2023

Management Principles

Index
Foundation for Value Creation

Founding Philosophy

2 History of Toyo Kanetsu
4	The Toyo Kanetsu Group’s Value Creation
Process

Be Creative,
Be Good for Society

6	The Toyo Kanetsu Group’s Material Issues
8 Material Issues and KPIs
10 President’s Message
19	Summary of the Group Medium-Term Business
Plan (Fiscal 2022–2024)
20	Message from the Head of the Corporate Division
22	Business Overview
		 22 Logistics Solutions Business		 24 Plant Business		 26 Next-Generation Energy
Development Business

Founding
Philosophy

		 28 Business Innovation and Other Businesses

Five Principles in
the Toyo Kanetsu
Group’s Code of Conduct

Code of Conduct

Toyo Kanetsu’s Vision for Providing Value
30	Special Feature 1: Contributing to Society
through Next-Generation Energy Storage
32	Special Feature 2: Using Data in
Logistics Solutions
34	Special Feature 3: Toyo Kanetsu Group’s Human
Resources Strategy
36	Special Feature 4: Initiatives to Support
the Sustainable Growth of the Entire Group• Adhere to laws, regulations,and rules

Management Vision• Fulfill responsibilities to society

Become a Solution
Innovator that solves
social issues throughinnovative technology andexecution capability

Editorial Policy
Since fiscal 2019, the Company has published the TKK Report, an
integrated report that conveys information about its management
strategy, business environment, ESG (environmental, social, and gov-

• Conduct business activities
transparently and in good faith• Adhere to standards of
ethical conduct• Create health-conscious work
environments

ernance) issues, and finances annually,with the aim of furthering an
understanding of its corporate value from a medium- and long-

Governance
38 Board of Directors

term perspective. In preparing this report, the Company referred to
Framework (<IR> Framework) of the IFRS Foundation. We wel-

40 Chairman’s Message

come any feedback or opinions from ­readers in order to make this41 Outside Directors’ Dialogue

report better and easier to understand.

45 Messages from the Outside Directors
46 Corporate Governance
53 Business Risks
54 Director Profiles

Data Section
56 Consolidated Financial Highlights
58 ESG Data Highlights
60 Domestic and Overseas Offices
61 Corporate Profile and Stock Information

Group Medium-Term Business Plan
(Fiscal 2022–2024)

sources that include the International Integrated Reporting etails about results for fiscal 2022, the fiscal year ended
D
March 31, 2023, are available in the TKK Report 2023
Financial Section, which is on the Company’s website.

https://www.toyokanetsu.co.jp/global/ir/tkk_
report.html
 lease visit the Company’s website for other informationPfor investors.

https://www.toyokanetsu.co.jp/global/ir/
Cautionary Note Regarding Forward-Looking
Statements
In this report, content not based on historical fact comprises future

Please see page 19 for summary.

ACTION FOR THE FUTURE
The ability to exceed expectations andbecome a force for the future

Logistics Solutions

Plant

Next-Generation
Energy Development

Business Innovation
and Others

ACTION FOR
NEXT LOGISTICS

ACTION FOR
INFRASTRUCTURE

ACTION FOR
NEXT ENERGYACTION FORSUSTAINABILITY

Become the power
behind the logistics
system of the future

Become a force that
supports social
infrastructure

Become a force
supporting the futureof energy

Become a force
that supportsa sustainable society

estimates and projections about Toyo Kanetsu and the Toyo
Kanetsu Group’s plans, strategies, and earnings that were madebased on currently available information. Actual results may differ
significantly from these forward-looking statements due to­business-related risks and various uncertain factors.

TKK Report 2023

1

Foundation for Value Creation

History of Toyo Kanetsu
Plant BusinessFirst LNG tanks ordered from Brunei

Contribution to the Expansionof Clean Energy

Our founder’s desire to always anticipate and contribute to

When our tank business first supplied liquefied
natural gas (LNG) tanks to Brunei in 1969, LNG
was just beginning to attract attention as a sourceof clean energy. We were well-positioned to growinto a manufacturer capable of producing everything from ambient temperature to cryogenic­storage tanks. Since then, Toyo Kanetsu hasdelivered one of the world’s largest tanks (230,000kl), and now boasts a more than 10% share of the
global market. We also have the number one
share in maintenance for domestic refineries.

society’s needs has become a cornerstone of our­business, especially in the logistics and energy fields.

The first ordered tank built at theShowa Sekiyu Muroran refinery

Plant Business

Certificate from the API

1969

1950s

Corporate motto handwritten by Mr. Funo

1941

Rapistan conveyor (delivered to the Harumi
Post Office of the Ministry of Posts andTelecommunications)Founding
Logistics Solutions BusinessLabor-Saving and Streamlining Cargo Handling
Operations during the Construction Boom

A line of trucks carrying our boilers lined up in
front of the Nihonbashi Head Office2

TKK Report 2023

2000s

Next-Generation Energy Development Business

Becoming Carbon Neutral
1970s

1970
Listed on the First
Section of the Tokyo
Stock Exchange

In fiscal 2022, Toyo Kanetsu completed the development of the underlying
technology for large-scale liquefied hydrogen storage tanks, a project­subsidized by the New Energy and Industrial Technology Development
Organization (NEDO). From fiscal 2023, we are pursuing a new R&D projectwith NEDO’s support in which we will work to make this technology­practical, conducting verification experiments of storage tanks throughbench-scale testing.

1955

Changed the Company
name to Toyo Kanetsu K.K.

Founding
Years

80th anniversary of
Toyo Kanetsu’s founding

Moved to the Tokyo Stock Exchange
Prime Market

In 1950, the Company received its first order tomanufacture oil storage tanks and, as demand for
petroleum and other stable energy supplies grew,quickly expanded overseas and began manufacturing tanks in great numbers in the Middle East
and Asia. In 1958, the Company became the firstJapanese company to gain API (American
Petroleum Institute) certification and quickly
gained renown as a world-class provider of­ambient-temperature storage tanks.

Concentrated management
resources in the tank andconveyor businesses

Yoshio Funo,
our first president

Establishedthe Strengths ofToyo Kanetsu

2021

2022

Providing Energy Infrastructure
to Support Rapid Growth
Toyo Kanetsu was founded in 1941 as Toyo Kanetsu
Kogyo K.K.
With war on the horizon, increased military demand
for firebricks and other refractories was anticipated.
Spun off from Toyo Tile Co., Toyo Kanetsu Kogyo wasestablished to take over the operation of the former’s
industrial kiln furnace manufacturing and sales division.
The Company operated independently of its parent, andthe first president, Yoshio Funo, and the second president, Zenkichi Kinugawa, worked together to expand
the business.
The Company’s postwar restart was the result of construction projects to supply heating and cooling boilers
to various locations of troop garrisons. The technology
developed during this boiler production period waspassed on to later tank production.

2023

Early conveyor for civilengineering andconstruction work

In 1952, we saw belt conveyors’ potential aslabor-saving equipment and opened the
Yokohama Plant to manufacture them for­construction use. A construction boom led todemand for labor-saving solutions and the rationalization of cargo handling operations. To meetthis demand, we created the first automatic pressure conveyor (APC) and started production in
1960. The APC system was widely accepted bydomestic customers who required high-speed,
reliable conveyor systems, and the Company
succeeded in capturing domestic demand in thismarket. The Company then shifted its focus to
growing the logistics business.

Logistics Solutions Business

Logistics Solutions Business

Providing Pioneering
Logistics Solutions

Providing Logistics
Solutions That Meetthe Needs of Society

In the Logistics Solutions Business, the Company
entered the airport baggage handling system (BHS)
market in response to a rapid increase in demandfor efficient, high-volume baggage handling as­larger commercial jet aircraft came into widespreaduse. In the three years from the first delivery ofa BHS in 1971 to 1974, more than 30 airports inJapan began using our BHS, and our BHS share at
airports in Japan is now over 80%.
In addition, during the postwar period of rapid
economic growth, the need for labor-saving solutions
surged due to rising costs and distribution centerswere pressed to expand their scale of operations inorder to respond to diversifying customer demand.
Starting with the delivery of the Rapistan Conveyor
System, which was completed in 1969 and boasted
the largest scale and most advanced efficiency in
Asia at the time, the Company developed a new
and innovative logistics system. In 1996, we delivered the world’s first conveyor-based automatic
handling system for a large-scale auction market,
which won the Technology Prize in the Logistics
Awards organized by the Japan Institute of
Logistics Systems in fiscal 1997.

Tri-Planar® three-dimensional
conveyor

World’s first conveyor-based
automatic handling system fora flower market

Multishuttle system

Amid the growing need for speedy delivery of a wide variety of products inthe expanding e-commerce market, the Multishuttle automatic case storage
system, which performs the four functions of picking, sorting, replenishing,and storing has been adopted by many customers in the e-commerce and­manufacturing industries since its introduction in 2010 due to its high­warehousing and storage capacity.
Toyo Kanetsu has long cultivated its system planning capabilities in logistics centers and in 2023 added Scrum Software Co.,Ltd., which specializes
in system development for warehouse management systems (WMS), etc., to
the Group. Going forward, we will further expand our active fields and strive
to become a comprehensive engineering manufacturer.
The need for labor and manpower savings is becoming more and more
important. Utilizing cutting-edge AI and IoT technologies, we will supply
systems that meet the needs of our customers and provide backup services
that allow them to operate with peace of mind.

Business Innovation Business

Maintenance and management conductedby an Eco Analysis Corporation employee

The Business Innovation Business iscomposed of the environmental business,the industrial machinery business, andthe building construction business, andwe are working to establish it as ourthird pillar of business. As we advanceM&A and collaboration with startups,
we are striving to proactively generatesynergistic effects through Groupwide
open innovation.

TKK Report 2023

3

The Toyo Kanetsu Group’s Value Creation Process

Founding Philosophy

Social Environment
Declining birthrate andaging society
Decreasing working
population andlowered production

Transition to nextgeneration energy
Growing momentum
toward the realizationof carbon neutrality

INPUT

The Toyo Kanetsu Group’s Business Model

Financial capital

Logistics Solutions BusinessTotal assets ¥64.0 billion
Shareholders’ equity
¥34.8 billion

Capital expenditures¥1.1 billion

Human capital

Impact of changes
in living environmenton the naturalenvironment, etc.

Concern for the work
environment
Ensuring occupational
health and safety

OUTPUT
Profitability for growthPage 22–23

Plant Business

Manufacturing
capital

Net sales¥47.3 billion
Operating profit¥2.4 billion
Operating profit ratio
5.2%
ROE6.4%

Page 24–25

Shareholder returns

Next-Generation Energy
Development Business

Page 26–27

Business Innovation
and Other Businesses

Page 28–29

Securing humanresources andenhancing diversity
Female managers
6.9%
38.0% of mid-career hires inmanagement positions
71.8% of paid leave taken(FY2022 target is 70% of newdays granted for the fiscal year.)

Toyo Kanetsu’s Strengths

R&D costs
¥570 million
197 patents held

Reduction ofenvironmental impact

More than 80 years of continuously
supporting social infrastructure

Social andrelationship capital

GHG emissions
Scope 1 2,155 t-CO2e
Scope 2 1,444 t-CO2e
GHG emission reduction of
1,677 t-CO2e (compared to
FY2019)Technical capabilities and trust cultivatedthrough a wealth of experience

9 consolidated subsidiaries,of which 3 are overseas
Promote collaboration andpartnerships with diverse
stakeholders

Pioneering development capabilities andbringing in new technology

Natural capital
997 kl energy used
(crude oil equivalent)
9,300 m3 water used

Corporate culture

Corporate governanceHigh awareness of social contribution

Highly transparent business operations

Realize labor-saving
and unmanned
logistics sites throughtechnologicalinnovation andsolutions capabilities

Offer social infrastructure technologies
that contribute to
the realization ofa carbon-neutral society

Realize a diverse andsustainable living
environment(Fiscal 2022 results)

Management Vision

Becomea Solution
Innovator thatsolves social
issues throughinnovativetechnology andexecution
capability

Provide a safe, secure,and attractive
workplace

Business Foundation(Fiscal 2022 results)

OUTCOME

Total dividends
¥1.2 billion
Dividends per share¥147

1,143 employees(consolidated)
Annual training costs¥50.1 million

Intellectual capital

Concern about living
environment risks“Be creative, be good for society”

The Toyo Kanetsu Group’s Material Issues

A

B

Issues to be addressed through our business toimprove our corporate value

Initiatives addressing material issues tosustainably improve corporate value

C
Fundamental initiatives to undertake before addressing A and B issues
Please see pages 6–9 for details.

4

TKK Report 2023

TKK Report 2023

5

The Toyo Kanetsu Group’s Material Issues

1

Basic Approach to Material Issues

The Toyo Kanetsu Group has identified 10 importantmaterial issues to prioritize with the objective of sustainably improving corporate value through business activities. By addressing these issues, the Group will ensure

2

B

C

sustained growth and financial performance. Our material
initiatives are designed to help contribute to the relevant
SDGs, and, by proactively working to solve these issues,
we will fulfill the role expected of us by society.

those two issues, primarily through our business­activities. The four topics in category B are important­management issues to be addressed in order for theGroup to carry out these business ­activities sustainably.
The four topics in category Care prerequisites for
improving corporate value.

Issues to be addressed
through our business toimprove our corporate value(1)	Respond to changes in the business environment caused byclimate change(2) Respond to the decline in Japan’s population

Initiatives addressing material
issues to sustainably improve
corporate value

(3)
(4)
(5)
(6)

Fundamental initiatives toundertake before addressingA

and B issues

Training and utilization of human resources
Innovation in technologies and their usage
Promote collaboration with partner firms
Increase productivity(7) Ensure occupational health and safety(8) Execute steadfast compliance and corporate governance(9) Improve risk management(10)	Evolve our corporate culture into one that encourages
employees to quickly and proactively take on challenges
Please refer to pages 8–9 for more details about each material issue.

Toyo Kanetsu concluded a Positive Impact Loan agreement with Resona Bank, Limited in March 2023.
Under this agreement, Resona Bank and Resona Research Institute have analyzed and evaluated the impact of Toyo
Kanetsu’s initiatives related to achieving the SDGs as well as the material issues identified by the Company. Based on
this, the two have set KPIs for Toyo Kanetsu’s next-generation energy-related technological development to achievecarbon neutrality.
In addition, we have obtained a third-party assessment from Rating and Investment Information, Inc. about our­compatibility with the Principles for Positive Impact Finance in relation to this evaluation.
For details, please see the press release published March 22, 2023 (Japanese only).

6

Process for Identifying Material Issues and KPIs*

By giving due consideration to opinions inside and outside the Company and referencing global standards, the Toyo
Kanetsu Group identified its material issues in March 2019 through the following process. In addition, we set KPIs in
August 2020.
* Key performance indicators: Indicators for visualizing progress toward resolving identified material issues.

1

Research andpreparation

Management examined methods for identifying issues that are important for sustaining the growth of the
Toyo Kanetsu Group and of society, referring to international guidelines, such as the SDGs adopted at
the UN Sustainable Development Summit in 2015 and the Sustainability Accounting Standards Board(SASB), as well as to the Corporate Governance Code. We furthered the understanding of our employees
in these areas by holding in-house seminars about ESG initiatives, the SDGs, and integrated reports.

2

Listing of social
issues, identificationof important issues

All members of upper management participated in multiple discussions about material issues to reacha consensus on the strengths of the Toyo Kanetsu Group, social issues that directly affect its operations, and the role that the Group should play in the future. As a result, we identified priority social
issues needing resolution, as well as the Group’s own issues that must be addressed to solve suchsocial issues.

3

Incorporation of
opinions ofstakeholders

Toyo Kanetsu exchanged opinions with outside experts and institutional investors, listened to the­concerns and expectations of stakeholders of the Group, and made a list of identified issues.

4

Identification ofmaterial issues

The material issues discovered through this process were deliberated by the Management Council
and the Board of Directors, which identified and approved 10 material issues for the Group to addressin the future.

5

Setting of KPIs

Referring to guidelines, examples from other companies, interviews with relevant internal divisions, andother sources of information, we set KPIs by conducting discussions at internal meetings with the participation of members of management, after having listed several candidate KPIs for each material issue.

4

The Toyo Kanetsu Group’s Approach

The Toyo Kanetsu Group’s Three Categories of Material Issues

The Toyo Kanetsu Group has divided its material issues
into three categories (A, B, and C) in accordance with
their characteristics. The two topics in category A aresocial issues that could have a major impact on theGroup. We will provide value to society and improve­corporate value by contributing to the resolution ofA

3

TKK Report 2023

https://www.toyokanetsu.co.jp/info/2023/0322/000686.html

The Toyo Kanetsu Group engages in business activities while positioning these 10 material issues as important guides
to consider when formulating business strategies and making decisions in each business.
With regard to initiatives for addressing material issues, the director serving as the chair of the CSR Committee istasked with monitoring progress
The Toyo Kanetsu Group’s CSR Structure
in resolving said issues. In addition,
Board of Directors
through dialogue with various
stakeholders, ­management will
Management Council
keep track of changes in stakeReport
CSR Committee
holder concerns and expectations
Chairof the Group while monitoring
Director in Charge of CSR Managementsocial trends. If deemed
Committee Members­necessary, the Company will­flexibly revise its material issues
Logistics Solutions Division
Plant Business Division
Business Innovation Division
and KPIs.
Next-Generation Energy
Development Office

Green Transformation
Promotion Office

Safety, Environment, andQuality Assurance Dept.

Corporate Division

Report/Consultation

CSR Subcommittee

Secretariat

TKK Report 2023

7

Material Issues and KPIs
A

Issues to be addressed through our business to improve our corporate value(1) Respond to changes
in the businessenvironment causedby climate change(2) Respond to the decline
in Japan’s population

Climate change may have a major impact on the Company’s business environment. There is the risk of a negative
impact from weaker demand for storage tanks as energy use shifts away from fossil fuels. While considering measures to combat global warming, the Company will work on projects related to demand for fossil fuel alternatives,
such as hydrogen energy, and develop products and services with excellent environmental performance. In theseand other ways, Toyo Kanetsu will seek out new business opportunities in a bid to sustain business growth.

It has become harder to secure human resources due to Japan’s declining population, which reflects a decreasein the birth rate and an increase in the number of elderly citizens. The Company understands the importance of
maintaining attractive workplaces that are comfortable, inclusive of diversity, and ­conducive to rewarding work.
In the Logistics Solutions Business, there is a risk that the contraction in the population will lower the purchasing power of consumers and lead to weaker demand overall. By developing labor-saving systems and taking
other steps to counter labor shortages, the Company believes it can turn this into a major growth opportunity.

2020

2021

2022

Scope 1 emissions

FY

1,586

2,214

2,155

Scope 2 emissions

3,407

2,928

1,444*22023 (Target)

2,638*

2

Unit

t-CO2et-CO2e*1 Emissions for fiscal 2022 after carbon offset.    *2 Fiscal 2030 target figure is the Scope 1 and Scope 2 total.
Note: Toyo Kanetsu and consolidated subsidiaries

FY

Rate of Annual Paid Vacation Taken

2020

2021

2022

2023 (Target)

Unit

68.4

66.8

71.8

70.0

%

Note: Toyo Kanetsu, non-consolidated
At least 10 days in fiscal 2020 and 13 days in fiscal 2021; the target from fiscal 2022 is set at 70% of new paid vacation days granted forthe fiscal year.

