TOPY Report 2023

TOPY

ReportTOPY

Report2023
TOPY INDUSTRIES, LIMITEDArt Village Osaki Central Tower
1-2-2, Osaki, Shinagawa-ku, Tokyo, 141-8634
TEL: 03-3493-0777 FAX: 03-3493-0200

http://www.topy.co.jp[Overview of official X (formerly Twitter) account]
Account name: Topy Industries, Ltd.
User name: @TOPY_INDUSTRIESURL: https://twitter.com/TOPY_INDUSTRIES

2023

With an eye on the future society of 2050, the Group iscommitted to contributing to the realization ofa carbon-neutral society and addressing societal challenges
in an era of major transformation.

TOPY Sustainable Green Vision 2050
- Aiming to realize an affluent society where people canlive safely and healthily, we will continue togrow sustainably beyond the times -2050
Under the Group s fundamental philosophy to fulfill its responsibilities as a public institution and contribute to the realization of a sustainable recycling-oriented society through the continuation and development of its business, we are advancing sustainability activities. As the movement toward
carbon neutrality by 2050 gets into full swing, the Group will further promote efforts to address various ESG issues, including climate change, in order
to continue to be a company trusted by society for many years to come.

Achieve carbon neutrality
A global corporation inharmony with people
and the environment

2030

2040

Reduce CO2 emissions by 46% (compared to FY2013)
Promote green businessd diversity
Pursue decarbonization an

Reduce CO2 emissions by 46%
Contribute to achieving the SDGs

TOPY
Active &Challenge
2025
FinancialstrategyStrengthen resilience

A company that creates new value
and leads in solving social issues
Medium- to long-term innovation
through the promotion of DX

Sustainability
strategy

TOPY Report 2023

A solid managementfoundation forsustainable growth<Vision for 2030>

Businessstrategy01

Reduce environmental impactof customers
Accelerate contributions torealization of low-carbon society

An affluent
society where
people canlive safely andhealthily

th
en
h
t
eng
St r

in
nt
me y chaegna upplasmnt ableeilires stainang nd suidli
Bu tion a
n
tio
a
a
d
n
nd
fou
fou
t
en
m
e
g
ana
m
e

The green concept
In this vision, going green is not limited to reducing environmental impact, also includes the broader conceptof activities that aim to contribute to the optimization of
all ESG issues that should be addressed by the Group.

TOPY Report 2023

02

Group Basic
Philosophy

Contents

The Topy Industries Group will fulfill its
responsibilities as a public institution andcontribute to the realization of a sustainable
recycling-oriented society through theContents and Editorial Policy
Businesses of the Topy
Industries Group05

continuation and development

Business Model and Strengthsof the Topy Industries Groupof its business.

Pursuit of High Added Value
through Proprietary Technologies

09
11
13

Non-Financial Capital toSupport Value Creation

15

Special Feature
Human Resources Strategies

17

Chapter 2 Growth Strategies− To win the trust and respect of society −Top Message

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

29

31

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

33

Automotive and Industrial Machinery
Components Segment (Undercarriage
Parts for Construction Machinery)

35

Business Development Segment

37

Chapter 4 Sustainability
Stakeholder Engagement

38

Identification of Materiality

39

Promotion System for
Sustainability Management40

19

Relationship with Customers
and Business Partners

49

Contribute to Society throughBusiness

51

Contribution to
Local Communities

52

Respect for Human Rights

53

Strengthening Human Capital54

G Corporate GovernanceManagement Team61

Corporate Governance

63

Chapter 5 Corporate Data
Our History

69

Consolidated Financial
Performance for the Past
11 Years

71

Under the Group Basic Philosophy, theMedium-Term Management Plan

23

E Environmental Initiatives

management and employees of the Topy

Special Feature DX Strategies

25

Environmental Management41

Non-Financial Highlights

73

Industries Group shall strictly abide by

Message from the Officer
in Charge of Finance

Response to Climate Change

43

Major Subsidiaries & Affiliates

75

IR Information76

all applicable laws and ordinances, thespirit reflected, and the Corporate Code of
Conduct, while accepting full corporate social
responsibility and fostering an open-minded
and creative corporate culture.

27

Basic Sustainability
PolicyThe Topy Industries Group will promotemanagement based on the Group Basic
Philosophy and aim to enhance sustainablecorporate value and contribute to the sustainable
development of society through the pursuit oftechnological innovation and the resolution ofsocial issues.

TOPY Report 2023

Responding to Environmental
Risks and Contributing to theEstablishment of a RecyclingOriented Society

45

Reducing Environmental Impact
through Products and Services

47

Editorial Policy
Basic Policy

Reporting Scope

Reporting Period

Topy Report 2023 provides selected important information focusing on the company s management strategies to improve
corporate value in the medium to longterm, including information related to its
business activities, operating results, social responsibilities, and management
control system. The aim of this report isto encourage candid dialogue with our
stakeholders, including shareholders, investors and related parties.

This report covers all companies listed as
subsidiaries of the Topy Industries Group(consolidated basis). However, some activities and data represent only Topy Industries, Ltd. In principle, activities where thescope is not specified refer to those of theTopy 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 or the Company, and activities by an individual Group company are
identified by its corporate name.

Covers mainly FY2022 (April 1, 2022 toMarch 31, 2023), but also includes some
activities that occurred on and after April
1, 2023.

The IFRS s International Integrated Reporting Framework and the Ministry of
Economy, Trade and Industry s Guidance
for Collaborative Value Creation were used
as references in the creation of this report.

03

S Social Responsibility

Chapter 3 Business
Steel Segment

History of the Topy Industries Group 07
Value Creation Process of
the Topy Industries Group

Group Code of
Conduct

04

Chapter 1 Value Creation

Date of Issue
October 2023

Inquiries Regarding this Report
Topy Industries, Ltd.
(General Affairs Department)
Art Village Osaki Central Tower, 1-2-2
Osaki, Shinagawa-ku, Tokyo 141-8634,
Japan
TEL: +81-3-3493-0777

TOPY Report 2023

04

Chapter1

Value Creation

Steel Segment

The Topy Industries Group is a comprehensive metal processing group with an integrated production procedure from raw material production to thefabrication of finished products. Within this, the steel segment engages in raw material supply and the automotive and industrial machinery components segment unit deals in material processing, both of which are interrelated. The Group is also striving to diversify its businesses, which now
encompass the power generation segment, manufacture and sale of mica, research and development of robots, leasing of real estate, and operationof sports clubs.

A raw material business operated since our foundation(JPY million)

Net sales

Operating profit

334,496Sales
by segment
in FY2022

198,147

4,016

59.24%

107,971

Steel Segment

32.28%

21,957

Power Generation Segment

6,418

8,000

Operating profit (loss)

188,175
7,833

166,542

4,813

4,000

-2,0002019

Undercarriage parts forconstruction machinery

2020

100,000
75,0008,038

50,000

6,000
3,000

4,142

25,000

2,248

1,293

0

(625)

0
-25,000-3,0002018

2019

Steel construction materials

2020

2021

2022

(FY)

Steel materials for ships andindustrial machinery

2021

Power Generation Segment

Other Segment

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

Creating new sources of profit

120,000

Net sales

80,0004,000

20,0002,500

40,0003,000

15,000

2,000

0

2,000

10,0001,500-40,000

1,000

9,718

5,000

1,000

0

(1,957)0500-5,0000-10,000

-500

4,016

(221)

0

75,6572022 (FY)

Industrial fasteners(precision leaf springs, etc.)-1,000Operating profit (loss)

10,567

1,228

9,326

852

21,957(JPY million)

7,583

(566)

165

-2,000

2018

2019

2020

2021

2022 (FY)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 the surrounding environment,
and began to operate our electricity wholesale business in 2000. In
December 2022, the plant began generating power using biomass
solid fuel produced from food waste and sewage sludge in Toyohashishi, contributing to local production for local consumption of energy.

Ultra-Large Wheels for
Mining Equipment [SGOR®]

Net sales

Operating profit (loss)
7,041

6,558

(JPY million)

5,767

6,001

1,550

6,418

6,000

1,360
1,023

893

7,500

4,500
3,000

Corporate Data

Wheels for commercial vehicles

200,000

1,657

2,000

73,404160,000

136,113(track shoes, tracks)

Wheels forpassenger vehicles(JPY million)

6,000

2018

Wheels198,147
174,01580,442

Sustainability*1 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.
*2 Tracks: A general name for the assembled undercarriage components of construction machinery
vehicles, which are generally called a steel track belt.

10,0009,000

125,000

88,915Business

We manufacture and sell products including steel and aluminum wheels forautomobiles, wheels for mining vehicles, undercarriage parts for construction
machinery (track shoes*1 and tracks*2 ), and industrial steel fasteners for automobiles such as precision leaf springs.

Net sales

12,000

1,360

1.92%

Automotive and Industrial Machinery Components Segment
A world-leading comprehensive manufacturer of wheels
and undercarriage parts for construction machinery(JPY million)

107,971

Deformed
sectionsteelsSteels for use within the company

(566)

6.56%

Other Segment

Generalsectionsteels8,038

Operating profit (loss)

15,000Growth Strategies

Automotive and Industrial Machinery
Components Segment

7,175

Net sales

At the Topy Industries Group (the Group ), the steel business unit produces
steel using electric furnaces as well as a wide variety of steel bars. Wide flange
beams, general section steels and deformed bars are shipped as construction
materials chiefly to customers in both domestic and overseas markets, while
deformed section steels are largely supplied to the company s automotive andindustrial machinery components segment unit where they are turned into finished products. This business unit includes companies engaging in the collection and recycling of steel scrap, a transportation company, and a trading
company that acts as the logistics and trading arms of the unit. In addition tointer-group business transactions, it also sells products and provides services
to customers outside the Topy Industries Group.

Value Creation

Businesses of the Topy Industries Group

1,500

(185)

0
-1,500

2018

2019

2020

2021

2022 (FY)In the Business Development Area, we are expanding sales of mica (artificial mica), which is used for cosmetics and other products, in Japanand other countries, while conducting research and development for
crawler robots utilizing our suspension technology. We also lease realestate, such as TOPYREC PLAZA (https://topyrecplaza.com/) (Minami-suna, Koto-ku, Tokyo), and operate sports clubs, including OSSO.

Track shoes
Aluminum
Steel
Steel

05

TOPY Report 2023

Industrial fasteners
TracksPower plant

Biomass solid fuelMica for cosmetics

RobotsTOPY Report 2023

06

Chapter1

Value Creation

History of the Topy Industries Group(JPY billion)
350(JPY billion)
35

Net sales

300

Three strengths developed over our 100-year history

30

250

25

200

20

150

15

100

10

50

5

0
Steel

Undercarriage partsfor construction machinery

Wheels0(FY) 1964

Business development

Power generation

Value Creation

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

Operating profit

1970

1980

1990

2000

2010

2020

-5

*FY1964 to FY1976: Non-consolidated FY1977 to FY2022: Consolidated

Founded in

1921

Origin of deformed section steel technologies

1921

1922

Japan

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

Establishment of an integrated production system

1953

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

Hot-rolling andthe commercial
production of
track shoes starts

1930
●

2020

1964

2008

2014

2021

Strengthening of the business alliance with
Nippon Steel Corporation

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

100th anniversary

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

Through the merger of Japan Motor
Wheel Co., Ltd., Toto Steel Mfg., Co.,
Ltd., Toto Zoki Co., Ltd., and Toto Tekko
Co., Ltd.

Steel wheels for passenger
vehicles

1985

2003

2013

2016

2017

Expansion
into theUnited States

Expansion
into China

Expansion into
MexicoThe business and capitalalliance with MW Italia
S.R.L. is strengthened

Expansion into
India

2018

Aluminum wheels forpassenger vehicles

Wheels forcommercial vehicles

Wheels manufactured by Teikoku
Hatsujo Seisakusho

Undercarriage parts forconstruction machinery

1999
Expansion
into theUnited States

Strength 2Expansion into China andThailand (Asahi Tec Corporation
becomes a wholly owned
subsidiary)

GlobalExpansion of
the Processing
Division

2013
Expansion into
Indonesia

2002

2013

Expansion
into China

Expansion into
Indonesia

1982

1989

2000

2009

2018

2021

Commencement of theindustrial fastener business

Development of SGOR®,
the world s largest wheel formining vehicles

Heat treatment efficiency improved
through the development of lowcarbon boron steel for track shoes

The power
generation businessis launched

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

Launched TACoil®, Japan s
first compact coil made of steel
bars wound at high density forreinforced concrete

Launched Evolution Type SGOR®
wheels for mining vehicles

Developed from metal
processing technologies

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

1987
Practical applicationof high-quality mica
for cosmetics

Environmentallyfriendly

Developed from electric
furnace melting technologiesof the steel business

1971
Established Topy Industries
Central Environmental Facilities
Committee

TOPY Report 2023

Strength 3

1992

2001

2010

2018

2020

2020

Established Global
Environment Office

Developed chromefree pretreatment
technology foraluminum wheels

Started mass production of ISO
method wheels combined with ECODprocessed discs, achieving a weight
reduction of approximately 15%.

Received Energy
Conservation Center
Chairman s Award at theEnergy Conservation Grand
Prize 2017

Toyohashi Plant received gold
rating in the CSR company
evaluation by EcoVadis ofFranceIntroduced water-soluble
coating for crawler tracks
to reduce VOC emissions

1998 to 1999
ISO 14001 certification
obtained at four Topy
Industries plants

Corporate Data

Technologies andnew businesses

1974

Sustainability

Overseas

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

07

Integrated
Production
System2009

Topy Industries, Ltd.
is establishedStrength 1

Business

Teikoku Hatsujo Seisakusho (the predecessorof Japan Motor Wheel Co., Ltd.) commences
the production of prototype steel wheels forautomobiles

2000

Growth Strategies(Year)

2004「Topy Industries Environmental Philosophy
Formulated Topy Industries Basic
Environmental Policy

Value Creation
through
Proprietary
Technologies

2013

2020

2022

Started EneKatsu 2020

Acquired right to use EcoLeaf
Environmental Label for six
products

Formulated long-term
vision for sustainability

TOPY Report 2023

08

Chapter1

Value Creation

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

Medium-Term Management Plan
2022 to 2025

TOPY Active & Challenge 2025
Group Basic Strategy

Basic Sustainability Policy
OUTCOME

Promote segment
management

Strengthen domestic
business baseStrengthen overseas
profitability

Contribute todecarbonization

Three key strategies
Businessstrategy

Business model

Technologies for rollingdeformed section steel

Manufacturing
P. 15
capitalP. 15

Proprietary technologies
and know-how, and R&D
for future growth
Human capital P. 16

P. 16

Trust from customers,
business partners, local
communities, and otherstakeholders
Natural capital P. 16
Efficient use of various
resources
Financial capital

Metal processing
technologies
Heat treatment
technologies
Coating technologies

Procurement

Strength 2

Global Expansionof the Processing
Division

Strength 3

Value Creation
through
Proprietary
Technologies• Wheels for passenger vehicles(steel, aluminum)
Steel wheels for commercial
vehiclesUltra-large wheels for mining
equipment• Undercarriage parts forconstruction machinery(track shoes, tracks)

Stable supply chain within andoutside the Group

Development
and design

Product development and design
capabilities that leverage thetechnological strengths andsynergies of each process

Production

Ability to produce products
efficiently and stably in anenvironmentally friendly mannerSupply andsales

Power generation

Businessdevelopment

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

Electricity: Use of the existing infrastructureof the steel businessMica: Application of electric furnace melting
technologies
Robots: Application of track manufacturing
technologies

Financialgoals

Non-financial
goals

Materiality

Provision of a stable energy
supplyImprovements in the safety andfunctionality of cosmetics using
impurity-free synthetic mica asa raw material

Sustainability
strategy

Promotionof green
innovation

A global corporation
A solidin harmony withmanagement
people and thefoundation forenvironment
sustainable growth

Environment

E

Reductions in manpower andenergy needs using robots

Economic ValueContribution
to buildinga recyclingoriented
society

Corporate Data

Social capital

Integrated
Production
SystemAutomobiles andindustrial machinery

Recycling

Diverse human resources
capable of supporting
sustainable growth

Improvements in the safety
and functionality of wheels
and undercarriage parts forconstruction machinery

Steel for use within
the company

Strength 1

Enhancement of thefunctionality of steel materials
for various purposes

Financialstrategy

Sustainability

Production bases in Japanand overseas and highly
efficient manufacturing
facilities and lines
Intellectual
capital• Steel construction materials• Steel materials for ships andindustrial machinery

Electric furnacesteelmaking technologies

An affluent society
where people can live
safely and healthily

BusinessStrength

Five key
themesRecycling of scrap iron, etc.
using electric furnaces

Steel

INPUT

TOPY Sustainable
Green Vision 2050

Growth Strategies

Group Basic Philosophy

Value Creation

Creating social value and achieving sustainable growth
based on advanced technological capabilities andan integrated production system for producing
and making full use of steel

Respect forhuman rights

Financial capital targets(medium-term plan)

Rate of operating profit
on sales
4.5% or higher
EBITDA .... 32.0 billion yen
ROE ......... 8.0% or higher

SocialS

Support fordiverse humanresources
Contribute tosociety throughbusiness

Governance

G

Build of a solidmanagementfoundation

Sound financial footing

09

TOPY Report 2023

TOPY Report 2023

10

Chapter1

Value Creation

Business Model and Strengths of the Topy Industries Group

Building a competitive value chain with the One-piece
Cycle and supplying high value-added products globally

Strength 1

Integrated
Production
SystemStrength 3

Our integrated production system from materials to finished products is the source of our ability to develop
products that meet the needs of customers and society
as well as our manufacturing capabilities that enable us toconsistently produce high-quality products. In addition, we
contribute to the realization of a recycling-oriented society
by recycling steel scrap as the main raw material, whileat the same time reducing both environmental impact andcosts by utilizing environmentally friendly production facilities and energy-saving technologies.

×18 production bases in
7 countries overseas

Strength 2

GlobalExpansion of
the Processing
DivisionWith production bases around the world, we
have established a global supply system capableof meeting the local procurement needs ofglobal automobile and construction equipment
manufacturers.

Value Creation

Value Creation
through
Proprietary
Technologies

The Group hopes to create a new movement, using steel as a medium to create a cycle in unison with society throughthe technology and quality that we have developed over the years to make society more affluent and easier to live in.
The One-piece Cycle embodies the thinking of the Group.

Product lineup with high market
share at the top level in Japanand overseas

Source of our product development
and manufacturing capabilities

Products

Materials division

Steel segment

Materials

Automotive and industrial machinerycomponents segment

Procurement

Stable supply chain within

Development
and design

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

Production

Ability to produce products efficiently and stably

in an environmentally friendly manner

Products

and outside the Group

Society

Customers

Compensation/
cash
Business

Shareholder returns

Supply and sales

Ability to handle a wide variety of products in small lots

and global supply system of the processing division
Growthinvestment

External suppliers

18 production bases in 7 countries overseas** Excluding locations in Japan, MW Italia S.p.A., Incoasc, Paco Aquina

Recycling of steel scrap as a raw material

Sustainability

China
Topy Undercarriage (China) Co., Ltd.

Europe(France, Poland, Romania, Russia, and Turkey)(MW Italia S.p.A.)

Growth Strategies

Processing
division

Fujian Topy Autoparts Co., Ltd.

United States

Ring-Techs Guangzhou Co., Ltd.

Topy America, Inc.

Guangzhou Wheelhorse Asahi Aluminium Co., Ltd.

Topy Precision Mfg., Inc.

Guangdong Dicastal Auto Parts Co., Ltd.

Japan

India

Corporate Data

Topy Industries, Ltd.

WIL Car Wheels

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

Capacity expansion of the Akemi Recycling Center
Processing capacity
CO2 emissions from electric
furnaces due to recyclingof dustApproximately
4,000 tons
per monthApproximately
10,000 tons
in 2025

VietnamTopy Fastener Vietnam Co., Ltd.

South Africa(MW Italia S.R.L.)

Topy MW Manufacturing

Indonesia

Mexico S.A. de C.V.

PT. Topy Palingda Manufacturing Indonesia

Topy Fasteners Mexico,

Topy Fasteners (Thailand) Ltd.

PT. Topy Undercarriage Indonesia

S.A. de C.V.

Asahi Tec Aluminium(Thailand) Co., Ltd.

(PT. Inkoasku, PT. Pakoakuina)

ThailandReduction of approximately 17,000 t/year

MexicoProducts produced at each base
Wheels for passenger
vehicles (steel)Raw materials
11

TOPY Report 2023

Wheels for passenger
vehicles (aluminum)

Wheels for commercial
vehiclesWheels for mining
equipment

Undercarriage partsfor construction
machinery

Industrial
fasteners

Alliance
partner

Ferrous scrap
TOPY Report 2023

12

Chapter1

Value Creation

Pursuit of High Added Value through Proprietary Technologies

Proprietary technologies to meet diverse internal andexternal needs

Achieved weight reduction and high strength and quality, and gained about 90% of
the Japanese market share
The company boasts world-class productivity, capable of manufacturing commercial
wheels as fast as one every nine seconds. Rim materials for commercial vehicle wheels
are made from our electric furnace materials, which are effective in achieving carbon neutrality. Through our technologies for rolling deformed section steel, we have reduced theweight of the rim material by making it as thin as possible while maintaining its strength,
which greatly contributes to improved fuel efficiency. In addition, discs manufactured
through our unique ECOD molding process can significantly reduce waste materials
compared to general manufacturing methods, contributing to resource conservation.

Electric furnace steelmaking technologies
High-efficiency electric furnace that achieves the world s top-level low electrode basic unit

*ECOARC™ is a registered trademark of Steel Plantech Co.

Achieving high durability of undercarriage parts for construction machinery

Heat generation efficiency improvement of 4.9%
Total energy consumption reduced by 7.7%

Shaft
output side
exhaust gas
temperaturemust be above
a certain level.

Heat treatment technologies

Maintain exhaust gas
temperature
Maximize the use of scrap
preheating
Secondary combustion of
unburned gases such as CO isused to achieve these goals.

Our strength lies in our technology that increases
strength, wear resistance and toughness basedon a proprietary heat conduction analysis systemthrough repeated heating and cooling. In addition,
by developing the world s fastest link processing
line and an automatic link belt assembly line thatno other company can match, we supply stable
quality and low-cost crawler belts to the world.

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

Sustainability

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

Our steel wheels for trucks and buses are made of deformed section steel, which
we have independently developed based on our advanced analysis technology andaccumulated know-how, to reduce weight and achieve high strength and quality.
We have captured approximately 90% of the domestic market share of steel wheels
sold to automobile manufacturers.

Business

Energy saving and cost reduction
effects

Steel wheels for commercial vehicles
Growth Strategies

The Toyohashi Plant Steelmaking Factory began operations in March 2015, with theupgrading of aging equipment and a supply system resistant to disasters such as the
anticipated Nankai Trough earthquake. We introduced one of Japan s largest 200-ton
eco-friendly high-efficiency electric furnace (ECOARC™*) and made subsequent changes in operation methods, such as in-furnace atmosphere control to suit the characteristics of the ECOARC™ furnace. By improving operations using our unique technology
and know-how, we have achieved energy conservation and cost reduction, leading tofurther decreases in per-unit electrode consumption. The steelmaking factory is now
one of the most environmentally friendly and competitive in Japan, operating only on
inexpensive nighttime electricity due to increased steelmaking capacity, and becoming
self-sufficient in billets for steel bars by introducing a continuous casting machine for bothblooms and billets.

Value Creation

Over the years, the Group has nurtured diverse and original technologies under the keyword of making steel and handling steel. We will continue tofocus on developing and strengthening technologies that will contribute to solving issues faced by our customers and society and become a sourceof competitiveness for the Group.

Metal processing technologies

Tracking shoes, the material used in tracks, are one of ourcore products. They are manufactured in an integrated manner in-house, from material selection to completion, in close
cooperation with the Steel Division, which handles steelmaking and rolling.

Technologies for rolling deformed section steel

One of our strengths is our deformed
section steel manufacturing technologythat makes full use of our unique numerical analysis. Although deformed section
steel products with asymmetrical crosssections are prone to bending during therolling process, we are able to correct thebending by having our production lines
convey the special shapes.

