TOYODA GOSEI REPORT 2023

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

We are a company that pursues the
TG Spirit

possibilities of polymers to contribute toWithin the Toyoda Gosei Group, we have established TG Spirit as a common set of values for our work.

a future of better mobility and living.

With today’s diversifying work styles and changing values, TG Spirit serves as an important foundation foraround 40,000 employees working in 16 countries and regions around the world, who differ in nationality,
gender, age, lifestyle, and other characteristics, to demonstrate their collective strength throughteamwork. Despite these tremendous changes in our environment, we still place importance on and willcontinue to pass on the valuable mindsets and ways of thinking for performing our work that have been

The Toyoda Gosei Group will continue to meet the needs of society

handed down to this day, and aim for sustainable corporate evolution and growth in the future.

by providing automotive parts using its rubber and plastic polymer technologies.

Passing on the ideas that we have inherited to
the next generation by making them our own
Sharing this TG Spirit throughout the entire Toyoda Gosei Group will bring us together as a one team,transcending differences in nationality, gender, age, and lifestyle.

Company Creed

Boundless Creativity andSocial Contribution
Management Philosophy

Good Corporate Citizenship

Proper Business Operation

We, as a good corporate citizen, contribute to

We promote business operations with integrity

the economy and society through community-

through the establishment of a system foundedbased business activities and social action

on thorough compliance and corporate ethics.

programs.

Sustainable Growth

Customer Satisfaction

We aim to build up the TG Group’s collective

We aim to provide products and services withstrength through an open and fair relationshipsatisfying quality and price in a timely manner,with suppliers, through a mutually strengthened

through forward-looking R&D and production

corporate structure and innovative management

engineering.

1

2

3

Customer Oriented

Challenge

Ownership

Think from the customer’s
perspective

Aim high, be resolutein the face of difficulties

Be responsible andproactive

How can we help customers get

We will aim high, set ambitious goals

Each and every TG employee iswhat they want?

and work relentlessly toward achieving

encouraged to feel a sense of ownershipthem no matter what the difficulties may be.

for the products that leave our doors.

4

5

6

Continuous Kaizen

Respect

Teamwork

Never be satisfied;improvement never ends

Respect for individuals andtheir perspectives

Help each other,grow as a teamUsing the approaches of genchi-genbutsu

We will maintain respect for the individuality

We will combine our strengths within(go and see) and genjitsu (activities based

and perspectives of each person, be humble

teams, between departments,on the actual situation) and asking why

in our dealings with others regardless ofand between Toyoda Gosei Group

five times, we will constantly strive to bringnationality, gender, or rank, and always try

companies to make One TG a reality.

our operations and products to the next

to learn from each other.

highest level.

response to change.

Conservation of Global
Environment and Resources

Respect for the Individual

We aim to conserve the global environment andWe aim to establish a vibrant corporate culture

resources in order to hand down a greener world

through respect for individuality and the value of

to our children through every business activity,

enhanced teamwork, based on shared

which includes cooperation with society and the

responsibility and mutual trust between

development of an environment-friendly productemployees and management.

and manufacturing process.

Our company logo is modeled on thebenzene ring, a compound formed bysix carbon atoms. Even extremely active
and unstable chemical substances
become stable in hexagonal form, andthe logo symbolizes our vigorous activity
and stability.

2

T OYODA GOSEI REP OR T 20 23

3About Toyoda Gosei

Contents

Value Creation Story

About Toyoda Gosei
2 Company Creed/Management
Philosophy/TG Spirit

4 Contents/Editorial Policy/
Purpose of This Report2

6About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Foundation of Value Creation
53 Sustainability Management
54 Environment
60 Social
70 GovernanceValue Creation Story
6 Message from the President
12 History of Our Business Evolution
and Value Creation

Data
90 Consolidated 10-Year Financial Summary
92 Consolidated Financial Statements

15 Our Competitive Advantages

96 Financial and Non-Financial Highlights

16 Value Creation Process

99 IR Activities and External Recognition/

18 Materiality (Key Issues)Company and Investor Information

22 Toyoda Gosei’s Management Capital

Value Creation Strategy
24 Toyoda Gosei’s Growth Strategy
30 Initiatives Supporting the Growth Strategy

24

53

90

Value Creation Strategy

Foundation of Value Creation

Data

Editorial Policy

Purpose ofThis Report

This report was prepared for the purpose of enabling shareholders, investors, and otherstakeholders to gain a deeper understanding of the Toyoda Gosei Group. The report explains
the Toyoda Gosei Group’s business performance in FY2022 and presents our strategies andinitiatives for creating medium- and long-term value. The report has been produced as anintegrated report since the FY2018 edition, and has been edited with reference to theInternational Integrated Reporting Framework published by the International Integrated
Reporting Council (IIRC) and the GRI Standards published by the Global Reporting Initiative
to make it concise and easy to understand. For more detailed information, please refer to theindividual reports and websites.

Support the Growth Strategy

46 Business Overview

Reporting Period

April 1, 2022 to March 31, 2023 (Past initiatives and recent information are
included where necessary to facilitate understanding of the disclosed information.)

Scope of Report

As a general rule, the report covers the 62 companies of the Toyoda Gosei
Group, consisting of Toyoda Gosei Co., Ltd. and its 61 subsidiaries andaffiliates in Japan and overseas. (Some items are treated individually.)

Date of Issue

October 2023 (Previous edition issued in November 2022, published annually)

Reference Guidelines • International Integrated Reporting Framework (International Integrated
Financial Information

Non-Financial Information

Website: Investor Relations

Website: Sustainability

https://www.toyoda-gosei.com/ir/

https://www.toyoda-gosei.com/csr/

Financial Results/Securities Reports, etc.

Environment/Social/Governance etc.

Toyoda Gosei Report

440 Strengthening the Management Base tohttps://www.toyoda-gosei.com/csr/dl/

Reporting Council (IIRC))• GRI Standards (Global Reporting Initiative)• Environmental Reporting Guidelines 2018 (Ministry of the Environment, Japan)• Environmental Accounting Guidelines 2005 (Ministry of the Environment, Japan)* Please refer to the website for environmental data and case studies.
Also, third-party verification of CO2 emissions has been conducted.
https://www.toyoda-gosei.com/csr/environmental/report1/

Disclaimer

While every effort has been made to ensure the accuracy of the information
contained in this report, we do not guarantee the accuracy or timing of
updates, and are not liable for any problems, losses, or damages arising fromupdates, errors, or other issues in the provided information.

T OYODA GOSEI REP OR T 20 23

5About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Message from the
President

In today’s world where the global market structureis undergoing major changes, we aim to become
a company that can make its presence known
through our “KOBUNSHI” based on the polymer
technology that we have developed over many years.
Katsumi Saito
President, CEO

We will transform into a “polymerlike organization” that excels in
responsiveness to changes, speed,
and dynamism
My name is Katsumi Saito, and I assumed the positionof president in June 2023. I am once again aware of theweight of responsibility and the great potential power of
the Toyoda Gosei Group as I am now in a position to
influence the lives of many people, including our 40,000
global employees, their families, and our business
partners, and to take the helm to achieve sustainablegrowth and development in a time of great change in
the automotive industry.
I am a car enthusiast by nature. My family ran an auto
repair shop, so cars have been a part of my life since I

6

was a child. In my job search, I researched companies
in various industries, but I came to the conclusion that I
wanted to work for a company that is involved in theautomobile industry, which I love so much. In particular,
I was attracted to suppliers that can be involved in awide range of automobile manufacturing, and among
them, the potential of polymer technologies such as
rubber and plastics, and I made the decision to join
Toyoda Gosei. Our company’s polymer technology,
which I was strongly attracted to at the time, has beensteadily evolving and still has great potential to support
corporate growth and development.

plastic, and their formulation and processing
technologies, and this has been a major strength thathas enhanced our competitive advantage.
In assuming the position of president this time, we havedrawn up the vision of the company based on what I
have personally felt through my past experiences. We
have been and will continue to pursue and deepen our
expertise in polymer-related technologies. By energizing
our people and organization, we would like to become acompany where people think “Toyoda Gosei is aninteresting company” and “this is a company that
benefits people.”

Originating from the rubber research department of
Toyoda Automatic Loom Works, Toyoda Gosei has long
been involved in polymer technology. For more than 70
years, we have been providing products and services
with high functionality and quality based on rubber,

I have learned from my experience that work nurturesand builds people. I would like to build a strong andflexible organization by further developing the mindset
and actions that we have cultivated through our long
history of manufacturing products based on polymer

materials.
Polymers are large molecules made by combining small
unit molecules. By linking these molecules together,materials with a wide variety of functions and propertiesare created. Having been involved in human resource
management for many years, I view people andorganizations in the same way. When people withdiverse values gather and mingle with each other,creativity is produced and also organizations andinstitutions, both inside and outside the company, arejoined together. By forming a polymer-like organization,
we can bring together creativity, teamwork, and power
through chemical reactions and molecular bonding thatmake the most of individuality.
In order to cope with an uncertain businessenvironment where the future is unclear, includingchanges in people’s sense of values, increasingly
complex environmental and social issues, and growing

T OYODA GOSEI REP OR T 20 23

7About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Message from the President

geopolitical risks, the people and our organizations
must become more organically connected to thinkflexibly and to adapt to changes in form on the fly. We
will build a corporate culture that excels in
responsiveness to environmental changes, speed, anddynamism. We will become a company that people
think of as interesting and that benefits people byhaving each individual change and make changes
boldly without fear of failure, take on challenges, andattract, seize, and create opportunities.

Reexamining the value of our own
existence, we have formulated a new
business plan that aims to achieve bothsocial and economic value<FY2022 in Review>
In FY2022, we worked to create a system that could
flexibly respond to changes in the business environmentand generate profits. We made improvements
throughout the entire value chain, with a focus on theAmericas, which had significant profitability issues,
based on the three pillars of reducing cost beyond
conventional levels, limiting the impact of material
market conditions, and responding to production
volume fluctuations. Although the implementation ofthese measures was generally successful, there was agreater drop in production than we had anticipated,
mainly in the Japanese domestic market, as a shortageof semiconductors prevented the production of luxury
car models. As a result, the product mix worsened, andalthough sales revenue grew, operating profit increased
only slightly. Going forward, we will demonstrate theresults of our steady buildup of strength as the logistics
Consolidated Financial Results for Fiscal Year Ended
March 31, 2023 (April 1, 2022–March 31, 2023)
Consolidated Operating Results(Amounts are rounded down to the nearest million yen)
(Percentage figures are changes from the previous year)

Revenue
Millionsof yenFY ended
March 31, 951,877
2023
FY ended
March 31, 830,243
2022

FY ended
March 31, 21,048
2023
FY ended
March 31, 26,7342022

8Pre-tax profit%

Millionsof yen%Millionsof yen%14.7

35,0692.6

35,323

(6.3)

15.1

34,172(6.3)

37,696

1.1

Net income
Millionsof yenOperating profit%

Net income attributable Comprehensive income
to owners of parent
Total
Millions
Millions%%of yenof yen(21.3)

16,004(31.5)

33,150(37.8)(29.8)

23,352(33.7)

53,294(8.1)

and supply disruptions and price hikes that were
triggered by the COVID-19 pandemic have calmed down.
<Toward the Formulation of Our 2030 Business Plan>
We had embarked on the development of our 2030
Business Plan as the business environment changed
significantly since we had projected in 2018, the year
when the 2025 Business Plan was formulated. Social
trends had also changed dramatically against the
COVID-19 pandemic, rapid progress in decarbonizationand the shift to BEVs (Battery Electric Vehicles), andheightened geopolitical risks. As a result, the social
issues, opportunities, and risks that are important to us
are changing rapidly, and we need to address complex
business issues as quickly as possible.
In devising the new plan, we have once again discussed
how we will contribute to society in the future based on
our company creed, “Boundless Creativity and Social
Contribution,” and our strengths.
One of the reasons for this is my experience when I was
the head of the Human Resources Division. During
recruitment campaigns, more and more applicants
become interested in what they can do for society by
joining this company. In order to continue to be acompany that is trusted and needed by stakeholders
and society at all times, I remember feeling that
economic value alone is not enough to achievesustainable growth; it is necessary to combine
economic value with social value. In the IR activities that
I was in charge of, I also felt that stakeholders had highinterest in and high expectations for our efforts to solve
environmental and social issues, as sustainability
management had become widely accepted. Throughthese experiences, I have come to strongly believe that
it is necessary to return to the basics of “a company is a
public institution.”In the 2030 Business Plan, released in August 2023, we
focus on contributing to solving social issues andachieving sustainable social development throughpursuit of our polymer technologies, a way that is
uniquely Toyoda Gosei. To this end, we will focus on
structural reforms, increasing strategic non-financial
capital, mobilizing each and every one of our 40,000
employees in our 62 Group companies in 16
countries/regions around the world, and maximizing thepower of our people and organization as priority
measures.

Expanding into businesses that
contribute to safety, comfort, anddecarbonization based on ourpolymer technology

We are determined to support the transformation ofJapanese automobile manufacturers by anticipating
future trends in mobility, creating new value, and making
the most of our 70-plus years of accumulated
manufacturing expertise to ease the transformation forour various customers. At the same time, we will further
enhance Toyoda Gosei’s competitive advantage bydeveloping products with local automobile
manufacturers in markets such as China and India,
where BEVs are leading the way, and by taking on thechallenges of the changing mobility market. We also aim
to help strengthen the competitiveness of the Japanese
automotive industry as a whole by leveraging the newknowledge and technological capabilities we willdevelop in this new field.
In April 2023, we visited Auto Shanghai, where we saw
first-hand the changes in the automotive industry
through visits to dealers and meetings with executives
from Chinese automobile manufacturers. Although I waswell aware of the dominance of BEVs in the market,
Chinese BEVs have evolved much more significantly
than I had imagined in the three areas of design,function, and finish. I was impressed by the evolution of
the design, which is on par with European cars, and thestate-of-the-art software, such as voice recognition
functionality. It was an opportunity for us to further
strengthen our resolve to take on the challenges of adrastically changing market with our own technologies.
The 2030 Business Plan aims to achieve growth along
two major axes. The first axis is to contribute to society
by developing products and services for the safety andcomfort that will support new mobility, including BEVs,
CASE (Connected, Autonomous, Shared, Electric), and
MaaS. The second axis is to contribute to thedecarbonization of society in order to leave aprosperous global environment for the future.
Compared to automobile manufacturers in theAmericas, Europe, and China, Japan lags far behind in
the adoption of BEVs. To catch up on this lag, our major
customers are working to drastically change
conventional car manufacturing and processes byintroducing “gigacasting,” a production technology thatcan significantly reduce the number of parts. To realize
the new production method, vehicle assembly at
automobile manufacturers must be made easier, andwe expect growing needs for modularization going
forward. This change in car manufacturing means that
we also need to make significant changes in our
products.

Let me explain how we can realize this growth strategy.
The structure of BEVs is drastically different from that ofconventional internal combustion vehicles, and with thischange comes a variety of new needs. We can meet itwith our rubber and plastics technology in various way.
The biggest challenge for BEVs is to improve electric
power efficiency to extend the cruising distance withless power. To achieve this, we must first reduce theaerodynamic drag. The latest BEVs in Europe haveadopted a sleek body design with the tips and roof ofthe car lowered significantly to take aerodynamic draginto account. The lowered hood design naturally lowers
the position of the windshield, so a thinner instrument
panel around the front of the car is essential to ensure a
spacious and comfortable cabin. To achieve this, we areplanning to integrate parts and functions inside theinstrument panel by utilizing our expertise in polymer
materials to slim down the instrument panel using aframework component we have never handled before.
Furthermore, we will make full use of airbag technology
to realize a thinner instrument panel that is unrivaled byany other company. In order to achieve this, we areconducting development efforts that cross over theboundaries of company organizations.
Another major challenge for BEV bodies is that thestructure that absorbs impact is altered by theplacement of the batteries under the body. Normally,
when a collision occurs, the car body deforms toabsorb the impact and reduce the shock to theoccupants. Finally, the seat belts and airbags thenprotect the occupants. In the case of BEVs, however,the structure protects the battery pack so that no force
is applied to the battery, so the body is not easily
deformed in the event of a collision as it has been in thepast. This change in the way the car deforms requires

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9About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Message from the President

airbags that are different from those used in the past.
For this reason, we are developing systems such as
high impact-absorbing safety devices and lap airbags
combined with seat belts to accommodate futurechanges in vehicle cabin layouts by advancing ourtechnologies.
With these structural changes in the car due to the shift
to BEVs, we see great opportunities in the areas ofsafety systems and interior and exterior components.
We will create new added value beyond the frameworkof our existing business. For example, we will enhance
our competitiveness through set proposals that takeadvantage of our expertise in the development ofinterior and exterior components, airbags, steering
wheels, and other parts, and collaborate with othercompanies to develop novel technologies. At the sametime, we always want to propose what our customers
want to realize, giving shape to their ideas faster thananywhere else.
In 2030 and beyond, we will reorganize our businessportfolio by shifting our resources to fields that provide
both social value and economic value, taking into
account the changing nature of automobiles and theneeds of the times. First, in the safety systems
business, which is a growth driver, we will expand our
airbag production volume to 1.5 times the current level
and contribute to the reduction of traffic fatalities
through our products, aiming to create a safer
automotive society. This will also lead to our increased

sales revenue and global market share. Also, as
mentioned earlier, the growth of CASE will bring about amajor change in people’s sense of values toward cars.
We will pursue a new level of comfort in transportation,centered on the interior and exterior component
business, and take on the challenge of providing avehicle cabin space that only we can offer.
As we move toward decarbonization beyond the year
2030, we expect that society’s needs for hydrogen will
increase. The Japanese government’s Basic Hydrogen
Strategy, revised in June of this year, sets new targets
for the amount of hydrogen to be adopted and planslarge-scale investments, so expectations are rising forhydrogen as a sustainable form of energy. Currently, weare providing our hydrogen tanks to Toyota’s MIRAIFCEV (Fuel Cell Electric Vehicles) and CJPT’s* fuel celllight-duty trucks. In the future, we expect to expand ourapplications in many fields, including large trucks andcommercial vehicles, as well as non-automotive
applications such as railroads and ships, and evenhousehold tanks, and we hope to see a path forbusiness expansion.

* Commercial Japan Partnership Technologies Corporation

We are committed to management
reform to maximize the power of ourpolymer-like organization by leveraging
the culture we have built up over the years
The auto industry is currently undergoing a majortransformation with the advances in electrification andautomated driving. Our business environment is alsochanging at a dizzying pace, with difficulties in securing
human resources due to the declining birthrate andaging population, and changes in corporate
competitiveness due to digitalization. In thisenvironment, we need the power of people andorganizations to implement the 2030 Business Plan.
The most important thing for that is to create a placeand stage where each and every employee can play anactive role. In order to realize a workplace where
employees themselves can be motivated to work
positively together with their colleagues, in other words,
to create a place where they can take on challenges
without fear, we will first work on management reform
for managers. If supervisors do not provide support forthe careers and work of their members, it will be difficult
for them to actively take on new challenges.
To date, we have identified various issues throughactivities conducted by labor and management
together, and have implemented initiatives as
management issues and workplace-based activities.
One such initiative is the renewal and implementation ofmanager education. Our goal is to establish amanagement style in which supervisors tap into themotivation, knowledge, and ideas that individual
employees possess, rather than just supervisors issuing
one-way instructions on work duties. In order to achievethis, it is important for managers to have sufficientpsychological and time resources, so we are working onreforming the way managers work in parallel withmanagement education.
We are also working on strengthening governance andmanagement innovation with the aim of maximizing ourorganizational strength on a global scale. In June 2023,
we introduced the CxO (Chief Officer) system andappointed new positions for CEO, CFO, CRO, CTO, andCMO (Manufacturing) for priority functions. In line withthis change, a portion of the authority previously held by
the president has been transferred to each CxO. Thiswas introduced out of my strong desire to speed up
management by strategically implementing the priority
function “x” on a global basis beyond the framework ofbusinesses and regions. We are shifting from our former
unipolar, unidirectional approach to new multi-polar,
multi-directional approach.

10

In most cases, the head office in Japan has been
responsible for formulating management andmanufacturing policies and implementing them outside
Japan. We would like to further transfer authority toregional division managers and adopt the concept ofCenter of Excellence to use the strengths of each region
for strengthening regional communications andcooperation among regions. Strengthening cooperation
not only between the head office and the regions, butalso between regions is the very essence of apolymer-like organization in which people andorganizations are more organically connected. We will
be able to create new added value flexibly throughthese efforts.

The Toyoda Gosei Group is on the move.
Becoming a company that exceeds the
expectations of all stakeholders
Toyoda Gosei Group is now making a fresh start toward
a future of great change. Through dialogue meetings
with managers and mid-level leaders as well as labor
union executives, I have sensed a positive energy risingthroughout the company. We will share globally thepolymer-like organization, a new vision for 2030 that wehave prepared for further growth, and aim to become acompany that can demonstrate even greater value in its
social and economic presence.
We will further enhance our IR activities in order to firmly
convey to our stakeholders how our Group is steadily
growing year by year. Ideally, we would like to create avirtuous cycle toward sustainable growth, stimulated bymany opinions through careful dialogue with our
stakeholders.
The entire Toyoda Gosei Group will work even harderthan before to make Toyoda Gosei a company thatpeople think of as interesting and that benefits them,and so we ask for your continued understanding andsupport.

Katsumi Saito
President, CEO
October 2023

T OYODA GOSEI REP OR T 20 23

11About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

History of Our Business Evolution and Value Creation
Through manufacturing that leverages our unique technological capabilities in the rubber and plastic fields that
we have cultivated since our founding, we respond to the needs of the times and provide new value to the world.
Founding to 1970s

1980s to 2000s

Carrying on the spirit of Kiichiro Toyoda to develop rubber and plastic parts

Growing into a global company through commitment to research and development

In the late 1930s, Kiichiro Toyoda, who recognized theimportance of rubber parts, established a rubber research
department within the automotive division of Toyoda Automatic
Loom Works. This was the origin of Toyoda Gosei. Kiichiro
Toyoda would later go on to found Toyota Motor Corporation.
Kiichiro’s passion for research was carried over to Nagoya
Rubber Co., Ltd., which was established in 1949.
In the 1950s, Nagoya Rubber focused on the development andproduction of rubber parts for automobiles, and became thefirst JIS-certified plant in Japan to manufacture hydraulic brakehoses for automobiles. Nagoya Rubber also took on the

As a member of the Toyota Group, our development andproduction of rubber and plastic parts for automobiles
has expanded into various fields since the 1980s.
As a polymer manufacturer, we aim to be a developmentoriented company and have strengthened ourdevelopment capabilities by establishing the Kitajima
Technical Center in 1995 and the Miwa Technical Centerin 2009.
We also turned our attention to fields in other industries,
and based on our thin-film formation technology
developed in the automotive parts business, from 1986,

1949

challenge of producing plastic steering wheels, which had
previously been made of hard rubber. In 1954, the injection
molding process was used to produce plastic steering wheels
for Model FA trucks, and later, the same process was also used
for the plastic steering wheels in the Toyopet Crown model.
From the 1960s onward, Nagoya Rubber expanded its businessas Japan’s automobile industry continued to grow and develop.
In 1967, the Company opened the Inazawa Plant to produce
plastic parts by injection molding, and subsequently expanded its
production bases mainly in the Owari area. In 1973, the Company
changed its name to the current Toyoda Gosei Co., Ltd.

1960

1970

1980

we took on the challenge of researching blue LEDs,
whose development had numerous technological hurdles
that were considered difficult to overcome. In 1995, we
succeeded in achieving mass production of blue LEDs.
Until the end of the 1980s, Toyoda Gosei’s overseas
markets consisted of Taiwan and North America under afour-company system, but in the 1990s, we accelerated
our overseas expansion. Following North America andAsia, we expanded to Australia, Europe, Central andSouth America, and Africa, and have now grown into a
global company with 62 overseas companies.

1990

Knowledge in the Fields of Rubber and Plastics

2000
World’s first
World’s first

1974

Instrument panels

1950

Weatherstrips

1953

Brake hoses

1954

Plastic injection
steering wheels

Sound insulating
glass runs

1961

1989

Piston cups

1977

Constant velocity joint boots

Experience in Developing
New Businesses

1997

Driver-side airbags

1982

Rubber recycling
technology

The challenge of developing airbags

In 1952, at the suggestion of Toyota MotorCo., Ltd., one of our major customers, weinstalled a 48-ounce injection molding
machine manufactured by Watson-Stillman
Co. of the United States. While some wereapprehensive about adopting injection
molding, which was still an excessive
investment even with financial support fromToyota Motor Co., Ltd., we took a leap of faithand succeeded in putting the equipment into
operation. This marked the beginning of theage of plastics for automotive parts.

Injection molding machine

1998

Curtain airbags

Plastic fuel filler caps

The challenge of developing plastic
injection steering wheels

Rubber Research Department,
Toyoda Automatic Loom WorksWorld’s first

1982

1986

World’s first

Toyoda Gosei boasts the top share in theJapanese airbag market. It is easy toassume that Toyoda Gosei began toproduce airbags as part of its steering
wheel manufacturing business, but infact, the Company felt a sense ofurgency over new commercial rights for
Toyota Motor Corporation’s first airbag,
and the Company felt that it had todevelop airbags as quickly as possible,
resulting in a bold new challenge against
fierce development competition.

1991
Successful developmentof blue LEDs is certified

Start of R&D for blue LEDs

2003

Millimeter wave
radar-compatible
emblem

2008

Plastic fuel filler pipes

World’s first! Successful development of blue LEDs
LEDs are being used in a growing range of fields as
an environmentally-friendly light source because of
their superior energy-saving performance. It was thecommercialization of blue LEDs in the 1990s thatmade LED products possible. In 1986, under theguidance of Professor Isamu Akasaki of Nagoya
University’s Faculty of Engineering and with thecooperation of Toyota Central R&D Labs, Toyoda
Gosei began developing a gallium nitride (GaN)based blue LED, which was certified as a success in1991. Until then, the development of blue LEDs wasthought to be impossible. The challenge, which was
the first of its kind in the world, was a series of
uncertainties and obstacles.

2007
Start of R&D for e-Rubber

Global Network
2000

1957
1949

Nagoya Rubber Co., Ltd. isestablished as a spin-off ofthe rubber research divisionof Toyota Motor Co., Ltd.

12

Haruhi Plant
begins operation

1967

Inazawa Plant
begins operation

1973

Company name is changed to
Toyoda Gosei Co., Ltd.

1976

Morimachi Plant begins operation

1977

U.S. Office is established in Illinois

1995

1980

Head office is relocated topresent location(Kiyosu, Aichi Prefecture)

1982

Bisai Plant begins operation

1989

Kitajima Technical Centeris established

1999

Toyoda Gosei Minda India Pvt.
Ltd. is established2006

Toyoda Gosei(Shanghai) Co.,
Ltd. is establishedTG Missouri Corporation isestablished

Toyoda Gosei North America
Corporation is established2008

Toyoda Gosei Europe
N.V. is established

2001

Toyoda Gosei Asia Co.,
Ltd. is established2009

Miwa Technical Center isestablishedT OYODA GOSEI REP OR T 20 23

13About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

History of Our Business Evolution and Value Creation and Our Competitive Advantages

Our Competitive Advantages
2010s to Future

Knowledge in the Fields of Rubber and Plastics

Contributing to the future with a focus on safety, comfort, and decarbonization
The 2010s brought new challenges for companies, such asmeasures to prevent global warming and the achieving of asustainable society. In the automotive market, vehicles that do
not rely on petroleum fuels, such as BEVs (battery electricvehicles), are expected to play a leading role in the future,
forcing major changes.
We have developed high-pressure hydrogen tanks for FCEVs(fuel cell electric vehicles) using our polymer technology. Thistank, jointly developed with Toyota Motor Corporation, is being
used in Toyota’s second-generation Mirai model, which started
mass production in 2020. In response to the shift to BEVs, wewill contribute to the reduction of traffic fatalities by offering

optimal solutions for airbags and seat belts that accommodate
the changes in vehicle structure, and we will also innovate
vehicle design and manufacturing with our polymer technology
for realizing new mobility. Also, we will develop and recycle
high-performance materials by utilizing our expertise in polymer
materials, and will not only utilize our developed materials andtechnologies within the Company but also sell them outside theCompany, and through these new businesses, we will contributeto achieving a decarbonized and recycling-oriented society.
We will continue to provide value to society in the three areas ofsafety, comfort, and decarbonization through the use of polymer
technology.

Materials, manufacturing methods, and mold technology that give our products an edge
We are leveraging our foundations in basic research, which have been ongoing for multiple generations
since the rubber research department was established by Kiichiro Toyoda, the founder of Toyota Motor
Corporation, to create materials and manufacturing methods that anticipate the needs of our customers
and the times for enhancing our competitive advantage.
Weatherstrip Products

Functional Components

Weatherstrips● Plastic turbo ducts● Door glass runs

Mixingtechnology

Interiors and Exteriors

2020● Brake hoses

Formulation
design● Radiator grilles

2010

Other Areas● Plastic fuel filler pipes● Opening trim/● Instrument panels,

Rubber andplastic materials
surface treatment
Plating, painting,coating design

Denaturation,
reformation,polymerizatione-Rubber

LED product(package)

Safety System Products● Steering wheels● Airbags

modules andcomponents

GaN power
semiconductor
products

Knowledge in the Fields of Rubber and Plastics
World’s firstExperience in Developing New Businesses
2020

2010

Lightweight opening
trim weatherstrips

2017

Large radiatorgrilles

2023

2021

Miniature wireless charging holder

Extra-large spindle
grilles

Driver-side airbags for better
protection in angled frontal collisions/
Pedestrian protection airbags

High-pressurehydrogen tanks

2022

2019

Plastic turbo ducts/
Battery cases

2023

Millimeter wave compatible emblem
that emits light

CNF reinforced plastic

Experience in Developing New Businesses

Innovative Products
Under our company creed of “Boundless Creativity and Social Contribution,” we have had many successes
over our 70-year history of quickly anticipating the needs of the times in areas such as safety and theenvironment, and developing suitable products. These experiences form the basis for our mindset of taking
on challenges, as set out in the TG Spirit. We treasure this mindset that has been passed down to us by ourpredecessors, and will continue to evolve as a company by taking on the challenges of social issues.

2021

UV-C LED high-speed
surface disinfectors
SRS curtain airbags

Blue LEDs

2021

2010

2019

Start of R&D for GaN
power semiconductors

Development with
EBM Corp. of theSupeR BEAT heart
surgery simulator thatuses e-Rubber

Smart insoles

2020

UV-C space disinfectors, which
use UV-C (deep UV) LEDs, arelaunched. UV-C (deep UV) LEDs
are confirmed to be highly
effective in neutralizing COVID-19

2022

Success in making larger GaN
substrates for next-generation
power semiconductors

Global Network
2013

Toyoda Gosei East Japan
Co., Ltd. is established2013

GDBR Industria e Comerciode Componentes Quimicos
e de Borracha Ltda.
is established

14

2014

Toyoda Gosei Irapuato
Mexico, S.A. de C.V.
is established

2018

2019

PT Toyoda Gosei
Hubei Toyoda Gosei
Indonesia is established Zheng Ao Rubber And
Plastic Sealing Technology
Co., Ltd. is established

2020

Inabe Plant begins operation

Global Network

Value chain that leverages our
network of 62 Group companies
in 16 countries/regions
Following our entry into the global car
market, we have established more than
40 Group companies in about 20 years.
Utilizing this global network, we deliver
reliable technology and quality in atimely manner based on an optimal
production system that takes into
account customer needs and politicalconditions.

Millimeter wave
radar-compatible emblem

Lightweight opening trim

Development& Design
Supporting speedy vehicle
development through close
collaboration between overseas
sites and the head office’s
engineering, development,
and production
technologies

Plastic fuel filler pipes

Procurement
Our partnership with morethan 700 global suppliers(Tier 1) ensures stableprocurement of parts andmaterials even in the midstof geopolitical risks

Sales

Production

Establishing sales structuresin each region to meet theneeds of customers aroundthe world

Establishment of production
backup and response
support systems in four
regions (Japan, theAmericas, Asia, Europe
and Africa)

T OYODA GOSEI REP OR T 20 23

15About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Value Creation Process
With the company philosophy of “Boundless Creativity and Social Contribution,” the Toyoda Gosei Group leverages
its knowledge in the fields of rubber and plastics, its global network, and its experience in developing new businesses.
We will continuously meet social needs by providing automotive products and other innovations.

Input

Business ModelManagement Base and Sourcesof Competitiveness▶ P.22

Diverse human resources to support value creation▶ P.22Global network to realize variety of solutions

Intellectual Capital

Medium-Term Business Plan
“2030 Business Plan”

What we aspire to be

Revenue

Operating profit

Operating profit ratio

ROE¥100.0 bn

8%10%Become a company that pursues thepossibilities of polymers to contributeto a future of better mobility and living.