B Initiatives addressing material issues to sustainably improve corporate value(3) Training and utilizationof human resources

To sustain growth, the Company must train its employees appropriately, imbuing them with knowledge and­technical skills related to its businesses while enhancing leadership skills, international awareness, and­responsiveness to changes in the business environment. We must advance measures to secure, train, anddeploy diverse human resources.

(4) Innovation intechnologies andtheir usage

The development and use of new technologies will allow the Company to provide new products and services whilestrengthening the competitiveness of existing businesses. Moreover, new technologies are likely to become thedriving force behind new business creation. In particular, efforts to develop new technologies in the fields of AI, IoT,
robotics, and failure prediction should be effective in resolving the social issue of increasing efficiency in logistics byhelping conserve and reduce labor as well as stabilize operations.

(5) Promote collaboration
with partner firms

The value chains in the Company’s businesses depend on numerous partners inside and outside Japan involvedin the supply of parts and materials, installation work, and IT engineering. Toyo Kanetsu works with its partners to
supplement areas where it has insufficient resources and provide cutting-edge ­technologies in such areas as AI
and IoT. These partnerships expand the scope of business domains that Toyo Kanetsu can enter and increase
opportunities to start new businesses.

(6) Increase productivity

Amid stronger demand from customers for the delivery of high-performance, low-priced equipment, Toyo
Kanetsu must continuously increase productivity with innovative technologies to keep winning orders andbooking sales.

FY

Ratio of female managers*

2020

2021

2022

2023 (Target)

Unit

2.70

5.41

6.85

10.0

%

* Managers: Group managers and department heads, excluding executive officers (definition changed from fiscal 2021 results)
Note: Toyo Kanetsu, non-consolidated (set as a KPI in fiscal 2022)

FY

Operating Profit per Employee

2020

2021

2022

2023 (Target)

Unit

3,306

2,967

1,950

1,953

Thousands of yen

2020

2021

2022

2023 (Target)

Note: Toyo Kanetsu, non-consolidated

C

Fundamental initiatives to undertake before addressing A and B issues(7) Ensure occupational
health and safety

Safety is a priority in everything that Toyo Kanetsu does. If a safety- or health-related issue arises among our
employees, our most important resource, there is a risk that corporate value will be damaged considerably. Since
accidents must not happen, the Company is reinforcing its safety-first mindset by creating and implementing
safety management plans to prevent accidents from occurring.

FY

Unit

Frequency Rate of Industrial Accidents

1.39

1.20

0.33

0

Severity Rate of Industrial Accidents

0.05

0.02

0.02

0

Number of Fatal Work Accidents

0

0

0

0

Casualties/ million
working hours
Days lost/thousandworking hours
Cases

Note: Toyo Kanetsu, non-consolidated(8) Execute steadfast
compliance andcorporate governanceAs compliance with laws and regulations is a vital cornerstone of Toyo Kanetsu’s execution of trustworthy­business activities, the Company requires that all employees maintain a value system in which compliance is theirhighest priority. In addition, Toyo Kanetsu continuously reinforces its corporate governance system.

(9) Improve risk
management

Since Toyo Kanetsu Group engages in operations related to social infrastructure, management responds properlyand quickly to demand from society when a problem arises while taking steps to prevent accidents from occurring. As the scope of business expands with the introduction of new businesses and projects overseas and thefabric of society changes with ever greater speed, the risks the Company must address are growing in number
and magnitude. Toyo Kanetsu aims to further strengthen its ability and systems for identifying, assessing, andminimizing various risks, for example, by improving its credit and project screening capabilities and strengthening
internal security, in addition to stepping up its emergency preparedness around the world.

(10) Evolve our corporate
culture into one thatencourages employees to quickly andproactively takeon challenges

8

TKK Report 2023

In order to advance existing businesses and create new ones, we must nurture a corporate culture where all of
our employees can work together as one on challenges in new fields.

FY

2020

2021

2022

2023 (Target)

Unit

Rate of Information Security Training Participation

100

100

100

100

%

Number of Training Sessions Held on
Risk Management

5

6

5

5

Times

2020

2021

2022

2023 (Target)

Unit

72.3

70.7

79.8

100

%

Note: Toyo Kanetsu and consolidated subsidiaries

FY

Commendation System: Improvement
Proposal Submission Rate

Note: S ubmission rate = Total number of proposals submitted (Toyo Kanetsu, non-consolidated) ÷ number of eligible Toyo Kanetsu employees at theend of the second fiscal quarter. Total number of proposals is the aggregate; multiple proposals from one person are counted individually.

TKK Report 2023

9

President’s Message

Initiatives to Expand
Business Operations andEstablish a Growth Pathfor the Future
Reflecting on 2022, my first year as president, weto take in c
­ reating a company in which each and every

faced a variety of challenges, such as the ongoing­employee can take part in the growth of the business.

semiconductor-related part shortages over the past

The first target we focused on was work status

two years, amidst this unstable business environ-improvements. Base salary increases were imple-

ment. While handling these urgent challenges, wemented and we also made one-time cost-of-living

aimed our sights a little higher, and it was a year in

support payments. To create an open and comfort-

which we worked internally to revitalize the entire

able workplace, we deepened exchange within our

Company as a measure to enhance our social value.

community by holding technical meetings in which

Employees worked independently and actively andparticipants could get to know other technologies

good work was done, and I believe this has led toacross the boundaries of business divisions, andincreased productivity and higher profit. A company

I visited bases and service centers myself to hearis held up by its employees.

their opinions firsthand.

Based on that idea, I made three promises to ourOn the other hand, through a Companywide

employees when I became president: dreams andemployee survey and interviews that I conducted­fulfillment, open and comfortable workplace, and workwhen I first assumed office, I once again found thatstatus improvement. We have positioned these ascommunication was insufficient. This was the caseextremely important targets, and I ­discussed each

not only at our headquarters, but also at service

matter thoroughly with our directors and ­division­centers and sites throughout the country.

­managers. I got a little over-enthusiastic during theseWith the goal of communicating the Company’s

discussions, but we eventually agreed on the direction

status as well as my own thoughts to each employee

Takashi Owada
President and Representative Director

10

TKK Report 2023

TKK Report 2023

11

President’s Message

in an easy-to-understand manner, I started doing thethere will be both successes and failures. And, even

Positioned as a material handling manufacturer­maintenance services, including planning, cleaning,

Owada 845 initiative, in which I do a live stream at

failure plays a role as we correct errors and connectthat specializes in logistics and shipping systems,

inspection, and repair for approximately one hundred

the beginning of every month. In past live streams,

lessons learned to the next step towards success.

Toyo Kanetsu has long been proposing and building

tanks across Japan. Since these inspections are

systems focused on shipping, the main challenge forrequired by the Fire Service Act, we can expect this

distribution centers. However, Japan’s upcoming

business to be a stable source of profit. On the other“logistics 2024 problem,” which will see an overtime

hand, as the aging of engineers becomes a more

cap being applied to truck drivers starting from April

serious issue across the entire energy industry, main-

I have discussed the thought process behind our­slogan, “ACTION FOR THE FUTURE,” made requests
to employees, introduced Group companies and bases

Reflecting on the First Year of
the Medium-Term Business Planas well as financial results, and touched on various
themes related to dreams and fulfillment. Another effort

Next, I will discuss the initiatives aimed at realizing

2024, is now a major point of discussion. Amongtaining and passing on technology has also become

towards work status improvements was the live stream

the policy of the Medium-Term Business Plan,other changes, shipping companies will need toa challenge for Toyo Kanetsu. To address this, inI did calling for employees to join the Toyo Kanetsu“Establish a Growth Path for the Future.”

reduce truck drivers’ waiting time for cargo. To

2021, we established TKK Plant Engineering K.K. At

address this issue, we have expanded our scope of

TKK Plant Engineering K.K., we are flexibly securing

Employee Stock Ownership Plan. Of course, increasing
the incentives and compensation for enrollment

Logistics Solutions Business

operations beyond warehouse logistics and havehuman resources and promoting the training ofoffered each month helps build the assets of every

The Logistics Solutions Business, which has grownbegun creating a warehouse system for managing

young human resources to learn the skills and design

employee, but joining the plan has the added benefit of

into the Toyo Kanetsu Group’s largest business,entire distribution centers. Specifically, we are devel-

technology of onsite supervisors. Going forward, byincreasing engagement.

­handles solutions for distribution centers, including

oping our warehouse management systems (WMS),

collaborating with our partner companies, we will

picking, sorting, conveyor belts, and storage

thereby contributing to efficiency improvements at

respond to ongoing tank maintenance demand.

sharing, I also promised to increase opportunities for­systems, and specializes in e-commerce, co-ops,

distribution centers.

­disseminating information outside of the Company.

airports, and 3PLs.

In fiscal 2023, in addition to internal information

Sharing the Company’s status and future policies

The digital picking system the Company introduced

solutions will not sufficiently differentiate us from

Next-Generation Energy
Development Business

However, simply adding WMS into our proposed

externally will lead to internal rejuvenation andto Japan from the United States in the 1980s wasother companies. A distribution center serves as

In the Next-Generation Energy Development­synergistic effects, including the enhancement ofadapted to support co-op operations and, since

a buffer between shipping and receiving, and we are

Business, we are working to supply storage tanks for­corporate value. Fiscal 2023 was the second year ofthen, has been adapted to meet the needs of thetrying to build a WMS that allows customers tofuel ammonia, liquefied CO2, liquefied hydrogen, andthe Medium-Term Business Plan, a critical time fortimes along with its deployment at co-ops through-dynamically change the way they operate thanks toother next-generation energy sources that we expect

achieving the targets of the plan. Achieving theseout Japan. The ­e-commerce market has expanded

the use of our shipping and receiving technology.

will be needed in the future. In April 2023, the Green­targets is important, but I believe growth for the future

rapidly, and the Company continues to utilize theThis is what will set us apart from other companies.

Transformation Promotion Office and the Next

will be driven by every division setting and achieving

knowledge it gains to meet the needs of thetheir own high goals. I think that if we take “ACTION,”­e-commerce logistics ­centers for same-day delivery.

Specifically, we are aiming to differentiate ourselves

Generation Energy Development Office were estab-in the field of demand chain logistics solutions. In

lished directly under the president to further strength-

recent years, shipping conditions and product lineups

en these efforts. Due to the large scale of investment

have been changing drastically along with shifts inin storage tanks and the long time period from orderconsumer preferences. Because of this, we are

to delivery, we decided to separate it from the Plant­considering ways of enhancing efficiency, for example,

Business, as, going forward, a different way of doingby creating demand forecasts based on customers’

business will need to be adopted. I also wanted touser data that can be combined with our WMS to

get even closer to our ­customers and learn more

direct changes in storage location and shipping

about their real situations, so in fiscal 2022, we reor-

method even before orders come in.

ganized these departments under the direct controlof the president.

Plant Business

12

TKK Report 2023

Next-generation energy storage tanks can utilize

Toyo Kanetsu has a track record as a world-leader inthe technology cultivated for cryogenic LNG storage

LNG and crude oil tank manufacturing, and wetanks as well as for the manufacture of various other­consistently provide total tank installation andlarge storage tanks. As ammonia is a clean energy

TKK Report 2023

13

President’s Messagehydrogen carrier, we expect sales of ammonia s­ torage

remained severe due to soaring construction materialtanks to pick up in the future, and we already haveand construction costs.

The third initiative is to expand our consultationliquefied hydrogen tanks, a project that was subsidized

expertise beyond onsite operations at logistics cen-by the New Energy and Industrial Technology

ters and thereby give our customers’ management

Development Organization (NEDO). In fiscal 2023,

teams a better understanding of Toyo Kanetsu.

we will start a new R&D project, also subsidized byexperience in delivering such tanks for chemical

I believe that we can still expand these businesses­fertilizers overseas. This technology can also be

by responding to living environment risks. By pursuing

applied to fuel ammonia. We can apply the technology

the M&A of companies that develop businesses in

Expanding our customer base, expanding our busi-

NEDO, involving a proof-of-concept experiment using

for our large spherical tanks and petroleum storage

environmental fields adjacent to those of our existingness scope, and consulting at the management level—I

bench scale test tanks for liquefied hydrogen storage.

tanks for low-temperature materials that we havebusinesses, we will work to solve emerging environmen-

see these as the three i­nitiatives for business expansion.

Toyo Kanetsu is pursuing R&D with the end goal ofdelivered around the world to liquefied CO2 andtal problems, a major social issue, while tackling issues

The Plant Business is responsible for handling

methylcyclohexane (MCH), another hydrogen carrier,associated with the declining working population andstorage tank maintenance, which we expect to50,000 m3-class tank by putting flat-bottomed

and I believe we will be able to handle the needs ofensuring the stable supply of energy.

­maintain a certain level of demand. Furthermore, at­cylindrical liquefied hydrogen tanks into practical use,

the maintenance planning stage for petroleum whole-which is part of NEDO’s Technology Development

salers, a Toyo Kanetsu customer industry, we comeRoadmap for Fuel Cells and Hydrogen published inin and make proactive repair proposals based on ourMarch 2019, and we are working on schedule toknowledge and past results.

­complete the experiment in 2027. The Japanese

the hydrogen society of the 2030s. Specifically, we­completed a technical review of our liquefied CO2 tanks
in fiscal 2022, and we have the technology to fully sup-Specific Initiatives for
Growth Strategies

port production until delivery. We have now establishedsystems for sales, procurement, and construction, andWhenever I have an opportunity, I proactively

are preparing to implement them, so we have the tech-­communicate about Toyo Kanetsu’s WMS in ourare actively meeting new storage demand with theprice of hydrogen to one-third of its current price by

nology and structure ready to immediately handle any

mainstay Logistics Solutions Business. This isdevelopment of technologies for new tank construction

2030, so that year is expected to be a turning point ininquiries we may receive. There are many tank manufac-

because, despite the strength of our reputation in theand the renovation of existing facilities. Moreover, wethe practical application of hydrogen.

turers across the world, but I can proudly say that Toyoarea of shipping systems, our reputation in the area

are expanding our scope of activity to such areas as

Kanetsu is the only company that can supply these,of WMS that it is of limited scope, but I would like tosustainable aviation fuel (SAF), which has been attract-

Businesses, I believe that enhancing the competitive-

backed by the project driving force that has thus far

dispel this. In fiscal 2023, we will work to expand ouring attention in recent years. We will also implement

ness of every Group company will lead to businessdelivered more than 5,700 tanks in Japan and overseas.

business and enhance our reputation in this area.

digital transformation at business sites, and develop

expansion. For example, Eco Analysis Corporation’s

One initiative we are undertaking is to expand ourmeasures to prevent heatstroke, etc., and work tomaintenance work for environmental air and water

Business Innovation andOther Businesses

customer domain. Toyo Kanetsu excels at providing

ensure the health and safety of onsite workers.

quality measuring equipment has established a good

logistics solutions for such businesses as co-ops andIn fiscal 2022, the Next-Generation Energy

In Business Innovation and Other Businesses, we are

e-commerce providers, but I believe that the knowledge

Development Business completed R&D into theacross Japan, and the company also contributes toexpanding existing areas through M&A and ­corporate

we have cultivated in logistics can also be applied to theunderlying technology needed to create large-scalesociety through environmental field surveys.

­venture capital investment methods while maintaining

manufacturing industry. We will proactively approach

our focus on the businesses ­developed by four of our

new areas by collaborating with other companies.

Group companies.
The markets for both Kankyo Research InstituteHowever, we do not stop at tank maintenance. We

realizing the commercialization of a large-scale,­government has announced a policy to lower the

Finally, in the Business Innovation and Other

reputation with various government authorities

The second initiative is expanding our businessscope. As I mentioned previously, this means

Inc., which does research and analysis in the

expanding from shipping systems to entire logistics­environmental field, mainly for asbestos, and Eco

centers, as well as the initiatives for both before

Analysis Corporation, which conducts equipment

arrival and after shipping. In other words, we aim to

maintenance and surveys on lifestyles and thetransform from a material handling manufacturer with­environment, are expanding. In the industrial machinerya specialty in shipping systems to a comprehensive

business handled by Toyo Koken K.K., demand

engineering manufacturer. To realize this, we invested

began to recover after slowing down during thein FIRST ORDER Co., Ltd. in fiscal 2022, and madeCOVID-19 pandemic, but in Toyo Kanetsu Builtec

Scrum Software Co., Ltd. a subsidiary in fiscal 2023.

K.K.’s construction business, the environment14

TKK Report 2023

TKK Report 2023

15

President’s Message

In addition to its usual field of asbestos investiga-

to accelerate our important WMS development. In terms

by providing ammonia and CO2 storage throughout theof BCP measures, currently, the Wakayama Plant is theInstitute Inc. will be successful in further broadening

transitional period. I believe that we can create synergy“mother” plant, and we have built a p­ roduction structure

its scope of offered value by expanding into the envi-

in the Business Innovation and Other Businesses

in collaboration with ­our ­subcontractors. Thanks to

By implementing ESG management, we have maderonmental consulting and solution proposal business.

through the M&A of environmental companies.

these measures, in the case of an emergency such as

great progress regarding the environmental aspects

a natural disaster, the ­production system will not beof our business. For comparison, the Toyo Kanetsu

immediately affected. We would like to make the appro-

Group’s GHG Scope 1 and 2 emissions were approx-

For Toyo Koken K.K., I believe we can expect a rise

Realize Growth Investment for the
Next Period of Rapid Growth

in replacement demand for industrial machinery inlight of society’s growing needs for labor-saving,
automation, and safety technologies at factories andpriate investments in BCP measures in light of potential

imately 5,000 t-CO2e in fiscal 2019. In fiscal 2022,

disaster risks from climate change.

however, our emissions were down to approximately

I believe there are three main pillars of growth invest-

construction sites.
In the course of promoting the growth of each

ment: M&A of environment-related companies, M&AGroup company, we will expand our business, create

and investment to expand the Logistics Solutions

synergistic effects, and conduct M&A. Reflecting

Business domain, and investment in BCP measures.

what I have covered in this message, our long-term

The investment policy we set for investing a cumu-

business portfolio is anticipated to grow as shown inEstablishing a Growth Path for
the Future

3,600 t-CO2e thanks to the implementation of Scope
2 carbon offset measures. Our policy is to advanceour participation in such green initiatives as engaging
in environment-related investment, converting

Putting Toyo Kanetsu on a growth path means

Company cars to EVs, and expanding solar power

lative total of ¥10 billion over the three-year period of­balancing the prioritization of profit against expansion

generation facilities.

the below diagram. We aim to transform the Logistics

the Medium-Term Business Plan has not changedin scale. Business expansion is a phrase I have been

Solutions Business into a highly profitable businesssince the plan began in fiscal 2022. Moving beyond

using frequently, and as we work to reinforce Toyoplace for every employee, we have been recognizedby expanding its scope, and the Plant Business will

M&A targeting environment-related companies,

Kanetsu’s resources, I believe that human resource

as a Certified Health & Productivity Management®

continue to enjoy stable earnings in its maintenance

I would like to pursue investment and M&A aimed at

strategies and M&A are our most urgent challenges.

