Toyota Industries Report

2 0 12
Corporate Social Responsibility
Corporate Philosophy

P

42(Toyoda Precepts, Basic Philosophy and CSR Policy)

Corporate Governance
Relationship with Our Customers
Relationship with Our Associates
Relationship with Our Business Partners
Relationship with Our Shareholders and Investors
Relationship with Our Local Communities

43−49
P 50
P 51−52
P 53
P 54
P 55−56
P

41

Toyota Industries Report 2012

Corporate Philosophy

Corporate Governance

Based on the Basic Philosophy that carries on the spirit of founder Sakichi Toyoda,
the Toyota Industries Group contributes to the harmonious and sustainable
development of society and the Earth under its CSR Policy.

As a globally operating company, Toyota Industries seeks sound and efficient management to maintain the trust of every stakeholder.

(Toyoda Precepts, Basic Philosophy and CSR Policy)

Guided by a strong ambition to “contribute to society andthe world through monozukuri (manufacturing),” Toyota
Group founder Sakichi Toyoda devoted himself to “endlesscreativity, inquisitiveness, and the pursuit of improvement”
and made various inventions including the non-stop
shuttle-change Toyoda Automatic Loom, Type G. The
spirit of Sakichi is enshrined in the Toyoda Precepts,
formulated in 1935 and passed down today in our Basic
Philosophy, which we established in 1992 and revisedin 1998.
The business environment surrounding Toyota
Industries is continuing to evolve rapidly and dramatically.
Regardless of changes in the business environment andvalues, we remain unchanged in our belief that realizing
our Basic Philosophy is the cornerstone of the Toyota
Industries Group’s corporate social responsibility (CSR).
Acting on this belief, in March 2009 we formulated andimplemented the Toyota Industries Group CSR Policy,
which clarifies our relationships with stakeholders, namely
customers, employees, business partners, shareholders
and local and global communities.
The CSR Policy is divided into nine areas, and the CSR
Committee* confirms and evaluates the implementation
status of this policy and promotes CSR activities.
Corporate Social Responsibility Corporate Philosophy* Chaired by the president, the committee convenes twice per year and consists ofdirectors, managing officers and corporate auditors.

CSR Areas

Customer First
SocialContributions

n Toyoda Precepts• Always be faithful to your duties, thereby contributing to
the Company and to the overall good.
• Always be studious and creative, striving to stay ahead of
the times.
• Always be practical and avoid frivolousness.
• Always strive to build a homelike atmosphere at work thatis warm and friendly.
• Always have respect for God, and remember to be
grateful at all times.

[Respect for the Law]
Toyota Industries is determined to comply with the letterand spirit of the law, in Japan and overseas, and to be fair
and transparent in all its dealings.
[Respect for Others]
Toyota Industries is respectful of the people, culture, andtraditions of each region and country in which it operates. It
also works to promote economic growth and prosperity inthose regions and countries.
[Respect for the Natural Environment]
Through its corporate activities, Toyota Industries works tocontribute to regional living conditions and social prosperity
and also strives to offer products and services that areclean, safe and of high quality.
[Respect for Customers]
Toyota Industries conducts intensive product research andforward-looking development activities to create new value
for its customers.
[Respect for Employees]
Toyota Industries nurtures the inventiveness and otherabilities of its employees. It seeks to create a climate ofcooperation, so that employees and the Company canrealize their full potential.

Implementation Structure
Toyota Industries convenes monthly meetings of the Boardof Directors to resolve important management matters andmonitor the execution of duties by directors. We also
appoint outside directors who are knowledgeable about
our business operations. They attend meetings of theBoard of Directors and give opinions and ask questions as
deemed necessary. Through this supervisory function ofoutside directors, we ensure the legality and validity of theBoard’s decisions as well as directors’ execution of duties
Shareholders’ Meetings
Selection/
Dismissal

Contributing to Sustainable
Development in Harmony
with Society and the Earth

Safety and
HealthFair andTransparent
Business
Activities
Managementof Confidential
Information

Selection/
Dismissal

Timely andProper
Disclosure

web

Access Toyota Industries’ Website for details.
http://www.toyota-industries.com/corporateinfo/philosophy/

Cooperation

Independent Auditors
Board of Directors

ReportingWe, Toyota Industries Corporation and our subsidiaries,
contribute to the harmonious and sustainable developmentof society and the Earth through all business activities that
we carry out in each country and region based on our Basic
Philosophy.
We comply with local, national, and international laws andregulations as well as the spirit thereof, and we conduct ourbusiness operations with honesty and integrity.
In order to realize sustainable development, we carry out
management with an emphasis on stakeholders, and wewill endeavor to build and maintain sound relationships with
our stakeholders through open and fair communication.
We expect our business partners to support this initiative
and act in accordance with it.

Selection/
Dismissal

Reporting

ReportingBoard ofCorporate Auditors

Respect for
Employees

ComplianceToyota Industries Report 2012

Corporate Governance Structuren Basic Philosophy

Reportingn CSR Policy (Preamble)
Environmental
Conservation

42

Toyota Industries strives to enhance the long-term stabilityof its corporate value and maintain society’s trust by
earnestly fulfilling its CSR commitments in accordancewith its Basic Philosophy.
To that end, Toyota Industries strives to enhance its
corporate governance based on the belief that maintaining
and improving management efficiency and the fairness
and transparency of its corporate activities is of utmost
importance.