▶ P.22

Knowledgein the fields ofrubber andplastics▶ P.23▶ P.23Global management for transformation
to positive impact

Financial Capital

Our Vision▶ P.24¥1,200.0 bn

Engagement with stakeholders

Natural CapitalBusiness, Products

FY2030 management targets

Knowledge and technology platform to transformbusiness models and build competitive advantages

Social and Relationship Capital▶ P.2

OutcomeGlobalnetwork

Experiencein developing
newbusinesses

Competitive
advantages▶ P.23

Delivered value

Automotive parts

Safety System ProductsInteriors and Exteriors“Safety,” “Comfort,” and“Decarbonization”
Basic policy▶ P.48▶ P.49▶ P.15Strong financial baseProc

Functional Components

urProviding value to stakeholders and society

Devel

en t

Weatherstrip Products

Value chain

Focus on fields that balance social
value and economic value▶ P.50

em

opm
開
発e
・

i gn
De s
&計
nt設

調

Manufacturing CapitalCompany Creed/Management Philosophy

達

Human Capital

Output▶ P.51Natural environment
Prompt response to climate change(Contributing to carbon neutrality andrecycling-oriented society)

Providing both innovations in
automotive technology (BEVs, CASE)
and a safe and secure mobility society

Shareholders, investors

c産t

le

s

販

Requests from society
Social issues from Toyoda Gosei’s
perspective

Sa

売

io

n

●

Pr

生
du

o

Other areas

General Industry Products
LED/e-Rubber
Re-S eco-brand ▶ P.52

Sustainability management▶ P.53

Changes in company
competitiveness with accelerating
digital/IT transformation●●

Employees●●

Demographic changes (declining
birthrate and aging population)●

Rising geopolitical risks

Contributing to business growth, purpose realization- Providing safe and reliable products- Flexible response to business transformation

Suppliers

TG Spirit/Sincerity,
Activeness, Unity▶ P.3

Changing values anddiversifying work styles
BCP risks

Active participation of a diverse workforce
Stimulating and pleasant workplace environment

Customers

Increasingly serious problems
in the global environment
Business transformation
due to climate change
and resource shortages

Stable, sustainable shareholder returns
Providing transparent IR information●●

Sustainable, equitable and fair business dealings
Mutual development based on mutual trust

Local communities, government
Corporate Governance●Risk management●

Compliance

Achieving a safer, more secure, and more
comfortable mobility society
Contributing to sustainable community
development▶ P.70

Increase sustainable corporate value from creation cycle

16

T OYODA GOSEI REP OR T 20 23

17About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Materiality (Key Issues)With “Boundless Creativity and Social Contribution” as our company creed, we aim to contribute to therealization of a sustainable society through our growth by achieving both social value and economic value.
In order to realize the vision for the company and the delivered value set forth in the 2030 Business Plan, we
have designated and worked on several key areas as “materiality” where we can make a particular contribution
from among various social issues, such as social forecasts and SDGs, taking into consideration the changing
business environment.

Social Issues/Megatrends

Business Operations

Providing both innovations in
automotive technology (BEVs, CASE)
and a safe and secure mobility society
Changes in company competitivenesswith accelerating digital/ITtransformation

Opportunities and Risks

Expansion of CASE (BEV/FCEV)
marketExpansion of MaaS market
Market changes
Accelerate adoption ofdigitalization, IoT, and DXIncreasingly serious problems in the
global environment
Business transformation due to climatechange and resource shortages

Management BaseDemographic changes (declining
birthrate and aging population)

Environment and resources

Human capitalChanging values and diversifying work
stylesSupply chain

BCP risks
Rising geopolitical risks

Governance

BEV expansion to bring new products to market

Risk

Opportunity

Support for BEV leading markets and BEV leading OEMs

Risk

Opportunity

Expansion of FCEV market

Opportunity

Advancement of technology for preventing traffic accidents

Opportunity

Reduction in fuel system components

Risk

Change in the way that users value and relate to their cars

Risk

Opportunity

Market changes due to infrastructure improvements and laws and regulations inemerging countries

Opportunity

Increased production efficiency (automation and reduced workforce)

Opportunity

Market expansion in new fields through green technology*

Risk

Opportunity

Change in competitiveness due to adoption of carbon pricing

Risk

Opportunity

Full utilization of rubber and plastic materials and development of materials (lighter
weight, material replacement, higher durability, and new materials)

Risk

Opportunity

Large-scale disasters due to extreme weather conditions

Risk

Opportunity

Reduction of energy costs due to implementation of energy-saving initiatives

Opportunity

D&I for diversification of thinking, skills, and experience

Opportunity

Human resource portfolios for efficient use of human capital (including re-skilling)

Opportunity

Rising global labor costs

Risk

Production impact, supply chain disruptions, and human casualties due to geopoliticalrisks, infectious diseases and disasters

Risk

Rising raw material costs, material shortages

Risk

Serious quality issues and recalls

Risk

Cyberattacks and scam emails

Risk

Leakage of confidential information

Risk

Antitrust law violations (bid rigging and cartels)

Risk

Opportunity* Green technology: T echnologies and products that solve or mitigate environmental problems (e.g., technologies and products that contribute to more lightweight designs
and decarbonization)

18

T OYODA GOSEI REP OR T 20 23

19About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Materiality (Key Issues)
Materiality Identification Processof
1 Selection
materiality candidates

and analysis
2 Evaluationof materiality candidates

of appropri3 Assessment
ateness by managementof
4 Identificationmateriality

5 Review

Selection of issues to beconsidered by sustainability
implementation memberswith reference to social
issues, market and social
trends, GRI standards, etc.

Analysis and evaluation
based on our materiality
and the materiality of our
stakeholders

Interviews with outside
directors and others on
identified material issues,
including identification
processes, to evaluate
the appropriateness ofmateriality

Selection of priority topics
to be addressed throughdeliberations by theManagement Council

Review of initiatives
linked to corporate
policies, confirmation at
Sustainability Council,
and periodic review ofmateriality

Key Sustainability Issues(Materiality)Responding to the transformationof the automobiles
Reducing traffic fatalities forrealizing a safe, secure, andcomfortable mobility society

Creating new businesses
utilizing core technologies

Main Initiatives(Social Issues/Opportunities and Risks to be Addressed)
Development of new products for BEVs
BEV-related share of revenue: 40% BEV production volume/Car production volume

P.25* Based on S&P Global Information

Development and sales expansion of airbag products
to deliver safety and comfort to all P.27
P.48

Airbag production volume: +1.5 fold increase (compared to FY2022)

Deployment of corporate venture capital (CVC)Based on cash allocation

P.37
P.38

(Allocating funds mainly for R&D, human resources, and strategic
investments with the aim of expanding fields that contribute to safety,

Creating a recycling-oriented
society through waste
reduction and water risk
reduction

Living together with local
communities
Use of diverse humanresources and respect forhuman rights

Corporate governance as acompany with integrity
Ensuring compliance

20

Achieving a safer, more secure, andmore comfortable mobility society

Expanding new businesses by leveraging experience innew business development P.34
Realization of smart factories (double productivity)

Creating a decarbonizedsociety by reducing CO2
emissions and greenhousegas emissions

Relevant SDGs
Most Important Areas

Target Setting FormulaP.26

Expanding sales to BEV leading markets and OEMs

KPIs and Medium- to Long-term Targets (FY2030)

Solving social issues by creating
innovations

comfort, and decarbonization)
Creating environmentally-friendly businesses byleveraging our knowledge in the rubber and plastics
P.33
fields P.29
Globally integrated operations to achieve carbon
neutrality P.54
Contribution to a recycling-oriented society(Car to Car recycling) P.58

Scopes 1 and 2: Carbon neutralWaste volume (total) [non-consolidated]: −50% (compared to FY2012)
Scope 3: −27.5% (compared to FY2019)Waste volume (unit) [overseas]: −55% (compared to FY2015)
Renewable energy adoption rate: 100%

Initiatives rooted in local communities(local self-reliant management, Center of Excellence)Diversity & inclusion P.62
Safety and health management P.68
Strengthening quality and supply chain to support
sustainability management P.65
Responding to geopolitical and economic risks P.82

Percentage of employees receiving training on human rights: 100%
Employee engagement affirmation rate [non-consolidated]: 75%
Ratio of local executives (vice presidents and above) at overseas locations:
60% or more
Number (ratio) of female managers [non-consolidated]: 100 (8.8%)
Ratio of mid-career hires in management positions [non-consolidated]:
30% or more
Number of serious accidents: 0
Percentage of suppliers implementing sustainability activities: 100%

Strengthening of BCP resilienceEnhancing of internal controls

P.84

P.70

P.42

Number of major legal violations: 0
Major cyber security incidents: 0

Realization of a decarbonized,
recycling-oriented society

Sustainable growth throughdiverse workforce

Fair and transparent corporate
governance system

T OYODA GOSEI REP OR T 20 23

21

About Toyoda Gosei

Toyoda Gosei’s Management Capital

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Management capital cultivated over more than
70 years of history* This data is current as of March 2023 (the number of locations only is current as of July 31, 2023).

Management capital is an important source of sustainable enhancement of corporate value.
Toyoda Gosei builds management capital through repeated cycles of value creation based on ourmanagement philosophy, and invests capital at the appropriate time in business opportunities and risks that
we foresee.

Human Capital

Transformation into a dynamic “polymer-like organization”
that supports corporate evolution and growth

Number of employees

Toyoda Gosei operates in 16 countries and regions around the world with 62
Group companies. We aim to achieve sustainable evolution and growth bybecoming a dynamic polymer-like organization that brings out the individuality
and power of employees with diverse values and talents from different
nationalities, genders, ages, and lifestyles, and generates new creativity andpower through organic linkups.

38,942

Ratio of overseas employees: 75.7% Ratio of local executives: 32%
Women in management positions (non-consolidated): 33
Ratio of mid-career hires in management positions (non-consolidated): 31.3%
Diversity & Inclusion

Manufacturing
Capital

Number of locations

62(July 31, 2023)

Social and
Relationship Capital
Number of suppliers(non-consolidated)773

In order to meet the needs of our customers around the world in a timely manner,
we have established sales and technical structures that are closely linked to eachregion and an optimal global production and delivery system. In addition, we areenhancing our manufacturing capabilities by innovatively evolving ourmanufacturing methods and production facilities based on our knowledge ofrubber and plastics, a strength we have cultivated for more than 70 years.
We have adopted Internal Carbon Pricing (ICP) and make investment decisions
based on the balance between the global environment and economic activities.

The auto industry is undergoing a major transformation with the conversion
to electrification and automated driving. In order to realize our management
vision, smooth cooperation with various stakeholders is important. Throughrepeated and careful dialogue with stakeholders and by providing value tosociety, we will build and maintain strong relationships of mutual trust andcontinue to evolve steadily while flexibly adapting to a challenging businessenvironment.
Joint university research (Nagoya University, Osaka University, Tohoku University)
Individual meetings for analysts and institutional investors: 109
Social Initiatives

P.62

Providing safety, comfort, and decarbonization to customers
around the world by leveraging our global network andknowledge of rubber and plastics

Building strong relationships with stakeholders throughcareful dialogue

Natural Capital
Total energy input

2.311 million GJ** Gigajoule = 1,000,000,000 J

Capital investment cost: 48.8 billion yen
CO2 emissions reduction (non-consolidated): −32.2% (compared to FY2015)
Competitive Advantages P.15

R&D expenses

34.2 billion yen
22

Pursuing the possibilities of polymers and refining our one-ofa-kind R&D capabilities to further enhance our competitiveness
It is important for us to anticipate the needs of society and our customers, and tohave the technological capabilities to offer solutions that focus on the futurechanges with the changing automobile industry. R&D capabilities are the source ofour corporate growth, and we have invested approximately 100 billion yen in R&D
over the past three years to conduct R&D for new and existing businesses that
pursue the potential of polymers. We are further enhancing our competitive
advantages by utilizing IP landscaping and other techniques to improve theaccuracy and speed of our decision-making process for new business development.
Development and engineering staff (non-consolidated): 2,293
Number of patents held: 4,835
Financial and Non-Financial Highlights P.96
Competitive Advantages P.15
Research and Development P.30
Intellectual Property Strategy P.36

Financial Capital
TG-ROIC*

8.2%(FY2022)

P.99

Initiatives for climate change and resource recycling utilizing theenvironmental technologies and knowledge we have developed
In 1993, we launched our full-scale environmental initiatives with the First
Environmental Action Plan, and have been vigorously implementing various
initiatives for about 30 years. Natural capital is the source of materiality (keyissues) and outcomes, and by further advancing the knowledge andtechnologies for environmental conservation, which we have cultivated, andthe knowledge in the rubber and plastics fields, which are our competitive
advantages, we aim to efficiently invest natural capital in resources andreduce environmental impact, thereby achieving both conservation of the
global environment and resources and the creation of economic value.
Total material input: 38,935 t
Water resource input: 1.05 million m3
Renewable energy input: 34,000 GJ
Acquisition rate of ISO 14001 for production sites: 100% (environmental
management system)
Materiality

Intellectual
CapitalIR Activities

P.60

P.18

Environmental Initiatives

P.54

Sound financial management to support sustainablegrowth and enhance corporate value
Continuous investment in machine equipment, R&D, and alliances isnecessary to achieve sustainable growth and enhance corporate value.
We maintain the stability of our financial base through healthy financial
management and achieve sustainable growth by effectively using financial
capital when necessary. We will practice more multifaceted financial
management by adopting new management indicators such as TG-ROIC andevaluating the creation of corporate value.
* TG-ROIC =Operating profit
Non-current assets + Inventories

ROE: 3.6% (March 2023)
Financial Policy: Message from the Chief Financial Officer
Financial and Non-Financial Highlights P.96

P.43

T OYODA GOSEI REP OR T 20 23

23

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Toyoda Gosei’s Growth Strategy

New Medium-Term Business Plan: The 2030 Business Plan
In August 2023, Toyoda Gosei prepared the 2030 Business Plan as our medium- to long-term management planto achieve sustainable business growth in the future by providing social value in response to changes in themobility society.
Our goal is to become a company that pursues the possibilities of polymers to contribute to a future of better
mobility and living, and we will deliver safety through safety systems, comfort through interior and exterior
components, and decarbonization to society through the development of new businesses for polymer materials
to society.
Progress of the 2025 Business Plan
In the 2025 Business Plan announced in2018, we have set targets of 1 trillion yen inrevenue, 8% in operating profit ratio, and
10% in ROE. We are on track to achieve ourrevenue target due to the growth in sales
revenue, which exceeded the increase inautomobile production, as well as the impactof the yen’s depreciation. On the other hand,operating profit ratio and ROE are projected
to fall short of the targets because of
production fluctuations due to the COVID-19
pandemic, the impact of the materials market,
and the postponement of the development of
new products and technologies.
Based on the 2025 Business Plan, we haveidentified four main issues that we must
address in order to achieve our next stageof growth: Adapting to CASE technologicaladvances with a focus on BEVs,
Restructuring of our business portfolio,
business management with an awarenessof capital efficiency, and creating new
businesses and products to serve as newpillars in the next generations. These will be
addressed in the 2030 Business Plan.

ROE
Operatingprofit ratio

Target line

10%

Outline of 2030 Business Plan
Vision for the company

Become a company that pursues the possibilities of polymers
to contribute to a future of better mobility and living.
Delivered value

SafetyComfortThrough safetysystems

Through interior &exterior
components

Decarbonization

Target line¥

1,000.0 bn¥951.8 bn

Through new
businesses forpolymermaterials

Target line

3.7%

8%
Basic policy

Revenue
FY2018FY2019FY2020

FY2021

FY2022

FY2025
Forecast

Challenges for further growth
01. Responding to CASE (Connected, Autonomous, Shared,
Electric) technological advances with a focus on BEVs

Priority measures Structural reforms aimed at growth in priority businesses, regions, and customers(expand sales in safety systems, interior/exterior, and materials businesses toregional automakers in North America, India, and China).
 Forge strategic alliances to accelerate growth globally and strategically reinforce
development and intellectual properties (IP).
 Revamp management with a “polymer-like organization” that organically binds
people and the organization.

 Focus on fields that balancesocial value and economic value.
(business portfolio restructuring)

Roll out different products for different regions and customers. Expand
organizations and human capital in each overseas region.

02. Restructuring of business portfolio
Focus on fields that balance both social value and economic value.

03. Business management with an awareness of capital efficiency

FY2030financial objectives

Revenue

Operating profit

Operating profit ratio

ROE¥1,200.0 bn¥100.0 bn

8%

10%Shift resources into high-growth, high-profit fields and manage balance sheets.

04. Creating new businesses and products to serve as newpillars in the next generation

Speed up the generation of ideas and ascertain their commercial viability.
Develop products from the customer’s point of view and market them as solutions.

areas that combine social and economic value. We
aim to achieve revenue of 1,200 billion yen, operating
profit of 100 billion yen, operating profit ratio of 8%,
and ROE of 10% by increasing our economic value
while enhancing our presence value. To achieve thesegoals, we will implement structural reforms for priority
businesses (safety systems, interior and exterior
components), regions, and customer service, as well
as forge strategic alliances to accelerate growth
globally and strategically reinforce development andintellectual properties (IP). At the same time, we will
implement the invigoration of our people andorganizations. By evolving into a “polymer-likeorganization,” in which people and departments work
closely together and demonstrate high creativity andproductivity, we will be able to respond to changes inthe environment while freely changing the shape of theorganization and create new value.

Economic value (profitability)

Overview of the 2030 Business Plan
The 2030 Business Plan sets forth our vision of
becoming a company that pursues the possibilities ofpolymers to contribute to a future of better mobility
and living, and we aim to further enhance our strengths
by expanding our business domain using polymer
technologies such as rubber and plastics. The
manufacturing of parts rooted in polymer technology is
our original business, and at the same time, it is thebusiness we carried on from the rubber research
department of our predecessor, Toyota Industries
Corporation. We view this as our strength and a sourceof profits, and we are strongly committed to expanding
our business into new areas while maintaining anddeveloping our wealth of knowledge and advanced
technological capabilities.
Our specific growth areas are (1) safety, (2) comfort,and (3) decarbonization, and we aim to achievesustainable business development by focusing on

Business portfolio restructuring for growth
We will shift our resources to growth areas that deliver
In restructuring of our business portfolio, we will adopt
both social and economic value.
TG-ROIC*1 management and invest efficiently for eachregion and business.
We currently have four main product areas: safety
Operating profit
system products, interior and exterior components,*1 TG-ROIC =Non-current assets + Inventories
functional components, and weatherstrip products.
While implementing
restructuring of theseEnvisioned business portfolio in 2030 (circle size denotes revenue)
businesses, we will shift
BEVand expand our businessexclusive Decarbonization
products
domain to contribute to theimprovement of safety,
Make interior
Providespaces more
safety to BEV
security, and comfort of
Resource shiftcomfortableusers and otherduringvehiclesociety. Also, we willtravelInterior/
occupants
Fuel
Safetydevelop new businesses
exterior
systemsystemcomponents
products
products
and products, such ashydrogen tanks andNew businesses/products
material recycling, toWeatherstrip(hydrogen tanks, materials recycling)
products
contribute to
Growth areas
decarbonization.
Social value (degree of contribution to safety, comfort, and decarbonization)

24

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25

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Toyoda Gosei’s Growth Strategy

Enhancing Social and Economic Value
Changes in the mobility society and anticipated needs

1. Contribution to Safety

In preparing the 2030 Business Plan, we began bya means of transportation to a space for relaxation.

creating a concrete image of what the world will be like

The trend toward viewing mobility not simply as ain 2030 (the future mobility society). We predict thatmeans of transportation, but as something that must

mobility will change in 2030 due to advances in CASE*

provide value, such as relaxation or entertainment, willand decarbonization, and that people’s relationships

accelerate. The final change is human coexistencewith cars will also change significantly.

with new forms of mobility. As various forms of mobility

The first change is the acceleration in resource

are created, we believe that functions forrecycling. We envision the creation of a social systemcommunication between cars and between cars andthat will create a large cycle, including the final

pedestrians will be required.

disposal of ELVs (End-of-Life Vehicles). The second

As the automobile industry and other companies workchange is the proliferation of clean energy. As theto implement the mobility society of the future, and as

energy mix is rapidly changing, there is expected to bevehicle manufacturing changes, we also will support

a need to improve energy efficiency, including fuelnew vehicle manufacturing while reexamining what ourefficiency, in mobility as well. In addition to the

products should offer.

environment, we believe that there will be a shift from* CASE: A term coined from the initial letters of Connected, Autonomous,
Shared, and Electric.

Over the years, Toyoda Gosei has contributed to the
reduction of traffic fatalities by providing various typesof airbags. Safety system products such as airbags,
seat belts, and steering wheels will be required to
evolve in terms of both function and performance as
BEVs and self-driving vehicles become morecommonplace. Also, demand continues to grow assafety regulations are tightened around the world.
We will continue to develop and provide moreadvanced occupant protection products to achieve asafe and secure mobility society. To this end, we will
deepen and accelerate our collaboration with Ashimori
Industry Co., Ltd., which we have been conducting
since 2021. By leveraging each other’s businessassets and expertise, we will maximize synergies indevelopment, design, sales, procurement, andproduction, and aim to become a system supplier thatcan propose and provide total safety system productsolutions.
In proposing seat belt and airbag systems, we expectthat the lap airbag, which incorporates an airbag inside
a seat belt, will be an innovative turning point. Thissystem can protect occupants in any position, and is
adaptable to major changes in vehicle structure. We
are developing airbags that can respond to changes inmeans of transportation and new mobility, such as
cyclist airbags that protect pedestrians and bicyclists
from collisions, and variable-volume airbags withbiometric sensing technology that protect the elderly
and pregnant women. We plan to increase airbag
production to 1.5 times the FY2022 level by FY2030.

• Over the years, we have reduced traffic fatalities by supplying airbags of various types.
• As BEVs and autonomous vehicles proliferate, our next task is to develop and bring to market sophisticated products forprotecting vehicle occupants.

Mobility society envisioned in 2030: Advances in CASE and decarbonization
Acceleration inresource recycling

1

Proliferation of clean energy

2

3

Deepen collaboration with Ashimori Industry Co., Ltd.
Offer seat belt and airbag systems
Provide safety toeveryone on the move

Provide safety tovarious vehicle
occupants

4
H2

Mobility infuture society

H2

Provide safety to BEV
users

H2

Added value

SafetyComfortDecarbonization

Airbags adapted to changing modes oftransportation and new forms of mobility

Illuminated steering wheels that connect the personwith the vehicle, and lap airbags that protect
occupants in various postures in anticipation of
the proliferation of autonomous vehicles

Airbag and seat belt solutions
optimized for changes in vehicles
brought on by the shift to BEVs

Cyclist airbags that offer protection
for pedestrians and cyclists
in case of collisions

Biometric sensing technology
and variable-volume airbags that
protect the elderly and mothers-to-be

FY2030airbag production
volumeCompared to FY2022:

1.5xTransformation from means of transportation to space for relaxation

26

Human coexistence with new forms of mobility

2025

2030

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About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Toyoda Gosei’s Growth Strategy

2. Contribution to Comfort

3. Contribution to Decarbonization

Aiming to create more comfortable in-car spaces while

contribute to the improvement of comfort for new

responding to changes in mobility, we have set a target

mobility by utilizing the polymer technologies that weto increase the ratio of BEV-related sales revenue tohave developed over the years and by strengthening

40% by FY2030. Specifically, we will work to provide

our cooperation with other manufacturers.

new functions that are unique to BEVs, such as

We will also develop and propose signage and lighting

combining interior and exterior components withusing LED light as a means of communication between

safety systems and illumination products. Also, forcars, and between cars and pedestrians, inself-driving vehicles, we will develop retractable

collaboration with other companies. Signage, forsteering wheels and multifunctional consoles that can

example, can be used in the new mobility society to

expand the interior space during automated driving.

signify “please go ahead” to pedestrians at pedestrian

Furthermore, we will provide new comfort value incrossings when the driver is not present in a self-

response to the new era of mobility through plastic-

driving vehicle.

based, lightweight, and integrated designs for frontend modules and other components, as well as
improvement of instrument panel modules. We will
• By integrating safety systems and illuminated products into interior & exterior components, we will offer new
functionality suited to BEVs
•W ith our polymer technology, we will also upgrade car designs and manufacturing to bring about new forms of mobility

Ramp up collaboration
with other manufacturers
Communication with othervehicles and pedestrians

Employ polymer technology tocontribute to the evolution of mobility• Harness our knowledge of polymer materials (formulation, kneading) to focus on development of high-performancematerials and recycling materials.
•C ontribute to decarbonization and recycling promotion in society at large by not only utilizing the materials ourselves
but also selling them externally.

Base ingredient manufacturer

Toyoda Gosei

Automakers

Recycling company

Monomers/polymerization

Formulation, kneading/
Molding, processing

Assembly

Collection/recycling

Transformation of
structure and build
Frontend module

Broad instrument panel
and integration of components

Designs that evoke
the essence of BEVs

Added value

Polymer materials
knowledge andknowhow

Sensor transparent front end
and sensory illumination

Space to relax during
autonomous driving

Instrument panel module

Retractable steering wheel
and multifunction console

2025

innovations as well as daily improvements in
manufacturing processes. Our manufacturing
processes mainly emit CO2 through painting, plating,rubber extrusion molding, and plastic injection
molding. We aim to achieve carbon neutrality by
production technology innovations in each process,such as developing decorative elements with low
environmental impact in the painting and platingprocesses, optimizing vulcanization conditions during
the rubber molding process, and using electric power
and low pressure in the plastic molding process, aswell as utilizing renewable energy and other resources.
We have moved up our goal of achieving carbon
neutrality for Scopes 1 and 2 to 2030 from the previous
target of 2050. We will contribute to the realization of awide range of decarbonization and recycling promotion
in society by establishing a system that enables us toprovide CO2-free, high-added-value products as earlyas possible.

Plastic-based, lightweight,
integrated

External signage and lighting

28

We will harness our knowledge of polymer materials tofocus on the development of high-performancematerials and the formation of businesses for material
recycling.
In the recycling of products and materials, since many
products are incorporated into automobiles, it isdifficult for us to go it alone and we need to proceedon the premise of collaborating with other companies.
We will implement initiatives with the entire supply
chain in mind, including how to collect and recycle
materials and products up to and including final
disposal of automobiles. For some products, such as
plastics, rubber, and airbags, we are already working
on a system to collect waste materials from outside
the company and recycle them into recycled materials,
which we will develop into businesses and monetize,
including sales outside the company.
We will accelerate the pace of our energy-conservation
efforts by implementing production technology

2030

BEV-relatedshare of sales
in FY2030

Collaboration/alliance40%

High-performance materials

Collaboration/alliance

External sale

Recycled materials

Fire-resistant materials,
insulating materials, etc.

Plastics, rubber, airbags, etc.

Expand into organic synthesis
and develop new materials

Collect waste materials externallyand recycle them into new materials

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About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives Supporting the Growth Strategy

Research and Development

Message from the CTO
With an eye on society beyond 2030,
we will accelerate development in response toadvances in CASE and decarbonization tocontribute to society and achieve corporate
growth.
Development Efforts toward the 2030
Business Plan
We are developing products that will help make future
lifestyles more sustainable and affluent based on our
understanding of social issues that will continue into
the future.
As our broad development policy for the 2030
Business Plan, we are working on the following threepolicies to contribute not only to the automotive field
but also to a wider range of fields.
1. D evelop system and module products that leadthe mobility of the CASE society
2. Develop technologies and create new businesses
that achieve carbon neutrality and lead the way
in the circular economy
 evelop solutions with a focus on Energy,
3. D
Healthcare, and Smart Homes
The technologies required for these developments willbe identified as core technologies to be developed
from both backcasting and forecasting perspectives
based on our polymer material technology and otherfundamental technologies. We will aim for quick
business development by implementing measures that
include external collaboration.

Mobility Development

30

Initiatives Supporting These Activities

Carbon neutrality (CN) has become a commonplace
responsibility, and the idea of creating value and runningan economy with a circular economy (CE), which isbased on a recycling-oriented society, has become awidely-held vision of how businesses should be. In theautomotive industry, in addition to the need for new
functionality for plastic materials due to the conversion
to electrification, the ELV Directive has set a target value
for the use of recycled materials, and social demands
are greatly accelerating. We will not only utilize recycledmaterials, but also consider the lifecycle of plastic/
rubber, and implement design proposals that facilitate
vehicle disassembly, aiming for complete recycling. In
addition, we will contribute to the global environment by
developing uses for bio-based materials.

In order to speed up the development of solid
technology for future business expansion, we are
strategically working on securing intellectual property
rights, strengthening our R&D system outside Japan,
and building stronger external partnerships.
1) Intellectual property strategy
To boost the competitiveness of our technologies, weare utilizing IP landscapes that lead to the creation of
new development themes in order to create patents
with the aim of acquiring intellectual property rightsfrom a long-term perspective. In order to win against
new competition, it is necessary to know where westand compared to other companies, build a strategy
to gain an advantageous position, and obtain patents
in line with that strategy.
Through these operations, we will combine market andpatent information to come up with a strategy that will
enable our company to win against the competition.
2) R&D system outside Japan
With the accelerating adoption of BEVs, it is necessary
to enhance local development in order to better
investigate market trends and respond quickly tocustomer demands. To expand sales to local OEMs,
we will also bolster our overseas R&D system byincreasing the number of local staff to enhance ourability to make decisions locally.
3) Building stronger external partnerships
In order to acquire customers and the technologies
needed to develop mobility and solutions, we will
systematically strengthen alliances, corporate venture
capital (CVC), and other external partnerships thatcross over industry boundaries to achieve
technological development. Also, we will accelerate
human resource training and business development byactively sending employees to companies where wehave CVC investments.

New Business/Solution Development

Mitsuhiro
Nawashiro

Director, Corporate Officer

CTOneed to conduct development not on a component
basis as in the past, but on a module and system basis.
To this end, we have started projects that cross overbusiness domains, enabling us to break down
conventional internal norms and barriers and quickly
realize ideas from planning to developing of
manufacturing methods.
We need a product planning strategy that anticipates
the world’s trends and changes in people’s values
toward CASE for the future, and that captures
technological trends from a global perspective.
We envision the value required for mobility that will
support people’s lives in the future, and we areworking to imagine and propose products that embody
the huge concepts of space and mobility to ourcustomers.
We always aim to create vehicles that are friendly tothe earth and people, and to incorporate safety andsecurity (zero fatalities for all traffic participants),
comfort (providing value based on how the vehicle isused), and decarbonization into our product planning.

In the 2030 Business Plan, we have set targets for“creating new businesses and products to serve as
new mainstays in the coming era” and are working on
development themes by identifying social issues andtargeting Energy, Healthcare, and Smart Homes as
fields with high affinity by combining our corecompetence and growth markets.
(1) In the Energy field, as a part of our efforts to expand
renewable energy sources, we are developing nextgeneration solar cells, hydrogen production
technology, and power devices for recharging
batteries, aiming for mass production by 2030.
(2) In the Healthcare field, we are developing materials
for the rapidly growing global market of the healthindustry and are working to develop smart insoles for the
early detection of diseases by measuring foot pressure.
(3) In the Smart Homes field, as the use of IoT sensors,
AI, and other technologies becomes more widespread,
we are developing products with wireless power sources
for seamless power supply for more comfortable living,and plan to bring them to market in the near future.
Regulatory
trendsIndoor and unattended
environment (2023)

40 W <

Power transmission capacity

In order to respond to the rapid shift to BEVs in theautomotive industry, we must accelerate productdevelopment from the perspective of changing
vehicles and user needs.
For vehicles, not only are the power units being
replaced, but automobile manufacturers are also
considering a fundamental review of their production
processes. As automotive parts manufacturers, weCarbon Neutrality/Circular Economy

32 W

Indoor and attended
environment (2025)

For automotive use
Smartphones

Miniature
wireless charging
holderIn-vehicle wireless power supply
Magnetic resonance,electromagnetic induction2022

For consumer use
Step 1
Power charging
products forresidential use
2025

Outdoor and mobile(2028)

Step 3In-vehicle power supply service
Infrastructure services
Step 2
Implementation in smart cities(Smart Homes and Buildings)

Microwave power supply system (2025 and beyond)2030

To Our Stakeholders
To achieve the targets in the 2030 Business Plan, we
will draw up a technology strategy that responds tochanges in the market so that we can become thecompany of choice. All employees will work together
to take on challenges, develop and grow ourtechnology, and strive to create value that willcontribute to future society.

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About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives Supporting the Growth Strategy

Research and Development

Mobility

Carbon Neutrality/Circular Economy

For mobility in 2030 and beyond, we will assess the future of CASE, which is constantly evolving, and implement
technological development as an initiative to anticipate social changes and solve future social issues in order toprovide new value through the entire vehicle, from value-added improvements of existing parts to modules/
systemization, and beyond.

