CSR Report

2010

CONTENTS
Message from the President................. 2
Compliance..................................................... 3
Environmental Initiatives......................... 4
Creating Comfortable Workplaces..... 6
Social Contribution Activities................ 7
Products and Technology
Supporting Social Infrastructure......... 8

About This Report
Purpose and Editorial Policy
The purpose of this report is to disclose the basic approach tocorporate social responsibility (CSR) of Toyo Denki Seizo K.K.,
and its progress in the area of CSR initiatives, in a format that isaccessible for readers. In assembling this report, the company
referred to the Environmental Reporting Guidelines ( Fiscal Year2007 Version) issued by Japan’s Ministry of the Environment aswell as questionnaire items relating to socially responsible investment (SRI ). In this report, the company conveys information thatit considers to be important to Toyo Denki and its stakeholders.

Communication with Stakeholders
General meeting of shareholders
Briefing sessions for businessresults and investors
Publication of To Our
Shareholders
Shareholders businessand Investors
reportInformation disclosure
through website, other

Business Principles

Scope
Toyo Denki Seizo K.K.
Period Covered by This Report
This report focuses on the 2009 fiscal year from June 1, 2009 to
May 31, 2010, but also contains some information from before
and after this period.
Publication Date
Issue date : July 2010
Next issue date (tentative): July 2010
Reference Guidelines
Environmental Reporting Guidelines ( Fiscal Year 2007 Version)issued by Japan’s Ministry of the Environment
Inquiries
PR, IR, and CSR Department, Planning Division
Toyo Denki Seizo K.K.
Phone : +81-3-3535-0633
E-mail : kikaku@toyodenki.co.jp

Customers

Regular sales activities
Website inquiries
Briefing sessions
Industry trade shows,other

Employees
Labor-management
councils, special
committees
Publication of
in-house newsletter
Goal management
and self-assessment
programs
Employee suggestion
programs for
improvement
Information on
programs andbenefits available
over intranet, other

The Toyo Denki Group will practice the following business principles to ensure the growth ofits business, earn the confidence and understanding of shareholders and stakeholders,and foster the development of its employees:
Prioritize ethics and contribute to the prosperity of customers and society as a whole
Encourage creativity and an enterprisingspirit, to meet the challenges of the future
Build trust by focusing on quality first
Established: June 2001

GlobalSociety
Regulatory compliance
Support for community events andworkshops
Supply of information to mass media
Social initiatives

Environment

Suppliers
Regular procurement activities
Supplier briefing
sessions
Quality and safety
guidance

Regulatory compliance
Development and manufacturing of environmentally friendly products and systems
Environmental initiatives
Involvement in Challenge 25 Campaign

Message from the President

Hiroshi Tsuchida
President
Toyo Denki Seizo K.K.

Stepping Up CSR Initiatives witha Focus on Our Core Business
Guided by the “Challenge Up” Medium-Term Management Plan
Our First CSR Report

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Environmental and Social Contributions
Unique to Toyo Denki

Toyo Denki Seizo K.K. is publishing this CSR Report in order to communicate our initiatives in the area of corporatesocial responsibility (CSR) to stakeholders.
Toyo Denki has long had a role in expanding social infrastructure and encouraging energy and resource conservation, as a supplier of electrical equipment for rail vehicles,
high efficiency motors and inverters, and information system products. In addition to these social contributions
which our core business makes, we engage in environmental and social initiatives at our plants, and implement programs to build a vibrant corporate culture. I hope that thiswill report will help you gain an even deeper understandingof our company.

In this report, we examine the environmental contributionsof Toyo Denki, and how we are proactively and continuously pursuing diverse environmental initiatives at our production sites. We also describe how our products and systems
themselves are making positive environmental contributions through their usage in diverse business sectors.
(Please see page 8, “Products and Technology Supporting
Social Infrastructure.”)We also examine the social initiatives that Toyo Denki
engages in for communities. We welcome any feedback
that you may have, so that we may better co-exist with andearn the admiration of members of the community.

