Kumagai Gumi : Corporate Report 2021（1/2）

Insight, Onsite, Farsight

The Kumagai Gumi Group Corporate Report 2021

As a leader in the construction services that society requires, the

Kumagai Gumi Group is committed to contributing to the creation of an ideal community in which people would want to live by solving social issues to the best of our ability at all times.

Management Planning Process

Based on the Group Vision

CONTENTS
Corporate Information
The Kumagai Gumi Group's Value Creation History....................	4
The Kumagai Gumi Group's Business.........................................	6
The Kumagai Gumi Group's Strengths........................................	8
The Kumagai Gumi Group's Value Creation Process................	10
Financial and Non-Financial Highlights......................................	12
Strategies for sustainable growth
The Medium-Term Management Plan........................................	14

Technology to Creates Social Value...........................................	40
Aiming for Safe Workplace Environments..................................	42
Quality Control and Environmental Preservation.......................	43
Stakeholder engagement
Engagement with Customers.....................................................	47
Engagement with Employees.....................................................	48
Engagement with Shareholders and Investors..........................	50
Engagement with Business Partners.........................................	51

Kumagai Gumi Group Vision Statement

Insight, Onsite, Farsight

When we build a structure,

we are building a community -

together with the people who will use that space.

Group	Kumagai
Gumi
Vision	Group's
corporate	image

Interview with the President.......................................................	16
Kumagai Gumi's ESG/SDGs Strategy.......................................	22
Sustainability Dialog...................................................................	24
Business Strategy: Civil Engineering.........................................	26
Business Strategy: Building Construction..................................	28
Business Strategy: Overseas Projects.......................................	30

Engagement with Communities.................................................	52
Evaluation by Society and Participation in Initiatives.................	53
Governance
List of the Board of Directors......................................................	54
Corporate Governance...............................................................	56

Long-term

Vision

Medium-term

Management Plan

Management
policy		for
beyond
2030	and
Policies,	Strategies,
	for
	and	Goals
		-FY2023
	FY2021

Business Strategy: Construction-related Peripheral Businesses.... 31
Value creation initiatives
Special Feature 1: Bringing innovation to expressway
renewal construction
The Challenge of the Cotter Floor Slab
Method for Bridges..................................	32
Diverse Human Resources........................................................	34
Special Feature 2: A new challenge in the region of our
founding
Aiming to Achieve Medium- and large
scale wooden construction.....................	38

Risk Management......................................................................	58
Interview with an Outside Director.............................................	60
Financial Information
Commentary on and Analysis of Management Performance.....	62
Key Financial Data over 10-Year Period....................................	64
Corporate Information and Stock Information............................	66
Organizational Chart..................................................................	67

Our Company's Code of Conduct

(Mission Statement)

• TRUST: To develop client trust and earn their confidence.
• CONSISTENCY: To be consistently professional and responsible.
• CO-OPERATION:To promote cooperation and mutual prosperity.

Management Philosophy

• ENVIRONMENT: We aim to use our breadth of expertise to design and construct projects which are environmentally friendly and which will improve quality of life and satisfy the needs of society.
• CLIENTS: We aim to be an innovative and dynamic company, one that can provide our clients with a comprehensive service of consistently high standards, tailored to satisfy clients' individual requirements.
• STAFF: We strive to be a progressive and nurturing company, offering each individual the opportunity for personal growth, pride, and satisfaction in his or her work.
• REPUTATION: We strive to be a responsible corporate citizen, recognized for our business integrity and social awareness.

Editorial Policy

This Corporate Report is issued with the goal of communicating the Kumagai Gumi Group's management policies, business strategies, and value creation initiatives to all of our stakeholders.

It showcases the involvement of our ESG-based business activities with the SDGs, and communicates our contribution to the formation of a sustainable society.

The report meets the expectations of stakeholders for information disclosure, and makes reference to various guidelines in order to ensure objectivity and transparency.