Corporate Data

Manufacturing various complex cross-section steel to meet the needs of customers

Coating technologies
Responding to the diversifying needs of customers and society
Leveraging our coating technology that enables metallic particles to be uniformly and precisely oriented, we have developed satin, bronze, and high-gloss glitter-colored wheels
for high-grade vehicles, in addition to conventional plated
wheels, which stand out for their premium appearance, in order to differentiate ourselves from our competitors and meet
diversifying needs. We are also actively promoting environmental friendliness by using low-temperature baking paints
and improving coating efficiency.

Mast materials for forklift trucks
This steel shape is used for the vertical section(mast) at the front of a forklift. It is a product that
requires high strength as well as wear resistanceand weldability.

13

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Chapter1

Value Creation

Non-Financial Capital to Support Value Creation

Strengthening non-financial capitalfor further value creation

Non-financial capital, including technological capabilities that have been continuously refined over the 100 years since our founding and humanresources that are the source of value creation, are important management resources that support the sustainable growth of the Group.
We are working to strengthen our non-financial capital for further evolution of value creation.

Value Creation

Natural capital

Production bases in Japan andoverseas and highly efficientmanufacturing facilities and lines

Proprietary technologies and knowhow, and R&D for future growthDiverse human resources capable ofsupporting sustainable growthTrust from customers, business
partners, local communities, andother stakeholders

Efficient use of various resources

The Group has a wide range of production
bases in Japan and overseas, manufacturing product in optimal locations according to
product characteristics and customer needs.
We promote the supply and cross-sourcing ofmaterials and the sharing of development andmanufacturing roles among our production
bases to build an efficient global production
system and support the integrated production system from materials to products andthe resource-recycling business model that isa characteristic of the Group.
In addition, at each of our production
bases, we are introducing highly efficientmanufacturing equipment and constructing
production lines to create products that arecompetitive in terms of both cost and environmental friendliness.

Throughout its more than 100-year history,
the Group has always been a pioneer, repeatedly taking on new challenges with originality
and ingenuity, and creating diverse and creative technologies. Recently, customers haverequested a wide range of products in termsof weight reduction, shape and size, andenvironmental friendliness, and the Group s
strength lies in its ability to respond to such
requests, backed by the proprietary technologies and know-how it has developed over
the years.
Furthermore, by applying these technologies and know-how, we have created newtechnologies, leading to the expansion of ourbusiness.

We believe that our human capital is ourgreatest asset and that reinforcing it is thesource of our value creation.
In order to respond to rapidly changing
society and technology and open the way tothe future, we need human resources who canalways think and act on their own initiative. We
also believe that the ability to create new value comes from diverse human resources who
recognize each other s differences in values,
enhance organizational capabilities, and takeon the challenge of achieving major goals.
The Group is working to strengthen its
human capital through human resources development and the creation of a workplaceenvironment in which a diverse range of human resources can play an active role.

The Group has earned the trust of its customers
by providing products and services that meettheir needs. In addition, by building strong relationships of trust and cooperation with many ofour business partners and alliance partners, weare able to provide a stable supply of products
and services around the world.
Moreover, coexistence with the local
communities in which we operate is essential to our business activities, and each of our
production bases engages in activities that
contribute to the local communities in which
it is located.

The business activities of the Group areclosely related to natural capital, including theuse of water resources and mineral resources as raw materials for products and fuel for
power generation.
Through its resource-recycling businessmodel, the Group contributes to the realization of a sustainable, recycling-oriented society by effectively utilizing limited resources
through recycling. We also view promotionof green innovation as a materiality and promote efficient use of natural capital and environmental impact reduction through development and advancement of environmental
technologies to conserve the global environment and biodiversity as well as to create
economic value.

• Optimal global production system(Japan and 18 production bases in 7
countries overseas)• ECOARC™, an environmentally friendly
high-efficiency electric furnace• Crude steel production capacity of approx.
1 million tons/year• Advanced metal sorting equipment at the
Akemi Recycling Center• Manufacturing facilities and lines based on
proprietary technologies• Capital investment 8.9 billion yen (FY2022)• Electric furnace steelmaking technologies• Technologies for rolling deformed section
steel• Metal processing technologies• Heat treatment technologies• Coating technologies• Business development strategy center• R&D expenditures 1.0 billion yen (FY2022)• Number of consolidated employees:
approx. 5,700• Ratio of employees at overseas production
bases: 43% (FY2022)• Human resources development based onan education system• Promotion of environmental improvement
and other measures to promote diversity• Efforts to improve ES (employee satisfaction)• Promotion of Health Management®*• High market share based on customer trust· Steel wheels for passenger vehicles:
approx. 55% in Japan· Steel wheels for commercial vehicles:
approx. 93% in Japan· Ultra-large wheels for mining equipment:
approx. 90% in Japan and overseas· Track shoes for hydraulic excavators:
approx. 71% in Japan• CO2 emissions(consolidated, Japan, FY2022)
Scope 1 233 thousand tons CO2
Scope 2 332 thousand tons CO2
Scope 3 1,334 thousand tons CO2• Environmental management system ISO
14001 certification ratio (consolidated andproduction sites): 75% (FY2022)• Monthly processing capacity of the Akemi
Recycling Center: approx. 4,000 t• Respect for human rights• Respect for human rights• Support for diverse human resources• Contribute to society through business• Human resources strategy .................. P. 17• Human resources development ........... P. 54• Diversity ............................................... P. 55• Improvement of employee satisfaction P. 57• Health and safety ................................. P. 59• Quality...................................................
• Supply chain management ..................
• Ensuring fair trade ................................
• Contribution to communities ................
• Respect for human rights .....................

*All of the above are actual sales shares for automobile manufacturers and construction equipment manufacturers in FY2022 (based on research by Topy)• Promotion of green innovation

Related materiality• Contribution to building a recyclingoriented society• Promotion of green innovation• Promotion of green innovation• Contribute to society through businessInitiatives forstrengthening capital• Global production bases .....................
• Proprietary technologies ......................
• Responding to environmental risks
and contributing to the establishmentof recycling-oriented societies .............
• Quality...................................................

P. 12
P. 13

P. 45
P. 49

• Proprietary technologies.......................
• Development of environmentallyfriendly products ...................................
• Technical education (developmentof education system) ............................
• Intellectual property policy ...................

P. 13
P. 47
P. 54
P. 68

Corporate Data

Social capital

Sustainability

Human capitalBusinessStrengths ofcapital/current status

Intellectual capital

Growth Strategies

Concept of capital

Manufacturing capital

P. 49
P. 50
P. 50
P. 51
P. 53

• Dialogue with shareholders
and investors ........................................ P. 68• Contribution to building a recyclingoriented society• Resource-recycling value chain............ P. 11• Environmental management ................. P. 41• Response to climate change ................ P. 43• Biodiversity preservation andchemical management ......................... P. 45• Waste reduction and recycling ............ P. 46*Health Management® is a registered trademark of the Institute for Health Management, a non-profit organization.

15

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16

Chapter1

Value Creation

Special Feature

Human Resources Strategies

Creation of organizational results

Output- Manifest results -Develop
Takanori Yoshikawa- Nurture -We provide opportunities for reskilling and various exchanges with theaim of fostering a proactive spirit of improvement.

■ Promotion of job crafting■ Evaluation system based on human resources
development■ Expansion of opportunities for improvement
suggestions and project proposals

Value Creation

The Group aims to achieve sustainable growth by making appropriate investments in human resources in order to maximize their potential. The basic concept of the Human Resources Development
Policy is to create human resources who continue to develop through their work, and we encourage employees to feel a sense of growth through working for the Group, thereby fostering a desire tocontribute to their peers and to the organization. Since 2015, we have been continuously working to
improve our corporate culture through activities to enhance job satisfaction, creating an environment
in which employees can proactively engage in their work. We will continue to engage in improvement
activities so that employees can continue to work with peace of mind in a lively atmosphere.

To clearly manifest results, we are strengthening initiatives that celebrate
results through presentations and awards.

Fostering a mindset for development■ Expansion of managerial staff education■ Support for relearning (reskilling)■ Introduction of training to promote innovation

General Manager,
Human Resources Department

Growth Strategies

Topy Industries Group Human Resources Development Policy• Create human resources who continue todevelop• Strengthen employees capability to respondto environmental changes• Support employees in their autonomous careerdevelopment• Continue to produce future business leaders• Create an organizational environment that
permits diverse human resources to work
actively in various ways

Reward- Compensate -Vision for 2030

• Providing opportunities for self-awareness realizations: 1-on-1
meetings, thorough implementation and revision of the evaluation
system, expansion of 360-degree surveys, etc.
• Quality improvement of awareness based on realizations: cross-industry exchanges, culture improvement workshops, training to enhance DX literacy, etc.
• Quality improvement of actions based on consciousness change:
cross-industry exchange training, idea proposal systems, etc.

• Quality improvement of corporate culture through the human resource strategy implementation process• Enhancement of human capital leading to human resource growthand higher profitability• Securing diverse human resources in consideration of sustainability management• Human resources development in response to innovations in DX
technologies such as AI and automation

Attract- Draw in -Medium-Term Management Plan
human resources strategy
Working stylereforms
Realization of operational
reform through promotionof DX■ Promotion of D&I recruitment and diversification ofrecruiting methods■ Promotion of remote working (promotion of telework)■ Introduction of hourly annual leave■ Introduction of a retirement age of 65

Turnover rate within
three years of hirefor new graduates(FY2022)

Output- Manifest results Four axes of activity
and correlated
measuresUtilization ofhuman resources

Creation of organizational results■ Promotion of job crafting*2■ Evaluation system based on humanresources development■ Expansion of opportunities for
improvement suggestions and project
proposals

Improving the working
environment and securing
diverse human resources

Strengthening
human capital

Demonstrate initiative throughmotivation and achievement(engagement)[Targets to be achieved by FY2030]
Ratio of female managers:

Develop
Human resources
development

Reward- Compensate -5.2%

Ratio ofmid-career hires(FY2022)25.4%

Progress towards the achievement goals set for FY2030
We are making steady progress towards the goals for securing and developing human resources set for FY2030. In terms of securing human resources, we have achieved our recruitment target of at least 40% for female employees in career-track positions,
thanks to the success of measures such as internships. We have also met our plans for both men and women regarding the rateof acquiring childcare leave, which is one of our initiatives for promoting diversity. The ratio of female managers reached 6.3% in
FY2022 (up 1.3% from the previous year), and is on track to reach the target of 10% or more in FY2030.

- Nurture -Expansion of
育成施策の拡充
development measures
Ratio of female managers(FY2022)

10% or more

Implementation of evaluations and pay raises ina balanced manner■ Review of personnel treatment system (personnel
evaluation, grading system, promotion system, etc.)■ Expansion of various awards

Enhancement of recruiting strength anddiversification of work styles

Corporate Data

Enhancement of recruiting strength and diversificationof work styles■ Promotion of D&I*1 recruitment and diversificationof recruiting methods■ Promotion of remote working(promotion of telework)■ Introduction of hourly leave system■ Introduction of a retirement
age of 65- Draw in -■ Review of personnel treatment system (personnel
evaluation, grading system, promotion system, etc.)■ Expansion of various awards

Sustainability

Human resource strategy in the Medium-Term
Management Plan and four activity axes

Attract

We aim to be a company where people want to continue to work, throughmeasures that are carefully tailored to each employee with diverse values. We have established a system to support employees with various
backgrounds who have challenges or difficulties in working, and we are
improving the working environment for them. We will continue to support
diverse working styles while listening to the voices of our employees.

Implementation of evaluations and pay raises
in a balanced mannerBusiness

Strategies and initiatives for FY2025

We are conducting a fundamental review of our human resources systems based on the concept that results are defined as problem-solving
ability combined with the ability to take action that leads to results.

Fostering a mindset for development■ Expansion of managerial staff education■ Support for relearning (reskilling)■ Introduction of training to promote
innovation

6.3%(Target for FY2030:
at least 10%)Percentage of female new graduates hired forcareer-track positions (Topy Industries, FY2022)

53.8%
Plan period: April 1,
2021 to March 31, 2026
Target: at least 40%

Percentage of employees acquiring
childcare leave (Topy Industries, FY2022)

27%
Female employees: 100%
Male employees:

Plan period: July 1, 2020 to March 31, 2025

Male employees: acquisition rate of at least 7%
Female employees: acquisition rate of at least 75%*1 Diversity and inclusion*2 Method for enhancing job satisfaction and fulfillment by making creative adjustments to one s way of working

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Chapter2

Growth Strategies

Value Creation
Growth Strategies

Top Message

Business

We will achieve sustainable growth by strengthening
our ability to respond to change and maximizing
the capabilities of the Topy Industries Group.

Hiromi Ishii

My name is Hiromi Ishii, and I assumed the position of Representative Director, President and CEO in June 2023. I comefrom a technical background at Nippon Steel Corporation, where
I was involved in steelmaking-focused manufacturing and production technology at steel plants for 30 years, and then spent
the subsequent 10 years in management at the headquarters
bar and wire rod division and with Sweden s leading steel company, Ovako AB.
I feel that the Group is an attractive corporate group withan enterprising spirit and an open and vigorous corporate culture. For over a century since its foundation, the Group has
maintained an integrated production system from materials to

19

TOPY Report 2023

processing, creating numerous pioneering technologies. It is a
corporate group that works brightly, energetically, and enjoyably,
and we are united in overcoming difficulties together. However,
it is also true that in the last decade, there has been a stall in thecreation of new technologies. My desire is to reclaim the presence as a technology-driven Topy so that this wonderful corporate culture can continue into the future. To achieve this, wemust first complete our Medium-Term Management Plan, TOPY
Active & Challenge 2025 (below, A&C 2025 ), and furthermore,
we must enhance our adaptability to change and our perspective on tradition, and advance towards realizing our sustainability
long-term vision. I will continue to lead our management withthese three missions in mind.

Formulation of the long-term vision forsustainability for 2050
In October 2022, we formulated our long-term sustainability vision, TOPY Sustainable Green Vision 2050. The vision aims toachieve carbon neutrality and an affluent society where people
can live safely and healthily, as well as to establish a solid management foundation that enables sustainable growth and to become a global company that is in harmony with people and theenvironment. As part of our journey toward this goal, we have set
our vision for 2030 as a company that creates new value andleads the way in solving social issues, and have defined eachstrategy of A&C 2025 based on a backcasting approach. I would
like to make use of my experience at Ovako AB in executing thisCorporate Data

Greetings on assuming the office of President

Sustainability

Representative Director, President and CEO
Topy Industries, Ltd.

long-term vision and A&C 2025. At Ovako AB, we achieved theworld s first carbon neutrality in the steel industry, and there wasmuch to learn not only about environmental considerations but
also about management aimed at achieving goals. First, the top
management decides to go for it and starts running, adapting
measures flexibly in response to environmental changes, andpersevering towards goals no matter what happens. I would
definitely like to incorporate this mindset into the Group as well.

TOPY Report 2023

20

Chapter2

Growth Strategies

Overview of the first year of the Medium-Term
Management Plan TOPY Active & Challenge 2025

The responsibility of the Representative Director, President andCEO of the Group, which operates a wide range of businesses,
is a very important one. First of all, I will place the highest priority
on achieving A&C 2025, and will focus on breathing life into theframeworks we have established and enhancing their effectiveness by rebuilding our domestic business base by strengthening
profitability and developing our overseas business by strengthening alliances. Furthermore, we intend to explore possible new
business pillars while taking necessary measures by closely
monitoring changes in the environment through 2025.
The Group has a pioneering spirit that we have cultivatedsince our founding. If we do not start something, nothing will
be born. Looking back on the history of the Group, there havebeen many products and businesses that have found successby persistently confronting new technologies and finding a way
forward. We are determined to create a group that is trusted bysociety and achieves sustainable growth by constantly challenging ourselves and creating new technologies. We would like to
ask for your continued support in this endeavor.

Corporate Data

TOPY Report 2023

Pioneering spirit for sustainable growth

Sustainability

21

Recently, demand for aluminum wheels for passenger vehicles
has been increasing against the backdrop of the emphasis on
improving fuel efficiency through high design and weight reduction, and the installation rate of steel wheels, in which the Group
has a large market share, has been steadily declining. The progress of the shift to EVs is spurring the need for lighter weight,
and the dominance of aluminum wheels in the market is likely
to continue in the future. In response to this trend, the Group isalso strengthening its aluminum wheel business, centered on the
Aluminum Administrative Center established last year, and we
consider the expansion of the aluminum wheel business to be
one of our future growth drivers.
On the other hand, I am also looking at the potential of steel
wheels. For wheels for light vehicles and small passenger cars,
steel wheels are more advantageous in terms of weight reduction. Furthermore, there is a movement to use wheel covers to
reduce air resistance, leading me to believe that steel wheels
could be adopted in situations where aluminum wheels werepreviously favored for their design.
In addition, I consider the lower CO2 emissions at manufacturing process to be an important point. The Group has always
boasted a high share of the steel wheel market. The reason why
I am talking about the potential of steel wheels is because wewant to protect this strength. I believe that one of the challenges
of A&C 2025 will be to consider aggressive measures from theperspective of how to maximize our current steel wheel production system, while strengthening our aluminum wheel businessand developing demand for steel wheels in response to market
needs. The shift to EVs could be a great business opportunity for
the Group, which can handle both aluminum and steel wheels,
so we will take on this challenge with an enterprising spirit.

Our sustainability strategy is steadily progressing towards theachievement of KPIs. In particular, we are working with a senseof speed on diversity, one of the materialities, and we are in sightof achieving the FY2030 target of a ratio of female managers ofat least 10%.
Regarding financial strategy, I recognize the need for further
steps toward FY2025, and we will consider measures including
more structural reforms and growth investments.

Business

With regard to the business strategy of A&C 2025, rebuilding
the business foundation to strengthen profitability and achievesustainable growth, in FY2022, all segments made significant
progress in their efforts to optimize selling prices in response to
the recent sharp rise in raw material prices. In addition to this, thesteel segment improved its product mix by increasing the sales
ratio of high-margin section steel.
In the automotive and industrial machinery components segment, we steadily implemented structural reforms, including theconsolidation of domestic production of steel wheels for passenger cars to the Toyokawa Works and the transfer of productionof some wheels for commercial vehicles to Indonesia. Although
the recovery of automobile production was slower than expected due to the impact of the shortage of parts such as semiconductors, automobile production is now recovering, and ourchallenge is to strengthen our production system to ensure that
we can leverage this recovery and improve profitability.
With regard to strengthening our overseas business, werecognize that the conventional globalization that allowed us toexpand the scale of our business by aligning ourselves with theoverseas operations of Japanese automakers is now a thing of
the past, and that we are now being tested on our skillful alliance strategies. The Group is in partnership with MW Italy andWheels India for automotive wheels, and it is necessary to further
strengthen these alliances. Expanding sales to local companies
and developing new markets are also challenges, and we willaddress these through the newly established Overseas Business
Strategy Department this year.
In order to deepen proprietary technologies and becomecarbon neutral, we are further promoting the visualization ofenergy consumption through smart factories. At the Toyohashi
Plant, we have achieved a record-high electrode consumption
rate with an eco-friendly high-efficiency electric furnace, and weare making steady progress toward becoming carbon neutral,such as by starting power generation using biomass solid fuelat Akemi Electric Power, Ltd. CO2 emissions in FY2022 werereduced by 9.6% from the FY2013 level (CO2 emissions are

Responding to the shift to EVs

Sustainability strategy and financial strategy

Growth Strategies

Achievements and challenges in the first fiscal year

Responding to social demands for further growth

are seldom possible. In order for the Group to remain competitive, we believe it is important to build a cycle that consistently
produces one-step-ahead technologies such as the latter. In order to build such a cycle, it is necessary to have enough people
and time to search for the seeds of new technologies basedon the insights gained from our daily work. However, this leeway is becoming less and less available due to the expansionof our business, including our overseas business. Moreover, thesituation is expected to be even more difficult in the future as
the working population declines throughout Japan. Therefore,
we must implement the transformation to a more contemplative,
proposal, and improvement-oriented work style through the promotion of DX to support employee tasks and by utilizing data to
improve efficiency.
We have already achieved data visualization and improved
efficiency through DX at our automotive wheel production sites,
and we plan to roll out this example to production lines for otherproducts and overseas plants. We will also focus on the development of DX human resources to advance DX. We will continue
to promote DX to solve the Group s challenges of worker shortages and the creation of new technologies.
Looking at overseas companies, the introduction of AI atproduction sites has advanced more than in Japan. However,Japan s use of AI is not inferior to that of other countries in thathumans have the data in their hands. We understand which data
to check to reduce the basic unit cost. The management capability of Japan s production sites can be said to be reaching thelevel of artistry. It is clear that this is achieved through a high levelof expertise and technical capabilities. Along with the promotionof DX, we will focus on the development of individuals, including
skill transfer from senior human resources, and aim to enhance
our business activities with this hybrid approach.

Value Creation

In the global economy, there are concerns about growing geopolitical risks, global inflation, and soaring prices of raw materials
and energy, and in Japan, there are also concerns about worker
shortages and the 2024 problem in the logistics industry. In thisenvironment, in FY2022, the first year of A&C 2025, we achieveda record-high net sales and returned to profitability in terms ofoperating profit and ordinary profit for the first time in three fiscal years, thanks to cost improvements through optimization of
selling prices and structural reforms. The results of individual
strategies of A&C 2025 were almost in line with the plan, andwe consider that we were able to achieve results that will lead
to FY2023.

the total of Scope 1 and Scope 2), and we are making steadyprogress toward our goal of a 46% reduction in FY2030. Goingforward, we will continue to accelerate our efforts to achieve our
CO2 reduction target with a strong determination. We will also
promote the development of automotive wheel technologies
that emphasize weight reduction, aerodynamic drag, and fuelefficiency in order to contribute to the reduction of CO2 emissions in Scope 3.

Reviving the pinnacle of technology through thepromotion of DX combined with human resources
development
Regarding human resources, as a manufacturing company, I amaware of the challenge of securing technical human resource.
In technological development, there are two types of inventions:
groundbreaking, long-lasting inventions, and inventions that other companies will follow in a few years. The former are tackledfrom a long-term perspective with the Business Development
Strategy Center playing a central role, but such major inventions
TOPY Report 2023

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Chapter2

Growth Strategies

Overview and progress of the Medium-Term Management
Plan 2022 to 2025
Medium-Term
Management Plan

Under the Group Basic Philosophy, we will solve a wide range of social issues, grow and develop
through contributing to the realization of a sustainable, recycling society, and aim to become a global
company that is trusted by stakeholders for many years to come.

Business Strategy: Five Key Themes
Progress in FY2022 and Future Policy
Business strategy
Five key themes• Priority investment with emphasis on capitalefficiency

Restructuring of the businessfoundation for enhanced
profitability and sustainablegrowth P. 21 P. 27• Profit improvement through appropriate pricing of products· Order activities focused on profit· Shortening of pricing revision terms and changes in commercial
practices• Optimization of product mix for steel materials (progress inreviewing sales ratios of section steel and steel bars)• Cost reduction through structural reform· Consolidation of domestic production bases for steel wheels forpassenger vehicles· Progress in transferring some production of wheels forcommercial vehicles to Indonesia (3 out of 7 sizes transferred)• Strengthening of the aluminum wheel business centered on the
Aluminum Administrative Center• Continued optimization of selling prices• Promotion of efforts to strengthen
profitability and development of overseas
business• Promotion of efforts to strengthen sales ofcommercial and supply parts

Deepen proprietary technologies
and become carbon neutral• Achieved record-high electrode consumption rate with ecofriendly high-efficiency electric furnaces• Commenced demonstration testing of an AI system for automatic
analysis of steel scrap (jointly with Eversteel Inc.)• Started power generation using biomass solid fuel produced
from food waste and sewage sludge• Scope 1 & 2 CO2 emissions: 9.6% reduction (compared to FY2013)• Further technological deepening andpromotion of green innovation

Secure and develop humanresources to support sustainablegrowth P. 17 P. 54• Expansion of various systems to achieve flexible working styles• Promote recruitment activities to secure diverse human resources• Strengthen DX human resources development to support
operational improvements• Expansion of self-development support• Acceleration of efforts to strengthen humancapitalEnhance management
sophistication through promotionof DX strategy P. 25• Acquire certification as a DX-certified Business Operator in
June 2022 based on the DX (Digital Transformation) Certification
System recognized by the Ministry of Economy, Trade and Industry• Development of DX human capital

P. 27

Basic PolicyGroup Basic Strategy• Transform earning power to strengthen existing
businesses• Pursue innovation for the next stage of growth• Contribute to a sustainable society through ourbusiness activities

Promote segment
management

Strengthen domestic
business baseStrengthen overseas
profitability

Contribute todecarbonization

Three key strategies
Businessstrategy
Five key
themesIn order to realize our vision for 2030, we have formulated a Medium-Term Management Plan, TOPY Active & Challenge 2025,
which will cover the period from FY2022 to 2025, based on a
backcasting approach.