CSR as a Key Management Priority

Building a Vibrant Corporate Culture

In the “Challenge Up” Medium-Term Management Plan that
we unveiled in July 2009, we outlined the goal of strengthening our CSR initiatives. I consider CSR to be an importantmanagement priority. We have a duty to inform our stakeholders of the contributions that Toyo Denki can make, andto help realize a society that offers the level of safety, security and amenity that people seek, while enabling sustainable growth throughout the globe. Our aim is to make thismessage easy to understand, while at the same time inviting feedback from our many stakeholders and using it toshape the future of our management.

Since being appointed president of Toyo Denki, I have
stepped up our efforts to build a vibrant corporate culture,so that our employees can fully capitalize on their own talents and rise up to the challenge in diverse fields. We arebuilding an environment for our employees to work together
for our business, driven by a passionate commitment, sothat we may achieve the business targets outlined in the“Challenge Up” Medium-Term Management Plan.
Through these activities, all of us at Toyo Denki will endeavor to earn the trust of stakeholders and do an even better job of fulfilling our social responsibilities. We look forward to your continued interest in our company.

Compliance
The foundation of good corporate governance is a commitment toregulatory compliance and upholding corporate ethics.
Toyo Denki is taking action companywide to communicate this message
and build a stronger framework for compliance and ethical behavior.

Framework for Compliance
The Legal and Compliance Department is responsible forpreparing a framework for compliance and taking specificsteps to ensure it. Specifically, the department develops
and implements training based on a master plan for compliance training, and follows up on compliance issues raisedby whistle-blowers. In addition to the Legal and ComplianceDepartment, the company designates compliance officers
at each business location, who are responsible for implementing on-site activities in compliance with laws at each
workplace.

Compliance Education and Training
Each fiscal year, Toyo Denki designates specific themes topursue under its master plan for compliance training. The
company implements group training for management,group training for administrative professionals, and videobased training for the general workforce.
In October 2009, the company organized a monthly series of events designed to enhance compliance. The events

included seminars on preventing insider trading and managing intellectual property, and a roundtable discussion on
removing social barriers for women in the workplace. In addition, Toyo Denki carried out a simultaneous compliancecheck for directors and all employees.

Compliance Status
Toyo Denki was issued a cease and desist order and surcharge payment order by the Japan Fair Trade Commissionin October 2008, for a violation of the Antimonopoly Act
when bidding for a designated electric equipment construction project ordered by the City of Sapporo. The company
has taken several steps to prevent the recurrence of regulatory violations, including making changes to its compliancemanual and preparing a compliance card. The card was distributed to directors and all employees, to provide a routine
reminder of the importance of regulatory compliance.

Compliance training at Toyo Denki
Compliance Card

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Getting Everyone Involved in Compliance

Compliance activities can be challenging, because it is difficult to create an atmosphere ofworking in total unison to achieve a goal. This is why I believe we need to take a deeper approach by developing a corporate culture that places an even stronger emphasis on adhering
to principles and rules. Rather than trying merely to assign certain compliance behaviors toour directors and employees, we must continue to pursue initiatives to create a framework inwhich everyone at Toyo Denki understands that compliance can only be achieved through the
combined and balanced efforts of every director and employee.
Isami Takase
General Manager, Legal andCompliance Department

3

Environmental Initiatives
Toyo Denki established an environmental philosophy in June 2009,
which commits the company to maintaining management priority on supplying
environmentally friendly products and executing initiatives for environmental conservation.

Environmental Philosophy
The Toyo Denki Group has positioned global environmental protection as a key management issue. In this context, the Group will make every effort to contribute to the development of a sustainable society.

Code of Conduct
Through future technologies that harmoniously blend the needs of the global environment and humankind, theToyo Denki Group will consistently deliver products and services that work to reduce adverse impacts on theenvironment. To this end, the Group is committed to engaging in the following conduct.