As a polymer manufacturer of rubber and plastics, we aim for carbon neutrality and circular economy by combining
our various technological capabilities in material development, weight reduction, process innovation, 100% recycling,
and more, throughout the entire LCA* from the stage of raw materials and purchased parts to disposal in the
manufacturing process.
* Life Cycle Assessment

Toward resolution of social issues
Based on future projections of society, theenvironment, the economy, technology, and people’svalues in 2035, we see the key social issues ascontributing to a decarbonized society, responding todiversifying values, and mobility optimized for eachregion, and we are working on technology

Research on materials and devices to achieve carbon neutrality
In the recent trend toward carbon neutrality, a2020
wide range of technologies must be developed
to reduce CO2 emissions from a short- to
medium- and long-term perspective. In the
Recycled plastics
Short-term
short term, we are working on material
Recycled rubber
modification technology to restore the physicalproperties of materials to the same state as
Technology
new ones by utilizing our strengths in polymer
for more
Medium-term
technology, aiming to improve the recycling
lightweight
designsrate of used automotive plastics and rubber.
We are also engaged in material research to
Manufacturingmake it easier for customers to accept
methods byLong-term
recycled materials by reducing odors andnew energy
reproducing colors and designs more easily.

Cars that are friendly to the earth and users
In order to achieve carbon neutrality by 2050, OEMs haveannounced their goals for electrification, and we are also
working on the development of products responding toelectrification as a priority theme. In particular, we are
pursuing three development approaches todecarbonization, with an eye beyond the 2030 target. The
first is the use of perovskite and other photovoltaic
materials in automobiles, the second is aerodynamic
products that are not bound by conventional structures,development under the theme of creating value basedon the three concepts of cars that are friendly to theearth and users, free space created together with thecar, and freedom of movement for all.

and the third is a functional exterior panel system that does
not use energy from the vehicle side. By integrating newelements using outside
Solar power Aerodynamic
generation
producttechnology based on
our materials, surface
treatment, and design
technologies, thesedevelopments will
enable the creation of
new value.
Functional exterior
panel system

32

Free space created together with the car
With the advances in automated driving, the ways inwhich the vehicle interior space is used will continue
to diversify. In particular, after 2030, Generation Z and
Generation Alpha will also own cars, and the aging of
the population will lead to a wide range of users usingcars. In anticipation of the diversification of user
values, we aim to create safer and more comfortableinterior spaces that can switch between sharing andpersonalization according to the user.
For example, we believe that the combination ofretractable steering wheel technology and instrument
panel/console technology can create an
overwhelmingly expansive space, and by adding
elements that appeal to the five senses, such as light,
scent, and sound, we can create new spatial value.

Also, one factor for why the number of traffic accidents
among seniors has not been reduced is the lack ofmeans of transportation in rural areas where public
transportation is scarce. There is a growing need for
micromobility that allows people to get around evenafter they have surrendered their driver’s license, andwe are committed to developing safe, secure, andeasy-to-operate micromobility vehicles that willcontribute to the happiness in people’s lives.

Freedom of movement for all
As urban populations become increasingly
concentrated and rural populations age, the futuretransportation society is expected to develop
automated transportation networks connecting urban
and rural areas, as well as mobility systems that are
optimized for each region. For mobility that allows
people to easily move around in their daily lives, weare developing driving modules that are easy andenjoyable for anyone to operate. We are working on

the development of a steering wheel incorporating agas pedal and brake levers and with HMI functions sothat the steering wheel becomes an “agent.”

2030

2050

CO 2 emissions reduction throughprocessing innovations
Reduction of production losses
Surfaceprocess
innovations

Easy recycling
technology

Technology
development
based on biomass
and non-petroleum
raw materials

CCUS*1,CCS*2*1 Carbon dioxide recovery, effective utilization and storage *2 Carbon dioxide recovery and storage

Initiatives for recycled plastics
In our work, we give priority to polypropylene (PP)materials, which are the most widely used polymer
material (excluding tires) in the entire vehicle. In using
recycled materials in automotive parts, which havehigh quality standards, we use bio-based materials(cellulose nanofiber: CNF, which is five times stronger
than steel), to increase the strength of the recycledmaterials, thereby enabling repeated recycling. In ourlatest initiative, Toyoda Gosei’s plastic recycling
technology has been adopted for use in the Lexus
ROV*, Lexus’ environmentally friendly off-road vehicle.

Cabin space that appeals
to the five senses throughcommunication between
people and the car (HMI,
vitals sensing, etc.)*Abbreviation for Recreational Off highway Vehicle. A concept vehicle
that aims to realize a lifestyle of enjoying driving while living inharmony with nature by stepping into places where even off-roadvehicles cannot go and coming into contact with nature while enjoying
excellent responsiveness and sounds that stimulate the five senses.
Incorporated technology: Plastic recycling technology (diagram of recycling automotive parts) * This example uses the manufacture of hoods and bumpers.
Conventional process Incineration (only heat is used in thermal recycling)
Strength of recycled material
improved by utilizing CNF

End-of-life vehicle
Parts recovery

ReclaimNew vehicle
Molding

Recycled material
from end-of-life vehicles

CNF

Enables repeated recycling (CNF does not lose its strength easily when heated and melted for reuse)
Driving module

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About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives Supporting the Growth Strategy

Research and Development

Input chemicals to selectively
desulfurize only sulfur cross-links

Pulverized
vulcanizedrubberDesulfurization
reagent
Water injection(deodorization)

Deodorization

Water

Pulverization Desulfurization

Water*1 A new technology that can selectively desulfurize only thesulfur cross-links by using chemicals in the desulfurization
process of vulcanized rubber after pulverization.
*2 R ecycled materials using technology to return rubber to raw
material by breaking molecular bonds in the recycling
process in order to make rubber elastic.

GaN crystal substrate materials
Many of the electronic devices that we use everyday
have switching devices to convert DC/AC power, andthere is a need to reduce CO2 emissions by improving
switching efficiency. Based on the GaN crystal growthtechnology that we have developed in the LED sector,
we are researching large GaN crystal substratematerials and GaN on GaN power devices, which are
next-generation semiconductors. We have beencollaborating with Osaka University for more than 10
years on substrate material research, and the joint
research on our proprietary crystal growth technology

Recycling process using Toyoda Gosei’s chemical
desulfurization technology

Water

Initiatives for recycled rubber
We have been mass-producing desulfurized
recycled materials*1 for weatherstrips for morethan 20 years. To further expand the scope ofour recycling, we are working on thedevelopment of new chemical desulfurization
technology*2 for improving the quality ofdesulfurized recycled materials. This initiative
aims to selectively cut 100% of sulfur crosslinks by combining the conventional
desulfurization technology with a newly
developed reagent to dramatically improve thequality of the recycled material. This will greatly
expand the scope of recycling, not only forin-house use but also as a viable businessthrough sales of recycled materials to othercompanies, thereby contributing to industrywide efforts to reduce environmental burdens.

Exhaustfume
treatment
Coolingtank

Heating
RecycledrubberAiming to expand and develop businesses
in the recycling sector

New Business/Solution Development
We are strengthening our R&D operations to create innovative technologies, products, and services that will lead tosolutions to future social issues.
Based on our core technologies cultivated in automobiles and LEDs, we will accelerate innovation through cocreation activities with promising start-ups and industry-academia partnerships to provide new customer value andcreate new businesses.
Efforts to create new businesses
One of the priority issues in the 2030 Business Plan is“creating new businesses and products to serve as
new mainstays in the coming era,” and we have drawn
up a medium- to long-term growth strategy based onproviding solutions to social issues. We are building aportfolio of medium- to long-term R&D themes basedon a backcasting approach, breaking down social
issues into factors in three priority areas that we have
newly identified as targets and envisioning a futuresociety in which these issues have been resolved.
In order to create new value for our customers, weneed to take on a wide range of challenges that
Priority Areatranscend the conventional framework of research anddevelopment, from upstream materials in the supply
chain to midstream devices and downstream dataservices. We will work to create new value by providing
solutions that combine these elements.
In order to deliver this value to the market as quickly
as possible, in addition to advancing our own coretechnologies, we are actively pursuing alliances withindustry leaders, industry-academia partnerships, andpromising start-ups as efforts to compensate forshortcomings and accelerate development throughco-creation with other companies.

EnergySmart Homes

Healthcare

Expansion of renewable energy

Achieving of seamless electric
power society

Improvement of quality of life in
the era of 100-year life expectancy

Next-generation solar cells
Green hydrogen

Wireless power supply
GaN crystal substrate materials

Health condition sensing
Non-invasive POCT technology*

New delivered
value to customer

Research area
(example)* POCT: Point of Care Testing. Technology for immediate examination at clinical sites with minimal injury to the patient’s body (including assisted examination technology).

34

R&D for achieving a hydrogen society
At Toyoda Gosei, we have been accelerating ourresearch and development for achieving a hydrogensociety, starting with the market launch of highpressure hydrogen tanks for FCEVs in 2020. In the
future hydrogen society, needs for hydrogen supply
will emerge not only in mobility-related fields but also
in various other fields, such as construction sites andhome use, and we will contribute to achieving ahydrogen society by expanding the scope of ourtechnological development from simply storing andusing hydrogen in the hydrogen value chain to eventransporting and producing hydrogen.
In the area of transporting technology, we areresearching and developing organic/inorganic
materials that selectively adsorb hydrogen to increase
the storage efficiency per volume of hydrogen tanks,
leading to the development of tanks that are morecompact and portable than conventional ones. This
R&D is being conducted as part of a NEDO-subsidized
project, and aims for early social implementation

Challenges of digital healthcare services
Japan, a society with the world’s longest healthy life
expectancy, is entering the era of 100-year life
expectancy, and there is a need to develop digital
healthcare technologies for pre-disease, prevention,and prognosis in order to extend people’s healthy lifespans. In particular, early detection of frailty and mild
dementia, which are signs that an elderly person may
require nursing care, is of great significance inextending healthy life expectancy, and there isacademic data showing that this is accurately
indicated through the gait of elderly people. Our
eRubber insoles have a built-in pressure sensor thatcan measure the center of gravity sway data of elderly
people when they walk, and in this way, we are taking
on the challenge of detecting pre-disease states byprocessing this data through AI.

(MPS + FFC method) has produced world-leading
results on large-diameter, low-crystal-defect GaN
substrates. Through collaboration with industryleading companies and industry-academia partners in
the national project, we will
study the entire processfrom materials to devices
and application
demonstrations, aiming forearly implementation insociety.
6-inch GaN crystal substrate

through integrated development from materials
research to hydrogen tank implementation incollaboration with participating companies.
In the area of producing technology, research is being
conducted on photocatalytic materials that generate
green hydrogen by utilizing the natural energy ofsunlight, and on wavelength conversion materials forthe efficient use of sunlight. For the wavelength
conversion research, we are conducting joint researchwith universities using LED wavelength conversion
material technology as our core technology, and arechallenging basic research on the synthesis of new
fluorescent dyes.

Adsorbent
Left: Cross-sectional image of a hydrogen tank with hydrogen storage material inside
Right: Prototype of wavelength conversion material (SEM photograph)

In this research, we are participating in the Moonshot
R&D project of the Cabinet Office, and are implementing
efforts to improve the accuracy of data collection andanalysis through medical-engineering collaboration withthe university medical school, which is a partner in the
project. We are also conducting demonstration tests
with the general public in tie-ups with large-scalecommercial facilities and local governments toaccelerate development for social implementation.

Left: e -Rubber insole and measurement
application
Right: Demonstration test at acommercial facility

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About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives Supporting the Growth Strategy

Research and Development

Initiatives Supporting Activities
1. Intellectual Property Strategy
Toyoda Gosei’s intellectual property efforts andenhancing of strategic initiatives through IP
landscape (IPL)
Based on the premise of compliance with laws andcontracts, Toyoda Gosei has traditionally conducted
its intellectual property efforts based on the following
guidelines: (1) Acquisition, effective use, andmanagement of intellectual property rights based on along-term perspective; (2) Prevention of infringementof intellectual property rights by other companies andrespect for the intellectual property rights of othercompanies; and (3) Continuous improvement ofintellectual property skills of our engineers andstimulation of innovation.
In addition to these efforts, we contribute to
management and business through IPL initiatives, andfor this purpose, we established the IPL Project within
the Development Division. By discussing andimplementing strategic IP initiatives, we arestrengthening our intellectual capital, which is thesource of sustainable business growth.

Achievements in our past intellectual property
initiatives and number of patents held
In FY2022, we registered 255 new patents in Japanand 143 new patents outside Japan, bringing the total
number of our patents held to 2,567 in Japan and2,268 outside Japan at the end of the fiscal year. The
number of patents held is comprised of 60% in
automotive fields and 40% in non-automotive fields.
As a necessary input to realize the 2030 Business
Plan, we will properly manage these patents held andeffectively utilize them in a wide range of fields.
Number of patents held as of the end of FY2022
Japan

2,567

Outside Japan

2,268

36

Backcast IPL

Forecast IPLCreate new
topics and uses

Create a patent network
capable of winningagainst other companies

point observation
1 Fixedof trends

define who
1 Clearly
competitors arefor new
2 Searchdevelopment themes

2 stronger than otherfor new uses for
3 Search
existing technology

3 Avoid patent infringement

Find topics/uses insteadof submitting patents

Create a patent network
for topics that havebeen issued

Obtain patents that arecompanies’ patents

Mass production design andproduction preparations

Mass production

Conventional IP efforts(1) Obtaining patents
Protect inventions created fromdevelopment as patents(2) Response to other companies’ patents
Examine other companies’ patents and avoid
patent infringement(3) Disputes and lawsuits
Negotiate in response to lawsuits(warnings) from other companies

Co-creation with venture companies to create new value and develop human resources

In addition, we classify IPL initiatives into a forecast
IPL, which creates a patent network that can win
against competitors, and a backcast IPL, which
creates new topics and uses.

IPL initiatives for achieving the 2030 Business PlanAmong the delivered values cited in the 2030 Business
Plan, forecast IPL initiatives are directed toward safety
and comfort based on existing businesses, whilebackcast IPL initiatives are directed toward
decarbonization with the goal of creating new
businesses.
In the forecast IPL, as one example, we conduct athorough investigation of the current status of ourcompany and other companies within the scope of ourbusiness, determine the target areas for patentapplications to improve our business, and thenconduct a multifaceted and intensive application
process through invention discovery meetings andbrainstorming sessions.
The backcast IPL, on the other hand, combines
general information from specialized industry

Development

2. Building Stronger External Partnerships

Strategic IPL initiatives
In our IPL initiatives, we first select key technologies inline with our technology strategy, then set IP
investment KPIs (number of applications/patents held,etc.) and submit applications for differentiation
technologies and contribute to the launching of new
businesses.

Search and planningmagazines, motor show exhibits, and information on
the Web with intellectual property information, such as
patent information, to analyze patent information to
anticipate customer problems and make development
proposals, explore potential applications for our
technologies and propose ideas for new uses, andsearch for and select alliance partners that possess
important technologies, and in this way, we contributeto new business development through a variety ofactivities.
We will continue our efforts to acquire and effectively
utilize necessary intellectual property rights andintellectual property information in order to increase
corporate value in a sustainable way.

Collaboration with innovative start-ups is
indispensable for creating new businesses based on
solutions to social issues. We launched our corporate
venture capital in 2019 with the aim of maximizing
strategic and financial returns, and have invested inand co-developed 18 companies to date.
For example, we are collaborating with Ossia, acompany with microwave-based long-distancewireless power transmission technology, with the aimof achieving a seamless power supply society freefrom electrical outlets in living spaces. This technology
uses radio waves to wirelessly charge various
electronic devices from a distance of several meters,
and we are developing high-frequency antennas,
rectifying elements, and control software for thistechnology.
In 2024, a prototype of a power transmitter designed
by Ossia and a prototype of a power receiver designedby Toyoda Gosei will be built, and a PoC (Proof ofConcept) demonstration of wireless powertransmission is planned in about 10 industries in the
North American market.
Furthermore, as one measure to develop innovative
human resources, we have established a system forsending staff to venture companies, and are working
to foster a culture that encourages the challenge ofcreating new businesses.

Left: Power transmitter jointly developed with Ossia
Middle: P rototype IoT surveillance camera with abuilt-in power receiver
Right: AA battery wireless power receiver

Message from Co-Creation Partner/Ossia Inc.
“Ossia’s mission is to create a world where the full potential of Cota Real
Wireless Power is ubiquitous,” said Doug Stovall, CEO of Ossia. “We arehonored to work with the industry leader, Toyoda Gosei, to deliver smart
wireless power and connectivity to devices across the world. Cota® is the
future.”Doug Stovall, CEO

Jennifer Grenz, CRO

T OYODA GOSEI REP OR T 20 23

37

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives Supporting the Growth Strategy

Manufacturing Innovations
Priority reduction through visualization of CO2
emissions: Clean × SmartTG Advanced Factory Concept
Even in the manufacturing field, where certainty isrequired, dreams are necessary for evolution. In orderto evolve together as one in these turbulent times, wehave established the TG Advanced Factory Concept,
which is also in line with our management philosophy.
We have drawn up a backcast vision (= dream) in linewith three concepts centered on “Smart.” Furthermore,by setting KPIs that serve as a common metric andclarifying our own capabilities and gaps, we will
formulate and steadily implement more concrete
strategies while keeping our eyes on the distant
dream. We will contribute to the realization of the 2030
Business Plan by continuing to evolve globally in asingle, straight-line direction that includes new plants
such as the new plant in South China and the Seto
plant expansion, as well as existing plants.

We provide a “CO2 field” utilizing our cost visualization
expertise. We visualize all CO2 emitted from factories
to strategically achieve carbon neutrality in factories.

TG Advanced Factory Concept
Concept

LivelyWhat we want to be
What we aspire to be
Free people from heavy-duty
and mentally and physicallyexhausting work

People andmachines
Engagement
grow together
Carbonneutrality

Energyminimization

Clean

CO2 emissions

Integrity

Bringing the near
future within reach

Disasters,
Elimination ofcomplaints
human error Legal compliance

Smart

Sequential
production,
sequential delivery

Ultimate one-pieceflow manufacturing
process

Production
lead time

Strategies and Implementation in Line with Each Concept
Commitment to shortening production lead time:
Smart

Production lead time to be
shortened
CO2 emissions to be reduced

AI posturedetection

Data collection

Analysis

Digitization ofprocess
Feedback

Predictive maintenanceand prevention

Shipping

38

Assembly

By digitizing the entire intuitive process of human
work, it is possible to examine the entire process inadvance digitally. This makes it possible to eliminate
the mistakes caused by human error in advance.

Shipping

Molding

Major examples

Intermediate
inventory
Decorative
elements

Molding

Material

Integrated into
molding process

Prevention through digital integration:
Integrity × Smart
Real manufacturing sites can be verified digitally. Bybringing the near future within reach, human error iseliminated from the factory.

Intermediate
inventory

Material

Process integration can reduce intermediate inventory,
which is a bottleneck. Based on the concept of
integration into the molding process, which is our coretechnology, we have begun development of production
technology for applying decorative elements andassembly at the same time or in the same cycle as themolding process.

What wewant to be

Major examples

Air
Water
Electricity

Extrusion

Can vulcanization
Conventional
methodPart of the air remains during
the discharge process,preventing a rise in temperature

Rooting
Current (Cross-sectional
method view)

Air
Requires 4 times
as much steam
as can’s capacity
to discharge air

Efficient discharge of
air by the developed
technology

Discharge port
50%
reduction

Evenly filled

Steam

Large cans to heat rubber

CO2 reduction: −110 tons

Guiding people to value-added work: Lively × Smart
We will install low-investment automated equipment
on a global scale to free people from heavy-duty andmentally and physically exhausting work that remains
in factories. We will shift the stage for human activity
to higher value-added areas, such as accident
prevention, maintenance of advanced equipment, andnew development. We will create factories where
everyone can work with machines with vigor andenthusiasm to achieve self-fulfillment.

Major examples
We are expanding our automation guidelines globallyto ensure effective governance of process creation,and strategically expanding the use of AGVs*1 andcollaborative robots. Based on the concept of CoE*2,
Toyoda Gosei (Thailand) Co., Ltd. plays a central role
as a global center of automation implementation.
*1 Automatic Guided Vehicle*2 Center of Excellence

Production lead time

Current

Even though products may change, we will not change
our mission to deliver good products to our customers
when they are needed and in the quantity they need.
We have designated production lead time as our main
KPI, and we will pursue the ultimate one-piece flow
manufacturing process to thoroughly eliminate waste
and double productivity.

We have begun process innovation, focusing on
processes that handle heat. Based on the results
shown in the CO2 field, we are taking on the challengeof reducing energy consumption in can vulcanization,
which has remained unchanged over the past
decades. Using simulation technology from Toyota
Central R&D Labs., Inc., we have succeeded in halving
the amount of steam required for replacement.

Steam/gas

CO2 field

Major examples

KPI

End goal

Example of energy reduction
Vantagein can vulcanization
point
process

Automation Example from Thailand Plant Message from President Tani of Toyoda Gosei (Thailand) Co., Ltd.
The Thai region has developed manual labor-intensive processes that take advantage of cheap labor costs,
but as labor costs continue to rise year after year, the need for automation has been increasing.
In such a changing environment, we are implementing low-cost and energy-saving smart automation thatutilizes our special karakuri technology.
We design and manufacture everything in-house except for robots, thereby accumulating in-house
expertise in low-cost automation, and we are also extracting product designs for automation and providing
feedback (applied to product drawings). This automation initiative is linked to improvements in initiatives
from the work source and how work is done.
These initiatives are being expanded globally with video, and we are receiving inquiries not only from Japanbut also from North America, India, Europe, and other countries, for viewing the initiatives on site and inperson. In March 2023, a mini-summit on robot automation in the ASEAN region was held, where not only
the top management from companies but also production engineers (actual practitioners) were able to see
the results, and operations have been started to have themhorizontally deployed.
In order to deploy the developed automation technology, wemust standardize the technology (convert to drawings anddata) and train human resources to complete the task, bothof which will be implemented in parallel.
We are planning to issue and deploy these initiatives fromThailand to the rest of the world to create a Toyoda Gosei
company that is even stronger in manufacturing.
President Tani instructing local staff

T OYODA GOSEI REP OR T 20 23

39About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Strengthening the Management Base to Support the Growth Strategy

Revitalization of People and Organizations
Corporate Culture and Human Resources to Support Achieving of the 2030 Business Plan
In order to achieve the targets in the 2030 Business
Plan, we believe it is important to embrace change
without fear of failure, and to seize and create
opportunities by taking on challenges, and we willdevelop measures for enhancing both corporate
culture and human resources.
In terms of the corporate culture, we aim to create adynamic “polymer-like organization.” Each and every
molecule with various personalities and values
stimulates each other, enhances creativity by creatingchemical reactions, and brings together power throughstrong bonds among molecules. The same stimulation
and reaction occurs among teams, groups, divisions,and affiliated companies, as well as with otherorganizations such as partner companies, suppliers,
business partners, and customers, resulting in a highlevel of creativity and productivity. We are able to freelychange our form and create new value in response tochanges in the environment. This is what we think of
as a polymer-like organization. In order to create thecorporate culture that is a foundation for this, we will
support the attainment of employee wellbeing throughSelf-realization by creating a safe and secure place towork, creating a stage where they can play an activerole, and shining a light on each and every one ofthem.
In the area of human resources, on the other hand, TG
aims to develop human resources who can ask
themselves questions about the social value andsignificance of TG’s existence and strategicallydevelop their businesses. To this end, we are working
to acquire diverse human resources and review ourbusiness portfolio.

method for increasing corporate value, our humanresource strategy to date has been based on therecognition of issues from the perspective of humanresource functionality, and so we have revised our humanresource strategy (see figure below). In FY2023, we willfurther strengthen the linkage with the management
strategy, and based on the newly formulated strategy, weare developing new measures and implementing new
initiatives in addition to the previous ones.

Become a company that pursues the possibilities of polymers
to contribute to a future of better mobility and living.

What We
Aspire to Be

To embrace change without fear of failure, and to seize
and create opportunities by taking on challenges

Mainstays of measures to achieve the human resource strategy
Enhancing Organizational Power(Transforming into a dynamic polymer-like organization)
D raw out the individuality, energy, and strengths ofeach individual and mobilize creativity and power
through organic bonding
Strengthen internal and external organizational tiesF lexibly change the shape of the organization to
respond to change in the environmentCatalyze management to speed up work andmaximize results

Self-fulfillment foreach employee
Embrace change
without fear of failure

Human resources

Corporate culture

Enhanced employee
engagement

1

2

3

Polymer-like organization where
people and organizations are connectedwith energy and enthusiasm

Train diverse human resources
capable of leading and enabling change

Acquiring the human resources
needed for growth areas

 Well-being initiatives based on the Cultivate management personnel

Establish comfortable spaces
and stages upon which to shine

Reformmanagement styleCreating a safe and secure place
to workCreating a stage where people
can play an active role

Shining a light on each and every
personDiverse human resources can recognize
each other and speak up and take onchallenges in a safe and comfortableenvironment. Vitality and trust exist in theworkplace, and people are motivated to dotheir best work with other members.

Employees can feel that they arecontributing and feel that they are
truly making a difference in their roles.
They understand the significance of
their work and feel job satisfaction.

Employees are recognized,
encouraged, and praised.
Regardless of the size of their role,
their supervisors look out for themand treat them with the respect.

keywords “place,” “stage,” and“light” Discuss and implement corporate
culture issues and reform proposals
for achieving the targets of the2030 Business Plan at allorganizations and levels bythemselves

 Clarify human resources required

who can lead challenging growthstrategies
 Train young employees with asense of growth and who want tomake a difference, and implement
the initiatives of senior employees Train local executive personnel to makeoverseas bases more autonomous

for growth strategies in terms ofboth number and capabilities(business building capabilities,
highly specialized capabilities, etc.),
and specify measures to acquirethem

Respect for human rights and diversity & inclusion (D&I)

Toyoda Gosei’s goals for employee wellbeing
Key KPIs

Our Human Resources Strategy Linked to Our Vision and Business Plan

Employee engagement
affirmation rate

75% (FY2030)

We regard the use of diverse human resources andrespect for human rights as one of our materiality (keyissues), and have been focusing on the three pillars of ourhuman resource strategy: promotion of human resource
development, active participation of diverse humanresources, and creation of a comfortable work
environment, and have been working to provide
educational opportunities to acquire problem solving
methods and the PDCA cycle, which are fundamental to

how work is conducted, as well as specialized knowledge
in areas such as technology and materials, to create anenvironment where women, people with disabilities, andpeople with diverse values can demonstrate their abilities,
and to improve engagement, where job satisfaction and asense of growth overlap with our efforts to achieve ourcorporate vision.
However, when examined in light of human capitalmanagement, which today is expected to be a significant

50 (FY2030)

70%
56%

Ratio of local executives

Number of female managers

60% (FY2030)

100 (FY2030)

50

59%

40%
31%

45

32%
30

33

16
3
FY2021 FY2022 FY2025(Target)40

Number of expatriate
employees for training

FY2021 FY2022 FY2025(Target)FY2021 FY2022 FY2025(Target)FY2021 FY2022 FY2025(Target)T OYODA GOSEI REP OR T 20 23

41

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Strengthening the Management Base to Support the Growth Strategy

Financial Policy

Revitalization of People and Organizations

Achieving Sustainable Growth through Highly Strategic Execution of Operations
The auto industry is undergoing a major transformation
with the conversion to electrification and automateddriving. Moreover, the future is unclear and difficult topredict due to changes in people’s values, worsening
environmental and social issues, geopolitical risks, andother factors, making it extremely difficult for
management to steer the ship.

We will turn uncertain situations into opportunities for
growth through speedy and highly strategic executionof operations, such as by accepting uncertain eventswith a high level of sensitivity, changing management
approaches in line with the times, and adopting new
initiatives.

Adoption of CxO (Chief Officer) system
We adopted the CxO (Chief Officer) system uponenactment of the new executive structure in June
2023. By transferring some of the president’s authority
and responsibilities to the CxOs, we will manage key

functions globally, going beyond the framework ofbusiness and regional operation bases, to realize
highly strategic execution of operations and speed up
management.

CxO

In a rapidly changing businessenvironment, we are committed to
improving our corporate value byreviewing our business portfolio andimproving capital efficiency.

Role

CEO (Chief Executive Officer)

Determines medium- to long-term policies for sustainable growth of thecompany (Maximize corporate value)

CFO (Chief Financial Officer)

Formulates strategies and allocates resources to realize medium- to long-term
policies

CRO (Chief Risk Officer)

Evaluates, takes countermeasures against, and controls various risks facing
the company

CSMO* (Chief Strategic Marketing Officer)

Conducts market, competitive, and customer research and analysis, anddevelops and oversees global sales strategies

CTO (Chief Technology Officer)

Directs product and manufacturing method development to achieve mediumto long-term policies

CMO (Chief Manufacturing Officer)

Directs strategies and measures to improve SQDC of manufacturing toenhance competitive advantages* Introduced in November 2023

Revitalization of people and organizations through the CoE (Center of Excellence) concept
In order to achieve sustainable growth even in an
uncertain business environment, it is essential to
speedily and reliably implement functional and businessstrategies, and it is important to strengthen cooperation
among production bases and organizations.
We will adopt the new CoE concept and implement a
management style in which each of the 16 countries/
regions and 62 locations globally are united, and eachregion and location will be more actively involved in
the decision-making processes for conducting
business than ever before.

Furthermore, we will deploy globally from Japan, theAmericas, China, ASEAN, India, and Europe thetechnologies and methods that are our strengths andhave been cultivated and developed in each region,and create synergies throughout our Group
companies, thereby drawing out the motivation andpower of each region and organization. We aim tofurther strengthen our global network, which is one of
our competitive advantages, and to realize
management based on regional autonomy that is
tailored to the characteristics of each region.

 Sharing the regional strengths we have cultivated on a global scale
We will strive to revitalize people and organizations by adopting the best of each region and implementing a cycle of
Change and Challenge.
Examples of CoE (Global expansion from overseas regions)• Low-cost, energy-saving production automation technology• National human resource development and recruitment methods

42

Message from the CFO

Progress of the 2025 Business Plan
Under the 2025 Business Plan prepared in May 2018,
we have been working to achieve our managementtargets of 1 trillion yen in sales revenue, 8% in
operating profit ratio, and 10% in ROE.
Although automobile production volume was lower
than expected, we are still expecting to reach oursales revenue target because of expanding sales to
new customers. However, it will take some time toachieve our operating profit ratio and ROE targets due
to significant changes in the business environment
surrounding our company, including the COVID-19
pandemic, semiconductor supply shortages, andsoaring raw material prices.
On the financial side, we have set forth our financial
policy in line with the 2025 Business Plan from thethree perspectives of shareholder returns, capital
investment, and cash on hand. For shareholder
returns, we have maintained a consolidated dividend
payout ratio of 30% or more, but the dividend pershare has remained the same and has not met the
expectations of our shareholders. Capital investment
continued at an annual pace of approximately 50
billion yen, and we secured 30 billion yen in cash on
hand as risk-response funds in our consolidated
monthly sales, which contributed to sales expansion,
but left us with challenges in improving profitability andefficiency.
In preparing the 2030 Business Plan, we haveformulated a new financial policy that balances growth,soundness, and efficiency while enhancing corporate
value. In particular, we will focus on B/S management
to improve efficiency based on our recognition ofcurrent issues.

Hiroshi Yasuda
Vice President

CFO

New Financial Policies to Support the2030 Business Plan
2030 Business Plan
The 2030 Business Plan sets forth our vision of
becoming a company that pursues the possibilities ofpolymers to contribute to a future of better mobility andliving by setting our basic policy to focus on areas thatcombine social value and economic value. As priority
measures, we will (1) implement structural reforms toachieve growth in priority businesses, regions, andcustomers, (2) forge strategic alliances to accelerate
growth globally and strategically reinforce development
and intellectual properties (IP), and (3) revamp
management through a polymer-like organization inwhich people and organizations are organically bonded.
We have set management targets of sales revenue of
1,200 billion yen, operating profit of 100 billion yen,operating profit ratio of 8%, and ROE of 10%.

T OYODA GOSEI REP OR T 20 23

43About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Strengthening the Management Base to Support the Growth Strategy

Financial Policy

2030 Business Plan: Toward Greater Growth

Soundness

The new financial policy is based on the idea of aiming
to boost growth and increase corporate value througha balance of growth potential, soundness, andefficiency, and strengthening balance sheet
management to achieve an ROE of 10%.

In order not to miss out on growth opportunities, wewill ensure that we have the sufficient funds and thefund-raising capacity to respond flexibly to any
investment opportunities. While there has been nochange in our emphasis on soundness in terms ofcash on hand, the global cash situation has beeninefficient, with both cash and debt being used. With
the adoption of Group financing, the head office hastaken the initiative in streamlining and equalizing
funds, and after reviewing the situation, cash on hand
was set at one month’s worth of consolidated sales
volume.

Growth potential
Investment resources, including R&D, will be allocatedwith priority to areas where high growth andprofitability can be expected. On the business side,these are safety systems and interior and exterior
components, and on the regional side, these are theAmericas and India.
For example, in India, which is growing rapidly, we
expect further growth, especially in the field of safetysystems. A new regulation will soon require the use of
six airbags, which will make it mandatory to install side
airbags and curtain airbags in addition to the existing
driver and front passenger airbags. We expect demand
to double in terms of both quantity and quality, and wewill expand our R&D and production systems as well
as strengthen our marketing efforts by taking regional
characteristics into account.

