Taisei Annual Report 2017 · ANNUAL REPORT 2017 TAISEI ANNUAL REPORT 2017 [ Inquiries ] TAISEI...

A N N U A L R E P O R T 2017

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［ Inquir ies ］

TAISEI CORPORATIONCSR Promotion Section,Corporate Communication Department, Corporate Planning Office

E-mail : [email protected]

URL : http:// www.taisei.co.jp

1708.2000.T.S

6.2㎜

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To Create a Vibrant Environment for All Members of SocietyThe Taisei Group creates “safe, secure, and attractive spaces” and “high value” in harmony with the nature, and strives to build a global society filled with dreams and hopes for the next generation.

In the Taisei Group, diverse human resources are playing active roles at many workplaces. In addition to employees, including female employees and foreign national employees, all persons involved, including workers with construction skills who are engaged in Monozukuri (precise, superb craftsmanship), acknowledge diversity and pursue the Group philosophy of “To Create a Vibrant Environment for All Members of Society.”

Diverse human resources

(as of March 2017)

Tokyo Outer Ring Road Shinjuku Line Intersection Point Construction Site(scheduled for completion in August 2018)

Client/designer: Bureau of Transportation, Tokyo Metropolitan Government

Photo: From left to right, technical intern trainee from Vietnam, Chinese female engineer, and Japanese male engineer

● Both the female and male engineers are Taisei Corporation employees

Number of foreign national employees: 718Number of

female employees: 2,243

21 TAISEI ANNUAL REPORT 2017TAISEI ANNUAL REPORT 2017

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TAIPEI OFFICE Zone B, 6F, No. 16, Sec. 4, Nan-Jing E. Road,

Taipei, Taiwan R. O. C.

TEL. 886-2-2578-5656 FAX. 886-2-2578-3300

MIDDLE EAST OFFICE Corner Abdullah Bin Jassim St. United

Bank Bldg. 4th Floor, Facing QNB Bldg, Doha - Qatar, PO BOX

47366

TEL. 974-4443-4174 FAX. 974-4443-7176

KUALA LUMPUR OFFICE 9-3, 9th Floor, Faber Imperial Court,

Jalan Sultan Ismail, 50250 Kuala Lumpur, MALAYSIA

TEL. 60-3-2070-6155 FAX. 60-3-2070-6010

JAKARTA OFFICE PLAZA OLEOS 18th Floor JI. TB Simatupang

No.53, Pasar Minggu Jakarta Selatan, 12520, Indonesia

TEL. 62-21-2278-3902 FAX. 62-21-2278-3903

INDIA OFFICE #602, 6th Floor, Tower B, Global Business Park,

M.G. Road, Gurgaon, Haryana-122002, India

TEL. 91-124-466-9800 FAX. 91-124-466-9888

PAKISTAN OFFICE Office-A, 5th Floor, Block-A, Saudi Pak

Tower, 61-A, Jinnah Ave., Islamabad, Pakistan

TEL. 92-51-8316620 FAX. 92-51-8316629

VIETNAM OFFICE (Hanoi) Room No.410, 4th Floor, V-Tower,

649 Kim Ma Street, Ngoc Khanh Ward, Ba Dinh District, Hanoi,

S.R.VIETNAM

TEL. 84-24-3553-5032,-5033 FAX. 84-24-3553-5002

VIETNAM OFFICE (Hochiminh City) VIETNAM CHAMBER OF

COMMERCE AND INDUSTRY, Hochiminh City Branch Building

7th FL, 171 Vo Thi Sau St., Ward7, District-3, Hochiminh City,

S.R.VIETNAM

TEL. 84-28-3932-1759 FAX. 84-28-3932-1758

THAILAND OFFICE 9th Floor, Thanapoom Tower, 1550 New

Petchburi Road, Kwaeng Makkasan, Khet Rachtavee, Bangkok

10400, THAILAND

TEL. 66-2-207-0330 FAX. 66-2-207-0332

PHILIPPINE OFFICE 23F Tower 6789, 6789 Ayala Avenue,1227

Makati City, Metro Manila, PHILIPPINES

TEL. 63-2-528-3117 FAX. 63-2-528-3117

MYANMAR OFFICE 2nd Floor, Tokyo Enterprise Building, No.32,

Pyay Road, 61/2 miles, Hlaing Township, Yangon, Myanmar

TEL./FAX. 95-1-654-838

SRI LANKA OFFICE No.177, 3rd Floor, Galle Road, Colombo

03, Sri Lanka

TEL. 94-11-2446194 FAX. 94-11-2446198

NORTH AFRICA OFFICE 25th, Rd. No.10, Station Sqr., Maadi,

Cairo, Arab Republic of Egypt

TEL. 20-2-2378-3609 FAX. 20-2-2380-1362

ISTANBUL OFFICE Barbaros Mah. Seyit Ahmet Deresi Sok.

Bahar Sitesi Yani, 34662 Altunizade - Uskudar Istanbul, TURKEY

TEL. 90-216-651-8160 FAX. 90-216-651-8180

PT.PP-TAISEI INDONESIA CONSTRUCTION PLAZA OLEOS

18th Floor JI. TB Simatupang No.53, Pasar Minggu Jakarta

Selatan, 12520, Indonesia

TEL. 62-21-2278-3906 FAX. 62-21-2278-3903

TAISEI (THAILAND) CO., LTD. 9th Floor, Thanapoom Tower,

1550 New Petchburi Road, Kwaeng Makkasan, Khet Rachtavee,

Bangkok 10400, THAILAND

TEL. 66-2-207-0330 FAX. 66-2-207-0332

VINATA INTERNATIONAL J/V CO., LTD. (Vinata Head Office)

3F, Song Da Bldg., Pham Hung Rd, My Dinh 1, Nam Tu Liem

Dist., Hanoi, S.R. VIETNAM

TEL. 84-24-3553-3839, -3840 FAX. 84-24-3553-3788

CSCEC-TAISEI CONSTRUCTION, LTD. (Head Office)

4thFloor, Building No. 8, Foreign Culture Creativity Park, 19

Chegongzhuang Xi Road, Haidian District, BEIJING, P.R.C. 10048

TEL. 86-10-6845-1267 FAX. 86-10-6845-1266

(Hochiminh City Branch Office) 7th FL, VIETNAM CHAMBER

OF COMMERCE AND INDUSTRY TOWER,171 Vo Thi Sau St.,

District3, Hochiminh City, S.R.VIETNAM

TEL. 84-28-3932-1765 FAX. 84-28-3932-1764

(Shanghai Branch) 3rd Floor No.6419 SanLuLu, Pudong Xin Qu,

Shanghai, P.R.C. 200120

TEL. 86-21-6209-9757 FAX. 86-21-6209-9758

TAISEI PHILIPPINE CONSTRUCTION INCORPORATED 23rd

Floor, BDO Equitable Bank Tower, Paseo de Roxas, Salcedo

Village, Makati City, PHILIPPINES

TEL. 63-2-886-0670 FAX. 63-2-886-0663

PT. INDOTAISEI INDAH DEVELOPMENT (Chikanpeck Office)

Kawasan Industri Indotaisei, Kota Bukit Indah Sector IA, Block B

Karihurip, Cikampek, Karawan, Jawa Barat, INDONESIA

TEL. 62-264-351-003 FAX. 62-264-351-026

TAISEI MYANMAR CO., LTD. 2nd Floor Tokyo Enterprise

Building, No.32, Pyay Road, 61/2 miles, Hlaing Township, Yangon,

MYANMAR

TEL. 95-1-654-838

Overseas Network (As of August 1, 2017)

Overseas Business Offices Overseas Subsidiaries / Affiliated Companies

116TAISEI ANNUAL REPORT 2017 116

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(as of March 2017)







2TAISEI ANNUAL REPORT 2017 2TAISEI ANNUAL REPORT 2017 2

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History of Tackling Challenges Takes ShapeSince its foundation, the Taisei Group has been boldly facing challenging tasks, such as completion of Japan’s first subway line, which went from Ueno to Asakusa in Tokyo and constructed solely with the expertise of Japanese engineers, with the aim of contributing to the development of a safe and secure society. Taisei Corporation’s history of tackling challenges has been passed down as a legacy based on the trust and track record we have cultivated.

3 TAISEI ANNUAL REPORT 2017

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Design Works and Construction Works of New National Stadium Japan(scheduled for completion in November 2019)

Client: JAPAN SPORT COUNCIL Contractor: Taisei Corporation, Azusa Sekkei Co., Ltd.,

and Kengo Kuma and Associates Joint Venture

We will create a stadium open to everyone as a “big tree of life” that takes root deep in the ground, connected to the greenery of the historic Meiji Jingu Shrine Outer Garden, with an eye on 100 years into the future.

By leveraging technologies and know-how Taisei Corporation has cultivated, we will construct a robust and long-lasting stadium featuring high durability, long service life, easy maintenance, use of natural energy, and restricting areas of use according to the scale of events held there.

©Taisei Corporation, Azusa Sekkei Co., Ltd. and Kengo Kuma and Associates Joint Venture Note: This perspective photo shows images for illustrative purpose only and that may differ from the actual construction. Vegetation shows an image about 10 years after completion of the stadium.

Mori-no Stadium (Stadium in Forest) to be Inherited for 100 years

4TAISEI ANNUAL REPORT 2017

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Passing on Legacies Built with Taisei’s Cultivated Technologies to the Next GenerationReliable technologies broaden future potential. We believe that technological innovation generates great possibilities and creates a society filled with hope. Taisei Corporation will continue its efforts to develop new technologies to entrust the prosperous future to the next generation.


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The New Head Office Building of Kinki Sangyo Credit Union (scheduled for completion in January 2019)

Client: Kinki Sangyo Credit UnionDesigner: Taisei Corporation

We will achieve Japan’s first-ever ZEB Ready urban-style high-rise building of 60 meters tall or higher.

Taisei Corporation has been working to achieve energy-saving building construction throughout the life cycle from design, construction, and to operation, and achieved a zero energy balance on a single building basis (a 100% energy-saving building) for the first time in Japan in the ZEB Demonstration Building within its Technology Center in 2015. In July 2016, the Company renovated Taisei Sapporo Building to make it ZEB Ready*, and has already received orders to construct four ZEB-seeking buildings. We will continue to proactively conduct proposal activities to promote market-oriented ZEB.

Number of orders received for ZEB-seeking buildings: 4 (as of March 2017)

*A building with more than 50% energy savings compared to modern standard buildings (see p.18)6TAISEI ANNUAL REPORT 2017

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Contents

Taisei Snapshot

Management Strategy

Strategic Report

15 Interview with the President

20 Message from External Members of the Board

21 Members of the Board, Audit & Supervisory Board Members, Chairman and Executive Officers, Executive Fellows

25 Business Overview

31 Activities of Group Companies

This report has been produced in an environmentally friendly manner. It is printed on lightweight paper to reduce the use of timber resources and transportation energy, using vegetable oil-based ink.

Note Regarding Forward-Looking StatementsOpinions and predictions, etc., expressed in this report are based on the judgment of the Company at the time of preparation of this document. Therefore, please be aware that there is a possibility that the results of the actual target values, etc., could be different from the stated future estimates, due to changes in various factors.

■ Civil Engineering ■ Building

Construction ■ Real Estate Development

TAISEI Snapshot 1 To Create a Vibrant Environment for All Members of Society

3 History of Tackling Challenges Takes Shape

9 History of the Taisei Group

11 The Taisei Group in Numbers

13 Value Creation Process of the Taisei Group

5 Passing on Legacies Built with Taisei’s Cultivated Technologies to the Next Generation

Scope of ReportingReporting period: From April 1, 2016 to March 31, 2017 in the mainTarget organizations: Taisei Corporation and consolidated subsidiariesScope of result data: ● Finance: Taisei Corporation and consolidated

subsidiaries ● ESG: Taisei Corporation, key group

companies, and overseas companies

Reference Guidelines● Environmental Reporting Guidelines (2012 Edition)● GRI “Sustainability Reporting Guidelines 4th Edition”● ISO 26000: 2010 (International Organization for Standardization)● Integrated Reporting Framework (International Integrated Reporting

Council, or “IIRC”)

Third Party Assurance and Opinions● Third Party Assurance Report: Environmental information assurance

by Ernst & Young Sustainability Co., Ltd.

Editorial PolicyThis annual report (published on August 31, 2017) is published to enable stakeholders to obtain an overall view of the Taisei Group’s corporate value creation, including corporate activities that conform to the Taisei Group Philosophy and the Group Action Guidelines, financial reporting, and management issues. This report discloses our various CSR activities for fiscal 2016, while securing objectivity and transparency by drawing on a variety of reporting-related guidelines. The report outlines the Group Action Guidelines and basic principles for actions governing those activities, as well as how these guidelines and principles are promoted; highlights the results of various measures; and, presents an analysis of key performance indicators (KPI). Moreover, detailed information not presented in this report is presented in the Taisei Corporation website.http://www.taisei.co.jp/english/index.html

The Taisei Group will contribute to the sustainable development of society by resolving social challenges and build its own strengths to advance to the next stage.

©Taisei Corporation, Azusa Sekkei Co., Ltd. and Kengo Kuma and Associates Joint Venture Note: This perspective photo shows images for illustrative purpose only and that may differ from the actual construction. Vegetation shows an image about 10 years after completion of the stadium.


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CSR

Financial and Corporate Data

ESG Initiatives

Basic Information

Strategic Report

39 Major Projects

33 OUR STORY 43 The Taisei Group CSR 47 Focus on Stakeholder Dialogue Business Activities and a Sustainable Society

49 Governance Report 59 Social Report 67 Environmental Report 75 Table of Comparisons for ISO 26000 and GRI Guidelines

77 11-Year Financial and Non-Financial Summary 79 Explanation and Analysis of Business Results 85 Consolidated Financial Statements 114 Corporate Profile 116 Overseas Network

The Source of Taisei Corporation’s Value That Takes on Social Challenges through its Business Activities

Presented below are our prioritized themes and solution technologies we engage in each field to resolve social challenges.

● Taisei Technology Center● Environment Division● Design Division● Nuclear Facilities Division● Engineering Division

“Technologies”

Composition of Communication Materials ● Japanese ● English

Security Report ●

Data Book ● ●

TAISEI CORPORATE REPORT 2017 ●

Publications TAISEI ANNUAL REPORT 2017 ●

CSR Activities: Corporate Social Responsibility (CSR) ●http://www.taisei.co.jp/english/csr/

IR Information: To Our Shareholders and Investors ● ●http://www.taisei.co.jp/english/ir/

Website General corporate activities ● ●http://www.taisei.co.jp/english/

Taisei Technology Center Report, etc. ●

Corporate Governance Report ●Taisei Circle (Shareholder Newsletter) ●

Non-Financial InformationFinancial Information

● Incorporated into the world’s leading SRI indices (As of July 2017)Assessment by External AgencyMSCI Japan ESG Select Leaders Index and the MSCI Japan Empowering Women Index (WIN) FTSE4Good Index and FTSE Blossom Japan Index Morningstar Socially Responsible Investment index

THE INCLUSION OF Taisei Corporation IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Taisei Corp. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKSOF MSCI OR ITS AFFILIATES.

Taisei Corporation is a member of the FTSE4Good Index, an equity index series that is designed to facilitate investment in companies that meet globally recognized corporate responsibility standards.

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19901956 2000 2010 2016(FY)

109.0 127.7 135.9 106.8 86.5 35.0 14.9 46.9 41.4 43.6 66.7 55.5 49.4 59.8 48.9 55.1 57.6 48.8 (0.6) 35.6 36.2 36.4 35.6 53.7 70.4 117.4 140.8140.8

History of the Taisei Group

Completed construction of Asia’s first subway, the Tokyo Underground Railroad connecting Ueno to Asakusa

1927The founder, Kihachiro Okura, founded several companies, contributing to the modernization of Japan

1873

The main building of Hotel New Otani, Japan’s first skyscraper constructed in time to accommodate visitors to the 1964 Tokyo Olympics

1964

1960 to 2009

From the foundation to 1959

Following the success of the 1964 Tokyo Olympic Games, Japan achieved rapid economic development and Taisei Corporation also developed new technologies successively. Taisei Truss, Taisei’s unique three-dimensional truss structure, was awarded the Imperial Invention Award, which is given to the best invention of the year, in 1967. In 1997, Taisei was awarded again the Imperial Invention Award for the spherical shield production process, a tunneling method developed jointly with IHI Corporation, as Japan’s first civil engineering technology to receive the award.

Kihachiro Okura, the founder, engaged in the construction and operation of buildings, in addition to pursuing direct import businesses, undertaking a series of pioneering projects. In 1946, the Company changed its corporate name to Taisei Corporation, becoming a non-family-controlled company, a rarity for construction companies at the time. In 1956, Taisei Corporation became the first company in the construction industry to list shares on the stock exchange.

Received the First Imperial Invention Award in the Construction and Civil Engineering Field

Became the First Construction Company to List Shares on the Stock Exchange

Since its foundation in 1873, each employee of Taisei Corporation has contributed to building the Company’s trust and track record by channeling their dreams and passions to each single project. With the pride in having supported Japan’s modernization and development, Taisei Corporation will continue to strive towards a better future.

Tokyo Metropolitan Government Main Building No. 1, a symbolic building towering over the new city center in the global city of Tokyo

1991

Sapporo Dome adopted the world’s first hovering stage to enable it to host both indoor football and baseball games

2001

Kannongawa River water-conveyance conduit (Original client: Kawasaki City, Client: Japan Sewage Works Agency), for which the spherical shield production process (horn industrial method) was adopted for the first time in the world

1994

Operating Income (Billions of Yen)


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19901956 2000 2010 2016(FY)

109.0 127.7 135.9 106.8 86.5 35.0 14.9 46.9 41.4 43.6 66.7 55.5 49.4 59.8 48.9 55.1 57.6 48.8 (0.6) 35.6 36.2 36.4 35.6 53.7 70.4 117.4 140.8140.8

Highlights of Business Activities for FY2016

JP Tower was built to replace the old Tokyo Station Central Post Office that was completed in 1934, preserving part of the historic building

2012

Tokyo International Airport (Haneda) Runway D adopted the world’s first hybrid structure that combines a reclaimed land portion with a jetty portion

2010

2010 to 2016Formulation of TAISEI VISION 2020 In 2010, we reestablished a philosophy structure for the Group that is clear-cut, easy-to-understand, and sharable, allowing Taisei Group directors and employees to have a sense of group unity. Also, the “Taisei Vision 2020” was formulated as the long-term vision within the new philosophy structure to serve as the way to achieve our envisioned future 10 years hence.

Bosphorus Strait Crossing Railway Tunnel, Turkey.The undersea tunnel was constructed by the immersed tunnel method to form the world’s deepest immersed tunnel, in one of the most rapid ocean currents in the world.

2013

Sumitomo Fudosan Roppongi Grand Tower.Completed a high-rise building of about 230 m tall, housing three functions of commercial office space, residential space, and retail space, in an extensive area of about 27,000 m2 that is adjacent to Roppongi-itchome Station on the Tokyo Metro Namboku Line

2016

Held the Souyu-kai Convention to celebrate the milestone of 100 years since the establishment of Souyu-kai (the organization of Taisei’s main cooperating companies)

February 2017 p.54

Established The Taisei Foundation to support academic research

March 2017 p.61

Started construction work for the New National Stadium Japan

December 2016 p.3｜4

Taisei Sapporo Building ZEB Ready * Renewal received the Kitaguni Energy Conservation and New Energy Grand Prize (the effective energy use category) for FY2016.

December 2016

Ranked first in the “ranking of patent assets scale for the general contractor industry” of Patent Result Co., Ltd.

November 2016

Received the Special Encouragement Prize in “Ikumen Company Award”

October 2016

The fourth “Arc lighting”, Japan’s first electrical street lighting built in 1882 by the founder Kihachiro Okura, was relit.

September 2016

Certified as among the Climate A List companies that have achieved the highest performance in the CDP 2016 Climate Change Report.

October 2016 p.69

p.63

*A building with more than 50% energy savings compared to modern standard buildings (see p.18)

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Total CO2 Emissions*3

0

100

200

400

300

（103t-CO2）

337 332333

2015 20162014 (FY)

Number of Patent Applications Filed*2

0

100

200

300

400

2015

316

2016

311

2014

300

(Cases)

(FY)

Business Overview

● Net sales and operating income include intersegment transaction. Composition percentages are figures calculated from simple sum totals.

Builds a secure and comfortable environment and highly convenient facilities through constructing and renovating buildings such as airports, office buildings, commercial facilities, factories, and hospitals, the housing business, and research and development and engineering technologies that contribute to a low-carbon and recycling society

Building Construction

Civil Engineering

Constructs infrastructure such as tunnels, bridges, roads, and dams, and builds social infrastructure that supports citizens’ lives and industries with high technological capabilities

OthersProvides optimum solutions at every phase, such as contract research, technology provision, and environmental measurements

Real Estate Development

Proposes urban renewal by fully utilizing accumulated methods and knowhow with regard to diverse business schemes such as redevelopment, PFI, property management, and condominium sales projects

Civil Engineering¥449.4 billion28.8%

Others¥13.0 billion0.8%

Building Construction¥977.7 billion62.6%

Real Estate Development¥121.7 billion7.8%

Net Sales by Segment (Consolidated)

Civil Engineering¥55.1 billion38.6%

Others¥1.2 billion0.8%

Building Construction¥73.3 billion51.3%

Real Estate Development¥13.3 billion9.3%

Operating Income by Segment (Consolidated)

Civil Engineering3,90728.0%

Others1491.1%

Building Construction7,90756.5%

Real Estate Development2,01414.4%

Number of Employees by Segment (Consolidated)

*1 The targets of frequency rates are set on the basis of all accidents entailing days off work including a small and medium sized employers and self-employed workers.*2 The Target organizations include Taisei Corporation, TAISEI ROTEC CORPORATION, Taisei-Yuraku Real Estate Co., Ltd., TAISEI U-LEC CO., LTD., TAISEI SETSUBI CO., LTD.,

SEIWA RENEWAL WORKS CO., LTD., and TAISEI HOUSING CORPORATION.*3 For target organization of CO2 emissions, please refer to p.74.

The Taisei Group in Numbers

Non-Financial Highlights

Frequency Rates*1*2

0

0.4

0.8

1.2

(FY)2015

0.59

2016

0.59

2014

1.00

Number of Employees (Consolidated) /Number of Female Managers (Non-Consolidated)

0

8,000

16,000(People)

(FY)2015

13,748

2016

13,977

2014

13,7012,016

11,685

2,038

11,710

2,243

11,734

■Male　■Female Female managers

39

6253


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Consolidated Financial Highlights

Orders Received

0

500

1,000

1,500

2,000

(Billions of Yen)

(FY)2015

1,671.0

2016

1,655.0

2011

1,379.5

2012

1,404.4

2013

1,645.8

2014

1,765.7

受注高Down 0.1% YoY ¥1,655.0 billion

Net Sales

(Billions of Yen)

0

500

1,000

1,500

2,000

(FY)2016

1,487.2

2015

1,545.8

2011

1,323.5

2012

1,416.4

2013

1,533.4

2014

1,573.2

売上高Down 3.8% YoY ¥1,487.2 billion

Operating Income

(Billions of Yen)

0

40

80

120

160

(FY)2016

140.8

2015

117.4

2011

36.4

2012

35.6

2013

53.7

2014

70.4

営業利益

Up 19.9% YoY ¥140.8 billion

Net Income Attributable to Owners of Parent / Return on equity (ROE)

(Billions of Yen)

0

40

80

120

160

(FY)2015

77.0

2016

90.5

16.7

20111.1

2012

20.0

2013

32.0

2014

38.1

0

6.0

12.0

18.0

24.0

(%)

6.3

0.4

8.9 8.8

15.3

■Net income attributable to owners of parent ROE

当期純利益／ ROE

Interest-Bearing Debt / Debt to Equity Ratio

(Billions of Yen)

0

150

300

450

600

(FY)2015

254.6

2016

238.1

2011

419.2

2012

379.0

2013

316.4

2014

273.2

0

0.5

1.0

1.5

2.0

(Times)

1.3

1.00.8

0.5 0.40.5

Debt to equity ratio■ Interest-bearing debt

Payout Ratio

0

25

50

450

600

(%)

2011 2012

482.3

28.4

(FY)2013

21.3

2014

23.9

2015 2016

24.3 25.5

Up 1.2 points YoY 25.5%

Up 17.5% YoY ¥90.5 billion

Up 1.4 points YoY 16.7%

Down 6.5% YoY ¥238.1 billion

Down 0.1 points YoY 0.4 times

¥1,655.0 billion

Orders Received

¥1,487.2 billion

Net Sales

¥140.8 billion

Operating Income

¥90.5 billion

Net Income Attributable to Owners of Parent

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Shareholders/Investors

Clients/End-Users

Suppliers

Employees

Self-realization by doing work that

remains on the map

Sustainable harmony and

benefit

Create a safe, secure, and comfortable

infrastructure

Improve financial health and raise corporate value

Objectives to be Pursued by the Taisei GroupBy seeking to achieve the Taisei Group Philosophy, the Taisei Group will create safe, secure and attractive spaces, and high value in harmony with the nature, as well as strive to build a global society �lled with dreams and hopes for the next generation.

Contributing to Solving Global ChallengesSpeci�c social challenges, such as Sustainable Development Goals (SDGs) and the Paris Agreement have been set out as global common goals to be achieved. The Taisei Group will contribute to realization of a sustainable and better world to resolve these challenges.

Sustainable Developmentthrough Value Creation

Crea

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Clients/End-Users

Suppliers

Employees


remains on the map


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infrastructure





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Taisei Group Philosophy

“To Create a Vibrant Environment for All Members of

Society”

＞＞＞＞＞＞

＞＞＞＞＞

＞＞＞

＞

Expansion of global energy

demand Global energy demand is expected to grow by 30%

by 2040.Source: “World Energy Outlook 2016”

by the International Energy Agency (IEA)

World population growth

World population is projected to grow to 9.6 billion by 2050.Source: The official United Nations

population estimates

Aging of social infrastructure

The percentage of road bridges (bridge length of 2m or longer) aged 50 years or more is projected to increase

from 16 % in 2013 to 65% in 2033. Source: “Basic Plan on Building Long-life Infrastructure” by the Ministry of Land, Infrastructure,

Transport and Tourism

Promotion of women’s participation

and advancement in the workplace in Japan

Labor force participation rate of women in 2015 was 49.6% (the

rate for men was 70.3%).Source: Actual Situation of Working Women in 2015, published by the

Ministry of Health, Labour and Welfare

Decline in labor force due to

domestic population decrease

Production-age population is projected to decline from 77.28 million in 2015

to 45.29 million in 2065.Source: Population Projections

for Japan (2017 Projections)

Global environmental

issuesGlobal temperatures are

expected to rise by up to 4.8 degrees Celsius by 2100.Source: IPCC’s RCP 8.5 scenario

from the fifth Assessment Report

Focusing on resolving social challenges,

anticipating the needs of society, and responding

to changes in the business environment

The Taisei Group’sImportant Initiatives

Design andengineering

Strategy, planning,

anddevelopment

Renovation and demolition

Operation and management; maintenance and preservation

Procurement and work implementation

CSR Management“Seeking to realize the Taisei Group

Philosophy (Form Aimed For)”

Management Strategy“To promote conversion to a business

structure for creation of higher added value”

Ensure quality and improving

technologies

Develop next-

generationtechnologies

Promote diversity

Develop safe and secure

society

Develop next-

generation engineers

The Taisei Group’s Strengths

TechnologiesWork-Site Capabilities

Challenge-Tackling Capabilities

Value Creation Process of the Taisei Group


011_0356501372908.indd 13 2017/08/17 11:35:13


Clients/End-Users

Suppliers

Employees


remains on the map


benefit


infrastructure





Crea

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valu

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ith s

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Clients/End-Users

Suppliers

Employees


remains on the map


benefit


infrastructure





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“To Create a Vibrant Environment for All Members of

Society”

＞＞＞＞＞＞

＞＞＞

＞＞＞

＞＞＞

Expansion of global energy

demand Global energy demand is expected to grow by 30%

by 2040.Source: “World Energy Outlook 2016”

by the International Energy Agency (IEA)

World population growth

World population is projected to grow to 9.6 billion by 2050.Source: The official United Nations

population estimates

Aging of social infrastructure

The percentage of road bridges (bridge length of 2m or longer) aged 50 years or more is projected to increase

from 16 % in 2013 to 65% in 2033. Source: “Basic Plan on Building Long-life Infrastructure” by the Ministry of Land, Infrastructure,

Transport and Tourism

Promotion of women’s participation

and advancement in the workplace in Japan

Labor force participation rate of women in 2015 was 49.6% (the

rate for men was 70.3%).Source: Actual Situation of Working Women in 2015, published by the

Ministry of Health, Labour and Welfare

Decline in labor force due to

domestic population decrease

Production-age population is projected to decline from 77.28 million in 2015

to 45.29 million in 2065.Source: Population Projections

for Japan (2017 Projections)

Global environmental

issuesGlobal temperatures are

expected to rise by up to 4.8 degrees Celsius by 2100.Source: IPCC’s RCP 8.5 scenario

from the fifth Assessment Report

Focusing on resolving social challenges,

anticipating the needs of society, and responding

to changes in the business environment

The Taisei Group’sImportant Initiatives

Design andengineering

Strategy, planning,

anddevelopment

Renovation and demolition

Operation and management; maintenance and preservation

Procurement and work implementation

CSR Management“Seeking to realize the Taisei Group

Philosophy (Form Aimed For)”

Management Strategy“To promote conversion to a business

structure for creation of higher added value”

Ensure quality and improving

technologies

Develop next-

generationtechnologies

Promote diversity

Develop safe and secure

society

Develop next-

generation engineers

The Taisei Group’s Strengths

TechnologiesWork-Site Capabilities

Challenge-Tackling Capabilities

The Taisei Group strives to maximize the value created through dialogue with stakeholders, and aims to achieve sustainable development together with society by proactively getting involved in social challenges which the Group needs to resolve through its businesses.

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■ Basic Policies [Medium-term Business Plan (FY2015–2017)]

Looking back on Fiscal 2016 We began undertaking the construction work for the main

arena of the new National Stadium Japan last December.

Taisei Corporation, having constructed the old National

Stadium Japan, has strong feelings towards the new

National Stadium, and we deeply appreciate the honor of

receiving the order for its construction work. For the next

three years, we will make the most of the benefit of getting

involved in the project from the design phase and

endeavor to build a legacy that we can be proud of for

future generations.

Towards Moving on to the Final Stage of the Medium-term Business Plan (2015-2017)

With strong confidence regarding “Deep Cultivation of the Construction Industry, Our Core Business,” the Taisei Group will strive to achieve growth in the “energy” and “overseas business” areas, in addition to the five target fields.

The Taisei Group will contribute to the sustainable development of society by resolving social challenges and build its own strengths to advance to the next stage.

Aims

●To obtain high customer satisfaction by ensuring quality and safety

●To achieve stable and sustainable growth

●To promote conversion to a business structure for creation of higher added value

●To obtain high trust and evaluation from all stakeholders

Management Tasks

❶ Strategic initiatives for target projects❷ Active contribution to enhancement of social

infrastructure❸ Promotion of next generation technological

development❹ Establishment of next generation business

models for target fields❺ Strengthen domestic construction business❻ Construct the basis for healthy growth of

overseas projects❼ Increase the Group strength❽ Evolution of management infrastructure

Deep Cultivation of the Construction Industry, Our Core Business

Interview with the President

Yoshiyuki MurataPresident and Chief Executive Officer, Representative Director

What does the Group aim to achieve by its basic policy of “Deep Cultivation of the Construction Industry, Our Core Business”?No matter how the world changes, including changes in

demographic structure, the Taisei Group believes that

becoming a company that is trusted by clients and chosen

for our primary business is a prerequisite for achieving

sustainable growth. To this end, there are two points on

which deep cultivation is necessary. Firstly, we need to

solidly deal with challenges for which there is much work

to do towards resolving them based on the experience and


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■ Numerical Targets in Fiscal 2017, the Final Year of the Medium-term Business Plan (2015–2017)Business and Financial Targets

March 31, 2018

Consolidated Non-Consolidated

Net sales ¥1,610 billion ¥1,310 billion

Operating income 125 billion 109 billion

Net income* 87 billion 76 billion

Interest-bearing debt Less than 260 billion ―

Capital Policy and Guidelines for Return to Shareholders

March 31, 2018

Consolidated

Target Revised Target

Dividend payout 25% or more 25.8%

ROE 8.0% or more 14.8%

*Consolidated net income is presented as net income attributable to owners of parent.

results we have earned. For instance, we will make greater

efforts to improve our technological capabilities, increase

productivity by utilizing ICT, and implement work-style

reforms. Secondly, we will cultivate our primary business

more deeply for the future. Specifically, we will seek to

build a high value-added business structure by deepening

exchanges with companies in the construction industry, as

well as in other industries, both in Japan and abroad.

What are the achievements in the five target fields?Of the five target fields, we received steady orders for

seismic resistance, etc., in the renewal and replacement

field. In the nuclear power field, we won safety measure

work orders for the decommissioning and restart of

nuclear power plants. In the environment field, we set up

the ZEB Demonstration Building within the Taisei

Technology Center, and our trailblazing effort led to winning

orders for new ZEB-seeking buildings. In the engineering

field, our efforts have yielded results in winning orders in

the pharmaceuticals and food production facility area,

backed by a wealth of achievements. In the urban

development field, orders are increasing steadily in central

Tokyo, as well as in regional cities such as winning orders

for large-scale urban redevelopment projects in Sapporo

and Kumamoto. In addition to these five target fields, the

Taisei Group will strive to achieve growth by focusing on

energy, which still poses serious social challenges, and the

overseas business related to infrastructure export.

What are short-term risks faced by the Group and their countermeasures?Considering that a labor shortage is expected to occur

from 2018 to 2019 due to a jump in business in the run-up

to the Tokyo 2020 Olympic and Paralympic Games, we are

developing a thoroughgoing production system as our

focused challenge for the current fiscal year. In recent

years, we have been implementing human resources

management, such as strengthening recruitment, including

mid-career employment and transferring employees from

regional branches to our offices and branches in the Tokyo

metropolitan area. However, these measures are not

sufficient to address the looming labor shortage. Therefore,

the Taisei Group intends to ride out the extremely busy

period by implementing measures to improve productivity,

such as strengthening work-site capabilities, utilizing ICT,

and work-style reforms. During busy times, we need to be

more cautious about the risk of quality problems and take

measures to prevent them. Since any error may lead to an

incident that would have a major impact on society, we will

steadily implement a quality management process.

How do you see the outlook for the domestic market after the Tokyo 2020 Olympic and Paralympic Games?There are projects for which order placement has been

postponed to avoid the current busy period, and we thus

anticipate that a certain level of construction demand will

continue for some time after the Tokyo 2020 Olympic and

Paralympic Games. Although the outlook for the subsequent

period is unclear, orders from the growth industry of the time

have kept the construction industry going.

The strength of the construction industry is that there is

always a growth industry in any given time, even if the

growth rate of the overall economy slows. Even so, since

competition for winning orders will intensify in a given

growth industry, the important thing for us is to earn higher

evaluation ratings from clients than other companies in the

industry, regardless of the order-taking environment.

With the increase in clients with limitations on

construction timeframes and costs in recent years, we

have been receiving an increasing number of orders for

one-stop solutions from design to construction. We believe

that the background behind this is a higher evaluation for

general contractors’ technological capabilities in the

project-planning phase, such as proposals for shortening

construction periods and reducing costs, in addition to

their construction capabilities. We see this as a very

significant change in the long history of the construction

industry, and we will work to build a competitive advantage

in the future market by steadily improving evaluations from

clients in design and construction projects.

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Responses to ESG Challenges

The Taisei Group works group-wide towards implementing measures to strengthen corporate governance, easing busyness and promoting women’s active participation and advancement in the workplace. Agreeing with the concept of ESG investment, the Taisei Group proactively discloses non-financial information.

■ Sustainable Development Goals (SDGs）

SDGs are global goals set in the United Nations’ “The 2030 Agenda for Sustainable Development”

17 GOALS TO TRANSFORM OUR WORLD

*Empowerment Grand Prize: Prize awarded to an organization taking unique and ingenious initiatives aimed to promote women’s active participation in the workplace and improve productivity.

SDGs are new goals defined and adopted by the United Nations in 2015 by building on the Millennium Development Goals (MDGs) that expired at the end of 2015. SDGs, comprising 17 goals and 169 targets to be achieved by 2030 to build a truly sustainable world, require active involvement by countries as well as corporations.

Why does Taisei disclose the ESG information?ESG investment, which takes into account information

related to the environment (E), social issues (S), and

corporate governance (G), is growing rapidly. It is obvious

that companies with appropriate policies and initiatives for

social responsibility and higher levels of corporate

governance functions will achieve medium- and long-term

growth. Taisei Corporation will proactively disclose ESG

information, in addition to financial information, through the

TAISEI ANNUAL REPORT.

As for our ESG initiatives, we place priority on

strengthening corporate governance. As a company

engaged in the development of safe and secure

infrastructure, we must prevent at all costs any incident

that would lead to the loss of public trust.

To this end, we discuss measures to strengthen

company-wide risk management at the Board of Directors

meetings, and conduct active exchange of opinions with

Audit & Supervisory Board members and audit corporation.

With respect to appropriate implementation of

compliance, we consider it important to persistently

communicate the necessity to each employee to ensure

compliance clear of improper accounting, etc.

What are measures implemented to ease employee busyness at construction sites?We have figured that the high busyness level of employees

working at construction sites is attributable to inefficiency

in operations of those sites. We will review matters to

determine if there is any inefficiency in the conventional

approach to work, and will push through work-style

reforms with the “courage to change.”

In addition to improving efficiency in construction work

as mentioned above, by taking this opportunity, we are

focusing on productivity improvements by utilizing ICT,

such as the introduction of Office365, a tool for improving

information and operational efficiency, in the entire Group,

to improve the working environment.

How is progress on the promotion of women’s active participation and its results?In 2015, Taisei Corporation was honored with the second

Empowerment Grand Prize* in recognition of its efforts to

proactively expand the job categories of female employees,

which led to a significant increase in the number of female

employees working at construction sites and as sales

persons. In recent years, Taisei Corporation has been

supporting women’s active participation and advancement

in the workplace by taking various approaches involving

male employees as well, such as promoting childcare

support for male employees by providing a five-day paid

childcare leave towards achieving a 100% rate of childcare

leave for men, and holding seminars for male superiors

who play a significant role in female employees’ skill

development.

Of the skilled construction engineers working in the

construction industry, the percentage of female engineers is

still only about 1%. If more female employees of general

contractors work at construction sites, it will encourage the

hiring of skilled female workers at cooperating companies.

Taisei Corporation will thus promote the creation of a pleasant

working environment for both male and female employees.


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Taisei’s Initiatives for the UN’s SDGs to Be Achieved by 2030

Taisei Corporation has set out “TAISEI i-Innovation” to promote productivity improvement. As a pioneer in ZEB buildings, we will embark on the development of next generation energy-saving technology.

■ ZEB (Net Zero Energy Building)

As the definition of ZEB for its quantitative judgment criteria released by the ANRE on December 17, 2015, the agency specified the following ZEB levels.

New Definition of ZEB Taisei Corporation’s Road Map for ZEB Penetration with Government’s Target

Building achieving an energy consumption reduction of 75% or more



*1 BIM: Building Information Modeling. It is a process of building three-dimensional computer models of buildings and utilizing the information obtained from model creation in the entire lifecycle process of buildings, including designing, construction and maintenance.

*2 CIM: Construction Information Modeling is designed to boost the efficiency of a series of construction production systems by introducing three-dimensional models from the investigation and design phases and interfacing them with three-dimensional models in each phase of construction and maintenance.

How is Taisei Corporation going to contribute to SDGs as a construction company?One major goal to which the Taisei Group can possibly make

a significant contribution is “Build resilient infrastructure,”

which is one of the 17 goals of the SDGs. Specific measures

are “promotion of greater national resilience,” “recovery from

the Great East Japan Earthquake,” and “promotion of

i-Construction.”

Taisei Corporation has regarded the development of safe

and highly reliable infrastructure, working on the recovery of

disaster-hit areas, and building a disaster-resilient nation as its

social responsibilities in the construction industry, and has

worked group-wide towards resolving these social

challenges.

Regarding the “promotion of i-Construction,” the

government’s Council on Investments for the Future held in

September 2016 set out a goal of achieving a 20 percent

increase in construction site productivity by 2025. In order

to meet that goal, Taisei collectively termed the initiatives

for productivity improvement and technological innovation

as “TAISEI i-Innovation” and has started deploying it

throughout the Group from April 2017.

We are working to improve productivity by promoting

TAISEI i-Innovation both from the aspects of hardware,

which generates results immediately, and software, ranging

from promotion of the utilization of BIM*1 and CIM*2 to the

cutting-edge technological innovation.

In this manner, Taisei Corporation intends to contribute

to increasing the momentum for the achievement of

SDGs, which are universal guidelines for building a

sustainable society.

What are your recognition and initiatives for environmental challenges?Taisei Corporation takes seriously the fact that it is exerting

various effects on the global environment, such as

consumption of resources and energy, while conducting its

primary construction business.

We will thus contribute to forming a sustainable society

by working to reduce the environmental impact, which is

inevitably generated during the course of business

activities, as much as possible, and by reducing the

environmental impact of buildings after delivery, and

regeneration of the natural environment.

To this end, Taisei Corporation has focused efforts on

developing environmental technology, including energy-

saving technology and ecosystem conservation

technology. As for energy-saving technology, in particular,

Taisei Corporation built the ZEB Demonstration Building

within its facility ahead of other companies in the industry,

successfully demonstrating the achievement of zero annual

primary energy balance. In the course of performing the

zero energy balance demonstration, we also developed

the T-ZEB Simulator, a tool that can calculate the cost in a

short time by optimally combining element technologies.

As a pioneer in ZEB buildings, we will promote the

penetration of market-oriented ZEB.

Taisei Corporation will work on the development of

technologies, centering on energy-related technologies, with

the intention of contributing to society through ZEB, as well as

technologies in the energy field. For instance, in addition to

the development of fuel cells, we will pursue the development

of CO2 containment technology to reduce the environmental

impact, and radioactive waste disposal technology.TA

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Promoting ZEB in new public buildings

Popularizing and spreading market-oriented ZEB

Developing tailored proposals

Sophisticated ZEB shift technologies and cost savingsComplete theT-ZEB Simulator

ZEB attainment

Strategic Energy Plan—April 2014 Cabinet decision

2015 2016 2017 2020 2030

Promoting ZEB upgrade averaged for new buildings


012_0356501372908.indd 18 2017/08/10 9:58:58

To Our Stakeholders

Manufacturing of grand architectural structures is the result of the accumulation of good day-to-day work processes. Taisei Corporation will further contribute to the building of a sustainable society by leveraging its unique strengths.

Occurrence of Violation of Anti-Monopoly Act by TAISEI ROTEC CORPORATION Taisei Corporation had always guided its group companies under

the policy of never violating the Anti-Monopoly Act. Unfortunately,

however, violation of the Act occurred at TAISEI ROTEC

CORPORATION, a major group company of Taisei Corporation.

Taking the incident sincerely and seriously, Taisei Corporation will

further ensure compliance in the entire Group, including TAISEI

ROTEC, and will strive to prevent similar misdeeds and recover

public trust as soon as possible.

What do you attach importance to in promoting businesses?I take pride that we at Taisei Corporation are engaged in

great work that excites each employee in their day-to-day

work process towards manufacturing grand architectural

structures that will remain on the map, and be etched in

employee’s lives. The Taisei Group Philosophy of “To

Create a Vibrant Environment for All Members of Society”

is our statement on the ideals of a construction company

from the perspective of the relationship with society.