Outstanding Organization for the second consecutive

business. Although the Next-Generation Energy

reinforcing the Logistics Solutions Business. As

It is also critical to realize management that isyear, and also acquired the “Tomonin” mark, which

Development Business can be largely impacted by

I mentioned previously, we have acquired FIRST­conscious of cost of capital and share prices. Fiscal

promotes workplace environments that enable

national policy, we would like to support carbon

ORDER and Scrum Software with this goal in mind and2022 results included a total shareholder return (TSR) of

employees to balance work and nursing care. The

105.4%, and we are continuing to acquire treasury

use of childcare leave by male employees is a current

stock, as well as continuing to sell cross-shareholdings

issue, and after the success of appeals from theto maintain a ratio of 20% or less of cross-­shareholdings

human resources department that started in 2023,

to consolidated net assets. In ­fiscal 2023, we

attitudes toward using childcare leave have improved

acquired ¥1.2 billion in treasury stock. Movingaround the Company, and leave was actually taken.

­forward, we will continue to sell cross-shareholdings.

On top of creating a corporate culture that encourages

In addition to these measures, I believe that having

the free and open exchange of opinions, I believe

the trust of our stakeholders as well as that of societythat creating an environment in which employees canwill lead to enhanced corporate value over thework comfortably and healthily will lead to improved­medium to long term. Accordingly, we will expand

corporate management and stronger governance.

measures aimed at encouraging market dialogue, forOn the governance side, we appointed two new

example, holding multiple financial results briefings,

female outside directors to the Board in fiscal 2022.

one-on-one meetings with institutional investors, andIn addition to appointing outside directors as half of

IR seminars for individual investors, so that the Toyo

the Board of Directors, we strengthened our governance

Kanetsu Group is more widely and deeply known. To

by establishing the independent Nominating Advisory

further progress toward ­establishing a growth path

Committee and the Compensation Advisory

for the future, I would like to enhance our corporate

Committee, both of which are chaired by an outside

Future Portfolio Changes Over the Long Term
High

Toward high-growth, high-profit areas

GrowthNextGeneration
EnergyDevelopment

From technology
investment tobusiness project
Businessacquisition
creation anddevelopment
Newbusinesses

BusinessInnovation

Logistics
SolutionsField expansion
Logistics
systems

Low

High

Profitability
NextGeneration
EnergyDevelopment

Plant
Storage
tanks

Low

16

Aiming for ESG Management
Unique to Toyo Kanetsu

neutrality through the realization of a hydrogen societytion and analysis, I believe that Kankyo Research

TKK Report 2023

Maintain stable earnings

On the social side, as part of creating a lively work-value by promoting M&A and IR strategies.

TKK Report 2023

17

Summary of the Group Medium-Term Business Plan (Fiscal 2022–2024)

President’s Message

Establish a growth path for the future

Medium-Term
Management Policy

ACTION FOR THE FUTURE

SloganThe ability to exceed expectations and become a force for the futureMarket Environment and Strategies

1941

100th
anniversaryof founding

Founded2030

Earnings growth
1955

Consolidated into
two businesses

Long-term strategies

2024

High growth through the
expansion of offered value
Declining working population and growth of
e-commerce as well as sophisticated andautomated logistics systems

2022

Logistics Solutions

director in addition to having memberships comprising

so I am always encouraging our employees to takea majority of outside directors. I myself have witnessed

the chance if there is at least a 60% probability offirsthand how much more lively the Board of­success. I would like everyone to add boldness to

Directors’ discussions have become.

their characteristic skills as they continue to take

Note: Health and Productivity Management® is a registeredtrademark of the Nonprofit Organization Kenkokeiei.

“ACTION.” Through a combination of new technolo-

Every Employee Working Together
to Take “ACTION”
Toyo Kanetsu’s Founding Philosophy is “Be Creative,
Be Good for Society.” We will help solve the social
issues that are besetting global society, including
declining birthrates, aging populations, energy­challenges, and environmental problems.
I feel very strongly about the word “ACTION” in ourgies and our 83 years of experience, we aim to­provide completely new solutions to the world andrespond swiftly to its rapid changes as well as toissues so that they can have vibrant lifestyles. Every
Toyo Kanetsu employee will work together to continue
taking “ACTION” as we move forward toward ourFinally, I would like to thank all of our stakeholders

However, there is a cautious side to the Company
that tends toward hesitation when taking on challenges,

18

TKK Report 2023

Formational period for next-generation energy
towards a carbon-neutral society

Next-Generation Energy
Development

Increased interest in environmental impacts
and changes, including climate change andliving conditions

Business Innovation andOther Businesses

Secure stable earnings throughmaintenance businessEnter into the next-generationenergy market
Creation and development ofbusinesses that will become
our third pillar(M&A in the environmental field)

Numerical Targets of the Plan
Medium-Term Business Plan
FY2024 Targets

Net sales¥54.0 billion¥52.1 billion¥65.0 billion

OperatingprofitROE¥4.2 billion

Operating profit(Including corporate
expenses)

8.0%

ROE

¥65.0 billion¥47.3 billion

Net sales

100th anniversary.

¥3.3
billion¥4.2¥2.7
billion¥2.4
billionFY2022 (Plan)

FY2022 (Results)

FY2023

FY2024

6.0%

6.4%

6.0%

8.0%

¥28.0 billion¥2.6 billion¥32.6 billion¥3.3 billion¥36.4 billion¥3.7 billion

billionfor their continued support.

has a strong corporate culture with many very eartaking on the goals and challenges that lie ahead.

Plant

inspire hope for the future and help solve social

slogan, “ACTION FOR THE FUTURE.” Toyo Kanetsu
nest employees as well as a serious commitment toTransition period for energy transformation

President and Representative Director

Net sales

Logistics Solutions¥31.0 billion¥3.1 billion

Operating profit

Plant¥9.0 billion¥380 million

Operating profit¥8.5 billion¥560 million¥8.5 billion¥450 million¥8.5 billion¥450 million

Next-Generation Energy Development¥2.0 billion(¥470 million)

Net sales¥1.0 billion¥1.6 billion(¥500 million)¥2.4 billion(¥260 million)¥9.7 billion¥1.0 billion¥11.3 billion¥940 million¥17.7 billion¥1.2 billion

Business Innovation andOther Businesses

Net sales

Operating profit (¥730 million)¥10.1 billion Net sales¥800 million Operating profit

For details, please see the Group Medium-Term Business Plan for fiscal 2022–2024 (Japanese only). https://www.toyokanetsu.co.jp/pdf/2022/toyo_kanetsu_2833.pdf

TKK Report 2023

19

Message from the Head of the Corporate Division
 rogress of the Group Medium-Term
P
Business Plan

Takeshi Yonehara
Senior Managing Officer
Head of the Corporate Division

Fiscal 2022 Performance Assessment

In line with our basic policy under the current
Medium-Term Business Plan of establishing a growth
path for the future, we planned and implemented
measures to further the strategies for each business;
however, the business environment remained uncertain due to social turmoil such as the COVID-19­pandemic and hesitancy around next-generationenergy progress. As a result, progress lagged in thefirst fiscal year of the plan.
In fiscal 2023, although there are concerns about
inflation due to rising interest rates, a weaker yen,
and increasing prices, we will work to improve­process progress by softening the parts shortage,secure continuous stable earnings through the tankmaintenance business, and strengthen activities to
win orders for storage tanks that help reduce GHG
emissions. Furthermore, by pursuing the M&A of
companies that could become a pillar of future businessand collaborating with startups, we will accelerate thecreation and development of new corporate value.

In the financial results for fiscal 2022 (ended March
31, 2023), profits increased primarily in the environmental business and the industrial machinery b­ usinessof the Business Innovation and Other Businesses.
However, due to the continued impacts on the
Logistics Solutions Business of parts shortages thatbegan during the COVID-19 pandemic, the effects ofoperations adjustments within manufacturing andconstruction processes. In the Next-Generation
Energy Development Business, there was a delay ina planned new tank installation project and other­factors. As a result, ­consolidated net sales and­operating profit were lower.

Toyo Kanetsu’s capital policy and shareholder return
policy have remained unchanged since we announced
the current Medium-Term Business Plan in May 2022,
and we will flexibly implement measures to improve
total shareholder returns, increase the dividend payout ratio to at least 50%, and enhance total dividends.
One of the management challenges we face is ourshare price trending lower than the dissolution value.
We plan to improve our price book ratio (PBR) by
steadily raising business revenue in order to boost

Total Shareholder Return (TSR)

ROE

Capital Policy, Shareholder Return
Policy, and PBR

(%)

(%)

120

10

98.9
90

95.0

105.4

6.4

70.3
4.9

6

6.4

5.0

Toyo Kanetsu’s Management Vision is to “Become a
Solution Innovator that solves social issues throughinnovative technology and execution capability,” andin line with our slogan, “ACTION FOR THE FUTURE,”
our basic human resources policy is to cultivate aworkforce that boasts abundant creativity, strong
critical thinking skills, and reliable expertise.
Also underlying this policy is the Company’s Founding
Philosophy, “Be creative, be good for society.” To realize
the spirit of this philosophy, we recognize that we needhuman resources who are constantly working tosolve future social issues, who can continuously­contribute, and who are broad-minded.

Business cash flow
Approx. ¥10 billion

2.9

Dividends¥3 billion or moreFinancing as needed0

FY2018FY2019TKK Report 2023

FY2020

FY2021

FY2022

Outlook for Fiscal 2023
In fiscal 2023 (ending March 31, 2024), we anticipate
net sales of ¥54.0 billion, operating profit of ¥3.3
­billion, ordinary profit of ¥3.5 billion, and profit attributable to owners of parent of ¥2.4 billion, with higher
revenues and income compared with the previous
fiscal year.
The Company forecasts that foreign exchange rate
fluctuations will have a limited impact on operating
profit as foreign currency-denominated imports andexports account for only a few percentage points ofboth net sales and manufacturing costs. Moreover,the contributions of our overseas subsidiaries, which
are converted into yen and included in non-operating
income, are expected to have an only slight impact
at the ordinary profit level. In addition, we forecast
that higher wages, prices, and interest rates will add
to costs in the current fiscal year and onward, which
could have a negative impact on the Company’s­performance. However, because both the assets and­liabilities of overseas Group companies are converted
into non-operating profit and loss, ordinary profit may
be affected by exchange rate fluctuations. By steadily advancing the measures laid out in our MediumTerm Business Plan, we hope to mitigate the negative
impact of cost increases by raising our top line andimproving profit levels in fiscal 2023 and beyond.

FY2018FY2019FY2020

FY2021

FY2022

FY2024(Target)Dividend payout ratio

50% or higher

Growth investments
R&D¥10 billion scale

2

0

20

 asic Approach to Human Resources
B
and Future Vision

Reference
Depreciation:
Approx. ¥3 billion

60

30

To create new corporate value, in addition to pursuing
M&A targeting IT companies with the goal of expanding
business in the warehouse management system(WMS) field, we are investing in R&D focused onlarge-scale liquefied hydrogen tanks. In addition, inline with our business continuity plan we are investing
in measures aimed at ensuring the resilience of ourplants and facilities against natural disasters­stemming from climate change.
Our proactive policy is to invest in growth by utilizing both funds on hand and interest-bearing liabilities
to maintain a balance of cost of capital and returnon capital.

* Stands for volatility, uncertainty, complexity and ambiguity—qualities that makea situation or condition difficult to analyze, respond to or plan for

Three-Year Total
8.0

4

 rowth Investment and R&D Investment
G
Progress, Future Investment Policies,
and Financing Plan

In the current VUCA* era, the importance of having
human resources who can flexibly respond to changes and communicate proactively is increasing, andwe would like to produce a great number of humanresources with these such capabilities as weapproach the 100th anniversary of our founding.

Medium-Term Business Plan Financial Strategy

8

68.6

the share price and will work toward our fiscal 2024
target of ROE at 8.0% while maintaining an appropriate
equity ratio.

Regular capital expenditure
Working capital

Growth investments•M &A and otherinvestments, etc.

R&D

Capital Expenditure• Wakayama Plant(BCP and upgrading
production activities)•D evelop products for logistics
solutions•R esearch into large-scale­liquefied hydrogen storage
tanks, etc.

TKK Report 2023

21

Logistics Solutions BusinessBusiness Overview

Logistics Solutions BusinessWe provide high-quality, advanced
logistics systems that empower
our customers and solve problems
and issues facing society today.

Review of Fiscal 2022

Yasunori Kobayashi
Senior Executive Officer
Division Manager,
Logistics Solutions Division

Value Propositions
 utomate customer processes with next-generation robotics systems to achieve a reduction in labor needs,A
greater accuracy, and efficiency.
Utilize customer supply chain and logistics data for better efficiency and productivity in warehouse operations.
 nsure the smooth, continuous operations of logistics systems with superior maintenance services, contributingE
to a robust social infrastructure.
Business Environment
Increase in demand for change in the work environments, particularly more automation and greater flexibility to meet changing­business conditions.

 epreciation of yen against major currencies,D­inflation, and rising labor costs due to tight labor
supply, which are pushing companies to maximize
investment and cut costs.

Increase in demand for automated logistics solutions to address
the declining workforce due to rapid aging and declining birthrates.

Greater sophistication and development in ecommerce and other distribution warehouse operations.

 hanges in consumer modes of behavior since COVID 19, drivingC
new demand for at-home shopping and faster delivery times.

 bundant experience in the distribution and airport baggage handling fields and systemA­development capabilities cultivated through this experienceProject execution skills to deal with complex and new mechanisms

Competitive
Advantages

 erve customers with logistics systems and maintenance programs in order to meet theS
demands of a new generation.
Maximize customer benefit and solve problems with the intelligent, streamlined application of
new technologies.

IssuesBusiness Strategy for the New Medium-Term Business Plan
SloganACTION FOR NEXT LOGISTICS Become the power behind the logistics system of the future

Basic
PolicyEvolve into a high-growth company
by expanding business scope

Net
sales

¥36.4

billionOperatingprofitMeasure1
2¥3.7

Measurebillion3
Measure

4

22

TKK Report 2023

where we already have a strong presence while
opening up new avenues of growth.

Net sales / Operating profit(Millions of yen)

(Millions of yen)

4,000

40,00027,23930,0003,140

32,60032,987
3,149

3,320

28,032

3,000

2,605
20,0002,000

10,0001,000

0FY2020

FY2021

FY2022

FY2023(Targets)

Net sales (left axis)

0Operating profit (right axis)

Forecast for Fiscal 2023
By the end of fiscal 2023, we expect parts shortages
to ease, while sales and profit should increase as wemove forward in fulfilling our order backlog. In May,
we purchased Scrum Software Co., Ltd, a logistics
software development company, making it a subsidiary, and giving the company greater leverage andexpertise in developing next generation WMS(Warehouse Management Systems). With the help ofScrum Software and our experience as a material
handling system equipment manufacturer, we canharness a wealth of information and experience, andapply it to the improvement and development ofadvanced software systems.
Furthermore, we adopt an innovative approach toincorporating and developing new solutions andtechnologies, such AMRs, AI and IoT to enhance ourcurrent offerings. New technologies, combined with
our flagship, time-tested products such as
Multishuttle Systems and GTP (Goods-to-Person), a
process where goods are delivered to a workstation
to be picked without walking, give customers a wide
variety of options and ideas to choose from as they
make their journey to greater automation.
At Toyo Kanetsu we will continue to be the leader
in new and innovative logistics solutions by utilizing
our vast expertise in material handling along withincreasing amount of information and data in an
increasingly complex logistics environment.

AMRs

Utilizing 3D layouts to help improve logistics center efficiency

Priority Measures

MeasureFY2024 Targets

During 2022, we experienced lingering effects fromthe pandemic, such as shortages in semiconductors
and other critical parts, however, we were able to still
deliver on-time to customers. Unfortunately, themeasures implemented to address these shortages,
combined with an overall rise in costs led toa decrease in sales and operating profit.
The maintenance service business, however,showed robust growth, prompting the company toestablish an additional four satellite bases in the
Kanto region to address an increase in the demandassociated with the rise of warehouse and distribution centers along Ken-O expressway.
We expanded our global reach for Japanese­customers by establishing three new partnerships,
providing said customers with the world’s best, stateof-the-art solutions such as AMRs (Autonomous Mobile
Robots). These technologies, combined with ourother products and expertise developed overdecades, help customers improve efficiency, reduce
warehouse footprint, and control labor costs in fields

Expand operations from partial tototal engineering
Improve proposal capabilities and expand
customer base by leveraging our strengths
Strengthen service business by developing
and securing human resources
Develop new solutions that integrate
video and digital information

TKK Report 2023

23

Plant BusinessBusiness Overview

Plant Business

Review of Fiscal 2022

We excel at the maintenance of safety
and stable supply of energy storage
facilities and boast advanced
technological know-how along withextensive construction experience.

Hiroshi Ohgi
Senior Executive Officer
Division Manager, Plant Business Division
Assistant to the Green Transformation
Promotion Office

Value Propositions
Provide highly reliable social infrastructure

Sales decreased compared to the fiscal 2021 results
and planned values, but profit increased thanks to anemphasis on profitability and on-site efficiency.
For over half a century, Toyo Kanetsu has contributed to the maintenance of a stable energy infrastructure by delivering large-scale storage tanks tocountries around the world and by providing thetechnologically advanced maintenance services thatsuch facilities require. In the storage tank maintenance business, we regularly carry out legallyrequired inspections and maintenance for more thana hundred tanks across Japan and, by introducing
technologies that improve work efficiency in thesesites, such as new automated welding methods, wehave implemented the evolution of our technologies.

In addition, to improve the safety of on-site working environments through digital transformation, we
set up on-site computer monitors to communicate
the latest safety information. We also set up heatstroke prevention sensors to ensure the health of ourand our partner companies’ employees.

(Millions of yen)

Net sales
Operating profit

FY2022

FY2023 (Targets)

8,508

8,500

560

450

Business Environment

Forecast for Fiscal 2023

Decrease in demand due to the consolidation of petroleum and chemical plants
Stagnant plant-related capital expenditure due to heightened geopolitical risks
Ongoing legal inspections and maintenance demand associated with tank safety assuranceExpertise in technologically advanced large tank maintenanceCompetitive
Advantages

 high level of customer trust and a solid ­reputation cultivated through high quality and safeA
operations over many years in Japan and overseas
Ensuring flexible response to changing m­ aintenance needs and a stable profit structure

Issues ddressing the aging of on-site supervisors, lack of successors, and the passing downAof technology

Drawing on our strong project execution capabilities,
advanced technology, and extensive delivery recordof large-scale storage tanks, we will continue todemonstrate consistent management from order
receipt to the execution of construction and tankmaintenance while striving to secure stable earnings.
Due to the consolidation of the petroleum and­chemical industries and the decline in demand for
petroleum products, the general consensus is thatplant-related capital expenditure will continue toslow. However, we expect demand for tank maintenance to continue in Japan to ensure the safe

operation of existing infrastructure. Despite such
issues as the aging of site supervisors and a shortage of successors, we will work to maintain good
relationships with our partner companies, improve
the work environment together with TKK Plant
Engineering, and strive to secure and develop­construction systems and cultivate on-site humanresources. We will continue to support energy infrastructure worldwide with our storage technologies,
based on our long history and experience in ensuring
the safe and stable supply of energy infrastructure.