Growth potential

Growthpotential(Profit growth)

Priority investment inhigh-growth, high-profit
areas (R&D/capital
investment)

Operating profit¥100.0 bn
Efficiency

Soundness
Maintain sufficient funds
and fund-raising capacity
to respond flexibly to any
investment opportunities

Enhancementof corporate valueSoundness

Balance of growthpotential, soundness,and efficiency

Consolidated
monthly sales(Asset efficiency andcapital efficiency)
Efficient business
operations with anawareness of the costof capital

Efficiency
ROE
10%

TG-ROIC*
20%

Efficiency
The most significant point for improvement on thefinancial aspect of the 2025 Business Plan was, in thedisproportionate emphasis placed on the P/L, a lack of
B/S-conscious management and not enoughconsideration of asset and capital efficiency.
Based on our recognition of these issues, one of ourpolicies is to promote efficient business operations
with a renewed awareness of the cost of capital.
First, we have named it TG-ROIC, and we will pursue
returns commensurate with our resources, such as
non-current assets and inventories in each businessand region, while promoting efficiency. We will set atarget of 20% for TG-ROIC on a consolidated basis toachieve 10% in ROE by 2030, and set targets for eachbusiness and region to improve our business portfolio.
For shareholder returns, we will meet investors’
expectations by increasing dividends stably andcontinuously, flexibly repurchasing shares, and being
more conscious than ever about improving capitalefficiency.
In addition, we will strive to reduce the cost ofshareholders’ equity by proactively disclosing
information, including non-financial information, anddiversifying our shareholder composition, especially byincreasing the number of individual shareholders.

Cash Allocation

To Our Stakeholders

Assuming that we will achieve the 2030 managementtargets, we estimate that the operating cash flow to begenerated from now until 2030 will be approximately
650 billion yen. At the same time, we will streamline
our operations by reducing cross-shareholdings andother measures.
First, we will invest 350 billion yen in capital
investments, mainly in our priority businesses andregions. We will make capital investments in abalanced manner using TG-ROIC as a metric. For
shareholder returns, as I explained earlier, we willsecure 100 billion yen as a source of funds for stable
and continuous dividend increases.
With the remaining 250 billion yen in cash, we intend
to make additional investments in highly profitableprojects, as well as in discontinuous growth areas
such as M&A and alliances, depending on the businessenvironment and growth opportunities.
In the absence of such investments, we will strategicallyallocate the cash to be used for additional shareholder
returns from the perspective of improving capitalefficiency.

FY2030management targets

Revenue¥1,200.0 bn

Operating profit

Operating profit¥100.0 bn

Operating profit ratio
8%

ROE
10%

Cash allocation (Total from FY2023 to FY2030)

Operating cash flow
¥650.0 bn
Assumes achievementof an operating profit
ratio of 8% by FY2030

Capital investment¥350.0 bn

Priority businesses and regions(within scope of depreciation)

Reshuffle our business portfolio by strategically allocating resources to newforms of mobility, decarbonization, non-Toyota sales, etc.

(Carbon neutrality
investment)(safety systems and interior and exterior businesses; North America, India, and China)

Strategic investment(including M&A
and alliances)¥250.0 bn

Additional returns
to shareholders

R&D expenses,
HR investment
Improve the balance sheet* TG-ROIC =Until now, we have grown by responding to thedemands and expectations of our customers, theautomobile manufacturers. However, we have enteredan era in which we cannot survive on this basis alone,
and we strongly recognize that we must formulate ourown issues and clarify our goals before proceedingwith our business. We will strive to combine economic
value in areas that contribute to the social values ofsafety, comfort, and decarbonization.
We will disclose more information than ever before toyou on how we conduct our business and contributeto society, and I hope that you will look forward to the
future of the Toyoda Gosei Group.

¥50.0 bn

Enhance efficiency in utilization of non-current
assets and inventories
Reduce cross-shareholdings, etc.

Strategic allocation
Strategically allocate cash in response to ouroperating environment and growth opportunities

Dividends¥100.0 bn

Maintain a dividend
payout ratio of 30%
or higher

Non-current assets + Inventories
A simplified, easier-to-use version of the typical formula

44

T OYODA GOSEI REP OR T 20 23

45

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Business Overview
Since Toyoda Gosei’s establishment in 1949, we have been providing products and services with highfunctionality and quality based on our synthetic rubber, synthetic plastics and their formulation technologies incooperation with various stakeholders involved in development, design, procurement, production and sales.

FY2022 Results
Revenue

Operating profit¥951.8 bn¥35.0 bn

Profit attributable to owners of parent

FCF¥16.0 bn¥22.0 bn

Revenue by business area

Revenue by region

Weatherstrip
products¥107.3 bn(11.3%)

Europe and Africa¥27.3 bn

Functional
components¥154.8 bn(16.3%)¥951.8 bn(FY2022)

Interior andexterior
components¥353.6 bn(37.1%)

Safety systemproducts¥335.9 bn(35.3%)

Asia¥241.1 bn¥951.8 bn(FY2022)

Safety System
Products
Airbags

Steering wheels (with built-in airbags)

Instrument panels and components

Radiator grilles

Pop-up hood actuators

Interiors and Exteriors

Japan¥357.4 bn

Console boxes

Functional
Components
Plastic fuel filler pipes

Plastic turbo ducts

Brake hoses

High-pressure hydrogen tanks

The Americas¥325.8 bn
1

3

4
2

Number of locations by region

Number of employees by region

Europe and Africa
4 companies

Europe and Africa
1,231

Number of Group
companies
Asia
23
companies

Opening trim weatherstrips

Door glass runsJapan
17 companies

Japan
9,437
Asia
14,11662

Weatherstrip
Products

38,942(FY2022)* Consolidated companies

Other Areas
The Americas
18 companies

46

The Americas
14,158LED products

Air purifiers(general industry products)

e-Rubber products

Re-S eco-brand

T OYODA GOSEI REP OR T 20 23

47

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives and Progress toward the 2030 Business Plan

SS (Safety Systems)
Business Area
With our strength in product developmentusing world-class CAE technology*1, we
provide high-quality, low-cost airbags to all
regions to solve social issues and achievebusiness growth.
*1 Computer-aided engineering (CAE) analysis technology
in the mechanical design process

Issues
Product development in response to changing accident patterns
Developing a system to respond to the globally expanding market
Product development in response to the transformation of theautomobiles

Strengths
Product development using world-class CAE technology
Development and production bases covering an expanding
geographical area
Ability to propose system solutions that include airbags andperipheral components

Priority Initiatives for FY2022
In 2022, we were able to receive orders nearly at the forecast level by identifying target vehicle models, including key
models for major Japanese automobile manufacturers and BEVs for North American and Chinese automobile
manufacturers. In those orders, our new high-performance products, such as far-side airbags, received wide recognitionand has become an advantage in order-taking activities.
Enhanced Global Production System through Collaboration with Partner Companies
We purchase inflators and bag base fabrics, which are elemental parts of airbags, from specialized manufacturers who
are our partners. We share our growth strategies, including order receiving strategies, with our specialized manufacturers
and work together to strengthen our competitiveness and supply capabilities by improving development efficiency
through personnel and technology exchange, and by implementing shared local procurement and production in targeted
regions.
Sales Expansion through High Value-Added Products
Illumination that communicates status to theWith changes in vehicle body structure and cabin
driver in conjunction with ADAS andautomated driving
interior design due to the shift to BEVs, as well as
HOD*2 and HMI*3 for automated driving, there is a
growing need for steering wheels with different
designs and additional functions. We have also
developed steering wheels with irregular shapes
and high value-added steering wheels that
Ergonomic spoke angles
Designs that create an EV-like feelincorporate touch sensors and LEDs, and many
Built-in grip detection and heater function
automobile manufacturers have shown an interest
Figure 1. High value-added steering wheel concept
in these products.

IE (Interiors and Exteriors)
Business Area
We will conduct development of products andmanufacturing technologies that respond to changes
in automobiles (BEVs and subscription-based
services) and the diversification of user needs, and will
expand our business by developing environmentallyfriendly materials (including the use of recycledmaterials) and manufacturing facilities while being
environmentally conscious.

IssuesDevelopment of products and production technology inanticipation of changes in design and functional needs andfuture customer trends
Cost reduction and productivity improvements throughautomation and improved production technology
Provide value-added products in response to the trend
toward subscription-based services
Expansion of carbon-neutral material production facilities

Strengths

Capabilities to develop, design, and produce high quality decorative
variations, transparent products, and mechanical products
Factories equipped with the latest production technology for
major manufacturing processes (molding, painting, etc.) andnew manufacturing processes (hot stamping, etc.)

Priority Initiatives for FY2022
We developed the world’s first emblem that combines
millimeter-wave radar transparency and luminescencefunctions, which contributes to the advanced functionalityand designs unique to BEVs, and this led to its adoption in
Japan.
We began production of radiator grilles using the hot
stamping manufacturing method as a decorative variation
to meet customer needs, and proceeded to offer them toour customers.
In the midst of the ongoing parallel production by
manufacturers of a wide variety of different vehicles,
including HEVs and BEVs, we expanded the Seto Plant toenable a wider range of variations of large painted products
such as radiator grilles and back door garnishes, our main
products, that are highly functional and meet the designneeds of customers. In addition to improving productivity at
the plant, we are also working to reduce CO2 emissions bymaking the new building all-electric for implementing
manufacturing that is also environmentally friendly.

Luminescent millimeter-wave emblem

Hot-stamped grille
Reconstruction
section (Scheduled
to start operationin Feb. 2025)

Extension section (Scheduled to start operation in Dec. 2023)
Seto Plant (Image after construction of new building)*2 HOD: Abbreviation for hands-on detection. The system detects whether the driver is holding the steering wheel or has released the driver’s hands from the wheel andsends a signal to the vehicle side.
*3 HMI: Abbreviation for human-machine interface. A device that allows humans and machines (vehicles) to exchange information.

Development Concept

Future Initiatives toward 2030
Future Initiatives toward 2030
With an eye toward 2030, we aim to capture the second largest market share in the industry in order to contribute to
reducing the number of fatalities and injuries in traffic accidents.
In addition to existing customers, sales expansion efforts will focus on the growth regions of China and India. In China,
we are boosting production capacity by constructing a new plant in South China, and in India, we are strengthening ourdevelopment capabilities by enhancing R&D and ramping up production capacity by expanding the Neemrana plant.
To win out in the competitive field of seat belts andairbags, we will strengthen our competitivenessAirbagSeat belt
through collaboration with seat belt manufacturers
and by using CAE technology, which is one of ourstrengths. We will also conduct development of
Before collision
After collision
new concept occupant protection devices, such
The extent of injury inside the body, such as
A bag integrated into the seat belt
rib deformation, can also be verified by CAE
as lap airbags, that improve the degree of freedom
inflates to protect the occupantin cabin interior design and accommodate diverse
Figure 2: Development of airbag and seat belt set (CAE) Figure 3. Lap airbag
riding postures.

48

We are aiming to expand our business by developing
products and production technologies that anticipatechanges in design and functional needs andcustomer trends (lighting, seamless design, etc.).
In response to the trend toward automobile
subscription services, we will strive to add value tointerior and exterior components by utilizing ouradvanced decorative technologies to add
interchangeable decorative elements and safetyfunctions.
To achieve carbon neutrality, we aim to expand theuse of ELV materials in our products and increase theproduction of recycled materials. We will also promoteuse of electric equipment and electrification (molding
machines, painting equipment) to reduce CO2
emissions.

Varying design expressions byluminescence/non-luminescence(+ light control)
Hidden functions (millimeter wave,
translucency) (body color paint)

Customer (Toyota)

Customer (Nissan)
Purchase/
Lease agreement

Used cars/Lease renewal

Used cars/Lease renewal

Second user

3 years
RECYCLED

Grade management products*

Third user

3 years
RECYCLEDRECYCLED

Replacement of parts and decorative elements

Value-added products (image)

Adding safety and functionality* Differentiated solutions that matchthe grade (car model grade)

T OYODA GOSEI REP OR T 20 23

49

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives and Progress toward the 2030 Business Plan

FC (Functional Components)
Business Area
In addition to expanding global sales of fuelsystem products to meet vehicle weight reductionand emission regulations, we will enhancedevelopment of products for the increasing
number of electric vehicles, build production
systems, and aim for further growth throughnew environmentally-friendly businesses.

IssuesDevelopment of low-CO2 emission products for BEVs
(natural-derived materials, use of material recycling, more
lightweight designs, etc.)
Development of products for BEVs, development of fuelsystem products (including CN fuels, e-fuels, etc.), andsecuring production resources

Strengths
Development of environmentally-friendly products byleveraging our expertise in the rubber and plastic fields
Technology and manufacturing for high-quality production ofcritical safety parts
Global supply system

Priority Initiatives for FY2022

WS (Weatherstrips)
Business Area

IssuesEstablish a sustainable sealing product business despite theuse of rubber materials that are difficult to recycle due to theirhigh CO2 emissions
To meet the growing need for quietness due to the shift toelectrification while reducing product costs

We will shift to a sustainable business basedon carbon neutrality and circular economy,
and aim to solve social issues and secure
reliable profits through recycling andquietness technologies.

Strengths
Rubber desulfurization and regeneration technology
Product development and evaluation technologies that
contribute to quietness improvement by leveraging
knowledge in the rubber and plastics fields

Priority Initiatives for FY2022

We are implementing an all-round strategy for BEVs and FCEVs byinvesting resources in cutting-edge development and capital investment.
We have brought to market large high-pressure hydrogen tanks for FCEV
trucks that run on hydrogen, and we expect needs to grow for thesetanks in the future. The tanks are being used in the mass-market fuel cell
Large high-pressure hydrogen tanklight-duty trucks that CJPT*, a joint partnership in which Toyota Motor
Large high-pressure hydrogen CJPT’s mass-market fuel cell
Corporation, Isuzu Motors Limited, and other companies have invested, is tanklight-duty truck
introducing to the market.
Commercial vehicles such as transport trucks are required to have a long cruising range and to fill up in a short time, andso FCEV trucks are expected to become widely used. We will contribute to achieving a hydrogen society through thedevelopment and production of high-pressure hydrogen tanks, a key component of FCEVs.
As for carbon neutral initiatives, we have successfully reduced the weights of our products through thinner wall thickness
and material substitution from metals to plastics by designing and developing manufacturing methods utilizing our
expertise in the rubber and plastics fields, which are our strengths.
* Commercial Japan Partnership Technologies Corporation

Future Initiatives toward 2030
We will expand our business in all directions, including the development of low-cost fuel system products forsealed tank systems for HEVs and PHEVs, cooling piping and battery pack products for BEVs, and full-scalemass production of tanks for FCEV passenger vehicles and commercial vehicles.
We will also effectively use rubber resources through our proprietary desulfurization and regeneration technology
to achieve carbon neutrality, as well as use naturally derived materials and recycled materials by leveraging our
expertise in polymer materials.

Initiatives Leveraging Our Strengths
We are conducting initiatives to reduce waste and CO2 emissions by utilizing our rubber
desulfurization and regeneration technology and reusing rubber waste from our plants.
In FY2023, the Morimachi Plant (Shuchi-gun, Shizuoka Prefecture) also obtained ISCC
certification, an international certification for sustainable products made from recycled
and other renewable materials, to provide products with high environmental value by
meeting growing demand for recycled products due to growing environmental
awareness.
Furthermore, in order to enhance product added value, we are continuously working
together with the Experimental Department to develop quietness technologies. We
identify vehicle weaknesses that contribute to quietness, and develop and propose
quietness-enhancing products that improve these weaknesses.
Also, to improve our manufacturing capabilities and profitability, we are implementing
automation of processes and cost reduction
initiatives through elimination of processes
requiring high skills. In FY2022, we started
1
3
mass production of glass run products,
which are used in Lexus.

Recycled rubber produced fromour proprietary technology
Cross-section

Conventional productDeveloped product

Inside the car

Inside the car

2
Outside the car

PowertrainsFunction

Storage,control,
supplyGasoline
vehicles

HEV
PHEV

BEV

FCEV

Expansion of hydrogen tank business

Battery cases

Mobility
Plastic fuel filler pipes

Expanded
volumeCooling
Cooling piping

50

Energy infrastructure
For households

FC stack manifolds
Electric vehicles withhigh cooling needs
require about fourtimes the length ofpiping compared togasoline vehicles

Noise

Future Initiatives toward 2030

Lifestyles
ChangeOutside the car

Communities/
society

High-pressurehydrogen tanks
Fuel tank peripheral parts

Noise

Improved
soundinsulation

Hydrogentanks

Passenger vehicles

To further promote carbon neutrality and circular economy, we aim to improve the quality of recycled rubber andincrease the amount of recycled rubber produced.
At the same time, we will work to further reduce CO2 emissions and improve the recycling rate while conducting
studies on switching some products to plastics according to the characteristics of the products.
In addition, we aim to improve overall business profitability by developing technologies to expand the scope of
use of recycled rubber and plastic materials and by developing sealing structures that maintain high quietness
performance and cost competitiveness.

Tanks for commercial vehicles; trains and ships

T OYODA GOSEI REP OR T 20 23

51

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Initiatives and Progress toward the 2030 Business Plan

Sustainability Management

Life Solution Business

Basic Approach to Sustainability Initiatives

In addition to expanding our LED businesses,
including UV-C, we are conducting initiatives
to develop businesses for new fields such as
power semiconductors.

IssuesFurther expand our industrial machinery parts and LED
business and increase sales
Accelerate establishment of technologies for quick businessdevelopment in new fields

Strengths

Toyoda Gosei’s company creed of “Boundless Creativity
and Social Contribution” was formulated based on the
Toyota Principles, and has been passed down fromgeneration to generation as the basis of Toyoda Gosei’s
management.
This thinking is also seen in our sustainability concept ofcontributing to solving environmental and social issues
through our business activities.

UV-C LED light units

Priority Initiatives for FY2022
We have been developing various products that sterilize water and air using UV-C LEDs,
which are effective in eliminating viruses and bacteria, and have developed a water
purification unit with a compact design that is one-third the size of conventional units. This
product is being used by major home appliance manufacturers and is installed in EcoCute,which was developed against the backdrop of the recent increase in hygiene awareness.
We will continue to expand our lineup of water purification units that can efficiently sterilize
water according to the specific application and performance required by our customers.
Our UV-C LEDs enable sterilization even in confined areas where it could not be done
before. In the future, we will contribute to mercury-free and energy-saving designs byreplacing mercury lamps.

High sterilization performance(sterilizes 8 ℓ of water in 1 minute)
Uses LED cooling by runningwater for enabling compact size.
Can be installed in confined spaces.

Sterilizes water by
irradiating deep ultraviolet
rays inside the unit

UV-C LED high-speed surface disinfectors

LED products (disinfection devices)

Safety system products (such as airbags)

FCEV products (hydrogen tanks)

Energy-saving LED technology is used to also
contribute to hygiene by disinfecting air and surfaces
and purifying water

Contributes globally to reducing
the number of traffic fatalities andinjuries

Contributes to achieving a hydrogensociety for carbon neutrality and reduced
environmental impact

Implementation System
We have built a management system to further efforts forthe sustainable development of society and sustainablegrowth of Toyoda Gosei through business activities
based on our company creed and management

Compact water purification unit

Management

Execution

Driver circuit board with GaN
power semiconductors

Used inside
dotted areas

GaN power semiconductor and driver circuit board
with GaN power semiconductors

Executive Appointment
Committee/Executive
Compensation Committee
Incorporates theresults of sustainability
initiatives

Sustainability
Council

Future Initiatives toward 2030
To establish the above products as our mainstay products, we are steadily developing them according to theirrespective plans, but for UV-C LEDs, there are issues to be addressed in module design, production
preparation capability, and exit strategies.
In the area of power devices, the challenge is to improve the degree of technological completeness andestablish a supply chain with an eye on finished marketable products. In the area of new value creation, we aredeveloping a microwave power supply, but there are issues in system development, quality assurance, andproduction system.
We will work to resolve these issues by efficiently accelerating our efforts to realize our goals.

Director and ASB members[including outside members]

Corporate strategy (sustainable development of society and sustainable growth of Toyoda Gosei)

Medium- to Long-Term Business Plan
Business (Financial)
Growth strategy
Development of technologies andproducts, Community/customer
strategy, Manufacturing innovation

Customers

Management Base (Non-Financial)
E: Environmental protection, natural
resource preservation
S: Human rights, human resources
development, safety, quality,
supply chain management
G: Risk management, compliance

Shareholders,
Investors
Employees
Suppliers
Local communities
National and

Improvement/
correction

ACT

PLAN

Annual plan

DO

Execution/
implementation

local governments,
Industry groups

Assessments/
monitoring

CHECK

Sustainability Council
In this Council, in order to accelerate our sustainability
initiatives, we have established the structure shown on
the right to deliberate and decide on priority issues andconfirm the status of implementation.

Various Councils andCommittees

Board of Directors

Human Resources Council

Reports
SpreadCompliance Subcommittee
Central Safety and Health Committee

Sustainability Council
Submission/
Report52

Stakeholders

Medium- to long-term plan: What we aspire to beInitiatives for key sustainability issues

Sustainability KPIs, targets
Functions/Divisions

Board of Directors

On/off operation confirmed in one millionth of
a second at 24 kW (800 V × 30 A) power

philosophy. Emphasis is placed on repeated dialogue
with all of our stakeholders, establishment of KPIs andtargets to achieve our medium-term business plan, andperforming the PDCA cycle.

Company Creed/Management Philosophy

Management Council, others

Newly-developed GaN
power semiconductor(6 mm height × 4 mm width)

To continue as a company that is trusted and valued bystakeholders and society, we will pursue managementthat integrates key sustainability issues with our mediumto long-term business plan, aiming for the sustainable
development of society and sustainable growth of
Toyoda Gosei in line with the changes of the times.

UV-C LED

Power Device Business
Power devices are widely used to control electric power in industrial
equipment, cars, home appliances, and other equipment. In order toachieve carbon neutrality throughout society, next-generation power
semiconductors that can reduce power loss during control are expected
to be adapted for practical use in a growing number of applications. GaN
power semiconductors are characterized by high-speed operation, but
their application in a wider range of fields requires higher voltages (higher
power). Following last year’s announcement of the successful fabricationof 6-inch seed crystals, we announced operation verification of theworld’s top-class high-voltage, high-speed horizontal GaN power
semiconductors. (June 2023)

Data

Examples of our major products that contribute to resolving environmental and social issues

Knowledge of LED field and materials
Industry-academia-government collaboration

UV-C LED Business

Foundation of Value Creation

Carbon Neutrality and Environmental Committee

T OYODA GOSEI REP OR T 20 2353

About Toyoda Gosei

Taking on the challenge of carbon neutrality and a circular economy
with the concerted strength of the Toyoda Gosei Group

Environment

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Global warming, resource depletion due to mass production and disposal, and waste problems have become
shared issues worldwide. Under our slogan of “A Greener, Richer World for Our Children,” Toyoda Gosei isaccelerating its efforts by bringing together the entire Group to realize carbon neutrality and a circular economy
as soon as possible by maximizing its strengths in rubber and plastic polymer technologies in both production
and products.

Contributing to Environmental Preservation through All Our Business Activities
Basic Philosophy
The Toyoda Gosei Group formulated its 1st
Environmental Action Plan in 1993 based on its
Environmental Policy, and since that time has been
actively confronting environmental issues. In February
2016, we announced our long-term targets in theTG2050 Environmental Challenge, and have set
milestone targets to be reached by 2030. We have also
formulated a 5-year action plan in which activity items
and targets are set and are carrying out activities topreserve the environment.
Globally, we have placed integrated environmental
functions in the regions of the Americas, China,
ASEAN, and India. The Group is also making efforts as
a whole with area control in five global regions, theabove four plus Europe/South Africa. These efforts are
made in conjunction with government agencies,
customers, and suppliers.

Environmental Organization
Our medium- to long-term policy and key action items
are discussed and decided in a Carbon Neutrality andEnvironmental Committee chaired by the company
president. The Carbon Neutrality and Environmental
Committee consists of three subcommittees in theareas of products, production, and quality. In the areaof production, a Production and Environment
Subgroup has been established to strengthen
environmental initiatives over the entire manufacturing
process. The above subcommittees are further broken
down into working groups that implement and manage

areas such as reductions in energy use and waste
products, and preservation of the environment. In thisway, environmental preservation and management
activities are conducted from an expert perspective.
Also, liaison meetings have been established as aforum for information sharing with domestic andoverseas Group companies. A carbon neutrality
project was started in FY2021 to accelerate efforts
over the entire product lifecycle. The project is headedby the president with outside directors as advisers andthe general managers of related divisions as members.

Environmental Organizational Structure
1. Environmentally-friendly
business activities

Environmental
PolicyWe are keenly aware that all stages of ourbusiness relate deeply to the environment,from development, production, and sales to
end-of-life disposal. The Toyoda Gosei Group,
including all internal departments, domestic
and international affiliates, and suppliers,
conducts all business activities with concern
for the environment in cooperation andcoordination with customers, government
authorities, and others.

2. Good corporate citizenship

3. While spreading
information on these
initiatives, we listen to theopinions of people at alllevels of society and work
to improve our initiatives
wherever we can.

As a good corporate citizen, we participate
in, support, and cooperate withenvironmental activities by many groups
while also working on environmental
activities in the community and broader
society. We also provide education for all
employees to support them in becoming
involved in environmental activities as
members of the community and society,and support social contributions andvolunteerism.

Recyclingoriented society

Contribute to an
environmentally-friendly
society through polymer
and LEDtechnology

Minimize water risks andimprove wastewater
quality

Environmental
management
Foster an environmentally
responsible corporate
culture andemployees• Global consolidated target management• Water use reductions(27.5% decrease vs. 2019)• Start of plant afforestation

Strengthen and expand
environmental protection
and preservation
activities

Scopes 1, 2, and 3
Carbon neutrality

Scopes 1 and 2
Carbon neutrality
Scope3

Greater reduction of 6 gases
Enhanced initiatives for coexistence with nature

Environmental
preservation andliving with nature

Recyclingoriented society

54

Global enhancement

Cut plant CO2 to zeroand utilize renewableenergyMinimize waste andcreate resource
recycling systems

view to the year 2050.
As a roadmap to achieve this goal, in August 2023, wemoved up the date from 2050 to 2030 for achievingcarbon neutrality (Scopes 1 and 2), which will
strengthen our response to climate change issues, andwe have also prepared an environmental action plan
as a five-year plan to guide our efforts.

Medium- to Long-Term Scenarios for Achieving
the TG2050 Environmental Challenge

Decarbonizedsociety

Products(meets twice/year)(Chairperson: Company president)
Discussion of mattersrequiring medium- tolong-term management
decisions

Formulation of mediumto long-term targets anddiscussion of measuresand issues to achievethem

Production andEnvironment Subgroup
Production

Liaison Committee for Environmental
Communication with Domestic
Affiliates (meets twice/year)

Products and Technology Environment
Subcommittee (meets as needed)(meets twice/year)
Discussion of specific measuresand issues to achieve short- to
medium-term goals

Quality AssuranceManages, guides, andsupports coordinatedenvironmental efforts bydomestic affiliates

Implements and manages development of environmentallyfriendly products and technologies

Production Environment Subcommittee(meets twice/year)

Liaison Committee for Environmental
Communication with Overseas
Affiliates (meets once/month)

Implements and manages policies and technical development
measures for reduced emissions from production processes

Subcommittee on Systems for SOC Regulations
and Quality Assurance (meets as needed)

Manages, guides, andsupports coordinatedenvironmental efforts byoverseas affiliates* The Carbon Neutrality and Environmental Committee is positioned within the organization as shown in the Corporate Governance System Chart (see p. 71), and the deployment of policies from the Carbon Neutrality and Environmental
Committee, the Production and Environment Subgroup, and the respective subcommittees to plants and other operations is done by establishing expert committees in accordance with the ISO 14001 system at each plant.

The Toyoda Gosei Group specializes in the field of
rubber and plastic polymers. Our symbol is thebenzene ring, a hexagonal hydrocarbon structure thatis the starting point for polymers. Borrowing from thesix sides of the benzene ring, the TG2050
Environmental Challenge sets six challenges tostrengthen our environmental efforts with a long-term

Products
and technology

CarbonNeutrality
Project

Develops systems for compliance with SOC regulations
and for quality control

TG2050 Environmental Challenge

TG2050 Environmental Challenge(6 Challenges)

Carbon Neutrality
and Environmental
Committee*

Achieving
the TG2050
Environmental
Challenge

Initiatives for decarbonized society

Full-fledged startof environmental
initiatives• Adoption of renewable energy• Completion of conversion to LED lighting• Enhanced improvements in production
technology• Establishment of energy conservation
improvement team• Management system
consolidation• Legal compliance• Waste reduction• CO2 reduction
targets• ISO acquisition
at main plants

2030
Milestones
7th

1st

5th

1993

2015

6th

Action Plan
Action Plan
Action Plan
Environmental Action Plan (5-year plans)

2020

Announced in August 2023
(Setting of new targets)Action Plan
Announced in April 2021

2025

2030

2050

Strategy on Carbon Neutrality and Circular Economy
We have established a strategy on carbon neutrality
and circular economy for the entire product lifecycle
and are implementing initiatives for achieving it. We
have set Sustainable Materials, Sustainable Design,
Zero Emission Challenge, and Resource Circulation as
our goals, and have incorporated them into specificcontent from four perspectives, and in this way, we
aim to realize carbon neutrality and a circular economy
and link it to viable businesses.
Materials

We will strive to procure recycled materials for also ensuring
stable supply and expand the use of bio-materials.

DesignWe will strive to develop lightweight designs, easilydisassembled designs, compact designs, and otherimprovements.

Manufacturing In addition to day-to-day improvements, we will also study
the adoption of innovative processes, such as process
downsizing and reduction of heat energy, as well as theuse of hydrogen.

Strategy on Carbon Neutrality and Circular Economy

Sustainable
Materials

Materials
Resource
Circulation

Collection
andrecycling

DesignSustainable
DesignManufacturing

Zero Emission
Challenge

Collection/ We will systematically minimize waste in our plants andrecycling build a system to collect parts from the market.

T OYODA GOSEI REP OR T 20 2355

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment

Reducing CO2 Emissions

Building a Decarbonized Society

To achieve our 2030 target, we are reducing CO2 emissions throughout the entire product lifecycle by improving
productivity and efficiency of logistics, in addition to more lightweight designs for products leading to even higher
vehicle fuel efficiency.

Basic Philosophy
In order to achieve the Paris Agreement’s goal of
limiting the global average temperature increase to
1.5°C above pre-industrial levels, greenhouse gas
emissions must be reduced to virtually zero by 2050.
At Toyoda Gosei, we are aiming to achieve thedecarbonized society set forth in the TG2050
Environmental Challenge by working throughout ourvalue chain to set targets for CO2 emissions generated
from our own production operations in 2030 (Scopes 1
and 2) and from the procurement of materials andparts (Scope 3).

Endorsement of TCFD Recommendations
In May 2019, we expressed our endorsement of therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) and conducted ascenario analysis of risks, opportunities, andresponses based on the Guide. We are accelerating
our efforts across our business activities andproactively disclosing relevant information, including
incorporating the results in our 2030 Business Planand reviewing our TG2050 Environmental Challenge
and 2030 milestones.

Carbon Neutrality Project
We are conducting initiatives to reduce CO2 emissions
throughout the entire lifecycle of our products, fromprocurement of materials and parts to productdevelopment, production, use, and disposal.

SystemInitiative

With the president at the top, the project leader is thevice president, and the core members consist of
department heads and above. This is a system thatenables speedy and immediate managerial decisions
and their implementation.
Each task is led by the head of the relevant department
to carry out the initiative.

Task A
Understand productlifecycle assessment(LCA) and set
reduction targets

Task B Visualization of CO 2 emissions and reductions
 Target setting items(1) Establishment of medium- tolong-term targets(2050, 2030, and 2025)(2) Subdivision of targets by category(Scope 3)(3) Setting of targets by theme

Task C
Share carbon
neutrality (CN)relatedinformation

 Strategic reduction approach, identification of vantage points
 Development of scenarios (mainstays of major initiatives) Identification of action themes to achieve scenarios
 Definition of environmental investments, clarification of financial
impact, and budgeting

Production Stage: Emission Reduction through Development of New Manufacturing Methods and Day-to-Day
Improvements Manufacturing
We have set a 2030 milestone for achieving zero CO2
of utilities, expansion of renewable energy, and more.
emissions at our plants, and are working to achieve
In particular, renewable energy initiatives are underway
this goal through day-to-day improvements at plants,
with the goal of converting all electricity to renewable
innovations in production technology, higher efficiency
energy by FY2030.
Logistics Stage: Improving Loading Efficiency

Achievingcarbon neutrality

Prepare andimplement
reduction
scenarios

Product Development Stage: Environmentally-Friendly Product Development Materials Design
In the product development stage, we are making
or rubber to plastic), reduce the number ofheadway in providing products for environmentallycomponents, integrate functions, and use morefriendly, next-generation vehicles and developing
lightweight designs while ensuring quality for the
products with lighter weight for greater fuel efficiency
strength and other properties of instrument panel
and lower energy consumption and CO2 emissions
peripherals and other interior and exterior components
across the areas of materials technology, productand of functional parts such as hoses. We are also
design, and production technology. Examples include
actively working with suppliers to develop materials
the development of high-pressure hydrogen tanks forwith low CO2 emissions, such as bio-materials andrecycled materials.
FCEVs and efforts to switch materials (e.g., from metal

 Gathering and sharing information on IR Gathering and sharing information on
government, customers, JAPIA, etc.

