INTEGRATED REPORT 2021

Lighting for Your Safety

Lighting for Your Safety
Keeping people and automotive safe

Corporate
Principles
Corporate Policy
Corporate Message
The KOITO Group Corporate
Behavior Charter

KOITO is a leading company in automotive
lighting equipment delivering safety,
peace of mind and trust to customers formore than 100 years since its
establishment.
Under our corporate message “Lighting for Your Safety,”
the KOITO Group creates customer needs in a variety of
trafﬁc systems and contributes to social development intransportation such as automobiles, railways, aviation,
marine vessels and others, all guided by the theme of “Light.”

Corporate Principles

The KOITO Group Corporate
Behavior Charter

We will contribute to social development
through lighting.

1. Sustainable growth and resolution ofsocial issues

We will step forward to realize our
employees' dreams.

2. Trusted corporate activities

We will support a sustainable society as
one of its members.

Corporate Policy
Innovative ideas and decisive action

KOITO INTEGRATED REPORT 2021

4. Fair information disclosure and constructive
dialogue
5. Respect for human rights
6. Work practice and enhancement of
workplace environments
7. Engagement in environmental issues
8. Contribution to society

Corporate Message
Lighting for Your Safety

Keeping people and automotive safe
2

3. Compliance with social conventions /Global management

9. Rejection of relations with anti-social forces /Comprehensive risk management engagement
10. Role of top management and thoroughimplementation of this Charter
KOITO INTEGRATED REPORT 2021

3

Value Creation
Story

Contents

Corporate Principles/Corporate Message

2

ESG Activities

33

Contents/Editorial Policy

4

Environmental Activities

34

Value Creation Story

Social Activities

43

Staying true to our basic stance to adopt

Governance50

the perspective of customers,

Value Creation Story

5

The KOITO Group's History

6

The KOITO Group's Value Creation Process

8

Corporate Information

63

Materiality

10

The KOITO Group's Value Chain

12

Financial Summaryof the Last 11 Years

64

Message from Top Management

14

Consolidated Financial Statements

66

The KOITO Group's Vision18

Stock Information

70

Business Overview

20

Corporate Information

71

Special Feature:30

The KOITO Group's Activities to Resolve
Social Issues

ESG
Activities

Corporate
Information

the KOITO Group is contributing to materialize a safe
and comfort society by providing high-value
products and services.

Corporate
Information

Editorial Policy
KOITO has started to issue an “Integrated Report” from 2021 to provide shareholders, investors and other stakeholders with a deeper
understanding of our initiatives.
This report gives you an explanation about our business results in FY
2021, ﬁscal year ended March 31, 2021, and our medium- to long-termbusiness strategies.
In order to secure fair and effective disclosure, KOITO issues integrated report both in Japanese and English. We hope this report serves todeepen your understanding of the KOITO Group.

Philosophy andhistory etc.

Integrated
ReportCSR
Information
Environment,social andgovernance

IR
Information
Financialinformation

Reporting Period

FY 2021 (April 1, 2020 to March 31, 2021)

Scope of Report

The KOITO Group (In this report,
KOITO MANUFACTURING refers to
KOITO on a non-consolidated basis)

IssuedJune 2021 (to be issued once a year)

Reference Guidelines

International Integrated Reporting
Framework - International Integrated
Reporting Council (IIRC)
Guidance for Integrated Corporate Disclosure andCompany-Investor Dialogues for Collaborative Value
Creation - Ministry of Economy, Trade and Industry
GRI Standards 2016 - Global Sustainability
Standards Board (GSSB)Note on Future Projections
This report contains future statements
including the KOITO Group's future plans,
strategies and performance.
These future statements are assumptions andbeliefs based on the current available data.
We therefore wish to caution readers thatthe actual results may differ materially fromour expectations.

4

KOITO INTEGRATED REPORT 2021

The KOITO Group's History

6

The KOITO Group's Value Creation Process

8

Materiality

10

The KOITO Group's Value Chain

12

Message from Top Management

14

The KOITO Group's Vision

18

Business Overview

20

Special Feature: The KOITO Group's Activities to Resolve Social Issues

30

KOITO INTEGRATED REPORT 2021

5

Value Creation
Story

ESG
Activities

Corporate
Information

The KOITO Group's History
The foundation of KOITO began in 1915 with the development andproduction of the Japan's ﬁrst fresnel lenses for railway signal lamps.
Since then, we have been contributing to the safe and comfortablesociety by developing lighting equipment for all kinds of transports,

900

including automobiles, railways and even aircraft and ships.

800

600
500
400
300

Net sales (billion yen)

700

200
100

1915

1950

1960

1915

Koito Genrokuro Shoten foundedF o u n d e r G e n r o k u r o Ko i t o fo u n d e d Ko i t oGenrokuro Shoten in Kyobashi-ku, Tokyo (current Kyobashi, Chuo-ku, Tokyo) to sell fresnell e n s e s fo r ra i l w ay s i g n a l l a m p s , w h i c h h esucceeded in the Japan's ﬁrst production in
1912.

1936

Entering the automotive lighting
equipment business

Based on KOITO's experience in supplying headlamps to military motorcycle with sidecars called“Kurogane” in 1932 and three-wheeled trucks in
1933, KOITO has started to supply headlamps
for the A A passenger cars to the automotive
department of Toyoda Automatic Loom Works,
Ltd. (current Toyota Motor Corporation) in 1936.
This commemorates KOITO's par ticipation in
automotive lighting equipment business.

Founding Period 1915〜1945
1915

1970

1980

1990

2000

2021 (FY)

1957

1985

2007

S i n c e 19 51, KO I TO h a s b e e n d e v e l o p i n g
all-glass SB headlamps. Through many trials
and improvements at the Shizuoka Plant, KOITO
succeeded in its commercialization in 1957.
KOITO then started supplying the products tovarious automotive manufacturers, including
Toyota Motor Company (current Toyota Motor
Corporation), from October 1957.

As a result of steady efforts on resiniﬁcating
headlamps to reduce weight and improve
design, KOITO has succeeded in developing
plastic lenses and a BMC reﬂector with evenhigher heat resistance and molding accuracy in
1981. In January 1985, the world's ﬁrst all-resin
aerodynamic-t ype headlamp was adopted in
Toyota Motor “Soara.”

With white LEDs rapidly becoming more efﬁcient,
KOITO developed a headlamp using LEDs as thelight source for low beam. Offering improved
photometric performance and heat dissipation
efﬁciency, they were installed in the Lexus LS
600h in May 2007, becoming the worldʼs ﬁrst
LED headlamp in the market.

1978

1996

2019

With a light source that utilizes arc dischargeb e t we e n e l e c t ro d e s , d i s cha rg e h e a d l a m p s(GDHL) were excellent in increasing light intensity, and has long life and high energy efﬁciency.
As the next-generation lamp, KOITO succeeded
in developing t he lamp as well as a cont rol
circuit called ballast, and were installed in the
Nissan “Terrano” and the Toyota “Mark II” in
1996.

KOITO developed the world's ﬁrst ADB (Adaptive
Driving Beam) system which emits LED light tofast- revolving blade mirrors and ensureshigh-resolution light distribution. It was installedin the Lexus RX in August 2019, becoming theworld's ﬁrst system in the market.

Production and sales of all-glass
sealed beam (SB) headlamps begins

Production and sales of all-resin
aerodynamic-type headlamps begins

Production and sales of
halogen headlamps begins

Halogen bulbs, which have high luminous
intensi t y and excel l ent g la re - p ro oﬁ ng
properties, were standardized in Europe in1971 and in the United States in 1978. In
l i n e w i t h t h e s e t re n d s , KO I TO s t a r te d
producing SB and SSB headlamps incorp orat ing halogen light sources in July
1978.

Reﬂector
Lens
Halogen bulb
Terminal
Main ﬁlament(high beam, run beam)Subﬁlament(low beam,cross-purposes beam)

Production and sales of discharge
headlamps (GDHL) begins

Post-war Recovery and Developing Period 1946〜1980

Production and sales of the worldʼsﬁrst LED headlamps begins

Production and sales of the world's
ﬁrst BladeScanTM ADB begins

Expanding Period 1981〜1999

Koito Genrokuro Shoten founded (Kyobashi, Tokyo)
Fresnel lenses for railway signal lamps introduced

1949

KOITO MANUFACTURING listed on both the Tokyo andOsaka Stock Exchange

1981

Production and sales of the worldʼs ﬁrst plastic lens headlamps
begins1930 Koito Genrokuro Shoten becomes KOITO MANUFACTURING

1955

Enacted1983

North American Lighting, Inc. established (Illinois, U.S.A.)

1961 Transferred a head ofﬁce to Minato-ku, Tokyo

1985“Innovative ideas and decisive action” corporate slogan introduced

1936 KOITO MANUFACTURING CO., LTD. incorporated(capital 2.5 million yen)

1968

Chicago Representative Ofﬁce opens (Illinois, U.S.A.)

1986

Headquarters building completed (Minato-ku, Tokyo)

1943 Shizuoka Plant opens (Shizuoka, Japan)

1970

THAI KOITO COMPANY LIMITED established (Thailand)
Sagara Plant opens (Shizuoka, Japan)

1972

Aircraft equipment and electronics plant opens(Shizuoka, Japan)

1988

Capital interest in Ta Yih Industrial Co., Ltd. acquired (Taiwan)

1990

Production and sales of projector headlamps begins

1977

Haibara Plant opens (Shizuoka, Japan)

1992

Fujikawa Tooling Plant opens (Shizuoka, Japan)

1979

Production and sales of Japan's ﬁrst aerodynamic-type
headlamps begins

1996

Capital interest in Britax Vega Limited acquired (U.K.)

1997

Technical Center opens in Shizuoka Plant (Shizuoka, Japan)
INDIA JAPAN LIGHTING PRIVATE LIMITED established (India)

1999

Britax Vega Limited becomes Koito Europe Limited

1935 Shinagawa Plant opens (Tokyo, Japan)

0

2010

trademarkTo Be a “Global No.1 Supplier” 2000〜Present
2001 Koito Czech s.r.o. established (Czech Republic)
2003 Production and sales of the world's ﬁrst swivel AFS(Adaptive Front Lighting System) begins
2005 Fuzhou Tayih Industrial Co., Ltd. becomes a KOITO subsidiary (China)
KOITO KYUSHU LIMITED established (Saga, Japan)
GUANGZHOU KOITO AUTOMOTIVE LAMP CO., LTD. established (China)
2006 Production of all-glass sealed beam headlamps ends
(Total production: 430 million units)
2010 PT. INDONESIA KOITO established (Indonesia)
2012

North American Lighting Mexico, S.A. de C.V. established (Mexico)

2014 Hubei Koito Automotive Lamp Co., Ltd. established (China)
2015 KOITO celebrates its 100th anniversary
2017 NAL do Brasil Indústria e Comércio de Componentes de Iluminação Ltda.
established (Brazil)
KOITO MALAYSIA SDN. BHD. established (Malaysia)
2019 Capital interest in BrightWay Vision Ltd. acquired (Israel)
2020

6

KOITO INTEGRATED REPORT 2021

Capital interest in Cepton Technologies, Inc. acquired (U.S.A.)
KOITO Development Center opens (Aichi, Japan)

KOITO INTEGRATED REPORT 2021

7

Value Creation
Story

ESG
Activities

Corporate
Information

The KOITO Group's Value Creation Process
Investment inBusiness Model of- A Leading Company inSocial Issues

managerial resources

the KOITO Group

Automotive Lighting Equipment -Prevention of
global warming

Environment

Reduction ofenvironmental impact
substances and waste

Reduction of
trafﬁc accidents

Safety/peaceof mindTechnological development
contributes to materialize
a sustainable society
Enhancement of
product quality
ComplianceCorporate governance
Information security

Corporate
foundation

Human resource
development
Healthy and safe
working environment
Workstyle reform

Disaster prevention

Materiality
P.10

Business Issues● Intensiﬁed competition in theautomobile industry● Progress in technologicalinnovation (IoT/AI)● Growing social demands for CSR

R&D

Procurement

KOITO INTEGRATED REPORT 2021

Marketing(FY 2021)

Financial CapitalIntellectual Capital
R&D expenditures 32.6 billion yen

3,130
Number of patents applied 938
R&D personnel

Net income※ 37.6billion yen

Automotive Lighting Equipment
Contributing to safety and peace ofmind of automotive society

ROE

Ratio of overseas net sales 51.7%

Natural Capital(KOITO MANUFACTURING)

Resin materials 45,635t
Electricity

103,247,000kWh
Utility gas1,921,000㎥
3,070tLPG
672,000t
Water

No・1

Values provided
to society(Safety/peace of mind/trust)Contribution to Resolve
Social Issues

Number of employees 23,799

Social and Relationship Capital

7.4%※Proﬁt attributable to owners of parent

The KOITO Group delivers headlamps with world-classbrightness, instantaneous lighting, low power consumption, and long life. We also produce rear combination lamps and other products by developing cutting-edge technologies to pursue even better safetyand designs. Our products are widely used by automobile manufacturers all over the world.

Human Capital

Ratio of overseas employees 68%

706.3billion yen

Operating income
ratio over net sales 8.0%

Net assets 569.4 billion yen

Capitalexpenditures 37.8 billion yen(FY 2021)

Operating income 56.7billion yen

Total assets 782.1 billion yen

Manufacturing Capital

Creation of
corporate value
Net sales

Aviation Products

Promoting energy efﬁciency and reducing
CO2 emissions in aviation lighting
By adapting LEDs into interior lighting devices (cabinreading lights, ceiling lights, sidewall lights and others)
and exterior lighting devices (landing lights and others),
the KOITO Group provides product with high energy
efﬁciency and long life. These lamps help cutting operational costs while delivering superior reliability.

