TOPY Report 2021

TOPY

Report2021

TOPY

Report2021

TEL：+81-3-3493-0777 FAX：+81-3-3493-0200

TEL：+81-3-3493-0777 FAX：+81-3-3493-0200

Editorial Policy
The Topy Industries Group Corporate Basic Philosophy

Win the trust and respect of society
through the continuance and developmentof the Topy Industries Groupand the execution of one s duty
as a public institution.

Basic Policy
Topy Report 2021 provides selected important information
focusing on the company s management strategies to improve corporate value in the medium to long term, including
information related to its business activities, operating results, social responsibilities, and management control system. The aim of this report is to encourage candid dialogue
with our stakeholders, including shareholders, investors
and related parties.
The IIRC s International Integrated Reporting Frameworkand the Ministry of Economy, Trade and Industry s Guidance for Collaborative Value Creation were used as references in the creation of this report.

The Topy Industries Group Corporate Code of Conduct− To win the trust and respect of society −Under the Corporate Philosophy, the management and employeesof the Topy Industries Group shall strictly abide by all applicablelaws and ordinances, the spirit reflected, and the Corporate Codeof Conduct, while accepting full corporate social responsibility andfostering an open-minded and creative corporate culture.

Reporting Scope
This report covers all companies listed as subsidiaries of theTopy Industries Group (consolidated basis). However, some
activities and data represent only Topy Industries, Ltd. In
principle, activities where the scope is not specified refer tothose of the Topy Industries Group. Where it is necessary
to specify the applicable scope, activities by Topy Industries
alone are identified within the headline or descriptions as
Topy Industries, and activities by an individual Group company are identified by its corporate name.

Reporting Period
Covers mainly FY2020 (April 1, 2020 to March 31, 2021),
but also includes some activities that occurred on and after
April 1, 2021.
Date of Issue
October 2021
Inquiries Regarding this Report
Topy Industries, Ltd. (General Affairs Department)
TEL: +81-3-3493-0777
Art Village Osaki Central Tower, 1-2-2 Osaki, Shinagawa-ku,
Tokyo 141-8634, Japan

1

TOPY Report 2021

Contents
Editorial Policy and Contents

2

Chapter 1

3

Value Creation

Businesses of the Topy Industries Group

3

History of the Topy Industries Group

5

Value Creation Process of the Topy Industries Group7

Topyʼs Strengths

9Strength 1

An Integrated Production System

9Strength 2

Global Expansion of the Processing Division

11

Strength 3

Value Creation Through Proprietary Technologies

13

Chapter 2

Growth Strategies

15

Top Message

15

Medium-Term Management Plan (Growth & Change 2021)

19

Chapter 3

21

Business

Steel Business

21

Automotive and Industrial Machinery Components Business(Wheels for Passenger Vehicles)

23

Automotive and Industrial Machinery Components Business(Commercial and Off the Road Wheels)

25

Automotive and Industrial Machinery Components Business(Undercarriage Components for Construction Machinery)

27

Business Development Area

29

Chapter 4

31

Sustainability

Sustainability Initiatives of the Topy Industries Group

31

Environmental Initiatives

33

Social Responsibility

38

Corporate Governance

45

Chapter 549

Corporate DataManagement Team49

Our History

51

Consolidated Financial Performance for the Past 11 Years

53

Major Subsidiaries & Affiliates

55

IR Information

56

TOPY Report 2021

2

Chapter1

Value Creation

Businesses of the Topy Industries Group

Automotive andIndustrial Machinery
Components Business

Steel Business
A raw material business operated
since our foundation

Focusing on the stable supply ofelectricity while paying utmost
consideration to maintaining harmony
with the surrounding environment

We manufacture and sell products including steel and aluminum
wheels for automobiles, wheels for mining vehicles, undercarriage components for construction machinery (track shoes* andtracks**), and industrial steel fasteners such as precision leaf
springs.

We took electricity deregulation as an opportunity to construct a coal thermal power plant (Toyohashi-shi, Aichi) while
paying utmost consideration to maintaining harmony with thesurrounding environment, and began to operate our electricity
wholesale business in 2000.

Creating new sources of profit
We are expanding sales of mica, which is used for cosmetics
and other products, in Japan and other countries, while developing applications for crawler robots utilizing our suspension
technology. We also lease real estate, such as Topy-Rec Plaza(Minami-Suna, Koto-ku, Tokyo), and operate sports clubs,
including OSSO.

*Track shoes: Component of tracks manufactured by processing and heat-treating
hot rolled steel materials (special steel). Track shoes and other components are assembled to form tracks.
**Tracks: A general name for the assembled undercarriage components of construction machinery vehicles, which are generally called a steel track belt.

Wheels for passenger vehicles

Wheels for trucks and buses

Steel

Growth Strategies

Aluminum

Mica for cosmetics
Steel

Ultra-large wheels for mining
equipment [SGORⓇ]

Undercarriage components forconstruction machinery
Power plant

Steel materials for ships andindustrial machinery

Track shoes

TracksIndustrial fasteners

WheelsRobotsPower Generation Business

Other Businesses

Operating Profit on Sales
Net sales

Operating Profit on Sales(JPY million）

Operating Profit

15,00012,0009,596
9,000

10,567

9,326

8,425

7,583

6,000
3,000

Steel for use within the company

Industrial fasteners

494

2016

871

2017

60,000Operating Profit on Sales

80,44280,00063,80371,525(JPY million）

73,40475,657

Net sales

10,000200,000

8,000

160,000
129,681

6,000

2,882
1,925

20,00003

TOPY Report 2021

2016

2017

2,248

2018

2020 (FY)

4,000

80,0002,000

40,0000(JPY million）
20,000174,015

142,790

136,113

16,00012,000

8,433

1,293
2019

Operating Profit
188,175

120,000

4,142
40,000

2019

6,000

6,000

4,000

4,000

2,000

2,000

165

2020 (FY)

5,000

6,326

6,548

1,557

1,465

7,041

4,000
6,558

893

1,000

-185
2016

2017

2018

3,000
2,000

1,550

0

0

5,767

2019

0

2020 (FY)

6,524

7,833

8,000
1,657

0

2016

2017

2018

2019

4,000

-221

Operating Profit

225,121■ Steel Business

136,113 60.46 ％Net Sales andOperating Profit
by Segment in
FY2020■ Power Generation Business(Unit: JPY million)

75,65733.61％■ Automotive and Industrial
Machinery Components Business

7,583

3.37 ％■ Other Businesses

5,767

2.56 ％-2,943■ Steel Business

1,293

Corporate Data

Operating Profit on Sales
Operating Profit

2018

8,000

8,000

(JPY million）

Operating Profit(precision leaf springs, etc.)

Automotive and Industrial Machinery Components Business

Steel BusinessNet sales852

10,000(track shoes, tracks)

Net sales

100,000

1,228

Net sales

10,000

Sustainability0

Undercarriage components
for construction machinery

Business

Steel construction materials

Topyʼs Strengths

At the Topy Industries Group, the steel business unit produces
steel using electric furnaces as well as a wide variety of steel bars.
Wide flange beams, standard structural shapes and deformed bars
are shipped as construction materials chiefly to customers in both
domestic and overseas markets, while special sections are largely
supplied to the company s automotive and industrial machinerycomponents business unit where they are turned into finishedproducts. This business unit includes companies engaging in thecollection and recycling of steel scrap, a transportation company,
and a trading company that acts as the logistic and trading armsof the unit. In addition to inter-group business transactions, it also
sells products and provides services to customers outside the Topy
Industries Group.

Other Businesses

Power Generation Business

A world-leading comprehensive
manufacturer of wheels and undercarriage
components for construction machinery

Value Creation

The Topy Industries Group is a comprehensive metal processing group with an integrated production system from raw
material production to the fabrication of finished products. Within this, the steel business engages in raw material supply
and the automotive and industrial machinery components business unit deals in material processing, both of which areinterrelated. The Group is also striving to diversify its businesses, which now encompass the wholesaling of electricity,
manufacture and sale of mica and robots, leasing of real estate, and operation of sports clubs.

■ Automotive and Industrial
Machinery Components Business-221■ Power Generation Business165■ Other Businesses-185

Net sales and operating profit bysegment shown are amounts prior toadjustments (total: JPY 1,051 million).

02020 (FY)TOPY Report 2021

4

Chapter 1

Value Creation

History of the Topy Industries Group
Three strengths developed over our 100-year history

SteelFounded in

1921

Origin of deformed section
steel technologies

1922

Miya Steelworks
succeeds in hot-rolling steel sash bars
(window frames)

1990

Establishment of an integrated
production system

2000
2008

Strength 1

An Integrated
Production
System2003

2013

Overseas

Expansion into
China

Expansion into
Mexico2016

The business and capitalalliance with MW Italia
S.R.L. is strengthened

2017

Expansion into
India

2018

Expansion into
China and Thailand(Asahi Tec Corporation
becomes a wholly
owned subsidiary)

2013

Wheels fortrucks and buses
Undercarriage components forconstruction machinery

Wheels manufactured
by Teikoku Hatsujo Seisakusho

1999

Expansion into
the United States

2002

2009

Development of lighter weight wheels

section steel and discs formed throughcold spinning (rocking die forming)(for buses and trucks)● Adoption of high-tensile-strength steel
sheet (for passenger vehicles)

1989

1987
Practical application of high-quality
mica for cosmetics

2018

Launched TACoil®, Japan s
first compact coil madeof steel bars wound athigh density for reinforced
concrete

2000
The power generation
business is launched2017

Use of existing infrastructure of thesteel business for the power generation
business (including land, quays andpower transmission facilities)

Developed from electric
furnace melting technologiesof the steel business

Strength 3

Value creation
throughproprietary
technologies

Sustainability

1974

Expansion into
Indonesia● Adoption of rims made of deformed

Heat treatment efficiency improved
through the development of low-carbon boron steel for track shoes

Commencement of theindustrial fastener business

Globalexpansion of
the processing
division

Business

1982

Strength 2

2013

Expansion
into China

Development of SGOR®, the world slargest wheel for mining vehicles

Developed frommetal processing
technologies

Expansion into
Indonesia

Growth Strategies

Expansion into
the United States

Aluminum wheels

A building in the early Showa Period(1926 to 1989) with steel sash bars

Technologies and new businesses

A new steelmaking plant is completed at
the Toyohashi Works with the introductionof an environmentally-friendly, highefficiency electric furnace

The production capacity of the rolling millshop for medium-size steel products(a rolling line for deformed section steel)is increased at the Toyohashi Works

1985

Steel wheels forpassenger vehicles

2020

2009

through the merger of Japan Motor
Wheel Co., Ltd., Toto Steel Mfg.,
Co., Ltd., Toto Zoki Co., Ltd., andToto Tekko Co., Ltd.

Teikoku Hatsujo Seisakusho (the predecessor of Japan Motor Wheel Co., Ltd.)
commences the production of prototype
steel wheels for automobiles

Otherbusinesses

2014

Strengthening of the business alliance with
Nippon Steel Corporation

Topy Industries, Ltd.
is established

1930

Power
generation
business

2010

1964

1953

Hot-rolling andthe commercial
production of track
shoes starts

Undercarriage
components
for construction
machinery

Topyʼs Strengths

Japan

1921

Foundation of Miya
Steelworks (predecessor of Toto Steel
Mfg., Co., Ltd.)1950

WheelsValue Creation

In 1964, our integrated production system for producing and making full use of steel was completed through themerger of four companies (engaging in businesses concerning steel and wheels, undercarriage components forconstruction machinery, and others). The integration of different businesses has led to the global development of theautomotive and industrial machinery parts business and the creation of new businesses (industrial fasteners, power
generation, mica, robots, and other businesses), creating management stability and contributing to earnings growth.

Development of an automated driving
system for crawlers that can move left,right, forward and backward

Developed from track
manufacturing technologies

Corporate Data

Net sales

1964
5

TOPY Report 2021

1970

1980

1990

2000

2010

2020
TOPY Report 2021

6

Chapter 1

Value Creation

Value Creation Process of the Topy Industries Group
Creating social value and achieving sustainable growth
based on an integrated production system for producing
and making full use of steel

Value Creation

The Group has paved the way for global expansion by providing products and services that meet the needs of customers and society based on its advanced technological capabilities and integrated production system for producing
and making full use of steel and continued to grow by applying its core technologies to expand business into peripheral fields. Going forward, we will continue to achieve sustainable growth by maximizing the strengths and management resources we have developed over the years, while working to solve social issues and create social value.

The Topy Industries Group
Corporate Basic Philosophy
Medium-Term Management Plan
Growth & Change 2021

P19-20Main products and services(output)

Manufacturing capitalSocial value(outcomes)

Social impact

http://www.topy.co.jp/

World-class, high-efficiency,
state-of-the art electric
furnace factory and global
processing bases

Materials

StrengthP11-13Integrated Production system
Strength2

Trust from customers
and other stakeholders
P38-40Natural capital

P9-10,13,33-37

Global expansion of
the processing division

Value chain
Procurement

Stable supply chain within and outside the Group

Development
and design

Product development and design capabilities that leverage
the technological strengths and synergies of each process

Production

Ability to produce products efficiently and stably
in an environmentally friendly mannerSupply and sales

Ability to handle a wide variety of products in small lots
and global supply system of the processing division

Intellectual capital
Our unique technologies,
including rollingdeformed section steel

Human capital
Approximately 6,000 diverse
human resources
Development of humanresources capable ofsupporting sustainablegrowth3

Proprietary
technologies

Steel for use within thecompany (rims, track shoes)
Supply of materials tothe processing division

Improvements in thesafety and functionality ofwheels and undercarriage
components for construction
machinery

Wheels for passenger vehicles

Steel wheels
for trucks and buses

Improvements in the safety
and functionality of cosmetics
using impurity-free synthetic
mica as a raw material

Ultra-large wheels
for mining equipment

Reductions in manpower andenergy needs using robots(steel, aluminum)Contribution to recycling-basedsocieties

Contribution to motorization andinfrastructure development

Securing of manpower andimprovements in safety

Supporting prosperous lifestyles
and the natural environment

Value creation through proprietary technologies
・Electric furnacesteelmaking
・Deformed steel rolling

Proprietary ・Metal processing
technologies ・Heat treatment

Undercarriage components
for construction machinery(track shoes, tracks)

Economic Value

Powergeneration

Electricity: Use of the existing infrastructure of
the steel business

Financial capital targets forthe company

Electricity(medium-term plan)

Net sales ............ JPY 320.0 billion

Businessdevelopment

Mica: Application of electric
furnace melting technologies

Robots: Application of track
Manufacturing technologies

Synthetic mica (for cosmetics, etc.)
RobotsShareholder returns
Corporate Data

Sound financial footing

Enhancement of thefunctionality of steel
materials for various
purposes

Provision of a stable energy
supplyP41-44

Financial capital

Recycling of scrap iron, etc.
using electric furnaces

Sustainability

P13-14

Strength

Steel construction materials
Steel materials for ships andindustrial machinerySocial Issues andRelevant SDGs

Business

Reduction in the environmental burden throughenergy and resource-saving technologies
Recycling of steel scrap
as a main raw material

Automobiles andindustrial machinery

2019

Growth Strategies

1Social capital

Processing

Steel

19.04.2000

Topyʼs Strengths

Business Model and Strengths

Operating profit ... JPY 16.0 billion
Operating margin ................. 5.0%
ROE ....................................... 8.5%

P53-54

Corporate governance P45 -48

Reinvestment of capital
7

TOPY Report 2021

TOPY Report 2021

8

Topy sStrengths

Strength1

An Integrated Production System

Toward the realization of a recycling-oriented society

Contributing to the realization of a recycling-based society andcreating economic value through the advancement of recycling

Value Creation

Realizing the resource recycling of iron
Business model of making steel and handling steel

Approachof Topy
Industries

Akemi Recycling Center, Ltd.
History of the Akemi Recycling Center, Ltd.

Topy Industries manufactures steel products using scrap iron generated in the course of consumption and production activities around the world. Through this business model, we have a vital role to play in production activities
within society s recycling systems. The most distinctive feature of our business is the One-piece Cycle, in which
we realize integrated production from materials to finished products, and in which products that have been disposed of after social activities are reincarnated as raw materials using our electric furnace technology. Furthermore,
we implement an original recycling system within our production processes for the reuse of resources.

Products

http://www.topy.co.jp/

Collected by Group companies

Steel business

External purchase

Materials

Processing
departments

A variety of hot rolled steel materials
are made from recycled materials, andwheels, shoes, and track shoes are
manufactured by processing some ofthese materials

Automotive andindustrial machinerycomponents business

Nonferrous
scrap

PartialShredder dust

PartialAll

Shredding

Shredding

Screening

Screening

Dust

Steel Division, Commercial and Off the Road Wheel
Division, Undercarriage Components Division■In-house recycling system
Use as materials

Reuse of materials

Construction machinerycomponents
Industrial machinerycomponents

Commercial
and Off theRoad Wheel
Div.

Undercarriage
Components
Div.

Melting/rolling

Electric
furnace

Solidification

Steel

Steel

Nonferrous

Carbonmaterial

Introduction of advanced metalsorting equipment to upgrade
recycling functions
Screening
ELVs, end-of-life vending machines, and other waste arecrushed into tiny pieces withblades attached to a cylindricaldrum that rotates at high speed
in the shredder. The shredded
pieces go through various
screening processes in which
they are sorted out into iron,
nonferrous metals (e.g., copperand aluminum), and shredder
dust (e.g., plastics and rubber).

Steel Div.

Volume reduction andsolidification
Shredder dust is reduced in volume and solidified into shapes
optimal for use in electric furnaces.
The resulting product is used as
an alternative to carbon materials
in the electric furnaces at Topy
Industries Toyohashi Works forthermal recycling.

Corporate DataAt Topy Industries Toyohashi Works, we produce various steel sections and steel bars from molten steel made in an electric furnace. The
scrap iron used as raw materials for these products is mainly procured
externally, but we also use iron scrap generated in-house. A substantial
quantity of steel sections produced by the Steel Division is shipped to
the Commercial and Off the Road Wheel Division and the Undercarriage
Components Division to be used as raw materials in the processing andproduction of various wheels and undercarriage components.

Wheel
Div.