1. Strictly comply with all environment-related laws and regulations
2. Engage in activities that reduce environmental load including efforts to cutback energy consumption at each stage of
its products’ lifecycles from planning through development to design, manufacture, sale, use and disposal
3. Establish and implement systems that facilitate the ongoing promotion of global environmental protection activities
4. Raise environmental awareness in each and every employee through education and training throughout the Group
Established: June 2009

Global Warming Initiatives
Environmental Initiatives in Fiscal 2009
Toyo Denki has established a company-wide framework forenergy management, complying with the most recent revisions to Japan's Act on the Rational Use of Energy. Following are some of the initiatives that the company is implementing in order to reduce carbon dioxide (CO2) and othergreenhouse gas emissions.

1. Energy Conservation at Plants
Conversion to energy-efficient inverter units for air conditioning and heating fan motors and exhaust fan motors
Upgrades to energy-efficient fluorescent and mercury lighting
As a result of these initiatives, the company reduced CO2
emissions by 55% in 2009 compared with 1990 levels,
which represents a 38% reduction of CO2 emissions perunit of production. The graph at right shows CO2 emissions
by total volume and per unit of production.

2. From Team Minus 6% to the Challenge
25 Campaign
Toyo Denki has been involved in the Japanese government’s
Team Minus 6% initiative to reduce CO2 emissions since2007, and in 2010 began participating in the Challenge 25
Campaign. The company has appointed managers and coordinators at each business location to encourage eco- andearth-friendly practices such as detailed below.
Set moderate temperatures for air-conditioning and heatingin the summer and winterAlways switch off lights and computers when away from thedesk or during lunch breaks
Participate in the “Black Illumination” campaign by extinguishing lighting for exterior plant signage at certain times
CO2 Emissions by Volume and Per Unit of Production Output
Total volume of CO2 emissions■Electricity ■Town gas ■Type A heavy oil ■Kerosene● CO 2 emissions per unit of production(Tonnes)Figures in percentages show comparison
against 1990 (as 100%)

8,000

200

6,000

150

4,000

100

2,000

50

0

‘90 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09

0(Fiscal Year)

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Waste Reduction
Since fiscal 2006, Toyo Denki has reduced its landfill waste
output to less than 10% of all waste compared with 1998
levels, achieved by implementing strict rules for waste processing and other measures including comprehensive sorting of metal scraps and paper recycling. The total volume ofwaste was over 1,200 tonnes in 1996, but in the last few
years has hovered at the 600 to 700 tonne level.
Volume of Landfill Waste

Toyo Denki initiated paper recycling initiatives in 2002, withthe result that the recycling rate has risen from 30% to approximately 75% in 2007.

Output of General and Valuable Waste■ Total volume of waste ■ Volume of landfill waste● Percentage of landfill wastecompared to 1998 level

Waste output■General waste ■Industrial waste ■Valuable metal waste● Recycling rate for general waste(Tonnes)Figures in percentages show comparison against 1990 (as 100%)(Tonnes)(100%)

1,500

100

1,500

100

1,200

80

1,200

80

900

60

900

60

600

40

600

40

300

20

300

20

0

0

0

‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09(Fiscal Year)‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09

0(Fiscal Year)

Initiatives for Chemical Substance Management
Filing for disposal of PCB wastes, through proper storageand Japanese government notification in accordance with
the Act on Special Measures Concerning Promotion of
Proper Treatment of PCB Wastes
Substitution of volatile organic compounds ( VOCs) and recycled use of solvents, to reduce waste output
An ongoing focus on management of chemical substances
contained in products, including green procurement

Notification Volume for Pollutant Release and Transfer Register (PRTR) Substances
Output(Tonnes)

12
10
8
6
4
2
0

‘03

‘04

‘05

‘06

‘07

‘08

(Fiscal Year)

Pollutant Release and Transfer Register ( PRTR )

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Company-Wide Acquisition of ISO 14001 Certification

Toyo Denki had until recently operated separate environmental management systems under
ISO 14001 for its Yokohama Works and its Shiga Factory. It also operates a unified company-wide quality management system including its head office and sales offices, to engage incomprehensive initiatives for raising customer satisfaction. The company recently completed acomprehensive overhaul of its environmental management systems to establish a single company-wide system. The change will enable the company to engage in environmental management at a higher level that also encompasses its sales and administrative organizations, so thatit can deliver products and services with less environmental impact.

