TOPY Report 2020

TOPY

Report2020

TOPY

Report2020

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

https://www.topy.co.jp/
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.
The Topy Industries Group Corporate Code of Conduct

Basic Policy
Topy Report 2020 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.

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 Group

7

Business Model of the Topy Industries Group9

Chapter 2

11

Growth Strategies

Top Message

11

Medium-Term Management Plan (Growth & Change 2021) 15
Business

19
19

Automotive and Industrial Machinery Components Business(Wheels for Passenger Vehicles)
21
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.

Covers mainly FY2019 (April 1, 2019 to March 31, 2020),
but also includes some activities that occurred on and after
April 1, 2020.
Date of Issue
October 2020
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, JapanTOPY Report 2020

2

Steel Business

Reporting Period

1

Editorial Policy and Contents

Chapter 3− 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.

Contents

Automotive and Industrial Machinery Components Business(Commercial and Off the Road Wheels)
23
Automotive and Industrial Machinery Components Business(Undercarriage Components for Construction Machinery)25
New Fields

27

Global Expansion of the Topy Industries Group

29

Chapter 4

31

Sustainability

Sustainability Initiatives of the Topy Industries Group

31

Environmental Initiatives

33

Social Responsibility

40

Corporate Governance

46

Chapter 549

Corporate Data

Our History

49

Management Team

51

Consolidated Financial Performance for the Past 11 Years

53

Major Subsidiaries & Affiliates

55

IR Information

56

TOPY Report 2020

2

1

Value Creation
1 Value Creation
Chapter

Chapter

Net Sales and Operating
Profit by Segment in FY2019

Net sales■ Steel Business(Unit: JPY million)

Businesses of the Topy Industries Group

73,404

174,015

Automotive andIndustrial Machinery
Components Business

6,558

3.5 ％

2.5 ％

■ Other Businesses

852
893

*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 trucks and buses

11.3 ％

11.8 ％Net sales and operating profit by segment and constituent ratios shown are amounts prior to adjustments(total: JPY 7,545 million).

Other Businesses

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

Creating new sources of profit
We are expanding sales of mica, which is used for cosmetics and other products, in Japan and other countries, whiledeveloping applications for crawler robots that can move left,right, forward and backward. We also lease real estate, such as
Topy-Rec Plaza (Minami-Suna, Koto-ku, Tokyo), and operatesports clubs, including OSSO.

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.

Power plant

Business

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.

22.0 ％

1,657■ Power Generation Business

Power Generation Business

A world-leading comprehensive manufacturerof wheels and undercarriage components forconstruction machinery

Wheels for passenger vehicles

66.1％■ Power Generation Business

9,326

54.9 ％

4,142■ Automotive and Industrial
Machinery Components
Business

Growth Strategies

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.

■ Steel Business27.9 ％■ Other Businesses

2,851

Value Creation

A raw material business operated since
our foundation

Operating Profit■ Automotive and Industrial
Machinery Components Business

The Topy Industries Group is a comprehensive metal processing group with an integrated production system fromraw 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 are interrelated.
The Group is also striving to diversify its businesses, which now encompass the wholesaling of electricity, manufacture and sale of mica and crawler robots, leasing of real estate, and operation of sports clubs.

Steel Business

263,305

Crawler robots

Sustainability

Mica for use in cosmetics
Aluminum

Steel
Steel

Ultra-large wheels for mining
dump trucks (SGOR®)

Undercarriage components forconstruction machinery

Steel construction materials

Steel materials for ships and industrial
machinery

WheelsTracksIndustrial fasteners

Steel Business
Operating Profit
on Sales

100,000
80,00060,000Automotive and Industrial Machinery Components BusinessNet sales

63,76763,8032,882

20,0000

Steel for use within thecompany(track shoes, tracks)

Industrial fasteners(precision leaf springs, etc.)

2015

15,000Net sales

10,626
8,425

9,000
6,000

73,404
4,142

1,925

2017

2,248

2018

0

9,596

494

2015

2016

871

2017

Operating Profit
on Sales2019 (FY)

200,000

8,000

160,000

6,000

120,000

4,000

80,000Net sales

Operating proﬁt
188,175

134,099 129,681

5,320

6,524

0

0

2015

(JPY million）

174,015

142,790
8,433

2017

16,000

8,000

1,657
2016

20,00012,000
7,833

40,000

2,000

2018

2019 (FY)4,000
0

Other Businesses(JPY million）

Operating proﬁt

2,475

3,000

TOPY Report 2020

71,52580,442

10,000Power Generation Business
Operating Profit
on Sales

12,000

3

2016(JPY million）

Operating proﬁt

4,815

40,000Undercarriage components
for construction machinery

Corporate Data

Track shoes

10,567

1,228

2018

10,0009,326

852
2019 (FY)Operating Profit
on Sales

10,000

8,000

8,000

6,000

6,000

4,000

4,000

2,000

2,000

0

0

Net sales

7,378

1,474

2015

6,326
1,557

2016

Operating proﬁt

6,548
1,465

2017

7,041

1,550

2018

(JPY million）
5,000

6,558

4,000
3,000
2,000

893

1,000

2019 (FY)0

TOPY Report 2020

4

Chapter1

Value Creation

History of the Topy Industries Group
Value Creation

Three strengths developed over our 100-year history

Growth Strategies

In 1964, our integrated production system for producing and making full use of steel wascompleted through the merger of four companies (engaging in businesses concerningsteel and wheels, undercarriage components for construction machinery, and others). The
integration of different businesses has led to the global development of the automotive andindustrial machinery parts business and the creation of new businesses (industrial fasteners,mica, power generation, and other businesses), creating management stability and contributing to earnings growth.
Net sales

1964

1970

1980

1990

2000

2010

Steel

Founded in

Origin of deformed section
steel technologies

Japan

1921
Foundation of Miya
Steelworks (predecessor of Toto Steel
Mfg., Co., Ltd.)

1950

1990

Establishment of an integrated
production system

2000

Hot-rolling andthe commercial
production of track
shoes starts

1930
Teikoku Hatsujo Seisakusho (the predecessor of Japan Motor Wheel Co., Ltd.)
commences the production of prototype
steel wheels for automobiles

1964

Strength 1

Strengthening
the integrated
production
system2009

2003
Expansion into
China

Overseas

1985
Expansion into
the United States

2013
Expansion into
Mexico2016
The business and capitalalliance with MW Italia
S.R.L. is strengthened

2017
Expansion into
India

2018

2013

Wheels for trucks andbuses
Undercarriage components forconstruction machinery

Wheels manufactured
by Teikoku Hatsujo Seisakusho

1982

2009

1989

1987

Commencement of theindustrial fastener business

Practical application of high-quality
mica for cosmetics

Expansion into Indonesia

Development of lighter weight wheels
Adoption of rims made of deformed section
steel and discs formed through cold spinning(rocking die forming) (for buses and trucks)
Adoption of high-tensile-strength steel sheet(for passenger vehicles)

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

1974

Globalexpansion of
the processing
division

2013

Expansion
into China

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

Developed frommetal processing
technologies

Expansion into Indonesia

2002

1999
Expansion into theUnited States

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

Strength 2

Corporate Data

Technologies and new businesses

2014
A new steelmaking plant is completed at
the Toyohashi Works with the introductionof an environmentally-friendly, highefficiency arc furnace

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

Developed from electric
furnace melting technologiesof the steel business
TOPY Report 2020

2008

Aluminum wheels

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

5

2019

Strengthening of the business alliance with
Nippon Steel Corporation

Topy Industries, Ltd. is establishedthrough the merger of Japan Motor
Wheel Co., Ltd., Toto Steel Mfg.,
Co., Ltd., Toto Zoki Co., Ltd., andToto Tekko Co., Ltd.

Other
businesses

Sustainability

Steel wheels forpassenger vehicles

Power
generation
business

2010

1953

1922

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

Undercarriage
components
for industrial
machineryBusiness

1921

Wheels2019

2000
The power generation
business is launched

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

2018

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

Strength 3

Creating new
value

2017
Development of an automated driving
system for crawlers that can move left,right, forward and backward

Developed from track
manufacturing technologies
TOPY Report 2020

6

Chapter1

Value Creation

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

The Topy Industries Group
Corporate Basic Philosophy

Management resources

P.15 -18

Business Model and Strengths

Main products and services (output)

Manufacturing capital

SteelStrength 1

P.9-10, 29-30

Integrated
production
systemSocial capital
Trust from customers andother stakeholders

P.40-42Natural capital

P.33-39

Industrial
machinerycomponents

Recycling of scrap iron, etc.
using electric furnaces

Social Issues andRelevant SDGs

Enhancement of thefunctionality of steel
materials for various
purposes(steel, aluminum)

Steel wheels for trucks andbuses

Globalexpansion of
the processing
division

Ultra-large wheels for mining
dump trucks

Contribution to recycling-basedsocieties

Contribution to motorization andinfrastructure development

Wheels for passenger vehicles
Strength 2

2019

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

Sustainability

Reduction in theenvironmental burden throughenergy and resource-saving
technologies
Recycling of steel scrap as amain raw material

Automotive
components

Social impact

Business

High-efficiency, state-of-theart electric furnace factory
Global processing bases

Steel construction materials
Steel materials for ships andindustrial machinery
Steel for use within thecompany (rims, track shoes)

Social value (outcomes)

Growth Strategies

Medium-Term Management Plan
Growth & Change 2021

Value Creation

Creating social value and achieving sustainable growth
based on an integrated production system for producing
and making full use of steel

Securing of manpower andimprovements in safety

Undercarriage components forconstruction machinery(track shoes, tracks)Intellectual capital

Supporting prosperous lifestyles
and the natural environment

P.9-10

Human capitalPowergeneration

Approximately 6,000 diverse
human resources
Development of humanresources capable ofsupporting sustainable growth

P.43-45

Financial capitalSound financial footing

P.53-54

New
businesses

Use of the existing
infrastructure of thesteel business

TOPY Report 2020

Provision of a stable energy
supplyStrength 3

Economic Value

New value
creation

Financial capital targets forthe company
Applicationof electric
furnace melting
technologies
Use of track
manufacturing
technologies

Corporate governance

7

Electricity

Corporate Data

Our unique technologies,
including rolling deformed
section steel

Mica (for cosmetics, etc.)

Crawler robots (AGVs, etc.)

Improvements in the safety
and functionality of cosmetics
using impurity-free synthetic
mica as a raw material
Reductions in manpower andenergy needs using crawler
robots(medium-term plan)

Net sales

JPY 320.0 billion

Operating profit

JPY 16.0 billion

ROS

5.0%

ROE

8.5%

P.46-48

TOPY Report 2020

8

Chapter1

Value Creation

Business Model of the Topy Industries Group- Value chain of our core businesses of steel production and automotive andindustrial machinery components -An integrated
production
systemThe Topy Industries Group wants to realize a more prosperous andcomfortable society by leveraging the technology and quality it
has cultivated over many years using steel as a medium to create
a new movement as a cycle that brings society together. This approach has been incorporated into the One-piece Cycle.

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

19.04.2000

The source of our product development and manufacturing capabilities

Strength 2

Our integrated system for production from raw materials to finished products is the source of our ability to develop products that meet the needs of customers and society and manufacturing capabilities
that can realize the stable production of high-quality products. Also, by contributing to the realizationof a recycling-based society through recycling that uses steel scrap as a main material and leveraging environmentally friendly production facilities and energy-saving technology, we are both reducing
costs and shrinking environmental burden.

Processing
departmentswith a global
reach

Growth Strategies

Strength 1

Value Creation

Building a competitive value chain and supplying
high-quality products worldwide through the One-piece Cycle

17 locations in 7 countries
We have built a global supply system with locations in eachregion of the world that can meet the local procurement
needs of globally active automakers and construction machinery manufacturers.