Appointment/
Monitoring

Monitoring

Corporate
Auditor’s
OfficeMonitoring

Discussion/
ReportingPresident
Accounting
Audit

(

Management
Committee
Deliberates on importantmatters frommanagement’s perspective

Directives

Business Operation
Committee

Management
Council

Follows up on theexecution ofbusiness operations

Reports on andconfirms execution ofbusiness operations) (Discussion/
ReportingDirectives) (ReportingDirectives

Directives)

Reporting(monthly)

Committees*1
Functional
Meetings*2
Policies

Directors/Managing Officers
Business Divisions/In-House Company/Departments
Subsidiaries/Affiliates

Directives
ReportingMonitoring*1: Committees*2: Functional
Meetings

CSR

Human Resources

Environmental

Quality

Human Resources
Development
Export Transaction
Controls

Reporting

Safety and HealthCorporate Social Responsibility Corporate Governancefrom an objective perspective. The Management
Committee, which is composed of directors above theexecutive vice president level as well as relevant directors,
managing officers and corporate auditors, deliberates on avariety of issues concerning important management
matters such as corporate vision, management policies,
medium-term business strategies and major investments.
Toyota Industries has a divisional organization system,with significant authority delegated to each businessdivision. For especially crucial matters, however, we haveestablished the Business Operation Committee to enable
the president to meet with the heads of each businessdivision regularly to monitor and follow the status of theirbusiness execution. At meetings of the Management
Council, directors, managing officers and corporate
auditors convene to report and confirm the monthly statusof business operations and share overall deliberations at
Board of Directors meetings and other managementrelated information.
In addition, issues pertaining to human resources,quality, production, technologies, procurement and otherfunctions are discussed at the corresponding functional
meetings. We have also put in place committees todeliberate on more specific matters, such as CSR, theenvironment, human resources development and exporttransaction controls. These functional meetings andcommittees discuss important matters and action themes
in respective areas.

Basic Perspective of Corporate Governance

Production

Technologies

Audit Dept.

Internal Reporting
Audit
ReportingEmergency Profit
Improvement

Procurement

These entities deliberate and follow up on issues inrespective areas.
Emergency Profit Improvement Committee
In response to the rapid downturn in our businessenvironment, Toyota Industries has established theEmergency Profit Improvement Committee on December
1, 2008 directly under the president. We have been
carrying out profit improvement activities throughout theCompany via different subcommittees.

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Toyota Industries Report 2012

Board of Corporate Auditors System
Toyota Industries has adopted a board of corporate
auditors system. Two full-time corporate auditors andthree outside corporate auditors attend meetings of theBoard of Directors to monitor the execution of duties bydirectors. At the same time, meetings of the Board of
Corporate Auditors are held once a month to discuss andmake decisions on important matters related to auditing.
The full-time corporate auditors carry out auditing byattending primary meetings and receiving reports directlyfrom directors. Additionally, we have assigned dedicatedpersonnel, while corporate auditors monitor the legality
and efficiency of management through collaboration withindependent auditors and the Audit Department.
As a publicly listed company, Toyota Industries strives
to ensure the fairness and transparency of management.
Following the Securities Listing Regulations stipulated
respectively by the Tokyo Stock Exchange, Osaka
Securities Exchange and Nagoya Stock Exchange, we
designated as independent auditors two outside auditors
who have no conflicts of interest with our shareholders tofurther enhance our corporate governance.

We determined that our internal controls over financial
reporting as of the end of fiscal 2012 are effective, andaccordingly, submitted an Internal Control Report in June
2012. The report was reviewed by independent auditors
and judged fair in their Independent Auditors’ Report.

Compliance
Four Pillars of Compliance Activities

Review of internal
controls by
Audit Department

Audit on internal controls by independent auditors

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Toyota Industries Report 2012

Annual financial report

Improvement ofinternal controls

Detection of
insufficiencies

Internal control report

Internal control activities undertaken by eachdepartment and consolidated subsidiary(Establishment and operation of internal controls)

Independent
auditors’internal
control report

Give directives

Departments in charge of legal compliance: 11;
supporting department: 1

Toyota Industries
Corporation

CSR selfassessment

1

Leadership/
Organization

3

2

Thoroughly
Informing
Employees

Codes of
Conduct

Education on
relevant laws
and regulations

Declaration by
the president/
Compliance
Committee

Conduct
guidelines

Establishment and Reinforcement of
Implementation Organization
To promote compliance throughout the Toyota Industries
Group, we have established the Compliance Subcommittee(led by an executive in charge of legal affairs*) as asubordinate organization to the CSR Committee. Every
1 We encouraged the establishment of compliancencommittees at our consolidated subsidiaries inJapan and the appointment of compliance officers at
consolidated subsidiaries outside Japan in an effort tohelp them set up their own voluntary compliancepromotion structures.
2 The Compliance Subcommittee compiled and reviewed
ncases of law violations within the Toyota Industries
Group and measures taken to prevent recurrence
every six months as well as promoted the sharing andhorizontal dissemination of information among theGroup companies as deemed necessary, providing
support to raise the level of compliance acrossthe Group.
* As of March 31, 2012

Consolidated
subsidiaries
in Japan

Portable Code of
Conduct Handbook
for employees in
China (TIK, TACK)

Consolidated
subsidiaries
outside Japan

Compliancecommittees

Four Pillars of Compliance Activities

4

Code of Conduct
for Raymond
employees inNorth America

Compliance Subcommittee

We believe that compliance means both adhering to laws
and regulations and observing ethics and social norms. In
order to ensure compliance, it is vital that we raise theawareness of each and every employee.
Under the strong leadership of top management, we
promote compliance throughout the Toyota Industries
Group, including consolidated subsidiaries in and outside
Japan, by formulating a Code of Conduct and thoroughly
informing employees together with checking andconfirming compliance.

Checking
andConfirming

formulate and deliver to employees
their own Code of Conduct matchedto their respective business lines andcorporate cultures. Toyota Industries’
29 consolidated subsidiaries in Japanand 54 consolidated subsidiaries
outside Japan have already createdtheir own Code of Conduct.