Although it was in 1990 that Taisei Corporation put this

philosophy into words, we valued the idea behind this

philosophy since long before that time. We will continue

our relentless effort to pass it on to our future generations.

Taisei Spirit of “Active and Transparent Culture,” “Value

Creation,” and “Evolution of Tradition”, which crystallize the

Company’s common values based on the Group

philosophy, are also enduring assets which Taisei

Corporation will continue to value. Taisei Corporation has

been known to have an “active and transparent culture.” It

has a nice ring to it, but we need to work to create an

environment that fosters the exchange of opinions among

employees, to ensure that it will not end up being merely a

pie in the sky idea.

Lastly, may I have your message to stakeholders?Taisei Corporation has achieved growth by winning the

trust of various stakeholders including clients and

shareholders. I have long experience in carrying out

construction management at construction sites, and I still

vividly remember things from those days, such as the

sense of fulfillment I felt when we managed to pull off a

difficult process, and the excitement of seeing clients’

happy faces after successful completion of a challenging

construction work project.

I firmly believe that a company can become a trusted

company only if it fulfills social responsibilities, in addition

to pursuing profit.

Based on the knowledge obtained through the

dialogue with stakeholders, Taisei Corporation will

contribute to resolving social challenges both in Japan and

abroad through technology to bring the Company to the

next stage. Also, we will provide new value to stakeholders

by taking advantage of our unique strengths cultivated

over the course of the Company’s history.


012_0356501372908.indd 19 2017/08/10 9:59:02

Proactively Contributing to the Improvement of Information Transmission Capability for Stakeholders

Providing Highly Practicable Supervision and Advice from the Viewpoint of All Stakeholders to Contribute to Taisei Corporation’s Sustainable Value CreationDuties of external Board Members are to provide highly practicable supervision

and advice to management and executive officers from an independent

standpoint, as well as appropriately evaluating business results.

In the past few years, Taisei Corporation has conducted active discussion

on objectives to be pursued, such as improvements to profitability and financial

position, and improvements to shareholder returns and annual employee

compensation, and the Company has effectively delivered results in each of

these objectives.

In the meantime, there are signs that the business environment surrounding

corporations is likely to change drastically in various industries both in Japan

and abroad. It suggests the importance of constant study on medium- and

long-term strategy, and of the capability to respond to more detailed and

sincere corporate governance codes, and I believe these factors will determine

the fate of corporations.

With a full awareness of the difficulty of these matters and the huge

responsibilities of external Board Members, I faithfully perform duties from the

standpoint of all stakeholders with a strong sense of commitment to helping

Taisei Corporation’s sustainable Value Creation.

We might call last year the “First Year of ESG Investment,” with the rapid growth

in the balance of ESG investment. Among the ESG investment criteria,

expectations from capital markets and various stakeholders have been increasing

year after year for the roles of external Board Members, who play a part in

corporate governance of a company, which has given me a renewed

determination to work hard to fulfill my duties and responsibilities.

In my opinion, the essence of corporate governance is information disclosure.

That is to say, a company has established its corporate governance only after it

has not only created rules and implemented initiatives for corporate governance,

but also disclosed the information and made commitments related to it.

Since the formulation of the Corporate Governance Basic Policy in 2015,

I have attended Taisei Corporation’s Board of Directors meetings, and have

come to evaluate that the Company appropriately implements the policy. Going

forward, I expect that the Company will skillfully communicate its initiatives and

results externally.

General contractors, as well as integrated trading companies, where I have

spent most of my career, are regarded to have unclear management structures

from the viewpoint of outsiders, including overseas investors. I will thus utilize my

past experience and proactively contribute to Taisei Corporation’s improvement of

information transmission capability.

Message from External Members of the Board

External Board Member

Toru Tsuji

External Board Member

Fumio Sudo

Biography

1961.04 Joined Marubeni-Iida Co., Ltd.1991.06 Member of the Board of Marubeni Corporation1995.06 Managing Executive Officer,

Member of the Board1996.04 Managing Executive Officer,

Representative Director1997.06 Senior Managing Executive Officer,

Representative Director1999.04 President and Chief Executive Officer,

Representative Director2003.04 Chairman of the Board, Representative Director2004.04 Chairman of the Board, Member of the Board2008.04 Corporate Advisor, Member of the Board2008.06 Corporate Advisor2011.06 Member of the Board of Taisei Corporation

[Present Position]

Biography

1964.04 Joined Kawasaki Steel Corporation1994.06 Member of the Board of Kawasaki Steel

Corporation1997.06 Managing Executive Officer,

Member of the Board2000.06 Executive Vice President,


Representative Director2002.09 Member of the Board of JFE Holdings, Inc.

(Part-time)2003.04 President and Chief Executive Officer,

Representative Director of JFE Steel Corporation2005.04 President and Chief Executive Officer,

Representative Director of JFE Holdings, Inc.2010.04 Director2010.06 Honorary Advisor2011.06 Member of the Board of Taisei Corporation

[Present Position]

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Kazuhiko Dai Representative Director

Masahiro Sakai Director

Norihiko Yaguchi Director

Toru Tsuji External Board Member

Atsuko Nishimura External Board Member

Fumio Sudo External Board Member

Yasushi Yoshinari Director

Shigeyoshi Tanaka Director

Shigeyuki Sakurai Representative Director

Takashi Yamauchi Chairman, Representative Director Yoshiyuki Murata President, Representative Director1969.06 Joined the Company1999.06 Executive Officer2002.04 Managing Executive Officer2004.06 Senior Managing Executive Officer2005.06 Senior Managing Executive Officer,

Member of the Board2007.04 President and Chief Executive Officer,

Representative Director2015.04 Chairman, Representative Director

[Present Position]

1974.04 Joined the Company2007.04 Executive Officer2010.04 Managing Executive Officer2011.04 Senior Managing Executive Officer2013.06 Senior Managing Executive Officer,

Member of the Board2015.04 Executive Vice President, Representative Director2017.04 Executive Vice President, Representative Director

Chief of Marketing & Sales Division (Integrated); Chief of Marketing & Sales (Civil Engineering) Division; In charge of Safety Administration [Present Position]

1977.04 Joined the Company2012.04 Executive Officer2013.04 Managing Executive Officer2013.06 Managing Executive Officer,

Member of the Board2015.04 Senior Managing Executive Officer,


Member of the BoardDeputy Chief of Marketing & Sales Division (Integrated), Supervising Marketing Sales (Building Construction) Divisions [Present Position]



Member of the BoardChief of Architecture & Engineering Division (Integrated); Chief of Building Construction Division [Present Position]

1961.04 Joined Marubeni-Iida Co., Ltd.1991.06 Member of the Board of Marubeni Corporation1995.06 Managing Executive Officer, Member of the Board1996.04 Managing Executive Officer, Representative Director1997.06 Senior Managing Executive Officer,


Representative Director2003.04 Chairman of the Board, Representative Director2004.04 Chairman of the Board, Member of the Board2008.04 Corporate Advisor, Member of the Board2008.06 Corporate Advisor2011.06 Member of the Board of Taisei Corporation

[Present Position]

1979.04 Joined Ministry of Foreign Affairs of Japan1995.07 Director, Non-Proliferation of Weapons-Related

Resources, Foreign Policy Bureau1997.06 Director, First Africa Division,

Middle Eastern and African Affairs Bureau1999.08 Minister/Counsellor of Permanent Mission of Japan to

the United Nations2001.06 Minister of Embassy of Japan in Belgium2004.09 Professor of Tohoku University Graduate School of Law2008.06 Administrative Vice President of the Japan Foundation2012.04 Advisor of Japan Oil, Gas and Metals National Corporation2014.04 Ambassador Extraordinary and Plenipotentiary to

Grand Duchy of Luxembourg2016.07 Ambassador Extraordinary and Plenipotentiary for

Women, Human Rights and Humanitarian Affairs2017.06 Member of the Board of Taisei Corporation

[Present Position]

1964.04 Joined Kawasaki Steel Corporation1994.06 Member of the Board of Kawasaki Steel Corporation1997.06 Managing Executive Officer, Member of the Board2000.06 Executive Vice President, Representative Director2001.06 President and Chief Executive Officer,

Representative Director2002.09 Member of the Board of JFE Holdings, Inc. (Part-time)2003.04 President and Chief Executive Officer,

Representative Director of JFE Steel Corporation2005.04 President and Chief Executive Officer,

Representative Director of JFE Holdings, Inc.2010.04 Director2010.06 Honorary Advisor2011.06 Member of the Board of Taisei Corporation

[Present Position]


Member of the Board2015.04 President and Chief Executive Officer,

Representative Director [Present Position]



Representative Director2017.04 Executive Vice President,

Representative DirectorChief of Business Administration Division [Present Position]

1979.04 Joined the Company2011.04 Executive Officer2013.04 Managing Executive Officer2015.04 Senior Managing Executive Officer2015.06 Senior Managing Executive Officer,


Member of the BoardChief of Civil Engineering Division [Present Position]


Member of the BoardChief of Medical & Welfare Business Division [Present Position]

Members of the Board

Members of the Board, Audit & Supervisory Board Members, Chairman and Executive Officers, Executive Fellows (As of July 1, 2017)


012_0356501372908.indd 21 2017/08/10 9:59:08

Misao Akune Audit & Supervisory Board Member (Full-Time) Takashi Matsuyama Audit & Supervisory Board Member (Full-Time)1973.04 Joined the Company2003.07 General Manager of Accounting Dept.,

Business Administration Div.; Project Manager of Accounting Dept.

2004.04 Executive Officer2007.04 Managing Executive Officer2007.06 Managing Executive Officer,


Representative Director2015.04 Member of the Board2015.06 Audit & Supervisory Board Member of the

Company [Present Position]

1968.04 Joined Fuji Bank, Ltd.1995.06 Director1997.05 Managing Director2001.05 Vice-president2002.01 Director of Mizuho Holdings, Inc.2002.04 President and Chief Executive Officer, Director2003.01 President and Chief Executive Officer of

Mizuho Financial Group2009.04 President Emeritus2011.06 Audit & Supervisory Board Member of Taisei

Corporation [Present Position]

1977.04 Joined National Police Agency1987.04 First Secretary, Embassy of Japan in Germany,

Ministry of Foreign Affairs1998.03 Police Commissioner,

Tokushima Prefectural Police2004.07 Auditor-Secretary,

Hanshin Expressway Company Limited2005.09 Police Commissioner, Ibaraki Prefectural Police2010.03 Chief of Police, Chugoku District2011.03 Chief of Police, Kanto District2012.06 Audit & Supervisory Board Member of Taisei


1966.04 Joined Japan National Railways1987.03 Professor of Civil Engineering, School of

Engineering, Tokyo Institute of Technology1996.04 Professor of Social Infrastructure Engineering,

Graduate School of Engineering, University of Tokyo2004.04 Professor, National Graduate Research Institute

for Policy Studies2004.04 Vice Chairman, The Institution For Transport Policy

Studies President, The Institute For Transport Policy Studies

2011.04 Director of Policy Research Center; Academic Fellow; Adjunct Professor

2012.06 Audit & Supervisory Board Member of Taisei Corporation [Present Position]

1977.04 Joined Board of Audit of Japan2009.12 Director General of 3rd Bureau, Board of Audit2011.05 Director General of 5th Bureau, Board of Audit2013.03 Secretary General, Board of Audit2016.06 Audit & Supervisory Board Member of Taisei


1975.04 Joined the Company2008.04 General Manager of Auditing Department2015.06 Audit & Supervisory Board Member of the

Company [Present Position]

Terunobu Maeda External Audit & Supervisory Board Member

Kiwamu Miyakoshi External Audit & Supervisory Board Member

Shigeru Morichi External Audit & Supervisory Board Member

Kunitoshi Saito External Audit & Supervisory Board Member

Audit & Supervisory Board Members

Notes 1: Toru Tsuji, Fumio Sudo and Atsuko Nishimura are External Directors as defined by the Companies Act,Article 2-XV. 2: Terunobu Maeda, Shigeru Morichi, Kiwamu Miyakoshi and Kunitoshi Saito are External Audit & Supervisory Board Members as defined by the Companies Act,

Article 2-XVI. 3: Toru Tsuji, Fumio Sudo, Atsuko Nishimura, Terunobu Maeda, Shigeru Morichi, Kiwamu Miyakoshi and Kunitoshi Saito are independent directors in accordance

with the rules of Tokyo Stock Exchange and Nagoya Stock Exchange.

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012_0356501372908.indd 22 2017/08/10 9:59:09

Executive Officers

Chairman

President and Chief Executive OfficerYoshiyuki Murata

Executive Vice PresidentsKazuhiko Dai

Chief of Marketing & Sales Division (Integrated);Chief of Marketing & Sales (Civil Engineering) Division;In charge of Safety Administration

Junichi IkeguchiChief of Marketing & Sales (West Japan) Division

Shigeyoshi TanakaChief of Civil Engineering Division

Shigeyuki SakuraiChief of Business Administration Division

Masahiro SakaiDeputy Chief of Marketing & Sales Division (Integrated),Supervising Marketing & Sales (Building Construction) Divisions

Senior Managing Executive OfficersYoshinobu Shigeji

In charge of Marketing & Sales (Building Construction),Marketing & Sales Division (Integrated)

Katsuyuki KanaiChief of Urban Development Division

Tamotsu UmeharaChief of Tokyo Branch

Takeo HorinouchiChief of Marketing & Sales Promotion Division

Haruhiko KonoChief of Design Division

Shoji KondoChief of Nagoya Branch

Norihiko YaguchiChief of Architecture & Engineering Division (Integrated);Chief of Building Construction Division

Takao KanaiChief of Kansai Branch

Managing Executive OfficersKazuhiko Hombu

In charge of Technology;In charge of Energy & Environment

Masahiro OshimaDeputy Chief of Marketing & Sales (Civil Engineering) Division;In charge of Olympic Projects

Satoru TsutaeDeputy, in charge of Civil Engineering, International Operations Headquarters;Deputy Chief of International Marketing & Business Development Division, in charge of Civil Engineering

Takashi Yamauchi

Yoshitaka InoueChief of International Operations Headquarters

Yasushi YoshinariChief of Medical & Welfare Business Division

Tetsuya ShibayamaChief of Proposal & Solutions Division;In charge of Olympic Projects

Hiroshi ShirakawaChief of Yokohama Branch

Tsuyoshi NakanishiChief of Engineering Division

Masaharu OkadaChief of Marketing & Sales (Building Construction) Division III

Masao YoshikawaIn charge of Marketing & Sales (Building Construction),Marketing & Sales Division (Integrated)

Hiroshi SuzukiChief of International Marketing & Business Development Division

Takeshi KagataDeputy Chief, In charge of Civil Engineering, Kansai Branch

Jirou TaniyamaDeputy Chief of Civil Engineering Division;General Manager of Civil Engineering Department

Yoshiro AikawaChief of Marketing & Sales (Building Construction) Division II

Keiji HiranoChief of Corporate Planning Office

Masaaki ItoChief of Tohoku Branch

Tatsuhiko MatsuiChief of Taisei Technology Center

Hiroshi TsuchiyaChief of Marketing & Sales (Building Construction) Division I

Susumu MoritaGeneral Manager of Energy Business Strategy Department

Noriaki KonChief of Sapporo Branch

Tetsuya HanyuIn charge of Marketing & Sales (Building Construction),Marketing & Sales Division (Integrated)


012_0356501372908.indd 23 2017/08/10 9:59:09

Executive Fellows

Executive OfficersAtsuo Ogawa

In charge of Technology

Nobuyuki HayashiGeneral Manager of Design Department, Civil Engineering Division

Shimpei OguchiDeputy Chief of Marketing & Sales (West Japan) Division

Taku YamamotoIn charge of Marketing & Sales (International Building Construction), Marketing & Sales Division (Integrated)

Atsushi YamamotoDeputy Chief of Business Administration Division

Masatoshi YamakamiDeputy Chief, in charge of Civil Engineering, Tohoku Branch;General Manager of Civil Engineering Department

Kyo MuraiChief of Procurement Division

Shun KitanoChief of Safety Administration Division

Hiroshi KimuraChief of Chugoku Branch

Jo IwataChief of Chiba Branch

Fumihiko SudohChief of Kanto Branch

Yuichi KitaguchiIn charge of New National Stadium Project, Tokyo Branch

Hiroshi HaradaIn charge of Chuo Shinkansen Project, Tokyo Branch

Atsushi SuzukiChief of Mechanical & Electrical Division

Shunichi SonodaDeputy Chief of Marketing & Sales (Building Construction) Division III;General Manager of Marketing & Sales Department

Makoto Ohta General Manager of Construction Engineering Department, Civil Engineering Division; General Manager of International Projects Management Department

Yasumitsu SakuraiDeputy Chief of Architecture & Engineering Division (Integrated);General Manager of International Projects Management Department;General Manager of Profit Achievement Ratio (PAR) Management Section

Satoshi ImamuraChief of Nuclear Facilities Division

Toru InabaDeputy, in charge of Building Construction & Engineering, International Operations Headquarters

Yasushi Kamezawa Chief of Environment Division

Yoshihiro Teramoto Chief of Kyusyu Branch

Shinsaburo SawaDeputy Chief of Marketing & Sales (Building Construction) Division I;General Manager of Marketing & Sales Department

Shinji KawamuraDeputy Chief of Marketing & Sales (West Japan) Division

Masahiko OkadaGeneral Manager of Secretarial Department

Yoshio AbeDeputy Chief of Marketing & Sales (Civil Engineering) Division;General Manager of Marketing & Sales Department

Osamu HosozawaDeputy Chief of Design Division

Kazuyuki ShimamuraIn charge of Energy & Environment

Toshihiko TsukaGeneral Manager of Information Planning Department

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012_0356501372908.indd 24 2017/08/10 9:59:09

(FY)2014

471.0

■ Sales (Billions of Yen) ● Operating margin (%)

2015

455.7

7.07.011.111.1

2016

449.4

12.312.3

Overview of SegmentSales / Operating margin

● The figures include intersegment transaction.

Sales in the Civil Engineering segment decreased 1.4% year on year, to ¥449.4 billion reflecting lower sales in the Company and its consolidated subsidiaries, while operating income rose 8.8% to ¥55.1 billion due to an improvement in gross profit margin.

¥449.4 billion

Sales

(Down 1.4% YoY)¥55.1 billion

Operating income

(Up 8.8% YoY)

▶Operating margin: 12.3%

In the Civil Engineering Division, we have been making efforts towards challenges specified as: 1) production capacity expansion; 2) profitability enhancement; and 3) overseas business earnings stabilization. To expand production capacity, it is essential to secure and develop diverse human resources and allocate the right people in the right places. We seek to raise productivity by utilizing ICT equipment in CIM [cf. Column on the right-hand page], and introducing energy-saving and automation technologies. In addition, the Company has implemented specific measures aimed at reducing total working hours in an effort to achieve work-style reforms. While discussions have been underway within the government on the upper limit of overtime work, the construction industry has launched new initiatives designed to improve productivity and reform work styles. We work to boost productivity by distinguishing between things that should be changed and things that should not. In an effort to enhance our profitability, we bolster our procurement capabilities by maximally leveraging the Company’s size and devise price-competitive work implementation plans by deploying our technological capabilities. With regard to overseas business earnings stabilization, we established the International Project Management Dept., which implements thorough earnings management to stabilize earnings, in January 2017. We will continue to engage in order acquisition activities with a focus on regions and fields where our strengths can be leveraged, as well as focusing on human resource development with an eye on the future. Through the endeavors discussed above, we aim to become number one in more respects and achieve higher recognition and presence in the market.

The domestic market has continued to enjoy a boom, and Taisei Corporation has steadily been acquiring work orders, mainly for large projects such as the Linear Chuo Shinkansen Southern Alps Tunnel, facilities related to the Tokyo 2020 Olympic and Paralympic Games, and the Tokyo Gaikan Expressway. In addition, the Company is actively participating in electrical power-related work, such as restarts of nuclear power plants and thermal power plant projects, and national-level projects including post-earthquake reconstruction work. Overseas, the Japanese government is expanding major infrastructure export projects, and the Company will promote expansion of our overseas business to exploit these opportunities.

〈Opportunities〉A growing number of projects

requiring advanced technologies

An increasing amount of

construction work on energy

field projects, including restarts

of nuclear power plants and

thermal power plant projects

An increasing number of overseas

large infrastructure projects

〈Risks〉Production capacity decline due

to workforce shortage

Occurrence of an incident

that would have a significant

social impact

Opportunities and Risks

Executive Vice Presidents, Member of the Board; Chief of Civil Engineering Division

Shigeyoshi Tanaka

Civil Engineering

Aiming to Become Number One in More Respects and Achieve Higher Recognition and Presence in the Market

Looking Ahead and Key Strategies

Business Environment

Actively Participating in National-Level Projects and Contributing to Social Infrastructure improvement

Business Overview


012_0356501372908.indd 25 2017/08/10 9:59:09

Major Projects

Column

1

5

3 4

2

6

*CIM: Construction Information Modeling is designed to boost the efficiency of a series of construction production systems by introducing three-dimensional models from the investigation and design phases and interfacing them with three-dimensional models in each phase of construction and maintenance.

Diagram of T-CIM®

We developed a unique construction information modeling (CIM) system, enabling centralized management of all construction workImproving construction site productivity and taking measures to overcome workforce shortages are our most pressing issues, and we have achieved improvements in productivity, quality, and safety through the application of ICT and robotics. The Company developed T-CIM®, a unique construction information modeling (CIM*) system that integrates the construction system using information and communication technologies with three-dimensional models for use at our civil engineering work sites. We have introduced T-CIM® at several civil engineering work sites for earthmoving work and construction of dams and bridges from the current fiscal year, enabling us to implement centralized management of all construction work information.

1Yagiri Box Culvert Construction (No. 10) of Tokyo Gaikan Expressway (Matsudo-Ichikawa City, Chiba Prefecture) Client: Ministry of Land, Infrastructure, Transport and Tourism. Kanto Regional Development Bureau 2Tajiri Work for Tokyo Gaikan Expressway (Ichikawa City, Chiba Prefecture) Client: East Nippon Expressway Company Limited, Kanto Branch 3Outer Circular Highway (OCH) to the City of Colombo Project Northern Section 1 from Kadawatha to Kaduwela (Greater Colombo Urban Transport Development Project) Client: THE GOVERNMENT OF DEMOCRATIC SRI LANKA MINISTRY OF PORTS AND HIGHWAYS, ROAD DEVELOPMENT AUTHORITY 4Hitachi LNG Terminal (Hitachi City, Ibaraki Prefecture) Client: Tokyo Gas Engineering Solutions Corporation 5Land Preparation (First Phase) at the Area of Nobiru Northern Hills (Higashimatsushima City, Miyagi Prefecture) Client: Urban Renaissance Agency 6Construction of the Intake of Tunnel Outlet Facility in Redevelopment of Amagase Dam (Uji City, Kyoto Prefecture) Client: Ministry of Land, Infrastructure, Transport and Tourism. Kinki Regional Development Bureau

Photo courtesy: East Nippon Expressway Company Limited

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012_0356501372908.indd 26 2017/08/10 9:59:14


977.7

(FY)2014 2015 2016

7.57.5

1,017.2 1,015.4

2.42.45.65.6

Senior Managing Executive Officer, Member of the Board; Chief of Architecture & Engineering Division (Integrated); Chief of Building Construction Division

Norihiko Yaguchi

¥977.7 billion(Down 3.7% YoY)

¥73.3 billion(Up 30.1% YoY)


The Building Construction Division will work on four priority challenges: 1) strengthening of our production system; 2) enhancement of profitability; 3) complete elimination of accidental deaths and serious quality defects; and 4) stabilization of profitability in our overseas business. In particular, we are placing the utmost priority on the strengthening of our production system in the run-up to the peak period of construction work starting from the second half of the current fiscal year. We established the Productivity Promotion Dept. [cf. Column on the right-hand page] from the current fiscal year to make a company-wide effort to enhance productivity improvement technologies to expand production capacity, work on smooth starts and progress project management through front loading of projects, and promote strengthening the collaboration with Souyu-kai (organization set up for key suppliers). To achieve profitability enhancement, we will work to further improve procurement capabilities and production capacity, and promote the development of price-competitive work implementation plans. With regard to the complete elimination of accidental deaths and serious quality defects, we will work to eliminate accidental deaths by enhancing employees’ ability to identify danger and actively watching out for each other. In addition, we will steadily implement our quality management process so as never to cause serious quality defects. To achieve the stabilization of profitability in overseas business, we established the International Projects Management Dept. in January 2017. We strive to generate stable business earnings by conducting risk assessment of project prior to acceptance, thoroughly implementing profit management by using a new performance indicator, and ensuring implementation of process management at construction sites. In addition, we will enhance organizational strength and promote operational improvement and reform of our overseas business to develop the structure for healthy growth with a view to the post-Olympic period. We will work on the above-mentioned priority challenges and promote the development of next-generation technologies (planning technologies, work implementation technologies) going forward. In addition, we will proactively work towards reducing total work hours, which is one of the measures for work–style reforms, and promote the provision of guidance for encouraging enrollment in social insurance programs, for which the Company started strict implementation in April 2017. Taisei Corporation will further step up collaboration with group companies to enhance the total strength of the Taisei Group. Through this, the Company will build a production system to be passed on to the next generation and aim to become the number one player in the industry.

Construction work for national-level projects, large-scale redevelopment projects, and construction of accommodation facilities for the Tokyo 2020 Olympic and Paralympic Games are steadily underway, and our work order acquisition environment is projected to be favorable going forward. With the sharp rise in construction work volume that will occur mainly in Tokyo from the current fiscal year to the fiscal year 2019, our urgent task will be to strengthen our production system. With a view to the necessity of addressing the social issue of ensuring a stable power supply, we established the Power Plant Construction Planning Dept. from the current fiscal year, and will contribute proactively to the improvement of social infrastructure.

Working on Focused Challenges towards Achieving Further Growth and Seeking to Become the Number One Player in the Industry by Developing a Production System to be Passed Down to the Next Generation



Participating in National-Level Projects and Responding to Social Issues

Building Construction

Sales in the Building Construction segment declined 3.7% year on year, to ¥977.7 billion reflecting lower sales in the Company, while operating income jumped 30.1% to ¥73.3 billion due to an improvement in gross profit margin.



Sales Operating income

〈Opportunities〉Development of new original

technologies and enhancement of

application track record

Development of a new production

system and its succession to

future generation

〈Risks〉Production capacity potentially

deteriorating due to workforce

shortages

Losing opportunities to receive

orders due to occurrence of a

work-related accident or

quality defect



012_0356501372908.indd 27 2017/08/10 9:59:14

Newly established Productivity Promotion Dept. to address the urgent task of strengthening the production systemTaisei Corporation established the Productivity Promotion Dept. in the Architecture & Engineering Division (Integrated) with the aim of introducing a new production method and improving the productivity and working environment. In the Productivity Promotion Dept., we will work to further promote the introduction of ICT to construction sites, and reform production processes by developing production technologies that will enhance productivity through collaboration with other departments. To cite an example, the Productivity Promotion Dept. will collaborate with the BIM* Promotion Office, newly established in the Engineering Div., to further promote front loading of the incorporation of productivity improvement technologies from the design phase, as well as digital mock-ups.

Major Projects1

5 6 7

2

3 4

Column

*BIM: Building Information Modeling. It is a process of building three-dimensional computer models of buildings and utilizing the information obtained from model creation in the entire lifecycle process of buildings, including designing, construction and maintenance.

Digital mock-up of production facilities

1Sumitomo Fudosan Roppongi Grand Tower (Minato-ku, Tokyo) Client: Cooperative for Urban Renewal of Roppongi 3-chome East District 2BLUE HARBOR TOWER Minato Mirai (Yokohama City, Kanagawa Prefecture) Client: Okada Building Co., Ltd. 3Taichung Tiipao Condominium (Taiwan) Client: Run Long Construction Co., Ltd., Hontai Life Insurance Co., Ltd., Jaysanlyn Real-Estate & Development Co., Ltd. 4Okura House (Chuo-ku, Tokyo) Client: Chuo Building Co., Ltd. 5GINZA PLACE (Chuo-ku, Tokyo) Client: SAPPORO REAL ESTATE CO., LTD., Tsuzureya Co., Ltd. 6SAITAMA RED CROSS HOSPITAL (Saitama City, Saitama Prefecture) Client: JAPANESE RED CROSS SOCIETY 7Tsumura Shizuoka Plant (Fujieda City, Shizuoka Prefecture) Client: TSUMURA & CO.

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012_0356501372908.indd 28 2017/08/10 9:59:17


143.4127.6

(FY)2014 2015 2016

8.58.5 7.47.4

121.7

10.910.9Sales in the Real Estate Development segment fell 4.6% year on year, to ¥121.7 billion reflecting lower sales in the Company and its consolidated subsidiaries, while operating income expanded 41.1% to ¥13.3 billion due to an improvement in gross profit margin.


In central Tokyo, the boom in large development projects is continuing on the back of the nation’s infrastructure development for the Tokyo 2020 Olympic and Paralympic Games, as well as the Japanese government’s growth strategy involving the National Strategic Special Zones, among others. In the Urban Development Division, while tackling various challenges, we provide strong support for customers’ development plans and serve as developer to implement development projects.

Following the (tentative name) Vinata Towers Project [(Image) 6 on the right-hand page], Taisei Corporation is proactively working to enlarge our development areas in Southeast Asia to achieve continuous growth into the future. In addition, the Company will take on the challenge of new business fields such as area management [cf. Column on the right-hand page] and concessions*. Furthermore, the Company will take the initiative in the Group’s housing business, such as conducting contracted activities to promote fireproofing for areas with densely built timber housing, and respond to the requests of our customers and the needs of society by accumulating and utilizing yet higher levels of development skill.

Senior Managing Executive Officer; Chief of Urban Development Division

Katsuyuki Kanai Taisei Corporation has been involved in approximately 20% of all the nation’s city center redevelopment projects, the key field for urban redevelopment. In large private sector development projects, such as the (Tentative Name) Toranomon 2-10 Project [(Image) 1 on the right-hand page], for which construction work started in May 2016, the Company is serving as developer. We will continue to provide support to the promotion of operations in many areas centering on the Tokyo metropolitan area, and conduct large-scale development business by leveraging our know-how. In addition, we have a leading track record in PFI projects, a new method of developing public facilities. The Ehime Prefectural Central Hospital [(Image) 2 on the right-hand page] opened in December 2014. This is the fourth year that Taisei Corporation has been delivering management services for the facility since its opening. Considering that the long-term management of facility operation is essential to ensure stable earnings in the PFI projects, as well as projects in which Taisei serves as developer, we newly established the Property Management Business Dept. in April 2017, and will make further efforts for our property management business.

Promoting the Urban Development Business and Facility Administration Operations by Leveraging Know-How and Experience



New Businesses

Supporting Large-Scale Development Projects that Continue to Boom and Promoting Development Projects in which Taisei Serves as Developer

Taking on the Challenge of New Business Fields

*Concession: Refers to an arrangement in which a public-sector entity, such as a government entity, sells the operation rights for an airport or water supply business, for example, to a private-sector enterprise while retaining ownership. Concessions allow the central government or municipality to achieve a reduced funding burden for infrastructure maintenance and development, and provide private-sector enterprises with the commercial opportunity of running the infrastructure.

Real Estate Development ¥121.7 billion

(Down 4.6% YoY)¥13.3 billion(Up 41.1% YoY)



Sales Operating income

〈Opportunities〉Needs for reconstruction of aged

buildings constructed during

Japan’s high-economic growth era

Developing various development

plans by accumulating and

utilizing sophisticated

development skills

〈Risks〉 Investment in overseas

development projects

Deterioration in profitability of

projects due to spike in work costs



012_0356501372908.indd 29 2017/08/10 9:59:17

Contributing to Value Improvement in Urban Areas and Creating New Business Opportunities through Area Management16 companies and universities based in, or have sales bases in, Nishi-Shinjuku established the General Incorporated Association Shinjuku Subcenter Area Environmental Improvement Committee, which is promoting revitalization of the entire area, while making full use of roads and public open spaces. Through such area management, we will promote efforts to contribute to improving the value of the entire area, including buildings, while deepening cooperation with the administration and the community.

Joint Development

Development Overseas Real Estate Development

PFI

Redevelopment

This development project carried out by Taisei applies all of our expertise such as planning, designing, leasing and PM expertise. Employing cutting-edge seismic base isolation and environmental technologies, the building has a high occupancy rate.

This urban redevelopment project is in the area infront of Meguro Station where JR Yamanote Line and other lines link. After a group of companies including Taisei won the bid for the project (cooperation), we formed a consensus among landowners and leaseholders, and consulted with the administration with the aim of developing a “forest,” offices, commercial buildings, and residential buildings that are open to the local community.

This PFI project involves the provision of maintenance and administration services for Ehime Prefectural Central Hospital until March 2033. The project delivers high-quality hospital management services efficiently and consistently by leveraging the know-how and ingenuity of the private sector.

This PFI project involves the construction of a complex facility that houses the ward office as well as a library and community space, and the provision of maintenance and administration services for the facility for 20 years. Our distinctive building design and proposal for rejuvenating the community were evaluated highly.

(Tentative Name) Toranomon 2-10 Project

Ochanomizu Sola City

Ehime Prefectural Central Hospital

Meguro Station Front Redevelopment Project

Construction and Maintenance Service for the New Omiya Ward Office

(Tentative Name) Vinata Towers Project

Column

Community revitalization event in the Nishi-Shinjuku area

1

4

2

5

3

6

Taisei will acquire the office floors in the high-rise building constructed under the Hotel Okura Tokyo Main Building Reconstruction Project through a special purpose company (SPC) set up jointly with Hotel Okura Co., Ltd., etc. We will promote the office leasing business through the SPC.

Client: Hotel Okura Co., Ltd.Designer: Toranomon 2-10 Planning Design JVLocation: Minato-ku, TokyoScheduled completion: 2019

Client: Surugadai Development Special-Purpose CompanyDesigner: Taisei CorporationLocation: Chiyoda-ku, TokyoYear completed: 2013

Client: Ehime Hospital PartnersProject owner: Ehime PrefectureDesigner: Taisei Corporation – Nikken Sekkei JVLocation: Matsuyama City, Ehime PrefectureYear completed: 2014

Client: Meguro Station Front Area Urban Redevelopment Association

Designer: Taisei Corporation – Takenaka Corporation Design JV

Location: Shinagawa-ku, TokyoScheduled completion: 2017

Client: OMIYA CROSS POINT CO., Ltd.Project owner: Saitama CityDesigner: Kume Sekkei – Coelacanth K&H Architects –

Taisei Corporation JVLocation: Saitama City, Saitama PrefectureScheduled completion: 2019

This is a development project in Hanoi being undertaken jointly by Daiwa House Industry Co., Ltd. and Taisei. Under phase 1 of the project, a 256-unit serviced apartment is being constructed with Japanese expats as the main target.

Client: DT Development Vietnam LLCDesign and construction: VINATA INTERNATIONAL J/V

LTD. CO. (Overseas subsidiary)Location: Vietnam Scheduled completion: 2018 (stage 1)

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012_0356501372908.indd 30 2017/08/10 9:59:19

Contributing to the Formation of a Society Where People Can Live with Peace of Mind

TAISEI ROTEC CORPORATION has refurbished its asphalt mixtures plants in Fukuoka and Asahikawa into environmentally-friendly plants with consideration to energy saving and the surrounding environment. In addition, the company is conducting activities to extend pavement life through the development and application of “relaxphalt pavement” and the “inject method,” which feature high durability.

Representative Director and President

Yoshinori Nishida


Hiroyuki Hamanaka

http://www.taiseirotec.co.jp/english/

http://www.taisei-yuraku.co.jp/

Sales ¥93.8 billionNumber of employees 963

Established 1961

Sales ¥94.3 billionNumber of employees 1,358

Established 1971


Established 1963


Established 1965

Taisei-Yuraku Real Estate Co., Ltd. focuses on the renewal business for buildings and condominiums suffering from age-related degradation, with an eye on the upcoming stock-type society. We leverage our know-how cultivated in the real estate business, and our strength of being well-informed about buildings as their management company, and provide asset value-enhancing renewal services from energy-saving facility replacement and facility functionality improvements to design profile upgrading, in order to meet the diversifying needs of society.

Giving Consideration to the Environment and Contributing to Extending the Life of InfrastructureTAISEI ROTEC CORPORATION

Providing New Services and Added Value Based on the Stock-Type SocietyTaisei-Yuraku Real Estate Co., Ltd.

http://www.taisei-setsubi.jp/

TAISEI SETSUBI CO., LTD. devises creative solutions, while anticipating the needs of the times, and enables reduction of environmental load by generating energy through photovoltaic power generation and appropriate control of energy-saving equipment through BEMS. We will fulfill our social responsibility as an enterprise by seeking to achieve a “natural and earth-friendly environment” appropriate to the living environment.


Masahiro Kodama

Aiming to Remain an Enterprise Trusted by SocietyTAISEI SETSUBI CO., LTD.

http://www.u-lec.com/

TAISEI U-LEC CO., Ltd. has been engaged in the construction of wall-type precast concrete (PCa) condominiums since its foundation. The company’s PCa construction method is an environment-friendly construction method which enables reduction in the volume of veneer frames used by about 70% compared to the conventional method of construction. We aim to become a company continuing to contribute to society by spreading the use of the PCa construction method.


Takaaki Kobayashi

A Construction Company Creating Comfortable Residential SpaceTAISEI U-LEC CO., LTD.

Main Domestic Group Companies

Activities of Group Companies

Taisei Group companies share the Group Philosophy “To Create a Vibrant Environment for All Members of Society” and the Group Action Guidelines, and contribute to the formation of a society where people can live with peace of mind and good health.

Pavement and civil engineering

Real estate development and facility management

Construction of housing complexes

General building services construction

Rising construction demand for the Tokyo 2020 Olympic and Paralympic Games Full-scale launch of renewal work projects for expressways Risk of a decrease in production capacity due to workforce shortages owing to

low birthrate and aging society


An expanding renewal market due to aging deterioration in existing buildings. Growing energy-saving needs for becoming environmentally friendly Risk of a workforce shortage owing to a tightening labor market environment


Expansion of needs for measures to adapt to climate change Expansion of the renewal market due to the aging of existing building facilities Risk of a deterioration in production capacity due to a shortage of engineers

and skilled construction laborers


Expansion of demand for the construction of geriatric health services facilities with the aging of society Risk of a decrease in construction demand for rental condominiums due to a

population decline



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Established 1997


Established 1956

Sales ¥1.6 billion*Number of employees 83

Established 1984

http://www.seiwarw.co.jp/

Since its founding in 1956, SEIWA RENEWAL WORKS CO., LTD., while seeing its mission as contributing to building a safe social infrastructure, has been meeting the needs of society. Going forward, the company will seek to remain an enterprise that constantly contributes to society on the basis of its sophisticated skills and reliable quality, by leveraging its characteristics as a composite engineering company that has fundamental, machinery, environmental, and renewal business lines.


Makoto Imasaka

Contributing to Building a Safe Social InfrastructureSEIWA RENEWAL WORKS CO., LTD.

Since its founding in 1984, TAISEI (THAILAND) CO., LTD. has been engaged in construction of plants for Japanese companies, distribution warehouses, hotels, and commercial facilities. We meet customers’ needs by providing integrated services to meet their requirements in the entire construction work process, from the business planning stage and design and implementation to after-sales services, and deliver high-quality construction services. We will contribute to the development of society and industry in Thailand by providing the advanced technologies of Taisei Corporation.Representative Director and

President

Mutsuhiro Yanai

Providing High-Quality Construction Services by Leveraging the Total Strength of the Taisei GroupTAISEI (THAILAND) CO., LTD.

http://www.palcon.jp/

TAISEI HOUSING CORPORATION succeeded the philosophy and technologies of the wall type reinforced concrete housing “Palcon,” which was developed by Taisei Corporation, by applying its technologies to single-family house building, and strives to advance the penetration of houses resistant to earthquakes and other natural disasters. It has been 48 years since the market rollout of “Palcon” housing, and we will continue to contribute to society by providing valuable housing in which customers can live securely, safely, and comfortably over a long period of time. Representative Director and

President

Shinichi Hirajima

Contributing to Society by Building Safe and Comfortable HousingTAISEI HOUSING CORPORATION

Overseas Subsidiary

Vietnam VINATA INTERNATIONAL J/V CO., LTD.

Myanmar TAISEI MYANMAR CO., LTD.

China CSCEC-TAISEI CONSTRUCTION, LTD.

Philippine TAISEI PHILIPPINE CONSTRUCTION INCORPORATED

Indonesia PT. INDOTAISEI INDAH DEVELOPMENT

*January to December, 2016

Order-made individual housing construction

General engineering including foundation works

Thailand

Expansion of the renewal market due to aging of social infrastructure Risk of production capacity declining due to workforce shortages


Expansion of capital investment by Japanese companies due to economic recovery and improvement of the investing environment Risk of a downturn in the manufacturing industry, mainly in the automobile

industry, due to economic stagnation


Order increase due to the revitalization of the existing housing/renovation market Expansion of needs for products resistant to natural disasters, which occur

more frequently and are growing in intensity Risk of a decrease in new single-family house buildings due to declining

birthrate and aging society


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012_0356501372908.indd 32 2017/08/10 9:59:21

The Source of Taisei Corporation’s Value That Takes on Social Challenges through its Business Activities

“Technologies”

OUR STORY

To live up to the Taisei Group Philosophy of “To Create a Vibrant Environment for All Members of Society,” it is important to face social challenges squarely and resolve them firmly.The foundation of our technologies is our commitment not only to customers but also to end-users farther down the supply chain. Presented below are our prioritized themes and solution technologies we engage in each field to resolve social challenges.

Improving Quality and Work Site Efficiency by Using New Technologies and Distributing / Offering a Vision of Future Construction through Technological Innovation

Taisei Technology

Center

Managing Executive OfficerChief of Taisei Technology Center

Tatsuhiko Matsui

Undertaking Activities from Research and Development to Demonstration by Promoting the Expansion of FacilitiesOriginally created as the Technology Research Department in 1958, Taisei Technology Center has broadened the scope of its research in response to the needs of the times, and developed a number of ground breaking new technologies and construction methods primarily in the building construction and civil engineering businesses. Under the current facilities expansion plan, implemented in 2012, the Center has installed the Urban Net Zero Energy Building (ZEB) Demonstration Building, tsunami wave making systems, large seismic testers and the like, which now enable us to evaluate the performance of newly developed technologies. We will pursue the faster establishment of more Taisei Technology Center (Yokohama City, Kanagawa)

innovative new technologies through verification under various conditions, as well as distribute and offer a vision of future construction that is led by technological innovation to a broader spectrum of society through demonstrations and experiments. Among other things, toward the achievement of “Urban-Style ZEB®,” which is expected to contribute greatly to global warming prevention and energy solutions, we adopt cutting-edge lighting and air conditioning systems at the ZEB Demonstration Building within the Taisei Technology Center to advocate enhanced office worker comfort and a next-generation office for intellectual productivity improvements. The building has gained much attention since its completion, receiving more than 10,000 visitors domestically and internationally, including the then-Minister of the Environment Yoshio Mochizuki, and the Governor of Kanagawa Prefecture Yuji Kuroiwa. We currently conduct research in the fields of materials, structure, disaster resistance/prevention, environment, energy, ground, hydraulic engineering, biology and soil, and development in the field of advanced technologies such as automation, robot utilization and analysis technologies, as well as in the field of production technologies such as ICT/IoT/AI-based and BIM/CIM-based technologies.