Business Strategy for the New Medium-Term Business Plan
SloganACTION FOR INFRASTRUCTURE Become a force that supports social infrastructure

Basic
PolicyContribute to a stable energy
infrastructure as society transitions
to the next-generation energy market

24

¥8.5

TKK Report 2023

billionOperatingprofitMeasure1
MeasureFY2024 Targets
Net
sales

Priority Measures

2

¥450

Measuremillion3

Secure stable earnings by continuing toreceive maintenance orders and attracting
new orders
Pursue efficiency through full utilizationof TKK Plant Engineering and collaboration
with partner companies
Expand business scope based on
our achievements and knowledge asa tank manufacturer

Enhancing work efficiency with new automated welding method

Safety information monitors and heat stroke sensors

TKK Report 2023

25

Next-Generation Energy Development BusinessBusiness Overview

Next-Generation Energy Development Business
Through the provision of our advanced
technological capabilities, we will contributeto the conversion of infrastructure to suchnext-generation energy sources ashydrogen and fuel ammonia.

Toshiyuki Mita
Executive Officer
Chief of the NextGeneration Energy
Development Center

Value Propositions
Provide social infrastructure technologies that contribute to the realization of carbon neutrality
Business Environment
Decrease and stagnation in demand for new conventional tank construction due to the global energy situation
Transition to next-generation energy towards a carbon-neutral society
Growing importance of next-generation energy storage technologies for hydrogen, fuel ammonia, and liquefied CO2

 apable of delivering storage tanks for next-­generation energy and boasting the t­ echnicalC
capabilities needed to meet ­construction requirements

Competitive
Advantages

 ossess the advanced technology and project execution capabilities needed to meet domesticPand international demand for new storage tank construction

Review of Fiscal 2022
Due to a cancelled new tank construction project andbeing still in the upfront investment phase regarding
next-generation energy tank R&D, we did not achieve
our planned figures. In R&D, we have completed
technical research on the large-scale liquefied CO2­storage spherical tank necessary for CO2 capture,reutilization, and storage. For ammonia tanks, which
we have a track record of supplying, we expanded­customer support and order-winning activities in
preparation for the construction phase. Goingforward, we will continue to work on acquiringt­ echnological capabilities and participate in thenext-generation energy society.

(Millions of yen)
FY2022

FY2023 (Targets)

Net sales

1,043

1,600

Operating profit

(734)

(500)

Forecast for Fiscal 2023
In April 2023, the Next-Generation Energy
Development Center was reorganized into the Green
Transformation Promotion Office and the NextGeneration Energy Development Office, an organization directly under the president, to further promote
R&D and win orders for the next-generation energy
storage tanks that will enable the move toward thegoal of a carbon-neutral society by 2050.
During the transition period to next-generationenergy by 2050, we believe that demand will start
increasing gradually for ammonia and liquefied CO2
storage tanks in the mid-2020s and for hydrogenstorage tanks from around 2030. We can alreadydeliver ammonia and liquefied CO2 storage tanks, so
we will promote activities to win new orders.
As for hydrogen, as part of a new project subsidized by the New Energy and Industrial Technology
Development Organization (NEDO), we are participating
in a R&D project aiming to commercialize large-scaleliquefied hydrogen tanks, and are planning demonstration testing with a small test tank, for step-up of
our R&D business. We will continue to deliver storage
tanks for next-generation energy, drawing on thetechnical and project execution capabilities we havecultivated over our history.

Next-generation energy storage concept

Tank plant equipment concept

Responding to the global energy shift and maintaining a solid market standing
Issues einforcing organizational capabilities, including overseas offices, to acquire new storage
Rtank projects

Business Strategy for the New Medium-Term Business Plan
SloganACTION FOR NEXT ENERGY Become a force supporting the future of energy

Basic
PolicyCultivate advanced technologicalcapabilities and prepare for the arrivalof a next-generation energy society

26

¥2.4

TKK Report 2023

billionOperatingprofitMeasure1
MeasureFY2024 Targets
Net
sales

Priority Measures

2

-¥260

Measuremillion3

Address storage needs for fuel ammonia,
methylcyclohexane (MCH),* liquefied CO2, etc.
Capture demand for new storage tanks inoverseas markets
Acquire construction technology(design, welding inspection, construction)
for liquefied hydrogen storage tanks* A liquid made through the ­combination of hydrogen andtoluene. It is one of the most notable hydrogen carriers.

TKK Report 2023

27

Business Innovation and Other Businesses

Business Overview

Business Innovation and Other Businesses
Akira Kakihara

We will create businesses that
support the future with freeperspectives and flexible ideas in
the midst of a great paradigm shift.

Director and Senior Executive Officer
Division Manager,
Business Innovation Division

Eco Analysis Corporation
Maintenance and management of equipment
for continuous environmental measurement
such as that of air and water quality, environmental surveys for large-scale public works,
related system development

Industrial Machinery
Business

Comprehensive environmental consulting,investigation, measurement and analysis ofasbestos, sick houses, noise/vibration, odor

Toyo Koken K.K.

Building Construction
Business

Kankyo Research Institute Inc.
Environmental Business einforcing responsiveness to changes inRthe business environment

 bility to understand and respond to customer needsA
through on-site contact

Securing stable profitability and market positionIncreasing added value by leveraging synergies
among companies and promoting open innovation

Review of Fiscal 2022

Provide services and solutions that contribute to the creation of a sustainable environment and society

Toyo Kanetsu Builtec K.K.

Design, manufacture, installation, and sales oflabor-saving machinery for construction andproduction sites (winches, industrial­manipulators, etc.)

Building construction of a variety of small andmedium-sized properties such as condominiums,
welfare-related facilities, and stores, etc., rental
and sale of gondolas (suspended scaffolds),
and steel pipe business for construction sites

Acquire Groupwide synergies and opportunities for external collaboration• Introduce new technologies to strengthen existing businesses• Enter into growth areas through medium- to long-term business creation

Collaboration withstart-ups

IssuesTop-level performance and expertise in a wide rangeof business areas xtensive collaboration channels through cE­ orporate
venture funds

Value Propositions

M&A

Competitive Advantages

In the Environmental Business, we achieved significant
increases in sales and profit by leveraging Groupsynergies in the field of asbestos research and analysis.
We also secured stable earnings from continuous
environmental monitoring solutions, including themaintenance and inspection of environmental­measurement equipment for publicly owned offices.
In the Industrial Machinery Business, we successfully
expanded sales of our mainstay products, setting
a new profit record. In the Building Construction
Business, although there was a reactionary decline inlarge-scale projects, there was an increase in projects
in such areas as the repair of existing buildings andthe rental and installation of gondolas, leading to an­overall increase in profit. We also promoted activities
to deepen collaboration between startup companies
we invested in through our corporate venture capitaland Group companies. In addition, we participated instartup accelerator programs launched by financial
institutions, etc., and promoted innovation in ourbusiness fields by networking with startups,i­nvestors, and universities.
Net sales / Operating profit(Millions of yen)

(Millions of yen)

11,581

12,000

1,071

10,000

8,000

9,767

11,300

6,729

1,200

1,000

940

800

789
6,000

600

572
4,000

400

2,000

200

0

FY2020

FY2021

FY2022

Net sales (left axis)

FY2023(Targets)0Operating profit (right axis)• Create new pillars of business that go beyond the boundaries of existing businesses

Forecast for Fiscal 2023
Business Strategy for the New Medium-Term Business Plan
SloganACTION FOR SUSTAINABILITY Become a force that supports a sustainable society

Basic
PolicyTake on the challenge of establishinga third business to accelerate
the Group's growth¥17.7

billionOperatingprofitTKK Report 2023

1
2

¥1.2

MeasurebillionNote: Includes the businesses of major domestic Group companies and other businesses such as realestate leasing and management, leasing, and copying and printing

28

MeasureMeasureFY2024 Targets
Net
sales

Priority Measures

3

Achieve business expansion, including
through environmental businessrelated M&A
Stabilize earnings by strengthening thecompetitiveness of Group companies
Reform business model through theapplication of proprietary technology andknow-how and external collaboration

To further develop the Environmental Business, we willcontinue to aggressively pursue M&A ­opportunities inbusiness areas with growth potential.
We will strengthen the competitiveness of theexisting Environmental Business by entering newmarkets and focusing on technological innovation.
We will nurture the environmental solutions businessthrough field research and analysis, one of theGroup’s strengths, in line with recently growing
themes like carbon neutrality, renewable energy
usage, and biodiversity. We are developing new
methods of environmental assessment for living andwork spaces through quality measurements, includingof CO2 concentration and humidity, and by utilizing
instruments that can continuously measure noise,dust, and other aspects of the environment. In­ ddition, we will focus on such themes as achievingafood supply self-sufficiency and disaster prevention
and mitigation while transforming our businessmodel and expanding our business areas throughexternal collaboration.

Continuous monitoring andmeasurement of air quality and soundDrone surveys to determine
tree species and topography

TKK Report 2023

29

Toyo Kanetsu’s Vision for Providing Value

Special Feature

1

Contributing to Society through Next-Generation Energy Storage
A

Issues to be addressed through our business to improve our corporate value
Respond to changes in the business environment caused by climate change

To realize a society powered by next-generation energy, Toyo Kanetsu is applying the expertise it has accumulated over the years in the area of large-scale cryogenic storage tanks,
undertaking research and development to acquire technologies for the construction oflarge-scale liquefied hydrogen tanks and thereby addressing storage needs for fuel ammonia, MCH, and liquefied CO2.
TOPICSTOPICS

1

2

Establishing the Underlying
Technology to Build Large-Scale
Liquefied Hydrogen Tanks

Taking the Next Step to Small-Scale
Test Tank Experiments

Laying the groundwork for the commercialization ofhydrogen power generation around 2030, Toyo
Kanetsu is engaged in ongoing R&D focused onlarge-scale liquefied hydrogen storage tanks that will
facilitate the establishment of a stable, large-volume
hydrogen supply chain.
Over the four years from fiscal 2019 to fiscal 2022,
we participated in the Development of Technologies
for Realizing a Hydrogen Society project initiated by
Japan’s New Energy and Industrial Technology
Development Organization (NEDO), and establishedthe following technologies: (1) a vacuum exhaust system, (2) a method for calculating heat input to thebottom of the inner tank, and (3) a welding method
using SUS316L welding materials. In summary, we
realized the basic underlying technologies needed forlarge-scale liquefied hydrogen storage tanks.

Toyo Kanetsu is further advancing R&D to realize thecommercialization of a large-scale, vacuum-insulated
50,000 m3-class flat-bottomed cylindrical liquefiedhydrogen tank.
Under the NEDO Development of Technologies for
Building a Competitive Hydrogen Supply Chain project, which kicked off in fiscal 2023, Toyo Kanetsu will
construct a small test tank incorporating the technologies it has developed to verify the performance ofthe storage tank structure. The tank will be used to
conduct experiments involving liquefied hydrogen atminus 253°C.

TOPICSTOPICS

3

4

Initiatives for Ammonia

Initiatives for Liquefied CO2
Storage Tanks

Ammonia is a zero-emissions fuel—it does not generate
CO2 during combustion—and as a fuel for power­generation, it does not contribute to global warming.
Moreover, in comparison with other hydrogen storage
mediums, ammonia has a high hydrogen density andis easy to transport and handle, which is why it isattracting attention as a promising carrier for swift
commercialization.
Through Toyo Kanetsu’s experience in constructing
storage tanks for LPG tanks with similar liquid storage
temperatures, cryogenic LNG storage tanks, anddelivering ammonia tanks overseas, we will contributeto the global storage and utilization of large quantities
of fuel ammonia.

On the road to achieving carbon neutrality, there are
great expectations for expanded CCS*1 and CCUS*2
technologies. Accordingly, practicality studies andexperimental projects are under way for the large-scaletransportation of CO2 via ship, focusing on transport
from the shipping base to the receiving base.
Liquefied CO2 storage tanks play an essential roleat both bases, but the existing medium-temperature,
medium-pressure units currently have limited tankcapacity. The development of tanks that meet
low-temperature, low-pressure specifications is­necessary for mass transportation.
Using Toyo Kanetsu’s accumulated construction technology for cryogenic storage tanks and pressured vessels, we have completed a technical research study of alarge-scale liquefied CO2 storage tank with low-­temperature, low-pressure specifications made using
9% nickel steel, and are contributing to the popularization and expansion of the CCS and CCUS businesses.
*1 CCS: Carbon dioxide capture and storage technology.
*2 CCUS: Carbon dioxide capture, utilization and storage technology.

COLUMN

Reducing GHG Emissions
In May 2022, the Toyo Kanetsu Group established and announced its targets for the reduction of
GHG emissions through business activities.

Scope for Reduction
Scope 1*1 and Scope 2*2 emissions of Toyo Kanetsu(non-consolidated) and its domestic and overseas
consolidated subsidiaries*1 Scope 1: Direct GHG emissions that occur from internal fuel usage, etc.
*2 Scope 2: Indirect GHG emissions associated with the purchase of electricity, steam,heat, or cooling

GHG Emissions Trends(Unit: t-CO2e)(Unit: t-CO2e)

6,000

300,000

4,000

3,407

Reduction Targets
Achieve Carbon Neutrality by 2050
Achieve a 50% reduction in emissions by 2030
(compared to 2019 levels)
Toyo Kanetsu will work with its suppliers and customers toencourage the reduction of Scope 3*3 emissions throughout the supply chain.
*3 Scope 3: Indirect GHG emissions outside of Scope 1 and Scope 2 that occur within
the supply chain of business activities.
Bottom vacuum exhaust experiment equipment30

TKK Report 2023

1,022

2,928

3,524

1,444

150,000

2,000

0(Left axis)

1,751

1,586

2019

2020

Scope 1

Scope 2

2,214

2,155

2021

2022

(FY)

(Right axis)

Scope 3

Scope 2 (offset amount)0

Note: As of August 2023, Scope 3 emissions for fiscal 2022 are tentative values
under calculation.

In fiscal 2022, the 1,022 t-CO2e was a carbon offset of Scope 2 emissions. Combined with the Scope 1 emissions, thisamounted to about 3,600 t-CO2e, a reduction of 32% compared with the total Scope 1 and 2 emissions in the starting
year of fiscal 2019.

TKK Report 2023

31

Toyo Kanetsu’s Vision for Providing Value

Special Feature

2

Using Data in Logistics Solutions
B

Initiatives addressing material issues to sustainably improve corporate value
Innovation in technologies and their usage

Toyo Kanetsu has developed systems to easily acquire and store data in thecloud, giving customers the ability to analyze and leverage the data to develop
insights into their operations, and make data-driven decisions and improvements.
Ongoing systems development will give customers valuable insight into their busi-

TOPICS

Value-Added WMS Made Possible through Our Experience as
1 Higha Premier Intralogistics Integrator
Toyo Kanetsu is currently working on developing and improving a WMS
with a view of the entire distribution operation, including delivery status ofincoming and outgoing shipments. Functionality to collect and store dataand present KPIs visually for key decision-making is already available.
Going forward, we will continue to add new features and capabilities that
improve the overall efficiency of warehouse, in addition to connecting itwith external systems for a bird’s eye view of the full supply chain. Toyo
Kanetsu has the kind of experience as an intralogistics systems integrator
that makes such innovative improvements possible.

ness, enabling decision makers to see operational data in real-time, allowing them
the ability to address issues and improve operations quickly and easily. Suchefforts will not only improve and optimize the warehouse operations, the entire
supply chain, including incoming and outgoing truck freight, will benefit as warehouse operations become linked to TMS (Transportation Management Systems).
Toyo Kanetsu continues to reach for new heights, raising the bar on combined
technologies such as our tried-and-true Multishuttle System/GTP (Goods-toPerson), but also by incorporating AMR (Autonomous Mobile Robots), verticalstorage, grid storage, AI-enabled pick robots, and other innovative solutions that

TOPICS

2 AI-Vision Enabled, High-Performance, High-Capacity Picking Robots
Toyo Kanetsu, in collaboration with a start-up, has recently begun thedevelopment of a AI-vision enabled picking robot. With similar AI-enabledapplications, we can not only improve the speed with which decisions canbe made, change conventional thinking, and challenge the old method of­buffering in the picking process, we can fundamentally change the overall
process for the better. It is this consistent effort that engenders new­solutions and ideas that will continue to help customers optimize theiroverall operations and take their business confidently into the future.

will take customers’ automation to a whole new level.
TOPICS

3 Better People, Better Business for Sustainable Development
People are our greatest resource in sustainable development at Toyo Kanetsu,
therefore, we do our best to develop the future leaders of the industry by
improving our training systems, prioritizing the training of early-career
employees, and giving employees hands-on opportunities to improve andenhance their understanding and skills at our Education Center locatedinside the Chiba Plant. We sincerely believe that strong human resources
contribute directly to improved technological results and high-quality­intralogistics systems for our customers. We also utilize regular outreach
opportunities such as video messages from management which let
employees know of events, initiatives, and activities that the Logistics
Solutions Business has implemented. We believe that this regular communication with employees keeps them in touch with our goals and strategies,
helping keep them aligned toward the same objectives and ultimately­contributing to a solid corporate structure.

32

TKK Report 2023

TKK Report 2023

33

Toyo Kanetsu’s Vision for Providing Value

Special Feature3

Toyo Kanetsu Group’s Human Resources Strategy
B

Initiatives addressing material issues to sustainably improve corporate value
TOPICS

Training and utilization of human resources

1 Active Recruitment of Diverse Human Resources
Creating a Corporate Culture That Embraces and Utilizes Diversity

Internal Environment
Improvement Policy

Basic Policy for Human
Resource Development
Toyo Kanetsu’s basic training policy is toencourage every employee to recognize
the ­necessary knowledge and skills and to­maintain their motivation to learn in a self-­
directed way as well as to provide sufficientlearning opportunities in both on-the-job andoff-the-job training. We aim to actively promote t­alented personnel with management
and business execution skills to senior­management positions, regardless of­gender, nationality, or employment status.

Our basic policy is to ensure the active
participation and retention of diverse
human resources, we will createa ­comfortable workplace that focuses
on work-life balance, respects each­individual’s opinions and values, and­provides a healthy working environment
and, through this, improve our corporate­culture and increase engagement.

To ensure that diverse human resources support the Company’s
growth, we are actively recruiting mid-career employees and conduct
recruitment activities regardless of attributes such as gender or­disability and are aiming to reform our corporate culture and create
new value. For example, we are promoting further initiatives such assign language education to improve communication with employeeswith disabilities and facilitate the selection of members from among all
employees in the Women’s Activity Promotion Project, which transcends the boundaries of divisions and other departments.
In addition, as a prerequisite to implementing these measures, we are taking care to ensure a comfortable
work environment and increase engagement by establishing a fair evaluation and compensation system,
raising awareness of the importance of dialogue, and improving compensation.