Products
Materials departments

Processing departments

Steel business

Materials

Stable supply chains for the Group in Japan and overseas

Development
and design

Product development and design that leverages synergies between
the technological capabilities of each process

Products

Technology for rollingdeformed section steel

Metal processing
technologies

Heat treatment
technologies

Manufacturing steel that canmeet the varied performance requirements of customers and theprocessing departments

Manufacturing various cross-section steel to meet the needs ofcustomers and the processing
departments

Realizing wheels that arehighly stable, lightweight,
and offer good traction
performance and design

Realizing highly durable undercarriage
components for construction machinery

Topy America, Inc. s
Kentucky Plant

Toyohashi Works
new trackassembly line

Customers

Society

Corporate Data

Electric furnacesteelmaking technologies

The ability to realize environmentally friendly, efficientand stable production
The Toyohashi Works steelmaking mill
Toyohashi Works features ECOARC™, an environmentally friendly, high-efficiency
arc furnace boasting world-leading heat efficiency. By combining this furnace withthe steelmaking technologies of Topy Industries, we have reduced power consumption and increased productivity, resulting in unmatched cost-competitiveness.
In addition, the mill is designed to be earthquake resistant in readiness for the Nankai Trough earthquake. This contributes to the stable supply of Group products,
which enjoy large market shares (operation began in 2014).

Supply and sale

Automotive and industrial
machinery components business

Sustainability

Procurement

Production

Business

An array of
products with
top-level market
shares in Japanand overseas

The Kentucky Plant of our U.S. subsidiary Topy America,
Inc. is carrying out capital investment with the aim of becoming the world s No.1 steel wheel manufacturing plant.
It has dramatically raised productivity by upgrading rim
assembly and coating lines to make them state-of-theart and by introducing predictive maintenance systems
that use IoT, as well as energy and labor saving facilities.
Through these improvements, it has been reborn as ahigh-performance plant that is considerate of both workers
and the global environment (operations began in 2020).

The new track assembly line at Toyohashi
Works helps to reduce CO 2 emissions
through the integrated production of everything from track materials to products,
significantly reducing the volume of shipping
between facilities. The facility also curbs
emissions of volatile organic compounds(VOCs) by using water-soluble coatings in its
coating process (operations began in 2019).

Payment
Cashflow

Shareholder
returnThe ability to realize high-mix, low-volume production andprocessing departments with a global supply structure

Growthinvestment

External suppliers
Raw material
9

TOPY Report 2020

Steel scrap
TOPY Report 202010

Chapter2

Growth Strategies

Top Message
Value Creation
Growth Strategies

We will seize on the challenging
business environment as an opportunity
to transform ourselves,aiming for sustainable growth beyond the100th anniversary of our founding.

Business

Foreword

Representative Director, President and CEO
Topy Industries, Ltd.

11

TOPY Report 2020

Based on outstanding technical capabilities for making
and mastering steel, the Topy Industries Group provides
high quality, high functionality products in Japan and overseas by sharing technology and know-how developed ina number of business units. Among these products, ourwheels for automobiles, wheels for mining vehicles, andundercarriage components for construction machinery
have captured a leading share of the global market. Our
integrated production system under which we complete
everything in-house from raw material production to finished product processing is what makes this possible.

Corporate Data

Creating value based on an integrated
production system and global supply
structure

We have built a competitive value chain based on theability to develop and produce by constantly going backto the properties of raw materials. Moreover, in our automotive and industrial machinery components business,
which is a processing unit, we have built a global supply
structure in collaboration with 17 production sites in sevencountries around the world and our alliance partners tomeet the component procurement needs of Japanese,
European, and U.S. automobile and industrial machinery
manufacturers operating worldwide.
In FY2019, we launched our medium-term management plan Growth & Change 2021 (G&C 2021), positioned as the final stage of the series of medium-term
management plans under which we have promoted global
Growth and Change to achieve a highly profitablebusiness structure. Our priority is increasing the earning
power of businesses that were enhanced under the previous medium-term business plan as well as strengthening
the development of new businesses and products to capture the needs of customers and society with the aim ofsustainable growth beyond 2021, the 100th anniversaryof our founding.

Sustainability

I would like to express our condolences for those whohave passed away as a result of the COVID-19 pandemic
and our deepest sympathies to those who have been affected.
The Topy Industries Group will continue to fulfill the responsibility to supply products to our customers who aresupporting industry and society while ensuring we havethorough infection prevention measures in place to control
the spread of the pandemic. Our priority is the safety andhealth of our customers, suppliers, local communities,
and employees and their families.

Changes in Market Structure
In FY2019, the first year of G&C 2021, sales volume ofwheels for mining vehicles, and undercarriage compo-

TOPY Report 202012

Chapter2

Growth Strategies

Value Creation

TOPY Report 2020

Train Human Resources and Reform Organizational
Culture to Cope with Change
Society is changing at an ever-accelerating speed. In orderto achieve sustainable growth, the Topy Industries Group

Achieve Sustainable Growth Through Transformation
Although the Group s core businesses of steel and theautomotive and industrial machinery components business are affected by fluctuations in the economy, theyplay a role in supporting resource recycling, industry, andsocial infrastructure, and demand is expected to continue
growing over the long term alongside global economic
growth. We will seize on the challenging business environment as an opportunity for transformation and promotebusiness structure reform aimed at increasing earning
power so that we are able to return to our growth trajectory quickly after the COVID-19 pandemic.
In addition, by transforming ourselves to adapt to socialchanges and continuing to create social and economic value based on our integrated production system formaking and mastering steel, we will aim for sustainablegrowth beyond the 100th anniversary of our founding.

TOPY Report 2020

Corporate Data

13

Venture into New Businesses
Although mica and crawler robots businesses are currently being impacted by a slowdown in marketing activities
due to the COVID-19 pandemic, demand is expected
to expand over the medium-to-long term, and we have
implemented initiatives aimed at full-scale commercialization. For mica, which has received high acclaim asa raw material for cosmetics, we will take advantage of
its advanced barrier properties and safety due to being
derived from natural materials to develop demand as analternative packaging material to plastic in addition to its
conventional use in cosmetics. In the area of crawler robots for automated guided vehicles (AGVs), we will speed
up development and sales expansion of products withspecialized applications and functions.

Create Shared Value Through Resource Recycling
and Energy Conservation
Although the Topy Industries Group recycles and reuses
scrap iron, a valuable domestic resource, as a principal
raw material, we consume a large volume of energy, andregard resource recycling and energy conservation as key
issues for sustainable growth.
In resource recycling, the Group has promoted the recycling of low grade scrap iron such as end-of-life automobiles and miscellaneous scrap, using Japan s largest
shredder plant and unique steelmaking technology. In
2021, we plan to introduce advanced metal sorting equipment, and, by doing this, we will aim to further increase
recycling volume and improve the quality of sorted andrecycled iron and non-ferrous metals.
In energy conservation, we have achieved one of thebest levels of energy efficiency in the electric furnaceindustry utilizing cutting-edge, environmentally-friendly,
high-efficiency electric furnaces, and our unique operating technology and know-how. In addition, we have beendeveloping Ene-katsu 2020, a company-wide energy andelectricity conservation campaign, since FY2013. The
campaign s achievements include Electricity Consumption Visualization and Display, which won the Energy
Conservation Grand Prize and a reduction in the amountof contracted electricity through the introduction of theEnergy Conservation Meister Program to drive energy
conservation activities in manufacturing sites. Going forward, the Group will continue working on both tangible
and intangible initiatives aimed at conserving energy andpreventing global warming.
The Topy Industries Group will continue creating bothsocial and economic value through these initiatives.

must adapt to social change more quickly than ever before.
We will use the COVID-19 pandemic as an opportunity toaccelerate workstyle reform and promotion of health management with the aim of creating more efficient and innovative workplaces and bringing about a transformation in theindividual awareness and actions of employees. In addition,
in FY2019, we renamed the activities for improving work
satisfaction mainly led by young employees, implemented
since FY2016, as the Communication Promotion Committee in order to take them to the next stage. The committee
is promoting measures to stimulate vertical and horizontal
communication with the objective of sharing the company s
vision and goals and enhancing employee satisfaction. In
addition, we are hoping to boost the employment and training of human resources at overseas locations. In the past,
we dispatched employees from Japan, and our overseas
locations have been based on the Japan-style. However,
we are putting a focus on training diverse human resources
who can play active roles in the culture and customs of individual countries and building systems to provide support
from Japan as the mother factory through teleworking andother methods.

Sustainability

Structural reform of production in the automotive
and industrial machinery components businessWe are working to reduce fixed costs in line with demand
as a top priority issue. We are optimizing the domestic
production system in the automotive and industrial machinery components business, including steel wheels
for passenger vehicles where falling demand due to adecrease in Japanese automobile production and risinguse of aluminum wheels has led to excess capacity. We
will also assess changes in market structure and future
profitability to review the production system and work to
reduce fixed costs at overseas locations. Moreover, we

Enhance Strategic Products
Faced with sluggish demand, we are seeking to differentiate and promote higher value-added products andservices while aiming to secure sales volume. First, we
will provide high quality products that satisfy customers
through constant efforts to upgrade technological capabilities and workplace skills. We will also leverage theunique technology of the Topy Industries Group to further
enhance and increase sales of strategic products thatmeet the needs of customers and society. This includes
deformed section steel products that help shorten processing, TACoil®, a compact coil for reinforced concrete
steel bars that facilitates use of automatic processing machinery and also features high storage efficiency, aluminum wheels for automobiles that meet the need for lighter
vehicle bodies and higher design quality, and the replacement parts market in undercarriage components for construction machinery and wheels for mining vehicles.

Strengthen a Sustainable Management
Foundation

Business

Implement Business Structure Reform to
Increase Earning Powerwill use the opportunity to reinforce the mother factory
functions of domestic sites, paving the way to increasing
the competitiveness of overseas locations.

Growth Strategies

nents for construction machinery declined significantly as
the global economy continued to slow with an additional
impact from the COVID-19 pandemic toward the end of
the fiscal year. Consequently, although we increased cost
improvements through such measures as consolidatingproduction lines, results on the business performance
front were extremely tight. The difficulty of the current circumstances is unprecedented due to the sharp slowdown
in the global economy associated with the COVID-19
global pandemic. It will also take considerable time for the
global economy to return to its pre-pandemic growth trajectory, and changes in the environment surrounding theTopy Industries Group that have been present for sometime are expected to accelerate going forward. These
include changes in the supply chains of finished vehicle
manufacturers, such as local production for local consumption and on-shoring of production owing to conflict
between the U.S. and China and geopolitical risk, as well
as a growing need for lighter vehicle bodies due to increasingly severe global warming.
Given these conditions, we are reconsidering our initiatives under G&C 2021, which put a priority on increasing
earning power, to include additional measures, and will
implement measures with a sense of speed once they aredrafted.

14

Chapter2

Growth Strategies

Medium-Term Management Plan

Basic Policy

Growth & Change
Global Growth and Change
to achieve a highly profitablebusiness structure

Transformation into a company
with sustainable growth that isgreat place to work

Accomplish G&C and prepare
for the next stage of growth

2012 to 2015
Medium-Term Management Plan

2016 to 2018
Medium-Term Management Plan

2019 to 2021
Medium-Term Management Plan

Growth & Change 2015

Issues up to the previous medium-term management plan
Maximize capabilities of state-of-the-art steel-making plants and leverage our strengths in a widearray of products to expand sales volumes

Automotive
components business・Optimize steel wheels for passenger vehicle production systems in Japan
・Strengthen the competitiveness of each production location
・Capture global demand for steel and aluminum wheels for passenger vehicles
・Develop appealing products in response to factors such as the need for lighter vehicle bodies
and the spread of EV

Industrial machinerycomponents business

Engage growth markets and the market for replacement parts

Major Topics

1 Increase Earnings Power・Increase earnings power with a focus on operating profit (quality)
・Steadily reap the results of growth measures implemented in G&C 2018
・Implement measures based on customer needs and the Group s strengths and weaknesses
・Achieve further cost improvements across the entire value chain in response to the expanding scaleof the company

2 Leverage Group Synergies• Synergies with the subsidiary Ring Techs Co., Ltd.

Synthetic
mica

Capture the growing demand for cosmetics

CrawlerrobotsMake a full-scale entry into the AGV market

Optimize production systems for steel wheels for passenger vehicles in Japan and overseas and share designs,
technology, and purchasing to reduce costs and improve productivity

Sustainability

New fields

Growth & Change 2021

Business

Steel business

Growth & Change 2018

Growth Strategies

Under the slogan of Growth & Change, we have positioned this as the final stage of our medium-term management
plan, in which we will promote global growth and change to build a highly profitable business structure.
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 and continue to develop new businesses
and products that meet the needs of our customers and society, aiming for sustainable growth beyond our 100th
anniversary in 2021.

