Corporate Report 2020

If you have any questions or comments about this report, please contact: SDGs Management & Promotion Department Co., Ltd. (Secretariat of the Environmental Measures Promotion Committee) 2-1-41 Shikitsu-higashi, Naniwa-ku, 556-8503, Tel : 06-6631-6300 Fax : 06-6632-6257 URL : http://www.nankai.co.jp/ Nankai Electric Railway Co., Ltd. Composition ratio of operating revenue by segment (Fiscal 2019) Note: The composition ratio is the ratio of operating revenues including transactions between segments. Corporate profile Corporate Outline As of March 31, 2020 Shiomi- bashi Ebisucho Company Name: Nankai Electric Railway Co., Ltd. Tennoji Station Established: December 27, 1885 District Hankai Head Of ce: 2-1-41 Shikitsu-higashi, Naniwa-ku, Tramway Osaka, 556-8503, JAPAN Website: http://www.nankai.co.jp/ Hamadera Paid-in Capital: ¥72,983,654,121 Ekimae Nakamozu Operating Revenue: ¥104.508 billion (head corporation) ¥228.015 billion (consolidated) No. of Shareholders: 52,850 Takashinohama Transportation Business Sembokukosoku ％ No. of Employees: 2,639 (head corporation) line 37 companies 38.2 9,205 (all group companies) Railways, rail track management, buses, ocean Managed track: 154.8 km freight, cargo transportation, Izumi Chuo train maintenance Kansai Airport Rolling Stock: 696 Kishiwada

Misakikoen Tanagawa Hashimoto Osaka

Kada

Wakayama Gokuraku- Wakayamashi bashi Wakayamako Koyasan

％ Real Estate Business 16.4 Corporate Philosophy 4 companies With wisdom and dynamism, forging the way to the future Real estate leasing, real estate sales Contributing to the Community Justifying public trust as an all-round lifestyle provider, and building a better society Putting the Customer First Providing excellent services for the customer, bringing living comfort and cultural enrichment Future Challenges Distribution Business Meeting the needs of coming generations with bold energy and creativity ％ 10 companies 12.2 A Dynamic Workplace Shopping Center management, Creating a workplace brimming with vitality, harnessing the expertise and personal Business operations inside the Station Concourse strengths of every employee

Editorial Policy Contents We issue corporate reports as Corporate pro le ...... 1 Leisure Services Business communication tools to convey information Financial and non nancial highlights ...... 3 16.3％ to all our stakeholders. This includes 22 companies business results, strategies and nances, Message from the president ...... 5 Travel agency, hotels and ryokan Japanese inns, along with our approaches to CSR and Medium and Long Term Business Plan .....11 Leasing of facilities for motorboat racing, related efforts. For CSR information, we refer building management and maintenance businesses, Business overview by sector ...... 17 printing, advertising agency to GRI standard and provide comprehensive reporting. Applicable Term: Fiscal 2019 (Monday, April 1, ESG and SDG section ...... 24 2019 to March 31, 2020). Some information, ■ Safety ...... 27 however, is from outside this period. ■ The Environment ...... 31 Organization covered: Nankai Electric Railway Other Society ...... 35 Co., Ltd. and consolidated companies ■ 15.6％ Governance ...... 40 Construction Business Guidelines referenced: Environmental ■ 1.3％ Reporting Guidelines, 2018 Edition by the 4 companies Ministry of the Environment, Environmental Financial report ...... 46 Construction Business Accounting Guidelines for Private Railway Businesses 2008 by the Association of Japanese Private Railways, and the GRI Standards. Company information by segment is current as of July 1, 2020.

1 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 2 Financial and nonfinancial highlights

Number of passengers 1 Operating revenue* ¥228,015 mil. Ordinary income ¥31,677 mil. (Nankai Electric Railway only) 239 mil. Number of employees 9,205 (Consolidated) (¥ millions) (¥ millions) 31,677 (Thousands of people) (Individuals) 300,000 30,000 29,733 240,000 238,479 239,835 239,454 10,000 27,110 27,111 233,301 236,153 9,104 9,158 9,168 9,205 23,898 8,853 219,065 221,690 227,874 227,424 228,015 7,500 200,000 20,000 220,000 5,000

100,000 10,000 200,000 highlights 2,500 2,567 2,577 2,615 2,624 2,639

0 0 0 0

2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) nonfinancial and Financial Consolidated Nankai Electric Railway only

Profit attributable to owners Number of female employees Number of new female hires of parent ¥20,811 mil. Net assets ¥256,003 mil. (16 main companies*4) 563 (16 main companies*4) 67 (¥ millions) (¥ millions) (Individuals) 20,811 (Individuals) （％） （％） 20,000 300,000 600 563 21 90 30 16,452 256,003 510 81 14,719 232,835 241,561 483 494 73 15,000 203,939 219,288 435 66 67 12,612 13,023 200,000 400 14 60 56 24.7 20 10,000 8.90 7.21 7.86 7.88 8.10 100,000 200 7 30 14.914.9 14.714.7 15.91 9 10 5,000 12.612.6 Message from the president

0 0 0 0 0 0 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year)

Number of Ratio of female employees New female hires Female hiring rate female employees (number of female employees/number of all employees)

Investments for safety Total assets Dividend per share*2 Number of “Customer’s Voice” cases ¥925,058 mil. ¥32.5 (Nankai Electric Railway only) 10.1 billion 2,264 (¥ millions) (Yen) (¥ millions) (Number of cases) Business Plan Business 1,000,000 918,385 925,058 40 12,000 3,000 894,621 890,798 902,045 10,093 2,563 2,719 32.5 9,755 Medium and Long Term 750,000 30 30 30 30 30 9,000 9,216 2,327 2,306 2,264 7,942 2,000 6,865 500,000 20 6,000 1,000 250,000 10 3,000

0 0 0 0 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year)

CO2 emissions per unit of individual CO2 emissions transportation income Return on equity (ROE) 8.8% Return on assets (ROA) 2.3% (Nankai Electric Railway only) 118,431 t-CO2 (Nankai Electric Railway only) 1.409 t-CO2 / ¥ millions

（％） （％） (t-CO2) (t-CO2 / ¥ millions) (t-CO2 / ¥ millions) 2.3 Business overview by sector 10.0 2.0 300,000 2.10 3 8.8 1.8 1.88 1.79 1.71 8.1 1.6 2.240 2.091 7.5 6.5 6.8 1.5 1.4 1.4 1.43 2.059 5.8 200,000 1.40 2 1.740 177,806 171,266 170,258 1.13 1.409 5.0 1.0 142,899 100,000 0.70 1 2.5 0.5 118,431 0 0 0 0 0 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year)

CO2 emissions rate (CO2 emissions/operating revenue CO2 emissions (Nankai Electric Railway only)) ESG and SDG section CO2 emissions per km Rolling stock energy Railway Revenue of individual travel t-CO2/million km consumption rate*5 *3 Interest-bearing debt/EBITDA ratio 7.2 (Nankai Electric Railway only) ¥57,636 mil. (Nankai Electric Railway only) 20.7 of individual travel (Nankai Electric Railway only) 5.68 kl/10,000 km (¥ millions) (t-CO2/million km of individual travel) (million km of individual travel) (kl/10,000 km) 12.0 60,000 55,911 57,187 57,953 58,445 57,636 40 3,881 3,941 3,971 3,976 3,922 4,000 7.00 9.0 8.4 8.3 8.5 30 3,000 6.12 7.6 7.2 40,000 6.00 6.12 6.05 5.91 32.3 30.3 30.0 5.68 6.0 20 25.6 2,000 20,000 20.7 5.00 3.0 10 1,000

0 0 0 0 0 reportFinancial 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) CO2 emissions per km of individual travel Km of individual travel (Nankai Electric Railway only) (Nankai Electric Railway only)

*1 Operating revenue does not include consumption tax, for example. *4 Nankai Electric Railway Co., Ltd., Co., Ltd., Nankai Bus Co., Ltd., Kansai Airport Transportation Enterprise Co., Ltd., Tokushima Bus Co., Ltd., *2 Values reflect adjustments for reverse stock split made October 1, 2017. Nankai Ferry Co., Ltd., Nankai Vehicles Service Engineering Co., Ltd., Nankai Fudosan Co., Ltd., Nankaishoji Co., Ltd., Nankai FD Service Co., Ltd., Nankai Food System *3 EBITDA (earnings before interest, taxes, depreciation and amortization) = Operating Income + Depreciation and Amortization Co., Ltd., Nankai Travel International Co., Inc., Suminoe Enterprise Co., Ltd., Nankai Building Service Co., Ltd., Nankai Tatsumura Construction Co., Ltd., Nankai “Operating Income” for fiscal 2017, 2018 and 2019 were calculated using values that included dividend income. Management Service Co., Ltd. *5 Energy used by railway business (kl)/total operating distance of all railroad cars (10,000 km) 3 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 4 Message from the president

As a unified company we will overcome the crisis of the coronavirus pandemic and continue to seek sustainable growth

and increased corporate value over medium and long terms. highlights If we exclude the impact of the coronavirus pandemic, I believe

Financial and nonfinancial nonfinancial and Financial that we were able to achieve our target values for the Kyoso 136 Plan a year early. Moreover, even though what lies ahead is becoming Overview of fiscal 2019 business increasingly unclear, considering fiscal 2019 business results, Introduction internal reserves for management foundations and other results factors, we provided fiscal 2019 dividends totaling 32.5 yen per share (an increase of 2.5 yen), with midterm dividends of 15 yen and end-of-term distributions of 17.5 yen. I would like to express my deepest gratitude for giving us your In fiscal 2019 (in the March 2020), our corporate group exceptional favor in the past. pursued a variety of measures in accordance with the Message from the president Let me extend my respectful condolences for people who fundamental policies (most important issues) that we have passed due to COVID-19, the contagious disease established in the Kyoso 136 Plan, our medium term business caused by the new coronavirus, as well as my heartfelt plan. COVID-19 infections increased in Japan at the beginning concern for others who have contracted it. of 2020, impacting transportation, distribution and similar As a result of the spread of COVID-19, the movement of businesses. In contrast, Namba SkyO, which opened for people and things has been greatly restricted, and the global business in October 2018, along with increased condominium economy has been seriously impacted. Businesses involved in sales and other factors contributed greatly to our real estate railways such as ours are in a particularly severe economic business. As a result, our fiscal 2019 operating revenue was Plan Business

environment. Furthermore, when we think about how things roughly equivalent to the year before at 228.015 billion yen Medium and Long Term could be in the post-coronavirus era, we must expect that (0.3% increase over the previous fiscal year). frameworks for economic activities will have changed greatly In terms of profit, we were able to set new records for from before. every metric due to the effect of increased profit in real estate On the other hand, maintaining and improving safe and as well as the impact of appraisal losses of real estate for sale reliable public transportation functions, which are that accompanied the revision of our residential housing indispensable for local communities, continues unchanged as development business, for example, in the previous fiscal year. the fundamental mission of our corporate group. So that our As a result, operating profit was 35.223 billion yen (27.0% corporate group can continue to be an entity that is needed more than the previous fiscal year), ordinary income was by society, we will continue focusing on establishing strong 31.677 billion yen (32.5% more than the previous fiscal year),

business foundations that can respond flexibly and quickly to and profit attributable to owners of the parent company was Business overview by sector changes in the age. 20.811 billion yen (59.8% more than the previous fiscal year). President and CEO Achikita Teruhiko

Response to COVID-19 At our company, we judged that a corporatewide and rapid trust with all our stakeholders by pursuing, for example, the response to COVID-19, the contagious disease caused by following objectives: “assure the safety and health of our

the novel coronavirus, is necessary. Accordingly, we have customers and employees,” “sustain our mission as a public ESG and SDG section been promoting thorough understanding about contagion transportation network,” “protect the employment of our prevention among all employees. Moreover, we have been staff,” and “strive to support our business partners and undertaking various measures, including efforts toward tenants in areas along our train lines.” preventing the spread of the disease so that people can use Moreover, anticipating that the time until the coronavirus railway services safely and with peace of mind, and the pandemic is resolved will be long, we are raising capital with implementation of countermeasure simulations for the the highest priority being the assurance of funds that are infection of customers and employees. As predictions about readily available. Meanwhile, we are also striving to curb the resolution of the coronavirus pandemic continue to be equipment investments and reduce costs while keeping unclear, we are focusing on responses with a long-term safety and urgency as evaluation criteria. reportFinancial perspective as we continue to emphasize relationships of

5 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 6 Message from the president highlights

If we exclude the impact of the coronavirus pandemic, I believe express, we quickly implemented efforts to restore customer second and later phase buildings, we are advancing

Naniwasuji Line plan overview that we were able to achieve our target values for the Kyoso confidence, starting with emergency inspections of the bogies. nonfinancial and Financial construction utilizing land adjacent to this center. Fundamental policy 4 Fundamental policy 5 Total project expense 136 Plan a year early. Furthermore, to further increase safety at railway crossings, Even in the conditions of the coronavirus pandemic, the About 330 billion yen in estimated expenses Moreover, even though what lies ahead is becoming we installed new level crossing obstacle detection equipment Develop communities with stations as core Expand real estate business logistics business is continuing without being impacted greatly Project implementation increasingly unclear, considering fiscal 2019 business results, with outstanding obstacle detection capabilities. locations At our company, we position “broadening and deepening our due to increased purchasing over the Internet and other Kansai Rapid Railway Co., Ltd. Operators and operation sections internal reserves for management foundations and other For the plan, we were able to complete In cooperation with City, we have been advancing real estate business” as a driver for growth. We are advancing background factors. Since we can expect this field to continue Nankai Electric Railway Co., Ltd. factors, we provided fiscal 2019 dividends totaling 32.5 yen three government procedures that are necessary for the Wakayamashi Station Revitalization Plan, which is the acquisition and development of new properties that growing in the future, the idea is to advance the functionality Fiscal 2020 (ending March 2021) must be said to be a year of (Operation section: Nankai Shin-Imamiya Station – Umekita conditions that are unprecedented in their severity and are (Osaka) underground station) per share (an increase of 2.5 yen), with midterm dividends of advancing the project by the end of fiscal 2019. Having centered on Nankai Wakayamashi Station. Following office contribute to community development and the renovation of of the center at an early stage by fiscal 2027. West Japan Railway Company 15 yen and end-of-term distributions of 17.5 yen. received type II railway business approval for the Naniwasuji and parking buildings that were opened first, construction of properties that we already own, for example. At the same having a great impact on our corporate group. Resulting from (Operation section: JR – Umekita (Osaka) the global spread of the coronavirus pandemic, these include In fiscal 2019 (in the March 2020), our corporate group Line from the Minister of Land, Infrastructure and Transport in Ki:no Wakayama was completed in the spring of 2020, and time, we are seeking to explore flow business possibilities, and underground station) the disappearance of inbound tourism demand and reduced pursued a variety of measures in accordance with the July 2019, we also advanced environmental assessment and the grand opening of this facility that is the core of the we are pursuing the cultivation of personnel who have Main expected effects Message from the president transportation passenger numbers in our railway businesses. fundamental policies (most important issues) that we urban planning procedures with others involved in the plan. redevelopment of Wakayamashi Station was held in June. developed expertise in real estate and the acquisition of ● Enhance access to the Kansai International Airport We recognize that as a result of the spread of the established in the Kyoso 136 Plan, our medium term business We will continue to steadily proceed with plans toward the Ki:no Wakayama is a multifunction facility comprised of a know-how. ● Direct connection of Shin-Osaka, which is along a national core Progress of Kyoso 136 Plan, our coronavirus, the environment surrounding our group plan. COVID-19 infections increased in Japan at the beginning route, and Central Osaka with southern Osaka and other areas. scheduled opening in the spring of 2031. commercial zone, a hotel and a public library. As a new Furthermore, the Kita-Osaka Logistics Center Building, ● Induce interaction among tourist destinations over a wide area businesses will continue to change greatly. This includes of 2020, impacting transportation, distribution and similar medium term business plan landmark for Wakayama, we will continue trying to make it a which is owned by Semboku Rapid Railway, is located about ● Increase functionality as a core of the Kita Umeda area and changes ranging from retreating from globalization to the businesses. In contrast, Namba SkyO, which opened for promote community development in the Nakanoshima area bastion for invigorating the area by creating scenery and 10 km from the urban center in a logistics business complex Improve accessibility of the Namba area We believe that the corporate social responsibility (CSR) popularization and normalization of working remotely and from business in October 2018, along with increased condominium ● activity appropriate for this entrance to the city. neighboring an expressway and other main roads. Since this Fundamental policy 2 perspective is indispensable for an enterprise to realize home, as well as shifts in consumption patterns related to sales and other factors contributed greatly to our real estate Among towns developed along train lines where is one of few ideally-located large-scale logistics businesses Tokaido sustainable development and growth while coexisting with mobility. I believe that a crucial point that has arisen is the bullet train Our corporate group established the Nankai Group Business Develop the Namba community Plan Business responding to the aging of residents and declining populations that can operate 24 hours a day and 365 days a year in the business. As a result, our fiscal 2019 operating revenue was Hankyu Hankyu Takarazuka Line Shin- society. For this reason, we have been advancing proactive “rapid advancement of digitalization” and businesses that Line Osaka Line Vision 2027 as a long-term vision with a focus on the opening For Namba community development, we are creating a has become an urgent matter, we are focusing efforts on , we are advancing comprehensive roughly equivalent to the year before at 228.015 billion yen Medium and Long Term efforts for CSR with “assurance of safety and peace of mind,” cannot respond to this change will not be able to survive. (0.3% increase over the previous fiscal year). Yodogawa of the Naniwasuji Line, a new train line scheduled for the “Greater Namba” that integrates tourism and city functions. severe situation, along with the resolution of the coronavirus formulating the first phase plan for the redevelopment of this asset that will drive future group profits. “emphasis on the environment,” “compliance thoroughness” From this belief, we established a new Digital Strategy In terms of profit, we were able to set new records for Sanyo Shinkansen spring of 2031. In this vision, we set the period from fiscal Within this large objective, we are broadly advancing two pandemic in the medium or long term, we expect to return to Area Revitalization Plan. With a medium and long-term Seeking further development as the largest logistics base in bullet train and “pursuit of a customer orientation” as four business Division as an organization dedicated to the advancement of every metric due to the effect of increased profit in real estate 2018 to fiscal 2027 as “10 years to enhance along our train measures, enhancing the area around the Nankai Terminal a growth trajectory with economic expansion in the Asian perspective, we will continue to make efforts to refurbish and the Kansai region through the concentration of combined guidelines for our corporate group. digital transformation (DX) in June 2020. Our objective is to as well as the impact of appraisal losses of real estate for sale Juso lines,” setting “have our train lines and corporate group be Building and creating a North-South axis that links Namba region and the holding of the Osaka, Kansai, Japan Expo enhance the functions of stations, increase their appeals and logistics facilities, the first building opened for business Furthermore, as symbolized by the sustainable push ahead with a sense of speed utilizing digital technologies that accompanied the revision of our residential housing chosen because we provide satisfaction and excitement” as with the Shin-Imamiya and area. 2025, for example. Accordingly, we have not changed our revitalize them in ways that are suitable to the characteristics without incident in April 2020 as the starting point for this development goals (SDGs) of the United Nations, people are to radically reform and optimize business operations, provide development business, for example, in the previous fiscal year. our “ideal form” for 2027. In fiscal 2019, along with the increased popularity of fundamental commitment to “increasing value along train lines of their communities. center. Currently, in order to enhance the functionality of seriously questioning how businesses respond to the various businesses and services that are not extensions of those in As a result, operating profit was 35.223 billion yen (27.0% Discussion and As the first step for realizing this vision, having set the Namba SkyO, which opened in the fall of 2018, YOLO BASE, by making the most of inbound travel”. However, since deliberation about three-year period from fiscal 2018 as the “foundation the first work training and exchange facility for foreigners in conditions do not allow us to expect quick recovery, our problems of society. As a company responsible for railways, the past, and innovate new business models. more than the previous fiscal year), ordinary income was Naniwasuji/Shin-Osaka JR which are important social infrastructure for regions, rather A significant amount of time is still expected to be connecting lines preparation period” for “making opening moves for future Japan, opened in Shin-Imamiya. Other ways that we are objective is to continue making efforts to increase the appeals 31.677 billion yen (32.5% more than the previous fiscal year), Kita Umeda (Osaka) underground than only economic advancement, people want us to consider necessary to completely resolve the coronavirus pandemic. I station growth,” we are advancing the Kyoso 136 Medium Term steadily advancing the sowing of seeds for the creation of a of areas along our train lines through marketing and