Financial goals

FY2025 target

Operatingprofit margin
EBITDAROE

FY2022 results

4.5% or more

2.1%

JPY 32.0 billion

JPY 20.5 billion

8.0% or more

5.4%

Financialstrategy

Sustainability
strategy

Financialgoals

Non-financial
goals

P. 13

Evaluation
indicators

Numerical targets

Environment (E)CO2 emissions(Scope 1 and 2)

Aim to reduce
CO2 emissions by
46% compared to
FY2013 (FY2030)

9.6% reduction(compared to
FY2013)

Ratio of female
managers

10% or more
(FY2030)

6.3% (1.3% increase
from the previous
year)

Number of workrelated accidents inJapan

Aim to achieve zeroaccidents every year
(Lost time injuries or
more)

Not achieved dueto the occurrence oflost time injuries

Number of serious
complianceviolations

Continue to report
zero violations everyyear

0Social (S)Governance (G)FY2022 results

Topic

Progress of financial targets
EBITDA(JPY billion)
35

Operating profit margin

30
25
20

1.1

0.6

ROE
5.4

5.3

2.1

2.6

23

4.5 or more

6
4
2

32.0
15.2

5
0

(%)
8

0.4

15
10

8.0 or more

(4.2)
2019

TOPY Report 2023

(1.3)

(0.6)

9.6

11.1

2020

2021

20.5

22.4

0
(2)
(4)

2022

2023 Forecasts

2025 Targets

(6)

P. 43

Corporate Data

Non-financial
goals

P. 30

Sustainability• Introduced internal carbon pricing (ICP) as one of the criteria forenvironmental investment decisions in April 2023
• Scope of the system: Capital investments involving changes in
CO2 emissions

Business

Future policy

Growth Strategies

Progress in FY2022

Improve capital productivity
and optimize business portfolio

Recovering earnings power and moving into the growth phase

Value Creation

Medium-Term Management Plan
2022 to 2025

TOPY
Active &Challenge
2025

Establishment of overseas business strategy department

In April 2023, we established the Overseas Business Strategy Department with the purpose ofstrengthening overseas profitability, one of the Group s Basic Strategies of the Medium-Term
Management Plan, by aggregating information to strengthen the management foundation foroverseas businesses, establish a speedy decision-making process, and systematically expand
overseas business.
Members with expertise in overseas business gather together to study the strengthening ofalliances with overseas companies and the development of new markets. We are examining new
strategies with alliance partners as part of efforts to uncover issues in overseas business andreinvigorate existing alliances.
We will continue to explore the creation of new added value, including the development of
new markets.

(FY)

TOPY Report 2023

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Chapter2

Growth Strategies

Special Feature

DX Strategies

Energy conservation, peak power reduction

Efficiency improvements

Standardization, collaboration, and systematization

Reducing peak power by utilizing digital technology

Masayoshi Takezawa
Senior Managing Director
In charge of Technology, Safety &Health, DX Strategy, and the Business
Development Strategy Center

Step 1 By FY2025 (A&C2025)

Step 2 By 2030 (vision)

Raise awareness and improve environment
for promotion of DX

Stable profit creation through digital utilization

By FY2025

By 2030
Realization of cyber-physical*3 daily routines

Realization of daily routine of digital utilization

Realization of seamless, borderlessmanagement

Realization of data-driven*1 daily routines

Establishment of a foundation for digital utilization

Promotion of management that makes
decisions based on data

Sharing of experiences and case studies oftransforming operations• Each employee voluntarily and safely utilizes data
• Judgments are made not only based on experienceor intuition but based on data and standards• Working on the digital twin*2 transformation of
manufacturing lines• Digital twin is being rolled out and utilized inbusiness operations• Information is linked with business partners• Core development can be internalized*1 Data-driven: Activities are initiated based on data, rather than ideas or experience*2 Digital twin: A method of recreating real-space information in virtual space in real-time*3 Cyber-physical: Technology that analyzes real-world data in a digital virtual space to improve efficiency and create new value without relying on intuition or experienceDX examples and their positioning
Innovation/New profit generation

Level 6
Gaining and opening up new insights

Standardization, collaboration, and systematization

Level 4
Identifying and addressing problems

Digitization

Digitization of information that waspreviously only available
in the real world

Level 1
Collecting

Streamlining(Digitalization)
Change the way of working
to manifest effects
Visualization ofefficiency andproductivity

Visualization of energy
consumption

Individual and personalized
optimization

AI utilization

Operations improvement

Equipment
operation
monitoring

Automatic
formulation of
production plans

Centralized facility
operation
management

Energy use
forecasting

Automated inspection ofprocess defects

Standardization of operations with BI tools

Scrap quality determination

Partial and departmental
optimization

Automation

Equipment and process
improvement

Improvement of quality traceability

Digitization of factory operation data
Adoption of
paperless documentsand RPA

Information
collaboration

Overall and company-wide optimization

Maximizing value

Logistics reform
and inventory
management

Overseasinterpretation andmeeting minutes

Impact on
management

Envisioned form(business targets)

Significant
outcomes

Confirmation by the DX
Promotion Council
Methodtransformation

Follow-up on individual
measures(small themes)
Follow-up on small
theme progress by
the DX Promotion
Subcommittee

Methodtransformation

Measure (1)(envisioned form)

Approach ofoverall initiatives

MethodMeasure (2)(envisioned form)

MethodMeasure (3) transformation Measure (4) transformation Measure (5)(envisioned(envisioned(envisioned
form)
form)
form)

Measure (6)(envisioned
form)
Methodtransformation

Measure(7)

Measure(8)

Measure(9)

Measure(10)

Develop ambidexterity in transforming operations and digital utilization

Measure(11)

Measure(12)

Measure(13)

Measure(14)

Human resources development

We are actively developing human resources capable of transforming operations and utilizing digital information, and we are simultaneously
promoting measures to raise the Group s overall level (improving operational efficiency and sophistication) and cultivating individual experts.
As one of the overall Group improvement measures, we prioritize the introduction of digital technologies that contribute to solving
specific concerns in the daily operations of the business and staff departments, and aim to permeate the transformation of operations.

X (transformation) axis

Level 2Visualization

Levels in
FY2025: Small themes

Data-driven decision-making(decision-making transformation through commonization, collaboration, and structuring)

Executives

Promotion of digital expert human resources development

Executives
Managerial
staff
Staff

Corporate Data

Levels in2030

Level 5
Foreseeing the future

Level 3
Organizing as information

We have established a company-wide DX
Promotion Council and department-specificsubcommittees to create a promotion structure. We aim to achieve results by implementing measures based on a digital value tree thatclarifies the causal relationship between theobjectives and means of measures towards
the envisioned form.
In particular, the DX Promotion Subcommittee implements and evaluates small theme
measures in order to realize the results of digital utilization in a short period of time.

Awareness raising and experience

Sustainability• Workplace documents have become paperless• Status of production at each location has beenvisualized and shared• Information sharing using groupware has been
progressing

Digital transformation that eliminates
organizationaland hierarchical seams

Company-wide promotion system and theme identification

Business

Current status*3 Act on Rationalizing Energy Use: Law concerning the rational use of energy and the transition
to non-fossil energy*4 DR (demand response): A mechanism that controls energy resources on the consumer side to
manage power demand

Both human resources and organizational functions areenhanced, transforming into a corporate culture that is
flexible and quick to respond to change(1) Reform consciousness through successful experiences
promoted by DX themes(2) Development of DX human capital(3) Improvement of DX environment

Growth Strategies

Enhance management sophistication through promotion of DX strategy

We simulated power demand and realized cost reductions due
to peak power based on the actual data from the energy visualization system. Specifically, based on actual power data, peak
power demand was forecasted every 30 minutes in accordancewith production demand, and contracted power consumption
was reduced by shifting break times and optimizing equipment
startup timing.
Going forward, we intend to demonstrate measures to further reduce peak power consumption by improving the accuracy of forecasts using AI. Furthermore, in response to the future
progress of the Act on Rationalizing Energy Use*3 amendment,
we are building a foundation for operation and power demand
management with an eye on borderless collaboration with external parties through DR*4.

Value Creation

Topy Industries Group seeks to create new sources of profit by producing novel approaches to digital innovation, evolving its smart factories established as part of its digital transformation in the manufacturing domain with digital transformation (DX). In addition, we will create new value by creating perspectives and ideas that transcend organizational boundaries
through the centralized management and sharing of big data collected from each businessdivision in order to realize overall optimization. In June 2022, we obtained DX Ready certification from the Ministry of Economy, Trade and Industry, demonstrating our commitmentthat the promotion of DX is one of our most important management strategies.

Managerial staff

AI and BI expert training (experience in DX department)
Expansion of expert human resources community of core members

Staff
Operational
staff

Elevation
Introduction of and education on no-code/low-code tools
Provide a forum for case study sharing and consultation,and support autonomous activities in which users
themselves utilize digital tools

Operational staff

D (digital) axis
*AI: Artificial intelligence BI: Business intelligence, a decision-making tool that combines data through analysis and visualization

25

TOPY Report 2023

TOPY Report 2023

26

Chapter2

Growth Strategies

Message from the Officer in Charge of Finance

Shinichi Kijima
Director and Executive Vice President
Assistant to the President,
in charge of Finance

Shareholder
returns• Consolidated payout ratio guideline of 30-35%• Consideration given to maintaining stable dividends

Capitalexpenditures
Operating cash
flow of87 billion yen
over 4 years

64.4

Growthinvestment

26.8

New products, businessexpansion, DX, CN, etc.

Routineinvestment

21.4

Investments to maintainproduction activities

billion yen
Equipment
16.2
maintenanceInterest-bearing debt repayment

6.0

Shareholder returns

10.9

Cash and deposits, etc.

5.7

Renewal of
aging facilities, etc.

proposals and best practices aimed at sales price optimizationand further strengthened our dialogue with customers. Although
the impact of factors such as the COVID-19 pandemic continued to create a challenging business environment, our perseverance in these initiatives allowed us to escape an operating
loss in FY2022, which I believe has also boosted our employees
confidence. For FY2023, we expect to increase both sales andprofits, and set a new record high for sales.
The Group s business spans a wide range of fields, withdifferent commercial practices depending on the industry. Evenin areas where there is still room for optimization, we will continue to confirm the thinking of each customer and engage indialogue with them to develop business based on a common
understanding of the value of using our products.

To grow profits while coping with the population decrease in Japan, improving capital productivity is essential, and the transfer
of production of some wheels for commercial vehicles to Indonesia as set out in A&C 2025 and the enhancement of the distribution system for construction machinery are examples of suchinitiatives. In addition, we are strengthening initiatives to shorten
the collection period for trade receivables and to improve themanagement of inventories through the use of DX, which leads
to an improvement in CCC, and to optimize the business portfolio. On a non-consolidated basis, the Company has a long history of evaluating businesses, including balance sheets, using aninternal capital system. Currently, from a consolidated management perspective, there is a demand for management and evaluation by segment, and we are now considering mechanisms toenhance precision.
As management becomes more sophisticated and overseas
expansion continues, we intend to focus on the development offinancial management human resources. We aim to improve theability to oversee the Group s finances by not only enhancing
financial expertise but also by creating opportunities to experience the culture and customs of various countries firsthand,which is essential when strengthening overseas businesses.

Strengthening IR activities and shareholder returns

The visualization of production lines through DX investments,
which the Group is currently focusing on, enables the precise
capture of production volumes, output, and the costs of line
stoppages. This will lead to more sophisticated inventory management, shortening the CCC (cash conversion cycle)* and optimizing cash management. We see DX as an effective means toadvance our financial strategy.
The D/E ratio, one of the key management indicators, is set
to target 0.6 times by FY2025. Accordingly, while carefully examining investments and considering the utilization of cross-shareholdings, we aim to reduce our interest-bearing debt by 6 billion
yen by FY2025 (compared to FY2021).
*CCC: cash conversion cycle
CCC refers to the period from when payment is made for purchases such as raw materials until
the product is sold and cash is collected. A shorter period indicates a smaller burden on cash flow
management.

Beyond FY2023, we will continue to accelerate our efforts toachieve one of the financial goals of A&C 2025, an ROE of at least
8.0% (FY2025 target). As for improving PBR, we are currently
discussing this issue internally, as it is not explicitly mentionedin A&C 2025. For the reduction of capital costs, we intend to
focus on enhancing information disclosure and strengthening IR
activities so that investors can deepen their understanding of theGroup s businesses. In FY2023, we are disclosing supplementary explanatory materials for financial results, which were previously undisclosed for the first and third quarter financial results, andparticipating in IR events for individual investors.
In addition, from FY2023, we have set the dividend payout
ratio guidance to 30-35% of the parent company s current net
profit, excluding one-time gains and losses that do not involve
changes in cash and deposits. This is part of management thatemphasizes cash flow, deciding dividends based on whether
cash has been generated, regardless of accounting profit or loss.
Moreover, we have changed the dividend amount to one yen increments to realize more precise and flexible shareholder returns.
We aim to stabilize existing businesses and secure a revenue
base while venturing into growth markets. Going forward, we intend to continue these efforts to create social value and achievesustainable growth. We will continue to endeavor to meet the
expectations of our stakeholders, taking the candid opinions of
our investors seriously.

Corporate Data

TOPY Report 2023

Capitalexpenditure• Expand cash generation through prioritized investments witha focus on capital efficiency• Allocate about half of the investment cash flow to growthinvestments while properly implementing maintenance andrenewal investments to strengthen the foundation• Implement investments that support sustainable growth

Cash out

Cash inSustainability

27

Cash flow• Secure investment resources through sustained EBITDA
generation• Improve capital efficiency by shortening CCC and optimizing
asset holdings

Efforts to improve capital productivity

Investment activities and cash management
In our Medium-Term Management Plan TOPY Active & Challenge
2025 (A&C 2025), we base our financial strategy on emphasizing
investment activities to secure appropriate cash flow. In terms ofinvestment, we are committed to completing the structural reformof steel wheels for passenger and commercial vehicles, enhancing
the added value of aluminum wheels, and rationalizing production of undercarriage parts for construction machinery, as well as
making selective investments with a focus on capital efficiency innew strategic growth areas. In addition, towards achieving carbon
neutrality, we plan to enhance the effectiveness of the ICP (internal carbon pricing) that we started operating in FY2022 in ourinvestment decisions, along with investments in DX. We expectthat these investments will peak in FY2024.

Secure free cash flow of at least 20 billion yen, reduce interest-bearing debt, and improve financial position.

Business

In FY2022, we achieved a return to profitability for the first timein three fiscal years, with net sales of 334.5 billion yen, operating
profit of 7.2 billion yen, and ordinary profit of 8.0 billion yen. The
main factors were a gradual recovery in the external environment and the successful results of sales price optimization andcost improvement through structural reform. Regarding sales
price optimization, we have not only negotiated shifting prices
to customers based on fluctuations in raw material costs as wehave done in the past but also vigorously engaged in dialogues
about what the value of our products is in the first place, and bybuilding a common understanding of the value provided by our
products with our customers, we have challenged ourselves toestablish appropriate pricing at a level different from cost andmarket conditions. In FY2021, we established a sales headquarters and by closely coordinating between segments, shared

While maintaining a sound financial base, we will invest in corebusinesses and growth businesses, and aim to improve shareholder returns.

Growth Strategies

Results for FY2022 and forecast for FY2023

Cash allocation (4-year cumulative total)

Value Creation

Focusing on profitability and cash
generation to invest in growth andreturn profits to shareholders

Financial strategy

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Chapter3

Business

Steel Segment

Operating Officer
General Manager of
Steel Division
Responsible for
Steel Business andGeneral Manager of
Toyohashi Plant
Steel Division

Outcomes Created by our Products

Strengths of the Business

The Group contributes to the realization of a recycling-oriented society through the recycling of various resources, including steel scrap, into steel products, andthe use of advanced technologies to provide steel products with manufacturing processes that save energy andhave a low environmental impact. In addition, our advanced design and development capabilities and manufacturing technologies for deformed steel products contribute to the development of sustainable, high-quality
social infrastructure.

In addition to being able to efficiently produce various
types of products, such as steel sections and bars forconstruction, rims for automobile and construction machinery components, and deformed section steel for
track shoes and the like, the Group s strength is productdevelopment capabilities that meet the needs of customers and society. This enables us to have a broad and stable customer base. Another of our strengths is our
eco-friendly high-efficiency electric furnace, which enables us to recycle steel and save energy.

• Enhancement of the recycling businessTo address the various medium- and longterm issues that need to be addressedin order to realize our Vision for 2030,
we have established project teams for
improving logistics, procurement, andpurchasing, and considering investment
in a large rolling mill to clarify the challenges and study countermeasures. We
will continue to implement measures torealize our vision going forward. We will
also continue our efforts to expand andincrease sales of high value-added products, which is a priority issue, and to formulate appropriate sales prices.

• Creation of new value-added products
using DX

Sustainability

Core Competencies• Further productivity improvements,
cost improvements, and priceoptimization

Although steel scrap prices remained
high throughout the year, as well as prices for electricity and other forms of energy and secondary materials, we madesteady progress in optimizing steel sales
prices to match rising costs and optimizing the product mix with a focus on profit.

Business

Social Value of Products• Optimization of logistics

Future issues and initiatives

Growth Strategies

Akihiro Noaki• Expansion of high value-added
products

Summary of initiatives in FY2022

Value Creation

Responding to customer needs by leveraging
proprietary technologies and contributing to
the realization of a recycling-oriented society
through the recycling of resources

Policies and strategies ofthe Medium-Term
Management Plan

Corporate Data

Our Business Environment
Opportunities and risks
Opportunities• Global steel demand is expected to grow in the long term, driven
by infrastructure-related demand in emerging nations• In regard to steel demand in Japan, there is continuing demand
related to civil engineering projects, such as measures for building national resilience• Companies are expected to tackle global environmental issues
such as reducing greenhouse gas emissions and realizing a recycling-oriented society

29

TOPY Report 2023

Risks
• Steel demand in Japan is shrinking in the long term
• Rising production costs due to higher prices for energy, secondary materials, etc.
• Steel scrap prices remain high despite having peaked

Topic

Commenced demonstration testing of an
AI system with EVERSTEEL for steel scrap
inspection and acceptanceIn December 2022, we commenced demonstration testing with EVERSTEEL Corporation,a start-up company from the University of Tokyo, to analyze the grade and dust content
of steel scrap and detect non-conforming products using AI. This will address the issuesof inconsistencies in the assessment results of iron scrap quality by visual inspection byinspectors at the time of acceptance, and the lack of human resources. Going forward, we
will use the iron scrap analysis results to develop optimization of the entire steelmaking
process, including the charging of iron scrap into electric furnaces and melting, after theinspection process.
Scrap yard at Toyohashi Plant

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30

Chapter3

Business

Automotive and Industrial Machinery Components Segment(Wheels for Passenger Vehicles)• Completion of structural reform of steel
wheels for passenger vehicles• Expansion of aluminum wheels forpassenger vehicles business• Restructuring of global production
system (optimization of production
bases)• Initiatives to respond to the shift to EVs

Koji Takeuchi

Core Competencies

Outcomes Created by our Products

Strengths of the BusinessWe are constantly pursuing improvements in fuel efficiency and electric power consumption, which are created bylightweight, aerodynamic, and quiet wheel technologies,
thereby contributing to the reduction of environmental
burdens and supporting motorization around the world.

The Group has built a global supply steel system forwheels for passenger vehicles by establishing locationsin Japan, the U.S., Mexico, China, and India and forminga strategic alliance with MW Italia S.R.L. in Europe. In
addition, our aluminum wheels for passenger vehicles
are valued for their high design quality and lightweighttechnology. These strengths enable us to have a broad
sales network to the world s major automakers.

Although the external environment wasmore challenging than initially expected
due to the impact of parts supply shortages such as the shortage of semiconductors and the impact of production
cutbacks by automakers due to the lockdown in China, we have steadily accumulated the effects of structural reforms
through measures such as reviewing our
production system while adjusting selling
prices to match the rising costs such as
those of raw materials.

We will continue to optimize selling prices in line with costs, minimize the impact
of cost increases on business profitability, and further improve profitability andcost-effectiveness in order to establish asolid business foundation.

Business

Social Value of Products

Future issues and initiatives

Growth Strategies

Operating Officer
General Manager of Commercial andOff the Road Wheel Div., General
Manager of Wheel Division, incharge of Automotive and Industrial
Machinery Components Business

Summary of initiatives in FY2022

Value Creation

Maximizing our completed global networkand our technological capabilities and know-how
as a comprehensive wheel manufacturer

Policies and strategies ofthe Medium-Term
Management Plan

Sustainability

Our Business Environment
Opportunities and risks
Risks• As a result of economic growth worldwide, global automobile
demand is expected to expand in the medium to long term, particularly in emerging nations• Production stoppages or significant fluctuations in production
volume by automakers due to supply chain disruptions, natural
disasters, or the emergence of geopolitical risks• The automotive industry is advancing technological innovationsuch as CASE*1 and MaaS*2• Rising production costs due to soaring raw material, energy, andtransportation costs, etc.

*1 Connected, Autonomous, Shared/Service, Electric*2 Mobility as a Service• Decrease in demand due to the spread of sharing, population
decline, etc.

TOPY Report 2023

Corporate Data

31

Opportunities

Topic

The Group s comprehensive strength in
the aluminum wheel businessWe have established the Aluminum Administrative Center in Kakegawa, Shizuoka Prefecture, toconsolidate the development and operation functions of the aluminum wheel business, promoting
integrated operations with Asahi Tec Corporation and Kyushu Wheel Kogyo, Co.,Ltd., our consolidated subsidiaries. We are manifesting synergies through integrated operations, such as sharing
manufacturing technologies, promoting optimal production through bridge production (considering
each company s production capacity), and personnel exchange. In response to the rapid shift toEVs, rising raw material and energy prices, and changes in the business environment, we aim tocapture the growing demand for aluminum wheels for passenger vehicles, which is expected to
expand globally, and further increase profits in aluminum wheels for passenger vehicles.

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Chapter3

Business

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

Koji Takeuchi• Completion of structural reform of
the wheels for commercial vehicles
business (optimization of domestic andoverseas production systems)• Expansion of inspection and repair
service business and market sales
expansion system for wheels forconstruction machinery• Expansion of high-value-added
products that respond to the shift toEVs and a carbon-neutral society

Summary of initiatives in FY2022

Future issues and initiatives

We implemented structural reform of
the commercial vehicle wheel business,streamlining the domestic production
system, consolidating product types andtransferring production lines, and optimizing the product mix with our production base in Indonesia. In addition, in response to soaring costs of raw materials,
energy, and transportation, we worked to
optimize selling prices.

We will continue to streamline manufacturing processes, diversify material procurement, and optimize selling prices inline with costs through structural reforms
in the commercial vehicle wheel business.
Optimization of the product portfolio of
the off the road wheels business, and sophistication and modernization of manufacturing by streamlining the manufacturing process.