Corporate foundation to
support our value creation

Resolving

8

Production andQuality Management

Railway and Other Products
Contributing to safe and securedtransportation

The KOITO Group manufactures and sells railway LED
headlamps which improve visibility while lowering power
consumption and seats for railroad cars. We also produce
and sell a wide variety of lighting equipment, from marine
vessels to the roadways and bridges that provide dailytransport, and even to theme parks and stadiums.

P.2
The KOITO Group Corporate
P.10
Behavior Charter
Corporate Governance
P.50
Corporate Principles

Supplier

Protection ofhuman rights

Managerial
resources

P.12

GlobalConservation ofwater resources

Value Chain● Safety and security of

automotive society● Contribution to local

communities

Contribution to Resolve
Environmental Issues● Reduction of CO 2 emissions ofautomobiles, aircraft and railway cars

● Reduction of environmental

impact substances

P.18● Utilization of renewable energysocial issues

KOITO INTEGRATED REPORT 2021

9

Value Creation
Story

Materiality

ESG
Activities

Corporate
Information

Materiality Assessment Process

We believe that our business activities are highly compatible with and relevant to Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015, and can contribute to achievethese goals.
In order to accelerate these initiatives, we have referred to the GRI (Global Reporting Initiative) guidelines and identiﬁed material issues (materiality) to be focused and SDGs to be solved among the various social issues.
We will continue to promote our business activities that contribute to materialize a sustainable society.

STEP

1

Identiﬁcationof issues

We have identiﬁed fulllist of potential social
issues which should be
solved through ourbusiness activities.

STEP

2

Materiality
analysis

We have analyzed theissues based on
importance forstakeholders and the
KOITO Group.

STEP

3

Identiﬁcation ofmateriality andcorrelates with SDGs

We have identiﬁed issuesof “very high” importanceas our materiality, andcorrelated them with
SDGs.

STEP

4

Approval

Material issues wereapproved by the Boardof Directors.

Very highDegree of impact on
stakeholders

The KOITO Group Corporate Behavior Charter
The KOITO Group's basic management policy is to create customer needs and contribute to the progress of society,while also fostering mutually beneﬁcial relationships with all stakeholders, including shareholders, customers, employees, and business partners, all guided by the theme of “Light.”
In accordance with this policy, we have established the following ten principles. We will comply with domestic andoverseas laws and regulations, international rules, and their underlying spirit, and conduct corporate activities inaccordance with corporate ethics.
In addition, with the aim of achieving sustainable growth of society, we will strive to resolve social issues throughour business activities and fulﬁll our social responsibilities.

services, providing appropriate information regarding those products andservices, and fulﬁlling our social responsibility.

Fair information disclosureand constructive dialogue

04

With the purpose of enhancing ourcorporate value, we will disclose corporate information in an appropriate, effective, and fair manner and engage inconstructive dialogue with a wide rangeof stakeholders, including shareholders,business partners, and local residents.

Respect for human rights

05 We will respect the human rights of all
persons.

Engagement inenvironmental issues

07

Guided by t he t heme of “ Eco -fr iendl y
Manufacturing for People and the Earth,”
we will proactively engage in global environment conservation through our business activities.

03

Work practice andenhancement of workplaceenvironments

06

Rejection of relations with anti-social
forces / Comprehensive risk
management engagement

Contribution to society

08

We will be conscious of our responsibility
as a good corporate citizen, and actively
engage in social contribution activities,
and we will contribute to the realizationof a prosperous society.

We will respect the personality, diversity,and character of each of our employees,
regardless of their nationality or gender.
We will also strive to provide a healthyand safe workplace environment in which
all employees can make the best use of
their capabilities and fulﬁll their potential.

09

We will adamantly reject any relations
with and resolutely stand against anti-social forces or groups that pose a threat tocivil life or corporate activities, and we will
engage in comprehensive corporate risk
management in preparation for terrorist
activities, cyberattacks, natural disasters,
and other crises.

Role of top management and thorough implementation of this Charter

10

10

Top management will recognize that fulﬁlling the spirit of this Charter is their own role, and they will be committed to thoroughly informing the
KOITO Group and its supply chain about the Charter and encouraging them to take actions based on the Charter.
Top management will also continually gather opinions from both inside and outside of the company to help establish an effective governancesystem and thoroughly enforce corporate ethics.
In the event that the corporation violates the spirit of this Charter and loses social trust, top management shall take the initiative and fulﬁll its
responsibility by resolving the problem, elucidating the causes, disclosing information, and preventing future recurrences. Additionally, top management will severely punish those involved, including themselves, if appropriate, after clarifying their authority and responsibility.

KOITO INTEGRATED REPORT 2021

Environment

We will gain customers' satisfaction andthrough developing and providing
02 trust
safe and high - qualit y products andImportance in the KOITO Group

Materiality

Safety/peace of mind

We w i l l s t r i ve t o a c h i eve s u s t a i n a b l e
growth and resolve social issues by developing and providing socially beneﬁcial
and safe products and services throughinnovative manufacturing.

We will comply with all applicable laws andregulations and will engage in fair, transparent, and free market competition, as
well as prop er t rade, and resp onsible
pro curement . In our global cor p orate
activities, we will also comply with international rules and local laws, respect local
culture and customs, and maintain soundrelationships with government andgovernment agencies.

● Prevention of global

warming

Relevant SDGs
P.38

● Reduction ofenvironmental impact P.40
substances and waste● Conservation of water
P.41
resources● Reduction of trafﬁc

accidents● Technologicaldevelopment
contributes tomaterialize asustainable society● Enhancement of

product quality● ComplianceCorporate foundation

01

High

Compliance with social
conventions / Global management

Trusted corporate
activities

Sustainable growth andresolution of social issues

Materiality● Corporate governance● Information security● Human resource

development● Healthy and safe

working environment● Workstyle reform● Protection ofhuman rights● Disaster prevention

P.30

P.43

P.44
P.54
P.50
P.57
P.48
P.48
P.47
P.49
P.56

Very highDeclaration of KOITO's Initiatives● We will promote reduction of CO 2 emissions andenvironmental impact substances, and resource
recycling guided by the theme of “Eco-friendly
Manufacturing for People and the Earth.”● We will contribute to the reduction of CO 2
emissions by further improving the light emission efﬁciency and reducing the weight ofmainstay products.
● We will strive to achieve sustainable growth

and resolve social issues by developing andproviding socially beneﬁcial and safe products
and services.
● Looking ahead to autonomous driving society,we will promote product development of sensors (LiDARs and cameras).
● We will gain customers' satisfaction and trust

through developing and providing safe andhigh-quality products and services.

● We will enhance corporate governance andstrengthen compliance to establish sound management system.

● We will strive to protect information assets by

preparing for risks on information security.

● We will strive to provide a healthy and safe

workplace environment in which all employees
can make the best use of their capabilities andfulﬁll their potential.

● We will promote initiatives to respect thehuman rights of all persons.

● We will strengthen our disaster prevention

system throughout the supply chain.

KOITO INTEGRATED REPORT 2021

11

Value Creation
Story

ESG
Activities

Corporate
Information

The KOITO Group's Value Chain
The KOITO Group will demonstrate the strengths of its value chain from R&D
to procurement, production, quality management and marketing to deliver high-value
products and services to society with the aim of enhancing our corporate value.

R&D

OutlineThe KOITO Group makes full use of optics, electronics
and other cutting-edge technologies in the pursuit ofsafety and reliability, and conducts research and development of innovative and environmentally friendly
system products. The KOITO Group's R&D activities arebroadly categorized into basic research and productdevelopment.
Basic researchCentered upon technical center in Japan, the KOITO
Group conducts research to commercialize a new generation of products anticipating market needs throughfurther evolution of our core technologies such as optics,
electronics, machinery, and structures.

Procurement
The KOITO Group selects necessary material andcomponent suppliers for product manufacturing toprocure components.
This selection of suppliers is determined basedon component speciﬁcations, monthly quantities,
unit prices, estimated price of molds and otherfactors. In addition, we audit and approve supplier
plants when engaging in new procurement.
We formulate and manage procurement plans formaterials and components according to the KOITO
Groupʼs production plans.

The KOITO Group not only proposes new technologies toautomotive manufacturers and other customers, but also
develops products accommodating development plans
and required speciﬁcations.

Our Strength

world (Japan, Americas, China, Europe and Asia)● Clear understanding of needs through partnerships with customers, suppliers, external agencies and other such organizations, and its implementation to the products● Provision of safe and reliable products such as
Adaptive Driving Beam (ADB) headlamps to provide better visibility at night● Environmental contributions through energy efﬁciency as well as smaller and light-weight reductions, including the promotion of a transition toLEDs● Rapid response to technical challenges based ona wealth of knowledge and experience● Educational system to develop and strengthen
diverse human resources in technical ﬁelds

Tasks Addressed to
Deep Value Chain● Promotion of research and development themes

12

adapting to rapidly changing technical and market
needs as well as a ﬁercer development race fromconnectivity, autonomous driving, sharing and electricvehicles (CASE) to mobility as a service (MaaS)● Promotion of advanced technical development thathelps materialize a safe, reliable automotive society
and resolve social issues● More efﬁcient product development through the useof various simulations, ICT and other technologies

KOITO INTEGRATED REPORT 2021

The KOITO Group manufactures the products it develops and designs using the materials and products purchased from subsidiaries and suppliers. We audit plants
when star ting the manufacture of new products orwhen changing manufacturing processes at subsidiaries.
We formulate delivery plans based on order estimatesfrom automotive manufacturers and other customers
as well as subsidiaries (unof ﬁcial monthly, yearly,
mid-term and other plans) in addition to conﬁrmed
orders as well as production plans taking applicableinventory and other plans into account.

Marketing
The KOITO Group understands global customer needs,
realizes cooperation with relevant departments andconducts proposal and marketing activities throughpresentations.
We make proposals of next-generation products that
contribute to safety and the environment based ongood customer relationships founded in trust, aiming to
expand its sales channels and proﬁt.

KOITO engages in quality management operations toassure quality throughout the entire Group and formulates qualit y inspection criteria and qualit y control
methods. Everyone involved in manufacturing engages
in quality control activities based on the criteria andquality control methods.

Product development● Global R&D network in ﬁve major regions of the

Production andQuality Management● Global procurement system that allows local sourc-

ing from suitable procurement sites● Enhancement of local procurement to mitigate
the impact related to foreign exchange ﬂuctuations● Sustaining and strengthening of good, strong
relationships with suppliers● Realization of high-level Quality, Cost, Delivery and Development (QCDD) through ongoing improvement activities with the cooperation of suppliers● Preparation of a system to quickly grasp the levelof damage and problems faced by suppliers
when disasters strike and to cooperate with suppliers to take the necessary action● Promotion of CSR/ESG activities throughout
the entire supply chain to materialize a sustainable society● Stable procurement by securing a ﬂexible supply

and strengthening the effectiveness of BusinessContinuity Plans (BCP) in the supply chain● Optimization of supplier portfolios (thoroughcooperation across industries and elements ofcompetition)● Enhancement of CSR/ESG activities throughout
the entire supply chain● Reduction of environmental impacts throughout
the entire supply chain, such as proper management of environmental impact substances andmeasures to prevent global warming● Appropriate production system established by

the KOITO Production System (KPS)● Global production and quality assurance system
in all ﬁve major regions of the world● Designation of the KOITO Shizuoka District as themother plant and support for launching overseas
production sites and measures to address various
problems● Drills and training to pass down and improve thetechnical abilities and skills of employees
throughout the entire Group● Strengthening and continuation of improvement
activities for production sites● Strengthening of competitiveness by improving global

QCDD● Strengthening of quality management that adapts tomore advanced and complex products● Shift to production equipment and processes that
contribute to global environmental conservation andimpact substance reduction● Enhancement of productivity through the use of AI,
IoT and other technologies, such as the realization ofsmart factories● Strengthening of BCP at production sites, such as
more resistant buildings and equipment and better
complimentary supply capabilities● Global information gathering and sales system inall ﬁve major regions of the world● Global top share sales capabilities● Clear understanding of changing and diverse

customer needs as well as speciﬁc sales capabilities● Sustaining and strengthening of good, strong
relationships based on close communication withcustomers● Product proposals of light sources and lighting
technology cultivated in the automotive lighting
equipment business for adoption in aviation andrailway products● Strengthening of marketing systems that reﬂect cus-

tomer and market needs● Proposals of attractive products that help materializea safe, reliable automotive society and resolve social
issues● Higher customer satisfaction● Education and training to foster and strengthen compliance awareness

KOITO INTEGRATED REPORT 2021

13

Value Creation
Story

ESG
Activities

Corporate
Information

Message from Top Management
The KOITO Group will contribute to materialize a sustainable

On the earnings front, although KOITO strongly implemented cost reduction and rationalization in responseto the decrease in sales, operating income, recurring
proﬁt and proﬁt attributable to owners of parent decreased year on year. This was at tributable to theinvestment to meet new orders, and investment in R&D
activities for the future growth, such as LiDARs.

society and resolve social issues through our“Lighting for Your Safety” corporate message.

As for F Y 2022, the global automobile production
volume is expected to recover, even though the effectsof the novel coronavirus (hereinafter “COVID-19”) continue, and the constraints in the supply and demand of
semiconductors remain.
As a result, the KOITO Group's net sales for FY 2022
are expected to increase year on year. Accordingly,
even though we are planning to make further investment to meet new orders and promote R&D activities
for the future growth, each of the operating income,recurring proﬁt, and net income attributable to theowners of the parent is expected to increase year on
year.
The KOITO Group will continue our efforts to achieve
higher earnings to meet the expectations of all stakeholders.