Steel
WheelsShapesCurrently, ARC solidifies about 1,000 tons of shredder dust per month, of which
about 8% is metals such as copper, aluminum, brass, and stainless steel. The
advanced metal sorting equipment to be introduced crushes the dust and further
separates the metals, so that the nonferrous metal content of the final dust canbe reduced to less than 1% after this sorting equipment is put into operation. As
a result, the amount of nonferrous metals recovered and sold to outside parties
will increase (to about 70 tons per month at the current handling level), which is
expected to boost earnings.
In addition, the decrease in the nonferrous metal content in the solidified material of shredder dust increases the ratio of components that function as substitutes
for charcoal in the solidified material, which increases the amount of substitutecharcoal, thereby contributing to the reduction of CO2 emissions.
The Topy Industries Group contributes to the realization of a recycling-oriented
society by advancing the sophistication of recycling of waste automobiles andmiscellaneous scrap, which are valuable domestic resources, and by creating economic value, it will strengthen its sustainable business management base.

Sustainability

1 million tons/
year

TOPY Report 2021

Shredded iron
scrap

Gains on sale increase as processing capacity increases

Steel recycling
volume9

Shredding and screening

Business・Tojitsu Co., Ltd. (cargo collection)
・Akemi Recycling Center, Ltd. (shredding)Growth Strategies

Waste(Steel scrap)

End-of-life vehicles, End-of-life appliances, Miscellaneous waste, etc.

Akemi Recycling Center, Ltd. (ARC) was established in 1991 as a member of theTopy Industries Group. Since then, the company has been recycling large volumesof iron scrap, end-of-life vehicles, and industrial wastes into major raw materials
for producing steel and aluminum by making full use of its shredder plant, which isone of the largest plants in Japan.
Shredder dust and automobile shredder residue are sold to Topy Industries as a
substitute for charcoal after being solidified and melted down in the steel making
process. In addition, because Chinaʼs ban on the import of miscellaneous scrap,
there has been a rapid increase in the need for ARC to process miscellaneous
scrap for recycling, so we decided to introduce an advanced metal sorting system(the facility will start operation in October 2021).

Consumption andproduction activities

Materials
departments■Recycling flow chart

Invested in advanced recycling to make effective use ofresources and respond to the needs of society

Market19.04.2000

2004 Developed a technology to recycle shredder dust (ASR), which is generated when shredding end-of-life vehicles, as a substitute for charcoal
used in electric furnaces. Realization of a zero-waste recycling system
2013 Expanded the dust collection capacity of the shredder line and built a
new nonferrous sorting line in order to significantly improve the grade offerrous and nonferrous scrap from crushed waste automobiles and othermaterials

Topyʼs Strengths

The Topy Industries Group s One-piece Cycle contributes tosociety s recycling system

1991 Established as a base for the collection and processing (shredding andsorting) of metal scrap and industrial waste with one of the largest shredder plants in Japan

Waste
Recycling
Slag

Waste paper

Civil engineering
materials

Recycled
paper

Steel

Scrap iron in the market■ Effects of installing
advanced metalsorting equipment

Amount of dust
generated

Approximately
1,000 tons
per month

Metal content of dust

Amount of nonferrous
metals recovered

Residual nonferrous metals in dust

Beforeinstallation

After
introduction

Approximately
70 tons per month

Beforeinstallation

After
introduction

Average 8%

Less than 1%

Sold externally

Approximately
80 tons per month

Less than about
10 tons per month

TOPY Report 2021

10

Topy sStrengths

Strength2

Global Expansion of the Processing Divisionv

Implementation of growth strategies

Products
produced ateach base

Wheels fortrucks andbuses

Wheels forpassenger
vehicles (steel)

China

Wheels forpassenger
vehicles(aluminum)

SGOR®

Industrial
fasteners

Alliance
partner

United States(France, Poland, Romania, Russia, and Turkey)(MW Italia S.R.L.)

Topy Undercarriage (China) Co., Ltd.

Topy America, Inc.

Fujian Topy Autoparts Co., Ltd.

Topy Precision Mfg., Inc.

Ring-Techs Guangzhou Co., Ltd.
Guangzhou Wheelhorse
Asahi Aluminium Co., Ltd.
Guangdong Dicastal Auto Parts Co., Ltd.

JapanWIL Car Wheels Ltd.

Topy Industries,
Ltd.

Improving productivity
Upgrading the rim assembly line and painting line
to dramatically improve productivity

Ring Techs Co., Ltd.
Kyushu Wheel Kogyo, Ltd.

South Africa

Topy Fasteners, Ltd.

(MW Italia S.R.L.)

MexicoVietnamTopy Fasteners Mexico,
S.A. de C.V.

Indonesia
PT. Topy Palingda Manufacturing Indonesia

Topy Fasteners (Thailand), Ltd.
Asahi Tec Aluminium(Thailand) Co., Ltd.

PT. Topy Undercarriage Indonesia(PT. Inkoasku, PT. Pakoakuina)

11

TOPY Report 2021

By connecting various sensors and devices to equipment,
the production status can be monitored in real time toachieve high productivity and high quality. By constantly
monitoring the operating status of the equipment, the system detects abnormalities in the operating cycle of the line
and load fluctuations, enabling early detection of quality
abnormalities, and by monitoring fluctuations in temperature and vibration of the equipment, the system enables
early detection
and avoidance ofequipment problems.

Human resources development

Promoting global HR development■Overseas net sales
Others

China

United States(billion yen)
100

80

31.5

60

40

20

0

178
17.8

22.2

7.9

12.4

26.1

23.5

2016

2017

17.9
32.6

31.8
12.8
31.1

23.0
12.0
17.0

2018

2019

2020 (Fiscal year)

Topy Industries has been focusing on developing human resources who can work overseas in line with the development of global business through language training and study abroad programs. While we will continue to
implement these measures in the future, we believe that it is important to develop human resources who can
respond to various diversities in language, nationality, culture, values, and gender, both domestically and internationally, rather than just the idea that global = overseas. To this end, we intend to actively promote hiring ofdiverse human resources, as well as create opportunities for many employees to experience diversity up close,
such as promoting communication with overseas group companies and exchange meetings with companies
from different industries. The basic policy of human resource development is to nurture human resources who
are able to respond to diversity in the three axes of vision, skills, and mind, which are essential conditions forbeing active globally.

Corporate Data

The Group is expanding and strengthening its global supply system in the automotive and industrial machinery parts business in response to growing global demand
for automobiles and construction machinery.
In the area of automotive steel wheels, we have established a system to supply
high quality wheels to the world through the development of production and sales
bases in the United States, China, Indonesia, Mexico, and India, as well as throughcooperation with overseas partners such as MW Italia S.p.A. In addition, we madeAsahi Tec Corporation, an aluminum wheel manufacturer with production bases in
China and Thailand, a subsidiary in 2018, and are building a foundation for a global
supply system for aluminum wheels, for which demand is increasing in terms of design and weight reduction.
In the area of undercarriage components for construction machinery, we haveproduction and sales bases in the United States, China, and Indonesia.
In the area of industrial fasteners such as precision thin sheet springs for automobiles, our production bases in Japan, the US, Mexico, Thailand, and Vietnam complement each other, and by supplying products from the most suitable production
bases, we are able to capture global demand.

17 locationsin 7 countries*

Improving performance by introducing a
predictive maintenance system using IoT andenergy- and power-saving equipment

Sustainability

Enhancing the global production and supply system* Excluding locations in Japan,
MW Italia S.p.A., Incoasc,
Paco Aquina

The production line has been upgraded to the latest technology to
avoid equipment problems caused by age-related deterioration. The
power source for presses and other equipment has been switchedfrom hydraulic to electric servo motors to improve the reproducibilityof equipment operating conditions and save energy at the sametime. In the rim forming process, DC
butt welding (direct current butt welding) is used in critical welding processes to reduce welding time and arc flash(sparks), thereby shortening processing
time and improving the environment.

Environmentally friendly factory

Business

Topy MW Manufacturing
Mexico S.A. de C.V.

Topy Fastener Vietnam Co., Ltd.

ThailandTopy America, Inc., our US base for the production of automotive steel wheels, underwent a majorrenovation of its Kentucky Plant, which began operations in October 2020.
Against the backdrop of the recent expansion of automobile production in the US, the rim assembly line and the painting line have been upgraded to the most advanced levels in order to accommodate the high level of operation and to improve productivity.
At the same time, the plant has been reborn as an environment and worker-friendly plant withhigher performance by introducing IoT-based predictive maintenance systems and energy and labor-saving equipment.
Topy Industries has positioned the automotive wheel business as a growth driver, and is working
to improve its presence as a global supplier capable of supplying high-quality wheels around theworld by expanding its global production bases and strengthening alliances. This capital investment is part of efforts to strengthen our supply system in the US, where the worldʼs major automakers have production facilities. We have positioned the US market as an important market for
gaining a solid reputation as a global supplier, and by enhancing the production capacity of the
Kentucky Plant, we will be able to meet the demands of our customers, including the growing demand for large wheels for pickup trucks and SUV-type vehicles, and achieve sustainable growth in
the automotive wheel business.

Growth Strategies

India

Renewal of US automotive steel wheel production bases

Topyʼs Strengths

EuropeUndercarriage
components
for construction
machineryStrengthening production capacity
Value Creation

Strengthen and expand overseas bases to increasepresence in the global market

Approachof Topy
Industries

Tetsuya Sakai

Operating Officer,
General Manager of Personnel Department

TOPY Report 2021

12

Topy sStrengths

Strength

3

Value Creation Through Proprietary Technologies

Pursuit of even higher value-added productsTechnology forrolling deformed
section steel

State-of-the-art electric furnace plant boasting world-leading
power saving and productivity

Largest scale in Japan
Japan s largest class 200-ton
eco-friendly high-efficiency electric furnace

Outstanding environmental
performance
World-leading heat efficiency

Mastmaterial

Metal
processing
technologies

Robust BCP
The seismic strength of the building exceeds the seismic intensity of the Tokai and
Tonankai earthquakes when they are linked. The electrical equipment is TP500.
(Installed at 500 cm above the average sea level in Tokyo Bay)

3. Melting to steel discharge

Ladle refining
furnace

5. Iron alloy
6. Continuous
wire addition
casting

Ferroalloy
wire addition
equipment

Continuous
casting
machine7. Stock to rolling mill

Steel wheels fortrucks and buses

Roughmaterial
yard

Thermalinsulationbox

Heat treatment
technologies

Energy saving and cost reduction effects
Energy saving and cost reduction
effects

Maintain exhaust gas
temperature
Maximize the use of scrap
preheating
Secondary combustionof unburned gases suchas CO is used to achievethese goals.

20% reduction
in steelmaking
costs compared
to conventional
equipment
Lowest cost level inJapan

Unique heat conduction analysis system achieves high durability ofundercarriage components for construction machinery
Based on a proprietary heat conduction analysis system, we have achieved a technology that increases strength, wear resistance and toughness through repeatedheating and cooling. In addition, by developing the worldʼs fastest link processing
line and an automatic link belt assembly line that no other company can match, we
supply stable quality and low-cost crawler belts to the world.

Corporate Data

TOPY Report 2021

Shaft output side
Exhaust gas
temperature must be
above a certain level.

Exhaust gas

13

Scrap residual heat

By using the heat energy from the exhaust gas,
which used to be discarded, to preheat steel
scrap and continuously feed it into the electric
furnace, we have been able to significantly reduce the amount of electricity used. In addition,
continuous melting by flat bath operation, in
which scrap is continuously fed from the preheating shaft into the hot water pool of the electric furnace, has resulted in improved productivity
and significant cost reduction due to the reduction of inactive time and heat extraction.

Heat generation efficiency improvement of 4.9%
Total energy consumption per unit of production
reduction of 7.7%

Our steel wheels for trucks and buses are made of
deformed steel, which we have independently developed based on our advanced analysis technology
and accumulated know-how, to reduce weight andachieve high strength and quality. We have acquired
about 90% of the Japanese market share.

Sustainability

200-ton electric furnace → Ladle refining furnace

4. Ladle
refining

Business

Scrap yard

2. Continuous
loading of scrap

Achieved weight reduction and high strength and quality, and gained
about 90% of the Japanese market share
The company boasts world-class productivity, capable of manufacturing truck andbus wheels as fast as one every nine seconds. The rim material for steel wheels isdeformed steel manufactured by the company. We have reduced the weight of therim material by making it as thin as possible while maintaining its strength, which
greatly contributes to improved fuel efficiency. In addition, discs manufactured
through our unique ECOD molding process can significantly reduce waste materials
compared to general manufacturing methods, contributing to resource conservation.

■Electric furnace steelmaking process
1. Scrap collection

Forklift

This steel shape is used for thevertical section (mast) at the frontof a forklift. It is a product that
requires high strength as well aswear resistance and weldability.

Growth Strategies

The steelmaking plant at the Toyohashi Plant began full-scale operations in 2015
after upgrading and modernizing aging facilities. In addition to establishing a disaster-resistant supply system by implementing earthquake and tsunami countermeasures in readiness for the Nankai Trough earthquake, we have also introduced
ECOARCTM, one of the largest 200-ton eco-friendly high-efficiency electric furnaces in Japan, to achieve further power saving and productivity improvement. Furthermore, the plant has been reborn as one of the most environmentally friendly
and competitive steel plants in Japan, with the introduction of a continuous casting machine that can be used for both blooms and billets, enabling the plant to
supply its own billets for steel bars.

Topyʼs Strengths

One of our strengths is our deformed steel manufacturing technology that makes fulluse of our unique numerical analysis In the case of deformed steel with asymmetrical cross sections, bending occurs from the side with the strongest deformation to
the side with the weakest deformation when it is processed from a rectangular crosssection (rectangular cross section) to a deformed cross section. We have a special
production line that can correct this straightening by using the conveying force ofthe slanting rollers, making it possible to efficiently manufacture deformed steel withcomplex cross-sectional shapes.

Over the years, we have nurtured diverse and original technologies under the keyword of making steel andhandling steel. We will continue to focus on developing and strengthening technologies that will contribute tosolving the problems of customers and become the source of our competitiveness.

Electric
furnacesteelmaking
technologies

Manufacturing various complex cross-section steel to meet theneeds of customers and the processing departments

Value Creation

Proprietary technologies to meet diverse internaland external needs

TracksOur main product, track shoes, ismanufactured in an integrated manner in-house, from material selection
to completion, in close cooperation
with the Steel Division, which handles steelmaking and rolling.

TOPY Report 2021

14

Chapter2

Growth Strategies

Top Message
Value Creation
Topyʼs Strengths

We will continue to fulfill our
responsibilities as a public institutionof society for the next 100 years whilepursuing productivity and high added
value toward the transformation into
the new Topy Industries.

Growth Strategies
Business

Representative Director, President and CEO
Topy Industries, Ltd.

15

TOPY Report 2021

three-layer coating structure, a new pearl material using
high-quality mica, and increased the size (to 3 tons) of TACoil®, a compact coil for reinforced concrete steel bars.

▌Industries

Transformation toward a new TopyIn October 2021, Topy Industries celebrates its 100th anniversary. I see this milestone year in the midst of a difficult
business environment as a great opportunity for change.
The new Topy Industries will evolve into a company that
supplies high value-added products that are unique toTopy, based on high productivity. The Topy Industries
Group Corporate Basic Philosophy is to Win the trust
and respect of society through the continuance and development of the Topy Industries Group and the executionof one s duty as a public institution. Based on this, wewill continue to develop through high value-added products while guaranteeing our survival through high productivity. This is the vision aimed of the new Topy Industries.

■ Pursuing high productivity

In the past 100 years, the Group has responded to the
expectations of our customers by successively realizing
technologies that were considered difficult to achieve,
such as rolling sash bars (window frames), rims for automobile wheels, and track shoes. These high value-added
products have supported the development of our group.
However, the current situation is being pushed by thewave of commoditization in the cost-sensitive environment that has occurred since the 2000s. In response tothese changes, we will continue our efforts to create highvalue-added products and implement constant transfor-

TOPY Report 2021

Corporate Data

It can be said that FY2020 was a year in which the rapid
and severe changes of the times and the weakness ofJapanese society became apparent against the backdrop of the spread of the coronavirus, the resulting economic recession, and prolonged trade friction between
the US and China. Under these market conditions,although the automotive and industrial machinery parts
business experienced a significant drop in demand in
the first half of the fiscal year, it gradually showed a recovery trend in the second half. On the other hand, thesteel business continued to face a difficult situation as
the price of steel scrap, the main raw material, rose due
to a surge in steel demand caused by robust public investments in China. Sales of mica-related products werealso sluggish due to a decline in demand for cosmetics
as people curbed their outings and wore masks moreregularly. This was a year of confronting the fundamental
issue of our business model, which is that a decline insales volume is rapidly putting pressure on earnings. In
response, in line with our three-year medium-term management plan, Growth & Change 2021 (G&C 2021),
we focused on initiatives to reform our production structure and improve profitability, thereby putting in place asystem to resolve these issues.
As a separate measure, in October 2020 Topy America,
Inc. s Kentucky Plant began operating a new production
line. This will strengthen our supply structure in the US in
the automotive and industrial machinery parts business.
Regarding the expansion of strategic products and thedevelopment of new businesses, we have developed
Japan s first high-brightness metallic color wheel with a

Sustainability▌FY2020 summary and future issues

16Chapter 2

Growth Strategies

Top Message■ Supplying high value-added products

Corporate Data

TOPY Report 2021

In recent years, sustainability initiatives have become increasingly important in business transactions. Especiallyin Europe, the level of requirements is high, and the construction machinery industry is also moving to restrict theuse of oil-based paints. The Group has been promoting
a variety of initiatives to respond to these trends aheadof time, and these initiatives have also been evaluated byexternal organizations. The Toyohashi Plant has received
the Gold rating for the second consecutive year in asustainability survey conducted by EcoVadis (France). In
terms of evaluations in Japan, six of our products, including H-beams, have acquired the Eco Leaf environmental
label certified by the Sustainable Management Promotion
Organization. In addition, we have also been engaged in
activities that contribute to sustainability in areas otherthan the environment, such as the promotion of healthmanagement initiatives starting from June 2020.
The Group collects, sorts, and recycles steel scrap
independently to produce the main raw material, iron.
In a sense, our business itself is built on the idea of sustainability. In July 2021, we organized the Sustainability
Promotion Preparation Project to further fulfill our responsibility for a sustainable society, aiming to be a public
institution of society. In this project, we will clarify the

Sustainability

17■ Business activities and sustainability

The Akemi Recycling Center, which plays an importantrole in the Group s sustainability, began operating a new
advanced metal sorting facility in October 2021. By increasing the amount of recycled materials and improving
the quality of sorted and recycled ferrous and nonferrous
materials, we will contribute to resource recycling evenmore than before, and aim to further enhance One-piece
Cycle in our business activities. We are also promoting
energy conservation through the use of state-of-the-art,
environmentally friendly, high-efficiency electric furnaces
and proprietary operating technologies. Our productivity
and energy efficiency, including the steady activities of our
production bases, are among the highest in the electric
furnace industry. In addition, the Kanagawa Plant, which
won the Energy Conservation Grand Prize, is actively
working to roll out its approaches to other plants. Throughelectricity consumption visualization and display, we are
realizing the Group s unique people-centered smart factory where each and every worker thinks about what they
can do to save energy and does it. Furthermore, we are
currently promoting the evolution from smart factories to
DX, through means such as speeding up management
decisions by linking with ERP.
We will also continue to focus on expanding our humancapital, which is the source of value creation. Since theprevious mid-term management plan, the Group has beenpromoting global expansion. Up until now, we have conducted business in each country and area based on Japanese methods. However, in order to evolve into a truly
global company, we need to blend in locally, and we recognize that we are now entering that phase. In the future,
we will strengthen the recruitment, training, and retentionof local human resources who will be the driving force behind localization. While some of our overseas subsidiaries
have already started to promote local human resources to
executive positions, we believe that it will take some time
to realize the ideal form. We will continue to consider andtake on the challenge of developing human resources thatwill lead to global growth, as well as how the mother factory in Japan should be.