and profit attributable to owners of the parent company was Business overview by sector Business Plan, which seeks coordination with various Greater Namba include participating in the Namba Naka information distribution oriented toward attracting domestic impacts on the environment and society. They want us to believe, however, that particularly in these severe conditions, 20.811 billion yen (59.8% more than the previous fiscal year). JR Tozai Line stakeholders and “the creation of new value together.” 2-chome development plan (site A) occurring south of Namba customers. keep working long-term and continuously for the global from a medium and long term perspective, steadily continuing environment and the needs of society through our businesses. efforts that prioritize connections with every stakeholder will I believe we have made steady progress and been able to Parks as well as starting the Shin-Imamiya Station Renewal Specifically, for the creation of “areas along train lines that Nakanoshima For this reason, under our Environmental Policy Promotion Keihan realize some success in these two years regarding the various Project. are worth visiting,” we are strengthening various promotions keep contributing to the growth of our corporate group. By Nakanoshima Line measures indicated in the five fundamental policies of this I want our corporate group to continue to have a key role in for both domestic and overseas markets in order to further Department, which has been primarily responsible for doing our best not to allow the many measures that we have plan, as detailed below. the development of the Namba community. We will continue attract visitors to the Sakai area, which has the Mozu-Furuichi environmental issues until now, we established the Promoting advanced thus far to stagnate and overcoming this difficult SDGs Management Department as a new division that will be Subway Chuo Line to increase the value of Namba not only through the hard Kofun Group, a registered World Heritage Site. Furthermore, in situation, we will continue seeking sustainable growth and the Hanshin Nishi-

Hommachi JR-Nankai joint operation section active in responding to an even wider variety of society’s medium and long-term increase in corporate value. Namba Line infrastructure aspects of property acquisition and the Kada area of Northern Wakayama City, we are advancing problems. development, but also by strengthening efforts for soft the Kada Renovation Community Development Project based ESG and SDG section Fundamental policy 1 infrastructure, including coordination with communities and on an agreement with Wakayama City, and we held a In the future, we will actively utilize SDGs as CSR effort I humbly request that you, our stakeholders, continue to Kintetsu indicators. In addition, we will continue deepening give us your understanding and support in the future. Nara Line and Provide high-quality transportation services that government organizations, which is indispensable for realizing “renovation school” for idle real estate in the area in fiscal are safe and reliable coordination toward the resolution of global social problems JR Nankai the Greater Namba concept. 2019. In the Koyasan area, we have been advancing the JR operation section JR Osaka Loop Line Namba Shin-Namba Efforts we undertook to provide high-quality transportation Koyasan Tourism Attractiveness Improvement Project since using SDGs as a shared language in cooperative situations services that are safe and reliable in fiscal 2019 included fiscal 2018. In the fall of 2019, we renovated the buildings of inside and outside the company.

JR Kansai Nankai Line starting distribution of the Nankai app, which allows people to the Kudoyama and Koyashita stations, which are unattended Line Fundamental policy Nankai operation section check train operation information and other data on 3 stations, in cooperation with a startup business involved in the smartphones. We also advanced renovation of station Increase nonresident population, starting with rejuvenation of traditional Japanese style houses. Our Shin- Imamiya restrooms and added newly built train cars (30) on the Nankai inbound travelers objective is to continue expanding “Kyoso” (cooperative reportFinancial

To and . Inbound tourism, which had been growing rapidly in recent development) efforts such as these with attractions along our Moreover, in response to the serious incident involving the years, has been seriously impacted by the global spread of train lines that we had not noticed but have been brought out Note: “Umekita (Osaka) underground station” is the name of the new station scheduled to discovery of cracks in bogies used by the Rapi:t limited the coronavirus pandemic. Even though this is an extremely by fresh outside perspectives. open in 2023 as part of a plan, which is being implemented by the West Japan Railway Company, to put branch lines of the Tokaido Line underground and build new stations.

7 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 8 Message from the president highlights express, we quickly implemented efforts to restore customer second and later phase buildings, we are advancing confidence, starting with emergency inspections of the bogies. construction utilizing land adjacent to this center. nonfinancial and Financial Fundamental policy Fundamental policy Furthermore, to further increase safety at railway crossings, 4 5 Even in the conditions of the coronavirus pandemic, the Prospects for fiscal 2020 we installed new level crossing obstacle detection equipment Develop communities with stations as core Expand real estate business logistics business is continuing without being impacted greatly with outstanding obstacle detection capabilities. locations At our company, we position “broadening and deepening our due to increased purchasing over the Internet and other For the Naniwasuji Line plan, we were able to complete In cooperation with Wakayama City, we have been advancing real estate business” as a driver for growth. We are advancing background factors. Since we can expect this field to continue three government procedures that are necessary for the Wakayamashi Station Revitalization Plan, which is the acquisition and development of new properties that growing in the future, the idea is to advance the functionality Fiscal 2020 (ending March 2021) must be said to be a year of advancing the project by the end of fiscal 2019. Having centered on Nankai Wakayamashi Station. Following office contribute to community development and the renovation of of the center at an early stage by fiscal 2027. conditions that are unprecedented in their severity and are received type II railway business approval for the Naniwasuji and parking buildings that were opened first, construction of properties that we already own, for example. At the same having a great impact on our corporate group. Resulting from Line from the Minister of Land, Infrastructure and Transport in Ki:no Wakayama was completed in the spring of 2020, and time, we are seeking to explore flow business possibilities, and the global spread of the coronavirus pandemic, these include July 2019, we also advanced environmental assessment and the grand opening of this facility that is the core of the we are pursuing the cultivation of personnel who have the disappearance of inbound tourism demand and reduced urban planning procedures with others involved in the plan. redevelopment of Wakayamashi Station was held in June. developed expertise in real estate and the acquisition of transportation passenger numbers in our railway businesses. Message from the president We will continue to steadily proceed with plans toward the Ki:no Wakayama is a multifunction facility comprised of a know-how. Efforts for sustainable We recognize that as a result of the spread of the scheduled opening in the spring of 2031. commercial zone, a hotel and a public library. As a new Furthermore, the Kita-Osaka Logistics Center Building, development goals coronavirus, the environment surrounding our group landmark for Wakayama, we will continue trying to make it a which is owned by Semboku Rapid Railway, is located about businesses will continue to change greatly. This includes bastion for invigorating the area by creating scenery and 10 km from the urban center in a logistics business complex changes ranging from retreating from globalization to the activity appropriate for this entrance to the city. neighboring an expressway and other main roads. Since this We believe that the corporate social responsibility (CSR) popularization and normalization of working remotely and from Fundamental policy 2 Among towns developed along train lines where is one of few ideally-located large-scale logistics businesses perspective is indispensable for an enterprise to realize home, as well as shifts in consumption patterns related to sustainable development and growth while coexisting with mobility. I believe that a crucial point that has arisen is the Our corporate group established the Nankai Group Business Develop the Namba community responding to the aging of residents and declining populations that can operate 24 hours a day and 365 days a year in the Plan Business Vision 2027 as a long-term vision with a focus on the opening For Namba community development, we are creating a has become an urgent matter, we are focusing efforts on Kansai region, we are advancing comprehensive society. For this reason, we have been advancing proactive “rapid advancement of digitalization” and businesses that Medium and Long Term of the Naniwasuji Line, a new train line scheduled for the “Greater Namba” that integrates tourism and city functions. severe situation, along with the resolution of the coronavirus formulating the first phase plan for the Izumigaoka Station redevelopment of this asset that will drive future group profits. efforts for CSR with “assurance of safety and peace of mind,” cannot respond to this change will not be able to survive. spring of 2031. In this vision, we set the period from fiscal Within this large objective, we are broadly advancing two pandemic in the medium or long term, we expect to return to Area Revitalization Plan. With a medium and long-term Seeking further development as the largest logistics base in “emphasis on the environment,” “compliance thoroughness” From this belief, we established a new Digital Strategy 2018 to fiscal 2027 as “10 years to enhance along our train measures, enhancing the area around the Nankai Terminal a growth trajectory with economic expansion in the Asian perspective, we will continue to make efforts to refurbish and the Kansai region through the concentration of combined and “pursuit of a customer orientation” as four business Division as an organization dedicated to the advancement of lines,” setting “have our train lines and corporate group be Building and creating a North-South axis that links Namba region and the holding of the Osaka, Kansai, Japan Expo enhance the functions of stations, increase their appeals and logistics facilities, the first building opened for business guidelines for our corporate group. digital transformation (DX) in June 2020. Our objective is to chosen because we provide satisfaction and excitement” as with the Shin-Imamiya and Shinsekai area. 2025, for example. Accordingly, we have not changed our revitalize them in ways that are suitable to the characteristics without incident in April 2020 as the starting point for this Furthermore, as symbolized by the sustainable push ahead with a sense of speed utilizing digital technologies our “ideal form” for 2027. In fiscal 2019, along with the increased popularity of fundamental commitment to “increasing value along train lines of their communities. center. Currently, in order to enhance the functionality of development goals (SDGs) of the United Nations, people are to radically reform and optimize business operations, provide As the first step for realizing this vision, having set the Namba SkyO, which opened in the fall of 2018, YOLO BASE, by making the most of inbound travel”. However, since seriously questioning how businesses respond to the various businesses and services that are not extensions of those in three-year period from fiscal 2018 as the “foundation the first work training and exchange facility for foreigners in conditions do not allow us to expect quick recovery, our problems of society. As a company responsible for railways, the past, and innovate new business models. preparation period” for “making opening moves for future Japan, opened in Shin-Imamiya. Other ways that we are objective is to continue making efforts to increase the appeals which are important social infrastructure for regions, rather A significant amount of time is still expected to be growth,” we are advancing the Kyoso 136 Medium Term steadily advancing the sowing of seeds for the creation of a of areas along our train lines through marketing and than only economic advancement, people want us to consider necessary to completely resolve the coronavirus pandemic. I Business overview by sector Business Plan, which seeks coordination with various Greater Namba include participating in the Namba Naka information distribution oriented toward attracting domestic impacts on the environment and society. They want us to believe, however, that particularly in these severe conditions, stakeholders and “the creation of new value together.” 2-chome development plan (site A) occurring south of Namba customers. keep working long-term and continuously for the global from a medium and long term perspective, steadily continuing I believe we have made steady progress and been able to Parks as well as starting the Shin-Imamiya Station Renewal Specifically, for the creation of “areas along train lines that environment and the needs of society through our businesses. efforts that prioritize connections with every stakeholder will realize some success in these two years regarding the various Project. are worth visiting,” we are strengthening various promotions For this reason, under our Environmental Policy Promotion keep contributing to the growth of our corporate group. By measures indicated in the five fundamental policies of this I want our corporate group to continue to have a key role in for both domestic and overseas markets in order to further Department, which has been primarily responsible for doing our best not to allow the many measures that we have plan, as detailed below. the development of the Namba community. We will continue attract visitors to the Sakai area, which has the Mozu-Furuichi environmental issues until now, we established the Promoting advanced thus far to stagnate and overcoming this difficult to increase the value of Namba not only through the hard Kofun Group, a registered World Heritage Site. Furthermore, in SDGs Management Department as a new division that will be situation, we will continue seeking sustainable growth and the infrastructure aspects of property acquisition and the Kada area of Northern Wakayama City, we are advancing active in responding to an even wider variety of society’s medium and long-term increase in corporate value. problems. development, but also by strengthening efforts for soft the Kada Renovation Community Development Project based ESG and SDG section Fundamental policy 1 infrastructure, including coordination with communities and on an agreement with Wakayama City, and we held a In the future, we will actively utilize SDGs as CSR effort I humbly request that you, our stakeholders, continue to Provide high-quality transportation services that government organizations, which is indispensable for realizing “renovation school” for idle real estate in the area in fiscal indicators. In addition, we will continue deepening give us your understanding and support in the future. are safe and reliable the Greater Namba concept. 2019. In the Koyasan area, we have been advancing the coordination toward the resolution of global social problems Efforts we undertook to provide high-quality transportation Koyasan Tourism Attractiveness Improvement Project since using SDGs as a shared language in cooperative situations services that are safe and reliable in fiscal 2019 included fiscal 2018. In the fall of 2019, we renovated the buildings of inside and outside the company. starting distribution of the Nankai app, which allows people to the Kudoyama and Koyashita stations, which are unattended Fundamental policy September 2020 check train operation information and other data on 3 stations, in cooperation with a startup business involved in the smartphones. We also advanced renovation of station Increase nonresident population, starting with rejuvenation of traditional Japanese style houses. Our President and CEO Achikita Teruhiko restrooms and added newly built train cars (30) on the Nankai inbound travelers objective is to continue expanding “Kyoso” (cooperative reportFinancial Line and Koya Line. Inbound tourism, which had been growing rapidly in recent development) efforts such as these with attractions along our Moreover, in response to the serious incident involving the years, has been seriously impacted by the global spread of train lines that we had not noticed but have been brought out discovery of cracks in bogies used by the Rapi:t limited the coronavirus pandemic. Even though this is an extremely by fresh outside perspectives.