Since our founding in 1915, the KOITO Group has
developed and commercialized attractive products
through innovative ideas and contributed to the safety
and peace of mind of society through our corporate
principles “to create customer needs and contribute to
the progress of society, guided by the theme of 'Light'”
and the “innovative ideas and decisive action” corporate
policy. The KOITO Group recognizes these activities arehighly compatible with and relevant to Sustainable Development Goals (SDGs) adopted by the United Nations.
To further promote and vitalize our business activities
from SDGs as well as Environmental, Social and Governance (ESG) perspectives, we revised the KOITO Group
Corporate Behavior Charter, which is our corporate
code of conduct, in January 2021 and have identiﬁed
14 materialities (material issues) by associating thesustainable growth of the KOITO Group with solutions
to social issues. By resolving these issues, we aim tocontribute to materialize a sustainable societ y andbecome a company trusted by all of our stakeholders.

Response to the Spread of COVID-19
City lock downs, rapid decline in automotive production
and demand as well as other such factors have greatly
impacted the KOITO Group causing temporary production adjustments and stoppages. However, the KOITO
Group has implemented various measures in accordance with governmental and municipal requirements
to prevent the spread of COVID-19 infection with thesafety of our customers, business partners, employees
and their families as our top priority.

Review of FY 2021 and Forecast
for FY 2022
In FY 2021, the production volume decreased year on
year for both domestic and export vehicles in the Japanese automobile industry. In overseas, the production
volume increased in China etc., year on year. However,
the global automobile production volume as a whole
has decreased year on year due to the decrease in the
production volume in North America, Europe, ASEAN
countries, India and other regions.
In this climate, despite an increase in new orders in themainstay automotive lighting equipment segment and ashift in automobile lamps to LED, the KOITO Groupʼs net
sales decreased year on year due to a year on year decrease in sales in Japan, Nor th America, and Asia,
caused by a decrease in the automobile production
volume.
Chairman and CEO

14

KOITO INTEGRATED REPORT 2021

President and COO

To maintain the safety and continuity of our businessactivities in this time of crisis, we looked at these challenges as an important opportunity to strengthen andenhance the development, production and supply systems in all ﬁve major regions of the world (Japan, Americas, China, Europe and Asia), including a mutually complementary supply network within the KOITO Group. By
recognizing the clear risks arising from centralized procurement from a single entity, we are identifying materials and components acquired by centralized purchasing and are reevaluating proper procurement methods
and ideal supply chains from perspectives to reduce
costs and risks.
Striving to turn the COVID-19 crisis to an opportunity,w e a re p ro m o t i n g a n d i m p rov i n g m o re e f ﬁ c i e n t
operations using IT and ﬂexible employee work styles
from staggered work hours to teleworkings, whichshould help foster further growth of the KOITO Group.

KOITO INTEGRATED REPORT 2021

15

Value Creation
Story

ESG
Activities

Corporate
Information

Aiming to become a “Global No.1 Supplier”
The automotive industry is facing a once-in-a-century transformational period illustrated by CASE
as well as MaaS. In addition, worldwide competition and optimal global production systems are
ever accelerating due to the advancement of globalization.
During this transformation, the KOITO Group isaccelerating various initiatives toward its mediumto long-term growth with the goal of becoming a“Global No.1 Supplier” w it h t hree key words:“World-leading Technologies and Ingenuity,” “Sustainable Growth” and “A Trusted Company.”

World-leading Technologies
and Ingenuity
The KOITO Group has created technologies andproducts which have always pioneered eachgeneration and market, and developed its businesses by responding to customer needs to materialize a safe, reliable society of transportation
founded in our “innovative ideas and decisive
action” corporate policy.
Technical capabilities are an essential competitive power of the KOITO Group. Therefore, wehave established a global net work in all ﬁve
major regions of the world, centered upon
KOITO technical center. Aiming to reduce trafﬁc
accidents by prov iding pro ducts t hat help
ensure visibility in night driving from LED headlamps to Adaptive Driving Beam (ADB) headlamps, the KOITO Group is enhancing its product variations and lowering costs toward greater
market prevalence targeting a 100% adaption
rate of LED headlamps and 50% adaption
rate of ADB by FY 2031.
In addition, we are undertaking the challenge
of developing LiDAR, all-weather cameras andother sensing technology for an autonomous
driving society with the goal of practical implementation by 2023.
To achieve our future growth, the KOITO Groupwill strive to improve productivity and creativity
in pursuit of added value through digital transformation (DX) while continuing to actively
invest in research and development.

R&D Network in Five Major
Regions of the WorldGUANGZHOU KOITO
Technical Section

KCZ
Technical Section

16

KOITO INTEGRATED REPORT 2021

THAI KOITO
Technical Center

KOITO
MANUFACTURING
Technical Center

NAL
Technical Center

Sustainable Growth
We believe that human resource development
is the driving force of our corporate growth.
With the keywords of “communication andcollaboration,” the KOITO Group encourages
every employee to share their knowledge, experience, ﬁndings, and problem awarenessthrough various means to build energetic
worksites where every member can work on
tackling problems.
We strive to enhance work-life balance, promote diversity, expand human resource development programs and rebuild sys temat ic
human resource development achievement
evaluations in an effort to ensure every emp l oy e e c a n ex p e r i e n c e t h e i r g r o w t h a n d
become motivated to take on new challenges.

A Trusted Company

New Challenge: To Illuminate
the World
The KOITO Group aims to materialize a sustainable society and resolve social issues as a leading company of automotive lighting and electrical equipment and will strengthen its businessa c t i v i t i e s t h ro u g h o u r “ L i g h t i n g fo r Yo u r
Safety” corporate message.
Under our corporate slogan, “New challenge: To illuminate the world,” we will continue to develop thenewest and the best technologies, improve performance and quality of our products, promote training for employees to raise their performance andskills, as well as stay true to our basic stance toadopt the perspective of customers to supply products and services that will meet their expectations.
We would greatly appreciate your continued understanding and support.
June 2021

To ensure thorough compliance with laws andregulations, social conventions, corporate
ethics and internal rules, the KOITO Group willcontinue to raise compliance awareness ineach and ever y employee and fur therstrengthen trust from all of its stakeholders.
In recent years due to the accelerated transition to electric vehicles, higher qualit y has
become even more important as automotive
parts become more advanced and complex.
The KOITO Group strengthens on-site capabilities and investigates the true causes of defects through information sharing about any
problems or challenges discovered, mutual understanding of pre- and post-processes, andas su rance of ea ch pie ce w i t h t he g oal ofachieving a level of quality chosen by customers through the quality and trust of being
global No. 1.
In terms of the environmental activities, we are
reducing CO 2 emissions and environmental
impac t subs tances as well as promoting
resource recycling and expanding “Eco-friendly
Manufacturing for People and the Earth” consciousof a decarbonized society and carbon neutrality.
We are also preparing for disasters andspearheading comprehensive risk management
to strengthen our corporate capabilities.

KOITO INTEGRATED REPORT 2021

17

Value Creation
Story

The KOITO Group's Vision“Global No.1 Supplier”［ Three Pillars ］+

Sustainable
Growth+The KOITO Group will achieve sustainable growth by engaging in initiatives such as the creation of value that
anticipates the needs of society and customers, building of a ﬁrm proﬁt structure and the development ofdiverse human resources.
●We will strengthen our global business framework through the enhancement of development, production and sales systems
globally and the conﬁguration of global information infrastructure and networks revolutionizes work style and information
sharing with our overseas business entities.
●We will improve our employees' work-life balance by introducing teleworking system as new normal work styles, andpromote active participation of women, senior employees and other diverse human resources.
●We will also establish a systematic education and training system by expanding curriculum to include content such as logical thinking and various methods of expression while promoting the development of human resources who can experience
growth and become motivated to take on new challenges.

TargetA Trusted
Company(FY 2026)
Number of women insenior management

Speciﬁc Measures (Strategies)
TACTICS

01

Enhance a system torespond to the ﬁve major
regions of the world (Japan,
Americas, China, Europe
and Asia), such as further
enhancements to productdevelopment, manufacturing and sales functions of
the Group.

TACTICS

02

Respond to future changes in mobility and develop advanced technologies anticipating customer and market needs aswell as rapidly commercialize and bring attractive products to market
in a timely manner.

TACTICS

03

Monthly average
overtime hours

TACTICS

Pursue the highest
quality and safety standards, advance environmental conser vationand strengthen compliance.

04

Further reinforce the
proﬁt structure and corporate constitution by
securing and effectively
allocating resources.

1 World-leading Technologies and Ingenuity
The KOITO Group will work to develop world-ﬁrst technologies and products such as the new technology driving the next generation of LED, innovative designs, revolutionary new materials and work methods, which contribute to the safety and security of a transportation society.
●We will deliver attractive products to customers worldwide at an early stage andcontribute to the safety and security of a transportation society by further promoting automotive lamp's transition to LED and ADBs, as well as reducing its
weight. Moreover, we will cooperate and coordinate with the Group companies
and external agencies, such as startup companies and universities, to develop
LiDAR, all-weather cameras and other such technologies.
●We will reinforce business activities in marketing, aircraft component andot h e r d i v is i o ns to ex pa n d o u r s a l e s by d eve l o p i n g a n d co m m e rcia l izi n g
unprecedented products which offer new value to the market.

LED adoption ratio
ADB adoption ratio※

Result(FY 2021)

Plan(FY 2022)

Forecast(FY 2026)

64%

74%

90%

5%

8%

Note: ADB adoption among the KOITO Group's headlamps

18

KOITO INTEGRATED REPORT 2021

Corporate
Information

2 Sustainable Growth

The KOITO Group conducts business activities based on the three pillars of “World-leading Technologies and Ingenuity,” “Sustainable Growth” and “A Trusted Company” with the goal of becoming a “Global No.1 Supplier.”

World-leading
Technologies
and Ingenuity

ESG
Activities■ Worldʼs ﬁrst BladeScanTM ADB-equipped
Toyota vehicle: Lexus RX

25%

17 hours or less

(KOITO MANUFACTURING)

3 A Trusted Company
The KOITO Group will strive to gain trust of all of our stakeholders by providing safe and eco-friendly products
to the market, promoting quality-ﬁrst manufacturing, improving employee motivation and ensuring thoroughcompliance.
●We will promote CSR from thorough compliance to the achievement of mutual prosperity with customers and business partners and contribution to shareholders and local communities.
In addition, we will coexist with the Earth, reduce environmental impacts, and promote the use of renewable energy while
preparing for disasters and thoroughly managing other risks to further strengthen trust from all of our stakeholders.
●As products become more advanced and complex, we will promote quality assurance initiatives through active cooperation with all departments from research and development to design, evaluation, testing, production and even our
suppliers to prevent the recurrence of any quality issues in the market, delivery or processes.
●We will strengthen on-site capabilities and investigate the true cause of defects through information sharing about any
problems or challenges discovered, mutual understanding of pre- and post-processes, and assurance of each piece withthe goal of achieving the quality and trust of being global No. 1.

Target(FY 2021)

Result(FY 2021)

CO2 emissions
intensity

13% reduction
from FY 2016

17% reduction
from FY 2016

Waste generated
per unit

18% reduction
from FY 2016

31% reduction
from FY 2016

Water usage per unit

9% reduction
from FY 2016

27% reduction
from FY 2016

250 t or less

220 t

VOC emissions■ Concept model equipped with thenext-generation headlamp

4 times than thenumber of FY 2015

Shareholders
and Investors
Local
Communities

Customers

Business
Partners

Employees(KOITO MANUFACTURING)
KOITO INTEGRATED REPORT 2021

19

Value Creation
Story

Business Overview

Global Network

The KOITO Group is developing, manufacturing and selling lighting equipment for all
kinds of transports, including automobiles, railways and even aircraft and ships.
Other Businesses

16.1

Non-automotive Electrical
Equipment Business39.0

billion yen

Corporate
Information

ESG
Activities

billion yen

Consolidated sales
by business segments

The KOITO Group consists of 31 companies located in 13 countries worldwide. We provide products
and services to customers all over the world, through our global network led by ﬁve major regions of
the world (Japan, Americas, China, Europe and Asia). By accurately capture the customer needs in
different countries, with its global perspective, all companies in the KOITO Group are expanding its
development and production system. Based on the stance of “customer-ﬁrst,” KOITO continues topursue better operations to keep Quality, Cost, Delivery and Development (QCDD) to the highest
level.
Through our mutually complementary supply network among afﬁliated companies that leverage our
global network, we are stably providing products and services to customers worldwide even amid the
COVID-19 pandemic.
●Head Ofﬁce

706.3

Automotive Lighting
Equipment Business651.2

billion yen(FY 2021)

billion yen

NORTH
AMERICA

3.9%

20.3%
CHINA

NAL Flora Plant

14.7%

KEL

JAPAN

FUZHOU KOITO TAYIH
GUANGZHOU KOITO
BWVBelgium Ofﬁce

48.3%

Hubei Koito

THAI KOITO
Bangplee Plant

NAL Paris Plant
NAL Salem Plant

Detroit Ofﬁce
KPS

Seattle Ofﬁce

NAL Indiana Tooling Plant

KOITO MANUFACTURING

NAL Alabama Plant

R&D Lab in
Silicon Valley
THAI KOITO Prachinburi Plant

France Ofﬁce

Ta Yih Industrial

IJL Bawal Plant
IJL Chennai Plant■ LED headlamps●Overseas Representative Ofﬁces

EUROPEKCZ

Automotive Parts (Headlamps)●Overseas Subsidiaries and Afﬁliates●Overseas Technical Associates

INDONESIA KOITO

NAL Mexico

KOITO MALAYSIA

SOUTH
AMERICA

ASIA

12.2%

0.6%

NAL Brasil■ LED headlamps for motorcycles

Automotive Parts (Rear Combination Lamps and Others)■ LED rear combination lamps■ Side turn signal lamp

Parts for Railroad, Aircraft, Maritime and Others■ Headlamps for railroad cars

20

KOITO INTEGRATED REPORT 2021

■ Interior lighting devices for aircraft■ Seats for railroad cars

■ Lamps for stadiums● Overseas Subsidiaries and Afﬁliates● Domestic Subsidiaries and Afﬁliates

North American Lighting, Inc. (U.S.A.)

