DAI DAN : REPORT2021-2022

2021 REPORT2022- DAN-DAI

DAI-DAN CO., LTD.

h t t p s : / / w w w . d a i d a n . c o . j p /

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DAI-DAN CO., LTD. DAI-DAN REPORT 2021 PROJECT

1-9-25 Edobori, Nishi-ku, Osaka City 550-8520 Japan

TEL. [phone]

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DAI-DAN CO., LTD.

DAI-DAN REPORT 2021-2022

Published in November 2021

.LTD ,.CO DAN-DAI

Dai-Dan's118-year History

As a building services engineering and installation provider, Dai-Dan has continued to use its advanced technology to add comfort and vibrancy to interior spaces where people gather. For more than a century, we have been expanding the breadth of our expertise and securing the trust of our customers.

At the same time, we are helping to achieve greater harmony with nature.

1907

1923

1964

Sumitomo General Head	Nagoya City Library, Aichi	Nippon Budokan, Tokyo
Ofce Building, Osaka
1909	1931							April
			2013
						March
			2003
					August
			1993
			April
Bank of Japan Building,	Bank of Japan Head Ofce	October	1987
Hakodate Branch, Hokkaido	Building, Tokyo	1984
					New Research Center
		February						is completed in
		1983						Technical Research
		January						Laboratory.
	January	1979				The		company celebrates
	1965					its 100th anniversary.
	December
	1946				The	company lists its stock on the first
September					section of Tokyo Stock Exchange.
1943			The		corporate name is changed to
October
1933			DAI-DAN CO., LTD.

March

1903Technical Research Laboratory is constructed at

Miyoshimachi, Iruma-gun, Saitama Prefecture.

The building of head office is constructed at the current place
(Edobori, Nishi-ku, Osaka City).
Singapore Branch is opened.
The corporate name is changed to
Osaka Denki Danbo Co., Ltd.
The corporate name is changed back to Osaka	1994	2010
Denki Shokai/Osaka Danbo Shokai Co., Ltd.
The corporate name is changed to
Osaka Denki Tekkan Kogyo Co., Ltd.
Osaka Denki Shokai/
Osaka Danbo Shokai Co., Ltd.
is incorporated.	Control Tower and Passenger	Labs and Center Building,
Founded.	Terminal, Kansai International	Okinawa Institute of Science and
Airport, Osaka	Technology Graduate University,
		Okinawa
1974	1996	2010

Supreme Court Ofce	M-Wave Nagano Olympic	Haneda Airport Terminal 2,
Building, Tokyo	Memorial Arena, Nagano	Tokyo

2012

2011

	JP Tower, Tokyo	June
	February	2021
CREATE, Singapore	2020

June 2019

May 2019

May 2017

May

2016EneficeTM Hokkaido (new Hokkaido Branch office building) is completed.

Cellab Healthcare Service Co., Ltd. is established.

Singapore Branch obtains the certification of ISO 45001.

EneficeTM Shikoku (new Shikoku Branch office building) is completed.

The company is registered as a ZEB Planner.

EneficeTM Kyushu (new Kyushu Branch office building) is completed.

2015

2017

New K-1 Building, Nichia	GINZA SIX, Tokyo
Corporation, Tokushima

2018

msb Tamachi Station TowerS /

Pullman Tokyo Tamachi, Tokyo

Contents

Dai-Dan's 118-yearHistory ......................................................................................	01
A Message from Management ...............................................................................	03
Dai-DanGroup Sustainability Policy ..................................................................	03
Our Services.......................................................................................................................	04
Featured Interview with President Fujisawa	.........................	05
Long-Term Vision Stage 2030	........................................................................	09
				....
							10
Mid-TermManagement Plan Stage 2030 Phase 1《Preparation Stage》
Materiality at Dai-Dan	............................................................................................	11
Feature: Steering Our Way to Sustainable Growth	........	13
Material Issues and Progress of Corresponding Efforts
Contributing to a carbon-freesociety ..................................................	13
Responding to changes in the business environment via DX ....	15
Achieving high-quality medical environments ..............................	17
Recently Completed Noteworthy Projects.....................................................	19
Dai-Dan'sOverseas Business ................................................................................	21
Dai-Dan Innovation	..............................................................................................	22
Planning stage (planning and design)...............................................................	23
Construction stage (installation)...........................................................................	24
Operations stage (production activities/management/maintenance).....	24
Technical Research Laboratory............................................................................	25
Dai-DanEngineering .........................................................................................	26
Industrial Applications................................................................................................	27
Medical Applications...................................................................................................	28
ICT Applications ............................................................................................................	29
Dai-Dan's Practical Competence	.......................................................	30
Introducing Our Installations ..................................................................................	31
Enhancing Our Installation Expertise and
Ability to Provide Design Solutions ....................................................................	34
FY2020 CSR/ESG Targets and Performance	......................	35
Environmental Contribution ....................................................................................	37
Meeting Customer Expectations .........................................................................	39
Initiatives with Subcontractors..............................................................................	40
Valuing Our Employees .............................................................................................	43
Partnering with Hosting Communities..............................................................	45
Fair and Transparent Business Practices.......................................................	47
Dai-Dan's Businesses
Corporate Profile / Financial Highlights ...........................................................	51
Third Party Opinion........................................................................................................	53
Global Network.................................................................................................................	54