Value Creation

Providing products and services that contribute to society
on a global scale through advanced
technological capabilities and innovation
for the next stage of growth

Policies and strategies ofthe Medium-Term
Management Plan

Outcomes Created by our Products

Strengths of the Business

Wheels for commercial vehicles enrich the lives of people
and contribute to the logistics society by reducing environmental impact through improved loading efficiency
and fuel efficiency through the development of lighter
weight wheels. Wheels for mining equipment support themining of coking coal, iron ore, copper, and other resources as well as the development of social infrastructure around the world, contributing to industrial and economic development worldwide.

In wheels for commercial vehicles, we have approximately 90%* of the domestic market share thanks to our advanced product development capabilities based on flatmaterials, in addition to the development of products using deformed steel supplied by the Steel Division. In addition, our production base in Indonesia is meeting theneeds of automobile manufacturers for local production.
In wheels for mining equipment, we offer SGOR® wheels,
the world s largest class of high-strength, high-quality
wheels that can withstand the harsh conditions of minedevelopment around the world, as well as new productsthat improve safety and workability when changing tires,and with high reliability we hold approximately 90%* of
the global market share.

Sustainability

Core Competencies

Business

Social Value of Products

Growth Strategies

Operating Officer
General Manager of Commercial andOff the Road Wheel Div., General
Manager of Wheel Division, incharge of Automotive and Industrial
Machinery Components Business* Sales shares for automobile manufacturers and construction equipment manufacturers (new vehicle assembly)

Corporate Data

Our Business Environment
Opportunities and risks
Opportunities

Risks• Long-term expansion of demand for commercial vehicles with
global population growth• Commercial vehicle production in Japan is decreasing due toa decline in domestic demand and a shift to local production
overseas• Long-term expansion of demand for mining equipment in nonferrous mines due to the shift to EVs in vehicles• Growing demand for inspection and repair business for wheels
for mining machinery providing safety to customers• Changing customer needs towards the realization of a carbon-neutral society• Production stoppages or significant fluctuations in production
volume by automakers due to supply chain disruptions, natural
disasters, or the emergence of geopolitical risks• Decrease in demand for mining equipment due to the shift toaluminum wheels for commercial vehicles toward a carbon-neutral society and decrease in demand for coal
• Rising production costs due to soaring raw material, energy, andtransportation costs, etc.

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TOPY Report 2023

Topic

Caterpillar Inc. of the U.S. Receives SER Excellent
certification

We received the highest level of Excellent certification in the mining equipment wheel categoryof the U.S. Caterpillar Inc. s 2022 SER*1 (Supplier Excellence Rating). SER is a system in which
Caterpillar certifies suppliers every year based on its own criteria, and comprehensively evaluatesa variety of requirements. This time, we achieved high ratings in quality, stable supply, and continuous improvement activities, and other required items, resulting in the acquisition of the Excellent
certification, awarded to the top 5% of suppliers. Following the SQEP*2 Platinum certificationthat we have received for more than 10 consecutive years since 2012, very few companies havereceived SER Excellent certification, making this a prestigious certification. We will continue topromote continuous improvement activities to further enhance the trust of our customers and ouroverall strength.
*1 SER: Supplier Excellence Recognition*2 SQEP: Supplier Quality Excellence Process
The requirement for certification has been changed from SQEP (Supplier Quality Excellence Process) to SER from January 2022.

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34

Chapter3

Business

Automotive and Industrial Machinery Components Segment(Undercarriage Parts for Construction Machinery)• Strengthen partnerships withconstruction equipment manufacturers• Develop new products and sell highvalue-added products• Optimization of production system• Enhance sales expansion system for
supply parts

Summary of initiatives in FY2022

Future issues and initiatives

In addition to steadily capturing the demand for undercarriage parts for construction machinery, we advanced appropriate pricing in line with rising costs of
raw materials and energy. We also madesteady progress in improving cash flowby improving manufacturing costs andreducing inventories.

We will develop new products based onmarket needs. In addition, we will optimize our production system and expand
sales of supply parts by utilizing our global bases.

Value Creation

Achieve stable earnings and growth
as a leading company in undercarriage partsfor construction machinery

Policies and strategies ofthe Medium-Term
Management Plan

Hideo Katsuyama

Outcomes Created by our Products

Strengths of the Business

By providing undercarriage components for construction
machinery, we contribute to the realization of a society inwhich people can live with peace of mind through infrastructure development, resource development, andhousing construction in countries around the world.

We have gained high levels of trust from customers by involving them in the design process from the development
stage and supplying high-quality undercarriage parts forconstruction machinery that meet their needs. In hydraulicexcavator tracks and their component parts, such as track
shoes, we hold approximately 70% of the domestic market share and 30% of the global market share, and haveestablished a global supply system that includes North
America, China, and Indonesia. One of our strengths is ourefficient production system, which integrates production
from materials to finished products.

Sustainability

Core Competencies

Business

Social Value of Products

Growth Strategies

Operating Officer
General Manager of Undercarriage
Components Div., in charge ofAutomotive and Industrial Machinery
Components Business

Our Business Environment

Opportunities

Risks• Long-term growth of global construction machinery demand,
especially in emerging countries• Increase in manufacturing costs due to high prices of raw materials and energy• Increase in mining activities and investment in mining machinery
due to sustained high resource prices• Emergence of low-priced Chinese construction equipment manufacturers• Sudden decrease in global demand for construction machinery

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TOPY Report 2023

Corporate Data

Opportunities and risks

Topic

Topy Undercarriage Indonesia (TUI) achieves record
annual production volume

In Indonesia in FY2022, demand for construction equipment was strong due to the economic
recovery from the COVID-19 pandemic and soaring resource prices, and TUI s track productionlines were in full operation throughout the year. Therefore, in order to reduce the risk of strain on
employees both mentally and physically, we worked to establish a favorable work environment byimplementing various measures to improve job satisfaction, such as establishing new rest areas,
improving lunches, and holding company events. As a result, we were able to maintain safety (noaccidents) and stable productivity, as well as achieve a record-high annual production volume. We
will continue our efforts to maintain a pleasant work environment and further improve productivity.

TOPY Report 2023

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Chapter3
Chapter4

Business

Business Development Segment

Sustainability

Becoming a global niche leader
in innovative technologies
Topic

Strengths of the Business
Topy Mica, which is refined from natural minerals, themain raw material, is well regarded by not only cosmetic manufacturers, but also overseas cosmetic manufacturers for its safety, high purity, and stable quality without impurities. It is also highly evaluated for its highbarrier performance controlling the permeation of gas
and other substances as a raw material for food packaging materials.

Tsuyoshi Nakamura
Senior Managing Director
In charge of Corporate Planning,
Business Management,
Sustainability Strategy

We regard the implementation of sustainability management as part of our growth strategy, andin 2022, we formulated our long-term sustainability vision, TOPY Sustainable Green Vision
2050. To realize this, we have established the Sustainability Strategy Committee and put inplace an implementation system, while identifying materialities and clarifying priority issues tobe addressed.
Cooperation with our stakeholders is indispensable to realize our goal of TOPY Sustainable Green Vision 2050. We will create new value through communication with customers,
business partners, employees, shareholders and investors, and the local community, contributing to the realization of carbon neutrality and building an affluent society where people canlive safely and healthily, and continue various ESG initiatives to ensure the Group remains acompany trusted by society for many years.

Customers

Particularly related
capitalSocial capitalStrengths of the BusinessWe are conducting research and development to improve thefunctions of our existing products, such as under-floor inspection robots for residential use, underwater cleaning robots, androbots for transporting caged vehicles, in response to customer needs. We are also conducting research and development
specifically on the lower traveling belt (undercarriage module)of crawler robots, which can be used in various applications
by taking advantage of our undercarriage traveling technology.
We will continue to focus on research and development withthe aim that our products will be used in more situations andhelp improve various operations.

Social capitalBusiness partners Manufacturing capitalIntellectual capital

Employees

Shareholders
and investors

Local communities

Human capital
Manufacturing capitalIntellectual capital

Financial capitalSocial capitalSocial capital
Natural capital

We deliver products and services of high quality andexcellent environmental performance to our customers, and promptly provide feedback on their evaluations to production sites and other related departments to build relationships of trust with them andenhance the sustainability of the entire supply chain by
reducing environmental impact.

• Proposal of environmentally friendly solutions(reduction of CO2 emissions throughout the productlife cycle by providing green products utilizing
electric furnace materials, proposal of lightweightautomotive parts, etc.)• Establishment of a sustainable supply chain byencouraging customers to optimize transactions(optimization of pricing and payment methods)

We mutually utilize each company s technologies andvalues under fair and equitable transactions. We aim
for coexistence and co-prosperity throughout the supply chain and new partnerships that transcend scale
and affiliations through the provision of technology andthe use of systems to improve efficiency.

• Establishment and dissemination of Procurement
Policy and Supply Chain Management Policy• Thorough implementation of fair and equitabletransactions (proper pricing methods and payment
methods)• Technical and efficiency support for business
partners

We will give the utmost consideration to the growth,
health, and safety of the people who work for the Topy
Industries Group, and we will maximize the skills andpassion of each individual to build a relationship of mutual growth for the future.

• Human Resources development based on the
Human Resources Development Policy• Advance diversity & inclusion and work-stylereforms• Implement efforts to improve ES (employee
satisfaction)• Promotion of Health Management®

We live up to the expectations of shareholders and investors in Topy Industries Group through sustainablebusiness development and transparent information
disclosure, and pursue optimal utilization of capital.

• Communication with shareholders through the
General Meeting of Shareholders• Active disclosure of financial and businessinformation (statutory disclosures, timely
disclosures, financial results briefings, IR interviews,
participation in IR events, information disclosure on
websites)

We will fulfill our responsibilities as a citizen of the local
community and actively communicate with our stakeholders, aiming to be recognized as a company thatgrows together with its stakeholders.

• Career education for elementary, junior high, andhigh school students (accepting company visits, etc.)• Support through culture and sports• Participation and sponsorship in local events• Development and provision of products andservices that contribute to solving social issues

Corporate Data

The robots we manufacture that make use of undercarriage technology our are equipped with running functions that can run on steep stairs of buildings andrough roads, and underwater running and swimming
functions that can run stably not only on land but also
in water.

Topic

Key initiatives

Sustainability

Undercarriage Technology

Approach to stakeholders

Business

Stakeholder Engagement
Stakeholders

Core Competencies

Growth Strategies

Core Competencies

To strengthen the global expansion of Topy Mica, we are not
only introducing our product (powder) but also developing andproposing cosmetic formulations using our product. This is
expected to shorten the time required for the adoption of our
products and increase the certainty of their adoption, as theefficacy of our products in final cosmetics will be confirmed.
We are also actively developing new customers and proposing
formulations for cosmetic formulations such as liquid foundations, which have not been widely adopted in the past.

Value Creation

Mica

We will implement sustainability
management based on
our long-term goals

Business development strategy center

37

TOPY Report 2023

TOPY Report 2023

38

Chapter

4

Sustainability

Sustainability Initiatives of the Topy Industries Group
Identification of Materiality

Promotion System for Sustainability Management• Materiality identification process
Materiality assessment of social issues

Validation and identification

We identified and listed global social
issues referencing the evaluation itemsof ISO 26000, international guidelines
such as the GRI Standards, the SDGs,
and major ESG rating agencies (FTSE,
MSCI, and Sustainalytics, etc.).

We analyzed and evaluated the selected social issues based on the two
perspectives of materiality for stakeholders (society) and materiality for theGroup (importance to operations), assigning a priority ranking to each.

The Sustainability Strategy Committee validated the evaluation process
and analysis results for materiality, andafter approval by the Executive Management Meeting and reporting to theBoard of Directors, each materiality
was identified.

Sustainability Topic

Initiatives for FY2022• CO2 emissions (Scope 1 and 2)• Energy consumption per unit

Aim to reduce CO2 emissions by
46% compared to FY2013 in FY2030
Continuation of 1% reduction fromthe previous year

Contribution tobuilding a recyclingoriented society• Reduce and recycle waste• Promotion of resource recycling within
the Group• Biodiversity conservation• Water resource conservation initiatives• Chemical substance management• Final disposal volume of industrial
waste per unit of production• Water withdrawal per unit ofproduction

Continuation of 1% reduction fromthe previous year

• Reduce final disposal volume of industrial waste per unit ofproduction by 8%• Reduce water withdrawal per unit of production by 5.6%
• Implementation of environmental improvement activities
based on ISO 14001

Respect forhuman rights• Establishment of human rights policy• Implementation of human rights
education• Assessment of and response to humanrights risks• Percentage of employees receiving
human rights education and training• Establishment of human rights due
diligence

Maintain 100% every year

• Formulation of the Group Human Rights Policy• 100% implementation of human rights education andtraining as planned within the company• Preparation for human rights due diligence, including
participation in training sessions

Support for diverse
human resources• Global human resources development• Promotion of diversity• Health management initiatives andpromotion• Improvement of engagement• Ratio of female managers• Number of work-related accidents
in Japan• Certified White 500 as a good
health management corporation

10% or more in FY2030
Aim to achieve zero lost time injuries
or more severe incidents every year
Aim to obtain certification in FY2025• Ratio of female managers: 6.3% (1.3% increase comparedto the previous year fiscal year)• Implementation of planned human resources development
and expansion of fields where female managers can excel toimprove the female management rate
• Certified as an Excellent Health Management Corporation 2023

Contribute to society
through business• Customer relations (quality)• Contribution through business• Contribution to local communities• Implementation of quality education• Number of complaints

Maintain 100% every year
Aiming for zero serious complaints
every year

• Implemented education based on ISO9001 as planned, witha 100% implementation rate of quality education• Number of serious complaints: 0

Build of a solidmanagementfoundation• Corporate governance• Compliance• Risk management/BCP• Supply chain management• Number of serious complianceviolations• Basic Sustainability Policy
awareness rate

Continue to report zero violations
every year
Maintain 100% every year

• Number of serious compliance violations: 0• Formulate a Group Procurement Policy and Supply Chain
Management Policy, and disseminate them to 100% of
suppliers through the implementation of questionnaires

Corresponding SDGs

Corporate Data

TOPY Report 2023

We received an ESG Rating of 3.0 (out of 5 points; our highest rating ever) in the FTSE Russell s ESG
Rating for 2023, which evaluates environmental, social, and governance initiatives.

Sustainability

39

Carbon Neutral
Promotion Council*Chairperson: Director in charge of Sustainability Strategy Department• Development of environmentally friendly
products (green products)• Reduction of CO2 emissions• Expanding the use of renewable energy

SocietyG

Sustainability
Promotion Council

Promotion of green
innovation

E

Governance

KPIs and targets

Sustainability Strategy Committee*• Reduce CO2 emissions by 9.6% (compared to FY2013)• Reduce energy consumption per unit by 0.7%
• Introduction of internal carbon pricing (ICP) system• In-house carbon price: 8,200 yen/t-CO2; covered by thesystem: capital investment that increases or decreases CO2
emissions• Consider the introduction of renewable energy generation
facilities• Promote energy conservation plans

EnvironmentS

Key initiatives

Executive Management Meeting

Business

Materiality

Board of Directors

Growth Strategies

Sorting of social issues

The Group has established the Sustainability Strategy Committee (convenes at least twice per year as a general rule) in an effort
to promote sustainability management.
The committee discusses and determines important matters
involving formulation of basic policy and medium- to long-term
strategy. It also conducts monitoring as well as reports its discussions and decisions to the Executive Management Meeting
and Board of Directors for deliberation. Furthermore, we haveestablished the Sustainability Promotion Council and Carbon
Neutral Promotion Council under the committee to plan andexecute specific sustainability measures while facilitating close
cooperation within the Group.

Value Creation

The Group identified the six forms of materiality (important issues) that it should address based on discussions held by the Sustainability
Strategy Committee and Board of Directors as well as the advice of outside experts. The identified materiality has been incorporated into
the main measures of the Group s Medium-Term Management Plan, and business activities are being carried out for sustainable growth
based on a detailed action plan and targets.

TOPY Report 2023

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Chapter

4

Sustainability

Environmental Initiatives

Environmental Management
Overall environmental impact of the Topy Industries GroupWe 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 make from materials to finished products to lay the foundation for the sustainable development of society.

(FY2022 consolidated Japan: Topy Industries + domestic consolidated subsidiaries)
Input

External
suppliers

Supply and sales

Raw materials

Products

Recycling
Ferrous scrap

Group company
environment staff

Environment andDisaster Prevention
Sub-Committee

Group company
environment staff

Environment staff ofeach factory

Factory Environment
Committee(Topy Industries + Group companies)

Topy
Industries

Customers
SocialOverseasGroupcompanies

Toyohashi

Apr. 1999

Toyokawa

Nov. 1998

Ayase

Nov. 1998

Kanagawa

Jun. 1999

Topy Fasteners, Ltd.

Sep. 2001

Kyushu Wheel Kogyo, Ltd.

July 1999

Tojitsu, Ltd.

Nov. 2005

Akemi Recycling Center, Ltd.

Mar. 2006

Ring Techs Co., Ltd.

Aug. 2002

Topy America, Inc.

Jun. 2009

Topy Fasteners (Thailand) Ltd.

Jun. 2021

Fujian Topy Autoparts Co., Ltd.

Jul. 2003

Topy Undercarriage (China) Co., Ltd.

Oct. 2017

Topy Fastener Vietnam Co., Ltd.

Sep. 2019

PT. Topy Palingda Manufacturing Indonesia

Dec. 2018

Waste
Waste generated .............. 276,084 tons
Waste recycled ................. 246,249 tons
Final disposal...................... 29,835 tons

Endorsement of environment-related initiatives
In April 2023, the Group joined the GX League based on the belief that the direction of its activities, which is to promote the examination of medium- to long-term strategies by a specializedorganization, is consistent with the objectives of the GX League Basic Concept published by
the Ministry of Economy, Trade and Industry. The Group announced its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in May 2022.

External assessments
In December 2022, the Company received a B rating in the CDP Climate Change Questionnaire and the CDP Water Security Questionnaire, which is an increase of one rank from the B- rating in FY2021 with respect to climate change. In October 2022, we announced
the TOPY Sustainable Green Vision 2050, and are promoting initiatives aimed at reducing CO2 emissions Scope 1 and 2 by 46% in
FY2030 compared to FY 2013, and achieving carbon neutrality in 2050. We regard addressing sustainability, including climate change,
as an important management issue, and aim to contribute to the realization of a sustainable society and enhance our corporate value
through various initiatives such as reducing CO2 emissions and developing environmentally friendly products.

Topic

Corporate Data

DomesticGroup
companies

ISO 14001
certification
obtained

Water discharge
Total water discharge................................... 1,242 thousand m3
Groundwater ............ 141 thousand m3
Rivers........................... 636 thousand m3
Oceans........................ 362 thousand m3
Underground ............ 103 thousand m3

Sustainability

ISO 14001 Certification Status

Pollutants
NOx ................................................ 167 tons
SOx................................................... 30 tons

Business

Since the Toyokawa and Ayase factories launched a program toacquire ISO 14001 certification to promote environmental conservation activities in February 1998, all of the manufacturing facilities of Topy Industries have acquired ISO 14001 certification,
and Group companies have also acquired certification.
Proper maintenance of our environmental management system has been confirmed through regular audits after obtaining
this certification, and we continue to carry out environmentallyfriendly production activities by promoting scheduled and systematic environmental initiatives in line with our Basic Environmental Policy.

Chemical substances
VOC ................................................ 213 tons▲▲▲

ISO 14001 certification

Development
and design

Engineering Administration Dept.

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.

Procurement

Production

Production
Supply and sales

Environment and Disaster
Prevention Office

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.

Topy Industries will promote understanding of its environmental
policy and raise environmental conservation awareness throughenvironmental training and enrichment for its employees.

Energy use
Energy consumption

Director in charge of Engineering
Administration Department
General Manager of General Affairs Dept.
General Manager of Engineering
Administration Department
General Managers of Factories
Executive Chairman of Labor Union

Materials

Development
and design▲

3. Reducing Our Environmental Footprint

5. Raising Environmental Awareness and Preserving
the Environment at the Global Level

Procurement

Growth Strategies

Central Environment
Committee

In all its manufacturing processes, Topy Industries will proactively strive to save energy and reduce greenhouse gases.

Topy Industries will develop environmentally friendly products
at every stage in their life cycle, from design and production touse and disposal.

Automotive andindustrial machinerycomponents segment..................................................... 11,044 TJ

2. Working to Save Energy and Prevent Global Warming

4. Developing Environmentally Conscious Products

Steel segment

Atmospheric emissions
Greenhouse gas emissions
CO2 emissions from energy............................. 1,486 thousand t-CO2
CO2 emissions fromother than energy...................................... 5 thousand t-CO2▲

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

Executive Management
Meeting

Processing division

Output

▲1. Complying with the Law

President

Materials division▲

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 establishedand implemented the following policies.

Environmental conservation structure

Business development
segment, etc.
▲

[Basic Environmental Policy]

Water intake
Water intake volume................................... 3,243 thousand m3
Total city water supply
and industrial water................................... 2,395 thousand m3
Groundwater....................................... 848 thousand m3

Power generation
segment

Value Creation

Environmental
Philosophy

Fostering sustainability literacy (promoting the acquisition of the eco certification test®*)Topy MW Manufacturing Mexico S.A. de C.V. Jan. 2017

Affiliates

Ring-Techs Guangzhou Co., Ltd.

Jan. 2008

Asahi Tec Aluminium (Thailand) Co., Ltd.

Jan. 2003

Hokuetsu Metal Co., Ltd.

Jan. 2005

To promote a sustainable society that balances the environment and the economy, we have been promoting the acquisition of the Environmental Society Certification Examination (eco certification test®) since FY2022, with the aim of systematically learning a wide range of knowledge
about the environment and global environmental issues and applying this knowledge to our respective operations and businesses. We support
employees to take the examination by providing subsidies for examination fees and the purchase of reference books, and 72 employees passed
the examination in FY2022.
* The eco certification test is a registered trademark of the Tokyo Chamber of Commerce and Industry.

41

TOPY Report 2023

TOPY Report 2023

42

Chapter

4

Sustainability

Environmental Initiatives

Response to Climate Change (excerpts from disclosures under the TCFD)
The Group positions sustainability management including response to climate change as one of management s most important issues.
A system of supervision led by the Board of Directors has been put into place for these initiatives.

Business and Financial Impacts Associated with Climate Change-Related Risks and Opportunities as Well as Our Response■ Risks
Category

Details

Executive Management Meeting

Business andfinancial impacts*1
Less than
2 degrees

4-degreeincrease

Reports (reports directly to the Board of Directors on occasion)

Sustainability Strategy Committee• Formulates business continuity plan and mitigatesbusiness continuity risks with approval• Response to contingencies in case climate changerisks materialize (occurrence of damages or loss, etc.)• Identifies and assesses risks related to climatechange and other sustainability issues based onreports from business divisions and discusses/monitors countermeasures for preventing the materialization of these risks, etc.

* Receipt of preliminary reports on events, instructions
for departments responding, and approval/confirmation of completion of events, etc.

Policy andregulation

Central Environment Committee• Identifies and assesses risks regarding laws andregulations related to the environment and disasterprevention based on reports from business divisions and monitors the situation, etc.

Rising transportation, manufacturing, and CO2 emission costs due to carbon pricing and higher energy
costs• Reduction of CO2 emissions (-46% by FY2030)• Use of renewable energy and transition of factories
and offices to ZEB*3• Promotion of decarbonization in the supply chain• Enhancement of energy conservation

All

Rising investment costs for achieving CO2 reduction
targets• Utilization of green finance• Expand trademarks through response to CO2
reduction

All

Rising costs due to response to greenification ofcommercial facilities̶

Engineering Occurrence of investment costs and running costs

Sustainability
Promotion Council

from fuel conversion and dual-fuel thermal power
generation with biomass fuelCarbon Neutral
Promotion Council

tation throughout the value chain and improving fuel efficiency
by reducing wheel weight, as it promotes initiatives to ensure
strategic responses by the company as a whole, including engineering, sales and production control functions. In this manner,
we continue to tackle the challenges toward carbon neutrality byimplementing these initiatives.