Tatsumi Hanamitsu
Deputy General Manager,
Quality Control Department

Wind Power and Solar Power Generation
Toyo Denki’s new Engineering Center, completed in January 2010, features a 12
kW rooftop solar panel array to start using an eco-friendly source of renewableenergy. The solar panel array is estimated to produce 11,000 kWh of electricity
annually, providing electricity to run 350 LCD monitors at the factory, as well as toreduce 7.6 tonnes of annual CO2 emissions.
Also installed on the rooftop is a wind power generation system which incorporates a breakthrough control-circuitless (CC-less) generating unit developed by Toyo Denki that does not require standby electricity. While collecting valuable field data from the system, the company will strive to develop more effective power generating systems to provide
environmental friendly technologies that can contribute to the establishment of a low-carbon society.

5Creating Comfortable
Workplaces
Toyo Denki engages in various initiatives to create a safe,
comfortable workplace and an environment
where employees can pursue their work with motivation and pride.

Initiatives for Creating Safe, Comfortable Workplaces
Occupational Safety
Toyo Denki has established an Occupational Safety Committee that implements activities designed to reinforce adherence to safety rules, and works to raise awareness on safety
and prevent occupational accidents in workplaces. The company also organizes fire fighting crews at each business location, and conducts regular fire fighting and evacuation drills
as a precaution against unforeseen circumstances such as afire or earthquake. These initiatives serve to raise awarenessregarding disaster prevention and help to ensure the safetyof employees.

Work-Life Balance
Toyo Denki has a Work Hour Management Committee thatserves as a forum for labor-management consultations aimed
at achieving work-life balance for employees. The Committee
primarily focuses on implementing changes to the work approach, so as to improve work efficiency and reduce overtime in each business location. “No overtime days” are also
designated for each business location, to encourage employees to enjoy a better work-life balance.

Human Resources Development
Human resources development at Toyo Denki is focusedon developing professionals
who are capable of self-development
and who each possess a high degree of specialized expertise.
Toyo Denki’s human resources development is aimed at making the most of the individuality of employees and drawing on
their skills and motivation, while enhancing the skills of each
employee through practical application. The company iscommitted to developing employees who understand andare capable of carrying out its Business Principles and Codeof Conduct. Backed by its pride in engineering excellence,
Toyo Denki will continue to endeavor to develop professionals
who are more than capable of developing their own skills.
Toyo Denki seeks and develops human resources basedon the basic approach outlined below.

Toyo Denki Approach to Human Resources Development
Human resources who understand and carry out Toyo Denki’s Business Principles and Code of Conduct
Human resources who are professionals, each possessing a highdegree of specialized expertise
Human resources who will take advantage of opportunities for employee self-development and growth

Work Schedule Flexibility
Toyo Denki conducts regular labor-management consultations to explore work schedule options so that the company
can accommodate employees at various stages in their life.
The company is currently considering various options thatwill help employees to balance their workwith their parental responsibilities.
The company has published an employee handbook that summarizes its
programs for child care and nursing careleave, and details the procedures for applying for leave. Toyo Denki is also introducing flexible working hours for part- Company handbook
on child care andtime employees.
nursing care leave

Education and training is implemented under the four
approaches shown in the diagram.
Education and Training Framework
On the job (OJT ) training

Support for
self-development

Education
and Training
Approach
STYLE

Outside training (off the job)

Building a Vibrant Corporate Culture
The “Challenge Up” Medium-Term Management Plan outlines Toyo Denki’s goal of building a vibrant corporate culture. In order to provide a platform for discussion among allof its employees, the company held discussion meetings at
its head office as well as its affiliates, branch offices, sales
offices, and production facilities. In all, 791 employees attended 105 meetings, including temporary staff and parttime employees. The meetings produced extensive feedback on the company’s future course and the various
challenges facing the company.

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Group training(off the job)

Discussion meeting for employees of Toyo Denki

Social Contribution
Activities
In addition to the social contributions made by its core business,
Toyo Denki places a strong emphasison community ties, engaging in diverse initiatives that focus on educating young people.