Value Creation

Growth & Change 2021

• Synergies with the subsidiary Asahi Tec Corporation
Coordinate sales of steel wheels for passenger vehicles and aluminum wheels to realize mutual sales growth andshare designs, technology, and purchasing to reduce costs and improve productivity

3 Enhance Strategic Products
Our Business Environment

Japanese
economy・Falling demand due to low birthrate
and aging population
・Increased investment in labor-saving
and efficiency
・Fall in production numbers of automobiles and construction machines

Society andenvironment

・Shrinking working population
・Shift toward automated and easily
usable equipment and facilities
・Far-reaching efforts to tackle environmental burden
・Promotion of AI and IoT usage andstreamlining of work

TOPY Report 2020

Steel business・While domestic demand will be maintained
over the medium term, it will shrink over thelong term
・Increasing steel demand in Asian emerging
countries, gentle slowdown in China

Automotive
components
business・Although demand in Japan is decreasing,global demand has grown
・Advances in CASE and MaaS, tighter environmental regulations
・Increase in the aluminum wheels installation rate due to the need to reduce vehicle
weight and improve design

Industrial
machinerycomponents
business

・Decline in domestic demand
・Although global demand will expand moderately over the long term, there will be a lot ofvolatility over the medium termNewbusinesses

・The cosmetic industry has continuously
grown both in Japan and overseas
・Rapid growth in the robot market due to ashortage of workers and the promotion of
automation in the fourth industrial revolution

Deformed section steel and TACoil ®, a new bar for reinforced concrete

・Automotive and industrial machinery components businessCorporate Data

15

Overseas
economy・Prolonged friction between the US
and China
・Growth in emerging countries andgradual slowdown in China

・Steel business

Lightweight wheels, high-quality design wheels, and mining vehicle wheels for the replacement parts market, etc.

・New fields

Synthetic mica as a base material for cosmetics, AGV crawler robots differentiated from existing tire-system vehicles

4 Embrace the Challenge of Innovation
・Increase investment in R&D and strengthen product and technological development capabilities
・Utilize IoT at production sites to shift toward smart factories
・Secure and cultivate human resources by fostering creative workplaces through continuous engagement in activities that improve job satisfaction and promote diversity

5 Further Strengthen the Management Foundation[E] 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] Strengthen the governance system that aims to prevent and minimize risks

TOPY Report 202016

Chapter2

Growth Strategies

Medium-Term Management Plan
Value Creation

Progress on Growth & Change 2021
Initiatives in the First Year of the Plan (FY2019)

Preventing Infection and the Current Status of the GroupWe are following government policy in each country and prioritizing the health and safety of customers, business partners, local communities, and our employees and their families.

Major Topics

Business Segment,
etc.

Head Office, etc.

Implementing remote working, staggered work hours, online meetings, and other initiatives

Production sites
in JapanIn order to supply necessary products, production is continuing at all production
sites based on thorough measures to prevent infection

Overseas production
sites

Although production at sites in China, Southeast Asia, the U.S., and Mexico was
temporarily suspended, all sites have been operational since June

Status of FY2019 Initiatives

Increase earnings power・Advanced cost improvements across the entire value chain(total cost improvement: ¥1.6 billion)

Business

Companywide

Growth Strategies

As the global economy slowed in the second half of the year, we made increasing earnings power our top priority andadvanced initiatives such as structurally reforming our automotive and industrial machinery components business andexpanding sales of strategic products in the steel business. We also steadily implemented various measures aimed at realizing sustainable growth.

Response to the COVID-19 Pandemic

Leverage Group synergies

Increase
earnings
power

Automotive andindustrial machinerycomponents business・Transferred production processes between locations and concentrated
production lines (steel wheels for passenger vehicles, tracks)
・Initiatives aimed at optimizing production systems for other products areunderway

Enhance strategic products

Embrace the challenge of innovation

Towardsustainablegrowth・Advanced the shift toward smart factories, such as visualizing electricity
consumption
・Advanced and vitalized activities that improve job satisfaction

Further strengthen the management foundation
Automotive andindustrial machinerycomponents businessCompanywide

・Created workplaces that are considerate of workers and the global environment
Toyohashi Works track assembly line: Started operations in January 2019
U.S. steel wheel production site: Started operations in October 2020

・Achieved a gold rating in a CSR assessment by France s EcoVadis

Changes in the External Environment

Emergency measures
to improve earnings

・Revised production structures to adjust for large declines in demand・Reduced fixed costs to rebuild an earnings base・Reduced officer compensation and management salaries (effective April 2020)・Applied for an employment adjustment subsidy and implemented furloughs(effective April 2020)

Securing solid capital・Shrunk inventories
・Established a commitment line (immediate line of ¥10 billion)+

Corporate Data

Companywide

We have implemented various measures to minimize the impact of the pandemic on earnings,
strengthen the Company s standing, and improve earnings. We have also carried out an appropriate
response in terms of cash flows.
Sustainability

Steel business・Expanded sales of mast rails for forklift trucks to overseas customers (deformed section steel)・Strengthened sales of products for projects and grew orders related to the
Linear Chuo Shinkansen project (deformed bars)
・Developed a large-sized version of TACoil®, a bar product for reinforcing
concrete that enhances processing and storage efficiency

Emergency Measures to Improve Earnings and Measures Concerning
Finance and Capital

Future Management Plan Initiatives• Assuming that the slump in demand will continue, we will make improving earnings our top priority andaccelerate measures to reduce fixed costs, such as optimizing Group production structures in the automotive and industrial machinery components business. We will also expand added value in terms ofboth quantity and price by differentiating existing products and enhancing strategic products.
• We will also steadily implement measures to strengthen the management foundation from an ESG perspective.

Going into 2020, the global economy experienced a huge slump due to the effects of the COVID 19 pandemic and the Groupsaw large declines in demand for automobiles and construction machinery in each country, which had a big impact on the automotive and construction machinery components business in particular. Additionally, factors such as the escalation of trade
friction between the U.S. and China, a decline in automobile production in Japan, an increase in the percentage of automobiles being fitted with aluminum wheels, and the rise of local manufacturers in the Chinese construction machinery market are
accelerating the changes in market structure anticipated in the G&C 2021 period.

17

TOPY Report 2020

TOPY Report 202018

3

3 Business
Chapter

ChapterBusiness

Steel Business
Value Creation

Medium-Term
Management Plan
Policy(Basic Strategy)

Tsuyoshi Nakamura

We plan to increase earnings power by further expanding sales ofstrategic products (such as deformed section steel and TACoil®) andmaximizing synergies between Group companies developing the recycling business.

(First Year of theMedium-Term
Management Plan)

Core Competencies

We have enhanced and expanded sales of high added value strategic
products such as TACoil®, a bar product for reinforcing concrete, forklift truck mast rails for overseas customers, and steel parts for tunnel
construction on the Linear Chuo Shinkansen project. Also, in order toexpand and strengthen our recycling business, we have decided to introduce advanced metal sorting equipment into our Akemi Recycling Center, Ltd. subsidiary (equipment scheduled to begin operating in 2021).

Mast rails for forklift trucks

In addition to being able to efficiently produce various types of products, such as steel sections andbars for construction, 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.

Opportunities and Threats

Opportunities

Threats

・Global steel demand is expected to grow in the longterm, driven by infrastructure-related demand in
emerging nations

・Steel demand in Japan is shrinking in the long-term

・In regard to steel demand in Japan, there is continuing demand related to civil engineering projects, suchas measures for building national resilience
・Companies are expected to tackle global environmental issues such as reducing greenhouse gas
emissions and realizing a recycling-based society

・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
・The slump in demand caused by the COVID-19 pandemic is becoming prolonged

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. Additionally, we plan to increase earnings power by maximizing the effects ofcapital investment in the recycling business.

Corporate Data

Our Business Environment

Issues to be
Addressed

Steel parts for tunnel construction on the Linear Chuo
Shinkansen project

Sustainability

Strengths of the BusinessBusiness

Progress in
FY2019Managing Executive Officer
in charge of the steel business
General Manager, Steel Division

Growth Strategies

Along with satisfying customer
needs by leveraging our unique
technologies, we contributeto solving environmental andsocial problems.

TopicsCompletion of the Large-Sized Two-Ton TACoil®
We have completed development of a large-sized two-ton version of the TACoil®. We plan topenetrate the market by showing the increased advantages that a larger-sized coil offers customers, such as increased processing and storage efficiency and reduced losses on disposal(development of a three-ton coil scheduled within FY2020).

From left: The one-ton, two-ton, andthree-ton versions of TACoil®

Application of the EcoLeaf Environmental Label Program
As part of our environmental initiatives, in October 2020 we applied the EcoLeaf Environmental Label Program*1 to six products, including H-section steel. Going forward, we will actively
disclose information on the environmental performance of our steel products.
*1 A program for disclosing quantitative information about the environmental burden of a product or service over its entire lifecycle,
from material procurement through to disposal or recycling
H-section steel

19

TOPY Report 2020

TOPY Report 202020

Chapter3

Business

Automotive and Industrial Machinery Components Business (Wheels for

Passenger Vehicles)
Value Creation

Medium-Term
Management Plan
Policy(Basic Strategy)

Koji Nanayama

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

(First Year of theMedium-Term
Management Plan)

For steel wheels, we optimized our production system with Ring
Techs Co., Ltd., including concentrating production lines in response
to a downturn in domestic demand. Additionally, in the U.S., which
we have positioned as an important market, we steadily invested inrenewing production sites to strengthen our supply structure (newproduction lines began operation in October 2020). For aluminum
wheels, we collaborated with our subsidiary Asahi Tec Corporation todevelop higher added value products and realize new orders.

Business

Progress in
FY2019Operating Officer in charge ofthe automotive and industrial
machinery components business
General Manager, Wheel Division

Growth Strategies

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

Core Competencies
The Group has built a global supply system for steel wheels for passenger vehicles by establishinglocations in Japan, 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.

Opportunities and Threats

Opportunities

Threats

・As a result of economic growth worldwide, global
automobile demand is expected to expand in the medium to long term, particularly in emerging nations

・Domestic automobile demand is contracting due tofactors such as Japan s declining population.

・ The automotive industry is advancing technologicalinnovation such as CASE* 1 and MaaS* 2*1 Connected, Autonomous, Shared/Service, Electric*2 Mobility as a Service

21

TOPY Report 2020

・Protectionism is becoming evident around the world・ The slump in demand caused by the COVID-19 pandemic is becoming prolonged

Corporate Data

Our Business Environment

Issues to be
Addressed

We will accelerate reforms to production structures, such as optimizing the Group s production structure in Japan for steel wheels
for passenger vehicles and strengthening competitiveness by maximizing the effects of investment in U.S. production sites. We will also
advance initiatives that maximize synergies with Ring Techs Co., Ltd.
and Asahi Tec Corporation in the production field and all other areas,
including sales, product development, and purchasing.

Sustainability

Strengths of the Business

Topic
Receiving the PREMIO GTO 2020 Award
from Mexico s Guanajuato State
Topy MW Manufacturing Mexico S.A. de C.V. (TMMM), theGroup s steel wheel production and sales site in Mexico,
has been awarded the PREMIO GTO 2020 award for improvement from the government of Mexico s GuanajuatoState. This award is presented to superior companies in thestate following an assessment of improvement activities thatinvolves both documentation and site visits. TMMM wasgiven the award due to a high assessment of initiatives toimprove productivity on its topcoat line, including improving
productivity and reducing the ratio of refinishes needed.

Guanajuato, Gto. A 27 de abril de 2020.
OFICIO DDTP/025/2020.
Asunto: Informe de resultados a participantes en el Galardón “GPEML2020”.

Ing. Alan Frías Torres
Topy MW Manufacturing México, S.A. de C.V.
Presente
Por este conducto tengo el honor de informarle el resultado del proyecto de mejora
inscrito en el Galardón GUANAJUATO PREMIO ESTATAL AL MÉRITO LABORAL en su
edición 2020.
En relación a su empresa los proyectos de mejora ganadores son:Productividad en Top Coat

Hacemos una extensiva felicitación a nombre del Subsecretario del Trabajo y Previsión
Social en el Estado, a los y las trabajadoras (es), que participaron este año demostrando su
talento y capacidad siendo Grandeza de México.
Asimismo, le informamos que debido a la Contingencia Sanitaria (Covid-19) que estamos
viviendo en nuestro estado y a nivel mundial, se ha pospuesto el Evento de la entrega delGalardón Guanajuato Premio Estatal al Mérito Laboral edición 2020, hasta que lasautoridades Sanitarias permitan la realización de eventos masivos, lo cual estaremos
pendientes de informarles e invitarlos por este medio a su empresa y a las y lostrabajadores ganadores.