9 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 10 Medium and Long Term Business Plan

In recent years, Namba, which is the largest business center for group 10 years in the future. In this vision, we established the 10 Executive message our group, has developed as one of the preeminent international years until fiscal 2027 as “a decade of enhancing our train lines tourist destinations in Japan. As a result, our company has been in preparation for the opening of the Naniwasuji Line.” We have achieving great growth and directly benefiting from the merits of begun our Kyoso 136 Medium Term Business Plan for the three We continue seeking to “satisfy and impress” increased inbound tourism. Furthermore, we have recently years from fiscal 2018, and have been steadily advancing every stakeholder and advancing various received permission to begin work on the Naniwasuji Line, and multiple measures in keeping with its five fundamental policies. measures to realize our business vision highlights we expect the convenience along train lines to be greatly Just as we were closing in on the numerical targets of the Managing Corporate Officer improved by its opening (targeted for spring 2031). On the other Kyoso 136 Plan, however, we began fiscal 2020 in economic Uraji Koyo hand, we can predict that our group will face even more conditions of unprecedented severity due to impacts from the nonfinancial and Financial We are pursuing “creating a Greater Namba,” “increasing resident control unnecessary and nonessential expenses and ensure extreme environmental changes, including continued population starting spread of infection caused by the coronavirus. By population by revitalizing communities along train lines” and immediate capital requirements. We are also striving to be thorough decline and the advancement of IT, in the future. overcoming this unprecedented crisis for society and advancing “becoming a general developer,” themes established in the Nankai in providing for the safety of customers and employees, and seeking To avoid becoming focused entirely only on immediate efforts in preparation for a new post-coronavirus normal as a Group Business Vision 2027, with a long-term perspective. In the to do our very best to fulfill our mission as a business that provides issues in these circumstances, we have the Nankai Group unified group, we will continue to seek sustainable growth and Kyoso 136 Plan, which is our medium term business plan designated public infrastructure. Business Vision 2027 that establishes the ideal form of our increased corporate value over medium and long terms. as the foundation building phase for our vision, we are steadily As one pillar for the growth strategy of our corporate group in our Note: The numerical targets and plan details in medium and long term business plans do not consider the impacts of the coronavirus pandemic. advancing various measures according to five fundamental policies, long-term business strategy, our objective to increase value along and we perceive that we have achieved a degree of success in these train lines while making the most of inbound travelers has not two years. changed. However, since conditions do not allow us to expect quick Considering the utilization of alliances and similar relationships, recovery, for the time being, we will make the most of the abundant which is one of the key themes of the plan, we utilized the knowledge tourism resources along our train lines and continue with efforts to Message from the president of other companies and experts as we pursued sowing seeds for the increase the appeals of areas along them through marketing and future. This included participating in project planning for the information distribution with the goal of attracting domestic Nankai Group Have our train lines and corporate group be chosen development of the area south of Namba Parks and opening YOLO customers. Business Vision 2027 because we satisfy and impress BASE, the first inbound work training facility for foreigners in Japan. In June 2020, we established a new Digital Strategy Division in Furthermore, as a result of Namba SkyO, which opened in 2018, our company. With the importance of responding to the rapid contributing to profit growth throughout the financial period and other advancement of digitalization during the coronavirus pandemic, we Positioning factors, we reach the highest level of profit ever in fiscal 2019. have begun efforts to radically reform service contents and cost As a result of the coronavirus pandemic that began just as we structures focusing on digitalization and to undertake efforts seeking Plan Business

A decade of enhancing our train lines in preparation for the opening of were closing in on the numerical targets of the Kyoso 136 Plan, to innovate new business models. Moreover, to enable development Medium and Long Term the Naniwasuji Line. however, the business environment changed drastically. This has also into an even more durable business after the resolution of the been having a large impact on the businesses of our corporate coronavirus, we will keep rapidly advancing the solidification of our group. While future prospects remain unclear, we will endeavor to medium-term road map and growth strategy. ● With neighborhoods along our train lines as main business areas, apply all the abilities of our group to focus on increasing value along these lines ● By using Namba and inbound tourism as business chances, accelerate increasing value along our train lines Numerical targets (consolidated basis) ● By proactively using alliances, raise the speed of business development Operating income*1 Capital investment amounts *2 Interest-bearing debt balance/EBITDA ratio (in ¥100 million units)

(in ¥100 million units) (Multiple)

2018 2019 2020 Business overview by sector (results) (results) (plan) 900 9 8.5*3 Increase revenue 237 218 7.6 7.2 7.5 or less Phase3 Developing the Namba community 109 18 About 6 Inbound travel 32 5 Medium Term 600 6 Phase2 Developing communities with stations Phase1 Medium Term Business Plan as core locations 14 25 Expanding real estate business, etc. Fiscal 2020 Business Plan 450 73 156 predictions KYOSO 136 Plan Other revenue growth investment 8 12 are currently

370 ESG and SDG section 347 361 pending Fiscal 2018–2020 300 287 3 Safety and updating 198 260 Fiscal 2020 Railway-related construction predictions (including new rolling stock) 105 127 are currently Real estate and logistics facility pending construction 40 45 Positioning 0 0 Total (Fiscal Year) 435 479 2017 2018 2019 2020 4 2027 4 ● First three years toward the achievement of the Nankai Group Business Vision 2027: (target)* (target)* Foundation preparation period 1 Make concentrated early investments as a key to future growth: * Including dividend income ● *2 Operating income + dividend income + depreciation and amortization reportFinancial Three years of making opening moves for future growth *3 In fiscal 2018, along with revision of our residential housing development business, appraisal losses of real estate for sale (6.3 billion yen) were calculated as cost of sales. With EBITDA calculated excluding the impact of this, the Interest-bearing debt balance/EBITDA ratio was 7.7. ● Realize growth and create new value in the future together with stakeholders: *4 The target values for fiscal 2020 and fiscal 2027 are based on data as of February 28, 2018. Three years of creating together If revisions to these targets or predictions occur, they will be reported on our corporate site Investor Information page (http://www.nankai.co.jp/company/investor.html).

11 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 12 Medium and Long Term Business Plan

Our entire company is working together to increase value along our train lines in preparation for the opening of the “Create train lines that are chosen” is one business strategy in the Nankai Group Business Vision 2027. To do this, we are Naniwasuji Line concentrating efforts on “developing the Namba community, which is the entry point for our train lines” and “community highlights development focused on improving value along our train lines.” Nankai Group Business Vision 2027 Develop the Namba community,

Kyoso 136 Plan fundamental policy Major achievements in scal 2018 Major achievements in scal 2019 nonfinancial and Financial (fiscal 2018–2027) which is the entry point for our train lines ● With inbound tourism and Namba SkyO as triggers, Provide high-quality transportation services that are safe and reliable cultivate the area with the two vectors of “development 1 as an international tourism city” and “enhancement of ● New crossing obstacle detection equipment and crossing urban functions” Increase safety of platforms and focus monitoring systems installed crossings ● With formation of a north-south axis between Namba ● New gates installed on Namba Station platform 1 and Shin-Imamiya/Shinsekai as the key, create a Renew rolling stock intensively and ● Koyasan cable cars updated with two new-model two-car trains ● Nankai Line trains changed to 12 cars vibrant excursion space and develop the region into “an systematically ● Nankai Line trains changed to 12 cars ● Koya Line trains changed to 18 cars area of greater excitement”

Refurbish station restrooms ● Executed at 14 stations ● Executed at 14 stations Image of Greater Namba Flow of people Steadily increase safety and ● Reinforced earthquake resistance of station buildings and overpass pillars ● Reinforced earthquake resistance of station buildings and overpass pillars

operation security of facilities (Sakaihigashi Station, Sumiyoshihigashi Station, etc.) (Hagurazaki Station, etc.) Message from the president Business strategy 1 against natural disasters ● Nankai Line Kinokawa Bridge pillars reinforced (work completed), etc. ● Disaster countermeasures (falling rock and embankment protection works, etc.) Create train lines that are chosen 2 Develop the Namba community Dotonbori Reverse population ● Namba SkyO opening Enhance the zone around the Canal area ● Participated in planning and advanced the Namba Hiroba Remodeling Plan, movement from net loss to Nankai Terminal Building net gain in 10 years which is a public-private cooperative project

Related Kyoso 136 Plan Formation of a north-south axis ● Completed building and prepared to open YOLO BASE, the first inbound between Namba and labor training facility in Japan – Opened for business fundamental policies Plan Business Shin-Imamiya/Shinsekai ● Participated in planning for and invested in Hoshino Resort OMO7 Osaka Shin-Imamiya development plan 1 2 3 4 5 Medium and Long Term ● Participated in project planning for Namba Naka 2-chome development plan (site A) Kuromon Minatomachi Namba Market and ● Started efforts for work to renew Shin-Imamiya Station area Terminal Nippombashi area Invest in real estate properties ● Nankai Namba Midosuji West ● Nankai Namba Daini Building ● Namba Midosuji Center Building that contribute to community ● FP HOTELS Grand South-Namba ● Nankai SK Namba Building development Formation of a north-south axis between Namba and Synergy 3 Increase nonresident population, starting with inbound travelers Shin-Imamiya/Shinsekai

Improve environment for receiving ● Utilized stress-free mobile environment services ● Completed e-ticket conversion of special tickets for overseas travel agencies Shin-Imamiya foreigners coming to Japan ● Adopted Alipay, the largest Chinese electronic payment service and ● Opened “hands-free sightseeing” service facilities, etc. Shinsekai area

Promote tourism that maximizes ● Advanced Koyasan Tourism Attractiveness Improvement Project Business overview by sector Business strategy 2 the features of locations along our – Started operation of new-model Koyasan Cable cars – Established a snack stand at Kudoyama Station and a Station Hotel at train lines Broaden and deepen ● Advanced Kada Fish Line Project Koyashita Station our real estate business – Started operation of Medetai Train Nana Cultivate this as a core business that is equal to our Increase appeal along train lines ● Entered cooperation agreement with Wakayama City related to Kada Renovation ● Opened “Renovation School @ Kada” for idle real estate in the Kada area Community development focused on railways and generates a by creating employment and Community Development Project ● Held Nankai Lines Atotsugithon race as part of support for innovation by majority of operating income industry businesses along train lines improving value along our train lines Related Kyoso 136 Plan ● Increase the “visitor population” by raising the value as fundamental policies Develop communities with station as core locations a place “to visit,” and contribute to increased “resident 4 population” by raising the value as a place “to live” 2 4 5 ESG and SDG section Increase appeal along train lines ● Advanced Wakayamashi Station Revitalization (Phase 2) (Ki:no Wakayama opening in June 2020*) by refurbishing stations – Completed construction of parking structure Value along – Completed construction of retail building, hotel and library Value as place train lines Value as place “to visit” “to live” Revitalize and invigorate Senboku ● Renovated Izumigaoka Station New Town ● Developing basic design plan to begin work on area in front of Izumigaoka Station. ● Employment opportunities ● Eonvenient transportation ● Tourism promotion for commuting to work ● Trendiness and school ● Accessibility, etc. ● Extensive facilities for 5 Expand real estate business daily living ● Sense of familiarity with Promote more effective land use ● Advanced development of Kita-Osaka Logistics (Opened for business April 2020*) areas along train lines, etc. at distribution bases Center Building No.1 ● Began construction of new A building Financial reportFinancial Invest in real estate properties ● Nankai Namba Midosuji West ● Nankai Namba Daini Building ● Namba Midosuji Center Building Increase Increase that contribute to community “visitor population” “resident population” ● FP HOTELS Grand South-Namba ● Nankai SK Namba Building development * Fiscal 2020

13 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 14 Medium and Long Term Business Plan

For details about scal 2019 efforts to “provide high-quality transportation services that are safe and reliable,” Fundamental policy Main scal 2019 efforts for the Kyoso 136 Plan 1 please see “Safety Investment” (p.28) and “Applying customer feedback” (p.35).

Fundamental policy 2 Develop the Namba community Fundamental policy 3 Increase nonresident population, starting with inbound travelers highlights

Namba SkyO drove profit growth Nagahori In the Koya-Sanroku area In Wakayama City and the Kada area With businesses along train lines A Tsurumi-ryokuchi Line nonfinancial and Financial for the Kyoso 136 Plan Yotsubashi N In October 2018, we opened Station Dotonbori Nagahoribashi Namba SkyO as a nexus of Line Station

Area Line Line Yotsubashi Sakaisuji

community development utilizing Midosuji company property in Namba. This development is endowed with a Namba Nankai Namba Midosuji West (July 2018) Station Kintetsu Nara Line and large-scale, urban convention hall Osaka Namba Namba Nippombashi and other facilities that meet the Station Station Namba Hiroba Station needs of the Namba area for Namba Midosuji Station Plaza JR Namba Center Building (planned) high-performance, large-scale Station (April 2019) Ura Nankai SK Namba Kuromon Seeking to expand the classes of visitors We advanced the Kada Renovation As a link among measures to increase Message from the president offices and advanced, area Ichiba Namba Building Swissotel to the Koya-Sanroku area and improve Community Development Project based resident population along our train lines, preventative medical treatment. (February 2020) Nankai Osaka Namba Station travel, we renovated the station building. on a cooperation agreement with we held the Nankai Lines Atotugithon as With the office area rental rate Fraser Residence Nankai Osaka A Namba We established a snack stand at Wakayama City. We held “Renovation a workshop for successors to small and reaching 100% and income and City Around the Nankai Namba Terminal Building Kudoyama Station and a Station Hotel at School @ Kada” practical workshops to medium-size businesses and retail expenditure becoming favorable, it SkyO Nankai Namba Midosuji West Koyashita Station as “bases for walking think about business plans utilizing shops, for example, in order to generate is driving profit growth in our Namba Parks (November 2018) the pilgrimage trail.” actual idle real estate. ideas for new business. We will continue current Medium Term Business Plan. As a landmark tower of B

Line to support innovation by businesses the Namba area, we will seek to make it further improve the Namba JR Kansai Nippombashi

along train lines in the future. Plan Business value of the area. EKIKAN Denden Zepp Namba Town

(OSAKA) Medium and Long Term Osaka Kizu Wholesale Nankai Line Fundamental policy Participated in project planning for Namba Marke 4 Develop communities with stations as core locations B Naka 2-chome development plan (site A) BON HOSTEL Daikokucho Station Grand opening of Ki:no Wakayama, a new building for Wakayamashi Station (June 2020) Seeking to further enhance the urban functions of the Namba Ebisucho JR North-south axis Station Station Area, we participated in project planning for the Namba Naka Imamiya We had advanced construction of Ki:no between Namba and Employment 2-chome development plan (site A), which is the area south of Shin-Imamiya/ and exchange Wakayama, a new station building that Shinsekai center for Shinsekai connects directly to Wakayamashi Station, Namba Parks. We are participating in this subleasing project in C foreigners area which about 4,400 m2 of rented land will be rented to others, FP HOTELS Hoshino Resort but its opening for business was delayed due Grand South-Namba development including Centara Hotels & Resorts, which is scheduled to (December 2018) plan to the pandemic. This multifunction facility open its first luxury hotel in Japan in the middle of 2023. D E comprised of a commercial zone, a hotel and

Shin-Imamiya Business overview by sector Station a public library finally had its grand opening in Opened YOLO BASE, an employment and Real estate property acquired in fiscal 2018 June 2020. We will continue to spread the C exchange center for foreigners Real estate property acquired in fiscal 2019 prosperity of the station to the surrounding area with this new landmark realized at the With the goal of enabling foreign entrance to Wakayama as a base. laborers to gain work skills, including for lodging and food and beverage Participated in planning and invested in services, as well as to learn Hoshino Resort OMO7 Osaka Fundamental policy Expand real estate business languages, for example, we opened E 5 Shin-Imamiya development plan YOLO BASE, the first inbound labor ESG and SDG section training facility for foreigners in We participated in planning Completed construction of Kita-Osaka Logistics Center Building No.1 (April 2020) Japan in September 2019. and invested in the Hoshino We are advancing the comprehensive JCT Resort OMO7 Osaka 138 redevelopment of the Kita-Osaka Logistics Advanced Shin-Imamiya Station Shin-Imamiya development Center Building No.1 in Ibaraki City, Osaka D renovation plan plan, which is advancing Suita IC 19 preparations for an urban Prefecture. We completed construction of Shin-Imamiya Station is a station that will connect with the tourist hotel that is to open in the Kita-Osaka Logistics Center Building No.1 as a starting point in April 2020. By 14 Tokaido Shinkansen Naniwasuji Line, which is scheduled to open in 2031, and is bullet train 2022. Through coordination Kinki Expressway Image provided by Hoshino Resort continuing to promote more effective land Setsukita IC also a key station for the formation of a north-south axis with the Hoshino Resort, we Kita-Osaka use, we are seeking to make this the largest Meishin Expressway reportFinancial between Namba and Shin-Imamiya/Shinsekai. We will continue will keep seeking to form a north-south axis between Namba 14 Logistics Center striving to raise the satisfaction levels of customers that use the and Shin-Imamiya/Shinsekai and improve mobility among these distribution base in the Kansai region. Osaka Chuo station by advancing a renovation work plan and seeking to areas, as well as to revitalize and increase the value of areas JR 147 Kanjo Line Yodogawa increase its convenience, improve its capacity for handling along our train lines by making them more attractive to visitors. travelers and enhance the local image.

15 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 16 Business overview by sector * The operating revenue values for each segment include transactions between segments.

▶Tramway business Business focus for this financial year Transportation The Hankai Tramway operates two lines, the and the Uemachi Line, and is thought of fondly as a local ▶Began operation of “NANKAI My Train” ▶Expanded routes covered by our “bus location system” Business means of transport. We completed renovation of the At Wakayama Bus, we have 9000 series cars that we began in incorporated a “bus location 2017 through the “NANKAI My system” that utilizes GPS terminals

% highlights 35 companies 38.2 ▶Bus business Train” project, in which we thought attached to buses to provide bus (100,980 mil.) Along with Nankai Bus, we also operate Wakayama Bus, about train car design with operation status in real-time since

Nankai Rinkan Bus, Kumano Gobo Nankai Bus, Tokushima customers, and started operating April 1, 2019. nonfinancial and Financial Bus and other bus lines that have deep local ties. them in April 2019. Furthermore, in addition to Kansai Airport Transportation Enterprise, each of these companies is expanding shuttle Operating revenue Operating income bus businesses to connect with the Kansai International (¥ millions） 102,051 (¥ millions） Conducted campaign commemorating Opened the Kyoto-Koyasan Line as a direct 120,000 99,551 100,980 20,000 12,953 Airport and major cities. ▶ ▶ 98,729 100,889 16,500 designation of the Mozu-Furuichi Kofun Group express bus route 16,140 15,004 15,033 80,000 10,000 as a World Heritage In order to encourage visits to the 40,000 ▶Ferry business In July 2019, we undertook a variety Koyasan World Heritage, Nankai 0 0 Nankai Ferry operates ferries that connect the ports of of measures, including running cars Rinkan Bus opened the 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Wakayama and Tokushima, providing comfortable sea with decorative wrapping and Kyoto-Koyasan Line, which connects (Fiscal Year) (Fiscal Year) access between the Kinki region and Shikoku island. issuing Sakai area tourism these two areas, jointly with the Message from the president pamphlets as part of efforts that we Keihan Bus Co., Ltd. This line was called the “Mozu-Furuichi Kofun operated during the limited period Business summary Group World Heritage Designation from September to November 2019 Business results Commemorative Campaign.” during the autumn excursion season. ▶Railway Business Our railway business provides safe and comfortable Even though the previous fiscal year reflected negative ▶Started operation of Kumano Gobo Nankai Bus ▶Put the newly-built “Ferry I” into commission transportation services along our various lines. These typhoon impacts, operating revenue this year decreased In order to flexibly utilize the Nankai Ferry began operation of

include the Nankai Electric Railway with two core lines, the 1.0% to 100.98 billion yen due to the effects of the business resources of the group the newly-built “Ferry I” on Plan Business Nankai Line that connects Namba with Senshu and coronavirus pandemic. Operating income was 12.953 companies in the Nanki area and December 15, 2019. In addition to Medium and Long Term Wakayama and the Koya Line that connects to the Koyasan billion yen (a 13.8% decrease from the previous fiscal year) operate them as a unified business, establishing new seating areas world heritage site, as well as the Airport Line that provides due to increased depreciation and other factors. we launched Nanki Kanko Holdings reserved for women on this ship important access to Kansai International Airport. In addition, as an intermediary holding company and outfitting it with Wi-Fi, we Semboku Rapid Railway Co., Ltd. became a part of our in October 2019. We also started focused on the exterior group in 2014, and its railway line travels to Senboku New operation of Kumano Gobo Nankai appearance, interior design and Town from its starting point at , which is a Bus as a new subsidiary responsible other details to enable customers station shared with Nankai Electric Railway. for bus operations in January 2020. to enjoy their travel more. Business overview by sector ESG and SDG section Financial reportFinancial

17 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 18 Business overview by sector * The operating revenue values for each segment include transactions between segments.