KOITO KYUSHU LIMITED

North American Lighting Mexico, S.A. de C.V. (Mexico)

Koito Transport Co., Ltd.

KPS N.A., INC. (U.S.A.)

Aoitec Co., Ltd.

NAL do Brasil Indústria e Comércio de Componentes deIluminação Ltda. (Brazil)

Shizuokadenso Co., Ltd.

Koito Europe Limited (U.K.)

Fujieda Auto Lighting Co., Ltd.

Koito Czech s.r.o. (Czech Republic)

Shizuoka Wire Harness Co., Ltd.

GUANGZHOU KOITO AUTOMOTIVE L AMP CO., LTD. (China)

Haibara Machine and Tools Co., Ltd.

Hubei Koito Automotive Lamp Co., Ltd. (China)

Shizuoka Kanagata Co., Ltd.

FUZHOU KOITO TAYIH AUTOMOTIVE L AMP CO., LTD. (China)

Koito Insurance Services Co., Ltd.

THAI KOITO COMPANY LIMITED (Thailand)

Takeda Suntech Co., Ltd.

PT. INDONESIA KOITO (Indonesia)

New Fuji Co., Ltd.

Ta Yih Industrial Co., Ltd. (Taiwan)

KOITO ELECTRIC INDUSTRIES, LTD.

INDIA JAPAN LIGHTING PRIVATE LIMITED (India)

Minatsu, Ltd.

KOITO MAL AYSIA SDN. BHD. (Malaysia)

Okayama Industry Co., Ltd.

Nissei Industries Co., Ltd

BrightWay Vision Ltd. (Israel)

KOITO INTEGRATED REPORT 2021

21

Value Creation
Story

Net sales [Japan]

JAPAN

Corporate
Information

Share of sales [Japan]
FY 2021(¥ billions)

In FY 2021, domestic automobile production volume for both domestic and export
vehicles decreased drastically year on year to less than 8 million unit.

ESG
Activities

400

Despite an increase in new orders and ashift in automobile lamps to LED, sales inJapan decreased 11.1% year on year to¥341.0 billion due to a decrease in the domestic automobile production volume.

300
200

48.3%

100
0

KOITO MANUFACTURING

KOITO KYUSHU LIMITED

Despite the increase in new orders and a shift in automobile lamps to LED, net sales of KOITO
MANUFACTURING for FY 2021 decreased 12.4% year on year to ¥312.2 billion.
On the earnings front, although KOITO implemented rationalization, operating income decreased 17.3% year on year to ¥21.1 billion, recurring proﬁt decreased 18.3% to ¥38.1 billion, andnet income decreased 8.6% to ¥38.0 billion, due to a decrease in sales, increased R&D expenses
and depreciation cost for capital investment to meet new orders.
KOITO made total capital expenditures of ¥12.1 billion primarily for the development of new
products and model changes in the automotive lighting equipment segment, and for new facilities
needed for rationalizations and cost-cutting measures, as well as molds and industrial tools.

KOITO KYUSHU LIMITED is responsible forsupp or t ing au tomobile pro duc t ion in t he
Kyushu and Chugoku region by various automakers, in conjunction with building a mutually complementar y supply net work andstructure through collaboration with KOITO
MANUFACTURING.

2019

2020

2021 (FY)■ KOITO KYUSHU Head Ofﬁce and Plant

Non-automotive Electrical Equipment BusinessIn the non-automotive electrical equipmentb u s i n e s s , KO I TO EL ECT R I C I N D US T R I ES ,LTD. and other subsidiaries manufacture andsell control systems and seats for railroadcars, equipment for information, trafﬁc systems and others.
■ KOITO MANUFACTURING Shizuoka Plant■ KOITO MANUFACTURING Haibara Plant■ KOITO ELECTRIC INDUSTRIES Head Ofﬁce and Fujinagaizumi Plant■ KOITO MANUFACTURING Sagara Plant

22

KOITO INTEGRATED REPORT 2021

■ KOITO MANUFACTURING Fujikawa Tooling Plant

KOITO INTEGRATED REPORT 2021 23

Value Creation
Story

Net sales [North America]

NORTH AMERICAIn FY 2021, automobile production in North America decreased year on year to the
13 million unit level.
In North America, KOITO operates automotive lighting equipment business in the
U.S.A. and Mexico.

United States
In the U.S.A., KOITO operates business at North American Lighting, Inc. (NAL). NAL conducts production operations at four plants: Paris, Flora and Salem in Illinois, and a plant in Alabama. As thelargest independent lighting equipment manufacturer in North America, NAL supplies automotive
lighting equipment to U.S.-based automotive manufacturers and to local plants of Japanese automotive manufacturers. NAL also produces dies for plastic moldings at a tooling plant in Indiana.
In research and development, NAL conducts product development at its Technical Center in thecity of Farmington Hills in Michigan.
In the non-automotive electrical equipment business, KPS N.A., INC. manufactures and sells
electrical components for railroad cars.

Despite an increase in new orders
and a shift in automobile lamps
to LED, sales in North America
decreased 21.2% year on year to¥143.4 billion due to a decreasein automobile production volume
and the effect of currency exchange.

(¥ billions)

ESG
Activities

Corporate
Information

Share of sales [North America]
FY 2021

250

200
150

20.3%

100
50
0

2019

2020

2021 (FY)

MexicoNorth American Lighting Mexico, S.A. de C.V.
(NAL Mexico), which commenced its operations in September 2014, responds to the
expanding automotive production in Mexico.

■ NAL Mexico

SOUTH AMERICAIn FY 2021, automobile production in South America decreased year on year to the
2.2 million unit level.
Despite an increase in new orders,sales in South America decreased
4.1% year on year to ¥4.5 billion
due to a decrease in automobile
production volume and the effectof currency exchange.

■ NAL Head Ofﬁce (Paris)

Net sales [South America](¥ billions)Share of sales [South America]
FY 2021

5

4
3

0.6%

2
1

■ NAL Paris Plant■ NAL Flora Plant■ NAL Salem Plant

Brazil

0

2019

2020

2021 (FY)In order to respond to the growing automot ive market in Sou t h A merica , in Januar y
2017, the KOITO Group established NAL do
Brasil (NAL Brasil), a manufacturing subsidiary in São Paulo State, Brazil. The subsidiary
commenced operations in May 2018.
■ NAL Alabama Plant■ NAL Indiana Tooling Plant■ NAL Technical Center■ NAL Brasil

24

KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021 25

Value Creation
Story

ESG
Activities

Corporate
Information

CHINA

EUROPE

Automobile production in China increased to the 27 million unit level in FY 2021.

Automobile production in Europe decreased from the previous ﬁscal year to 12 million units in FY 2021.
In Europe, KOITO operates businesses in the U.K. and Czech Republic.

Net sales [China]

Share of sales [China]

Net sales [Europe]

FY 2021(¥ billions)

40

90
60

14.7%

Sales in Europe decreased 21.1%
year on year to ¥27.6 billion due to adecrease in automobile production
volume.

30
0

FY 2021(¥ billions)

120

Sales in China increased 10.4% year
on year to ¥103.4 billion due to anincrease in automobile production
volume.

Share of sales [Europe]

30
20

3.9%

10

2019

2020

0

2021 (FY)

2019

2020

2021 (FY)

United Kingdom
KOITO has been developing its automotive lighting equipment business in China through 3 companies: GUANGZHOU KOITO AUTOMOTIVE LAMP CO., LTD. (GUANGHZOU KOITO), Hubei Koito
Automotive Lamp Co., Ltd. (Hubei Koito), and FUZHOU KOITO TAYIH AUTOMOTIVE LAMP CO.,LTD. (FUZHOU KOITO TAYIH).
In research and development, KOITO is conducting product development at the Technical Section in GUANGZHOU KOITO.

In the U.K., KOITO has been producing automobile lighting equipment at Koito Europe Limited (KEL) since 1996, as KOITOʼs ﬁrst production base in Europe.

Czech Republic

26■ GUANGZHOU KOITO■ GUANGZHOU KOITO Technical Section■ Hubei Koito■ FUZHOU KOITO TAYIH

KOITO INTEGRATED REPORT 2021

■ KEL

In the Czech Republic, KOITO produces automobile lighting equipment at Koito Czech s.r.o.
(KCZ). To respond to increasing new orders, KOITO expanded its plant in KCZ, and commenced
operations in May 2020.
R&D activities are conducted at its Technical Section, and a wide range of businesses arebeing carried out, from gathering technological information to developing and designing for
local and Japanese automakers.

■ KCZ■ KCZ Technical Section

KOITO INTEGRATED REPORT 2021 27

Value Creation
Story

Net sales [Asia]

ASIA

FY 2021120

Despite a shift in automobile lamps toLED, sales in Asia decreased 15.2%
year on year to ¥86.2 billion due to adecrease in automobile production
volume and the effect of currency exchange.

100
80
60

12.2%

40
20
0

2019

2020

2021

(FY)

ThailandIndia

In Thailand, which is the center of the Asian automotive industry, KOITO supplies automotive
lighting equipment to all local Japanese automotive manufacturers. The products are manufactured in 2 plants in THAI KOITO COMPANY LIMITED (THAI KOITO): Bangplee Plant and Prachinburi Plant. Furthermore, KOITO is strengthening its development systems in the Asian region led
by THAI KOITO Technical Center.

In India, where the automotive industry is expected to grow in the long term, KOITO is conducting business in INDIA JAPAN LIGHTING PRIVATE LIMITED (IJL). IJL manufactures automotive
lighting equipment at 2 plants: Chennai Plant and Bawal Plant.

■ THAI KOITO Bangplee Plant■ THAI KOITO Prachinburi Plant

Corporate
Information

Share of sales [Asia](¥ billions)

In FY 2021, compared to the previous year, Asian automobile production volume decreased in ASEAN counties, India and other regions.
In Asia, KOITOʼs business is conducted in Thailand, Indonesia, Taiwan, India and Malaysia.

ESG
Activities■ THAI KOITO Technical Center■ IJL Chennai Plant

Indonesia

Taiwan

Malaysia

In Indonesia, KOITO produces lamps for automobiles and motorcycles at PT. INDONESIA
KOITO. In March 2019, KOITO expanded plants
in Indonesia to respond to increasing orders.

In Taiwan, operations are conducted by Ta Yih
Industrial Co., Ltd. (Ta Yih Industrial), in which
KOITO took an equity interest in 1988.

In Malaysia, which is the third largest automotive production country in the ASEAN regions,
the KOITO Group established KOITO MALAYSIA SDN. BHD. (KOITO MALAYSIA) in October
2017. The subsidiary commenced operations in
November 2019.

■ IJL Bawal Plant■ KOITO MALAYSIA■ INDONESIA KOITO

28

KOITO INTEGRATED REPORT 2021

■ Ta Yih Industrial

KOITO INTEGRATED REPORT 2021 29

Value Creation
Story

ESG
Activities

Corporate
Information

Special Feature:
The KOITO Group's Activities to Resolve Social Issues

Improving Safety with the World's First
BladeScanTM ADB System which“Manipulates Light”■ADB adoption targets (global)

The KOITO Group is committed to materialize a safe and secured automobile society by developing products that contribute to reduce trafﬁc accidents. As part of this effort, we are promoting development
and adoption of ADB (Adaptive Driving Beam) systems.