TOPICS

2 Enhancing the Training System
Updating Growth Opportunities through Internal and External Environmental Changes

Experiencing the Company Intern System
I learned so much on-site. It was very rewarding to be in the field and actually be involvedin ­handling the Company’s products. I thoughtthat most of my work was related to products,
but there are so many other types of workfrom paperwork in the office to on-site environmental
maintenance. I learned that on-the-ground operations
were able to proceed smoothly because of such work.
Also, there were many things that I didn't know until
I worked in the field, and I now understand why Toyo
Kanetsu prioritizes these bases. (Second-year employee)

34

TKK Report 2023

I learned about various tasks such as making
presentations and participating in meetings.
Although the content of the work was­challenging, the support system was solid,
so it wasn't too hard to keep up. I thinkI ­really grew from the experience in my internship.
(Second-year employee)

Based on the idea that personnel growth is directly tied to Company
growth, we have created the following three themes: 1) training foreach stage such as mid-career and management, 2) training to adapt
to the needs of the times, such as harassment and risk management,
and 3) training to promote the reform of corporate culture and resolution of business issues. In light of these themes, we are working toenhance our training system in response to environmental changes.
For example, to cultivate young employees as future leaders, we will
start management training earlier; raise Companywide awareness and knowledge of legal revisions such as
childcare leave and overtime work reduction; and, as a shared framework for thought that will become
more important in an organization where diversity is p
­ rogressing, we are improving training on critical thinking.

TOPICS

3 Toyo Kanetsu’s Intern System for New Employees
Self-Directed Career Development
After new employees join Toyo Kanetsu, they first complete introductory training, and then they are given
the opportunity to experience working as an intern at the three departments of their choice for six months.
The purpose of this is to enable new employees to experience the actual work they would be doing, see
the appeal and roles of each department, and learn the flow of processes. After finishing their in-houseinternships, we try to assign the employee to their more desired department whenever possible, aiming tonurture employees with a sense of ownership in their work by letting them choose how their careers start.

TKK Report 2023

35

Toyo Kanetsu’s Vision for Providing Value

Special Feature

4

Initiatives to Support the Sustainable Growth of the Entire GroupB

Initiatives addressing material issues to sustainably improve corporate value

TOPICS

C

Fundamental initiatives to undertake before addressing A and B issues
Improve risk management

TOPICS

1 Robot Programming Class

1 Initiatives

In recent years, programming classes have been introduced at elementary
schools to enable students to understand and become proficient at using
computers. We have been similarly involved in education via the provisionof robot programming classes in collaboration with the Kanagawa Instituteof Technology.
As an initiative aimed at local elementary school students near theCompany’s Head Office, we are conducting experiences that use­programming technology to reproduce the mechanics of a logistics­system using building block teaching materials. We believe that this isa fun opportunity for children to learn about not only programming, butalso Toyo Kanetsu’s business.

 ertified Health & Productivity Management
C
Outstanding Organizations 2023
(Large Enterprise Category)In August 2021, we issued the
Toyo Kanetsu Group Health andProductivity Management
Declaration and, in recognition ofefforts to maintain and promote
employee health, Toyo Kanetsu
was named a Certified Health & Productivity Management
Outstanding Organization (Large Enterprise Category) by
the Ministry of Economy, Trade and Industry and the
Nippon Kenko Kaigi for the second year in a row in 2023.

TOPICS

2 Artpara Fukagawa Chatting Arts Festival

Tomonin MarkIn November 2022, Toyo Kanetsu
received the Tomonin mark, a symbol
established by Ministry of Health, Labourand Welfare that recognizes companies
that create and implement a work environment that
­accommodates employees balancing work and nursing care.

Toyo Kanetsu is a partner of the Artpara Fukagawa Chatting Arts Festival,
a civic art festival. An annual event, this art festival is held in the Fukagawa
area of Tokyo’s Koto Ward with a theme of promoting the harmonious
coexistence of all people regardless of disability, and works by artists withdisabilities are exhibited across the city. We have endorsed the goals of
this event and have been a partner since it was first held. Moreover, Toyo
Kanetsu employees participate as volunteers. The winners of the 2022
Toyo Kanetsu encouragement award are as follows.

2 Our Newly Established Risk Management Committee

TOPICS

3 Toyo Kanetsu Children’s Bunko

36

TKK Report 2023

Green Transformation (GX) League
Toyo Kanetsu is a member of
the GX League, a forum forcompanies, government entities, and academia to work
together to achieve carbon
neutrality by 2050. We will continue engaging
in dialogue with our stakeholders to realize a­carbon-neutral society.

TOPICS
Mr. Makoto Muto, winner of the 2022
Toyo Kanetsu encouragement award

On the 80th anniversary of the Toyo Kanetsu Group’s founding in May
2021, we launched Toyo Kanetsu Children’s Bunko activities to mark theoccasion. This social contribution activity is aimed at giving back to local
communities in appreciation for their longstanding support over the years
and comprises an ongoing donation for the purchase of picture books andother children’s books to libraries in the five municipalities that are hometo the Group’s main business sites. Going forward, we plan to continue
this program as we move toward our 100th anniversary with the aim ofestablishing more collaborative relationships.

Japan Climate Initiative (JCI)
We have endorsed thebasic principles of the
JCI, a network of companies, local governments, and NGOs thatare actively working tocombat climate change, and are working toachieve GHG emissions reduction targets that willcontribute to the realization of a sustainable society.

Keisuke Kodama
Director, Executive Vice
President, Executive Officer,
and Chair of the Risk
Management Committee

To enhance its risk management structure, Toyo Kanetsu newly established the Risk
Management Committee in April 2022.
This Committee identifies, assesses and monitors risks for the entire Group andperiodically reviews significant risks in light of changes in the business environment aswell as the status of risk response to ensure that appropriate countermeasures aretaken in a timely manner.
The Committee has met five times in its first year, in addition to ­performing theabove functions, has enhanced the Company’s system for reporting risk to management, and conducted activities in line with the declaration to achieve c­ arbon neutrality
by 2050 as well as the disclosure of climate change risks and ­opportunities based on
TCFD recommendations.

TKK Report 2023

37

Governance

Board of Directors

38

Shuji Iwamura

Yukari Sakai

Kazuto Abe

Toru Yanagawa

Akira Kakihara

Keisuke Kodama

Takashi Owada

Shigeharu Nakamura

Makiko Sato

Kazuo Ushida

Outside Director and
Audit & Supervisory
Committee Member

Outside Director

Director and
Audit & Supervisory
Committee Member

Director andChairman of
the Company

Director, Senior
Managing Officer

Director, Executive
Vice President,
Executive Officer

President &Representative
Director

Outside Director and
Audit & Supervisory
Committee Member

Outside Director

Outside Director and
Audit & Supervisory
Committee Member

TKK Report 2023

TKK Report 2023

39

Chairman’s Message

Director and Chairmanof the Company
Chairman & Representative
Director of the Board of Directors

Toru Yanagawa

Draw on the Diversity of Directors andFurther Heighten EffectivenessI believe that Toyo Kanetsu’s Board of Directors isfunctioning well and in accordance with the Corporate
Governance Code, and in fiscal 2022, we proceededwith a review of the composition of the Board in order tofurther enhance corporate governance.
Specifically, the 114th General Meeting of
Shareholders held in June 2022 resolved to add two
new female outside directors to the Board who were­not Audit & Supervisory Committee members. The
Board of Directors is p
­ resently composed of five internal and five external directors, and I believe that it is
becoming more diverse and discussions more active.
Ms. Yukari Sakai became an outside director in ­fiscal
2022, and her experience working in securities firms
as well as in various industries as an outside auditor
and Audit & Supervisory Committee member led toher appointment as a member of the Compensation
Advisory Committee. Another outside director,
Ms. Makiko Sato, in addition to business experienceat a startup company, is a representative partner ofa venture capital firm. She has joined the Nominating
Advisory Committee and provides valuable advice on
our diversification strategy.
At the 115th General Meeting of Shareholders heldin June 2023, Mr. Shuji Iwamura was newly appointed
as an outside director. With a legal background similar

40

TKK Report 2023

to that of Mr. Toshiaki Hiwatari, who retired at thesame General Meeting of Shareholders, he has held
important positions such as Superintending
Prosecutor and has extensive experience as an­outside director. I am excited to have his experienceand skills added to the Board of Directors.
My duty is to coordinate the Board and in doing so
to best utilize the skills of both internal and outside
directors. I will work to support the Board in achieving
an even higher level of management by drawing on
the directors’ diverse and ­specialized knowledge torealize a more active Board. I also aim to improve theBoard’s functioning with regard to discussions­dealing with medium- to long-term issues by­carefully vetting the proposals submitted by theManagement Council.
We expect Toyo Kanetsu to see ongoing rapidchange in the business environment along witha diversification in social expectations, starting withdecarbonization. In the face of this evolving­landscape, not only do we need to ensure that theCompany is prepared for the changing times,
I believe that the number of issues that management
will need to tackle will only increase, and I would liketo support President Owada and the Board throughcontinued dialogue.

Outside Directors’

Yukari Sakai

Dialogue

Makiko Sato

Supporting the future development of
Toyo Kanetsu by leveraging
our long-nurtured skills and experience
About Our Roles
Sato: When I was first approached about being

Sakai: I was approached about creating a path toappointed as an outside director, I asked what

promote diversity and inclusion (D&I). I have experi-

President Yanagawa (currently Chairman) expectedence as an outside director in a great variety ofof me, and I was told that I would be asked to provide

industries and have seen such D&I as it is practiced,

my opinions on topics such as new businesses,

so I accepted the offer.

­venture investments, and the active participation of
women from a perspective that Toyo Kanetsu lacked.

TKK Report 2023

41

Outside Directors’ Dialogue

Yukari Sakai

Impressions of the Toyo Kanetsu Board of Directors
Sakai: My first impression was that it was a very

Although we consult about the direction, etc., of­serious and stiff. However, after a year of participating­individual projects, I think having more discussions

in dialogue at the Board meetings, I found that it’s

about what areas the Company is investing its assets

actually a forward-looking organization that flexibly

in and how to create new businesses would be helpful.

accepts changes and tries to create new ideas.

Sakai: Currently, discussions on visions for the

Going forward, I would like to use my position as an

future, strategies, portfolios, etc., are conducted byoutside director and experience to contribute to thethe internal management team, but I understand that

Company’s growth.

there will be more opportunities for discussion that

Sato: I think it would be nice if there was opportunity

utilize our knowledge as outside directors in thefor the Board as a whole to step back and discuss­formulation the new medium-term business plan.

management strategy from a bird’s eye view

I would like to see deeper discussions as a Toyo­perspective. For example, the Company is investing

Kanetsu director to improve corporate value.

in start-ups through corporate venture capital funds.

Utilizing Human Capitalan opportunity for people to view their work fromthree promises President Owada made to the Toyoa multifaceted perspective and expand their fields of

Kanetsu employees.

activity. It will also be important to place more focus

Sato: The Company should develop its strengths byon building a medium- to long-term human resources

understanding the ideas, individuality, and qualities

training system spanning planning and hiring throughof every employee, and if we can utilize this in man-

Sakai: When discussing the utilization of humanspecialized training, and I would like to support thiseducation and development. I would like to see

agement, it would be even better. Currently, we are­capital, I have often heard that Toyo Kanetsu has

endeavor so that discussions will develop further ina human resources strategy that promotes employees

making our first attempt to increase understanding of­limited resources. Precisely because of these limited

the future.

in their 20s and 30s in order to create the foundation

the skills and qualities needed in the president,

resources, I believe that we must treat human

Sato: I think it will improve even more if we can com-

for leaders of the next generation.

­chairman, and directors. I proposed a tool for diag-

resources as a source of growth and added value formunicate and hold discussions across the organiza-

Sakai: We must work steadily on these initiatives.

nosing these individual qualities. I think that thethe future, and we must strategically cultivate ourtion. We have started efforts for cross-departmental

Working hard today is no guarantee that we’ll see

speed at which the Company completes the PDCA

human resources and improve the work environment.

and cross-business divisional understanding, one

results tomorrow. To realize the results you want,cycle and implements proposals, testing them, andCurrently, President Owada is cultivating theexample being internal tours of the Chiba Plant. I

communication from the top will be extremely

making improvements is extremely swift. I believe

Company’s young employees and providing

hope that this will revitalize communication, and offer

important. It’s good for Toyo Kanetsu to have a firmthat the future of the Company can definitely change

culture because it is a manufacturer, but I feel that

if we continue to take on such challenges, imple-

perhaps if the culture were a little more flexible, ourmenting them, and making improvements, both theemployees would naturally begin to demonstrate

directors and employees will understand each other’s

their abilities. I look forward to seeing the realization

strengths better and become an even stronger team.

Makiko Sato
After joining CyberAgent, Inc., she wasseconded to CyberAgent Ventures­(currently CyberAgent Capital, Inc.) In
2016, she founded iSGS Investment
Works Inc. She was appointed as
an Outside Director of the Company inJune 2022. She currently serves asa Director and Representative Partner of
iSGS Investment Works and as a member of the Promotion Committee ofTokyo Data Platform Council.

42

In June 2005, after working at Nomura
Securities Co., Ltd., she becamea Standing Audit and Supervisory
Committee Member of UNITED ARROWS
LTD. In June 2016, she was appointed
as an Outside Director and Standing
Audit & Supervisory Committee Memberof the same company (current position).
In June 2022, she was appointed as
an Outside Director of the Company(current position). She has served as theoutside director and audit committee
member of multiple companies and­concurrently serves as an Outside
Director at Pacific Metals Co., Ltd.

TKK Report 2023of an open and comfortable workplace, one of theDiversity and Inclusion
Sakai: Toyo Kanetsu really values D&I, and I can feeland making changes for the future like making

how passionate the Company is in its efforts. First of­promotions based on character and ability.

all, I’d like to recognize the Company’s sincere andSato: I agree, I get the impression that broader dis-sound efforts towards addressing the challenge ofcussions on D&I are yet to come. The next generation

women’s active participation in the workplace.

of Toyo Kanetsu’s leaders are currently employees in

However, D&I is a much broader topic, and we needtheir 20s and 30s, so it will be key for our generation

to deepen our discussions on respecting diversity

to create a comfortable working environment to

TKK Report 2023

43

Messages from the Outside Directors

Outside Directors’ Dialogue

ensure the Company’s continued existence one

participation, rather than with an authentically diverse­hundred or even two hundred years from now.

organization. Also, to deepen discussions andto change so that they can discuss how to take action

Sakai: I also think it’s necessary to deepen internal­promote D&I more concretely, it would be good toto improve corporate value. Looking at President

discussions on D&I. If we miss this step, we will end

incorporate D&I into the human resources system.

Shigeharu Nakamura

up in a balancing act of nationalities and women’s

Outside Director and Audit &Supervisory Committee Member

Owada now, it is clear that the Nomination andCompensation Committee of that time (currently the
Nominating Advisory Committee and the Compensation
Advisory Committee) was functioning well.

Expectations for President Owada

It has been a year since we started the new system

Toyo Kanetsu’s outside directors come from manywith President Owada, and I feel that the exchange

different backgrounds, and the resulting wide range

of opinions on important management matters atof overlapping skills lends itself to in-depth discussions

Board of Directors meetings has become livelier.

and meaningful exchanges of opinion. I will continue toI believe that the reason for this is that President

provide strong support for improving the effectivenessOwada is always sincere in sharing the issues that heof the Board of Directors, utilizing the perspective myor the Company as a whole is facing with all theexperience in bank management gives me.

Sato: The Company has been working to continu-

our future IR and public relations activities. In any

ously realize President Owada’s desire to create ancase, I believe that communication with various

open and comfortable work environment in line withstakeholders, including those within the Company, isthe slogan “ACTION FOR THE FUTURE.” I feel thatvery important.

employees and the management team, including theSato: I would like to see President Owada use his

president, have become closer than they were when

top management position to effect the changes he is

I was appointed a year ago.

aiming for. Decision-making is the kind of job only

Sakai: On the other hand, there is insufficientsomeone in this kind of role can do. I’m sure that­communication with the capital market and outsidesome decisions will be difficult, as an outside director

urge that we cultivate each and every businessparties. I have good expectations for fiscal 2023

I will support the execution of those decisions with

­opportunity. A management team must think about

since the Company’s announcement of a policy to

the goal of improving corporate value.

increase opportunities for dialogue with the capital

directors, and I believe that every director is working

Kazuo UshidaIn fiscal 2022, the number of individual sharehold-Outside Director and Audit &Supervisory Committee Member

what stakeholders will need thirty or forty years into
the future. I believe that the Company’s business thathas been passed down over the past seventy years

market. Recent examples of this policy in practiceers increased by more than a thousand, and theinclude President Owada’s presentation at an IR­voting rights ratio exceeded forty percent. I hope thatseminar, and work to increase Toyo Kanetsu’s pres-our many stakeholders will understand our businessThis was the second year of President Owada’s sys-

infrastructure for the future. Because the business isence by defining the corporate identity and commu-

and sustainability initiatives, and that we can receive

tem. Chairman Yanagawa and President Owada haveso diverse, Toyo Kanetsu can expect to continue

nicating it externally via newspaper advertisements.

even great support by expanding the scope of ourbuilt a relationship of trust, and I believe that the way

developing technology and expanding toward the

In light of these efforts, I have high expectations for

IR activities.

they have divided of their roles has positively impacted

next business. I hope the Company will maintain theand strengthened governance while revitalizing thespirit of contributing to society through business,

Board of Directors.

meeting the expectations of stakeholders, andToyo Kanetsu’s Advancement
Sakai: Before every Board of Directors meeting, weof medium- to long-term perspectives. In this way,

are provided with detailed explanations of the agen-I would like to help increase the effectiveness of theda items, so I believe that the support system for

Board of Directors.

will contribute to building next-­generation energy

Toyo Kanetsu is engaged in a variety of business-encouraging and ­motivating employees.

es, and based on my experience, I would like to

When I first met President Owada, he was able to
make me really feel Toyo Kanetsu’s determination tooutside directors is sufficient. Going forward, to con-

Sato: When I talk to employees and candidates fortribute to the Board of Directors even more deeply, I

executive roles, they always profess love for Toyo

Shuji Iwamura

would like to have more “hands-on” discussions.

Kanetsu and take the conversation seriously. This is

It really comes down to what the Company

why I truly believe that cultivating a more open cor-

Outside Director and Audit &Supervisory Committee Member

actively contribute to society as a company that builds
social and economic infrastructure. The entire
Company should unite to proactively move forward
without being afraid of failure. Even if we encounter

expects from its outside directors. If they want us toporate culture, listening to the opinions of all employ-just raise our hands and pass Board resolutions, thenees, and utilizing that feedback in management will

I was appointed in June 2023, and at the time, I thought

failure along the way, I hope the Company will strive

maybe we are wasting our time. While avoiding any

lead to the advancement of Toyo Kanetsu. If I canabout how I could contribute to the Company’s growth.

to swiftly create something new from that failure.

inefficiency that could arise on the executive side

provide support as an outside director for employees

Now, by making use of my experience as a publicfrom working with outside directors, we will discuss

to become more active, then I think that is the true­prosecutor, a lawyer, and an outside director for multiple­governance of the Board of Directors and the Audit &the Company’s sustainable growth, looking at its

meaning of my joining the Board of Directors.

companies, I am working to ensure steady corporate

Supervisory Committee members, improve effec-

activities while always keeping shareholders’ perspec-

tiveness, and contribute to the growth of thetives and other outside parties’ in mind. I hope that my

Toyo Kanetsu.

future based on market changes from a wide range

With my legal background, I will support theparticipation will lead to enhanced corporate value.