Declining revenue caused by delayed response to
low carbon products

Market̶

Rising procurement costs from higher demand for
scrap following the shift from the blast furnace method to the electric furnace method with lower CO2
emissions
Declining profitability and real estate values due toweaker ability of the Group s commercial facilities
to attract customers caused by rising demand forgreenification of commercial facilities

̶

Decreasing profitability and rising financing costs due

Reputation to declining reputation caused by delays in response
to climate change or lack of disclosures on response

Targets for CO2 emissions and results

2050 target

CO2 emissions Scope 1 and 2

CO2 emissions(Scope 1, 2 and 3)

Aim to reduce by 46%
compared to FY2013

Tackling the challenge ofcarbon neutrality

Item

Unit

Reporting

FY2013

Consolidated(Japan)Consolidated
Scope 2 1,000 t-CO2(Japan)Consolidated
Scope 3 1,000 t-CO2(Japan)Scope 1 1,000 t-CO2

625
̶FY2021

FY2022(Topy Industries + Consolidated
subsidiaries)

Scope 1 and 2 CO2 emissions

FY2030

Production improvements
DX deployment
Introduction of energy efficient equipment

Utilization of renewable energy
Fuel
conversion

Transition away from fossil fuels
Use of electrification and CO2 fuelReview existing processes and tap into innovative technologies

46% reduction in CO

254

233

310

332

1,194

1,334

2050

Tackling
the challengeof carbon
neutrality

2*Activities after FY2030: Continue energy conservation, use of renewable energy, fuel conversion, review of existing processes and pioneering innovative technologies, etc.

43

TOPY Report 2023

Parts

• Improving productivity of electric furnace method andreduction of electricity per unit of production• Increasing procurement capability (expansion of
procurement regions, etc.)• Use of difficult-to-melt scrap due to improving
technology

Steel• Promotion of conversion to facilities with lower energy
consumption and CO2 emissions (promotion of
initiatives for using 100% renewable energy)

Real Estate• Higher ESG rating from increased information
disclosure on climate change response and increased
dialogue with shareholders/investors

Power
GenerationAll■ Opportunities
Category* Not including CO2 emissions equivalent to electricity supplied externally for selling purposesas part of the Power Generation Business (FY2022: 957 thousand t-CO2)* Due to reviews of aggregation content, past fiscal year figures have been changed from thepublished value of May 2022.
* Scope 1 and 2 are defined as energy-based CO2 emissions.
* Emission factor for electricity is used as the basic emission factor.
* In FY2013, Scope 3 CO2 emissions from purchased products (billets) in the steel business areincluded. Currently, all are handled by in-house production (Scope 1 and 2 CO2 emissions).

46% reduction

Energyconservation• Energy conservation activities based on the Act on
Rationalizing Energy Use• Promotion of green procurement(Topy Industries + Consolidated subsidiaries in Japan)■ CO2 emissions reduction roadmap
FY2013Power
Generation

Details

Business andfinancial impacts*1
Less than
2 degrees

4-degreeincrease

Operations*2

Topy Industries Group s response

Declining energy usage and energy costs from greater energy conservation• Expanded use of renewable energy (introduction ofrenewable energy power generation facilities, etc.)• Promotion of energy conservation activities

Parts

Avoidance of carbon tax costs from initiatives to reduce carbon emissions• Reduction of CO2 emissions (-46% by FY2030)• Promotion of energy conservation activities• Transition of factories and offices to ZEB*3 from use ofrenewable energy

All

Reining in energy costs by switching to renewableenergy• Transition of factories and offices to ZEB*3 fromintroduction of renewable energy• Enhancement of energy conservation

Steel and
Parts

Products Increasing profitability from development and market
launch of competitive and superior low carbon prodand
services ucts in response to societal needs• Enhanced development of environmentally friendly
products• Development of low carbon products as well as
research and conversion to alternative materials(utilization of carbon material substitutes made bysolidifying shredder dust with fewer nonferrous metal
content in electric furnaces)• Promotion of green procurement• Promotion of decarbonization in the supply chain

Steel andParts

Growing demand for electricity derived from renewable energy (in case of shift to renewable energy
power sources)• Tackling challenges of renewable energy power
generation (examination of dual-fuel with biomass fueland single fuel with biomass fuel)Power
Generation

Resource
efficiency

EnergysourceOpportunities

MarketCorporate Data

(Topy Industries + Consolidated
subsidiaries in Japan)• Utilization of green finance• Introduction and utilization of internal carbon pricing• Improved resilience through re-review of andenhancement of BCP• Promotion of BCP including supply chain

Declining revenue caused by intense climate disasters and occurrence of losses on assets, etc.

Scope 1, 2 and 3 results

Scope 1, 2 and 3 targets
FY2030 target

Acute

Real Estate

Sustainability

Physicalrisk• Utilization of green finance• Introduction and utilization of internal carbon pricing

Business

The Group has established long-term targets for CO2 emissions
reduction for FY2030 and 2050 and is now working on initiatives
to achieve these targets.
We are not only addressing Scope 1 + 2 by thoroughly conserving energy in the production process through the Energy
Conservation Meister Program, but also addressing Scope 3
emissions by reducing energy consumption in product transpor-

Transition
risk

Operations*2

Topy Industries Group s response

Growth Strategies

Risk Management Committee

Value Creation

Board of Directors*1 Business and financial impacts (anticipated single year impacts on P/L in FY2030): over 10 billion yen, between 1 and 10 billion yen, andless than 1 billion yen*2 Operations: Steel stands for Steel Business, Parts for Automotive and Industrial Machinery Components Business, Power Generation for Power Generation Business, and Real Estate for Real Estate Business*3 Acronym for Net Zero Energy Building. A building that seeks to achieve net zero use of primary energy for an entire year.
* For details of information disclosure based on the TCFD, please see our website.

TOPY Report 2023

44

Chapter

4

Sustainability

Environmental Initiatives

Responding to Environmental Risks and Contributing to the
Biodiversity conservation

Point

Water resource conservation initiatives

Water consumption (Topy Industries + Consolidated subsidiaries)(Thousand m3)
4,000

1,066

979

919

Clean water

Well water, etc.

877

820

848

863

742

821

844

2,162

2,148

2,164

2,164

2,149

2018

2019

2020

2021

2022

3,000

2,000

1,000

To conserve water resources, the Group is working to reducewater consumption by circulating and reusing cooling water atIndustrial water

0

(FY)

33,024
28,678150,000

29,83530,000(Tons)
300

50,00010,000

250

0

2018

2019

2020

2021

2022

0
(FY)

200
150

283

292
230

100

232

213

2018

2019

2020

2021

2022

Electric furnace slag for recycled road-bed material
The electric furnace slag for recycled road-bed materials (product name: ECO Stone™) is a recycled roadbed material madeby crushing, sieving, and mixing oxidized slag and reduced slag.
ECO Stone™ 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 thematerials meet quality, performance, and environmental safety
requirements, and that they can be used for public works (Certificate Number: 2)-201).
ECO Stone™ passes environmental standards by a wide
margin in terms of elution and inclusion of hazardous materials.

Corporate Data

351

40,000200,000

20,0000347

33,46750,000100,000

Effective utilization of electric furnace slag

50

251

32,480236,154(Topy Industries + Consolidated subsidiaries)

500

304

242,132

276,084

Sustainability

Total amounts of releases and transfers of VOC

244,525

Final disposal (Tons)
60,000Electric furnace oxidized slag aggregate
Toyohashi Plant has deployed a slag cooling facility and crushing 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 the ladle after continuous casting subsequent to the refinery process. In April 2013, thefactory obtained JIS A 5011-4: Slag aggregate for concrete Part
4: Electric arc furnace oxidizing slag aggregate certification. In
December 2013, the factory acquired another certificate for the
Revised JIS A 5011-4 and started 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 we therefore
expect slag to be used for heavy concrete aggregate such aswave dissipation blocks. Increasing sales of oxidized slag aggregate for concrete reduces the extraction of natural aggregatematerials 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.

Business

As a proactive approach for the prevention of air pollution, theGroup voluntarily measures VOC (volatile organic compounds)
concentrations from VOC generating facilities while also reviewing action items related to production technologies for the reduction of emissions.

(Topy Industries + Consolidated subsidiaries)
Total transfers

Effluent

265,068
250,000

Total amounts of environmental releases and transfersof substances regulated under the PRTR Act

255

A part of the metal scrap (steel) generated during production
activities is reused directly in-house as a raw material in electric
furnaces. As for other waste, we are engaged in reducing final
waste disposal volumes through re-resourcing efforts such ascollecting scrap iron and collecting zinc from melted dust. Oxidized slag generated from steelmaking is recycled and reusedfor civil engineering and concrete materials.
In FY2022, the total amount of industrial waste generated by
the Group companies was 276,000 tons, and the final disposal
amount was 30,000 tons. We will continue to promote the expansion and improvement of the 3Rs (reduce, reuse, recycle) torecycle waste and reduce the amount of final disposal.

(Tons)
300,000

Air pollution prevention initiatives

In accordance with the PRTR Act (the Pollutant Release and Transfer Register Act; the Act on Confirmation, etc. of Release Amountsof Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof), business entities that handle chemical substances are obliged to manage andreport to administrative offices the amount of environmental emissions and transfers of chemical substances that are hazardous tohumans and ecosystems at each of their business sites. Based on
this system, the Group submits annual reports to the respective
regulatory bodies while also using this process to continuously
manage chemical substance and emission reductions.

400

Waste reduction and recycling(Topy Industries + Consolidated subsidiaries)

Substance emissions andmanagement under the PRTR Act

Total releases

Initiatives for waste reduction and recycling

Industrial waste emissions

Chemical management

Promote in-house recycling and reduce delivery packaging wastes.

Growth Strategies

The business and manufacturing operations of the Group does
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 asustainable society. As a part of efforts to conserve biodiversity
and forest resources in developing countries, the Group encourages the use of paper made from domestically-produced materials and recycled paper that have less environmental impact.

Contribution to building a recycling-oriented society

Value Creation

its factories. Also, to prevent environmental pollution, we are using treatment facilities to purify our drainage to within environmental regulatory limits.

Biodiversity initiatives(Tons)
600

Establishment of a Recycling-Oriented Society(FY)

The Group promotes the effective use of resources by recycling
electric furnace slag. We sell recycled products equivalent to theamount of electric furnace slag generated.

300
200

283

292

100
0

45

2018

TOPY Report 2023

2019

231

232

2020

2021

213

2022

(FY)

TOPY Report 2023

46

Chapter

4

Sustainability

Environmental Initiatives

Reducing Environmental Impact through Products and Services
Point

Promotion of green innovation

Conversion to power generation methods and fuels with low CO2 emissions, development of environmentally friendly
products, and consideration of LCA

Scope 3 accounts for approximately 70% of our supply chain emissions (total of Scope 1, 2, and 3), and the development of environmentally friendly
products will help us live up to society s expectations. We are working to reduce environmental impact through our products and services by improving product durability, weight reduction, efficiency in use, use of raw materials with low environmental impact, and the refinement of recycling.

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

Ultra-large wheels for mining equipment [SGORⓇ]

47

TOPY Report 2023

Contributes to a significant reduction in environmental
impactTracks used in the undercarriage of construction equipment are
painted to prevent rust. While solvent-based paints have beenused traditionally, we switched to water-soluble paints when a
new crawler assembly line was built at Toyohashi Plant in 2019.
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 and contributing to a reduction in
CO2 emissions.

Akemi Recycling Center, a consolidated subsidiary with one of
the largest shredder plants in Japan, has established a recycling
system that minimizes waste generation by shredding waste automobiles and miscellaneous scrap into ferrous and nonferrous
scrap, and utilizing shredder dust consisting of plastic and rubber as a substitute for charcoal in our electric furnaces.
Akemi Recycling Center, Ltd. https://www.akemi-rc.co.jp/

Corporate Data

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 mining equipmentused at large mines across the world. These wheels are used atlarge mines and excavation sites outside of Japan. Currently, thelargest wheels available have a rim diameter of 63 inches (about
1.6 meters), are 44 inches (about 1.1 meters) wide, and weigh as
much as 2.83 tons each, making them about five times the diameter of ordinary passenger car wheels. SGOR® wheels meet thedemanding requirements ofmining applications in termsof functionality and haulingcapacity, and contribute to
reducing environmental burden.

Water-soluble coated tracks

Six of our products, including H-beams, have acquired the rightto use the EcoLeaf environmental label certified by the Sustainable Management Promotion Organization (SuMPO). EcoLeaf
is one Environmental Product Declaration (EPD) certification
system that quantitively discloses environmental information ofa product throughout the course of its entire life cycle, from resource extraction to manufacturing, distribution, use and endof-life disposal, using the life cycle assessment (LCA) method.
Customers can use this system to quantitively and objectively assess the environmental impacts of the
products they use and use this as a determining factor in purchasing environmentallyfriendly products.

Refinement of recycling by Akemi Recycling
Center, Ltd.

Sustainability

Vertical standing part

Acquisition of right to use EcoLeaf
environmental label

Business

Success in reducing disc weight
In the automotive industry, efforts to improve fuel efficiency andreduce the weight of vehicles are continuing every day with theaim of reducing environmental impact. Our Super Square Wheel,a steel wheel for passenger vehicles, is a lightweight technologythat has succeeded in reducing the amount of material used forthe disc by approximately 10% by expanding the window area
and increasing strength through higher rigidity by installing a vertical standing vertical wall on the outer circumference of the disc.
This wheel contributes to the reduction of environmental burden
by reducing the amount of materials used and improving vehicle
fuel efficiency.

Non-chrome pre-treatment of aluminum wheel
painting

Growth Strategies

Lightweight wheel - Super Square Wheel

In July 2023, we obtained an independent third-party assurance
report from Socotec Certification Japan Co., Ltd. based on theCO2 emissions calculation report for FY2022. Please visit our
website for more information.

Value Creation

Development of environmentally friendly products

Independent third-party assurance of environmental data

Topic

Participation in NEDO Green Innovation Fund Project

We have joined the consortium of the Green Innovation Fund Project, Development of Concrete
Manufacturing Technology Using CO2, led by the National Research and Development Agency,
New Energy and Industrial Technology Development Organization (NEDO), and we are responsible for developing reinforcement bar steel that does not degrade in performance due to rust progression for use in CP (carbon pool) concrete. The consortium aims to implement CP concrete,
a carbon-negative material, in society by 2030 in order to achieve a decarbonized society. The
Group aims to contribute to the realization of a sustainable society and enhance our corporate
value through various initiatives such as reducing CO2 emissions and developing environmentallyfriendly products.
Carbon Pool Concrete Project
https://www.carbon-pool.com/

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Sustainability

Social Responsibility

Relationship with Customers and Business Partners
Point

Contribute to society through business

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

Quality policy for FY2022 to 2023

Establish a quality assurance system for the next generation of new creation!
Deepen and develop initiatives without fearing change
̶Promote centralized management and utilization of quality informationfrom the perspective of DX to transform quality control for a new era̶

Formulate president s quality policy

President s quality review

President Review factory quality
Issue instructions in response to critical quality problems

Central qualitycommittee

At least once per year

Use Genchi/Genbutsu to verify the degree to which thepresident s quality policy has been implemented

Two times per year
Formulate division quality policy

Division head
personnel
with overall
responsibility
for quality

Conduct division quality audit
Conduct Group company quality audit
Work as a member of central quality committee
Judge the necessity of reporting quality issues tothe president at headquarters

Committee members
Chairperson, vice chairperson, and othermembers

Mechanism(Committee, motivation boosting, etc.)

Ensuring fair trade
Managing rank
(responsibility andauthority)

Approximately fourtimes per year

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

GeneralManager ofFactories or
Departments

Formulate quality policy for factory or
department
Management in QMS or manager

Implement PDCA based on ISO 9001
Quality Management System

Implementation of quality training
The Group is built on a QMS based on ISO 9001. We disseminate and thoroughly familiarize all employees involved in productquality work with the company-wide quality policy and continuously implement necessary quality education to improve capabilities. In addition to OJT, we also appropriately conduct
specialized quality training, including training on the QC Story.
Furthermore, we periodically evaluate the effectiveness of our

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TOPY Report 2023

Group
company
president

Formulate president s quality policy
Management in QMS

In line withthe current
ISO 9001

Implement PDCA based on ISO 9001
Quality Management System

education and training programs and renew them to ensure thatthe curriculum helps to improve quality. Through these ongoing
activities and by having
each employee take thelead in quality, we seek toeliminate all quality-related
complaints and earn thetrust of customers.

The Topy Industries Group Corporate Code of Conduct statesthat we will operate business in a fair and transparent manner
under free competition. In order to conduct fair transactions inaccordance with domestic laws and regulations such as the Act
on Prohibition of Private Monopolization and Maintenance of Fair
Trade (Antimonopoly Act) and the Act against Delay in Payment
of Subcontract Proceeds, etc. to Subcontractors (Subcontract

TopicAct), as well as related overseas laws and regulations, we arethoroughly educating and disseminating information to employees, creating and utilizing formats for basic transactional contracts in accordance with the intent of laws and regulations, andconfirming the status of compliance with laws and regulations
through internal audits.

Corporate Data

Quality division
managers meeting

Engineering Administration Dept.
• 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 andthe risk management committee• Participate as auditing members in division quality audits andGroup company quality audits

Dissemination of the basic approach and examples of
initiatives in accordance with the approach• Dissemination of the Topy Industries Group Procurement Policy and the Topy Industries Group Supply Chain Management
Policy to domestic and overseas Group companies (translated
versions distributed to overseas Group companies)• Distributed the Topy Industries Group Procurement Policy and
the Topy Industries Group Supply Chain Management Policy tobusiness partners who are major suppliers. At the same time,
we conducted a survey on the policies (with a 100% response
rate for collected questionnaires)*We plan to continue conducting surveys regularly• Shortened the payment deadline to 60 days for our business
partners who are subcontractors under the Act against Delay inPayment of Subcontract Proceeds, Etc. to Subcontractors, withwhom the Company has direct transactions (from May 2023)• Declared our refusal to accept iron scrap originating from socalled inappropriate yards as scrap yards that are operating inviolation of laws and regulations (from September 2023)

Sustainability• Quality policy deployment status andquality costs
Status report and follow-up (regular meeting)• Conduct audits to verify the effects ofmeasures taken against critical quality issues
by the chairperson and vice chairperson of thecommittee (extraordinary meetings)* For details about the Topy Industries Group Procurement Policy, the Topy Industries Group Supply
Chain Management Policy and the Declaration of Partnership Building, please see our website.

Business

Quality Management Structure

For current supply chains, response to worldwide issues such as
human rights, ethics, the environment, and information security
is an important issue facing all companies. Additionally, there are
growing risks facing procurement symbolized by political uncertainty, extreme weather, volatility in market prices and exchange
rates, and leakages involving technology and confidential information. The Group must achieve procurement that can continuously support its stable and efficient production activities.
In response to these challenges, the Group established theTopy Industries Group Procurement Policy and the Topy Industries Group Supply Chain Management Policy. Following thesepolicies, the Group builds relationships of trust and mutual understanding with all of its business partners in the supply chain
and follows a high level of ethical values in building and maintaining a safe and secure supply chain with consideration forprotecting human rights and the environment, which enables us
to contribute to a sustainable society. At the same time, by maintaining a high level of quality, delivery and cost with suppliers, theGroup is able to achieve stable and efficient production activities.
We have also released the Declaration of Partnership Building, promoting coexistence and co-prosperity throughout the
supply chain and new close cooperation that goes beyond scale
and affiliations, and compliance with the Promotion Standards(note), advancing better relationships with our business partners.

Note: The Promotion Standards refer to a set of standards for maintaining desirable business practices between the subcontracting party and subcontractor. Topy Industries has set five priority
areas for transaction optimization: (1) optimization of pricing methods; (2) optimization of costburden such as mold management; (3) optimization of payment terms such as bills; (4) protection of intellectual property and know-how; and (5) prevention of any toll associated withwork style reforms.

Growth Strategies

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

Basic approach

Value Creation

Quality Assurance
Philosophy

Procurement and supply chain management

Strengthen the quality assurance system and management system

Received the Gold award in the EcoVadis (France) Sustainability Rating for the fourthconsecutive year

For the four year in a row, the Toyohashi Plant received the Gold award in the sustainability assessment conducted by
EcoVadis, an international supply chain evaluation organization, placing it among the top 5% of approximately 100,000
companies surveyed worldwide. This Sustainability Rating is a comprehensive assessment in four areas: environment,labor and human rights, ethics, and sustainable procurement. We received particularly high marks in the areas of theenvironment, and also improved scores in the areas of labor and human rights and ethics.

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Sustainability

Social Responsibility

Social Responsibility

Contribute to Society through Business
TACoil®
Deformed Reinforcing Bars
TACoil® is an advanced solution to problems faced by users inrebar industry, such as labor shortages, processing losses, andstorage space.

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

Career education for elementary, junior high,and high school students
Our Head Office accepts junior high and high school students
from all over Japan for company visits as part of the career
education support activities conducted by the NPO School
Support Center.
In addition, each plant accepts factory tours from local elementary schools. It has been well received as a valuable opportunity to see, touch, and feel the manufacturing process.

In the cultural field, we have sponsored events related to ourbusiness, such as special exhibitions at the National Museum
and the National Museum of Emerging Science and Innovation.
We will continue to consider sponsoring events and exhibitions
that align with the Group s philosophy.

Sustainability

Other local community initiatives
Each of our manufacturing plants is working together with local communities on environmental conservation activities. In
FY2022, the Toyohashi Plant implemented a zero waste movement for environmental conservation.

Corporate Data

1) Product name: Evolution Type SGOR®
2) Sizes: 57-inch and 63-inch3) Weight: around 2 to 3 tons
4) Features:(1) Tires can be changed without removing the wheel from themining vehicle.
(2) This not only greatly reduces the time spent on tire changes, but also can reduce hazardous work by streamlining
the work process.
(3) The wheels completely eliminate the need for an impact
wrench, mitigating the risk of vascular related neurologicaldisorders (Raynaud s disease).

Business

Evolution Type SGOR® wheels for mining vehicles make it possible for tire changes without having to remove the wheel fromthe mining vehicle, addressing the needs of mining companies
to a much higher degree, including increasing the utilization rateof mining vehicles, streamlining of maintenance work, and improving safety.

Support through sports and culture
Under the Group Basic Philosophy, the Group works closely withlocal communities to actively support sports and culture as agood corporate citizen.
In the field of sports, since 2018 we have become an official
sponsor of the San-En Neophoenix, a member of a Japanese
professional basketball league (B.LEAGUE) whose hometown is
the Mikawa area where our manufacturing plant is located. We
support the team together with the fans in the hope of further development of the Mikawa area as part of our active involvementin the local community. At our sponsored games held in April
2023, we set up a booth and organized a quiz event to foster
community interaction through sports.

Growth Strategies

Wheels for mining equipment

1) Product name: TACoil®
2) Sizes: D10, D13, D163) Weight: 2 tons, 3 tons
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 theprocess and increasing the yield rate.
(3) Highly dense and compact, it saves storage space while
enabling excellent transportation efficiency.
In addition, it offers excellent transportation efficiency.
(4) Maintains the same performance as existing deformed reinforcing bars even when used as a straightened bar.

Support for the Shinagawa Kids Cafeteria Networkand reduction of food loss
We have donated stockpiled food at our head office for disaster prevention, which will expire in one year, to the Shinagawa
Kids Cafeteria Network operated by the Shinagawa City Council of Social Welfare in Shinagawa Ward, since 2019. By donating these stockpiled foods prior to their expiration date, we not
only help to prevent food loss and waste, but also provide theseproducts to people truly in need of food. Through this initiative,
we hope to contribute not only to the reduction of food loss but
also to the enrichment of the lives of local residents. We also
received a letter of appreciation from the Council for our contribution to the development of the local community and the improvement of social welfare.

Value Creation

Evolution Type SGOR®
Wheels for Mining Vehicles

Contribution to Local Communities

NC processor

Tire change in progress(Tires can be changed without removing the wheel from the mining vehicle)

Examples of a TACoil® processed with an NC processor

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TOPY Report 2023

In addition, at the Toyohashi Plant, we made visits to local
junior and senior high schools in Toyohashi-shi as part of a career education program sponsored by the Toyohashi Chamberof Commerce and Industry to introduce the Group s history andbusinesses and to teach the students about the appeal of steel.