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Creating New Value by Mobilizing Wisdom Inside and Outside the CompanyTo further accelerate an initiative to create value for the future, we are committed to open innovation activities. A team exclusively in charge of open innovation activities, formed in 2016 within the Taisei Technology Center, is now running its operations in full swing. Particularly in an effort to enhance quality, quantity, and speed in technology development, the team promotes business matching in which our needs are disclosed to the public in an extensive search of prospective alliance partners, and holds lecture meetings with outside experts with the objective of changing mentalities and sharing information inside the company. A website has been set up to gain more exposure to prospective alliance partners and to strengthen and expand Co-Creation networks. By combining the resources of all executives and employees (human resources/connections, information, technologies, values, ideas, agenda

Contributing to Productivity Improvements through Innovative Technologies Energy-saving and labor-saving construction could be considered one of the important challenges ahead in the construction business. Construction demand has shown the highest growth in recent years as a result of national-level projects such as restoration activities in disaster-hit areas, the Tokyo 2020 Olympic and Paralympic Games and national resilience, as well as the Linear Chuo Shinkansen project, which makes a labor shortage in the construction industry a serious issue at the moment. We therefore are proactively developing energy-saving and labor-saving technologies that contribute to more efficient construction. “T-Mark. Navi®” is a marking survey navigation system that achieves more efficient and labor-saving survey work. Based on a combination of an eyeglass-based wearable device and a dedicated surveying device, “T-Mark. Navi®” allows the user to perform surveys unaided in 40 minutes, which previously took a pair of workers an hour. “T-CIM®” is an independently developed CIM system for construction information integration, which integrates an

awareness, etc.) with those of the outside, the team operates so that we can bring a new relationship with the outside, learn new values, perspectives, and methodologies, import new ideas and flexibility, and cultivate an environment that creates sustainable innovation. In anticipation of moving one step beyond by considering how the construction industry will change and how it should be, the Taisei Technology Center will proactively work on advanced technology development in the new construction industry toward the realization of “TAISEI i-Innovation” that promotes productivity improvements in the entire construction production system using ICT, IoT, and AI technologies. Web See our website for more details of our Taisei Open Innovation

Laboratory (T. O. I. Lab) http://www.taisei.co.jp/oi/index.html

ICT-driven information-based construction system and a three-dimensional structure model on computer, centralizes various construction information, and organizes construction records automatically. In addition to the above, in automation and robot utilization technologies, an autonomous control-type unmanned construction system, “T-iROBO Series,” which can make its own decisions and work using multiple sensors equipped on the construction machine, has been developed to apply at construction work sites.

■ New Experiment Facilities Introduced under Taisei Technology Center Facilities Expansion Plan■Application of Large Fuel Cells to Smart Communities

In 2017 we will start demonstrations and experiments to apply electricity and heat, which are generated from large solid oxide fuel cells placed in the Taisei Technology Center, as energy for smart communities for the first time in Japan.

In January 2017 we launched “wind noise simulator” (Left) and “floor impact sound experiment facilities” (Right) operations to evaluate wind noise and the effect of countermeasures for floor impact sound for the first time in the industry.

Survey navigation system “T-Mark. Navi®” (Left)Autonomic cleaning robot “T-iROBO® Cleaner” (Right)

Promoting business matching in extensive search of prospective alliance partners

Wind noise simulator Floor impact sound experiment facilities


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Executive OfficerChief of Environment Division

Yasushi Kamezawa

Contributing to Achieving a Sustainable Society as a Pioneer in Providing Environmental Solutions

Taking on Various Social Challenges Based on an “Environmental” ApproachIn 1997 Taisei Corporation set up a department to deal exclusively with environmental matters before any other peer companies. Founded in 2009, the current Environment Division has two functions: “To respond to societal demand” and “to promote environmental management”, not only from within the boundaries of civil engineering and building construction, rather from an environmental perspective. In an effort to achieve a low carbon society as part of the function “to respond to societal demand,” we pursue the “penetration of market-oriented ZEB” based on the performance record of ZEB Demonstration Building, which became Japan’s first-ever single building to achieve zero annual energy consumption. With large next-generation fuel cells installed at the Taisei Technology Center to accommodate energies between multiple buildings, we are also working toward the achievement of a smart community that would reduce carbon emissions for an entire area, envisioned to be the size of a city block, in our technology development and sales activities. Furthermore, the “T-Root® Construction Method,” which was developed for soft ground, is employed in construction of large solar power plants in tsunami-hit areas in the Tohoku Region in Japan. In the biodiversity conservation field, we are committed to developing “Ikimono (living creatures) Concierge®” (see p.71), which has received acclaim from many of our external parties, including receiving the Good Design Award, as well as a new plant selection tool, “Mori (forest) ConciergeTM.” In the field of contamination countermeasures for soil and ground water to achieve a recycling society, a technology to visualize contamination status in 3D has been developed in preparation for i-Construction. We are also actively involved in national projects such as decontamination work, interim

■JS Hakata Watanabe Building (To be completed in 2018)

In March 2017, the building became the first-ever tenant office building in Japan to earn a “ZEB Ready*” certificate and the top grade (★★★★★) in the Buildings Energy-Efficiency Labelling System (BELS) led by the Ministry of Land, Infrastructure, Transport and Tourism.

Environment Division

■Pioneering Initiatives for Soil and Ground Water Solutions

To visualize the contamination level of soil, 10m lattices are color-coded at one meter depth intervals (Left). A technology to reduce the volume of contaminated soil by extracting cesium using an alkaline agent (Right).

storage activities, and final disposal of decontaminated soil for the future in Fukushima Prefecture. In respect of the function “to promote environmental management,” we were accredited by CDP, an international NPO, in its evaluation of CO2 emissions reduction initiatives as an A-lister, or the top level among 500 Japanese companies. We believe our efforts across the supply chain involving group companies and the disclosure of highly reliable environmental data with third-party endorsement have been well received. Climate change could have a serious impact on the ecosystem and human society over the years to come. Based on our belief that the greatest mission in our time is to leave a beautiful Earth for future generations, we have announced “TAISEI Green Target 2020/2050” (see p.68) as the medium- to long-term environmental targets. Toward achieving those targets, we will make every effort across the board.

*A building with more than 50% energy savings compared to modern standard buildings (see p.18)


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Senior Managing Executive OfficerChief of Design Division

Haruhiko Kono

Creating and Supporting a Sustainable Society; Providing for “What-Ifs” with Constantly Forward-Looking Design Technologies

Providing Maximum “Safety and Security” for the World in All AgesThe Design / Construction Administration Division was created in 1925. Its catalyst was the 1923 Great Kanto Earthquake, based on the idea that as a construction company we should design and construct in a consistent way to fulfill social responsibilities. The Division has since evolved side by side with the Company’s growth, and now has established a structure that satisfies increasingly complex and diversified societal needs, with highly professional teams of interior design, environmental design, urban planning, BIM promotion, etc. Earthquake response is one of our most important themes in Japan, the land of earthquakes. The Design Division has visited disaster sites at times of major earthquakes to check damage, assess building availability, and plan recovery measures. Based on such experience, we have developed our aseismic / damping / base isolation technologies, for example, improving the earthquake resistance of nonstructural elements (ceilings etc.) and base isolation at semiconductor factories before any other peer companies, and deployed them in various projects in an effort to support customers’ business continuity from a technological standpoint. For instance, for the business continuity at an existing super high rise buildings in operation that meet earthquake resistance standards, we adopted “the T-RESPO construction method” at Shinjuku Center Building, and confirmed its effectiveness as a long-period ground motion countermeasure at the time of the Great East Japan Earthquake. For this method, we have developed the “T-S Oil Damper” (switching-type oil damper for base isolation) applicable to any building, whether it is new or existing, and offering earthquake countermeasure technologies according to customer needs. We also promote energy-saving designs to achieve ZEB. Starting from this year, in accordance with the suitability

■ T-RESPO Construction Method (Damping Construction Method for Existing Super High Rise Buildings)

A long-period ground motion countermeasure method using high-performance oil dampers for existing super high rise buildings, which enables construction work at occupied buildings without having to reinforce columns or beams.

Design Division

assessment under the “Building Energy Saving Act,” buildings that fail to meet energy efficiency standards can no longer be constructed. The Buildings Energy-Efficiency Labelling System (BELS) is also gradually prevailing. With environment and energy awareness rising among customers, the Design Division will play an increasingly important role. In 2016 we registered the Construction Administration Department, specializing in construction administration, as an office of first-class architects, and boosted its independence and expertise in an effort to respond to the needs of the times and societal demand. We believe the designer’s mission is always to accept challenges presented by customers, discover the essence, and deliver optimal solutions. Being aware of this mission, each one of us aims to enhance our design capabilities and to become a creative and intelligent group that can unite as a team to demonstrate our capabilities.

■ ZEB Demonstration Building’s Annual Energy Balance

Urban-style ZEB’s characteristics include achieving single-building-based net zero balance of annual energy consumption in urban areas with many constraints, such as limited hours of sunlight. We have successfully saved significant amounts of energy by combining technologies and developing new technologies.

0

0

Typical building

ZEB Demonstration Building

Net zero balance

Production

100%

–75% 25% 25%

Consumption

Ultimate energy saving Power generation

Annual energy consumption

Annual energy production


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Executive Officer Chief of Nuclear Facilities Division

Satoshi Imamura

Contributing to Stable Power Supplies by Providing Greater Safety and Security at Nuclear Power Facilities

Removing Anxiety over Nuclear Power Plants Using Reliable Technologies, from Safety Assessments to Decommissioning WorkAfter the Great East Japan Earthquake, the principal business activities of the Nuclear Facilities Division, whose history has spanned a half century since its foundation in 1968, now include restart of nuclear power plants, decommissioning of the Fukushima Daiichi Nuclear Power Plant, and decontamination and interim storage related operations. Under the new regulatory requirements, which were carried out in 2013, a decision to decommission six more reactors in nuclear power plants around Japan was made and full-scale decommissioning operations began. Decommissioning operations are long-running business activities requiring nearly 30 years to complete, from the preparation phase including contamination status research to dismantling of buildings, etc. It is important for safety operations in decommissioning to reduce human exposure to radiation. In addition to this, technologies to research contamination status, to dismantle buildings safely, and to reduce, classify, and control radioactive waste are needed. We believe the use of ICT is also essential to perform these tasks. We will streamline remote control and volume reduction work, and control waste by using ICT in an effort to develop decommissioning technologies with greater safety and security. One of the critical challenges is countermeasures for contaminated water and soil generated from the Fukushima Nuclear Accident. Due to the massive volume, the government leads the promotion of recycling soil removed during decontamination work and of technology development for recycling and volume reduction. We are working on reducing levels of radioactive materials in decontaminated soil using an

■Decontamination Support System “T-DECOS”

We have developed a system that can control huge volumes of information by entering data into tablet PCs at decontamination work sites and transmitting it to offices, which contributes to expedited work via ICT.

An analysis model that reflects rock classifications accurately is created to precisely analyze stress and strain to be generated on rocks and weak layers when earthquakes occur, and assess the stability of foundation ground for nuclear facilities and peripheral slopes in detail.

Nuclear Facilities Division

■ Assessment Technology for Ground and Structure Stability during Earthquakes

alkaline cleaning method through technology demonstration business activities for the Ministry of the Environment. An initiative toward improving the safety of nuclear power generation is needed more than anything else. According to the government’s basic energy plan, nuclear power is considered a key base load power and its 2030 target ratio is set at 20-22%, which indicates the necessity of the restart of nuclear power plants. We are therefore committed to safety assessments for restarts. We are also working on new safety assessment methods, as nuclear power plants need to be continuously assessed for improved safety after the restart. Furthermore, with new projects being planned for nuclear power facilities other than nuclear power plants, and new fast reactors, etc., we will actively participate in such projects from the planning stage, commit to their realization, and contribute to a stable power supply.

Nuclear reactor building

Turbine building


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Managing Executive OfficerChief of Engineering Division

Tsuyoshi Nakanishi

In Response to Changing Times, Increasing Added Value and Contributing to Sophistication of Industries

Achieving Optimal Features for Users in Both Hardware and SoftwareEngineering at a construction company is intended to add value by achieving various goals in the most appropriate form at facilities, or in businesses where people, materials, equipment, machinery, information, etc. are intermingled and compounded. To this end, it is necessary to consider buildings, resources, businesses, environment, impact on society, and other matters according to the needs of the times and incorporate them in a balanced manner. Our engineering field activities started in 1968. Initially, we primarily resolved customer problems regarding the optimal configuration of production equipment, material handling equipment, and about saving energy, based on building use units such as factories and logistics facilities. Subsequently, however, in a bid to make facilities the way they inherently should be, we ventured to deal with software issues, including appropriate facilities operations, and streamlining logistics systems inside and outside facilities. The engineering field has expanded in scope and now includes production facilities, logistics facilities, aquariums, energy and infrastructure facilities, hospitals, information systems, etc. Especially, in life science fields such as pharmaceuticals and food, we accommodate customer requests in all phases including the planning of production facilities, design and construction, production equipment, material handling equipment, and the planning of information systems. Customer problems and requests have become further diversified in recent years, thus incorporating business expansion, business continuity, energy saving, and environment consciousness into the requirements for facility construction and for commercialization has become important. We are contributing to the stable supply of high-quality, safe and secure goods by dealing with these diversified needs in the planning and proposal stages. As for business continuity

■ Constructing High-Quality Pharmaceutical Production Facilities

■ Our Efforts on Technology to Speed Up Supply Chain Recovery

Our record of over 40 years in constructing pharmaceutical production facilities is the best in the industry. We are working together with our customers to apply our experience and knowledge. Through appropriately automated production processes, we speed up production and save labor in an effort to achieve enhanced productivity.

Our automatic hi-rack vibration control device and seismic isolator can control the drop of goods and products following earthquakes so that shipment recovery will be expedited. We can calculate optimal configuration requirements using simulation analysis.

Engineering Division

needs after an earthquake, for example, we offer a proposal from the planning stage to prevent the collapse of cargo in automatic high rised warehouses by combining various base isolation and vibration control technologies. To energy and labor saving needs, we grasp operations properly and propose from the planning stage to introduce a system of streamlining transport inside facilities. Regarding aging facilities, we review a number of options, including rebuilding, extension, repairs, and integration based on a diagnosis of the facilities, and provide economical consulting services for reconstructing in accordance with the latest sanitation codes. We are aware that the mission of the Engineering Division is to understand problems from the user’s point of view in an ever-evolving society, and find optimal solutions by integrating a number of relevant functions. We will continue to support the building of facilities and businesses with higher added value.


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2 3

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1(Tentative Name) Vinata Towers Project, Vietnam 2Outer Circular Highway (OCH) to the City of Colombo Project Northern Section 1 from Kadawatha to Kaduwela (Greater Colombo Urban Transport Development Project), Republic of Sri Lanka 3Taiwan Coal Landing Pier 4Indus Highway Project (N-55) Kohat Tunnel and Access Roads, Pakistan 5Singapore Downtown Line (907) 6Bosphorus Strait Crossing Railway Tunnel, Turkey 7New Doha International Airport Terminal Building, Qatar 8The Palace Condominium, Taiwan

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9Djibouti Palace Kempinski Hotel ⓾Sri Lanka Southern Expressway ⓫Jimah Power Station, Malaysia ⓬Hanoi, Vietnam No.2 Terminal Building Noi Bai International Airport ⓭Taichung Cheng Ching Hospital, New Building (Jing Yi Building), Taiwan ⓮Taiwan Highwealth Construction, New Taipei City, Linkou District Linlin Section Condominiums ⓯Bangkok Ring Road Cable-stayed Bridge, Thailand ⓰Almas Tower, Dubai

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1The Otemachi Tower 2Honokuni Toyohashi Arts Theater PLAT 3Todoroki Athletics Stadium, Main Stand 4TOKYO SQUARE GARDEN 5YOKU MOKU AOYAMA SHOP 6TSURUMI Children's Hospice 7Earth Environmental Service Co., Ltd. Saito Research and Training Institute (T-CUBE) 8Midosuji Utility Conduit 9Namikata National LPG Stockpiling Base ⓾Box Culvert Construction of Ken-OExpressway (Okegawa-Kitamoto District No.1) ⓫Ishikari LNG storage tank ⓬⓭G.IToya

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Major Projects (Domestic Projects)


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Under its Taisei Group Philosophy of “To Create a Vibrant Environment for All Members of Society,” the Taisei Group strives to build safe and secure local communities and makes efforts to resolve social challenges in earnest, thereby contributing to building a sustainable society.

Corporate Social Responsibility of the Taisei Group towards Realizing Sustainability

The Taisei Group CSR p.43

Focus on Stakeholder Dialogue p.47

Governance Report p.49

Social Report p.59

Environmental Report p.67

Table of Comparisons for p.75ISO 26000 and GRI Guidelines

Taisei Group Philosophy Taisei Spirit

Action Guidelines for Taisei Personnel and the Taisei Group as a Whole Individual Policies

OverallManagementPerspective

OverallPrinciples of

Conduct

Taisei Spirit


To Create a Vibrant Environment forAll Members of Society

Objectives to be Pursued by the Taisei Group (Goals)

Taisei Group Medium-term Business Plan

"Active and Transparent Culture""Value Creation" "Evolution of Tradition"

Key concepts for the Taisei Group to pursue the Taisei Group Philosophy

( 1 ) Cultivating an open corporate culture( 2 ) Securing a pleasant working environment( 3 ) Respect for fundamental human rights and diversity( 4 ) Creating a vibrant environment for all members of society( 5 ) Striving to create value( 6 ) Pursuing customer satisfaction( 7 ) Ensuring and improving safety and quality( 8 ) Respect for traditions( 9 ) Promoting partnerships with subcontractors and suppliers(10) Promoting environmental conservation and creation(11) Communication with local communities(12) Conduct in the international community(13) Appropriate disclosure of information(14) Fulfilling social responsibilities

●Quality Policy●Health and Safety Policy●Environmental Policy●Taisei Agenda●Declaration of Biodiversity Preservation●Policy on the Protection of Personal Information●Policy on Business Continuity in Times of Disaster

●Information Disclosure Policy●Risk Management Policy●Policy on Intellectual Property●Procurement Policy●Human Rights Policy●Fundamental Corporate Governance Policy●Fundamental Policy to Enhance Operational Compliance Systems●IR Policy●Social Media

TAISEI VISION 2020

*Observing the Charter of Corporate Behavior of the Nippon Keidanren


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CSR & Our Structure of Values and Policies

In 2010, the Taisei Group rebuilt its structure of values and policies. All officers and employees of the Taisei Group share the Taisei Spirit, and carry out corporate activities based on the Group Action Guidelines and Individual Policies in the Overall Principles of Conduct, and the long-term vision and Medium-term Business Plan in the Overall Management Perspective. We will contribute to the sustainable development of society by offering new value to our stakeholders through solving social issues.

To Share the Group’s Common Philosophy and Values

Taisei Corporation’s CSR Committee (5 board members and officers) deliberates CSR activities and obtains the implementation status of initiatives.

The CSR Promotion Section provides training and guidance on CSR, and exchanges opinions with the various departments and Group companies to promote CSR activities.

System for Promoting CSR Diagram of CSR Promotion System

Group Companies

The CSR Procurement Committee＊1

Corporate CommunicationDepartment of

Corporate Planing OfficeCSR Promotion Section

Each Department

President CSR Committee

The Souyu-kai＊2

The Taisei Group CSR

In FY2011, we identified CSR issues and KPIs derived from both our Overall Management Perspective including our Medium-term Business Plan, and our Overall Principles of Conduct including our Group Action Guidelines and have been striving to improve them through a PDCA (plan-do-check-act) cycle.

In FY2016, we partially revised our KPIs in accordance with changes in the global social environment and in our business activities.

To identify important factors, the Taisei Corporation reevaluated the CSR issues and KPI identified with reference to SDGs and ISO 26000 from the dual perspectives of the importance to stakeholders and the importance of the impact on Taisei Group management.

Revision of KPI

Process for Identifying Important Factors (Materiality)

The CSR issuesKPI

ISO26000

Overall Principles of Conduct

Action Guidelines for Taisei Personnel and

the Taisei Group as a WholeIndividual Policies

Overall Management Perspective

Taisei Group Medium-term Business Plan

TAISEI VISION 2020

PDCA for KPI

Importance of impact on Taisei Group management

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●Respect for human rights, prohibition of discrimination●Development of local communities●Promotion of compliance●Thorough risk management●Promotion of supply chain management●Thorough management of labor safety and welfare●Support for employment and career formation●Dialog with and information disclosure to stakeholders●Response to environmental risks●Creating a workplace where it is easy to work●Conservation of biodiversity and contributions to the environment

●Development of a safe and secure society●Ensuring quality and improvement of technology●Technological development and corporate governance for the next generation●Cultivation of next generation engineers●Promotion of diversity●Establishing corporate governance●Protecting intellectual property●Proper management and use of information●Mitigation of and adaptation to climate change●Sustainable use of resources

Compliance Committee

Central Safety Committee

Risk Management Committee

Technology Committee

Environment Committee

Central Labor Affairs Committee etc.

*1 Composed of the Corporate Planning Office, Safety Administration Division, Building Construction Division, Civil Engineering Division and Procurement Division*2 The organization of the Taisei Corporation’s main cooperating companies

Members of the Board


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CSR Management

In order to secure the trust of society and at the same time to develop as a sustainable corporation, the Taisei Group regards swift, accurate, fair and transparent decision-making in management as the fundamental idea for corporate governance.

At the Taisei Group, we create a corporate climate with good communication and respect for basic human rights and diversity. We do not condone discrimination based on ethnicity, religious beliefs, gender, nationality, social position, disability, or sexual orientation. It is a matter of basic policy to respect cultures and customs and to comply with local laws at our overseas businesses.

The taisei Group is formulating Environmental Policies aimed at the formation of an environmentally friendly society. We will determine objectives and measures for taking action, strive for “preservation and creation of the environment” and promote “advanced environmental business.”

Taisei’s basic concept on our Health and Safety Policy is that all work-related accidents are preventable.

Safety must be our top priority as a member of the construction industry. To this end, we call for a safety first posture in the workplace, endeavoring to provide a safe, anxiety-free working environment.

Taisei Group recognizes corporate ethics and compliance as the fundamentals of our business operations. We not only make this clear in our Action Guidelines to Taisei personnel and the Taisei Group as a whole, but also engage in a variety of measures to encourage self-awareness of each and every executive and employee on this matter.

The Taisei Group aims to contribute to society as a whole and to develop sustainably as a corporate group.

For such purposes, we will continue to provide our customers and society as a whole with ensured quality in our products and services as well as such technologies as necessary for the resolution of social issues.

Taisei Group, as a good corporate citizen, will build sound relationships with local communities and promote dialog and harmony with society. We will also contribute to the development of society as a whole.

■ Developing the business foundation Establishing corporate governance for the next-generation

■ Developing the business foundation Promoting diversity management to support further active roles of women,

foreigners,and elderly Nurturing and improving human resources

■ Developing the business foundation Establishing corporate governance for the next-generation

■ Actively contributing to improving infrastructures Participating in development of the major infrastructures for public

security, safety and convenience Participating in projects for a steady supply of electricity■ Promoting the development of nextgeneration technologies Upgrading technologies for earthquake-related problems■ Improving the total strength of the Taisei Group Strengthening joint cooperation among the Group for urban housing

renewal and development of new renewal technologies for infrastructures

■ Actively contributing to improving infrastructures Actively contributing to earthquake disaster reconstruction projects■ Establishing next-generation business models in the focused fields Promoting introduction of smart communities in large-scale redevelopment

projects, etc.

ISO 26000 and CSR Activity Report

1. Organization Governance

3. Consumer Issues

5. Human Rights

7. The Environment

2. Fair Operating Practices

4. Community Involvement and Development

6. Labor Practices

G p.49

S p.59

E p.67

“Overall Principles of Conduct” Basic Conceptual Approaches (1)-(14)


“Overall Principles of Conduct” Basic Conceptual Approaches (10)


“Overall Principles of Conduct” Basic Conceptual Approaches (9)(12)-(14)

“Overall Principles of Conduct” Basic Conceptual Approaches (4)-(7) “Overall Principles of Conduct” Basic Conceptual Approaches (8)(11)

“Overall Management Perspective”

Medium-term Business Plan (2015-2017) Management Goals


Medium-term Business Plan (2015-2017) Management Goals“Overall Management Perspective”










The Taisei Group implements CSR management in line with ISO 26000, the international standard for corporate social responsibility at organizations. We will promote the Overall Principles of Conduct and Overall Management Perspective in an integrated manner and we will aim for the sustainable development of society and to improve corporate value through our business activities.

■ Strengthening domestic construction projects Improving construction capabilities Strengthening safety management systems■ Developing the business foundation Utilizing ICT

■ Actively contributing to improving infrastructures Actively contributing to earthquake disaster reconstruction projects■ Promoting the development of next-generation technologies Upgrading environment & smart community related technologies■ Establishing nextgeneration business models in the focused fields Strengthening biodiversity offset management proposals

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ESG ISO26000 CSR issues KPIs 2014 2015 2016 results / targets 2017targets

G

1. Organization Governance

● Corporate governance and internal controls

● Participation rate of training for the Taisei Group philosophy and policies

87.9 94.1 96.3 / 100 100

● Risk management ● Rate of participation in the Large-Scale Disaster Drill (%)

100 100 100 / 100 100

2. Fair Operating Practices

● Promotion of compliance ● Compliance training participation rate (%) 92.3 90.8 100 / 100 100

● Intellectual Property protection, management and Utilization

● Number of training regarding intellectual property rights (times)

32 30 22 / 30 20

● Information security Measures ● Number of times education in information security implemented in all companies*1 (times)

19 26 16 / 15 14

● Number of major information security accidents*2 (cases) 0 4 0/0 0

● Supply Chain Management ● Average implementation rate of companies where CSR activity survey was conducted (%)

ーー 62.6 / 70.0 70.0

S

3.Consumer Issues ● Ensuring Quality and Improving Customer Satisfaction

● Obtaining rights to technologies that solve social issues

● Customer satisfaction (Civil Engineering) (%) ーー 80 / 100 100

● Customer satisfaction (Building Construction) (%) ーー 90 / 100 100

● Number of patent applications filed (cases) 297 307 304 / 290 250

● Number of patent rights registered (cases) 249 192 232 / 200 200

● Development and providing technologies to solve social issues

● Number of media announcements regarding technical development and application projects (cases)

61 58 59/70 70


● Contributions to local communities ● Expenditures on social contribution activities (millions of yen)

ーー 653 / 1,266 1,100

5. Human Rights ● Respect for human rights and diversity ● Rate of attendance at human rights training (%) 100 93.8 93.8 / 100 100

● Rate of employment of handicapped persons (%) 2.07 2.08 2.05 / 2.00 2.00

● Number of female managers (people) 39 53 62 / 53 70

● Number of female engineers (people) ーー 584 / 578 610

6.Labor Practices ● Creating a pleasant workplace ● Turnover rate of employees within 3 years of hiring*3 (%) 6.90 4.00 5.0 / ー 4.5 or below

● Rate of paid leave utilization (%) 32.4 34.6 37.3 / 35.0 40.0

● Average overtime hours per month (hours) ーー 38.4 / 35.0 35.0

● Rate of return to work after childcare leave (%) 93.8 100 100 /9 5 95

● Rate of taking childcare leave by males (%) ーー 42.9 / 100 100

● Toward human Resource skill development

● Training hours per person (hours) 43.8 44.6 44.7 / 43.0 43.0

● Improving of the Health and safety Standards ● Number of fatal accidents (cases) 4 2 1 / 0 0

E

7.The Environment ● Mitigate and Adapt to Climate Change ● Improve reduction rate of CO2 emissions at the operation stage of buildings (%)

37.5 41.7 38.9 / 35 or above 37 or above

● Improve reduction rate of CO2 emissions at the construction stage on building construction sites and civil engineering sites (%)

56.8 52.7 51.9 / 45 or above 47 or above

● Effectively Utilize Resources ● Decrease construction waste final disposal (%) 4.8 4.7 3.5 / 4.0 or below 4.0 or below

● Conserve Biodiversity ● Promote biodiversity related technologies (cases) ーーー 30 or above

● Reduce Environmental Risks ● Non-occurrence of environmental accidents (cases) ーーー 0

● Improve electronic manifest diffusion rate (%) 91.6 93.9 94.7 / 90 or above ー

● Reduction of environmental impact by supply chain

● Rate of green procurement (%) 36.1 28.7 30.8 / 30 or above ー

● Promote Development of Technologies ● Promote media presentations on research, development and promotion of environmental technologies (cases)

41 39 30 / 20 or above 20 or above

● Promote Environmental Activities ● Promote adoption of ZEB (Zero Energy Building) (cases) ーーー 10 or above

Taisei Corporation KPIs (FY)

*1 and 2 are the totals for our 8 major Group companies.*3 The turnover rate of new graduates in general and expert positions within 3 years of hiring


014_0356501372908.indd 45 2017/08/10 10:11:17

Group Company KPIs

TAISEI ROTEC CORPORATION (FY)


G 2. Fair Operating Practices ● Promotion of compliance ● Compliance training participation rate (%) 100 100 100 / 100 100

S

3. Consumer Issues ● Maintenance and improvement of quality ● Ratio of achievement of target score in construction evaluation (number achieved / total number) (%)

43.0 50 42.8 / 50 50

6. Labor Practices ● Creating a pleasant workplace ● Rate of taking refreshment leave (Acquisition time limit 2 years) (%)

53.2 88.2 89.5 / 100 100

● Improvement in health and safety standards ● Frequency rates*1 0.5 0.3 0.81 / 0.5 or below 0.5 or below

E 7. The Environment ● Sustainable resource usage ● Number of times training for prevention of industrial waste accidents was implemented (times)

ー 9 9/9 9

TAISEI U-LEC CO., LTD. (FY)


G 2. Fair Operating Practices ● Promotion of compliance ● Compliance training participation rate (%) ー 97.2 100 / 100 100

S

3. Consumer Issues ● Thoroughgoing quality control ● Rate of return of customer questionnaires (%) 81 87 72 / 75 80

6. Labor Practices ● Thoroughgoing occupational safety management system

● Number of fatal accidents (cases) 0 0 0 / 0 0

● Frequency rates*1 0.00 0.55 0.60 / 0.7 or below 0.7 or below

E7. The Environment ● Sustainable resource usage ● Rate of recycling of construction waste (%) 96.8 98.2 95.9 / 98 or above 98 or above

● Rate of use of Electronic Manifest System (%) 99.4 99.4 99.6 / 98 or above 98 or above

TAISEI HOUSING CORPORATION (FY)


G1. Organization Governance ● Risk management ● Rate of participation in the Large-Scale Disaster Drill (%) 100 100 ー / 100 100

2. Fair Operating Practices ● Promotion of compliance ● Compliance training participation rate (%) 100 100 100 / 100 100

S

3. Consumer Issues ● Improvement in customer satisfaction ● Customer satisfaction surveys (promoter survey) (%)

95 95 97 / 100 100


● Contributions to local communities ● Number participating in social responsibility activities (people)

20 23 20 / 20 20 or above

E7. The Environment ● Response to climate change ● Rate of use of Electronic Manifest System (%) 99.2 98.3 99.4 / 99.5 99.5

● Sustainable resource usage ● Rate of mixed waste in construction waste (%) 10.8 11.8 11.5 / 12 12

Taisei-Yuraku Real Estate Co., Ltd. (FY)


G1. Organization Governance ● Risk management ● Rate of participation in the Large-Scale Disaster Drill (%) 100 100 100 / 100 100

2. Fair Operating Practices ● Promotion of compliance ● Participation rate for e-learning on compliance (%) ー 100 100 / 100 100

● Activities for information security ● Rate of implementation of Information security measures (%) 100 100 100 / 100 100

S 6. Labor Practices ● Toward skill development ● Participation rate for training (%) 98.6 99.0 99.8 / 100 100

E7. The Environment ● Provision of environmentally friendly technologies ● Rate of reduction of electrical power usage (office) (%) 8.4 8.1 8.2 / 1.5 0.1

● Number of projects proposing improvement in energy efficiency at customers’ facilities (cases)

47 65 81 / 40 50

*2

TAISEI SETSUBI CO., LTD. (FY)


G2. Fair Operating Practices ● Promotion of compliance ● Compliance training participation rate (%) 100 100 100 / 100 100

● Activities for information security ● Number of major information security accidents (cases) 0 0 0 / 0 0

S 6. Labor Practices ● Thoroughgoing occupational safety management system

● Frequency rates*1 0.99 0.00 0.56 / 0 0

E7. The Environment ● Promotion of technological development ● Percentage of energy efficiency proposals to customers (%) 98.7 70.8 56.2 / 100 100

● Comprehensive environmental activities ● Attendance rate of environmental education (%) 87 95.7 82.4 / 100 100

SEIWA RENEWAL WORKS CO., LTD. (FY)


G1. Organization Governance ● Risk management ● Rate of participation in the Large-Scale Disaster Drill (%) 100 100 ー/ 100 100

2. Fair Operating Practices ● Promotion of compliance ● Compliance training participation rate (%) ー 100 100 / 100 100

S

6. Labor Practices ● Creating a pleasant workplace ● Numbers taking nursing leave and caregiving leave (people) 2 3 4 / 4 5

● Thoroughgoing occupational safety management system

● Number of labor accidents (4 or more days off work) (cases) 1 1 2 / 0 0

3. Consumer Issues ● Development and providing technologies to solve social issues

● Number of technical proposals submitted (cases) 11 11 10 / 12 12E 7. The Environment

*1 Frequency rates are total of figures from January 2015 to December 2016.*2 FY2013 is used as the base year until FY2016 and FY2015 is used as the base year from FY2017 and beyond.

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014_0356501372908.indd 46 2017/08/10 10:11:17

SG

Looking ahead ten years from now, it would be expected that Taisei Corporation start working proactively on risks related to human rights risks in supply chain.

Promoting Corporate Governance that Exhibits the Good Relationship between Sustainability of Companies and Society

In the construction industry, where vast

numbers of skilled workers are

employed via many layers of

subcontractors, companies will be held

responsible for understanding the

actual working conditions of those

workers throughout their entire supply

chain, even at the subcontractor levels.

NPOs both in Japan and abroad are stepping up their oversight on

human rights issues to prepare for the Tokyo 2020 Olympic and

Paralympic Games. Therefore, it is important that companies

demonstrate their understanding of these issues, and take steps to

address them. One of the first actions a company can take is to check

whether there are any human rights abuse cases or potential risks in

their supply chains, as these would attract negative international

attention. For example, the heavy use of migrant workers or foreign

intern programs would raise concerns about fair labor and wages.

Procuring wood products from overseas would also raise concerns

about illegal logging and land rights issues in developing nations.

Taisei Corporation’s human-centric philosophy of, “Putting my work

on the map”, is a driver for its employees’ engagement to make

concerted efforts in creating legacies together in Japan and overseas.

My suggestion would be that Taisei make the most of this philosophy,

and share this human-centric core value to expand business in a way

that advances a social mission all can take pride in.

Corporate governance efforts by

Japanese companies tend to be

focused on organizational

frameworks, such as Board of

Directors’ meetings and the general

meeting of shareholders. However, I

believe what is important is the

content of corporate governance and,

in particular, the content of the corporate governance policies.

With today’s rapidly changing society, there will possibly be

significant differences in thinking as to how a general contractor

should be run going forward, compared to that up to now.

In dramatically changing environments, companies need to have

policies and long-term goals that clearly show how they are going to

respond to changes in social situations and maintain sustainability.

In this respect, corporate governance demonstrates the good

relationship between corporate sustainability and society.

Corporate governance is also extremely important for companies

from the viewpoint of making a commitment to medium- and

long-term targets, and strategies and directions.

Taisei Corporation has established long-term targets for 2050 to

adapt to climate change. In addition to these, I expect the Company to

formulate broad long-term targets, including responses to climate

change, and contribute to the building of a sustainable society.

Toshihiko GotoChief executive officer, Sustainability Forum Japan; Director and Supreme advisor, Japan Sustainable Investment Forum; Board member, Global Compact Network Japan, etc.

Serves as chair and member of multiple committees, including national committee member for ISO/TC207, SCI, SC4; member of the judging committee for the Environmental Communication Awards; convener of the working group to develop a platform for disclosing environmental information.

Keiichi UshijimaMr. Ushijima joined Hitachi, Ltd. In 2002, and was responsible for managing CSR / Sustainability Strategy for the Hitachi Group since 2005. He promoted the integration of CSR and management strategy, and worked hard to realize the Company’s philosophy and Group vision. Since 2014, Mr. Ushijima has been the Japan Area CCaSS Leader at EY Japan, to conduct research and advise on incorporating sustainability concepts into global business practices.

CCaSS Leader and Managing Director, EY Japan

Keiichi UshijimaChief Executive Officer, Sustainability Forum Japan

Toshihiko Goto

The United Nations has adopted sustainable development goals (SDGs) to be achieved by 2030. During

these changing times, we sought the opinion of experts who have profound insight into CSR regarding social

challenges that Taisei Corporation is expected to work on going forward and their social background.

Stakeholder Dialogue

Business Activities and a Sustainable Society

Focus on


014_0356501372908.indd 47 2017/08/10 10:11:17

E CSR

Expecting a Contribution to the Achievement of the UN’s Goal for “Building Resilient Infrastructure”

Making Contributions by Leveraging the Strengths and Technologies in the Environmental Field

In 2015, the United Nations adopted

the Paris Agreement and the

sustainable development goals

(SDGs) to be achieved by 2030,

providing the major directions and

course of action for human society.

SDGs have set 17 goals and 169

targets, and many of the challenges

are interrelated. “Build a resilient infrastructure”, one of the goals,

involves not only building of infrastructure but also a wide range

of challenges, such as poverty, climate change, and biodiversity.

Therefore, it is important to contribute to the achievement of goals

by taking a comprehensive view of two or more goals. For areas

that often experience abnormal weather conditions due to climate

change, for instance, disaster-prevention measures and regional

community support will also be important tasks. SDGs have set a

slogan: “Leave no one behind.” I expect Taisei Corporation to work

to contribute to the achievement of SDGs with an eye on

“transforming the world,” a common idea underlying SDG’s 17 goals.

Following the introduction of the

Stewardship Code, ESG investment

has been increasing rapidly. As a

result, investors, such as pension

funds and asset managers, are more

actively engaged in dialogue with

companies than before. Of the

environmental (E), social (S) and

governance (G) criteria, I think the urgent task for Taisei Corporation,

operating in the construction industry, is to address environmental

issues.

In conducting dialogue with investors, companies need to

proactively disclose what kind of value they can deliver to society,

and with what kind of technologies. Technologies for preserving

natural capital, in particular, lead to earning high marks from

investors. Preserving forests, securing water, and building

infrastructure resistant to extreme weather conditions, such as

floods caused by climate change, are becoming increasingly

important challenges with a view to the global environment going

forward, and it is expected that there will be increasing cases where

Taisei Corporation, with its many environment-related technologies,

will need to play active roles. I expect that Taisei will formulate

long-term targets and lead the way in the industry in efforts to solve

social challenges including environmental issues through the

construction business and build a sustainable society.

Mariko KawaguchiMs. Kawaguchi Joined Daiwa Securities Co., Ltd., in 1986, and served in 2010 as General Manager for corporate social responsibility (CSR) in Daiwa Securities Group Inc.’s Corporate Communication Department. She returned to the Daiwa Institute of Research in July 2011, and became a chief researcher, focusing on environmental, social and governance (ESG) investment, CSR, and ethical consumption, and is also a board member of Global Compact Network Japan, the chief executive and secretary general of the Sustainable Investment Forum Japan, a councilor of Plan Japan, and a chartered member of the Securities Analysts Association of Japan.

Kaori KurodaFollowing a career in the private sector, Ms. Kuroda worked for the Center on Japanese Economy and Business at the Columbia University School of Business and The Asia Foundation Japan Office, before assuming her current post in 2004. She also served as a Japanese non-governmental organization (NGO) expert for developing ISO 26000 (ISO Standard for Social Responsibility), a member of the Sustainable Development Goals (SDGs) Promotion Roundtable Meeting, and a councilor of Sustainable Development Solutions Network (SDSN) Japan.

Executive Director, CSO Network Japan

Kaori KurodaChief Researcher, Daiwa Institute of Research

Mariko Kawaguchi

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Taisei Corporation (the “Company”) has established this Fundamental Corporate Governance Policy*1 in order to achieve sustainable development and improvement in the mid- to long-term value of the Company and its subsidiaries and affiliates (collectively, the “Taisei Group”) in accordance with the philosophy of the Taisei Group, being "to create a vibrant environment for all members of society" (the “Taisei Group Philosophy”) and the so-called “Taisei Spirit”, which embodies our commitment to “Active and Transparent Culture”, "Value Creation" and "Evolution of Tradition."

In line with the basic policy, the Taisei Corporation’s Board (including three External Members of the Board) gives its undivided attention to important management decisions and the supervision of corporate affairs. In addition, the Company has established several committees of the Board, and introduced a system of Executive Officers. In addition, the Audit & Supervisory Board (including four External Audit & Supervisory Board Members), operating independently of the Board and the operating divisions, works in close collaboration with the Accounting Auditors and Auditing Departments, the in-house Auditing Department, to implement independent and effective audits and to strengthen the auditing system across the whole Group.

At Taisei Corporation, the Board has established a “Basic Policy for Development of a System for Ensuring Appropriate Business Operations”*2 to ensure the credibility of financial reporting and systems for conducting operations in an appropriate and efficient manner as a Group. Through these systems, we will deliver improved risk management and compliance.

The Company implemented a range of measures in FY2016, such as organizing two training sessions led by a lawyer on the topic of “Responsibilities and Roles of Executive Officers.”

■ Basic Policy for Governance and Management Systems

■ Promotion of Internal Controls

ISO26000 Organization Governance

Corporate Governance and Internal Controls

To spread and consolidate the Group Philosophy while connecting it to social demands and in-house initiatives, we have operated annual e-learning courses about the Group Philosophy since FY2011. In FY2016, after reconfirming the significance and composition of the Group Philosophy, we conducted a training course on the theme of the relationship between improvements in corporate value required by ESG investment and the Group Philosophy.

Spreading and Consolidating the Taisei Group PhilosophyCorporate Planning Department, Corporate Planning Office

KPIsParticipation rate of training for the Taisei Group philosophy and policies

96.3%

Foundations for Sustainable Development

Internal controls on financial reporting based on the Financial Instruments and Exchange Act are recognized as one of the most important issues for a corporation. We have set up the internal systems including daily monitoring to ensure the credibility of the financial reporting disclosed to the public.

The effectiveness of the system is evaluated by the Audit Department and audited by KPMG AZSA LLC. The results are disclosed in the Internal Control Report and in the Audit Report of Internal Controls. We will fulfill our social responsibility as a corporation by continuing to ensure the effectiveness of these internal controls.

In order to continue to operate the internal control systems relating to financial reporting in a sound manner, we are also publishing messages from the President, implementing e-learning, and other campaigns to raise awareness among officers and employees.

In FY2016, Taisei Corporation conducted an evaluation of the effectiveness of the Board by means of self-evaluation by the Members of the Board and Audit & Supervisory Board Members, followed by deliberations by the Board with reference to an overall evaluation by the External Members of the Board and a third-party opinion from a lawyer.

The results of the evaluation indicated that the Board is functioning effectively overall, that proposals were accurately explained and deliberated, and that the comments of External Members of the Board and Audit & Supervisory Board Members were taken into account. A desire for discussion regarding the state of Group governance and medium- to long-term management strategy were among other opinions noted.

In light of this evaluation, the Company will work to further enhance the operations of the Board.

■ Ensuring Credibility of Financial Reporting

■ Effectiveness of Board of Directors

➡ Please refer to p.52 for Risk Management and p.55-56 for Compliance.Please refer to http://www.taisei.co.jp/english/profile/Fundamental_Corporate_Governance_Policy.pdf for Fundamental Corporate Governance Policy at Taisei Corporation and theCorporate Governance Report submitted to the Stock Exchange.