Executive message Business results Real Estate Operating revenue was 43.486 billion yen (a 17.7% increase As a mission of our group, we are Business over the previous fiscal year) due to the contributions of advancing a variety of efforts to provide Namba SkyO throughout the year and increased condominium sales. Operating income was 13.832 billion yen

companies 16.4% highlights high-quality transportation services Managing Corporate Officer 4 (a 189.6% increase over the previous fiscal year). This change (43,486 mil.) that are safe and reliable Kajitani Satoshi is due in part to the inclusion in the previous fiscal year of

appraisal losses of real estate for sale that accompanied the nonfinancial and Financial The most important mission of our railway business is to endeavored to increase convenience for customers from revision of our residential housing development business. “provide high-quality transportation services that are safe Japan and abroad. For example, we incorporated a and reliable,” which is a fundamental policy of our Kyoso multilingual train announcement system on the Koya Line, Operating revenue Operating income Business focus for this financial year (¥ millions (¥ millions 136 Plan. Considering this, the discovery of cracks in Rapi:t deployed mobile translation devices to stations and some ） ） 13,832 bogies in August 2019 and the recognition limited express trains, and distributed the Nankai app that 50,000 43,486 12,000 11,347 ▶Advance first phase of redevelopment plan for 33,744 41,248 9,379 that this was a serious incident brings us great shame. We can be used to check train progress locations, for example. 33,922 36,956 8,000 8,581 Kita-Osaka Logistics Center apologize again for causing great worry and anxiety to Our company is responsible for public infrastructure that 25,000 4,776 4,000 Semboku Rapid Railway advanced everyone concerned. is indispensable to daily living, so we have a duty to redevelopment of the Kita-Osaka In response to this incident, we reviewed the content of continue our business while minimizing infection risks, even 0 0 Truck Terminal Building 1 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 our regular bogey inspections and revised our inspection in conditions with fewer railway users due to the spread of (Fiscal Year) (Fiscal Year) (completed on April 3, 2020). By Message from the president manuals, for example, and we made efforts to restore the coronavirus pandemic. For this reason, we are also unifying the terminal and the customer confidence in fiscal 2019. Moreover, we work to working to apply antibacterial and antivirus treatments distribution center, we have created improve safety by continuing to advance work to increase inside train cars and to attach antibacterial and antivirus a logistics facility that achieves the earthquake resistance of facilities and elevated line sheets to the touch panels of fare adjustment machines, for quick and efficient distribution. pillars. We also installed new obstacle detection equipment example. Business summary at railway crossings, for example. For disaster prevention, In fiscal 2020, which is the final fiscal year the Kyoso 136 YOLO BASE inbound labor training facility we undertook the removal of trees that would be dangerous Plan, we are striving to build a culture that actively creates We have been undertaking real estate leasing and sales, ▶ if they fell, and we developed disaster prevention records safety with “aggressive safety” as the action guideline. In particularly along our train lines and around main stations. opened for business for slopes. In addition, we adopted web meeting systems to the medium and long terms, we should respond to Our leasing business includes commercial and office In September 2019, we opened Plan Business buildings, rental apartments and parking lots. In addition, YOLO BASE, the first inbound labor

link our head office, work sites and command centers, and customer needs both during and after the coronavirus Medium and Long Term strengthened our information coordination during disasters. pandemic. To do this, we will continue to create new value we have been broadly undertaking real estate sales, training facility for foreigners in Japan. On the other hand, in terms of service, we began with innovative ideas and seek to raise the value along train including residential land sales and condominium sales. We Through this well-outfitted facility, operation of renovated 9000 series cars developed through lines as well as increase resident and nonresident are contributing to increasing the value along these lines which includes a hotel, a restaurant the “NANKAI my train” project in which we thought about populations and “create train lines that are chosen.” and to creating more appealing living environments for and event space, we seek to help train car design for the Nankai Line with customers. We also customers living in these areas. people, including enabling them to gain the work skills needed to work at Japanese businesses and to master languages and other knowledge. Executive message

We will continue endeavoring to increase Business overview by sector brand value by being deeply involved in each area and maximizing the expertise of Senior Corporate Officer all group companies Tsukuda Yoshio

In order to “have our train lines and corporate group be payment service for inbound travel routes in Kansai Airport chosen,” as prescribed in our Business Vision, the important Terminal 1. In our distribution facility real estate rental

things are having every group company be deeply involved business, Semboku Rapid Railway, which has a large ESG and SDG section in each area and providing products and services with high distribution facility, advanced the redevelopment of the added value that feature the expertises of each business. Kita-Osaka Logistics Center. In our hotel and ryokan lodging Moreover, I believe that gaining and developing the trust of business, Nakanoshima rebranded Hotel Nakanoshima, all stakeholders, starting with our customers, is a major duty reopening it as “The azure island accommodation for every group company. Kumano-bettei NAKANOSHIMA” a luxury Japanese-style In fiscal 2019, every group company again advanced resort oriented toward individual travelers. business that maximized each of their expertises. For Making the most of their individual expertises and already example, in order to respond to demand related to inbound cultivated public confidence, I want every group company travel, bus businesses Kansai Airport Transportation business, including transportation, real estate, distribution, Financial reportFinancial Enterprise and Nankai Bus increased the number of airport leisure and services, and construction, to continue limousine buses as well as buses circulating on Kansai increasing service quality and employee satisfaction and Airport Island. In addition, we incorporated a new mobile building high brand value in each business field.

19 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 20 Business overview by sector * The operating revenue values for each segment include transactions between segments.

Business results Executive message Distribution Operating revenue this year was 32.348 billion yen (a 3.4% Business decrease from the previous fiscal year) due to the impacts We are promoting comprehensive of the coronavirus pandemic and other factors. Costs community development in terms of both related to the renovation of a shopping center were Senior Managing companies 12.2% hard and soft infrastructure, and working highlights 10 included in the previous fiscal year results, so operating Corporate Officer (32,348 mil.) income increased this year to 3.835 billion yen (a 3.2% to increase value along train lines. Takagi Toshiyuki

increase over the previous fiscal year). nonfinancial and Financial We established the Nankai Group Business Vision 2027 as our develop pedestrian space at Namba Station Hiroba Plaza and Business focus for this financial year ideal form for 10 years in the future. In this vision, as a business the revitalization of the Shin-Imamiya and Shinsekai area, for Operating revenue Operating income strategy we set enhancing the areas along train lines by example. In addition, we are focusing efforts on the soft (¥ millions） (¥ millions） generating synergies from “creating train lines that are chosen” infrastructure of community development, including area 33,482 ▶Namba Parks renewal 40,000 35,200 35,608 32,348 5,000 and “broadening and deepening our real estate business.” Our management in coordination with governments, business 35,794 In March 2020, we renovated 4,011 3,715 3,835 real estate and distribution segments are filling important roles innovation along train lines and other community invigoration 3,163 3,181 Namba Parks. In addition to 20,000 2,500 for realizing this. efforts. We will also continue working to revitalize and invigorate opening a total of 37 shops* Needing to make Namba an even more attractive the towns developed along our train lines, starting with Semboku. including retail stores, dining and 0 0 neighborhood after the opening of the Naniwasuji Line Meanwhile, the business environment is changing drastically 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 drinking establishments and some (Fiscal Year) (Fiscal Year) scheduled for spring 2031, we are not just advancing, for due to the current coronavirus pandemic. As a result of the

businesses appearing for the first Message from the president example, the acquisition of properties in the Namba area and increase in working from home and the sudden reduction in time in Japan, we also created a conducting steady rental business through the development, inbound travel, reforming business structures has become an new wedding space. maintenance and management of properties that we have immediate concern. At the same time, it is important to continue * These include new shops as well as shops that relocated, remodeled or changed lines of business. owned for some years. Along with the acquisition and grappling with changed perceptions of value in a “new normal” Business summary development of properties, we are also striving to become a age, including reconsiderations of suburban living. First, as we comprehensive developer that conducts even more diverse focus on structural reforms, needing to solidify our footing, we Grand opening of Ki:no Wakayama held We are advancing a wide range of highly-refined shopping ▶ business, including flow businesses with focuses even on will actively incorporate alliances in terms of both hard and soft centers, convenience stores, dining and drinking We had been advancing construction of Ki:no Wakayama in renovation and sales. In these ways, we will continue to infrastructure. We will also continue accelerating community establishments and retail shops, centered around our train a new station building that connects directly to “broaden and deepen our real estate business.” development in Namba as well as along our train lines, and Plan Business lines, and working to invigorate the communities in these Wakayamashi Station. This multifunction facility had its

Moreover, in cooperation with government agencies and advance efforts toward realizing our goals to “broaden and Medium and Long Term areas. We are also working to develop our station business grand opening in June 2020. With a commercial facility, local stakeholders, we are making spaces for walking that deepen our real estate business” and “create train lines that are outside our train lines, utilizing our expertise from retail hotel, library and other features, this has become an contribute to the creation of Greater Namba through plans to chosen.” shops inside stations. entrance to Wakayama and a new landmark.

Executive message

Creating enhanced urban functions and lively pedestrian spaces, we will keep Business overview by sector

contributing to the formation of rich living Senior Corporate Officerr environments Nishiyama Tetsuhiro

At our company, by “broadening and deepening our real construction of the Truck Terminal 1 Building in the estate business,” we are seeking to make commercial Kita-Osaka Logistics Center as a starting point for our facilities, offices, residences, hotels, distribution centers and intention to make the largest distribution center in the other locations more attractive, and contribute to creating Kansai region. In our residential development business, we even richer living environments. opened the new neighborhood of Mitsuishidai Soratomori at In fiscal 2019, anticipating the opening of the Naniwasuji Rinkandenentoshi near Nankai Hashimoto. ESG and SDG section line, we purchased office buildings in the Namba area. At Since the beginning of this year, however, the power of Namba Parks, we also renewed the Parks Garden, which the coronavirus pandemic has been causing radical has received high praise in Japan and abroad, earning changes in how we live and the way we work. As a result, various awards and recognitions. Little Oyatsu Town the creation of new value both during and after the Namba, an urban theme park centered on Baby Star coronavirus has become an urgent matter. While a variety of Ramen, is scheduled to open this fall. Moreover, in the communication has gone online through the spread of Wakayama area, Ki:no Wakayama, a multifunction facility digital technologies, by re-creating the value of “real” places comprised of a commercial zone, a hotel and the again and creating locations that are worth visiting, we will

Wakayama City Public Library opened in June this year, continue working earnestly to increase visitor and resident reportFinancial realizing “community development with a station as the core populations along train lines and make train line location” that fuels activity in the area around it. neighborhoods for a new era that have value as both Furthermore, in our distribution business, we completed destinations and places to live.

21 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 22 Business overview by sector * The operating revenue values for each segment include transactions between segments. ESG and SDG section

In our corporate group, we are pursuing CSR with four overarching themes that we have identified as business guidelines for our group. They are “assurance of safety and peace of mind,” “emphasis on the environment,” Leisure Services Construction “compliance thoroughness” and “pursuit of a customer orientation.” In addition, we have also begun efforts for Business Business sustainable development goals (SDGs) as guides for CSR efforts toward the resolution of issues faced by global society.

22 companies 16.3% 4 companies 15.6% Overview of our approach to sustainable development goals (SDGs) highlights (42,981 mil.) (41,111 mil.) The SDGs adopted by the United Nations in 2015 are goals toward SDGs and the characteristics of our business, which is HOTEL shared worldwide for 2030 toward the resolution of social, closely linked with communities, we established a new SDGs Financial and nonfinancial nonfinancial and Financial economic and environmental issues facing society around the Management & Promotion Department under our globe. They are comprised of 17 goals with 169 targets for Environmental Policy Promotion Department in 2019. The goal the realization of a sustainable world. Moreover, to achieve of this is to advance efforts to consider and contribute to a Operating revenue Operating income 2,762 Operating revenue Operating income these goals, cooperation is desired not only among the wide range of social issues not just the environment. (¥ millions (¥ millions (¥ millions (¥ millions ） 39,640 ） ） 45,201 ） governments of countries around the world but also among Moreover, in fiscal 2020, we implemented “SDG-related 42,981 45,275 41,849 41,111 40,000 38,863 39,571 39,362 2,000 1,841 1,845 1,847 1,922 50,000 44,830 3,000 2,953 2,655 local governments, businesses, nonprot organizations and trainings” for all management and for group company officers 2,337 2,304 2,000 1,946 numerous other stakeholders. to deepen their understanding of SDGs and environmental, 20,000 1,000 25,000 At the same time, developing numerous business activities social and corporate governance (ESG) criteria. We also 1,000 and close relationships with communities and contributing to organized daily work activities for each ESG domain. 0 0 0 0 the consideration and resolution of various social issues in SDGs are valuable resources for the identification of 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 local communities is important for the continuation of our important social issues, which is necessary in formulating (Fiscal Year) (Fiscal Year) (Fiscal Year) (Fiscal Year) business activities. business strategies. We expect that they will also contribute to Message from the president Regarding environmental issues, for some time we have the Nankai Group Business Vision 2027 and enhance our been pursuing environmental management that considers medium term business plans that build to it. impacts on the environment from our business activities. In In the future, we will seek to achieve the targets of Business summary Business summary 2008, we established our Environmental Policy Promotion related SDGs through our business activities. We will set Department as a dedicated department, and we have been concrete tasks for them over the medium and long terms in We are undertaking businesses that contribute to enhancing the Starting with Nankai Tatsumura Construction Co., Ltd., four of our undertaking efforts throughout the entire group for the the areas of environment (E), society (S) and corporate lives of our customers both near and far from our train lines. We group companies are involved in the construction business. building of promotion systems. However, taking into account governance (G), and continue undertaking steady efforts while increasing expectations about the contributions of businesses applying PDCA cycles. are seeking to increase customer draw and invigorate these Utilizing an abundance of experience and expertise gained through Business Plan Business businesses, which include hotels and traditional Japanese inns, a variety of construction projects, including construction related to

boat racing facility leasing, and building management and our railways, the Japan World Exposition and Kansai International Medium and Long Term maintenance. In recent years, we have been concentrating efforts Airport, these companies are advancing general construction on inbound demand, focusing on travel and lodging businesses. businesses involved in every aspect of construction projects, including civil engineering, architecture and electrical work. Business results Business results Operating revenue was 42.981 billion yen (an 8.4% increase over the previous fiscal year) and operating income was 2.762 billion In this fiscal period, along with private residential construction, we also yen (a 43.7% increase over the previous fiscal year) due to focused on efforts to receive orders for private non-residential factors including increased revenue in our building maintenance construction and public construction. As a result of a reduced number of business, the rebranding and reopening of Hotel Nakanoshima, construction completions, however, operating revenue was 41.111 billion

and more funeral services in our funeral business. yen (a 9.0% decrease from the previous fiscal year) and operating profit Business overview by sector was 2.304 billion yen (a 13.2% decrease from the previous fiscal year). Business focus for this financial year Business focus for this financial year Misaki Park closed event held ▶ We use these SDG icons to show their relationships with safety, Before the closing of Misaki Park at ▶Designed and built Circles Ginza the environment, society and governance. the end of March 2020, we held a Nankai Tatsumura Construction Co., “Misaki Park Closed Ceremony – Ltd. Received the order to design and We played a lot” to express 63 build Circles Ginza, a building with 10

years of gratitude. Due to the floors above ground, from Mitsubishi ESG and SDG section impact of COVID-19, we had no Estate Co., Ltd. and Matsuya Co., Ltd. choice but to reduce the duration After completing construction, we turned and scale of the event, but many over the building on November 29, park visitors still enjoyed it. 2019. In this building, we incorporated Communicating efforts related to SDGs with news releases features that include interior balconies Other In other businesses, our operating revenue was 3.503 billion yen (30.7% and a rooftop terrace that can be We are seeking to link contributing to the achievement of SDGs through various increase over the previous fiscal year) and our operating income was connected to a shared kitchen. business activities to increasing value along train lines. In order to strengthen 212 million yen (37.9% increase over the previous fiscal year). communication to stakeholders about activities such as these, we have been conveying information about them in news releases and including the SDG logo and the icons of SDGs relevant to their contents. reportFinancial

23 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 24 Efforts for SDGs in each ESG domain

In order to further deepen the efforts for CSR that our corporate group has made until now, we have incorporated the approach adopted by the UN for Sustainable Development Goals (SDGs) in our business activities, and we are seeking to continue contributing to the sustainable development of society. In 2020, as one aspect of this, we implemented SDG-related trainings for all management and group company employees. In these trainings, we were able to deepen understanding about SDGs, as well as organize daily work activities into ESG domains and gather numerous opinions about issues that our company should be taking on. As a step to identify important issues for our corporate group, we classified group business activities into ESG domains and organized their current relationships with SDGs in the table below.