44

TKK Report 2023

TKK Report 2023

45

Corporate Governance
Basic Approach
Toyo Kanetsu manages its operations while considering the perspectives of its stakeholders, including
shareholders, customers, suppliers, employees,
creditors, and local communities, and striving toensure efficiency, soundness, and transparency in

Audit & Supervisory Committee
management. The Company has a corporate governance system that facilitates accurate decision-­making, rapid business execution, and proper
supervision and monitoring of operations.

Progress in Strengthening Corporate Governance
2000

Introduced an executive officer system

2005

Established the Compliance Committee
Changed the maximum number of directors stipulated
in the Articles of Incorporation from 20 to seven

2008

Abolished the retirement allowance scheme for directors

2015 ransitioned to a “company with an audit and superTvisory committee” structure (shortening the term ofoffice of directors from two years to one year)
Changed the Articles of Incorporation to stipulate themaximum number of directors who are not Audit &Supervisory Committee members as seven and the
maximum number of Audit & Supervisory Committee
members as fourAppointed independent outside directors (threemembers of the Audit & Supervisory Committee
members)
Established the Nomination and Compensation
Committee (chaired by an outside director)
Formulated a shareholder return policy
Established the Corporate Governance Guidelines

2016 ommenced evaluations of the effectiveness of theC
Board of Directors
Formulated a basic capital policy

2018 evised the Articles of Incorporation to allow anRexecutive officer to be appointed as president

2019Introduced a performance-linked stock compensation system2021

 esolved a policy for determining the compensationRof executive directors
Established a succession plan2022

 hanged the Articles of Incorporation to allow theCselection of a person authorized to convene and preside at meetings of the Board of Directors to be
selected by a resolution of the Board
Reorganized the Nomination and Compensation
Committee into the Nomination Advisory Committee
and Compensation Advisory Committee
Appointed female directors

Structure

Director compensation system

Operational policy

Corporate Governance System
On June 26, 2015, Toyo Kanetsu switched froma “company with an audit and supervisory board” toa “company with an audit and supervisory committee”
structure. By giving voting rights in the Board of
Directors to directors who are members of the Audit& Supervisory Committee (including a number of­outside directors), we strengthened the functions of
the Board of Directors as well as auditing and­supervisory functions, with the aim of building
a more effective corporate governance system.

Board of Directors
The Company’s Board of Directors consists ofa maximum of four directors who are members of the
Audit & Supervisory Committee (including one insidedirector, in principle) and no more than seven directors who are not members of the Audit & Supervisory
Committee, for no more than 11 directors. These
directors have extensive work experience, deep
insight, and high levels of specialization, are genderand age diverse, and possess international perspectives. We have thus ensured the Board of Directors is
sufficiently diverse and of an appropriate size.
Directors who are members of the Audit &Supervisory Committee are selected for their experience in corporate management and/or in-depth46

TKK Report 2023

understanding of the Company’s operations, as well
as for their knowledge in the necessary fields offinance, accounting, and law. At least one of these
directors is an expert in finance and accounting.
Utilizing the framework provided by the “company
with an audit and supervisory committee” structure, theBoard of Directors meets once a month, in principle, todeliberate and decide on important matters that are
fundamental to the Company based on resolutions
approved by the General Meeting of Shareholders;matters that should be discussed and authorized as
defined by laws, regulations, and the Articles ofIncorporation; and important matters related to­management principles, aims, strategic directions, andbusiness execution. The Board of Directors also­monitors business execution. From the standpoint ofenhancing the effectiveness and efficiency of businessexecution, important matters related to the operationsof the Company and the Group are deliberated andconsulted on by the Management Council, and thendecided by the Board of Directors. In accordance withlaws, regulations, and the Articles of Incorporation,­certain decisions related to important aspects of­business execution are entrusted to certain directors,
and core management matters that are especially
important must be approved by the Board of Directors.

The Audit & Supervisory Committee has four­members, including three outside directors to forma majority in accordance with the Companies Act.
The Audit & Supervisory Committee conducts organizational audits using the internal control system with
the intention of improving corporate value from an
independent and objective standpoint, fully aware of
the authority given only to members of the committee
and of the importance of the roles and duties they
are expected to perform. The Audit & Supervisory
Committee also audits and monitors business execution from an independent and objective vantage
point. For this reason, candidates who will serve as
both outside directors and members of the Audit &Supervisory Committee are independent and highly
specialized and possess extensive experience ascorporate managers.
The Audit & Supervisory Committee meets oncea month, in principle, and has one full-time member.
While coordinating with the Internal Audit Divisionand the accounting auditor, committee members­audit directors’ execution of duties and conduct theirprofessional duties as dictated by the Companies
Act, such as creating audit reports. While monitoringand evaluating whether the accounting auditor isproperly conducting audits, the committee receives
reports and explanations from the accounting auditor
about the state of progress on its work and also
audits financial statements, supplementary documents,

and the consolidated financial statements in­ ccordance with the audit policy and audit planaestablished by the Committee.
In addition, the Audit & Supervisory Committee has
established the Internal Audit Department under its
direct control as an organization separate from theexecutive side in order to enhance the independence
and effectiveness of audits.

Nomination Advisory Committee andCompensation Advisory Committee
To ensure transparency and appropriateness in theselection of director candidates and determination ofcompensation, the Company has established theNomination Advisory Committee and theCompensation Advisory Committee as voluntary
advisory bodies of the Board of Directors, with amajority of outside directors. The Company has
established a system to ensure the fairness andtransparency of all procedures and provide opportunities for appropriate involvement and advice fromoutside directors. The Committees meet whenevernecessary to discuss matters related to the nomination and compensation of directors. The Board of
Directors makes decisions based on the discussions
and reports of the Committees.
Both committees have at least three members, andare composed of a majority of outside directors. The
committees are also chaired by the lead independent
outside director.

Corporate Governance System (as of June 28, 2023)

General Meeting of Shareholders
Appointment, dismissal

Appointment,
dismissal,
non-reappointment

Appointment, dismissal
Auditing,supervision

Board of Directors
Non-committee
member directors

Committee member
directors

Audit & Supervisory
Committee

LinkageAccounting auditor

ReportConsultation
Recommendation
Supervision

Business
Execution
Division

Nomination Advisory Committee
Compensation Advisory Committee

President and Representative Director

Audit
ReportMonitoring,guidance

Report,monitoring,guidance

Audit

Linkage

Management Council

Business execution in each division(businesses, Group companies, etc.)

ControlsupportInternal Control
Division

Audit andcontrolassessment

Internal Audit Division

TKK Report 2023

47

Corporate GovernanceEvaluation of Effectiveness of the Board of Directors

Board of Directors Skills Matrix

In order to confirm that the Board of Directors isfunctioning effectively overall, each director completes a self-evaluation of the Board every year aftergathering the necessary information from relevant
divisions for evaluating the effectiveness of the Boardof Directors, which then reaches a final evaluation­decision while referring to these opinions on its effectiveness. In addition to evaluating the effectivenessof the Board of Directors, evaluations are conducted
every year on whether the entire corporate governancesystem is operating in accordance with the Company’s
Corporate Governance Guidelines, with the objectiveof ­constantly improving the effectiveness of overall­corporate governance.

In light of the Founding Philosophy, Management
Vision, slogan, and business plans, it has been determined that to fulfill its roles and responsibilities, theBoard of Directors needs skills in eight areas, including
management oversight, the formulation of future
growth strategies, and other areas that may contributeto improving corporate value in existing businesses.
In appointing directors, the Company takes into

Summary of the Results of the EffectivenessEvaluation in Fiscal 2022
The Company’s Board of Directors evaluated theeffectiveness of the Board of Directors mainly by asking,“Is the Board of Directors operating in accordancewith the Corporate Governance Guidelines?”(1) Method of Evaluation
From March to April 2023, the Board of Directors
conducted an evaluation of its effectiveness ­following
the procedures outlined below.
1. The secretariat provided the reference materials
needed to evaluate effectiveness.
2. The Board of Directors asked questions about thereference materials supplied by the secretariat,
exchanged opinions, and asked for additional
information to be provided.
3. Each director completed the self-evaluation basedon a scoring sheet for effectiveness.
4. At the Board of Directors’ meeting held on April
25, 2023, the directors discussed the self-­
evaluations and reached a decision on the
final evaluation.
(2) Results of the Evaluation and Analysis ofEffectiveness of the Board of Directors
Through this evaluation process, the Company’s
Board of Directors affirmed that the Board of
Directors is functioning effectively overall. Below isa summary of the results of the evaluation.
1. The Company’s Board of Directors is appropriately
structured and operating in accordance with its
Corporate Governance Guidelines.

48

TKK Report 2023

2. Each director is fully aware of the roles andresponsibilities expected of them by the Board of
Directors while properly carrying out their duties.
3. The Company will formulate a Medium-TermBusiness Plan that clarifies its strategic direction
and disclose the progress of the plan at financial
results briefings. In addition, the Company places
importance on ESG management and discloses
the status of ESG-related initiatives and otherinformation in its integrated report, the TKK Report.
4. The Nomination Advisory Committee and theCompensation Advisory Committee, chaired byan independent outside director, was established
as a voluntary advisory body to the Board of
Directors. The Committee deliberated on mattersrelated to director nominations and compensation,and ensured fairness and transparency in the­decision-making process with the appropriate
involvement of independent outside directors.
(3) Efforts to Improve the Effectiveness of the Boardof Directors
The Board of Directors will continue to ensure its
effectiveness, undertaking the following measures sothat it can adequately fulfill its vital roles, including
setting the strategic direction for the Company andfacilitating independent and objective audit functions. We will strengthen our efforts to deepen outside directors’ understanding of initiatives
undertaken by the various divisions and the environment in which the Company operates, and to passon outside directors’ knowledge and experience tothe executive officers responsible for such divisions.
In fiscal 2022, outside directors held such events as
business interviews, business site inspections, andinterviews with the president and other officers aswell as meetings exclusively for outside directors. In
addition, we are strengthening initiatives to improve
opportunities for explanation and dialogue withstakeholders about the Company’s initiatives, including the content and progress of management plans.
1. Gather information necessary for making
decisions;
2. Hold in-depth discussions from multiple­perspectives; and3. Take appropriate risks and proactively and boldly
make decisions.

consideration the criteria set forth in the Company’s
Corporate Governance Guidelines to ensure the­optimum balance of diversity and skill sets within thecohort of directors as set forth in the Articles ofIncorporation. For each director, a skills matrix
revealing the areas in which they are expected todemonstrate expertise based on their experience iscreated and disclosed.
Main Expected Areas of Expertise

Corporate
management /Organization
management

Legal, risk
management

Finance,accounting

International
experience

IT / innovation,newbusinesses

ESG, SDGs

Industry
experience /Sales

Production,engineering /R&D

Toru Yanagawa
Takashi Owada
Keisuke Kodama
Akira Kakihara
Yukari Sakai
Makiko Sato
Kazuto Abe
Shigeharu Nakamura
Kazuo Ushida
Shuji Iwamura
Independent outside director

Member of the Audit & Supervisory Committee

Director Compensation
At its meeting held on February 26, 2021, the Boardof Directors approved a policy for determining individual
director (excluding outside directors and directors
who are members of the Audit & Supervisory
Committee, hereinafter referred to as “executive
directors”) compensation, and at its meeting held on
May 13, 2022, the Board approved revisions to thatpolicy. Resolutions of the Board of Directors are­discussed with the Nomination and Compensation
Committee (currently the Compensation Advisory
Committee), the majority of which is composed ofindependent outside directors, and a report is received
from the committee. The following is a summary of thepolicy for determining individual compensation of
executive directors.
a) Basic policy• To ensure that compensation for executive directors
enhances their motivation to improve its performance and increase its corporate value over the
medium to long term and functions properly as
an incentive to share risks and returns arising fromchanges in its share price with shareholders, theCompany has adopted a compensation system
linking compensation with its business results andstock value. The basic policy of this system is to

TKK Report 2023

49

Corporate Governanceestablish appropriate criteria that take into consideration each individual’s responsibilities when­determining the compensation for individual executive directors. Compensation for executive directors
comprises basic (monetary/fixed) compensation,
performance-linked monetary compensation, andperformance-linked stock compensation.
• In light of their duties, only basic compensation(monetary/fixed) is paid to directors who are Audit& Supervisory Committee members and non-­executive directors who are not Audit & Supervisory
Committee members.
• Of the above, concerning the method of determining
the individual compensation of non-executive directors who are not Audit & Supervisory Committee
members, the Company will ensure transparency inthe process by adopting the same method as thatused for determining individual compensation of
executive directors as described in e) below.
b) Policy on determining individual compensation
amounts for basic (monetary) compensation(including the policy on determining the timing andthe conditions for granting compensation)• Basic (monetary) compensation for the Company’s
executive directors shall be monthly fixed compensation. This compensation is determined in linewith a pre-existing compensation table according
to rank, comprehensively taking into consideration
factors that include the compensation levels ofother companies, the Company’s performance, andthe salary level of its employees.

• Alongside performance-linked monetary compensation (see c) 1.), the Company will pay such basic(monetary) compensation as monthly fixed­compensation on a monthly basis for one year
during the next fiscal year.
c) Policy on determining the details of performancelinked monetary compensation and non-monetarycompensation (hereinafter referred to as“performance-linked stock compensation”) andthe method for calculating the amount and numberof points (including the policy on determining thetiming and conditions for granting compensation)
1. Policy on determining the details of performancelinked monetary compensation and the method for
calculating the amount and number of points• Performance-linked monetary compensation is
cash-based compensation reflecting key performanceindicators (KPIs) that the Company has establishedin order to raise awareness of the importance ofenhancing performance each fiscal year. The amountof this compensation is calculated by adding theamount of consolidated net income before taxes andother adjustments for each fiscal year to the projectedamount of consolidated net income before taxes andother adjustments for the next fiscal year.
• Executive bonuses of a certain portion of profits
may be paid by resolution of the General Meetingof Shareholders only in the event that the consolidated net income before taxes and other adjustments and stock dividend amounts are at a certain
level or higher.

Total Compensation by Director Category, Total Compensation by Type, and Number of Eligible Directors in Fiscal 2022
Total amount of compensation by type (¥ million)

Totalamount ofcompensation(¥ million)

Basic
compensation

Performancelinked
compensation

Performancelinked stockcompensation

Directors (excluding members of the Audit &Supervisory Committee and outside directors)

185

89

87

8

5

Directors (members of the Audit & Supervisory
Committee) (excluding outside directors)

16

16

—

—

1

Outside directors

39

39

—

—

5

Director category

Number of
eligible
directors

Notes: 1 T
 he number of directors (excluding Audit & Supervisory Committee members) as of March 31, 2023 was four. This number differs from that shown above as the above
number includes one director (not an Audit & Supervisory Committee member) who completed their term and retired at the conclusion of the 114th General Meeting of
Shareholders held on June 28, 2022.
2 The amounts paid to directors (excluding Audit & Supervisory Committee members) do not include employee salaries of those serving concurrently as employee and director.
3T he maximum amount of compensation for eligible directors (excluding those who are Audit & Supervisory Committee members) was resolved to be within ¥20 million permonth (of this amount, within ¥1.7 million for outside directors) (not including employee salaries) at the 114th General Meeting of Shareholders held on June 28, 2022 (thenumber of directors at the time of this meeting was six, two of whom were outside directors). Separate from this compensation, a performance-linked stock compensation
system using a trust for directors (excluding outside directors and Audit & Supervisory Committee members who are directors) and executive officers who are ranked managing executive officer or higher and who are not directors was introduced at the same General Meeting of Shareholders (the number of eligible directors at the time of thismeeting was four), with the maximum amount of trust money resolved to be ¥167 million for each of the three fiscal years of the period covered.
4 The maximum amount of compensation for directors (Audit & Supervisory Committee members) was resolved to be within ¥5 million per month at the 107th General Meetingof Shareholders held on June 26, 2015 (the number of eligible directors (Audit & Supervisory Committee members) at the time of this meeting was four).
5T he performance-linked stock compensation column for the above directors (excluding Audit & Supervisory Committee members and outside directors) represents theamounts reported as expenses for fiscal 2022.

50

TKK Report 2023

2. Policy on determining the details of performancelinked stock compensation and the method for
calculating the amount and number of points(i) Details, amount, and method for calculating
performance-linked stock compensation• Performance-linked stock compensation grants thefollowing points each fiscal year to executive directors
and executive officers who are ranked managing
executive officer or higher and who are not directors(hereinafter, “directors and executive officers”) in
accordance with their rank and level of achievementof earnings indicators based on the Medium-TermBusiness Plan and other materials on the basis of
the share delivery regulations of the PerformanceLinked Stock Compensation System for Directors,
which was resolved at a meeting of the Board of
Directors on May 14, 2019, and the determinationof compensation details and amounts associatedwith the introduction of the Performance-Linked
Stock Compensation System for Directors andExecutive Officers, which was resolved at the 111th
General Meeting of Shareholders held on June 27,
2019, and based on the resolution of the 114th
Ordinary General Meeting of Shareholders held on
June 28, 2022, the Partial Revision of Amount andDetails of Remuneration, etc. for Directors andExecutive Officers in Relation to Continuation of the
Performance-Linked Stock Compensation System.
• Directors and executive officers who are notresponsible for business divisions or are responsible
for corporate divisions:
Points granted = Base points for rank ×
Performance-linked coefficient((1) x 1.0)*• Directors and executive officers responsible forbusiness divisions
Points granted = Base points for rank ×
Performance-linked coefficient ((1) x 0.5 + (2) x 0.5)** The performance-linked coefficients of the two indicators, (1) ROE and (2)operating profit, vary between 0% and 144% according to the level ofachievement of targets for these indicators of each division.