Ｗｅｂ

*1 Formulated in November 2015 *2 Formulated in May 2006. Final revision in April 2015.


015_0356501372908.indd 49 2017/08/10 10:23:03

Group Companies

Appoint

Audit

Support

Collaborate

Internal Audit

Audit

Appoint / Supervise

Prior Consultation and Reporting

Appoint Appoint

Report / AdvicePresident and Chief Executive Of�cer

Collaborate

Colla

bora

te

Colla

bora

te

Operating DivisionOperating Division Operating Division

General Meeting of Shareholders ❶❶

Accounting Auditors❼❼

Audit & Supervisory Board Members’ Department ❺❺

Audit & Supervisory Board Members / Audit & Supervisory Board ❹❹ Members of the Board / Board ❷❷ Committees of the Board❸❸

Operations Committee❽❽ Special Committee❾❾Auditing Department❻❻

The Company shall endeavor to dispatch the convocation notice of its General Meeting of Shareholders at least three weeks prior to the scheduled date of such General Meeting of Shareholders in order to provide its shareholders time to sufficiently consider the agenda of such General Meeting of Shareholders and exercise their voting rights appropriately. In addition, prior to dispatching each notice, the Company shall announce electronically the information relevant to such General Meeting of Shareholders through the TDnet system and its official website.

❶ General Meeting of Shareholders (held on June 29, 2017)

The Board, entrusted by the shareholders, shall pursue activities for the common benefit of the Company and its shareholders, and shall be responsible for maintaining an efficient and effective corporate governance structure to facilitate the growth of the Company in a sustainable manner and improve its corporate value in the mid- to long-term.

For the purpose of fulfilling the responsibility described in the preceding paragraph, the Board shall exercise its supervisory function of the Company's overall operating activities, thus ensuring appropriateness, fairness, and transparency for the management, and shall make decisions regarding the execution of material business decisions as provided for in the laws and regulations, the Articles of Incorporation, the Board Regulations, and the Application Standards for the Board Regulations of the Company.

Nomination of a prospective Member of the Board and election of an Executive Officer shall be determined by the Board after the completion of deliberations by the Executive Personnel Committee established within the Board.

At least two (2) of the Members of the Board shall be Independent External Members of the Board in order to ensure that the independent and objective oversight of the execution of the Board’s operations may be effectively carried out.

❷ Members of the Board / Board (convened 13 times in FY2016)

For the purpose of expediting deliberations and decision-makings by the Board, the Company has established the following committees within the Board: 1) the Executive Personnel Committee responsible for deliberating on the personnel related matters of the Members of the Board and Executive Officers; 2) the Remuneration Committee responsible for deliberating on the remuneration of the Members of the Board and Executive Officers; 3) the Finance Committee responsible for deliberating on the potential acquisition and holding of significant assets; 4) the CSR Committee responsible for deliberating on matters to enhance the entire Group's CSR-based business management.

❸ Committees of the Board

As an entity independent of the Board and the Operating Divisions, and in accordance with the Audit Policy established by the Audit & Supervisory Board, the Audit & Supervisory Board Members audit the performance of the Member of the Board including attending the meetings of the Board and hearing of reports on business conditions from the Members of the Board.

The Audit & Supervisory Board Members and the Chief Executive Officer, the Auditing Department and the Accounting Auditors hold regular meetings to arrive at mutual understanding and to improve the effectiveness of the audits.

❹ Audit & Supervisory Board Members / Audit & Supervisory Board (convened 14 times in FY2016 )

We have set up a range of operations committees including the Technology Committee, the Central Safety Committee, the Environment Committee, the Risk Management Committee, the Central Labor Affairs Committee, and the Overseas Business Strategy Committee to deliberate matters that involve consultations with the President.

❽ Operations Committee

We have set up the Compliance Committee chaired by an external expert as a Special Committee to respond to consultations with the President and we endeavor to reinforce the promotion of compliance.

❾ Special Committee

In order to assist the Audit & Supervisory Board Members in the performance of their duties, the Audit & Supervisory Board Members’ Department has been set up independently of the Board as a dedicated organization to support the Audit & Supervisory Board Members with the collection of appropriate information and other tasks.

❺ Audit & Supervisory Board Members’ Department

Based on the annual auditing plan, the Auditing Department also conducts internal audits of administrative and management systems, as well as the legality and rationality of the management of corporate affairs at all in-house departments and Group companies.

❻ Auditing Department

The Accounting Auditors submit reports on the audit plan and the audit results to the Audit & Supervisory Board, the Accounting Department and other internal control departments as needed.

To ensure the external accounting auditors conduct fair and appropriate audits, the management of the Company, Audit & Supervisory Board Members and the Auditing Department shall have meetings on a regular and as-needed basis, and exchange their opinions with the external accounting auditors. Further, the Board shall respond appropriately if external accounting auditors detect dishonest practices and request that appropriate action be taken, or indicate errors or problems.

❼ Accounting Auditors

Governance system TAIS

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Remuneration for the Members of the Board is determined from a comprehensive perspective that includes the scale, content, and performance of our business, as well as individual job specifications and responsibilities. Based on a resolution passed at the 146th Annual General Meeting of Shareholders on June 27, 2006, the sum total of monthly remuneration for the Members of the Board shall not exceed ¥70 million. Based on a resolution passed at the 134th Annual General Meeting of Shareholders on June 29, 1994, the sum total of monthly remuneration for Audit & Supervisory Board Members shall not exceed ¥12 million.

Further, where remuneration for the Members of the Board is concerned, the system of remuneration shall reflect performance and will be determined by the Board after deliberation by the Remuneration Committee, which carries out preliminary reviews ahead of board meetings, while remuneration for Audit & Supervisory Board Members shall be determined upon consultation with the Audit & Supervisory Board.

■ Remuneration for Officers

Amounts of Remuneration and Others Paid to Members of the Board and Audit & Supervisory Board Member

Major Activities of External Members of the Board and External Audit & Supervisory Board Members

Appointment of External OfficersIn order to improve corporate governance, Taisei Corporation appoints

seven external officers (External Members of the Board and External

Audit & Supervisory Board Members). All seven officers meet the

standards for independence determined by stock exchanges and are

registered as independent officers based on the regulations for listing

marketable securities on the Tokyo Stock Exchange.

Classification Name Major activities

Member of the Board Toru Tsuji

He attended all the board meetings held in the current fiscal year. Based on the deep insights obtained from his experience as a manager in a different industry and from his neutral position and view as an external member of the board, he offered useful opinions to the Company’s management in order to establish an internal control system and strengthen corporate governance.

Member of the Board Fumio Sudo

He attended 12 out of a total of 13 board meetings held during the current fiscal year. Based on the deep insights obtained from his experience as a manager in a different industry and from his neutral position and view as an external member of the board, he offered useful opinions to the Company’s management in order to establish an internal control system and strengthen corporate governance.

Audit & Supervisory Board Member Terunobu Maeda

He attended all of the board meetings and audit & supervisory board meetings held during the current fiscal year. He offered his opinions as and when appropriate based on his broad knowledge of finance and accounting.

Audit & Supervisory Board Member Shigeru Morichi

He attended 12 out of a total of 13 board meetings held in the current fiscal year and 13 of a total of 14 audit & supervisory board meetings held during the same period. He offered his opinions as and when appropriate based on the deep insights obtained from his experience as a university professor.

Audit & Supervisory Board Member Kiwamu Miyakoshi

He attended all of the board meetings and audit & supervisory board meetings held during the current fiscal year. He offered his opinions as and when appropriate based on the deep insights obtained from his experience as a police officer.

Audit & Supervisory Board Member Kunitoshi Saito

He attended all of the board meetings and audit & supervisory board meetings held during the current fiscal year since assuming the position of external audit & supervisory board member at the 156th Annual General Meeting of Shareholders on June 29, 2016. He offered his opinions as and when appropriate based on the deep insights obtained from his experience at the Board of Audit of Japan.

CategoryTotal

External Members of the Board and External Audit & Supervisory Board Member

Number of Payees Amount Paid

Number of Payees Amount Paid

Member of the Board 10 582 2 26

Audit & SupervisoryBoard Member 6 108 4 45


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At Taisei Corporation, we have formulated a Risk Management Policy *1 and built systems to implement risk management across the whole company in order to respond to risk escalation following changes in the business environment.

In terms of handling risk management, we identify and select risks that influence business activities every year. Depending on their importance, we classify them into categories such as “important company-wide risk” or “risk within the jurisdiction of head office”. As well as preparing countermeasures, we also implement pragmatic risk management by clarifying supervisory roles and jurisdictions among the departments.

Specifically, information on incidents and accidents with the potential to have a serious impact on the management of the corporation is centralized at the CRO*2 Secretariat. We implement effective risk management across the whole company including measures to prevent any reoccurrence by sharing this information with the Risk Management Committee and the Risk Management Council.

Taisei Corporation has established the Policy on Business Continuity in Times of Disaster*3 to meet its responsibilities as a general construction company supporting the infrastructure for economic activities. We aim to become a company earning the trust of society by contributing to business continuity at central and local governments and corporations while maintaining our business functions in time of disaster.

The Company has recently enhanced bases to serve as backup locations in case head and branch offices are damaged in a disaster in order to further ensure solid base functions in time of disaster.

At head office, we strengthened our disaster response capabilities by enhancing our employee dormitory “Premier Hatsudai” and other facilities and setting them up as new backup locations for head office.

In addition, we update our Business Continuity Planning (BCP) annually in order to fulfill the duties noted above, including reinforcement of our crisis management system overseas in FY2015, and acquiring new certifications related to the BCP (Certification of Organizations Contributing to National Resilience).

Thanks to these efforts, we were able to swiftly respond to requests for reconstruction and supplies from our business partners during the Kumamoto Earthquake that occurred in April 2016.

■ Company-Wide Risk Management ■ Initiatives for Business Continuity Planning (BCP)

Risk Management

Premier Hatsudai Delivery of supplies after the Kumamoto Earthquake

President

CRO Secretariat

Head Of�ce Branch Of�ces

Risk Management Committee

Risk Management Council

平時

CRO

Branch Of�cesRisk Management Promotion Committee

Head Of�ceRisk Management Promotion Committee

Incident / accident responseCountermeasures and Prevention of Reoccurrence

➡ Please refer to the business risks on p.84 for the main issues that may have a major impact on investor decisions.

Please refer to http://www.taisei.co.jp/english/profile/Risk_Management.pdf for the Risk Management Policy and http://www.taisei.co.jp/english/profile/Business_Continuity.pdf for the Policy on Business Continuity in Times of Disaster.

Ｗｅｂ

Company-Wide Risk Management System

TOPICSAcquired Newly Launched “Certification of Organizations Contributing to National Resilience”

Taisei Corporation acquired the “Certification of Organizations Contributing to National Resilience (Resilience Certification)” in the first round of a newly launched government program that recognizes and supports outstanding disaster prevention and mitigation measures by private-sector companies. A total of 44 companies acquired the program’s first certification.

The certification is granted to business operators who support the advancement of national resilience and take active business continuity measures in its promotion. Taisei Corporation received certification in recognition of work through its BCP and other initiatives.

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*1 Formulated in September 2004 *2 CRO: Chief Risk Management Officer *3 Formulated in November 2005


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IR Policy

1. Fundamental policy for communications and meetings with shareholders and investors

The IR Section is the contact point for requests for communications and meetings with

shareholders and investors, and, as a general rule, an appropriate officer(s) and

employee(s) selected by the officers specified in sub-section 2(1) (the “Responsible

Officers”) shall communicate with such shareholders and investors as appropriate. In

such instances, participation of the management of the Company in any communications

or meetings will be considered if it is necessary based on the nature of the request.

2. Guidelines for the Implementation of the IR policy

(1) Nomination of and the Responsible Officers

(2) Policies for inter-departmental cooperation of the Company to facilitate communications and meetings

(3) Methods of communicating with shareholders and investors other than communications and meetings

(4) Appropriate reporting of the communications and meetings with shareholders and investors

(5) Policy for the management of insider information in communications and meetings


Stakeholder Dialog and Information Disclosure

To deliver sustainable development and to earn the trust of society as a corporation, it is vital to make timely and accurate disclosures to stakeholders concerning important information about corporate activities. Taisei Corporation established the Information Disclosure Policy*1 and stated principles for ensuring appropriate information disclosure and transparency in the basic policies of corporate governance. These policies form the basis for our practice of timely and appropriate information disclosure.

In order to achieve sustainable growth and improve corporate value in the medium- to long-term, Taisei Corporation established the IR Policy*2 regarding structures and initiatives to promote constructive dialog and discussions with shareholders.

To make the dialog with shareholders and investors more constructive, the opinions and content of our discussions with stakeholders are fed back to the management ranks. We also carried out IR activities overseas for the first time last year.

We strive for fair information disclosure via our website where we publish explanatory material with commentary, summaries of the President’s speeches and the main question and answer sessions (Japanese and English) in addition to the Medium-term Business Plan and materials distributed at results briefings.

We also strive to promote constructive dialog through business report briefings by the President and question answer session at the annual general meeting of shareholders, the main venue for important dialog with shareholders.

In addition, we disclose information to overseas investors in English in our annual reports and on our English website.

In order to further deepen understanding of the corporate

■ Information Disclosure Policy

■ Dialog with Shareholders and Investors

TOPICSImplementation of First IR Activities OverseasTaisei Corporation carried out its first IR activities overseas last year, with the President personally visiting overseas institutional investors and holding meetings with institutional investors from London and Edinburgh. Dialog at the meetings covered a wide variety of topics, from the outlook for Japan’s construction market after the Tokyo 2020 Olympic and Paralympic Games and the problem of the shortage of skilled construction workers, to shareholder returns.

We will continue to deepen our dialog with a broad range of shareholders and investors, including continued IR activities overseas.

Please refer to http://www.taisei.co.jp/english/profile/Disclosure.pdf for Information Disclosure Policy.

Ｗｅｂ

activities at Taisei Corporation, we also report on key business and ESG (Environment, Society, Governance) initiatives on the shareholder newsletter.

http://www.taisei.co.jp/english/index.html

*1 Formulated in May 2006 *2 Formulated in November 2015


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Stakeholder Engagement

Major Stakeholder Responsibilities of Taisei Corporation Opportunities for Dialog Related Pages

Shareholders, Investors

Improve financial health and raise corporate value● Raise corporate value● Secure stable profits and appropriate returns● Disclose timely and appropriate corporate information● Implement appropriate corporate governance and internal

controls

● General meeting of shareholders● Publish the Taisei Circle shareholder newsletter, the TAISEI CORPORATE

REPORT, TAISEI ANNUAL REPORT, Corporate Governance Report (once a year respectively) ★● Organize results briefings (twice a year), teleconferences ★● Carry out IR activities overseas (once a year)

p.53

p.53

Clients, End-Users

Creating a safe, secure, and comfortable society● Provide good-quality, safe and secure construction

products and related services● Support customer business continuity at times of disaster● Provide appropriate information about construction

products and related services● Manage customer information appropriately

● Conducted customer satisfaction survey with 77.3% response rate (Building Construction), 100% implementation rate for construction projects (Civil Engineering)

● TAISEI QUALITY activities ● Publish WEB.LIBRARY.TAISEI, the Taisei information magazine, and

solutions for earthquake countermeasures on Taisin Net ★● Organize step up forums on healthcare management, seminars on

earthquake resistance ★● Publish TAISEI CORPORATE

p.59

p.59

p.57

Suppliers (cooperating companies, specialist subcontractors)

Sustainable harmony and benefit● Fair and impartial transaction● Collaborate and cooperate toward productivity, safety

improvement and environmental protection● Improve working conditions at construction sites

● Organize CSR Procurement briefings● Conduct CSR Procurement survey● Cooperate with the Taisei Health, Safety, and Environment Cooperation Association● Conduct compliance training for specialized contractor owners (conducted at all 12 branches in Japan in January 2017)● Conduct compliance training for new employees of Souyu-kai member

companies (once a year/38 participants in FY2016)● Distribute the Information Security Pocket Book, the Human Rights Handbook ★● Free use of personal computer security diagnostic website ★● Taisei Occupational Health and Safety Management System (TAISEI OHSMS)

p.58p.58p.65

p.55

p.55

p.65

Employees

Self-realization by putting my work on the map.● Sustain and secure employment● Respect for human rights and diversity● Provide a pleasant working environment● rain and utilize human resources

● Corporate Ethics Helpline● Consultation desks (mental health, nursing care)● Implement training● Consultation between labor and management (7,592 persons)● Taisei Occupational Health and Safety Management System (TAISEI OHSMS)● Employee satisfaction surveys for union members (every 2 years, 2016 evaluation result: 82.1%)

p.62-64p.55p.62-64p.62-64p.62-64ーp.65

The Environment, Society, Future Generations

Capacity building*● Support, dialog, and cooperation for activities aimed at

resolving social issues● Cooperation in social contribution areas● Create employment● Build good relations with local community● Pay taxes

● Guided tours of the Technology Center and construction sites● Conduct dialog● Jointly hold Satoyama Preservation Project with Metropolitan Tokyo, NPO

environmental research associations, and Tokyo Greenship Action (twice a year)*● Taisei Corporation Public Trust of Funds for Natural and Historic Environments ★● Operating Galerie Taisei ★● Establishing the Taisei Foundation ★

p.71

p.61p.61p.61

Opportunities for Dialog with Major Stakeholders

TOPICSDeepening Ties with Souyu-kaiSouyu-kai, the organization of our main cooperating companies, which originated as Harusame-kai at its launch in 1917, counts 691 companies among its members as of March 2017.

The Souyu-kai Convention was held at the Hotel Okura Tokyo in February 2017 to celebrate the 100th anniversary since the establishment of Souyu-kai and to build strong cooperative relationships for the future. Approximately 200 people attended from Taisei Corporation, including Chairman of the Board Takashi Yamauchi and President Yoshiyuki Murata, along with some 400 Souyu-kai members.

In his address, President Murata said that he would continue to place great value on the relationship between Taisei Corporation and Souyu-kai, and that he hoped to see the Taisei Spirit of “Active and Transparent Culture,” “Value Creation,” and “Evolution of Tradition” realized in each branch and worksite.

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*Capacity building: An activity to form, improve, and build organizational capabilities and basic capacity.

Please refer to http://www.taisei.co.jp/ (Japanese) for items with ★ such as WEB.LIBRARY.TAISEI and Taisin Net. Ｗｅｂ


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Organization Description

Taisei Corporation

● Publish the Compliance newsletter (13 times a year). The themes● Implement e-learning (4 times a year)

Group company

● Organize conferences for staff with responsibility for legal affairs at ten Group companies in Japan (once a year)

● Guidance on KPI establishment to six companies in Japan

Specialized contractorsSouyu-kai

● Compliance training at the Safety Conference*4 (once a year / 12 branch offices)● Promote CSR procurement (see p.58)

ISO26000 Fair Operating Practices

A Corporation Trusted by Society

In FY2016, we used the e-learning format to organize four compliance training courses for all officers and employees on the topics of Fraudulent Conduct Related to Contracts and Construction, Violation of the Antimonopoly Act, Fraudulent Accounting, and Information Leaks. We have achieved a participation rate of 100%.

Improvement in Compliance AwarenessCompliance Promotion Section, General Affairs Department, Business Administration Division

KPIs

Promotion of Compliance

The Group Action Guidelines for the Taisei Group state that in order to fulfill its social responsibilities, the Taisei Group shall adhere to laws and regulations, etc. (laws and ordinances, bylaw, administrative guidance, customs and other social rules, and various company rules and regulations).

The guidelines also state that the company must act in good faith and fulfill contracts and promises with customers, suppliers, or the local community in all sincerity. This is the basis of compliance for all officers and employees of the Taisei Group.

As indicated in the diagram below, each department at Taisei Corporation has deployed managers, promoters, and implementers to install the in-house compliance promotion system and to strengthen compliance based on the opinions and recommendations of the Compliance Committee.

In order to raise awareness of compliance, Taisei Corporation systematically implements education and training for all officers and employees, as well as specialized contractors.

We also endeavor to strengthen group compliance by organizing periodic conferences for staff who are responsible for legal affairs at the domestic Group companies as a system for information sharing and exchange of opinions regarding issues related to legal affairs.

At Taisei Corporation, we have set up the Corporate Ethics Helpline, a system for whistle-blowing and consultation where acts contravene laws and ordinances or the Group Action Guidelines. We have established consultation desks in-house and at an external organization (a law firm). Based on the Whistleblower Protection Act, all information about the whistleblower is treated as confidential and any adverse action as a direct result of any whistle-blowing is prohibited. Since April 2016, we are accepting anonymous tips in order to nip a wide range of illegal activities in the bud.

■ Compliance Policy and Systems ■ Raising Awareness of Compliance

■ Whistle-blowing and Consultation SystemAdministrative Structure

Implementation Structure

Head Office Business Administration Div.

Head Office Branches

Division CP Manager(Chief of Division)Division CP Promoter

(General Manager In Charge of Administration)

CP Implementers*3 (All Department General Managers)

All Executives and Employees

President

CP General Manager(Chief of Business

Administration Division)

CP General Promoter(General Manager of

General Affairs Department)

Secretariat

CP*1 Committee

CP Promotion Section*2

Division CP Manager(Chief of Branch)Division CP Promoter(Administrative Manager)

CP Implementers*3

(All Department General Managers)

All Executives and Employees

*1 CP: abbreviation of compliance*2 Promotes and embeds compliance awareness among officers and employees.

Also functions as a secretariat for the Compliance Committee*3 All heads of departments are appointed compliance implementers. The heads of

each department educate and inform all officers and employees in their own departments about compliance.

➡ Please refer to p.50 for detailed information about the Committee.

*4 A conference that aims to inform specialty constructors about safety management.

Compliance Promotion System

Compliance training participation rate

100%


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Taisei Corporation has adopted Promoting Partnerships with Supply Chains in its Group Action Guidelines, and stipulates that relationships of fairness and mutual trust be built with suppliers and that transactions be conducted on an equal footing.

Furthermore, we have set out Measures for Dealing with Anti-Social Forces and Organizations, stipulating that we will take a resolute stance against anti-social forces and will not comply with illegitimate demands. In order to eliminate anti-social forces, we have included a condition in our contracts, including the basic contract for specialized sub-contractors, declaring that the supplier is not an anti-social force and that if revealed otherwise, the contract may be cancelled without notice.

In order to ensure the legitimacy of bids, Taisei Corporation operates an in-house system whereby the heads of branch offices confirm, produce the documents, and keep all bids on file. Every year, the legal department verifies the legitimacy of bids and checks compliance with the Construction Business Act, Antimonopoly Act and the Subcontractors Protection Act. The results are reported to the in-house Auditing Department.

■ Initiatives to Ensure Fair Subcontracts and Eliminate Anti-Social Forces

■ Verification of Compliance with Laws and Regulations (Guidance)

In FY2016, we conducted 22 intellectual property courses for technical departments in head office and operational departments in branch offices, including the utilization of application rights and a series of awareness campaigns about infringement.

Practice Intellectual Property StrategyIntellectual Property Department, Taisei Technology Center

KPIs

Taisei Corporation has formulated an Intellectual Property Policy*, based on which we practice our Intellectual Property Strategy. We strategically manage and utilize all intellectual property including patents, copyright, construction and business know-how to promote management that is focused on intellectual property. Regarding management of intellectual property, we intend to improve operational efficiency through building a search function for our own patents and preparing a database for managing patents.

We have tightened the handling of classified information and we have established Rules for Handling Intellectual Property Information in order to prevent leaks of technical know-how or other confidential business information. We also take measures to reduce the risk of infringing the intellectual property rights of third parties, such as making technical departments and business departments thoroughly aware of other companies’ patent information.

■ Practicing Intellectual Property Policy and Intellectual Property Strategy

Intellectual Property Protection, Management and Utilization

Intellectual Property Course Content

1. Basic knowledge about the Patent Act2. Secrets of patent creation3. Introduction to construction and civil engineering patents4. Examples of infringement5. Trademark branding6. Introduction to search tools

At a training course

Please refer to http://www.taisei.co.jp/english/profile/Intellectual_Property.pdf for Policy on Intellectual Property.

Ｗｅｂ

In addition, we conduct training to ensure that employees are fully informed about this policy and utilize intellectual property strategically in order to strengthen our competitiveness and improve our corporate value.

Number of training regarding intellectual property rights

22 times

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*Formulated in January 2007. Partly revised in 2012.


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Taisei Corporation has formulated policies and action guidelines in order to protect and make appropriate use of company information.

We have systematically built rules and regulations concerning company-wide information security systems and information management. We established Taisei-SIRT in order to strengthen the system for responding to security incidents* involving electronic information. We have been actively involved in the Nippon CSIRT Association since joining in March 2013.

■ Appropriate Information Management and Management Rules

Information Security Measures

We conducted 16 courses on company-wide information security at eight companies in the Taisei Group and there were no material information security accidents announced outside the Company.

Raising Awareness of Information Security Corporate Planning Section, Information Planning Department, Corporate Planning Office

KPIs

Under the slogan “ICT Safety First!,” Taisei Corporation implements a range of information security measures. Together with all Group companies, specialized constructors, and other partner companies, we aim for zero incidents related to information security.

We have been promoting a tighter information security environment at overseas business offices and construction sites since FY2016.

We have summarized the minimal rules to be followed in a pamphlet, and conducted education and instruction for all officers and employees as well as specialized constructors and other partner companies.

To manage information required by customers based on the Guidelines for Managing Customer Information, we set security levels according to the confidentiality level of each project, transmitting information to the relevant in-house departments, and implementing appropriate customer information management.

We aim to improve information security levels across the whole construction industry, not only Taisei Corporation, by providing partners and other companies in the same industry with free access to a personal computer security diagnostic website jointly developed with a security vendor.

■ Appropriate Information Management and Measures to Prevent Information Leakage

■ Robust Customer Information Management

■ Improving Information Security Levels across the Construction Industry

<Various Policies>

・Policy on the Protection of Personal Information

・Code of Conduct on the Use of Social Media

Please refer to http://www.taisei.co.jp/english/profile/Protection_of_Personal.pdf for Policy on the Protection of Personal Information and http://www.taisei.co.jp/english/profile/social_media.pdf for Code of Conduct on the Use of Social Media.

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ISO26000 Fair Operating Practices

Group action guidelinesBasic rules ofinformation disclosure

Basic rules regarding control of company information

Standard for establishing emergencyresponse headquarters, etc.Basic rules regarding businesscontinuity during disasters

Organizational basic rules

1st layer

Guidelines, manuals, etc.

Guidebooks (regulation guidelines)

4th layer

Regulations regarding handling company information2nd layer

3rd layer Rulesregardingcontrol ofcustomerinformation

Rulesregardingprotection ofpersonalinformation

Rulesregardingmanagementof intellectualpropertyinformation

Rulesregardingstorage ofdocuments

Rulesregardingcontrol ofinsiderinformation,and preventionof insidertrading

Standard forimplementinginformationsecurity forelectronicinformation

Overall Perspective on the System of Information Control Rules

Number of major information security accidents

0cases

Information security pocketbook

*Electronic information security incidents: Incidents and accidents including information leaks that threaten information security or have an impact on business operation.


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Taisei Corporation adopted Promoting Partnerships with Supply Chains and formulated the Procurement Policy* as part of the Group Action Guidelines to promote CSR procurement activities with cooperating companies and across the whole supply chain.

We have established the CSR Procurement Committee composed of the Corporate Planning Department, the Corporate Communication Department, the Safety Administration Division, the Building Construction Division, the Civil Engineering Division, and the Procurement Division as the structure for promoting the concept of CSR in procurement activities.

As noted in stakeholder dialog, CSR procurement initiatives are growing in importance amid increasing social concerns in recent years about the risk of human rights violations in the supply chain.

In FY2016, we began creating a framework for voluntary CSR procurement activities by formulating procurement policies at major Group companies.

We also carried out briefings on the significance of CSR procurement for the first time in approximately three years for the Souyu-kai member companies, who are our main cooperating companies, and conducted a CSR activity survey. Internally, we carried out briefings for international branch offices and the Procurement Division as part of our awareness campaign on CSR procurement.

In addition to conducting CSR procurement briefings at over-seas construction sites, we will visit the Souyu-kai member companies that accept foreign technical intern trainees and confirm the actual conditions under which they are accepted. In this manner, we aim to improve the quality of the supply chain by carrying out targeted CSR procurement activities.

■ Procurement Policy and System

■ CSR Procurement Initiatives in FY2016

■ Future Initiatives

Supply Chain Management

According to the CSR activity survey implemented in 2016, the implementation rate of CSR activities at cooperating companies based on the procurement guidelines established by Taisei Corporation was 62.6%. We will continue to carry out awareness campaigns with the aim of improving the implementation rate in the future.

Promotion of CSR ProcurementCSR Promotion Section, Corporate Communication Department, Corporate Planning Office

KPIs

Results of 2nd CSR Procurement Activity Survey

Civil Engineering Building Construction Total

Number of companies surveyed 74 449 523

Number of companies responding 60 272 332

Response rate 81.1% 60.6% 63.5%

Implementation rate★ 67.2% 61.6% 62.6%➡ Please refer to p.47-48 for the article about stakeholder dialog

★ Implementation rateIn order to ensure that cooperating companies understand our CSR procurement guidelines and carry out CSR activities in line with the guidelines, we conduct CSR activity surveys about whether or not they are carrying out specific measures. The percentage of total survey items for which the response is “measures taken” is called the “implementation rate,” and we request all of our cooperating companies to continue to improve their implementation rate.

Taisei Corporation actively accepts foreign technical intern trainees, whom specialist contractors (cooperating companies) employ, at specified model sites. Especially for the Vietnamese technical intern trainees, we visit, inspect and evaluate the local sending organizations, and make recommendations to the specialist contractors together with the partner supervising groups. The purpose of this activity is to promote the overseas transfer of Japan’s construction technologies and to address and aid the issue of the shortage of skilled construction workers for specialist contractors.

Human Resources Development Aimed at Overseas Transfer of Japan’s Advanced Construction Technologies

Average implementation rate of companies where CSR activity survey was conducted:

62.6%

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*Formulated in April 2013

➡ Please refer to p.68 for the article about green procurement.Please refer to http://www.taisei.co.jp/english/profile/procurement_policy.pdf for the Procurement Policy.

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Under the slogan of “ensuring and improving safety and quality” stated in the Group Action Guidelines, Taisei Group formulates the “Quality Policy,”* which governs our corporate activities. We obtained ISO 9001 certification in 1996 for the first time in the Japanese construction industry. We operate and establish a quality management system covering from design and construction to after handover in order to provide customers with construction products and after-sales service with safety and comfort. Additionally, in conjunction with the quality management system, “TAISEI QUALITY” activities have been implemented since 2009 to ensure thorough awareness and application of the quality management standards and procedures within the entire Group. We also conduct customer satisfaction interviews and surveys to ensure proper quality management and eliminate any defects caused by quality, in cooperation with the relevant departments.

To ensure higher quality and safety, and objective construction auditing in design and building projects, Taisei Corporation established the office of first-class architects which specializes in construction auditing operations. The office started its operations in FY2016 with 70 experts in design, structure and facilities who are dedicated to construction auditing under the basic policy that “customer satisfaction and trust shall be secured by providing ‘high-quality construction products and related services’ meeting the demands of customers and society.”

Taisei Corporation has been using the “Kensetsu Site” cloud service provided by Mitsubishi Corporation (currently MC Data Plus) since 2003 to manage and share plans and documents at branches and on-site offices with the aim of improving productivity at increasingly complex construction sites.

In 2012, we developed the “Field Pad,” an app for iPhones and iPads for the purpose of improving operations and enhancing quality control in construction management, leading to labor-saving in labeling and organizing photographic construction records.

Users of these apps include not only officers and employees at Taisei Corporation, but also employees of cooperating companies and others involved in construction. Currently, approximately 30,000 users take advantage of these apps to access the latest plans and information on documents regardless of time or place.

■ Quality Policy and System ■ Provision of High-Quality Construction Products and Related Services

ISO26000 Consumer Issues

Ensuring Quality and Improving Customer Satisfaction

The customer satisfaction rate on surveys conducted by the Civil Engineering Division after building handover was 80%. The customer satisfaction rate for the Building Construction Division, the rate was 90%. The results of surveys are reflected in follow-up construction meetings to eliminate complaints in concerted efforts among the headquarters and branches.

Implementation of Customer Satisfaction SurveysCivil Engineering Division/ Building Construction Division

KPIs

Utilization of Cloud Services and Smart Devices at Construction Sites

Establishment of Specialized Construction Auditing Office

Please refer to http://www.taisei.co.jp/english/profile/Quality.pdf for the Quality Policy.

Ｗｅｂ

Our Pride in Quality

Customer Satisfaction Rate (Civil Engineering)

80%

Customer Satisfaction Rate (Building Construction)

90%

A Poster of “Taisei Quality”

*Formulated in July 2005.


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Under the basic policy of the Medium-term Business Plan (2015-2017), the Taisei Group implements technological development aimed at stable and sustainable growth, as well as obtaining high customer satisfaction by ensuring quality and safety.

In carrying out technological development, we actively promote alliances with various research university research organizations, companies in different industries, and other companies in the same industry, etc., in order to enhance investment efficiency in technological developments and to meet increasingly advanced and diverse technical needs.

We actively pursue the protection and utilization of intellectual property assets, such as inventions and brands associated with our research and development, based on our intellectual property strategy. Our rate of registration of patent applications is very high at 90%, compared to the actual rate of registration of 71.5% for all types of industry in 2015.

We contribute significantly to the dissemination of Japanese research and development activities overseas, including the publication of 21 papers overseas in FY2016.

We aim to contribute to society through the development of new technologies based on the unity of our business strategy, our research and development strategy, and our intellectual property strategy, through technological support for our construction sites, and through our utilization of intellectual assets, etc.

■ Policy on Research and Development Activities ■ Results of Research and Development Activities

Development and Provision of Technologies for Social Issues

The Taisei Technology Center implements technological development and obtains the rights to technologies to solve social issues. In FY2016, 41 construction sites were visited to identify patentable technologies at these construction sites and obtained the rights to them.

Obtaining Rights to Technologies that Solve Social Issues Intellectual Property Department, Taisei Technology Center

KPIs

Trend in Research and Development Expenditure

2013 2014 2015 2016

Research and development costs ¥9.5 billion ¥10.6 billion ¥10.9 billion ¥11.1 billion

Under the “educational supporter system” introduced in 2009, educational supporters appointed from among employees with experience as construction site managers check the progress of OJT education of young employees and provide support and guidance. The Civil Engineering Division strengthens employees’ management capability to reinforce productivity and the production system, in addition to “improvement of the working environment” and “securing of human resources.”

Specifically, under the goal of “increasing the employees’ capabilities at production sites,” the “On the Job Training (OJT) education” is introduced and operated to enhance the capabilities of process management, design, estimation, negotiation and action, among others.

■ Hitozukuri (development of human resources) for Monozukuri (precise, superb craftsmanship)

Educational Supporter System (Civil Engineering Division)

The “meister system” and the “HQ staff’s coaching system” were put into practice from 2009 as part of the “TAISEI QUALITY” activities to promote the acquisition of skills and expertise in order to securely pass along our technologies and know-how, with the aim of strengthening productivity and the construction management system.

The employees appointed as meister and the executive staff of the Building Construction Division, with abundant on-site experience, make actual visits to the sites and provide education and guidance on the skills and quality/site management and other capabilities through OJT, in close contact with the young and middle-aged employees.

Building Meister System / HQ Staff’s Coaching System (Building Construction Division)

➡ Please refer to p.91 for the Medium-term Business Plan (2015-2017) Basic Policy.

OJT education provided by an educational supporter

OJT education provided by a meister

Number of patent rights registered

232Number of Patent Applications Filed

304

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ISO26000 Community Involvement and Development

For the Benefit of Community and SocietyContributions to Local Communities

Taisei Corporation sets forth “communication with the local communities” under the Group Action Guidelines to establish a good relationship with the local communities and contribute to the development of the society as a good corporate citizen.

Taisei Corporation carries out various social contribution activities such as environmental beautification activities at the headquarters, the Technology Center and individual branches (including construction sites). At construction sites in particular, we implement a range of social contribution activities including environmental beautification activities, participating in and sponsoring local events, and holding visits to worksites. Through these social contribution activities, we hope to deepen understanding of the Company among local residents as well as to contribute to the development of the local community as one of its members.

The purpose of Galerie Taisei is to spread construction culture by exhibiting architecture and paintings by Le Corbusier, whose works have been inscribed on the World Heritage List. Two exhibits were held in 2016. (The gallery is currently closed due to relocation.)

For 24 years, we have granted subsidies of ¥15 million each year (for a total 532 grants) to projects conducive to the preservation of the natural environment and others that are the common property of present and future humanity.

We took part in the “Summer Riko-challe” organized by the Cabinet Office and others for junior and senior high school students during their summer vacation. We conducted activities such as site visits, design workshops, and exchange events with science and engineering professionals to communicate the significance of science and engineering studies and the appeal of science and engineering careers.

We established the Taisei Foundation in March 2017 in order to support the researchers who are realizing the Taisei Group Philosophy, “to create a vibrant environment for all members of society.” The Taisei Foundation will endeavor to play a role in improving Japan’s construction technologies by supporting new technological fields for the next generation (disaster prevention and mitigation technologies, ZEB technologies, compact city and smart community technologies, etc.). We have installed automatic vending machines with a donation

function at construction sites and other locations, and are donating part of the proceeds to the NPO Borneo Conservation Trust Japan. We support activities for the protection of Borneo elephants, which are in danger of extinction due to the reduction of Borneo’s tropical rainforest.

■ Promotion of Social Contribution Activities

■ Examples of Social Contribution Activities

3D design workshop Future Session

Operation of Galerie Taisei

Grants from the Taisei Corporation Public Trust of Funds for Natural and Historic Environments

Held Workshop: “Gene-Con Girls! — Experience ‘Putting my work on the map.’”

Establishment of the Taisei Foundation

Supporting “Giving Back to Borneo Project” through Automatic Vending Machines with Donation Function

Taisei Corporation belongs to KEIDANREN’s 1% Club and carries out various social contribution activities as a member of the local community.

In FY2016, our social contribution spending amounted to ¥653 million. We will continue to implement ongoing social contribution activities that contribute to the development of local communities.

Promotion of Social Contribution ActivitiesCSR Promotion Section, Corporate Communication Department, Corporate Planning Office

KPIsExpenditures on social contribution activities

653millions of yen


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Main Initiatives to Promote Diversity

Diversity of characteristics

Diversity of working styles

Female employees

Senior personnel

Non-Japanese employees

Physically challenged employees

ISO26000 Human Rights

Creating a Workplace Where Everyone Enjoys Their WorkRespect for Human Rights and Diversity

We provide e-learning and group training for all employees by incorporating human rights training in the basic education system for each layer and department of the employees. In FY2016, we held 31 group training sessions, with 1,253 employees taking part in the training. We also implement human rights promotion activities such as human rights education programs, including talks from external speakers, and solicitation of human rights essays and slogans.

Human Rights Promotion ActivitiesHuman Resources Department, Business Administration Division

KPIs

The Taisei Group has developed the Human Rights Policy*1 with reference to international human rights standards such as the Universal Declaration of Human Rights, the eight fundamental conventions of the International Labour Organization (ILO) and the ISO 26000, as well as the International Code of Conducts to prohibit child labor, compulsory labor and discrimination in employment and occupation and guarantee the right of association and the right to bargain collectively.

In addition, the “Taisei Human Rights Awareness Promotion Committee” continually engages in efforts including the creation and review of basic policies and activity plans.

In FY2016, we provided e-learning training for all employees and training for employees according to their number of years on the job. In addition, some of the content was translated into English and Chinese and used as material for training conducted for local staff employed at overseas business sites.

As one of the issues addressed in the Medium-term Business Plan, we aim to encourage diversity management, focusing on creating a workplace in which employees are able to take the most active possible role, taking advantage of their diversity in terms of sex, nationality, disability, values, the way of working and career.

Taisei Corporation has established a whistle-blowing system (helpline) and consultation services in each department in the Company in order to prevent abuses of human rights and harassment from occurring. We respond appropriately to resolve problems by investigating the facts while giving consideration to the protection of whistle-blowers.

We worked to enhance the reemployment system for senior personnel with a wealth of knowledge, experience and skills to let them pass on their know-how to the next generation and continue to play an active role, and have reemployed 663 personnel in FY2016.

In addition, we have started a job return system in FY2008 to reemploy personnel who have resigned due to unavoidable circumstances such as childcare or nursing care so that they can return to the workplace, and have reemployed 24 employees to date.

Approximately 130 physically challenged employees work at Taisei Corporation (an employment rate of 2.04% in FY2016). These employees take an active role in various fields thanks to measures that consider individual disabilities, such as sign language interpretation, use of UDTalk*2, and the establishment of a consultation desk.

■ Our Human Rights Policy and System ■ Human Rights Promotion Activities

■ Promotion of Diversity Management

■ Consultation Services for Human Rights and Monitoring

■ Employment of Senior Personnel, Employees Who Have Left the Company after Childcare or Nursing-care Leave, and Physically Challenged Persons

Please refer to http://www.taisei.co.jp/english/profile/Human_Rights_Policy.pdf for the details of the Human Rights Policy.

Ｗｅｂ

Diversity Management Selection 100

⃝Active employment in careers with promotions

⃝Expanding fields of employment⃝Implementation of career

development training

⃝Preparation of reemployment system that provides fulfilling work

⃝“Working style reform” through use of ICT in daily operations

⃝Enhancement of support framework to balance childcare/nursing care and work

⃝ Support for male employees’ participation in childcare

⃝Establishment of consultation desks

⃝Creation of handbook for receiving departments

⃝Consideration according to disability, consultation services

⃝Use of tools to support active participation

Rate of Attendance at Human Rights Training

93.8%

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*1 Formulated in October 2005*2 UDTalk: A software application for the hearing impaired that can convert speech to text using a smart device


015_0356501372908.indd 62 2017/08/10 10:23:15

ISO26000 Labor Practices

Workplace Environment of Employees

Creating a Pleasant Workplace ＷEB

We strive to eliminate mismatching of employees and jobs through measures such as providing detailed job descriptions during the recruitment screening process and conducting construction site visits. We also work to retain employees by striving to create a pleasant working environment, including holding interviews with young employees after they join the Company, and introducing a mentorship program on a trial basis.

Improving Retention Rate of Young EmployeesHuman Resources Department, Business Administration Division

KPIs

We have targeted making the childcare leave usage rate by male employees 100% as one of our working style reform measures, and are involving the employees’ assigned departments and their supervisors in this company-wide effort. In addition to joining the Ikuboss Corporate Alliance in April 2017, we have received the Ikumen Enterprise Award 2016 and a recognition based on the Act on Advancement of Measures to Support Raising Next-Generation Children.

Initiatives for Childcare Support

Taisei Corporation was recognized under the 2017 Certified Health and Productivity Management Organization Recognition Program (White 500) established by the Ministry of Economy, Trade and Industry in FY2017.

Health Management Initiatives

We are pursuing a number of measures to create a fulfilling workplace for each and every employee. Recently, we have been striving towards the realization of work-life balance through efforts to reduce working hours focusing on both tangible and intangible aspects such as increasing operational efficiency with use of smart devices.

■ Toward the Realization of Work-Life Balance

In order to enable employees to manage their mental and physical health, we encourage workers who displayed symptoms in a health checkup to seek medical attention. We also ensure that overworked employees meet with a physician.

Furthermore, we encourage the taking of stress checks, carry out Line Care Training for management employees, and prepare a broad support system in collaboration with specialized organizations and industrial physicians.

■ Health of Employees

Taisei Corporation has a union shop agreement with its employees union, and all 7,592 employees, except for management, belong to the union. The Company conducts various surveys and dialogs between labor and management every year for the purpose of facilitating labor- management relations and the business activities of the Company. Changes in working conditions are listed as items determined in advance through discussion between labor and management.