As we embark on the next 100 years as the new Topy
Industries, we have thought hard about what kind of company we should be in order to survive, develop, and continue to be a public institution of society. The Group hasa long tradition of manufacturing products that no othercompany can match, based on our solid technologicalcapabilities and frontier spirit. While keeping this traditionin our DNA, we will continue to maintain our stance as amanufacturing company, focusing on manufacturing anddeveloping through technology. Moreover, in the future,
we would like to focus on expanding the circle of the
One-piece Cycle and strengthening collaboration with
the Group and external stakeholders. By doing so, we willcontribute to the sustainability of society while enhancing
the sustainability of the Group, and aim to become a leading company in each field where customers around theworld say, It has to be a Topy product.
What we should aim for beyond that is the pride andgrowth of our employees. When I think about what acompany is, the first thing that comes to mind is a place
where each and every employee can grow as a person.
We are moving forward to become a company where
employees can take pride in working with products andthe Topy that they have created with their own hands, andwhere they can develop themselves. I hope that you continue to watch the future of the Topy Industries Group.

Business

The new Topy Industries will also implement operational reforms for change in G&C 2021. In order to realize
Growth in business in a society of extreme uncertainty
and opacity, Change in business operations is necessary.
As part of these efforts, we have newly organized theSales Division from April 2021. Although each business
unit had its own sales system in the past, by eliminating
the barriers between businesses and sharing informationand methods, we will build a sales system that takes
advantage of the Group s comprehensive strengths This
will make it possible to strengthen our relationships withour customers and enhance our ability to respond to customer needs, while at the same time creating synergies
across the company by collaborating extensively with ourtechnical divisions.
We will also implement DX (digital transformation) using

Strengthening the foundation for■ Approaches to address individual issues▌Toward the next 100 years

Growth Strategies■ Implementation of operational reforms▌sustainable management

connection between our business and a wide range ofsocial issues, not only resource recycling, and rebuild theapproach to sustainability in the Group. In fiscal 2022, weplan to further promote sustainability based on the resultsof the current year s activities of this project.

Topyʼs Strengths

We will use our unique technologies and production system to develop and expand sales of high value-added
products that are unique to Topy and can be recognized
and selected by customers. One example is an aluminum
wheel for passenger cars that uses the latest casting analysis technology. In recent years, aluminum wheels havebecome the mainstream for luxury cars, and there is astrong need to reduce weight as well as design. Because
the Group has been mass-producing products with highstrength and light weight and has been steadily increasing
its market share, we will first solidify our superiority in thismarket.
In October 2021, we established the Business Development Strategy Center to consolidate the Group s technologies and to create new businesses by centrally andconsistently managing the basic research and commercialization phases of new strategic products and technologies. In addition, the businesses of synthetic mica androbots, which are business models in which the phases ofbasic research and practical application are closely related, will be transferred to this center to strengthen our ability to respond to development-oriented projects throughvertical integration of development, manufacturing, andsales. At the same time, we will accelerate business development and the development of high value-added
products by working closely with the Sales Division, which
will be discussed later.

ERP (enterprise resource planning) systems, etc. By centrally managing and instantly sharing the wealth of datacollected from each organization, we expect to generate
new perspectives and ideas that transcend organizationalboundaries in areas such as production planning, shop
floor improvement, budget management, and cost improvement.
All of the above are intended to raise the level of the
One-piece Cycle that is the basis of our Group. The
Group has established the One-piece Cycle as an integrated production system that completes all processes
from the production of materials to the processing of final
products in-house. By expanding this idea from the conventional production concept to the business concept,
and by building a One-piece Cycle as an organizationthat generates new synergies through cooperation among
each division, we will create the new Topy Industries.
While it can be assumed that it will take several years, wewill aggressively implement each measure.

Value Creation

mation to improve productivity on order to build our business foundation.

TOPY Report 2021

18

Chapter 2

Growth Strategies

Medium-Term Management Plan
Value Creation

Progress on Growth & Change 2021
Progress of major topics and issues

Overview of Growth & Change 2021
Basic Policy

Topyʼs Strengths

Increase earnings power
While we struggled with a decrease in volume due to stagnant economic activities caused by the spreadof COVID-19, we have been reviewing our production system and implementing hard cost improvements.
This will result in a reduction in fixed costs of 6.7 billion yen and an improvement in costs of 2.3 billion yen.

Under the basic policy of accomplishing G&C and preparing for the next stage of growth, we will focus on improving the
profitability of the businesses we expanded in G&C 2018 in the previous medium-term management plan, and expand the
cash flow generation capacity for the next stage of growth. In parallel, we will continue to develop new businesses andproducts that meet the needs of our customers and society.

Leverage Group synergies

Major Topics
We will steadily reap the results of growth measures implemented in G&C 2018 and achieve
further cost improvements across the entire value chain in response to the expanding scaleof the company in order to strengthen profitability.

In the wheels for passenger vehicle business, the company promoted synergy measures such as the common use of technology and common purchasing of steel materials with the bases of acquired Ring Techs
Co., Ltd. and Asahi Tec Corporation, and also initiated measures to transfer production between bases andconsolidate production lines. This will gradually produce results from FY2021 onward.

Growth Strategies

Earnings
1 Increase
Power

Increase
earnings
power

Enhance Strategic Products

Strategic
3 Enhance
Products

In the steel business, we will strive to differentiate ourselves from our competitors by increasing the size of our new product TACoil®. In the automotive and industrial machineryparts business, we are developing wheels that are lighter and have a higher design. In addition, we will strengthen sales of synthetic mica, a basic raw material for cosmetics, both inJapan and overseas, and for crawler robots, we will develop AGVs (automated guided vehicles) and make a full-scale entry into a market where demand is expected to grow against
the backdrop of labor shortages.

Embrace theChallenge of
Innovation

We will hone our proprietary technologies and strengthen our product and technology development capabilities to take on the challenges of the future, while promoting the conversion
to smart factories in the manufacturing sector. In addition, we will continue to work to improve job satisfaction and promote diversity, and focus on creating creative workplaces.

Further Strengthen[Ｅ] Aim to manufacture at eco-friendly and environmentally conscious production plants and bases[S] Promote the provision of products that will contribute to society and regional contribution
activities[Ｇ] Work to strengthen the governance system that aims to prevent and minimize risks

4

5 the Management
Foundation

Overview of business results for FY2020

TOPY Report 2021

FY2020Net sales

263.3

225.1

Operating profit

2.9(1.1%)-2.94(-1.3%)(Operating margin)

TowardsustainablegrowthFurther strengthen the management foundation
To strengthen our corporate foundation, we are developing initiatives to enhance ESG management.
In particular, in terms of the environment, we are continuously developing and promoting various initiatives, such as implementing power-saving measures at our main factories and reducing CO2 emissions.
Currently, we are working on building a system to systematically promote these initiatives and identifying
materiality.

Due to the impact of the spread of COVID-19, the economic situation is more severe than we had assumed when we formulated our medium-term management plan.
G&C 2021 is designed to strengthen profitability to increase resistance to changes in the business environment and toachieve sustainable growth over the long term, and we recognize that the five priority themes are corporate issues that must
be overcome even in a difficult business environment. We will continue to take further steps to strengthen our corporate
foundation and improve our profitability in line with the priority items of G&C 2021.
We are also promoting a variety of reforms to achieve sustainable growth over the next 100 years. In April 2021, weestablished the Sales Division with the aim of improving our relationship with customers and strengthening cooperation
between sales and engineering departments. In addition, in October of the same year, we newly established the Business
Development Strategy Center to establish a system to centrally manage the basic research and practical application phasesof products and technologies. Through these organizational reforms, we will create higher level of synergies, further improve
operational efficiency, and build a solid management foundation.

Corporate Data

19

FY2019We are strengthening our technological capabilities and the human resources that support them to achieve
technological innovation for future growth.
Specifically, we are working to develop outstanding technicians and engineers, as well as global humanresources and IE human resources. To strengthen our technological capabilities, we are working to deepen
our existing technologies, develop high value-added products, and convert to smart factories.

Future issues and measures(Billion yen)

In FY2020, sales declined
from the beginning of theyear due to the spread of
COVID-19. Although demand
showed signs of recovery inthe second half of the fiscal
year, an operating loss wasrecorded due to the worsening of the metal spreadcaused by the sharp rise insteel scrap prices.

Embrace the challenge of innovation

Sustainability

We will promote initiatives to maximize synergies with Ring Techs Co., Ltd. and Asahi Tec
Corporation, which were added to the Group in FY2018.

BusinessGroup
2 Leverage
Synergies

In order to achieve sustainable growth and increase corporate value, we are expanding the Groupʼs strategic product groups and promoting further earnings growth by increasing the ratio of such products. The
ratio of strategic products in FY2019 improved to 45%, +9% compared to FY2018, achieving the medium-term target of 45%. In FY2020, the ratio was 40%, due in part to the spread of COVID-19. In the future,
we will continue to strengthen our technological capabilities and invest in strategy and growth as well.

TOPY Report 2021

20

Chapter3

Business

Steel Business

Value Creation

Along with satisfying customer needsby leveraging our unique technologies,
we contribute to solving environmental
and social problems.

Medium-Term
Management Plan
PolicyWe plan to increase earnings power by further expanding sales of strategic products (such as deformed section steel and TACoil®) and maximizing synergies between Group companies developing the recycling
business.

Operating Officer
in charge of the steel business
General Manager,
Steel Division

Core Competencies

Development of a large 3-ton coil of TACoil®, a bar product for reinforcing concrete, was completed. In addition, we have enhanced andexpanded sales of high added value strategic products such as forklift truck mast rails for overseas customers, and steel parts for tunnel
construction on the Linear Chuo Shinkansen project. Also, in order
to expand and strengthen our recycling business, we introduced anadvanced metal sorting facility at our subsidiary, Akemi Recycling
Center, Ltd., and it started operations from October 2021.

Growth Strategies

Progress in
FY2020Topy＇s Strengths

Katsuyoshi Tanaka

Mast rail materials for forklift trucks

Steel parts for tunnel construction on the Linear Chuo
Shinkansen project

Strengths of the Business

Opportunities and Threats

Opportunities● Global steel demand is expected to grow in the long-● In regard to steel demand in Japan, there is continuing

demand related to civil engineering projects, such asmeasures for building national resilience▌ Expanding sales of mast rail materials for
Threats● Steel demand in Japan is shrinking in the long-term● Protectionism is becoming evident in many countries,and emerging nations are shifting to domestic
production● The price of steel scrap is rising due to increasing

electric furnace steel production in China● Companies are expected to tackle global environmental

issues such as reducing greenhouse gas emissions andrealizing a recycling-based society

21

TOPY Report 2021

Topic
forklift trucks for overseas markets

エコリーフ環境ラベルプログラム

エコリーフ

In 2015, we started selling mast rail materials for forklift trucksタイプⅢ環境宣言 (EPD)
登録番号︓ JR-AJ20009E
for overseas markets, and have been steadily expanding thenumber of customers to which we sell our products, currently トピー工業株式会社
delivering about 10 sizes of products to customers in Korea （TOPY INDUSTRIES, LIMITED）
and China.
In addition, this product was certified for the EcoLeaf Environmental Label Program* in October 2020. We will continue
to respond to the trust of our customers by actively disclosing
the environmental performance of our steel products.

一般社団法人サステナブル経営推進機構
東京都千代田区鍛冶町2-2-1
https://ecoleaf-label.jp

フォークリフト用マスト材(Forklift mast materials）

Corporate Dataterm, driven by infrastructure-related demand in
emerging nations

We are focusing on leveraging product development capabilities toenhance and expand sales of strategic products, as well as making
further improvements to productivity and cost reductions. In order tomaximize the effect of capital investment in the recycling business, wewill contribute to the realization of a recycling-oriented society by promoting the sophistication of recycling and improve profitability.

Sustainability

Our Business Environment

Issues to be
Addressed

Business

In addition to being able to efficiently produce various types of products, such as steel sections and bars forconstruction, rims for automobile and construction machinery components, and deformed section steel for
track shoes and the like, the Group＇s strength is product development capabilities that meet the needs of customers and society. As a result, we have built a broad and stable customer base. Furthermore, our recycling
technologies using electric furnaces and energy saving technologies are also significant strengths.

* A program for disclosing quantitative information about the environmental burden of a productor service over its entire lifecycle, from material procurement through to disposal or recycling

登録番号

算定単位
1t

JR-AJ20009E

適用PCR番号 PA-180000-AJ-03
PCR名

建設用鉄鋼製品（中間財）

公開日

2020年11⽉1⽇

TOPY Report 2021

22

Chapter 3

Business

Automotive and Industrial Machinery Components Business(Wheels for Passenger Vehicles)

Value Creation

Our completed global network,and maximizing synergies as
a comprehensive wheel manufacturer.

Medium-Term
Management Plan
PolicyKoji Nanayama
Operating Officer in charge ofthe automotive and industrial
machinery components business
General Manager, Wheel Division

Progress in
FY2020Topy＇s Strengths

We plan to increase earnings power by optimizing the Group＇s production structure in Japan and strengthening the competitiveness of eachproduction site with a focus on changes in market structure as well as
to advance product development aimed at achieving the next stage of
growth.

Growth Strategies

In the automotive industry, demand in Japan and overseas was sluggish in FY2020 due to the deteriorating market caused by COVID-19.
In this environment, in steel wheels, the company optimized its production system with its subsidiary Ring Techs Co., Ltd., including theconsolidation of production lines in response to declining domestic
demand, while further improving productivity and reducing fixed
costs. In addition, in order to strengthen the supply system in theUS, which is positioned as an important market, we have invested in
the renewal of production facilities at Topy America, Inc. and started
operation of the new line in October 2020. In the area of aluminum
wheels, by maximizing the Group＇s production capacity, such as bystrengthening the production complementary system in cooperation
with subsidiaries, we have been able to expand sales and receive
new orders for high value-added products, which have resulted insteady synergies.

Core Competencies
Strengths of the Business

Opportunities and Threats

Opportunities● As a result of economic growth worldwide, global● Domestic automobile demand is contracting due tofactors such as Japan＇s declining population.
● Protectionism is becoming evident around the world● The automotive industry is advancing technologicalinnovation such as CASE*1 and MaaS*2● Production adjustment by automobile manufacturers

due to economic trends and difficulty in procuring parts▌Renewal of the production facilities in the US
To strengthen the supply system of steel wheels for passenger
cars in the US, the production facilities of the Kentucky Plant
of Topy America, Inc. were renewed. With the aim of becoming
the world＇s No. 1 wheel factory, we have dramatically improved
our production capacity by upgrading the rim assembly line
and painting line, and by introducing energy- and labor-saving
equipment and predictive maintenance systems using IoT. In
this manner, the plant has been reborn as an environmentallyfriendly factory where workers can demonstrate high performance.

Corporate Data

automobile demand is expected to expand in themedium to long term, particularly in emerging nations

Threats

Topic

Sustainability

Our Business Environment

Issues to be
Addressed

Business

The Group has built a global supply system for steel wheels for passenger vehicles by establishing locations inJapan, the U.S., Mexico, China, and India and forming a strategic alliance with MW Italia S.R.L. in Europe. We
are also highly regarded for our high-quality designs and lightweight technology for aluminum wheels. These
strengths have resulted in a broad sales network comprising major manufacturers of complete automobiles
worldwide.

We will optimize the Group＇s internal production system for passenger
car steel wheels and further improve productivity to continue to improve
costs and accelerate structural reforms. In North America, where demand for steel wheels is high, we will strive to maximize the effect of ourinvestment in Topy America, Inc. to promote sales expansion and improve profitability. As for aluminum wheels, in addition to the establishment of an optimal production system, we will promote the integrationof functions with Asahi Tec Corporation in all aspects, including productdevelopment, purchasing, and sales, and promote sales expansion not
only in Japan but also in North America and Europe by utilizing our sales
network for steel wheels.

*1 Connected, Autonomous, Shared/Service, Electric*2 Mobility as a Service

23

TOPY Report 2021

TOPY Report 2021

24

Chapter 3

Business

Automotive and Industrial Machinery Components Business(Commercial and Off the Road Wheels)

Value Creation

Supplying products and services that
anticipate the needs of society andcustomers all over the world throughoutstanding technological capabilities.

Medium-Term
Management Plan
PolicyTopy＇s Strengths

We plan to increase earnings power by restructuring domestic production
systems for the commercial and off the road wheels business. We are also
advancing product development and providing services that anticipate theneeds of society and customers. In the off the road wheels business, weare strengthening frameworks for expanding sales in overseas markets andenhancing our inspections and repair business.