In the future, considering opportunities and risks in the business environment, we want to link this to concrete efforts by highlights advancing identification of important issues that we should prioritize in our efforts, considering their importance from the perspectives of both society and our company. Financial and nonfinancial nonfinancial and Financial

SDGs related to corporate group business activities in each ESG domain

Domain Theme Fiscal 2020 business activity Objective achieved Related SDGs Domain Theme Fiscal 2020 business activity Objective achieved Related SDGs

① Reduced Nankai Group CO2 emissions 12% ① Implement measures focused on the Medetai ① Implemented continuous promotion and Reduce Nankai Group CO2 emissions (compared to fiscal 2013) Suppress global warming ① Increase value along train Train to attract customers to the Kada Fish Line enhancement measures ② Promote green procurement ② Determined status of efforts at business partners lines ② Support innovation by businesses along train ② Built support network for enterprises along train (questionnaires for 100 companies) lines (Atotugithon along Nankai lines, etc.) lines seeking commercialization ① Undertake preparations for smart city formation Investigated business models to form smart cities Enhance the zone around the Nankai Terminal Advanced work for Namba Naka 2-chome in the Namba area and along train lines as one ① ① ① Realize a recycling- along our train lines Develop the Namba Building development plan aspect of driving urban development centered on oriented society ② Reduced Nankai Group water usage by 5% community ② Form a north-south axis between Namba and ② Participated in Hoshino Resort OMO7 Osaka

train stations Message from the president (compared to fiscal 2017) Shin-Imamiya/Shinsekai Shin-Imamiya development plan ② Reduce Nankai Group water usage Implement preservation activities and develop Develop communities with Investigate and implement measures to invigorate ① Grand opening of Ki:no Wakayama held medium and long term plans for the long-term stations as core locations the Wakayamashi Station area objectives of the Tanagawa Biotope, which is Developed medium and long-term plans E ① in a multipurpose park in the Tanagawa area of based on the effects of efforts through biotope ① Acquired trust beneficiary rights for Namba Preserve biodiversity ① Acquire properties that will contribute to Misaki-cho, preservation activities Expand real estate 4-chome office building Local communities developing the Namba community Environment Implement activities to promote biodiversity Developed and implemented promotion plan business ② Completed construction of Kita-Osaka Logistics ② ② ② Enhance logistics facilities preservation at Parks Garden, which is a rooftop Center Building No.1 garden spread over terraces on Namba Parks – Strengthened coordination with national Improve and advance environmental management Responded to issues in order to improve S Plan Business Deepen environmental Coordinate with local government, local public organizations and other systems based on ISO 14001 and investigate implementation of environmental management communities and Advance Naniwasuji Line project stakeholders

management Medium and Long Term transition to more independent management systems systems governments – Advanced work entrusted by Kansai Rapid Promote environmental preservation activities Railway Co., Ltd., which is the project leader Improve effectiveness of utilizing Nankai no Mori, which is a company-owned Acquired new offset credits (J-Credit) Invigorate internal communication efforts environmental efforts forest near Mt. Gomadan in Totsukawamura, Nara ① (in-house education posters, management video Prefecture distribution, etc.) Improved engagement with group employees Create vital workplaces ① Advanced earthquake resistance reinforcement ② Implement “calming and exciting activities” ② Increased Nankai brand loyalty for overpass pillars, bridge dislodgement (“something good” cards and train line Reduce natural disaster Advance various measures to reduce natural countermeasures, etc. community ambassadors) risks disaster risks, which are increasing (113 overpass pillars completed, work on 2 bridges begun) Create workplaces where Enhanced support for the return to work of people 100% return rate at head company people can work easily who have taken childcare leaves

Conduct training to respond in emergencies Conducted trainings for comprehensive disaster Employees Implement safety resulting from large-scale accidents and natural recovery, train line equipment confirmation, and education disasters, for example cable car emergency guidance ① 30% or higher female employment rate among Proactively employ women Business overview by sector Promote diversity ① college graduates at head company Systematically update old equipment and facilities Conducted continuous grade separation projects, ② Promote employment of the disabled ② Employed more than legally required rate

Safety and peace of mind Safety investment to prevent serious accidents and reduce operational updated transformer substation equipment, impediments renewed train cars, etc. Restrooms remodeled at Shichido Station and Hold Board of Directors meetings using remote Provide high-quality stations by refurbishing ① Implement corporate Increased effectiveness of Board of Directors ① 7 other locations (shared use started at all 8 meeting systems with video and audio that enable station facilities and advancing barrier-free governance Meetings locations, 58 locations completed total, JSCI “seeing faces” (stable operation) Increase convenience for conversion, and increase appeal along train lines evaluation scores raised) diverse customers. (advance restroom remodeling and barrier free Increase effectiveness of BCP at head company Barrier-free conversion completed at Kishinosato- ① Implemented training throughout company (once conversion) (regularly review BCP and related manuals, ① Tamade Station (Koya Line side) Undertake business in year) ② Build new train cars conduct trainings, increase stockpiles of parts for S ② 12 cars in fiscal 2020 continuity planning (BCP) BCPs have been steadily formulated at group disasters, etc.) ② companies and will be continued in the future

Plan and sell travel products with the goal of ESG and SDG section ① Strengthened relationships with local ② Support BCP formulation at group companies increasing visitor populations in neighborhoods ① governments, concerned organizations and other along train lines Establish risk management PDCA cycle, including Customers Promote inbound travel stakeholders along train lines Conducted interviews and evaluations with every Prepare implementation plan for four-language Promote risk management planning, execution and evaluation of risk ② Established implementation plan and reflected it division and group company emergency earthquake announcements in areas ② countermeasures in budget (Platplat and Ki:no Wakayama) G where not yet implemented Deepen efforts for Establish PDCA cycle with compliance awareness Feedback received from awareness surveys and

Provide easy-to-understand information to customers Improved customer evaluations (customer Governance Improve customer thorough compliance surveys at the core issues identified using own media resources (website, text messages, satisfaction) satisfaction posters in stations, etc.) Increased favorable impressions of the Nankai brand In addition to preventing scandals that would cause ① Disclose information in a fair, timely and loss of public trust, pay attention to the following appropriate manner items during the implementation of audits focused Implement information ② Disclose accounting information in a timely on the appropriate handling of issues that receive Implemented internal audits, follow-up audits, disclosure that is easy for manner, utilize our corporate website, and Promoted constructive dialog with shareholders and Deepen internal auditing great attention due to, for example, legal reforms internal control audits, and semi-full-time auditor reportFinancial shareholders, investors publish news releases and corporate reports investors (1) Setting shared group themes, audits, and observed accountant site visits and others to understand ③ Conduct General Meeting of Shareholders, (2) Coordinating information within the Risk Financial Results Briefings and individual Management Office, (3) Improving auditing quality

Shareholders & investors Shareholders interviews (telephone reporting)

Note: Some contents related to fiscal 2020 business activities and other items have been changed or omitted due to coronavirus countermeasures.

25 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 26 Measures to ensure customer safety highlights In accordance with Section 4, Article 19 of the Railway Safety priority measures

Business Act, Nankai publically releases its Safety nonfinancial and Financial Safety Report, which details the measures taken to ensure In order to resolve issues related to assuring transportation Safety priority measures for the three-year period transportation safety during the previous scal year, as safety, we have been making efforts based on the five safety starting scal 2018 Safety Information Report well as other efforts to ensure safety (excerpt). priority measures, shown to the right, that we set for the ● Reduce growing natural disaster risks three-year period starting fiscal 2018. ● Respond to the demands of society Moreover, for our Safety Management System, we ● Systematically update old equipment and facilities, starting with implemented management reviews based on, for example, the rolling stock ● Improve abilities to respond in emergencies implementation status of these safety priority measures and the ● Foster safety culture and develop human resources results of internal safety audits.

Message from the Comprehensive Safety Administration Manager Message from the president (corporate of cer in charge)

To restore customer con dence, we will work to foster Safety Investment a culture of safety and implement measures to prevent and minimize disasters as we strive to provide safe, In order to implement the necessary safety measures as advancing include construction work to enhance the planned without delay, we invested about ¥9.8 billion in the earthquake resistance of overpass pillars and station buildings trustworthy and reliable transportation renewal and improvement of facilities, rolling stock and other and to improve station platform safety as well as the updating of Business Plan Business infrastructure during fiscal 2019. aging facilities. Comprehensive Safety Administration Manager Managing Corporate Officer We are doing this in preparation for a large-scale earthquake We will continue advancing safety measures systematically Medium and Long Term Railway Business Division General Manager that is expected to occur in the future. The measures we are in fiscal 2020. Kajitani Satoshi Investments for safety Thank you very much for using our businesses. railroad crossings and systematically update old equipment (¥ million) Major equipment investments in Fiscal 2019 In April and August last year, cracking was discovered on and facilities, starting with rolling stock. 15,000 ● Reinforced earthquake resistance of overpass pillars Limited Express Rapi:t cars, and the August case was In addition to physical infrastructure such as this, we are 13,775 ● Disaster countermeasures (falling rock and embankment 12,442 recognized as a serious incident by the Japan Transport working to strengthen the culture among workers in charge 11,788 protection works) 3,936 ● Safety Board of the Ministry of Land, Infrastructure, so that they implement safety policies with dedication to 10,000 2,572 2,687 Reinforced earthquake resistance of station buildings (5 Transport and Tourism. In September, operation impairment acting at all times in accordance with the principle that 8,525 stations, including Hagurazaki) ● resulting in delays of over three hours occurred due to a train safety is the highest priority. We are also seeking to 1,660 New manufacture of 8300 series train cars (12 for Nankai Line, 18 for Koya Line) Business overview by sector car malfunction related to the steel cables. Furthermore, we invigorate communication and develop human resources 5,000 9,839 9,755 ● Renewal work on 9000 series (8 cars executed) confirmed that an incident (cracking in a 6000 series train through thorough training and education as additional soft 9,216 6,865 ● Chiyoda transformer conversion to receive electricity car) that occurred in 2015 was not included as an incident in infrastructure enhancements. independently ● the fiscal 2016 Safety Report. We apologize deeply for As we have been doing this, we have also worked with 0 Installed new crossing obstacle detection equipment and causing great worry to customers who use our trains all our abilities to restore the confidence of customers who 2016 2017 2018 2019 (Fiscal Year) crossing focus monitoring systems because of these incidents. were made to feel insecure by other incidents along with the ● Updated transformer silicon rectifiers (Haruki transformer) ● In fiscal 2019, we fortunately did not experience any cracking in the Limited Express Rapi:t cars. Based on our Safety investment Other investment Continuous grade separation projects (in Sakai and Takaishi cities) major natural disasters. However, undertaking measures to determination that fostering a safety culture is indispensable prevent and ameliorate natural disasters, which have been in enabling our customers to use our services with peace of becoming more frequent and intense, is one of our most mind, we are continuing to seek to build a culture that ESG and SDG section important tasks. We have advanced the reinforcement of actively creates safety, in other words, practices “aggressive earthquake resistance for overpass pillars and station safety,” and to offer transportation services that are safe and buildings, the installation of overpass pillar abnormality provide peace of mind. detection systems, the reinforcement of embankments and On January 30, we established a countermeasure countermeasures to prevent the dislodgement of bridges. headquarters in response to the coronavirus pandemic that We will continue advancing these efforts systematically began to spread from around January 2020. during fiscal 2020. Moreover, we are working to ensure safe In order to enable our customers to use our services with transportation by strengthening initial response measures peace of mind, we have been working to prevent contagion

and systems to minimize disaster impacts on train operation and stop the spread of the virus by implementing reportFinancial and times before resuming operation to the greatest extent countermeasures to the greatest extent possible (see the possible even if damage should occur. Furthermore, we will feature on page 29 for details). continue to conduct safety measures for platforms and

27 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 28 Safety Safety Information Report

Feature Efforts made to protect against and stop the spread of COVID-19 Status of the occurrence of railway operation impediments, transportation impediments and incidents Since we began to see signs that COVID-19 would spread beginning in January 2020, we established a Our main countermeasures and efforts countermeasure headquarters on January 30. Since then, 1. Wearing of masks by station staff, train crew members and

we have been meticulous in prevention countermeasures other employees who interact with customers highlights and continued working to stop the spread of this infectious 2. Installation of plastic sheets at station wicket counters to Status of occurrence in scal 2019 disease. At present, in order to enable our customers to use prevent droplet transfer our services with peace of mind, we have been working to 3. Sterilization of station facilities (staircase railings, waiting nonfinancial and Financial stop the spread of COVID-19 by implementing rooms, customer restrooms, automatic wickets, ticket vending No serious accidents (collisions, derailments Railroad crossing Fatal accident Operation machines and other locations people touch with their hands) countermeasures to the greatest extent possible. or fires) occurred in fiscal 2019. Railroad obstacle accident impediment 4. Attachment of antiviral and antibacterial sheets to touch Furthermore, we are also asking for cooperation from our crossing obstacle accidents, fatal accidents Just before crossing: 10 Trespass on tracks: 10 Other: 4 customers in precautions against contagion, including panels of ticket vending machines and fare adjustment Animal machines and operation impediments were as follows. contact: 1 coughing etiquette and hand-washing, as well as by 5. Ventilation inside train cars through the operation of Two incidents occurred in fiscal 2018, commuting at different times, based on public appeals, Trespass air-conditioning that brings in outside air and by opening Natural disaster: 8 including from the Ministry of Land, Infrastructure, Transport and it was reported to the Kinki District Total: 10 Total: 10 on tracks: 2 Total: 21 windows and Tourism and the Ministry of Health, Labour and Welfare. Transport Bureau. Our company received 6. Announcements in stations and train cars educating about no administrative guidance. Train car failure: 4 Train car interior ventilation illustration (Series 12000) preventing contagion

7. Antiviral and antibacterial treatments inside train cars, and Safety equipment Message from the president Air-conditioning equipment Ventilation unit disinfection through wiping of hanging handles, handrails, etc. malfunction: 2

External External Providing information to customers Incident air input air input ● In order to provide information to customers considering commuting at different times, for example, we post data about Cracking in Limited Express Rapi:t (50000 series) bogies and recurrence prevention measures “utilization conditions during different time periods at main Air stations” on our website After discovering bogie cracks on April 8, 2019, they were again found Recurrence prevention measures output on August 24, 2019 in the Suminoe car inspection section of the Nankai 1. We conducted emergency visual and magnetic particle Line. The cracking in August was recognized as a serious incident by Plan Business Circulating Circulating inspections of all main electric motor seats, and repaired air air the Japan Transport Safety Board of the Ministry of Land, Infrastructure, locations where cracks were detected. Medium and Long Term Transport and Tourism. By allowing the cracking to occur on Limited 2. We added the location (back of main motor seat) where By bringing in outside air using air-conditioning equipment, Express Rapi:t bogies multiple times, we caused great worry and cracking occurred this time to the key inspection locations the air is replaced about every 3–8 minutes inside limited anxiety to everyone concerned, starting with the customers who use in our Bogie Inspection Manual. express train cars and every 8–10 minutes inside ordinary 3. For important part inspections conducted every four our train lines. cars. Air exchange in ordinary train cars can be accelerated years in general, we have included checking important by leaving windows open and opening and closing doors. Making thorough efforts to determine the causes and formulating inspection locations using magnetic particle inspections. safety countermeasures based on the identified facts, we will continue Note: We will replace the Limited Express Rapi:t bogies with even safer ones. to do our utmost to prevent recurrence and assure the safety of bogies. When the results of the investigation by the Japan Transport Safety Board are released, we will accept the content sincerely and respond appropriately. Business overview by sector

Status of occurrences in the last ve years

Number of accidents over five years Reference: Classification of railway operation (number of accidents) Wearing of masks by staff who interact with customers Disinfection of ticket vending machines accidents, etc. 50 44 43 Train collision Accident in which a train collides with or 40 40 1 40 accident contacts another train or vehicle ESG and SDG section 7 10 10 7 Train derailment Accident in which a train derails 30 31 accident Serious

5 14 11 10 accidents 12 Train re accident Accident in which a fire occurs in a train 20 8 Railroad crossing Accident at a railroad crossing in which a train or vehicle collides with or contacts a person, 10 17 17 21 21 21 obstacle accident vehicle or something else crossing the tracks

0 1 1 1 1 2 Fatal accident Accident in which a person dies or injured due 2015 2016 2017 2018 2019 (Fiscal Year) to train or vehicle operation (excluding Railway operation accidents operation Railway accidents that fall into the above categories) ■ Serious accidents ■ Railroad crossing obstacle accident ■Fatal accident

■ Operation impediment ■ Incident Operation impediment Situation in which a train stopped operating or reportFinancial Note: The serious accident in fiscal 2017 was a train derailment accident. was late (at least 30 minutes) for a reason other than a railway operation accident Disinfection of hanging handle Antiviral and antibacterial treatment of door parts Attachment of antiviral and antibacterial sheets to ticket vending machines Incident Situation in which no accident occurred, but the possibility of a railway operation accident was recognized

29 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 30 Suppressing global warming highlights

At our corporate group, we want to keep contributing to Reducing CO2 Emissions as a Group the preservation of the environment, including by nonfinancial and Financial The Environment reducing environmental impacts in all of our businesses At the Nankai Electric Railway Group, based on the greenhouse reducing not only our emission rate but also our rate of use per and continuing to prevent global warming. gas reduction target set by the government for fiscal 2030 (26% unit of productivity, which expresses energy efficiency. (See reduction from fiscal 2013), we have set a goal to reduce CO2 “Rolling stock energy consumption rate” on page 4.) emissions by 26% compared to fiscal 2013 for all 56 We will continue to utilize various programs, starting with consolidated group companies. those provided by the Ministry of Land, Infrastructure, Transport As a result of our efforts, we reduced emissions to 234,679 and Tourism, and adopt energy-conserving rolling stock along tons in fiscal 2019, a 24.3% decrease from 309,902 tons in with other rolling stock as well as distribution and real estate fiscal 2013, which was the baseline year. facilities that have high energy efficiency. We will also keep Breaking down these reductions, in the railway business of striving to raise energy conservation awareness among all Message from the president Environmental Philosophy and Environmental Policies Nankai Electric Railway, we updated 34 train cars and took group employees and achieve the targets in the Nankai other measures in fiscal 2019, reducing emissions by 20,494 Environmental Vision 2030. tons compared to fiscal 2018. On the other hand, in our Our corporate group has established the Nankai Electric logistics and real estate businesses, the complete opening of CO2 emissions of 56 Nankai Electric Railway Group Railway Group Environmental Philosophy, and we will continue Environmental Philosophy Namba SkyO added 3,186 tons of new emissions, so overall companies to consider the environmental impacts of our business activities (complete text) our reduction was 3,862 tons. (t-CO2) 350,000 and to work toward the creation of a society that is easy on the Moreover, we began calculating emission amounts using We, the Nankai Group regard protection of the global 309,902 natural environment. As Nankai Electric Railway, we had already 298,107 Plan Business environment as one of our missions. We always emission coefficients for each power business as publicized by 300,000 established environmental guidelines in 2004. Seeking to 264,765

consider the environmental impact of our business the Ministry of the Environment based on the Act on Promotion 250,000 Medium and Long Term 234,679 conform with the ISO 14001:2015 standard, we made the activities, and work to foster a society that treasures of Global Warming Countermeasures. We also recalculated the 200,000 following reforms in 2017. the environment. values for past fiscal years using the same coefficients. 150,000 Furthermore, Nankai Tatsumura Construction and Semboku In the Act on the Rational Use of Energy, these emission Rapid Railway Line, which are group companies, have each coefficients are required to be used in the calculation of 100,000 established philosophies and policies regarding the environment emission amounts in regular reports, which are mandated 50,000 and are making reforms as they seek to conform with the ISO annually. We began following this method for our calculations in 0 14001:2015 standard. our corporate report this fiscal year. Furthermore, we are 2013 2017 2018 2019 (Fiscal Year)