100
80
60
40
20
（%）0

50
25

5
2021

2026

2031 (FY)High Beam Contributes to Reduce Accident Mortality
The number of trafﬁc accident deaths in Japan is about 3,000 per year. Among them, fatal accidents at dusk (17-19
o'clock range) account for the largest proportion. “Vehicle-to-pedestrian” accidents occur most frequently from thedusk to nighttime, which is two to four times larger than daytime accidents. It can be inferred that deterioration ofdrivers' visibility can be one of the causes for trafﬁc accidents with pedestrians. In addition, an analysis of “vehicle-to-pedestrian” fatal accidents occurrence shows that a considerable number of accidents were likely to have been
avoided if the driver had utilized high beam.
High beam, which allows drivers to detect pedestrians from a greater distance, is effective in preventing trafﬁc accidents in dark driving conditions.
■Number of “vehicle-to -pedestrian” death
accidents by time period (2015-2019 cumulative)

Daytime(excluding dusk)

Nighttime

Approx. 4 times

（44%）

Dusk
(cases) 0

Shading
area

99

295.2

(excluding dusk)

595
100

200

300

400

500

600

126

（56%）

225 (cases) in total※Prepared based on the National Police Agency's “Preventionof Nighttime Pedestrians Accidents through the Advanced
Use of High Beam”
https://www.npa.go.jp/bureau/trafﬁc/anzen/highbeam.html

Array TM ADB system
Own vehicle

Preceding vehicle
Pedestrian

3 2m
BladeScanTM ADB system

Preceding vehicle

Own vehicle

Pedestrian

56m■ ADB system can improve drivers' visibility

30

KOITO INTEGRATED REPORT 2021

BladeScanTM ADB system

Blade Mirrors(Reﬂectors)■Accidents with a low probabilityof collision avoidance

Driving with high beam on offers much better visibility. However, as it causes glare for other drivers, drivers need to switch highbeam into low beam manually when they encounter with other vehicles. This troublesome manipulation and the situation where highbeam can only be used in limited conditions in Japan, where trafﬁc volume is high and the road range is relatively narrow, hasavoided drivers to drive with high beam all the time. As a solution to these problems, KOITO has developed an ADB system in 2012.
The system uses an in-vehicle camera to identify and dim preceding vehicles. This allows drivers to drive with high beam all thetime and signiﬁcantly improved their visibility. The most popular ADB system is an “Array TM” ADB, which controls shaded area byalternating the illumination of LEDs arranged laterally, and can prevent preceding and oncoming vehicles from glare. However,
KOITO has confronted with a new challenge. As lighting segments were proportioned to the number of LEDs, if we were to improve
the performance of Array TM ADB system, we had to increase the number of LEDs as well. As an increase in the number of LEDsalso leads to an increase in the unit size, we could not enhance ADB performance without increasing costs. How can we achieveprecise light distribution without increasing the number of LEDs? Through a lot of trial and error, KOITO has developed the world's
ﬁrst “BladeScan TM ADB,” developed based on completely different and innovative ideas than the conventional system. The new
system has contributed to improve safety signiﬁcantly by enabling drivers to identify pedestrians from a distance.

ADB system

Array TM ADB system

Scans lightlaterally■Accidents that are likely to havebeen avoided

Improving Drivers' Visibility by ADB System

Low beam

BladeScanTM ADB adopts innovational “scanning method,” instead of conventional “ArrayTM.” It utilizes LED lights reﬂected on a fast-rotating mirror and allows the LEDs to cast their light laterally to create an illumination surface with anafterimage of the light. The system turns off the light while it passes through the area to be shaded and alternates theillumination of the LEDs, and delivers more precise control over the shading effect than the conventional ADB system.
However, to illuminate the front with sufﬁcient light intensity, we had to move large mirrors at high speed. As a resultof repeating various trial and error, we have developed a mechanism which rotates disk-type mirrors. By rotating a blade
mirror combined by multiple twisted-shaped mirrors, this mechanism allowed us to change light reﬂection direction.
BladeScanTM ADB, which “manipulates light,” achieved precise light distribution equivalent to 300 segments swith 12
LEDs.
It was ﬁrst adopted by Toyota Motor “Lexus RX” in 2019, and are expected to further adopted to a wide range of vehicles. The KOITO Group will continue contributing to reduce trafﬁc accidents by utilizing light manipulation technologies.

■Probability of collision avoidance by high beam

153
Approx.
2 timesDeveloping and Commercializing BladeScanTM ADB

Lens

Unable to adjust
shading range

LED■ Outline of BladeScan TM ADB system

Fine adjustment ofshading range■ Comparison between Array TM and BladeScanTM ADB system

Our Advanced Technology and Contribution to
Safety Received High Evaluations
BladeScan TM ADB has won numerous awards, including “CES2020 Innovation
Awards” by CES, one of the world's largest electronics trade shows sponsoredby Consumer Technology Association (CTA), in recognition of its innovative
lighting technologies and its contribution to safe driving.
Winning
PeriodSponsoring Organization

January 2020

CTA (Consumer Technology
Association)

July 2020Society of Automotive
Engineers of Japan, Inc.

October 2020

MONODZUKURI Nippon
Conference

March 2021

The Japan Society of
Mechanical Engineers

Awards■ CES2020 Innovation Awards

CES2020 Innovation Awards
70th Society of Automotive
Engineers of Japan Award“Technology Development Award”
2020 Super Manufacturing
Parts Grand Prize“Nippon Brand Award”
2020 The Japan Society of
Mechanical Engineers Award(Technology)■ 2020 Super Manufacturing Parts Grand
Prize “Nippon Brand Award”■ Comparison between Array TM and BladeScanTM ADB system

KOITO INTEGRATED REPORT 2021

31

Value Creation
Story

ESG
Activities

Corporate
Information

Special Feature: The KOITO Group's Activities to Resolve Social Issues

Providing Optimal Lighting forAutonomous Driving Vehicles

ESG Activities
The KOITO Group's basic management policy is to

Looking ahead future autonomous driving society, KOITO is working to develop and commercialize
lighting and sensing technologies that materialize safety, peace of mind, and comfort. We are accelerating development efforts toward the early commercialization of next-generation products, such as
conducting R&D with domestic and overseas startup companies and universities.

create customer needs and contribute to theprogress of society, while also fostering mutually
beneﬁcial relationships with all stakeholders,
including shareholders, customers, employees,
and business partners, all guided by the theme of “Light.”●Next-generation ADB- Supporting drivers Next-generation ADB system delivers the optimal lighting by minimizing shaded areas and maximizing the driverʼs visibility during nighttime driving. It shades pedestrians to avoid glare and can also locally dim the lightagainst objects such as trafﬁc signs.

■ Next-generation ADB headlamp (concept model)●Development of Sensing Technology- Supporting vehicles and pedestrians We are working to develop LiDAR that can accurately
monitor the shape and distance of distant obstacles, aswell as all-weather cameras that can accurately detect
them even under bad weather conditions such as rain,
fog and snow. By installing surrounding monitoring sensors into headlamps and rear combination lamps at four
corners of the vehicle, these lamps protect sensors
from dirts and keep them in optimal condition, achieving 360°monitoring of the surroundings.

LiDAR
Camera■ Sensor lighting module (concept model)●Communication Lamps- Supporting vehicles and pedestrians Utilizing its road projection and displaying functions,communication lamp conveys the movement of the vehicle to the surrounding vehicles and pedestrians
instead of drivers. It contributes to safety of autonomous driving society by enabling vehicles-to-pedestrians communication.

■ Image of road projection●Smart Transportation Infrastructure- Supporting reliable transportation In the vicinity of intersections, street lights and trafﬁcsignals with LiDARs and cameras detect pedestrians andvehicles in a blind spot of the driver. By sharing theseinformation with surrounding vehicles and drivers, smart
transportation infrastructure can contribute to reduce
trafﬁc accidents and support smooth transportation.

Environmental Activities

34

Social Activities

43

Governance50■ Smart street light (concept model)

32

KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021 33

Value Creation
Story

Environmental Activities

Oversees environmental-related committees and decides
the direction on measures regarding signiﬁcant environmental issues

Water Conservation Subcommittee
Environmental Conservation Committee at each plant

34

KOITO INTEGRATED REPORT 2021

(Secretariat) Safety andEnvironment Department■Environmental certiﬁcation acquired in the KOITO Group

July 2000

Overseas subsidiaries

Domestic subsidiaries

The latest
renewal date

January 2000

ISO 14001

January 2021

KOITO KYUSHU

North American Lighting (U.S.A.)

AoitecNorth American Lighting Mexico (Mexico)

Shizuokadenso

Koito Europe (U.K.)

Nissei Industries

Koito Czech (Czech Republic)

Fujieda Auto Lighting
Shizuoka Wire Harness

January 2003

Scope of Environmental Management:
KOITO's environmental management is applied tothe above ﬁve sites with respect to businessactivities related to the R&D, design, production,
logistics, etc. of automotive lighting equipment,
aircraft components and others. In addition,
environmental impact arising from the productlife cycle are also applied to the management.

Eco-Action 21
Green Management Certiﬁcate

GUANGZHOU KOITO (China)
ISO 14001

Hubei Koito (China)

KOITO ELECTRIC INDUSTRIESFUZHOU KOITO TAYIH (China)

Haibara Machine and Tools

THAI KOITO (Thailand)

Shizuoka Kanagata

INDONESIA KOITO (Indonesia)

Takeda Suntech

Ta Yih Industrial (Taiwan)

Koito Transport

INDIA JAPAN LIGHTING (India)

Environmental Targets and Performance
The KOITO Group has set quantitative targets for each index to implement “Eco-friendly Manufacturing for People andthe Earth.” We set the quantitative goal for various indicators in order to implement activities effectively. The Safe andEnvironmental Committee and others are supervising the progress of environmental conservation activities and evaluating
the status of the achievement.
KOITO is working to achieve the midterm target (midterm priorities) that started in FY 2017 and completed in FY 2021,
and is engaging in various activities to achieve short-term goals, which are designed to check the status of achievement
each year.
■Environmental management plans and results

Measures to alleviate
climate change

Environmental
objectives

Contribution
to low-carbon
society

Resource and water
circulation

Safe and Environmental Committee

Plant Emissions Reduction Working Group

Koito Parts Center

Year-month of
initial registration

Development ofrecycle-oriented
society

Management andreduction ofchemical substances

KOITO convenes the monthly Safe and Environmental Committee chaired by the Director to supervise environmental activities of the entire Group and to discuss and make decisions on important environmental issues andenvironmental conservation measures to be implemented under environmental laws and regulations.
Subcommittees and working groups, such as the Energy and CO2 Reduction Subcommittee, Environmental
Impact Substance Reduction Working Group, and Recycle Promotion Working Group, which were established toaddress speciﬁc environmental issues, are implementing speciﬁc activities.
These activities are reported to the Safe and Environmental Committee, which follows up on progress anddiscussing various actions.

Recycle Promotion Working Group

Shizuoka Plant

Reduction ofenvironmental
impactsubstances

Enrichment of environmental management

Management Structure for Environmental Activities

Environmental Impact Substance Reduction Working GroupSite

Fujikawa Tooling Plant

１. To clarify our targets and measures for environmental conservation and continuously work to
improve the KOITO Groupʼs environmental performance,
2. To formulate and promote environmental improvement plans by considering environmental
issues in advance in addition to complying with environmental laws and regulations,
3 . To strive to develop and establish new environmentally friendly technologies and products
throughout the product life cycle,
4 . To minimize the environmental impact and use of resources and energy in the manufacturing process,promote environmental protection activities and prevent environmental problems from occurring,
5 . To actively promote human resources development to achieve our environmental targets.

Energy and CO2 Reduction Subcommittee■KOITO's ISO 14001 certiﬁcation in
production sites

Sagara Plant

KOITO MANUFACTURING CO., LTD. pursues “Eco-friendly Manufacturing for People and the Earth” in all business activities centered on automotive lighting by promoting environmental conservation activities;

Determines, discusses, and implements
Streamlines and improves environmental
environmental conservation countermeasuresmanagement and audit systems
based on environmental laws and regulations

The KOITO Group is building the environmental management system for the entire Group. We are working to acquire ISO
14001 and other environmental certiﬁcates primarily at our manufacturing sites. As of the end of March 2021, a total of 23
companies out of 25 eligible for certiﬁcation have acquired environmental certiﬁcates: 12 in Japan, including KOITO MANUFACTURING, and 11 overseas.
The KOITO Group also recommends major suppliers to acquire certiﬁcates, such as ISO 14001 and Eco-Action 21, inorder to reinforce environmental management and conservation throughout the entire supply chain.

Haiabara Plant

Environmental Policy

Environmental Audit
Committee

Corporate
Information

Establishment of Environmental Management System

The KOITO Group declares in the KOITO Group Corporate Behavior Charter, our basic policy of thecorporate activities, that “guided by the theme of 'Eco-friendly Manufacturing for People and theEarth,' we will proactively engage in global environment conservation through our business activities.”
Based on this policy, KOITO has established an Environmental Policy that sets out the framework for
its environmental activities and implements that policy in the environmental management of all ﬁelds:
development, design, production, procurement, logistics and others.
Moreover, our domestic and overseas subsidiaries also have established “Environmental Policy” aswell as built environmental management systems. We are promoting environmental conservation
activities throughout the KOITO Group.