■ Labor-Management Relations

List of Initiatives Promoting Work-Life Balance

Promoted items Content of activities

Shorter working hours

● Implementation of campaigns to achieve target for the number of holidays and leave days taken per year

● Implementation of business improvement activities through labor-management cooperation by establishing the shorter working hours conference in April 2015

● Promotion of working style reform by utilizing ICT

Childcare support

● Promotion of childcare leave taken by male employees by establishing five paid leave days for childcare

● Implementation of childcare support programs to support smooth leave and return to work, meetings for employees on childcare leave, consultation sessions on finding daycare services, seminars for fathers, and work-life balance seminars

● Creation of a temporary day-care center during training and seminars in consideration of employees who are raising children

Nursing-care support

● Provision of information by implementing nursing-care seminars nationwide

● Individual consulting meetings with outside organizations on nursing-care

● Three-person meetings for employees who are facing nursing-care

Vacations ● Promotion of taking of annual paid leave, refreshment leave and long-service leave

Others ● Salary increase and revised allowances to support employees who are getting married and having and raising children

● Enhancement of the welfare program

Please refer to http://www.taisei.co.jp/english/csr/annual_report_online2017/csr/index.html

Ｗｅｂ

Turnover rate of employees within 3 years* of hiring

5.0%

*Percentage of new graduates hired on general and specialized career tracks who resigned within 3 years of employment.


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Toward Human Resources Skill Development

Outline of Human Resources Development SystemExamples of Support for Qualification Acquisition

➡ Please refer to p.59 for details on Field Pad.

TOPICSWorking style Reform through Use of ICT in Daily OperationsSocial issues including risks to employee health due to long working hours have recently come to the fore. In order to resolve these issues, Taisei Corporation is promoting working style reform through ICT solutions such as utilization of the Field Pad app.

In May 2016, we introduced the Office 365 cloud service, to create a business environment “that can be safely used by anyone, anytime, anywhere, with any device.” We have promoted use and spread of the service, and results of an in-house survey showed that an average of eight hours could be saved per month.

The Taisei Group will continue seeking to enhance its vibrant workplace environment with the aim of realizing work-life balance.

We provide employees with comprehensive training in each phase after joining the Company to develop human resources with specialty and creativity.

Taisei Corporation helps all employees improve skills in their area of work, by supporting their acquisition of qualifications, in order to develop engineers and managers with strong specializations.

■ Support for Career-Building ■ Support for Qualification Acquisition

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Construction work Civil engineering work

● First-class architect ● First-class building operation and

management engineer● First-class plumbing work operation and

management engineer● Building mechanical and electrical engineer

● Professional engineer● First-class civil engineering works execution managing engineer● Chief concrete engineer● Certified chief managing engineer for dam construction

Design International

● First-class architect ● First-class architect in structural design● First-class architect in facility design● US licensed architect

● Licensed architect● Professional engineer● Project management professional● APEC architect / engineer

Development Engineering

● The Association for Real Estate Securitization certified master

● Redevelopment planner● Professional engineer● Real estate notary

● Professional engineer● First-class plumbing work operation and management engineer● First-class electrical work operation and management engineer

Administration

● Construction industry accountant ● Registered real-estate broker

Career utilization period

Career formation period

Basic formation period

When entering the Company

External training

Year/Age

Internal training

Dispatch to external training (graduate schools in Japan, overseas universities,

public of�ces, training institutes, overseas companies, etc.)

Department training (Annual training, support for quali�cation acquisitions, etc.)

Global training I Global training II/III Training for business leaders (Basic/Advanced)

Training for newly appointed general managers

Introduction training for new employees

1st year- 3rd year- 30s- 40s-

Mental development training

Career vision training

Power-up management training


015_0356501372908.indd 64 2017/08/10 10:23:16

ISO26000 Labor Practices

Workplace Environment at Construction SitesImproving Health and Safety Standards

The Company set a target of “achievement of zero fatal accidents” in 2016, but regretfully one fatal accident occurred. For 2017, we have again set a target of “zero fatal accidents,” and will promote various measures aimed at “shifting from recurrence-prevention safety management to preventive safety management.”

Improvement of the Health and Safety StandardsSafety Administration Department, Safety Administration Division

KPIs

Based on the ideal of “Safety First,” Taisei Corporation works hard to ensure safety in a tangible form day to day in concerted efforts among its employees, group companies and cooperating companies. We are committed to this under the “Health and Safety Policy,”* which the President indicates by systematizing and organizing the “Taisei Occupational Health and Safety Management System” (TAISEI OHSMS), to eliminate accidents and damage and prevent third-party accidents.

TAISEI OHSMS is established based on the safety and health management techniques and know-how which Taisei Corporation has accumulated over many years. Using this system as a platform, the PDCA (plan-do-check-act) cycle is properly implemented to improve health and safety standards.

In addition, we work to prevent accidents and damage by conducting risk assessment and taking necessary measures to reduce risk, based on the results of audits of the actions under the “Health and Safety Management Policy.” We also carry out thorough construction site patrols and safety education for construction workers in order to ensure health and safety management based on TAISEI OHSMS.

Taisei Corporation cooperates closely with the “Taisei Health, Safety, and Environment Cooperation Association,” which consists of cooperating companies all over Japan, to prevent accidents and damage. Members of the Association work to prevent accidents and damage by participating in the “Safety Conference (January)” and the “Safety Promotion Conference (June)” held by Taisei Corporation each year, and by using educational and instructional material for health and safety management such as the journal “Cooperation” and the “Collection of Accident Cases.”

In the civil engineering field, the system for rewards for excellent civil engineering skilled workers, under which a reward is paid to the workers with excellent construction skills who contribute to construction work at the sites of Taisei Corporation, is introduced to improve the overall capabilities, including quality, safety and skills.

In the building construction field, a system for the highest quality foremen was newly established and has been put into operation upon partial revision of the first-class foremen system during FY2015 to further improve the foremen’s construction management capability, including quality, skills and safety to strengthen the production system.

■ Health and Safety Policy and OHSMS System ■ Safety Education Support for Specialist Contractors (Cooperating Companies)

■ Establishment of Various Foremen Systems

The President’s patrol The award ceremony

TAISEI OHSMS

*BMT: Best Meister of Taisei As of March , 2017

Number of Fatal Accidents

1cases

Category Name of system Amount of payment

Time for certification /

Number of certified persons

Subject Start of system

Civil engineering

System for reward to excellent civil engineering skilled workers (BMT*)

¥2,000 per day

Annually (each December) / 502 workers

Skilled workers who meet the specified requirements including qualificationsAll over Japan

January 1, 2013

Building construction

System for first-class foremen (partially revised)

¥1,000 per day

Each April / 770 foremen

April 1995

Building construction

System for highest quality foremen

¥3,000 per day

Each April / 43 foremen

November 2015

Head of�ce

Central Safety Committee

Accidentanalysis

Prevention ofreoccurrence

Accidentanalysis

Prevention ofreoccurrence

Accidentresponse

Branch Safety Committee

President’s Health andSafety Policy

Construction SiteManager’s

Management Policy

Branches

Health andSafety Management policy

· Branch targets· Action priorities

Branch Health and SafetyManagement Plan

Construction sites

Construction Healthand Safety Plan

(Warning)

(Guidance)

(Warning)

· Targets· Action priorities· Management priorities, other

· Head of�ce plan · Branch action plan

Implementation and operation Implementation and operation Implementation and operation

Internal audits / guidance Construction site patrols On-site inspections / remediation

Records / storage Records / storage

· Health and Safety Management Policy· Health and Safety Management Plan· Emergency Response Plan· Basic Construction Work Plan

Spec

i�c

caus

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f dan

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nd h

arm

and

spec

i�c

item

s to

be

addr

esse

d

Accidentinformationdatabase

System review

Records / storage

(Guidance)

Acci

dent

inve

stig

atio

n an

dan

alyt

ical

info

rmat

ion

*Formulated in July 2005. Final revision in November 2009.


015_0356501372908.indd 65 2017/08/10 10:23:17

We are pursuing worksite-led activities in order to improve health and safety levels at the “(Tentative Name) Jingumae Plan” construction site in Harajuku, Tokyo, where we are constructing a high-rise building with 23 floors above ground and 3 basement floors.

The Foremen’s Council engages in various activities such as conducting safety patrols from various perspectives depending on the day of the week, promoting the “point-and-call” practice, which is an effective safety check, and practicing individual danger prediction activities at morning assemblies. In addition to constantly maintaining a sense of alertness on the site, we also create innovative ways to ensure that safety measures quickly become familiar without being simply rote, such as publishing the Jingumae Newspaper, a tabloid-type paper that enables all construction workers to share an understanding of the project status, and putting up manga-style posters. We further strengthen the sense of unity by creating plenty of opportunities for deeper, direct communication among construction workers, such as by holding occasional fireworks, sports festivals, barbecues, and cultural exchanges among construction workers of different nationalities.

Emphasizing Unity while Maintaining Alertness

The repetition of these processes fostered a culture where workers can freely speak their minds to each other. This produced a virtuous circle, whereby a higher level of awareness among all employees is reflected in improvement activities, such as when active communication leads workers to caution each other and prevent trouble before it occurs. In addition, the openness of the workplace boosts the morale of construction workers and facilitates smooth coordination among cooperating companies, thus promoting work efficiency as well as safety.

Fostering a Culture of Preventing Accidents and Damages before They Happen

Skilled construction workers are the leading figures at a construction worksite. What the site manager says does not have any effect unless it penetrates to each and every person working on site. Through activities led by the foremen, we can surely achieve zero accidents and zero damage if everyone thinks of this place as “their site” and considers fellow workers as “their family.” Creating that environment is an important job for the site manager.

⃝ Osamu Kubota, Construction Site Manager, (Tentative Name) Jingumae Plan Construction Site, Tokyo Branch

Health and Safety Initiatives at Construction Sites

Promoting Activities Led by ForemenSpecialized contractors (cooperating companies) are involved in work on construction sites in a wide range of fields until the building is completed. An average of about 40 foremen, who are the leaders from each cooperating company, along with some 400 skilled construction workers, enter this construction site each day. In order to preserve safety at a worksite where different companies are involved depending on the stage of work, and new skilled construction workers join the site each day, it is vital that everyone share an awareness of safety and engage in efforts collectively. We have therefore organized a Foremen’s Council that cross over company borders at this worksite, and formulated the council’s slogan, “Dedicated Wholeheartedly to Progress.” We are implementing initiatives under four sub-committees, namely environment, safety, vehicles, and publicity, in order to work as one to realize zero accidents and zero damage.

Collective safety prayer with Foremen’s Council

Illustration of Tokyo Branch (Tentative Name) Jingumae Plan construction site after completion

Jingumae Newspaper

Poster promoting “point-and-call”

Cultural exchange event

Promoting use of workplace accident example sheets

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015_0356501372908.indd 66 2017/08/10 10:23:20

The Taisei Group endeavors to conserve and create the environment through our core business of the construction industry, and promotes environmental management aimed at realizing a sustainable society. Taisei Corporation operates an environmental management system (EMS) in compliance with ISO14001:2015, and we revised our “Environmental Policy”*1 for the first time in six years in order to promote environmental management better in line with our business by responding to changes in the situation surrounding the Company based on identified risks and opportunities. Based on the Environmental Policy, we work to reduce various environmental risks and impacts by setting specific environmental management targets (Taisei Agenda), and practice activities aimed at forming sustainable social infrastructure.

Environmental Management Activities

President

Environment Committee Environment Committee Administration Meeting, Environment Management Group Meeting, Climate Change WG, Resource Recycling WG, Biodiversity WG, Energy Efficiency Promotion Committee, Taisei Corporation Group Environmental Promotion ConferenceCentral Safety Committee*2

Specific environmental representative

Companywide EMS Administration Bureau, Internal environmental audit team

Head office /Branch office organizations

Environment Committee and EMS Administration Bureau of each department

Environmental Management System Organization Chart

Environmental Policy

Under the group philosophy of “Creating a Vibrant Environment for All Members of Society”, Taisei Corporation, through its construction activities, strives for development of high-quality social infrastructure and improvement of the living environment in harmony with nature.

Moreover, realizing a sustainable society is a challenge common to all humankind, and a mission to be accomplished as a company.

With these environmental management principles as a guide, Taisei Corporation and its group companies actively strive for “environmentally friendly society”.

1. Development in TechnologyWe will develop environmental technologies, propose to customers consideration for global environment and reduction of environmental impact through all construction lifecycle stage, and together with customers, create safe, comfortable and attractive spaces with exceptional value.

2. Collaboration with Supply ChainWe will collaborate with our supply chain at each stage of the planning, procurement and construction activities to reduce environmental impact and to develop sustainable social infrastructure.

3. Cooperation with StakeholdersWe will promote communication with local communities, governments, domestic or foreign NGOs/NPOs, and other organizations, to disclose information and to resolve environmental issues actively.

We recognize “Risks and Opportunities” appropriately and utilize Environmental Management System (EMS) based on ISO14001 practically, to fulfill all above.

Taisei Corporation Environmental Management

Internal and external issues and needs

Stakeholder needs

Business plan and environmental policy based on Group philosophy

Providing value to stakeholdersCreating sustainable business opportunities

Environmental risks, social issuesHigh temperatures / insufficient water / concentrated heavy rain / environmental pollution / loss of natural resources / rapid increase in cost of building materials and equipment / urbanization / deterioration in labor and living environment / environmental laws, regulations, and taxes / changing demand for buildings and infrastructure / large scale disasters / evaluation by society

Realizing a sustainable environmentally friendly society

P

D

A

C

Management reviewImprovement initiatives

Performance evaluation

Developing and deploying technologyEnvironmentally friendly initiatives

Setting issues and KPIsTaisei AgendaEMS Implementation Plan

Cooperating with supply chain Collaborating with stakeholders

PDCA of EMS

*1 Formulated in July 2005. Final revision in April 2017.*2 Central Safety Committee: Since FY2012, environmental incidents are investigated and discussed by the Central Safety Committee.

■ Formulation of New Environmental Policies

ISO26000 Environmental

For Our Global Environment

Low Carbon Society

Nature Co-existing Society

Recycling Oriented Society


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TAISEI Green Target 2020 TAISEI Green Target 2050

● Reduction in predicted CO2 emissions in the building operation stage compared with 1990 (and popularization of urbanstyle ZEBs as top runner architecture) 40%

● Reduction in CO2 emissions in the construction stage compared with 1990 50%

● Reduction in predicted CO2 emissions in the building operation stage compared with 1990 (and aim for popularization of urban-style energy creation buildings as top runner architecture) Aim for 80%

● Reduction in CO2 emissions in the construction stage compared with 1990 Aim for 80%

● Aim for final disposal rate of construction waste of 3% or less● Aim for a recycling index for construction by-products of 80 or more

● Aim for final disposal rate of construction waste of 0● Aim for a recycling index for construction by-products of 100

● Use and expansion of biodiversity evaluation methods● Participation in and promotion of biodiversity offsets

● Aim for development of social infrastructure that co-exists with nature● Aim to realize society that increases biodiversity

Taisei Corporation has set KPI targets in connection with important business-related environmental risks and opportunity creation in the FY2017 Taisei Agenda, and is making efforts to meet those targets.

We also continue to work on response to restoration and recovery in areas hit by major disasters as an item in our everyday management.

We recognize the close affinity between promotion of

environmental management in the construction industry and efforts toward meeting the United Nations’ sustainable development goals (SDGs) such as improving urban resilience. We have included the symbols for strongly related SDGs on the Taisei Agenda, which is posted throughout the Company.

Medium- to Long-term Environmental Target

Taisei AgendaResults in FY2016 on the Taisei Agenda, which comprises our environmental management targets, and targets for FY2017 are as follows.

* Radioactive materials: Target item since FY2017

● KPI Key Performance Indicator　

★Targets included in Taisei Corporation’s “Eco-First Commitments” certified by Japan’s Minister of the Environment

Challenges Targets Targets for FY2016 Results for FY2016 Targets for FY2017

Mitigate and adapt to climate change

Improve reduction rate of CO2 emissions at the operation stage of buildings ★

Not less than 35% compared with fiscal 1990 level KPI

38.9% Not less than 37% compared with fiscal 1990 level KPI

Improve reduction rate of CO2 emissions at the construction stage on building construction sites and civil engineering sites ★

Not less than 45% compared with fiscal 1990 levelNot less than 17% compared with fiscal 1990 level (Intensity)KPI

51.9%23.3% per unit

Not less than 47% compared with fiscal 1990 levelNot less than 18% compared with fiscal 1990 level (Intensity) KPI

Improve reduction rate of energy consumption in offices Not less than 12% compared with fiscal 2010 level (Intensity)

19.1% Not less than 17% compared with fiscal 2010 level (Intensity)

Promotion of initiatives for adaptation strategy 3 or more cases 3 cases －

Effectively utilize resources

Decrease construction waste final disposal ★ Final Disposal Rate: Not more than 4.0% KPI

3.5% Final Disposal Rate: Not more than 4.0% KPI

Reduce mixed waste weight rate of new building construction projects

Mixed Waste Weight Rate: Not more than 25%

14.6% Mixed Waste Weight Rate: Not more than 25%

Minimize the decrease index of construction waste processing amount in civil engineering construction projects

Intensity Reduction Index: Less than 1.0

0.7 Intensity Reduction Index: Less than 1.0

Conserve biodiversity

Support and practice activities & trainings to preserve natural environment ★

Activities / Trainings: 6 or more (Headquarters),1 or more (Each branch)

16 for head office1 or more for each branch office

Activities / Trainings: 6 or more (Headquarters),1 or more (Each branch)

Promote biodiversity related technologies Promotions: 30 or more 42 cases Promotions: 30 or more KPIPromote biodiversity offsets initiative Promotions: 3 or more 6 cases Promotions: 3 or more

Reduce environmental risks

Manage construction waste, polluted soils, industrial wastewater, harmful and/or chemical substances, radioactive materials* appropriately

Non-occurrence of environmental accidents

Non-occurrence of environmental accidents

Non-occurrence of environmental accidents KPI

Implement environmental management procedures in construction sites, based on “Operation Manual for Prioritized Environmental Issues”

Improve electronic manifest diffusion rate ★ 90% or more KPI 94.7% －

Reduce environmental impact in the supply chain

Carry out environmental education Programs: 3 or more 5 times Programs: 3 or more

Increase green procurement rate ★ 30% or more KPI 30.8% －Increase green procurement items at the design stage of buildings

Items / Project: 9 or more 9.8 items Items / Project: 9 or more

Promote development of technologies

Promote media presentations on research, development and promotion of environmental technologies

Media Presentations: 20 or more KPI

30 cases Media Presentations: 20 or more KPI

Promote environmental activities

Put into practice eco-model projects4 ★ Projects: 26 or more 27 projects Projects: 26 or more

Promote adoption of ZEB (Zero Energy Building) ★ Promotions: 10 or more 26 cases Promotions: 10 or more KPI

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Mitigate and Adapt to Climate Change

In FY2016, Taisei Corporation was recognized by CDP*3 on its “A List,” which evaluates initiatives by companies to address climate change. This is the highest of eight levels on the evaluation, and, of 500 Japanese companies surveyed, 22 received recognition.

The Company works to promote environmental management across the entire Group, by participating in the CDP Supply Chain Program with six major Group companies who are our business partners, and by identifying and analyzing risks and opportunities related to climate change.

Reducing the estimated CO2 emissions at the stage of building operation helps reduce the CO2 emissions in Category 11 (use of products sold) in Scope 3 based on the GHG protocol criteria.

(103t-CO2) Scope 3 (upstream) Scope 1 and 2 Scope 3 (downstream)GHG protocol criteria*1 Category 1 – 8 1,900

209Category 11 and 12 4,100

Industry organization criteria*2 22 －

*3 CDP: A not-for-profit organization based in the U.K. that sends questionnaires on environmental strategies, GHG emissions, etc., to leading companies around the world and analyzes and evaluates their answers, and publishes the results to investors. ● The calculated total values may not be consistent with the total values due to data rounding ● Third-party assured values (independent assurance report on p.74) are indicated with the 　 mark.

*1 Global standard for calculation and reporting of Greenhouse Gas (GHG) emissions (URL: http://www.ghgprotocol.org/)*2 Calculation range criteria set by the Japan Federation of Construction Contractors

・ Energy Efficiency Plan: A plan that summarizes the measures for the efficient use of energy such as building thermal insulation, air conditioning facilities, etc., which is required to be submitted when designing buildings with a total floor area of 300 m2 or more in accordance with the Act on the Rational Use of Energy.

0

20

40

60

0

150

100

50 37 46

■Calculated value based on 1990 criterion■Predicted CO2 emissions

・Predicted CO2 emissions increased as target calculation range expanded from FY2016.

CO2 emissions(103t-CO2)

212012 2013 2014

29

40

252015

34

84

20（FY）

Emissions per unit floor area ● (kg-CO2 /year.m2)

23

3832 36

2016

51

56

40

20

0

35.343.6

37.5

2012 2013 2014

41.7

2015

38.9

2016 2017 （FY）

● Predicted CO2 reduction percentage（%）

Target value37.0

2016Target value35.0

Prediction of CO2 emissions in the building operation stage and reduction percentage (Non-consolidated)

0

100

200

300

0

150

150

300

450

Emissions by site Emissions by site

Emissions by scope

Construction stage emissions intensity 274Construction stage emissions 453

103 143

206229

186

■Office ■Construction site (civil engineering) ■Construction site (building)

■Scope1 ■Scope2 ■Scope3

CO2 emissions(103t-CO2)

118

73

163

65

124

67

9797 9292

108

Target value240

Target value225

209250

216

8888

2012 2013 20172014 （FY）

Emissions per unit floor area ● （kg-CO2 /mil. yen）

2522

18

1615

13

195

128

76

122

226

9292

2015

22

12

211

138

71

113

231

106106

201622

12

219219

　　1990 criterion

CO2 emissions in the construction stage (Non-consolidated)

Calculation Standards for CO2 Emissions■ Recognized as a Climate “A List Company” by CDP


Taisei Corporation is working to reduce the estimated CO2 emissions at the stage of building operations by promoting ZEB and implementing environmentally friendly designs. We have also set intensity targets (emissions per construction turnover) for CO2 emissions at the construction stage, and all construction sites throughout Japan are striving to reduce environmental impact and CO2 emissions during construction.

Contribution to realizing Low Carbon SocietyEnvironment Division

KPIsImprove reduction rate of CO2 emissions at the operation stage of buildings

38.9%

Improve reduction rate of CO2 emissions at the construction stage on building construction sites and civil engineering sites

51.9%

Objective Item Calculation Method & Standard

Classification by business type

Classification into civil engineering and building construction (sites), offices (excluding development projects and others), and factories

CO2 emissions Scope classification

Scope 1: CO2 emissions associated with the combustion of fossil fuelsScope 2: Indirect CO2 emissions associated with the use of electricity, steam, and chilled and hot waterScope 3: CO2 emissions associated with the transport of construction waste off construction sites and

the outward and return transport of soil from construction (off-site emissions)

CO2 emissions CO2 emission coefficient: Calculated using the emission coefficient in accordance with the Act to Rationalize the Use of Diesel, Heavy Oil, and Energy and the Act on Promotion of Global Warming Countermeasures. For offices, the actual emission coefficient for FY2015 according to the electrical power company is used.

Electrical power: Calculated using the 2015 emission coefficient on the user end announced by the Federation of Electrical Power Industries of Japan (before reflecting the Kyoto credit), 0.534t-CO2/Mwh.

City gas: Calculated using the standard calorific value of the gas supply company and the emission coefficient of the Act on Promotion of Global Warming Countermeasures.

Estimated CO2 emissions and reduction rate in the building operation stage

Calculated using the “Energy Efficiency Plan” for each of 44 projects, each with a total floor area of 300 m2 or more and with a total area of about 910,000 m2, of Taisei Corporation building construction projects.

CO2 emissions and reduction rate in the construction stage

CO2 emissions at Taisei Corporation construction sites and percentage of CO2 emissions reduced from FY1990 emissions. In some cases, temporary or special construction that has a major effect on the date continuity has been excluded from the calculation.

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KPIs

Effectively Utilize Resources

Taisei Corporation sets targets to manage the adoption of green procurement items during the design of buildings based on the “Taisei Corporation Green Procurement Guidelines.” In FY2016, we adopted 9.8 green procurement items per project (compared to the target of 9 or more items). We also organize study groups on SDGs and supply chain management for procurement departments.

■ Reducing Environmental Impact in the Supply Chain

*3R: Reduce / Reuse / Recycle● The calculated total values may not be consistent with the total values due to data rounding.　● Third-party assured values (independent assurance report on p.74) are indicated with the 　 mark.

➡As for the green procurement quantity of main construction materials, please refer to the material flow on p.74 or our website.

Adoption of Green Procurement Items (Construction Design: Non-Consolidated)

Structural items

Architectural items●Ceramic tiles●Thermal insulation sashes and doors, etc.

●Recycled steel material●Ultra-high-strength concrete, etc.

Other items●Rooftop greening, etc.

Equipment items

60%18%

12%

10%

●LED lighting fixtures●Automatic water faucets●Water-saving toilet bowl●Automatic flushing system and water-saving urinal with automatic flushing system●High-efficiency transformers, etc.

Breakdown of specified items

in the design stage

Quantity of Construction Waste (Non-Consolidated)

Calculation Standard for Quantity of Construction Waste

Construction Waste Treatment Breakdown (Non-Consolidated) (103t)

Am

ount

gen

erat

ed 1

,658

Con

trac

ted

dis

pos

al a

mou

nt

1,47

9Direct �nal disposal amount 9

Intermediatetreatmentamount234

Recyclingfacility1,237

Resourcerecoveryamoun1,415

Recycling 184

Intermediatetreatment residue 50 Final

disposalamount59

Recycledamount1,599

Sale of valuable materials,wide-area certi�cation, on-site use, etc.179

(excluding sludge and waste not attributable to Taisei Corporation)

（103t）

0

500

1,000

1,500

2,000

2,500

3,000

1,554（1,281）1,554（1,281）

666（227）666（227）

17（14）

2,236（1,522）

2012

1,863（1,414）1,863（1,414）

797（270）797（270）

35（25）

2,695（1,709）

2013

1,676（1,215）1,676（1,215）

636（250）636（250）

43（24）

2,355（1,489）

2014 （FY）

1,426（1,207）1,426（1,207）

835（276）835（276）

22（20）

2,284（1,503）

2015

1,775（1,415）1,775

（1,415）

597（234）597

（234）

43（9）

2,415（1,658）

2016

( ) is the quantity excluding polluted mud and waste not originating from the Company■Quantity recycled　■Quantity of intermediate processing　■Quantity of direct final disposal

Emissions and Recycling Rate by Construction Waste Category (Non-Consolidated) Unit: 103t

Construction waste Civilengineering

Building constructionTotal Recycling rate

New construction Demolition Subtotal

Concrete remnants 233 180 651 832 1,065 100.0%

Asphalt and concrete remnants 59 41 42 83 142 100.0%

Construction site sludge 408 277 57 334 742 ーMixed waste 11 27 14 40 51 71.1%

Wood scrap 20 7 7 14 34 98.3%

Metal scrap 80 67 41 108 188 99.9%

Miscellaneous 31 68 93 161 193 69.8%

Total 843 667 905 1,572 2,415 ー

Promotion of 3R* Activities and Green ProcurementEnvironment Division

In FY2016, the final disposal rate for construction waste excluding sludge and quantities not attributable to Taisei Corporation was 3.5%. We also operate the “Taisei Corporation Green Procurement Guidelines” for the purpose of adopting materials and equipment and applying construction methods with low environmental impact. In FY2016, the green procurement rate was 30.8%, based on procurement data for 91 items.

Decrease construction waste final disposal

3.5%

Objective Item Calculation Method & Standard

[Civil engineering, building construction (sites), and factories] Calculation of construction and industrial waste emissions

Construction by-products (waste and valuable resources) emitted at the sites of the Taisei Group’s individual construc-tion projects, joint venture construction for which Taisei Group is the representative, and factories owned by Taisei Group.

Results for adoption of green procurement items

Calculated the quantities based on the design specifications by Eco Sheet CASBEE introduced to buildings designed by Taisei Corporation

Final disposal rate (%) (final disposal quantity / quantity arising) × 100 (excluding construction sludge and quantities not attribut-able to Taisei Corporation)Recycle rate = 100 - final disposal rateRe

sour

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Taisei Corporation is continuously working to develop technologies to create a society with rich biodiversity. We are developing a wide range of proposals using those technologies, from planning and construction of facilities to support for operation and management after completion.

At Sapporo Dome, our technologies were adopted from the planning stage with the aim of creating an environment that can be used by diverse living creatures. In order to verify that they can actually inhabit the environment, long-term monitoring of living creatures has been implemented and demonstrated from the planning stage to the present day. The store of knowledge acquired in the process has been used in developments such as the biodiversity communication tool “Ikimono (living creatures) Concierge,” and is shared broadly with society through various environmental awareness plans and activities conducted by Sapporo Dome Co., Ltd.

Taisei Corporation cooperated and participated in the “2nd Expedition to Find the Living Creatures of Sapporo Dome - Let’s Observe the Birds and Insects that Live in the Dome” (organized by Sapporo Dome Co., Ltd.), a nature observation event for elementary school students and their parents held at Sapporo Dome on August 1, 2016.［Images 1 2 ］

After an explanation by Taisei Corporation employees about environmental measures taken during construction, participants wandered around the grounds of Sapporo Dome accompanied by biology specialists, looking for birds and insects and touching the natural surroundings with their own hands in this program implemented to teach the value of biodiversity. ［Images 3 4 ］

The Taisei Group carries out initiatives for employees and their families to help them better understand the importance of the connection of the construction business and social life with the natural environment. We implement various environmental activities and education, including volunteer activities that have continued for more than 10 years, and support for NGOs working to protect small animals and forests.

Conserve Biodiversity

■ Support and Practice Activities & Trainings to Preserve Natural Environment

■ Environmental Contribution Activities and Environmental Education

● Volunteer activities to protect rural communities (Tokyo Greenship Action) ［Image 5 ］

● Volunteer activities to make dormouse nest boxes［Image 6 ］● Support for “animal pathways” for small animals● Environmental contribution activities by volunteer employees “TAISEI

1ton CLUB”［Image 7 ］ (Support for forest conservation activities in the Philippines by REDD+ project)

● Seminars on the environment (Specialists are invited to give talks on topics such as eco-life overseas)

● E-learning on the environment for all employees (Environmental management targets and initiatives as an Eco First Corporation)

1

2

3

5

6 7

4



016_0356501372908.indd 71 2017/08/10 10:36:27

KPIs

Reduce Environmental Risks

■ Risk Management at Construction Sites and Offices ■ Complaints on Construction Sites and Responses Taken

Types Response measures (examples)

NoiseIn response to complaints about the noise of a compressor that was set up at a designated place outside the building in order to do chipping work inside a building, the location of the compressor was changed.

Traffic obstruction

In response to complaints about the location where dump trucks and other work vehicles waited in the vicinity of the site, the specialist contractor was directed not to have trucks on standby, and the site was checked regularly.

Vibrations

In response to complaints from the neighborhood about noise and vibration during blasting and digging of tunnels, a measuring device was set up and the measure-ments checked regularly to ensure that the noise was below the control values agreed upon in discussion with customers.

DustIn response to comments that the dust produced on the construction site was carried outside the site on the workers’ shoes, the number of mats where workers could wipe their feet was increased after cleaning up the dust.

Water pollution

In response to an incident in which water used to rinse paint was released into storm drains and polluted water flowed into a river, measures were taken to pre-vent recurrence, including thorough implementation of education and appropriate processing across the Company.

Waste management43％

Construction material recycling16％

Law for promotion of effective utilization of resources 11％

Others12％

Prevention ofhealth impairmentdue to asbestos5％

Water Pollution Control, etc.3％

Industrial Safety and Health Act10％

■Laws and regulations, etc.　66%

■Site planning　22%

■Education and training, etc.　12% Noise 39%

Trafficobstruction 15%

Dus 6%

Others 23%

Vibrations 13%

Water pollution　5%

Proportion of Observation Items Portion of Complaint Types

At Taisei Corporation, Site Environmental Patrols are implemented by the environmental departments at head office and branches to survey compliance with environmental laws and regulations on construction sites throughout the Company. Corrective actions and preventative measures are taken in response to observations in order to achieve continuous improvement.

At construction sites, we provide our employees and subcontractors with environmental education based on the “Operation Manual for Prioritized Environmental Issues” to help them understand the importance of environmental management and prevent environment-related accidents, through measures such as sharing cases leading to environ-mental accidents, raising awareness of the proper manage-ment of harmful chemicals such as asbestos and PCBs, and thoroughly implementing appropriate management and processing of contaminated soil.

In FY2016, no accidents or legal violations related to the environment occurred.

Taisei Corporation takes the appropriate measures regarding complaints related to the environment reported to its construction sites, etc., and maintains records and reports using communication sheets based on the EMS procedures and communicates across the relevant departments and companywide when necessary.

We also strive to respond appropriately to opinions received from citizen groups and other organizations.

Proper Management of Construction WasteEnvironment Division

In order to ensure the proper processing of construction waste, Taisei Corporation has been promoting the use of the electronic manifest (waste transmittal form) in cooperation with outsourcing companies for waste processing, collection and transport companies, and waste disposal companies, and has worked to improve the rate of use. Since we have achieved our initial goal of increasing use, the electronic manifest has become a matter for everyday management starting in FY2017, but we are continuing our efforts to ensure proper management of waste, including digitalization of subcontracts for industrial waste processing and promotion of the electronic manifest within the Taisei Group.

Improve electronic manifest diffusion rate

94.7%

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KPIs


Technologies and initiatives to reduce risks and solve issues concerning the environment are developed and deployed at various stages of the Taisei Group’s business activities, from planning and design to construction, operation, and demolition, and these contribute to reducing the impact on the global environment.

Environmental risks and issues influence each other and are profoundly interrelated in various fields such as low carbon, resource recycling, and co-existence with nature (biodiversity). For that reason, the development and deployment of environmentally friendly technologies in any one of these fields contributes to reducing the environmental impact in all, and Taisei Corporation has an important role to play as a socially responsible company involved in the formation of social capital.

Taisei Corporation has been implementing “CO2 Zero Action,” an initiative to reduce environmental impact in the construction stage, at all construction sites in Japan and at some construction sites overseas together with many companies in the supply chain. In addition, construction sites that carry out particularly advanced initiatives are selected as “Eco Model Projects,” and further CO2 reduction activities are implemented.

Starting with the construction of Japan’s first urban Net Zero Energy Building, the “ZEB Demonstration Building,” Taisei Corporation has worked to spread and expand ZEB as an industry top runner by realizing ZEB in customers’ buildings, among other measures.

We will continue our efforts to contribute to achieving Japan’s CO2 reduction targets by widely promoting the shift to ZEB in buildings of various purposes, including tenant buildings.

Promote Development of Technologies ＷEB

Promote Environmental Activities

■ Technologies and Initiatives That Are Useful for Solving Environmental Issues

■ Implementation of CO2 Zero Action and Eco Model Project ■ ZEB (Zero Energy Building) Proposals

See our website for more details of our environment-related technologies.http://www.taisei.co.jp/english/environment/

Ｗｅｂ

Taisei Corporation Technology Center ZEB Demonstration Building“Eco Model Project” icon for site

indication

Providing Environmentally Friendly TechnologiesEnvironment DivisionTaisei Corporation pursues research and development for the prevention of global warming, effective utilization of resources, and conservation of biodiversity. In FY2016, we made 30 media announcements about environment-related technology and projects that apply it. Main examples include technologies and systems related to ZEB and smart communities, earthquake resistance and seismic isolation technologies and technologies to analyze and evaluate earthquake response, purification technologies for contaminated soil or water, and solar lighting systems.

Promote media presentations on research, development and promotion of environmental technologies

30Projects


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Material Flow and Third-Party Assurance� ＷEB

For details on material flow, environmental accounting and third-party assurance, please refer to our website.Ｗｅｂ

■Taisei Corporation■7 Main Group Companies

Diesel

Kerosene

Gasoline

Heavy oil

Construction sites (sites)

Factories

Of�ces

Ready mixed concrete4,833

(Non-consolidated)

Aggregates1,979

Cement262

Steel638

Others 26

Taisei Corporation2,338

7 Main Group Companies132

Fossil fuel (103KL)

Electricity (106kWh)

Main construction materials

(103t)

Water (103m3)

60 111

1

34

7

18122

11

1.4

0.5

2.0

■Taisei Corporation■7 Main Group Companies

219

12 8

26

67138

22

23

2

77

71

Construction sites (sites)

Factories

Of�ces

Scope1

Scope2

Scope3





CO2

(103t-CO2)CO2 by Scope

(103t-CO2)Construction waste

(103t)Water

(103m3)

Material Flow of Taisei Group

Calculation Standard for Material Flow Data

OUTPUT(Quantity discharged)

Civil engineering BuildingConstruction

Offices

(Consumption)

INPUT

Data indicated with the mark are the same data as some of those indicated with the mark among data disclosed online in the “CSR Report: Environment.” Of the said, data indicated with the mark (which are the same data as that indicated with the mark online) are subject to third-party assurance by Ernst & Young Sustainability Co., Ltd., whose “Independent Assurance Report” is given below.http://www.taisei.co.jp/english/csr/annual_report_online2017/csr/environment/assurance/index.html● Organization covered: the Taisei Group (Taisei Corporation, TAISEI ROTEC CORPORATION, Taisei-Yuraku Real Estate Co., Ltd., TAISEI U-LEC CO., LTD., TAISEI SETSUBI CO.,

LTD., TAISEI HOUSING CORPORATION, SEIWA RENEWAL WORKS CO., LTD., and J-FAST Co., Ltd.), which are all within Japan only. Environmental data cover more than 90% of the sales made by the entire Taisei Group.

・ Calculation standard: Calculated based on in-house standards and the Taisei Group’s environmental data calculation manual for the management of environmental information, complying with the Act on the Rational Use of Energy, the Act on Promotion of Global Warming Measures, the Waste Disposal and Public Cleansing Act, and the GHG Protocol, etc. In calculation of CO2 emissions, Taisei Corporation uses the value of the fuel consumption of the Japan Construction Mechanization Association, from which the fat content is excluded.

● Energy-related: Fossil fuels (heavy oil, diesel, gasoline, kerosene), electrical power, city gas, and LPG consumption and their energy-equivalent values.

objective Item Calculation Method & Standard

Classification by business type Classification into civil engineering and building construction (sites), offices (excluding development projects and others), and factories

CO2 emissions Scope classification Scope 1: CO2 emissions associated with the combustion of fossil fuelsScope 2: Indirect CO2 emissions associated with the use of electricity, steam, and chilled and hot waterScope 3: CO2 emissions associated with the transport of construction waste off construction sites and the outward and return

transport of soil from construction (off-site emissions)

CO2 emissions CO2 emission coefficient: Calculated using the emission coefficient in accordance with the Act to Rationalize the Use of Diesel, Heavy Oil, and Energy and the Act on Promotion of Global Warming Countermeasures. For offices, the actual emission coefficient for FY2015 according to the electrical power company is used.

Electrical power: Calculated using the 2015 emission coefficient on the user end announced by the Federation of Electrical Power Industries of Japan (before reflecting the Kyoto credit), 0.534t-CO2 / Mwh.

City gas: Calculated using the standard calorific value of the gas supply company and the emission coefficient of the Act on Promotion of Global Warming Countermeasures.

[Offices and Factories] Energy-related and water consumption

The annual quantities purchased and used by the offices and factories of the Taisei Group are calculated in monthly units.

[Civil Engineering and building construction (sites)] Energy-related and water consumption

Calculated for each company based on the Taisei Group environmental data manual. Consumption in a two-month period in FY2016 is sampled at 193 construction sites to calculate the consumption per unit of construction turnover (basic unit). Annual consumption is calculated by multiplying this basic unit by the construction turnover for the year. For civil engineering, this calculation is performed for each construction type.

[Civil Engineering and building construction (sites)] Calculation of the main construction materials and other materials (concrete formworks and alternative formworks) purchased.

The quantities of the main construction materials and other materials purchased directly through individual construction of Taisei Corporation and joint venture construction for which Taisei Corporation is the representative. The same calculation method applies to the consumption of concrete formworks and alternative formworks.

[Civil engineering, building construction (sites), and factories] Calculation of construction and industrial waste emissions

Construction by-products (waste and valuable resources) emitted at the sites of the Taisei Group individual construction projects, joint venture construction for which Taisei Group is the representative, and factories owned by Taisei Group.

Mat

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Table of Comparisons for ISO 26000 and GRI Guidelines (As of July 1, 2017)

ISO26000 GRI Guidelines

The following chart is a comparison table of required disclosure categories under “ISO 26000 (guidelines regarding social

responsibilities: seven core subjects)” and the GRI “Sustainability Reporting Guidelines 4th Edition (G4),” and publicized content

in this report and the website of Taisei Corporation. We are currently working on transition to the GRI standards.