DesignMaterials and Parts Procurement Stage: Emission
Reduction through Collaboration with Suppliers

Manufacturing

Materials Manufacturing

In collaboration with logistics companies, we are
reducing CO2 emissions by improving truck loading
capacity and logistics efficiency through the use of AI
and other means.
Initiatives to Reduce CO2 Emissions in the Value Chain

We implement CO2 reduction by sharing goodpractices with suppliers through the Energy Saving
Dojo and supporting actual data measurements.
Toward Carbon Neutrality in the Value Chain by 2050

Product Lifecycle

Moved up the Timetable for Carbon Neutrality to 2030
Toyoda Gosei has established a new target to achievecarbon neutrality for CO2 emissions (Scopes 1 and 2)
generated from its production operations that is 20
years earlier than the previous target by moving it up
from 2050 to 2030. This is a significantly shorter timeframe for achieving carbon neutrality that reflects our
responsibility as a company to contribute to solving
climate change risks that are becoming more serious
in various parts of the world. We will continue to
implement initiatives to become a leading company inthe environmental field.

Procurement of materials and parts

Initiatives to Achieve Carbon Neutrality

Scope 3*1CO2 emissions Day-to-day
improvements
Develop decorative techniques that
reduce environmental impact during
the painting and plating processes

Other
areas
Painting/
plating
Rubberextrusion
molding
Plastic
injection
molding

Optimize vulcanization
conditions for rubber
molding process

Production
technology
innovation

Implement electrification
and reduce pressureduring the plastic
molding process

Go beyond day-to-day
improvements and develop
production technology
innovations to accelerateenergy conservation

Procurement ofmaterials and parts

Initiatives
Minimizing CO 2 emissions Reducing CO 2 emissions
from materials and parts from logistics
In collaboration with material
manufacturers

Renewableenergy utilization

2030

2050

Achieve Scopes 1 and 2
carbon neutrality

Transport

In collaboration with logistics
companies Development and utilization of Improved loading efficiency andrecycled materials and bio-materials
operating route efficiency
 Adoption of electrically powered
In collaboration with parts
trucksmanufacturers

Our company (manufacturing)

Use and disposal (recycling)

Scope 1*2, Scope 2*3

Scope 3

Commuting andbusiness travel

Parts manufacturing

Minimizing CO 2 emissions
from commuting andbusiness trips

Achieving zero CO 2
emissions from plants

Minimizing CO 2 emissions
at the usage stage

 Day-to-day improvements: Comprehensive
energy-saving initiatives
 Utility updates: Higher equipment efficiency
 Innovations in production technology:
Development of innovative manufacturingmethods
 Adoption of renewable energy:
Installation of solar panels, purchaseof green electricity

 More lightweight products Development of products for BEVs and FCEVs
 Development of technology for power devices

 Promote use of BEVs and FCEVs
 Encourage web conferencing
and telecommuting

 Reduction of CO 2 emissions

Transport

Use

Disposal

Minimization of waste Easily-disassembled designs
 Collection of waste materials andimplementation of recycling*1 GHG emissions in the supply chain indirectly emitted by the company (e.g., raw material production, transportation, business trips, commuting) *2 GHG emissions directly emitted by the company itself (e.g., fossil fuels, natural gas)
*3 GHG emissions indirectly emitted by the company (e.g., purchased electricity)

2030

2050

Scopes 1
and 2

Carbon neutrality

Carbon neutrality

Scope 3

27.5% reduction
compared to 2019

Carbon neutrality

Reduction of Greenhouse Gas (6 gases)*4 Emissions
Of the six greenhouse gases, Toyoda Gosei uses three(HFC, PFC, SF6) and is conducting initiatives to reduce
all of them. By FY2015, we had completed a switch toalternative gases with a low environmental impact forthe shield gas and other gases used in the productionof steering wheel cores. We will continue these
reduction initiatives going forward.
*4 Hydrofluorocarbon (HFC), perfluorocarbon (PFC), sulfur hexafluoride(SF6), methane (CH4), nitrous oxide (N2O), nitrogen trifluoride (NF3)56

T OYODA GOSEI REP OR T 20 23

57

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment

Reduction of Waste Materials in the Production Stage

Building a Recycling-Oriented Society

Manufacturing Collection/recycling

Basic Philosophy
In order to mitigate resource depletion and water risks,
we not only take measures for defects and yield, which
are the focus of our manufacturing divisions, but also
work on emission control and recycling involving
material and production technologies in the sourcing
divisions for contributing to the attainment of arecycling-oriented society. For water, we identify risks
in each country and region where we conduct businessglobally while also striving to reduce risks by reducing
water usage, recycling water, and returning cleaner
wastewater to the community.

Risks and Opportunities Related to Resource Recycling
We consider risks and opportunities related to resource recycling as important management issues, and we areworking on them company-wide as one of our priority issues to be addressed.
Issue

Risks

Resource
depletion(shortage)

Water risk(quantity andquality)

Opportunities

Response• Improved earnings through recycling
technology and reduced material usage• Reduced earnings and production
volumehindered by difficulty in procurement of raw• Improved corporate value throughmaterials and price hikes
development of the above-mentioned
technologies• Development of more lightweight products• Development of recycling technology for
raw materials• Expanding the use of plant-derived
biomaterials and recycled materials• Improved earnings through reuse of water• Production hindered by difficulty inand reduced water usage
securing water necessary for production• Drop in product quality due to deterioration • Improved corporate value throughdevelopment of the above-mentioned
in water quality
technologies• Production hindered by water damage• Development of water reuse technology• Expanding the use of rainwater• Review of production system andinstallation locations of electrical facilities

In 2018, we launched the Waste Reduction Project toimplement source measures and recycling initiatives.
At each plant, we are conducting inspections for all
types of waste to identify items for reducing waste byusing the genchi-genbutsu system (collecting facts
and data at the actual site of the work or problem) to
implement waste reductions. We also share examplesof waste reduction with both domestic andinternational Group companies to implement waste
reduction throughout the entire Group.
Reducing Water Risks Manufacturing
Establishment of 2030 Milestones
We are assessing risks in both water usage and water
quality in Japan and international locations, andmaking improvements at high-risk locations. Even inlocations where risks are low, we are trying to reducewater intake amounts for the effective use ofresources.
Since FY2021, we have been working to reduce water
use by reducing leakage and implementing wider
recycling.

Reduction of Packaging Materials in theDistribution Stage Collection/recycling
By washing returnable boxes* more frequently andkeeping them clean, we are reducing the amount of
packaging materials used to prevent products frombeing soiled. We are also reducing packaging materials
by putting lids on returnable boxes and making otherchanges while maintaining a balance between ensuring
product quality and reducing the amount of packaging
materials used.
* Boxes for transporting products

We are also working to systematically upgrade ourwastewater treatment facilities to produce evencleaner wastewater.
2030 Milestones for Water Risk Reduction [Global]
Item

FY2030 Target

Water quality

Measures completed
at four locations

Water intake

Measures completed
at seven locations

Water intake per sales
unit

11% decrease vs.
FY2019High risk area

Low risk area

Building Environmentally-Friendly Societies
Waste Reduction
Establishment of 2030 Milestones

Development of Product Recycling Technology

We are working to effectively use resources such as bycurbing emissions, source measures, reducing wastes
by recycling rubber and plastic chips, and reducing
wastes by thoroughly sorting them.

Scenario for Minimizing Amount of Waste(Waste Reduction Diagram) [Non-consolidated]
Day-to-day
improvements
Percentage of waste

Post-occurrence
measures2030 Target
2025 Target line: Targets forthe 7th Environmental Action Plan

50% reduction(Compared to FY2012)

40% reduction(compared to FY2012)

Manufacturingmethod development
Recycling(including developmentof recycled products)

0
2012

2017

2020

2025

2030

2040

DesignManufacturing Collection/recycling

We develop and design easily recyclable products andmaterials by taking into consideration the entire
lifecycle of automobiles. We are also developing
recycling technology for waste material.

Based on the concept of Nature Positive, we have set
coexistence with local communities as one of thematerialities (key issues) in our efforts to build nature

coexistence initiatives to conserve biodiversity, andare working on woodlands creation, building of
biotopes, and conservation initiatives for tidal flats.

Risks and Opportunities Related to Biodiversity

Establishment of Medium- to Long-Term Targets

We conduct initiatives by identifying risks andopportunities related to biodiversity.

We have set a “No Net Loss of Greenery” goal ofrestoring 59 hectares of greenery by 2050, which isequivalent to the area of our plants, and are
conducting initiatives to achieve this goal. Specifically,
under the slogan “Connecting Activities with Water,
the Source of Life,” we are conducting initiatives in theareas of mountains, rivers, and oceans.

Technology Development for Recycling ELV* Parts

(%)

100

60
50

Materials

Basic Philosophy

2050 (FY)TG2050 Environmental Challenge Minimization

Key item

Measures implemented

New recycling• Composite material separation technology• New recycling technology (high-quality material
recycling)

Use of recycledmaterials in
vehicles• ELV parts recycling technology• Development of uses for recycled materials

Design of easilyrecyclable products• Product design for easy dismantling• Materials and composition changes for easy
recycling

Issue

Risks

Opportunities

Response• Reduced earnings • Business continuity by • Development ofand production
securing human
more lightweighthindered byresources and raw
products
difficulty inmaterials through• Development ofprocurement of
nature conservation
recyclingraw materials and initiatives
technology for
Reduction price hikes• Sustainable production raw materialsof natural• Drop in productand enhancement of • Expanding thecapitalquality due tocorporate value by
use of plantdeterioration insecuring good quality
derivedwater quality
water resourcesbiomaterials andthrough woodlands
recycled materials
creation and riverconservation

Scenario for Attaining Targets
0

2010

2030

2040

2050 (FY)

-10
-20
-30

-36.0
2022 results-49.0
2021 results-50 2010 results -51.0
2025 target
-45.0
-59.0
-40

* ELV: End of Life Vehicle

2020

2050 target
0-60

2030 target• Tree planting• Woodlands creation• Use of abandoned• Solar power generation
farmland• Elimination of invasive• Building of biotopes
alien species• Overseas conservation
initiatives, and more-70
ha (lost greenery area)

Woodlands creation by employees and their families

58

T OYODA GOSEI REP OR T 20 2359SocialGrowing together through activities with all
stakeholders

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

With our management philosophy of conducting business operations with integrity, we are committed tocontributing to society through manufacturing, and are working to develop our personnel and create comfortable
work environments as the foundation for such initiatives. Respect for human rights is also important, and is thebasis for various initiatives with our domestic and overseas Group companies and business partners.

Acquiring and Developing Candidates for Management Leadership
Human Rights Initiatives: Basic Approach
The Toyoda Gosei Group respects and supports the
Universal Declaration of Human Rights, the UN Guiding
Principles on Business and Human Rights (“Guiding
Principles” below), and other international norms. The
Toyoda Gosei Group Charter for Business Ethics lays out
our basic principles of “respecting human rights and thediversity, character, and individuality of each person andstriving to create workplaces that are free of discriminationand harassment and always healthy, pleasant and safe,
based on labor-management cooperation.” The Toyoda
Gosei Guidelines for Business Ethics, our code of conduct
to realize the ideals in the Charter, declares respect forindividual character, human rights, and fairness in hiring,and forbids forced labor and child labor.

Conducting Due Diligence Based on Human Rights Policy
Since May 2022, we have been conducting humanrights due diligence based on the Toyoda Gosei Group
Human Rights Policy.
Toyoda Gosei Group Human Rights Policy
https://www.toyoda-gosei.com/csr/social/report2/pdf/
ToyodaGoseiGroupHumanRightsPolicy.pdf

Human rights due diligence refers to a series ofprocesses that identify negative human rights impacts
in a company’s operations, supply chain, and otherbusiness relationships; prevent or mitigate thosenegative impacts; track implementation and results;
and communicate how the negative impacts havebeen addressed, with the cycle repeated periodically.
As a first step, we conducted a human rights impact
assessment and identified three priority human rights
issues (prominent human rights issues) within ourGroup: (1) harassment, (2) immigrant workers, and (3)diversity and inclusion (D&I). We implement initiatives
to prevent and mitigate the negative impacts of humanrights issues within our Group that have been
identified, in cooperation with relevant departments.
This fiscal year, we conducted a status survey of ourdomestic consolidated subsidiaries (six companies)that utilize foreign technical intern trainees, and areworking on correcting fees for trainees from Vietnam,
improving the working environment, and making
appropriate use of trainees.
Also, the identification of priority issues to beaddressed in the supply chain is scheduled to becompleted by the end of this year, and surveys andassessments are currently being conducted. The
progress of these initiatives will be disclosed on our
website as appropriate.

Initiatives to Improve Well-Being
We have always been committed to creating a pleasantcorporate culture, and in response to the 2030 Business
Plan, in order to take full advantage of these initiatives, wehave been working to create an environment and systems
that enable each employee to achieve self-fulfillment, placing
importance on efforts to revitalize people and organizations.
To achieve this goal, we are implementing measures toenhance well-being and to enable horizontal collaboration.
Measures to enhance well-being are centered on the threepillars of “Creating a safe and secure place to work,”“Creating a stage where people can play an active role,” and“Shining a light on each and every person.” In FY2023, wehave been working on “Creating a workplace where people
Workplace Environment
As part of our initiatives on respect for diversity, we
have revised some of our benefit programs from April
2023, such as by allowing employees with same-sex
partners to take special marriage leave in the same
way as legally-recognized marriages. We haveobtained Bronze rating in the Pride Index, an index
that evaluates a company’s inclusivity initiatives toward
LGBTQ employees, and we are working to promote

60

can communicate with each other” with the aim of changing
the management style to one where managers are close to
their employees and make the most of each individual’svalues. Training is provided to management-level employees(GLs and section managers), and by having them put theirtraining content into practice, we aim to build relationshipsof trust and bonding.
Self-fulfillment for each employee
Improving well-being
Creating a stage
Creating a safe andShining a light on eachwhere people cansecure place to work play an active roleand every person

diversity and inclusion so that people with various
talents and values can maximize their abilities. We areworking on ongoing efforts to create a workplace
where everyone can continue to work with peace ofmind, such as through the establishment of “restrooms
for everyone” and consultation services that take into
consideration diverse gender orientations, as well as
in-company awareness training programs.

To systematically develop human resources who canassume roles in future management, we have adopted
a comprehensive system from management strategy
to personnel selection, training, and assignment. We
acquire future executive candidates for important
posts in each generation, starting with young
employees, and continuously develop them throughtraining and putting their training into practice (toughassignments). We will develop diverse humanresources who can lead and realize change by
appointing local staff/employees from outside thecompany.

Clarification of key strategic management positions and executive
requirements contributing to the execution of job responsibilities
Talent pool
(Basic information and previous
experience of employees, etc.)

Deployment plan

Training anddevelopment(Tough assignments)

Visualization of information and situation
Development of diverse management personnel
Contribute to achieving targets in business plans

We want to grow the company and our employees by outputting what we learn
After gaining experience in production engineering and design of safety systems, in 2022, I
was transferred to Toyoda Gosei (Foshan) Auto Parts Co., Ltd. I learned a lot from lectures
and advice from the management team during the training before my assignment, and these
are the cornerstones of my current position as a base manager. While it is important toacquire knowledge through training (input), it is also very important to put what you learn into
practice (output), which I believe will lead to further growth and learning. I am grateful that I
was given not only the training but also the opportunity to demonstrate my learning as abase manager. I hope to continue to support the success of our employees and help boththe company and our employees grow under the motto “开心工作 (joyful work).”

Tetsuya Ogata
President
Toyoda Gosei (Foshan) Auto Parts Co., Ltd.

Local Executive Training
With 62 companies in 16 countries and regions aroundthe world, we aim to achieve operations rooted in thelocal communities that support sustainable growth.
For such business operations, we believe theinvolvement of personnel who are familiar with local
business practices and culture is essential, and we are
actively appointing and training local executives at ouroverseas locations. To accelerate the active promotion
to such positions in each region, we established abasic policy and targets for the promotion of local
executives (vice presidents and above) in FY2021, andeach business unit is working to achieve these targets.
With the aim of having 40% local executives by 2025,

we are evaluating people with high potential in eachregion and formulating plans for their development. We
are also developing local human resources by
providing basic management skills training andproblem-solving training for executive candidates. In
addition, Regional Succession Committee (RSC)
meetings are held in the Americas, Southeast Asia,
and China to share the status of activities and issues
related to the development and recruitment of
successor candidates for executives. Reports are
given at Global Succession Committee (GSC) meetings
held annually at the headquarters.

We want to make the company bigger and stronger by leveraging the strengthsof local staff
I am currently attending an executive training program for top management candidates in
the China region. During the training, in addition to lectures and exercises on vision-building
problem solving and strategic thinking, the president and board members directly explained
medium- to long-term management strategies to us, and through friendly competition
among trainees, we strengthened our bond as one team. This experience has strengthened
my belief that “we will grow our China business!” The Chinese market is highly competitiveand changing at a rapid pace, but there are some things that only Chinese people canunderstand about the local culture and way of thinking. From now on, I would like to actively
seize business opportunities in China by being involved in management, making use of mystrengths as a local staff member and what I learned in the training program.

Li Haitao
General Manager, Tianjin Sales Division
Toyoda Gosei (China) Investment Co., Ltd.

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61About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialToyoda Gosei Diversity & Inclusion
At Toyoda Gosei, we are implementing initiatives in linewith the roadmap shown below in order to enhance

the well-being of each individual and achieve diversity
and inclusion (D&I) that leads to value creation.

Achieving well-being
and D&I

Support forinclusion
Active promotion ofdiversity

Creation of a safe
and comfortable
work environment

Women, people with disabilities,
foreigners, etc.

Women, etc.

Stage II

Creating new value througha “polymer-likeorganization” that connects
and expands
Stage V

Women, people with disabilities,
foreigners, young employees,
veterans, LGBTQ, etc.

Stage IV

Well-being“Polymer-like organization”(Creating a safe and secure place to work,
creating a stage where people can play an activerole, and shining a light on each and every person)(Organically combining people andorganizations on a global scale)

Human rights policy
Diversity

2010 and beyond

Inclusion

2020 and beyond

2025 and beyond

2030 and beyond

Encouraging More Active Roles by Women
To bring about a situation in which all employees,
regardless of gender, can play active roles and grow,and to create new value by taking advantage ofdiversity, we are implementing the initiatives shown in
the table below. Our focus is on training and support
for more active roles by female employees, reforming
the attitudes and behaviors of superiors, and support
for work-life balance.
We aim to have more than 45 female managers by
2025 in order to create an environment where female
employees can work long-term with assurance andcontinue to grow, as well as to incorporate morediverse values and new perspectives and ideas into
our management.
For example, in our training and support for more

Training and support for more
active roles by female
employees

62

Two years ago, I became the first female section manager at Toyoda Gosei. I loved working
with technicians and operating machinery at worksites, but there were two reasons why I
decided to work hard as a management-centered section manager. One was that I wanted
to test my potential, and the other was that I thought it would be an opportunity to makevarious proposals from a woman’s point of view. After becoming a section manager andgiving birth to my second child, I am now making further efforts to create an environment inwhich women can work comfortably while balancing work and childcare, supported by theunderstanding and support of those around me. My mission now is to create amanufacturing site where women can work with peace of mind even after childbirth, and toincrease the number of women aiming for higher positions.

Ayumi Hashii
Section Manager, SS
Manufacturing Division

Stage III

Stage I

2000 and beyond

As the first on-site female section manager, I’m a role model for employees forworking with peace of mind after childbirth

active roles by female employees, we are enhancing
our training initiatives to encourage female employees
who aspire to become leaders by providing training to
improve their management skills and actively
implementing training rotations to expand their rangeof experience and perspective.
In technical workplaces, we are also creating
manufacturing sites where employees can play anactive role regardless of gender or age by adopting
innovations to minimize heavy labor, such as rethinking
high-load work with the use of karakuri kaizen(mechanical gadgets that improve work processes)
and the greater use of robots, for encouraging more
active participation by female employees.

• Challenge programs: Educational program that provides female manager candidates with acquisition of management
skills through training, expanded range of experience through training rotations, and sharing and mutual advice on
issues or matters that are noticed through actual practice in the workplace.
• Encourage training: Training for mid-career female employees to help them develop their careers by creating aleadership image that makes the most of their strengths through year-round training, workplace practice, and internaland external exchanges.
• Tea meetings: A place for female employees to discuss their problems and express their opinions, and for female
employees inside and outside the company to exchange opinions and gain new insights and networking opportunities.

Reforming the attitudes andbehaviors of superiors• Workplace reform management class: A place to exchange opinions on voluntarily improving the management skillsof those in managerial positions, and to reform the culture and awareness of the company.
• Human rights training, human rights lectures: A place to deepen understanding of unconscious bias and diversity andinclusion.
• Creating a workplace where people can communicate with each other: Training for managers to change their
management style to be more attentive to employees and to make the most of each individual’s values.

Support for work-life balance• Expansion of childcare leave, reduced working hours (systems exceeding legal standards)• Adoption of telework (for office and engineering work since January 2021)

Encouraging More Active Roles by Senior Employees
We will create an environment in which an everincreasing number of senior employees can continue
to work with a sense of security and a high level ofmotivation, even after the age of 60. This will create
new value by combining their wealth of experience,techniques, and skills with the ideas and perspectivesof our younger employees. To build a foundation for
this, we have raised the retirement age from 60 to 65,
effective April 2022. We will continue the initiatives
shown in the table below to encourage employees tocontinue working enthusiastically and with high energy
until age 65.
We will continue initiatives to create an environment inwhich employees, regardless of age, can maximize
their potential and to further improve engagement(target: positive response rate of 65% or more for
employee engagement (50s and 60s)).
For example, as a means of improving motivation, we
conduct career training for employees in their 50s,
providing them with opportunities to exchange
opinions with their peers and rethink such issues as
how they will work in the future and how todemonstrate the techniques, skills, and experiencethat they have developed in the workplace.
Also, to improve health and physical fitness, we are
stepping up initiatives to promote health throughregular discussions with employees, such as holding
health seminars at milestone ages and reviewing
cafeteria menus to improve dietary habits.

Increasing motivation• Provide management education to supervisors(Better communication and dialogue skills, etc.)• Career development education (for young employees, mid-career employees, and senior employees)• Conduct open recruitment targeting veteran employees(Matching the experience, techniques, and skills of applicants with the support needs of our suppliers)

Health and physical fitness
improvement• Health education (seminars for employees at milestone ages)• Improve cafeteria menu (address the risk of high lipids, high blood pressure, etc.)

Workplace environment
improvement• Develop good practices in the workplace at manufacturing sites• Initiatives to reduce physical workload (use of karakuri kaizen (mechanical gadgets that improve work processes),etc.)

Supporting suppliers’ growth by challenging new environments
I decided to apply for the open recruitment process for senior staff because, when I thought
about what I could do in my remaining five years before retirement, I wanted to support
suppliers by utilizing my experience and skills in production engineering and planning. Now,
I support those who have also been transferred in the open recruitment system, receive
consultations from suppliers, and try to ensure that operations proceed smoothly by serving
as a point of contact for them. I am also working to create a system to dispatch veterans
who meet the needs of the client company so that both sides can grow together. Although
we are still in the process of exploring, it is always fun to discover something new no matter
how old we are. Many of our senior employees have a wide range of work experience, andwe are working to create an environment where their strengths can be put to use.

Takashi NakanoGroup Leader, Purchasing Division

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63About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialGlobal Uniform Quality Assurance
Enhancing Corporate Structure through TQM*1 Initiatives

Career Development for Young Employees
In the automotive industry, which is said to beundergoing a once-in-a-century major transformation,
we must enhance our corporate competitiveness forfurther growth and development as a company. To thisend, we believe that it is essential for each and every
employee to achieve their fullest potential and growth,
while gaining a sense of fulfillment and satisfaction by
drawing up their own career plans and achieving
self-fulfillment.
Since FY2021, we have been implementing Waku-Cari

Initiatives (initiatives to raise awareness of careerdevelopment with excitement and high energy) andpositioning the three pillars of the Waku-Cari Initiatives
as priority measures as shown in the table below. In
the future, we will further expand measures (careerdevelopment initiatives) to help employees realize theirindividual career plans in cooperation with theirsupervisors, centering on “a safe and secure place towork” and “a stage where people can play an activerole.”

Visualization• Creation of career path models(To show a model of career visions, career routes, and other career options available at the Company and to expand theimage of career paths)• Creation of a career development guide (a tool to support career autonomy by showing the knowledge base and ideas forcareer development)• Career design training for employees in their 20s/30s/40s

Developing awareness• Career autonomy support• Management training (education for managers on career autonomy support for subordinates and management concepts
and methods by outside instructors)• Career development information sessions for employees (motivate non-management staff to take control in developing theirown careers)

Career development
initiatives

I’ve been living overseas for five years. I have a new job with global connections*1 Total Quality
Management
Creating
customer
expectations

CustomerFirst

TQM
Continuous
improvement

TQM
Challenge toimplement reforms
and innovations

Participationby all members

Basic Philosophy of TQM

We have obtained ISO 9001/IATF 16949 certificationfor our quality assurance system and have establisheda quality management system. We are also building
quality into new products using an Initial Management
System that checks the degree of completion of eachprocess from planning to design to production. We are

Eachand every
one thinks, acts,
and works together

New TQM Philosophy

continuously working to improve the Initial
Management System to ensure quality that meets
customer expectations for new technologies, newly
developed products, software, and experienceoriented businesses that are changing due to CASE,
MaaS, and other factors.

Establishing a Quality Mindset of Customer First and Quality Firstbases, through periodic review of their own actions.
We have also established a Quality Learning Center
where each and every one of our employees can learn
about the concepts and attitudes that should be valued
in manufacturing, and where they can constantly learn
about quality, from its origins to future initiatives.

Developing Human Resources Capable of Taking on the Challenge to Implement
Reforms and Innovations
With the rapid expansion of DX in recent years, it has
become essential to have human resources who canutilize big data and link it to the creation of new value.
We are enhancing our practical education for humanresources who can utilize statistical quality control(SQC) and machine learning (ML) methods throughHironori Takagi
IM Engineering Division*2 Lecturers from Shiga University
and Toyota Group experts

Toyota Group machine learning
practice seminar

Ensuring Manufacturing Quality and Continuous Improvement Initiatives
Creation of Self-Contained Processes in the Safety Parts Process
In order to deliver safe and reliable products to ourcustomers around the world, we are working toward
self-contained processes*3, particularly in the
production process of safety parts, which are directly

We are conducting Quality Assurance Declaration
Initiatives with the aim of cultivating a workplaceculture that enables continuous improvement andcreating manufacturing sites that are resilient tochange. In these initiatives, all employees participate
in improvement initiatives from the perspectives ofdeveloping human resources, developing processes,
and preventing recurrences, and when targets areachieved, the section manager issues a declaration ofassurance to the president and area managers.
The entire Group is working together to implement
these initiatives, aiming for quality that earns the trustof customers globally.

*3 Under the philosophy of “Quality is built into the process,” we will
not produce or pass on defective products.
Process

Results

Continuous improvement
Human
resource
development

Establishment of the 10 workplaceprinciples/Thoroughness of supervisory
and command initiatives, etc.

Process
creation

2S1Y/Identification and correctionof difficult tasks

Preventionof recurrence

Approaches and education toprevent major defects from fadingaway/Education on past defects

Reducing complaints

Ongoing Quality Assurance Declaration Initiatives

Before being transferred to Woven City two years ago, I was engaged in productdevelopment for automobile exterior components. As one of the people in charge of the
wellbeing area of Woven City, I am involved in creating something from scratch incollaboration with people with various backgrounds, such as software developers, architects,
and lawyers. Since this is an unprecedented project to create a demonstration city, plans are
frequently revised. I am learning so many things every day, such as the flexibility to quickly
respond to changes and the communication skills to bring together the feelings of many
people toward a single goal. I hope to make use of the skills and network I have developedat Woven City even after I return to my position.

related to the basic performance (driving, turning,
stopping) and safety of vehicles.

Achieving “0”I would like to make use of the skills and network that I developed at Woven City

Mitsue Tanaka
Transferred to Woven by Toyota, Inc.

industry-academia
collaboration*2 and othermethods.

Three pillars of improvement

64

working to foster a value creation mindset in addition to a quality
mindset while enhancing psychological safety.

Establishment of a Quality Assurance System and Human Resource Development That Can Respond to
Future Business and Environmental Changes
Quality Assurance System Adapted to New Technologies and Newly Developed Products

The president’s Declaration of Global Quality
Improvement, the Declaration of Thought and Action foreach employee’s position and job, and the Global Quality
Month in November are all part of our efforts to establish
a Customer First and Quality First mindset among all
Group members, including suppliers and overseas• Open recruitment-type rotation policy• Exchange meetings with different industries• Transfer of employees for overseas training

In my fourth year with the company, I was given the opportunity to be transferred to North
America under the Overseas Young Employees Training Transfer Program. During my freetime while overseas, I participated in legal training, cross-cultural camps, and volunteer
activities to gain a better understanding of different cultures. During my second assignment
to North America, I had a child there and became interested in the differences in the
educational systems between Japan and the U.S. I’ve been living overseas for five years
now. It is a valuable asset for me that I have been able to broaden my perspective and makeglobal connections regardless of my position. As the environment surrounding theautomobile industry is dramatically changing, I would like to continue to chart new paths bytrying to develop new products with our overseas members without being bound by
preconceived notions.

Based on the basic principles of TQM, we are implementing TQM
initiatives throughout the company to enhance product and work
quality and human and organizational vitality to create a flexible
and strong corporate structure. In addition to traditional
improvement initiatives such as the Workplace Management
Improvement Initiative and Small Group Initiatives, we haveestablished and are developing a new TQM philosophy based on
the concept of anticipating change and changing how we do work.
Through TQM initiatives, we aim to create a workplace where
employees can discuss anything with each other, and we are

Report on initiatives to

Declaration of assurance the president and area managers
On-site confirmation meeting by thepresident and vice president(Top: Japan, Bottom: North America)

T OYODA GOSEI REP OR T 20 23

65About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialImplementing Carbon Neutral Initiatives in the Supply Chain

Supply Chain Management
Basic Procurement Policy
The Toyoda Gosei Group has set a Basic Procurement
Policy based on the concept of coexistence andco-prosperity with our suppliers. We aim to deepen

our partnerships with suppliers while achieving
sustainable growth for both of us.

Basic Procurement Policy
1. Globally Optimized Procurement
We procure the optimum raw materials,
products, and equipment fairly from a global
perspective, taking into consideration cost,quality, technology, and production.
We also welcome proposals from suppliers
for new technologies, manufacturingmethods, and new products.

2. Mutual Development Basedon Mutual Trust
We aim to enhance the collective strengthof the Toyoda Gosei Group based on open
and fair relationships with our suppliers,
mutually strengthening our corporate
structures, innovating our management,
and building relationships of mutual trust.

3. Efforts for a Sustainable Society
Toyoda Gosei has established action
guidelines on social issues to be addressed,
including the SDGs, and shares theseguidelines with suppliers in carrying out
initiatives.
We also aim to ensure complete legal
compliance and confidentiality in corporate
operations, including our supply chain.

liaison meetings are held twice a year to share
information and engage in dialogue to resolve issues
related to sustainability initiatives in addition to QCD(quality, cost, and delivery).

Suppliers(number ofcompanies)

Products &parts

Materials &equipment

Other

Total

421

327

25

773

Business with New Suppliers
We have an entry form on our website for open
dialogue regarding new proposals and new businessdealings. In addition to QCD assessments at the startof new business dealings, we also check the status of
the other party’s management initiatives based on theirlevel of support for our sustainability guidelines andother factors, and at the same time, we explain thevarious guidelines we have developed and seek theirunderstanding when concluding various contracts andmemorandums of understanding.

Initiatives with Suppliers
Sustainability Initiatives throughout the Supply Chain
We have created the Supplier Sustainability Guidelines(2nd Edition) for the purpose of ensuring theunderstanding, dissemination, and implementation of
our sustainability initiatives by suppliers. These
guidelines set policies related to human rights, labor, theenvironment, compliance, and other matters. In addition
to social aspects (including eliminating child labor,
forced labor, and discrimination, and ensuring equal
opportunity, reductions in long working hours, andcompliance with minimum wage laws), the guidelines
also require compliance with environmental aspects
such as water use and biodiversity by suppliers.
With regard to the environment, our Green
Procurement Guidelines require suppliers to reduce
CO2 emissions, recycle resources including waste, andmanage chemical substances. For conflict minerals,

66

120 participating companies brought together
examples of reductions and issues they have faced
over the past year, and group discussions by industry
sector were held for sharing issues. We will continue to
implement carbon neutral initiatives in cooperation
with our suppliers.