Masahiro Abe
Operating Officer in charge ofthe automotive and industrial
machinery components business
Commercial and Off
the Road Wheel Division

Progress in
FY2020Strengths of the Business● Global demand for commercial vehicles is expected toThreats● Commercial vehicle production in Japan is decreasing

due to a decline in domestic demand and a shift tolocal production overseas● Global demand for mining machinery is expected to

grow in the long-term
Demand is increasing in copper mines, especially withthe shift to EVs in automobiles● Global demand for mining machinery is expected to

grow in the long-term● Decline in mining equipment production due to reduced

demand for fossil fuels (coal) to achieve a decarbonizedsociety● Restrictions on ocean transport due to global container

shortages and rising ocean transport costs

In response to diversifying customer needs in the field ofwheels for commercial vehicles, we have developed Japan＇s
first high-luminance metallic color wheel with a three-layer
coating structure, consisting of a base coat, colored coating
and clear coating, under the theme of joy of selection, joy ofriding and joy of seeing. The high-intensity metallic color wheelis the first wheel in Japan with a three-layer coating structure
for commercial vehicles, after satisfying the standards forcoating film thickness at the fastening area with the vehicle. In
addition to achieving a glossy appearance that was previously
unattainable, the film thickness effect and the clear coating
effect on the outermost surface have improved corrosion resistance.

▲ Purple▲ Dark blue

▲ Green25

TOPY Report 2021

Corporate Data

grow in the long-term▌Development of the first clear-coatedcommercial vehicle wheels in Japan

Opportunities and Threats

Opportunities

Topic
Sustainability

Our Business Environment

Issues to be
Addressed

In order to complete the structural reform of the commercial wheelbusiness, we will rebuild the domestic production system and optimize
the product mix between domestic and Indonesian production bases
to strengthen profitability. In addition to expanding sales of high-luminance metallic color wheels, we will also work to expand our strategic
products by strengthening development of new products that anticipate customer needs.
In the off the road wheels business, we will continue to promote thereinforcement of the inspection and repair business and expand thelineup of new products that contribute to improved work efficiency andsafety for customers.

Business

For wheels for commercial vehicles, we are producing lightweight wheels using deformed section steel produced by the steel business as a material and our site in Indonesia means we can respond to local procurement needs of manufacturers of complete automobiles. For wheels for mining vehicles, we are realizing qualitythat can withstand harsh conditions at mines all over the world and producing SGOR®, which is one of thelargest wheels in the world with a rim diameter of 63 inches (approximately 1.6 meters) and a weight of nearly
three tons. These strengths mean we have an overwhelming share of the markets for wheels for commercial
vehicles and mining vehicles.

Growth Strategies

Core Competencies

In FY2020, although the commercial and off the road wheels business was severely impacted by the restrictions on economic activity
caused by COVID-19, the commercial vehicle wheel business rebuilt
its domestic production system and began structural reforms tostrengthen profitability. In addition, we developed and started sellingthe first high-luminance metallic color wheels with clear coating inJapan, which pursued high design quality for the general market.
In the off the road wheels business, the company made capital
investments in North America to strengthen its inspection and repair
business.

▲ Blue▲ GoldTOPY Report 2021

26

Chapter 3

Business

Automotive and Industrial Machinery Components Business(Undercarriage Components forConstruction Machinery)Medium-Term
Management Plan
PolicyWe aim to achieve stable earnings and growth supported by the trust we have earned over theyears from construction machinery manufacturers by implementing the following initiatives.
・We will improve our readiness for the supplemental components market as a strategic partner
for construction machinery manufacturers.
・With the goal of sustainable growth, we will continue to plan and build a supply system toserve international growth markets.
・We will identify customer needs and enhance our system for developing new products andtechnologies in order to further improve customer satisfaction.

Topy＇s Strengths

Shuichi Tachibana

Value Creation

Achieve stable earnings and growth as
a leading company in undercarriage
components for construction machinery.

Operating Officer in charge ofthe automotive and industrial
machinery components business
General Manager, Undercarriage
Components Division

Issues to be
Addressed

Strengths of the Business

Topic
Sustainability

The undercarriage components for construction machinery business has gained high levels of trust from
customers by involving them in the design process from the development stage and supplying high quality
undercarriage components that meet their needs. We have a leading share of the global market for hydraulicexcavator tracks and its component parts, track shoes, and have established a global supply structure that
includes North America, China, and Indonesia.
We have also built an efficient production system that integrates processes from materials to finished products.

・We will develop new products based on customer needs and upgrade our production facilities to play a role as a strategic partner andimprove customer satisfaction.
・We will continue to study further ways to strengthen our ability to respond to the supply market and supply systems for growth markets
around the world.

BusinessCore Competencies

Growth Strategies

Progress in
FY2020・We focused on the development of reinforced links for mini excavators to meet market and customer needs. We are also conducting
field surveys on the use of crawlers at the operating sites of large
construction machinery, which will lead to the development of
next-generation models.
・We have worked to further improve its cost competitiveness by expanding procurement sources for materials and components.

▌Introduction of automatic defect detection
equipment

Awareness of business environment
Opportunities and Threats● Demand for construction equipment is growing

worldwide● Demand for smaller product models is expected to riseas emerging nations become increasingly urbanized

Threats● Soaring resource prices and marine transportation

costs

Corporate Data

Opportunities

Although the Toyohashi Machinery Manufacturing Division used
to visually inspect products for defects, it has now introduced
an automatic defect detection system to reduce the variabilityof visual inspections and man-hours. This device can detect
defects by irradiating a laser beam from a sensor to an object and measuring the distance to the object using the angle
change of the reflected light. We will continue to improve theaccuracy of our visual inspection to enhance customer satisfaction.

● Emergence of low-priced Chinese construction

equipment manufacturers
Defect in the object (actual object)

27

TOPY Report 2021

TOPY Report 2021

28

Chapter 3

Business

Business Development Area

From smart factory construction to DX
Smart factory initiatives
Value Creation

Becoming a global niche leader ininnovative technologies

The company has built a smart factory (below, ＂SF＂) that collects real-time information on production, quality, and facility operation, centralizes the management of big data, and makes it visible in order to make improvements more advanced and faster.
(1) Continued promotion of energy conservation activities through company-wide deployment of the energy visualization system(2) Promotion of manufacturing reform through construction and demonstration tests of SF model lines (production, efficiency,
and equipment management)
Currently, we are promoting the upgrading to the world of DX (digital transformation) through means such as speeding up
management decisions by linking with ERP.

Smart factoryTopyʼs Strengths

Degree of digital utilization

Corporate transformation
through DX
・Smart line (process innovation)・Continued introduction of advanced
technologies (AI, etc.)
・Big data collaboration, etc.
Considerationof introduction

ERP
integrated businesspackage

Full-scale introduction

Management
layer

Data centralizationcommon platform

Strengths of the Business

Strengths of the Business

Topy Mica, which is refined from natural minerals,
the main raw material, is well regarded by domestic
and overseas cosmetic manufacturers for its safety,
high purity, and stable quality without impurities.
It is also highly evaluated for its high barrier
performance as a raw material for food packaging
materials.

The robots we manufacture are equipped withrunning functions that can run on steep stairs andrough roads of buildings, and underwater runningand swimming functions that can run stably not
only on land but also in water.

Visualization ofelectric power

Industry 4.0
Society 5.0
2015

On-site layer

DX index
DX certification system

2016

2017

2018

2019

2020

2021

2022

2023

2025〜
(Fiscal year)
Digitalization trend

Final target

Level 6

・Totaloptimizationof factory
production

Coordination and cooperation
Level 5

tion

ova

Inn

Foreseeing the future

・Forecasting simulation

Level 4
Identifying and addressing problems

Controlling the flow

・Automation of production, maintenance, and quality
assurance processes

Level 2

FY2021Connecting

Visualization

・Identifying and addressing bottlenecks

DX

Level 3

Corporate DataENYLITE is a robot that can safely and reliably enter narrow or
dangerous areas where it is difficult for people to enter or exit,
and can survey every nook and cranny, and it has been used
to survey and inspect the effects of flooding under the floor ofhouses in the aftermath of torrential rains. The undercarriage belt
developed by the company makes full use of the technology of
crawler plates and crawler belts used for construction machinery parts, and has higher running performance on uneven terrainsuch as rubble than other robots with moving mechanisms.

2024

Sustainability

Together with KOSÉ Corporation, we have developed ahigh-quality, high-purity pearl agent* that has a color structure
similar to that of bare skin and can naturally cover blemishes,dark circles and other color problems. Through this joint development, we were able to solve the problem of the unnatural
finish of conventional concealers by providing a pearling agent
with natural color and texture that matches KOSÉ Corporation＇s concealing theory and utilizes our unique mica manufacturing technology.

Maturity level

Topic

S

n

ctio

stru

on
Fc

・Automatic calculation of energy intensity by lot

・Visualization of operation status, production results, efficiency, and energy

Control data coordination

TOPY Report 2021

Visualization of energy

By developing SF into DX and utilizing manufacturing data, we will promote DX with the aim of creating digital innovation that is
not an extension of the past. The current maturity level of our company＇s DX is level 2, which is to connect and utilize data, andwe have completed building the foundation for DX.
In the future, we will take actions from individual optimization to overall optimization by analyzing, evaluating, and predictingchanges in production and facility operation information, etc., and will proceed with systematic construction, aiming for level 6
data coordination and cooperation while reaping small effects.

Level 129

Company-wide deployment of energy visualization
Participation by all Energy Conservation Meister

The companyʼs concept of DX

Topic* Pearling agent: This is a material that can produce a pearl-like luster that changes color
depending on the angle, and is mainly used to create textures in makeup products.

Preparation forbuilding smart factory

Administration
layer

BusinessCore Competencies

Model line demonstration test
Performance and operation management

Establishmentof smart factory
construction team

RobotsCore Competencies

Quality, equipment,
management system

Growth Strategies

Mica

Measurement and Control Technology Research Group
Exploration of advanced technologies such as AI androbotics

Individual optimization

Overall optimization
Data coordination level

Inspection of flooded houses under floor in heavy rain disaster

TOPY Report 2021

30

Chapter

4

Sustainability

Sustainability Initiatives of the Topy Industries Group

Customers

Local communities

Loop of trust

Loop of symbiosis
As acorporate
citizen

Evaluation
Trust

Corporate Basic Philosophy of the Topy Industries Group【The Topy Industries Group Corporate Basic Philosophy】
Win the trust and respect of society through the continuance and development of
the Topy Industries Group and the execution of oneʼs duty as a public institution.

【The Topy Industries Group Corporate Code of Conduct】− To win the trust and respect of society −Sense offellowship
Trust

Under the Corporate Philosophy, the management and employees of the Topy Industries Group shall strictly abide by all
applicable laws and ordinances, the spirit reflected, and the Corporate Code of Conduct, while accepting full corporatesocial responsibility and fostering an open-minded and creative corporate culture.
Article 6 Technology and know-how innovation

Article 1 For the benefit of customers
Produce and supply, high-quality and safety-oriented merchandise andservice to gain customers and consumer confidence.

Article 2 For the benefit of society

Shareholders andinvestors
Information
disclosure
Relations

Fulfill responsibilities as a member of the local community, actively promote communication, and engender a feeling of fellowship
for achieving growth together.

For thebenefit ofcustomers

Employees
For thebenefit ofsociety

Responsibilities
of seniormanagement

Loop of expectations
Sustainable
development
Return of
profits

Group Basic
Philosophy

Loop of growth
Human
resource
development
Safety andhealthFor thebenefit of
employees

Skill
improvement
Enthusiasm

Article 3 For the benefit of employees
Respect the individual character and personality of employees, and provide safe-working environments allowing them to work with enthusiasm,
and attain fulfilling lives.

Article 4 With the world
Pay due respect to different cultures and customs of all countries andregions, and perform business activities to contribute to the development and well-being of local communities.

Article 5 With the environment

Article 7 Fairness in corporate activities
Operate business in a fair and transparent manner under free competition and appropriately keep an armʼs length distance from politics andadministrative agencies.

Article 8 Responsibilities of top management
1. Top management shall make example by leadership and inform thestrict adherence to the Code of Conduct and ensure the complianceof the corporate ethics effectively administrating its managements.
2. If and when any of the Code of Conduct is violated, management
shall demonstrate an indomitable determination to personally solve
the issue by launching an investigation and shall take actions toprevent the recurrence of such incidents. At the same time, top management shall make full disclosure within and outside the company
promptly and precisely, and, upon determining the source of competence and responsibility, impose strict disciplinary action against those
held responsible.

Realize that a sensible approach to environmental conservation is essential to the existence and activities of the company, and behave voluntarily and actively.

Business

Fair
corporate
activities

1. Communicate widely with society as well as shareholders and actively disclose corporate information fairly and appropriately. Cooperatewith local communities and actively work on social contribution activities as being a good corporate citizen.
2. Oppose resolutely any anti-social forces and parties posing a menace to social orders and security.

Seek widely for knowledge and information both domestically and internationally, and continue the innovation of technology and knowhow byrefining distinctive technologies and professional competence.

▌ESG Initiatives of the Topy Industries Group
Innovation in Group Code of Conduct
technology
and knowhow

Respond to shareholdersʼ and investorsʼ
expectations toward the Topy Industries
Group through sustainable business growthand highly-transparent corporate information disclosure, and establish mutually
beneficial relationships.

Fully consider the growth and safety of
employees working in the Topy Industries
Group and make the most of their skills andenthusiasm. Build a relationship to ensurethat both employees and the corporation
can grow.

Environment andtechnologies

Environmental andsocial issues

Business opportunities

Value
Trust

Technologicalstrength
Analysis andmeasurement

E

Environmentally-friendly product development

Environmental
philosophy
Basic policy for theenvironment

Environmental
impactreduction

Recycling business

Chemical management
Waste reduction initiatives

Skilled worker shortages

S

Global warming reduction initiatives

Water and resource depletion

Loop of recycling
Valuablenaturalresources

Response to risks andregulations
Recycling

Acceleration of global warming

Air pollution

Loop of collaboration

Products enhancing work efficiency

Tightening of laws andregulations in countries

Promotion of responsible procurement
Supplying safe, secure products (quality assurance)

System for promoting
environmental activities

31

TOPY Report 2021

Proactively carry out initiatives for recycling
precious natural resources as a company
that is committed to recycling, and work to
reduce environmental burden in everyday
life.

Supporting
systems

Supply chain
management

E

Corporate Data

Local economic development

Make use of technologies and values
possessed by both parties through fairand equitable dealings, and establish acollaborative relationship across the entire
value chain by actively providing analysis,
measuring, and other such technologies.

Corresponding
SDGs

Topy Industriesʼ approach

Sustainability

Business partners

Working inharmony
with theenvironment

Working inharmony
with theworld

Growth Strategies

Supply safe and high quality products tocustomers, establish an environment where
customers evaluations of our products arerepeatedly fed back to the production site,and build solid trust.

Topyʼs Strengths

Quality
SafetyValue Creation

At the Topy Industries Group, we see our relationship with stakeholders as shown below and aim to achieve sustainable growth by deepening mutual understanding through the six loops.

Local job creation

Small group activities

Diversity

Strengthening
governance

Global management

Communication Facilitation Committee

Recruitment anddevelopment of globallycompetitive human resources

Risk management system
BCP (Business Continuity Plan)

Compliance

S

G

TOPY Report 2021

32

Chapter 4

Sustainability

Environmental Initiatives

Environmental Initiatives

Environmental Philosophy and Basic Environmental Policy

Reducing environmental impact through products and services

Environmental
Philosophy

Development of environmentally friendly products

We believe it is our duty to preserve a rich and beautiful world for future generations to enjoy. In partnershipand solidarity with local communities, we will work to promote continuous improvement in everything we
make from materials to finished products to lay the foundation for the sustainable development of society.

As part of its duty as a corporate citizen, Topy Industries ranks
continuous improvement under the ISO 14001 environmental
management system as among its top management priorities.
Topy Industries has therefore established and implemented thefollowing policies.

Environmental conservation structure(Topy Industries)

President

１. Complying with the Law
Topy Industries will comply with all environmental regulations,
protocols, and agreements in its manufacturing activities.

Executive Management
Meeting

Central Environment
Committee

３. Reducing Our Environmental Footprint
In order to bolster environmental management, Topy Industries will undertake cost-conscious efforts to reduce its
environmental footprint by saving energy, lowering greenhouse gas emissions, using fewer resources, and recycling.

General Manager of General
Affairs Dept.
General Manager ofEngineering Administration
Department
Executive Chairman of Labor
Union

Business

Produc
製品図
drawing

Ultra-large diameter wheels for mining
equipment

コルゲート材rim
CorrugatedEnvironment and Disaster
Prevention Sub-Committee

Factory Environment
Committee

Environment staff of each factory

ISO 14001
certification obtained
Apr. 1999

Toyokawa

Nov. 1998

Ayase

Nov. 1998

Kanagawa

Jun. 1999

Group companies

Topy Fasteners, Ltd.

Sep. 2001

Kyushu Wheel Kogyo, Ltd.

Jul. 1999

Tojitsu Co., Ltd.

Nov. 2005

Akemi Recycling Center, Ltd.

Mar. 2006

Ring Techs Co., Ltd.

Aug. 2002

Hokuetsu Metal Co., Ltd.

Jan. 2005

An industry first for chromium-free processing
Aluminum alloy wheels have long been surface-treated toachieve long-term corrosion resistance and anti-discoloring,and treatment with chromium was thought to be essential toconfer anti-corrosion properties. However, in view of European
environmental regulations, Japanese automobile manufacturers have turned their attention to surface treatments that avoid
the use of heavy metals such as
chromium. Topy Industries has
spent substantial time on the
study and technological development of alternative materials to replace chromium, and is the first in
the industry to succeed in creatinga chromium-free process.