Core subjects and issues Reference Page

6.2 Organization Governance6.2.3 42-586.3 Human Rights6.3.3 Issue 1 626.3.4 Issue 2 626.3.5 Issue 3 626.3.6 Issue 4 636.3.7 Issue 5 62-636.3.8 Issue 6 646.3.9 Issue 7 636.3.10 Issue 8 626.4 Labor Practices6.4.3 Issue 1 626.4.4 Issue 2 636.4.5 Issue 3 ─6.4.6 Issue 4 63-666.4.7 Issue 5 63-666.5 The Environment6.5.1 Issue 1 67-686.5.2 Issue 2 67-686.5.3 Issue 3 72-736.5.4 Issue 4 706.5.5 Issue 5 696.5.6 Issue 6 716.6 Fair Operating Practices6.6.3 Issue 1 55-566.6.4 Issue 2 55-566.6.5 Issue 3 55-566.6.6 Issue 4 586.6.7 Issue 5 56-576.7 Consumer Issues6.7.3 Issue 1 59-606.7.4 Issue 2 59-606.7.5 Issue 3 606.7.6 Issue 4 ─6.7.7 Issue 5 ─6.7.8 Issue 6 59-606.7.9 Issue 7 ─6.8 Community Involvement and Development6.8.3 Issue 1 61,Web (social contribution activities list)6.8.4 Issue 2 61,Web (social contribution activities list)6.8.5 Issue 3 61,Web (social contribution activities list)6.8.6 Issue 4 ー6.8.7 Issue 5 61,Web (social contribution activities list)6.8.8 Issue 6 ー6.8.9 Issue 7 ー7.6 Enhancing credibility regarding social responsibility7.6.1 Issue 1 ー7.6.2 Issue 2 Web (third-party assurance)7.6.3 Issue 3 ー

Items Reference Page

Strategy and AnalysisG4-1 15-19G4-2 13-14,25,27,29,43-46,67Organizational ProfileG4-3 114G4-4 7-8,11,13-14G4-5 114G4-6 Japan (majority of earnings)G4-7 11,114G4-8 11,114,Web (corporate information)G4-9 9-12,114G4-10 9-12,77-78G4-11 63G4-12 58G4-13 N/AG4-14 42-44,52,72G4-15 7-8,18,42-44G4-16 N/AIdentified Material Aspects and BoundariesG4-17 7-8G4-18 7-8G4-19 43G4-20 42-48G4-21 42-48G4-22 N/AG4-23 N/AStakeholder EngagementG4-24 54G4-25 54G4-26 53-54G4-27 47-48,53-54Report ProfileG4-28 7G4-29 7G4-30 7G4-31 7,Back coverG4-32 75,Web (third-party assurance)G4-33 Web (third-party assurance)GovernanceG4-34 43,49-50,83-84G4-35 43,20-24G4-36 43G4-37 43G4-38 49-51,83-84G4-39 49-51G4-40 49-51G4-41 49-51G4-42 43G4-43 43G4-44 43G4-45 43-46G4-46 43-46G4-47 52G4-48 43G4-49 43G4-50 ─G4-51 51G4-52 51G4-53 ─G4-54 ─G4-55 ─Ethics and IntegrityG4-56 42-44,55-56G4-57 55G4-58 55Disclosure of Management ApproachDMA 42-48EconomicEconomic PerformanceEC1 9-14,45,59EC2 25,27,29,52,84EC3 ─EC4 ─


Market PresenceEC5 ─EC6 ─Indirect Economic ImpactsEC7 ─EC8 ─Procurement PracticesEC9 ─EnvironmentMaterialsEN1 Web (group material flow)EN2 ─EnergyEN3 Web (group material flow)EN4 ─EN5 ─EN6 ─EN7 ─WaterEN8 Web (group material flow)EN9 ─EN10 ─BiodiversityEN11 ─EN12 ─EN13 71EN14 ─EmissionsEN15 45,69,74,Web (group material flow)EN16 45,69,74,Web (group material flow)EN17 45,69,74,Web (group material flow)EN18 69EN19 69,Web (group material flow)EN20 Web (group material flow)EN21 Web (group material flow)Effluents and WasteEN22 Web (group material flow)EN23 70,Web (group material flow)EN24 ─EN25 Web (group material flow)EN26 ─Products and ServicesEN27 45,69,73EN28 70ComplianceEN29 31,68TransportEN30 ─OverallEN31 Web (environmental accounting)Supplier Environmental AssessmentEN32 58EN33 45,58Environmental Grievance MechanismsEN34 72SocialEmploymentLA1 45,62-63,Web (personnel data)LA2 ─LA3 45,Web (personnel data)Labor/Management RelationsLA4 63Occupational Health and SafetyLA5 63LA6 11,45-46,77-78LA7 ─LA8 63Training and EducationLA9 45LA10 60,64LA11 ─Diversity and Equal OpportunityLA12 2,11,77-78


Equal Remuneration for Women and MenLA13 ─Supplier Assessment for Labor PracticesLA14 58LA15 45,58Labor Practices Grievance MechanismsLA16 ─Society(Human Rights)InvestmentHR1 58HR2 62Non-DiscriminationHR3 ─Freedom of Association and Collective BargainingHR4 58Child LaborHR5 58,62Forced or Compulsory LaborHR6 58,62Security PracticesHR7 ─Indigenous RightsHR8 ─AssessmentHR9 45,62Supplier Human Rights AssessmentHR10 58HR11 45,58Human Rights Grievance MechanismsHR12 ─Society(Society)Local CommunitiesSO1 61,Web (social contribution activities list)SO2 ─Anti-corruptionSO3 55,58SO4 45,54-55,58SO5 55,58Public PolicySO6 ─Anti-competitive BehaviorSO7 56ComplianceSO8 55-56,Web (environmental accounting)Supplier Assessment for Impacts on SocietySO9 58SO10 45-46,58Grievance Mechanisms for Impacts on SocietySO11 ─Society(Product Responsibility)Customer Health and SafetyPR1 59PR2 ─Product and Service LabelingPR3 ─PR4 ─PR5 45-46,54,59Marketing CommunicationsPR6 N/APR7 N/ACustomer PrivacyPR8 45-46,57CompliancePR9 ─FS6 ─FS7 ─FS8 ─FS10 ─FS11 ─


016_0356501372908.indd 75 2017/08/10 10:36:31

The corporate information of Taisei Corporation is provided, including an outline of the Company and overseas network.

Financial and Corporate Data

11-Year Financial and Non-Financial Summary p.77

Explanation and Analysis of Business Results p.79

Medium-term Company Management Strategy and Issues to Be Dealt with p.83

Risk Information p.84

Consolidated Financial Statements p.85

Independent Auditor’s Report p.113

Corporate Profile p.114

Overseas Network p.116


017_0356501372908.indd 76 2017/08/08 21:16:48

Millions of Yen(except for per share figures)


Thousands of U.S. Dollars*1

(except for per share figures)

March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2017

Revenue:

Net sales:Construction contracts ¥ 1,673,576 ¥ 1,517,770 ¥ 1,467,070 ¥ 1,289,809 ¥ 1,079,139 ¥ 1,171,927 ¥ 1,254,291 ¥ 1,321,289 ¥ 1,404,530 ¥ 1,394,677 ¥ 1,342,455 $ 11,965,906Real estate development and other 199,749 193,944 174,112 152,166 138,980 151,577 162,205 212,184 168,740 151,212 144,798 1,290,650

Total 1,873,325 1,711,714 1,641,182 1,441,975 1,218,119 1,323,504 1,416,496 1,533,473 1,573,270 1,545,889 1,487,253 13,256,556% change from previous year 7.4% (8.6)% (4.1)% (12.1)% (15.5)% 8.7% 7.0% 8.3% 2.6% (1.7%) (3.8%)

Costs and expenses:Cost of sales 1,708,751 1,567,091 1,545,918 1,318,593 1,100,022 1,206,014 1,304,677 1,402,446 1,425,295 1,348,302 1,260,968 11,239,576Selling, general and administrative expenses 106,901 95,767 95,920 87,755 81,803 81,004 76,213 77,254 77,558 80,119 85,462 761,761

Total 1,815,652 1,662,858 1,641,838 1,406,348 1,181,825 1,287,018 1,380,890 1,479,700 1,502,853 1,428,421 1,346,430 12,001,337Operating income (loss) 57,673 48,856 (656) 35,627 36,294 36,486 35,606 53,773 70,417 117,468 140,823 1,255,219Income (loss) before income taxes 48,698 42,172 (38,449) 35,516 19,374 16,673 32,828 46,593 66,980 117,797 135,190 1,205,009Income taxes 20,248 13,878 (9,404) 14,462 8,514 15,480 12,399 14,120 28,755 40,996 44,793 399,260Net income (loss) attributable to owners of parent ¥ 26,222 ¥ 24,447 ¥ (24,401) ¥ 21,222 ¥ 10,883 ¥ 1,181 ¥ 20,051 ¥ 32,089 ¥ 38,177 ¥ 77,045 ¥ 90,566 $ 807,256

Per share data of common stock(in yen and dollars):Net assets ¥ 365.72 ¥ 318.12 ¥ 239.87 ¥ 262.15 ¥ 253.94 ¥ 255.60 ¥ 299.84 ¥ 335.42 ¥ 418.61 ¥ 442.67 ¥ 496.60 $ 4.426Net income (loss) attributable to owners of parent 24.64 22.97 (22.93) 19.74 9.58 1.04 17.60 28.17 33.52 65.85 78.57 0.700Cash dividends 6.00 6.00 5.00 5.00 5.00 5.00 5.00 6.00 8.00 16.00 20.00 0.178

Financial ratios:Net income (loss) attributable to owners of parent as a percentage of total revenue 1.4% 1.4% (1.5)% 1.5% 0.9% 0.1% 1.4% 2.1% 2.4% 5.0% 6.1%

Total costs and expenses as a percentage of total revenue 96.9% 97.1% 100.0% 97.5% 97.0% 97.2% 97.5% 96.5% 95.5% 92.4% 90.5%Dividends paid as a percentage of net income 24.4% 26.1% ---% 25.3% 52.2% 482.3% 28.4% 21.3% 23.9% 24.3% 25.5%

Financial position data:Current assets ¥ 1,200,945 ¥ 1,120,798 ¥ 1,082,037 ¥ 912,895 ¥ 847,467 ¥ 982,931 ¥ 1,012,639 ¥ 1,076,213 ¥ 1,136,497 ¥ 1,112,305 ¥ 1,223,572 $ 10,906,248Current liabilities 1,161,870 1,003,741 1,074,229 894,026 808,052 921,196 907,281 946,097 984,762 927,777 986,994 8,797,522Net property, plant and equipment 270,682 244,594 236,705 238,534 232,000 212,639 206,076 181,051 169,973 177,529 175,983 1,568,616Long-term liabilities 276,923 291,550 248,400 250,083 235,607 219,101 292,514 268,802 258,373 211,767 202,271 1,802,933Shareholders' equity 266,636 283,135 252,905 274,779 290,282 284,714 299,336 327,067 370,140 437,533 485,396 4,326,553Net assets 421,731 373,988 284,713 297,179 290,598 292,602 343,300 384,166 492,114 521,278 570,814 5,087,922

Other data:New orders received during the year ¥ 1,875,127 ¥ 1,753,692 ¥ 1,524,578 ¥ 1,244,439 ¥ 1,254,095 ¥ 1,379,572 ¥ 1,404,407 ¥ 1,645,896 ¥ 1,765,743 ¥ 1,671,061 ¥ 1,655,036 $ 14,752,082Contract backlog at the end of year 1,843,576 1,885,554 1,768,950 1,571,414 1,607,390 1,663,459 1,651,370 1,763,793 1,956,266 2,081,438 2,249,221 20,048,320

Shares issued (thousands) 1,064,803 1,064,803 1,064,803 1,090,622 1,140,269 1,140,269 1,140,269 1,140,269 1,171,269 1,171,269 1,146,753

March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017

Number of employees (people) 16,052 15,460 15,260 14,461 14,039 13,776 13,569 13,599 13,701 13,748 13,977

Male (people) ---- ---- ---- ---- ---- ---- ---- ---- 11,685 11,710 11,734

Female (people) ---- ---- ---- ---- ---- ---- ---- ---- 2,016 2,038 2,243

Japanese (people) ---- ---- ---- ---- ---- ---- ---- ---- 12,971 12,970 13,259

Non-Japanese (people) ---- ---- ---- ---- ---- ---- ---- ---- 730 778 718

Frequency rates*2*3 ---- ---- ---- ---- ---- ---- ---- 0.89 1.00 0.59 0.59

CO2 emissions*4 (103t-CO2) ---- ---- ---- ---- ---- ---- ---- ---- 333 337 332

Number of patent applications*2 (cases) 164 208 209 219 233 275 304 283 300 316 311

Financial Highlights(Consolidated)

Non-Financial Highlights*2

11-Year Financial and Non-Financial SummaryTAISEI CORPORATION and Consolidated SubsidiariesYears ended March 31, 2007 through 2017

*1 U.S. dollar amounts were translated from yen, for convenience only, at the rate of US $1=¥112.19

*2 The Target organizations include TAISEI CORPORATION, TAISEI ROTEC CORPORATION, Taisei-Yuraku Real Estate Co., Ltd., TAISEI U-LEC CO., LTD., TAISEI SETSUBI CO., LTD., SEIWA RENEWAL WORKS CO., LTD., and TAISEI HOUSING CORPORATION.

*3 The targets of frequency rates are set on the basis of all accidents entailing days off work including a small and medium sized employers and self-employed workers.*4 For target organization of CO2 emissions, please refer to p.74.


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Thousands of U.S. Dollars*1

(except for per share figures)

March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2017

Revenue:

Net sales:Construction contracts ¥ 1,673,576 ¥ 1,517,770 ¥ 1,467,070 ¥ 1,289,809 ¥ 1,079,139 ¥ 1,171,927 ¥ 1,254,291 ¥ 1,321,289 ¥ 1,404,530 ¥ 1,394,677 ¥ 1,342,455 $ 11,965,906Real estate development and other 199,749 193,944 174,112 152,166 138,980 151,577 162,205 212,184 168,740 151,212 144,798 1,290,650

Total 1,873,325 1,711,714 1,641,182 1,441,975 1,218,119 1,323,504 1,416,496 1,533,473 1,573,270 1,545,889 1,487,253 13,256,556% change from previous year 7.4% (8.6)% (4.1)% (12.1)% (15.5)% 8.7% 7.0% 8.3% 2.6% (1.7%) (3.8%)

Costs and expenses:Cost of sales 1,708,751 1,567,091 1,545,918 1,318,593 1,100,022 1,206,014 1,304,677 1,402,446 1,425,295 1,348,302 1,260,968 11,239,576Selling, general and administrative expenses 106,901 95,767 95,920 87,755 81,803 81,004 76,213 77,254 77,558 80,119 85,462 761,761

Total 1,815,652 1,662,858 1,641,838 1,406,348 1,181,825 1,287,018 1,380,890 1,479,700 1,502,853 1,428,421 1,346,430 12,001,337Operating income (loss) 57,673 48,856 (656) 35,627 36,294 36,486 35,606 53,773 70,417 117,468 140,823 1,255,219Income (loss) before income taxes 48,698 42,172 (38,449) 35,516 19,374 16,673 32,828 46,593 66,980 117,797 135,190 1,205,009Income taxes 20,248 13,878 (9,404) 14,462 8,514 15,480 12,399 14,120 28,755 40,996 44,793 399,260Net income (loss) attributable to owners of parent ¥ 26,222 ¥ 24,447 ¥ (24,401) ¥ 21,222 ¥ 10,883 ¥ 1,181 ¥ 20,051 ¥ 32,089 ¥ 38,177 ¥ 77,045 ¥ 90,566 $ 807,256

Per share data of common stock(in yen and dollars):Net assets ¥ 365.72 ¥ 318.12 ¥ 239.87 ¥ 262.15 ¥ 253.94 ¥ 255.60 ¥ 299.84 ¥ 335.42 ¥ 418.61 ¥ 442.67 ¥ 496.60 $ 4.426Net income (loss) attributable to owners of parent 24.64 22.97 (22.93) 19.74 9.58 1.04 17.60 28.17 33.52 65.85 78.57 0.700Cash dividends 6.00 6.00 5.00 5.00 5.00 5.00 5.00 6.00 8.00 16.00 20.00 0.178

Financial ratios:Net income (loss) attributable to owners of parent as a percentage of total revenue 1.4% 1.4% (1.5)% 1.5% 0.9% 0.1% 1.4% 2.1% 2.4% 5.0% 6.1%

Total costs and expenses as a percentage of total revenue 96.9% 97.1% 100.0% 97.5% 97.0% 97.2% 97.5% 96.5% 95.5% 92.4% 90.5%Dividends paid as a percentage of net income 24.4% 26.1% ---% 25.3% 52.2% 482.3% 28.4% 21.3% 23.9% 24.3% 25.5%

Financial position data:Current assets ¥ 1,200,945 ¥ 1,120,798 ¥ 1,082,037 ¥ 912,895 ¥ 847,467 ¥ 982,931 ¥ 1,012,639 ¥ 1,076,213 ¥ 1,136,497 ¥ 1,112,305 ¥ 1,223,572 $ 10,906,248Current liabilities 1,161,870 1,003,741 1,074,229 894,026 808,052 921,196 907,281 946,097 984,762 927,777 986,994 8,797,522Net property, plant and equipment 270,682 244,594 236,705 238,534 232,000 212,639 206,076 181,051 169,973 177,529 175,983 1,568,616Long-term liabilities 276,923 291,550 248,400 250,083 235,607 219,101 292,514 268,802 258,373 211,767 202,271 1,802,933Shareholders' equity 266,636 283,135 252,905 274,779 290,282 284,714 299,336 327,067 370,140 437,533 485,396 4,326,553Net assets 421,731 373,988 284,713 297,179 290,598 292,602 343,300 384,166 492,114 521,278 570,814 5,087,922

Other data:New orders received during the year ¥ 1,875,127 ¥ 1,753,692 ¥ 1,524,578 ¥ 1,244,439 ¥ 1,254,095 ¥ 1,379,572 ¥ 1,404,407 ¥ 1,645,896 ¥ 1,765,743 ¥ 1,671,061 ¥ 1,655,036 $ 14,752,082Contract backlog at the end of year 1,843,576 1,885,554 1,768,950 1,571,414 1,607,390 1,663,459 1,651,370 1,763,793 1,956,266 2,081,438 2,249,221 20,048,320

Shares issued (thousands) 1,064,803 1,064,803 1,064,803 1,090,622 1,140,269 1,140,269 1,140,269 1,140,269 1,171,269 1,171,269 1,146,753

March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017

Number of employees (people) 16,052 15,460 15,260 14,461 14,039 13,776 13,569 13,599 13,701 13,748 13,977

Male (people) ---- ---- ---- ---- ---- ---- ---- ---- 11,685 11,710 11,734

Female (people) ---- ---- ---- ---- ---- ---- ---- ---- 2,016 2,038 2,243

Japanese (people) ---- ---- ---- ---- ---- ---- ---- ---- 12,971 12,970 13,259

Non-Japanese (people) ---- ---- ---- ---- ---- ---- ---- ---- 730 778 718

Frequency rates*2*3 ---- ---- ---- ---- ---- ---- ---- 0.89 1.00 0.59 0.59

CO2 emissions*4 (103t-CO2) ---- ---- ---- ---- ---- ---- ---- ---- 333 337 332

Number of patent applications*2 (cases) 164 208 209 219 233 275 304 283 300 316 311

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Thousands of U.S. Dollars* (except for per share figures)

2016 2017 2017 Change (%)

Contract backlog at the beginning of the year ¥ 1,956,266 ¥ 2,081,438 $ 18,552,794 6.4%

New orders received during the year 1,671,061 1,655,036 14,752,082 (1.0)Net sales 1,545,889 1,487,253 13,256,556 (3.8)Contract backlog at the end of the year ¥ 2,081,438 ¥ 2,249,221 $ 20,048,320 8.1%

Net income attributable to owners of parent ¥ 77,045 ¥ 90,566 $ 807,256 17.5% Per share (in yen and dollars) 65.85 78.57 0.700 19.3

Cash dividends applicable to the year 18,719 22,907 204,180 22.4 Per share (in yen and dollars) 16.00 20.00 0.178 25.0

Net assets 521,278 570,814 5,087,922 9.5 Per share (in yen and dollars) 442.67 496.6 4.426 12.2

Total assets 1,660,822 1,760,079 15,688,377 6.0

Explanation and Analysis of Business ResultsTAISEI CORPORATION and Consolidated SubsidiariesYears ended March 31, 2016 and 2017

Client Project

JAPAN SPORT COUNCIL New National Stadium Development Project (2nd Period) ➡ p.3-4

Hotel Okura Co.,Ltd. (Tentative Name) Toranomon 2-10 Project ➡ p.30 1

East Nippon Expressway Company Limited Construction Work of the Tokyo Outer Ring Road at Oizumi South

Mitsui Fudosan Co., Ltd. Toyosu 2nd District 2-1 Project (Towers A and C)

Tokyo Metropolitan Government Construction of Wide-area Balancing Reservoir under the Loop Route No.7 (Shakujii River Section)

Client Project

Okada Building Co.,Ltd. (Tentative Name) MM59th Town Area B Block Development Plan ➡ p.28 2

Cooperative for Urban Renewal of Roppongi 3-chome East District Urban Renewal of Roppongi 3-chome East District ➡ p.28 1

JAPANESE RED CROSS SOCIETY Construction of SAITAMA RED CROSS HOSPITAL ➡ p.28 6

Urban Renaissance Agency Land Preparation (First Phase) at the Area of Nobiru Northern Hills ➡ p.26 5

Ministry of Land, Infrastructure, Transport and Tourism Kinki Regional Development Bureau

Construction of the Intake of Tunnel Outlet Facility in Redevelopment of Amagase Dam ➡ p.26 6

* U.S. dollar amounts above and elsewhere in this Annual Report were translated from yen, for convenience only, at the rate of US $1=¥112.19, the approximate exchange rate at March 31, 2017.

Major new orders received during FY ended March 2017

Major projects completed during FY ended March 2017

The Japanese economy during this fiscal year continued to recover

overall as capital investment has been moderately bouncing back

responding to strong corporate performance, and consumer

spending has been gradually picking up.

In the domestic construction market, both government and

private investments in construction were steady, allowing the

construction industry to maintain a solid business environment.

Under these circumstances, the Company and its affiliated

companies reported consolidated results of its operations as follows:

Orders received of 1,655.0 billion yen, 1.0% decrease

compared to the previous fiscal year, net sales of 1,487.3 billion

yen, 3.8% decrease, operating income of 140.8 billion yen, 19.9%

increase, and net income attributable to owners of parent of 90.6

billion yen,17.5% increase compared to the previous fiscal year.

Status of Results


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Results according to reporting segment, etc., are as follows (the

results for reporting segments include internal transactions between

segments).

1. Civil Engineering

In our Group, net sales decreased by 1.4% compared with the

previous consolidated fiscal year to ¥449.4 billion, due to a

decrease in net sales for both the Company and its consolidated

subsidiaries. Also, operating income increased by 8.8% year on

year to ¥55.1 billion, due to an improvement in gross profit margin.

2. Building Construction


previous consolidated fiscal year, to ¥977.7 billion, due to a

decrease in net sales for the Company. Also, operating income

increased by 30.1% year on year to ¥73.3 billion, due to an increase

in gross profit margin.

Millions of Yen

2016 2017

Name of reporting segment, etc.:

Civil engineering ¥ 444,462 ¥ 427,594

Building construction 1,101,915 1,101,472

Real estate development 112,201 115,337

Others 12,482 10,630

Total ¥ 1,671,061 ¥ 1,655,035

(Consolidated) Orders received

(Consolidated) Sales

Note: In Orders received and Sales, transactions between segments have been eliminated.

Millions of Yen

2016 2017

Name of reporting segment, etc.:

Civil engineering ¥ 433,924 ¥ 422,847

Building construction 978,176 938,548

Real estate development 121,305 115,225

Others 12,482 10,630

Total ¥ 1,545,889 ¥ 1,487,252

3. Real Estate Development

In the real estate sales market, while demand was strong in the

condominium market mainly for properties in central Tokyo as

sales prices remained high due to the rising cost of land, some

properties in the suburbs took a long time to sell. The building

leasing market was robust, amid improvement in the vacancy

rate as corporate demand related to relocation and expansion of

floor space continued to flourish and the average rent continued

to climb.


previous consolidated fiscal year to ¥121.7 billion, due to a

decrease in sales for both the Company and its consolidated

subsidiaries. Also, operating income increased by 41.1% year on

year to ¥13.3 billion, due to an increase in gross profit margin.

4. Other


previous consolidated fiscal year to ¥13.0 billion, and operating

income increased by 27.5% year on year to ¥1.2 billion.

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017_0356501372908.indd 80 2017/08/08 21:16:49

1. Overview

Although the business results for this consolidated fiscal year did

not achieve the predictions at the beginning of the fiscal year for net

sales, predictions were achieved for orders received, operating

income, and net income attributable to owners of parent. Also, as

net income attributable to owners of parent increased by ¥13.5

billion from the previous consolidated fiscal year to ¥90.5 billion,

ROE (return on equity) increased by 1.4% to 16.7%.

Despite an increase of ¥1.1892 trillion in liabilities due to an

increase in deposits received, net assets increased to ¥570.8 billion

due to posting of net income attributable to owners of parent, and

the ratio of capital to assets increased by 1.1% compared with the

end of the previous consolidated fiscal year to 32.3%. Also, as a

result of a decrease in interest-bearing loans associated with

procurement of finance by ¥16.5 billion to ¥238.1 billion (including

non-recourse loans of ¥3.5 billion, down ¥1.6 billion), the D/E ratio

improved 0.1 points to 0.4 times.

Analysis of Financial Position and Business Results2. Financial Position

(1) Assets

As a result of an increase in cash and time deposits, total assets

increased by 6.0% or ¥99.2 billion compared with the end of the

previous consolidated fiscal year to ¥1.7600 trillion.

(2) Liabilities

Total liabilities increased by 4.4% or ¥49.7 billion compared with

the end of the previous consolidated fiscal year to ¥1.1892

trillion, due to an increase in deposits received.

2. Cash Flows from Investing Activities

A balance of excess revenue of ¥6.2 billion was recorded for this

consolidated fiscal year due to the sales of investment securities, etc.

(expenditure of ¥25.0 billion in the previous consolidated fiscal year).

3. Cash Flows from Financing Activities

A balance of expenditure of ¥60.0 billion was incurred in this

consolidated fiscal year due to cash dividends paid and acquisition

of treasury stock, etc. (expenditure of ¥35.1 billion in the previous

consolidated fiscal year).

As a result of the above, cash and cash equivalents at the end of

this consolidated fiscal year was ¥534.7 billion (an increase of

¥163.0 billion compared with the end of the previous consolidated

fiscal year), and the balance of interest-bearing loans associated

with procurement of finance was ¥238.1 billion (a decrease of ¥16.5

billion year on year). In addition, of the balance of interest-bearing

loans associated with procurement of finance at the end of this

consolidated fiscal year, non-recourse loans were ¥3.5 billion (a

decrease of ¥1.6 billion year on year).

1. Cash Flows from Operating Activities

Income before income taxes of ¥135.1 billion was earned in this

term, which, together with an increase in deposits received and

other factors, resulted in a balance of excess revenue of ¥218.1

billion for this consolidated fiscal year (excess revenue in the

previous consolidated fiscal year was ¥95.3 billion).

Cash Flows

Cash Flows Status■ Cash flows from operating activities ■ Cash flows from investing activities■ Cash flows from financing activities

Increase / decrease in cash and cash equivalents

24.6

88.5

(17.2)(46.5)

73.0

(4.7)

(68.8)

(30.4)

138.7

24.016.0

(13.9)

300.0

200.0

100.0

(100.0)

0

（Billions of Yen）

2012 2013 2014 2015 (FY)

34.5

163.0

218.1

6.2

(35.1)(60.0)

95.3

(25.0)

2016

Explanation and Analysis of Business ResultsTAISEI CORPORATION and Consolidated SubsidiariesYears ended March 31, 2016 and 2017


017_0356501372908.indd 81 2017/08/08 21:16:49

The Company has made it a basic policy to pay long-term stable

dividend to Shareholders. The Company tries to reinforce internal

reserve for the future business operation, and returns the profit to

the Shareholders by way of a special dividend and the like when

the business performance of the Company is well.

Comprehensively taking into account both achievement of

much greater performance than the initial plan, and business

surroundings in the future, etc., it has been decided to increase

the dividend by ¥4 compared with the previous term and the last

dividend forecast, or a dividend of ¥20 per year per ordinary share

is allocated (of which ¥8 is allocated as an interim dividend).

The Articles of Incorporation of the Company permit an interim

dividend to be allocated, in accordance with Paragraph 5 of Article

454 of the Companies Act, with dividends allocated twice every

year, at the middle and at the end of the fiscal year. These

dividends are decided at the General Meeting of Shareholders for

the end of term and the Board meeting for the interim dividend.

Also, it is the policy to utilize retained earnings to promote

next generation technology development, etc.

At the Board meeting on May 12, 2017, acquisition of treasury

stock, the maximum limitation of which is 40 million shares (¥25.0

billion), was resolved in order to increase shareholder returns and

to improve the capital efficiency.

Millions of Yen Yen

Total dividend amount Dividend per share

Resolution meeting date:

Board meeting, November 11, 2016 ¥ 9,162 ¥ 8.00

General Meeting of Shareholders, June 29, 2017 13,744 12.00

Total dividend amount and dividend per share

Dividend Policy

Note: The dividends on retained at the record date of this term are as shown above.

(3) Net Assets

Net assets increased by 9.5% or ¥49.5 billion to ¥570.8 billion

compared with the end of the previous consolidated fiscal year,

due to posting of net income attributable to owners of parent,

etc., despite carrying out an acquisition and cancellation of

treasury stock.

3. Business Results

(1) New Orders and Net Sales

Despite an increase in Real Estate Development, new orders

received have decreased in Building Construction, decreasing

overall by 1.0% compared with the previous consolidated fiscal year

to ¥1.6550 trillion.

Also, net sales decreased in all segments, decreasing by 3.8% to

¥1.4872 trillion, compared with the previous consolidated fiscal year.

(2) Operating Income

Operating income increased by 19.9% to ¥140.8 billion

compared with the previous consolidated fiscal year, due to an

increase in gross profit resulting from an increase in gross margin

rates in all segments.

(3) Net Income Attributable to Owners of Parent

Net income attributable to owners of parent increased by 17.5%

to ¥90.5 billion compared with the previous fiscal year, due to the

increase in operating income, offsetting deterioration of

extraordinary loss (income) due to losses incurred in relation to the

Anti-Monopoly Act.

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017_0356501372908.indd 82 2017/08/08 21:16:49

Medium-term Company Management Strategy and Issues to Be Dealt with

Although we expect the market environment to remain strong for a while, the outlook is unclear beyond the Tokyo 2020 Olympic and Paralympic

Games in light of the decreasing population and financial constraints, and securing and nurturing employees in the construction business is

deemed to be a major challenge.

Under these circumstances, we are implementing the “Medium-term Business Plan (2015-2017),” and are working with full force toward

achieving the management goals listed below.

A case of violation of the Anti-Monopoly Act occurred at our group company TAISEI ROTEC CORPORATION. We consider this to be a

grave and serious matter, and will strive to prevent recurrence and to restore trust at an early stage by implementing even more rigorous

compliance across the Group, including TAISEI ROTEC CORPORATION.

Medium-term Business Plan (FY2015-2017)

Basic Policies Deep Cultivation of the Construction Industry, Our Core Business

• To obtain high customer satisfaction by ensuring quality and safety

• To achieve stable and sustainable growth

• To promote conversion to a business structure for creation of higher added value

• To obtain high trust and evaluation from all stakeholders

Aims

1. Strategic initiatives for target projects 1. Participation in National Projects 2. Participation in large scale private sector projects 3. Participation in overseas infrastructure export

2. Active contribution to enhancement of social infrastructure 1. Participation in the main infrastructure development for the safety, security, and convenience of the people 2. Participation in projects for stable electrical power supply 3. Active contribution to earthquake reconstruction projects

3. Promotion of next generation technological development 1. Development of construction technologies for the next generation 2. More advanced technologies for dealing with earthquakes 3. Development of technologies for differentiation in fields such as environment, nuclear power, etc.

4. Establishment of next generation business models for target fields 1. Renewal and replacement field 2. Nuclear power field 3. Environmental field 4. Engineering field 5. Urban development field

5. Strengthen domestic construction business 1. Improvement in construction capabilities 2. Strengthen the quality and safety management systems 3. Expansion of design and construct projects 4. Improvement in procurement power

6. Construct the basis for healthy growth of overseas projects 1. Construct systems with a view towards participation in overseas infrastructure exports 2. Promotion of business in areas and fields with good prospects 3. Strengthen the business systems of overseas companies

7. Increase the Group strength 1. Promote Group housing strategy 2. Development of new renewal technologies for seismic retrofit of infrastructure, etc. 3. Strengthening cooperation among group companies in connection with sales, procurement, and construction

8. Evolution of management infrastructure 1. Establishment of corporate governance for the next generation 2. Promotion and improvement of a solid financial foundation 3. Training and strengthening of human resources 4. Promotion of diversity management 5. Utilization of ICT

Management Tasks


017_0356501372908.indd 83 2017/08/08 21:16:49

Risk Information

The main items of risk for the business of this Group which are considered to have the potential to have an important effect on the decisions

of investors are as follows. The Group recognizes the possibility of occurrence of these risks, and intends to take measures to avoid these

risks, and deal with them when they occur.

Matters described relating to the future are the judgment of the Group as of the end of this consolidated financial year.

1. Trends in the Construction and Real Estate Markets

If the construction or real estate markets suddenly shrink or if the

competitive environment becomes severe, it could affect out results.

2. Risks Associated with Overseas Projects

We carry out projects in many countries throughout the world, so

terrorism, war, violence, etc., could occur, the circumstances in

the country could worsen, there could be sudden fluctuations in

the economic situation, there could be large fluctuations in the

exchange rates, and changes in laws and regulations could

change without notice, and if it is not possible to hedge these

risks through the contract, our results could be affected.

3. Customer Credit Risk

Normal contracts in the construction industry involve a large

contract amount in a single transaction, and in most cases

contracts are concluded on the condition that a large amount of

the construction fee is paid when the constructed object is

handed over. Therefore, if the customer runs into credit problems

before the construction fee is received, it could affect out results.

4. Fluctuations in Material and Equipment Prices

If the price of raw materials suddenly increases, and if it is difficult to

reflect this in the contract amount, our results could be affected.

5. Asset Holding Risks

Assets such as real estate and tradable securities, etc., are held

out of necessity for sales activities, so our results could be

affected by fluctuations in the present market price.

6. Retirement Benefit Obligations

If there are changes in the assumptions for calculating the

retirement benefit obligations, such as a drop in the value of

retirement assets, investment yield, discount rate, etc., our results

could be affected.

7. Fluctuations in Interest Rates

If interest rates suddenly increased, our results could be affected.

8. Defects on Construction Products or Services

If we become liable for a large amount of compensation based on

liability for defects caused by the Group's work or product liability,

our results could be affected.

9. Ancillary Related Project Risks

The Group operates ancillary projects associated with PFI

projects, leisure projects, as well as civil engineering, building, and

real estate development projects. The project period for most of

these is long, so if the project environment changes greatly in the

future, our results could be affected.

10. Legal Controls over the Civil Engineering and Building

Construction Business

The civil engineering business and the building construction

business are subject to legal controls such as the Construction

Industry Act, the Building Standard Act, the Industrial Safety and

Health Act, and the Anti-Monopoly Act, etc., and if these laws or

regulations were amended or abolished, or if new laws or regulations

were enacted, and if we were subjected to administrative disciplinary

action in accordance with these laws or regulations, our results could

be affected.

11. Occurrence of a Major Accident

If a major accident involving human injury or loss or life or damage

to a structure occurs in the civil engineering or building construction

fields, our results could be affected.

12. Large Scale Natural Disaster, etc., Risk

If a large scale earthquake, a large scale natural calamity such as

wind or water damage, etc., or if an infectious disease became an

epidemic, our results could be affected.

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017_0356501372908.indd 84 2017/08/08 21:16:49

Consolidated Balance SheetsTAISEI CORPORATION and Consolidated SubsidiariesMarch 31, 2016 and 2017

Millions of Yen

Thousands of U.S. Dollars

(Note 1)

ASSETS 2016 2017 2017

Current assets:

Cash and time deposits (Notes 3 and 4) ............................... ¥ 374,193 ¥ 535,592 $ 4,773,973

Notes and accounts receivable, trade (Note 4) ...................... 443,635 420,131 3,744,817

Cost on uncompleted contracts ............................................ 84,549 67,053 597,673

Cost on development projects in progress ............................ 107,771 102,743 915,795

Other inventories ................................................................... 4,009 3,462 30,858

Deferred income tax assets (Note 8) ..................................... 28,072 28,046 249,987

Other current assets ............................................................. 70,430 66,843 595,801

Allowance for doubtful accounts ........................................... (354) (298) (2,656)

Total current assets ............................................ 1,112,305 1,223,572 10,906,248

Fixed assets:

Property, plant and equipment:

Buildings and structures (Notes 6, 9 and 20) ..................... 124,111 123,479 1,100,624

Machinery, vehicles, tools, furniture and fixtures (Notes 6 and 20) ... 53,814 55,071 490,873

Land (Notes 6, 17 and 20) ................................................. 121,155 119,826 1,068,063

Construction in progress ................................................... 255 922 8,218

299,335 299,298 2,667,778

Accumulated depreciation ................................................. (121,806) (123,315) (1,099,162)

Net property plant and equipment ..................... 177,529 175,983 1,568,616

Intangibles ............................................................................ 4,875 5,085 45,325

Investments and other assets:

Investment securities (Notes 4, 5 and 6) ............................ 321,320 309,015 2,754,390

Net defined benefit asset (Note 10) .................................... 10,944 10,778 96,069

Deferred income tax assets (Note 8) .................................. 628 3,029 26,999

Other assets (Note 6) ......................................................... 36,484 35,082 312,702

Allowance for doubtful accounts ........................................ (3,263) (2,465) (21,972)

Total investments and other assets .................... 366,113 355,439 3,168,188

Total fixed assets .................................. 548,517 536,507 4,782,129

Total assets .......................................... ¥ 1,660,822 ¥ 1,760,079 $ 15,688,377

The accompanying notes are an integral part of these balance sheets.


018_0356501372908.indd 85 2017/08/08 21:18:11

Millions of Yen


(Note 1)

LIABILITIES AND NET ASSETS 2016 2017 2017

Current liabilities:

Notes and accounts payable, trade (Note 4) ......................... ¥ 442,758 ¥ 424,494 $ 3,783,706

Short-term loans (Notes 4, 6 and 7) ...................................... 54,341 71,417 636,572

Current portion of long-term debt (Notes 4 and 7) ................. 65,000 53,554 477,351

Income taxes payable ........................................................... 23,633 31,139 277,556

Advances received and progress billings on uncompleted contracts (Note 14) ... 160,172 175,689 1,565,995

Deposits received (Note 4) .................................................... 120,205 171,132 1,525,377

Allowance for warranty on completed contracts .................... 3,316 3,391 30,226

Allowance for losses on construction contracts ..................... 22,117 15,666 139,638

Allowance for losses on order received ................................. 43 15 134

Other current liabilities ........................................................... 36,192 40,497 360,967

Total current liabilities ............................... 927,777 986,994 8,797,522

Long- term liabilities:

Long-term debt (Notes 4, 6 and 7) ........................................ 136,161 113,928 1,015,491

Deferred income tax liabilities (Note 8) ................................... 8,262 11,351 101,177

Deferred income tax liabilities for revaluation of land (Notes 8 and 17) .... 4,189 4,184 37,294

Retirement benefits for directors and corporate auditors ....... 412 432 3,851

Allowance for losses on investments in subsidiaries and affiliates ... 40 66 588

Allowance for environmental protection ................................. 119 90 802

Allowance for losses on Anti-Monopoly Act (Note 18) ........... — 11,036 98,369

Net defined benefit liability (Note 10) ...................................... 43,926 41,262 367,787

Other long-term liabilities ....................................................... 18,658 19,922 177,574

Total long-term liabilities ........................................................ 211,767 202,271 1,802,933

Total liabilities ........................................... 1,139,544 1,189,265 10,600,455

Net assets (Notes 11 and 21):

Shareholders’ equity:

Common stock

Authorized: 2,200,000,000 shares

Issued (Note 23): 1,146,752,860 shares ............................ 122,742 122,742 1,094,055

Capital surplus ...................................................................... 104,465 85,150 758,980

Retained earnings ................................................................. 210,721 278,614 2,483,412

Less: Treasury stock, at cost (Note 23) .................................. (395) (1,110) (9,894)

Total shareholders’ equity ........................ 437,533 485,396 4,326,553

Accumulated other comprehensive income:

Unrealized holding gains on securities, net of taxes ............... 85,161 82,463 735,030

Deferred losses on hedging derivatives, net of taxes (Note 13) ... (214) (158) (1,408)

Revaluation reserve for land (Note 17) ................................... 177 773 6,890

Foreign currency translation adjustments .............................. (2,158) (2,969) (26,464)

Remeasurements of defined benefit plans, net of taxes (Note 10) .... (2,624) 3,275 29,191

Total accumulated other comprehensive income .... 80,342 83,384 743,239

Non-controlling interests: ......................................................... 3,403 2,034 18,130

Total net assets ........................................ 521,278 570,814 5,087,922

Total liabilities and net assets ................... ¥ 1,660,822 ¥ 1,760,079 $ 15,688,377

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018_0356501372908.indd 86 2017/08/08 21:18:11

Consolidated Statements of IncomeTAISEI CORPORATION and Consolidated SubsidiariesYears Ended March 31, 2016 and 2017

Millions of Yen

Thousands ofU.S. Dollars

(Note 1)

2016 2017 2017

Revenue:

Net sales (Note 15):

Construction contracts ...................................................... ¥ 1,394,677 ¥ 1,342,455 $ 11,965,906

Real estate development (and other) ................................. 151,212 144,798 1,290,650

1,545,889 1,487,253 13,256,556

Costs and expenses (Note 15):

Cost of sales (Note 19) .......................................................... 1,348,302 1,260,968 11,239,576

Selling, general and administrative expenses (Note 19) ......... 80,119 85,462 761,761

1,428,421 1,346,430 12,001,337

Operating income ..................................................................... 117,468 140,823 1,255,219

Other income (expenses):

Interest and dividend income ................................................ 3,652 3,913 34,878

Interest expenses .................................................................. (2,796) (2,157) (19,226)

Taxes and dues .................................................................... (727) (758) (6,756)

Litigation settlement .............................................................. — (955) (8,513)

Foreign exchange gains (losses) ............................................ (4,771) 2,276 20,287

Investment gain on equity method ........................................ 4,448 1,379 12,292

Gains on sales of investment securities ................................. 19 2,878 25,653

Gains on sales of property and equipment ............................ 67 552 4,920

Gains on return of assets from retirement benefits trust ......... 4,021 — —

Impairment losses on fixed assets (Note 20) ......................... (3,018) (685) (6,106)

Losses on Anti-Monopoly Act (Note 18) ................................ — (11,640) (103,753)

Other, net .............................................................................. (566) (436) (3,886)

329 (5,633) (50,210)

Income before income taxes ..................................................... 117,797 135,190 1,205,009

Income taxes (Note 8):

Current .............................................................................. (33,332) (45,506) (405,615)

Deferred ............................................................................ (7,664) 713 6,355

(40,996) (44,793) (399,260)

Net income ............................................................................... 76,801 90,397 805,749

Net loss attributable to non-controlling interests ........................ 244 169 1,507

Net income attributable to owners of parent ............................. ¥ 77,045 ¥ 90,566 $ 807,256

YenU.S. Dollars

(Note 1)

Amounts per share of common stock:

Net income (Note 21) ........................................................ ¥ 65.85 ¥ 78.57 $ 0.700

Diluted net income (Note 21) ............................................. — — —

Cash dividends applicable to the year ............................... 16.00 20.00 0.178

The accompanying notes are an integral part of these statements.