Orientation for Nankai Environmental Vision 2030

Environmental issue Orientation for Nankai Environmental Vision 2030 Business overview by sector Energy reduction in the Railway Business ① Reduce the amount of Nankai Electric Railway Group CO2 emissions by 26%

The Nankai Electric Railway Group will reduce CO2 emissions by 26% compared to fiscal 2013, which is in line with the greenhouse gas reduction target set by the government for fiscal 2030 (26% reduction from Reducing Electricity Consumed by Railways Changes in electricity consumption for train operations fiscal 2013). Suppressing The amount of electric power used by railways in fiscal 2019 (Fiscal Year) global warming ② Create corporate value through environmental businesses was 227,324,000 kWh. Of this, 197,082,000 kWh, 86.7% of 2010 212,926 39,608 252,534 By expanding energy production and sales businesses along our train lines, in addition to creating new the total, was used for train operation. This is a reduction of 2011 210,190 37,442 247,632 sources of earnings, we seek to increase the values of our corporate group and these areas themselves to 1.5% from the previous fiscal year. The incidental power use society by also contributing to the environmental policies of their local governments. 2012 ESG and SDG section was 30,242,000 kWh. 205,643 36,409 242,052 Form smart cities along our train lines Incidental power use is power used for signaling equipment, 2013 204,348 35,380 239,728 Realizing a As an infrastructure business in areas along train lines, we will seek to form smart cities and model crossing equipment, and station equipment (including lighting, 2014 201,784 34,675 236,459 recycling-oriented environmental areas that contribute to raising value in these neighborhoods. We will also contribute to the air conditioning and elevators). society 2015 199,992 33,512 233,504 realization of a recycling-oriented society while coordinating with business plans and experimental Due to the effects of incorporating energy-conserving rolling businesses led by local governments. 2016 198,737 33,751 232,488 stock with good power efficiency (VVVF control) and other Realize a society that coexists with nature measures, overall power use for train operations has decreased 2017 199,722 32,484 232,206 Preserving 2018 199,663 31,232 230,895 biodiversity In all our business activities, we will be conscious of avoiding or minimizing impacts on biodiversity, and we by 7.35% over five years in terms of energy efficiency per unit of will practice the maintenance of ecosystems and the sustainable use of natural resources along our train lines. 2019 transportation capacity. 197,082 30,242 227,324 reportFinancial

Enhance environmental promotion systems and strengthen environmental information (1,000 kWh) Deepening 0 100,000 200,000 disclosure Amount of electrical power used for operations Amount of incidental power use environmental management Independent operation of an environmental management system at the standard required by ISO 14001 is being established.

31 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 32 The Environment

Environmental Impact Data

Environmental impact data (inputs and outputs) for Nankai Electric Railway and Semboku Rapid Railway Line in 2019 are detailed below. This data is focused on that submitted in accordance with the Energy Conservation Law and other laws to the Ministry of

Land, Infrastructure, Transport and Tourism (Kinki District Transportation Bureau), the Ministry of Economy, Trade and Industry highlights (Kansai Bureau), Osaka Prefecture and other agencies. Financial and nonfinancial nonfinancial and Financial INPUT OUTPUT

Electrical power 227,554,056 kWh Metallic waste 777 t (–25 t) ( – 3,557,577 kWh) Waste plastic 164 t (＋16 t) CO2 CO2 Water Water use Sludge 93 t (–9 t) Urban gas 357,341 m3 emissions emissions Waste Alkali 0.2 t (＋0 t) ( – 4,838 m3 ) 197,096 m3 2 3 Glass and ceramic waste 19 t (＋14 t) 81,183 t-CO (+970 m ) 1 kg 2 * Propane gas 18,703 Waste paper 15 t (＋3 t) (–20,565 t-CO ) ( – 232 kg) Energy Rubber waste 0.2 t (＋0.2 t) Gasoline – 10 Waste 25 ㎘（ ㎘） Waste wood 94 t (–33 t) Message from the president Waste oil 11 t (–6 t) Light oil 57 ㎘ （ – 6 ㎘） Waste acid 0 t (＋0 t) Debris (including concrete) 244 t (＋35 t) Total amount of Kerosene 8 ㎘ （ – 3 ㎘） Paper Paper use Slag 1 t (–2 t) general waste Railway Business 2,026,200 Waste asbestos 0 t (＋0 t) generated Heavy oil 0 0 (–240 t) ㎘ （＋ ㎘） (sheets of paper) Other industrial waste 499 t 926 t ( – 38,882) (–117 t) Total 2,276,333 GJ Total amount of industrial ( – 35,760 GJ) waste generated 1,917 t (–247 t) Plan Business Medium and Long Term Nankai Metallic waste 19 t (＋13 t) Electric Railway Electrical power 77,364,512 kWh Water Water use Waste plastic 234 t (–22 t) CO2 CO2 (＋1,893,348 kWh) Sludge 65 t (＋34 t) emissions emissions 3 Urban gas 4,444,827 m3 571,059 m Waste Alkali 3 t (＋3 t) ( – 37,181 m3 ) 37,249 t-CO2 ( 764,979 m3 ) (–1 t) 1 ＋ Glass and ceramic waste 4 t (–3,902 t-CO2)* Waste ( 0 t) Energy Propane gas 503 kg Rubber waste 0 t ＋ ( – 16 kg) Waste wood 0 t (＋0 t) Waste oil ( 1 t) Kerosene 8 ㎘ （ – 1 ㎘） 64 t ＋ Waste acid 0.073 t (＋0.073 t) Total amount of Heavy oil 8 ㎘ （ – 6 ㎘） Paper Paper use Debris (including concrete) 0 t (＋0 t) general waste Business overview by sector other Facilities generated Head Of ce and Total 962,839 GJ 3,247,500 Other industrial waste 254 t (＋184 t) (＋52,368 GJ) (sheets of paper) 2,125 t ( – 240,000) Total amount of industrial (＋89 t) waste generated 643 t (＋212 t)

Electrical power 34,512,306 kWh Waste plastic 211 t (＋20 t) Water Water use CO2 CO2 ( – 480,012 kWh) Waste palettes and 2 ( t) * 3 other wood scraps 491 t ＋67 emissions emissions 3 89,481 m

Fluorescent and ESG and SDG section Urban gas 74,135 m 3 2 ( – 6,199 m ) ( 1 t) 12,352 t-CO ( – 468 m3 ) mercury lamps 2 t ＋ (–3,074 t-CO2) Energy Waste Sludge 7 t (＋2 t) ( 0 t) Gasoline 7 ㎘ （ – 0 ㎘） Paper use Waste oil 0 t ＋ (Copy paper) Used train tickets 2 t (＋0 t) Light oil 6 ㎘ （ – 0 ㎘） Paper 1,120,500 Waste containing PCBs Semboku (sheets of paper) and other contaminants 1 t (＋1 t) (＋32,500) Rapid Railway Entire company Kerosene 1 ㎘ （＋1 ㎘） Concrete waste 0 t (–1 t) (Contracted printed matter) Total 347,927 GJ 214,480 Total amount of industrial (sheets of paper) ( 89 t) ( – 4,791 GJ) ( – 11,247) waste generated 714 t ＋ Financial reportFinancial

*1 These numbers were submitted to the Kinki District Transportation Bureau and the Kansai Bureau of Economy, Trade and Industry in accordance with Figures in parenthesis ( ) shows comparison with the previous fiscal year. the Energy Conservation Law. For electric power, the CO2 emissions total was calculated using the emission coefficient set by Kansai Electric Power Co. of 0.352 kg-CO2/kWh. 2 Energy used exclusively by shops within Semboku Rapid Railway Line station buildings and by companies occupying the Higashiosaka and Kita-Osaka * Logistics Center is included.

33 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 34 Efforts for inbound travel

In fiscal 2019, we undertook direct public relations efforts worked to increase awareness and draw people to our toward overseas customers by holding “travel expos” locally company site through information distribution using various and conducting business discussions with travel agencies. In social media services.

addition to East Asia, which is our main market, we also sought Moreover, as measures to promote tourism along our train highlights to approach the growing markets of Southeast Asia, Europe, lines, we focused on creating and selling new travel products. As a business responsible for public transportation and

the USA and Australia. The Koyasan Kumano travel route was selected for the Plus nonfinancial and Financial that operates with close relationships to communities, Next, needing to respond to the increased use of the One Trip campaign sponsored by the Kansai Tourism Bureau. Society we are undertaking a variety of activities to meet the Internet by customers to gather information, we updated Find expectations of our stakeholders as we should. My Osaka-Japan, which is our group company portal site for overseas users. We enhanced the contents and prepared them in five languages. Furthermore, we also participated in the planning of the Live Japan Perfect Guide Kansai, which is a tourism information service for foreign visitors to Japan. We also

Find My Osaka-Japan website Message from the president Relationships with customers Plus One Trip website

Identifying customer needs Business Plan Business

We consider the opinions and requests that we receive from our customers to be precious management resources for our company. Travel fair (USA) Live Japan Perfect Guide Kansai press release event Medium and Long Term This data is useful in every related division, including in education and guidance for railway staff, as we strive to improve our business and raise service levels while we work to constantly improve quality. Executive message

Creation of customer feedback database By division Numbers for previous year shown in parentheses We collect the opinions, requests and complements that we Number of cases We will respond exibly to changes in conditions receive from customers through our website and directly to Railway surrounding the inbound tourism market and employees and put them in our customer feedback database. 1 1,998 （2,112） We make this available on our in-house network so employees 2 Misaki Park 92 （70） diversifying needs as we advance the creation of Senior Corporate Officer can use the content, which is helpful in improving our business 3 The Nankai Group Companies 58 （64） new systems to grow tourism consumption. Kiyohara Yasuhito

and raising service levels. Business overview by sector In fiscal 2019, we received a great amount of customer The number of inbound travelers in 2019 increased solidly due to with local governments along our train lines and destination opinions, totaling 2,264 cases. Execution of customer satisfaction surveys large increases from China and other parts of East Asia, the Rugby marketing organizations (DMO). We will also keep planning new In fiscal 2019, continuing from fiscal 2018, we hired an World Cup and other factors. After entering 2020, however, inbound products and strengthening sales to meet the new normal brought 2019 customer feedback breakdown unaffiliated survey company to investigate the satisfaction of our travel all but disappeared due to the impacts of global travel about by the coronavirus pandemic. This includes spotlighting restrictions due to the spread of the coronavirus pandemic. tourism resources along our train lines from the perspective of Ranking Numbers for previous year shown in parentheses customers using the Internet. We analyzed the service levels When the pandemic will be resolved is still unclear. Since the full customers and experiential tours utilizing online resources. Number of cases and brand images of our companies, and this is serving to return of inbound travelers will take some time, we believe that Furthermore, needing to respond to the shift online in recent improve our work and services. 1 Customer treatment/reception 750 （810） radically revising our tourism strategy is an immediate concern. years, we renewed our corporate group portal site for overseas

2 Passenger manners 313 （271） Under these conditions with unexpected changes to the business users. We also sought to increase awareness of tourism resources ESG and SDG section environment, as measures taking to respond to them, we will along our train lines and draw visitors to them by, for example, 3 Station facilities 247 （250） continue to have new awareness of the importance of domestic strengthening multilingual support and enhancing contents related to 4 Schedules/schedule disruptions 228 （349） tourism first of all, and advance the creation of systems to grow new these areas, starting with the Mozu-Furuichi Kofun Group World 5 Tickets 206 （204） tourism consumption. Heritage Site. Focusing on participating in travel expos and business

6 Air-conditioning 186 （169） As efforts for inbound tourism, taking the big events of the Tokyo discussions online due to the coronavirus pandemic, we will continue Olympics and the World Masters Games 2021 Kansai as accelerating promotional strategies centered on the digital domain. Train vehicles 7 65 （100） opportunities, we will continue creating and selling attractive travel In the medium and long terms, since we anticipate that the 8 Special planned products 43 （13） products and focusing on digital promotion that reliably conveys opening of an integrated resort (IR) and EXPO 2025 Osaka, Kansai, 9 Crossings 40 （55） information about tourism along our train lines. Japan will have great ripple effects on the Kansai economy, we will Last fiscal year, in cooperation with tourism-related organizations, continue working to increase the visitor population, treating reportFinancial 10 Website 31 （66） we created and sold new travel products that allow people to fully expansion of tourism consumption in our business domains as a enjoy Koyasan and the Kii Peninsula with a focus on the Kumano management issue. Kodo route. We will continue to further strengthen our coordination

35 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 36 Society

Raising awareness about human rights and Relationships with employees harassment prevention As a company involved in the railway business that provides a Moreover, to prevent the occurrence of various forms of means of public transportation, we recognize that we should harassment, including sexual and power harassment, we are proactively work on all forms of human rights issues, including working to establish consultation desks and to continuously those related to discrimination based on caste, ethnicity, gender implement prevention and awareness trainings. highlights and disability. For this reason, we have been working to raise Creating workplaces where people can work easily awareness about human rights since 1971. In addition to using

thorough training content, we are continuously conducting nonfinancial and Financial In order to provide customers with services that are safe and create peace of mind, we are working to improve workplace environments, awareness-raising efforts in order to make correct understanding which are the bases that enable employees to maximize the use of their abilities. and recognition of human rights permeate even more deeply.

Average number of years employed at Nankai Electric Number of new hires (16 main group companies*) (People) Railway Co., Ltd. (single company) (Years) Efforts for diversity Fiscal Year 2015 2016 2017 2018 2019 Fiscal Year 2015 2016 2017 2018 2019 Believing that respecting diversity within the organization and proactively making the most of it are indispensable in order to flexibly Number hired 355 406 371 338 328 Men 20.3 21.0 21.1 21.9 22.2 respond to changes in the business environment and to grow sustainably, we are endeavoring to promote diversity from a variety of angles. Women 9.1 10.0 10.0 9.6 9.1 Message from the president New graduates 82 96 109 93 98 Note: Numbers from April 1 each year Experienced workers 273 310 262 245 230 Advancing the active participation of women Number of female employees (16 main groups companies*) We are conducting hiring and appointments that are focused on (People) (%) Women 750 10 46 68 57 52 81 individual qualities without regard to gender, and we are 8.90 7.86 promoting the active participation of women. 600 7.70 7.79 8 Female hire ratio 13.0% 16.7% 15.4% 15.4% 24.7% 6.99 In April 2016, we established an Action Plan to Advance the 450 6 * 16 group companies: Nankai Electric Railway Co., Ltd., Semboku Rapid Railway Co., Ltd., Nankai Bus Co., Ltd., Kansai Airport Transportation Enterprise Co., Ltd., Tokushima Bus Co., Ltd., Active Participation of Women. In addition to setting a female Plan Business Nankai Ferry Co., Ltd., Nankai Vehicles Service Engineering Co., Ltd., Nankai Fudosan Co., Ltd., Nankaishoji Co., Ltd., Nankai FD Service Co., Ltd., Nankai Food System, Co., Ltd., employment rate of at least 30% continuously for recent Nankai Travel International Co., Inc., Suminoe Enterprise Co., Ltd., Nankai Building Service Co., Ltd., Nankai Tatsumura Construction Co., Ltd., Nankai Management Service Co., Ltd. 300 4 Medium and Long Term university graduates, we have been promoting the placement of 490 563 417 469 483 women in a variety of types of work in our on-site railway 150 2 operations, including as conductors, drivers and assistants. We are also advancing the preparation of lodging facilities for 0 0 Encouraging the use of paid leave women. 2015 2016 2017 2018 2019 (Fiscal Year) We are working to increase the rate of annual paid leave usage Numbers of employees utilizing childcare leave by gender (at 16 main group companies*) We will continue strengthening efforts to further expand Number of female employees Percentage of employees who are female by adopting a planned annual paid vacation system and (People) opportunities for active participation of female employees encouraging use of leave in half-day units, for example. The 50 48 throughout the company and systematically cultivate their utilization rate of allowed annual paid leave days at Nankai 44 40 40 abilities. Specifically, we will continue to actively undertake Number of female managers (16 main groups companies*) Electric Railway was 92.6% in fiscal 2019. This is a high level (People) (%) 30 advertising oriented toward women during hiring, and strive to compared to the usual rate of utilization (52.4%) according to 27 32 25 3.0 Business overview by sector 23 35 expand the recruitment population as we seek to advance the the General Survey on Working Conditions issued by the 20 30 2.51 placement and appointment of women in all fields and roles. 20 2.31 2.4 Ministry of Health, Labour and Welfare. 24 2.11 10 20 Moreover, in our railway operation divisions, we will continue In addition, we have arranged systems that include leaves 1.70 1.81 10 9 16 striving to build work environments that enable women to keep 15 1.8 for childcare as well as leaves and time off for caregiving. The 0 3 3 2015 2016 2017 2018 2019 (Fiscal Year) working by further expanding support for balancing work and rate of childcare leave utilization by employees that gave birth 10 1.2 family. We are already doing this by, for example, enabling has been 100% for seven years running. Moreover, the use of Men Women 14 childcare leaves to be taken until children begin attending 10 12 13 this leave by male employees has been trending upward in See the margin of this page for details about the 16 companies. 5 9 0.6 * school. We will continue building systems for childcare leaves recent years. In fiscal 2018, 48 employees from our 16 main during pregnancy and from the time of birth as well as for 0 0.0 ESG and SDG section group companies took childcare leaves. following up after returning to work. 2015 2016 2017 2018 2019 (Fiscal Year) Number of female managers Percentage of managers who are female Annual paid leave utilization rate Average number of monthly overtime hours * See the margin of page 37 for details about the 16 companies. (Nankai Electric Railway only) (%) (at Nankai Electric Railway only) (hour)