Corporate Data

Topy Industries

Toyohashi

Non-chrome pre-treatment of aluminum
wheel painting

The worldʼs largest wheel contributing to efficient mining
operations and hauling
SGOR® (Super Giant Off-the-Road Rim) wheels are ultra-large
diameter wheels that we have developed for mining equipmentused at large mines across the world. Currently, the largest
wheels available have rim diameter of 63 inches (about 1.6
meters), are 44 inches (about 1.1 meters) wide, and weigh as
much as 2.83 tons each, making them about five times the diameter of ordinary passenger car wheels. SGOR® wheels meetthe demanding requirements of mining applications in terms offunctionality and hauling capacity, and contribute to reducing
environmental burden.

Sustainability▌ISO 14001 certification

TOPY Report 2021

Overall thickness distribution was redesigned

Engineering Administration Dept.

ISO 14001 Certification Status (Topy Industries, Group companies)

33

Contributes to a significant reduction in environmental
impactTracks used in the undercarriage of construction equipment
are painted to prevent rust. While solvent-based paints havebeen used traditionally, we switched to water-soluble paints
the year before last when a new crawler assembly line wasbuilt at Toyohashi Works. This has greatly reduced emissionsof VOC (volatile organic compounds). In addition, the works
has achieved integrated production of tracks from raw materials to finished products, significantly reducing transportation
volume and contributing to a reduction in CO2 emissions.

Environment and Disaster
Prevention Office

５. Raising Environmental Awareness and Preserving theEnvironment at the Global Level
Topy Industries will promote understanding of its environmental policy and raise environmental conservation awareness through environmental training and enrichment for its
employees.

Since the Wheel Division (Toyokawa and Ayase factories)
launched a program to acquire ISO 14001 certification topromote environmental conservation activities in February
1998, all of the manufacturing facilities of Topy Industries haveacquired ISO 14001 certification, and Group companies havealso acquired certification.
Proper maintenance of our environmental management system has been confirmed through regular audits after obtaining
this certification, and we continue to carry out environmentally-friendly production activities by promoting scheduled andsystematic environmental initiatives in line with our Basic Environmental Policy.

Helping to reduce CO2 emissions (life cycle/scope 3)
Topy Industries has developed ISO-compliant wheels, which
are about 15% lighter than corresponding conventional wheels,by combining an ECOD-processed disc with a corrugated
rim created with the companyʼs proprietary weight reduction
technology. The corrugated rim is made from a rim section ofan uneven thickness and corrugated tire-mounting surface,giving it optimal thickness distribution when roll-formed. The
corrugated rim is a product of our integrated production system, which enabled us to combine our proprietary hot-rollingsteelmaking technologies (One-piece Cycle) with wheel analysis and design technologies. The ECOD disc is formed throughcold spinning (rocking die forming) tubes made of steel plate.
This enables a thinner, lighter disc while also ensuring the required strength. These lightweight wheels contribute to efforts
to prevent global warming by reducing CO2 emissions during
material production by reducing the amount of material used,
and also by reducing CO2 emissions through improved fuel efficiency when driving trucks and buses.

General Managers of Factories

４. Developing Environmentally Conscious Products
Topy Industries will develop environmentally-friendly products at every stage in their life cycle, from design and production to use and disposal.

６. Conserving the Environment in Overseas Business Activities
Topy Industries will remain mindful of its impact on local
environments and implement measures in accordance with
the needs of local communities.

Director in charge ofEngineering Administration
Department▌Water-soluble coated tracks

Growth Strategies

２. Working to Save Energy and Prevent Global Warming
In all its manufacturing processes, Topy Industries will proactively strive to save energy and reduce greenhouse gases.

▌Lightweight wheels

Topyʼs Strengths【Basic Environmental Policy】

Value Creation

Environmental Management

TOPY Report 2021

34

Chapter 4

Sustainability

Environmental Initiatives

Environmental Risk Response
Biodiversity Preservation▌Reduction of CO2 emissions▌Biodiversity initiatives

CO2 emissions from energy sources(Topy Industries + Domestic Group companies)
Domestic industry

Domestic Group companies

1,500

1,000

1,038

1,059

1,023

1,040

1,062

500

526

520

482

2016

2017

2018

2019

0

480
2020
(Fiscal year)

To conserve water resources, Topy Industries is working to
reduce water consumption by circulating and reusing coolingwater at its factories. Also, to prevent environmental pollution,(Topy Industries + Domestic Group companies)
Well water, etc.
Clean waterIndustrial water(Thousand m3)
3,000
2,500
2,000
1,500

836

919

940

183

236

1,515

2016

843

749

258

210

201

1,465

1,393

1,393

1,395

2017

2018

2019

2020
(Fiscal year)

1,000
500
0

Chemical Management
Substance emissions and management
under the PRTR Act
In accordance with the PRTR Act (the Pollutant Release andTransfer Register Act; the Act on Confirmation, etc. of Release
Amounts of Specific Chemical Substances in the Environment
and Promotion of Improvements to the Management thereof),business entities that handle chemical substances are obliged
to manage and report to administrative offices the amount ofenvironmental emissions and transfers of chemical substances that are hazardous to humans and ecosystems at each of
their business sites. Based on this system, we submit annual
reports to the respective regulatory bodies while also using
this process to continuously manage chemical substance andemission reductions. FY2018 saw a reduction over FY2017 asplanned, and further systematic reductions will be made.

▌Air pollution prevention initiatives
As a proactive approach for the prevention of air pollution,
Topy Industries voluntarily measures VOC concentrations fromvolatile organic compounds (VOC) generating facilities at its
four major factories while also reviewing actions items related
to production technologies for the reduction of emissions.
Total amounts of releases and transfers of VOC(Topy Industries + Domestic Group companies)(Tons)
350
300
250
200
150

Total amounts of environmental releases andtransfers of substances regulated under the PRTR Act

Sustainability

507▌Water resource conservation initiatives

Water consumption

Business(thousand ton-CO2)
2,000

The business and manufacturing operations of Topy Industries
do not involve activities such as deforestation and other activities that may disrupt the ecosystem. We recognize that biodiversity conservation and global warming prevention are essential for a sustainable society. As a part of efforts to conserve
biodiversity and forest resources in developing countries, we
encourage the use of paper made from domestically-produced
materials and recycled paper.

Growth Strategies

Topy Industries is a company that consumes a large amount ofenergy, and because of its social responsibility, is participatingin Challenge Zero, a new project launched by the Japan Business Federation (Keidanren) in FY2019. Challenge Zero is an
initiative by Keidanren in collaboration with the Japanese government to address climate change and encourage innovative
actions to achieve a decarbonized society. Topy Industries is
not only addressing Scope 1 + 2 by thoroughly conserving energy in the production process through the Energy Conservation Meister Program, but also addressing the life cycle (Scope3) by reducing energy consumption in product transportation
throughout the value chain and improving fuel efficiency by
reducing wheel weight, as it promotes initiatives to ensure
strategic responses by the company as a whole, including
technology, sales, and production management. We will further
strengthen our activities and take on the challenge of achievingcarbon neutrality in the future.

we are using treatment facilities to purify our drainage to within
environmental regulatory limits.

Topyʼs Strengths

275

281

310

288
221

100

(Topy Industries + Domestic Group companies)

50(Tons)
700

0

600

2016

2017

2018

2019

2020
(Fiscal year)

Corporate Data

Every Topy Industries factory undertakes a range of improvement activities appropriate to the products and production
equipment it handles to achieve the CO2 reduction target outlined in the Action Plan for Low Carbon Society stipulated by
the Japan Business Federation (JBF), and works to reduce CO2
emissions associated with energy consumption through energy
conservation activities. In FY2020, CO2 emissions (Scope 1 +2) from energy sources at Topy Industries were 480,000 tons,
and the total for Topy Industries and domestic Group companies was 1,542,000 tons. The amount of CO2 emitted by Topy
Industries is regularly reported to the relevant government authorities through data that includes emissions from its offices
and emissions from energy management factories designatedin the Revised Act on the Rational Use of Energy, which cameinto effect in FY2009. With regard to the Ayase Factory and
the Kanagawa Factory in Kanagawa Prefecture, we submit ourplans for counteracting global warming in our business activities in accordance with Kanagawa Prefectureʼs ordinance topromote measures against global warming. In FY2010, we began reporting the actual CO2 emissions and improvements that
we have made in accordance with our reduction plan. For the
Toyohashi Works and the Toyokawa Factory in Aichi Prefecture,
we submit our plans to tackle global warming in accordancewith Aichi Prefectureʼs Law Concerning the Promotion of the
Measures to Cope with Global Warming.
To further promote energy saving, Topy Industries has implemented the Energy Conservation Meister Program at allcompanies since FY2018. Energy Conservation Meisters propose and give advice on tasks to all employees up to factory
manager level at their production sites, while also promoting
energy-saving activities throughout the site. The Kanagawa
Factory, which was the first site to implement the Energy
Conservation Meister Program, received the Chairman of theEnergy Conservation Center, Japan Award in the Best PracticeCategory of the Energy Conservation Grand Prize for FY2017,
which is hosted by the Energy Conservation Center, Japan andsponsored by the Ministry of Economy, Trade and Industry,
while the Energy Conservation Meister who led the way wasawarded the Chairmanʼs Prize for Meritorious Achievementsof the Kanto District Electric Use Rationalization Committee in
FY2019.
Furthermore, we are strengthening our efforts to improveenergy conservation by introducing an energy visualization system to each of our manufacturing plants in October 2020.

Taking on the challenge of achieving
a decarbonized society

Value Creation

Initiatives for Preventing Global Warming

500
400

Explanation of terms
Scope 1: Direct emissions of greenhouse gases by the company itself (fuel combustion, industrial processes)

200

Scope 2: Indirect emissions from the use of electricity, heat and steam supplied by other companies

100

Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions of other companies related to the company s activities)

35

300

TOPY Report 2021

0

522

546

565

2015

2016

2017

611

620
501

2018

2019

2020
(Fiscal year)

TOPY Report 2021

36

Chapter 4

Sustainability

Social Responsibility

Relationship with Customers

Environmental Risk Response▌Waste reduction and recycling

Effective utilization of electric furnace slag

Final disposal

Effluent(Tons)
300,000

274,176

262,724(Tons)
120,000

261,093

250,000

245,953

250,241

110,000
100,000

150,000

90,000100,000

80,00050,000068,08062,28765,54167,752

66,08370,00060,000

2016

2017

2018

2019

2020
（Fiscal year）

2. Focus on building quality in the design and development stages, and stabilize product quality while improving reliability
3. Recognize the importance of education and training and enhance the quality awareness of all employees at the company
4. Recognize that quality defects are caused by multiple factors and promptly investigate the true causes of problems to makesubstantial improvements

Quality policy for FY2020 to 2021

Quality Management Structure
Formulate president's quality policy
President

Review factory quality

Issue instructions in response tocritical quality problems

Central quality committee

least once
President's quality review At
per year

Creating quality from the customerʼs perspective togain trust and empathy for the new Topy Industries!

Use genchi genbutsu to verify the
degree to which the president's quality
policy has been implemented

̶ Strengthening the quality assurance system to achieve zerocomplaints and become a partner for customers for a new era! ̶

Two times
per year• Report and follow up on quality policy
implementation and quality costtransitioning (regular meetings)• Conduct audits to verify the effects ofmeasures taken against critical quality
issues by the chairperson and vicechairperson of the committee(extraordinary meetings)
Committee members:
Chairperson, vice chairperson,and other members

Engineering Administration Dept.

Formulate division quality policy
Conduct division quality audit
Division head
personnel with
Conduct Group company quality audit
overall responsibility
for quality
Work as a member of central quality committee

Judge the necessity of reporting quality issues
to the president at headquarters• Central quality committee office• Office for president's quality review• Office for quality divisional managers meeting• Support reporting on critical quality issues to thepresident and the risk management committee• Participate as auditing members in division quality
audits and Group company quality audits

Managing rank (responsibility and authority)

Business

200,000

Toyohashi Works has deployed a slag cooling facility andcrushing facility to separate, treat, process, and recycle oxidized slag generated within the electric furnace during the refining process, and has reduced the slag discharged from theladle after continuous casting subsequent to the refinery process. In April 2013, the factory obtained “JIS A 5011-4: Slagaggregate for concrete Part 4: Electric arc furnace oxidizing
slag aggregate” certification. In December 2013, the factoryacquired another certificate for the Revised JIS A 5011-4 andstarted to produce and sell electric furnace oxidized slag aggregate for concrete.
Oxidized slag aggregate has a larger specific gravity thannatural materials such as sand and gravel which have traditionally been used as concrete aggregate materials, and wetherefore expect slag to be used for heavy concrete aggregate
such as wave dissipation blocks. Increasing sales of oxidizedslag aggregate for concrete reduces the extraction of natural
aggregate materials and thus mitigates its impact on the natural environment while also curbing energy consumption. We
will continue working to reduce our environmental load by reviewing our business activities.

1. Always anticipate the expectations and needs of customers ahead of time, react to their requirements promptly and precisely,
and continue to introduce and deliver quality products and services that satisfy customers

Growth Strategies

Industrial waste emissions(Topy Industries + Domestic Group companies)(electric furnace oxidized slag aggregate)

Topy Industries is committed to making customers its first priority and strives to contribute to society
by delivering safe and high-quality products and services that always satisfy customers, while continuously improving the effectiveness of its quality management system (QMS).

Topyʼs Strengths

A part of the metal scrap (steel) generated during production
activities is reused directly in-house as a raw material in electric
furnaces. As for other waste, we are engaged in reducing final
waste disposal volumes through re-resourcing efforts such ascollecting scrap iron and collecting zinc from melted dust. Oxidized slag generated from steelmaking is recycled and reusedfor civil engineering and concrete materials.
In FY2020, the total amount of industrial waste generated byTopy Industries and domestic Group companies was 250,000
tons, and the final disposal amount was 66,000 tons.
We continue to promote recycling and reduce final disposal
volumes of industrial waste by expanding and improving our
3R (reuse, reduce, recycle) activities.

Quality Assurance
Philosophy

Value Creation

Initiatives for Reducing Waste (Topy Industries)

Mechanism(Committee, motivation boosting, etc.)

Effective utilization of electric furnace slag
(electric furnace slag for recycled road-bed material)

Approximately
four times per year

Enhance the system and actively
exchange information• Quality assurance division managers• Engineering Administration Dept.

Topic

Factory generalmanager

Formulate quality policy for factoryManagement in QMS

Implement PDCA based on ISO 9001 Quality
Management System

Group company
president

Formulate president's quality policy
Management in QMS

In accordancewith current
ISO 9001

Implement PDCA based on ISO 9001 Quality
Management System

Sustainability

The electric furnace slag for recycled road-bed materials (product name: ECO StoneTM) is a recycled roadbed material madeby crushing, sheaving, and mixing oxidized slag and reduced
slag. The ECO StoneTM obtained a license on August 31, 2014
under the Aichi Prefecture Recycle Materials Evaluation System (pet name: AIKURU), which started in 2002. The license
certifies that the materials meet quality, performance, and environmental safety requirements, and that they can be used for
public works (Certificate Number: 2)-201).
ECO StoneTM passes environmental standards by a wide
margin in terms of elution and inclusion of hazardous materials.

Quality division
managers meeting

Received the Gold award in the EcoVadis (France) CSR rating for the second consecutive year

For the second year in a row, the Toyohashi Plant received the Gold award in the sustainability survey conducted by
EcoVadis, an international supply chain evaluation organization, placing it among the top 6% of approximately 65,000
companies surveyed worldwide. EcoVadisʼs CSR rating is a comprehensive assessment in four areas: environment,labor and human rights, ethics, and sustainable procurement. We received particularly high marks in the areas of theenvironment and sustainable procurement.

Topic

Recognition from a customer Received the highest level of SQEP certification from Caterpillar (US) in two categories
Corporate Data

We have received the highest level of platinum certification in the two categories of wheels for mining equipment and undercarriage partsfor construction equipment in the 2020 SQEP* (Supplier Quality Enhancement Process) of Caterpillar Inc. of the US, for meeting high standards in quality, production, delivery and other requirements. This is the ninth consecutive year
for the wheels for mining equipment category, and the second consecutive year for undercarriage
parts for construction equipment. Very few companies have received platinum certification for
more than nine consecutive years, and we consider it a prestigious certification. In addition, we
have been honored by Dongfeng Nissan and other companies as an excellent automotive wheel
supplier.
* SQEP: Supplier Quality Excellence Process

37

TOPY Report 2021

TOPY Report 2021

38

Chapter 4

Sustainability

Social Responsibility

Relationship with Society

TACoil®
deformed reinforcing bars

Underwater Anie is a robot that has been developed not only
to contribute to solving the problems of worker safety andmanpower shortage in periodic cleaning and inspection of water distribution ponds and other facilities, but also to consider
the hygiene of water quality.

（1）Product name : TACoil®

（1）Product name : Underwater Anie

（2）Sizes : D10, D13, D16（2）Features:（3) Weight: 2 tons, 3 tons

NC processor

39

TOPY Report 2021

Exterior view of water
distribution pond

Environmental conservation activities in cooperation
with local communities
Our Toyohashi, Toyokawa, Ayase, and Kanagawa manufacturing plants are working together with local communities onenvironmental conservation activities. In FY2020, although allenvironmental conservation activities were cancelled due tothe spread of COVID-19, we will continue to actively engage inactivities in cooperation with local communities.

Corporate Data

Examples of a TACoil® processed with an NC processor

Cleaning inside the tank

Sustainability

Densely rolled compact coil is drawn and put into
the NC processor

Career education for elementary, junior high, and highschool students
Our Head Office accepts junior high school students from allover Japan for company visits as part of the career education
support activities conducted by the NPO School Support Center. In addition, at the Toyohashi Works, we made visits to local
junior high schools in Toyohashi City as part of a career education program sponsored by
the Toyohashi Chamber ofCommerce and Industry to
introduce the history andbusiness of the company
and to teach the students
about the appeal of steel.
In addition, each plant
accepts factory tours fromlocal elementary and juniorhigh schools. It has been
well received as a valuable
opportunity to see, touch,and feel the manufacturing
process. In FY2020, eachactivity had to be drastically reduced to prevent the
spread of COVID-19.