018_0356501372908.indd 87 2017/08/08 21:18:11

Consolidated Statements of Comprehensive IncomeTAISEI CORPORATION and Consolidated SubsidiariesYears Ended March 31, 2016 and 2017

Millions of Yen

Thousands ofU.S. Dollars

(Note 1)

2016 2017 2017

Net income ............................................................................... ¥ 76,801 ¥ 90,397 $ 805,749

Other comprehensive income (Note 22):

Unrealized holding gains on securities, net of taxes ............... (26,048) (2,691) (23,986)

Deferred gains (losses) on hedging derivatives, net of taxes ... (3) 2 18

Revaluation reserve for land .................................................. 233 — —

Foreign currency translation adjustments .............................. (342) (404) (3,601)

Remeasurements of defined benefit plans, net of taxes ......... (12,574) 5,923 52,794

Share of other comprehensive income of associates accounted for by the equity method ... (402) (438) (3,904)

Total other comprehensive income ........................................ (39,136) 2,392 21,321

Comprehensive income ............................................................ ¥ 37,665 ¥ 92,789 $ 827,070

Comprehensive income attribute to:

Owners of parent .................................................................. ¥ 38,026 ¥ 93,014 $ 829,076

Non-controlling interests ....................................................... (361) (225) (2,006)


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018_0356501372908.indd 88 2017/08/08 21:18:11

Consolidated Statements of Changes in Net AssetsTAISEI CORPORATION and Consolidated SubsidiariesYears Ended March 31, 2016 and 2017

Millions of Yen Millions of Yen

Common stock Capital surplus

Retained earnings Treasury stock

Total shareholders’

equity

Unrealized holding gains on securities, net of

taxes

Deferred gains (losses) on hedging

derivatives, net of taxes

Revaluation reserve for land

Foreign currency translation

adjustments

Remeasurements of defined benefit

plans, net of taxes

Total accumulated

other comprehensive

incomeNon-controlling

interestsTotal net assets

Balance at March 31, 2015 ........................................... ¥ 122,742 ¥ 104,464 ¥ 143,290 ¥ (356) ¥ 370,140 ¥ 111,199 ¥ (4) ¥ (70) ¥ (1,486) ¥ 9,974 ¥ 119,613 ¥ 2,361 ¥ 492,114

Cumulative effect of changes in accounting policies ..... — — — — — — — — — — — — —

Restated balance at beginning of year ........................ 122,742 104,464 143,290 (356) 370,140 111,199 (4) (70) (1,486) 9,974 119,613 2,361 492,114

Dividends ..................................................................... — — (11,699) — (11,699) — — — — — — — (11,699)

Net income attributable to owners of parent ................. — — 77,045 — 77,045 — — — — — — — 77,045

Sale of treasury stock ................................................... — 1 — 1 2 — — — — — — — 2

Acquisition of treasury stock ........................................ — — — (40) (40) — — — — — — — (40)

Retirement of treasury stock ........................................ — — — — — — — — — — — — —

Reversal of revaluation reserve for land ........................ — — (31) — (31) — — (10) — — (10) — (41)

Changes of scope of consolidation .............................. — — 97 — 97 — — — — — — — 97

Changes of scope of equity method ............................. — — 2,019 — 2,019 7 (255) 24 — (19) (243) — 1,776

Changes other than shareholders’ equity, net ............... — — — — — (26,045) 45 233 (672) (12,579) (39,018) 1,042 (37,976)

Balance at March 31, 2016 ........................................... ¥ 122,742 ¥ 104,465 ¥ 210,721 ¥ (395) ¥ 437,533 ¥ 85,161 ¥ (214) ¥ 177 ¥ (2,158) ¥ (2,624) ¥ 80,342 ¥ 3,403 ¥ 521,278

Cumulative effect of changes in accounting policies ..... — — 12 — 12 — — — — — — — 12

Restated balance at beginning of year ........................ 122,742 104,465 210,733 (395) 437,545 85,161 (214) 177 (2,158) (2,624) 80,342 3,403 521,290

Dividends ..................................................................... — — (22,032) — (22,032) — — — — — — — (22,032)



Acquisition of treasury stock ........................................ — — — (20,031) (20,031) — — — — — — — (20,031)

Retirement of treasury stock ........................................ — (19,315) — 19,315 — — — — — — — — —

Reversal of revaluation reserve for land ........................ — — (596) — (596) — — 596 — — 596 — —


Changes of scope of equity method ............................. — — (71) — (71) (2) — — — — (2) — (73)

Changes other than shareholders’ equity, net ............... — — — — — (2,696) 56 — (811) 5,899 2,448 (1,369) 1,079

Balance at March 31, 2017 ........................................... ¥ 122,742 ¥ 85,150 ¥ 278,614 ¥ (1,110) ¥ 485,396 ¥ 82,463 ¥ (158) ¥ 773 ¥ (2,969) ¥ 3,275 ¥ 83,384 ¥ 2,034 ¥ 570,814

Thousands of U.S. Dollars (Note 1) Thousands of U.S. Dollars (Note 1)

Common Stock Capital surplus



equity


taxes





adjustments


plans, net of taxes

Total accumulated

other comprehensive


interests Total net assets

Balance at March 31, 2016 ........................................... $ 1,094,055 $ 931,144 $ 1,878,250 $ (3,522) $ 3,899,927 $ 759,078 $ (1,907) $ 1,578 $ (19,235) $ (23,389) $ 716,125 $ 30,332 $ 4,646,384


Restated balance at beginning of year ........................ 1,094,055 931,144 1,878,357 (3,522) 3,900,034 759,078 (1,907) 1,578 (19,235) (23,389) 716,125 30,332 4,646,491

Dividends ..................................................................... — — (196,381) — (196,381) — — — — — — — (196,381)





Reversal of revaluation reserve for land ........................ — — (5,312) — (5,312) — — 5,312 — — 5,312 — —



Changes other than shareholders’ equity, net ............... — — — — — (24,030) 499 — (7,229) 52,580 21,820 (12,202) 9,618

Balance at March 31, 2017 ........................................... $ 1,094,055 $ 758,980 $ 2,483,412 $ (9,894) $ 4,326,553 $ 735,030 $ (1,408) $ 6,890 $ (26,464) $ 29,191 $ 743,239 $ 18,130 $ 5,087,922



018_0356501372908.indd 89 2017/08/08 21:18:12

Millions of Yen Millions of Yen

Common stock Capital surplus



equity


taxes





adjustments


plans, net of taxes

Total accumulated

other comprehensive


interestsTotal net assets

Balance at March 31, 2015 ........................................... ¥ 122,742 ¥ 104,464 ¥ 143,290 ¥ (356) ¥ 370,140 ¥ 111,199 ¥ (4) ¥ (70) ¥ (1,486) ¥ 9,974 ¥ 119,613 ¥ 2,361 ¥ 492,114

Cumulative effect of changes in accounting policies ..... — — — — — — — — — — — — —

Restated balance at beginning of year ........................ 122,742 104,464 143,290 (356) 370,140 111,199 (4) (70) (1,486) 9,974 119,613 2,361 492,114

Dividends ..................................................................... — — (11,699) — (11,699) — — — — — — — (11,699)



Acquisition of treasury stock ........................................ — — — (40) (40) — — — — — — — (40)

Retirement of treasury stock ........................................ — — — — — — — — — — — — —

Reversal of revaluation reserve for land ........................ — — (31) — (31) — — (10) — — (10) — (41)


Changes of scope of equity method ............................. — — 2,019 — 2,019 7 (255) 24 — (19) (243) — 1,776

Changes other than shareholders’ equity, net ............... — — — — — (26,045) 45 233 (672) (12,579) (39,018) 1,042 (37,976)

Balance at March 31, 2016 ........................................... ¥ 122,742 ¥ 104,465 ¥ 210,721 ¥ (395) ¥ 437,533 ¥ 85,161 ¥ (214) ¥ 177 ¥ (2,158) ¥ (2,624) ¥ 80,342 ¥ 3,403 ¥ 521,278


Restated balance at beginning of year ........................ 122,742 104,465 210,733 (395) 437,545 85,161 (214) 177 (2,158) (2,624) 80,342 3,403 521,290

Dividends ..................................................................... — — (22,032) — (22,032) — — — — — — — (22,032)





Reversal of revaluation reserve for land ........................ — — (596) — (596) — — 596 — — 596 — —



Changes other than shareholders’ equity, net ............... — — — — — (2,696) 56 — (811) 5,899 2,448 (1,369) 1,079

Balance at March 31, 2017 ........................................... ¥ 122,742 ¥ 85,150 ¥ 278,614 ¥ (1,110) ¥ 485,396 ¥ 82,463 ¥ (158) ¥ 773 ¥ (2,969) ¥ 3,275 ¥ 83,384 ¥ 2,034 ¥ 570,814

Thousands of U.S. Dollars (Note 1) Thousands of U.S. Dollars (Note 1)

Common Stock Capital surplus



equity


taxes





adjustments


plans, net of taxes

Total accumulated

other comprehensive


interests Total net assets

Balance at March 31, 2016 ........................................... $ 1,094,055 $ 931,144 $ 1,878,250 $ (3,522) $ 3,899,927 $ 759,078 $ (1,907) $ 1,578 $ (19,235) $ (23,389) $ 716,125 $ 30,332 $ 4,646,384


Restated balance at beginning of year ........................ 1,094,055 931,144 1,878,357 (3,522) 3,900,034 759,078 (1,907) 1,578 (19,235) (23,389) 716,125 30,332 4,646,491

Dividends ..................................................................... — — (196,381) — (196,381) — — — — — — — (196,381)





Reversal of revaluation reserve for land ........................ — — (5,312) — (5,312) — — 5,312 — — 5,312 — —



Changes other than shareholders’ equity, net ............... — — — — — (24,030) 499 — (7,229) 52,580 21,820 (12,202) 9,618

Balance at March 31, 2017 ........................................... $ 1,094,055 $ 758,980 $ 2,483,412 $ (9,894) $ 4,326,553 $ 735,030 $ (1,408) $ 6,890 $ (26,464) $ 29,191 $ 743,239 $ 18,130 $ 5,087,922

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Consolidated Statements of Cash FlowsTAISEI CORPORATION and Consolidated SubsidiariesYears Ended March 31, 2016 and 2017

Millions of Yen


(Note 1)

2016 2017 2017

Cash flows from operating activities:Income before income taxes ................................................. ¥ 117,797 ¥ 135,190 $ 1,205,009Depreciation and amortization ............................................... 5,991 6,268 55,870Impairment losses on fixed assets ......................................... 3,018 685 6,106Increase (decrease) in allowance for doubtful accounts ......... (1,239) (854) (7,612)Increase (decrease) in allowance for losses on construction contracts ... (19,119) (6,451) (57,501)Increase (decrease) in net defined benefit liability ................... (12,811) (2,662) (23,728)Increase (decrease) in allowance for losses on Anti-Monopoly Act ... — 11,036 98,369Interest and dividend income ................................................ (3,652) (3,913) (34,878)Interest expenses .................................................................. 2,796 2,156 19,217Foreign exchange losses (gains) ............................................ 4,771 (2,276) (20,287)Write-down of investment securities ...................................... 304 217 1,934Gain (Loss) on sale of marketable and investment securities .. (18) (2,787) (24,842)Write-down of cost on development projects in progress ...... 2,043 1,371 12,220Losses (gains) on sales of property and equipment ............... (67) (552) (4,920)Investment gain on equity method ........................................ (4,448) (1,378) (12,283)Decrease (increase) in trade receivables ................................ 47,085 23,431 208,851Decrease (increase) in cost on uncompleted contract ........... (7,243) 17,490 155,896Decrease (increase) in inventories other than cost on uncompleted contract ... (13,909) 3,091 27,551Decrease (increase) in other current assets ........................... 28,305 3,346 29,825Decrease (increase) in net defined benefit asset .................... 25,864 167 1,489Decrease (increase) in investment and other assets ............... 5,938 1,406 12,533Increase (decrease) in trade payables .................................... (46,801) (18,138) (161,672)Increase (decrease) in advances received and progress billings on uncompleted contracts ... 22,460 15,540 138,515Increase (decrease) in deposits received ............................... (21,806) 50,937 454,024Decrease (Increase) in other current liabilities ......................... 7,553 4,977 44,362Other, net .............................................................................. (18,319) 13,722 122,311

124,493 252,019 2,246,359Cash received (paid) during the year for:

Interest and dividend received ............................................... 4,435 8,139 72,547Interest paid .......................................................................... (2,973) (2,338) (20,840)Income taxes paid ................................................................. (30,595) (39,662) (353,525)

Net cash provided by (used in) operating activities ......... 95,360 218,158 1,944,541

Cash flows from investing activities:Decrease (increase) in time deposits ..................................... (1,319) 1,652 14,725Purchase of marketable and investment securities ................ (17,257) (2,097) (18,692)Proceeds from sale of marketable and investment securities ... 2,811 9,912 88,350Purchase of property, equipment and intangible assets ......... (10,222) (7,227) (64,418)Proceeds from sale of property, equipment and intangible assets ... 487 4,155 37,035Other, net .............................................................................. 429 (99) (881)

Net cash provided by (used in) investing activities .......... (25,071) 6,296 56,119

Cash flows from financing activities:Increase (decrease) in short-term borrowings ........................ (2,734) 17,076 152,206Proceeds from long-term borrowings .................................... 31,100 32,950 293,698Repayment of long-term borrowings ..................................... (48,710) (54,975) (490,017)Proceeds from long-term non-recourse loans payable .......... 1,500 — —Repayment of long-term non-recourse loans payable ........... (100) (1,600) (14,262)Issue of bonds ...................................................................... 9,956 — —Redemption of bonds ........................................................... (15,000) (10,000) (89,135)Acquisition of treasury stock ................................................. (40) (20,031) (178,545)Cash dividends paid, including those to minority interest ....... (11,699) (22,032) (196,381)Other, net .............................................................................. 555 (1,449) (12,915)

Net cash provided by (used in) financing activities .......... (35,172) (60,061) (535,351)

Effect of exchange rate changes on cash and cash equivalents ... (2,310) (1,382) (12,319)Net increase (decrease) in cash and cash equivalents ............... 32,807 163,011 1,452,990Cash and cash equivalents at beginning of year ....................... 337,166 371,731 3,313,406Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation .... 1,758 45 401Cash and cash equivalents at end of year (Note 3) ................... ¥ 371,731 ¥ 534,787 $ 4,766,797



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Notes to Consolidated Financial StatementsTAISEI CORPORATION and Consolidated SubsidiariesYears Ended March 31, 2016 and 2017

1. Basis of Presenting Consolidated Financial StatementsThe accompanying consolidated financial statements of Taisei Corporation (the “Company”) and its consolidated subsidiaries (collectively the “Group”) have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards.

The accompanying consolidated financial statements have been reformatted and translated into English (with some expanded descriptions) from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law. Certain supplementary information, included in the statutory Japanese language consolidated financial statements but not required for fair presentation, is not presented in the accompanying consolidated financial statements.

The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2017, which was ¥ 112.19 to U.S. $ 1. The translations should not be construed as representations of what the Japanese yen amounts have been, could have been, or could in the future be when converted into U.S. dollars at this or any other rate of exchange.

2. Summary of Significant Accounting Policies(a) Consolidation and equity methodThe Company prepares the consolidated financial statements including the accounts of the Company and those of its majority-owned subsidiaries, whether directly or indirectly controlled. The consolidated financial statements include the accounts of 29 subsidiaries for the year ended March 31, 2017 (29 subsidiaries for the year ended March 31, 2016). KYOUTAN CONSTRUCTION Co., LTD. is included in the scope of consolidation because the company became more significant on the consolidated financial statements. SHINSAI BRIDGE LLC. is excluded from the scope of consolidation because of liquidation.

Exclusion of certain small-scale subsidiaries from the scope of consolidation does not have material impact on the consolidated financial statements.

All significant intercompany transactions, account balances and unrealized gains or losses have been eliminated in consolidation.

The financial statements of non-consolidated subsidiaries, and investments in affiliated companies in which the Group does not have control but has the ability to exercise significant influence, are accounted for by the equity method.

The financial statements in 19 subsidiaries, mainly consist of TOKYO ACADEMIC SERVICE Co., Ltd. and EHIME HOSPITAL PERTNERS Co., Ltd. are accounted for by the equity method for the year ended March 31, 2017. 2 non-consolidated subsidiaries newly established are included in the scope of equity method.

Investments in 41 affiliated companies are also accounted for by the equity method for the year ended March 31, 2017 (43 affiliated companies for the year ended March 31, 2016). 1 affiliated company that was newly established is included in the scope of equity method. 1 affiliated company the Group sold its shares partly and other 2 affiliated companies that were liquidated are excluded from the scope of consolidation.

Exclusion of certain small-scale non-consolidated subsidiary (TAISEI-TEHRAN BERKELEY ENGINEERING AND CONSTRUCTION COMPANY) from the scope of equity method does not have material effect on the consolidated financial statements.

All consolidated subsidiaries other than 9 consolidated overseas subsidiaries have the same balance sheet date, March 31, corresponding with that of the Company. As for the 9 consolidated overseas subsidiaries whose fiscal year ends are December 31, their financial statements as of December 31 are used in the preparation of the consolidated financial statements. Significant transactions, if any, in the period from January 1 to March 31 have been adjusted in the consolidated financial statements.

(b) Valuation of Assets and Liabilities of SubsidiariesIn the elimination of the investments in subsidiaries, the assets and liabilities of the subsidiaries including the portion allocated to non-controlling interests are recorded based on their fair value at the time the Company acquired control of the respective subsidiaries.

(c) GoodwillSignificant excesses of investment cost over net equity of consolidated subsidiaries and affiliated companies accounted for by the equity method are recognized as goodwill (negative goodwill, if credit balance), and amortized principally over the estimated useful lives or less than twenty years on a straight-line basis. However, immaterial goodwill is charged to income in the year of acquisition. Negative goodwill is credited to income upon occurrence.

(d) Foreign Currency TranslationReceivables and payables denominated in foreign currencies are translated into Japanese yen at year-end exchange rates. The resulting exchange gains and losses are reflected in the consolidated statements of income. All revenues and expenses associated with foreign currencies are translated at rates of exchange prevailing when such transactions are made.

The financial statements of consolidated foreign subsidiaries and affiliated companies under the equity method are translated into Japanese yen at exchange rates prevailing at the respective year-end dates except for shareholders’ equity accounts, which are translated at historical rates. The resulting foreign currency translation adjustments are presented in accumulated other comprehensive income in the net assets section of the consolidated balance sheets.

(e) Cash and Cash Equivalents in the Consolidated Statements of Cash FlowsIn preparing the consolidated statements of cash flows, cash on hand, readily available deposits and short-term highly liquid investments with maturities not exceeding three months at the date of purchase and with insignificant risks of change in value are considered to be cash and cash equivalents.

(f) SecuritiesSecurities held by the Group are classified into (a) debt securities intended to be held to maturity (hereafter “held-to-maturity debt securities”), (b) equity securities issued by subsidiaries and affiliated companies, and (c) all other securities that are not classified in any of the categories above (hereafter “available-for-sale securities”).

Held-to-maturity debt securities are stated at amortized cost. Equity securities issued by subsidiaries and affiliated companies that are not consolidated or accounted for by the equity method are stated at moving-average cost. Available-for-sale securities with available fair market values are stated at fair market value. Unrealized gains and losses on available-for-sale securities, net of applicable income taxes are reported as a separate component of accumulated other comprehensive income in the net assets section. Realized gains and losses on sales of such securities are computed using moving-average cost. Other securities with no available fair market value are stated at moving-average cost.

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Notes to Consolidated Financial Statements (cont.)TAISEI CORPORATION and Consolidated SubsidiariesYears Ended March 31, 2016 and 2017

(g) Revenue Recognition of Construction Revenue associated with construction contracts of which the outcome can be reliably estimated is accounted for by the percentage-of-completion method; otherwise contract revenue is accounted for by the completed-contract method. The percentage of completion at the end of the reporting period is determined by the percentage of the cost incurred to the estimated total costs.

(h) InventoriesThe Company and its certain subsidiaries develop real estate projects on their own account. Cost on development projects in progress are mainly stated at the lower of cost based on the specific-identification cost method or net realizable value. For this purpose, the cost includes the purchase cost of land, incidental costs, direct development costs and (in relation to certain developments by one of the subsidiaries) interest expenses.

Cost on uncompleted contracts is mainly stated at cost based on the specific-identification cost method.

(i) Property, plant and EquipmentProperty, plant and equipment except for buildings and structures are recorded at cost and depreciated principally by the declining-balance method over the standard useful lives prescribed in the Corporation Tax Law. Buildings and structures are principally depreciated by the straight-line method.

(j) Accounting for Lease TransactionsFinance leases, except for certain immaterial or short-term finance leases in which ownership is not transferred to lessee, are capitalized. Capitalized leased assets whose ownership is transferred to lessee are depreciated by the same method of depreciation applied to property, plant and equipment. Capitalized leased assets whose ownership is not transferred to lessee are depreciated to a residual value of zero by the straight-line method over a useful life period corresponding to the lease contract period.

(k) Derivatives and Hedge AccountingDerivative financial instruments are stated at fair value and changes in fair value are recognized as gains or losses unless derivative financial instruments are used for hedging purposes.

If derivative financial instruments are used as hedges and meet certain hedging criteria, the Company and its consolidated domestic subsidiaries defer recognition of gains or losses resulting from changes in fair value of the derivative financial instruments until related losses or gains on hedged items are recognized.

If interest rate swap contracts are used as hedge and meet certain hedging criteria, net amounts to be paid or received under the interest rate swap contracts are added to or deducted from the interest on liabilities for which the swap contract were executed.

(l) Income TaxesThe Company and its wholly owned domestic subsidiaries apply the system of consolidated tax returns.

The Company computes the provision for income taxes based on the pretax income included in the consolidated statement of income and recognizes deferred tax assets and liabilities for expected future tax consequences of temporary differences between the financial statement basis and the tax basis of assets and liabilities.

(m) Allowance for Doubtful AccountsAllowance for doubtful accounts is provided to reserve for probable losses from bad debt. It consists of the estimated uncollectible amount of certain identified doubtful receivables and the amount estimated on the basis of the past default ratio for normal receivables.

(n) Allowance for Warranty on Completed ContractsAllowance for warranty on completed contracts is provided as the amount estimated using an actual ratio of related losses during the past certain periods.

(o) Allowance for Losses on Construction ContractsAllowance for losses on construction contracts is provided with respect to construction projects for which eventual losses are reasonably estimated.

(p) Allowance for Losses on Order ReceivedAllowance for losses on order received is provided with respect to orders (excluding construction contracts) for which eventual losses are reasonably estimated.

(q) Retirement Benefits for Directors and Corporate AuditorsRetirement benefits for directors and corporate auditors of certain consolidated subsidiaries have been set up in accordance with each company’s regulations.

(r) Allowance for Losses on Investments in Subsidiaries and AffiliatesAllowance for losses on investments in subsidiaries and affiliates is provided for estimated losses from certain subsidiaries and affiliates in liquidation.

(s) Allowance for Environmental ProtectionAllowance for environmental Protection is provided based on estimated costs for disposal of Polychlorinated Biphenyl (“PCB”) waste, which is obligated to dispose by the Act on Special Measures Concerning Promotion of Proper Treatment of PCB Waste.

(t) Allowance for Losses on Anti-Monopoly ActAllowance for losses on Anti-Monopoly Act is provided based on estimated payment for penalties under the Anti-Monopoly Act.

(u) Accounting Method for Retirement BenefitNet defined benefit liability is provided for severance and retirement benefits for employees and executive officers of the Company’s certain consolidated subsidiaries based on estimated amounts of projected benefit obligations and plan assets at the year-end.

In calculating projected benefit obligations, the method of attributing estimated amounts of retirement benefits to the period until this fiscal year is based on the benefit formula basis.

Past service costs are amortized using the straight-line method (some consolidated subsidiaries use the declining-balance method) over 1-10 years, which is not longer than an average remaining service period of the employees when the costs are incurred.

Actuarial gains and losses are amortized from the subsequent fiscal year (some consolidated subsidiaries amortize actuarial gains and losses from the current fiscal year) using the straight line method (some consolidated subsidiaries use the declining balance method) over 1-10 years, which is not longer than an estimated average remaining service period of the employees when the gains or losses are incurred.


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(v) Net Income and Cash Dividends per ShareNet income per share is calculated by dividing net income available to common shares by the weighted average number of common shares outstanding during the year. Cash dividends per share shown for each year represent dividends declared as applicable to the respective years.

(w) ReclassificationsCertain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on previously reported results of operations or retained earnings.

(x) Change in Accounting Policy· Application of Implementation Guidance on Recoverability of Deferred Tax AssetsEffective from the fiscal year ended March 31, 2017, the Group adopted “Implementation Guidance on Recoverability of Deferred Tax Assets (the “Guidance”)” (ASBJ Guidance No. 26, March 28, 2016) and revised part of accounting method on recoverability of deferred income tax assets.

The Company and its domestic subsidiaries followed the provisional treatments in article 49 (4) of the Guidance. The differences between deferred income tax assets and liabilities at the beginning of the fiscal year ended March 31, 2017 that were computed in accordance with article 49 (3) and those at the end of the fiscal year ended March 31, 2016 were adjusted to retained earnings and other comprehensive income at the beginning of the fiscal year ended March 31, 2017. The impact on the consolidated financial statements is immaterial.· Changes in depreciation methodEffective from the fiscal year ended March 31, 2017, the Group adopted “Practical Solution on a change in depreciation method due to Tax Reform 2016” (ASBJ PITF No. 32, June 17, 2016) in associated with the amendments to the Japanese Corporation Tax laws. According to this adoption, the Group changed the depreciation method of building facilities and structures acquired after April 1, 2016 from declining-balance method to straight-line method. The impact on the consolidated financial statements is immaterial.

3. Cash and Cash EquivalentsCash and cash equivalents at March 31, 2016 and 2017 consisted of the following:

Millions of Yen Thousands of U.S. Dollars

2016 2017 2017

Cash and time deposits .......................................................................... ¥ 374,193 ¥ 535,592 $ 4,773,973

Less: Time deposits with maturities exceeding three months .................. (2,462) (805) (7,176)

Cash and cash equivalents ..................................................................... ¥ 371,731 ¥ 534,787 $ 4,766,797

4. Financial Instruments(1) Policies for using financial instrumentsThe Group restricts investments to the low risk assets such as deposits, and raise funds by the indirect finance such as loans from bank as well as by the direct finance such as issuing corporate bonds or commercial papers.

Derivative financial instruments are employed mainly for hedging fluctuation in interest rate and foreign currency exchange, and not used to speculate.

Receivables: trade notes and trade accounts are exposed to the credit risks of customers. In order to reduce such risks, the Group conducts strict credit examinations when orders are received, and afterward manage the receivables individually and make effort to detect reduction of credit risks early.

For investment securities which are mainly held-to-maturity debt securities and shares held to keep the relationship with business partners, the Group regularly monitors the fair values or financial positions of the invested companies, and revises the portfolio timely (except for held-to-maturity debt securities) considering the relationship with them.

Debts, trade payables: notes and accounts are debts mostly due within one year. Loans, commercial papers and bonds are primarily for working capital, and have maturity dates of five years or less. Although the loans or bonds issued at variable rates are exposed to interest rate fluctuation risk, the risk is hedged by derivative transactions (interest rate swap contracts).

The Group primarily utilizes derivative transactions related to interest rates in order to mitigate the fluctuation risk in interest rates or to reduce financing costs, and derivative transactions related to currency in order to mitigate the foreign exchange risk. These transactions are exposed to the fluctuation risk in interest rates and the foreign exchange risk. However, the Group is exposed to limited risk, because most of them are hedged by the corresponding transactions. They consider the credit risk to be low, because they conduct derivative transactions solely with reliable international financial institutions.

The Group executes and manages derivative transactions in accordance with internal rules. Their Finance Departments are responsible for conducting, evaluating transactions and managing related risks.

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(2) Fair Value of Financial Instruments(a) Book values of the financial instruments included in the consolidated balance sheet, the fair values of said items as of March 31, 2016

and 2017, were as follows. Items for which it is extremely difficult to calculate the fair value were not included in the following table (see “Note 2” below).

Millions of Yen

2016

Book Value Fair Value Difference

ASSETS

Cash and time deposits .......................................................................... ¥ 374,193 ¥ 374,193 ¥ —

Notes and accounts receivable, trade ..................................................... 443,635 443,621 (14)

Investment securities

Debt securities intended to be held to maturity ................................... 682 703 21

Available-for-sale securities ................................................................. 249,879 249,879 —

LIABILITIES

Notes and accounts payable, trade ........................................................ 442,758 442,758 —

Short-term loans ..................................................................................... 109,081 109,492 (411)

Deposits received ................................................................................... 120,205 120,205 —

Bonds .................................................................................................... 50,000 50,817 (817)

Long-term loans ..................................................................................... 95,114 96,306 (1,192)

[Derivative financial instruments (*)] ......................................................... (2) (2) —

Millions of Yen

2017


ASSETS

Cash and time deposits .......................................................................... ¥ 535,592 ¥ 535,592 ¥ —

Notes and accounts receivable, trade ..................................................... 420,131 420,131 —


Debt securities intended to be held to maturity ................................... 570 584 14

Available-for-sale securities ................................................................. 243,869 243,869 —

LIABILITIES

Notes and accounts payable, trade ........................................................ 424,494 424,494 —

Short-term loans ..................................................................................... 114,701 114,960 (259)

Deposits received ................................................................................... 171,132 171,132 —

Bonds .................................................................................................... 40,000 40,526 (526)

Long-term loans ..................................................................................... 82,945 83,850 (905)

[Derivative financial instruments (*)] ......................................................... 22 22 —

Thousands of U.S. dollars

2017


ASSETS

Cash and time deposits .......................................................................... $ 4,773,973 $ 4,773,973 $ —

Notes and accounts receivable, trade ..................................................... 3,744,817 3,744,817 —


Debt securities intended to be held to maturity ................................... 5,081 5,205 124

Available-for-sale securities ................................................................. 2,173,714 2,173,714 —

LIABILITIES

Notes and accounts payable, trade ........................................................ 3,783,706 3,783,706 —

Short-term loans ..................................................................................... 1,022,382 1,024,690 (2,308)

Deposits received ................................................................................... 1,525,377 1,525,377 —

Bonds .................................................................................................... 356,538 361,226 (4,688)

Long-term loans ..................................................................................... 739,326 747,393 (8,067)

[Derivative financial instruments (*)] ......................................................... 196 196 —

(*) Note: The assets and liabilities are reported as net amounts. Any items for which the total becomes a net liability are indicated in parentheses.


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Note 1: The calculation method of the fair values of financial instrument and securities, derivative transactionsASSETS∙ Cash and time deposits and Notes and accounts receivable, trade The fair values of these financial instruments are almost equivalent to the book value, due to the short term settlements; although, the fair value of receivables due after one year are based on the present values of discounted cash flows reflecting the interest rate, the estimated collection terms and credit risks with respect to each receivables categorized by collection terms.· Investment securitiesThe fair values of marketable securities are based on the quoted market value, and bonds are based on the market value, the price indicated by a third party such as broker or the present value of discounted cash flows.

See the notes on “5. Securities” for notes pertaining to securities categorized by the purposes for which they are held.

LIABILITIES∙ Notes and accounts payable, trade, Short-term loans and Long term loans due within one year, Commercial papers and Deposits received The fair values of these financial instruments are almost equivalent to the book value, due to the short term settlements; although, the fair value of long-term loans due within one year is based on the same method as that for long-term loans.∙ Long-term loansThe fair value of long-term loans is based on the present value of discounted cash flows by the interest rate which may be applicable when the same kind of loans is conducted. ∙ BondsThe fair value of marketable bonds is based on the quoted market value, otherwise the fair value of nonmarketable bonds are based on the present value of discounted cash flows by the interest rate reflecting the estimated redemption terms and issuer’s credit risk.

[Derivative financial instruments]See the notes on “13. Derivative Transactions”.

Note 2: Financial instruments for which it is deemed to be extremely difficult to calculate the fair valueNonmarketable securities (book value amount to ¥ 70,759 million and ¥ 64,576 million ($ 575,595 thousand) at March 31, 2016 and 2017, respectively) are not included in the Assets Investment securities–Available-for-sale securities above, as it is extremely difficult to calculate the fair values because they have no quoted market prices and the future cash flows cannot be estimated.

Note 3: Scheduled redemption amounts after the consolidated balance sheet date for monetary claims and securities with period of maturities as of March 31, 2016 and 2017 were as follows:

Millions of Yen

2016

Due within one yearDue after one year but

within five yearsDue after five years but

within ten years

Time deposits ......................................................................................... ¥ 373,739 ¥ — ¥ —

Receivables: Trade notes and trade accounts ......................................... 441,687 1,949 —


Debt securities intended to be held to maturity

Government bonds ......................................................................... 112 300 270

Available-for-sale securities

Government bonds ......................................................................... 25 271 —

Others .................................................................................................... 30 — —

Total ................................................................................... ¥ 815,593 ¥ 2,520 ¥ 270

Millions of Yen

2017



within ten years

Time deposits ......................................................................................... ¥ 535,125 ¥ — ¥ —

Receivables: Trade notes and trade accounts ......................................... 420,127 4 —



Government bonds ......................................................................... 148 178 244


Government bonds ......................................................................... 26 245 —

Others .................................................................................................... — — —

Total ................................................................................... ¥ 955,426 ¥ 427 ¥ 244

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2017



within ten years

Time deposits ......................................................................................... $ 4,769,810 $ — $ —

Receivables: Trade notes and trade accounts ......................................... 3,744,781 35 —



Government bonds ......................................................................... 1,319 1,587 2,175


Government bonds ......................................................................... 232 2,184 —

Others .................................................................................................... — — —

Total ................................................................................... $ 8,516,142 $ 3,806 $ 2,175

Note 4: See the notes on “7. Short-term Loans and Long-term Debt” for notes pertaining to the aggregate annual maturities of long term debt after the consolidated balance sheet date.

5. Securities(1) Following tables summarized acquisition costs, book values and fair values of securities with fair values available as of March 31, 2016

and 2017:(a) Held-to-maturity debt securities:∙ Securities with fair values exceeding book values

Millions of Yen

2016

Type Book value Fair value Difference

Government bonds ............................ ¥ 682 ¥ 703 ¥ 21


2017 2017

Type Book value Fair value Difference Book value Fair value Difference

Government bonds ............................ ¥ 570 ¥ 584 ¥ 14 $ 5,081 $ 5,205 $ 124

∙ Securities with book values exceeding fair value

Millions of Yen

2016

Type Book value Fair value Difference

Government bonds ............................ ¥ — ¥ — ¥ —


2017 2017

Type Book value Fair value Difference Book value Fair value Difference

Government bonds ............................ ¥ — ¥ — ¥ — $ — $ — $ —

(b) Available-for-sale securities:∙ Securities with book values exceeding acquisition costs

Millions of Yen

2016

Type Book value Acquisition cost Difference

Equity securities ................................. ¥ 239,171 ¥ 113,612 ¥ 125,559

Government bonds ............................ 296 286 10

Others ............................................... 1,216 742 474

Total ........................ ¥ 240,683 ¥ 114,640 ¥ 126,043


2017 2017

Type Book value Acquisition cost Difference Book value Acquisition cost Difference

Equity securities ................................. ¥ 227,878 ¥ 107,689 ¥ 120,189 $ 2,031,179 $ 959,881 $ 1,071,298

Government bonds ............................ 271 264 7 2,415 2,353 62

Others ............................................... 1,045 641 404 9,315 5,713 3,602

Total ........................ ¥ 229,194 ¥ 108,594 ¥ 120,600 $ 2,042,909 $ 967,947 $ 1,074,962


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∙ Securities with acquisition cost exceeding book values

Millions of Yen

2016

Type Book value Acquisition cost Difference

Equity securities ................................. ¥ 9,182 ¥ 12,524 ¥ (3,342)

Government bonds ............................ 1 1 (0)

Others ............................................... 13 14 (1)

Total ........................ ¥ 9,196 ¥ 12,539 ¥ (3,343)


2017 2017

Type Book value Acquisition cost Difference Book value Acquisition cost Difference

Equity securities ................................. ¥ 14,562 ¥ 16,328 ¥ (1,766) $ 129,798 $ 145,539 $ (15,741)

Government bonds ............................ 0 0 (0) 0 0 (0)

Others ............................................... 114 114 (0) 1,016 1,016 (0)

Total ........................ ¥ 14,676 ¥ 16,442 ¥ (1,766) $ 130,814 $ 146,555 $ (15,741)

(2) Total sales of available-for-sale securities and the related gains and losses for the years ended March 31, 2016 and 2017 were as follows:

Millions of Yen

2016

Type Equity securities Others Total

Total amount of available-for-sale securities sold ................................. ¥ 185 ¥ 12 ¥ 197

Gains on sales of available-for-sale securities ......................................... 11 8 19

Losses on sales of available-for-sale securities ......................................... 1 — 1

Millions of Yen

2017


Total amount of available-for-sale securities sold ................................. ¥ 6,999 ¥ 30 ¥ 7,029

Gains on sales of available-for-sale securities ......................................... 2,878 0 2,878



2017


Total amount of available-for-sale securities sold ................................. $ 62,385 $ 268 $ 62,653

Gains on sales of available-for-sale securities ......................................... 25,653 0 25,653


(3) Impairment losses on securitiesThe Group recognized impairment losses on the following securities for the years ended March 31, 2016 and 2017 were as followings:

Millions of YenThousands of U.S. Dollars

Type 2016 2017 2017

Write-down of investment securities ... ¥ 304 ¥ 217 $ 1,934

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6. Pledged Assets(1) The following assets were pledged as liabilities at March 31, 2016 and 2017:Secured liabilities


2016 2017 2017

Long-term non-recourse loans payable .................................................. ¥ 4,550 ¥ 2,950 $ 26,295

Long-term loans ..................................................................................... 1,600 1,600 14,261

Non- recourse bonds payable ................................................................ 500 500 4,457

Short-term non-recourse loans payable .................................................. 100 100 891

Short-term loans ..................................................................................... 630 — —

Total ................................................................................... ¥ 7,380 ¥ 5,150 $ 45,904

Asset pledged


2016 2017 2017

Land ....................................................................................................... ¥ 8,143 ¥ 6,311 $ 56,253

Buildings and structures (net of accumulated depreciation) ..................... 6,103 1,236 11,017

Machinery, vehicles, tools, furniture and fixtures (net of accumulated depreciation) ... 20 7 62

Total ................................................................................... ¥ 14,266 ¥ 7,554 $ 67,332

(2) The following assets were pledged principally as collateral for loans of companies which were not consolidated at March 31, 2016 and 2017:


2016 2017 2017

Investment securities .............................................................................. ¥ 2,105 ¥ 3,173 $ 28,282

Other assets ........................................................................................... 1,589 1,593 14,200

Total ................................................................................... ¥ 3,694 ¥ 4,766 $ 42,482


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7. Short-term Loans and Long-term Debt Short-term loans at March 31, 2016 and 2017 mainly consisted of short-term notes and overdrafts from banks. The weighted average interest rates of short-term loans at March 31, 2016 and 2017 were 0.6% and 0.5%, respectively.

The Group has had no difficulty in renewing such notes and overdraft facility agreements, when they considered such renewal advisable.

Long-term debt at March 31, 2016 and 2017 consisted of the following:


2016 2017 2017

Bonds and notes:

Issued by the Company:

0.80% yen bonds due in 2016 ........................................................ ¥ 10,000 ¥ — $ —

1.58% yen bonds due in 2017 ........................................................ 10,000 10,000 89,134

1.146% yen bonds due in 2018 (*1) ................................................ 500 500 4,457

0.66% yen bonds due in 2018 ........................................................ 10,000 10,000 89,134

0.67% yen bonds due in 2020 ........................................................ 10,000 10,000 89,134

0.527% yen bonds due in 2022 ...................................................... 10,000 10,000 89,134

Loans, principally from banks and insurance companies:

Secured loans (*2) ............................................................................... 7,380 5,150 45,905

Unsecured loans ................................................................................. 142,474 121,079 1,079,232

Capital lease ........................................................................................... 807 753 6,712

201,161 167,482 1,492,842

Amount due within one year ................................................................... (65,000) (53,554) (477,351)

Total long-term debt (due after one year) ................................................. ¥ 136,161 ¥ 113,928 $ 1,015,491

(*) Notes 1: This bonds are non-recourse liabilities for the Group. 2: These loans as of March 31, 2016 and 2017 include ¥ 4,650 million and ¥ 3,050 million ($ 27,186 thousand) of non-recourse

loans payable for the Group, respectively.

The annual interest rates applicable to long-term loans due within one year averaged 1.3% and 1.1% as of March 31, 2016 and 2017, respectively, and the annual interest rates applicable to long-term loans due after one year averaged 0.9% and 0.7% as of March 31, 2016 and 2017.

The aggregate annual maturities of long-term debt (including current portion) at March 31, 2017 were summarized as follows:

Year ending March 31, Millions of Yen Thousands of U.S. Dollars

2018 ................................................................................................. ¥ 53,554 $ 477,351

2019 ................................................................................................. 27,804 247,830

2020 ................................................................................................. 24,807 221,116

2021 ................................................................................................. 30,848 274,962

2022 ................................................................................................. 11,941 106,435

2023 and thereafter .......................................................................... 18,528 165,148

Total ................................................................................... ¥ 167,482 $ 1,492,842

The Company has a commitment line provided by co-financing consisting of several correspondent financial institutions for the purpose of securing financing in case of an emergency. The commitment line amounts as of March 31, 2016 and 2017 were ¥ 50,000 million and ¥ 50,000 million ($ 445,673 thousand), respectively, although there was no amount of corresponding loans as of March 31, 2016 and 2017.

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8. Income TaxesTaxes on income consist of corporation, enterprise and inhabitants taxes.

The following table summarized the significant differences between the statutory tax rate and the Company’s effective tax rate for financial statement purposes for the year ended March 31, 2016 and 2017.

2016 2017

Statutory tax rate .................................................................................... 33.1% 30.9%

Permanent differences:

Non-deductible expenses ................................................................... 2.8 3.8

Non-taxable income ............................................................................ (1.8) (0.4)

Per capita inhabitant tax and others ........................................................ 0.5 0.4

Changes in valuation reserve .................................................................. (0.2) 0.3

Effect of enacted changes in tax laws and rates on Japanese tax ........... 2.1 0.0

Share of profit of entities accounted for using equity method .................. (1.3) (0.3)

Others .................................................................................................... (0.4) (1.6)

Effective tax rate ..................................................................................... 34.8% 33.1%

Significant components of deferred income taxes at March 31, 2016 and 2017 were as follows:


2016 2017 2017

Deferred income tax assets:

Disallowed portion of expenses and losses:

Net defined benefit liability ............................................................... ¥ 38,420 ¥ 37,312 $ 332,579

Inventories ....................................................................................... 18,567 15,020 133,880

Accrued bonuses ............................................................................ 5,261 6,979 62,207

Fixed assets .................................................................................... 5,035 4,991 44,487

Advances received .......................................................................... 832 2,276 20,287

Others ............................................................................................. 9,563 8,522 75,961

Tax loss carryforward .......................................................................... 160 519 4,626

Unrealized profits ................................................................................ 7,433 7,497 66,824

Sub-total ............................................................................ 85,271 83,116 740,851

Valuation allowance ............................................................................. (4,065) (3,861) (34,415)

Total ................................................................................... 81,206 79,255 706,436

Deferred income tax liabilities:

Unrealized holding gains on securities ................................................. (37,525) (36,347) (323,977)

Gains on securities contribution to employee retirement benefit trust ... (17,711) (17,711) (157,866)

Net defined benefit asset .................................................................... (4,471) (4,272) (38,079)

Others ................................................................................................. (1,061) (1,201) (10,705)

Total ................................................................................... (60,768) (59,531) (530,627)

Net total ............................................................................. ¥ 20,438 ¥ 19,724 $ 175,809

In addition to the deferred income taxes shown above, deferred tax liabilities concerning revaluation of land amounting to ¥ 4,189 million at March 31, 2016 and ¥ 4,184 million ($ 37,294 thousand) at March 31, 2017 were included in the consolidated balance sheets.


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9. Investment and Rental Property(1) The Company and certain consolidated subsidiaries hold some office buildings for rent in Tokyo and other areas. The rental income on

office buildings for rent was ¥ 2,696 million and ¥ 2,708 million ($ 24,138 thousand) at the year ended on March 31, 2016 and 2017, respectively. Rental income is mainly booked in Net sales: Real estate development and other, and rental cost is mainly booked in Cost of sales.

(2) The amounts of investment and rental property which booked in consolidated balance sheets, the amounts of increase or decrease, and fair value at March 31, 2016 and 2017 were as follows:

Millions of Yen

2016

Book value Fair value

April 1, 2015 Increase (decrease) March 31, 2016 March 31, 2016

¥ 51,138 ¥ 10,192 ¥ 61,330 ¥ 69,220

Millions of Yen

2017



¥ 61,330 ¥ (4,637) ¥ 56,693 ¥ 63,452


2017



$ 546,662 $ (41,332) $ 505,330 $ 565,576

Note 1: The carrying amount is stated at cost of acquisition less accumulated depreciation and impairment losses.Note 2: The main reasons of increase for the years ended March 31, 2016 were the amounts regarding the change in scope of consolidation

¥ 7,686 million and purchases of fixed assets ¥ 3,474 million. The main reasons of decrease for the years ended March 31, 2017 were the amounts regarding the liquidation of consolidated subsidiary ¥ 2,968 million ($ 26,455 thousand).

Note 3: The book value at March 31, 2016 and 2017 included asset retirement obligations of ¥ 226 million and ¥ 219 million ($ 1,952 thousand), respectively.

Note 4: The fair value of investment and rental property as of March 31, 2016 and 2017 were mainly calculated by the Company according to the appraisal standard of real-estate (including those which were adjusted by the land price index, if any).