Environmental Conservation
Committee

ESG
Activities

Reinforcementof global
environmental
activities

Developmentof society inharmony
with nature

Priority efforts and performance in FY 2021
Priority

TargetResultReduction of CO 2 fromproduction

CO 2 emission intensity: 13%
reduction from FY 2016
(amount of CO 2 emissions:
62,900 t-CO 2)

17% reduction from FY 2016
(amount of CO 2 emissions
57,800 t-CO 2)

Reduction of CO 2 fromlogistics

Energy usage per unit:
1% reduction per year

9% reduction from FY 2016

Reduction of theamount of waste

Waste generated per unit:
18% reduction from FY 2016

31% reduction from FY 2016

Reduction of water
consumption

Water usage per unit:
9% reduction from FY 2016

27% reduction from FY 2016

Reduction of VOCemissions

VOC emissions:Less than the amount in
FY 2016 (315 t)
Target for FY 2021: 250 tonsor less

220 t(30% reduction from FY 2016)

Promotion of thereinforcement ofconsolidated
environment activities

Reinforcement of environmental
risk management
Thorough environment compliance

Identiﬁcation of potential risks andreinforcement of preventive measures(Identiﬁcation of and response tonear miss incidents)

Promotion ofenvironmental efforts
collaborating with
suppliers

Promotion of aggressive
environmental activities,
improvement of environmental
performanceConﬁrmation of management
status and promotion of
improvement through information
sharing and on-site inspections

Disclosure of environmental
information andenhancement ofcommunication

Global disclosure ofenvironmental information
Promotion of mutual understanding
with local communities

Disclosure of consolidated
information
Hosting round-table session
with local communities

Reinforcement ofenvironmental
education

Promoting compliance,
employee education andawareness-raising activities

Reevaluation of education structure for manager,
supervisor and newly hired employees
Implementing training for contractors(construction workers etc.) working in the premises

Promotion of
biodiversity and nature
conservation activities

Promotion of activities atindividual ofﬁces and regions
Promotion of biodiversity
conservation activities

Cooperation with local organizations
and participation in activities with them
Reinforcement of activities to prevent
global warming and effectively use resources

Main approaches from FY 2017 to FY 2021
①Reduction of energy use and CO 2
emissions in production activities- CO 2 intensity in FY 2021: 13% reduction
from FY 2016
②Reduction of energy use and CO 2
emissions in logistics- Energy usage per unit: 1% reduction
per year③Reduction of environmental impact
substances in the product life cycle①Development of recycle-oriented society- Reduction of waters and effective utilizationof resources in production
Waste generated per unit in FY 2021: 18%
reduction from FY 2016
②Minimization of water impact- Reduction of water consumption
Water usage per unit in FY 2021: 3% reduction
from FY 2016
- Improvement of wastewater quality management①Reduction of environmental impact
substances in production activities- Amount of VOC emissions: Maintain theamount below FY 2011
②Thorough management of environmental
impact substances in products①Reinforcement of the worldwide
environmental management- Promotion of the reinforcement ofconsolidated management- Promotion of environmental activities
with business partners (suppliers)- Proactive disclosure of environmental
information and enrichment ofcommunication- Reinforcement of environmental
education②Development of society in harmony
with nature- Promotion of biodiversity and nature
conservation activities

KOITO INTEGRATED REPORT 2021 35

Value Creation
Story

ESG
Activities

Corporate
Information

Material Balance

Environmental Education

Energy and resource inputs and emissions (outputs) of greenhouse gas (GHG) and environmental impact substances such as VOC (Volatile Organic Compounds) in KOITO's business activities are as follows.
KOITO keeps track of the material balance in its business activities to verify and evaluate activities to reduce
the environmental load and to use the data for the establishment of future measures.

KOITO has established an education system and periodically provides environmental education to promote training forhuman resources to achieve our environmental targets as stated in the Environmental Policy and help every employee
gain a deep understanding of the environment.
In addition to education for speciﬁc job ranks, such as new employees, managers, and supervisors, KOITO provides special education for internal auditors and promote our employees' acquisition of ofﬁcial licenses and qualiﬁcations. Meanwhile, June and July of every year are designated as KOITO Environmental Months during which employees participate inlocal clean-up activities and practice intensive environmental inspection to enhance the awareness of every employee.
KOITO provides education on preventing contamination and spillage to workers on the premises of KOITO, such as contractors, to enhance their awareness and prevent environmental accidents.

Results (FY 2021)
Inputs

Outputs

Raw materials

Products

・Resin materials:
45,635 t・Organic solvent andpaints: 797 t
・PRTR Act※ chemical
substances: 265 t

Energy・Electricity:
103,247,000 kWh
・Utility gas:
1,921,000 m3
・LPG: 3,070 t
・Heavy oil: 0 kl

Water

Manufacturing
Parts modiﬁcation(resin molding, painting
and deposition)

Emissions into theatmosphere・CO2: 57,800 t
・Chemical substancesthat require notiﬁcation
under the PRTR Act: 84.5 t
・VOC (Volatile Organic Compounds):
220 t

Assembly

Product packaging
Recycling・Resin materials: 399 t・Municipal water:
204,000 t
・Industrial water:
468,000 t

Emissions into waters
・Discharged: 164,000 t(discharged amount into
the sewer and wastewater
treatment facilities)

Emissions・Thermal use and recycling
in outside the company:
5,145 t(including Waste: 2,407 t)
・PRTR chemical substances:
7.6 t※PRTR Act: Act to promote identiﬁcation and management of speciﬁc
chemical substances' released amount to the exterior environment.

■ Safety and environmental education for the work conducted within
the premises (2019)■ Education for internal environmental auditors (2019)

Efforts throughout Supply Chain
KOITO is committed to promote measures to reduce environmental load based on the comprehensive perspectiveof the product life cycle to coexist with global environment and local communities and to engage in environmental activities through all business activities, including
procurement, development, production, and sales.
Aiming to materialize a sustainable society, KOITO is
working to strengthen supply chain management. We
hold annual procurement policy brieﬁng session andmonthly information liaison meetings for suppliers toencourage them to acquire environmental certiﬁcations,such as ISO 14001 and Eco-Action 21, and request compliance with environmental laws and regulations on environmentally hazardous substances.
In FY 2021, KOITO held a supplier meeting on May 29,
2020, and 199 suppliers attended it.

■ Procurement policy brieﬁng session (2019)

Compliance with Environmental Laws and Regulations●External Environmental Audits
A registered external accreditation ﬁrm checks whether the environmental management system has been properly established and operated based on ISO 14001.

●Internal Environmental Audits

To ensure the independence of internal environmental audits, an audit team composed of internal auditors otherthan the department being audited is organized, and audits are conducted based on ISO 14001. The internal
auditors are also conducting audits at their depar tments for continuous improvements and enhanceenvironmental awareness.

36

KOITO INTEGRATED REPORT 2021

Risk management

Risk avoidance and removal

KOITO conducts annual external environmental audits and internal environmental audits to check the operational status of the environmental management system. Improvement proposals are prepared and implemented torespond to the aspects identiﬁed through those audits to maintain and operate the proper management
system.

■Environmental risk management to comply with environmental laws and regulations

Prevention of
expanding risks

Environmental Audits

KOITO conducts thorough risk management,such as specifying the sources of environmental risks, detecting abnormalities in theearly stages through regular measurements,and establishing emergency response measures to minimize environmental risks bycomplying with environmental laws and regulations, such as ones to prevent air pollution,water contamination and soil contamination.
Through these risk management activities,
KOITO makes sure that emissions, water quality,
noise, soil and groundwater contamination arewithin the ranges permitted under laws, regulations and standards. In FY 2021, neither violations of environmental laws and regulations nor
ﬁnes were reported at the KOITO Group.
The KOITO Group is committed to compliance with environmental laws and regulations, and continue to work on environmental
risk management.

Prevention ofenvironmental
pollution

Early
detection ofabnormality

Procedures
Identiﬁcation ofsources・Identiﬁcation of facilities and equipment
which may cause environmental pollution
in case of malfunction

Source management

・Scheduled inspection and repairing risk
identiﬁed facilities or equipment
・Elimination of environmental near missincidents and prevention of recurrence

Settingself-management
standards

・Setting self-management standards thatare stricter than legal regulations

Daily inspection(monitoring andmeasurement)

・Management within the self-management
standards (implement preventive measures
before the standards exceed legal regulations)・Setting the abnormality handling procedures
Setting emergency
・Setting procedures to notify nearby residents
response proceduresand public agencies
Emergency
response

Implementation oftraining to handle
abnormality

・Implementation of periodic training

KOITO INTEGRATED REPORT 2021 37

Value Creation
Story

ESG
Activities

Corporate
Information

Reduction of Greenhouse Gas Emissions
Aiming to contribute to materialize a decarbonized society and achieve carbon neutrality, KOITO is promoting products' power conservation, size reduction, and weight reduction from the development and designphase and improving fuel efﬁciency in automobiles and reducing CO2 emissions. KOITO has set quantitative reduction targets for midterm priority activities in the production and logistics phase to promoteenergy conservation and to reduce CO2 emissions.

Efforts through Products●LED Headlamps

Through our collaboration between relevant divisions, development, design, production and procurement,
KOITO is working to minimize and reduce the weight of our products by reducing the number of components and resiniﬁcation to contribute to improve the fuel efﬁciency of automobiles.

■Reduction of LED headlamp power consumption

2 LEDs low beam
52 W/vehicle

Efforts in the Production Processdla

Daihatsu Move Custom, etc.

mpn

1 LED highand low beam
56 W/vehicle

Mazda 6, etc.

2008

The KOITO Group is contributing to improve vehicle fuel efﬁciency and reduce CO 2 emissions
by providing LED headlamps.
KOITO has evaluated our global environmental
contribution of LED headlamps by comparing
the amount of CO 2 emissions when using conventional halogen headlamps.
Contributions are increasing year by year due
to the spread of LED headlamps and the evolution of light sources.

2010

2012

2014

2016

2020

(FY)

Contribution on CO2 reduction(thousand t of CO2)

287.0

300

200

100

2017

2018

2019

2020

2021

(FY)

・KOITO has calculated the contribution by referring to the calculation methodologies on the EU's "Technical Guidelines for the preparation of applications for the approval of innovative technologies pursuant to Regulation (EC) No 443/2009 and Regulation (EU) No 510/2011" and JAPIA's"Second Version of Regulation 2 of the Guidelines for Calculating LCI (Data Chart for Calculating Environmental Impact at the Stage of Use)."[Calculation formula]
Energy-saving effect ※ (W/units) / 1,000 × Consumption of effective power (ℓ/kWh) / Efﬁciency of alternator × CO 2 emission factor (t-CO2/ℓ)× Operating hours (hours/year) × Usage factor × the number of vehicles equipped with the KOITO Group's LED headlamps※Power consumption differences between LED headlamps and halogen headlamps

KOITO INTEGRATED REPORT 2021

To improve energy and production efﬁciency in the
production process, KOITO is reducing CO2 emissions
by improving work methods and updating facilities,
such as updating to higher-efﬁciency transformers
and gas heat pump (GHP) air conditioners, installingenergy-efﬁcient facilities, automatic power shutdown
systems to kick in when facilities are not in use, andoptimizing production lines.
KOITO has set a target of reducing CO 2 emissions(CO 2 emissions intensity) per production monetaryamount (million yen) by 13% by FY 2021 from the levelof FY 2016 in the ﬁve-year plan from FY 2017 to FY
2021.
Factories in Japan were streamlined by integratingproduction lines and conducting improvement workthat resulted in improved productivity and energy
efﬁciency. With this effort, KOITO has succeeded inachieving the goal; intensity of CO 2 emissions in FY
2021 decreased by 17% from FY 2016.

■LED headlamp's contribution on CO2 reduction

038

KOITO has conventionally used incandescent light bulbs to rear combination lamps. However, as LED
achieves smaller, lighter, more energy efﬁcient, and longer life lamps, and it contributes to the improvement of the fuel efﬁciency and CO2 emissions reductions of vehicles, LED rear combination lamps are also
being adopted in various vehicles as in the case of LED headlamps.

●Development of Smaller and Lighter Components

KOITO started using LEDs as the light source for Power consumption (W/vehicle)
headlamps before other companies to improve
the fuel efﬁciency of automobiles and to reduce
CO 2 emissions by reducing power consumption
The world's ﬁrst
of the lamps. The LED headlamps consume Halogen
mass production
110W
about 40% less electricity than discharge head5 LEDs low beamlamps and contribute to reduce battery load.
100 W/vehicle
1 LED high and
LEXUS LS600h
The adoption of LED headlamps has expanded
low beam 66 W/vehicle
Toyota Prius, etc.
to various vehicles, from large-size vehicles, Discharge
90W
3
LEDs
low
beam
compact vehicles, mini vehicles, and to motorcy66 W/vehicle
cles. In F Y 2021, global LED adoption ratio
Toyota Prius α, etc.
among the KOITO Group's headlamps was ap1 LED low beam
44 W/vehicle
proximately 64%, and is expected to widespread
Nissan Skyline, etc.
further.
We are now developing energy efﬁcient lampsPo
weof r coby improving the performance of the white LED
LE nsuDh mlamps as well as reducing the size and weight.
ea ptio●LED Headlamp's Contribution
on CO2 Reduction●LED Rear Combination Lamps■Amount of CO2 emissions and CO2 emissions intensity
Amount of emissions(thousand t of CO2)

Amount ofCO2 emissions※
CO2 emissions
intensity

80

Emissions intensity(t of CO2 per million yen)
0.4

57.8

60

0.28
40

0.2

20

0

0.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)※The amount of CO 2 emissions from Shizuoka, Haibara and Sagara
plant are calculated by using the CO 2 emissions coefﬁcient in FY 2008
at the receiving end released by the Federation of Electric Power
Companies for electricit y and the coefﬁcients used in the Act on
Rationalizing Energy Use and the Act on Promotion of Global WarmingCountermeasures for city gas, LPG, and heavy oil.

Efforts in Logistics
The logistics of KOITO are mainly conducted byfreight trucks. A domestic subsidiary, Koito Transport,
is mainly carrying out the logistics operations.
Koito Transport acquired the Green Business Certiﬁcate in February 2004. Collaborating with KOITO, Koito
Transport aims to operate environmentally friendly
transport business by reducing environmental impacts
focusing on reducing the energy consumption of
freight trucks, CO 2 emissions, and waste emitted
through the logistics process.
The amount of CO2 emissions from the entire logistics operation of KOITO was 12,800 tons in FY 2021,
which was less than the previous ﬁscal year due to thedecrease in transpor tation. Energy per unit ※ was
0.154 kl per billion yen, which was 9% lower than FY
2016 due to continuous improvement efforts.

■Amount of CO2 emissions and energy usage per unit
in logistics
Amount of emissions(thousand t of CO2)
20

Amount ofCO2 emissions
Energy usage
per unit※

Emissions intensity(kl per billion yen)
0.2

0.154
15

10

12.8
0.1

5

0

0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)※Energy usage per unit: Amount of energy (kl in crude oil equivalent) consumed inlogistics per unit in sales (billion yen).