Editorial Policy

Since fiscal 2008, we have been publishing our CSR report as a means of informing our stakeholders of our business operations and CSR initiatives. In fiscal 2014, we renamed this publication the Dai-Dan Report. Compiled as an integrated corporate report, it contains both financial and non-financial data in addition to the conventional content.

Scope of This Report

・Target organization

This report covers the operations of DAI-DAN CO., LTD. All financial information is reported on a consolidated basis.

・Period

This report covers the fiscal year spanning April 1, 2020, to March 31, 2021. Some data refers to activities after April 1, 2021.

Report Guideline References

ISO 26000

Ministry of the Environment Environmental Reporting Guidelines (2018)

GRI Sustainability Reporting Standards

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Policy Sustainability Group Dan-Dai / Water & Air Light, by Inspired Management from Message A

A Message from Management

Inspired by Light, Air & Water

At Dai-Dan, our duty has always been to provide people with safe, comfortable places in which to live and work, while also giving due consideration to the environment.

This 118-year journey is one we have shared with a variety of stakeholders, not only our customers, but also the shareholders, investors, subcontractors, employees, and communities we have met along the way.

We believe that continuing to meet their expectations will lead to raising our corporate value in a sustainable way. Going forward, we hope we can count on your continued understanding and support for our activities.

Shohei Kitano	Ichiro Fujisawa
Representative Director	Representative Director
Chairman	President
DAI-DAN CO., LTD.	DAI-DAN CO., LTD.

Dai-Dan Group Sustainability Policy

The management principles that guide the Dai-Dan Group explicitly challenge us to "create value for our customers while contributing to the development of a better environment and stronger communities." Those principles underscore the Corporate Code of Ethics on which we seek the trust of our stakeholders and the business activities through which we strive to solve the problems facing society and the environment, and contribute to the realization of affluent but sustainable ways of life. In doing what we can to help steer society towards true sustainability, we at Dai-Dan are committed to:

1. Finding and applying light, air and water technologies that protect the global and local environments while providing comfortable work and living spaces by reducing environmental loads.
2. Fostering a corporate culture that respects the human rights and individuality of all persons by welcoming diversity into the workplace.
3. Ensuring full compliance with laws, regulations and agreements by continuously improving our systems of corporate governance.
4. Maintaining an open dialog with stakeholders that allows us to meet social expectations and demands, and build strong bonds of trust with all.
5. Sharing this policy with group subsidiaries and subcontractors so that we can promote sustainability initiatives in unison.

03 DA I - DAN REPORT 2021

Our Services

Electrical installations

Electricity is what brings a building to life, and it is our electrical installations that support its supply, creation, and storage.

Our installations are comprised of such varied elements as high-efficiency power receiving and transforming equipment, solar power systems for

generating electrical power, LED lighting fixtures that help to lower power consumption, storage batteries for optimizing power usage, and IoT-driven control systems.

Dai-Dan assembles the various pieces of equipment into electrical systems that serve the intended purpose whether to build or retrofit buildings with ZEB technologies, ready buildings for disasters as part of business

continuity planning, or other need.

Air conditioning installations

It is our air conditioning installations that maintain optimal levels of temperature, humidity, and airflow to create high-quality living or working environments.

They vary widely in size and performance from typical AC systems for office buildings to precision models required by semiconductor manufacturing plants. Dai-Dan has advanced technologies and vast experience with planning, designing and installing air conditioning systems. In fact, the large data centers that underscore today's internet society adopt many of our technologies-forexample-to introduce cold outdoor air in order to reduce air conditioning load

and to effectively direct cooled air towards IT equipment. Moreover, we can tap renewable geothermal energy as a heat source in order to efficiently manage a building's energy balance to meet ZEB criteria.