10. Employees’ Severance and Retirement Benefits1. The Company and its main consolidated subsidiaries have adopted the defined-benefit pension plans and defined-contribution pension

plans. The defined-benefit pension plans adopted consist of defined-benefit corporate pension plans and lump-sum payment plans.Liabilities and expenses for severance and retirement benefits of the Company and its consolidated domestic subsidiaries are

determined based on amounts obtained by actuarial calculations. The Company may also pay additional retirement benefits which are not subject to actuarial calculation.

The Company has established a retirement benefit trust.

2. Defined-benefit pension plans(1) Movement in retirement benefit obligations


2016 2017 2017

Balance at beginning of the year ............................................................. ¥ 149,626 ¥ 147,980 $ 1,319,013

Current service cost ............................................................................ 6,011 6,224 55,477

Interest cost ........................................................................................ 1,527 937 8,352

Actuarial loss (gain) ............................................................................. 4,682 1,561 13,914

Benefits paid ....................................................................................... (11,765) (11,050) (98,494)

Past service costs ............................................................................... (25) (122) (1,087)

Other .................................................................................................. (2,076) 112 998

Balance at end of the year ...................................................................... ¥ 147,980 ¥ 145,642 $ 1,298,173

Some of the consolidated subsidiaries use simplified method for the calculation of retirement benefit obligations.Retirement benefit expenses in the consolidated subsidiaries applying simplified method are recorded in current service cost.

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(2) Movements in plan assets


2016 2017 2017

Balance at beginning of the year ............................................................. ¥ 129,686 ¥ 114,998 $ 1,025,029

Expected return on plan assets ........................................................... 1,786 1,568 13,976

Actuarial loss (gain) ............................................................................. (8,743) 5,884 52,447

Contributions paid by the employer ..................................................... 1,209 1,039 9,261

Benefits paid ....................................................................................... (7,333) (6,870) (61,235)

Other .................................................................................................. (1,607) (1,462) (13,032)

Balance at end of the year ...................................................................... ¥ 114,998 ¥ 115,157 $ 1,026,446

(3) Reconciliation from retirement benefit obligations and plan assets to net defined benefit liability (asset)


2016 2017 2017

Funded retirement benefit obligations ..................................................... ¥ 145,375 ¥ 142,938 $ 1,274,071

Plan assets ............................................................................................. (114,998) (115,158) (1,026,455)

30,377 27,780 247,616

Unfunded retirement benefit obligations .................................................. 2,605 2,704 24,102

Net total at year-end ............................................................................... 32,982 30,484 271,718

Net defined benefit liability ...................................................................... 43,926 41,262 367,787

Net defined benefit asset ........................................................................ (10,944) (10,778) (96,069)

Net total at year-end ............................................................................... ¥ 32,982 ¥ 30,484 $ 271,718

(4) Retirement benefit costs


2016 2017 2017

Current service cost ................................................................................ ¥ 6,011 ¥ 6,225 $ 55,486

Interest cost ........................................................................................... 1,527 937 8,352

Expected return on plan assets .............................................................. (1,786) (1,568) (13,976)

Net actuarial loss amortization ................................................................ 733 5,480 48,846

Past service costs amortization ............................................................... (1,765) (1,393) (12,416)

Other ...................................................................................................... (7) 53 472

Total retirement benefit costs for the year ................................................ ¥ 4,713 ¥ 9,734 $ 86,764

(5) Remeasurements of defined benefit plans Items recorded in remeasurements of defined benefit plans, before tax were as follows:


2016 2017 2017

Past service costs .................................................................................. ¥ (1,740) ¥ (1,271) $ (11,329)

Actuarial gains and losses ...................................................................... (16,714) 9,803 87,379

Total balance at March 31, 2016 and 2017 ............................................. ¥ (18,454) ¥ 8,532 $ 76,050

(6) Accumulated remeasurements of defined benefit plans Items recorded in accumulated remeasurements of defined benefit plans (before considering tax effect) were as follows:


2016 2017 2017

Unrecognized past service costs ............................................................ ¥ (8,476) ¥ (7,205) $ (64,221)

Unrecognized actuarial gains and losses ................................................ 12,217 2,414 21,517

Total balance at March 31, 2016 and 2017 ............................................. ¥ 3,741 ¥ (4,791) $ (42,704)


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(7) Plan assets

2016 2017

( i ) Plan assets comprise:

Equity securities ................................................................................ 40% 45%

Bonds ............................................................................................... 22 20

General accounts ............................................................................. 20 19

Special accounts .............................................................................. 3 3

Short-term assets ............................................................................. 3 1

Other ................................................................................................ 12 12

Total ................................................................................... 100% 100%

The retirement benefit trust established for corporate pension plans accounted for 33% and 36% of total plan assets, for the fiscal year ended March 31, 2016 and 2017, respectively.

( ii ) Long-term expected rate of returnCurrent and target asset allocations, historical and expected returns on various categories of plan assets have been considered in determining the long-term expected rate of return.

(8) Actuarial assumptionsThe principal actuarial assumptions at March 31, 2016 and 2017 were as follows:

2016 2017

Discount rate

The Company and its consolidated domestic subsidiaries ................... 0.4∼1.5 0.5∼1.5

Consolidated overseas subsidiaries .................................................... 5.0∼9.0 5.7∼8.5

Long-term expected rate of return .......................................................... 1.0∼3.5 0.8∼3.5

3. Defined-contribution pension plansAmount payable for defined-contribution pension plans of the Company and its consolidated subsidiaries were ¥ 2,330 million and ¥ 2,436 million ($ 21,713 thousand), for the fiscal year ended March 31, 2016 and 2017, respectively.

11. Net AssetsNet assets comprise three subsections; which are shareholders’ equity, accumulated other comprehensive income and non-controlling interests.

Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new shares as additional paid-in capital, which is included in capital surplus.

Under the Japanese Corporate Law (“the Law”), when a dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying consolidated balance sheets.

Under the Law, appropriations of legal earnings reserve and additional paid-in capital generally require a resolution of the shareholders’ meeting.

Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, however, all additional paid-in capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends.

The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of the Company in accordance with the Law.

The number of treasury stock owned by the Company, consolidated subsidiaries and affiliated companies adopting the equity method as of March 31, 2016 and 2017 were 1,371 thousand shares and 1,408 thousand shares, respectively.

12. Lease TransactionsOperating leases(a) LesseeFuture minimum lease payments as of March 31, 2016 and 2017 were as follows:


2016 2017 2017

Due within one year ................................................................................ ¥ 4,245 ¥ 4,327 $ 38,569

Due after one year .................................................................................. 23,432 23,360 208,218

Total ................................................................................... ¥ 27,677 ¥ 27,687 $ 246,787

(b) LesserFuture minimum lease receipts as of March 31, 2016 and 2017 were as follows:


2016 2017 2017

Due within one year ................................................................................ ¥ 4,277 ¥ 3,913 $ 34,878

Due after one year .................................................................................. 23,472 20,325 181,166

Total ................................................................................... ¥ 27,749 ¥ 24,238 $ 216,044

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13. Derivative Transactions(1) Derivative transactions of the Company and its consolidated subsidiaries as of March 31, 2016 and 2017 were as follows:

( i ) Derivative transactions which were not accounted for by the hedge accounting· Currency-related transactions

(a) Over-the counter transactions

Millions of Yen

2016

Contract amount

Forward foreign exchange contract (long commitment) TotalDue afterone year Fair value

Unrealized gain (loss)

to buy US dollar ....................................................................................... ¥ 35,002 ¥ — ¥ 2 ¥ 2

Millions of Yen

2017

Contract amount



to buy Qatari Riyal .................................................................................. ¥ 6,558 ¥ — ¥ 23 ¥ 23


2017

Contract amount



to buy Qatari Riyal .................................................................................. $ 58,454 $ — $ 205 $ 205

Note: Fair value was determined at the quoted price obtained from the counterparty financial institutions.

( ii ) Derivative transactions which were accounted for by the hedge accounting as of March 31, 2016 and 2017 were as follows:∙ Currency related transactionsMain items hedged by forward foreign exchange contracts are accounts payable for construction contracts.

Millions of Yen

2016

Contract amount

Forward foreign exchange contract (short commitment) Total Due after one year Fair value

to sell US dollar ...................................................................................... ¥ 35 ¥ — ¥ (3)

to sell Euro ............................................................................................. 14 — (1)

Total ................................................................................... ¥ 49 ¥ — ¥ (4)

Millions of Yen

2017

Contract amount


to sell Euro ............................................................................................. ¥ 17 ¥ — ¥ (0)


2017

Contract amount


to sell Euro ............................................................................................. $ 152 $ — $ (0)

Note: Fair value was determined at the quoted price obtained from the counterparty financial institutions.


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∙ Interest Rate-Related Derivatives:Main items hedged by interest rate swap contracts are long-term debts.

The following interest rate swaps are used as hedges. The net amounts to be paid or received are added to or deducted from interests.

Special treatment of swap

Millions of Yen

2016

Contract amount

Total Due after one year Fair value

Interest rate swaps receive floating rate, pay fixed rate ........................... ¥ 100,910 ¥ 70,590 ¥ —

Millions of Yen

2017

Contract amount


Interest rate swaps receive floating rate, pay fixed rate ........................... ¥ 64,590 ¥ 36,400 ¥ —


2017

Contract amount


Interest rate swaps receive floating rate, pay fixed rate ........................... $ 575,720 $ 324,450 $ —

Note: Fair value of interest rate swaps was included in the corresponding hedged long-term debt (long-term debt due within one year was considered as short-term debt) as those interest rate swaps were recorded as an adjustment to the corresponding hedged long-term debt under the special treatment.

14. Related Party TransactionsThe Company had no transaction with related individuals, including shareholders and directors, for the year ended March 31, 2017. Information for the year ended March 31, 2016 is as follows:

Millions of yen

(a) Name(b) Attribution(c) Capital (Million yen)(d) Equity ownership percentage of the

Company

2016

Transactions during the year ended March 31, 2016 Balance at the end of the year

Description of transaction Amount Account Amount

(a) Assets contribution to retirement benefit trust

(b) Assets of corporate pension plan(c) —(d) —

Partial reimbursement of assets

¥ 21,969 — ¥ —

The Company’s consolidated subsidiaries had no transaction with related individuals, including shareholders and directors, for the year ended March 31, 2016. Information for the year ended March 31, 2017 is as follows:

Millions of yen


Company

2017



(a) Takashi Yamauchi(b) The director of the Corporation(c) —(d) 0.02%

House renovation work by Taisei Housing Co., Ltd.

¥ 19 — ¥ —

(a) Hajime Tanabe(b) Close relative of the director of the

Corporation(c) —(d) —

Housing construction by Taisei Housing Co., Ltd.

¥ 66 Advances received and progress billings on uncompleted contracts

¥ 20

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Company

2017



(a) Takashi Yamauchi(b) The director of the Corporation(c) —(d) 0.02%

House renovation work by Taisei Housing Co., Ltd.

$ 169 — $ —

(a) Hajime Tanabe(b) Close relative of the director of the

Corporation(c) —(d) —

Housing construction by Taisei Housing Co., Ltd.

$ 588 Advances received and progress billings on uncompleted contracts

$ 178

Notes 1. Consumption taxes were not included in the transaction amounts. 2. Transaction conditions and policies to decide transaction conditions (1) The purchase price of land was determined on an arm’s length basis considering the market price. The amount of transaction

above represents the price on the contract for sales of real estate. (2) Transaction condition including the contract price was determined properly on an arm’s length basis as in the case of other

general transactions. The amount of transaction above represents the contract price on the construction contract.

15. Segment Information(1) Segment information(a) General information on reportable segmentsEach reportable segment of the Group is a business unit in the Group, whose discrete financial information is available. Reportable segments are reviewed periodically at the Board of Directors Meeting in order to determine distribution of management resources and evaluate business result of each reportable segment.

The headquarters in the head office are established by the products of construction and the services. Each headquarter proposes comprehensive domestic and oversea strategies with respect to products and services, and operates its business activities.

The Group consists of segments identified by products and services based on the headquarters, and identifies the three segments, “Civil engineering,” “Construction contracts,” and “Real estate development” as reportable segments: “Civil engineering” delivering construction of civil engineering, etc.; “Construction contracts” delivering construction of building and housing, etc.; “Real estate development” delivering purchase, sale and rental of land and buildings, etc.

(b) Basis of measurement of net sales, profit or loss and other material items on reportable segmentThe accounting methods for each reportable segment are the same as that set forth in the “Summary of Significant Accounting Policies”. The profit (loss) of a reportable segment is based on the operating income (loss) before amortization of goodwill in Consolidated Statements of Income. In addition, conditions of intersegment transactions and transfers are determined by considering market prices as in the case of other general transactions.

Assets of the Group are not allocated to the segments. However, the corresponding depreciation expenses are allocated to the segments according to the rational bases such as the usage of assets.

(c) Information of net sales, profit or loss and other material items on reportable segmentSegment information as for the years ended March 31, 2016 and 2017 are as follows:

Millions of Yen

2016

Reportable segments

Civil engineering

Construction contracts

Real estate development Others Total Adjustments Consolidated

Net sales:

Customers ................................... ¥ 433,924 ¥ 978,176 ¥ 121,306 ¥ 12,483 ¥ 1,545,889 ¥ — ¥ 1,545,889

Intersegment ................................ 21,788 37,307 6,333 2,351 67,779 (67,779) —

Total ....................... 455,712 1,015,483 127,639 14,834 1,613,668 (67,779) 1,545,889

Operating income ............................ ¥ 50,717 ¥ 56,400 ¥ 9,434 ¥ 943 ¥ 117,494 ¥ (26) ¥ 117,468

Depreciation and amortization ......... ¥ 2,694 ¥ 2,119 ¥ 1,160 ¥ 94 ¥ 6,067 ¥ (76) ¥ 5,991

Increase (decrease) in allowance for losses on construction contracts ... ¥ (2,290) ¥ (16,829) ¥ — ¥ — ¥ (19,119) ¥ — ¥ (19,119)

Notes 1. “Others” presented businesses such as incidental business to the construction business, leisure business, and other service businesses, which are not included in reportable segments.

2. Adjustment amount of operating income was ¥ (26) million ($ (231) thousand), which included intersegment elimination. 3. Segment operating income was adjusted against operating income of Consolidated Statement of Income.



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Millions of Yen

2017

Reportable segments

Civil engineering



Net sales:

Customers ................................... ¥ 422,847 ¥ 938,549 ¥ 115,226 ¥ 10,631 ¥ 1,487,253 ¥ — ¥ 1,487,253

Intersegment ................................ 26,609 39,167 6,540 2,398 74,714 (74,714) —

Total ....................... 449,456 977,716 121,766 13,029 1,561,967 (74,714) 1,487,253

Operating income ............................ ¥ 55,200 ¥ 73,373 ¥ 13,310 ¥ 1,201 ¥ 143,084 ¥ (2,261) ¥ 140,823

Depreciation and amortization ......... ¥ 2,926 ¥ 2,305 ¥ 1,113 ¥ 91 ¥ 6,435 ¥ (167) ¥ 6,268

Increase (decrease) in allowance for losses on construction contracts ... ¥ (6,664) ¥ 213 ¥ — ¥ — ¥ (6,451) ¥ — ¥ (6,451)


2017

Reportable segments

Civil engineering



Net sales:

Customers ................................... $ 3,769,026 $ 8,365,710 $ 1,027,061 $ 94,759 $ 13,256,556 $ — $ 13,256,556

Intersegment ................................ 237,178 349,113 58,294 21,374 665,959 (665,959) —

Total ....................... 4,006,204 8,714,823 1,085,355 116,133 13,922,515 (665,959) 13,256,556

Operating income ............................ $ 492,022 $ 654,007 $ 118,638 $ 10,705 $ 1,275,372 $ (20,153) $ 1,255,219

Depreciation and amortization ......... $ 26,081 $ 20,545 $ 9,921 $ 811 $ 57,358 $ (1,488) $ 55,870

Increase (decrease) in allowance for losses on construction contracts ... $ (59,399) $ 1,898 $ — $ — $ (57,501) $ — $ (57,501)

Notes 1. “Others” presented businesses such as incidental business to the construction business, leisure business, and other service businesses, which are not included in reportable segments.

2. Adjustment amount of operating income was ¥ (2,261) million ($ (20,153) thousand), which included intersegment elimination. 3. Segment operating income was adjusted against operating income of Consolidated Statement of Income.

(2) Related information (a) Information about products and servicesThe information about products and services is included in “(c) Information of net sales, profit or loss and other material items on reportable segment” of “(1) Segment information” for the years ended March 31, 2016 and 2017.

(b) Information about geographic areas∙ Net salesThe information about net sales was not presented for the years ended March 31, 2016 and 2017 since sales to unaffiliated customers in Japan accounted for more than 90% of sales of Consolidated Statement of Income.

∙ Property, plant and equipmentThe information about property, plant and equipment was not presented for the years ended March 31, 2016 and 2017 since the amounts of property, plant and equipment that located in Japan accounted for more than 90% of the amounts of property, plant and equipment of Consolidated Balance Sheet.

(c) Information about major customersThe information about major customers was not presented for the years ended March 31, 2016 and 2017 since net sales to any customer were less than 10% of the amounts of sales of Consolidated Statement of Income. (d) Information about impairment losses on fixed assets of reportable segment for the years ended March 31, 2016 and 2017 is as follows:

Millions of Yen

2016

Reportable segments

Civil engineeringConstruction

contractsReal estate

development Others

Eliminationand/or

corporate Total

Impairment losses on fixed assets ..... ¥ 780 ¥ 2,044 ¥ 215 ¥ — ¥ (21) ¥ 3,018

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018_0356501372908.indd 108 2017/08/08 21:18:13

Millions of Yen

2017

Reportable segments



development Others

Eliminationand/or

corporate Total

Impairment losses on fixed assets ..... ¥ 74 ¥ — ¥ 666 ¥ — ¥ (55) ¥ 685


2017

Reportable segments



development Others

Eliminationand/or

corporate Total

Impairment losses on fixed assets ..... $ 660 $ — $ 5,936 $ — $ (490) $ 6,106

(e) There is no information about amortization and unamortized balance of goodwill of reportable segment for the years ended March 31, 2017. Information for the year ended March 31, 2016 is as follows:

Millions of Yen

2016

Reportable segments



development Others

Eliminationand/or

corporate Total

Amortization of goodwill ..................... ¥ — ¥ 1 ¥ — ¥ — ¥ — ¥ 1

Unamortized balance of goodwill ....... ¥ — ¥ — ¥ — ¥ — ¥ — ¥ —

(f) Information about gains on negative goodwill of reportable segmentInformation about gains on negative goodwill for the years ended March 31, 2016 and 2017 is not applicable.

16. Contingent Liabilities and CommitmentThe Group was contingently liable as guarantors for borrowings of companies, which were not consolidated, with the amount of ¥ 1,037 million and ¥ 686 million ($ 6,115 thousand) at March 31, 2016 and 2017, respectively.

In addition, the Group was contingently liable to invest in the specific purpose company for their repayment and other obligations of borrowings with the amount of ¥ 15,680 million and ¥ 15,680 million ($ 139,763 thousand) at March 31, 2016 and 2017, respectively. The amounts indicate their shares of the additional investment obligations.

17. Revaluation Reserve for LandIn the year ended March 31, 2002, certain consolidated domestic subsidiaries executed revaluation of their land for business in accordance with the Law Concerning Revaluation of Land (the “Law”).

As a result of this revaluation, deferred income taxes concerning the differences between the amounts after revaluation and the book values before revaluation were stated in the assets and liabilities in the consolidated balance sheets. The differences between these amounts, net of taxes, were stated as “Revaluation reserve for land” in “Accumulated other comprehensive income”.

The revaluation was executed in accordance with the method prescribed in the Article 2, Items 3, 4 and 5 of the Law on November 30, 2001 and March 31, 2002.

One of the consolidated subsidiaries, which was merged with another consolidated subsidiary on December 1, 2001, executed the revaluation on November 30, 2001.

Excess amount of the book values of the revaluated land over the fair values as of March 31, 2016 and 2017 was ¥ 4,815 million and ¥ 3,702 million ($ 32,998 thousand), respectively (including the excess amount of ¥ 1,005 million and ¥ 26 million ($ 232 thousand) related to investment and rental property at March 31, 2016 and 2017, respectively).

18. Losses on Anti-Monopoly ActAllowance for losses on Anti-Monopoly Act amounted to 11,036 million ($ 98,369 thousand) and losses on Anti-Monopoly Act amounted to ¥ 11,640 million ($ 103,753 thousand) for the year ended March 31, 2017.

The consolidated subsidiary of the company (TAISEI ROTEC CORPORATION) recognized the estimated penalties mentioned above at the fiscal year ended March 31, 2017.

19. Research and Development ExpensesResearch and development expenses, which were included in selling, general and administrative expenses and cost of sales, amounted to ¥10,999 million and ¥ 11,165 million ($ 99,519 thousand) for the years ended March 31, 2016 and 2017, respectively.



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20. Impairment Losses on Fixed AssetsImpairment losses on fixed assets for the years ended March 31, 2016 and 2017 consisted of the following:

2016

Use Type of assets Location

Assets for business use Land and Building and Machinery and equipment and others Chiba and others (16 lots)

Assets reclassified from business purpose to trading purpose Land and Building and others Yamanashi and others (12 lots)

Dormant assets Land and Building and others Shizuoka and others (6 lots)

2017

Use Type of assets Location

Assets for business use Building and Machinery and equipment and others Kumamoto and others (6 lots)

Assets reclassified from business purpose to trading purpose Land and Building Kanagawa and others (5 lots)

Dormant assets Land Osaka and others (5 lots)

The Company and its consolidated domestic subsidiaries grouped their fixed assets based on units, for which decisions for investments were made. Book values of the fixed assets listed above were reduced to recoverable amounts and impairment losses were recognized as follows:


2016 2017 2017

Assets for business use

Buildings and structures ...................................................................... ¥ 102 ¥ 45 $ 401

Land ................................................................................................... 348 — —

Machinery and equipment ................................................................... 67 29 259

Others ................................................................................................. 106 0 0

Subtotal .......................................................................................... 623 74 660

Assets reclassified from business purpose to trading purpose

Buildings and structures ...................................................................... 541 402 3,583

Land ................................................................................................... 1,565 208 1,854

Others ................................................................................................. 2 — —

Subtotal .......................................................................................... 2,108 610 5,437

Dormant assets

Buildings and structures ...................................................................... 154 — —

Land ................................................................................................... 113 1 9

Others ................................................................................................. 20 — —

Subtotal .......................................................................................... 287 1 9

Total ................................................................................... ¥ 3,018 ¥ 685 $ 6,106

The recoverable amount of the fixed assets for the years ended March 31, 2016 and 2017 were their net realizable values mainly based on amounts determined by valuations made in accordance with real estate appraisal standards.

21. Per Share DataNet assets per share and net income per share as of and for the years ended March 31, 2016 and 2017 were as follows:

Yen U.S. Dollars

2016 2017 2017

Net assets per share ¥ 442.67 ¥ 496.60 $ 4.426

Net income per share ............................................................................. 65.85 78.57 0.700

Diluted net income per share .................................................................. — — —

Diluted net income per share for the years ended March 31, 2016 and 2017 were not presented because the Company had no shares with dilutive effects.

Calculation bases for basic net income per share for the years ended March 31, 2016 and 2017 were as follows:


2016 2017 2017

Basic Net income per share

Net income attributable to owners of parent ........................................ ¥ 77,045 ¥ 90,566 $ 807,256

Net income not available to common stock holders ............................ — — —

Net income attributable to owners of parent available to common stock ... 77,045 90,566 807,256

Average common stock outstanding (in thousands share) ................... 1,169,933 1,152,619 —

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018_0356501372908.indd 110 2017/08/08 21:18:13


22. Comprehensive Income

Recycling adjustments and tax effects for each component of other comprehensive income were as follows:

Millions of Yen Millions of Yen Thousands of U.S. Dollars

2016 2017 2017

Unrealized holding gains on securities

Amount incurred ................................................................................. ¥ (41,527) ¥ (2,910) $ (25,938)

Recycling ............................................................................................ (9) (959) (8,548)

Before Tax ....................................................................................... (41,536) (3,869) (34,486)

Tax effect ......................................................................................... 15,488 1,178 10,500

Unrealized holding gains on securities, net of taxes ......................... (26,048) (2,691) (23,986)

Deferred gains or losses on hedging derivatives

Amount incurred ................................................................................. (9) (1) (9)

Recycling ............................................................................................ 5 4 36

Before Tax ....................................................................................... (4) 3 27

Tax effect ......................................................................................... 1 (1) (9)

Unrealized gains or losses on hedging derivatives, net of taxes ....... (3) 2 18


Tax effect ............................................................................................ 233 — —

Foreign currency translation adjustments

Amount incurred ................................................................................. (337) (423) (3,770)

Recycling ............................................................................................ (5) 19 169

Foreign currency translation adjustments, net of taxes ..................... (342) (404) (3,601)

Remeasurements of defined benefit plans

Amount incurred ................................................................................. (17,450) 4,445 39,620

Recycling ............................................................................................ (1,004) 4,087 36,429

Before Tax ....................................................................................... (18,454) 8,532 76,049

Tax effect ......................................................................................... 5,880 (2,609) (23,255)

Remeasurements of defined benefit plans, net of taxes ................... (12,574) 5,923 52,794

Share of other comprehensive income of associates accounted for by the equity method

Amount incurred ................................................................................. (402) (438) (3,904)

Total other comprehensive income ................................ ¥ (39,136) ¥ 2,392 $ 21,321


018_0356501372908.indd 111 2017/08/08 21:18:13

23. Subsequent Event(1) Acquisition of treasury stockThe Company resolved the item related to the acquisition of treasury stock at the board of directors held on May 12, 2017, in accordance with the article 156 of the Japanese Corporate Law (the “Law”), which is applicable as replacement of the article 165, paragraph 3 of the law, as detailed below.

( i ) Reason of acquisition of treasury stockThe Company decided to acquire its treasury stock in order to enhance the shareholders’ value per share and to improve the capital efficiency.

( ii ) Details(a) Type of stock to be acquired: Common stock of the Company(b) Number of stocks to be acquired: Up to 40,000,000 stocks (3.49% of the total outstanding stocks excluding treasury stock)(c) Total cost of acquisition: Up to ¥25,000 million ($ 222,836 thousand)(d) Period of Acquisition: From May 15, 2017 to September 30, 2017

( iii ) OtherThe Company plans to retire all of the acquired treasury stock by the resolve at the board of directors in accordance with the article 178 of the Law.

(2) Change in the Company’s share-trading unit and consolidation of sharesAt the board of directors’ meeting held on May 12, 2017, pursuant to article 195, paragraph 1 of the Japanese Companies Law, the Company resolved to change the Company’s share-trading unit and concluded to submit a proposal on the consolidation of shares to the ordinary general meeting of shareholders held on June 29, 2017. The proposal was approved at the said meeting of shareholders.

( i ) Change in share-trading unit(a) Purpose of changeJapanese stock exchanges have announced the “Action Plan for Consolidating Trading Units” aimed at standardizing the trading units of common stock of all listed domestic corporations at 100 shares by October 1, 2018. As a corporation listed on the Tokyo Stock Exchange and Nagoya Stock Exchange, the Company respected the objective of the plan and decided to change the share-trading unit of stock from 1,000 to 100 shares.

(b) Details of changeThe Company will change share-trading unit for common stock from 1,000 to 100 shares on October 1, 2017.

( ii ) Consolidation of shares(a) Purpose of consolidationAssociated with the change mentioned in “( i ) Change in share-trading unit,” the Company resolved to consolidate its shares (5 shares into one share) to maintain its investment unit at the level considered to be desirable by the stock exchanges, ¥50,000 or more and less than ¥500,000, and adjust its investment unit at adequate level from the point of view of medium to long term share price fluctuation.

(b) Details of consolidation∙ Type of stock to be consolidatedCommon stock

∙ Consolidation method and ratioThe Company will consolidate every 5 shares into one share on October 1, 2017 based on information of shareholder registry as of September 30, 2017.

∙ Decrease in number of shares due to the consolidationNumber of outstanding shares before consolidation (As of March 31, 2017) 1,146,752,860 sharesDecrease in number of shares due to consolidation 917,402,288 sharesNumber of outstanding shares after consolidation 229,350,572 shares(Note) “Decrease in number of shares due to consolidation” and “Number of outstanding shares after consolidation” are theoretical amounts

calculated by multiplying number of outstanding shares before consolidation by consolidation ratio.

(c) Treatment of fractional shares less than one shareIf any fractional shared less than one share exists after consolidation, the Company will dispose all of them in accordance with article 235 of Japanese Companies Law. The proceeds from the sale shall be distributed to the shareholders in proportion to their ownership interests.

(3) Cash dividendsThe following appropriation of retained earnings at March 31, 2017 was approved at the annual meeting of the Company’s shareholders held on June 29, 2017.


Cash dividends, ¥12 ($ 0.107) per share .................................................. ¥ 13,744 $ 122,506

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018_0356501372908.indd 112 2017/08/08 21:18:13

Independent Auditor’s Report


018_0356501372908.indd 113 2017/08/08 21:18:13

TAISEI (THAILAND) CO., LTDTHAILAND

PAKISTAN

MYANMARTAISEI MYANMAR CO., LTD

VINATA INTERNATIONAL J/V LTD. CO. VIETNAM(Hochiminh City Branch Office)

VINATA INTERNATIONAL J/V LTD.CO.VIETNAM (Head Office)

VIETNAM (Hochiminh City)

VIETNAM (Hanoi)

TAISEI PHILIPPINE CONSTRUCTION INCORPORATED

JAKARTA

PT. PP-Taisei Indonesia Construction

PT. INDOTAISEI INDAH DEVELOPMENT

ISTANBULINDIA

KUALA LUMPUR

PHILIPPINE

TAIPEI

CSCEC-TAISEI CONSTRUCTION, LTD.(Head Office)

CSCEC-TAISEI CONSTRUCTION, LTD.(Shanghai Branch)NORTH AFRICA

MIDDLE EASTSRI LANKA

Share Information (As of March 31, 2017)

Securities companies27,894,000 shares(2.43%)

Overseas corporations, etc.368,325,000 shares(32.12%)

Financial institutions355,676,000 shares(31.02%)

Ordinary companies84,545,000 shares(7.37%)

Individuals, others310,310,000 shares(27.06%)

Distribution of shares [Status according to ownership]

Status of Shares

Overseas Network

Domestic Network

Number of Shares Authorized 2,200,000,000Number of Shares Issued 1,146,752,860Number of Shareholders 88,322

Major Shareholders (Top 10):

Name of Shareholder

Number of Shares held

(Unit: Thousand shares)

Ratio ofShares held

(%)

Japan Trustee Services Bank, Ltd. (Trust Account) 72,183 6.30The Master Trust Bank of Japan, Ltd. (Trust Account) 67,624 5.90Retirement Benefit Trust in Mizuho Trust (Mizuho Bank, Ltd.Account) 39,289 3.43

Taisei Associates’ Shareholding Plan 26,251 2.29

Taisei Employees’ Shareholding Plan 21,271 1.86Japan Trustee Services Bank, Ltd.(Trust Account No.5) 20,932 1.83

State Street Bank West Client-Treaty 505234 18,051 1.58

GOVERNMENT OF NORWAY 15,537 1.36Japan Trustee Services Bank, Ltd.(Trust Account No.1) 15,455 1.35Japan Trustee Services Bank, Ltd.(Trust Account No.7) 15,417 1.35

Note: Treasury stock (1,408,179 shares) are excluded in calculating the Ratio of Shares held.

Stock Listings Tokyo, NagoyaCode 1801Transfer Agent Mizuho Trust & Banking Co., Ltd.

1-2-1, Yaesu, Chuo-ku, Tokyo 103-8670, Japan

Outline of the Company

Corporate Data (As of March 31, 2017)

Name TAISEI CORPORATIONEstablished December 28, 1917Paid-in capital ¥122.7 billionNumber of employees 8,415 people (non-consolidated)Representative Yoshiyuki Murata,

President and Chief Executive OfficerHead office Shinjuku Center Building, 25-1,

Nishi-Shinjuku 1-chome, Shinjuku-ku, Tokyo, 163-0606, JAPAN TEL. 81-3-3348-1111 (main number)

Number of offices

Head Office, 15 Branch Offices, Technology Center, 46 domestic offices, 12 overseas offices

Subsidiaries 29 consolidated subsidiaries, 43 affiliated companies accounted for by the equity-method

Sapporo

Tohoku (Sendai)

Head OfficeTokyoInternational OperationsHeadquarters (Shinjuku, Tokyo)

Chiba

YokohamaTechnology Center (Yokohama)

Head Office

Branch Office

Technology Center

Kansai (Osaka)

Shikoku (Takamatsu)

Chugoku (Hiroshima)

Kyushu (Fukuoka)

Kobe

Kyoto

Nagoya

Kanto (Saitama)

Hokushinetsu (Niigata)

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019_0356501372908.indd 114 2017/08/03 19:02:50

TAISEI CORPORATION Organization Chart (As of July 1, 2017)

Corporate Planning Office

Engineering Div.

Audit & Supervisory Board Member

Mechanical & Electrical Div.

Building Construction Div.

Design Div.

Civil Engineering Div.

Procurement Div.

Safety Administration Div.

Environment Div.

Taisei Technology Center

Nuclear Facilities Div.

Marketing & Sales Promotion Div.

Urban Development Div.

Business Administration Div.

Proposal & Solutions Div.

Marketing & Sales (Building Construction) Div. Ⅰ

Marketing & Sales (Civil Engineering)Div.

Marketing & Sales (West Japan) Div.

International Marketing & Business Development Div.

Marketing & Sales (Building Construction) Div. Ⅱ

Marketing & Sales (Building Construction) Div. Ⅲ

Medical & Welfare Business Div.

Auditing Dept.

Industrial Affairs Dept.

Energy Business Strategy Dept.

Audit & Supervisory Board Members' Dept.

★

★

Corporate Communication Dept.

Corporate Planning Dept.

Information Planning Dept.

Engineering Planning Dept.

Engineering Solution Dept.

Life-science Proposal Dept.

Life-science Project Dept.

Industrial Facilities Project Dept.

Project Management Dept.

Technology Strategy Dept.

International Projects Management Dept.

Power Plant Construction Planning Dept.

Productivity Promotion Dept.

Building Construction Dept.

Technology Control Dept.

Estimate Dept.

Mechanical & Electrical Dept.

Operations Planning Dept.

Architectural Design Depts.

Structural Engineering Depts.

Structural Planning Dept.

M&E Engineering Depts.

M&E Planning Dept.

Planning & Design Dept.

Quality Management & Technology Dept.

International Projects Dept.

Construction Administration Dept.

Nuclear Facilities Dept.

Specific Project Dept.

Civil Engineering Dept.

Construction Engineering Dept.

Machinery Dept.

Design Dept.

Estimate Dept.

Project Analysis & Information Dept.

Next Generation Project Dept.

International Projects Management Dept.

Procurement Dept.ⅠCoordination & Analysis Dept.

Procurement Dept.ⅡProcurement Dept.ⅢPlanning & Administration Dept.

Human Resources Dept.

General Affairs Dept.

Legal Dept.

Accounting Dept.

Finance Dept.

Planning & Administration Dept.

Environmental Technology Innovation Dept.

Sustainable Solution Dept.

Geo-Environmental Technology Dept.

Technology Planning Dept.

Intellectual Property Dept.

Urban Engineering Research Dept.

Infrastructure Technology Research Dept.

Advanced Technology Development Dept.

Production Engineering Technology Dept.

Planning Dept.

Structural Engineering Dept.

Advanced Analysis Technology Dept.


Environmental Engineering Dept.

Marketing & Sales Promotion Dept.

Planning & Business Promotion Dept.

Real Estate Information Dept.

Life Cycle Care Promotion Dept.

Marketing & Sales Depts.




Planning & Management Dept.

Project Development Dept.ⅠProject Development Dept.ⅡPPP Projects Dept.

Urban Redevelopment Dept.ⅠUrban Redevelopment Dept.Ⅱ

Property Management Business Dept.

Development Business Dept.



Planning & Business Promotion Dept.

Project Engineering & Promotion Dept.

Marketing & Business Development Depts.

International Business Promotion Depts.

Sales Mindset/Skills Training Dept.

Branch

International Operations Headquarters

Administration Dept.

Safety Administration & Environmental Dept.


Building Construction Dept.

Design Dept.


Reconstruction Project Dept. ＊(Civil Engineering) ＊ Tohoku Branch

International Business Strategy Dept.

Risk Management Dept.

Administration Dept.

Safety Administration & Environmental Dept.

Building Construction & Engineering Dept.


Nuclear Facilities Projects Dept.

Secretarial Dept.

Safety Administration Dept.

Environmental Administration Dept.

Subcontractor Relations Dept.

Customer Satisfaction Dept.

Project Solutions Dept.

Business Solutions Dept.

Projects Information Analysis & Strategy Dept.

Pres

iden

t

Archit

ectur

e & En

ginee

ring D

iv.(Int

egrat

ed)

Mar

ketin

g &

Sales

Div.

(Inte

grat

ed)


019_0356501372908.indd 115 2017/08/03 19:02:50

To Create a Vibrant Environment for All Members of SocietyThe Taisei Group creates “safe, secure, and attractive spaces” and “high value” in harmony with the nature, and strives to build a global society filled with dreams and hopes for the next generation.



(as of March 2017)







21 TAISEI ANNUAL REPORT 2017TAISEI ANNUAL REPORT 2017

091_0356501372908.indd すべてのページ 2017/07/31 9:25:53

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TAIPEI OFFICE Zone B, 6F, No. 16, Sec. 4, Nan-Jing E. Road,

Taipei, Taiwan R. O. C.

TEL. 886-2-2578-5656 FAX. 886-2-2578-3300

MIDDLE EAST OFFICE Corner Abdullah Bin Jassim St. United

Bank Bldg. 4th Floor, Facing QNB Bldg, Doha - Qatar, PO BOX

47366

TEL. 974-4443-4174 FAX. 974-4443-7176

KUALA LUMPUR OFFICE 9-3, 9th Floor, Faber Imperial Court,

Jalan Sultan Ismail, 50250 Kuala Lumpur, MALAYSIA

TEL. 60-3-2070-6155 FAX. 60-3-2070-6010

JAKARTA OFFICE PLAZA OLEOS 18th Floor JI. TB Simatupang

No.53, Pasar Minggu Jakarta Selatan, 12520, Indonesia

TEL. 62-21-2278-3902 FAX. 62-21-2278-3903

INDIA OFFICE #602, 6th Floor, Tower B, Global Business Park,

M.G. Road, Gurgaon, Haryana-122002, India

TEL. 91-124-466-9800 FAX. 91-124-466-9888

PAKISTAN OFFICE Office-A, 5th Floor, Block-A, Saudi Pak

Tower, 61-A, Jinnah Ave., Islamabad, Pakistan

TEL. 92-51-8316620 FAX. 92-51-8316629

VIETNAM OFFICE (Hanoi) Room No.410, 4th Floor, V-Tower,

649 Kim Ma Street, Ngoc Khanh Ward, Ba Dinh District, Hanoi,

S.R.VIETNAM

TEL. 84-24-3553-5032,-5033 FAX. 84-24-3553-5002

VIETNAM OFFICE (Hochiminh City) VIETNAM CHAMBER OF

COMMERCE AND INDUSTRY, Hochiminh City Branch Building

7th FL, 171 Vo Thi Sau St., Ward7, District-3, Hochiminh City,

S.R.VIETNAM

TEL. 84-28-3932-1759 FAX. 84-28-3932-1758

THAILAND OFFICE 9th Floor, Thanapoom Tower, 1550 New

Petchburi Road, Kwaeng Makkasan, Khet Rachtavee, Bangkok

10400, THAILAND

TEL. 66-2-207-0330 FAX. 66-2-207-0332

PHILIPPINE OFFICE 23F Tower 6789, 6789 Ayala Avenue,1227

Makati City, Metro Manila, PHILIPPINES

TEL. 63-2-528-3117 FAX. 63-2-528-3117

MYANMAR OFFICE 2nd Floor, Tokyo Enterprise Building, No.32,

Pyay Road, 61/2 miles, Hlaing Township, Yangon, Myanmar

TEL./FAX. 95-1-654-838

SRI LANKA OFFICE No.177, 3rd Floor, Galle Road, Colombo

03, Sri Lanka

TEL. 94-11-2446194 FAX. 94-11-2446198

NORTH AFRICA OFFICE 25th, Rd. No.10, Station Sqr., Maadi,

Cairo, Arab Republic of Egypt

TEL. 20-2-2378-3609 FAX. 20-2-2380-1362

ISTANBUL OFFICE Barbaros Mah. Seyit Ahmet Deresi Sok.

Bahar Sitesi Yani, 34662 Altunizade - Uskudar Istanbul, TURKEY

TEL. 90-216-651-8160 FAX. 90-216-651-8180

PT.PP-TAISEI INDONESIA CONSTRUCTION PLAZA OLEOS

18th Floor JI. TB Simatupang No.53, Pasar Minggu Jakarta

Selatan, 12520, Indonesia

TEL. 62-21-2278-3906 FAX. 62-21-2278-3903

TAISEI (THAILAND) CO., LTD. 9th Floor, Thanapoom Tower,

1550 New Petchburi Road, Kwaeng Makkasan, Khet Rachtavee,

Bangkok 10400, THAILAND

TEL. 66-2-207-0330 FAX. 66-2-207-0332

VINATA INTERNATIONAL J/V CO., LTD. (Vinata Head Office)

3F, Song Da Bldg., Pham Hung Rd, My Dinh 1, Nam Tu Liem

Dist., Hanoi, S.R. VIETNAM

TEL. 84-24-3553-3839, -3840 FAX. 84-24-3553-3788

CSCEC-TAISEI CONSTRUCTION, LTD. (Head Office)

4thFloor, Building No. 8, Foreign Culture Creativity Park, 19

Chegongzhuang Xi Road, Haidian District, BEIJING, P.R.C. 10048

TEL. 86-10-6845-1267 FAX. 86-10-6845-1266

(Hochiminh City Branch Office) 7th FL, VIETNAM CHAMBER

OF COMMERCE AND INDUSTRY TOWER,171 Vo Thi Sau St.,

District3, Hochiminh City, S.R.VIETNAM

TEL. 84-28-3932-1765 FAX. 84-28-3932-1764

(Shanghai Branch) 3rd Floor No.6419 SanLuLu, Pudong Xin Qu,

Shanghai, P.R.C. 200120

TEL. 86-21-6209-9757 FAX. 86-21-6209-9758

TAISEI PHILIPPINE CONSTRUCTION INCORPORATED 23rd

Floor, BDO Equitable Bank Tower, Paseo de Roxas, Salcedo

Village, Makati City, PHILIPPINES

TEL. 63-2-886-0670 FAX. 63-2-886-0663

PT. INDOTAISEI INDAH DEVELOPMENT (Chikanpeck Office)

Kawasan Industri Indotaisei, Kota Bukit Indah Sector IA, Block B

Karihurip, Cikampek, Karawan, Jawa Barat, INDONESIA

TEL. 62-264-351-003 FAX. 62-264-351-026

TAISEI MYANMAR CO., LTD. 2nd Floor Tokyo Enterprise

Building, No.32, Pyay Road, 61/2 miles, Hlaing Township, Yangon,

MYANMAR

TEL. 95-1-654-838

Overseas Network (As of August 1, 2017)

Overseas Business Offices Overseas Subsidiaries / Affiliated Companies


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A N N U A L R E P O R T 2017

TA

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I AN

NU

AL

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PO

RT

20

17

［ Inquir ies ］

TAISEI CORPORATIONCSR Promotion Section,Corporate Communication Department, Corporate Planning Office

E-mail : [email protected]

URL : http:// www.taisei.co.jp

1708.2000.T.S

6.2㎜

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