Atentamente

Mauricio Avendaño Sánchez
Director de Desarrollo para el Trabajo Productivo.
C.C.P. ARCHIVO MAS*CVJTOPY Report 202022

Chapter3

Business

Automotive and Industrial Machinery Components Business (Commercial

and Off the Road Wheels)
Value Creation

Medium-Term
Management Plan
Policy(Basic Strategy)

We plan to increase earnings power by restructuring domestic production systems for wheels for both commercial vehicles and mining
machinery. We are also advancing product development and providing services that anticipate the needs of society and customers.
For wheels for mining vehicles, we are strengthening frameworks for
expanding sales in overseas markets and enhancing our inspections
and repair business.

Masahiro Abe

Progress in
FY2019(First Year of theMedium-Term
Management Plan)

Core Competencies
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 quality that can withstand harsh conditions at mines all over the world and producing
SGOR®, which is one of the largest 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 shareof the markets for wheels for commercial vehicles and mining vehicles.

Opportunities and Threats

Opportunities

Threats

・Global demand for commercial vehicles is expected
to grow in the long-term

・Commercial vehicle production in Japan is decreasing due to a decline in domestic demand and a shift
to local production overseas

・Global demand for mining machinery is expected to
grow in the long-term
・Demand for the inspections and repair business formining machinery is expected to grow

23

TOPY Report 2020・Demand for commercial vehicles and mining machinery isdecreasing due to business conditions
・The slump in demand caused by the COVID-19 pandemic is becoming prolonged

Corporate Data

Our Business Environment

Issues to be
Addressed

Amid concern about the effects of the prolongation of the COVID-19
pandemic, our top priority has become to increase earnings powerby reducing fixed costs. We will advance initiatives such as concentrating production lines in order to restructure production systems forcommercial vehicle wheels in Japan while also optimizing our productmix between Japan and our locations in Indonesia. We will also continue to advance initiatives such as making wheels for commercial
vehicles lighter, developing new wheel for mining vehicles productsthat contribute to improving safety and operational efficiency for customers, and strengthening the inspections and repair business.

Sustainability

Strengths of the BusinessIn addition to transferring and integrating production between lines
in order to restructure production systems for commercial vehicle
wheels in Japan, in the overseas business we focused on expanding
sales to manufacturers of complete automobiles in Europe and the
U.S. and acquired new commercial rights. Also, in our inspections
and repair business for wheels for mining vehicles, we carried out
local investigations and information gathering, particularly in North
America, South America, and Australia, in order to identify the hidden
needs of customers.

Business

Operating Officer in charge of theautomotive and industrial machinerycomponents business
General Manager, Commercial
Commercial and Off the Road
Wheel Division

Growth Strategies

Supplying products and services
that anticipate the needs ofsociety and customers all over
the world through outstanding
technological capabilities.

Topic
Advancing product development that contributes tothe realization of a sustainable society
We are responding to the needs of automakers forlighter vehicle bodies by developing and manufacturing lightweight wheels that contribute to the realization of a sustainable society through effects such as
saving energy and reducing CO2 emissions.
At the Tokyo Motor Show 2019 held at Tokyo Big
Sight in October last year, we exhibited wheels featuring new materials and forms, enabling our products to be viewed by a large number of customers.

A Super Single wheel which contributes
to improved transportation efficiency andreduced fuel consumption. Compared tothe conventional method of using double
tires for the rear wheels of vehicles suchas trucks and buses, these wheels enable
lower fuel consumptions and the transportation of greater loads by making thevehicle lighter.

TOPY Report 202024

Chapter3

Business

Automotive and Industrial Machinery Components Business (Undercarriage(Basic Strategy)

We aim to achieve stable earnings and growth supported by the trust
we have earned over the years from construction machinery manufacturers.
・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 andbuild a supply system to serve international growth markets.
・We will identify customer needs and enhance our system for developing new products and technologies in order to further improvecustomer satisfaction.

Growth Strategies

Medium-Term
Management Plan
PolicyValue Creation

Achieve stable earnings andgrowth as a leading company inundercarriage components forconstruction machinery

Components for Construction Machinery)

Katsuyoshi Tanaka

Progress in
FY2019(First Year of theMedium-Term
Management Plan)

・We enhanced production capacity by starting operation of a new
track assembly line (Toyohashi). We also upgraded our water-soluble coating equipment.
・We made the development department independent, strengthening
our framework for identifying customer needs and developing new
products and technology.

Business

Operating Officer in charge of theautomotive and industrial machinerycomponents business
General Manager, Undercarriage
Components Division

Core Competencies
The undercarriage components for construction machinery business has gained high levels of trustfrom 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 hydraulic excavator tracks 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.

Opportunities and Threats

25

Opportunities

Threats

・Demand for construction machinery is expected to
grow in the long-term, especially in emerging nations

・Movement toward protectionism is becoming evident
around the world・Demand for smaller product models is expected torise as emerging nations become increasingly urbanized

・ The slump in demand caused by the COVID- 19
pandemic is becoming prolonged

TOPY Report 2020

We will improve our readiness for the supplemental components market and plan a supply structure for global growth markets.
We will also enhance cost-competitiveness by automating production equipment.

Corporate Data

Our Business Environment

Issues to be
Addressed

Sustainability

Strengths of the Business

Topic
Establishing new production equipment formini excavator tracks
In the Chinese market, which is becoming increasingly
urbanized, demand for mini excavators is growing due tofactors such as rising investment in public infrastructure.
Therefore, Topy Undercarriage (China) Co., Ltd., which isbased in China s Shandong Province, has upgraded its
equipment for producing tracks for construction machinery in line with the market.
It has also invested capital in environmentally friendly
initiatives such as the installation of new exhaust systems
that reduce emissions of volatile organic compounds(VOCs) in the coating process while at the same time enhancing processing capabilities.

Mini excavator processing equipment

TOPY Report 202026

Chapter3

Business

New Fields
Value Creation

Becoming a global niche leader
in innovative technologies

Growth Strategies

Satoshi Fukura
Operating Officer
General Manager, Science Division

Crawler Robots
Core Competencies

Strengths of the Business

Strengths of the BusinessOur mica has received high acclaim as a safe base material for cosmetics due to its high levels oftransparency and purity. It is also well regarded for the strong barrier properties it offers as an auxiliary material for food and other packaging.

The AGVs we produce use crawler belts for propulsion and excel in getting over rises and handlingrough terrain. We will strive to enhance the performance of products with functions such as the newly
developed ability to freely and autonomously move left, right, forward and backward.

PolicyWe have installed enhanced production equipment as well as developed and increased sales of new products for use in both cosmetics
and industry.

Topic

Medium-Term
Management
Plan Policy
and Progress
in FY2019

PolicyWe will fully enter the AGV market, where demand is expected to growas a consequence of labor shortages.

Progress

We collaborated with NEC Corporation to launch Sekisyu Crawler, acrawler-style autonomous mobile transportation support AGV equippedwith a new control function that enables it to control multiple robotic
transportation platforms. Additionally, for remote-type products, we
collaborated with NIPPON EXPRESS Co., Ltd. to advance research anddevelopment focused on reducing manpower required for cargo handling work.

Topic

Toyohashi Works receives a gold CSR assessment

Demonstration given at International Robot Exhibition 2019

Toyohashi Works, the Group s mica manufacturing plant, achieved a gold rating in a CSR assessment by EcoVadis, a French institution that assesses thesustainability of supply chains. This rating will contribute to raising our presence as a sustainable supplier in the global markets.
Additionally, it also enables us to handle natural origin indexes in compliancewith ISO 16128, so we will work to capture growing demand for nature-based
cosmetics.

We exhibited together with NEC Corporation and NIPPON EXPRESS Co., Ltd. atInternational Robot Exhibition 2019 which was held from December 18 to 21, 2019
at Tokyo Big Sight. A demonstration of the Sekisyu Crawler, in which it showed its
ability to skillfully control multiple transportation platforms over obstacles such as uneven terrain, rises, and openings, was wellreceived by visitors to the event.

TOPY Report 2020

Corporate Data

Progress

We will capture demand for cosmetics in Japan and overseas which is
expected to grow due to factors such as economic growth and a growing female workforce. We will also cultivate demand for materials to
replace plastic in packaging.

Sustainability

Core Competencies

Medium-Term
Management
Plan Policy
and Progress
in FY201927

Business

Mica

TOPY Report 202028

Chapter3

Business

Global Expansion of the Topy Industries Group

Icon Legend (products produced at each base)

Wheels fortrucks andbuses

Wheels forpassenger
vehicles (steel)

Wheels forpassenger
vehicles(aluminum)

SGOR®

Industrial
fasteners

Alliance partner

Value Creation

To capture some of the global increase in demand for automobileand construction machinery, we are expanding and strengthening
the global supply system for our automobile and industry machinerycomponents business.

Undercarriage
components
for construction
machinery

To provide our customers worldwide with high-quality products that satisfy their needs, the Topy Industries
Group is opening new production and sales facilities and conducting business with its alliance partners.

United States

Europe (France, Poland, Romania, Russia, and Turkey)

Growth Strategies

Topy America, Inc.

（MW Italia S.R.L.）

China

Topy Precision Mfg., Inc.

Topy Undercarriage (China) Co., Ltd.
Fujian Topy Autoparts Co., Ltd.
Ring-Techs Guangzhou Co., Ltd.

Japan
Business

Guangzhou Wheelhorse Asahi Aluminium Co., Ltd.

Topy Industries, Ltd.

Guangdong Dicastal Auto Parts Co., Ltd.

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

Topy Fasteners Vietnam Co., Ltd.

India

Sustainability

VietnamMexicoTopy MW Manufacturing Mexico S.A. de C.V.
Topy Fasteners Mexico, S.A. de C.V.

WIL Car Wheels Ltd.
Corporate Data

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

Overseas
net sales(billion yen)

100

31.5

80

South Africa（MW Italia S.R.L.）

Indonesia

60

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

TOPY Report 2020

17.8

7.9

7.9

22.2
17.9

40

20

0

29

17.8

31.8

12.4

26.1

26.1

23.5

2015

2016

2017

12.8
Other

32.6

31.1

2018

2019（Fiscal year）

China
United States

TOPY Report 202030

44 SustainabilitySustainability
Chapter

Chapter

Sustainability Initiatives of the Topy Industries Group
Value 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.

Corporate Basic Philosophy of the Topy Industries Group【The Topy Industries Group Corporate Basic Philosophy】

Customers

Local communities

Loop of trust

Loop of symbiosis
As acorporate
citizen

Evaluation
Trust【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 1 For the benefit of customers

Article 6 Technology and know-how innovation

Produce and supply, high-quality and safety-oriented merchandiseand service to gain customers and consumer confidence.

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

Article 2 For the benefit of society

Shareholders andinvestors

For thebenefit ofcustomers

Employees
For thebenefit ofsociety

Responsibilities
of seniormanagement

Loop of expectations
Sustainable
development
Return of
profits

Fair
corporate
activities

Group Basic
Philosophy

Loop of growth
Human
resource
development
Safety andhealthFor thebenefit of
employees

Skill
improvement
Enthusiasm

1. Communicate widely with society as well as shareholders andactively disclose corporate information fairly and appropriately.
Cooperate with local communities and actively work on social contribution activities as being a good corporate citizen.

Article 7 Fairness in corporate activities

2. Oppose resolutely any anti-social forces and parties posing a menace to social orders and security.

Article 8 Responsibilities of top management

Operate business in a fair and transparent manner under free competition and appropriately keep an arm s length distance from politics
and administrative agencies.
1. Top management shall make example by leadership and inform thestrict adherence to the Code of Conduct and ensure the compliance of the corporate ethics effectively administrating its management systems.
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 sourceof competence and responsibility, impose strict disciplinary action
against those held responsible.

