Integrated Report Corporate Communication Group, Corporate Planning Department, Corporate Strategy Division 1-16-14 Shibuya, Shibuya-ku, Tokyo 150-8340, Japan TEL : +81-3-5466-5008 FAX : +81-3-5466-5069 E-mail : [email protected] www.tokyu-cnst.co.jp Contents P02 P12 Story of Value Creation Initiatives for Value Creation As a Member of the Tokyu Group 02 Message from the President 12 History of Tokyu Construction Group 04 Financial and Capital Strategies 18 Strengths of Tokyu Construction Group Material Issues (Materiality) in (Source of Value Creation) 06 “Our Ideals for 2026 — The Company We Hope to Be in 2026” 20 Value Creation Process 08 Tokyu Construction Group’s Ideal Vision of Financial and Non-Financial Highlights 10 “Our Ideals for 2026 — The Company We Hope to Be in 2026” 22 Mid-Term Management Plan 2018-2020: Shinka 2020 Urban Solution Business 24 At a Glance (Business Overview) 28 Overview by Business 30 Civil Engineering Business 30 Building Construction Business 32 Real Estate Business 34 International Business 36 Special Feature: SHIBUYA SCRAMBLE SQUARE Phase I (East Wing) 38 Editorial Policy Tokyu Construction started issuing its “Integrated Report” in the fiscal year that ended in March 2017 (FYE Mar. 2017). This report allows us to consolidate our financial and non-financial information to inform our investors on how to contribute to society and the environment by improv- ing our corporate value through our businesses with both a medium- and long-term perspective. Reporting period April 2018 to March 2019 *Part of the report includes information before and after the fiscal year 2018. Scope of report Tokyu Construction Co., Ltd. and its domestic and overseas affiliates Reference sources International Integrated Reporting Council (IIRC)’s “International Integrated Reporting Framework,” Ministry of Economy, Trade and Industry’s “Guidance for Collaborative Value Creation,” Ministry of the Environment’s “Environmental Reporting Guidelines 2012,” GRI’s “G4 Sustainability Reporting Guidelines” and Japanese Standards Association’s “ISO 26000: 2010 Guidance on Social Responsibility” P40 P58 Foundation That Corporate Data Supports Value Creation 10-year Main Consolidated Financial and Non-Financial Data 58 Corporate Governance 40 Financial Overview 60 Board of Directors 44 Company Profile 64 Risk Management 46 Stock Information 65 Compliance 48 Human Resources 50 Occupational Safety (Health and Safety) 53 Quality Control 54 Consideration for the Environment 55 Social Initiatives 57 The figures shown in this report are calculated based on the account- ing standards as of March 2019, which include our projections and/ or forecasts. Please be noted that as they were forecasted based on our available information at the time of the publication, they contain some uncertainties. TOKYU CONSTRUCTION CO., LTD. Integrated Report 2019 01 As a Member of the Tokyu Group As a member of the Tokyu Group, each of us employees of Tokyu Construction will contribute to corporate activities and society with an awareness of our responsibilities to the Tokyu brand, based on our group philoso- phy, so that we will be trusted and cherished by customers, investors, and society as a whole. Tokyu Group Slogan Toward a Beautiful Age Beauty is the guiding principle and standard of value for Tokyu Group as it meets the challenges of the future. For all of us in the Tokyu Group, the beauty we aspire to is a universal beauty deeply impressing anyone who encounters it, regardless of a person’s age or culture. We aim to create beauty in harmony with people, their communities, and the natural environment. With beauty as our touchstone, the Tokyu Group’s goal is to create beautiful living environments, which reflect our desire to serve our customers by refining our products and services, raising quality, and promoting good health. We are making every effort to realize this vision, and moreover, we aspire to play an active role in creat- ing a more harmonious society, overflowing with kindness and consideration, so that all people may find genu- ine happiness and express an individual lifestyle. Our slogan, “Toward a beautiful age,” expresses the commitment of all of us in the Tokyu Group to continually pursue beauty, and proclaims our determination to lead the way in creating beautiful living environments. Corporate Mission Statement We will help each person realize his or her dream by creating comfortable living environments that allow peace of mind Philosophy Management Policy Management that rises to the challenge/Management that makes the best use of employees/Management that values customers/Management that is fair and open Principles of Conduct Independence/Speed/Teamwork/Reliability Brand Message Town Value-up Management The origin