Plumbing installations

Our plumbing installations both supply water that is high-quality and work to recycle it.

In this field, we are putting our efforts into purification to prevent the contamination of rivers and oceans and we also pursuing greater reuse of water, which is a limited resource. Our environmentally friendly plumbing

equipment covers such processes as purifying contaminated water or

wastewater from factories, or transporting supplies of water, whether hot or cold, or gas.

In addition to the above, the Plumbing Department also takes charge of firefighting equipment. As a company that is responsible for safety, we constantly strive to create installation technologies that can be relied on.

Water is something that we take for granted in our daily lives, and Dai-Dan is putting its technologies to work to ensure that does not change.

The Dai-DanGroup-centered on renovations and maintenance

DAI - DAN REPORT 2021 04

installations Plumbing / installations conditioning Air / installations Electrical Services Our

our ningre by society sustainable more richer, a about bring to Helping InterviewsawaijuF PresidentFeatured with

Featured Interview with President Fujisawa

Helping to bring about a richer,

more sustainable society by refining our light, air, and water technologies

In 2023, Dai-Dan will reach its 120th anniversary.

Securities analyst Toshiya Mizutani, a Dai-Dan shareholder and investor, spoke to President Ichiro Fujisawa about the group's vision and strategies for the future.

Mizutani: Dai-Dan announced its long-term vision in February this year and selected six areas of materiality, i.e., important issues for management, by evaluating the impact on society and the environment of your corporate activities. The first concerns environmental issues, with net Zero Energy Buildings (ZEBs) as its central theme. I feel that many companies don't clearly address the question of how environmental initiatives tie in to corporate value; how do you position environmental issues within managing the company?

Fujisawa: This goes back to what I said a moment ago, but I think carbon neutrality (CN)-moving from a low-carbon society to a carbon-freeone-is a major theme for us as a building services engineering and installation provider. On that basis, we will first go even further to achieve CN throughout our business activities, such as through energy-saving measures at our offices or by introducing eco-friendly vehicles. Mizutani: I saw that you have also announced your support for the Task Force on Climate-related Financial Disclosures (TCFD) guidance.

Fujisawa: That's right. In future, we will push for more analysis on the impact climate change will have on our business and disclose that information. With regards to encouraging the spread of ZEBs, we will go even further in our promotion efforts than we have been. For ourselves, we are making progress with switching our older branch offices over to ZEBs; so far, we have completed works in Kyushu, Shikoku, and Hokkaido, now we're turning our attention to Hokuriku.

Mizutani: It's not just in the construction part either, you're verifying that energy input and output for actual operations are net zero, too.

Fujisawa: Yes. We believe that making smaller buildings ZEBs in this way is a key way of achieving CN. That we are gaining experience with these construction projects at the same time as accumulating expertise on the business operations front is becoming one of our strengths. Publicizing and passing these on as we apply them to projects across the country will help to promote ZEBs even further.

our ningre by society sustainable more richer, a about bring to Helping InterviewFujisawa PresidentFeatured with

air, light,

In developing environments where female employees can actively participate, DX now plays a major role

air, light,

technologies water and

Ichiro Fujisawa	Toshiya Mizutani
Representative Director & President, DAI-DAN CO., LTD.	Securities Analyst
April 1979	Joined the company.	May 2000	Joined KOKUSAI Securities (now Mitsubishi UFJ Morgan Stanley
June 2009 Director, Corporate Officer, Head of Industrial Facilities Division, and		Securities) where he worked corporate and industry surveys, and was
	Manager of Technical Department		responsible for the construction industry in particular (an industry for which
April 2013	Director, Senior Executive Corporate Officer, in charge of East Japan Area, and		he has been responsible for more than 30 years)
	General Manager of Tokyo Head Office	2007-2017	For 11 years in a row, he came in first place in rankings produced by an
April 2018	Representative Director and President (currently)		American financial magazine (in 2016, he was inducted into their Hall of Fame)
		April 2019 onwards Active as a workplace management consultant

For management, using ZEBs to resolve environmental issues is the top priority

Mizutani: Sticking with the theme of the environment, I'd like to hear your thoughts on working environments where people want to work, and which pay due consideration to health and safety.

Fujisawa: Last year, we formed a committee to look at ways of improving work-life balances within the company. Both the committee and our change to the age of retirement to 65 are key examples for that topic.

Mizutani: Particularly in the case of publicly listed companies, that those companies that have a large proportion of female directors or managers do well in terms of share value and performance is something we see all over the world. How do you view developing environments in which female employees can play an active role?