Article 3 For the benefit of employees
Respect the individual character and personality of employees, andprovide 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
Realize that a sensible approach to environmental conservation isessential to the existence and activities of the company, and behave
voluntarily and actively.

Sustainability

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.

Business

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.

Growth Strategies

Quality
SafetyWin 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.

ESG Initiatives of the Topy Industries Group
Respond to shareholders and investors
expectations toward the Topy Industries
Group through sustainable business growthand highly-transparent corporate information disclosure, and establish mutually
beneficial relationships.

Business partners

Workingin harmony
with theworld

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

Topy Industries approach
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

Products enhancing work efficiency

Tightening of laws andregulations in countries

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

Local economic development

System for promoting
environmental activities

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.

31

TOPY Report 2020

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.

Corresponding
SDGs

Recycling
Acceleration of global warming

Air pollution

Loop of collaboration

Response to risks andregulations

Corporate Data

Innovation in Group Code of Conduct
technology
and knowhow
Working inharmony
with theenvironment

Supporting
systems

Supply chain
management

E

Local job creation

Small group activities

Diversity

Strengthening
governance

Global management

Communication
Promotion Committee

Recruitment anddevelopment of globallycompetitive human resources

Risk management system
BCP (Business Continuity Plan)

Compliance

S

G

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Sustainability

Environmental Initiatives

Environmental Initiatives

Nature of Our Business

Environmental Management

Recycling

Environmental
Philosophy【Basic Environmental Policy】

Environmental conservation structure

Collected byGroup companies

General Manager of General
Affairs Dept.
General Manager ofEngineering Administration
Department

Waste(scrap)Collected byGroup companies

Products

General Managers of Factories

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.

Engineering Administration Dept.

Sustainability

Executive Chairman of Labor
Union

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.

A variety of hot rolled steel materials are
made from recycled materials, and wheels,
shoes, and track shoes are manufactured byprocessing some of these materials.

Recycles and reuses scrap iron to
produce steel (Steel Division)

Steel Division, Commercial andOff the Road Wheel Division,
Undercarriage Components Division

Environment and Disaster
Prevention Sub-Committee

Factory Environment
Committee

Environment staff of each factory■ ISO 14001 Certification Status (Topy Industries)
ISO 14001
certification
obtained

Transition to2004 version

Transition to2015 version

Toyohashi

Apr. 1999

Completed inFeb. 2006

Completed in
Apr. 2018

Toyokawa

Nov. 1998

Completed in
Oct. 2005

Completed inAug. 2016

Ayase

Nov. 1998

Completed in
Nov. 2005

Completed in
Sept. 2016

Jun. 1999

Completed inJun. 2005

Completed inJun. 2017

Factory

Kanagawa

Reuse of materials
At Topy Industries Toyohashi Works, we produce various steel
sections from molten steel made in an electric furnace. We
have two sources of scrap iron, which is the major material forour steelmaking process: scrap gathered in-house and scrap
procured externally. 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 productionof various wheels and undercarriage components.

In-house recycling system
Use as materials

Steel
WheelsScience
Div.

Wheel
Div.

Commercial
and Off theRoad Wheel
Div.

Construction machinerycomponents
Industrial machinerycomponents
Undercarriage
Components
Div.

Corporate Data

TOPY Report 2020

Director in charge ofEngineering Administration
Department

MarketConsumption and production
activities
Business

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 greenhousegas emissions, using fewer resources, and recycling.

33• Tojitsu Co., Ltd.
• Akemi Recycling Center, Ltd.

Executive Management
Meeting

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.

Since the Wheel Division (Toyokawa and Ayase factories)
launched a program to acquire ISO 14001 certification to promote environmental conservation activities in February 1998,
all Topy manufacturing sites have undertaken the certificationacquisition program, which was completed in June 1999.
Proper maintenance of our environmental management system has been confirmed through regular audits after this initialcertification. We continue to carry out environmentally-friendly
production activities by promoting scheduled and systematic
environmental initiatives in line with our Basic Environmental
Policy.

systems. Furthermore, we implement an original recycling system within our production flow for the reuse of resources.

President

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

ISO 14001 certification

Topy Industries manufactures steel products using scrap irongenerated in the course of consumption and production activities around the world. In this business model, we have a vitalrole to play in production activities within society s recycling(Topy Industries)

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.

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 theneeds of local communities.

Topy Industries is a recycling corporation
Growth Strategies

We believe it is our duty to preserve a rich and beautiful world for future generations to enjoy. In partnership and solidarity with local communities, we will work to promote continuous improvement in everything
we make̶from materials to finished products̶to lay the foundation for the sustainable development ofsociety.

Value Creation

Environmental Philosophy and Basic Environmental Policy

Shapes
Melting/rolling
Electric
furnaceSteel Div.

Waste
Recycling
Slag

Waste paper

Civil engineering
materials

Recycled
paper

Steel

Scrap ironin the market

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Sustainability

Environmental Initiatives

Business Opportunities

Recycling of end-of-life vehicles,
end-of-life vending machines,
and other waste

Development of Environmentally-friendly Products■Recycling flow chart

Shredding and screening

Shredded iron
scrap

Shredder dust

Nonferrous scrap

Volume reduction
and solidification
Smelting andprocessing

Recycled crushed
stone

Nonferrous
products

SteelContributes to a significant reduction in environmental
impactTopy 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 company s proprietary weight reduction technology. The corrugated rim is made from a rim section of an
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-rolling steelmaking technologies with wheel analysis and design technologies. The ECOD disc is formed through cold spinning (rocking
die forming) tubes made of steel plate. This enables a thinner,
lighter disc while also ensuring the required strength.

Tracks 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
last year when a new crawler assembly line was built at Toyohashi Works. This has greatly reduced emissions of VOC (volatile organic compounds). In addition, the works has achieved
integrated production of tracks from raw materials to finishedproducts, significantly reducing transportation volume andcontributing to a reduction in CO2 emissions.

Overall thickness distribution
was redesigned

Sustainability

Electric furnace steelmaking and rolling

Water-soluble coated tracks

Helping improve fuel efficiency with about 15% lighter
weightBusiness

Product drawing
Corrugated rim■Volume reduction and solidification
Shredder dust is reduced in volume and solidified into shapes
optimal for use in electric furnaces. The resulting product isused as an alternative to coke in the electric furnaces at Topy
Industries Toyohashi Works for thermal recycling.

Ultra-large diameter wheel for mining
dump trucks (SGOR®)
Non-chrome pre-treatment of aluminum
wheel painting
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 creating a chromium-freeprocess.

End-of-life vehicles andvending machines

The world s 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 dump trucks usedat large mines across the world. Currently, the largest wheels
available have rim diameter of 63 inches (about 1.6 m), are 44
inches (about 1.1 m) wide, and weigh as much as 2.83 tons
each, making them about five times the diameter of ordinary
passenger car wheels. SGOR® wheels meet the demanding
requirements of mining applications in terms of functionality
and hauling capacity, and contribute to reducing environmental
burden.

Corporate Data

■Shredding and screening
ELVs, end-of-life vending machines, and other waste arecrushed into tiny pieces with blades 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., copper andaluminum), and shredder dust (e.g., plastics and rubber)

Disassembly and CFC
recoveryLightweight wheels

Growth Strategies

End-of-life vending
machines

End-of-life vehicles

Akemi Recycling Center, Ltd. was established in 1991 as amember of the Topy Industries Group. Since then, the company has been recycling large volumes of 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 is among the largest in Japan.
In 2004, Akemi Recycling Center and Topy Industries jointly
developed a technology for recycling automobile shredder residue (ASR), which is generated when shredding end-of-life vehicles (ELVs), into an alternative to cokes used for electric furnaces. The companies established ASR recycling facilities andcreated the ideal recycling system that produces zero waste.
In 2013, Akemi Recycling Center significantly improved thequality of iron and nonferrous scrap obtained from ELVs andother industrial wastes by increasing the dust collection capacity of the shredder line and building a new line for screening out
nonferrous metals.
The company also works to protect the environment by recovering CFCs from end-of-life vending machines and similar
wastes while screening out fluorescent lamps and dry cells in
advance.

Value Creation

Recycling business (Akemi Recycling Center)

Combustion improver forelectric furnaces

A machine for reducing the volume of shredder
dust and solidifying it

Shredded iron scrap

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Sustainability

環境への取り組みInitiatives
Environmental

Risk Response

Reduction of CO2 emissions

500

488

507

526

520

482

Water resource conservation initiatives
Taking on the challenge of achieving adecarbonized society
Topy Industries is participating in 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 climatechange and encourage innovative actions to achieve a decarbonized society. Topy Industries is taking on the challenge ofachieving zero carbon through the Energy Conservation Meister Program.

Pilot introduction of a solar power
generation facility
We are promoting Energy Saving Action 2020, which aims topreserve the global environment through energy conservation.
As part of the Promotion of Energy Efficiency Investments, themain initiative of Energy Saving Action 2020, we have experimentally deployed a solar power generation facility at the Toyohashi Works and began assessing it in March 2014. The facility
has a total solar panel area of 270 m2 and estimated output ofsome 46,000 kWh per year. In the pilot deployed, three different
panels (single-crystal panel, multi-crystal panel, and CIS panel)
were installed at the same time to compare output and power
generation characteristics. In another experiment, we laid oxidized slag aggregates produced in-house on the ground of thepilot facility to check their effectiveness for preventing weeds
and their effects on the pilot equipment and its power generation
performance. Through these and other initiatives, we are striving
to help protect the global environment in a variety of ways.

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,

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.

■ Total amounts of environmental releases andtransfers of substances regulated under the PRTR
Act (Topy Industries)（ton）

Industrial water

2,623
2,500

2,534

2,618

2,601

2017

2018

2,443

2,000

1,000
500
0
2015

2016

2019（Fiscal year）

Air pollution prevention initiatives
With the revision of the Air Pollution Control Law in May 2004,
it became necessary to comply with regulations governing
VOC emissions, and a reduction of 30% compared to FY2000
on a year-on-year basis was presented as the domestic reduction target by the end of FY2010.
As a proactive approach for the prevention of air pollution,
Topy Industries voluntarily measures VOC concentrations from
VOC generating facilities at its four major factories while also
reviewing actions items related to production technologies forthe reduction of emissions.
In FY2019, VOC emissions were about the same as in
FY2018. However, the emissions level ̶ roughly a 75% reduction compared to the FY2000 level ̶ was far below the guideline level established in the Air Pollution Control Act.
We will continue striving to reduce the emissions in a wellplanned manner.

■ Total amounts of environmental releases andtransfers of VOC (Topy Industries)
（ton）

500

700

339

338

359

320

356

631

600
500
400

200

200

Clean water

3,000

Chemical Management

300

300

Well water, etc.

(Thousand m3)

1,500

400

400

■Water consumption (Topy Industries)

Corporate Data

600

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.

Sustainability(thousand ton-CO2)

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

Biodiversity initiatives

Business■CO2 emissions from energy sources (Topy Industries)

Biodiversity Preservation

Growth Strategies

Every Topy Industries factory undertakes a range of improvement activities appropriate to the products and production
equipment it handles to achieve the CO 2 reduction target
outlined in the Action Plan for Low Carbon Society stipulatedby the Japan Business Federation. In FY2019, CO 2 emissions from energy sources at Topy Industries were 482,000
tons, which is below the FY1990 level set as the target. The
amount of CO 2 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 designated in the Revised Act on the
Rational Use of Energy, which came into effect in FY2009.
With regard to the Ayase Factory and the Kanagawa Factoryin Kanagawa Prefecture, we submit our plans for counteracting global warming in our business activities in accordancewith Kanagawa Prefecture s Law Concerning the Promotionof the Measures to Cope with Global Warming. In FY2010,
we began reporting the actual CO 2 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 accordance with Aichi Prefecture s Law Concerning thePromotion 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
the Energy Conservation Center, Japan Award in the Best
Practice Category of the Energy Conservation Grand Prize for
FY2017, which is hosted by the Energy Conservation Center,
Japan and sponsored by the Ministry of Economy, Trade andIndustry, while the Energy Conservation Meister who led the way was awarded the Chairman s Prize for Meritorious Achievements of
the Kanto District Electric Use Rationalization
Committee in FY2019.