At the Kanagawa Plant, in response to requests from local residents, we lend out the tennis courts within the plant,
enhancing understanding of our daily manufacturing activities
through interaction.

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Sustainability

Social Responsibility

Social Responsibility

Respect for Human Rights

Strengthening Human Capital

Basic approach

Initiatives in the supply chain

Rank-based (admin staff)

Cross-industry training

Sustainability

Plant technical training TPM activities

Safety and health training

JK* training

Intellectual property seminar(beginner to advanced levels)

In-house seminar for specified engineers

Newly hired
employee training

Topy juku/Follow-up training

In-house seminar for manager-level engineers(IE, quality control, MOT,
environmental protection, etc.)

Support for self-development (skills development seminars, subsidies for employees attending language schools, and encouragement to acquire public qualifications) and essential e-learning

Selective training*JK: Self-managed

FY2022 training results (Topy Industries)

Number of participants: over 1,100 employees Training hours: over 14,000 hours

Corporate Data

TOPY Report 2023

In-house TOEIC

53

0

T3 training

Development of human resources for strengthening human capital* For details about the Topy Industries Group Human Rights Policy and the Topy Industries Group
Supply Chain Management Policy, please see our website.

A&C 2025
Group Basic Strategy

Strengthen
domestic
business baseStrengthen
overseas
profitability

Policy for expansion of development measures

Businessstrategy for
major topics

Human Resources
Department mediumterm plan

Challenges in business execution

Response policies and specific initiatives• Securing and developing management executives• Demonstrating communication and interpersonal
skills that draw out organizational strength• Renewing the content of Topy Management School• Renewing content for new manager training• Introducing cross-industry training• Introducing e-learning for each rank

• Company-wide effort in human resources
development (active participation from employees
being trained as well)• Acquiring mandatory skills by qualification• Learning a business improvement mindset• Strengthening practical skills• Introducing training and reporting sessions for 1stand 2nd-year office staff• Introducing follow-up training before and after the
2nd year for new employees• Introducing e-learning for each rank

Global humanresources

Number of labor standards violations in FY2022

T4 training

Mid-career,
young, and new
employees

Compliance with labor standards on working hours andwages (Topy Industries, Ltd.)

Workplace leader
training

Specialized training(engineering training and technical training)

Management* This is the number of training sessions and locations confirmed by our human rights division. In addition to the above, each Group company and office implements initiatives to respect human rights.

Long-term
overseas dispatch

Logical thinking

Themes

Cultivating a habit of thinking
with a sense of ownership(learning and practice)9

Overseas
training

Career training for young employees

Enhance practicalglobal business skills

Improvement proposal presentation
Autonomous employee behavior transformation training

Short-term programfor studying English abroad

Improvement proposal presentation
Mid-career leadership development training

Mentor training/Tutor training(for eligible persons only)

Number of locations where sessions were held in FY2022

Reskill training

Management
coaching school(in-house training)(Promotion exam)

Fostering people who can growand enjoy change in a vibrant culture

31

Management
philosophy(off-site training)

DX promotion training

Training for new management level employees

Corporate culture
improvement workshop

Rank-based(blue-collar workers)

Business

New manager training

Corporate management
training

Areas to strengthen

Supervisor (interview) training

Promote segment
management

Number of sessions held in FY2022

Growth Strategies

Training System

Number of human rights training sessions(Topy Industries + domestic and international Group companies)• Continue to produce future business leaders• Create an organizational environment that permits diverse humanresources to work actively in various ways

First/Second year training presentation

The Group advocates the establishment of human rights due
diligence as one of the goals related to the materiality of respectfor human rights. We are gathering information and considering the development of an effective due diligence mechanism
for the Group, including conducting interviews with companies
participating in human rights awareness organizations we areaffiliated with.

Value Creation• Create human resources who continue to develop• Strengthen employees capability to respond to environmental changes• Support employees in their autonomous career development

Managertraining

Considerations for implementing
human rights due diligence

Our philosophy and basic policy on human resources development
The Topy Industries Group declares in Article 3 of the Group Corporate Code of Conduct (for the benefit of employees) that it will Respect the individual 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.

Secure and develop humanresources to support sustainable growth

The Group is working on various initiatives to increase awareness of human rights among officers and employees and establish corporate culture that respects human rights. These include
actively holding training sessions led by outside instructors andpersons in charge of human rights inside the Company, postingof internal rules related to human rights including harassment
prevention guidelines to the Company intranet, and taking disciplinary action against violations of provisions on human rights in
employment regulations.
In addition, we receive consultations and reports on human rights violations or suspected cases through two whistleblower hotlines: the Topy Industries Group Basic Corporate Ethics Consultation Office and the Topy Industries Group
Compliance Hotline.

Human resources development

Rank-and-file employees

Human rights training and establishing aculture that respects human rights

The Group engages in business globally and has established adiverse supply chain. To facilitate global business operations, werecognize the importance of supply chain actors working closely
together to address issues such as respect for human rights.
In 2022, the Group established the Topy Industries Group
Supply Chain Management Policy in order to contribute to a sustainable society by fulfilling our social responsibilities in various
issues within the supply chain. This policy contains provisions
concerning matters on human rights and labor, and declares theGroup will work on respecting human rights in the supply chain.
The Group is now working to promote initiatives for respect forhuman rights in the supply chain by gaining the understanding
and cooperation of its initiatives from suppliers to ensure it grows
together with them.
In addition, we take measures to respect human rights at thecontract level, such as stipulating compliance obligations withlabor-related laws and regulations in our basic transactional contracts with domestic business suppliers.
We take measures to correct and remedy human rights problems in the supply chain, such as accepting consultations andreports on human rights issues from suppliers at the Group s
whistleblower hotlines.

Managementlevel employees

The Topy Industries Group supports and respects international
human rights norms such as the United Nations Guiding Principles on Business and Human Rights. In accordance with theGroup s Basic Philosophy and Basic Sustainability Policy, we arealso committed to respecting the fundamental human rights thatall people are born with. Specifically, we will practice prohibitionof discrimination, child labor, and forced labor, prevention of harassment, promotion of diversity and inclusion, and respect for
fundamental rights at work.
The Group s basic philosophy concerning respect for humanrights can be found in the provision on Respect the individual
character and personality of employees in the Group Code of
Conduct. In addition, we have established the Topy Industries
Group Human Rights Policy that sets forth specific thoughts on
various initiatives for respecting human rights within our Group,
declaring respect for human rights as a materiality. Under thispolicy, the Group is working to ensure even greater respect forhuman rights going forward.

Initiatives for employees• Strengthening practical language skills• Strengthening practical communication skills• Promoting understanding of different cultures• Developing the ability to acquire diverse values• Introducing business English training• Introducing practical training for understanding
different cultures (global mindset training)• Resuming long-term overseas trainees

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Sustainability

Social Responsibility

6.3% (2030 target of 10% or more)

Data on women in management positions
Number of women in management positions
Percentage of women in management positions

6.3
5.3

Trainees at Topy America, Inc.

4.8

4.7

34

35

39

5.0

46
36

Number of employees taking childcare leave(Topy Industries)

Point

Support for diverse human resources

2018

2019

2020

2021

Number of women

2022 (FY)7

Advance diversity & inclusion and work-style reforms

Diversity initiatives
The Group sets Respect the individual character and personalityof employees in Article 3 (For the benefit of employees) of theTopy Industries Group Corporate Code of Conduct and positions
Supporting diverse human resources as one form of its materiality (important issues). Under our Medium-Term Management
Plan, TOPY Active & Challenge 2025, too, we are implementing
a number of initiatives to promote diversity as a main measure.
Status of and approach to appointing managers (executives)
Topy Industries promotes employees to management positions(executives) based on a fair evaluation of their abilities, insight,
and personality, regardless of gender, nationality, or whether they
are new graduates or mid-career workers.

Number of men

Our philosophy and basic policy on human resources
development for the promotion of measures topromote diversity
We conduct employee education and others to ensure diversity
based on our human resources development policy: Create anorganizational environment that permits diverse human resources to work actively in various ways. Examples include training
on human rights and holding seminars on different cultures focused on the home countries (Indonesia and Vietnam so far) of
foreign national employees as part of building a workplace thatembraces employees of different nationalities.
Environmental improvement policy for promoting diversity
and its implementation status
Topy Industries promotes the utilization of human resources that
respect the individuality of each employee, and is introducing
systems to realize diverse and flexible work styles and improving
the workplace environment in order to foster a corporate culture

1
5
2018

8

2
3
3
2019

5
2020

Corporate Data

TOPY Report 2023

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

Ratio of female managers (FY2022)(Plan period: July 1, 2020 to March 31, 2025)• Increase the rate of taking childcare leave to the standard
or a higher level during the plan period.
Male employees: Achieve the rate of taking childcare
leave of 7% or higher.
Female employees: Achieve the rate of taking childcare
leave of 75% or higher.
In FY2022, the percentage of employees acquiring childcare
leave were 27% for males and 100% for females, achieving theplan s targets for both.
• We will examine and develop systems to enable employees to achieve a work-life balance and promote flexible
work styles.
With the advancement of employee diversity, we introduced
a telework system in FY2020 and a flextime system in FY2021.
Furthermore, in FY2023, we introduced an hourly leave system and support for infertility treatment, enhancing environments
for diverse human resources to thrive long-term.
In addition, we are actively promoting our childcare leavesystem through leaflets and other means so that employees canbalance work and childcare. We introduced a job return system
as a reemployment system for employees who unavoidably left
the Company due to childcare or nursing care.

Sustainability

55

Point
Overview of long-term overseas training system (Topy Industries)

where employees and the Company can grow together.
As part of our efforts to achieve this goal, we are promoting
an action plan based on the Act on Advancement of Measures to
Support Raising Next-Generation Children with the following goals
in order to enable employees to balance work and child rearing
and to enable all employees to fully demonstrate their abilities.

Business

Global HR development
In FY2017, we introduced Long-Term Overseas Training withthe aim of developing young employees who can demonstrate
their capabilities in the different cultural environments of othercountries. The employees who undergo this training are dispatched to overseas Group companies for one year as trainees
and receive practical on the-job training under the guidance of
local managers in accordance with a training plan, thereby experiencing and learning about overseas work. They also acquire
the ability to communicate in different languages, along with intercultural skills.
Furthermore, with the aim of securing excellent overseas human resources at overseas Group companies and Topy Industries, we host internships in close collaboration with overseas
universities.
To create an environment where employees can feel close
to globalization even in Japan and to improve their motivation
to learn a second language, we have begun distributing English
e-mail newsletters in-house since FY2021. From FY2023, we
introduced business English online training, where participants

Introduction seminar for business
English online training

Regarding the percentage of women in management positions, we have formulated an Action Plan based on the Act on
Promotion of Women s Participation and Advancement in the
Workplace. For details, please see the section on Support for
women s empowerment. Within our Medium-Term Management Plan starting in FY2022, we have established a target toincrease the ratio of female managers in the Group as a wholeto 10% or more by FY2030 (from 6.3% as of March 31, 2023).
To achieve this target, we are quickly developing employees who
can become candidates for future managerial positions fromamong young and mid-career employees.
Although we have not set specific targets for appointing
non-Japanese and mid-career hires to management positions
based on the above approach, we will appoint suitable candidates to management positions regardless of their nationality orwhether they are new graduates or mid-career hires (as of June30, 2023, non-Japanese: 1.2%, mid-career hires: 25.9％).

Growth Strategies

Managerial (management level employees) training
We also provide systematic training for managers according
to their position. New managers undergo training to learn theirroles as managers first hand, the basics of organizational management, and methods for solving issues in their organization
through a cycle of knowledge acquisition and workplace practice. We also incorporate training for higher-level members ofmanagement, promoting the demonstration of organizational
capabilities expected of future business leaders.
Moreover, every other year, we conduct the “Topy Management Survey (360-degree Survey) for all management level employees, providing feedback training that enables eachmember of management to reflect on their workplace behavior
and gain insights.

communicate with multinational attendees online to improvetheir language skills, actively providing learning opportunities.
We believe that it is important to develop human resources
who can respond to diversity in language, nationality, culture,values, and gender, both domestically and internationally, rather
than just the idea that global = overseas. Going forward, we
will continue to develop global human resources who not only
improve their language skills, but who can also respond to diversity based on the three axes of vision, skills, and mindset.

Value Creation

New employee training
We conduct training (Topy juku) for university graduates recruitedduring the regular hiring period spanning a four-month period
after joining the Company. In FY2022, in addition to classroom
training to learn about business content, basic knowledge of theCompany as a whole, and business etiquette, the training heldat the head office included a five-day training camp where newhires learned IE basics, quality control, and improvement methods through hands on exercises and other means.
After the training at the head office, the trainees were divided into different manufacturing sites and on-site training andimprovement theme training were held. The on-the-job training saw participants learn the fundamentals of manufacturing
through actual tasks at production sites, while in the improvement theme training they took part in continuous improvement
activities using the methods learned at training camp under theguidance of senior workers. On the last day of Topy juku, participants reported on the achievements of improvement themes to
executive management at the head office.

7
3
2021

2022

(FY)

Support for women s empowerment
We launched a diversity promotion project in FY2014 and havesince enhanced related programs and introduced measuresrelated to career development support. Specifically, to provide
employees with access to flexible working hours after childcare
leave so that they can balance childcare and work, we have established a childcare support system that allows employees towork shorter hours until their youngest child is in the third gradeof elementary school. In addition, to ensure that all female employees can fully utilize their skillsets and play an active role, we
TOPY Report 2023

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Chapter

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Sustainability

Social Responsibility

Number of women

Number of men

Percentage of female employees (%)

47.6
41.7

43.8

44.4

36.0
11

16

12
14
9

12
10

9

10

2019

2020

4
2017

2018

10

14
7
2021

8
2022

2023 (FY)As of end of June 2023

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TOPY Report 2023

Activities[Corporate climate
and culture][Labor conditions][Business strategy]

Implementing measures
to strengthen internal
communication, suchas live streaming of the
President s speech andTopy Talk to the entire
company

We introduced a flextime
system in April 2022 basedon employees requests forflexible working styles

Announced the MediumTerm Management PlanTOPY Active & Challenge
2025, and conducted
briefings and internal
communication to inform
employees

Introducing team
improvement activities
where each department s
team freely chooses
themes and works towards
achieving goals, aiming
to improve organizational
culture and a sense of unity

Expanding the childcare,family care, and infertility
treatment leave systems
and creating a workplaceculture that facilitates theuse of these systems

Implementing corporate
activities conscious ofsolving social issues, suchas sustainability and healthmanagement

List of major measures implemented by FY2022
Discussions with managers(Topy Talk / Employee Satisfaction Improvement Meetings)(1)

Mentor program(2)

Corporate culture improvement workshop for managers(3)

Establishment of website introducing each department(4)

Topy Café (an exchange of opinions between staff employees
and skill-based employees)(5)Manager meetings(16) Promotion of 5S in the workplace(6)

Operational improvement activities(17) Improving the Company cafeteria(7)

Thanksgiving activities(18) Re-examination of age restrictions for bachelor dormitories(8)

Women s meetings

(19)

(9)

Topy s WA (circle) Talk (Inter-departmental mixers)(10) External mixers
Roundtable meeting for employees who have taken childcare or(11)maternity leave(12)(13) Encouraging interpersonal greetings(14) Activity-Based Working (ABW) implementation

Corporate Data

Promoting employment of people with disabilities
Topy Industries actively employs people with disabilities, andwith an employment rate of 2.41% (as of March 31, 2023), theCompany is above the legal employment rate (2.3%). Employeeswith disabilities are actively working in a wide range of workplaces, from manufacturing sites at each plant to administrative
departments at the head office.
We are also working on creating a work environment where
employees with disabilities can work with peace of mind andon promoting understanding among other employees to work
together in the same workplace, through means such as study
sessions. Furthermore, anticipating future increases in the statutory employment rate, we are actively building relationships
with special needs schools and employment transition support
facilities, and we will continue to promote further employment
opportunities and expansion of roles for people with disabilities.

Employee satisfaction survey
Since 2016, the Company has been conducting an ES (employee satisfaction) survey every year.
Based on the issues identified from these survey results,
they are shared within the Human Resources Department towork on solutions and are also addressed through activities of
the Communication Promotion Committee and District-specific
Subcommittee, established under the ES Improvement Promotion Office, to improve ES (consideration of new measures andverification of the effectiveness of policies). The ES survey results are provided as feedback to each business division anddepartment, and each business location also undertakes its own
improvement activities.
ES has been showing an annual increase in scores, and in
FY2022, it reached 3.23 (out of 5).

Sustainability

25.0

53.8

Team improvement activities (a measure where eachdepartment s team freely chooses themes and works
towards achieving goals)
Since FY2022, we have been conducting team improvement
activities, where teams set goals and take on challenges basedon themes together to foster a sense of unity. The purpose ofthis activity is to build a better organizational climate (trust, respect, and mutual recognition) in the workplace as employees
view their work as a personal concern, take on challenges, andto contribute to corporate profits through communication.
In FY2022, we invited applications for free participation, anda total of 280 employees in 33 teams from throughout the company participated over the six months of the second half of theyear, leading to improved teamwork and deeper communicationin many teams.
At the end of the activity, the entire company voted for teams
that had fun together, showed initiative, and took on challenges,
and the top three teams were recognized by the President asteams that conducted outstanding activities, chosen by everyone.

Business

Percentage of female new graduates hired forcareer-track positions (Topy Industries)

Communication promotion committee
With the goal of nurturing and enriching the human resources
who support technological innovation and further growth for theCompany around the world, Topy Industries established the Job
Satisfaction Improvement Committee led by young employees in
2016, and we studied and implemented more than 20 measures
to improve job satisfaction.
In FY2019, we renamed the Communication Promotion
Committee as a project team across all divisions that focuses
more on communication closely related to job satisfaction, andimplemented a total of 99 measures over the four years until
FY2022. Through activities to improve communication in theworkplace, we aim to make the Company more attractive in awide range of themes, and we are working on various measures
such as improving job satisfaction, increasing operational efficiency, and actively sharing information among departments.
The committee provides an opportunity for various employees across divisions and generations to brainstorm ideas andwork together, and it also serves as a venue for the human resources development of participating members.
Based on the results of the employee satisfaction survey
conducted every year, we consider new measures and verify theeffectiveness of existing measures.

Topy Talk (a company-wide communication program between
management and employees in the form of dialogue)
With the aim of creating a culture (climate) that allows for open
discussion and fostering a sense of unity through increased corporate transparency, we are implementing Topy Talk, a communication promotion program that allows for real-time dialogue
between management and employees. Participants can listen to
management speak and interact with them directly in real-timeusing the chat and questionnaire functions, which presents theopportunity to feel closer to management and learn more about
the Company and to think about the Company s growth as awhole. Topy Talk was held a total of six times in FY2022 with total
attendance of more than 800 employees.

Growth Strategies(Plan period: April 1, 2021 to March 31, 2026)• Maintain a percentage of 40% or more for female new graduates hired for career-track positions.
• We will support the career development of employees andpromote the use of various systems for female employees.
• Maintain the average length of service of female employees
at 13 years or more.
• We will double the percentage of women in management
positions (executives) from the current level (at the time offormulation of the action plan on April 1, 2021; a benchmarkof 2.4% (6 employees)).

Efforts to improve ES (employee satisfaction)

Value Creation

conduct ongoing career interviews and surveys to confirm theirneeds and consider necessary measures.
We are also expanding the scope of women s jobs by assigning them to operational, engineering, and sales positions,where there were few female employees in the past.
We are currently implementing an Action Plan based on the
Act on Promotion of Women s Participation and Advancementin the workplace with the following goals.

(15) Establishment of satellite offices and communication spaces

Establishment of information sharing site
(Topy s Pearls of Wisdom)(20) Installation of solo work spaces
Team improvement activities(21) (a measure where each department s team freely chooses
themes and works towards achieving goals)

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Chapter

4

Sustainability

Social Responsibility

Basic Philosophy of
Safety and Health

Based on the belief that the basis of safety is health, the Topy Industries Group places safety
above all else and promotes the creation of a sustainable, safe, and comfortable work environment
through the participation of all employees of the Group in ongoing health promotion and essential
safety activities.

Point

Number of work-related accidents in Japan
Aim to achieve zero accidents every year (Lost time injuries or more)

Creating a workplace
based on 3S principles
that is akaruku, anzen,
and anshin (bright,
safe, and reassurance)(3As)

Eliminating dangers
through the continuous
practice of mutual
caution, reporting, andcommunication

1. Employees will proactively think, learn, and practice how tomaintain and promote their own health.
2. The workplace will recognize its health challenges, work on
improvements, and promote health creation by caring foreach other s health among colleagues.
3. The company will implement concrete systems and measures
to facilitate health creation for employees and the workplace.
* These represent actions for employees and the company to work together on healthcreation and creation of a healthy workplace.

MentalhealthWork-life
balance· Health guidance· Eating habits· Exercise habits· Stress check· Prevention of
overwork· Harassment
education· Labor efficiency
improvements· Promotion of leaveacquisition· Support for childcare
and family care* kiken yochi (hazard prediction) actions

Labor accident statistics survey sheet(Period: January to December 2022)(Topy Industries + domestic Group companies)

Total
workinghours

Work-related Frequency
Severityrate ofaccidents(%)
absenteeism(cases)Topy Industries, Ltd.

5,661,150

6

1.06

0.05

Domestic Group
companies

4,963,177

4

0.81

0.04

Total

10,624,327

10

0.94

0.05

* Domestic Group companies include equity method affiliates.
* Frequency rate of absenteeism =* Severity=

59

Work-related accidents
×1,000,000
Total working hours

Healthand Safety
Committee of
each officeInformation
sharing

Central Healthand Safety
Committee

HealthPromotionCouncilTopy Industries Group
Safety and Health
Liaison Committee

Collaborative
healthClose
cooperation

Health Promotion
Subcommittee

Topy Health
Insurance Association
Topy Industries
Labor Union

Close
cooperation

Certification for health management
We were recognized as a Health and Productivity Management
Outstanding Organization 2023 (Large Corporation Category)by the Ministry of Economy, Trade and Industry and the Japan Health Council for considering employee health management from a managerial perspective and strategically working
on it. We were also recognized as a Sports Yell Company by
the Sports Agency in 2023 for actively working on implementing
sports for promoting the health of employees.

Corporate Data

PhysicalhealthCentral Health and Safety Committee (Chair and health management
promotion officer: Officer Responsible for Health and Safety)

Sustainability

Creating safe
individuals who canreliably practice daily
health management
and hazard prediction
actions (KY actions*)Three Principles of Healthy Behavior• Enhancement of employees health literacy through My Health
Declaration
Utilizing our target management system, a part of our evaluation system, every year, all employees must make a My Health
Declaration. This is aimed at improving the health literacy ofeach and every employee, and by setting challenging targets
for each employee to tackle from the above Active 7, we aim to
reduce health risks and improve productivity by raising healthawareness and encouraging changes in behavior.
• Implementation of various training programs
To ensure the mental and physical health of our employees,
as stated in our Health Management Declaration, we conductvarious training programs to promote health and create ahealthy work environment.
[Examples of training]· Mental health training
Line care training (for managers)
Self-care training (for all employees)· Women s health seminars· Tobacco video seminars• Initiatives to reduce the smoking rate
Since our smoking rate is as high as 36.9%, we are striving tofoster employees awareness to quit smoking by holding anti-smoking health seminars and introducing a simplified smoking cessation support program in collaboration with the Topy
Health Insurance Association. In addition, to prevent passive
smoking, we are implementing non-smoking during working
hours and reducing the number of smoking areas, and areworking toward the future realization of a non-smoking policy
on our business premises.

Executive Management Meeting

Business[Priority implementation items foroccupational safety management in 2023]

Health Management® Declaration
At Topy Industries, we believe that by keeping our employees
healthy both physically and mentally, our workplaces are filledwith smiles and vitality, and this allows employees to fulfill theirpotential. We declare that we will do our utmost to create ahealthy work environment to further energize the Company andits employees.