KOITO INTEGRATED REPORT 2021 39

Value Creation
Story

ESG
Activities

Corporate
Information

Reduction of Environmental Impact Substances

Resource Conservation and Recycling

To reduce environmental impact substances and waste, KOITO commits in its Environmental Policy to
strive to “develop and establish new environmentally friendly technologies and products throughout the
product life cycle” and “minimize the environmental impact and use of resources and energy in the manufacturing process,” and promoting relevant activities.
KOITO has set quantitative reduction targets for VOC emissions in the midterm priority activities. Activities are being implemented to reduce emissions while checking progress.
We are committed to actively engage in reducing environmental impact substances to materialize“Eco-friendly Manufacturing for People and the Earth.”Throughout our product life cycle, KOITO is actively working to effectively use raw materials, energy, andother resources, and to reduce water consumption and waste.
The KOITO Group will continue to actively promote “Eco-friendly Manufacturing for People and theEarth,” and strives to materialize a recycle-oriented society.

Efforts in Production Processes
Some raw materials, such as paints and chemicals, as well as secondary materials used in the production
processes, contain chemical substances that have negative environmental impacts. KOITO is reducing
these environmental impact substances by reinforcing the management of the amount to use and emit,
improving consumption efﬁciency, and using alternative substances.

●Management of Substances Regulated
under the PRTR Act
KOITO is keeping track of the amount of substances regulated under the PRTR Act handled or transferred in the production processes while managing
them appropriately as well as reducing the amountto use and replacing them with alternative substances.
In FY 2021, KOITO have handled six substances
subject to PRTR Act (Class 1 designated substances), including toluene and styrene. The amount ofthese substances handled was 264.7 tons, and theamount of atmospheric emissions and transfers as
waste was 92.1 tons.

●Reduction of VOC(Volatile Organic Compounds)
KOITO has set a target of reducing the amount of
VOC emissions by 30% from the amount in FY
2001 by FY 2021, by keeping it in alignment with
the Voluntary Environmental Action Plan of theJapan Auto Parts Industries Association and promoted several activities.
Our efforts resulted in an 80% reduction of the
VOC emissions in FY 2021 compared to FY 2001.
The VOC emissions per unit ※1 was successfully
reduced by 52% from FY 2009, when the reduction
activities started.
In addition, KOITO has not used the three major
hazardous air pollutants※2 since we had eliminatedits use in March 2003.
※1 VOC emissions per unit: The amount of VOC emissions (kg)
per production in monetar y amount (million yen)
※2 Hazardous air pollutants: Dichloromethane, trichloroethylene, andtetrachloroethylene■Amount of released and transferred substances
regulated under the PRTR ACT in FY 2021
Amountof atmosphericemissions

84.5t

Amount transferred
as wasteAmounthandled

7.6t

264.7tEffective Use of Water Resources
Recognizing the importance of water resources in ■Amount of water consumption and water usage per unit
Usage per unit
production activities and the risks that future eco- Amount of consumption
Amount of water(t per million yen)nomic growth, population growth, and climate change (thousand t)
consumption
would have on water resources, KOITO has identiﬁed 1,200
Water usage per unit
6.0
“conservation of water resources” as one of our materialities. KOITO is working on the effective use of
1,000
water resources and protecting water quality.
※
3.26
To reduce the water usage per unit , KOITO worked
3.0
on enhancing the awareness of employees toward 800
water conservation and improving the efﬁciency of672
water consumption in the production processes. As a 600
result, the water usage per unit in FY 2021 was 44%
lower and the amount of water consumption was 35%
0.00lower than FY 2009.
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)
KOITO is also conducting water quality monitoringon the wastewater discharged from production sites
to prevent water pollution in rivers or other bodies ofwater into which production sites wastewater is discharged.
※Water usage per unit: The amount of water consumption (tons) per
production output (million yen)

Discharge into
waters 0t

Efforts in Reducing Wastes and Recycling■Amount of VOC emissions and VOC emissions per unit
Emissions per unit
(kg per million yen)Amount of emissions (t)1,115 26.9

30

Amount of emissions
Emissions per unit

1,000
770

20
12.9

500

10
220

0

2001

0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)

KOITO is working on efﬁcient recycling of materials (including waste, valuable materials, and recycled materials) discharged from all plants. After achieving zero-waste※ in all plants in 2002, KOITO has been promoting waste reduction by setting the waste generated per unit as an index for recycling, mainly of plastics, and for efﬁcient use of resources in production.
※Zero -waste: A situation in which no waste is directly disposed of as landﬁll within the waste discharged by the plant.

●Efforts to Reduce the Amount of Waste
from Production Sites and the Waste
Generated per Unit
KOITO generated 5,544 tons of waste from plants in
FY 2021, among which 2,407 tons were processed aswaste※.
The waste generated per unit (the amount of waste
per production output) was 0.117 tons per billion yen,which was 36% lower than FY 2009 due to the continuous efforts to reduce the loss of defective resins.
Furthermore, KOITO has also worked to improverecycling (reduce waste for thermal recycling), and theamount of resources recycled in FY 2021 was 5,231
tons.

■Amount of emissions and waste (per unit) fromproduction sites
Waste generated per unit
Amount of emissions and waste(t per billion yen)(t)
Amount of emissions
Amount of waste
8,000 7,314
6,000
4,000

0.182

3,144

Waste generated per unit

0.2
5,544
0.117
0.1
2,407

2,000
0

0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)

※Waste: Generated material that requires processing costs, and theprocessing is outsourced to disposal businesses contractors

40 KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021

41

Value Creation
Story

Environmental Activities in Overseas Subsidiaries●Reducing Electric Power Consumption by Introducing Air Pressure Controlling System
in Production Plant/North American Lighting, Inc. (NAL/U.S.A.)At the Paris Plant in NAL, U.S.A., they were supplying air to each process by using air compressors
installed in the existing areas and in the expansion areas. Since the air piping was independent for eacharea, even if the amount of air used decreased, they needed to keep air compressors in operation in bothareas, and the use of electric power was inefﬁcient.
They optimized the operations by connecting air pipes in both areas and introduced an air pressure controlling system. This enabled them to take in information on increase/decrease in air pressure to the control system, and control the air compressor to operate only when necessary. The introduction of thissystem has resulted in a 30% reduction in electric power consumption.
Before introduction

After introduction

Air piping was independent for each area

Air compressors

Air compressors
Air pipes

Molding

Surfacetreatment

Connecting air pipes and introduced an air pressure
controlling system

Air pipes

Assembly

Molding

Production process

Surfacetreatment

Assembly

Expansion areas

Molding

Surfacetreatment

Assembly

Production process

Existing areas

Corporate
Information

Social Activities
Activities to Improve Safety and Security
The KOITO Groupʼs basic management policy is to create customer needs and contribute to the progress of society, guided by the theme of “Light.” Identifying “reduction of trafﬁc accidents” as one of ourmaterialities, the KOITO Group develops products to materialize a safe and secured automotive society
under our corporate message “Lighting for Your Safety.”
To further improve the performance of LED headlamps and ADBs, we are also promoting R&D activities on Advanced Driving Assistance System (ADAS), next- generation lamps and various sensors(LiDAR, cameras, etc.) which are compatible with autonomous driving.
The KOITO Group will continue to contribute to the improvement of safety and security in an automotive society through developing and supplying safe and high quality products and services through its
technologies.

Development of Technologies and Products to Improve Safety and Security
Air compressors●LED Headlamps

Air pipes

Production process

Existing areas

Air compressors

Air pressure
controlling system

ESG
Activities

Molding

Surfacetreatment

Assembly

Production process

Expansion areas●Reducing Electric Power Consumption in Cooling Towers by Introducing an
Inverter/KOITO EUROPE (KEL/U.K.)
In KEL, U.K., equipment cooling is conducted by cooling towers. The cooling tower is designed to cool equipment by circulating water with two pumps. As these pumps were always in operations, the use of pumps
were inefﬁcient.
In order to increase electric efﬁciency, they introduced an inverter that controls operations according tocooling demand so that the required amount of water is supplied only when necessary. A reduction of electric power consumption has resulted in reducing 66 tons of CO2 emissions annually.

KO I TO h a s b e e n d e v e l o p i n g h i g h - o u t p u t a n dhigh-performance light sources to create headlamps
that provide brighter light to greater distances forsafe nighttime driving.
LED headlamps are KOITO's main products. They
help drivers to gain clear night views as they arebright, turn on instantly and are close to daylight.
KOITO is also developing laser headlamps to further
improve distance visibility.

■Evolution of light sources
Luminous ﬂux (lm)104
Gas discharge
bulb

103

102

Semi-sealed
beam
Incandescent bulb

LED

Halogen bulb

Sealedbeam

Acetylene
gas lamp
Kerosene
lamp

10

1

10

0

Semi-sealed
beam
headlamp

Candle1900

1920

Sealed beam
headlamp

Halogenheadlamp

1940

1960

Gas discharge
headlamp

1980

LED headlamp

2000

2020 (CY)●Adaptive Driving Beam (ADB)
KOITO has developed a headlamp system called
Adaptive Driving Beam (ADB) that automatically controls the light distribution pattern of the high beamand ensures wide front visibility for drivers by enabling driving with high beams all the time while preventing preceding or oncoming vehicles from glare.
In addition, KOITO is conducting R&D activities on
ADB to further improve safety during nighttime driving by providing ﬁner light distribution.

■Image of ADB photometryHigh-beam lighting range

Please refer to the special feature on P30 of this report.
■ Cooling tower controlling panel■ An introduced inverter

External Evaluation on Our Environmental Activities

Veriﬁcation of Blind Spot Information Provision System in
the Autonomous Driving Bus Demonstration Experiment

KOITO evaluates its own initiatives by identifying key domestic and overseas external indicators and evaluations, and analyzing the results. We are actively disclosing information by responding to external evaluations, including ESG (Environmental, Social and Governance) rating agencies.

The KOITO Group is promoting R&D activities on next-generation products
such as smart trafﬁc lights and street lights equipped with sensors (LiDAR,
cameras, etc.) which are required to monitor the surroundings in the future
autonomous driving society.
Collaborating with KOITO ELECTRIC INDUSTRIES, a subsidiary manufacturesand sells signaling systems and other transportation infrastructures, KOITO
participated in a demonstration experiment conducted in Hitachi City, Ibaraki
Prefecture using medium-sized autonomous driving bus from November 2020
to March 2021.
By installing roadside sensors at intersections with poor visibility, we haveveriﬁed the effectiveness of a blind spot information provision system that
detects and identiﬁes vehicles, bicycles, pedestrians, and other objects in blind
spots that cannot be detected by sensors on autonomous driving bus, andsharing information with the vehicle.

In January 2021, the CDP Climate Change Report 2020, a survey of global companies on their strategies for climate change and speciﬁc greenhouse gas emissions,
was published by the U.K. nonproﬁt organization CDP (formerly known as the
Carbon Disclosure Project). KOITO received a “B-(Management)” rating in recognition of its efforts to address climate change, such as reducing CO 2 emissions andsetting medium- to long-term targets, as well as its disclosures.

42

KOITO INTEGRATED REPORT 2021

■Image of a blind spot information
provision system
Road-to-vehiclecommunication using LTE

Monitoring
blind spots byroadside sensors

Roadside
sensors

CameraLiDAR

Telecommunicationequipment

KOITO INTEGRATED REPORT 2021 43

Value Creation
Story

ESG
Activities

Corporate
Information

Quality and Product Safety

Supply Chain Management

The KOITO Group declares in the KOITO Group Corporate Behavior Charter that “we will gain customers'
satisfaction and trust through developing and providing safe and high-quality products and services,” andidentiﬁed “enhancement of product quality” as one of our materialities. We strive to create products with acustomer-ﬁrst attitude to maintain and further improve quality of all products and services we provide to
our customers.
The KOITO Group is utilizing its Quality Management System (QMS) to maintain and supervise the quality
level in all kinds of departments, from development to production.
We will continue quality assurance activities to meet the situations in various countries or regions andwill keep contributing to materialize a sustainable society through maintenance and improvement of the
product quality.

KOITO believes that it is important to fulﬁll its social responsibility throughout the entire supply chain topractice “Eco-friendly Manufacturing for People and the Earth” through all business activities. Therefore,
we have established the Procurement Policy to respond to social demands and expectations and deliver
high quality service to our customers while cooperating with suppliers.
KOITO is also presenting expectations on the cost, quality, and the elimination of industrial accidents toeach supplier to achieve goals together.
We are aiming to materialize a sustainable society throughout the entire supply chain while cherishing
the close relationship with our suppliers.

Quality Management Structure■Quality Management System

The KOITO Group promotes procurement activities emphasizing the following four items around

The KOITO Groupthe keywords of safety, quality and product appeal.

Customer-ﬁrst Production

KOITO MANUFACTURING

1. Early development of attractive and advanced technology products and strengthening of a
global business structureManagement Committee
ReportThe KOITO Group conducts marketing to investigate and search business partners who have new technologies,

Direction
Requests,
comments

Quality Assurance Department
Quality audit

Quality meeting

Prevention ofrecurrence

Qualitymonitoring

Systemreinforcement

Quality
improvement activity

new work methods and technologies to develop new components as a means to develop attractive and cutCustomers

KOITO has established a quality management
system based on ISO 9001 and IATF 16949
which are international standards to ensure
seamless operations.
Internal Quality Audits with the Quality Assurance Manager as the chair are conducted atleast once every year to make decisions on thequality management aspects and to monitor
the quality management status of the entire
KOITO Group.
The progress of these activities is reported
to the Board of Directors and the Managing
Committee by Director or Corporate Ofﬁcer
who are in charge of Quality Assurance Department to reinforce the management systemthrough monitoring by the management. KOITO
is building a system to ﬁnd the causes of any
defects found and implement prevention measures in case any defects are found throughquality tests and evaluations.