Contributing to Local Environmental Activities
Field Lectures on the Environment

University Cooperation

Since 2008, Toyo Denki has been involved in providing fieldlectures on the environment under a program run by Yokohama City. Under the program, the company conducts
workshops for students at Yokohama schools based on thetheme “Building Eco-Friendly Railway Systems—Promoting
Ecological Integrity through Increased Railway System
Use.”
Yokohama is the place where Toyo Denki was founded,
and is the first city in Japan to feature rail service. By implementing social initiatives that are closely tied to communities, Toyo Denki hopes to encourage environmental awareness and spur action by youth, as caretakers of the future.

In response to a request from the Kitami Institute of Technology, Toyo Denki arranged for Masanori Nakamura, Ph.D
in Engineering and head of the company’s research center,to give a lecture in October 2009 to third year undergraduate students. The lecture focused on the current state ofrotary machines and their future role in supporting Japanese industry. As a pioneer in the field of motor drive technology, Toyo Denki is committed to teaching young people
about the technology and knowledge it has developed over
the years, and to supporting science education.

Lecture by Masanori Nakamura, head of Toyo Denki’s
research center, at Kitami Institute of Technology

Donations to Yokohama Forest
Collaboration FundEnvironmental lecture at a Yokohama school

The Engineering Center of the Yokohama Works production
facility donates a portion of proceeds from company vending machines to a fund organized by Yokohama City to conserve small-scale forests.

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Toyo Wireless Measurement System Enables
Visualization of Energy Consumption

The Toyo Wireless Measurement System enables organizations to easily measure electric current, power, andtemperature data for plants, office buildings and facilities.
The system uses battery-free current and power sensors, and wireless data
communication between
sensors and the receiving unit, to significantly
simplify electrical installation.

Installation of battery-free sensors

The system has been deployedon each floor of Toyo Denki’s
new Engineering Center, completed in January 2010. Fromthe show room on the first floor,
it is possible to visually monitor
the power consumption statusof the building from a computer
monitor. The systems are also
installed at the Nagoya Branch(which is a tenant in an officebuilding) and the Shiga Factory,collecting useful data for tracking energy conservation.

Yuki Tsuruda
Marketing Department,
IT Business Division7

Products and Technology
Supporting Social Infrastructure
Toyo Denki is contributing to the development of safe,
secure social infrastructure for sustainable growth in four business segments.

Products and Systems Combining Environmental and Information Systems Technology
Transportation Systems

Information Systems

As a leading manufacturer of electrical equipment
for rail vehicles, Toyo Denki is still supporting the development of railways through its advanced electronics and motor drive technologies.

In addition to advanced, easy-to-use station service
equipment, Toyo Denki is engaged in the development of remote monitoring systems and other suchinformation systems products that employ sophisticated communications technologies.

Pantograph

N700 Series Shinkansen featuring Toyo Denki
components

Traction motor

Commuter pass issuing machine
Smart card charge machineμTOP remotemonitoring system

TD coupling

E³ Solution System ( Railway Power Storage System)

Driving gear unit

Handheld ticket issuingmachineToyo Wireless
Measurement System

Industrial Systems

Electric Vehicle Systems

As part of Toyo Denki’s environmental conservation
initiatives, the company is aggressively pursuing thedevelopment of industrial motors, inverters, andother products that offer greater efficiency and consume less energy and resources.

In addition to developing electric vehicle systems fora wide range of applications, Toyo Denki is developing in-wheel motors for use in next-generation electric vehicles.
In-wheel motor for next-generation electric vehicles
Brake rotor

Permanent magnet synchronous
motor ( ED motor)
Brake caliper
Shaftless newspaper rotary press featuring Toyo
Denki components

Rotor bracket

VF66 Series Intelligent Inverter

Testing equipment for automotive
development

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Application: Biomass power generation equipment

Stator bracket

Exhibit for in-wheel motor

In-wheel motor: Rotor
In-wheel motor: Stator