(1) Exercise: exercise your body for at least one hour every day(2) Sleep: get a good night s sleep(3) Meals: eat at least two hours before bedtime(4) Drinking: drink less than two servings of alcohol per day andtake two days off from drinking per week(5) Smoking: quit smoking cigarettes(6) Weight: maintain an appropriate weight(7) Stress: manage stress effectively

Representative Director,
President and CEO(Health Management Officer)

Growth Strategies

Initiatives to eliminate all workplace accidents
At Topy Industries Group, our primary corporate responsibility
is to ensure the health and occupational safety of our workers.
Based on this basic concept, we have set the highest priority
on safety and are implementing a variety of actions to achieve
zero accidents. We also report the results of statistical surveys
on workplace accidents through the Company s intranet and inhouse newsletters among other media, to raise the awarenessof each and every employee.
The priority implementation items for health and safety management in 2023 are based on an analysis of the Basic Philosophy of Safety and Health established in September 2022 andthe accident situation in 2022, and are designed to be put into
practice through practical actions.

Promotion of Health Management®
Since 2020, Topy Industries has been promoting health management initiatives to enhance the attractiveness of the Company
and the workplace by creating an environment where employees
can exercise their abilities in good health and with peace of mind
under the Health Management Declaration and Policy, as activities that directly lead to SDG 3, Health and well-being for all.

Health management promotion system

Value Creation

Employee health & safety

Our initiatives• Establishment of wellness leaders• Implementation of various measures linked to Active 7
To create an environment where each employee can work
brightly, safely, and with reassurance, and fully demonstrate theirabilities, we have selected seven items that could affect mental
and physical health and productivity, and designated them as
Active 7. We are implementing various measures such as habituating exercise and smoking cessation challenges based onthese 7 items.

Number of lost workdays
×1,000Total working hours

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60

Chapter

4

Sustainability

Corporate GovernanceManagement Team

Hiromi Ishii

Shinichi Kijima

Masayoshi Takezawa

Director and Chairman

Representative Director,
President and CEO

Director andExecutive Vice President

Senior Managing Director

Shuichi Tachibana

Takeshi Kiriyama

Hiroko Kaneko

Managing Director

Director (Independent, Outside)

Director (Independent, Outside)

In charge of Technology,
Safety & Health, DX Strategy,
and the Business Development
Strategy CenterIn charge of Corporate Planning,
Business Management,
Sustainability Strategy

In charge of General Affairs,
Personnel, and Risk Management,
Assistant in charge of
Health & Safety

Katsuyoshi Tanaka

General Manager of Corporate Planning Department, Headquarters

Tetsuya Sakai

General Manager of General Affairs Dept.

Yu Yasuhara

General Manager of Sales Div.

Deputy General Manager of North America Administrative Division and Sales Division, Headquarters,
Overseas Business Strategy Department, Deputy General Manager of Wheel Division,
Deputy General Manager of Commercial and Off the Road Wheel Division

Hideo Katsuyama

General Manager of Undercarriage Components Div., in charge of Automotive and Industrial
Machinery Components BusinessToshihito Kano

General Manager of Business Development Strategy Center

Koji Kawakami

General Manager of DX Strategy Department

Koji Takeuchi

Operating Officer in charge of the automotive and industrial machinery components business
General Manager, Commercial and Off the Road Wheel Division

Go Iizuka

Deputy General Manager of Business Development Strategy Center, Representative Director,
President and CEO of Topy Marine Transport, Ltd., General Manager of Business Development
Strategy Center

Shinichiro Tada

General Manager of Internal Audit Dept.

Tomoki Oyaizu

General Manager of Off the Road Sales Department, Sales Division,
Headquarters and in charge of Overseas Sales, Overseas Business Strategy Department

Akihiro Noaki

General Manager of Steel Division Responsible for Steel Business and General Manager of
Toyohashi Plant Steel Division

Hiroshi Ogawa

General Manager of Steel Department, Sales Division, Headquarters

Sustainability

Koji Nanayama

Business

Operating
Officers

Senior Managing Director

General Manager of Engineering Administration Dept.

Masatoshi Takahashi General Manager of Finance and Accounting Department, Headquarters

Assistant to the President,
in charge of FinanceTsuyoshi Nakamura

Masahiro Abe

Growth Strategies

Nobuhiko Takamatsu

General Manager of Overseas Business Strategy Department, Deputy General Manager of Sales Division,
Headquarters, General Manager of Aluminum Administrative Center, Wheel Division

Value Creation

Managing
Executive
Officers

Hideki Aoyama

Directors Skills Matrix
Skill/Experience
Name

Takanori Kawano

Shinya Hayakawa

Tetsuya Kawagishi

Director (Independent, Outside)

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member(Independent, Outside)

Nobuhiko Takamatsu●

Hiromi Ishii●

Shinichi Kijima●

Masayoshi Takezawa●

Finance
Legal affairs /Global businessand accounting Risk management
operations

◆
●

●

●

●

◆

Hiroko Kaneko

Akio Sakai

Sales andmarketingTechnology /safety IT / DX

ESG
Sustainability

◆

●

●

●

●

●

●

●

●

●

●

●

●

Shuichi Tachibana

Takahiro Mikami

●

●

◆

●

Tsuyoshi Nakamura
Takeshi Kiriyama●

Human resources /labor / humanresourcesdevelopment●

Corporate Data

Takahiro Mikami

Corporate
management

◆

●

●

●

●

●

●

◆

◆

●

●

●

◆

●

●

●
●

For ◆, the skills listed are as Representative Director.
The listed skills of executive directors excluding representative director are limited to four.

Audit & Supervisory
Board Member(Independent, Outside)

61

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Chapter

4

Sustainability

Corporate GovernanceCorporate GovernanceInitiatives to increase board effectiveness

Basic Policy on Corporate GovernanceCompensation Advisory Committee
To ensure the fairness and transparency of director compensation, we have a Compensation Advisory Committee chaired byan outside director and comprising the President and three outside directors. The committee serves as an advisory body to theBoard of Directors.
* For details on the activities of the Nomination Advisory Committee and the Compensation Advisory
Committee in FY2022 (attendance of individual members), please refer to the Company s annual
securities report submitted on June 23, 2023.

Corporate governance structure
General Meeting of Shareholders
Appointment and dismissal

Appointment and dismissal

Audit
Report(including two outside auditors)

Nomination Advisory Committee

Close cooperation
Close
cooperation

General Manager ofInternal Audit Dept.

ReportBoard of Directors(nine members)

Appointment
Advance
Dismissal
deliberation
Supervision

ReportExecutive
Management
Meeting

Whistleblowing

Topy Industries Group
Ethics Consultation Office
Topy Industries Group
Compliance Hotline

Risk Management Committee
Sustainability Strategy Committee

ReportPolicy, planning, etc.,
of business execution

Whistleblowing

Accounting Auditor

Compensation
Advisory Committee

Reply/Report

PresidentInternal
Audit

Audit and report
Report(including three outside directors)

ReportCentral Environment Committee
Each Permanent Committee

Close
cooperation* For details on the activities of the Board of Directors in FY2022 (including the attendance of individual
members), please refer to the Company s annual securities report submitted on June 23, 2023.

Evaluating board effectiveness
Every year, the Board of Directors analyzes and evaluates theeffectiveness of the Board of Directors as a whole. It then discusses issues identified as a result and strives to utilize thisknowledge in improvements to the operations of the Board of
Directors in the future.
Major improvements in FY2022

Head Office Organization
Division Organization
Affiliated Companies

63

TOPY Report 2023

Executive Director Officer

Employee• Institutionalize periodic reporting to the Board of Directors on thestatus of the Company s initiatives in response to proposals madeby outside Directors and outside Audit & Supervisory Board Members at meetings of the Board of Directors• Establishment of a new reporting session for outside Directors andoutside Audit & Supervisory Board Members on the status of operations of the Company s divisions, etc.

Awareness of
issuesFurther enhancement of selection of appropriate
agenda items and provision of information necessary for deliberation of strategies, such as review of
the criteria for agenda items for the Board of Directors meetings, and discussion from the perspectiveof overall optimization and appropriate allocation ofmanagement resources as a Group, rather than partial
optimization by business segment

Based on this evaluation of the effectiveness of the Board of
Directors, efforts will be made to review and implement specificmeasures required to further increase the effectiveness of theBoard of Directors.
Visits by outside directors to offices and domestic
and overseas Group companies
Visits by outside directors to business sites and domestic andoverseas Group companies are conducted on a systematic
basis to deepen outside directors awareness of the businessconditions of the Company and its Group companies, and toensure that the Board of Directors holds fruitful discussions witha bird s-eye view of the entire Group.

Visits in FY2022
Corporate Data

Audit & Supervisory Board(four members)

Appointment and dismissal

Evaluation
results

The majority of the respondents gave positive evaluations (5 or 4 out of 5 points on a scale of 1 to 5), and inparticular, open and vigorous discussions, operationsof the Board of Directors, and responsibilities of independent outside directors received extremely highmarks. The Company s Board of Directors is functioning well and its effectiveness has been ensured.

Sustainability

Business execution structure
Our management functions consist of a management decision-making function and a business execution function, and we
employ an executive officer system to vitalize and improve theefficiency of Company management.

Execution of duties by directors
The Board of Directors resolves matters required by laws and regulations or the articles of incorporation, as well as important issuesof 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 and others.
Prior explanations of the agenda for the Board of Directors areprovided to Outside Directors who do not attend the Executive
Management Meeting. In addition, as a means of communication between outside directors and business execution divisions,in addition to the Board of Directors meetings, division heads ofeach division hold meetings to report the status of division operations to outside directors (held 7 times in FY2022). In addition, theCompany endeavors to ensure efficient deliberations by the Boardof Directors and rationality in the course of its decision-making bymeans such as establishing bylaws concerning the preparation of
agenda documents for the Board of Directors.

Implementation
method(1) Utilized an independent third-party organization toensure objectivity and transparency of the evaluation(2) Survey conducted of all Directors and Audit & Supervisory Board Members (response rate of 100%)(3) Evaluation conducted at the Board of Directors
held in June 2023 based on the survey results

Business

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 efficiency of theCompany s management and improve corporate value.

Summary of the evaluation of the effectiveness of the Board of
Directors in FY2022

Growth Strategies

Nomination Advisory Committee
To ensure the fairness and transparency of director nominations,
we have a Nomination Advisory Committee chaired by an outside director and comprising the President and three outside directors. The committee serves as an advisory body to the Boardof Directors.

Overview of corporate governance system

Composition of the Board of Directors
The Company s Articles of Incorporation state that the numberof directors shall not exceed nine and the Board s composition
shall include the appropriate and necessary number of directors to ensure an effective management system and substantive discussions at the Board of Directors. In order to ensure
diversity and expertise among the Board of Directors Members,
the Board of Directors shall be composed of persons deemed
appropriate in consideration of the balance between executive
directors who have excellent personality, insight, and execution
skills, and are familiar with the Group s business and outside
directors in an independent position.
The Company believes that it is important to appoint diverse
outside directors with a high level of independence and expertise in order for outside directors to fulfill the role of advising andchecking management as expected by society. In addition, outside directors include persons with executive management experience at other companies.

Value Creation

Topy Industries pledges to enhance corporate value in the medium to long term by establishing a corporate governance system thatis appropriate for the Company from the standpoint of management soundness, transparency, and efficiency in order to maintainand improve the trust of stakeholders. This comes from the Group Corporate Basic Philosophy: Contribute to the realization of asustainable recycling-oriented society through the continuance and development of the Topy Industries Group s business and theexecution of one s duty as a public institution.

An overview of the analysis and evaluation of the effectiveness of the Board of Directors as a whole in FY2022 is provided
as follows.

(The Company s offices: 5 sites)
Toyohashi Plant, Toyokawa Plant, Ayase Plant, Kanagawa Plant,
Akemi Factory(Domestic Group companies: 3 companies)
Akemi Recycling Center, Ltd., Sanwa Buhin Co., Ltd.,
Asahi Tec Corporation(Overseas Group companies: 2 companies)
Topy America, Inc.
Topy MW Manufacturing Mexico S.A. de C.V.

At each office and Group company, the participants toured theplants and conducted interviews on profit levels, current issues,and proposed countermeasures, as well as exchanged opinionswith the management of offices and the management of theGroup companies.

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Chapter

4

Sustainability

Message from an Outside Director
I look forward to the creation of an organization thatmakes the most of diversity for future growth.

TOPY Report 2023

Fixed basic
compensation

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

Payment model

Cash

Cash

Stock-based compensation(medium- to long-term
incentives)
Stocks (partial cash)• Fixed amount• This is linked to company performance • The amount of thisbased on position and individual performance in thecompensation is linked toprevious fiscal year
the level of achievement• 70% of the basicof the Medium-Termcompensation• The standard amount of thisManagement Plancompensation is 30% of the basic
Details of•
The standard amount ofcompensation,
varyingfrom0%compensation
to 75%. The portion based on thethis compensation is 5%
Company s business performanceof the basic compensation,
ranges from 0% to 65%, while thatvarying from 0% to 10%
based on individual performance
ranges from 0% to 10%

Performanceindicators

Reduction
or denial of
remuneration• In principle, a quantitative evaluation • Quantitative indicators
calculated according tobased on the achievement of
the level of achievement ofconsolidated EBITDA (consolidated
each performance indicator
operating income plus consolidatedof consolidated operating
depreciation and amortization)
profit, return on equity (ROE)and net income attributable toshareholders of the parent company, and return on assets (ROA)
with qualitative evaluation taking into
account management activities andother conditions as necessary• Level of achievement of individual
missionA malus clause has been introduced that allows, under certain conditions, reductionof compensation before payment or non-payment of stock-based compensation in
the event of a director s serious failure to perform his or her duties or violation of laws,
regulations, or internal rules, etc.

Compensation for outside directors consists of only fixedbasic compensation. This is in consideration of their independent position, which is unaffected by the Company s businessperformance in principle.
Procedure for determining compensation for Directors
The Compensation Advisory Committee deliberates on the policy
for determining compensation and the level of compensation inconsideration of the business performance of the Company, andother factors. According to the results of the deliberation, the President, who has been delegated the authority based on a resolutionof the Board of Directors, determines the amount of compensation for each director within the total amounts of compensation forwhich resolutions were passed in advance at the General Meetingof Shareholders. Also, the Compensation Advisory Committee
shall confirm the appropriateness of the amount of compensationfor each director in advance to ensure that the delegated authority
is appropriately exercised by the representative directors, in addition to the percentage of performance-based compensation forthe previous fiscal year that is linked to company performance,

Compensation for Directors and Audit & Supervisory
Board Members in FY2022
Position

Amount of compensation by type (million yen)
Total amount of
Number of
Performance-based
compensations Fixed basic
Stock-based subject officers(million yen) compensation compensation in the compensation
previous fiscal year

Directors (excluding
outside directors)

208

152

55

−

8

Members of the
Audit & Supervisory
Board (excluding
outside members)

49

49

−

−

2

Outside Officers

53

53

−

−

5

Training of next-generation management candidates
Overview of training of next-generation management candidates
The Nomination Advisory Committee carefully deliberates on thedevelopment of candidates for successors to directors and othermanagement personnel. Based on the recognition that the management trustee has a mission to ensure the sustainable growthof the Group and increase its corporate value from a company-wide perspective, systematic training is provided for each levelof management from the time of their appointment as members ofmanagement, according to their position. In addition, the Company strives to develop human resources by giving them experiencein a wide variety of operations, including management responsibilities in various divisions of the Company and Group companies,
as well as through participation in management through attendance at important management meetings, such as the Board of
Directors and the Executive Management Meeting.
In addition, we have been conducting the Topy Management
School, a training program for developing internal management
candidates, since FY2005. In FY2018, a comprehensive review
was conducted, and the New Topy Management School washeld to improve the qualities of next-generation management
candidates, along with dispatching selected talented individuals toexternal management training programs, striving for the development and securing of next-generation management candidates.
TOPY Report 2023

Corporate Data

65

Basic compensation
Compensation

Sustainability

As chairman of the Nomination Advisory Committee
I have served as chairman of the Nomination Advisory Committee since FY2022. The role of our Nomination Advisory
Committee is to report to the Board of Directors and the
Audit & Supervisory Boards on candidates for Directors andAudit & Supervisory Board Members.
The unique feature of our Nomination Advisory Committee is that prior to the first meeting of the committee eachyear, each director, except for the members of the Nomination

Toward 2030
The Company provides high-quality products and services
produced by its superior technology and know-how. I believe that this is supported by our history and pride in thetireless efforts of our sincere and talented human resources.
I believe that this history, including our experience, knowledge, and confidence in dealing with past changes, is an
important asset of the Group.
The future will be an era of rapid change and difficulty in foreseeing the future. In order to survive and grow inthe coming era, it is important to further diversify our humanresources in addition to our existing assets. Although ourmanagement is already highly aware of the importance ofpromoting the advancement of women, I believe there is stillroom for improvement in increasing diversity. Diversity is not
limited to gender. I would like to see a new history of a corporate culture and systems that allow people to make useof their various experiences, knowledge, and talents, and to
make this a strength that will continue into the future.

Compensation composition and performance-based
compensation for Directors

Business

Evaluating board effectivenessIn the evaluation of the effectiveness of the Board of Directors meetings held in FY2022, our Board of Directors was
rated extremely high in terms of open and vigorous discussions and operations of the Board of Directors. In particular, open and vigorous discussions is a characteristic of theCompany s Board of Directors, and lively discussions sometimes result in resolutions that differ from the original policy.
In addition, the use of a third-party organization from thisyear s effectiveness evaluation made it possible to compare
the Company s performance with other companies information (average of other companies). It is worth mentioningthat our evaluation is higher than the average of other companies for all items.
Although there have been points raised as issues, suchas discussions from a perspective of the overall optimization
for the Group rather than a perspective of partial optimizationfor each business division, at the Company s Board of Directors, all directors share the awareness of steadily addressingthese issues, and therefore, we believe that improvements
to further enhance effectiveness will continue in the future.

Advisory Committee, recommends candidates for Directors
and Audit & Supervisory Board Members. When making a
recommendation, the reason for recommending an individual candidate and the future officer personnel plan, including
operating officers, are described, and each director explains
the proposed recommendation in a creative way, such as
using a skills matrix. We believe that the committee s discussions are enhanced by taking into account the opinions
of directors who are not members of the committee.
The committee discusses candidates based on recommendations from each director and the opinions of the committee members, as well as the skill matrix of the directors.
In the process, the committee also conducts interviews withcandidates as necessary.
In 2023, there have been significant changes in our executive structure, including the replacement of the Representative Director, President and CEO and all full-time audit& supervisory board members (two), and in reporting on
candidates, we have taken into consideration our challenges
in global business development and the need to further enhance our governance structure accordingly. Looking ahead
to next year, while confirming the status of the current structure, we intend to further enhance the discussions by thecommittee, as it is expected to be the year for discussing
the structure to drive the further growth of the Group in theMedium-Term Management Plan and further beyond.

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

Growth Strategies

Background of appointment
As an attorney, I have been involved in a wide variety of cases, focusing on issues facing corporations, and I have dealt
with many labor issues recently. In 2001, I went to the US to
study at a law school, followed by practical training at a local
law firm. I have served as an outside director of the Company since June 2021, and I look forward to continuing tocontribute by applying my legal experience and knowledge
with respect to compliance and governance.
When I became a lawyer, the presence of female legal
professionals was less than it is today, but today, I am seeing
an expansion of opportunities for female legal professionals
and a change in the awareness of society as a whole. I hopethat my experience of the transition from the time when I wasa minority, so to speak, to the present will be useful in some
way to improve the diversity of the Company.

Outside Director

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

and which is determined by the Board of Directors based on thereport of the Compensation Advisory Committee.
The Compensation Advisory Committee shall consist of
three external members and one internal member, and shall bechaired by an external member to ensure the fairness and transparency of compensation system.

Value Creation

Message

Hiroko Kaneko

Compensation for Directors and Audit &Supervisory Board Members

66

Chapter

4

Sustainability

Risk management and compliance

TOPY Report 2023

Eligibility

The Group s officers, employees and their families, former
employees, and suppliers (including contractors, partners in joint
ventures, and other partners)

Scope

Acts that appear to violate laws and regulations, corporate ethics,
the Group Corporate Basic Philosophy, the Group Corporate Codeof Conduct, or internal rules in relation to the Group s business(including violations of human rights such as harassment andchild labor and matters concerning corruption such as bribery)

Investigationand correction• The content of the consultations and reports will be promptly
reported to the chairman of the Risk Management Committeeof the Company.
• Within 20 days of receipt of the report, the Risk Management
Committee or the chairperson of the committee will decide
whether or not to conduct an investigation, and will inform thewhistleblower whether or not an investigation will be conducted
and, if so, the reason for such investigation.
• The Risk Management Committee or the chairperson of thecommittee will instruct the department or Group company
where the incident occurred to conduct the investigation.
• The results of the investigation will be reported to the Risk
Management Committee or the chairman.
• If it is determined that there is a violation of laws and regulations,
the Risk Management Committee will order corrective action.
• Notification of the results of the investigation and corrective
action will be given to any informant who wishes to be notifiedof the results of the investigation and corrective action.

Audits by the Audit & Supervisory Board
Through the Board of Directors 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 reports on the activities of such organizations as the Internal Audit Department
and Risk Management Committee and other matters that havea significant influence on the Topy Industries Group. In addition,
the Representative Director and Audit & Supervisory Board
Members hold regular meetings to exchange opinions. Information sharing sessions are also conducted among outside Directors and Audit & Supervisory Board Members. When an issue related to risk management occurs or is likely to occur in the Topy
Industries Group, it is also reported to Audit & Supervisory Board
Members in accordance with the Group Risk Management Regulations. In addition, the Company has developed a structure inwhich whistle blowing is reported to Audit & Supervisory Board
Members in accordance with the Rules Concerning the Topy Industries Group Basic Corporative Ethics Consultation Office andthe Topy Industries Group Compliance Hotline.

* For details about the Topy Industries Group Anti-Corruption Policy and the Topy Industries Group
Supply Chain Management Policy, please see our website.

Tax compliance and governanceAt the Group, we believe that it is necessary to increase tax
transparency for various stakeholders. Toward this end, we haveestablished the Topy Industries Group Tax Policy, which sets
forth compliance and governance related to taxation.
* For details about the Topy Industries Group Tax Policy, please see our website.

Intellectual property compliance and governance
We have established the Topy Industries Group Intellectual Property Policy. This policy positions intellectual property as a toolthat supports the sustainable growth of our business, defines it
as including know-how not limited to patents, promotes stricter
management, and creates innovative intellectual property strategies by visualizing, analyzing, and utilizing intellectual properties.
Under this policy, the Group strives to create intellectual property
and improve compliance and governance related to it.
* For details about the Topy Industries Group Intellectual Property Policy, please see our website.

Dialogue with shareholders and investors
Financial results briefings
After the announcement of full-year and second quarter financial results, Topy holds financial results briefings for analysts andinstitutional investors, where the Representative Director, President and CEO directly explains the contents of the briefings. This
management plan session can be watched via streaming fromthe IR Library on our website for shareholders and investors.

Number of participants

November 24, 2022

2Q financial results
briefing

21 members
Streaming views: 788

May 25, 2022

Full-year financial results
briefing

36 members
Streaming views: 654* Streaming views represent data as of September 13, 2023.

Meetings with institutional investors
The Company conducts meetings with institutional investors
to discuss topics such as responses to IR inquiries regarding
financial results and engagements about initiatives related to
ESG, during which we explain the Group s management situation and various initiatives. We disseminate informationfrom these interviews to directors, Audit & Supervisory Board
members, and the management administration department
as monthly flash reports, and regularly report in the Executive
Management Meeting with analysis, striving to feedback market opinions into our management.
(Status of meetings with institutional investors in FY2022)
Number of meetings: 39
Respondents from the Company: IR staff(Finance and Accounting Department, General Affairs Department,
Corporate Planning Department)* Some meetings include the director in charge of corporate planning.