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 91.5 93.3 91.0 90.7 92.6 31.5 31.2 31.4 26.7 25.6

Note: 29 employees took childcare leave in fiscal 2019 Financial reportFinancial

37 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 38 Society

Promoting employment of the disabled Promoting employment of older people Recognizing the important social responsibility of hiring the Considering the need to respond to the stepped increase in the disabled, we currently employ 46 people with disabilities at our age when the provision of welfare pensions begins, we have had special subsidiary company Nankai Heartful Service K.K. As of a reemployment system for employees after retirement age (60 June 2020, the employment rate for people with disabilities was years old) since fiscal 2004. As of March 31, 2020, we had 25 2.39% at Nankai Electric Railway and 7 related group such employees active in various fields. We recognize that the strengthening of corporate governance functions is an highlights companies that have received special authorization. At our company, we are not just following the law. Rather, we important management issue. For this reason, we strive to implement strict They undertake work that includes the cleaning of various are working to support more fulfilling lives for senior citizens, adherence to laws and regulations rst of all, while seeking to practice very facilities, starting with those of our companies, and the sorting of including by raising wage levels in response to the so-called transparent management and fair and rational decision-making, as well as nonfinancial and Financial mail. We are promoting communication and working to realize “pensionless period” and by holding classes that contribute to strengthen the supervisory functions that oversee these processes. We respect and maintain workplace environments where they can work maintaining and increasing motivation. Governance all of the principles in “Japan’s Corporate Governance Code,” which was easily through daily information exchanges and recreational established by the Tokyo Stock Exchange. We are strengthening and events, for example. investigating persistent functions related to corporate governance as we seek Reemployment numbers (Nankai Electric Railway only) sustainable growth and increased corporate value over medium and long terms. Number of disabled employees (People) 100 (People) (%) 92 50 5 46 47 46 46 80 75 40 42 4 60 64 Governance systems Message from the president 30 2.39 3 2.26 2.25 2.24 2.37 40 20 2 36 20 25 10 1 Overview of corporate government systems and reasons for adopting them 0 0 0 2015 2016 2017 2018 2019 (Fiscal Year) 2015 2016 2017 2018 2019 (Fiscal Year) Number employed Percentage employed To strengthen the supervision functions of the Board of Directors, necessary to appoint an appropriate number of directors who we set decision-making about management policy and related come from within the company and have expertise in the railway

issues and supervising business execution as the main roles of business and transportation safety management. On the other Plan Business the Board of Directors. At the same time, to increase the hand, along with appointing external directors as one third of all Medium and Long Term maneuverability of business execution, we clearly divided the directors, we are assuring objectivity and transparency in functions of business execution and supervision by making our decision-making processes about important management Executive message corporate officers responsible for business execution. issues, starting with nominations and compensation, by Considering the characteristics of our business, which has a establishing nominating and compensation committees with over We respect diversity within our organization and duty to society to ensure safe transportation, we believe that it is half the membership comprised of externally appointed directors.

are working to promote it Corporate governance and internal control systems (as of June 18, 2020)

Managing Corporate Officer General Meeting of Shareholders Ashibe Naoto Appointment Appointment Appointment Audit Board of Directors Board of Auditors At our company, we are promoting diversity in the belief that With the purpose of creating environments where people (Nominating Committee and Report Business overview by sector Compensation Committee) respecting diversity within the organization is indispensable can work easily, we greatly expanded our system for Exchange of opinions in order to flexibly respond to changes in the business working with reduced hours to support childcare. In our Outside Director Supervision Attendance environment and to grow sustainably. railway division, we have also prepared lodging facilities for Outside Auditor In our Action Plan to Advance the Active Participation of women and built a system to follow through from pregnancy, Management Accounting Committee Cooperation Women, which we established in April 2016, we set a goal birth and childcare leave to the return to work. Moreover, as audit Attendance of at least 30% female employment for recent university part of our efforts to enhance readiness to welcome President Appointment, supervision graduates. We have been clearing this target every year. We customers from overseas we are hiring foreign employees Full-time have been increasing the ratio of female employees every who are conversant in various languages. Corporate Auditor ESG and SDG section year. For example, 8 of 20 new university graduate When it comes to hiring the disabled, we are continuing Instructions, Instructions, directives Instructions, directives Assistance directives employees were women in fiscal 2020. In addition, we have to expand at our special subsidiary company Nankai Appointment, been steadily expanding the fields in which women are Heartful Service K.K., and our employment rate for people supervision Corporate Officer Cooperation Cooperation Senior corporate officer Assistance Instructions, active, including placing women in railway civil engineering with disabilities was 2.39% at Nankai Electric Railway and 7 Attendance directives positions. Moreover, we have also been continuously related group companies that have received special Audit on Nankai Group Company Corporate promoting women to management positions. We promoted authorization, exceeding legal standards. Dispatch of Guidance, Auditor’s Office directors, regulation Instructions, directives Instructions, directives two to chief manager and two to section manager in fiscal We will continue promoting diversity from every angle in advice 2019 and one to chief manager in 2020. the future. Audit Internal The Nankai Group Companies Each Department Audit Department Internal Audit Audit on Nankai Group Company Financial reportFinancial Accounting audit Report Cooperation Cooperation Accounting audit

39 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 40 Governance

Moreover, we are striving to strengthen our management Appointed Directors hear the same reports. In addition, we are Outside Directors and Outside Auditors auditing functions through our Board of Auditors by, for having it conduct regular opinion exchanges with the CEO who example, having our Internal Audit Department report auditing is ultimately responsible for the construction and application of Outside Director Standards and policies related to independence situations to the Board of Auditors and having the Externally internal control systems. Outside Directors are expected to utilize their knowledge and and how our company thinks about the state of experience as business managers for the management of the appointments

Business execution Company. They are responsible for the function which In the selection of our externally appointed directors and highlights contributes to the improvement of efficiency and transparency auditors, prerequisites include not having significant interests

in management from their independent standpoints without any with our company and not coming under independence nonfinancial and Financial Board of Directors mutual relationship which may impose significant control over standards determined by the Tokyo Stock Exchange at the time The Board of Directors (with the president as the chairperson This committee deliberates the following items ahead of the the management of the Company. of independent officer notification. Other requirements are that and the General Affairs Department as the secretariat) consists Board of Directors. they have the necessary knowledge and experience for of 8 directors and 5 auditors (including 3 outside directors and 3 ● Determination of candidates for Directors and Auditors, Outside Auditor supervising and auditing the execution of the diverse range of outside auditors). The Board meets on a monthly basis in selection of the President and appointment of Corporate Outside Auditors are expected to utilize their knowledge, duties in our corporate group business, starting with our railway principle to make decisions on fundamental policies for Officers experience and expertise as business managers or lawyers for business in which the assurance of safe transportation is our management and important business execution as well as to ● Propriety of dismissing Corporate Officers, and discharging or the auditing of the Company. They are responsible for the social mission. They must also possess the desire and supervise the execution of duties by directors. not reappointing the President ● Concrete implementation status of succession plans for function which contributes to the securing of transparency in disposition to work proactively in order to appropriately fill the management and the qualitative improvement of audits from roles expected of them from positions of independence to meet Management Committee people in charge of management based on how they should be as determined by the Board of Directors and selection their independent standpoints without any mutual relationship the responsibilities entrusted by our shareholders. Message from the president The Management Committee meets once per week as a policies which may impose significant control over the management of Based on these expectations, our company selects deliberation organization to aid the president in making decisions the Company. externally appointed directors and auditors that are about important business execution based on the fundamental Compensation Committee independent. We believe that these appointment conditions are management policies established by the Board of Directors. We established a Compensation Committee, which is functioning sufficiently for maintaining and improving our Comprised of senior corporate officers* with the President as comprised of the President and CEO along with outside corporate governance systems. the chairperson and the General Affairs Department as the directors (and chaired by an outside director), and ensure that secretariat, this committee seeks to comprehensively control the compensation process is objective, transparent and fair. business execution and optimize management decision-making. Plan Business From decisions made by the Board of Directors, the Senior corporate officers and higher Reasons for selection of externally appointed directors and auditors and their activity status * President and CEO is entrusted to determine the compensation Medium and Long Term Executive Independent Name Board of Directors/Auditors of individual directors and senior corporate officers. However, Name Reasons for selection classi cation director/auditor attendance record ( scal 2019) Nominating Committee those decisions must receive approval from this committee. This We established a Nominating Committee, which is comprised of Based on his extensive experience gained as a bank manager, we selected (designated) committee deliberates changes to the executive compensation him as an externally appointed director (independent director) because we expect he the President and CEO along with outside directors (and chaired Sono can provide suitable advice and supervision for the management of our corporate group Board of system ahead of the Board of Directors. Directors Attended 11 of 12 by an outside director), and ensure that the nominating process Kiyoshi ○ as a whole from an independent standpoint free of any relationship that could enable the exertion of notable control mutually between him and the corporate management meeting is objective, transparent and fair. ranks of this company.

Based on his extensive experience gained as a bank manager, we selected (designated) him as an externally appointed director (independent director) because we expect he Board of Outside Tsunekage can provide suitable advice and supervision for the management of our corporate group Director ○ Directors Attended 10 of 10 Hitoshi as a whole from an independent standpoint free of any relationship that could enable meeting the exertion of notable control mutually between him and the corporate management ranks of this company. Business overview by sector Status of audits by auditors Based on his extensive experience gained as a department store manager, we selected (designated) her as an externally appointed director (independent director) because we Board of Koezuka expect she can provide suitable advice and supervision for the management of our Directors Attended 10 of 10 ○ The Board of Auditors, which consists of 5 Auditors (secretariat: Board of Auditors attendance record Miharu corporate group as a whole from an independent standpoint free of any relationship that meeting could enable the exertion of notable control mutually between her and the corporate Corporate Auditor’s Office), meets once a month in principle management ranks of this company. Name Meetings Meetings eligible attended and execute audits on business execution. Based on his extensive experience gained as a bank manager, we selected (designated) Board of Senior Corporate him as an externally appointed auditor (independent auditor) because we expect he can Directors In this business fiscal year, our Board of Auditors held Fujita Takaichi 3 3 Attended 12 of 12 Auditor Arao raise the effectiveness of auditing in our corporate group as a whole from an meeting meetings 13 times with attendance as shown to the right. Kozo ○ independent standpoint free of any relationship that could enable the exertion of notable Senior Corporate control mutually between him and the corporate management ranks of this company. Board of

Katsuyama Masafumi 13 13 ESG and SDG section Auditor Furthermore, through his business experience at a bank, this auditor possesses Auditors Attended 12 of 13 Senior Corporate knowledge related to finances and accounting. meeting Auditor Iwai Keiichi 10 10 Based on his extensive experience gained as a business executive at a life insurance Board of Outside Auditor Oku Masayuki 13 12 company, we selected (designated) him as an externally appointed auditor (independent Directors Attended 12 of 12 Outside Aiba auditor) because we expect he can raise the effectiveness of auditing in our corporate meeting Auditor ○ group as a whole from an independent standpoint free of any relationship that could Outside Auditor 13 12 Koji Arao Kozo enable the exertion of notable control mutually between him and the corporate Board of management ranks of this company. Furthermore, through his business experience at a Auditors Attended 13 of 13 health insurance company, this auditor possesses knowledge related to finances and meeting Outside Auditor Aiba Koji 13 13 accounting. Based on his specialized knowledge and extensive experience gained as a lawyer in the Board of practice of corporate law over many years, we selected (designated) him as an externally Auditors (New appointment) Financial reportFinancial Kunibe appointed auditor (independent auditor) because we expect he can raise the effectiveness meeting Takeshi ○ of auditing in our corporate group as a whole from an independent standpoint free of any relationship that could enable the exertion of notable control mutually between him and Board of the corporate management ranks of this company. Furthermore, this auditor is an expert Directors (New appointment) in corporate law and possesses knowledge related to finances and accounting. meeting

41 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 42 Governance

Supporting System for Outside Directors and decision-making procedures at the Board of Directors’ Executive compensation system Outside Auditors meetings. The General Affairs Department is the secretariat of the In addition, absent Outside Officers will receive materials on changes to the executive compensation system ahead of the Board of Directors. In order to improve the effectiveness of the deliberation and reporting, as well as the results. Details of policy related to determining amounts Board of Directors. Compensation for auditors is determined supervising and auditing by Outside Directors and Outside The Corporate Auditor’s Office is the secretariat of the Board of executive compensation and other through deliberations by the auditors. Auditors, the General Affairs Department shall provide them of Auditors. The Corporate Auditor’s Office conveys information remuneration, their calculation methods, as well with materials for the Board of Directors’ meeting in advance such as the date and time of the Board of Auditors’ meeting as as their determination methods highlights whenever possible and as necessary, make an arrangement for well as the agenda in advance, while providing assistance on We divide compensation for directors and executive officers into Overview of stock compensation system

supervision compensation and execution compensation. For nonfinancial and Financial them to receive explanation from each officer in charge, etc. field audits to each business location as necessary. Directors (excluding those who are externally about the agenda and the contents ahead of meetings. The Information beneficial for the execution of audits are supervision compensation, we pay fixed and uniform monetary People subject to this appointed or residing overseas) and executive amounts to directors. We pay execution compensation, which system corporate officers (excluding those holding two secretariat also provides explanation on the agenda and the collected from the contents submitted to the Management posts or residing overseas) summary of matters to be reported to Outside Directors prior to Committee and other approval documents, and provided to is comprised of basic compensation, bonuses and stock From the end of the 102nd Regular General Meeting the Board of Directors’ meeting. Through the aforementioned Senior Corporate Auditors, who report and explain them to compensation, to executive corporate officers. The ratio of of Shareholders until the end of the General Meeting initiatives, the Company strives to ensure the propriety of Outside Auditors as necessary. these forms of compensation is 60% basic compensation, 25% Applicable Term of Shareholders for the latest business year ending within three years of the 102nd Regular General bonuses and 15% stock compensation. This ratio was devised Meeting of Shareholders in consideration of increasing incentives to improve business Maximum monetary results and seeking to make management that is conscious of amount contributed shareholder value and stock prices take root. by our company as 180 million yen total funds to acquire our Details are provided in the table below. corporate stock Message from the president Message from an outside director From decisions made by the Board of Directors, the necessary for granting President and CEO is entrusted to determine the compensation Acquisition methods By disposing of treasury shares or by obtaining it from for this stock a stock exchange (including in after-hours trading) of individual directors and executive corporate officers. The I will strive to offer assistance in continuously Points assigned according to executive position President and CEO has authority related to decisions about Point assignment and other factors standard increasing both value along train lines and remuneration for each executive position and evaluations and (1 point is equivalent to 1 share) Granting period At retirement as a rule corporate value Outside Director decisions of the individual performance of executive corporate officers. However, these decisions must receive approval from Note: Through a decision of the Board of Directors, the applicable term can be Tsunekage Hitoshi Plan Business the Compensation Committee. This committee deliberates extended whenever to a term of within 5 years. Medium and Long Term

My name is Hitoshi Tsunekage and I have been serving as corporate group be chosen because we provide an Externally Appointed Director since June 2019. satisfaction and excitement” In order to fulfill this, we will Compensation ratios Right now, the spread of COVID-19 is having enormous keep seeking to resolve the issues faced by our customers Basic compensation ● Fixed amount according to roles and responsibilities, paid in cash. impacts on our social and economic activities as well as and communities and increase our corporate value by (60/100) our lifestyles. sustainably raising the value along our train lines, including ● Amounts calculated based on “company performance” and “individual performance” for the applicable fiscal business year are paid in a As uncertainty increases in the daily lifestyles of society through efforts such as the above. lump sum of cash after the completion of the regular General Meeting of Shareholders for that year as a whole, for our company, which bears responsibility for In addition, facing the upcoming EXPO 2025 Osaka, ● The ratio of company performance to individual performance is 70:30. ● Only company performance is calculated for the president the important social infrastructure that are railways, Kansai, Japan and the opening of the Naniwasuji Line, we expectations are increasing daily that we provide various will continue applying all the abilities of our corporate group Company ● If the level set in advance for a conditional indicator is cleared, this is calculated and paid according to the performance performance conditions of the target indicator

services continuously and safely. to develop communities along train lines that open doors to Business overview by sector Moreover, high public involvement is expected of our new futures, including the development of the Namba fiscal year is a condition for payment, we have set “profit attributable to owners of parent” as a conditional indicator community, which is an entryway to our train lines. company, which is undertaking numerous business ● This is not paid if profit attributable to owners of parent for the subject fiscal year falls below 70% of the average of the activities that are deeply rooted in the areas along our train For the Japanese economy to recover from the current past five years, excluding the highest and lowest values lines, and I believe that always considering the environment stagnation resulting from the coronavirus pandemic, the Management Plan, consolidated operating income, which is a numerical target in both this vision and plan, is set as a duty. The Nankai Environmental Vision 2030, which was indispensable. I feel that continuously increasing the value target indicator ● Regarding the performance ratio for the budget formulated at the beginning of the period, this is reflected linearly established in 2017, indicates that we will contribute to along our train lines and our corporate value is necessary (proportionally) from 80% to 120% in the payment rates, and the paid amount varies between 50% and 150% when the increasing environmental value along train lines through to do this. I personally will utilize my management standard amount is 100% efforts for issues that our business activities have great experience and knowledge from my time at a financial ● This is not paid if the performance ratio falls below 80% ● The results for conditional indicators and target indicators in fiscal 2019 were as follows ESG and SDG section impacts on, including global warming, recycling-oriented institution so that I can assist in these efforts. I will seek to society and biodiversity. We are currently working steadily understand issues related to business and important items Conditional 70% of average of past Achievement indicators Results five years, excluding Target indicators Initial estimate Results rate to reduce CO2 emissions by, for example, adopting related to governance, and I will undertake business highest and lowest values Profit attributable to Consolidated energy-conserving rolling stock, and to maintain auditing as an Externally Appointed Director. Please extend ¥20.8 billion ¥10.3 billion ¥34.1 billion ¥35.2 billion parent company operating income 103.3％ ecosystems along train lines. me your favor as I pursue these activities. Note: The initial estimate for the consolidated operating income is Our corporate vision is to “Have our train lines and shown rounded up for values less than ¥100 million

