April 30, 2024
Company name: TAKAOKA TOKO CO., LTD.
Representative: Takashi Ichinose
President and Representative Director(Code: 6617 TSE Prime Market)
Contact:Kaoru Okame, Managing Executive Officer
Notice of Improper Practices regarding High-Voltage Transformers
It was identified on December 14, 2023 that AC withstand voltage tests and lightning impulse withstandvoltage tests were conducted in a manner different from the testing standard (*1) specified by customers in thetype test (*2) and acceptance test (*3) of high-voltage transformers (*4) manufactured at our Oyama Plant(Oyama City, Tochigi Prefecture) and that the test results were inappropriately reported (hereinaftercollectively referred to as “this case”). We inform you of the facts that we have investigated to date and themeasures to be taken as follows. If new facts come to light in the course of investigating this case, we willpromptly disclose them.
As stated in the IR news “Incidents of Impropriety Regarding Certain Instrument Transformer Products”
published on May 16, 2023, we are currently conducting a comprehensive quality inspection of all our products,
and this case was identified in the process.
As we continue to conduct ongoing comprehensive inspections, we will promptly disclose any new incident
that is identified.

(*1) Major standards include JEC (Japanese Electrotechnical Committee of the Institute of Electrical Engineersof Japan) standards, JIS (Japanese Industrial Standards) standards, IEC (International ElectrotechnicalCommission) standards, and IEEE (Institute of Electrical and Electronics Engineers) standards(*2) Conformity test made on one or more products representative of the production(*3) Test to confirm that the product has performance equivalent to that in the type test(*4) Transformers for substations, shunt reactors, series reactors, neutral point reactors, earthing transformers,
neutral point grounding resistors, mobile transformers, and power capacitors

1.

Outline of the subject products
Products:

Transformers for substations, shunt reactors, series reactors, neutral point reactors,
earthing transformers, neutral point grounding resistors, mobile transformers, power
capacitors
Note: Only transformers were delivered to customers overseas.

Period:From around 1980 to 2023 (*5)

Number of units:

5,835 units out of 6,819 units delivered during this period (*5) were the subject ofimproper practices in this case.
Note: Improper practices were confirmed in 458 of the units delivered to customers
overseas.

(*5) The timing of the start of these improper practices is estimated to be around 1980 based on the data
available at the moment. For this reason, we counted the number of units of the products starting fromproducts manufactured in 1980.
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2.

Outline of this caseIn the type test and acceptance test of the subject products, the following improper practices were revealedin the AC withstand voltage tests and lightning impulse withstand voltage tests based on the testing
standards specified by customers (hereinafter referred to as the “relevant standards”).
(1) AC withstand voltage tests
The purpose of this test is to verify the insulation strength (*6) against overvoltage that may occur
during power system accidents and the insulation strength against grid voltage during the productlifespan of the transformer.
In the acceptance test, we should have applied the test voltage specified by the relevant standard(hereinafter referred to as the “AC normal test voltage value”). However, we applied a test voltage
which was reduced by 10% or 15% (*7) from the AC normal test voltage value (hereinafter referredto as the “AC reduced test voltage value”). Meanwhile, we recorded in the test reports that the ACnormal test voltage value was applied to the transformers.
(*6) Actual voltage that can be withstood by the electrical insulation of equipment(*7) We confirmed through interviews with parties involved that most of the tests were conducted atvoltages reduced by 10%, and a few tests were conducted at voltages reduced by up to 15%.
(2) Lightning impulse withstand voltage tests
The purpose of this test is to verify the insulation strength against instantaneous overvoltage that may
occur when a lightning surge enters the power system.
In the type test and acceptance test, we should have applied the test voltage specified by the relevant
standards (hereinafter referred to as the “LI normal test voltage value”). However, we applied a test
voltage which was reduced by 25% (*8) from the LI normal test voltage value (hereinafter referred
to as the “LI reduced test voltage value”). Meanwhile, we recorded in the test reports that LI normal
test voltage value was applied to the transformers.
(*8) Based on the records of the setting conditions (capacitor numbers, gap lengths) of the test
equipment for generating lightning impulse test voltage, we confirmed that some tests wereconducted at LI normal test voltage value. However, most of the tests were conducted at LI reduced
test voltage value.

3.

Soundness of the subject products
In our insulation designs for transformers, we include margins exceeding the insulation strength requiredby the relevant standards. In the manufacturing and assembly processes of transformers, we manage
manufacturing quality by paying attention to the dimensional control of the insulation structure (*9), thewithstand voltage control of insulation oil, and the prevention of moisture/foreign substances
contamination. In addition, the type tests and acceptance tests are conducted to confirm that the designed
and manufactured products have the insulation strength specified by the relevant standards. However,in this case, the subject products were not tested by AC normal test voltage value and LI normal test
voltage value, which means that it was not confirmed that the subject products had the insulation strength
specified by the relevant standards. Therefore, we reconfirmed the above-mentioned design policy andthe actual conditions of the manufacturing and assembly processes and calculated the insulation strengthof the subject products considering the insulation structure (insulation dimensions of the winding section)
and assembly tolerance. As a result, we confirmed that the design, manufacturing, and assembly
processes of the subject products were properly implemented.
(*9) Shape of the insulation to be placed between the windings or between the windings and the iron core(between the windings and the earthing)-2-

Since the subject products have only been confirmed to have the insulation strength to withstand the AC
reduced test voltage value and the LI reduced test voltage value, we have evaluated the risk of insulation
breakdown (*10) of the subject products during use. As shown below, the risk is extremely low, and wehave determined that problems will not occur under normal use unless there are special circumstances.
AC withstand voltage performance
We calculated the probability of no insulation breakdown during periods of normal use andconfirmed that these probabilities are sufficiently high.

Lightning impulse withstand voltage performance
A survey of past test records has confirmed that some of the subject products were tested by LI
normal test voltage value, and it is considered that products designed and manufactured with aninsulation structure equivalent to or better than those products have the insulation strength
specified by the relevant standards. In addition, lightning arresters (*11) are usually installed in
the vicinity of transformer(s) and, when lightning overvoltage invasion occurs, those lightning
arresters can provide protection (suppress the intrusion voltage).

Failure case review
As a result of reviewing the cases of failure (after 1997) of our transformers, we have confirmedthat to date there have been no cases of insulation breakdown failures or partial discharge failures
directly caused by improper practices in this case.

(*10) Incident in which insulating materials that isolate conductors in electrical and power circuits or theirparts cease to insulate and become conductive(*11) Equipment that protects electric power facilities from abnormal voltages caused by lightning strikes,etc.

4.

Future measures
After this case was identified, we immediately suspended deliveries of the subject products and areproceeding with confirmation of each individual order accepted for the products identified in footnote 4
to ensure that only products for which all tests specified in the relevant standard have been properly
conducted are delivered.
In view of the seriousness of this case, we have established an independent investigation and verificationcommittee, which has no conflict of interest with us. The scope of this committee’s responsibilities isas follows:
1.
2.
3.

Investigation of this case
Analysis of the causes based on the investigation results and proposal of measures to prevent
recurrence
Evaluation and validation of the comprehensive inspection and investigation we have
implemented so far

At this time, there are no revisions to the consolidated performance forecast for the current fiscal year due
to this case. In the event that this case is anticipated to have an impact on the consolidated performancefor this fiscal year, we will promptly disclose such information.

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