(Main themes in dialogues)• Company overview• Performance trends• Medium-Term
Management Plan
• Strategies for stock priceimprovement• Future prospects of thebusiness• Initiatives related to ESG• Content of information
disclosure

Dialogue with individual investors
Until now, the Company has primarily engaged in dialogue withindividual investors through responses to individual inquiries, but
starting from FY2023, we are enhancing our engagement withindividual investors by participating in booths at IR fairs targeted
at individual investors. Going forward, we will continue our efforts
to enhance dialogue with individual investors through enhanced
information disclosure and participation in IR events.

TOPY Report 2023

Corporate Data

67(1) Internal: Topy Industries Group Basic Corporate Ethics
Consultation Office(2) External: Topy Industries Group Compliance Hotline (outside
law office)Details

Sustainability

Compliance system
We have formulated the Group Corporate Basic Philosophy and
the Group Corporate Code of Conduct and ensure that all theofficers and employees of the Topy Industries Group are familiar with them through such means as our websites, in-housenewsletter, and Group Compliance Guidebook. Moreover, under the leadership of the Risk Management Committee of theCompany, employees in each department of the Company andGroup companies formulate annual activity plans to ensure fullcompliance, engage in compliance improvement activities, andshare relevant information. In addition, our divisions that include
those supervising compliance provide a range of compliance education to employees at each level of the Topy Industries Group.

Consultation
and whistleblowing offices

Date

Business

Business management of the Group Companies
In accordance with the Group Company Management Regulations, the division of the Company supervising the Group
companies receives reports therefrom regarding their business
policies, plans, results and other matters as necessary, while
important matters are resolved at Executive Management Meetings or the Board of Directors. In addition, the Company promotes the autonomous management of each Group Company
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.

(Overview of whistle blowing system)

Financial results briefings held in FY2022

Growth Strategies

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 tooccur in the Topy Industries Group, it is reported to organizations
including the Risk Management Committee, with the necessary
instructions provided through the risk management system. The
activities of the Risk Management Committee are reported to
the Board of Directors to confirm their effectiveness. In the eventof a major disaster, a special task force headed by the Representative Director and President is established to respond to thesituation. We also work to improve the earthquake resistance ofour buildings and production facilities while regularly conducting
drills and other activities to cope with emergencies.

Whistle blowing system
To strengthen compliance, the Group has established offices
internally and externally that accept consultations and whistleblower reports concerning general matters relating to corporate ethics from Group employees and suppliers. Consultations
and whistleblower reports can be made anonymously and theconfidentiality of these communications is protected. The consulter or whistleblower and cooperating parties will be protectedfrom unfair treatment.

Anti-corruption initiatives
The Group recognizes that corrupt practices such as corruption
and bribery are risk factors that could substantially damage trust.
As such, the Group has established the Topy Industries Group
Anti-Corruption Policy that declares the Group will not engage inany form of corrupt practices and build fair and transparent relationships with all stakeholders (customers, suppliers, community
members, etc.) in order to promote sound corporate activities
and business growth. The Topy Industries Group Supply Chain
Management Policy also contains provisions on anti-corruption.
Under this policy, we are working with suppliers to prevent corrupt practices.
In addition to establishing rules, we are also promoting operational anti-corruption initiatives, such as providing anti-corruption training to Group officers and employees and establishing asystem for accepting consultations and whistle blower reports
at the Group s whistleblowing offices on suspected corrupt
practices such as corruption and bribery.

Value Creation

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.

The effectiveness of the Group Basic Philosophy and theGroup Code of Conduct is confirmed annually through the Boardof Directors review of their maintenance and operation to ensure
the appropriateness of operations, and they are revised as necessary (the last revision date for both was May 11, 2022).

68

Chapter

5

Corporate Data

Our History
1961

1921

1990

Miya Steelworks succeeded in hot-rollingof steel sash bars

1964

1991

Ayase Factory of Japan Motor Wheel Co., Ltd. (current Ayase Plant 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.

1926
Tokyo Shearing Co., Ltd. (predecessor of
Toto Steel Mfg., Co., Ltd.) was founded

1930

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

2013

Kimi to Boku Hall was completed at Toyohashi Plant

PT. Topy Palingda Manufacturing
Indonesia was founded
PT. Topy Undercarriage Indonesia wasfoundedTopy MW Manufacturing Mexico S.A.
de C.V. was foundedToshihide Kozuma
Founder of Miya Steelworks

2014
PT. Topy Undercarriage Indonesia
commenced operation
The New Steelmaking Factorycommenced commercial operation at
Toyohashi Plant

1934
Tokyo Sharin Seisakusho Co., Ltd.
(predecessor of Japan Motor Wheel Co.,
Ltd.) was founded

1936

2015

1992

Signing ceremony for the merger of four companies

1969
Topy International, Inc. (current Topy America, Inc.) was founded

1972
1977
Sales of synthetic mica started

Kurate Factory of Toyokawa Plant commenced operation

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

1995

2016

Bar Mill Factory of Toyohashi Plant commenced operation

1998

2017

Obtained ISO 9001 certification at all production sites

1999

Joint venture with Wheels India Limited
WIL Car Wheels Limited establishedTopy International, U.C.A. Inc. (current Topy America, Inc.) was founded
ISO 14001 certification was obtained at all production sites

2018Open hearth furnace plant under construction
at Miya Steelworks

1960

1980

1990

2000

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

2010

2020

1980

2000

2021

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

Concluded a technical assistance agreement with PT.
Inkoasku (Indonesia)

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

100th anniversary

1943

1982

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

Concluded a technical assistance agreement with PT.
Palingda Nasional (Indonesia)
Developed tubeless tire wheels for heavy- and medium-duty
commercial vehicles at Ayase Plant
Ultra-large wheels for mining equipment [SGORⓇ] weredeveloped

1955
Toto Zoki Co., Ltd. was founded1956
Toto Tekko Co., Ltd. was founded

1958

1985

Logo mark for the 100th anniversary

Topy Corporation (current Topy America, Inc.) was foundedToyohashi Steel Mill Plant of Toto Steel Mfg., Co., Ltd. (current
Toyohashi Plant of Topy Industries, Ltd.) was established

Corporate Data

1941

Sustainability

1940

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

Business

Technology Research Center (current R&D Center) was openedat Toyohashi Plant

1920

2011

Growth Strategies

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

Akemi Factory of Toyokawa Plant commenced operation

Value Creation

1922

Chigasaki Seisakusho of Toto Zoki Co., Ltd. (current Kanagawa Plant ofTopy Industries, Ltd.) was established
Toyokawa Factory of Japan Motor Wheel Co., Ltd. (current Toyokawa Plant
of Topy Industries, Ltd.) was establishedMiya Steelworks (predecessor of Toto
Steel Mfg., Co., Ltd.) was founded

2003
Took a stake in Fujian Yuan Shing Topy Ltd.
(current Fujian Topy Autoparts Co., Ltd.)

2004
Hamura Factory of Ayase Plant commenced operation

2007
1987

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

Succeeded in the practical application of high-quality
synthetic mica for cosmetics

2008

1988
Concluded a technical assistance agreement with PT.
Pakoakuina (Indonesia)

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

1989
69

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

TOPY Report 2023

TOPY Report 2023

70

Chapter

5

Corporate Data

Consolidated Financial Performance for the Past 11 Years

Fiscal year

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

234,682

237,677

215,872

208,237

230,462

286,227

263,305

225,121271,178

334,496

Operating profit (loss)

6,990

5,308

6,422

10,000

7,180

7,997

7,505

2,851

(2,943)(1,706)

7,175

Ordinary profit (loss)

6,234

4,485

6,037

8,806

6,116

8,034

9,357

3,597

(575)

(1,401)

8,043

Profit (loss) before income taxes

5,842

4,249

4,476

4,681

10,897

7,933

10,345

1,741

856

1,790

7,421

Profit (loss) attributable to ownersof parent

3,409

1,914

2,360

1,700

7,191

5,500

7,114

(4,497)

578

386

6,321

Capital expenditure

20,47725,45820,374

8,815

9,874

12,132

25,10013,397

10,371

8,429

8,939

Depreciation and amortization

8,957

10,086

10,315

11,321

10,631

10,59911,11012,332

12,515

12,775

13,295

EBITDA*1

15,947

15,394

16,737

21,322

17,812

18,596

18,61615,184

9,571

11,06820,471

Research and development costs

1,212

1,519

1,202

1,059

1,137

1,131

1,096

1,115

1,057

1,107

1,045

Total assets

208,781

232,714

252,456

231,583

223,050

248,102284,198

254,659

264,672

282,195

292,322

Shareholders equity

89,522

94,363

106,187

98,893103,951

108,959

111,304

102,732

107,428

112,657

120,265

Net assets

91,25896,219107,941

99,973

104,853

109,859

112,362

103,800

108,385

113,703

121,425

Interest-bearing debt

53,53462,45377,51670,07055,831

61,096

79,67676,782

81,07586,03583,587

Cash flows from operating activities

16,7707,251

19,44019,346

10,13010,78011,725

16,206

5,730(5,528)15,058Cash flows from investing activities(14,770)(17,478)(29,141)(7,529)(1,016)(5,861)(20,835)(16,048)(8,931)(2,609)(8,360)Cash flows from financing activities(4,997)

7,538

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

1,834

15,936(6,461)

3,668

3,527

(4,677)143.76

80.76

99.65

71.80

303.90234.25302.85(191.42)

24.70

16.61

276.51

40

20

40

60

80

80

90

40

20

20

88

Operating profit margin

3.1

2.3

2.7

4.6

3.4

3.5

2.6

1.1

(1.3)

(0.6)

2.1

Return on equity

4.0

2.1

2.4

1.7

7.1

5.2

6.5

(4.2)

0.6

0.4

5.4

Equity ratio

42.9

40.5

42.1

42.7

46.6

43.9

39.2

40.3

40.6

39.9

41.1

4,374
［491］

4,515
［538］

4,596
［573］

4,408
［597］

4,568
［587］

5,034
［581］

6,241
［869］

6,181
［1,016］

6,153
［756］

5,897
［779］

5,706
［842］

Growth Strategies

226,912Net sales

Value Creation

Operating Results (Fiscal year) (Million yen)

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

Business
Sustainability

Cash Flows (Fiscal year) (Million yen)

Net profit (loss) per share
Dividends per share

Corporate Data

Per Share Information (Yen)*2

Financial Indices (%)

Number of employees at period end[Average number of temporary
employees not included in the above]*1 EBITDA is calculated by adding the amount of depreciation and amortization to the amount of operating profit (loss).
*2 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 FY2012.

71

TOPY Report 2023

For detailed financial data, please see the Securities Reports and other reports page on our website.

TOPY Report 2023

72

Chapter

5

Corporate Data

Non-Financial Highlights
Environment
Unit

Reporting scope％

Consolidated*1
Production base

FY2018FY2019FY2020

FY2021

FY2022

Environmental management system
ISO 14001 acquisition rate

67%

71%

71%

75%

75%

Scope 1

1,000
t-CO2

Scope 2*3

1,000
t-CO2

Scope 3

1,000
t-CO2

Consolidated
Japan*2(Partially excluded)
Consolidated
Japan(Partially excluded)
Consolidated
Japan(Partially excluded)

228

234

254

233

353

322

307

310

332

−

−

1,301

1,194

1,334

10,951

10,43910,552

11,24911,044

Energy use
Energy consumption
Water intake
Total city water supply andindustrial water
Groundwater intake volume

TJ

Thousandm3
Thousandm3

Consolidated
Japan(Partially excluded)

3,081

3,012

2,906

2,985

2,993

Consolidated

1,066

979

877

820

848

Thousandm3

Consolidated

2,206

2,055

1,819

1,869

1,927

t
t

Consolidated
Consolidated

222,304
244,525

221,721242,132

217,248
236,154248,521265,068

246,249
276,084

283

292

231

232

213

255

304

251

347

351

283

292

230

232

213

Water discharge
Total water discharge

t
t
t

t
t

Consolidated
Japan
Consolidated
Japan
Consolidated
Japan
Consolidated
Japan
Consolidated
Japan

166

158

189

146

167

135

124

85

92

30

SocialTOPY Report 2023

Non-consolidated
Non-consolidated

15

9

11

10

9

43

25

14

8

10

35

Non-consolidated

4

4

1

0

5

Non-consolidated

47%

38%

21%

14%

25%

Non-consolidated
Non-consolidated

19
13

19
13

19
13

19
13

19
13

Non-consolidated

2.3%

2.4%

2.4%

2.5%

2.5%

Non-consolidated

74%

82%

67%

76%

72%

Non-consolidated

14

15

13

15

16

Non-consolidated
Non-consolidated

6
1

6
0

7
0

14
0

11
0

Non-consolidated

5.4

1.9

1.0

0.4

1.6

0.56

0.52

0.74

1.01

1.13

0
19

0
12

0
11

1
15

0
17

6

6

8

11

12

Consolidated
Japan
Consolidated
Consolidated
ConsolidatedJapan*6 Items related to employees in society cover full-time employees in Japan, unless otherwise stated.
*7 Includes employees on fixed-term labor contracts.
*8 Does not include Asahi Tec North America, Inc. and Guangzhou Asahi Dongling Research & Development Co., Ltd. However, equity method affiliate Hokuetsu Metal Co., Ltd. is included. Includes workplace
accidents that occur at Group business sites, including partner companies, regardless of the attribution of the victim.

Unit

Reporting scope

FY2018FY2019FY2020

FY2021

FY2022

Persons

Consolidated

6,241

6,181

6,153

5,897

5,706

Persons

Consolidated

5,079

5,021

4,974

4,742

4,585

Persons

Consolidated

1,162

1,160

1,179

1,155

1,121

%

Consolidated

19%

19%

19%

20%

20%

Persons

Consolidated

713

742

739

721

735

Persons

Consolidated

679

707

700

685

689

Persons

Consolidated

34

35

39

36

46

%

Consolidated

4.8%

4.7%

5.3%

5.0%

6.3%

Persons

Non-consolidated

247

256

255

248

242

Persons

Non-consolidated

2

2

6

6

6

%

Non-consolidated

0.8%

0.8%

2.4%

2.4%

2.5%

Unit
Board of Directors
Number of male directors
Persons
Number of female directors
Persons
Number of outside directors
Persons
Number of designated independent
Persons
officers among outside directors
Number of non-executive directors
Persons
or independent directors
Number of outside memberswith industry experience or nonPersons
management members
Number of Board meetings
Times
Attendance rate at Board meetings%
Average term of office of directors(covers directors in office as of theYearsfiscal year end)
Audit & Supervisory Board
Number of Audit & Supervisory
Persons
Board Members
Number of outside Audit &Persons
Supervisory Board Members
Number of Audit & Supervisory
Times
Board meetings
Average attendance rate at Audit &%Supervisory Board meetings
Nomination and Compensation Committees
Number of Nomination Advisory
Times
Committee meetings
Number of Compensation Advisory
Times
Committee meetings*9
Compliance and risk management
Number of whistle blower reports
and consultations

Cases

Reporting scope

FY2018FY2019FY2020

FY2021

FY2022

Non-consolidated
Non-consolidated
Non-consolidated

6
0
2

6
0
2

6
0
2

6
1
2

7
1
3

Non-consolidated

2

2

2

2

3

Non-consolidated

2

2

2

2

3

Non-consolidated

0

0

0

0

0

Non-consolidated
Non-consolidated

17
100%

16
100%

17
100%

18
100%

17
100%

Non-consolidated

1.8

1.9

1.9

2.1

2.1

Non-consolidated

4

4

4

4

4

Non-consolidated

2

2

2

2

2

Non-consolidated

16

16

15

16

15

Non-consolidated

100.0%

100.0%

100.0%

100.0%

100.0%

Non-consolidated

3

3

3

3

5

Non-consolidated

2

3

4

3

2

Consolidated

15

7

8

14

10

Corporate Data

73

Cases

40

Governance*1 Items whose scope is presented as consolidated cover consolidated subsidiaries unless otherwise stated.
However, environmental items do not include Asahi Tec North America, Inc. and Guangzhou Asahi Dongling Research & Development Co., Ltd.
*2 Items presented as partially excluded do not include figures equivalent to electricity related to power transmission sold outside the Company as a power generation business.
*3 Emission factor for electricity is used as the basic emission factor.
*4 Act on the Assessment of Releases of Specified Chemical Substances in the Environment and the Promotion of Management Improvement*5 Volatile organic compounds

Employee composition*6
Number of employees- consolidated
Number of employees- male - consolidated
Number of employees- female - consolidated
Ratio of females - consolidated
Managerial staff composition
Total number of managers- consolidated
Number of managers- male - consolidated
Number of managers- female - consolidated
Ratio of female managers- consolidated
Total number of managers- non-consolidated
Number of managers- female - non-consolidated
Ratio of female managers- non-consolidated

Number of workplace accidents

44

Sustainability

Waste
Recycling volume
Waste emissions
Chemical substances
Emissions of substances regulated
under the PRTR Act*4
Transfers of substances regulated
under the PRTR Act
Total amounts of releases andtransfers of VOCs*5
Pollutants
Air pollutants- NOx (nitrogen oxides)
Air pollutants- SOx (sulfur oxides)

38

Business

Consolidated

39

Growth Strategies

246

Non-consolidated

Value Creation

Greenhouse gas emissions

Recruiting
Number of university
Persons
graduates hired - men
Number of university
Persons
graduates hired - women
Number of mid-career hires - men
Persons
Number of mid-career hires Persons
women
Ratio of mid-career hires%
Average years of service
Men
Years
Women
Years
Composition of persons with disabilities
Employment rate of persons%
with disabilities*7
Use of leave programs
Average ratio of days of%
paid leave taken
Average number of days ofDayspaid leave taken
Employees using childcare leave
Persons
Employees using family care leave
Persons
Social contribution spending
Donations
Million yen
Workplace accidents and illnesses*8
Frequency rate of lost work-timeCases/1Mhworkplace accidents (employees)
Consolidated
Number of fatalities (employees)
Cases
Number of workplace accidents
Cases*9 Only meetings on determining the compensation of directors. Meetings on review of the compensation system are held separately.

TOPY Report 2023

74

Chapter

5

Corporate Data

Major Subsidiaries & Affiliates
Company nameHead office location

IR Information
Capital(million yen)

Business segment

Voting rights held or
owned by (%)

Stock exchange listings

Tokyo Stock Exchange Prime Market & Nagoya Stock Exchange Premier Market (Securities code 7231)

Number of authorized shares

88,300,000 shares

Shinagawa-ku, Tokyo

480

Steel, Automotive andIndustrial Machinery
Components

100

Number of outstanding shares

24,077,510 shares

Topy Marine Transport, Ltd.

Toyohashi-shi, Aichi Pref.

225

Steel

100

Number of shareholders

12,588 members

100

Topy Fasteners, Ltd.

Matsumoto-shi, Nagano Pref.

310

Automotive and Industrial
Machinery Components

Topy-Rec, Ltd.

Koto-ku, Tokyo

300

Others100
100

Top 10 major shareholders

Miyako-gun, Fukuoka Pref.

100

Tojitsu, Ltd.

Toyohashi-shi, Aichi Pref.

80

Steel

100 （100）

Autopia, Ltd.

Hachioji-shi, Tokyo

30

Automotive and Industrial
Machinery Components

100 （100）

Akemi Recycling Center, Ltd.

Toyohashi-shi, Aichi Pref.

200

Steel

100

Sanwa Buhin Co., Ltd.

Bando-shi, Ibaraki Pref.

200

Automotive and Industrial
Machinery Components

100Power Generation

100

Toyohashi-shi, Aichi Pref.

205

Ring Techs Co., Ltd.

Kurashiki-shi, Okayama Pref.

100

Seibu Wheels Co., Ltd.

Kurashiki-shi, Okayama Pref.

10

ATC Holdings Co., Ltd.
Asahi Tec Corporation

Kakegawa-shi, Shizuoka Pref.
Kakegawa-shi, Shizuoka Pref.

100
100
600 U.S. dollars

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
PT. Topy Undercarriage Indonesia

50 million bahts

8.98

Topy Fund Business Association

1,097,210

4.80

Meiji Yasuda Life Insurance Company

975,134

4.26

Mizuho Bank, Ltd.

787,802

3.45

Employee Shareholding Association of Topy Industries Group

745,731

3.26

Custody Bank of Japan, Ltd. (trust account)

614,127

2.69

100 （100）

Resona Bank, Limited

413,605

1.81

100

Sompo Japan Insurance Inc.

374,600

1.64

MWITALIAS.R.L.

367,200

1.61

100 （100）100
100 （100）
90

Automotive and Industrial
Machinery Components

90

Bekasi Regency, West Java, Indonesia

41.2 billion rupiahs

Automotive and Industrial
Machinery Components

100

Automotive and Industrial
Machinery Components

95

Ring-Techs Guangzhou Co., Ltd.

Guangzhou City, Guangdong Province, China

188 million renminbi

Asahi Tec Aluminium (Thailand) Co., Ltd.

Khlong Tamru, Chonburi, Thailand

1,480 million bahts

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.

Guangzhou Wheelhorse Asahi Aluminium
Co., Ltd.

Guangzhou City, Guangdong Province, China
Yingde City, Guangdong Province, China
Chiyoda-ku, Tokyo

1,969

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
Steel

Breakdown of shareholders by type
（80）

Financial institutions
30.43%

Individuals
and others
31.25%（3）

Foreign investors
11.84%

100 （100）
100 （100）
100 （100）

Securities
companies
0.96%
Other domestic
corporations
25.52%
Treasury shares are included in “Individuals and others.”

100 （100）51（51）35.1 （1.3）

Fiscal year end

March 31

Ordinary general meeting of shareholders

June

Record date

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

Corporate Data

331 million pesos

（55）

100

710.5 billion rupiahs

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

Notes: 1. Topy Industries, Ltd. owns 1,212,022 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 stock compensation plan for directors.
2. The shareholding ratios were calculated by excluding treasury shares.
3. Topy Fund Business Association is the name of the shareholding association of Topy Industries, Ltd., its affiliates, and its business partners.

100

Karawang Regency, West Java, Indonesia

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

（30）

100

100

867 million pesos(Other affiliates)
Nippon Steel Corporation

2,053,000

Automotive and Industrial
Machinery Components

Silao City, State of Guanajuato, Mexico

Guangzhou Dicastal Asahi Aluminium
Co., Ltd.

21.07

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

6,240,000 U.S.
dollars

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

Shareholding ratio (%)

4,818,264

Sustainability

Kentucky, U.S.A.

Number of shares held

Business

Topy America, Inc.

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

Name
Nippon Steel Corporation

216 million renminbi

Automotive and Industrial
Machinery Components

49

（49）

Share unit number

100 shares

40 million renminbi

Automotive and Industrial
Machinery Components

25

（25）

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)419,524

Manufacture and salesof steel products andengineering

Growth Strategies

Kyushu Wheel Kogyo, Ltd.

Automotive and Industrial
Machinery Components

Akemi Electric Power, Ltd.

Value Creation(Consolidated Subsidiaries)
Topy Enterprises, Ltd.

0.1
(Owned by) 21.4 （0.3）*1 The respective business segments are listed in the Business segment column (excluding other affiliated companies).
*2 Topy America, Inc. and Topy Precision Mfg., Inc. have paid premiums of U.S. $62,999,400 and U.S. $4,950,000, respectively, aside from the capital mentioned above, totaling capital of U.S. $63,000,000 and
U.S. $5,000,000, respectively.
*3 Topy Enterprises, Ltd., Topy America, Inc., Fujian Topy Autoparts Co., Ltd., Topy Undercarriage (China) Co., Ltd., PT. Topy Palingda Manufacturing Indonesia, Topy MW Manufacturing Mexico S.A. de C.V.,
Ring-Techs Guangzhou Co., Ltd., and Asahi Tec Aluminium (Thailand) Co., Ltd. are specified subsidiaries.
*4 Hokuetsu Metal Co., Ltd. and Nippon Steel Corporation issue official financial statements separately.
*5 The values in parentheses in the percentage of voting rights held or owned by column represent indirect holding percentages or percentages of voting rights indirectly owned by the company, which areeach included in the value above.
*6 Non-consolidated subsidiaries and non-equity-method affiliates are not listed.

As of March 31, 2023

As of March 31, 2023

75

TOPY Report 2023

TOPY Report 2023

76