Support through culture and sports
As a good corporate citizen, we continue to support culturalactivities and sports in a low-profile manner by working together with local communities. In the cultural field, we havesponsored events related to our business, such as the National
Museum of Nature and Scienceʼs special exhibition Deep Sea,
the National Museum of Emerging Science and Innovationʼs
special exhibition Under Construction! and the musical concert
Voices of the West End.
In the field of sports, we have become an official sponsor of
the San-En Neophoenix, a member of the professional basketball league (B.LEAGUE), whose home town is the Mikawa
area where our manufacturing plant is located, and we
support the team together
with the fans in the hope offurther development of the
Mikawa area. We will continue to engage in support
activities for revitalizing local
Ultra-large diameter wheels for mining
communities and other pur- equipment SGOR (FY2019) exhibited at the
special exhibition Under Construction!
poses.

Business

1) Combined with an NC processor, it significantly
increases processing efficiency and resolves labor
shortages.
2) It is capable of minimizing the loss generated
during the process and increasing the yield rate.
3) Highly dense and compact, it saves storage
space while enabling excellent transportation efficiency.
4) Maintains the same performance as existing
deformed reinforcing bars even when used as astraightened bar.

Support for The Shinagawa Kids Cafeteria Network andreduction of food loss
In order to contribute to the local community and to make effective use of stockpiled food for disaster prevention, which will
expire in one year, we have been donating food supplies fordisaster prevention to the Shinagawa Kids Cafeteria Network
operated by the Shinagawa City Council of Social Welfare in
Shinagawa Ward, where
our head office is located, since 2019. Throughthis initiative, we hope tocontribute not only to the
reduction of food loss but
also to the enrichment of
the lives of local residents.
We also received a letterof appreciation from theCouncil for our contribution
to the development of thelocal community and theimprovement of social welfare.

Growth Strategies（4）Features:

1) Cleaning work can be performed without draining
the water in the distribution reservoir or tank.
2) Cleaning and inspection can be performed without workers entering the water, which is safe interms of hygiene and reduces the risk of work.
3) By obtaining certification as an underwater robot
cleaning construction management engineer, thecamera mounted on the robot can be controlledfrom the ground to ensure reliable cleaning work
(to resolve the labor shortage of divers).
4) The robotʼs unique undercarriage design makes ithighly maneuverable.

Contribution to Local Communities

Topyʼs Strengths

TACoil® is an advanced solution to problems faced by users
in rebar industry, such as labor shortages, processing losses,
and storage space.

Underwater cleaning robot
̶ Underwater Anie

Value Creation

Contribution Through Business Products with high work efficiency

Robot operation

TOPY Report 2021

40

Chapter 4

Sustainability

Social Responsibility

Relationships with Employees
Value Creation

Initiatives for Employees
Human Resource Development

Training Programs (Topy Industries)
Support for
self-development

Off-JT
Mandatory

TOPY Report 2021

6

6

0.9
0.4

0.4

1

1

2017

2018

2

Number of employees taking childcare leave(Topy Industries)

2019

Number of women

Number of men

2

2020

2021
(End of fiscal year)
As of end of June, 2021

1

All photos are from FY2019.

Diversity Initiatives
Topy Industries has set Respect the individual character andpersonality of employees in Article 3 (For the benefit of employees) of the Topy Industries Group Corporate Code of Conduct
and is implementing various initiatives to promote diversity.

Status of and approach to appointing managers(executives)
Topy Industries promotes employees to management positions(executives) based on a fair evaluation of their abilities, insight,
and personality, regardless of gender, nationality, or whether
they are new graduates or mid-career workers.

Human resource development policies for promoting
diversity and their implementation status
Topy Industries conducts employee education to ensure diversity based on its human resource development policy: Create
an organizational environment that permits diverse human resources to work actively in various ways.
Examples include human rights training and overseas training for employees to improve their cross-cultural communication skills. In FY2020, in order to promote diversity in theworkplace, we held seminars on the cultural backgrounds andvalues of the employeesʼ countries of origin (Indonesia andVietnam) for the two departments where non-Japanese employees are assigned.
Policies for improving the environment for promoting
diversity and their implementation status
Topy Industries promotes the utilization of human resourcesthat respect the individuality of each employee, and is introducing systems to realize diverse and flexible work styles andimproving the workplace environment in order to foster a corporate culture where employees and the company can growtogether.

7
6

3

1
3
2
2017

2018

2019

2020
(Fiscal year)

Support for womenʼs empowerment
We launched a diversity promotion project in FY2014. In thisproject, we identified new issues and determined measures
to be taken by FY2015, and enhanced related programs andintroduced measures related to career development support
At present, we have been carrying out an action plan targetingthe following, based on the Act on Promotion of Womenʼs Participation and Advancement in the Workplace, with the aim ofallowing female employees to participate actively and fulfill theirpotential.
(Plan period: April 1, 2016 to March 31, 2021)• We will maintain the percentage of women among new recruits (career-track employees) at 40% or higher.

TOPY Report 2021

Corporate Data

41

2.5

Sustainability

New employee training
Topy Industries provided Topy Juku, a new employee training program, for a period of about four months. In FY2020,
a portion of the training will be web-based in response to the
COVID-19 pandemic. In addition, for new foreign employees
who were unable to enter the country in April, we provided
web-based training in Japanese to help them improve theirlanguage skills.
After the web-based training, the trainees were divided into
different manufacturing sites and participated in on-site training
and improvement theme training. The on-the-job training saw
participants learn the fundamentals of manufacturing throughactual tasks at production sites, while in the practical training
they took part in continuous improvement activities under theguidance of senior workers. After the completion of Topy Juku,
a debriefing session on the training was held on the web andthe results of the training were presented to the management.

Period: One year
Destination: Overseas group company
Requirement for trainees: TOEIC® score of 600 or higher

2.4

As part of our efforts to achieve this goal, we are promoting anaction plan based on the Act on Advancement of Measures to
Support Raising Next-Generation Children with the following goals
in order to enable employees to balance work and child rearing
and to enable all employees to fully demonstrate their abilities.
(Plan period: July 1, 2020 to March 31, 2025)• Increase the rate of taking childcare leave to the standard
or a higher level during the plan period.
Male employees: Achieve the rate of taking childcare leaveof 7% or higher.
Female employees: Achieve the rate of taking childcare
leave of 75% or higher.
• We will examine and develop systems to enable employees to achieve a work-life balance and promote flexible
work styles.
In FY2020, we introduced a telework system and piloted the
flextime system in April 2021, increasing the options for working without being restricted by location or time. In addition, we
introduced a job return system as a preferential reemployment
system for employees who left the company due to childcare
or nursing care.

Business

Technical training

Training on Jishu Kanri (autonomous control) and improvement proposal activities

Safety and health training

Overseas training

Business English

Topy juku

Short-term program forstudying English abroad

Career training
Training for promoted
employees

Tutor training

Training for employees
promoted to seniorstaff members

Mentor training

Rank-and-file employees

Training for employees
promoted to chiefs

Sectoral engineering training

Training for new management level employees

Number of women in management positions
Percentage of women in management positions【Outline of the program】
Support for acquisition of public qualications

New manager training

Correspondence course for developing capabilities

Manager training

Women in management positions (Topy Industries)

Specialized training
Subsidies for employees attending language schools

Management-level
employees

Management coaching
schoolTraining fordeveloping
globallycompetitive
human
resources

Regarding the percentage of women in management positions, we have formulated an Action Plan based on the Act on
Promotion of Womenʼs Participation and Advancement in the
Workplace. For details, please see the section on Support for
women s empowerment.
Although we have not set specific targets for appointing
non-Japanese and mid-career hires to management positions
based on the above approach, we will appoint suitable candidates to management positions regardless of their nationality orwhether they are new graduates or mid-career hires (as of June30, 2021, non-Japanese: 1.7%, mid-career hires: 25.4%).

Growth Strategies• Create human resources who continue to develop• Strengthen employeesʼ capability to respond toenvironmental changes• Support employees in their autonomous career development• Continue to produce future business leaders• Create an organizational environment that permits diverse
human resources to work actively in various ways

Global HR development
Although the program was not implemented in FY2020 due tothe COVID-19 pandemic, in FY2017, we introduced Long-Term
Overseas Training with the aim of developing young employees
who can demonstrate their capabilities in the different culturalenvironments of other countries. The employees who undergo
this training are dispatched to overseas group companies for
one year as trainees and receive practical on the-job training
under the guidanceof local managers inaccordance with a
training plan, thereby experiencing andlearning about overseas work. They alsoacquire the ability tocommunicate in different languages, along Presentation of trainee accomplishments at the
production facilities management functions division ofwith intercultural skills.
Topy America, Inc. (FY2019)

Topyʼs Strengths

Our philosophy and basic policy on human resources
development
The Topy Industries Group declares in Article 3 of the Code of
Conduct (for the benefit of employees) that it will Respect theindividual character and personality of employees, and provide
safe working environments that allow them to work with enthusiasm, and attain fulfilling lives. We promote initiatives for reinforcing our human resources in the belief that they are our greatest
asset and that improving their capabilities creates our value itself.

42

Chapter 4

Sustainability

Relationships with Employees

Number of women
Number of men
Percentage of female employees (%)

52.4

47.6
10

16

14

11

40.0
41.7

12
25.0
11

10

9

2018

2019

10

4
2016

2017

6

2020
2021
(End of fiscal year)
As of end of June, 2021

Communication Promotion Committee
With the goal of nurturing and enriching the human resources
who support technological innovation and further growth forthe company around the world, Topy Industries establishedthe Job Satisfaction Improvement Committee in 2016, and wehave studied and implemented more than 20 measures to improve job satisfaction up until now.

43

TOPY Report 2021

(Note) The name café was chosen in association with providing an opportunity to talk casually
over a light meal. From FY2020 onward, the program will be conducted in a format that does
not involve eating or drinking to prevent COVID-19.

⑶ Workplace culture survey⑷ Topy Cafe sessions (meetings)⑸ Manager meetings⑹

Operational improvement
activities

Discussions with managers(Topy Talk)⒀

Encouraging interpersonal
greeting⒁

Activity-Based Working (ABW)
implementation⒂

Establishment of satellite offices
and communication spaces

Installation of growth support⒃ bookshelf(engagement bookshelves)⑺ Thanksgiving activities⒄⑻ Women s meetings

Promotion of 5S in theworkplace⒅ Improving the company cafeteria⑼ Inter-departmental mixers⑽⑿

Department self-introduction
sessions[Health Management Declaration]

Re-examination of age⒆ restrictions for bachelor
dormitories

At Topy Industries, we believe that by keeping our employees healthy both physically and mentally, our workplaces arefilled with smiles and vitality, and this allows employees tofulfill their potential. We declare that we will do our utmost
to create a healthy work environment to further energize thecompany and its employees.

Employee Safety & Health
Improvement of labor health and safety
Initiatives to Eliminate All Workplace Accidents
At Topy Industries, our primary corporate responsibility is toensure the safety and health of our workers. Based on this basic concept, we have set the highest priority on safety and are
implementing a variety of actions to achieve zero accidents.
We also conduct statistical surveys on labor accidents and report the results through in-house newsletters and other media
to raise the safety and health awareness of each and every
employee.
[Workplace safety management: priority issues for 2021]
Observance ofprohibitions

Promotion of
intrinsically safe
activities

Provide thoroughsafety guidance toinexperienced workers

Results of a Statistical Survey on Labor Accidents

Physical health・Health guidance・Eating habits
・Exercise habits

Mental health・Stress check・Prevention of overwork
・Harassment education

Work-life balance
・Labor efficiency improvements
・Promotion of leave acquisition
・Child raising support andnursing care support(Period: January to December 2020) (Topy Industries)

Manufacturing
site

Total working
hours

Number ofaccidents

Frequency(%)

Severity(%)

Kanagawa

395,908

0

0

0.00

Ayase

825,032

3

3.64

0.00

Toyohashi

1,565,248

1

0.64

0.03

Toyokawa

769,453

1

1.37

0.00

Total

3,514,858

5

1.42

0.01

Corporate Data

Efforts to Improve ES(employee satisfaction)

Corporate culture improvement
workshop for managers

Sustainability

Promoting employment of people with disabilities
Topy Industries actively employs people with disabilities, andwith an employment rate of 2.41% (as of June 1, 2021), thecompany is above the legal employment rate (2.3%). In thesame manner as other employees, employees with disabilities
are employed in a variety of workplaces, from the manufacturing floor to the administrative division, according to their individual aptitudes.

Topy Café (an exchange of opinions between staff
employees and skill-based employees (working
employees))
In order to reduce misunderstandings and improve work efficiency through mutual understanding beyond the boundaries
of staff and skilled (on-the-job) workers, we hold Topy Café (seenote) to discuss in depth the workplace culture and information
sharing in our own workplace. During the Topy Café, each timea theme is set for discussion, communication between staff
and skilled employees is facilitated, and cooperation across
job categories isstrengthened to deal
with issues.

⑵

Promotion of health management
Since 2020, Topy Industries has been working on health management initiatives to enhance the attractiveness of the company and the workplace by creating an environment where
employees can exercise their abilities in good health and withpeace of mind under the Health Management Declaration and
Policy. In addition, we are promoting health management as
an activity directly linked to SDGs Goal 3, Good Health And
Well-Being, which is an international goal to realize a sustainable, diverse, and inclusive society where no one is left behind.
In the future, we will enhance our efforts with the newly established Health Promotion Council in FY2021.

Business936.0⑴ Mentor program

Roundtable meeting for⑾ employees who have taken
childcare or maternity leave

Growth Strategies(career-track employees) (Topy Industries)

Topy Talk (a company-wide communication program
between management and employees in the form of
dialogue)With the aim of creating a culture (climate) that allows for open
discussion and fostering a sense of unity through increased
corporate transparency, we are implementing Topy Talk, acommunication promotion program that allows for real-time
dialogue between management and employees. Participants
can listen to management speak and interact with them in realtime using the chat and questionnaire functions, and many
employees participate each time as anopportunity to learn
more about the company and to think
about the companyʼs
growth as a whole.

List of measures implemented by FY2020 (excerpt)

Topyʼs Strengths

Percentage of women among new recruits

In order to ensure the continuation of the achievements
made through the engagement improvement activities and tosolve problems, we renamed the committee the Communication Promotion Committee and began moving to the nextstage in FY2019.
The committee is working to improve employee satisfaction
by implementing measures that address areas of communication that cannot be covered by HR activities, and is also
promoting initiatives that emphasize the autonomy of the committee members so that the committee can function as a place
for human resource development through its activities.
We also conduct an annual employee satisfaction survey
and use the results to resolve issues.

Value Creation• We will proactively support employeesʼ career development. We will increase the percentage of womenamong management-level employees (executives) fivefold compared to the current level (at the time of the action plan on April 1, 2016; benchmark: 0.4% (1 person)).
⇒2.4% (6 employees) at the end of FY2020
In addition, a new action plan has been formulated effective
April 1, 2021.
(Plan period: April 1, 2021 to March 31, 2026)• We will maintain the percentage of women among new recruits (career-track employees) at 40% or higher.
• We will support the career development of employees andpromote the use of various systems for female employees.
• Maintain the average length of service of female employees at 13 years or more.
• We will double the percentage of women in management
positions (executives) from the current level (at the time offormulation of the action plan on April 1, 2021; a benchmark of 2.4% (6 employees).

TOPY Report 2021

44

Chapter 4

Sustainability

Corporate GovernanceCorporate Governance

Basic Policy on Corporate Governancefor Directors and Audit &▌Compensation
Supervisory Board Members▌Overview of Corporate Governance System
Nomination Advisory Committee
To ensure the fairness and transparency of director nominations, we have a Nomination Advisory Committee chaired byan outside director and comprising the President and two outside directors. The committee serves as an advisory body to
the Board of Directors.

Business Execution Structure
Our management functions consist of a management decision-making function and a business execution function, andwe employ an executive officer system to vitalize and improvethe efficiency of company management.

Compensation Composition and Performance-based Compensation for Directors

Corporate Governance Structure

Basic compensation

General Meeting of Shareholders
Appointment and dismissal

Audit & Supervisory Board(four members)

Board of Directors(seven members)（including two outside auditors）

Close cooperation

ReportTopy Industries Group
Basic Corporate Ethics
Consultation Office
Topy Industries Group
Compliance Hotline
Head Office Organization
Division Organization
Affiliated Companies

45

TOPY Report 2021

Close cooperation

Prior consultation

Appointment
Dismissal
Supervision

Payment model

Cash

Cash

ReportRisk Management Committee

ReportPerformanceindicators

Policy, planning, etc. of business execution

Executive Director
Executive Officer

Employee

Stocks (partial cash)

・Fixed amount ・This is linked to company
・The amount of thisbased oncompensation is
performance and individual
position
linked to the level
performance in the previousof achievement offiscalyear.
・70% of thethe Medium-Termbasic com- ・The standard amount of thisManagementPlan.
pensationcompensation is 30% of the
Details of・The standard amountbasic
compensation,
varyingcompensationof this compensationfrom 0% to 75%. The portion
based on the companyʼs busi- is 5% of the basic
ness performance ranges from compensation, varying from 0% to 10%.
0% to 65%, while that basedon individual performance
ranges from 0% to 10%.

Each Permanent Committee

ReportStock-based
compensation(medium to longterm incentives)・One is the result of quantitative ・Level of achievement
evaluation, which is calculated of performancebased on return on equity
indicators set in(ROE) as the key indicator, and the Medium-Termthe level of achievement ofManagement Plan,
performance indicators suchincluding operating
as return on assets (ROA),
profit and profit attributable to owners
operating profit on sales, andof parent.
debt equity ratio. The other isthe result of qualitative evaluation, which is determined inconsideration of management
activities and other situations.
・Level of achievement of individual missions

Corporate Data

Whistleblower

ReportAccounting Auditor

PresidentInternal Audit

Whistleblower

Audit and report

Compensation Advisory Committee
Executive
Management
Meeting

Performance-based
compensation in theprevious fiscal year
(short-term incentives)

Appointment and dismissal(including two outside directors)

ReportNomination Advisory
Committee

Internal Audit Dept.
Close
cooperation

Audit

Fixed basic
compensation

Sustainability

Appointment and dismissal

Compensation

Compensation for Audit & Supervisory Board Members
The compensation for Members of the Audit & Supervisory
Board is determined through deliberation by all members of the
Audit & Supervisory Board within the total amounts of compensation for which resolutions were passed in advance at the General Meeting of Shareholders in accordance with the regulations
on compensation for Members of the Audit & Supervisory Board
resolved by the Audit & Supervisory Board. The Members of the
Audit & Supervisory Board may consult with the Compensation
Advisory Committee as necessary. The Members of the Audit &Supervisory Board may consult with the Compensation Advisory
Committee as necessary. The compensation limit for Membersof the Audit & Supervisory Board was resolved to be within 8
million yen per month at the 118st Ordinary General Meeting of
Shareholders held on June 28, 2012.
Compensation for members of the Audit & Supervisory
Board consists of only a fixed basic compensation. This is inconsideration of their independent position, which is unaffected by the company s business performance.