Individual ● The president evaluates the overall achievement of targets presented in the “business plan” prepared each fiscal year on a performance four-level scale and determines the pay ratio from this result ● The paid amount varies between 0% or 70% and 130% when the standard amount is 100% Financial reportFinancial ● A trust established through cash contributions made by our company acquires our company stock either by disposing of treasury shares Stock compensation or by obtaining it from a stock exchange (including in after-hours trading), and then a proportionate number of our company shares are (15/100) granted through this trust to subject executives according to the number of points given to them by our company

43 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 44 Governance

Decision date of the General Meeting of Moreover, at the same general meeting, the adoption of a Shareholders related to executive compensation stock compensation system using trusts was decided in and other issues and details of that decision addition to the above. The maximum amount of auditor The maximum amount of compensation for directors was compensation was revised to 7 million yen per month at the revised to 514 million yen (with 50 million yen for outside 80th Regular General Meeting of Shareholders held June 27, directors, and not including employee salaries) per year at the 1997. (At this time, it applied to 4 auditors.) highlights 102nd Regular General Meeting of Shareholders held on June 21, 2019. (This covered 9 people, including 3 externally appointed directors, at that time.) Financial report nonfinancial and Financial

Executive training

As shown in the table below, we implement trainings that are necessary for directors and auditors to fulfill their roles and duties. Business results

Contents of executive trainings Message from the president

All executives We encourage participation to attend external lectures and related expenses will be provided by the Company as appropriate. At our group, we have been advancing efforts for various attributable to owners of the parent company was 20.811 billion measures based on our Kyoso 136 Plan, our medium term yen (59.8% more than the previous fiscal year). Internal ― business plan that we are the second year of. Furthermore, in our Kyoso 136 Plan, operating Income and New Even with the impacts of the spread of the coronavirus the interest-bearing debt balance/EBITDA ratio have been set as appointment We provides explanations by experts in law and corporate governance. pandemic in this consolidated fiscal accounting year (hereafter, important business indicators. Internal We conduct tours of the Group’s facilities, etc. “this fiscal year”), due to our real estate business, including The progress of these indicators at the end of this fiscal year New Namba SkyO, which contributed throughout the year, and are as shown below. appointment We provide explanations regarding the Company’s business description, financial condition, management strategy, etc. Plan Business increased condominium sales, our operating revenue was

Progress of Kyoso 136 Plan business indicators Medium and Long Term 228.015 billion yen (0.3% increase over the previous fiscal year). Moreover, due to the revision of our residential housing Previous scal year Current scal year 1 development business, including appraisal losses of real estate Operating income* 28.7 billion yen 36.1 billion yen Effectiveness evaluations for the Board of Directors for sale, and other factors in the previous fiscal period, operating Interest-bearing debt 8.5 7.2 income increased to 35.223 billion yen (27.0% more than the balance/EBITDA*2 ratio previous fiscal year), ordinary income was 31.677 billion yen Based on self-evaluations using questionnaires by every issues that require improvements still remain from before. *1 Operating income + dividend income (32.5% more than the previous fiscal year), and profit 2 Operating income + dividend income + depreciation and amortization director and auditor, we conduct analysis and evaluation of Some of these are thoroughly applying PDCA cycles, * the effectiveness of the entire Board of Directors every year at including for the Medium Term Management Plan, assuring a Board meeting. deliberation time and opportunities for formulation of the next Executive message In fiscal 2019, our Board of Directors is generally operating medium term business plan, and holding Board of Directors Business overview by sector well and definite improvements have been made for issues meetings using, for example, remote meeting systems with identified based on the analysis and evaluation of the previous video and audio that enable “seeing faces” Considering these In response to the spread of the coronavirus fiscal year. Since we were able to confirm these things, our issues, we will continue to advance efforts toward further pandemic, we will keep working to reduce costs, analysis and evaluation are that the effectiveness of the entire improving the effectiveness of the entire Board of Directors. for example, and maintain and strengthen Senior Corporate Officer Board of Directors is being maintained. On the other hand, nancial health Otsuka Takahiro

Our revenue increased in fiscal 2019 due to the contribution billion yen (10.6 billion yen less than the previous fiscal year). throughout the year of Namba SkyO, which opened for As a result, our interest-bearing debt balance/EBITDA ratio,

business the previous year, and increased condominium which is a business indicator for company finances, became ESG and SDG section sales. Moreover, we were also able to record the highest 7.2, allowing us to achieve our Kyoso 136 Plan fiscal 2020 operating income in our history even with the impacts of the numerical target (7.5 or less) one year early. We believe that coronavirus pandemic. This was due in part to the inclusion the upgrade of our ranking from BBB+ to A- by Rating and in the previous fiscal year of appraisal losses of real estate for Investment Information, Inc. is the result of the efforts we sale that accompanied the revision of our residential housing have made until now to improve our financial footing. development business. While continuing to ensure expenditures related to safety Considering our financial conditions in fiscal 2019, we and peace of mind, close scrutiny of the need for individual made investments with a total of 47.9 billion yen, including expenditure items and their costs is necessary in order to the acquisition of the Namba Midosuji Center Building and continue assuring profit even as revenue declines due to the Financial reportFinancial other growth investments, continuing from the previous fiscal impacts of the coronavirus. In addition to efforts to reduce year. Despite this, supported by solid business results, we costs such as these, we will continue striving to maintain and also maintained a positive free cash flow. As a result of strengthen our financial health by strengthening earning allocating this to the redemption of bonds and the repayment capabilities through efforts for post-pandemic growth of loans, we reduced our interest-bearing debt to 467.9 strategies and the diversification of financing.

45 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 46 Financial report Consolidated financial statements

Consolidated Balance Sheets (millions of yen) Consolidated Statements of Income (millions of yen)

Previous consolidated Current consolidated Previous consolidated Current consolidated Previous consolidated fiscal year Current consolidated fiscal year fiscal year fiscal year fiscal year fiscal year From April 1, 2018 From April 1, 2019 March 31, 2019 March 31, 2020 March 31, 2019 March 31, 2020 To March 31, 2019 To March 31, 2020

ASSETS LIABILITIES Operating revenue 227,424 228,015 Operating expenses:

Current assets: Current liabilities: highlights Operating expenses and cost of sales of transportation 192,252 185,667 Notes and accounts payable-trade Cash and deposits 18,359 17,874 20,807 19,877 Selling, general and administrative expenses 7,425 7,124 Short-term loans payable 67,426 91,526 Total operating expenses 199,678 192,791 nonfinancial and Financial Notes and accounts receivable-trade 23,188 19,481 Operating income 27,745 35,223 Current portion of bonds 20,000 10,000 Merchandise and finished goods 15,098 17,167 Non-operating income Income taxes payable 2,714 4,712 Interest income 27 26 Work in process 424 555 Provision for bonuses 2,666 2,697 Dividend income 956 966 Miscellaneous income 450 470 Raw materials and supplies 2,766 2,901 Provision for warranties for completed construction 1,188 1,189 Total non-operating income 1,433 1,462 Other 21,103 15,299 Provision for loss on litigation 2,664 — Non-operating expenses: Interest expenses 4,598 4,311 Allowance for doubtful accounts Other 60,483 67,864 △84 △58 Miscellaneous expenses 682 697 Total current liabilities Total current assets 80,856 73,221 177,951 197,867 Total non-operating expenses 5,281 5,009 Message from the president Non-current liabilities: Ordinary income 23,898 31,677 Non-current assets: Extraordinary income: Bonds payable 90,000 90,000 Contribution for construction Property, plant and equipment: 2,985 1,329 Long-term loans payable 301,227 271,426 Insurance income 1,040 773 Buildings and structures, net 369,430 367,040 Gain on sales of non-current assets 844 484 Deferred tax liabilities 39,579 39,436 Other 512 413 Machinery, equipment and vehicles, net 26,001 31,939 Deferred tax liabilities for land revaluation 18,766 18,748 Total extraordinary income 5,383 3,000

Land 354,823 358,624 Net defined benefit liability 16,873 18,969 Extraordinary losses: Plan Business Reduction entry of land contribution for construction 1,226 1,277 Medium and Long Term Construction in progress 35,492 42,935 Other 32,425 32,604 Loss on retirement of non-current assets 1,719 849 Other, net 6,674 6,020 Total non-current liabilities 498,872 471,186 Losses on business reorganization — 751 Impairment loss 5,560 403 Total liabilities 676,823 669,054 Total property, plant and equipment 792,422 806,561 Transfer of provision for loss on litigation 2,664 — NET ASSETS Loss on disaster 1,243 — Intangible assets 8,219 10,828 Shareholders’ equity: Other 1,344 868 Investments and other assets: Total extraordinary losses 13,758 4,150 Capital stock 72,983 72,983 Profit before income taxes 15,522 30,527 Investments securities 26,511 23,507 Capital surplus 28,105 28,117 (Income taxes:) Income taxes-current 7,932 7,580 Income taxes-deferred 5,249 1,127 Long-term loans receivable 100 88 Retained earnings 91,301 108,690 △

Total income taxes 2,682 8,708 Business overview by sector Net defined benefit asset 90 642 Treasury shares △160 △350 Profit 12,840 21,819 Profits and losses attributable to non-controlling interests ( Deferred tax assets 2,983 3,271 Total shareholders’ equity 192,230 209,440 △ ) △183 1,008 Profit attributable to owners of parent 13,023 20,811 Other 8,669 7,399 Accumulated other comprehensive income

Valuation difference on available-for-sale securities 7,143 4,465 Consolidated Statements of Comprehensive Income (millions of yen) Allowance for doubtful accounts △1,467 △462 Deferred gains or losses on hedges — 0 Previous consolidated fiscal year Current consolidated fiscal year Total investments and other assets 36,887 34,446 From April 1, 2018 From April 1, 2019 Revaluation reserve for land 30,953 30,976 To March 31, 2019 To March 31, 2020 Total non-current assets 837,528 851,836 ESG and SDG section Remeasurements of defined benefit plans 529 △468 Profit 12,840 21,819 Total assets 918,385 925,058 Total accumulated other comprehensive income 38,625 34,973 Other comprehensive income: Valuation difference on available-for-sale securities 1,567 2,757 Note: Amounts of less than one million yen have been rounded down. Non-controlling interests 10,705 11,590 △ △ Deferred gains or losses on hedges — 0 Total net assets 241,561 256,003 Revaluation reserve for land 1 — Total liabilities and net assets 918,385 925,058 Remeasurements of defined benefit plans, net of tax 869 △1,031 Note: Amounts of less than one million yen have been rounded down. Total other comprehensive income △696 △3,788 Comprehensive income 12,143 18,031

Comprehensive income attributable to reportFinancial Comprehensive income attributable to owners of the parent 12,414 17,136 Comprehensive income attributable to non-controlling interests △270 895 Note: Amounts of less than one million yen have been rounded down.

47 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 48 Financial report Consolidated financial statements

Consolidated Statements of Changes in Equity Previous consolidated fiscal year (from April 1, 2018 to March 31, 2019) (millions of yen) Consolidated Statements of Cash Flows (millions of yen)

Shareholders’ equity Previous consolidated fiscal year Current consolidated fiscal year From April 1, 2018 From April 1, 2019 Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity To March 31, 2019 To March 31, 2020 Balance at March 31, 2018 72,983 28,105 81,593 △146 182,535 Changes of items during period: Cash flows from operating activities: Dividends of surplus △3,400 △3,400 Profit before income taxes 15,522 30,527 Profit attributable to owners of parent 13,023 13,023

Depreciation highlights Reversal of revaluation reserve for land 85 85 27,440 28,786 Purchase of treasury shares △14 △14 Impairment loss 5,560 403 Disposal of treasury shares 0 0 0 Amortization of goodwill 471 401 nonfinancial and Financial Change in treasury shares of parent arising from transactions with non-controlling shareholders 0 0 △ △ Increase (decrease) in provision for bonuses ( is decrease) 27 30 Net changes of items other than shareholders’ equity △ Increase (decrease) net defined benefit liability ( is decrease) Total changes of items during period — △0 9,708 △13 9,694 △ 1,769 81 Balance at March 31, 2018 72,983 28,105 91,301 △160 192,230 Increase (decrease) in allowance for doubtful accounts (△ is decrease) 52 △1,029 Increase (decrease) in provision for loss on litigation (△ is decrease) 2,664 — Accumulated other comprehensive income Interest and dividend income 983 992 Non-controlling △ △ Valuation difference Total accumulated Total net assets on available-for-sale Deferred gains or Revaluation reserve Remeasurements of other comprehensive interests Interest expenses 4,598 4,311 losses on hedges for land defined benefit plans securities income Loss on retirement of non-current assets 915 845 Balance at March 31, 2018 8,638 — 31,037 354 39,320 10,978 232,835 △ Reduction entry of land contribution for construction Changes of items during period: 1,226 1,277 Message from the president Dividends of surplus △3,400 Contribution for construction △2,985 △1,329 Profit attributable to owners of parent 13,023 Decrease (increase) in notes and accounts receivable-trade (△ is increase) △8,302 5,175 Reversal of revaluation reserve for land 85 Decrease (increase) in inventories (△ is increase) 3,698 274 Purchase of treasury shares 14 △ △ Increase (decrease) in notes and accounts payable-trade ( is decrease) Disposal of treasury shares 0 △ △1,091 △432 Change in treasury shares of parent arising from transactions with non-controlling shareholders △0 Loss on valuation of inventories 6,509 221 Net changes of items other than shareholders’ equity △1,495 — △83 883 △695 △273 △968 Increase (decrease) in accrued consumption taxes (△ is decrease) △3,306 3,938 Total changes of items during period 1,495 — 83 883 695 273 8,726 △ △ △ △ Other, net 489 678 Balance at March 31, 2018 7,143 — 30,953 529 38,625 10,705 241,561 Plan Business Subtotal 54,276 72,621 Medium and Long Term Interest and dividend income received 983 992 Interest expenses paid △4,628 △4,313 Current consolidated fiscal year (from April 1, 2019 to March 31, 2020) (millions of yen) Expenses for monetary deposits — △2,000 Shareholders’ equity Damages paid — △2,756 Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Income taxes paid △11,901 △5,609 Balance at March 31, 2018 72,983 28,105 91,301 △160 192,230 Changes of items during period: Net cash provided by (used in) operating activities 38,729 58,935 Dividends of surplus △3,400 △3,400 Cash flows from investing activities: Profit attributable to owners of parent 20,811 20,811 Purchase of non-current assets △55,918 △55,981 Reversal of revaluation reserve for land 22 22 △ △ Proceeds from sales of non-current assets 1,233 2,035 Purchase of treasury shares △190 △190 Business overview by sector Disposal of treasury shares 0 0 0 Proceeds from contribution received for construction 10,419 6,047 Change in treasury shares of parent arising from transactions with non-controlling shareholders 12 12 Purchase of investments in securities △1,169 △1,111 Net changes of items other than shareholders’ equity Proceeds from sales and redemption of investment securities 500 0 Total changes of items during period — 12 17,388 190 17,209 △ Income from sales of shares of subsidiaries resulting in change in scope of consolidation 237 — Balance at March 31, 2019 72,983 28,117 108,690 △350 209,440 Other, net △521 94 Cash flows from investing activities Accumulated other comprehensive income △45,219 △48,915 Non-controlling Valuation difference Total accumulated Total net assets Cash flows from financing activities: on available-for-sale Deferred gains or Revaluation reserve Remeasurements of other comprehensive interests losses on hedges for land defined benefit plans securities income Net increase (decrease) in commercial paper (△ is decrease) △6,000 5,000 ESG and SDG section Balance at March 31, 2018 7,143 — 30,953 529 38,625 10,705 241,561 Net increase (decrease) in short-term loans payable (△ is decrease) △8,538 3,100 Changes of items during period: Proceeds from long-term loans payable 54,505 21,555 Dividends of surplus △3,400 Repayments of long-term loans payable Profit attributable to owners of parent 20,811 △47,214 △30,354 Reversal of revaluation reserve for land △22 Proceeds from issuance of bonds 19,833 9,911 Purchase of treasury shares 190 △ Redemption of bonds — △20,000 Disposal of treasury shares 0 Cash dividends paid 3,390 3,393 Change in treasury shares of parent arising from transactions with non-controlling shareholders 12 △ △ Net changes of items other than shareholders’ equity △2,677 0 22 △997 △3,652 884 △2,767 Other, net △562 △672 Total changes of items during period △2,677 0 22 △997 △3,652 884 14,442 Cash flows from financing activities 8,632 △14,853 reportFinancial Balance at March 31, 2019 4,465 0 30,976 △468 34,973 11,590 256,003 Net increase (decrease) in cash and cash equivalents (△ is decrease) 2,143 4,833 Note: Amounts of less than one million yen have been rounded down. △ Cash and cash equivalents at beginning of period 19,721 21,864 Cash and cash equivalents at end of period 21,864 17,030 Note: Amounts of less than one million yen have been rounded down.

49 The Nankai Electric Railway Corporate Report 2020 The Nankai Electric Railway Corporate Report 2020 50