Value Creation

Initiatives for Preventing Global Warming

300
100

100
0

200
0
2015

2016

2017

2018

2019（Fiscal year）

2015

2016

2017

2018

2019（Fiscal year）

119
100
0

2000＊

2015

103

113

2016

2017

156

158

2018

2019（Fiscal year）*Figures for 2000 do not include Toyohashi.

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Sustainability

Environmental Initiatives

Social Responsibility

Risk Response

Relationship with Customers

Effective utilization of electric furnace slag

Waste reduction and recycling（ton）

Effluent

Final disposal

250,000

190,596

200,000

165,804

150,816150,203

136,678

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
least
President’s quality review At
once per year

Formulate president’s quality policy
President

Review factory quality

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

Issue instructions in response tocritical quality problems

Central quality committee

Creating quality from the customer s perspective togain trust and empathy for the new Topy Industries!
- 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

Formulate division quality policy

Engineering Administration Dept.

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

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
Managing rank (responsibility and authority)

Mechanism

100,000(Committee, motivation boosting, etc.)

Effective utilization of electric furnace slag

50,0000

2. Focus on building quality in the design and development stages, and stabilize product quality while improving reliability

Sustainability

150,000

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

Business■Industrial waste emissions (Topy Industries)

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.

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).

Growth Strategies

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.
The amount of discharged industrial waste decreased about
9% year-on-year in FY2019 due to a drop in crude steel production, among other factors.
We continue to promote recycling and reduce final disposal
volumes of industrial waste by expanding and improving our3R activities.

(electric furnace oxidized slag aggregate)

Quality Assurance
Philosophy

Value Creation

Initiatives for Reducing Waste (Topy Industries)

5,640

5,616

5,616

6,416

2015

2016

2017

2018

6,898
2019 （Fiscal year）

Topy Industries uses various types of metalworking oil in its
manufacturing processes, and the reuse of such oil has become one of the major concerns in terms of environmental
impact. At the Ayase Factory, used metalworking oil is purified
and reused. We plan to deploy this system at all other factories.

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.

Approximately
four times per year

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

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

Corporate Data

Metalworking oil recycling throughpurification(electric furnace slag for recycled road-bed material)

Quality division
managers meeting

Topic Received the Gold award in the EcoVadis (France) CSR rating
Our Toyohashi Works received the Gold award, as one of the top 6% of approximately 65,000 companies surveyed worldwide, in the CSR rating by EcoVadis, a French sustainability and supply chain rating organization.
EcoVadis s CSR rating is a comprehensive assessment in four areas: environment, labor and human rights,
ethics, and sustainable procurement. We have received a particularly high rating in the environmental field for ourproactive efforts to reduce our environmental impact.

Topic Received the highest level of SQEP certification from Caterpillar (US) for the eighth consecutive year
For the eighth consecutive year, we have been certified as a Platinum Level supplier of wheels for mining vehicles in Caterpillar s (US)2019 SQEP* (Supplier Quality Excellence Process). We also received the Platinum certification as a supplier of undercarriage components for construction machinery, which means we received the highest rating in two categories. Out of more than 8,000 suppliers,
we are one of only three that have achieved platinum certification for more than eight consecutive years.
In addition, we have received awards as an excellent supplier of automotive wheels fromorganizations including Daihatsu Motor Co., Ltd., Honda of America, and FCA.
*SQEP: Supplier Quality Excellence Process

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Sustainability

Social Responsibility

Relationship with Society

TACoil®

deformed reinforcing bars

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

AGV Sekisyu CRAWLER
We are making further improvements to spread this product in awide range of areas to reduce labor shortages and heavy-dutylabor, which have become a major issue in various industries.
Examples of applications include conveying goods in logistics
warehouses and transporting materials at construction sites.

（1）Product name : TACoil ®
（2）Sizes : D10, D13, D16(scheduled to be developed during FY2020)

Features
1) The crawler type can smoothly carry heavy loads
with its unique traversability, even on uneven terrain.
2) Reduces power consumption to reduce the amountof heavy-duty labor at job sites, and at the sametime, improves safety by preventing the cart fromtipping over and avoiding accidents where workers
get their fingers and hands caught in the cart.
3) It is possible to run more than one machine automatically.

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

● Conveyance in a warehouse or outside from one factory
to another

Proposals for improving the safety ofcart transport
NC processor● Automation of cart transport in various warehouses,
improving safety by conserving power and manpower■（Toyohashi Works) Certified as an Aichi Brand Company
Toyohashi Works was recognized as an Aichi Brand Company
by Aichi Prefecture, which recognizes outstanding manufacturing companies in the prefecture.
Since 2003, Aichi Prefecture
has been working
to develop Aichi s
manufacturing into
a global brand, and386 companies in
the prefecture havebeen certified todate.

■（Toyokawa Factory) Joint fire drills with the city of
Toyokawa
In conjunction with the Toyokawa City Fire Department, we
conduct fire drills simulating the outbreak of a fire every year.
These joint drills help us tobuild a robust system of mutual assistance with local communities while ensuring theirsafety and strength.
■ (Ayase Factory) Agreement on the Use of Facilities
during Disasters signed with the city of Ayase
As part of the Ayase City Urban Development Plan for Disaster
Readiness, in July 2018 we signed an agreement with the citythat allows it to use our Ayase
Factory in the event of a disaster. The city can now use thefactory as a temporary shelter
for victims of earthquakes orother disasters.

■ Workplace visits for junior high school 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 as part of a career education project sponsored by the Toyohashi Chamber of Commerce and Industry togive students an opportunity tolearn about the company andthe products it manufactures.
We hope this effort helped tobroaden the students view ofsociety and benefit them in the
future.
■ Factory tour for elementary school students
As part of our efforts to communicate with local communities,
our factories provide tours
to local elementary schools
and other such organizations.
Allowing participants to see,touch, and feel where products
are made, the tours have beenvery popular experiences.

Support for cultural activities 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 cultural activities, wehave sponsored exhibitions
and other events related toour business, including thespecial exhibition Deep Sea
as well as the planned exhibition Under Construction!
, ultra-large diameter wheels forIn the field of sports, we have SGOR
mining dump trucks, as shown during
been an official sponsor of the the Under Construction! planned
exhibition
San-En Neophoenix, a professional basketball team in
the B. League since FY2018.
We will continue to engage insupport activities for revitalizing local communities andother purposes.

Corporate Data

Examples of use for saving labor at existing worksites

■ (Head Office) Support for the Shinagawa Kids Cafeteria
Network
Of the Head Office s stocks of emergency provisions for disasters, we donated 600 meals that are one year from expiration to
the Shinagawa Kids Cafeteria Network, an organization run by
the Shinagawa City Council ofSocial Welfare. We will continue making such donations to
help combat food waste andcontribute to local communities through such new CSR
activities.

Tours for Elementary and Junior HighSchool Students

Sustainability（4）Features:
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.

Activities Being Conducted at Each Site

Business（3) Weight: 1 ton, 2 tons, 3 tons

Contribution to Local Communities

Growth Strategies®

Crawler mechanism for moving left, right, forward
and backward

Value Creation

Contribution Through Business Products with high work efficiency®

Examples of a TACoil® processed with an NC processor

41

TOPY Report 2020

TOPY Report 2020

42

Chapter

4

Sustainability

Social Responsibility

Relationships with Employees
Value Creation

Initiatives for Employees
Human Resource Development

Support for
self-development

Off-JT

Support for acquisition of public qualications

Correspondence course for developing capabilities

Technical training

Safety and health training

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

Topy juku

Overseas training

Career training
Training for promoted
employees

Business English

Training for employees
promoted to senior staff
members

Short-term program forstudying English abroad

Training for employees
promoted to chiefs

Sectoral engineering training

New manager training
Training for new managementlevel employees

Subsidies for employees attending language schools

Manager training

Tutor training

Management-level
employees

Specialized training■ New employee training
We provided Topy Juku, a new employee training program, fora period of about four months. In FY2019, the training was provided to 23 trainees, who were allocated to different factories toreceive on-the-job practical training and telework training. The
on-the-job training saw participants learn the fundamentals of
manufacturing through actual tasks at production sites, whilein the practical training they took part in continuous improvement activities under the guidance of senior workers. After thecompletion of Topy Juku,
a debriefing session on
the training was held at
the headquarters, and allof the trainees reported on
their achievements from thetraining.

43

TOPY Report 2020

【Outline of the program】
Period: One year
Destination: Overseas group company
Requirement for trainees: TOEIC® score of 600 or higher

Number of men

52.4

47.6

10

11

Percentage of female employees (%)

16
36.0

12

14

2017

10

9

2018

2019

10
2020 (End of fiscal year)

As of end of June, 2020

Women in management positions (Topy Industries)
2.4
6

0.9

■Support for women s empowerment
Topy Industries stipulates that it shall Respect the individual
character and personality of employees in the Topy Industries
Group Corporate Code of Conduct and implements initiatives
for promoting the active participation of female employees asa measure for promoting diversity. As one of the initiatives,
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 are carrying out an action plan targeting thefollowing, based on the Act on Promotion of Women s Participation and Advancement in the Workplace, with the aim ofallowing female employees to participate actively and fulfill their

2.37
48
2.18
2.02

2.02

42.5

42.5

47

2.26

2.5
2.3
2.1

45

1.9
1.7

2016

2017

2018

2019

1.5
2020 (Fiscal year)

Work-life Balance Initiatives

Number of women in management positions
Percentage of women in management positions

Diversity Initiatives

Actual employment rate (%)

As of June 1 for 2020

4
2016

Number of employees

41.7

25.0
11

(Topy Industries)

0.4

0.4

0.4

1

1

1

2016

2017

2018

2

■ Action plan based on the Act on Advancement of Measures to Support Raising Next-Generation Children
We are implementing an action plan based on the Act on Advancement of Measures to Support Raising Next-Generation
Children with the aim of enabling all employees to fulfill theirpotential by balancing work and childcare. (Plan period: July 1,2015 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.

Corporate Data

Rank-and-file employees

Training fordeveloping globallycompetitive humanresources

Number of women

Employment of people with disabilities

Sustainability

Mandatory

Percentage of women among new recruits(career-track employees) (Topy Industries)

duction facilities management functions division of Topy
America, Inc.

■Training Programs (Topy Industries)

Management coaching
schoolpotential. (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.
• We will proactively support employees career development. We will increase the percentage of women among
management-level employees (executives) five-fold compared to the current level.

Business• Create human resources (human assets) who continue todevelop• Strengthen employees capability to respond to environmental changes• Support employees in their autonomous career development• Continue to produce future business leaders• Create an organizational environment that permits diverse
human assets to work actively in various ways

■ Global HR development
In FY2017, we introduced Long-Term Overseas Training with theaim of developing young employees who can demonstrate theircapabilities in the different cultural environments of other countries. The employees who undergo this training are dispatched tooverseas group companies as trainees and receive practical onthe-job training under the guidance of local managers in accordance with a training
plan, thereby experiencing and learning
about overseas
work. They alsoacquire the ability
to communicate indifferent languages,
along with interculPresentation of trainee accomplishments at the protural skills.

Growth Strategies■ 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.

Number of employees taking childcare leave
20192020 (End of fiscal year)(Topy Industries)

Number of women

As of end of June, 2020

■Promoting employment of people with disabilities
Topy Industries actively employs people with disabilities, andwith an employment rate of 2.37% (as of June 1, 2020), thecompany is above the legal employment rate (2.2%). 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.

Number of men

1
5

6

3

1
3
2
2016

2017

2018

2019（Fiscal year）

TOPY Report 2020

44

Chapter

4

Sustainability

Corporate GovernanceCorporate Governance

Relationships with Employees

Employee Health & Safety

Mentor program⑿

Discussions with managers⑵

Corporate culture improvement
workshop for managers⒀

Encouraging interpersonal greeting⑶

Workplace culture survey⒁

Activity-Based Working (ABW)
implementation⑷

Topy Cafe sessions (general employee
meetings)⒂

Self-led measures by committeemember departments⑸

Manager meetings⑹⒃

Operational improvement activities

Installation of engagementbookshelves⑺

Thanksgiving activities⒄

Promotion of 5S in the workplace⑻

Women s meetings⒅

Deployment of IT tools to support
sales

⑼

Inter-departmental mixers⑽

Department self-introduction sessions⒆

Re-examination of age restrictions forbachelor dormitories⑾

Anniversary Leave program
implementation⑴

45

TOPY Report 2020

Mentalhealth・Health guidance・Eating habits
・Exercise habits

・Stress check・Prevention of overwork
・Harassment education

Work-life balance

・Labor efficiency improvements
・Promotion of leave acquisition
・Child raising support andnursing care support■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. We therefore implement a variety of actions to achieve zero accidents. We also
conduct statistical surveys on labor accidents and report theresults through in-house newsletters and other media to raise
the safety and health awareness of each and every employee.