of Tokyu Construction lies in urban development such as Tama Garden City and the towns in areas surrounding Tokyu train lines. From this perspective, we will be involved in the life cycle of towns over many years, from planning proposals to new construction, renovation, and rebuilding. Accordingly, we will think not in terms of single buildings but of whole towns from the standpoint of customers and residents, and we will always strive to create new value. Deepening and Evolving Vision in the Pursuit of Genuine Value Tokyu Construction Striving to respond to diversifying customer needs and providing the best solutions, we will enhance the quality of our business. Developing better technology and services, we will pursue new business opportuni- ties in order to keep our capabilities evolving. Continuing a tradition of contributing to society in its role as a general contractor, Tokyu Construction is dedicated to the pursuit of genuine value. 02 TOKYU CONSTRUCTION CO., LTD. Integrated Report 2019 Story of Value Creation Story of Value Tokyu Group We hold the following shared vision as Philosophy we work together to create and support the Tokyu Group. Mission Statement We shall strive to create beautiful living environments, in which each person can pursue individual happiness in a harmonious society. Management Policy Work independently and in collaboration to raise Tokyu Group synergies and establish a trusted and beloved brand. Meet current market expectations and develop new ones. Manage in harmony with the natural environment. Pursue innovative management from a global perspective. Value individuality and encourage the best from each employee. Through these means, we will fulfill our corporate social responsibilities. Creation Initiatives for Value Principles of Conduct Fulfill your responsibilities. Collaborate to enhance each other’s abilities. Reinvent yourself with a global awareness. Tokyu Construction’s Business Model Business philosophy that guides Tokyu Construction and its employees in all activities Creation Foundation That Supports Value Corporate The significance of Tokyu Construction in society Philosophy Values that should be maintained when Brand Message Mission Statement establishing a management system for the Town Value-up Management continuous development of Tokyu Construction Management Policy The attitude that should be taken when working as Principles of Conduct an employee of Tokyu Construction Type of company we seek to become in 2020 Vision Shina Genuine value that can be shared by customers, employees and stakeholders Mid-term Management Plan and An action plan to realize the vision Annual Management Policy Criteria for action and behavior of employees of Code of Conduct Tokyu Construction Corporate Data (specific criteria) *“Shinka” is a key word to express our vision of “deepening and evolving in the pursuit of genuine value.” Please visit our website for details. CORPORATE PROFILE/Corporate Philosophy and Vision (https://www.tokyu-cnst.co.jp/company/vision.html) TOKYU CONSTRUCTION CO., LTD. Integrated Report 2019 03 History of the Tokyu Construction Group Despite emerging late as a general contractor, we have gradually built a business foundation driven by Japan’s era of high economic growth, and have developed into a safe and comfortable urban development partner alongside the development of the Tokyu Group. We will continue to contribute to society as “a general contractor that con- tinues to embody Shinka,” while advancing the technologies and know-how of construction industries in response to environmental changes and market needs, and accelerating our endeavors in new business domains. 1946 Social Trends Tokyo Construction Industry Co., Ltd., was established 1964 1989 1998 Tokyo Olympics Consumption tax introduced Financial System Reform Act 1954 established Absorbed as the Construction Industry 1970 1991 Expo ’70 held in Bubble economy burst 2001 Department of TOKYU LAND CORPORATION Osaka 1995 September 11 terrorist attacks in US 1973 Great Hanshin-Awaji Earthquake 2002 Oil crisis 2002 FIFA World Cup Korea/Japan 1959 TOKYU CONSTRUCTION CO., LTD. founded Establishment of Business Foundation Growth of Railway and Urban Civil Engineering Our origin was the development of Tokyu Tama Garden In the civil engineering field, we gained a foothold in the creation and construction of City. We created a vast area of 5,000 hectares, ranging railways, expanding to projects outside the Group to include private and government from Kajigaya to Chuo-rinkan construction, and improving our technologies in both sectors. 1960 General Civil Engineering Accumulated vast technolo- Construction technology that allows for railway lines to be gies and know-how related elevated or put underground