Complianceofficers

year, the subcommittee formulates an action policy andconducts follow-up checks on its progress on a quarterly
basis.
In fiscal 2012, we primarily focused on reorganizing
the structure to promote compliance throughout the entire
Toyota Industries Group.

Formulation of Code of Conduct andDissemination
Toyota Industries has formulated the Code of Conduct,
which serves as conduct guidelines that should beobserved by employees, and distributed a portable version
to every employee.
Consolidated subsidiaries in and outside Japan

Thoroughly Informing Employees about
Applicable Laws and Regulations
Toyota Industries provides compliance education to alllevels of employees. This includes providing required
legal knowledge to employees according to their job
ranks or positions, familiarizing them with the emergency
procedures that should be followed upon the occurrenceof a problem and educating them on risk management.
To new or young employees, in particular, we provide
guidance on “what to do” and “what not to do” based onlaws and corporate ethics, using our Code of Conduct as
an instructional material.
In order to provide effective education, we devise
various ways to actively engage employees. For example,
lectures are interactive and participatory, featuring group
discussions to deepen the level of understanding among
participants. We also survey participants’ needs (questions
and concerns) beforehand and offer lectures in responseto these needs, thereby raising the degree of usefulness
and satisfaction of compliance education.

Compliance Officers (outside Japan) and Compliance Committees (in Japan)
Regional
Representativecompliance officer
for Europe

AndreasLundh

Europe:24 compliance officers

Asia:
9 compliance officers

North America:
12 compliance officers

Japan:
36 companies
Compliance officer
in India

T R Nagaraj

Australia:
1 compliance officer

Corporate Social Responsibility Corporate GovernanceCorporate Social Responsibility Corporate GovernanceInternal Control Assessment System (Based on J-SOX)CSR Committee

Report activities

Internal Control System
In accordance with the Corporation Law of Japan, in
May 2006 Toyota Industries’ Board of Directors adopted
the Basic Policies for the Establishment of an Internal
Control System (Basic Policies) to ensure compliance, risk
management as well as the effectiveness and efficiencyof business operations. The CSR Committee, at its
meeting held in March, assesses the progress made in
implementing the Basic Policies in the year under review
and determines actions for the coming year, including
reviewing the implementation structure and enhancing
day-to-day operational management.
Furthermore, based on the Financial Instruments andExchange Law (so-called Japanese Sarbanes-Oxley Act(J-SOX)), we have established and appropriately operated
an internal control system to maintain the reliability offinancial reporting. The system’s status and progress arereviewed by the Audit Department and audited byindependent auditors. We determine which Toyota Industries
Group companies fall within the scope of J-SOX based on
the degree of impact on the reliability of financial reporting.

Organization for Promoting Compliance

Compliance officer
in South America

Edson
Masayuki
UhiedaRegional
Representativecompliance officer
for North America

Timothy A.
BarkerSouth America:
2 compliance officers

45

Toyota Industries Report 2012

In fiscal 2012, we started providing education on the
Antimonopoly Act of Japan to the sales executives ofToyota Material Handling Japan (TMHJ) dealers throughout
the country. We plan to extend the scope to include
consolidated subsidiaries outside Japan and offer detailed
support for respective companies.
Furthermore, we designate a particular month as“Corporate Ethics Month” and give all employees anopportunity to think about compliance through workplacemeetings.
As a means to disseminate information to consolidated
subsidiaries, we regularly provide executive training inJapan and hold regional compliance officers meetingsoutside Japan. These are designed to make a timely
response to any amendments to laws and regulations,share information on measures adopted to handle
violations or issues and take the necessary action toprevent the recurrence of any problems.

Management of Confidential Information

Checking and Confirming Compliance
In order to confirm the status of compliance, we request
internal departments and our consolidated subsidiaries
in and outside Japan to perform a compliance selfassessment.
Toyota Industries’ subsidiaries answer a checklist
comprised of 60 to 250 items defined for each of theapplicable laws. If any of these items are found to be
insufficient, each responsible department and respective
subsidiaries work together to make improvements.
We also operate a compliance hotline that allows
employees and their families to seek advice oncompliance-related matters without being exposed tonegative consequences, as well as to make adequate
responses. This compliance hotline is cited in our Code of
Conduct, and we regularly hand out a pamphlet tosubsidiaries’ employees to inform them of the service.

Seminar on the Antimonopoly Act at a TMHJ dealer

Compliance Education Provided
Toyota Industries
Executive training

Conducted training for newly appointed executives and legal seminars for executives

Rank-based (clerical, technical)

Promoted training on quality, safety, the environment, labor, management of confidential
information, export transactions, subcontracting and the Antimonopoly Act

Training by function

Training for affiliated companies★11,600 employees
participated★9,200 employees
participatedOngoing initiative

Ongoing initiative★8,200 employees
participated★1,400 employees
participated★1,800 employees
participatedToyota Industries recognizes that the personal informationof customers, employees and business partners as wellas information concerning our technologies and sales
activities are assets that need to be protected. Acting on
this belief, we are making our utmost efforts to safeguard
confidential information and strengthen its management as
one of the CSR areas.

Implementation Structure
Toyota Industries has set up the Information Security
Subcommittee (led by an executive in charge of generaladministration) as a subordinate organization to the CSR
Committee to promote proper management of confidential
information, taking appropriate actions against the leakageof the confidential information and complying with the
Unfair Competition Prevention Act and the Personal
Information Protection Law.
To thoroughly implement the initiatives adopted by
the subcommittee, we appoint information security
administrators*1 and information security managers*2 ateach department. We strive to raise awareness about
information security among their staff by holding
workplace meetings and conducting self-checks regarding
their information security practices.
Examples of such activities include requiring
employees to obtain permission when taking their PCs
off the premises, taking antitheft measures, restricting thecopying of electronic data on recording media, monitoring
email correspondences and regularly reviewing rules for
management of confidential information.
In addition, we collaborate with other Toyota Group
companies to carry out “All Toyota Confidentiality
Management Month” activities in May and October.
As part of this effort, we are working to discourage
and monitor unauthorized carrying out of PCs andrecording media.
Our consolidated subsidiaries in and outside Japan also
appoint respective information security administrators*1
and information security managers*2. We also haveformulated common guidelines concerning managementof confidential information and follow up on their activities
on a periodic basis.