■ Results of a Statistical Survey on Labor Accidents(Period: January to December 2019) (Topy Industries)

Manufacturing
site

Total working hours

Number ofaccidents

Frequency（％）

Severity（％）

Kanagawa

432,530

0

0

0.00

Ayase

887,134

6

6.76

0.06

Toyohashi

1,573,902

2

1.27

0.10

Toyokawa

769,453

1

1.30

0.00

Total

3,663,019

9

2.46

0.06

■Health promotion
Mental Health Initiatives
With the aim of recognizing one s own stress and preventing
mental health issues, we conduct stress checks for all employees and use the findings to improve workplace environments.
High-stress employees can receive follow-up care that includes
consultations with industrial physicians.

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.

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 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.

■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.

■Corporate Governance Structure
General Meeting of Shareholders
Appointment and dismissal

Appointment and dismissal

Audit & Supervisory Board(four members)

Audit（including two outside auditors）

Close cooperation

ReportWhistleblower

Whistleblower

ReportAppointment and dismissal
Audit and report（including two outside directors）

Nomination Advisory
Committee

Internal Audit Dept.
Close Internal Audit
cooperation

Board of Directors(six members)

コCorporate
ーポレートData
デ ータ■Measures Taken up to FY2019

PhysicalhealthTopy 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 duties as a public institution.

ト ピーのサSustainability
ス テ ナ ビ リ ティ

■External Mixers
Topy Industries holds regular mixers with companies engaged
in the same kinds of activities.
Attendees talk about the troubles
and challenges in their work andcome away with knowledge thatwill prove useful in designing newmeasures.

At Topy Industries, we believe that by keeping our employees
healthy both physically and mentally, our workplaces are filled withsmiles and vitality, and this allows employees to fulfill their potential.
We declare that we will do our utmost to create a healthy work environment to further energize the company and its employees.

Basic Policy on Corporate GovernanceトBusiness
ピ ーのビ ジネス

■Topy Mentoring Program (TMP)
Under this program third-year employees will meet with their senior colleagues and receive help with solving the problems they
face and achieving professional growth. Activities conducted thisyear led to a greater retention rate among program participants
and improved communication skills. This policy has been judged
to be effective as part of a program
to develop young human resources, such as improving ES scoresfor employees in their 20s, andhas been officially implemented by
the Personnel Department fromFY2020.

[Health Management Declaration]

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

トGrowth
ピーの成長戦略
Strategies■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 established the
Job Satisfaction Improvement Committee in 2016. The committee conducted the company s first employee satisfaction
survey, then, based on the survey results, discussed and carried out more than 20 measures for improving engagement.
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.
By carrying out initiatives tailored to areas of communication
not covered by current HR activities, the committee will improve employee satisfaction while conducting activities that willlead to better systems for developing human resources.

■Promotion of health management
Topy Industries began implementing health management initiatives from June 2020 to create a healthy and safe environment
for employees to fulfill their potential, thereby enhancing the attractiveness of the company and its workplaces. We have set
three readiness initiative policies, and will gradually enhance
our initiatives in the future.

トValueピーの
価値創造
Creation

Efforts to Improve ES(employee satisfaction)

ReportCompensation Advisory Committee

Accounting Auditor
Close cooperation

Prior consultation

Executive
Management
Meeting

ReportRisk Management Committee

President
Topy Industries Group
Basic Corporate Ethics
Consultation Office
Topy Industries Group
Compliance Hotline

Head Office Organization
Division Organization
Affiliated Companies

Appointment
Dismissal
Supervision

Each Permanent Committee
ReportReportPolicy, planning, etc. of business execution

Executive Director
Executive Officer

Employee

TOPY Report 2020

46

Chapter

4

Sustainability

Corporate GovernanceCompensation for Directors and Audit &Supervisory Board Members

Compensation
types

Details ofcompensation

Performance indicators

Payment
model

・Level of achievement of・The amount of thisperformance indicators set
compensation is linked
in the Medium-Term Manto the level of achieveagement Plan, including
ment of the MediumPerformanceManagementnet
sales, operating profit,
Termbased stockPlan.
profit attributable to owners
compensationof parent, operating profit(medium to long・The standard amounton sales, operating margin,term incentives)of this compensation
ROE, ROA, and debt equity
is 5% of the basic
ratio.
compensation, varying
from 0% to 10%.

Stocks,cash

・This is linked to com- ・One is the result of quantipany performance andtative evaluation, which isindividual performance
calculated based on returnin the previous fiscal
on equity (ROE) as the key
year.
indicator, and the level ofachievement of perfor・The standard amountmance indicators such as
Performanceof this compensation
return on assets (ROA),
based
is 30% of the basic
operating profit on sales,
compensationcompensation, varying
and debt equity ratio. The(short-termfrom 0% to 75%. The
other is the result of qualincentives)
portion based on theitative evaluation, which iscompany s businessdetermined in consideration
performance ranges
of management activities
from 0% to 65%, whileand other situations.
that based on individual performance ranges ・Level of achievement of
individual missions
from 0% to 10%.

47

TOPY Report 2020

Cash

Basic
Stock-based
compensation Bonus compensation

Number of
subject
officers

228

222

−

6

4

Members of the
Audit &
Supervisory Board

47

47

−

−

2

Outside officers

42

42

−

−

4

（excluding outside
directors）（excluding outside
members）

Internal Control and Risk Management
System■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.
■Compliance System
We have formulated the Group Basic Philosophy and the Group
Code of Conduct and ensure that all the officers and employeesof the Topy Industries Group are familiar with them through suchmeans as our websites, in-house newsletter, and Group Compliance Guidebook. Moreover, under the leadership of 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 complianceimprovement activities, and share relevant information. In addition,company divisions that include those supervising compliance provide a range of compliance education to employees at each levelof 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 held in strict confidence and will not become thebasis for any unfair treatment. We also provide outside counsel asrecipients of such reports and consultations.
■Risk management system
Under the leadership of the Risk Management Committee of thecompany, employees in each department of the company andgroup 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■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.
■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.
■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 Manage-

Information Disclosure■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.
■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)■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 quarter and 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 fromthe IR Library on our website for shareholders and investors.

Corporate Data

■ Incentive Compensation System and Compensation Composition（million yen）

Sustainability■Procedure for Determining Compensation
The Compensation Committee deliberates on the level of Board
member compensation, which is determined by considering thecompensation policy, the business performance of the company, and other factors. Based on the results of the deliberation,
the amount of compensation for each director is determinedby the Board of Directors, and that of each member 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 inadvance at the General Meeting of Shareholders.

Directors（million yen）

Amount of compensation by typement 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.

Business■Basic Policies
In accordance with its basic principle of improving company
performance and value, the company uses compensation
standards and a compensation system appropriate to individual employees job responsibilities. The company also uses survey data compiled by outside experts to improve the objectivityof compensation standards.

Position

Total amount ofcompensations

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 theBoard of Directors to confirm their effectiveness. In the event of amajor 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 and production facilities while regularly conducting drills
and other activities to cope with emergencies.

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

■ Compensation for Outside Directors and Audit & Supervisory Board Members
Compensation for outside directors and members of the Audit& Supervisory Board consists of only a fixed basic compensation. This is in consideration of their independent position,
which is unaffected by the company s business performance.

Value Creation

Outside Officers■ Financial results briefings held in FY2019
Date

Content

Number ofparticipants

November 20, 2019

2Q financial results briefing

25 members

June 2, 2020

Full-year financial results briefing（＊）(*) Held online to prevent the
spread of the coronavirus

TOPY Report 202048

5Corporate Data
5 Corporate Data
Chapter

Chapter2013

Our History

Topy International, Inc.
(current Topy America, Inc.)Tokyo Sharin Seisakusho and Abe
Tekkosho Co., Ltd. merged to form
Japan Motor Wheel Co., Ltd.

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.) wasestablished

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

1943

1964

1985

1941

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

1921

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

1934

Toto Zoki Co., Ltd. was founded

1922

Tokyo Sharin Seisakusho Co., Ltd.
(predecessor of Japan Motor Wheel
Co., Ltd.) was foundedMiya Steelworks (predecessor of
Toto Steel Mfg., Co., Ltd.) was
foundedMiya Steelworks succeeded in
hot-rolling of steel sashes

1926

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

1982

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

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.

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

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

1969

1988

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

Concluded a technical assistanceagreement with PT. Pakoakuina(Indonesia)

1972

1989

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

1977

1991

Kimi to Boku Hall was completed
at Toyohashi Works

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

2003

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

2004

1992

Hamura Plant of Ayase Factorycommenced operation

1995

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

Kurate Plant of Toyokawa Factorycommenced operation

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 sites

2007

2008

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

2013

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)

Corporate Data

1930

Akemi Plant of Toyokawa Factorycommenced operation

Concluded a technical assistanceagreement with PT. Inkoasku (Indonesia)

1961

2000
1990

1980

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

Sustainability

1930

1940 1950

1960 1970

2011

Business

Open hearth furnace plant under construction
at Miya Steelworks

1980

1990

2000

2010

Growth Strategies

Kimi to Boku Hall at Toyohashi Works

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

1920

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

Concluded an agreement with Nippon SteelCorporation to strengthen general businesscooperation

Signing ceremony for the merger of four
companies

Value Creation

1964

1958

1936

1985

1991

2008

2018

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

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

Sales of synthetic mica started

49

TOPY Report 2020

TOPY Report 2020

50

Chapter

5

Corporate DataManagement Team
Value Creation

Managing Executive Officers
General Manager of Business Process
Innovation & Promotion Dept.

Masayoshi Takezawa

General Manager of Internal Audit Dept.

Katsuyoshi Daido

Growth Strategies

General Manager of Corporate Planning Dept.

Hiroji Kobayashi
Representative Director and President

Director and Executive Vice President

Senior Managing Director

Audit & Supervisory Board Member

Audit & Supervisory Board Member

1979
2011

1979
2007
2011
2013

1981
2011

1982
2007
2010
2014
2015

1982
2015

Nobuhiko Takamatsu

2012
2014
2016

2017

2015
2017

2018
2019

Joined Topy Industries, Ltd.
Operating Officer, Deputy General Manager of Wheel Div.
Director, General Manager of Wheel Div.
Managing Executive Officer, Automotive and Machinery
Components Business, General Manager of Wheel Div.
Managing Executive Officer, General Manager of Corporate
Planning Dept.
Director of Topy Undercarriage (China) Co., Ltd., 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., and Sales Administration Dept.
Director and Executive Vice President (to present)

Assistant to the President
In charge of Corporate Planning, Finance, and Sales

Hiroyuki Kinoshita
2012
2015
2017
2018
2020

Joined Nippon Steel Corporation
Operating Officer, Technical Coordination (Manager, Special
Matters) of Topy Industries, Ltd.
Operating Officer, Deputy General Manager of Undercarriage
Components Div. and General Manager of Kanagawa
Factory, Undercarriage Components Div.
Managing Executive Officer, General Manager ofUndercarriage Components Div.
Senior Executive Officer, General Manager of Undercarriage
Components Div.
Senior Managing Director in charge of Engineering
Administration Dept., Internet of Things Promotion Dept.,
and Safety at Topy Industries, Ltd.
Senior Managing Director (to present)

Yukihiro Ogawa

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 (to present)

Koichi Sakamoto

2016
2017
2018

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

General Manager of Steel Division,in charge of Steel BusinessTsuyoshi Nakamura
Operating Officers

General Manager of Science Division

Satoshi Fukura

Business

2016
2017

Joined Nippon Steel Corporation
Executive Officer General Manager, Head of Division,
Ironmaking Technology Division, Nippon Steel Corporation
Advisor, Nippon Steel Corporation; Executive Officer
in charge of technology/quality, Usiminas Siderúrgicasde Minas Gerais S.A.
Executive Vice President in charge of business planning, Usiminas Siderúrgicas de Minas Gerais S.A.
Managing Executive Officer and Vice Head of 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 (to present)

Norio Saito

General Manager of Finance Dept.