• Directors and executive officers shall be granted
a maximum of 41,000 points (corresponding to
41,000 shares) (of which 30,340 points (corresponding to 30,340 shares) are for executive directors) each fiscal year in the three fiscal years fromfiscal 2022 through fiscal 2024 (hereinafter referred
to as the “initial period,” which is assumed to be
the period of the Medium-Term Business Plan) anda maximum of 123,000 points (corresponding to123,000 shares) (of which 91,020 points (corresponding to 91,020 shares) are for executive directors) in the three fiscal years of the initial period.
Moreover, the points granted shall be converted

into the Company’s shares at the rate of one shareper point when providing shares of the Company’s
stock to directors and executive officers.
(ii) Policy on determining the timing and conditions for
granting performance-linked stock compensation• The period of the performance-linked stock compensation system shall cover the initial period andevery three fiscal years starting from the end of theinitial period (or the period of the Medium-TermBusiness Plan formulated following the initial period).
• In principle, shares of the Company’s stock shall be
provided to directors and executive officers following
the determination of the Company’s performance inthe final fiscal year of each period covered by thecompensation system, in accordance with the
cumulative total of points granted in the period
covered. However, from the perspective of ensuring
capital for the payment of taxes, a number ofshares of the Company, corresponding to 50% of
the cumulative points, shall be converted into cash
and the cash amount equal to the amount of­converted shares shall be paid to directors andexecutive officers.
d) Policy on determining the ratio of the amount ofbasic (monetary) compensation, the amount of
performance-linked monetary compensation, andthe amount of performance-linked stock compensation to the amount of compensation for­individual directors Regarding the ratio of each type of compensationfor executive directors, as performance-linked
monetary compensation is calculated based on
performance in the preceding fiscal year and­projected performance in the next fiscal year, andas performance-linked stock compensation is thenumber of shares calculated based on ROE anddivisional operating profit—which are target KPIs
of the Medium-Term Business Plan for the initialperiod—the Company has not determined theratio, as said ratio will be decided by the performance in the relevant single fiscal year and thenext fiscal year and by the degree of achievementof targets for ROE and divisional operating profit
by each executive director in the initial period andthe subsequent three fiscal years. However, in­consideration of the intention behind introducing
performance-linked compensation, the structure ofcompensation types is such that the higher an
executive director’s rank, the more weight is
assigned to performance-linked compensation.
e) Matters regarding the method for determining
the details of compensation for individual­executive directors
TKK Report 2023

51

Business Risks

Corporate Governance The Company has stipulated policies and procedures for determining compensation for directors(excluding outside directors and Audit & Supervisory
Committee members who are directors) in its
Corporate Governance Guidelines, based on which
it determines the amount of compensation for­individual executive directors by a resolution of theBoard of Directors following deliberations and­recommendations by the Compensation Advisory
Committee, of which independent outside directors
form a majority, thereby ensuring the transparencyof the process for determining compensation.
f) Reasons why the Board of Directors decided tobring the details on compensation for individual
executive directors in relation to fiscal 2022 in linewith this policy The Compensation Advisory Committee, which
was consulted by the Board of Directors, conducteda multi-faceted examination of the draft proposal,
including of its consistency with decision-making
policy, and confirmed specific amounts by applying
them to the compensation table before making its
recommendations to the Board of Directors.
Accordingly, in determining the details of compensation for individual executive directors, the Boardof Directors basically respects the committee’s
recommendations, deeming them to be in line withdecision-making policy.

Cross-Shareholdings
Toyo Kanetsu has the following basic policies on
holding cross-shareholdings and the exercise of­voting rights.
(1)Toyo Kanetsu does not have cross-shareholdings
for purposes other than strengthening relationships
and partnerships with customers and suppliers,
with the objective of increasing corporate value.
New acquisitions of cross-shareholdings, as wellas buying and selling shareholdings, are conducted
and reported to the Board of Directors in accordancewith internal rules.

(2) Every year, the Board of Directors examines the
purpose of owning individual shares, the benefits
and risks of holding these shares, and whether
the holdings align with the cost of capital, in orderto determine whether it is appropriate to own
these shares.
(3) With regard to the exercise of voting rights, theCompany shall, in principle, be in opposition when
there are concerns that its purpose for owning
the stock does not align with management, suchas when:
1.Earnings have worsened for several years at theinvestee company, with no sign of a recovery insight; and2. Significant problems come to light in internal­controls related to financial reporting by the­investee, and improvements seem unlikely.
(4) In the event that a company that owns shares inToyo Kanetsu for cross-shareholding purposes
indicates its intention to sell these shares, theCompany shall not take inappropriate action that
may interfere with the sale of the shares, such as
suggesting the company would lose business with
the Company.
(5) Toyo Kanetsu shall not engage in business transactions with a company (in which it owns stock
for cross-shareholding purposes) that conflict with
its interests as well as with the common interestsof its shareholders, such as continuing to conductbusiness without adequate evidence of the economic rationale for the business transactions.
In fiscal 2022, the Company sold its cross-­shareholdings in four listed companies resulting ina total sale amounting to ¥1,544 million. As of March
31, 2023, the total amount of investment stocks heldfor ­purposes other than pure investment in theConsolidated Balance Sheets was ¥7,328 million,
which accounts for 19.2% of the consolidated net
assets of ¥38,087 million.

Of all the risks that could affect its business activities, certain of those potentially having a significant impact on
the Toyo Kanetsu Group are shown below. However, this is not an exhaustive list of risks related to the Groupand there are risks that are difficult to foresee.
For details please see the TKK Report 2023 Financial Section which is available on the Company’s website.

Category

1 Climate change

Corporate Governance Reporthttps://www.toyokanetsu.co.jp/pdf/ir/corporate_governance_4.pdf
Annual Securities Reporthttps://www.toyokanetsu.co.jp/ir/securities.html

Nature of risk
• Impact on the business environment in the event of a decrease in demand for LNG and crude oiltanks amid an acceleration in the shifting energy mix prompted by growing global environmental
awareness and the transition to a low-carbon and carbon-neutral society• Decrease in social trust in the event of the occurrence of environmental problems arising frombusiness activities
Logistics Solutions Business• Unexpected increase in costs due to various factors, such as compressed construction periods
due to unforeseen changes in construction plans under pressure to shorten delivery times anddelivery deadline adjustments due to carrying out multiple large projects simultaneously within acertain period of time• Impact on the execution of projects in the event that principal products and materials purchasedfrom specific overseas business partners cannot be purchased in a stable manner

2 Execution of projects

Plant Business and Next-Generation Energy Development Business• Impact on business execution in the event of shortages of construction workers, rising procurement
prices of materials and equipment, and delays in the transfer of technologies to project engineers• Shortages and price hikes for parts and materials due to COVID-19 outbreaks and geopolitical risks• Deterioration in profits from projects and adverse effect on the Group’s social reputation due toserious quality complaints or problems with products• In addition, the Group’s overseas operations carry the following inherent risks.
a) Unexpected changes in laws and regulations, b) Political and economic instability,c) Difficulties in securing human resources, d) Unfavorable tax system revisions, ande) Social disorder due to terrorism, war, epidemics, disasters, or other factors

3

4

Securing and developing
human resources• Impact on business activities from an outflow of human resources and rise in recruitment costs

Intensifying competition
for orders• Unreasonable downward pressure on profitability• Impact on the Group’s ability to obtain orders due to changes in terms of customer policies andplans, the business environment of the industry, and industry restructuring•Decline in the Group’s competitiveness in the event of delays in responding to market demandamid shortened product and technology life cycles• Impact on business results and financial position stemming from the recording of impairment losses
on non-current assets in the event that profitability declines and the Group cannot generate sufficient
cash flows due to dramatic changes in the business environment and business conditions

5 Launch of new businesses
6

Occupational healthand safety

7 Compliance• Adverse effect on business results and financial position in the event of delays in creating
a business that will become a third pillar to follow the Group’s core businesses• Compensation for damages, criminal penalties, administrative punishment, and a decline inpublic trust in the event of an incident or accident•Financial penalties and a decline in public trust in the Group stemming from the violation of laws
and regulations in Japan and overseas

Natural disasters andepidemics• Serious material damage and human injury caused by greater-than-expected natural disasters• Risks in a wide range of areas caused by the impact of COVID-19

Information security and9 maintenance of information
infrastructure• Damage to the Group’s reputation for reliability due to the loss or leakage of confidential­information as a result of unforeseen cyberattacks• Loss of business opportunities in the event that the Group lags behind in digital transformation
initiatives

8

Logistics Solutions Business• Reflecting lower demand for logistics facilities, slowdown in investments in logistics-related
facilities as a result of a recession or Japan’s declining birth rate and aging population• Decline in demand for air travel lease refer to the Corporate Governance Guidelines, the Corporate Governance Report andP
the Annual Securities Report for details (in Japanese only).
Corporate Governance Guidelines
https://www.toyokanetsu.co.jp/pdf/ir/corporate_governance_3.pdf

https://www.toyokanetsu.co.jp/global/ir/tkk_report.php

10 Market trends, etc.

Plant Business and Next-Generation Energy Development Business• Cancellation, postponement, or major revision of investment plans due to factors that include
global economic trends, economic and social conditions in oil and gas producing and consuming countries, energy and environmental policies in various countries, and trends in crude oiland LNG prices• In addition, the following risks are also possible in the event of the deterioration of the economic
environment.
a) Fluctuations in foreign exchange rates, b) Fluctuations in interest rates, andc) Valuation of securities held

Note: Forward-looking statements contained in this section are based on the understanding of the Company as of the submission date (June 28, 2023) of its Securities Report (inJapanese only) for the fiscal year ended March 31, 2023.

52

TKK Report 2023

TKK Report 2023

53

Director Profiles (As of June 28, 2023)
Directors
Toru Yanagawa

Takashi Owada

Kazuto Abe

Shigeharu Nakamura

President & Representative Director
Years on the Board: 4Company shares held: 5,017

Director and Audit & Supervisory
Committee Member
Years on the Board: 8Company shares held: 3,917

Outside Director and Audit & Supervisory
Committee Member
Years on the Board: 8Company shares held: 997

Apr. 1975 Joined the Company
Apr. 1998 General Manager of Plant & Machinery Sales Department of Sales Division
Jul. 2000 	Executive Officer, General Manager of Plant & Machinery Sales Department ofSales Division
Jul. 2003 	Senior Executive Officer, Deputy Division Manager of Plant & Machinery DivisionJun. 2005 	Director, Senior Executive Officer, Deputy Division Manager ofPlant & Machinery Division
Apr. 2008 	Director, President & Representative Director of Toyo Kanetsu Solutions K.K.
(currently Toyo Kanetsu)
Apr. 2014 President & Representative Director
Apr. 2022 Director and Chairman of the Company
Apr. 2023	Director and Chairman of the Company, Chairman of the Board of Directors(current position)

Apr. 1985 	Joined the Company
Oct. 2002	Transferred to Toyo Kanetsu Solutions K.K. (currently Toyo Kanetsu),
General Manager of System Sales No. 1 Department, Marketing Division
Jul. 2006 	General Manager of Systems Integration Department, System Division
Apr. 2008 Executive Officer and General Manager of System Division
Apr. 2015 Managing Executive Officer
Apr. 2018 	Transferred to the Company as an Executive Officer, seconded to Toyo Kanetsu
Solutions K.K. (currently Toyo Kanetsu) as a Director and Managing Executive Officer
Apr. 2019 Managing Executive Officer, Division Manager of Logistics Solutions DivisionJun. 2019 Director, Managing Executive Officer, Division Manager of Logistics Solutions Division
Apr. 2021 	Director, Executive Vice President, Division Manager of Logistics Solutions Division
Apr. 2022 President & Representative Director
Apr. 2023	President & Representative Director, Overseeing Safety, Environment, and Quality
Assurance Department, Green Transformation Promotion Office, and
Next-Generation Energy Development Office (current position)

Apr. 1976 Joined the Company
Jul. 2000 	General Manager of Accounting Department, Business Administration
Management DivisionDec. 2002 Executive Officer
Jul. 2003 	Seconded to Toyo Kanetsu Solutions (currently Toyo Kanetsu), Executive Officer,
Deputy General Manager of Administration Division
Aug. 2004 Administration Division Manager
Apr. 2009 	Executive Officer, General Manager of General Affairs and Human Resources
Department, Administration Division, General Manager of Chiba OfficeJun. 2009 Outside Corporate Auditor, Toyo Koken K.K.
Apr. 2012 Executive Officer, Head of General Affairs & Human Resources and Chiba OfficeJun. 2012 Audit & Supervisory Committee Member
Jun. 2015 Director and Audit & Supervisory Committee member (current position)

Apr. 1976 Joined Saitama Bank (currently Resona Bank, Limited)
Jun. 2006 	Director, Senior Managing Officer, Head of General Finance Department andCorporate Governance Office of Saitama Bank
Jun. 2008 	Representative Director, Executive Vice President, and Executive Officer of
Human Resources Services Department and Secretariat of Corporate Governanceof Saitama Bank
Jun. 2009 	Executive Officer, in charge of Corporate Communications Department andHuman Resource Services Department of Resona Holdings, Inc.
Jun. 2011 	Representative Director and Executive Vice President, Executive Officer,
Corporate Center (excluding Corporate Administration Department), Resona Bank, Ltd.
		
Outside Director of Saitama Resona Bank, Limited
Apr. 2012 President and Representative Director of Resona Research Institute Co., Ltd.
Jun. 2013 Outside Audit & Supervisory Board Member of the Company
Jun. 2014 	Supervisory Board Member of F-TECH INC., Audit & Supervisory Committee
Member of RIKEN TECHNOS CORP
Jun. 2015 	Outside Director and Audit & Supervisory Committee Member of the Company(current position)
Jun. 2016 	Outside Director and Audit & Supervisory Committee Member of
RIKEN TECHNOS CORP (current position)
Jun. 2018 Outside Director of Shoko Chukin Bank (current position)

Keisuke Kodama

Akira Kakihara

Director, Executive Vice President
Years on the Board: 8Company shares held: 8,314

Director, Senior Managing Officer
Years on the Board: 1
Company shares held: 1,143

Kazuo Ushida

Shuji Iwamura

Apr. 1982 Joined the Company
Jul. 2006 General Manager of Domestic Sales Department of Plant & Machinery Division
Apr. 2009 	General Manager of Corporate Management Department of Corporate
Management Division
Apr. 2010 	Executive Officer, General Manager of Corporate Management Department ofCorporate Management Division
Apr. 2012 	Seconded to Toyo Kanetsu Solutions K.K. (currently Toyo Kanetsu) as
an Executive Officer
Apr. 2013 Transferred to Toyo Kanetsu Solutions K.K. as a Managing Executive Officer
Apr. 2015 	Transferred to the Company as a Managing Executive Officer,
Deputy Division Manager of Corporate Management DivisionJun. 2015 	Director, Managing Executive Officer, Deputy Division Manager of Corporate
Management Division
Apr. 2016 	Director, Managing Executive Officer, Division Manager of Corporate
Management Division
Apr. 2018 	Director, Senior Managing Officer, Division Manager of Corporate
Management Division
Apr. 2019 	Director, Senior Managing Officer, Division Manager of Corporate Division
Apr. 2020 Director, Executive Vice President, Executive Officer
Apr. 2022 	Director, Executive Vice President, Executive Officer, Assistant to the President
Apr. 2023	Director, Executive Vice President, in charge of Risk Management Department, andSpecial Appointive Officer (current position)

Apr. 1983 Joined Saitama Bank (currently Resona Bank, Limited)
Apr. 2003 	General Manager of Department No. 1 of Saitama Head Office Branch,
Saitama Resona Bank, Limited
Jul. 2005 General Manager of Shiki Branch
Jun. 2007 General Manager of Muromachi Branch of Resona Bank, Limited
Apr. 2013 General Manager of International Business Department
Oct. 2015 Seconded to the Company
Oct. 2016 	Transferred to the Company, Executive Officer, General Manager of Corporate
Management Department of Corporate Management Division
Mar. 2018 Director of Kankyo Research Institute Inc. (current position)
Apr. 2018 	Managing Officer, Deputy Division Manager of Corporate Management Division of
the Company
Apr. 2020 	Managing Officer, Manager of Life & Work Environmental Business Division,
Deputy Division Manager of Corporate Division
Apr. 2021 	Senior Managing Officer, Division Manager of Life & Work Environmental Business
Division, Deputy Division Manager of Corporate Division, Director of Eco Analysis
Corporation (current position)
Apr. 2022 	Senior Executive Officer, Assistant to the President, Division Manager of Business
Innovation Division of the Company
Jun. 2022 	Director, Senior Executive Officer, Assistant to the President,
Division Manager of Business Innovation Division
Apr. 2023	Director, Senior Managing Officer, Division Manager of Business Innovation Division(current position)

Outside Director and Audit & Supervisory
Committee Member
Years on the Board: 2Company shares held: 410

Outside Director and Audit & Supervisory
Committee Member
Years on the Board: Newly appointed
Company shares held: 0

Apr. 1975 Joined Nippon Kogaku Tokyo K.K. (currently Nikon Corporation)
Jun. 2005 	Managing Director and Senior Executive Officer,
President of Precision Machinery Company of Nikon Corporation
Jun. 2007 	Director and Senior Managing Officer, President of Precision Machinery Company of
Nikon Corporation
Jun. 2013 	Representative Director, Executive Vice President and Executive Officer ofIntellectual Property Division, President of Precision Equipment Company,
Deputy Officer of Corporate Planning Division of Nikon Corporation
Jun. 2014 	Representative Director, President and Chief Executive Officer of Medical Business
Development Division and New Business Development Division of Nikon Corporation
Jun. 2017 	Representative Director, President and Chief Executive Officer of New Business
Development Division, Optical Division, and R&D Division of Nikon Corporation
Apr. 2019 Chairman and Representative Director of Nikon Corporation
Apr. 2020 Chairman of the Board of Nikon Corporation
May 2021 Chairman of Japan Telescope Manufacturers Association (current position)
Jun. 2021 	Outside Director and Audit & Supervisory Committee Member of the Company(current position), Chairman of the Board of Nikon Corporation (current position),
Chairman of Japan Optical Industry Association (current position)
Apr. 2022 Chairman of Japan Optical Glass Manufacturers’ Association (current position)
Jun. 2022 Outside Director of JSR Corporation (current position)

Apr. 1976 Appointed as Public Prosecutor
Oct. 2002 Head of special investigation task force of the Tokyo District Public Prosecutors OfficeJun. 2010 Superintending Prosecutor of the Sendai High Public Prosecutors Office
Aug. 2011 Superintending Prosecutor of the Nagoya High Public Prosecutors Office
Oct. 2012 Registered as an attorney at law, Advisor to Nagashima Ohno & Tsunematsu
May 2013 Outside Corporate Auditor of FamilyMart Co., Ltd.
Jun. 2013 Outside Director of Riken Corporation
Mar. 2015 Outside Auditor of CANON ELECTRONICS INC. (current position)
Jun. 2015 Outside Auditor of The Hokkaido Bank, Ltd. (current position)
Oct. 2017 	Member of the Board of Governors and Member of the Audit Committee of theGovernment Pension Investment Fund
Jun. 2018 Outside Director of Hayashikane Sangyo Co., Ltd. (current position)
Jun. 2019 Outside Director and Audit and Supervisory Committee Member of Riken Corporation
Jan. 2020 TOKYO FLEX LAW OFFICE LPC
Apr. 2021 T&K Partners (current position)
Jun. 2023	Outside Director and Audit & Supervisory Committee Member of the Company(current position)