Information disclosure scheme

			Financial Information		Non-financial Information
Simple		The Kumagai Gumi Group Corporate Report
			● Shareholder		● Company Information
			Corespondence		● KUMAGAI UPDATE
			● Financial Statement
				● Kumagai News
			Explanation Material
				● Governance Report
			● Financial Result
			● Securities Report
Detailed		Kumagai Gumi website

Website: https://www.kumagaigumi.co.jp/en/index.html

Period of Reporting

FY2020 (April 1, 2020 to March 31, 2021)

The information in this report also incorporates examples of activities and other information from April 2020 or later, as required.

Scope of Reporting

The scope of this report covers Kumagai Gumi Co., Ltd. and its seven group companies, six of which are in Japan and one of which is in Taiwan. References in this report to "Kumagai Gumi" or "our company" are used in reporting on Kumagai Gumi Co., Ltd. only. Reports on Group companies mention the specific companies. In reporting on environmental activities, numerical data for Kumagai Gumi covers construction projects undertaken by Kumagai Gumi alone, as well as for joint venture projects with Kumagai

Gumi as the lead company.

Issue Date

August 2021 (Previous edition: August 2020; Next edition: Scheduled for August 2022)

Referenced Guidelines

• Environmental Reporting Guidelines (2018 Edition) from the Ministry of the Environment
• International Integrated Reporting Framework (2021.1) from the IIRC

Notes on the Outlook for the Future

Opinions and other forward-looking statements in this report are based on data currently available to us and on certain assumptions that we believe are reasonable. Actual results may, therefore, differ materially from these statements for various reasons.

The Kumagai Gumi Group Corporate Report 2021 3

Corporate Information

The Kumagai Gumi Group's Value Creation History

1898 to 1945

Our founding and initial growth period

Work on difficult projects in difficult places

Kumagai Gumi started its operation in January 1898 when Kumagai Gumi founder Santaro Kumagai, who had worked as a stone mason in Fukui, undertook aqueduct construction at the Shikununo Power Station. Kumagai Gumi has carried forward his words of "If there is any challenging construction work, let me do it" to take on challenging construction projects.

1946 to 1960

Postwar reconstruction period Birth of Kumagai Gumi as tunnel experts

After the war, Kumagai Gumi established its Building Construction Division and contributed to the reconstruction of Japan. The Civil Engineering Division was involved in many tunnel construction projects. It was quick to adopt mechanized construction, and dramatically improved productivity. The division took charge of the hard construction of the Omachi Tunnel at the Kurobe River No. 4 Power Plant and solidified the reputation of Kumagai Gumi as tunnel construction experts.

1961 to 1980

Second growth period

Rapid progress and challenges

As the Japanese economy grew rapidly, Kumagai Gumi's Architectural Construction Division made remarkable advances, including the receipt of consecutive BCS Prizes and the construction of skyscrapers. The Civil Engineering Division, too, recorded numerous achievements that include the first use in Japan of NATM, which became a standard tunnel construction method. We went on to conduct business development on a global stage, particularly in Hong Kong, Taiwan, and Southeast Asia.

1981 to 1990

Third growth period Active business expansion

Our Overseas Projects expanded not only in Asia but US, Australia and so on. In 1985, Kumagai Gumi recorded over one trillion yen in orders along with the industry's highest ordinary income of 32.6 billion yen.

1991 to 2014

From crisis to reorganization

Kumagai Gumi was hit by the bursting of the economic bubble. Facing a financial crisis triggered by massive real estate investments, the company requested financial aid two times. It promoted thorough business revolution, tackled new fields of construction, and undertook the development of technologies such as unmanned construction. In 2014, Kumagai Gumi completed the cancellation of preferred stocks and achieved its reconstruction.

2015 onward

New founding period Aiming for a sustainable company

In 2016, Kumagai Gumi made a new start with the formulation of the Kumagai Gumi Group Vision Statement.

In 2017, the company entered into a business and capital alliance with Sumitomo Forestry Co., Ltd. with the aim of building a unique new position extending beyond its existing business domains. The company marked the 120th anniversary of its founding in 2018.