Takanori Kawano

In charge of Technology, Business Innovation, Safety,
and Smart Promotion

General Manager of General Affairs Dept.

Shuichi Tachibana

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

Masahiro Abe

Sustainability

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

Katsuyoshi Tanaka

General Manager of Personnel Dept.

Tetsuya Sakai

Sumio Moriwaki

Takeshi Kiriyama

1984
1999
2013

1981

1986
2008

Managing Director

2017
2018
2018
2020

2020

Joined Mita Kogyo Co., Ltd.
Joined Topy Industries, Ltd.
Operating Officer, General Manager of General Affairs
Department, and Chief of Secretariat
Operating Officer, General Manager of Internal Audit
Department
Managing Executive Officer, Representative Director andPresident 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 matters related to corporate
planning
Managing Director (to present)

In charge of General Affairs, Personnel, and Risk
Management
Assists Vice President Saito in matters related tocorporate planning

1991
1999
2007
2015
2017

Registered as lawyer (to present)
Joined Ishii Law Office (to present)
Partner of Ishii Law Office (to present)
Instructor, the Training and Research Institute for Court Officials,
Supreme Court of Japan
Visiting Professor, the University of Tokyo Graduate Schools for Law
and Politics
Chairman, Research Committee on the Judicial System, Japan
Federation of Bar Associations
Director of Topy Industries, Ltd. (to present)
Outside Auditor of JSR Corporation (to present)

2010
2013
2015
2018
2020

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

Audit & Supervisory Board Member

Audit & Supervisory Board Member

1978
2005

1982
2012

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 ofMizuho Corporate Bank, Limited
Managing Executive Officer, Chief Risk Officer and Chief
Personnel Officer of Mizuho Corporate Bank, Limited
Managing 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. (to present)
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 ofCorporate Sales Division of Meiji Yasuda Life Insurance
Company
Senior Managing Executive Officer, General Manager ofCorporate 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)

General Manager of Press Division, in charge ofAutomotive and Industrial Machinery
Components BusinessKoji Nanayama

General Manager of Marketing Administration &Planning Dept.

Corporate Data

Masayuki Yamaguchi

Director

Director

Hideo Katsuyama

General Manager of Toyokawa Factory,
Wheel Division

Makoto Shimura

Deputy General Manager of Wheel Division

Shuichi Taguchi

Deputy General Manager of Wheel Division and
Representative Director and President of
Asahi Tec Corporation

Hideki Aoyama

Deputy General Manager of Wheel Division*Directors Sumio Moriwaki and Takeshi Kiriyama are outside directors.
Audit & Supervisory Board Members Tetsuya Kawagishi and Akio Sakai
are outside audit & supervisory board members.

Masaru Yasuhara

General Manager of Engineering
Administration Dept.

Yoshihito Kano

As of June 24, 2020

51

TOPY Report 2020

TOPY Report 202052

Chapter

5

Corporate Data

Consolidated Financial Performance for the Past 11 Years

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Value Creation

Fiscal year

2019

Operating Results (Fiscal year) (Million yen)
240,534

226,912234,682

237,677

215,872

208,237

230,462

286,227

263,305

Operating profit

355

7,006

10,554

6,990

5,308

6,422

10,000

7,180

7,997

7,505

2,851

Ordinary profit

626

5,241

7,304

6,234

4,485

6,037

8,806

6,116

8,034

9,357

3,597

Profit (loss) before income taxes(1,641)

4,765

6,118

5,842

4,249

4,476

4,681

10,897

7,933

10,345

1,741

Profit (loss) attributable to ownersof parent(1,032)

2,072

3,918

3,409

1,914

2,360

1,700

7,191

5,500

7,114

(4,497)

Capital expenditure

7,659

7,170

8,982

20,47725,45820,374

8,815

9,874

12,132

25,10013,397

Depreciation and amortization

11,195

10,057

9,310

8,957

10,086

10,315

11,321

10,631

10,59911,11012,332

Research and development costs

1,288

1,245

1,271

1,212

1,519

1,202

1,059

1,137

1,131

1,096

1,115

Business

221,413Growth Strategies

196,848

Net sales

Financial Position (End of fiscal year) (Million yen)
201,138

203,956

212,828

208,781

232,714

252,456

231,583

223,050

248,102284,198

254,659

Shareholders equity

81,08779,50082,38989,522

94,363

106,187

98,893103,951

108,959

111,304

102,732

Net assets

81,88480,16583,096

91,25896,219107,941

99,973

104,853

109,859

112,362

103,800

Interest-bearing debt

62,35861,75958,09153,53462,45377,51670,07055,831

61,096

79,67676,782

Cash flows from operating activities

12,0106,236

16,01016,7707,251

19,44019,346

10,13010,78011,725

16,206

Cash flows from investing activities(7,507)(3,681)(7,703)(14,770)(17,478)(29,141)(7,529)(1,016)(5,861)(20,835)(16,048)

Cash flows from financing activities(2,236)(1,952)(4,983)(4,997)

7,538

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

1,834

15,936(6,461)(42.96)86.37

165.20143.76

80.76

99.65

71.80

303.90234.25302.85(191.42)

20

40

40

40

20

40

60

80

80

90

40

Operating profit on sales

0.2

3.2

4.4

3.1

2.3

2.7

4.6

3.4

3.5

2.6

1.1

Return on equity

(1.3)

2.6

4.8

4.0

2.1

2.4

1.7

7.1

5.2

6.5

(4.2)

Equity ratio

40.3

39.0

38.7

42.9

40.5

42.1

42.7

46.6

43.9

39.2

40.3

4,242
［422］

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]

Sustainability

Total assets

Cash Flows (Fiscal year) (Million yen)

Corporate Data

Per Share Information (Yen)Net profit (loss) per share
Dividends per share

Financial Indices (%)

Number of employees at period end[Average number of temporary employees
not included in the above]* 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 FY2009.

53

TOPY Report 2020

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

TOPY Report 2020

54

Chapter

5

Corporate Data

Major Subsidiaries & Affiliates

Head office location

Capital(millions of yen)

Business segment

Voting rights
held or ownedby (%)(Consolidated Subsidiaries)
Topy Enterprises, Ltd.

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

Kyushu Wheel Kogyo, Ltd.

Miyako-gun, Fukuoka Pref.

100

Automotive and Industrial
Machinery Components

100

Steel

100 (100)

Toyohashi-shi, Aichi Pref.

80

Number of authorized shares

88,300,000

Number of outstanding shares

24,077,510

Number of shareholders

11,600

Top 10 major shareholders
Name

Number of shares held

Shareholding ratio (%)

Nippon Steel Corporation

4,818,264

20.46

Topy Fund Business Association

1,133,710

4.81

Meiji Yasuda Life Insurance Company

975,134

4.14

Urayasu-shi, Chiba Pref.

34

Steel

100 (100)

Autopia, Ltd.

Hachioji-shi, Tokyo

30

Automotive and Industrial
Machinery Components

100 (100)

The Master Trust Bank of Japan, Ltd. (trust account)896,300

3.81

Akemi Recycling Center, Ltd.

Toyohashi-shi, Aichi Pref.

200

Steel

100 (30)Mizuho Bank, Ltd.

787,802

3.35

Sanwa Buhin Co., Ltd.

Bando-shi, Ibaraki Pref.

200

Automotive and Industrial
Machinery Components

100Japan Trustee Services Bank, Ltd. (trust account)

718,227

3.05

Akemi Electric Power, Ltd.

Toyohashi-shi, Aichi Pref.

205

Power Generation

100

Employee Shareholding Association of Topy Industries, Ltd.

588,843

2.50

Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components

100

DFA Intl Small Cap Value Portfolio

537,400

2.28

Mizuho Trust & Banking Co., Ltd.

489,300

2.08

Sompo Japan Insurance Inc.

474,600

2.02

Steel

35.8 (1.4)

Ring Techs Co., Ltd.

Kurashiki-shi, Okayama Pref.

100

Seibu Wheels Co., Ltd.

Kurashiki-shi, Okayama Pref.

10

Kikugawa-shi, Shizuoka Pref.

100

Kentucky, U.S.A.

600 U.S. dollars

100

Topy Precision Mfg., Inc.

Illinois, U.S.A.

50,000 U.S. dollars

Topy Fasteners (Thailand), Ltd.

Chonburi, Thailand

Fujian Topy Autoparts Co., Ltd.

Fujian, China

194 million renminbi

Topy Undercarriage (China) Co., Ltd.

Qingdao, China

606 million renminbi

Topy Fasteners Vietnam Co., Ltd.

Yen My District, Hung Yen Province, Vietnam

PT. Topy Palingda Manufacturing

Indonesia Karawang Regency, West Java, Indonesia

PT. Topy Undercarriage

Indonesia Bekasi Regency, West Java, Indonesia

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

Silao City, State of Guanajuato, Mexico

867 million pesos

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

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

167 million pesos

Ring-Techs Guangzhou Co., Ltd.

Guangzhou City, Guangdong Province, China

Asahi Tec Aluminium (Thailand) Co., Ltd.

Khlong Tamru, Chonburi, Thailand

1,480 million baht

Asahi Tec North America, Inc.

Troy, Michigan, U.S.A.

90,000 U.S. dollars

Guangzhou Asahi Dongling Research & Development Co., Ltd.

Guangzhou City, Guangdong Province, China

11 million renminbi(Equity-method affiliate)
Hokuetsu Metal Co., Ltd.

Nagaoka-shi, Niigata Pref.

50 million baht

6,240,000 U.S. dollars
710.5 billion rupiah
2,850,000 U.S. dollars

188 million renminbi

1,969

Guangzhou Wheelhorse Asahi Aluminium Co., Ltd.

Guangzhou City, Guangdong Province, China

216 million renminbi

Guangzhou Dicastal Asahi Aluminium Co., Ltd.

Guangzhou City, Guangdong Province, China

40 million renminbi(Other affiliates)
Nippon Steel Corporation

Chiyoda-ku, Tokyo

419,524

100 (100)100
100 (100)
90 (55)
100

Breakdown of shareholders by type
Individuals
and others

100

Financial
institutions

25.0%

100 (80)

32.3%

90
100

Securities
companies(3)

Foreigninvestors

95

0.5%

15.5%

100 (100)

Other domestic
corporations

90 (90)26.7%

100 (100)

Treasury shares are included in“Individuals and others.”

100 (100)
51 (51)

Fiscal year end

March 3149 (49)Ordinary general meeting of shareholders

June

25 (25)

Record date

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

Share unit number

100

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)

Automotive and Industrial
Machinery Components
Automotive and Industrial
Machinery Components
Manufacture and sales ofsteel products andengineering

0.1(Owned by)
20.8 (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. Nippon Steel & Sumitomo Metal Corporation changed its trade name to Nippon Steel Corporation
on April 1, 2019.
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
96,272 million yen(2) Operating profit
1,240 million yen(3) Net profit
849 million yen(4) Net assets
9,936 million yen(5) Total assets
33,275 million yen
6. On April 1, 2020, Tojitsu Co., Ltd. and NE-Tojitsu, Ltd. merged with each other in an absorption-type merger, with Tojitsu Co., Ltd. as the surviving company and NE-Tojitsu, Ltd. as the absorbed
company.
7. The values in parentheses in the Voting rights held or owned by column represent indirect holding percentages or percentages of voting rights indirectly owned by the company, which are each included in the value above.

TOPY Report 2020

Notes:
1. Topy Industries, Ltd. owns 526,804 treasury shares but is excluded from the major shareholders listed above. Treasury shares do not include the Company s shares held in trust for the stockcompensation 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.

As of March 31, 2020

Corporate Data

Kikugawa-shi, Shizuoka Pref.

Topy America, Inc.

100

Sustainability

Asahi Tec Corporation

100 (100)

Business

NE-Tojitsu, Ltd.

ATC Holdings Co., Ltd.

55

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

Growth Strategies

Tojitsu Co., Ltd.

Stock exchange listings

Value Creation

Company name

IR Information

As of March 31, 2020

TOPY Report 202056