Fujisawa: That's right. While the proportion of female employees has risen, most of that increase is in specialist jobs, such as in design or as CAD operators, and in administrative positions. By promoting DX, we've been able to connect job sites and offices remotely, and it has made it possible for employees to do some job site tasks in the office. This has meant that female office workers have, in a way, taken responsibility for certain aspects of progress made at job sites. As job sites are where the construction industry derives its profits, having female employees be part of our main business, has had a dramatic effect on productivity.

Mizutani: That's fantastic.

Fujisawa: Full-scale cooperation between our job sites and offices via remote communications first began in 2017. That

technologies water and

Mizutani: During my more than 30 years following various companies as a securities analyst, I get the impression that the past 5 years or so in particular have seen dramatic changes in the market environment. While in the past the only thing asked of companies was to increase profits, I feel that there are now strong demands on companies to also consider ESG perspectives and work more for the environment and society.

Fujisawa: The industry in which we work, building systems, is one that requires huge expenditures of energy; our industry's

energy consumption makes up a large proportion of the total used by society as a whole. As such, we have always worked passionately to research and develop ways of saving energy and reducing environmental load for our equipment. In other words, we have long been aware that ESG perspectives, particularly to do with resolving environmental issues, is something that our industry can make a major contribution towards. In recent years, though, I feel more strongly the importance of fully disclosing our efforts and sharing them so that all stakeholders can understand what it is we do.

Fujisawa: I'm aware that this is an issue in the construction industry. In the past, women made up only 10% of this company-a woefully low figure. Of the 1,721 officers and employees who currently work for Dai-Dan (as of the end of June 2021), 14%, more than 250, are women. While most work in our offices, the number of female engineers working on job sites in our frontlines is also increasing.

Mizutani: From what I've heard, you've fully introduced a digital transformation (DX) and this has been a massively positive major change for female employees.

was four years ago, making us one of the first in the industry to implement DX initiatives. I think that was probably one of the reasons we were selected as a DX Stock.

Mizutani: I see.

Fujisawa: At the Shareholders' Meeting in June this year, Ikumi Sato, previously an outside auditor, was appointed as an outside director, the first female to sit on the board. I like to think that her accomplishment opens up a career path for our female employees to aspire to.

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Featured President with

Training excellent human resources on job sites is part of Dai-Dan's120-year-old heritage

vital importance to us. It might sound obvious, but as evaluations of publicly listed companies are predicated on

Featured President with

our ningre by society sustainable more richer, a about bring to Helping InterviewFujisawa

Mizutani: Moving on the S part of ESG-Social-could you give me some examples of the measures you take to invest in personnel and train younger employees?

Fujisawa: As a building services installation and engineering provider, we buy in all sorts of materials and components and our job is to turn those into functioning equipment inside buildings. The important part to make devices and materials into a functional system is people, it is people who design layouts to fit the spaces provided and to complete the actual construction. Mizutani: That makes sense.

Fujisawa: Engineers at construction job sites must have a broad swathe of knowledge about materials, equipment, and technologies and they must be able to communicate with a variety of representatives from different professions, as well as keep work moving even as they attend meeting after meeting-in other words, they must have the ability to create building systems.

Mizutani: Right.

Fujisawa: Then, for new employees, at least in the case of engineers, we carry out six months of group training. After that period, trainees are dispatched for three-month placements at job sites for each of the different corporate offices so that they get a real feel for job sites. Currently, we are incorporating teleworking into the group training-through this and other means we are gradually changing our methods to meet the needs of the times. That said, job-site training as the basis of our training is something we will never alter.

Mizutani: That's part of the Dai-Dan corporate culture.

Fujisawa: It is. March 2023 marks 120 years since Dai-Dan was founded and throughout all that time there are certain things that have been passed down in an unbroken line, what you could call Dai-Dan's heritage. The changes we are seeing now are undoubtedly dramatic, but training personnel, assigning them to positions, and having them challenge themselves to produce results, is part of a corporate culture that remains unchanged these last 120 years.

their ability to generate revenue, if we cannot achieve our revenue targets, we will not be judged kindly. That could lead to our market capitalization falling short of the standards set for the Prime Market.

Mizutani: That's true.

Fujisawa: In terms of our status within the industry, which is a little easier to understand, we have set ourselves targets of 200 billion yen in sales and 10 billion yen in operating income in three years. If we can first achieve these targets, we will have cemented our position as an industry leader. With a new position will come a new perspective, and in turn new ideas and then surely our behavior will also change. On the other hand, that we will contribute, however little, to resolving societal and environmental issues, is a fact that we must share, and so raise the awareness of every one of our employees.