CN Initiative Conference held in September 2023. 122 participants from 118
companies attended, including those who participated via the Web.

Strengthening Our Partnerships with Suppliers

Our Supply Chain and Global Expansion
We directly deal with 421 suppliers for products andparts, 327 suppliers for materials and equipment, anda total of 773 suppliers including other suppliers inJapan and overseas.
As our business expands globally, we are collaboratingwith purchasing managers in each region, taking into
consideration all aspects of quality, cost, risk
avoidance, and other factors. Global procurement

To achieve our goal of carbon neutrality throughout our
entire supply chain, we started joint initiatives with our
suppliers in 2021.
We started CO2 emission reduction initiatives in 2022
after holding presentations and gaining an
understanding of the current situation for recognizing
the issues faced by individual suppliers. In addition to
study sessions at the Energy Saving Dojo where
Toyoda Gosei’s energy-saving expertise is exhibited,support for measurement of actual energy usage, andvarious training sessions to prepare reduction themes
and implement reduction initiatives tailored toindividual suppliers, we also held the Carbon Neutral(CN) Initiative Conference in September 2023. About

we ask suppliers to be responsible in theirprocurement of resources and raw materials, and oncea year, we conduct a survey on conflict minerals withthe cooperation of all suppliers.
As described above, we are accelerating initiatives
needed for sustainable growth over our entire supply
chain, matched to the various changing social
conditions.

Every April, we hold procurement policy briefings
where we explain our management philosophy, thebusiness environment, and company policy to about
250 major suppliers in Japan, share our issues andtargets, and regularly confirm results and discuss
improvements through anticipated value roundtables.
In addition, starting in FY2019, we have designatedDecember of each year as Supplier Month as anopportunity to express our gratitude and respect toour suppliers and to listen to their honest opinions withhumility, and we aim to build better relationships with
our suppliers by presenting them with letters ofappreciation to express our gratitude for their daily
efforts.
We also hold procurement liaison meetings six times ayear to introduce examples of initiatives and share
information, and to hold seminars on social issues
such as carbon neutrality.
Since FY2020, we have established a Management
Troubleshooting Consultations Office for managers inour suppliers for receiving inquiries from them on
various management issues, and we strive to provide
consultations for those issues and advise them onhighly effective solutions.

Support for Suppliers So That We Can Grow Together
To support our suppliers, we implement various
initiatives from the perspective of safety, sustainability,
quality, cost and production. No matter what the case,
we are implementing these initiatives in association
with human resource development support, such astransfer of our own skilled workers or accepting corepersonnel from our suppliers. In addition, we provide
indirect support for the initiatives of the Kyowa-kai,
which is organized by suppliers for the purpose of
mutual study and horizontal deployment of bestpractices, and from 2022, the Winning (Value)
Technology Exhibition has been hosted by the Kyowakai with the aim of strengthening the competitivenessof both parties by utilizing suppliers’ accumulated

knowledge to enhance the added value of our
products.
In 2023, we also began to leverage the strengths ofboth parties by sharing information on our problems(needs) and the proposals (seeds) of the Kyowa-kai.

The Winning Technology Exhibition
held in September 2023. About
1,100 visitors attended the exhibitionof various “value techniques” fromparticipating companies.

Monitoring of Supplier Information
We request suppliers with whom we have ongoingtransactions to submit a supplier survey sheet
covering management information at least once a year,
and we strive to quickly resolve risks and solve
problems by visiting and interviewing suppliers

regarding major changes.
Also, we conduct supplier evaluations, including QCD,
to sort out the strengths, weaknesses, and challengesof each company before considering the details oftransactions.

Conducting self-assessments of suppliers in accordance with the Supplier
Sustainability Guidelines revised in March 2023

T OYODA GOSEI REP OR T 20 23

67About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialHealth Management Initiatives

Health and Safety

We conduct health management initiatives to ensure that all of our employees remain healthy, both physically and mentally.

Basic Philosophy on Health and Safety
The Toyoda Gosei Group considers employee safety
and mental and physical health to be one of our mostimportant management issues, and we do our best toensure secure and pleasant workplace environments
for all business operations.

Health and Safety Initiatives
Based on the above basic philosophy, we have established the Safety and Health Declaration and are working to
spread our company initiatives.
Safety and
HealthDeclaration

1. We will comply with all laws and company regulations and standards related to safety and health.
2. We will keep in mind that “Safety takes priority over everything else” and ensure that each andevery one of us acts in a “safety-first” manner.
3. We will engage in initiatives with a sense of ownership, and strive to foster a culture of safety inwhich all employees participate and are mutually enlightened.

Implementation System
The Central Safety and Health Committee, chaired by
the general manager in charge of the Safety & Health
Promotion Division and attended by the president, thelabor union chairperson, all plant managers in Japan,
and the presidents of domestic and overseas
subsidiaries, meets four times a year to report anddeliberate on various safety and health-related
measures, and report the results of these deliberations
to the Board of Directors.
Targets and Achievements (Global)
Based on the belief that it is the company’s
responsibility to ensure that all employees return homefrom work in the same good health state as they
arrived at work, we have set a global target of zerocritical*1 and severe*2 STOP7*3 accidents, and are
implementing various measures. In FY2022, we
implemented initiatives to prevent entanglement
accidents by focusing on eliminating hazardous
sources, isolating hazardous sources, and shifting toinherent safety measures through automation andother means.

Implementation System
As a subordinate organization of the Central Safety
and Health Committee, the Health and Happiness
Promotion Council is held four times a year for the
purpose of expanding health management. This
council aims not only to ensure healthy workplaces but
also workplaces with happiness, and with the Safety &Health Promotion Division as the executive office,industrial physicians, the Human Resources Division,
the health insurance union, and the labor union all
work together to discuss health and happiness
management initiatives. In addition, the matters
discussed and decided upon are deployed to the
Safety and Health Committee at each business site.

Health Challenge 8 in Health Management Initiatives
In addition to the deliberation results of the Central
Safety and Health Committee, the entire company
works together to implement initiatives by repeatedly
disseminating safety information through thepresident’s New Year message and company
newsletters. We also regularly share information with
our suppliers through procurement liaison meetingsand other means.

Global Critical and Severe STOP7 Accidents(including contractors and engineering companies)(Number of cases)

Critical accidents

4

2

2

0

Severe STOP7 accidents

1

1

2018

2019

1
0
2020

2021

2022 (FY)*1 Critical: Death*2 Severe: Victim loses part of body (or function)*3 STOP7: Seven events that may cause serious injury: (1) Crushing or
entanglement, (2) Heavy object, (3) Drop or fall, (4) Electric shock, (5)Vehicle, (6) Hot object, explosion, or gas, (7) Amputation

We are working on health management initiatives withthe aim of ensuring that each and every employee canwork with energy and healthily.
Of the KPIs defined in Health Challenge 8*, stress,
sleep, and exercise, which had low scores, were
designated as priority items for FY2022, and various
initiatives were implemented, including the distributionof exercise-promoting videos.
In recognition of these initiatives, we were certified asa Sports Yell Company 2023 by the Japan Sports

Agency and as a Health & Productivity Management
Outstanding Organization 2023 (White 500) by the
Ministry of Economy, Trade and Industry (METI).
* Health Challenge 8 is a metric consisting of 8 KPIs: weight, breakfast,drinking, snacking, non-smoking, exercise, sleep, and stress.

Exercise video by Wolfdogs Nagoya players

Initiatives to Maintain and Improve Women’s HealthAs part of our initiatives to support the health ofworking women, a Women’s Health Seminar was held
for the first time for managers and female employees.
In March 2023, a special menu (Pink Ribbon Lunch)
was offered in the cafeteria and various information
was provided as a part of the Women’s Health Week
event. Also, individual letters and educational materials
were sent to raise awareness of the importance ofbreast and uterine cancer screening.
In recognition of these initiatives, the company

received the Partner Award for Cancer Prevention
Campaign (Information Provider Category) from theCancer Prevention Corporate Action Project sponsoredby the Ministry of Health, Labour and Welfare.

Plaque for Partner Award forCancer Prevention Campaign inInformation Provider Category

are held once a month (2 companies: 15 times in total)
to improve safety and fire prevention levels.

On-site physical audits and guidancefor domestic subsidiaries

Example of Pink Ribbon Lunch

Contribution to Local Communities

Ensuring the Safety at Domestic and Overseas Subsidiaries
We have been using safety and fire prevention maps
(SFPM) since FY2020 for the purpose of visualizing thesafety and fire prevention levels and rectifying
weaknesses of our domestic and overseas subsidiaries.
For domestic subsidiaries, on-site physical audits andsupport are conducted three times a year (13companies: 39 times in total), and for overseas
subsidiaries, priority guidance companies have been
designated from this fiscal year, and web-based
guidance meetings utilizing videos and various materials

Health Declaration: To Achieve “Boundless Creativity and Social Contribution”
1. We believe the health of our employees is an important management resource and will strive to foster a
corporate culture that puts safety and mental and physical health first.
2. We will strive to create positive and vibrant workplaces where employees can work energetically, anddevelop our personnel.
3. To help improve the health of employees and their families, we will raise health awareness for disease prevention.

Web-based guidance meetings foroverseas subsidiaries

In order to be a good corporate citizen, as expressedin our management philosophy, we are actively
engaged in global initiatives in four key areas: social
welfare, environmental conservation, youth
development, and community crime prevention. In
February 2023, our volunteer group Wheelchair
Doctors received the Selection Committee’s Special
Award at the 2nd Car, Society, and Partnership Awards
in recognition of their longstanding and hardworking
efforts to make a difference. We will continue toincrease opportunities for participation in social
contribution initiatives within the company andimplement initiatives that benefit the community.

Wheelchair Doctors at the CSP Award Ceremony

68

Wheelchair Doctors repairing a wheelchair
T OYODA GOSEI REP OR T 20 23

69Governance

About Toyoda Gosei

Establishing and operating transparent management systems
to further enhance Group-wide corporate governanceValue Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

To continue to be a trusted company, we are working to enhance corporate governance throughout the Toyoda
Gosei Group. We are improving the appropriateness and efficiency of our operations by developing andoperating internal control systems to create a fair and transparent corporate governance system, while we
ensure its effectiveness through management supervision and audits by outside directors and outside Audit &Supervisory Board members. Furthermore, we are also implementing legal compliance, corporate ethics, andrisk management activities.

Corporate Governance System

Corporate Governance

Shareholders’ Meeting

Basic Philosophy
We view the enhancement and strengthening ofcorporate governance with the aim of ensuring soundand efficient corporate management to be crucial
in achieving sustainable growth. Based on this, weare building and maintaining fair and transparent
management systems and organizational systems
that can respond effectively to a changing businessenvironment.
Additionally, Toyoda Gosei pursues consummate
corporate governance by voluntarily implementing a
range of policies in accord with the letter and spiritof the ideals and principles in Japan’s Corporate
Governance Code, formulated by the Financial
Services Agency and the Tokyo Stock Exchange.

Appointment/
Dismissal

Appointment/
Dismissal
Audit

Board of Directors
Appointment/
Dismissal
Reports

Supervision

Consultation
Submission/
ReportExecutive
Appointment
Committee

Corporate Governance System
Toyoda Gosei has adopted an audit and supervisoryboard system and set up the Shareholders’ Meeting,Board of Directors, Audit & Supervisory Board, andaccounting auditors as statutory entities. We have also
put in place internal auditors and other internal control
systems including internal audits. The Board of Directors
consists of eight directors and holds regular monthly
meetings (extraordinary meetings held as needed),
where matters prescribed by law or in the Articles ofIncorporation and important matters related to corporate
management are reported, discussed, and resolved.
A system of corporate officers is used to speed up decisionmaking and business execution. Furthermore, by introducing
the Chief Officer System in June 2023 and transferringsome of the president’s authority and responsibilities to theChief Officers, we will cross over the boundaries of businessand regional operation bases to manage priority functions
on a global basis, thereby realizing highly strategic businessexecution and accelerating the speed of management.
For important business matters, meetings for the General
Managers’ Council and Management Council are held
monthly. Functional council and committee meetings

70

Audit & Supervisory Board

Cooperation

Accounting Auditors

Main Councils &Committees

ReportExecutive
Compensation
Committee

Audit

Audit

Audit & Supervisory
Board Dept.

• Board of Directors• Sustainability Council• General Managers’ Council• Management Council

Business Execution System

relevant to key areas such as technology, costs, andpersonnel are also held as needed to ensure appropriate
management decisions.
The Audit & Supervisory Board consists of five members
and holds regular meetings. Members also attend
important meetings such as Board of Directors’ meetings
and audit each department and subsidiary, throughwhich they fulfill their function of auditing corporate
management. Accounting auditors are external auditors
who combine auditing functions with a commitment toensuring an independent and fair auditing system.
The Company uses the current system because audit,
supervisory, and execution functions are well coordinatedwith each other under this structure, with legality andefficiency of the Company’s decision-making andbusiness execution sufficiently ensured.
Also, in order to strengthen the supervisory function of
the Board of Directors and to increase the objectivity andtransparency of the decision-making process, we haveestablished the Executive Appointment Committee andExecutive Compensation Committee under the Board of
Directors as non-mandatory advisory committees.

Internal Control Systems
In accordance with the provisions of Japan’sCompanies Act, Toyoda Gosei has formulated a Basic
Policy on Establishing Internal Controls. Under thispolicy, we are striving to ensure appropriate operations
by establishing internal control systems, which help
us deliberate important matters, establish related rules
and guidelines, and handle internal audits, complianceand risk management. Every year, the Board of
Directors checks the status of establishment andoperation of internal controls in an ongoing initiative toimprove and reinforce them. In April 2023, we revised
the basic policy with the aim of improving internal
controls, including management of subsidiaries.
Also, to cultivate a healthy internal controls

Appointment/
Dismissal

environment at Toyoda Gosei and its subsidiaries, allGroup companies share its management philosophy.
The Toyoda Gosei Group Charter for Business Ethics,
a shared guideline for compliance, has also been
instituted and expanded to subsidiaries. While
respecting the independence of subsidiarymanagement, we receive regular business reports fromsubsidiaries and set up systems to confirm the
propriety and legality of subsidiaries’ businesses
through advance approval reports. We also send
non-executive directors and Audit & Supervisory Board
members to key subsidiaries in a system to monitor
and act as a check on their business execution.

President• Sales and Technical Council• Research andDevelopment Council• Profit and Cost Council• Production andPurchasing Council• Human Resources Council• IT Planning Council

Direction/Supervision

Reports
Business Execution
Audit

Audit Div.
Cooperation with
Audit & Supervisory Board
and Accounting Auditors

Company-wide Councils

Corporate Officers

Submission/
ReportFunctional/Business Divisions

Management Councils

Decision/
Approval

Committees

Subsidiaries and affiliates

Sustainability Council
In November 2021, we established our new Sustainability
Council with the aim of achieving sustainable corporate
growth, improving corporate value, and contributing to thesustainable development of society. In this Council, we
work diligently to discuss and decide on key action items
related to sustainability and confirm how the initiatives
are progressing with a sense of urgency. Chaired by thepresident, the Council consists of all directors, including
those from outside the company, Audit & Supervisory
Board members, and general managers of divisions,
including those in overseas regions, and implements• Internal Controls
Committee• Export Control Committee• Central Safety and HealthCommittee• Carbon Neutrality andEnvironmental Committee• Quality Committee

Functional Councils

balanced sustainability measures with a high degree ofobjectivity and transparency.
Frequency

Generally meets twice yearly

Chairperson President

Members

All directors and Audit & Supervisory Board members(including outside directors and Audit & Supervisory
Board members), general managers of divisions andoverseas regional operation bases

Main
Agenda• Make decisions on key action items related to sustainability• Report on the status of implementation of key action
items and target values• Make decisions on important external disclosure items

Executive Compensation Committee and Executive Appointment Committee
Toyoda Gosei’s Executive Compensation Committee
The chair of both committees is appointed from outside
and Executive Appointment Committee are composed of
directors to further enhance transparency and objectivity.
members of which more than half are outside directors.
Name

Executive
Compensation
Committee(Number of meetings
in FY2022: 1)

Role

Members

Deliberates and reports on
the compensation systemfor directors and theirindividual compensation(restricted stock-based
compensation, etc.)

Katsumi Saito, president*
Naoki Miyazaki, director
Kimio Yamaka, outside
director (chairperson)
Mayumi Matsumoto,outside director
Takashi Wada, outside
director** Assumed position in June 2023

Attendance(FY2022)

Name

—
1/1
1/1
1/1
—

Executive
Appointment
Committee(Number of meetings
in FY2022: 2)

Role

Members

Deliberates and reports
on proposals regarding
the appointment anddismissal of directors andAudit & Supervisory Board
members (appointment of
the president, etc.)

Katsumi Saito, president*
Naoki Miyazaki, director
Kimio Yamaka, outside
director (chairperson)
Mayumi Matsumoto,outside director
Takashi Wada, outside
director*

Attendance(FY2022)
—
2/2
2/2
2/2
—

* Assumed position in June 2023

T OYODA GOSEI REP OR T 20 23

71About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governance

Policies and Procedures to Appoint and Remove Senior Officers and Nominate Candidates for Directors andAudit & Supervisory Board Members
Nominations of candidates for directors and Audit &magnetism in terms of their ability to make accurate
Supervisory Board members are made after deliberationand prompt decisions after taking into account theand reporting by the Executive Appointment Committee,balance of knowledge, experience, and capabilities offollowed by a resolution of the Board of Directors and athe management team and the Board of Directors as asubsequent Shareholders’ Meeting.
whole. The candidates are comprehensively nominated
The nomination policy for senior officer and director
and appointed on the basis of their ability to fully
candidates is based on the candidate’s personal
comply with laws and corporate ethics.

The nomination policy for Audit & Supervisory Board
member candidates is to nominate candidates from acomprehensive perspective of putting the right personin the right position while ensuring a balance between
diverse perspectives on corporate management,
including knowledge of finance, accounting, and legal
affairs, and knowledge of the Company’s business.

If a candidate for senior officer or director is found tohave committed any fraudulent act or seriously violated
any law or regulation, or the Articles of Incorporation,
we will take procedures for their dismissal.

Skills Matrix• The following table shows each director’s and Audit & Supervisory Board (ASB) member’s expected field ofspecialty based on their past experience.
• The composition of our Board of Directors and Audit & Supervisory Board (ASB) as a whole takes into consideration
the balance of knowledge, experience, and abilities, as well as diversity and number of members.

Director

Director

Executive Compensation
Committee◎ indicates chairperson
Executive Appointment
Committee◎ indicates chairperson

OutsideIndependent

OutsideOutsideIndependent

OutsideIndependent

Skills required by the Board of Directors and Audit & Supervisory Board are selected to
implement the medium- to long-term business plan with the aim of achieving sustainablegrowth and increasing the corporate value of the Company.

◎Overseas operations

Finance

Legal/Risk management





















Technology

Manufacturing (production/
quality management)







To establish an accurate financial reporting system and a solid financial foundation, to invest in growth to achieve sustainablegrowth and increase corporate value, and to realize appropriate shareholder returns.












Personnel



DX







New business(non-automotive)

To implement the establishment of a governance structure based on legal compliance and appropriate risk management, tobuild a foundation for sustainable growth and increased corporate value, as well as to improve the effectiveness of supervision.

To achieve business growth as indicated in the medium-term business plan through technological innovation using advanced
technology and through skills and expertise in medium- to long-term product planning and development.



To adopt innovative production technologies and improve manufacturing sites and to maintain and improve product quality as
a company with its main focus on the automotive parts manufacturing and sales business.
To expand sales globally in response to changing automobile needs and to continue to provide high value-added products based on
skills and knowledge in preparation of sales strategies and information gathering through smooth communication with customers.

Environment and energy

To make appropriate management decisions that contribute to the Toyoda Gosei’s sustainable growth and enhancement of corporate value based on
experience and a proven track record in corporate management in the drastically changing global business environment surrounding Toyoda Gosei.
To grow our business globally by utilizing overseas business experience and knowledge of the overseas business environmentand business management.



Sales

72

OutsideIndependent◎

Corporate management

Attendance at Board of
Directors’ meetings(Apr. 2022–Mar. 2023)
Attendance at Audit &Supervisory Board meetings(Apr. 2022–Mar. 2023)

ASB Member ASB Member ASB Member ASB Member ASB Member

OutsideIndependent

Reasons for Skill Selection and Its Definition

Director

Takashi Wada**

Director

Masahiko
Yokoi**

MayumiMatsumotoDirector

Hitoshi
Kuwayama*

Kimio Yamaka

Director

Chika Kako

Naoki Miyazaki

Director
Vice President

Yamato Suzuki

Mitsuhiro
Nawashiro**

Director
President

Kenji Oiso

Masaki Oka

Skill

Hiroshi Yasuda

Position at
Toyoda Gosei

Katsumi Saito**

Name* Assumed positionin June 2022** Assumed positionin June 2023













To accelerate and implement initiatives integrated with business operations in areas requiring environmental consideration andto fulfill our social responsibility.



To develop and maximize the abilities of each and every employee by utilizing knowledge of diversity, inclusion, respect forhuman rights, and wellbeing.







To implement business transformation and establish a corporate culture utilizing digital technology, which is necessary tostrengthen the Company’s management foundation and build new businesses.







To plan and implement medium- to long-term plans to search for, develop, and launch new businesses in non-automotive
fields, and to expand new businesses in the future.

−

13/13

13/13

−

13/13

13/13

13/13

−

13/13

13/13

13/13

11/11

−

−

−

−

−

−

−

−

−

12/12

12/12

12/12

10/10

−

T OYODA GOSEI REP OR T 20 2373

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governance

Changes in Numbers of Directors and Audit & Supervisory Board Members

Evaluation of the Effectiveness of the Board of Directors

In 2012, Toyoda Gosei adopted a system of corporate
officers and downsized its Board of Directors to nine
directors from 23 as of 2011. It appointed its first outside
director in 2015.

Effective functioning of corporate governance isessential for the Company’s sustainable growth, toenhance corporate value, and to contribute to thesustainable development of society. Therefore, to ensure
the effectiveness of the roles and responsibilities of theBoard of Directors, evaluations and opinions are heard
every year from members of the Board. The Board of
Directors then analyzes, evaluates, and deliberates on
measures for improvement. In FY2022, debriefings withall nine directors and all five Audit & Supervisory Board
members were conducted to assess their performance.
As a result, Toyoda Gosei found no material deficiencies
across any of its assessments and concluded that theBoard continues to function effectively.
As in the previous year, the Board received high ratings
for its openness and candid discussions and support
for outside officers. We believe that questions andopinions from outside officers are important for ourdecision-making process, and we will continue these
efforts. However, regarding the Board’s discussions on
medium- to long-term policies, which has been an issue

No. of Directors

The Board currently comprises eight directors, three or
37% of whom are outside directors. One of the outside
directors is a woman. The outside director appointments
have increased the Board’s objectivity and diversity.

Outside Director Ratio

Female Director Ratio

23

2011

8

0%

37%

0%

12%

2023

2011

2023

2011

2023

No. of Audit & Supervisory Board (ASB) members
5

2011

Outside ASB Member Ratio

Female ASB Member Ratio

5

2023

60%

60%

0%

20%

2011

2023

2011

2023

Major Initiatives to Strengthen the Governance Structure
2012

2015

2019

2020

2021

2022

Board Effectiveness Evaluation Process2023

 Changed ratio of outside directors to 1/3

Board ofDirectors
and Audit &Supervisory
Board Reduced number of
appointed directors

Business
Execution
System Adopted a corporate Reduced the number ofcorporate officers
officer system
 Started implementation ofJapan’s Corporate Governance Code

 Established Executive Compensation
Committee and Executive
Appointment Committee
 Appointed a female director

 Appointed an independent
outside director as a chairpersonof both committees
 Appointed a female Audit &Supervisory Board member Adopted the Chief
Officer System
 Established the Sustainability Council

Councils
andCommittees

 Changed name to Compliance and Risk Management Committee Corporate Conduct
Ethics Committee
 Environmental Committee

Board of Directors
The Board of Directors deliberates from many different
perspectives on the direction of management,
including management and business strategies, thenreports and discusses on progress after any necessary
resolutions have been passed. In such a way, theBoard supervises from a number of different viewpoints
on whether management strategies are being74

 Changed name to Internal
Controls Committee
 Changed name to Carbon Neutrality
and Environmental Committee

executed appropriately. In addition to strengthening
the Company’s internal control system and risk
management system, in recent years the Board of
Directors has been working to achieve sustainablecorporate growth amid a chaotic business environment,
including political instability, worsening environmental
problems, and the COVID-19 pandemic.

Main Agenda Items and Reports by the Board of Directors in FY2022
Topic

Main Agenda Items and Reports

Management/
Business
Strategies• Medium- to long-term business strategy• Domestic and overseas subsidiaries’ business strategies (expansions, mergers,
downsizing)• Business execution reports (results, production, quality, safety, technology/development,
intellectual property, priority risk management, etc.)• Progress report on matters resolved by the Board

Corporate• Financial results, etc.
• Appointment of directors and Audit & Supervisory Board members, appointment ofexecutives, executive compensation• Sustainability measures• Internal control systems, internal audit department reports

Investment and
Loan Projects• Investment in buildings and facilities for expansion of domestic and overseas production
bases• Financing for domestic and overseas subsidiaries

for some time, members commented that opportunities
were provided for discussion at the Board of Directors’
meetings, but more active discussion was desired,
and that opportunities for discussion of measures andstrategies were desired rather than reports on initiatives.
Accordingly, Toyoda Gosei will set up opportunities fordiscussion and exchange of opinions not limited to theBoard of Directors’ meetings. Regarding the resumptionof opportunities to understand the actual situation on
the front line through on-site visits, we have resumed
process inspections for the agenda items raised by
the Board of Directors’ meetings as a priority, andwe will further expand such opportunities this year. In
addition, we are working to improve communication
by holding lunch gatherings to ensure opportunities
exclusively for communication among outside officers,
and by replacing individual interviews with roundtablediscussion-type meetings with all outside directors
for further improving communication. Through these
efforts, we will work to further improve the effectivenessof the Board in the current fiscal year.

Number of Agenda Items and Reportsby the Board of Directors in FY2022
1Q

2Q

3Q

4Q

Total

Agenda
Items

16

2

8

9

35

Reports

14

8

9

8

39

Total

30

10

17

17

74

Evaluation Method

Debriefing Items (Main Items)

Interview: Nine directors and five Audit & Supervisory Board members
Evaluation process: Analysis of interviews and debriefing results to ensure
anonymity• Roles and responsibilities of directors• Deliberations within the Board• Supervisory function of the Board• Support for outside officers* More detailed sub-items are laid out under the main items of the debriefing
to allow for a well-rounded evaluation.

FY2022 Board Effectiveness Evaluation Results
Issues Identified

Measures

Enhancing discussions on medium- to longterm plans and future visions

Enhance discussion of the 2030 Business Plan and its initiatives for medium- to long-term
management strategy and corporate value enhancement

Providing information to outside officers• Provide more in-depth information through explanations of business operations by executives in charge• Enhance opportunities for discussion with officer candidates• Resume opportunities for on-site visits that had been suspended due to COVID-19 measures

Opportunities for exchange of opinions among
outside officers

Plan opportunities for exchange of opinions among outside officers to further improve governance

Ensuring further diversity of the Board

Continue to select candidates with diversity in mind based on the skill matrix and to treat this as an
ongoing issue for consideration

Issues Evaluated in FY2021 for Board Effectiveness and Status of Initiatives in FY2022
Main Feedback (Issues) in FY2021
Enhancing discussions on medium- to longterm plans and future visions
Discussions on measures to respond toenvironmental changes (CASE, etc.)

Initiatives in FY2022
Continued to provide opportunities for discussion and reporting at the Board of Directors’ meetings on
initiatives to improve corporate value and medium- to long-term management strategies in response tochanges in the business environment

Explanations on the background of individual
investments and their relationship withmedium- to long-term strategies

Discussed individual projects at the executive level after indicating the direction of capital investment tomake projects easier to understandEnsuring time for outside officer liaison
meetings

Increased the time given for outside officer liaison meetings for further exchange of ideas anddiscussions

Ensuring further diversity of the Board

Continued selection of diversity-conscious candidates by arranging experience and expertise required
for the growth of the Company in a skills matrix

T OYODA GOSEI REP OR T 20 2375

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governance

Expected Roles of and Support for Outside Directors
All three outside directors possess a wealth ofexperience and keen insight.
Mr. Yamaka brings a wealth of experience andinsight in the areas of finance and the environment,
Ms. Matsumoto in the areas of the environment andthe SDGs, and Mr. Wada in the areas of corporate
management and manufacturing. Ms. Matsumoto is
Toyoda Gosei’s first female director.
The three adeptly fulfill monitoring and advisory roles in
addition to actively participating in Board discussions.
In their monitoring role, they receive support in theform of departmental briefings on business operations
and challenges and direct access to frontline
operations through on-site visits to domestic and

Executive Compensation
overseas subsidiaries to better understand the actual
state of operations. Additionally, they are briefed inadvance on the content and background of resolutions
to be voted on at Board meetings to facilitate sounddecision-making.
At the same time, the outside directors advise
management on company direction and businesschallenges. Advisory opportunities include regularlyscheduled liaison meetings attended by all outside
directors and outside Audit & Supervisory Board
members, each of whom also attends various othermeetings, including the Sustainability Council,
Sales and Technical Council, Carbon Neutrality andEnvironmental Committee, and ad hoc meetings.

Outside Directors and Outside Audit & Supervisory Board Members
At the annual Shareholders’ Meeting, held on June 15,2023, Kimio Yamaka, Mayumi Matsumoto, and Takashi
Wada were appointed as outside directors, andMasahiko Yokoi was appointed as an outside Audit &Supervisory Board member. Including Chika Kako andHitoshi Kuwayama, who are currently in office, a totalof three outside Audit & Supervisory Board members
have been appointed.

Appointment

Name

76

To benefit from her management oversight and advice based on her extensive experience and high-levelinsight as a news anchor and researcher in the broad fields of social issues, environment, and energy in the
management of Toyoda Gosei.
Ms. Matsumoto has been designated as an independent director because she meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.

TakashiWada

To benefit from his management oversight and advice based on his extensive experience and expertise in the
management of manufacturing companies over many years.
Mr. Wada has been designated as an independent director because he meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.

Chika Kako

To incorporate into Toyoda Gosei’s audits her wealth of experience and keen insight gained from her career at
Toyota Motor Corporation, where she served mainly in vehicle development and materials development roles
and was involved in management as a managing officer.

Hitoshi
Kuwayama

To incorporate his extensive experience and deep insight as a lawyer in the auditing of Toyoda Gosei.
Mr. Kuwayama has been designated as an independent auditor because he meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.

Masahiko
Yokoi

To incorporate his extensive experience and deep insight as a manager in the auditing of Toyoda Gosei.
Mr. Yokoi has been designated as an independent auditor because he meets the requisite criteria and is deemed
free of potential conflicts of interest with regular shareholders.

Long-term

OutsideAudit &
Supervisory
Board
members

MayumiMatsumoto

To benefit from his management oversight and advice based on his extensive experience and expertise infinance, particularly policy finance, project due diligence, and the environmental and energy sectors.
Mr. Yamaka has been designated as an independent director because he meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.

Short-term

Outsidedirectors

Reason for Appointment

Performance-based compensation

Kimio
YamakaIndependent
Director/Auditor

Director Compensation Scheme
FixedCompensation

Election of Outside Directors and Outside Audit & Supervisory Board Members

Directors’ compensation consists of monthly fixedcompensation and performance-based compensationin the form of cash bonuses (short-term incentive) andstock-based compensation (long-term incentive) basedon the idea that directors should be appropriately
incentivized to pursue sustained growth in Toyoda Gosei’svalue. Directors’ compensation is split roughly 70:20:10
among monthly compensation, cash bonuses, and stockbased compensation, respectively.
Monthly compensation is set at a fixed amount thatreflects the recipient’s job responsibilities and experience
as well as compensation levels at other companies. Cashbonuses are based primarily on fiscal yearly consolidated
operating profit. Secondary variables that factor into theirdetermination include the degree to which fiscal yearlyplans are attained, employees’ bonus levels, bonus levels
at other companies, medium- to long-term earnings,
previously paid bonus amounts, and contributions to ESG
management. Stock-based compensation is intended as
an incentive to pursue sustained growth in Toyoda Gosei’svalue. It is paid in the form of restricted stock to promote
greater sharing of value with shareholders.