Yukari Sakai

Makiko Sato

Outside Director
Years on the Board: 1
Company shares held: 170

Outside Director
Years on the Board: 1
Company shares held: 170

Apr. 1991 Joined Nomura Securities Co., Ltd.
Jan. 2005 Director of Corporate Tune Co., Ltd.
Jun. 2005 Standing Audit and Supervisory Committee Member of UNITED ARROWS LTD.
Jun. 2008 Outside Auditor and Supervisory Board Member, REPROCELL Inc.
Sep. 2013 Outside Auditor and Supervisory Board Member of Beauty Kadan Co., Ltd.
Jun. 2016 	Outside Director and Standing Audit & Supervisory Committee Member of
UNITED ARROWS LTD. (current position)
Oct. 2017 Outside Director and Audit & Supervisory Committee Member, Tea Life Co. Ltd.
Mar. 2019 External Director and Audit & Supervisory Board Member of Uzabase, Inc.
Jun. 2021 Outside Director of PACIFIC METALS CO., LTD. (current position)
Jun. 2022 Outside Director of the Company (current position)

Apr. 2000 Joined CyberAgent, Inc.
Oct. 2005 Seconded to WEDDING PARK CO., LTD.
Oct. 2006 Seconded to CyberAgent Ventures (currently CyberAgent Capital, Inc.)
Jun. 2016 	Founded iSGS Investment Works Inc., Director and Representative Partner
Dec. 2018 Outside Director of LiB, Inc. (current position)
Jun. 2021 Member of the Promotion Committee of Tokyo Data Platform Council (current position)
May 2022 	Member of the Committee for Evaluating the Conclusion of the “Exploration andDevelopment of Global Entrepreneurship for NEXT generation” Project at
Ministry of Education, Culture, Sports, Science and Technology
Jun. 2022 Outside Director of the Company (current position)
Feb. 2023	iSGS Investment Works Inc., Representative Director and Representative Partner(current position)

Director and Chairman of the Company,
Chairman of the Board of Directors
Years on the Board: 18
Company shares held: 23,981

54

Director and Audit & Supervisory Committee Members

TKK Report 2023

TKK Report 2023

55

Data Section

Consolidated Financial Highlights (Fiscal years ended March 31)
FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022(Millions of yen)

Net sales(Reference)

FY2022(Thousands of U.S. dollars)*2¥52,457¥46,572¥41,932¥41,758¥45,188¥46,518¥43,617¥59,177¥47,351$354,582

Operating profit

3,588

3,024

3,080

2,265

1,406

2,591

2,623

2,808

2,497

18,698

Ordinary profit

3,891

3,227

3,441

2,646

1,771

2,970

3,053

3,474

2,896

21,686

Profit attributable to owners of parent

3,019

1,906

3,746

2,362

1,025

1,717

1,777

2,334

2,378

17,807

Total assets

55,92851,36853,22855,81864,75660,98558,76464,29064,001

479,264

Total net assets

36,58034,37635,481

36,66635,23434,602

36,48436,47738,087285,210

Total shareholders’ equity

33,52532,13633,97834,20733,32432,72233,06834,45034,789260,513(Yen)(U.S. dollars)*2

Basic earnings per share*1

260.76174.53373.78251.26112.80195.87212.41285.43293.63

2.19

Dividends per share*1

40.00

50.00

120.00100.00100.00100.00115.00145.00147.00

1.10

Net assets per share*1

3,159.08

3,339.15

3,702.00

3,941.68

3,897.68

4,095.51

4,461.06

4,460.55

4,708.95

35.26
(%)

Equity ratio

65.0

66.9

66.7

65.7

54.4

56.7

62.1

56.7

59.5

—

Dividend payout ratio

15.3

28.6

32.1

39.8

88.7

51.1

54.1

50.8

50.1

—

Return on equity (ROE)

8.6

5.4

10.7

6.5

2.9

4.9

5.0

6.4

6.4

—

Return on assets (ROA)

7.1

6.0

6.6

4.8

2.9

4.7

5.1

5.6

4.5

—

(Millions of yen)(Thousands of U.S. dollars)*2

Net cash provided by (used in) operating activities

(213)

4,041

(2,131)

3,726(6,698)

6,955

1,482

(1,097)

1,105

8,274

Net cash provided by (used in) investing activities(1,120)(766)(1,714)(85)(1,315)

(812)

(338)

(830)

826

6,185

Net cash provided by (used in) financing activities(1,774)(3,640)(2,820)

2,032

3,249

(2,351)(5,176)

3,208(3,719)(27,849)

The Toyo Kanetsu Group prepares its consolidated financial statements in accordance with Japanese generally accepted accounting principles (GAAP).
Figures are rounded down to the nearest million yen.
*1 Toyo Kanetsu conducted a 10:1 reverse stock split for ordinary shares effective on October 1, 2017.
As a result, figures prior to the fiscal year ended March 31, 2017 have been restated for basic earnings per share, dividends per share, and net assets per share.
*2 Figures denominated in U.S. dollars were converted at a rate of ¥133.54 = $1, referring to the prevailing rate on March 31, 2023.

56

TKK Report 2023

TKK Report 2023

57

ESG Data Highlights
FY

A

Energy consumption (crude oil equivalent)

2022

Unit

927

1,058

997

kl

Energy consumption (electricity)

3,231

3,483

3,269

Thousand kWh

Energy consumption (LPG)

72

123

118

t

Energy consumption (city gas)

0.1

0.1

0.1

Thousand m3

1,959

1,783

1,378

t-CO2

1,586

2,214

2,155

t-CO2e

3,407

2,928

2,466

t-CO2eCO2 emissions
GHG emissions (Scope 1)*

2

GHG emissions (Scope 2, before offset)*2
GHG emissions (Scope 2, after offset)*2

GHG emissions (Scope 3)* 2
Purchase amount of non-fossil fuel certificate*4
Purchase quantity of non-fossil fuel certificate(2) Respond to
the decline
in Japan’s
population*1

—

1,444

t-CO2e285,324*3

t-CO2e——943

Thousands of yen(4) Innovation in technologies and their usage*2

Thousand kWh(6) Increase productivity*

2,300

0.05

0.04

0.04

t-CO2/millions of yen

Water consumption

9.6

9.0

9.3

Thousand m3

Total amount of waste generated

258

268

243

t

Rate of employees voluntarily leaving the Company*5

1.7

1.9

1.9

%

Average number of service years

15.5

15.7

17.1

Years

7

18

22

Persons

Number of employees taking childcare leave (male)

1

8

11

Persons

Number of employees taking childcare leave*

Unit

%

59.87

61.19

62.69

%

38.94

45.15

31.23

%

44,69936,27050,163Thousands of yen

78

63

86

Thousands of yen

14

41

20

Awards

490

1,450

870

Thousands of yen

97

90

75

Persons

1

Annual cost of research and development (consolidated)

597,420602,872

405,829

Thousands of yen

Sales revenue per employee

51,327

65,155

48,411Thousands of yen

Operating profit per employee

3,306

2,967

1,950

Thousands of yen

CFundamental initiatives to undertake before addressing A and B issues(7) Ensure occupational
health and safety*1

Casualties/ million
working hours
Days lost/
thousand working
hours

Frequency rate of industrial accidents

1.39

1.20

0.33

Severity rate of industrial accidents

0.05

0.02

0.02

Number of fatal work accidents

0

0

0

Cases

1.64

Casualties/ million
working hours

Frequency rate of industrial accidents not
resulting in lost work time

Number of employees taking childcare leave (female)

6

10

11

Persons

Number of employees returning to work after childcare leave*6

4

11

16

Persons

Total number of work hours

Number of employees working shortened hours

8

11

9

Persons

Number of Group safety meetings held

1.39

1.50

2,882,716 3,332,459 3,052,661
1

1

Hours

1

Times

Number of employees working shortened hours (male)

0

0

0

Persons

Number of safety patrols implemented

167

213

229

Times

Number of employees working shortened hours (female)

8

11

9

Persons

Response rate for stress checks

93.8

96.0

95.8

%

Number of employees taking nursing care leave

1

0

0

Persons

Rate of compliance training participation*14

92.5

93.8

—

%

Rate of annual paid vacation taken*7

68.4

66.8

71.8

%

Compliance training participants*

Average number of annual work hours*8

1,814

1,974

1,936

Hours

Average number of annual overtime work hours

245.76268.57233.15

Hours

Average number of monthly overtime work hours

20.48

22.38

19.10

Hours

Number of employees*

575

577

582

Persons

Number of employees (male)

470

471

471

Persons

Number of employees (female)

105

106

111

Persons

9

Average age of employees

44.4

44.6

44.8

Years old

Average age of managers*10

52.0

51.4

51.9

Years old

Number of new graduate recruits

16

8

12

Persons14

65Persons

Number of new graduate recruits (male)
Number of new graduate recruits (female)
Number of mid-career recruits

2

2

7

Persons

16

16

23

Persons

Number of non-Japanese employees

8

10

8

Persons

Managers as a percentage of all employees*10

12.9

12.8

12.5

%

Ratio of female managers*

2.70

5.41

6.85

%

Number of semi-management team leaders

46

55

56

Persons

Female semi-management team leaders as a percentage of
total semi-management team leaders

2.2

12.7

12.5

%

10

TKK Report 2023

2022

62.05

Number of rewards provided for qualificationacquisition
Amount of compensation givens for qualificationacquisition
Number of employees acquiring an importantqualification*13

204,327
—

2021

60.62

Annual cost of training

—

—

2020

59.39

Annual cost of training (per employee)

294,426

CO2 emissions per unit of net sales

6

FY

Actual wage difference between men and women(all workers) Actual wage difference between men and women(full-time employees)*11 Actual wage difference between men and women(non-full-time employees)*12(3) Training andutilization ofhuman resources*1(8) Execute steadfast
compliance andcorporate governance(9) Improve risk
management*2

Initiatives addressing material issues to sustainably improve corporate value(3) Training andutilizationof human
resources*1

58

2021

Issues to be addressed through our business to improve our corporate value(1) Respond tochanges inthe businessenvironment
caused byclimatechange*1B2020(10) Evolve our corporate
culture into one thatencourages employees to quickly andproactively takeon challenges

—

—

91

Persons

Number of helpline (whistleblower system) cases*2

5

7

7

Cases

Rate of information security training participation

100

100

100

%

93.5

92.4

93.7

%

5

6

5

Times

39

39

31

Persons

1,048

1,014

1,023

Cases

72.3

70.7

79.8

%

15

Rate of safety confirmation drill participation(annual average)
Number of training sessions held on risk
management
Number of automated external defibrillator (AED)
certificate holders
Commendation system: Number of improvement
proposals*16
Commendation system: Improvement proposal
submission rate*1, 17*1 Toyo Kanetsu, non-consolidated.
*2 Toyo Kanetsu and consolidated subsidiaries.
*3 As of August 2023, Scope 3 emissions for fiscal 2022 are provisional values still being calculated.
*4 Amounts shown do not include tax.
*5 	Includes full-time employees (including senior employees but excluding assignees) + Contract employees + Temporary workers + Number of incoming assignees + Seconded
employees (to the Company).
*6 Percentage of employees returning to work, based on the total number of employees taking childcare leave (includes continuous childcare acquisition).
*7 Acquisition target: At least 10 days in fiscal 2020 and 13 days in fiscal 2021; fiscal 2022 target is 70% of new days granted for the fiscal year.
*8 Includes full-time employees (including senior employees but excluding assignees).
*9 Includes directors, executive officers, and full-time employees.
*10 Managers: Group managers and department heads, excluding executive officers (definition changed from fiscal 2021 results).
*11 Of all workers, only full-time (regular and continuing employment) employees, excluding directors, were counted.
*12 Of all workers, only non-full time (part-time, contract) employees were counted.
*13 Number of employees who are 1st-class architects, engineers, or 1st-class construction management engineers.
*14 	Includes directors, executive officers, and new employees, including those at Group companies. Rather than showing participation rates, starting in fiscal 2022, the number ofparticipants will be shown.
*15 Includes directors, executive officers, mid-career hires, and new employees, including those at Group companies.
*16 	Overall number of proposals for the Toyo Kanetsu Group as a whole, including subsidiaries. The total number of proposals is the aggregate; multiple proposals from one person
are all counted.
*17 	Submission rate = Total number of proposals submitted (Toyo Kanetsu, non-consolidated) ÷ Number of eligible Toyo Kanetsu employees at the end of the second fiscal quarter.
The total number of proposals is the aggregate; multiple proposals from one person are all counted.

TKK Report 2023

59

Domestic and Overseas Offices (As of July 31, 2023)

Corporate Profile and Stock Information (As of March 31, 2023)

2-11-1, Minamisuna, Koto-ku, Tokyo 136-8666, Japan

Corporate Profile

Chiba Plant

2, Tsukiji, Kisarazu-shi, Chiba 292-0835, Japan

Corporate nameToyo Kanetsu K.K.

Wakayama Plant

457, No, Arida-shi, Wakayama 649-0314, Japan

Headquarters

Sapporo Service Center

5-7-23, Atsubetsuchuo 3-jo, Atsubetsu-ku, Sapporo-shi, Hokkaido 004-0053, Japan

2-11-1, Minamisuna, Koto-ku, Tokyo
136-8666, Japan

Sendai Service Center

4-4-11, Morisekinoshita, Natori-shi, Miyagi 981-1227, Japan

Saitama Service Center

1st Floor, Ishikawa Building, 3-14-7, Bessho, Minami-ku, Saitama-shi, Saitama 336-0021, Japan• Tsurugashima Satellite

1497-23, Suneori, Tsurugashima-shi, Saitama 350-2213, JapanTokyo Service Center

1-25-2, Minamisuna Koto-ku, Tokyo 136-8666, Japan• Nagareyama Satellite

8-1315-1, Nagareyama, Nagareyama-shi, Chiba 270-0164, Japan

Yokohama Service Center

2-22, 5th Floor Keihan Yokohama Building, Honcho, Naka-ku, Yokohama-shi, Kanagawa 231-0005, Japan• Atsugi Satellite

Toyo Kanetsu K.K. Head Office

EstablishedMay 16, 1941

Capital¥18.58 billion
9,323,074

Number ofissued shares

Number ofshares(Thousands)

Shareholding(%)

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

932

11.44

Nippon Life Insurance Company

414

5.08

Resona Bank, Limited

399

4.89

Custody Bank of Japan, Ltd. (Trust account)

371

4.55

Daiei Real Estate & Development Co., Ltd.

212

2.60

Toyo Kanetsu Employee Stock Ownership Plan

120

1.47

SUMITOMO LIFE INSURANCE COMPANY

115

1.41

Name

Share unit

100

1st Floor, MP Building, 1-17, Atsugi-cho, Atsugi-shi, Kanagawa 243-0011, Japan

Number of
employees

1,143 (on a consolidated basis)

Sato Kogyo Co., Ltd.

111

1.36

Nagoya Service Center

2-18-13, Naeshiro, Moriyama-ku, Nagoya-shi, Aichi 463-0046, Japan

Ticker code

6369

Manavis Co., Ltd.

109

1.33

Kansai Service Center

1-9-2, Senriokahigashi, Settsu-shi, Osaka 566-0011, Japan

Share registrar

Mitsubishi UFJ Trust andBanking Corporation

NIPPON EXPRESS HOLDINGS

100

1.22

Note: The calculation of the percentage of total shares outstanding excludes treasury stock.

Okayama Service Center

2nd Floor, lma3chome Aizu Building, 3-7-7, Ima, Kita-ku, Okayama- shi, Okayama 700-0975, Japan

Kyushu Service Center

1st Floor, Fukuoka Zasshonokuma Daiichi Seimei Building, 1-3-1, Shinonomemachi, Hakata-ku,
Fukuoka-shi, Fukuoka 812-0871, Japan

Haneda Satellite

2nd Floor, Sumitomo Seimei Kamata Building, 4-22-3, Kamata, Ota-ku, Tokyo 144-0052, Japan

Share registrar
address andcontact
information

Group Companies

Stock Transfer Agency Department
Mitsubishi UFJ Trust and Banking
Corporation
1-1, Nikko-cho, Fuchu City,
Tokyo 137-8081
TEL (free dial within Japan):
0120-232-711
Mailing address: P.O. Box 29, Shin-Tokyo
Post Office, Tokyo 137-8081, Japan

2-11-1, Minamisuna, Koto-ku,
Tokyo 136-8666, Japan

Design, manufacture, installation, and sales ofwinches, hoists, lifting equipment, balancers,­conveyors, etc.

Stock exchange
listing

Tokyo Stock Exchange
Prime Market

2-11-1, Minamisuna, Koto-ku,
Tokyo 136-8666, Japan

Construction (planning, design, and construction ofbuildings and steel pipe piling work)
Gondola business (rental and sale of temporary
construction gondolas)

Independentaccounting
auditorGyosei & Co.

Kankyo Research Institute Inc.

104, Okadomachi, Hachioji-shi,
Tokyo 192-0054, Japan

Investigation, measurement and analysis of­asbestos, sick building syndrome, noise/vibration,
odor, etc.

Eco Analysis Corporation

84, Takeda Kitamitsuguicho Fushimi-ku,
Kyoto-shi, Kyoto 612-8419, Japan

Maintenance/inspection/repair/data analysis ofenvironmental equipment and measuring­instruments, environmental surveys/assessment,
sales of environmental monitoring systems, sales ofenvironmental measuring instruments andreagents, etc.

Toyo Koken K.K.

Toyo Kanetsu Builtec K.K.

TKK Plant Engineering K.K.

2-11-1, Minamisuna, Koto-ku,
Tokyo 136-8666, Japan

Worker dispatching business in Japan specializing
supervision for maintenance and design ofstorage tanks

Scrum Software Co.,Ltd

3rd Floor, Dainichi Minamisenba Building,
1-5-21 Minamisenba, Chuo-ku,
Osaka 542-0081, Japan

Planning, development, production, and sales of
specialized computer systems for logistics and­distribution (development from scratch, package
application and customization, development tools,
database middleware evaluation and selection)

2-11-1, Minamisuna, Koto-ku,
Tokyo 136-8666, Japan

Leasing, comprehensive building management,
real estate and OA-related business

PT Toyo Kanetsu Indonesia

Midplaza Building 1, 8th Floor,
Jl. Jend. Sudirman Kav. 10-11,
Jakarta 10220, INDONESIA

Manufacture and sale of storage tanks

Toyo Kanetsu (Malaysia)
Sdn. Bhd.

Sublot 51, 1st Floor Medan Jaya Commercial
Centre, 97000 Bintulu MALAYSIA

Manufacture and sales of storage tanks and­equipment and devices for material
handling system

Toyo Service System K.K.

60

Major Shareholders

TKK Report 2023

Shareholders and Distribution of Shares
Financial institutions

27.1%

Financial products traders 1.3%
Other corporations

10.8%

Foreign corporations, etc.
10.0%
(individuals)
Treasury stock

12.6%

Individuals, etc.

38.2%

Note: Percentage of total shares outstanding held by shareholder

Share Price and Trading Volume(¥)(Points)
TOPIX

Share price

5,000

2,500

4,000

2,000
1,500

3,000

(1,000 shares)
Trading volume

4,000

2,000

2,000

1,000
0

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3FY2018FY2019FY2020

FY20210

FY2022TKK Report 2023

61

Contact Information

Toyo Kanetsu K.K.
Corporate Planning Department
Corporate Division
TEL: +81-3-5857-3333 FAX: +81-3-5857-3170
E-MAIL: tkkreport@toyokanetsu.co.jp
URL: https: //www.toyokanetsu.co.jp/