Information Corporate

and record Track

Sanshin Railway Line

the Kurobe River No. 4 Power Plant

project completed

Wide Center (New York)

Harbour Tunnel

2004 TAIPEI 101 completed

construction

condominium completed

technologies

1977

Opening of the Joetsu

2017

2018

Shinkansen Nakayama

1978 Shinjuku

1989

1992

Aso Ohashi Bridge Area

Hua Zhu Zi Huan (Taiwan)

1937 Whole line opening of

1958 Opening of the Omachi Tunnel at

Tunnel

Nomura Building

Completion of World

Start of service of Sydney

slope disaster prevention

high-rise designer's

Sales

Ordinary income

1989

2016

Establishment of

1993

Formulation of the Kumagai

FATEC Co., Ltd.

Establishment of Kumagai Techno-Space Co., Ltd.

Gumi Group Vision

* 2000 Change of company name to Techno-Space Creates Co., Ltd.

1985

1995 Establishment of Technical Support Co., Ltd.

Sales (bar)

Recorded over

Ordinary income (dotted line)

1996 Spin-off of the Toyokawa Factory as Kumagai Technos Co., Ltd.

History

1,500

* 1994 Change of company name to Gaeart Kumagai Co., Ltd.

one trillion yen

alliance with Sumitomo

60

ordinary income in

1963

in orders, along

* 2002 Change of company name to Technos Co., Ltd.

Business and capital

billion yen

Establishment of Kumagai Road Co., Ltd.

with the highest

billion yen

of

1945

the construction

2001 Establishment of K&E Co., Ltd.

Forestry Co., Ltd.

1,250

industry

50

the

Establishment of

1958

1974

1898

Building Construction

Opening of the

Establishment of Taiwan

group

2000, 2003

2014

1,000

Division

Toyokawa Factory

Kumagai Co., Ltd.

40

Founding

Request to

Cancellation

2018

of Kumagai

and

Kumagai

financial

of preferred

Gumi

institutions

stocks

120th anniversary of

Founder•Santaro

performance

500

No. 4 Power

for aid

completed

founding

20

Launch of GAEART T. K. Co., Ltd.

750

1958

2004

30

Opening of the

Merger of Gaeart Kumagai Co., Ltd. and

1938

Omachi Tunnel at

Tobishima Road Co., Ltd.

the Kurobe River

Establishment of

over

Kumagai Gumi

Plant

* 2016 Change of company name to GAEART Co., Ltd.

Co., Ltd.

time

250

10

0

0

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

2020

(FY)

* Financial results through fiscal 1988 are for the fiscal year ended September 31; financial results from fiscal 1989 are for the fiscal year ended March 31

* Figures through fiscal 1981 are for Kumagai Gumi only

Website History https://www.kumagaigumi.co.jp/en/company/history/index.html

4	The Kumagai Gumi Group Corporate Report 2021 5

Corporate Information

The Kumagai Gumi Group's Business

In every phase of the construction value chain, the Kumagai Gumi Group demonstrates the comprehensive capabilities of its eight group companies.

The construction value chain and our main fields of business

Kumagai Gumi Co., Ltd. / GAEART Co., Ltd.

Taiwan Kumagai Co., Ltd.

K&E Co., Ltd.

Techno-Space Creates Co., Ltd.

Technos Co., Ltd.

FATEC Co., Ltd.

Delivery

Planning and				Operational
Development				Management
Design	Construction	Maintenance
Engineering	and Repair
Procurement

business construction Core

Civil Engineering

Related information P26

Through the construction of tunnels, bridges, dams, roads, and other infrastructure vital to people's lives, Kumagai Gumi Group will continue to

build places where people can live in security and comfort. We will continue to enhance our Technology Strength to deal with superannuated infrastructure that is reaching the age of large- scale renewal, as well as increasingly severe natural disasters.

Building Construction

Related information P28

The Kumagai Gumi Group provides buildings for every application and purpose, including housing, offices, hospitals, schools, and commercial

facilities. The Kumagai Gumi Group provides buildings for every application and purpose, including housing, offices, hospitals, schools, and commercial facilities, always building stages for living with consideration of users' feelings.

We will also advance initiatives for environmentally friendly construction and medium- to large-scale wooden construction.

Overseas Projects

Related information P30

The Kumagai Gumi Group is expanding sales and marketing networks at our overseas offices, and is striving to expand our business to

secure stable sources of revenue. To develop our overseas business and enhance our earning ability, we will promote alliances with other companies while securing global human resources and making efforts toward risk management.