Through June 2020
Monthly compensation
Capped at ¥60 million/month
Up to¥720 million annualized()

Cash bonuses[Amount approved at annual
Shareholders’ Meetings]

80%

20%

Directors’ aggregate annual cash compensation (monthly
compensation plus bonuses) is capped at ¥650 million(outside directors’ share of which is capped at ¥65 million).
Directors’ aggregate annual restricted stock-based
compensation is capped at ¥100 million (outside directors
are not eligible for restricted stock-based compensation).
All three compensation caps were approved at the annual
Shareholders’ Meeting on June 12, 2020.
Outside directors and Audit & Supervisory Board
members receive only fixed monthly compensation
because their role is to oversee and audit managementfrom an independent vantage point.
Individual directors’ compensation is set in accord withthe above policies following a fair and transparent review/
reporting process by the majority-independent Executive
Compensation Committee, established in 2019.
At Executive Compensation Committee meetings, outside
directors have made suggestions about further enlarging
the incentive element of director compensation by, e.g.,
adjusting compensation to reflect the extent of directors’
respective environmental contributions.
Total Compensation for Each Officer Class,Total by Each Type of Compensation, and Numberof Officers Receiving the Compensation
Total Amount by Type of Compensation

From July 2020
Monthly
compensation

Cash bonuses

Restricted
stock-based
compensation

70%

Officer Class

Number(Millions of yen)
Total Executive
Fixed
Performance-based Non-cash of Subject
Compensation Compensation compensation Compensation
Officers(Millions of yen) Monthly
Stock-based (People)
Cash bonuses
compensation

20%

10%

Directors(excluding outside
directors)
Audit & Supervisory
Board members(excluding outside
members)
Outside officers

Compensation

325

222

74

28

6

76

76

—

—

2

70

70

—

—

7

* Bonuses are provisions for FY2022.

Internal Audits, Audit & Supervisory Board Members’ Audits, and Accounting Audits
We have set up the Audit Division to handle internal
audits. With the aims of achieving business objectives
and preventing misconduct and mistakes, internal
audits are conducted across the overall business(including audits of functional departments) based on
an internal auditing plan approved by management at
the beginning of each term.
The results of internal audits are reported to
management, and audited departments are given
recommendations for improvements based on the audit
results. The effectiveness of internal audits is increased
by checking their improvement plans and results.
Each Audit & Supervisory Board member follows theauditing policy and audit plan established by the Audit& Supervisory Board when investigating the Company
and subsidiaries. They attend the meetings of importantdeliberative bodies and committees including theBoard of Directors, General Managers’ Council, andManagement Council, listen to reports on businessfrom directors and others, inspect financial statements
and other important documents, and conduct on-site
audits of offices and subsidiaries to audit theperformance of duties by directors from theperspectives of ensuring legality and appropriateness,
protecting assets and rights, and preventing loss.
Moreover, a special department has been establishedto assist the auditors’ audits.
The certified public accountants who performed the
FY2022 accounting audit of Toyoda Gosei were Satoko
Nakatani and Kosaku Kawahara ofPricewaterhouseCoopers Aarata LLC.
Audit & Supervisory Board members, internal auditing
department personnel, and accounting auditors
regularly meet to confirm their respective auditing
systems, auditing policy, auditing plans, implementation
status, and audit results. They cooperate in performing
efficient and effective audits, contacting each other as
needed to exchange ideas and share information.

T OYODA GOSEI REP OR T 20 23

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About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceInterview with Outside Officers
Two outside officers, Mr. Wada and Mr. Yokoi, who took office in June 2023, discussed governance and the 2030
Business Plan.

Takashi Wada
Outside Director

Masahiko Yokoi

Outside Audit &Supervisory Board Member

We have great expectations for the growth of Toyoda Gosei,
which aims to bring together the future dreams
of its stakeholders by providing value in safety,
comfort, and decarbonization.
Chapter 1:
Providing a push when making big
decisions and major changes needed tostrengthen corporate governance
Wada: I joined Sanken Electric in 1979, whose main
products are semiconductors, electronic components,
and power supply systems, and have been with thecompany for over 40 years. My first assignment was in
the Information Systems Department, where for about 20
years I installed ever-changing IT technologies, from host78

computers to online systems, at sales and production
sites. Since I experienced the first period of digitalizationin Japan and the world, I am open-minded about
implementing DX, which has attracted growing attention
recently.
After that, I was involved in a wide range of areas,
including the secretarial section, materials and production
management, and factory and production control, andfrom 2015, I served as president for six years andchairman for one year. At the time of my appointment aspresident, the company was in a very difficult situation interms of performance and finances due to the lingering

effects of the Great East Japan Earthquake and otherfactors, and we were proceeding with large-scale
structural reforms and new growth strategies at the sametime. Despite the difficult business environment, weinvested in R&D to strengthen our development
capabilities, which are the seeds of sustainable growth.
With regard to work styles, we launched a project called
the New Normal Project led by young employees andestablished an operations center to implement reforms inwork styles, and were among the first to introduce theabolition of uniforms, a flextime system, an open plansystem, remote meetings, and other measures. Thanks
to these efforts, a teleworking system was almost fully inplace at the onset of the COVID-19 pandemic, enabling
us to minimize disruptions to conducting work due to the
spread of the infection.
I have the impression that Toyoda Gosei has a nononsense corporate culture and a DNA of steadily
accumulating runs through hits rather than trying to slug
one-hit home runs. This culture is quite similar to Sanken
Electric, and has both good and bad points at times. For
example, when major changes or decisions need to be
made, there is hesitation. I think one major role of an
outside director is to give a push to management when it
is in doubt. On the other hand, this position has theimportant role of supervising management execution,and I think there are things that the execution side does
not want to be known or, if possible, does not want tosay. Having been in the execution position in Sanken
Electric, I understand that well, but in order to overcome
difficult issues, it is essential to build a relationship of trust
and a sense of unity, and communication is the only way
to achieve this. I hope to be in a position where I canconsult with the corporate officers and everyone on site
about any doubts they may have as they share
information with me. I have experienced a number of
tough management decisions in an industry different
from Toyoda Gosei, and I have no vested interest, so I
hope that my experience will be of some help.

Strengthening crisis management toremain a company of integrity
Yokoi: My career is completely different from Mr. Wada. I
became a reporter for the Asahi Shimbun in 1978 andhave been at the forefront of the media world ever since.

When I was a correspondent in New York, I encountered
the Tylenol Incident, in which a lethal drug was mixed intoa fever medicine and several people who took it died. It
is considered the gold standard of risk management.
When I analyzed the company’s response in my own
way, I found two key points. The first was that thecompany’s credo clearly prioritized its stakeholders, with
the number one priority being the customer, or end user.
Another was the overwhelming speed with which thecompany responded to prevent the damage fromspreading. They were able to make quick decisions
because they were completely unwavering in their basic
principles of what the company valued most.
Later, as head of the society department and editorial
bureau of the Asahi Shimbun’s Tokyo headquarters, I
was in a position to uncover a series of suspected casesthat led to corporate fraud and a political administration
change. On the other hand, as a media outlet
representing Japan, I was often denounced by society
and other media outlets, and I experienced five press
conferences to explain and apologize for my reporting,and I learned firsthand that if you do not act with integrity
and speed when something goes wrong, it can be fatal.
Based on this experience, the first thing I did when I
became president of Nagoya Broadcasting Network was
to create a crisis management team of three elite
department heads in order to rebuild a crisis
management system. I also reviewed the regulations
pertaining to internal controls to ensure that we do not
betray the trust of viewers, which is the most importantfactor in the media.
As an outside Audit & Supervisory Board member for
Toyoda Gosei, one of the things I must fulfill is to help
with crisis management. Toyoda Gosei is a sincere
company and has probably had very few crises that haveshaken its management. I would like to help create asystem that, when an emergency occurs, concentrates
information and makes decisions immediately based on
the principle of what we should protect.
The next area in which I would like to help is with internal
regulations. Internal regulations, especially those related
to internal controls, show what the organization values
most. Toyoda Gosei is a B to B company, so in the past,
we may have been oriented toward automobile
manufacturers, our direct customers, but as Toyoda
Gosei expands its business domains in the future, it will

T OYODA GOSEI REP OR T 20 23

79About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governancebe necessary to let end users and the rest of the world
know what the company values and to have themrecognize the value in its existence. I would like to utilize
my experience in the media to assist in this regard.

Chapter 2:
A corporate culture that welcomes diverse
opinions from outside officers
Wada: Toyoda Gosei’s Board of Directors has been very
good in that it takes the time to provide us, the outside
officers, with a thorough explanation in advance and thatthe business divisions and people on the front lines
provide us with a lot of information. I believe that in the
future, as our understanding of each of our businesses
progresses, we will build up to full-fledged discussions atboard meetings. We are also provided with opportunities
to have specific topics for outside officers explained tous, so we are beginning to share a common
understanding of issues based on our respective skills
and areas of expertise.
Yokoi: As Mr. Wada mentioned earlier, our role is toencourage while closely monitoring execution. We do notwant to give rubber-stamp approval, but rather want toprovide support while discerning the direction that should
be taken in the future. To do this, it is of utmost
importance to stimulate discussion at board meetings.
This is not an easy task, but the chairperson encourages
attendees to speak up, and is working to ensure that thepresident and others on the executive side have anappropriate sense of urgency. The effectiveness of theBoard of Directors has been further enhanced by diverse
viewpoints and active discussions, and this is a very
positive step in the right direction.
Wada: In this era of VUCA (volatility, uncertainty,
complexity, and ambiguity), various structural changes
are taking place, and the automobile industry isundergoing a once-in-a-century transformation. This is
an important period of change for the company, and it
would be a good idea to add speed and challenge above
all else to the values of our employees. If each and every
employee of the Toyoda Gosei Group can take a step
forward with the mindset of not being afraid of failure,
speeding up, taking on challenges, and never giving up,
we will be closer to achieving the 2030 Business Plan.
Yokoi: The expectations of the times and of society for
Toyoda Gosei have been gradually changing. Is it reallyenough for us to continue with our past approach ofprofessionalism, which is to perfectly complete the work
we have been contracted to do? In order to venture into
new business areas, it is necessary to have a corporate
culture that matches the new business areas. In his
presentation of the 2030 Business Plan, company
president Saito spoke passionately about his attachment
to rubber and plastics, the roots of the Company’sbusiness, and he linked their chemical structures toorganization theory through the term “polymers.” He also
expressed his strong commitment to change thiscompany through his specialty, which is humanresources. I felt that Mr. Saito has become the president
at the right time.
From now on, we must actively communicate to not only
shareholders, employees, and business partners, butalso to the wider public so that they feel that they canentrust their lives to this company because of its
products, they can join this company and trust that it willtake their lives on the right path, or they want to form analliance with this company.
Wada: Toyoda Gosei is a Toyota Group company inwhich Toyota Motor Corporation holds more than 40% of
the shares and accounts for more than half of its sales.
This fact remains unchanged, so it is absolutely
necessary for us to grow by leveraging the strengths of80

the Group. Conversely, if the concentric circles of theGroup are broken up when the Toyota Group implements
its once-in-a-century transformation and competes with
automakers around the world, the Japanese auto
industry will be weakened, and so I believe that now is
the time to focus on Group growth.
However, looking ahead, we should consider creating theseeds for Toyoda Gosei to grow as an individual and to
put its growth on track. We must aim for growth throughour own creativity and power, rather than leaving it toothers. It is the role of outside officers such as myself tooffer our opinions and push them forward.

Chapter 3:
Achieving the 2030 Business Plan
Wada: In the 2030 Business Plan, we set managementtargets of 1.2 trillion yen in sales revenue and 100 billion
yen in operating profit, but investors will judge whether
these targets are large or small. As a manufacturer,
Toyoda Gosei’s first major goal is to generate profits fromits products and to create value for society by ensuringthat customers and end-users also value the quality of its
products. Since it is our employees who actually createthat value, it is most important that our goals areincorporated into each of our business divisions and thateach and every employee is able to understand thesegoals and link them to action. In addition, we must also
evaluate whether or not the resources for those actions
is sufficient.
The other day, I told the president that we should
visualize the skill map of the entire human capital andquickly evaluate which skills are lacking and which are
too much. Only then can we create an effective training
plan for individual personnel, and thus set targets forenhancing the workforce. Without such an assessment,
the company will only be able to take partial measures,such as hiring mid-career workers due to a lack ofexpertise in a certain area, and it is difficult to succeed
this way. The same is true for women’s advancement.
The objective is not to create female section managers
for the target of 100 female managers in Toyoda Gosei inJapan, but rather to quickly incorporate women’s thinking
into management. It is important to think about how to
first develop section managers, and from there, develop
them into division managers and corporate officers. This

will also require an inventory of employee skills. It is
important to approach essential issues with a firm graspof the overall picture.
Yokoi: Medium- to long-term management plans have
two objectives. One is to provide a specific itinerary for
growth, and the other is to share the goal of what kind ofcompany it will be in the future with its stakeholders. The
plan works well in terms of visualizing the goals. It makes
clear management’s will to be this kind of company. The
plan is not about abstract compliance, but rather it is a
declaration of what we will follow and what we willcomply with. We have demonstrated the first step in thisdirection.
Toyoda Gosei is a company that will grow through the
pursuit of safety and comfort. With regard to carbon
neutrality, we will not only prevent harm from being doneto the environment but also make it our corporate
mission to do business with a focus on decarbonization.
In other words, we are a company that brings together
the future dreams of its stakeholders. I have great
expectations for this vision.
Wada: That’s right. As a corporate group that createssocial value in line with the times and delivers it in a timely
manner, I would like to do my utmost to support Toyoda
Gosei’s strategies and challenges so that our
stakeholders will support us.

T OYODA GOSEI REP OR T 20 2381About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceRisk Management

Message from the CRO

Basic Philosophy
We are working to prevent risks that could have graveconsequences for management and to minimize
damage in adverse events. For these purposes, we
identify risks in each function and make decisions on
how to respond in meetings of the Board of Directors,
Internal Controls Committee, and various general
councils.
An Internal Controls Committee headed by thecompany president identifies key risks, determines
measures to counter them, and checks on the
progress in executing these measures. In this way,

We aim for sustainable growth anddevelopment through initiatives tocontrol risk and the challenge toturn risk into opportunity.

Organization of Internal Controls Committee

Internal Controls Committee

Hiromasa Zaitsu
Risks Surrounding Toyoda Gosei
There are a diverse range of risks that could shakethe foundations of management, and they are making
the situation unclear and uncertain. They include thestrategic business risks of the automotive industry
in the midst of a period of major change, as wellas natural disasters, infectious diseases, trade
restrictions and sanctions, human rights violations,and information security.
In order to continue sustainable growth anddevelopment as a company, it has become importantto understand and accurately address these risks.

Controlling Risks
The Internal Controls Committee, chaired by thepresident, has been established to implement
specific measures through three subcommittees:
the Risk Management Subcommittee for selecting
and mitigating important risks, the Compliance
Subcommittee for ensuring thorough compliancewith corporate ethics and laws, and the Internal Audit
Subcommittee to implement internal auditing in asystematic manner.
In particular, as a response to key risks, we have been
focusing on the following measures; preparations fora Nankai Trough earthquake since we are locatedin the Tokai region in Japan, prompt sharing of
information and strengthening of cooperation at the
global level to continue production operations undersuch circumstances as the COVID-19 pandemic andthe impact of the conflict in Ukraine, visualization andsystematic improvement of cybersecurity measures,and so on.

82

Corporate Officer

CROthese measures are made more effective.
In addition, initiatives to deal with key risks or
unexpected risks due to political instability or otherexternal factors are discussed regularly by the Boardof Directors, and continuous improvements are made.
Moreover, Risk Management and Response Guidelines
have been established. These guidelines show theactions taken to prevent potential risks and to respondto problems appropriately and quickly.

Chairperson: President Saito

Deliberation of policies and measures related to internal controls

Risk Management Subcommittee

Compliance Subcommittee

Identifies major risks, decides measures
to avoid or mitigate them, confirms
implementation status

Reports and deliberates on corporate ethics
and status of compliance with laws, etc.

Internal Audit Subcommittee
Status reports on internal audits

Principal risk management activities

Future Initiatives
In June 2023, we created the new role of CRO.
We have been implementing preventative measures tomitigate risks and prompt and appropriate responses
to incidents when they occur. Going forward, as CRO,I will work to raise the overall level and respond more
flexibly by providing horizontal coordination to relevant
departments within the company and to affiliates inJapan and overseas. We will address issues related tothe organizational structure in a cross-organizationalmanner from the standpoint of the CRO, such as
different departments being responsible for different
types of risks and the difficulty of identifying the
responsible department due to the involvement ofmultiple departments depending on the type of risk.
In addition, several issues have emerged, which
require responses in cooperation with entities ineach region on a global basis such as the revisionof laws and regulations on trade controls in various
countries. We will work to develop internal response
systems and specific measures to deal with suchcomplex and multifaceted risks. Although there are
an increasing number of risks for which it is difficult toknow the correct response, we will prepare for themby assessing the current situation and developing
response scenarios based on a variety of situations.
We are committed to risk management with the belief
that enhancing our ability to respond to contingencies
will be a proactive approach to turning risks into
opportunities for the Company.

Specify key risks for the next fiscal year
● Confirm plans to counter key risks●

Final report on the progress status ofactivities for the current fiscal year
● Improve and review risk management
policies, activities, standards, etc.

PLAN

●

ACTIONPLAN

ACTION

DO

DO(Execution of annual plan)● Share information on key risks (includingGroup companies in Japan and abroad)● Apply to company departmental policies● Conduct activities based on plan
Review yearly activities (including Group
companies in Japan and abroad)● Share risk analysis● Evaluate and discuss activities withmembers of the Board of Directors
●

CHECK

CHECK

External disclosure of activities (securities report, corporate governance report, integrated report, company website, etc.)

Response to Key Risks
Operating foundation risks (primarily handled by CRO)and business strategy risks (primarily handled by CFO)
based on the business environment are assessedfrom the perspective of impact on operations (financial
impact, etc.) and possibility of occurrence (frequency),and key risks are identified.
Key risks are reflected in company policy as important
action items, and initiatives are made to mitigate or
prevent risks.

Examples of Key Risks
Classification

Main Key Risks

Large Large-scale disasters (earthquakes, storm
and flood damage, etc.)
 Risks, opportunities, and responses basedon TCFD DX support
 Recalls due to serious quality issues

 Cyberattacks/scam emails
 Carbon neutrality measures Raw material procurement, energy price hikes, etc.
 BEV conversion measures
 Injuries and operation shutdowns due to serious work accidents

Medium Leakage of confidential information
 Trade friction

 Traffic accidents (causing serious damage/injury)
 Incidents of harassment

Small Antitrust law violations
 Business operations with partnercompanies

 Interruption of business operations due to fire or explosion
accidents

Size of risk
Impact on
operations(financial impact,etc.)
×Possibility ofoccurrence(frequency)

T OYODA GOSEI REP OR T 20 2383About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceCrisis Management Project in Anticipation of Large-Scale Earthquake Disasters

Basic Policy for Cybersecurity Measures

A crisis management system has been put in place forthe event of a massive disaster, such as the predicted
Nankai Trough earthquake or natural disasters due toclimate change. This system is based on the principles
of human life first, community support, and earlyrecovery. Specifically, in addition to infrastructure andsystem measures based on the Crisis Management
Project, resilience training has been conducted morethan 180 times for directors and members of antidisaster
departments since FY2013. These efforts are basedon the company’s belief that improving the skills of
response personnel is essential. Specific proceduresfor the recovery of affected buildings, facilities,

To strengthen the control of confidential information,
annual checks of the compliance status of each division
based on company confidentiality management
regulations are conducted together with onsite audits.
Self-inspections are also done at Group companies inJapan and overseas, as well as at major suppliers.
Confidentiality officers are assigned in all departments,
and confidentiality education activities are conductedbased on information system security operating

Disaster Response

Initiatives to Date

Disaster outbreak – First response

Recovery

Permanent

Warning & Monitoring Team
Earthquake
occursEmergency
earthquake alertFirst Response
Task Force
Advance Team
(investigative team)and processes have also been established, and foralternative production in a production recovery system.
Recovery training for design drawings and other datais also carried out so that product development can becontinued even after disasters. In addition, workshops
to strengthen crisis management not only in Toyoda
Gosei companies but also at Group companies andsuppliers are conducted regularly. Assessments using
anti-earthquake measure implementation statuscheck sheets, clarification of weak points with graphs,
presentation of responses taken at Toyoda Gosei andother companies, and collaborative preparation ofbusiness continuation plans (BCP) are carried out.

Emergency
Task Force

Life Support
Task ForceDistrict
Task Force

Production
Restoration
Task ForceInstructions
Reports

Classification

Measures

Facilityandequipment
measures Earthquake resistance measures for buildings and facilities
 Establishment of a disaster prevention center to serve as
an operations base for the entire company in the event of
a disaster Equipping all locations with a multi-channel access (MCA)
radio system*1 and satellite phones
 Installation of crisis management servers (earthquakeresistant structure) and emergency power generators
 Operation of a DR*2 system and DCs*3

Systemmeasures Implementation of site and building safety assessments
 Training in operation of earthquake early warning systems
and employee safety information systems
 Preparation of supply chain information
 Preparation of a business continuity plan (BCP)

Skills Ongoing resilience training (disaster simulation exercises)*1 Radio system used in Japan for various purposes, from daily
operations to emergencies and disasters*2 System for restoring and repairing damaged systems (Disaster
Recovery)*3 General term for special facilities equipped with and operating
computers, data communications, and other equipment (DataCenter)Enhancing Our Global Risk Response
In response to global risks that occur not only inJapan but also in other countries (e.g., parts and raw
material shortages, the Ukraine conflict, etc.), we aretaking necessary actions on a global basis to quickly
assess the situation (weekly BCP reports) both inJapan and overseas. Standardization is also underway
so that domestic and international locations can takemeasures on their own initiative, and we are enhancing
our ability to respond to key risks seen in the businessenvironment of each company.

standards and a confidential information management
manual. At domestic and international Group
companies and major suppliers, specific measures
are stratified and executed based on the size ofthe impact on Toyoda Gosei and inspection results
for cybersecurity risk measures at each company.
Regular reports and discussions are conducted in allcompany-wide councils, and cybersecurity measures
are implemented together globally.

Main Cybersecurity Measures
Classification

Prevent
leakage due tonegligence

Prevent leakage
and damage
due to malicious
intentMeasures (domestic and international Group companies and suppliers respond in accordance with the size of the impact)

Facility andequipment
measures Data encryption on personal computers

Systemmeasures Security measures when sending emails out of the company (mandatory cc to superior’s email address,
encryption of attached files)

Facility andequipment
measures Installation of computer anti-virus software Constant monitoring of unauthorizedcommunications
 Prevention of unauthorized connections to
the network

 Firewalls to control communication with outside parties Detecting and preventing tampering with systems open to the
public outside the company

Systemmeasures Confidentiality pledge
 Stricter standards for allowing items to betaken from premises

 Restricted access to file servers

Educational activities(morale measures) USB device connection controls

 Security training for employees Training in responding to targeted email attacks
 Company-wide confidentiality controls inspections and on-site audits using check sheets

Compliance
Basic Philosophy
Toyoda Gosei’s management philosophy states, “We
promote business operations with integrity throughthe establishment of a system founded on thoroughcompliance and corporate ethics.” Together withhighly ethical and fair business practices, we strive
for thorough compliance in all areas based on thisphilosophy. The Toyoda Gosei Group Charter for
Business Ethics sets forth shared values and acode of conduct for the entire Toyoda Gosei Group.
Group companies in Japan and other countries thenformulate and implement their own code of conduct
based on the Charter. Toyoda Gosei Co., Ltd. has alsoestablished the Toyoda Gosei Guidelines for Business
Ethics, which it expects every employee to follow, andhas worked to familiarize all employees with theseguidelines.

Compliance Implementation System

Toyoda Gosei Compliance Implementation System

Toyoda Gosei has established the Internal Controls
Committee with the Company’s president serving aschairman and all company officers as members, whose
activities include reporting on and discussing thestatus of compliance with business ethics, laws, andregulations. The items reported and discussed in theCommittee are shared with the compliance advocates
selected by each department in the Company-wide
Compliance Implementation Council so that they will
be incorporated into the activities of each workplace.
The Committee works for thorough compliance witha unified approach between management and theworkplace.

Corporate activities

Domestic
affiliates

Support for thecompliance system

Support for thecompliance system

Toyoda Gosei
Group Charterfor Business Ethics

Overseas
affiliates

Toyoda Gosei Guidelines
for Business Ethics
All company executives

Compliance advocates from each divisionInternal Controls
Committee

Company-wide Compliance
Implementation Council

Ensuring compliance
Legal affairs/
compliance training

84

Management
Philosophy

Compliance consultation office(internal/external)
Labor consultation office(internal)

T OYODA GOSEI REP OR T 20 2385

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceSpecific Compliance Initiatives

Initiatives for the Prevention of Antitrust and Competition Law Violations

Training and Educational Activities

The Group Charter for Business Ethics states that the
Toyoda Gosei Group will conduct business activities
with a spirit of “fair and free competition” (compliancewith antitrust and competition laws). We haveformulated the Codes of Conduct for Antitrust Law
Compliance as guidelines to be followed by our
employees, and are working to ensure thoroughToyoda Gosei conducts various training and education
activities with the aim of raising and solidifying
compliance awareness in every employee. Trainings
are conducted by level in the company and by risks
corresponding to the work. The level-specific trainings
target new officers, new managers, mid-level employees,
new employees and others as an opportunity to spreadand deepen awareness of compliance at various career
stages. Risk-specific training is conducted for specificrisks. These trainings include training for transferees

prior to overseas assignments, antitrust law training forpeople in sales and other business departments, training
for sports clubs, and more. The training programs
are proactive in incorporating online training so that alarge number of eligible participants can participate.
Educational tools are also prepared, including aCompliance Academy that is regularly published in thecompany newsletter, and Compliance KY Case Studies
using various case study materials.

List of Workshops/Education at Toyoda Gosei
Category

Workshop name/education

For eachrisk

Education

Main content

Frequency

Company officers

Company law, fiduciary duty, etc.

As
neededNew manager training

New managers

Compliance, mindset as a manager, antitrust laws, bribery, etc.

1 time/year

General employees (mid-level)

Compliance, contracts, internal company regulations, laws (antitrust laws, bribery, etc.)

1 time/year

Fifth-year employee training

General employees (skilledworkers)

Compliance in manufacturing settings

1 time/year

New employee training

New employees

Compliance, laws

Whenjoining thecompany

Pre-overseas assignment
training

Management/Generalemployees

Key points on compliance in other countries (antitrust laws,
bribery, etc.)As
neededAntitrust law training

Management/Generalemployees (sales)

Laws, internal company regulations

1 time/year

Product liability law training

Management/Generalemployees (technical)

Laws, internal company regulations

1 time/year

Training for sports clubs

Management/Generalemployees (athletes, staff)

Compliance overall

1 time/year

Compliance Academy(company newsletter)All employees

Presentation of compliance cases

4 times/year

For each Legal affairs/compliancetraining
level

Workshops

Recipients

Workshops/study sessions
for officers

Compliance KY Case Studies All employees

Theme-based case studies and interpretations (100)−Compliance Awareness Surveys and Self-Inspections
To ascertain the degree to which complianceawareness has been incorporated into the company
and whether there are any signs of problems, we
conduct an annual compliance implementationquestionnaire survey of all employees. The resultsof the survey are reported to the Internal Controls
Committee, and measures are implemented
throughout the company, and each workplace also
conducts improvement activities led by complianceadvocates by referring to the departmental feedback
reports of the questionnaires. Domestic and overseas
Group companies conduct annual self-inspectionsof the status of their compliance implementation
systems, status of compliance with antitrust andcompetition laws, bribery regulations, and otherimportant laws and regulations, as well as risks in key
functions including internal controls, human resources,
accounting, procurement, and quality. The results ofthese inspections are reviewed by each functional

86

department of the Company, and feedback reports
are provided to support each company in making
improvements and taking action so that the entire
Toyoda Gosei Group is working to ensure thoroughcompliance by implementing the PDCA cycle.
From the FY2022 Compliance Implementation Questionnaire

Aware

Implementing

93.9%

95.1%

I am aware of most of theinformation in the Toyoda Gosei
Guidelines for Business Ethics

We are implementing complianceand conducting awarenesscampaigns in the workplacecompliance by employees through training andeducational activities. Antitrust law compliancemanuals based on the laws of each country areprepared for the regions where Group companies arelocated, and initiatives are made to prevent
anticompetitive acts globally.

Anti-Bribery Initiatives
The Group Charter for Business Ethics clearly statesthat in Toyoda Gosei Group’s relationships withgovernment agencies and political parties, we shallstrictly refrain from any actions that could be mistaken
for “back-scratching” or cronyism in the eyes ofsociety in general, and shall strive to maintain highly
transparent and sound relationships. We have also

formulated Global Anti-Bribery Guidelines as acommon guide for global activities, and are making
Group-wide efforts to prevent bribery, accounting
fraud, and other forms of corruption. Education isprovided to employees through level-specific training
and training for Group companies doing business inregions where there is high risk to prevent corruption.

Initiatives to Ensure thorough Export Controls
Toyoda Gosei has established an import/export controls
system to ensure that goods, technical materials,
software, and other items subject to import/export
restrictions, as well as items that violate laws andregulations (such as counterfeit products), are not takenout of the country or brought into the country without
proper authorization.

In addition to ensuring compliance with laws andregulations through the Security Export Control Systemand company regulations, the Company ensures thatdomestic and overseas Group companies conduct
installation and check for defects through self-inspection,and provide appropriate support in cooperation with thehead office and overseas control companies.

Early Detection and Correction of Problems through an Internal Reporting System
We have established compliance consultation offices
both inside and outside the company for the purposeof early detection and correction of complianceissues and violations of internal rules and laws andregulations in the course of business operations.
Outside lawyers are in charge of the external offices
to deal with problems from an objective standpoint.
This system allows all employees of the company
and family members living with them to receive
consultations, and the company takes thoroughmeasures to protect their privacy and ensure thatthey will not be treated unfairly because of theirreport. In addition to the internal consultation officeof each Group company in Japan, they also have acommon external compliance consultation office with

the Company. Overseas Group companies also haveexternal or internal consultation services. In FY2022, asa result of making the consultation offices known to all
and building trust, 66 reports and consultations werereceived from within the company and its domestic
affiliates, mainly concerning labor management,
workplace problems, and harassment. These cases
were promptly investigated and appropriate corrective
measures were taken to resolve the issues.
No. of Compliance Consultations/Reports (Japan)
FY

2019

2020

2021

2022

No. of cases

48

69

42

66

T OYODA GOSEI REP OR T 20 2387About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governance

Officers (As of October 31, 2023)

President, CEO

Vice President, CFO, CMO

Director, Corporate Officer

Director, Corporate Officer, CTO

Katsumi Saito

Hiroshi Yasuda

Masaki Oka

Mitsuhiro Nawashiro

Apr. 1988

Joined Toyoda Gosei

June 2012 General Manager, Technical
Administration Division, Toyoda
Gosei
Jan. 2015 General Manager, Human
Resources Development
Division, Toyoda Gosei
June 2018 Corporate Officer, Toyoda Gosei(Retired in June 2019 due to achange in the board system)
Jan. 2019 President, TG Meteor GmbH

Apr. 1982

Joined Toyoda Gosei

June 2012 Corporate Officer, Toyoda Gosei
June 2016 Director, Managing Officer,
Toyoda Gosei
June 2018 Director, Senior Managing
Officer, Toyoda Gosei

Apr. 1985

Joined Toyota Motor Corp.

Jan. 2014 General Manager of Related
Business Department, Toyota
Motor Corp.
Jan. 2015 Adviser, Toyoda Gosei
June 2015 Corporate Officer, Toyoda Gosei

June 2019 Director, Corporate Officer,
Toyoda Gosei

June 2018 Director, Managing Officer,
Toyoda Gosei

June 2023 Executive Vice President,
Toyoda Gosei(CFO/CMO)

June 2019 Director, Corporate Officer,
Toyoda Gosei

Sept. 1997 Joined Toyoda Gosei
Jan. 2011 General Manager,
Manufacturing Division 3,
Interior & Exterior Components
Business Unit, Toyoda Gosei

Audit & Supervisory Board
MemberKenji Oiso
Apr. 1980
Apr. 2002

Joined Sumitomo Metal
Industries, Ltd.
Deputy Manager, Finance &Accounting Div., Sumitomo
Metal Ind., Ltd.

Audit & Supervisory Board
Member

Yamato Suzuki
Apr. 1987

Joined Toyota Motor Corp.

June 2018 Corporate Officer, Toyoda Gosei(Retired in June 2019 due to achange in the board system)

Mar. 2006 General Manager, Finance &Accounting Division, SUMCO Corp.

Jan. 2016 Deputy General Manager, Legal
Division, Toyoda Gosei

Apr. 2011

Corporate Officer, SUMCO Corp.

Apr. 2014

Functional Officer, Yokogawa
Sumikin Bridge Corp.

June 2016 General Manager, Legal
Division, Toyoda Gosei
June 2021 Audit & Supervisory Board
Member, Toyoda Gosei

Feb. 2016 General Manager, Finance &Accounting Division, Miraial Co., Ltd.
Apr. 2017

Project General Manager, Finance &Accounting Division, Toyoda Gosei

Apr. 2019

Managing Director, Toyoda
Gosei Corporate Pension Fund

Joined Toyota Motor Corp.

Jan. 2018 Managing Officer, Toyota Motor
Corp.