Based on the Basic Policies for the Establishment of anInternal Control System, which was set up by the Board of
Directors in May 2006 in compliance with the Corporation
Law of Japan, Toyota Industries is working to strengthen
regulations and a structure to promote risk management.
Toyota Industries considers that the basics of risk
management involve incorporating measures to preventand reduce potential risks into daily routines, and ensuring
quick and precise actions to minimize the impact on
business and society when a risk becomes apparent.

Implementation Structure
Business divisions and other departments at the Head
Office develop and promote annual action policies that
integrate measures to prevent and control risks related
to quality, safety, the environment, personnel, exporttransactions, disasters and information security.
Progress is assessed and followed up by each functional
management entity such as the CSR Committee and theEnvironmental Committee. The functional departments atthe Head Office responsible for quality, safety and theenvironment define rules and procedures, conduct training
and auditing of business operations and carry out on-sitechecks from a perspective of the entire Group, including
consolidated subsidiaries, in an effort to support therisk management activities of business divisions andconsolidated subsidiaries.
Our Crisis Response Manual provides specificexamples of risks and lays out basic rules to follow
when a risk becomes evident. This manual is distributed
to executives and department heads of Toyota Industries
as well as to those in managerial positions at consolidated
subsidiaries as a means of facilitating risk management.

*1: Head of each department*2: A person within the department, appointed by the head

Promoted group training via executive training seminars, subcontractor safe work training
and public relation division training, and through visits to dealers★2,000 employees
participated

Basic Perspective

Corporate Social Responsibility Corporate GovernanceCorporate Social Responsibility Corporate GovernancePamphlet regarding compliance hotline

Basic Perspective

Risk Management

Ongoing initiative

Crisis Response Manual

Consolidated subsidiaries
in Japan46

Toyota Industries Report 2012

Conducted training on the
Code of Conduct, safety, etc.
Not surveyed

Not surveyed

2010

2011

★11,700 employees
participated2012

Ongoing initiative2013

Poster to raise awareness for
management of confidential
information

(FY)

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Toyota Industries Report 2012

Risk Management
Response to a Possible Large-Scale Earthquake
Toyota Industries considers the occurrence of a major
earthquake in Japan as one of the most significant risks.
To ensure adequate Company-wide response when
an earthquake occurs, we define disaster prevention
measures in the three areas of pre-disaster mitigation,
initial response to be taken immediately after the disasterand production recovery.
In addition, we focus our disaster prevention measureson the three basic policies of placing maximum priority on
human life, placing top priority on the recovery of local
communities and ensuring the quickest possible recovery.
In fiscal 2012, we fully reviewed our disaster prevention
activities throughout the Toyota Industries Group following
the catastrophic Great East Japan Earthquake. Specifically,in addition to standard evacuation drills we conductedemergency training based on the assumption that power
failures and a tsunami have occurred and made greater
efforts to raise awareness through a lecture by a disasterprevention consultant and various workshops.

1) Equipment
We developed quake resistance standards for equipment
within plants and implemented measures to avoid turningover, falling and sudden sliding of equipment.
2) Buildings
We created a prioritized list of buildings requiring
anti-seismic treatment and have been carrying out
reinforcement work.
3) Prevention of Secondary Disasters
Through workshop activities, we identified latent risksof secondary disasters, such as fire, in each plant andconducted risk assessment and prioritization.

Employees evacuating to the second floor
to avoid tsunami

Workshop activity

Meetings of Disaster and Fire
Prevention Council (twice/year)

Chairman: Central general safety andhealth supervisor (Executive vice president)

Meetings of Disaster Prevention
Measures Promotion Council(six times/year)

Chairman: Head of the General Affairs
Department (Head Office)*

Secretariat

Pre-disastermitigation measures(once/month)

Initial response(once/month)

Production recovery(once/month)

2 Initial Responsen1) Initial Response Procedures
Placing maximum priority on the protection of human
life, we formulated and disseminated initial response
procedures to be followed by employees immediately
after a disaster.
2) Safety Confirmation System
In July 2011, we started operating a safety confirmation
system to account for employees and their families in caseof an earthquake. When an earthquake with a magnitudeof 5 or greater occurs, this system automatically sends
email messages to employees’ cell phones and otherdevices, to which employees send replies together withinformation on their safety status.
Lecture on disaster prevention

3 Production RecoverynOccurrence ofan earthquake

Request employees to report their safety status* As of March 31, 2012

1 Pre-Disaster Mitigation Measuresn

Activities in this area primarily focus on disaster prevention
measures concerning equipment and other devices toprotect the lives of employees.

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Toyota Industries Report 2012

Safety status of employees
themselves and their families

Employees

Damage to their houses
ReportSuperiors

Data center
Confirm(2) Securing Logistics Routes
We will conduct surveys on the infrastructures around eachplant and review the results to define safe logistics routes.
(3) Risk Avoidance regarding Production Information
In order to ensure the security of production-related
information and information systems, we are applying
anti-seismic reinforcements to the server rooms of ourplants, strengthening information backups and storingthese backups in remote locations.
4) Initiatives Related to Procedures and Methods(1) Response toward Production Bases outside Japan
In order to reduce the impact of a disaster occurring inJapan to our production bases outside Japan, we will
identify parts supplied from Japan and the logistics leadtimes to build a structure that allows us to quickly respondto emergency situations.