Business

Compensation Advisory Committee
To ensure the fairness and transparency of director compensation, we have a Compensation Advisory Committee chairedby an outside director and comprising the President and twooutside directors. The committee serves as an advisory bodyto the Board of Directors.

Basic Policy on Compensation for Directors
In accordance with its basic principle of improving company
performance and value, the company uses compensation
standards and a compensation system appropriate to individual employeesʼ job responsibilities. The company also uses survey data compiled by outside experts to improve the objectivityof compensation standards.
The compensation limit for Directors was resolved to bewithin 40 million yen per month (excluding salaries for employees) at the 121st Ordinary General Meeting of Shareholders
held on June 25, 2015. Separately, the 122nd Ordinary General Meeting of Shareholders held on June 23, 2016 resolvedthat the amount of performance-based stock compensation
for Directors, excluding outside directors, would not exceed
100 million yen over three years.

Procedure for Determining Compensation for Directors
The Compensation Advisory Committee deliberates on thepolicy for determining compensation and the level of compensation in consideration of the business performance of thecompany, and other factors. According to the results of the deliberation, the President, who has been delegated the authority
based on a resolution of the Board of Directors, determines
the amount of compensation for each director within the total
amounts of compensation for which resolutions were passed
in advance at the General Meeting of Shareholders. Also, theCompensation Advisory Committee shall confirm the appropriateness of the amount of compensation for each director inadvance to ensure that the delegated authority is appropriately
exercised by the representative directors, in addition to thepercentage of performance-based compensation for the previous fiscal year that is linked to company performance, andwhich is determined by the Board of Directors based on thereport of the Compensation Advisory Committee.
The Compensation Advisory Committee shall consist of
two external members and one internal member, and shallbe chaired by an external member to ensure the fairness andtransparency of compensation system.

Growth Strategies

Topy Industries has an Audit & Supervisory Board, while theBoard of Directors comprises executive directors well-versed in
the Group s business and independent outside directors. The
Board of Directors makes decisions on important managerial
matters and oversees company management, while the Audit& Supervisory Board, which has a legally stronger right to audit, oversees the company s management. Through this system, we maintain and strengthen the soundness and efficiencyof the company s management and improve corporate value.

Compensation for outside directors consists of only a fixedbasic compensation. This is in consideration of their independent position, which is unaffected by the company s businessperformance.

Topyʼs Strengths

Topy Industries pledges to enhance corporate value in the medium to long term by establishing a corporate governance systemthat is appropriate for the company from the standpoint of management soundness, transparency, and efficiency in order to maintain and improve the trust of stakeholders. This comes from the group s basic philosophy: Win the trust and respect of society
through the continuance and development of the Topy Industries Group and the execution of one s duty as a public institution.

Independence of Outside Officers (Outside Directors andOutside Audit & Supervisory Board Members)
In accordance with independence standards established byfinancial instruments exchanges in Japan, the company determines the independence standards of its outside officers (outside directors and outside Audit & Supervisory Board members)
based on their interests in the company, which include personal
relationships, capital ties, and business relationships with thecompany. The company deems all of its officers to be independent and has notified financial instruments exchanges of such.

Value Creation

We will work on strengthening and improving corporate governanceto establish a company that will earn the trust of society.

▌Outside Officers

Compensation for Directors and Audit & Supervisory Board Members in FY2020
Position
Directors

Amount of compensation by type（million yen）
NumberFixed basic Performance-based Stock-based of subject
compensation
inthe（million yen） compensation
officers
previous fiscal year compensation
Total amount ofcompensations

176

122

52

1

5

Members of the
Audit & Supervisory Board

49

49

−

−

2

Outside officers

44

44

−

−

7

（excluding outside
directors）（excluding outside
members）

TOPY Report 2021

46

Chapter 4

Sustainability

Corporate Governance

Financial results briefings held in FY2020
Date

Content

Number ofparticipants

November 26, 2020

2Q financial results briefing

23 members

Full-year financial results briefing

23 members

May 27, 2021

Corporate Data

TOPY Report 2021

Initiatives to vitalize general meetings of shareholders
We are taking the following initiatives to vitalize general meetings of shareholders as a place for communication among
the company, shareholders, and investors and to facilitate theseamless exercising of voting rights:(1) Enrichment and early dispatch of notice to convene
general meetings of shareholders(2) Use of the internet for notices to convene general meetings of shareholders(3) Exercise of voting rights via the internet(4) Preparation of notices to convene general meetings ofshareholders in English (summary)

Sustainability

47

Audits by the Audit & Supervisory Board
Through Board of Directors Meeting attendance, as well as by
Executive Management Meeting and other important meeting
attendance by full-time members of the Audit & Supervisory
Board, Audit & Supervisory Board members receive reportson the activities of such organizations as the Internal Audit Department and Risk Management Committee and other mattersthat have a significant influence on the Topy Industries Group.
In addition, the Representative Director and Audit & Supervisory
Board members hold regular meetings to exchange opinions.
Information sharing sessions are also conducted among outside
directors and Audit & Supervisory Board members. When an issue related to risk management occurs or is likely to occur in the
Topy Industries Group, it is also reported to Audit & Supervisory
Board members in accordance with the Group Risk Management Regulations. In addition, the company has developed astructure in which whistle-blowing is reported to Audit & Supervisory Board members in accordance with the Rules Concerning
the Topy Industries Group Basic Corporative Ethics Consultation
Office and the Topy Industries Group Compliance Hotline.

Financial results briefings
We believe that the opportunity for our top executives to directly explain our management plan and financial results helps
us earn the trust of our investors. Such sessions are held after
financial results are disclosed at the end of the second quarterand at the end of the fiscal year for analysts and institutional
investors. The president himself presents our financial results
as well as our medium to long term consolidated management
plans. This management plan session can be watched via
streaming from the IR Library on our website for shareholders
and investors.

Business

Risk management system
Under the leadership of the Risk Management Committee ofthe company, employees in each department of the company
and group companies formulate annual activity plans for risk
management and engage in risk management improvement
activities. When an issue related to risk management occurs
or is likely to occur in the Topy Industries Group, it is reported
to organizations including the Risk Management Committee,
with the necessary instructions provided through the risk management system. The activities of the Risk Management Committee are reported to the Board of Directors to confirm theireffectiveness. In the event of a major disaster, a special task
force headed by the Representative Director and President
is established to respond to the situation. We also work to
improve the earthquake resistance of company buildings andproduction facilities while regularly conducting drills and otheractivities to cope with emergencies.

Business management of the group companies
In accordance with the Group Company Management Regulations, the division of the company supervising the groupcompanies receives reports therefrom regarding their business
policies, plans, results and other matters as necessary, while
important matters are resolved at Executive Management
Meetings or Board of Directors Meetings. In addition, the company promotes the autonomous management of each groupcompany and conducts management soundness evaluations
to ascertain business results and risk management status,
among other aspects, of each group company for every fiscal
year. Based on the results of such evaluations, the division of
the company supervising the group companies provides instructions and support to the group companies.

Adequate information disclosure
Article 2 (For the benefit of society) of the Topy Industries
Group Corporate Code of Conduct stipulates that the Groupwil l Communicate widely with society as well as shareholders
and proactively disclose corporate information fairly and appropriately. Cooperate with local communities and be philanthropically active as a good corporate citizen. From the standpointof securing management transparency we are endeavoring todisclose corporate information in a fair and equitable manner inaccordance with the related laws and regulations such as the
Financial Instruments and Exchange Act.

Growth Strategies

Compliance System
We have formulated the Group Basic Philosophy and theGroup Code of Conduct and ensure that all the officers andemployees of the Topy Industries Group are familiar with themthrough such means as our websites, in-house newsletter, andGroup Compliance Guidebook. Moreover, under the leadershipof the Risk Management Committee of the company, employees in each department of the company and Group companies
formulate annual activity plans to ensure full compliance, engage in compliance improvement activities, and share relevant
information. In addition, company divisions that include those
supervising compliance provide a range of compliance education to employees at each level of the Topy Industries Group.
Regarding the whistle-blowing system, the Rules concerning
the Topy Industries Group Basic Corporate Ethics Consultation
Office and the Topy Industries Group Compliance Hotline stipulate that reports and consultations from employees are heldin strict confidence and will not become the basis for any unfair
treatment. We also provide outside counsel as recipients ofsuch reports and consultations.

▌Information Disclosure

Topyʼs Strengths

Internal Control Systems in General
To ensure the effectiveness of the internal control systems ofTopy Industries and its Group companies, and to make continuous improvements to these systems, the company s Internal
Audit Department monitors Topy Industries Group companies
for compliance with internal control rules established by theCompanies Act and Financial Instruments and Exchange Act
based on the company s annual auditing policies and plans.

Execution of duties by Directors
The Board of Directors resolves matters required by laws andregulations or the articles of incorporation, as well as important
issues of the company as stipulated in the Board of Directors
Regulations. Moreover, prior deliberations of matters to be resolved by the Board of Directors are held at the Executive Management Meeting, which comprises the Executive Directors andothers. Prior explanations of the agenda for Board of Directors
Meetings are provided to Outside Directors who do not attend
the Executive Management Meeting. In addition, the company
endeavors to ensure efficient deliberations by the Board of Directors and rationality in the course of its decision- making bymeans such as establishing Bylaws concerning Preparation ofAgenda Documents for Board of Directors Meetings.

Value Creation

Control and Risk Management▌Internal
SystemTOPY Report 2021

48

Chapter

5

Corporate DataManagement Team
Value Creation

Managing Executive Officers
In charge of Promoting Structural Reform andGroup Governance (Assistant to the President)

Hiroji Kobayashi

General Manager of Corporate Planning Dept.

Tsuyoshi Nakamura

Director and Executive Vice President

Senior Managing Director

Managing Director

Audit & Supervisory Board Member

Audit & Supervisory Board Member

1979
2011

1979
2007

1982
2013

1983
2015

1982
2007

1982
2015

Nobuhiko Takamatsu

2012
2014
2016

2017

2017

2011
2013

2015
2017

2018
2019
2021

Joined Topy Industries, Ltd.
Operating Officer, Deputy General Manager
of Wheel Div.
Director, General Manager of Wheel Div.
Director and Managing Executive Officer,
General Manager of Wheel Div. Managing
Executive Officer, General Manager of Wheel
Div.
Managing Executive Officer, General Manager
of Corporate Planning Dept.
Senior Managing Operating Officer of Corporate Planning Dept. and Finance Dept. Senior
Managing Director of Corporate Planning
Dept. and Finance Dept.
Senior Managing Director in charge of Corporate Planning Dept., Finance Dept., andSales Administration Dept.
Director and Executive Vice President,
and Assistant to the President in charge ofCorporate Planning, Finance, and Sales
Director and Executive Vice President (topresent)

Katsuyoshi Daido
2016
2018
2021
2021

Joined Topy Industries, Ltd.
Operating Officer, General Manager ofFinance Dept.
Operating Officer, General Manager of Steel
DivisionManaging Executive Officer, General Manager
of Internal Audit Dept.
Senior Executive Officer in charge of Corporate Planning, and Finance
Senior Managing Director (to present)

In charge of Corporate Planning, and Finance

Masayoshi Takezawa
2017
2018
2021
2021
2021

Joined Topy Industries, Ltd.
Operating Officer, General Manager of Business Process Innovation & Promotion Dept.
Managing Executive Officer, General Manager
of IoT Promotion Dept.
Managing Executive Officer, General Manager
of IoT Promotion Dept. and Technology Div.
Managing Executive Officer in charge ofTechnology, Business Innovation, Safety, andSmart Promotion
Managing Director in charge of Technology,
Business Innovation, Safety, and Smart
Promotion
Managing Director (to present)

Yukihiro Ogawa
2010
2014
2015

Joined Topy Industries, Ltd.
Manager of Educational Issues at Personnel
Dept.
Senior Manager of General Affairs Dept. (PR,IR)
Deputy General Manager of General Affairs
Dept.
Audit & Supervisory Board Member (topresent)

Koichi Sakamoto

2016
2017
2018

Joined Topy Industries, Ltd.
Operating Officer of Topy Industries, Ltd., Director
and CEO of Qingdao Topy Machinery Co., Ltd., andDirector and CEO of Topy Undercarriage (China) Co.,Ltd.
Operating Officer of Topy Industries, Ltd. and Director
and CEO of Topy Undercarriage (China) Co., Ltd.
Councilor of Topy Industries, Ltd. and Director and
CEO of Topy Undercarriage (China) Co., Ltd.
Councilor to General Affairs Dept. of Topy Industries,
Ltd., Audit & Supervisory Board Member (to present)

Operating Officers
General Manager of Internal Audit Dept.

Takanori Kawano

General Manager of Undercarriage Components Division,in charge of Automotive and Industrial Machinery Components Business

Shuichi Tachibana

General Manager of Commercial and Off the Road Wheel
Division, in charge of Automotive and Industrial Machinery
Components Business

Growth Strategies

2016

Joined Nippon Steel Corporation
Executive Officer General Manager, Headof Division, Ironmaking Technology Division,
Nippon Steel Corporation
Advisor, Nippon Steel Corporation; Executive
Officer in charge of technology/quality,
Usiminas Siderúrgicas de Minas Gerais S.A.
Executive Vice President in charge ofbusiness planning, Usiminas Siderúrgicas deMinas Gerais S.A.
Managing Executive Officer and Vice Headof Global Business Development Sector,
Nippon Steel & Sumitomo Metal Corporation
Director at Usiminas Siderúrgicas de Minas
Gerais S.A.
Senior Executive Officer, Appointed as Assistant to the President of Topy Industries, Ltd.;
Advisor, Nippon Steel & Sumitomo Metal
Corporation
Representative Director and President (topresent)

Norio Saito

Topyʼs Strengths

Representative Director and President

Masahiro Abe

In charge of Technology, Business Innovation,
Business Development Strategy Center, Safety,
and Smart Promotion

General Manager of Steel Division, in charge ofSteel Business

Katsuyoshi Tanaka

Assistant to the President In charge of Sales

General Manager of Personnel Dept. and General Manager
of General Affairs Dept.

Tetsuya Sakai

General Manager of Press Division, in charge of Automotive
and Industrial Machinery Components BusinessBusiness

Koji Nanayama

General Manager of Sales Dept.

Hideo Katsuyama

General Manager, Corporate Strategy of Corporate Planning
Dept. and Deputy General Manager of Marketing Administration & Planning Dept.

Hideki Aoyama
Director

Director

Audit & Supervisory Board Member

Audit & Supervisory Board Member

1984
1999
2013

1986
2008

1997
2006
2019

1978
2005

1982
2012

Masayuki Yamaguchi

2017
2018
2018
2020

2020
2021

Joined Mita Kogyo Co., Ltd.
Joined Topy Industries, Ltd.
Operating Officer, General Manager ofGeneral Affairs Department, and Chief ofSecretariat
Operating Officer, General Manager ofInternal Audit Department
Managing Executive Officer, Representative
Director and President of Ring Techs Co.,
Ltd.
Advisor, Representative Director and President of Ring Techs Co., Ltd.
Managing Executive Officer in charge of General Affairs, Personnel, and Risk Management
Assists Vice President Saito in mattersrelated to corporate planning
Assists Vice President Saito in mattersrelated to corporate planningManaging Director (to present)

2010
2013
2015
2018
2020

Joined the Development Bank of Japan
Chief Representative in London, Development Bank of JapanDBJ Europe Limited CEO
Director of Industrial Research, Development
Bank of Japan
Operating Officer, Director of Corporate
Investment
Chairman of the Board, DBJ Asset Management Co., Ltd.
Director of Topy Industries, Ltd. (to present)
President of Value Management Institute, Inc.
(to present)
Director of Japan Economic ResearchInstitute Inc. (to present)

Hiroko Kaneko

2021

Admitted to Bar, Japan (to present)
Admitted to Bar, New York (to present)
Audit & Supervisory Board Member of
Shinsho Corporation (to present)
Director of Topy Industries, Ltd. (to present)

Tetsuya Kawagishi

2009
2010
2011
2011
2013
2015
2020
2020

Joined The Fuji Bank, Limited
Executive Officer, General Manager of Corporate
Banking Division No. 2 of Mizuho Corporate Bank,
LimitedManaging Executive Officer, Chief Risk Officer andChief Personnel Officer of Mizuho Corporate Bank,
LimitedManaging Executive Officer, Head of Global Transaction Banking Unit, Head of Global Asset Management
Unit of Mizuho Corporate Bank, Limited
Outside Audit & Supervisory Board Member of Tokyo
Tatemono Co., Ltd.
Full-time Audit & Supervisory Board Member of
TANAKA Holdings Co., Ltd.
Director and Deputy General Manager of Technology& Marketing Division, TANAKA Holdings Co., Ltd.
Executive Officer, General Manager of CSR & Public
Relations Department and President s Office of
TANAKA Holdings Co., Ltd.
Advisor of TANAKA Holdings Co., Ltd.
Audit & Supervisory Board Member of Topy Industries, Ltd. (to present)

Akio Sakai
2014
2016
2018
2020

Joined Yasuda Life Insurance Company
Executive Officer, General Manager of Osaka Headquarters of Meiji Yasuda Life Insurance Company
Managing Executive Officer, General Manager of Corporate Sales Division of Meiji Yasuda Life Insurance
Company
Senior Managing Executive Officer, General Manager
of Corporate Sales Division of Meiji Yasuda Life
Insurance Company
Representative Director and President of Meiji Yasuda
General Insurance Co., Ltd. (to present)
Audit & Supervisory Board Member of Topy Industries, Ltd. (to present)

Deputy General Manager of Sales Dept.