Jan. 2015 Project General Manager,
Corporate Planning Division,
Toyoda Gosei

Jan. 2016 Joined Miraial Co., Ltd.

Apr. 1989

Jan. 2015 Chief Engineer, Lexus
International ZL, Toyota Motor
Corp.

June 2004 Joined Mitsubishi Sumitomo
Silicon, Co., Ltd.

June 2023 President, CEO, Toyoda Gosei

Chika KakoJan. 2012 Group Leader, Litigation Dept.,
Legal Division, Toyota Motor
Corp. (Project Senior Manager)

Mar. 2018 President, Toyoda Gosei Minda
India Pvt. Ltd.

June 2021 Corporate Officer, Toyoda Gosei

Outside Audit & Supervisory
Board Member

Jan. 2019 Field General Manager, Material
Technology Field, Advanced
R&D and Engineering Company,
Toyota Motor Corp.
Jan. 2020 Senior General Manager,
Material Technology Field,
Advanced R&D and Engineering
Company, Toyota Motor Corp.
June 2020 Audit & Supervisory Board
Member, Toyoda Gosei
Significant Concurrent Positions:
Senior General Manager, Material
Technology Field, Advanced R&D andEngineering Company, Toyota Motor
Corp.

June 2020 Audit & Supervisory Board
Member, Toyoda Gosei

Corporate Officers

Hiromasa Zaitsu (CRO)
Yutaka Ogasawara
Tadashi Yamamoto
Director

Outside Director

Outside Director

Outside Director

Naoki Miyazaki

Kimio Yamaka

Mayumi Matsumoto

Takashi Wada

Apr. 1980

Outside Audit & Supervisory
Board Member

Hitoshi Kuwayama

Outside Audit & Supervisory
Board Member

Masahiko Yokoi

Kenji Hayashi

Joined Toyota Motor Co., Ltd.

Apr. 1980

Joined Japan Development
BankOct. 1987 Contract newscaster, TV Asahi
Corporation

Apr. 1979

Joined Sanken Electric Co.,Ltd.

Apr. 1990

Registered as attorney
Joined Midosuji LPC

Apr. 1978

June 2008 Managing Officer, Toyota Motor
Corp.

Apr. 2007

Deputy Director-General,
Development Bank of Japan

Apr. 1993

Apr. 2007

Apr. 1997

Partner at Midosuji LPC

July 2003

June 2010 Director, Representative of
Osaka Head Office of the Asahi
Shimbun Company

Nobuhisa Tanaka

Director of the Energy Strategy
Institute Co., Ltd. (current)

General Manager, Production
Division, Production
Headquarters, Sanken ElectricJune 2013 Director, Nagoya Broadcasting
Network Co., Ltd.

Katsufumi Otani

June 2014 President and Representative
Director, Nagoya Broadcasting
Network

Bijay Krishna Shrestha

June 2019 Chairman and Representative
Director, Nagoya Broadcasting
Network

Yasushi Okada

Apr. 2013
Apr. 2014

Senior Managing Officer, Toyota
Motor Corp.

July 2009

Adviser, Toyoda Gosei

June 2014 Executive Vice President,
Toyoda Gosei
June 2015 President, Toyoda Gosei
June 2020 Chairman, Toyoda Gosei
June 2021 Director, Toyoda Gosei

Dec. 2012 General Advisor on Energy
Policy for Yamagata Pref.
(current)
Apr. 2014

Project Professor, Graduate
School of Economics, Kyoto
University (current)

Vice Chairman, Toyota Boshoku
Corporation
Outside Audit & Supervisory Board
member, Hino Motors, Ltd.

Significant Concurrent Positions:Freelance announcer, Horipro Inc.

May 2008 Collaborative Researcher, ResearchCenter for Advanced Science andTechnology, The University of Tokyo
May 2009 Project Researcher, ResearchCenter for Advanced Science andTechnology, The University of Tokyo
Apr. 2011

June 2016 Director, Toyoda Gosei
Significant Concurrent Positions:Contract newscaster, Japan
Broadcasting Corporation

Apr. 2013

Director of the Energy Strategy InstituteCo., Ltd.

Director, Principal Researcher,International Environment andEconomy Institute
Visiting Associate Professor, Special
Division of Environmental and Energy
Science, Komaba Organization for
Educational Excellence (KOMEX),The University of Tokyo

Project Professor, Graduate School of
Economics, Kyoto University

July 2017

General Advisor on Energy Policy for
Yamagata Pref.

June 2019 Director, Toyoda Gosei

Director, Japan Council for
Renewable Energy

June 2007 Corporate Officer, Sanken
Electric
Apr. 2009

Head, Production
Headquarters, Sanken Electric

Visiting Associate Professor, Komaba
Organization for Educational Excellence(KOMEX), The University of Tokyo

Apr. 2012

Vice Chairman, Osaka Bar
Association

Apr. 2013

Part-time Lecturer, Kyoto
University Law School

June 2009 Director and Senior Vice
President, Sanken Electric

May 2015 Outside Director, Maxvalu
Nishinihon Co., Ltd.

June 2012 Director and Executive Vice
President, Sanken Electric

Apr. 2020

Apr. 2015

President and Representative
Director, Sanken ElectricJune 2021 Chairman and Representative
Director, Sanken ElectricJune 2022 Senior Advisor, Sanken Electric

Senior Partner, Midosuji LPC

June 2020 Outside Director, Zett
Corporation (Audit andSupervisory Committee
Member)June 2022 Advisor, Nagoya Broadcasting
Network

June 2022 Audit & Supervisory Board
Member, Toyoda Gosei

Significant Concurrent Positions:
Advisor, Nagoya Broadcasting Network

June 2023 Director, Toyoda Gosei
Significant Concurrent Positions:
Significant Concurrent Positions:
Senior Advisor, Sanken Electric

Significant Concurrent Positions:

May 2011 Outside Company Auditor,
Maxvalu Nishinihon Co., Ltd.

Joined the Asahi Shimbun
Company

Makoto Hasegawa (CSMO)

Senior Partner, Midosuji LPC
Outside Director, Zett Corporation(Audit and Supervisory Committee
Member)Director, Principal Researcher, International
Environment and Economy Institute
Director, Japan Council for Renewable Energy

88

T OYODA GOSEI REP OR T 20 2389About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Data

Consolidated 10-Year Financial Summary(Millions of yen) (Amounts are rounded down to the nearest million yen)

FY2013

FY2014FY2015FY2016FY2017

International Financial ReportingStandards (IFRS)

689,477

727,846

781,886

755,601

806,938

Operating profit

43,79841,60342,82440,675

41,136

Japanese GAAP(FY ended(FY ended(FY ended(FY ended(FY ended
March 31, 2014) March 31, 2015) March 31, 2016) March 31, 2017) March 31, 2018)

Management Results Sales

Financial StateFY2020

FY2021

FY2022

Revenue

807,958

840,714

812,937

721,498

830,243

951,877

Operating profit

35,17936,525

17,88836,47934,17235,06945,847

43,792

41,49039,007

43,20046,101

39,851

36,71031,28835,775Pre-tax profit

35,50737,356

16,10637,301

37,69635,323

Net profit attributable to owners of parent

26,214

21,155

20,255

16,233

21,175

Net income attributable to owners of parent

21,361

23,30911,22635,20523,352

16,004

Cash and cash equivalents

92,36485,28378,38897,553

104,309

Cash and cash equivalents

97,991

107,311

127,930

134,003

109,145

105,268

Current assets

279,281291,246

281,212305,273

328,524

Current assets

357,666

382,106

359,565

380,578

425,165

419,108

Property, plant and equipment

210,214250,557

241,408

245,666

259,537

Property, plant and equipment

241,581257,728

273,479

290,246

316,901

327,838

Non-current assets

262,596

316,926

306,160

315,425

333,819

Non-current assets

321,819

326,023

349,619394,577

434,137

446,192

Total assets

541,877

608,172

587,373

620,699

662,388

Total assets

679,485

708,129

709,185

775,155

859,302865,300

39,06941,84821,07331,762

43,722

Borrowings

43,72232,39644,657

42,83543,92432,906

168,136

180,795

162,592

170,574

189,075

Current liabilities

195,392

194,309

180,653

185,535

209,396

196,047

Bonds and borrowings

64,511

93,089103,399

109,379

129,772

130,116*

Bonds payable

−

−

−

−

10,000Long-term borrowings

31,13842,92944,691

57,26154,458Fixed liabilities

73,462

88,902

96,937

110,663

119,403

Non-current liabilities

118,435

133,674

158,256

169,164

187,111

182,885

Total liabilities

241,598

269,697259,530

281,237

308,479

Total liabilities

313,828

327,983

338,909354,700

396,508

378,932

Shareholders’ equity

275,840

289,321

301,756

311,127

324,890

Equity attributable to owners of parent

Reference: Interest-bearing debt

70,207

84,77765,76589,023

108,181

Reference: Interest-bearing debt

108,233

125,486

148,057

152,215

173,696

163,022

Cash flow from operating activities

55,44851,283

77,76560,40160,848Cash flow from operating activities

44,00457,46365,247

67,24727,65853,973

Cash flow from investing activities(45,680)(62,432)(56,261)(82,131)(39,201)

Cash flow from investing activities(21,832)(55,491)(54,174)(49,949)(59,427)(31,952)

Cash flow from financing activities

(732)

(238)

(24,736)

14,794

6,541

Cash flow from financing activities

5,966

7,749

12,525(13,065)

2,206(28,558)

Ratio of net profit to sales (%)

3.8

2.9

2.6

2.1

2.6

Ratio of profit to revenue (%)

2.6

2.8

1.4

4.9

2.8

1.7

Total asset turnover (times)

1.34

1.27

1.31

1.25

1.26

Total asset turnover (times)

1.23

1.21

1.15

0.97

1.02

1.10

Equity ratio (%)

51.6

51.6

51.7

50.7

49.6

Ratio of equity attributable to owners of parent (%)

50.1

50.0

48.7

50.5

49.9

51.8

ROE (%)

6.4

6.7

3.2

9.6

5.7

3.6

ROE (%)Per Share
Information

FY2019Ordinary profit

Current liabilities

Key Indicators

FY2018

Profit before income taxes and other adjustments

Short-term borrowings

Cash Flow

FY2017(FY ended(FY ended(FY ended(FY ended(FY ended(FY ended
March 31, 2018) March 31, 2019) March 31, 2020) March 31, 2021) March 31, 2022) March 31, 2023)

9.8

7.1

6.6

5.2

6.6

Capital investment

43,08564,73354,49855,21864,816

Capital investment

53,411

46,891

41,83546,58949,74948,897

Depreciation and amortization

38,74339,353

44,46240,902

44,037

Depreciation and amortization

32,54532,92735,32335,52738,49944,814R&D expenses

29,17029,57928,40927,164

27,864R&D expenses

27,68430,02531,37431,00033,54334,254

Number of employees at end of term
(consolidated)

31,672

34,75435,90336,67938,234

Number of employees at end of term
(consolidated)

38,23439,42939,40338,82339,511

38,942

Dividend per share (Yen)

56.00

56.00

56.00

53.00

56.00

Dividend per share (Yen)

56.00

60.00

60.00

60.00

60.00

60.00

Basic earnings per share (EPS) (Yen)

202.54163.44156.49125.42163.60

Basic earnings per share (EPS) (Yen)

165.04180.0986.74

271.99180.39123.62

Dividend payout ratio (%)

27.65

34.26

35.79

42.26

34.23

Dividend payout ratio (%)

33.93

33.32

69.17

22.06

33.26

48.55

* Including current portion of long-term borrowings and current portion of bonds payable90

T OYODA GOSEI REP OR T 20 2391About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Consolidated Financial Statements(Millions of yen)

Consolidated Statements of Financial
Position
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Other financial assets
Investments accounted for by the equity method
Assets for retirement benefits
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Other financial liabilities
Liabilities for retirement benefits
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
CapitalCapital stock
Capital surplus
Treasury stock
Other components of equity
Retained earnings
Total equity attributable to owners of parent
Non-controlling interest
Total equity
Total liabilities and equity
92

Previous Consolidated Fiscal Year

Current Consolidated Fiscal Year(As of March 31, 2022)(As of March 31, 2023)

109,145
182,595
17,421
94,862
21,140425,165

105,268
185,640
4,380
99,171
24,646419,108

316,901
5,154
50,65015,642
5,741
18,706
21,340434,137
859,302327,838
5,240
50,23916,5293,581
18,021
24,740446,192
865,300

147,942
43,924
4,158
3,730
2,648
6,993
209,396

142,453
32,906
3,912
4,220
4,503
8,049
196,047

129,772
13,64532,420
3,233
5,304
2,734
187,111396,508

130,116
13,136
31,867
3,303
3,211
1,249
182,885
378,932

28,06924,465(1,233)42,433335,069
428,804
33,989462,794
859,302

28,09324,860(1,235)52,420344,275
448,41337,953486,367
865,300(Millions of yen)Previous Consolidated Fiscal Year

Current Consolidated Fiscal Year

830,243(733,686)
96,557(64,050)
5,239(3,574)
34,172
5,912(2,651)
264
37,696(10,962)
26,734

951,877(836,299)
115,577(76,519)
4,472(8,460)35,0693,681(3,691)
263
35,323(14,274)
21,048Net income attributable to
Owners of parent
Non-controlling interest
Net income

23,352
3,382
26,73416,004
5,043
21,048Net income per share
Basic earnings per share (EPS) (Yen)
Diluted earnings per share (Yen)

180.39180.38123.62
123.61

Consolidated Statements of Income
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Financial income
Financial expenses
Equity in earnings of affiliates
Pre-tax profit
Income tax expense
Net income

April 1, 2021
( FromTo March 31, 2022 )April 1, 2022
( FromTo March 31, 2023 )(Millions of yen)

Consolidated Statements of Comprehensive
IncomePrevious Consolidated Fiscal Year

Current Consolidated Fiscal Year

26,734

21,048Remeasurement of defined benefit plans
Share of other comprehensive income of equity-method affiliates
Total items not reclassified to profit or loss

4,926
221
37
5,185

(1,155)
397
1
(756)

Items that may be reclassified into profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income of equity-method affiliates
Total items that may be reclassified into profit or loss
Other comprehensive income, net of tax
Comprehensive income

20,533841
21,37526,56053,294

12,396460
12,857
12,101
33,150Comprehensive income attributable to
Owners of parent
Non-controlling interest
Comprehensive income

48,251
5,043
53,294

26,397
6,753
33,150Net income

April 1, 2021
( FromTo March 31, 2022 )April 1, 2022
( FromTo March 31, 2023 )Other comprehensive income
Items not reclassified to profit or loss
Equity financial assets measured at fair value throughother comprehensive income

T OYODA GOSEI REP OR T 20 23

93About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation(Millions of yen)

Consolidated Statements of Changes in Equity

Capital stock

Balance as of April 1, 2021
Net income
Other comprehensive income
Total comprehensive income
Issuance of new shares
Repurchase of treasury stock
Dividends
Changes in interests in controlled subsidiaries
Change due to capital increase
Change in scope of consolidation
Transfer to retained earnings from othercomponents of equity
Total amount of transactions with owners
Balance as of March 31, 2022
Net income
Other comprehensive income
Total comprehensive income
Issuance of new shares
Repurchase of treasury stock
Dividends
Changes in interests in controlled subsidiaries
Change due to capital increase
Change in scope of consolidation
Transfer to retained earnings from othercomponents of equity
Total amount of transactions with owners
Balance as of March 31, 2023

Balance as of April 1, 2021
Net income
Other comprehensive income
Total comprehensive income
Issuance of new shares
Repurchase of treasury stock
Dividends
Changes in interests in controlled subsidiaries
Change due to capital increase
Change in scope of consolidation
Transfer to retained earnings from othercomponents of equity
Total amount of transactions with owners
Balance as of March 31, 2022
Net income
Other comprehensive income
Total comprehensive income
Issuance of new shares
Repurchase of treasury stock
Dividends
Changes in interests in controlled subsidiaries
Change due to capital increase
Change in scope of consolidation
Transfer to retained earnings from othercomponents of equity
Total amount of transactions with owners
Balance as of March 31, 2023

94

Millions of yen

28,046
−
−
−
23
−
−
−
−
−

(Millions of yen)Previous Consolidated Fiscal Year

Current Consolidated Fiscal Year

Pre-tax profit

37,69635,323

Depreciation and amortization

41,94447,633−

3,955

Consolidated Statements of Cash Flow

Equity attributable to owners of parent
Other components of equity
Equity financial
Exchange
assets measured at Remeasurement
Capital surplus Treasury stock
differences onfair value through of defined benefit
translation ofother comprehensive
plans
foreign operations
incomeMillions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen

25,626−−−23−−(1,184)−−(1,232)
−
−
−
−
(1)
−
−
−
−

(1,356)−
19,735
19,735
−
−
−
−
−
29

19,116
−
4,910
4,910
−
−
−
−
−
−

−
−
253
253
−
−
−
−
−
−

Data

April 1, 2021
( FromTo March 31, 2022 )April 1, 2022
( FromTo March 31, 2023 )Cash flow from operating activities

Impairment loss (or reversal)
Increase (decrease) in provisions(1,411)

119

Increase (decrease) in liabilities for retirement benefits

(414)

1,316

Decrease (increase) in assets for retirement benefits(2,240)300

Financial income(5,235)(7,610)Financial expenses

2,566

3,623

Equity in (gains) losses of affiliated companies

(264)

(263)

Loss (gain) on sales of non-current assets

75

230

Decrease (increase) in inventories(15,789)

(636)

−

−

−

−

−

(253)

Decrease (increase) in trade and other receivables(25,283)

1,354

23
28,069
−
−
−
23
−
−
−
−
−

(1,161)
24,465
−
−
−
23
−
−
288
−
82

(1)
(1,233)
−
−
−
−
(1)
−
−
−
−

29
18,407−
11,162
11,162
−
−
−
−
−
−

−
24,026−(1,149)(1,149)
−
−
−
−
−
−

(253)
−
−
379
379
−
−
−
−
−
−

Increase (decrease) in trade and other payables

13,718(11,212)

Other(8,344)(5,670)37,01968,464

Interest income received

1,740

2,489

Dividends received

1,178

1,202

Interest expenses paid

(2,582)(3,603)

Income taxes paid

(9,697)(14,578)

−

−

−

−

(26)

(379)

Cash flow from operating activities

27,65853,97323
28,093395
24,860(1)(1,235)−29,570(26)
22,849(379)−

Equity attributable to owners of parent
Other components
Retainedof equityTotalearnings
Total
Millions of yen
Millions of yen
Millions of yen

Noncontrollinginterest
Millions of yen

29,372
3,382
1,661
5,043
−
−
(2,593)
1,606
176
383

Total
Millions of yen

17,759−24,89924,899
−
−
−
−
−
29

320,883
23,352−
23,352−−(9,063)−−(355)

391,083
23,352
24,89948,25146(1)(9,063)(1,184)−(326)

420,455
26,73426,56053,29446(1)(11,657)
421
176
57

(253)

253

−

−

−

(224)
42,433−
10,392
10,392−−−−−−(9,165)335,069
16,004−16,004−−(7,122)−−(82)(10,529)
428,804
16,004
10,392
26,39747(1)(7,122)
288
−
−

(426)
33,989
5,043
1,709
6,753
−
−
(2,868)40
39−(10,955)
462,794
21,048
12,101
33,15047(1)(9,990)
328
39
−

(406)

406

−

−

−

(406)
52,420(6,799)344,275(6,788)448,413(2,788)37,953(9,576)486,367

Subtotal

Cash flow from investing activities
Payments into time deposits(20,189)(4,882)

Proceeds from withdrawal of time deposits

13,297

19,623Purchase of property, plant and equipment and intangible assets(51,728)(46,129)

Proceeds from sales of property, plant and equipment and intangible assets

1,206

1,615

Purchase of investments(1,357)(1,028)(656)(1,149)(59,427)(31,952)

Proceeds from short-term borrowings

54,362

20,703

Repayment of short-term borrowings(34,138)(48,450)

Proceeds from long-term loans payable

24,41531,307

Repayment of long-term borrowings(27,868)(18,461)

Repayment of lease liabilities(3,073)(4,197)

Dividends paid

(9,071)(7,120)

Dividends paid to non-controlling interests(2,593)(2,706)

−

367

Other
Cash flow from investing activities
Cash flow from financing activities

Proceeds from payments from non-controlling interests
Other
Cash flow from financing activities

175

(1)

2,206

(28,558)

Net increase (decrease) in cash and cash equivalents(29,562)(6,537)

Cash and cash equivalents at beginning of year

134,003

109,145

4,704

2,660

109,145

105,268

Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year

T OYODA GOSEI REP OR T 20 2395

About Toyoda Gosei

Financial Highlights

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Non-Financial Highlights* The Toyoda Gosei Group has adopted IFRS from the first quarter of the consolidated fiscal year ended March 31, 2019.
Figures for the fiscal year ended March 31, 2018 have also been reclassified to IFRS basis.

Environment
Revenue
951.8(Billionsof yen)

840.7

800

Operating profit
Net income attributable to owners of parent(Billions of yen)

830.2

812.9

Operating profit/Net income
attributable to owners of parent
50

721.4

40

600

36.5

30

36.4 35.2 34.1

23.3

400

35.0

23.3
16.0

11.2

200

CO2 emissions (Scopes 1 and 2)(%)(10,000 t-CO2)

8

45.6
6.7

10

2018

2019

2020

2021

2022

5.7

4

20

2018

(FY)

Operating profit ratio

2019

2020

(Billions of yen)

10

80

8

46.8

5.1
4.1

4

3.7

2.2

40

30.0

31.3

2018

2019

2020

2021

2018

2019

2020

2021

2022
(FY)

Dividend per share

48.8(Billions of yen)

60.0

60.0

60.0

31.0

200

60.0

60.0

200

148.0

40
100
20

96

125.4 127.9

2020

2021

2022
(FY)

2018

2019

2020

2021

2022
(FY)

7.1

Upstream logistics

16.6

Scope 3 Waste generated by operations

4.0

Business travel

0.9

Employee commuting

4.5

Upstream leased assets

0.6

Product disposal

1.2

60

173.6

152.2
109.1

2018

2019

2020

2021

50.0

163.0

48.7

50.5

49.9

2020

2021

(FY)

6
3
0

(Index)

2.0

12

100

2020

2021

2022 2025 target 2030 target(FY)

Waste volume per unit sales (index*1)(Overseas affiliates)

11.3
Target40% reduction
from FY2012

8

5.9

5.5

2012

2020

5.1

60

45
34

Target55% reduction
from FY2015

28

20

0.03

0.03

2021

2022

0

(FY)

Waste generation and disposal(FY2022 result) (non-consolidated)
In-house reuse
volume 1,096 t

Target
50% reduction
from FY2015

40

2012

(Base year)

2020

2021

2022 2025 target 2030 target
(FY)

(FY)

51.8

100

80
Target
50% reduction
from FY2012

4

Fee-basedrecycling volume (sale)
6,018 t

Plastic industrial waste volume(tons)

1,152

1,215
1,050

2020

2021

2022 2025 target

2030 target(FY)(non-consolidated)

Target22% reduction
from FY2019

1,373

2015

(Base year)*1 Figures based on the base year as 100

Water intake per unit sales (index*2)(non-consolidated)
1,500

0

(Index)

120

100

107

Target6% reduction
from FY2019

107
93

1,073

Target
11% reduction
from FY2019

1,000
60

40

2022

13

260.5

(thousand tons)

2022

105.2

Fee-based recycling
volume (payment) 500
5,104 tWaste
volume5,104 t0

Target
2025
12%

20

0.25

20

2019

16.3

(10,000 t-CO2)

(%)

134.0

107.3

2018

Capital goods
Fuel and energy related activities

Waste volume (non-consolidated)

86.74

Ratio of equity attributable toowners of parent

50
0

209.3

Greenhouse gas (6 gases) emissions(CO2 equivalent) (non-consolidated)

123.620

Target
2030
100%

40

Minimal or not applicable for other than above

180.39180.0934.2

33.5

Cash and cash equivalents
Interest-bearing debt

150

0

2019

2022 2025 target 2030 target(%) 100

35.24

Goods and services purchased

1.0

Cash and cash equivalents/
Interest-bearing debt

(Yen)

60

2018

2021

10.62

Scope 2

Carbonneutrality

10.1

Scope 1271.99

100

0

2020

10.9

Emissions (10,000 tons)

(FY)

0

0

10.9

Scope/Category

Renewable energy adoption rate (Global)(FY)

Basic net income per share

300

2015

(Base year)

2022

(Yen)

20

2

45.9

1.3

49.7

46.5

41.8

0

(FY)

Capital investment
R&D expenses

60
4.3

2022

Capital investment/R&D expenses

(%)

6

2021

14.9

3.6

3.2

2

0

47.1

Target25% reduction
from FY2015

40

0

0

Non-consolidated

60 57.4

9.6

10

GlobalCO2 emissions by Scope 3 Category(FY2022 Results) (Global)

6

17.8

20

ROE

Landfill
waste
volume
0t

2018

2019

2020

2021

Incinerated
waste
volume
0.6 t

0

2019

(Base year)

2020

2021

2022

2030 target
(FY)

0

2019

2020

2021

2022 2025 target 2030 target(Base year)*2 Figures based on the base year as 100

(FY)

2022
(FY)

T OYODA GOSEI REP OR T 20 23

97About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

IR Activities

Non-Financial Highlights

We place great importance on dialogue with investors, analysts, and other stakeholders, and actively provide feedback to
management for enhancing corporate value.

Society

Initiative

Results of Key Items in FY2022 and Targets for FY2025 and FY2030 (Non-Consolidated)
Key itemNo. of individual meetings for analysts and institutional investors

125

109

No. of financial results briefings for analysts and institutional investors

44

FY2025 Target

FY2030 Target

60

80

—

21%

25% or more—

No. of business briefings and facility tours for analysts and institutional
investors

2

3

No. of conferences sponsored by securities firms

3

2

No. of briefings for individual investors

2

1(managers and technical and administrative staff)

Number of DX staff trained

190

270

400

Number of female managers

33

45 (4.0%)100 (8.8%)

32% (Global)

40% or more (Global)

60%

30%

30% or more
Achievement of legally mandated
employment ratio (Domestic affiliates)

30% or more

Ratio of local executives(vice presidents and above at overseas affiliates)

Ratio of mid-career hires in management positions

2.79% (Domestic affiliates)—

59%

70% or more

75% or more

11.3 hr/month/person

10.0 hr/month/person or less—

Percentage of employees taking paid vacations

94%

95% or more—

Percentage of male employees taking childcare leave

44.8%

75%

100%

Wage difference between men and women

76.6%

77%

82%

Engagement survey results (Positive evaluation)
Average overtime hours

FY2022 Result

FY2022 Result

Annual number of participants in training programsfor executives
Ratio of employees dispatched overseas

Employment of people with disabilities

FY2021 Result

External Recognition
Major Indices Where Toyoda Gosei Has Been Selected as a Constituent Stock
JPX
Nikkei Index 400

Average years of service by gender(non-consolidated)
Female(Years)

20

18.6
15.5

15

18.5
15.5

18.3
15.4

18.3
15.5

Male

19.6

Number of employees taking childcare
leave by gender (non-consolidated)*1
Female(People)

62

40

5

20

2018

2019

2020

2021

2022
(FY)

0

41

73

20

37

28
18.3
9

26
8

18

19

18

23

25

26

2018

2019

2020

2021

2022

33

30

30

80

10

(People)

99

100

16.5

60

0

Male

Number of women in management
positions (non-consolidate)

25
16

(%)

Occupational accident rate (lost time
injury frequency rate) (non-consolidated)
1.5

3

https://www.lseg.com/en/ftse-russell/indices/blossom-japan

0External Recognition of Sustainability
2018

2019

2020

2021

2022

2.31

2.38

2.47

2.39

1.25

400

0.54
0.5

Legal employment rate

2018

2019

2020

2021

2022
(FY)

0

0.50

Toyoda Gosei Co., Ltd.

0.16

98

1.21

Training for mid-level employees

336

317

153

175

Transport equipment manufacturing*2

2

1

1.20

1.0

2.3%

2.2%

1.20

2.40

1.31

New employee training
New manager training

600

2018

0.17

2019

0.48
0.21
2020

0.45
0.07
2021

0.56
200

323

292

216

196

73
2020

89

0.20
107
2022

(FY)
*2 Results from the Ministry of Health, Labour andWelfare’s survey on occupational accident trends(Survey period: January to December)

0

2018

2019

2021

Health & Productivity
Management Outstanding
Organization(White 500)

CDP
Climate Change 2022 Score: B
Supplier Engagement
2022 Score: A
Water Security 2022 Score: B

Sports Yell
Company 2023

Ministry of the Environment 30by30
Heiwacho plant biotope certified
as a site for coexistence withnaturePartner Award for Cancer
Prevention Campaign in“Information Provider Category”

330
215
56

82

Nikkei SDGs
Management Survey 2022

(FY)

Number of employees receiving
compliance training (non-consolidated)

Number of casualties in
occupational accidents × 1 million (People)
Total working hours

All manufacturing*2

S&P/JPX
Carbon Efficient
Index

10

(FY)
*1 Number of employees who started childcare leave
during the fiscal year(%) Lost time injury
frequency rate =https://www.lseg.com/en/ftse-russell/indices/ftse4good

https://www.lseg.com/en/ftse-russell/indices/blossom-japan

FTSE Blossom
Japan Index

19

Governance
Employment rate of persons withdisabilities (non-consolidated)

FTSE4Good Index Series

FTSE Blossom
Japan Sector Relative Index

External Recognition of Communication
Securities Analysts Association of Japan: 29th Awards for Excellence in Corporate Disclosure
Ranked 3rd in the automobile, parts, and tires category as a company that has continuously maintained a high level of disclosure

2022
(FY)

T OYODA GOSEI REP OR T 20 2399

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Company Information (As of March 31, 2023)
Head Office Address

1 Haruhinagahata, Kiyosu, Aichi,
452-8564, Japan

Number of consolidated
subsidiaries

54(Domestic: 13, Overseas: 41)

Date of Establishment

June 15, 1949

Capital stock¥28.0 bn

Number of equity
method affiliates

7(Domestic: 3, Overseas: 4)

Number of employees

Consolidated: 38,942,
Non-consolidated: 6,733

Re-S Eco-brand

Investor Information (As of March 31, 2023)
Total number ofsharesTotal number of authorized shares
200,000,000
Total number of shares issued and outstanding
129,511,849(excluding 559,255 shares of treasury stock)

Administrator ofshareholders’ registerand accountmanagement institution
for special accounts

Mitsubishi UFJ Trust and Banking
Corporation

Number of shareholders

13,314

Securities code

7282

Stock exchange
listings

Tokyo Stock Exchange andNagoya Stock Exchange

Shareholder Distribution
Individuals and others
7.55%

Financial
institutions
27.42%

Foreigncorporations,etc.
14.76%(2)(1)

Major Shareholders
Treasury stock
0.43%

Financial
instruments firms
0.89%
Domestic corporations, etc.
48.95%

As part of our efforts to reduce waste, we have developed the “Re-S” brand of
products using scrap materials from the production processes of automotive parts
such as airbags and steering wheels. Re-S comes from “Re-born” and “Re-cycle,”which start with the letters “Re,” and from the increased sustainability (S) byimplementing environmentally friendly initiatives.

Number of shares Shareholding
held
ratio
Thousands
55,459of shares
42.82%Name of shareholder

Toyota Motor Corporation
The Master Trust Bank of Japan,
Ltd. (Trust account)

10,600

8.18

Custody Bank of Japan, Ltd.
(Trust account)

9,889

7.63

Sumitomo Mitsui Banking
Corporation

5,049

3.89

Toyoda Gosei employee
stockholding association

1,855

1.43

Nippon Life Insurance Company

1,592

1.22

The Dai-ichi Life Insurance
Company, Limited

1,381

1.06

Colored tote bag using
a seat belt for the handle

SSBTC Client Omnibus Account

1,288

0.99

(Products made in collaboration with Ashimori Industry
Co., Ltd., with which we have a business tie-up)

State Street London Care ofState Street Bank and Trust,
Boston SSBTC A/C UK London
Branch Clients- United Kingdom

1,187

0.91

Daiei Sangyo Kaisha, Ltd.

1,041

0.80

(1) Pen holders, pen cases, and businesscard holders made from genuine leather
scraps and wood from forest thinning(2) Tote bags using airbags* The shareholding ratio is calculated after deducting treasury stock.

Printed with artist designs
by Atelier Yamanami

Corporate Website

https://www.toyoda-gosei.com/

100

Financial
Information

Visit here
for the online store

Non-Financial
Information

Website: Investor Relations

Website: Sustainability

https://www.toyoda-gosei.com/ir/

https://www.toyoda-gosei.com/csr/

Financial Results/Securities Reports, etc.

Environment/Social/Governance etc.

T OYODA GOSEI REP OR T 20 23

101

1 Haruhinagahata, Kiyosu, Aichi, 452-8564, Japan
Phone: +81-52-400-1055
https://www.toyoda-gosei.com/