Safety Confirmation Process Flow

Working group activitiesn Primary Measures for Disaster Prevention4) Strengthening Activities to Raise Awareness for
Disaster Prevention
In July 2011, we invited a disaster prevention consultant
to give a lecture on disaster prevention for the membersof the Disaster and Fire Prevention Council, including
executives. Through the lecture, participants reviewed thelessons learned from the Great East Japan Earthquake
and reaffirmed what needs to be done.

3) Initiatives Related to Parts Supplies, Logistics
and Information(1) Measures concerning Supply Chain
In order to respond swiftly and adequately to a disaster,
we are currently compiling information on our supply
chain. Using this information, we will identify potential risks
and consider countermeasures in advance.

To meet the expectations of society and customers in andoutside Japan, Toyota Industries has been implementing
measures to quickly restore production operations.
Previously, such activities had been undertaken by individual business divisions. Starting from fiscal 2011, we havebeen enhancing function-based initiatives by setting up a
Company-wide production recovery working group.
1) Initiatives Related to Organization and Personnel
Assignments(1) Organization for Recovery
We reviewed our existing structure for production recovery
and clearly defined the roles of each department.
Anticipating emergency situations and a prolonged recovery
period, we set up a structure in which two or more
responsible persons are appointed at respective
organizations in the Head Office and each business division.

(2) Formulation of Production Recovery Response
Manual
We formulated the Production Recovery Response Manual,
which incorporates what we have experienced and learned
during the Great East Japan Earthquake, with the aim offacilitating swift production recovery throughout the Toyota
Industries Group.

Production Recovery Response Manual

Corporate Social Responsibility Corporate GovernanceCorporate Social Responsibility Corporate Governance

Structure for Promoting Disaster Prevention Measures(2) Personnel Responsible for Recovery Work
We have established a structure to quickly launch
production recovery by preselecting leader candidates
capable of directing recovery activities and making
adequate responses at a place of disaster as well as
recovery personnel having appropriate experience,
knowledge and skills.
2) Initiatives Related to Equipment(1) Measures concerning Equipment
We identified processes and equipment that require a longer
time to recover and prioritized our equipment recovery
efforts. Based on the results, we will determine methods ofrecovery and clarify required materials and supplies.

Evacuation drill in case of
possible power failuren Implementation Structure
The Disaster and Fire Prevention Council devises
overall policies while the Disaster Prevention Measures
Promotion Council monitors progress. Specific measures
are formulated and implemented by a working groupconsisting of members of the functional departments atthe Head Office and representatives from each plant.

3) Practical Disaster Drills
In addition to conventional disaster drills, we conductedevacuation drills assuming cases of power failures and atsunami.

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Toyota Industries Report 2012

Relationship with Our Customers

Relationship with Our Associates

Based on a quality first approach, Toyota Industries strives to realize monozukuri (manufacturing) that quickly responds to the diverse,
ever-changing needs of customers while ensuring the highest level of quality.

Our ultimate goal is to create workplaces that give top priority to the safety and health of each associate and where diverse humanresources can exercise their potentials and play active roles.

“A product should never be sold unless it has
been carefully manufactured and has beentested thoroughly and satisfactorily.”
Carrying on the spirit of founder Sakichi Toyoda, Toyota
Industries strongly believes that quality is the lifebloodof a company. Focusing on quality first and ensuring
customer safety and reassurance are our most important
responsibilities to our customers and form the basis of
our CSR approach.
Toyota Industries strives to maintain and improve thetotal quality of our corporate activities, which encompasses“product quality,” “marketing quality” and “management
quality.” “Product quality” is embodied in the safety,
eco-friendliness, durability, ease of use and workmanshipof our products, while “marketing quality” entails excellent
sales and service in addition to these attributes and“management quality” further enhances our overall
corporate image and brand strength in terms of all ofthese attributes.

and structural aspect, and if deemed necessary, theDR system itself is reviewed to prevent recurrence insubsequent models.

Activities Based on the Quality Guidelines
Every year, we issue the Quality Guidelines, which identify
priority quality implementation items to all production
bases in and outside Japan. The progress made in
implementing these guidelines is reviewed at the
Quality Functional Meeting, which is chaired by the
executive vice president in charge of quality control andattended by top management, and through genchi
genbutsu (go and see for yourself) inspections that also
cover affiliated companies. Issues raised through these
activities are followed up at meetings of the Companywide Council of Heads of Quality Assurance Departments
chaired by a quality control department head.

Types of Quality Sought by Toyota Industries

alit
y
qu
Pro
du
ct

●Safety●Eco-friendliness●Durability●Ease of use●Brand strength●Corporate image●Sales●Service●Workmanship

Designquality

Brand identity
Quality inspection by top management

Ensuring the Highest Quality
Placing top priority on our “Customer First” philosophy,
Toyota Industries undertakes product development thatmeets customer expectations.
At Toyota Industries, development of a new productentails defining specific goals to incorporate quality in every
stage from product planning and design to production
preparation, production, sales and after-sales services.
We perform a design review (DR), which allows a productto proceed to the next stage only when a responsible
business division head examines and approves whether
the product has reached the target quality level.
Should a defect occur after the product launch, thequality assurance departments of each business division
immediately devise necessary measures. At the sametime, a probable cause is identified from both the technical

Toyota Industries Report 2012

In fiscal 2012, as part of activities to “reinforce quality
assurance that also encompasses the supply chain,”which is stipulated as one of the priority items underthe Quality Guidelines, we conducted a full review ofquality audit methods of our business partners. Basedon previous quality audit data, we defined evaluation
items to ensure manufacturing quality and created a new
Quality Audit Sheet with five levels of requirements foreach item. This audit sheet allows quantification of thequality assurance efforts undertaken by 70 major business
partners. In addition, it clarifies the target level, thereby
enabling us to provide more precise quality improvement
assistance to each company.
In fiscal 2013, Toyota Industries will steadily implement
priority action items defined under the Quality Guidelines inand outside Japan, with the aim of improving the level ofcustomer satisfaction.