Orders received composition ratio

Civil Engineering 35.6%

100.1 billion

Private

19%

Public

16%

Building Construction

64.4%

181.4 billion

Public

5% Private

60%

Fiscal year ended March 31, 2021,

Kumagai Gumi only (domestic)

Information Corporate

● Research and marketing				● Building management
● Product planning	● Design		● Quality assurance	● Quality and
						environmental
● Business planning	● Technology development/	● Construction planning	● After-sales care system
management
● Urban development	application	● Construction management	● Periodic inspection
● Inspections
● Patent-related
			● Safety and health
				● System audits
			measures
			management
				Work outsourcing and
				insurance agency

Technical Support Co., Ltd.

6

Businesses Peripheral related-Construction

P31 information Related

Renewable energy business

We will engage in businesses such as woody biomass power generation and wind power/ solar power generation to

contribute to decarbonization and to the formation of a recycling-oriented sustainable society.

Real-estate development

Kumagai Gumi has a construction industry-leading track record in real- estate development projects. We will take advantage of our know-how and expertise to contribute to urban redevelopment and area revitalization.

Infrastructure Management

Our company has engaged in PPP projects including the operation of toll roads. We will further leverage our

comprehensive strength to actively undertake such projects.

Technological product sales

We strive to solve problems and improve productivity through technology products. We will engage in collaboration with other companies to create new value.

The Kumagai Gumi Group Corporate Report 2021 7

Corporate Information

The Kumagai Gumi Group's Strengths

As stated in the Kumagai Gumi Group Vision Statement, the Kumagai Gumi Group is committed to support our customers and society throughout the ages by "On-site Capability" and "Happiness Quality".

FY2020 results	Kumagai Gumi only	Group companies
400	Sales		Operating income	45

FY2020 composition	Sales (outer circle)
ratio	Operating income (inner circle)

Our group will continue proactive measure for sustainable growth.

			(upper bar)														(lower bar)
billion yen												billion yen
									352.2	360.2
300
	273.4			294.5			307.1											30
200

Group companies

20.0%	27.0
20.0%	%
27.5%

Civil Engineering

(Kumagai Gumi

only)

Corporate

General contractor business

Kumagai Gumi Co., Ltd.

https://www.kumagaigumi.co.jp

Civil Engineering, Renovation,

and Production of Construction Machinery and Materials

Technos Co., Ltd.

https://www.technos.info

Established	February 1996	Capital	¥470,000,000
Headquarters	2-1 Honohara, Toyokawa,	Sales	¥6,448,000,000

	21.1	17.9		21.1	20.2	22.4	15
100		90.0
71.3	79.5	82.0	83.9
0	4		5.1	5.3	5.2	5.6	0
	FY2016	FY2017	FY2018	FY2019	FY2020

Building Construction (Kumagai Gumi only)

52.5%

53.0%

Information

Civil Engineering P26	Building	Overseas Projects
	Construction P28	P30

Kumagai Gumi implements its projects in close collaboration with its group companies by effectively utilizing and mutually complementing the technologies, expertise, products and management resources held by these companies, so as to maximize its collective

capabilities.

Related information P66 Corporate Information

Aichi Prefecture		(FY ended March 2021)
Representative Eiji Morita	No. of	148 (as of March 2021)
	employees

Technos manufactures segments for shield tunnels, construction machinery, etc.; engages in civil engineering and renovation, environmental-related projects, and basic construction; and operates a leasing business for a steel construction method called ACEUP.

• Value after deduction of intra-group transactions
• Amounts less than 100 million yen are rounded.

Examples of Group companies' initiatives

Continuing to create more comfortable spaces through total renewal / K&E Co., Ltd.

In 2001, K&E became independent from Kumagai Gumi's Renewal

Construction Unit as a specialist in the architectural renewal business, based

Manufacture and sales of road pavement and asphalt mixture, etc.		Trading company specializing in construction
	GAEART Co., Ltd.		FATEC Co., Ltd.
	https://www.gaeart.com			http://www.fa-tec.co.jp/
Established	November 1963	Capital	¥1,000,000,000	Established	June 1989	Capital	¥20,000,000
Headquarters	8-27 Shinogawamachi,	Sales	¥57,084,000,000	Headquarters	2-1 Tsukudocho, Shinjuku-ku,	Sales	¥4,768,000,000
	Shinjuku-ku, Tokyo		(FY ended March 2021)		Tokyo		(FY ended March 2021)
Representative	Kenji Yamamoto	No. of	753 (as of March 2021)	Representative	Takayuki Aono	No. of	8 (as of March 2021)
		employees				employees

on the creed "Practicing construction services." We believe that renewal business is not simply repair, but rather the creation of new value for buildings and the handing down of buildings to the next generation.