Masaru Yasuhara

General Manager of Business Development Strategy Center

Yoshihito Kano

General Manager of Business Process Innovation &Promotion Dept. and Engineering administration Div.

Koji Kawakami

As of October 1, 2021

Corporate Data

In charge of General Affairs, Personnel, and Risk
Management

Takeshi Kiriyama

Sustainability

Managing Director* Directors Takeshi Kiriyama and Kaneko Hiroko are outside directors.
Audit & Supervisory Board Members Tetsuya Kawagishi and Akio Sakai are outside audit & supervisory board members.

49

TOPY Report 2021

TOPY Report 2021

50

Chapter 5

Corporate Data

Our History

Topy MW Manufacturing Mexico
S.A. de C.V. was founded

Kimi to Boku Hall at Toyohashi
Works

Concluded an agreement with
Nippon Steel Corporation tostrengthen general businesscooperation

Topy International, Inc.
(current Topy America, Inc.)

View of Toyohashi Steel Mill Plant at
Toto Steel Mfg., Co., Ltd.

1940 -

Tokyo Sharin Seisakusho and Abe
Tekkosho Co., Ltd. merged to form
Japan Motor Wheel Co., Ltd.

1930
Miya Steelworks (predecessor of Toto
Steel Mfg., Co., Ltd.) was founded

Teikoku Hatsujo Seisakusho (predecessor of Japan Motor Wheel Co.,
Ltd.) commenced production of
prototype steel wheels for automobiles

Miya Steelworks and Tokyo Shearing
Co., Ltd. merged to form Toto Steel
Mfg., Co., Ltd.

1934

Toto Zoki Co., Ltd. was foundedTokyo Sharin Seisakusho Co., Ltd.
(predecessor of Japan Motor Wheel
Co., Ltd.) was founded

1922

1955
1956

Toto Tekko Co., Ltd. was founded1958

Toyohashi Steel Mill Plant of Toto
Steel Mfg., Co., Ltd. (current Toyohashi Works of Topy Industries, Ltd.)was established

1961

Chigasaki Seisakusho of Toto Zoki
Co., Ltd. (current Kanagawa Factoryof Topy Industries, Ltd.) was established
Toyokawa Plant of Japan Motor
Wheel Co., Ltd. (now Toyokawa
Factory of Topy Industries, Ltd.) wasestablished1964

Ayase Plant of Japan Motor Wheel
Co., Ltd. (current Ayase Factory of
Topy Industries, Ltd.) was establishedJapan Motor Wheel Co., Ltd., Toto
Steel Mfg. Co., Ltd., Toto Zoki Co.,
Ltd., and Toto Tekko Co., Ltd.
merged to form Topy Industries, Ltd.

1969

Topy International, Inc. (current Topy
America, Inc.) was founded

1972

Technology Research Center (current
R&D center) was opened at Toyohashi Work

1977

1982

Concluded a technical assistanceagreement with PT. Palingda Nasional (Indonesia)
Developed tubeless tire wheels forheavy- and medium-duty trucks andbuses at Ayase Factory
Super-Giant Off-the-Road Rim(SGOR®) vehicle wheels for mining
dump trucks were developed

1985

Topy Corporation (current Topy
America, Inc.) was founded1987

Succeeded in the practical application of high-quality synthetic mica forcosmetics

1988

2003

1991

Took a stake in Fujian Yuan Shing
Topy Ltd. (current Fujian Topy Autoparts Co., Ltd.)

1992

Hamura Plant of Ayase Factorycommenced operation

Kimi to Boku Hall was completed
at Toyohashi Works

Kurate Plant of Toyokawa Factorycommenced operation

1995

A mill for deformed concrete bars
commenced operation at Toyohashi Works

1998

Obtained ISO 9001 certification at
all production sites

1999

Topy International, U.C.A. Inc.
(current Topy America, Inc.) was
foundedISO 14001 certification was obtained for all production

2004
2007

Topy America, Inc. was founded(merger of Topy International, Inc.,
Topy Corporation, and Topy International U.C.A. Inc.)
Head Office moved to Osaki, Shinagawa-ku, Tokyo

2008

Science Division was established
Concluded an agreement with Nippon Steel Corporation to strengthen
general business cooperation

PT. Topy Palingda Manufacturing
Indonesia was founded
PT. Topy Undercarriage Indonesia
was founded
Topy MW Manufacturing Mexico S.A.
de C.V. was founded2014

PT. Topy Undercarriage Indonesia
commenced operation
The new steel making plant commenced commercial operation at
Toyohashi Works2015

Topy Fasteners Mexico S.A. de C.V.
was founded2016

The business and capital alliancewith MW Italia S.R.L. was strengthened

2017

WIL Car Wheels Ltd., a joint venturewith Wheels India Limited, wasestablished (India)

2018

Ring Techs Co., Ltd. was made into
a wholly-owned subsidiary
Asahi Tec Corporation was madeinto a wholly-owned subsidiary

Concluded a technical assistanceagreement with PT. Pakoakuina(Indonesia)

1989

A plant for undercarriage components for construction equipment
commenced operation at Toyohashi
Works

Corporate Data

Founder of Miya Steelworks
Toshihide Kozuma

1943

Concluded a technical assistanceagreement with PT. Inkoasku (Indonesia)

Akemi Electric Power Ltd., which engages in the power supply business,
commenced operation2013

Sustainability

1921

1941

Akemi Plant of Toyokawa Factorycommenced operation

1980

Topy Undercarriage (China) Co., Ltd.
was founded

2000
1990

2011

Business

1930

1950

1960 1970

1980

1990

2000

2010

2020

Growth Strategies

Signing ceremony for the merger of four companies
Topy Industries, Ltd. establishedOpen hearth furnace plant underconstruction at Miya Steelworks

1920

Logo mark for the 100th anniversary

Topyʼs Strengths

1936

1964

Value Creation

1958

1985

1991

2008

2013

2021

Sales of synthetic mica started

Miya Steelworks succeeded in
hot-rolling of steel sashes

1926

Tokyo Shearing Co., Ltd. (predecessor of Toto Steel Mfg., Co., Ltd.) was
founded51

TOPY Report 2021

TOPY Report 2021

52

Chapter 5

Corporate Data

Consolidated Financial Performance for the Past 11 Years

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Value Creation

Fiscal year

2020

Operating Results (Fiscal year) (Million yen)
226,912234,682

237,677

215,872

208,237

230,462

286,227

263,305

225,121

Operating profit (loss)

7,006

10,554

6,990

5,308

6,422

10,000

7,180

7,997

7,505

2,851

(2,943)

Ordinary profit (loss)

5,241

7,304

6,234

4,485

6,037

8,806

6,116

8,034

9,357

3,597

(575)

Profit (loss) before income taxes

4,765

6,118

5,842

4,249

4,476

4,681

10,897

7,933

10,345

1,741

856

Profit (loss) attributable to ownersof parent

2,072

3,918

3,409

1,914

2,360

1,700

7,191

5,500

7,114

(4,497)

578

Capital expenditure

7,170

8,982

20,47725,45820,374

8,815

9,874

12,132

25,10013,397

10,371

Depreciation and amortization

10,057

9,310

8,957

10,086

10,315

11,321

10,631

10,59911,11012,332

12,515

Research and development costs

1,245

1,271

1,212

1,519

1,202

1,059

1,137

1,131

1,096

1,115

1,057

Total assets

203,956

212,828

208,781

232,714

252,456

231,583

223,050

248,102284,198

254,659

264,672

Shareholdersʼ equity

79,50082,38989,522

94,363

106,187

98,893103,951

108,959

111,304

102,732

107,428

Net assets

80,16583,096

91,25896,219107,941

99,973

104,853

109,859

112,362

103,800

108,385

Interest-bearing debt

61,75958,09153,53462,45377,51670,07055,831

61,096

79,67676,782

81,075

Cash flows from operating activities

6,236

16,01016,7707,251

19,44019,346

10,13010,78011,725

16,206

5,730

Cash flows from investing activities(3,681)(7,703)(14,770)(17,478)(29,141)(7,529)(1,016)(5,861)(20,835)(16,048)(8,931)

Cash flows from financing activities(1,952)(4,983)(4,997)

7,538

13,157(8,391)(16,861)

1,834

15,936(6,461)

3,668

86.37

165.20143.76

80.76

99.65

71.80

303.90234.25302.85(191.42)

24.70

40

40

40

20

40

60

80

80

90

40

20

Rate of Operating profit on sales

3.2

4.4

3.1

2.3

2.7

4.6

3.4

3.5

2.6

1.1

(1.3)

Return on equity

2.6

4.8

4.0

2.1

2.4

1.7

7.1

5.2

6.5

(4.2)

0.6

Equity ratio

39.0

38.7

42.9

40.5

42.1

42.7

46.6

43.9

39.2

40.3

40.6

Number of employees at period end

4,151
[432]

4,135
[428]

4,374
[491]

4,515
[538]

4,596
[573]

4,408
[597]

4,568
[587]

5,034
[581]

6,241
[869]

6,181
[1,016]

6,153
[756]

Growth Strategies

240,534

Topyʼs Strengths

221,413

Net sales

Financial Position (End of fiscal year) (Million yen)

Business

Cash Flows (Fiscal year) (Million yen)

Net profit (loss) per share
Dividends per share

Sustainability

Per Share Information (Yen)

Financial Indices (%)* A one-for-10 reverse stock split of common stock went into effect on October 1, 2016. Data per share is thus calculated on the assumption that the reverse stock split was
executed at the beginning of FY2010.

53

TOPY Report 2021

Corporate Data

[Average number of temporary employees
not included in the above]

Detailed financial data are available on the following page of our official website.
https://www.topy.co.jp/ja/stock/library.html

TOPY Report 2021

54

Chapter 5

Corporate Data

Major Subsidiaries & Affiliates

Head office location

Capital(millions of yen)

Business segment

Voting rights heldor owned by (%)

Shinagawa-ku, Tokyo

480

Steel, Automotive andIndustrial Machinery
Components

100

Topy Marine Transport, Ltd.

Toyohashi-shi, Aichi Pref.

225

Steel

100

Topy Fasteners, Ltd.

Matsumoto-shi, Nagano Pref.

310

Automotive and Industrial
Machinery Components

100

Topy-Rec, Ltd.

Koto-ku, Tokyo

300

Others100

100

Automotive and Industrial
Machinery Components

100

Kyushu Wheel Kogyo, Ltd.
Tojitsu Co., Ltd.

Miyako-gun, Fukuoka Pref.
Toyohashi-shi, Aichi Pref.

80

Steel

100 (100)

30

Automotive and Industrial
Machinery Components

100 (100)

Akemi Recycling Center, Ltd.

Toyohashi-shi, Aichi Pref.

200

Steel

100 (30)

Sanwa Buhin Co., Ltd.

Bando-shi, Ibaraki Pref.

200

Automotive and Industrial
Machinery Components

Akemi Electric Power, Ltd.

Toyohashi-shi, Aichi Pref.

205

Power Generation

20.64

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

1,130,800

4.84

Topy Fund Business Association

3.37

100

Employee Shareholding Association of Topy Industries, Ltd.

603,843

2.59

100

Custody Bank of Japan, Ltd. (trust account)

566,346

2.43

Mizuho Trust & Banking Co., Ltd.

489,300

2.10

DFA Intl Small Cap Value Portfolio

432,600

1.85

Resona Bank, Limited

413,605

1.77

Automotive and Industrial
Machinery Components

100 (100)

ATC Holdings Co., Ltd.

Kakegawa-shi, Shizuoka Pref.

100

Automotive and Industrial
Machinery Components

100

Asahi Tec Corporation

Kakegawa-shi, Shizuoka Pref.

100

Automotive and Industrial
Machinery Components

100 (100)Topy America, Inc.

Kentucky, U.S.A.

600 U.S. dollars

Automotive and Industrial
Machinery Components

100

Topy Precision Mfg., Inc.

Illinois, U.S.A.

50,000 U.S. dollars

Automotive and Industrial
Machinery Components

100 (100)Topy Fasteners (Thailand), Ltd.

Chonburi, Thailand

50 million bahts

Automotive and Industrial
Machinery Components

90 (55)194 million renminbi

Automotive and Industrial
Machinery Components

100

606 million renminbi

Automotive and Industrial
Machinery Components

100

6,240,000 U.S. dollars

Automotive and Industrial
Machinery Components

100 (80)710.5 billion rupiahs

Automotive and Industrial
Machinery Components

90
100

Notes:
1. Topy Industries, Ltd. owns 729,296 treasury shares but is excluded from the major shareholders listed above.
Treasury shares do not include the Companyʼs shares held in trust for the stock compensation plan for directors.
2. The shareholding ratios were calculated by excluding treasury shares.
3. Topy Fund Business Association is the name of the shareholding association of Topy Industries, Ltd., its affiliates, and its business partners.

Breakdown of shareholders by typeIndonesia Bekasi Regency, West Java, Indonesia

41.2 billion rupiahs

Topy MW Manufacturing Mexico S.A. de C.V.

Silao City, State of Guanajuato, Mexico

867 million pesos

Automotive and Industrial
Machinery Components

95

Topy Fasteners Mexico, S.A. de C.V.

San Luis Potosi City, State of San Luis Potosi, Mexico

167 million pesos

Automotive and Industrial
Machinery Components

100 (100)

32.26%(3)

Securities
companies

1.01%

Foreigninvestors

Other domestic
corporations

12.98%

Guangzhou City, Guangdong Province, China

188 million renminbi

Automotive and Industrial
Machinery Components

90 (90)Asahi Tec Aluminium (Thailand) Co., Ltd.

Khlong Tamru, Chonburi, Thailand

1,480 million bahts

Automotive and Industrial
Machinery Components

100 (100)

26.25%

Asahi Tec North America, Inc.

Troy, Michigan, U.S.A.

90,000 U.S. dollars

Automotive and Industrial
Machinery Components

100 (100)

Treasury shares are included in“Individuals and others.”

Guangzhou Asahi Dongling Research & Development
Co., Ltd.

Guangzhou City, Guangdong Province, China

11 million renminbi

Automotive and Industrial
Machinery Components

51 (51)(Equity-method affiliate)
Hokuetsu Metal Co., Ltd.

Nagaoka-shi, Niigata Pref.

Guangzhou Wheelhorse Asahi Aluminium Co., Ltd.

Guangzhou City, Guangdong Province, China

216 million renminbi

Automotive and Industrial
Machinery Components

49 (49)

Guangzhou Dicastal Asahi Aluminium Co., Ltd.

Guangzhou City, Guangdong Province, China

40 million renminbi

Automotive and Industrial
Machinery Components

25 (25)(Other affiliates)
Nippon Steel Corporation

Chiyoda-ku, Tokyo

419,524

0.1(Owned by)
20.9 (0.2)

Notes:
1. The respective business segments are listed in the Business segment column (excluding other affiliated companies).
2. Topy America, Inc. and Topy Precision Mfg., Inc. have paid premiums of U.S. $62,999,400 and U.S. $4,950,000, respectively, aside from the capital mentioned above, totaling capital of U.S.
$63,000,000 and U.S. $5,000,000, respectively.
3. Topy Enterprises, Ltd., Topy America, Inc., Fujian Topy Autoparts Co., Ltd., Topy Undercarriage (China) Co., Ltd., PT. Topy Palingda Manufacturing Indonesia, Topy MW Manufacturing Mexico S.A.
de C.V., Ring-Techs Guangzhou Co., Ltd., and Asahi Tec Aluminium (Thailand) Co., Ltd. are specified subsidiaries.
4. Hokuetsu Metal Co., Ltd. and Nippon Steel Corporation issue official financial statements separately.
5. The sales ratio of Topy Enterprises, Ltd. as a proportion of the consolidated sales of the Topy Industries Group exceeds 10% (excluding internal sales among consolidated Topy Industries
Group companies).
Major financial information(1) Net sales
97,511 million yen(2) Operating profit 1,363 million yen(3) Net profit
970 million yen(4) Net assets
10,553 million yen(5) Total assets
36,989 million yen
6. The values in parentheses in the percentage of Voting rights held or owned by column represent indirect holding percentages or percentages of voting rights indirectly owned by thecompany, which are each included in the value above.

March 31

Ordinary general meeting of shareholders

June

Record date

March 31 (ordinary general meeting of shareholders, year-end dividend)
September 30 (interim dividend)

Share unit number

100 shares

Shareholder registry administrator(special account management institution)

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo

Contact for inquiries

Stock Transfer Agency Business Planning Dept.
Sumitomo Mitsui Trust Bank, Limited
2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Phone: 0120-782-031 (toll free)

Corporate Data

Manufacture and salesof steel products andengineering

Fiscal year end

Sustainability

Ring-Techs Guangzhou Co., Ltd.

35.8 (1.4)

Business

Financial
institutions

Individuals
and others

27.50%

PT. Topy Undercarriage

Automotive and Industrial
Machinery Components

Steel

Growth Strategies

4.18

787,80210

1,969

Shareholding ratio (%)

4,818,264

Mizuho Bank, Ltd.

Kurashiki-shi, Okayama Pref.

Indonesia Karawang Regency, West Java, Indonesia

Number of shares held

Nippon Steel Corporation

100

Seibu Wheels Co., Ltd.

PT. Topy Palingda Manufacturing

11,773

4.72

100

Yen My District, Hung Yen Province, Vietnam

Number of shareholders

975,134

Kurashiki-shi, Okayama Pref.

Topy Fasteners Vietnam Co., Ltd.

24,077,510 shares

1,103,010

Ring Techs Co., Ltd.

Qingdao, China

Number of outstanding shares

Meiji Yasuda Life Insurance Company

Automotive and Industrial
Machinery Components

Topy Undercarriage (China) Co., Ltd.

88,300,000 shares

Name

Hachioji-shi, Tokyo

Fujian, China

Number of authorized shares

Top 10 major shareholders

Autopia, Ltd.

Fujian Topy Autoparts Co., Ltd.

First Section of the Tokyo Stock Exchange & First Section of the Nagoya Stock Exchange(Securities code 7231)

Topyʼs Strengths(Consolidated Subsidiaries)
Topy Enterprises, Ltd.

Stock exchange listings

Value Creation

Company name

IR Information

As of March 31, 2021

As of March 31, 2021

55

TOPY Report 2021

TOPY Report 2021

56