In accordance with our fundamental policy of “creating
people capable of autonomously maintaining occupationalsafety and health,” Toyota Industries strives to prevent
industrial accidents and occupational disorders as well as
realize better work environments.
In fiscal 2012, we carried out activities under thefollowing three principal policies.
1 Create a Foundation for Realizing a Safetyn

Oriented Culture
As part of associate safety education, we further enhanced
and upgraded our safety dojo in each plant and conductedtraining on basic procedures for safe operations.
2 Promote Risk Assessment Activitiesn
Risk assessment activities allow us to identify risks
within work processes and let operators gain a better
understanding of these risks. Toyota Industries recognizes
risk assessment efforts as one of the most importantmeasures against industrial accidents. To enhance these
activities, we have reviewed and organized issues in ourcurrent risk assessment system. For equipment alreadyinstalled in our plants, we reorganized the specificstructure to raise safety awareness among operators andreduce risks by identifying risks more precisely.
3 Promote Fundamental Safetyn
As a means of promoting fundamental safety, we havebeen introducing risk assessment into the production
preparation phase when we establish new facilities.
We have also revised the standards regarding machineryand equipment, which are used when we fabricate
equipment, according to the administrative instructions
concerning industrial safety and health and other foreign
standards. In addition, we formulated facility standards toprevent equipment-induced fires.

Safety and health inspection at a consolidated subsidiary in Japan

Initiatives for Health Management andImprovement
As a task for the medium term, we are promoting
associate health improvement programs to counter
risks associated with aging and greater stress.
Specifically, we proactively provide health guidance toprevent lifestyle diseases for persons with metabolic
syndrome and actively encourage follow-up after annual
health checkups. We also conduct periodic age-based
health education for all associates to maintain andpromote their health and wellness.
Mental health care activities include providing self-care/line-care education and building closer collaboration withexternal medical institutions. We have also successfully
worked to prevent relapses by launching a return-to-worksupport program for persons on long-term leave andconducting a survey on workplace stress levels.

Assisting Consolidated Subsidiaries in Achieving
Even Higher Safety and Health Levels
We have been working with the relevant departments
to build a system that facilitates stronger and closer
relationships with our consolidated subsidiaries in Japan.
More specifically, we provide executive training,
conduct genchi genbutsu inspections and offer
guidance to help subsidiaries achieve higher safety
and health levels.
For our consolidated subsidiaries outside Japan, we
promote the sharing of such information as industrial
accidents, suggest measures to prevent similar accidents,
implement cross-deployment of safety dojos and provide
guidance through genchi genbutsu and activity support.

Corporate Social Responsibility Relationship with Our Associates

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Ma alityquCorporate Social Responsibility Relationship with Our Customers

50

Quality levels that
customers truly
expectBuilding a Safety-Oriented Culture that Aims for
Zero Industrial Accidents

Health guidance for preventionof lifestyle diseases

Physical fitness measurement conductedduring age-based health education

51

Toyota Industries Report 2012

Enhancing Team Strength
Toyota Industries believes that enhancing team strengthis vital to forming a dynamic workforce and achieving
sustainable corporate growth.

Technical Skills

Management Skills• Expertise• Skills• Know-how• TQM• TPM, etc.
Team Strength

LeadershipTo pursue improvements
thoroughly and continuously
Spirit of Harmony

Teamwork
Well-rounded humanity

Toyota Industries Report 2012

Toyota Industries is creating a bright, energetic and caring
work environment that fosters a dynamic workforce andallows every member to demonstrate his or her capabilities
both as an individual and as a team. Throughout theworld, we are proactively encouraging communication
not only during work hours but also through social
gatherings, sports days, summer festivals, Group-wide
ekiden long-distance relay races and cheer squads forvarious sports events.

Establishing Work Environments Where Diverse
Human Resources Can Play Active Roles
We are implementing a variety of measures to create work
environments where a diverse range of human resources
can fully exercise their capabilities. These measures
include supporting a balance between work and child/nursing care, supporting the employment of persons withdisabilities and enhancing a re-employment system for
associates who reach the mandatory retirement age.
n Balance between Work and Child/Nursing Care
We have already rolled out several initiatives to help ourassociates balance their work and family. For example,
we regularly hold exchange meetings to share information
concerning work-life balance and increase awarenessamong associates. In fiscal 2012, we enhanced thesystem for leave to allow parental care of children with
illnesses as well as the system for nursing care leave.

Toyota Industries encourages open procurement and seeks co-existence and co-prosperity with our business partners based on
mutual trust. We also facilitate environmentally preferable purchasing and CSR-oriented purchasing practices.

Fair Competition Based on an Open Door Policy
We have a fair entry process that allows all potential
business partners, regardless of nationality, size andexperience, the same opportunity to offer us their products
or services through our Website to achieve broad andopen procurement.
We comprehensively evaluate our business partners
based on quality, price, their adherence to delivery times,
technological capabilities and company stability. We
also assess their initiatives for safety, the environmentand compliance as we strive for the timely and stableprocurement of excellent products at lower costs basedon fair business transactions.
For business partners seeking advice on mattersconcerning subcontract transactions, persons who are notdirectly involved in such transactions serve as a point ofcontact and offer assistance from a third-party position.

Co-Existence and Co-Prosperity Based on
Mutual Trust
We work hard to realize co-existence and co-prosperity
with our business partners based on mutual trust. We holdannual procurement policy meetings and executive training
for major business partners to gain their understanding
and cooperation. In order to consistently procure better
products, we also conduct quality and technical skills
training programs and provide guidance directed toward
improving manufacturing processes at business partners’
production sites along with safety and health education.