In the Kyoto Gojo Hotel renovation (Fauchon Hotel Kyoto), a business hotel scheduled for dismantling was reborn as a luxury hotel with a sense of esprit through various technologies and

ingenious refinements.

GAEART Co., Ltd. is expanding nationwide as a company that meets various infrastructure needs, from new construction to maintenance management, through infrastructure development including paving for roads, airports, harbors, and bridges, and the manufacturing of asphalt mixtures as paving materials.

Building renovation

K&E Co., Ltd.

https://www.k-and-e.co.jp/

Established	January 2001	Capital	¥300,000,000
Headquarters	2-7-2 Fujimi Chiyoda-ku,	Sales	¥21,410,000,000
	Tokyo 15F, Stage Building		(FY ended March 2021)
Representative	Kazuhisa Iwama	No. of	373 (as of March 2021)
		employees

K&E Co., Ltd. is a comprehensive producer active in areas from building deterioration surveys and seismic diagnosis to the planning, design, and construction of comfortable spaces, as well as after-sales service.

Construction in Taiwan

Taiwan Kumagai Co., Ltd.

http://www.taiwankumagai.com.tw

Established	December 1974	Capital	NT$800,000,000
Headquarters	Section 1, Dunhua South	Sales	¥15,268,000,000
	Road, Taipei, Taiwan	employees	(FY ended December 2020)
	Room 8 (1408), 12F, No. 205	259 (as of March 2021)
		No. of
Representative	Toyohiko Ina

Since its founding in 1974, Taiwan Kumagai Co., Ltd. has built a best-in-class track record in Taiwan as a Japanese general contractor, introducing Kumagai Gumi's technology to Taiwan.

FATEC Co., Ltd. is a general technology trading company that offers construction materials and equipment developed with state- of-the-art technologies. We provide not only products but also technologies for their utilization.

Working drawing production and education

Techno-Space Creates Co., Ltd.

https://www.technsp.co.jp/

Established	November 1993	Capital	¥30,000,000
Headquarters	3-12-12Higashi-Ikebukuro,	Sales	765,000,000
	Toshima-ku, Tokyo	employees	(FY ended March 2021)
	9F, Showa Building	57 (as of March 2021)
		No. of
Representative	Naoyuki Yamashita

Techno-Space Creates Co., Ltd. engages in business including the preparation of construction and architectural schematics and application documents. It also engages in educational business aimed at universities and construction companies.

Work Outsourcing and Insurance Agency

Technical Support Co., Ltd.

http://www.tsp-kumagai.co.jp/

Established	July 1995	Capital	¥70,000,000
Headquarters	2-1 Tsukudocho, Shinjuku-ku,	Sales	¥555,000,000
	Tokyo		(FY ended March 2021)
Representative	Hiroshi Shimura	No. of	41 (as of March 2021)
		employees

The company is developing an outsourcing business for clerical work, and also offers insurance plans as an agency handling both life and non-life insurance.

	Guest room	Exterior

Sales of FLORA TENDER independent walking aid with stand-up assist feature / FATEC Co., Ltd.

After a period of development, Kumagai Gumi began sales of a new model of FLORA TENDER in November 2020 through the group company FATEC Co., Ltd.

FLORA TENDER is an independent walking aid with a powered stand-up assist feature.

To ensure use with peace of mind, we acquired robot safety certification from the Japan Electrical Safety & Environment Technology Laboratories (JET) based on multiple JIS standards and risk assessments, a first in Japan for welfare equipment.

FLORA TENDER

Website Information about FLORA TENDER https://www.kumagaigumi.co.jp/news/2021/nw_202210115_1.html

8	The Kumagai Gumi Group Corporate Report 2021 9