Mizutani: I'm not sure if they're worried about being seen as unfairly favoring their employees and business partners, but a surprisingly large number of companies don't expressly declare that they value them. I think that's something Dai-Dan should

be aware of and announce more firmly. I would have thought that boasting to society about your approach of working with employees is something quite important, too.

our ningre by society sustainable more richer, a about bring to Helping InterviewFujisawa

air, light,

Aiming to make our employees happy, even as we work hard to give back to society and our shareholders

air, light,

water and

Mizutani: I once attended a study seminar that discussed what was important for a company. The conclusion that was

Mizutani: The way in which you announce information is really important. By the way, I feel that the pandemic has transformed

An approach of entrusting others to take on challenges will foster Dai-Dan's next generation

water and

technologies

reached was that whatever industry the company was in, the answer was information disclosure and dialogue. In other words, companies should disclose information, whether good or bad, and engage in dialogue with investors, shareholders, and even ordinary people. Ultimately, I feel as though that must be true.

Fujisawa: In that respect, there are many of our initiatives that are well ahead of the rest of the industry that we could call society's attention to. However, we aren't yet able to disclose or publicize that information well and so people are not sufficiently aware of those; that's something I've reflected on. Mizutani: I see, that is definitely something I'd like to see Dai-Dan improve on.

Fujisawa: For instance, during the first state of emergency, declared in response to COVID-19, we fully implemented measures to prevent its spread. Moreover, we continued to carry out maintenance work at medical institutions, including those that cared for those infected with the disease. Within the company, we swore to react swiftly to any requests because a fault in a single pump or ventilator could cause a hospital to stop functioning, we didn't publicize that intent outside the company for more than a brief time.

how society views companies. Fujisawa: I do, too.

Mizutani: In the past, if asked who a company was for, most people would say shareholders. But now, the focus has shifted somewhat from shareholders to stakeholders. So while shareholders are still included, the idea that companies exist to benefit a range of people-society, employees, business partners, the next generation, etc.-has become the mainstream point of view.

Fujisawa: I entirely agree.

Mizutani: As such, can you, as president of Dai-Dan, tell the stakeholders about the company's aims for the future and its long-term vision?

Fujisawa: The company I would personally like to see Dai-Dan become is one where employee happiness comes first. That's because whatever kind of fantastic ideal we might set as our goal, no matter how well we outline our direction or organize the company, unless employees can sympathize with that goal and work autonomously towards its achievement, we will never see any results. Of course, our contribution to sustainability is not something we could step away from, and our shareholders, who support our business activities, are of

Mizutani: There's one last thing I'd like to talk about. For example, when you start to further promote DX, have you considered appointing individuals in their thirties or forties to take the lead or some other challenge? I think that could help breathe new life into the company and lead to a new corporate culture.

Fujisawa: Actually, only the other day, we renewed the design for our work uniforms. To take charge of the project I picked a number of people I thought seemed capable from among the ranks of the job-site engineers and they were at its heart as it went forwards.

Mizutani: Oh, that sounds wonderful.

Fujisawa: It really got the employees excited to tackle the project independently. There's a forum for engineers on the company intranet and there's tweet-like messages, mainly various questions and answers about technical matters, that engineers can write freely, from all over the country. When the forum asked employees what they wanted to see for the new uniform, they were soon dozens of replies. It also seems that using teleworking more they were able to make progress.

Mizutani: The employees at job sites who will be wearing the

uniforms seem very interested in them, don't they?

Fujisawa: Yes. The final result also applied some of the feedback we had from female employees who wanted distinct uniforms for men and women with different silhouettes and for the uniforms to be lined. What we ended up with is a stylish design that doesn't look like work clothing to an old-fashioned type like me! The tops come in an inner and an outer, there are three different varieties of trousers… the list goes on.

Mizutani: That's wonderful. There was a frank and lively exchange of ideas. If the project had been left to just higher-ups in the company, it probably wouldn't have turned out like this.

Fujisawa: I think that's true.

Mizutani: I think this is an excellent example of the company's corporate culture of setting challenges to get results in action. In other fields, say DX or similar, if you can appoint younger employees to work on it, and incorporate some supervision from higher-ups, that could lead to even better results.

Fujisawa: I agree. And I think that brings our discussion to a close, thank you for speaking with me today.

technologies

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