Diversity Navi exchange meetingn Employment of Persons with Disabilities

We respect the idea of people with and without disabilities
working together and sharing life and work values. Under
this basic policy, we continue to employ persons withdisabilities every year. They are assigned to a variety ofsections and work with other staff members to performtheir designated tasks. In fiscal 2012, the number andratio of associates with disabilities on a non-consolidated
basis were 194 and 2.03%, respectively.
n Re-Employment of Retirees
We have established a system to rehire staff of retirementage, offering them an opportunity to make the best use of
their advanced expertise and skills in carrying out business
operations. We have also been making Company-wide
efforts to set up a comfortable working environment for
older associates.

Participants in Training and Guidance Sessions
Description

Total Number ofParticipants to Date

Quality and technical skills training

288 persons

Support on process improvement

51 companies

Qualification education in safety andhealth and other areas

709 persons

In addition, we have specified substances of concernthat are prohibited for use in our products or manufacturing
processes, and requested our business partners toprevent the target substances from being mixed into theirproducts and establish a management structure. Our
procurement system also requires them to submit inadvance a non-use declaration of prohibited substances
as well as data on substances of concern. Only after
confirmation is carried out do we purchase these parts.

Localization of Business for Good Corporate
Citizenship
In view of increased local production outside Japan, we
promote procurement from local business partners inorder to contribute to the local community.

Further Promoting CSR
We provide education internally to all relevant persons forthe purpose of strictly complying with the competition lawsof each country and to maintain fair business transactions.
In fiscal 2012, a total of 734 people attended. It is also
Toyota Industries’ and our business partners’ policy tostrictly abide by both the letter and spirit of laws andregulations while also carefully handling and protecting
confidential corporate information of our business partners
and Toyota Industries.
We have developed the CSR Guidelines for Business
Partners, which describe our CSR-related requirements forour business partners in Japan, and encourage them toengage in CSR activities. We also provide our major
business partners with tools and relevant information to
support their respective CSR activities and require periodic
self-inspections to be conducted.
We will continue to promote activities around the world
to comply with CSR throughout our supply chain.

Corporate Social Responsibility Relationship with Our Business Partners

Corporate Social Responsibility Relationship with Our Associates

We believe that team strength is made up of “technicalskills” that form the basis of manufacturing operations,“management skills” to make maximum use of technicalskills and “spirit of harmony” that supports both. Whilefurther enhancing our team strength, we are striving toextend and hand it down beyond all business domains,
generations and geographic regions.
n Technical Skills
We are currently working to enhance the skills of ourtechnical staff primarily by providing training programs at
the Technical Learning Center. At the 49th National Skills
Competition held in December 2011, the team of Hiroshi
Himeno and Ryo Yamamura won a gold medal in the“mechatronics” category. We also won medals in the fivecategories of “electrical welding,” “structural ironsmith,”“mechanical engineering design—CAD,” “lathe” and“mechanical device control.”n Management Skills
A training program is provided for all administrative
staff and engineers to increase their problem-solving
capability. In addition to launching this training program atbusiness bases outside Japan, we invite human resources
administrators from overseas business bases for a Global
Human Resources Conference with the aim of sharing theway we work, our perspectives and our values throughout
the Toyota Industries Group.
We also accept local staff of business bases outside
Japan as seconded staff to facilitate the international
exchange of human resources.

Global Human Resources Conference

52

Relationship with Our Business Partners

n Spirit of Harmony

Reducing Environmental Impact throughEnvironmentally Preferable Purchasing
In order to create environmentally friendly products, we aim
to procure parts, materials and equipment from business
partners that give sufficient consideration to theenvironment. Based on our Environmentally Preferable
Purchasing Guidelines, we require our business partners toestablish an environmental management system.
Particularly for parts and raw materials, we make it a rule forbusiness partners to acquire external certification of theirenvironmental management systems such as ISO 14001.

Meeting on CSR Guidelines for Business Partners

53

Toyota Industries Report 2012

Relationship with Our Shareholders and Investors

Relationship with Our Local Communities

We aim to obtain an appropriate company valuation in stock markets through timely and appropriate information disclosure while promoting
good communications with shareholders and investors.

With a view toward engendering trust as a good corporate citizen, we actively undertake social contribution activities in countries
and regions where we do business.

Basic Perspective

Policy on Social Contribution Activities

Toyota Industries continually carries out timely andappropriate information disclosure for shareholders andinvestors. In this way, we raise management transparency
so that we obtain an appropriate company valuation instock markets. We provide not only information required
under disclosure laws and regulations but also informationthat fosters a better understanding of our management
policy and business activities. Also, we strive to promote
communications with shareholders and investors and feedback their comments to executives and relevant businessdivisions to reflect them in our business activities.

While striving to achieve sustainable growth as a company,
we work to fulfill our role as a good corporate citizen andactively undertake social contribution activities in every
community where we do business in our efforts to help
realize a prosperous and healthy society.
To accomplish this, Toyota Industries proactively offers
cooperation and support with the objective of contributing
to local communities by providing human resources,
facilities, funds and know-how. Each of our employees
also strives to contribute to society through such means
as volunteer activities.
Meeting with institutional investors

General Shareholders’ Meeting

Investor Relations Activities

Dividend Policy
Toyota Industries regards returning profits to shareholders
as one of the most important management policies.
Accordingly, we strive to continue paying dividends andmeet the expectations of shareholders upon taking into
consideration such factors as business results, demand
for funds and the payout ratio. For fiscal 2012, Toyota
Industries paid annual cash dividends per share of ¥50.0(interim cash dividend per share of ¥25.0 and year-end
cash dividend per share of ¥25.0).

Structure for Promoting Social Contribution
Activities
The CSR Committee deliberates on policies of our social
contribution activities while the Social Contribution Group
within the General Administration Department at the Head
Office takes the initiative in carrying out activities.

Toyota Industries is committed to building a close relationship with every local community in which we operate,placing particular emphasis on youth development, environmental protection/nature conservation and social welfare.

n Youth Development

With the aim of providing opportunities for youth to learn
the joy of monozukuri (manufacturing) and the meaningof work through actual experiences, we hold events
jointly with Youth Invention Clubs, host work experience
activities and conduct environmental education.
n Environmental Protection/Nature Conservation
As a member of the local community, we carry out
a range of environment-related activities, including
promoting the use of wood thinned from forests inJapan and conserving forests through employee
volunteer programs, to contribute to the developmentof a sustainable society.
n Social Welfare
To help develop local communities where everyone
enjoys an active life, we hold various social welfare events
to encourage exchange with persons with disabilities
and conduct joint fund-raising programs with ourconsolidated subsidiaries in Japan.

Activity Examples (in Japan)

Cash Dividends per Share (Annual)
For institutional investors and securities analysts, ourmanagement conducts briefing sessions to explain ourquarterly financial results. We also hold small and individual
meetings on an as-needed basis. During fiscal 2012, we
provided briefings primarily on such topics as the impactof the Great East Japan Earthquake as well as our Vision2020 and the Medium-Term Management Plan announcedin October 2011.
Additionally, the Toyota Industries Website features an
Investor Relations page for prompt information disclosure.
We use RSS feeds (in Japanese) to provide the latest
information in a timely manner.

Forest Conservation Activity(¥)

Support Activities for Children’s Home

60
50
40
30
20
10
0
(FY)

08

09

10

11

12

As part of its social contribution activities, the Toyota
Industries Team Leader Association* has been taking partin the forest conservation project of the Aichi Kaisho-noMori Center. Under the “TICO Ecocoro Tree Thinning
Activity,” members of the association have been carryingout tree thinning at Kaisho-no-Mori (Kaisho Forest) in
Seto-shi, Aichi Prefecture, with a plan to cover an area of
6,000 square meters by November 2012. In addition totree thinning, they also participate in a nature walk and astudy session to learn the necessity of tree thinning andimportance of cultivating a healthy forest, thereby gaining
a better understanding of nature conservation.

In fiscal 2012, Shine’s Co., Ltd., a subsidiary managing andoperating employee clubs, started providing support forchildren at Kaze-no-Iro children’s home in Higashiura-cho,
Chita-gun, Aichi Prefecture. On the day of Setsubun, whichmarks the beginning of spring, employees of Shine’s
delivered rolled sushi (food to bring good luck associatedwith Setsubun) and enjoyed a traditional bean-throwing
event with children to drive bad luck out and bring good luckin. At Christmas, employee volunteers brought Christmas
cakes to the children. Through these activities, we hope tocontribute to the sound and healthy growth of children.

Corporate Social Responsibility Relationship with Our Local Communities

Corporate Social Responsibility Relationship with Our Shareholders and Investors

We hold our annual general shareholders’ meeting
early to avoid the date on which many companies holdtheir respective shareholders’ meetings so that moreshareholders can attend.
We held our 133rd General Shareholders’ Meeting on
June 16, 2011, in which 320 shareholders participated.
For the purpose of fostering a better understanding of ourbusiness activities, we invited our shareholders for a plant
tour following the general shareholders’ meeting.

Three Pillars of Our Social Contribution Activities* An autonomous Company-wide organization consisting of approximately 1,700 young
leaders at manufacturing sites, the organization carries out cleanup and othervolunteer activities and promotes interchanges for self-development.

Setsubunbean-throwing
event

54

Toyota Industries Report 2012

Briefing on financial results for fiscal 2012 by the president (May 8, 2012)

Tree thinning
activities

55

Toyota Industries Report 2012

Activity Examples (outside Japan)− Germany −− India −Support for Youth Sports Activities
Kirloskar Toyoda Textile Machinery Pvt. Ltd. (KTTM),
a subsidiary producing automotive parts and textile
machinery, supports youth sports activities by donating
trophies and medals to an annual sports event at a local
elementary school. KTTM also donated uniforms to a local
high school Kabaddi* team.
* National sport of India

Supporting Employee Participation in Local
Sports Activities
In an effort to strengthen its ties with the local community,
TD Deutsche Klimakompressor GmbH (TDDK), a subsidiary
producing car air-conditioning compressors, encourages
its employees to participate in local sports events bypaying participation fees and providing team uniforms.
A TDDK team that also included a Japanese employee
participated in a local table tennis tournament held inJanuary 2012. The event provided a good opportunity topromote international exchange through sports activities.

Local table tennis tournament participantsAwards ceremony at sports event

Corporate Social Responsibility Relationship with Our Local Communities

56− Sweden −− U.S.A. −Plant Tour

Charity Drive for Cancer Research

Toyota Material Handling Europe AB (TMHE), theEuropean headquarters for the materials handlingequipment business, hosted a plant tour in October 2011,
inviting employees’ families, friends, local residents andstudents. In addition to a plant tour, this event showcased
TMHE’s product lineup and provided a game-based
lecture on the Toyota Production System (TPS), thereby
providing an opportunity to gain a deeper understandingof TMHE’s business activities.

At Michigan Automotive Compressor, Inc. (MACI), a
subsidiary producing car air-conditioning compressors, ateam of employees joined the Relay for Life, an overnight
charity walk event to celebrate the courage to fight against
cancer and a passion for life among cancer patients andtheir families, friends and supporters. The team, which
also engages in fund-raising activities for cancer research,
donated annual proceeds of roughly US$3,000 from bakesales and auctions to the American Cancer Society.

Children taking a close look at lift trucks

MACI employees who joined the Relay for Life event

Toyota Industries Report 2012