Procurement Policy for FY 2022

High-quality
products andservices
Production
sites

Engineering
Headquarters

Purchasing
Department

Management
Divisions

The KOITO Group strengthens marketing, development, and production systems by innovating information sharing and work styles using its global network.

2. Cost reforms realized by revising structures, work methods and speciﬁcations as well asreconﬁguration of competitive strengths through manufacturing pursuits

The KOITO Group revises product structures, work methods and speciﬁcations in an effort to reform costs. We
also strengthen our competitive power by pursuing optimal manufacturing process: identifying any waste, overburden and irregularities by improvement activities.

Overseas Subsidiaries

Domestic Subsidiaries

3. Realization of quality that satisﬁes customers by pursuing the true cause of defects andstrengthening on-site capabilities

Acquisition of Quality Management System Certiﬁcates
The table on the right is a list of Group companies, including overseas subsidiaries, that haveacquired ISO 9001 or IATF 16949.
All the subsidiaries and depar tments of
KOITO will continue to carry out a thorough
PDCA cycle, and ensure product safety andquality through enhancement of the quality
management system.

ting-edge technologies that contribute to the safety and security of a transportation society.

■Environmental certiﬁcation acquired in the KOITO GroupISO 9001

IATF 16949

KOITO KYUSHU

North American Lighting (U.S.A.)

AoitecNorth American Lighting Mexico (Mexico)

Shizuokadenso

Koito Europe (U.K.)

Nissei Industries

Koito Czech (Czech Republic)

Fujieda Auto Lighting

GUANGZHOU KOITO (China)

Shizuoka Wire Harness

Hubei Koito (China)

KOITO ELECTRIC INDUSTRIESFUZHOU KOITO TAYIH (China)

The KOITO Group enhances our quality assurance system throughout the entire supply chain to gain customer
trust by developing and providing safe and high-quality products and services.
We work to build a system that prevents inconsistencies and defects to improve quality throughout the entire
supply chain. In the event a defect does occur, we work with our suppliers to pursue the true cause and prevent
any recurrence.

4. Reinforcement of the corporate constitution through thorough risk management(prevent disasters, strengthen BCP management and contribute to achieve SDGs)

The KOITO Group secures the life and safety of its employees and other personnel even when unexpecteddisasters occur. We also work with our suppliers to anticipate all risks and work to prevent disasters andaccidents to maintain a stable supply of products.
The KOITO Group promotes procurement activities that incorporate SDGs perspectives from contributions to

THAI KOITO (Thailand)safety and peace of mind to global environmental protection, the respect for human rights and the promotion of

INDONESIA KOITO (Indonesia)

compliance, which contribute to materialize a sustainable society.

Ta Yih Industrial (Taiwan)
INDIA JAPAN LIGHTING (India)

Efforts in Quality Improvement
KOITO provides job rank-based quality education for new employees,
managers, and supervisors. In addition, KOITO holds training session
on SQC (Statistical Quality Control) for design and development engineers to improve their knowledge on quality management.
Furthermore, the QC circle activities and improvement presentation
sessions (FQC Meeting, Staff QC Meeting and others) are being held
periodically to improve quality management activities.
KOITO will continue to enrich activities on training and education tofurther improve quality.
44 KOITO INTEGRATED REPORT 2021

■ Staff QC Meeting (2019)

KOITO INTEGRATED REPORT 2021 45

Value Creation
Story

Reinforcement of CSR in the Supply Chain
KOITO helps its suppliers to understand our CSR
activities through procurement policy brieﬁng session and other opportunities in addition to providing advice at all times. At the annual procurement
policy brieﬁng session, we ask our suppliers tothoroughly comply with laws and regulations. We
have established a system for suppliers so thatthey can inform us and promote compliance in theevent of their violating the law.
KOITO conducts annual questionnaire surveys on
suppliers' status on environmental certiﬁcation. In
FY 2021, approximately 430 suppliers were eligible
for the survey. During ﬁre and disaster prevention
inspections to our suppliers, KOITO also conﬁrms
the management system or the amount of organic
solvents used by suppliers. In the event that there
is a problem with suppliers' management systemor others, we request them to submit an improvement plan and supporting their measures.

[KOITO's CSR activities]①Measures based on the “Guideline for the Right
Transaction of Automobile Industry”②Continuous investigation on the inclusion of environmental impact substances③Continuous annual investigation on conﬂict minerals④Thorough compliance with laws and regulations
concerning human rights and labor⑤Thorough implementation of compliance issues
in general (Concluding contracts to eliminate
anti-social forces, etc.)

As for suppliers who conduct business with the
KOITO Group, we ask them to implement environmental and social measures to materialize a sustainable supply chain.

[Environmental requests]
・Acquire external environmental certiﬁcations suchas ISO 14001 and Eco-Action 21
・Ban the use of certain materials under RoHS Directive
・Ensure transparency on substances under REACH
Regulation
・Ensure traceability of nanomaterials contained in
products
・Formulate environmental policies covering theautomobile industry's key challenges[Social requests]
・Abolish child labor, forced labor and discrimination
・Promote occupational safety and health・Secure decent wages and working hours
・Prevent other inhuman behaviors
・Conduct responsible procurement of minerals

Promotion of Fair Procurement Activities
In order to further strengthen our fair procurement activities, KOITO holds training sessions on the Subcontract Act for employees of relevant administrative divisions and business partners (subcontractors andothers) periodically. In FY 2021, a total of 394 people participated in this training, and we are working to
improve their knowledge of procurement activities.

Measures on Conﬂict Minerals
It has become an international concern that some minerals mined in the Democratic Republic of theCongo and nearby nations have been the source of ﬁnancing for armed forces engaging in human rights
violations. The United States deﬁned four types of minerals of tin, tantalum, tungsten and gold producedin these regions as “conﬂict minerals” in the Dodd-Frank Wall Street Reform and Consumer Protection Act
and mandated annual investigations of the use of these minerals and disclose the information.
KOITO avoids the use of conﬂict minerals along with its suppliers by conducting annual investigations on
conﬂict minerals not to assist human rights violations and environmental destruction and to fulﬁll its social
responsibility throughout the supply chain. When starting business with a new supplier, we carefully examine the results of conﬂict minerals investigations and consider the feasibility of conducting such transactions.

46

KOITO INTEGRATED REPORT 2021

Corporate
Information

ESG
Activities

Human Resource Management
KOITO has identiﬁed “human resource development,” “healthy and safe working environment,” “workstylereform” and “protection of human rights” as part of our materialities. With the keywords of “communication and collaboration,” KOITO encourages every employee to share their knowledge, experience, ﬁndings,
and problem awareness through various means to build energetic worksites where every member canwork on tackling problems.
KOITO is also building a systematic education and training system with an expanded range and curriculum for employees to acquire technical knowledge and skills, as well as logical thinking and various methods of expression. At the same time, achievement evaluation systems are being reorganized so that every
employee can experience growth and become motivated to take on new challenges.
To achieve the KOITO Group's further growth, we are improving work-life balance and diversity of ouremployees and renewing various human resource systems.

Work-life Balance

Promotion of Diversiﬁed Human Resources

KOITO has been improving the work-life balance tocreate a work environment where every employee
can make the best use of their capabilities and fulﬁll their potential. In addition, we are promoting ﬂexible and diverse working styles. KOITO has introduced teleworking system as one of “New Normal”
ways to work, following the COVID-19 pandemic.

To promote diversity, KOITO encourages active
participation of a variety of human resources,
including women, foreigners and the elderly, and is
working to improve the treatment of non-regular
employees.

[Reduction of long working hours]

・Overtime working hours in each department is reported at the monthly Managing Committee, and work
processes are being streamlined to reduce it.

[Acquisition of paid leaves]

・The Committee for the Acquisition of Paid Leaves promotes employees to take paid leaves of 15 or moredays per year and conﬁrms the acquisition status byeach department.

[Support for childcare and nursing care]

・Improvement of childcare leave (up to the end of April
after the child reaches three years old) and shor t
working hour system for childcare (up to the end of
March after the child reaches nine years old)・Nursing care leave can be taken up to one year
・Implementation of seminars to balance work and nursing care for employees[Women empowerment]

・Expanding the number of women in regular position,
senior management, newly and mid-career hires
・Provide education to women employees and for managers with women staff etc.

[Support for foreign employees]

・Employ foreign candidates to strengthen R&D・Strengthen the recruitment of exchange students bycooperating with universities etc.

[Support for senior employees]

・Rehiring of all applicants over 60 etc.

[Improve treatment for non-regular employees]

・Promote all non-regular employees as full-time employees (2019) etc.

[Introduction of teleworking system]

・Applicants in administrative divisions can work from home

■Personnel Data (KOITO MANUFACTURING)FY 2019

FY 2020

FY 2021

Number of employees (and women employees) in new hires

131 employees (24 employees)

142 employees (35 employees)

144 employees (27 employees)

Number (and percentage) of women in senior management

6 employees (1.0%)

6 employees (1.0%)

8 employees (1.3%)

Number (and percentage) of employment of staff with a disability

80 employees (2.27%)

85 employees (2.37%)

84 employees (2.31%)

19.7%

17.9%

17.7%

20.0 years (21.7 years)

19.6 years (20.9 years)

19.7 years (20.7 years)

1.1%

1.1%

0.8%

Monthly average overtime hours

23.7 hours

20.6 hours

9.9 hours

Number of paid leave per employees

16.0 days

16.2 days

14.7 days

Number of employees taking maternity leave

37 employees

34 employees

33 employees

Number of employees taking child care leave

63 employees

62 employees

79 employees

Employee training time
Average training time per employee

63,181 hours
14.9 hours

75,241 hours
16.9 hours

42,960 hours
9.6 hours

None

None

None

Ratio of dispatched employees
Average years employed by the company for all employees (and for women employees)
Employee turn over rate (voluntary resignation)

Violation of human rights

KOITO INTEGRATED REPORT 2021 47

Value Creation
Story

・ Safety comes ﬁrst.
・ Follow every rule in all work operations.
・ Do not touch any moving objects.
・ Report immediately if any abnormality is found.
・ Negligence causes accidents.
■Rate of lost-time injuries (lost worktime)
KOITO MANUFACTURING
Electric machinery and equipment
manufacturing industry※

0.6
0.4

0.51

0.2

0.09

0

2018

0.58

0.54

0.52

0

0

2020

2021

0.18

2019

Rate of lost-worktime injuries ＝

Numbers of workers
due to industrial accident
Man-hours of work

(FY)

×1,000,000※Source: The Ministr y of Health, Labour and Welfare

KOITO is working to enhance our member beneﬁt
and improve the workplace environment to increase
our employees' motivation.
As for beneﬁts, KOITO prepares dormitories, company housing, and cafeteria facilities for employees.
We also introduce an employee stock purchase plan
(ESPP) to support employees' property formation andshare the company's medium- to long-term growth.
The improvement of the workplace environment
includes the installation of security cameras at entrance gates and dormitories to enhance security,
installation of automatic ﬁre extinguishers as a ﬁresafety measure, and replacing lights with LED lamps
at work areas in production sites to reduce employees' workload.

Based on ﬁve management elements of occupational
health (work environment management, work management, health management, hygiene education,and hygiene management system), KOITO is implementing various activities to provide a healthy andsafe workplace environment.

Human Resource Development
KOITO engages in human resource development
through a wide variety of curriculums, and provides
job-rank based education, technical education, andglobal education.
The job-rank based education consists of management training for speciﬁc qualiﬁcations and positions.
The technical education includes 111 lectures in andoutside of KOITO, such as advanced education on AI,
IoT, and sensors. A total of 3,467 KOITO employees
participated in these training and lectures in FY 2021.
The global education focuses on multi- culture
training, e-learning, language training.
KOITO INTEGRATED REPORT 2021

[Activities on health]･Implementing periodic medical checkups and providing results to employees･Inﬂuenza vaccination for applicants･Implementing special health checkups to conﬁrm there
are no occupational illness･Implementing life-saving seminars (including AED seminars and others)[Efforts to maintain and promote mental health]

To prevent employees from mental health issues, we areproviding “self-care” training for new employees andapplicants, and “line-care” training for Managers andChiefs. In FY 2021, a total of 210 employees participatedin self-care and 79 in line-care training.
We conduct annual stress checks for all employees toencourage self-care, and support them by having individual counselings.
In addition, we are improving our support system by
establishing an external consulting desk where employees can consult on mental health issues over the phone.

[Activities on hygiene]

One of our management philosophies is to “stepping forward to realize our employees' dreams,” and we
declare in the KOITO Group Corporate Behavior Charter that “we will respect the human rights of all persons.”
By respecting human rights of all stakeholders while communicating with business partners, local communities and employees, KOITO strives to be a company that is trusted by international society.
We provide employee education on respecting human rights as a part of compliance education. Training
to address speciﬁc issues, such as harassment training, is offered when necessary to raise every employee's awareness on respecting human rights.

Social Contribution Activities
To materialize one of our management philosophies, “fostering mutually beneﬁcial relationships with all
stakeholders as a member of the society,” we declare in the KOITO Group Corporate Behavior Charter that
“we will be conscious of our responsibility as a good corporate citizen, and actively engage in social contribution activities, and we will contribute to the realization of a prosperous society.” Based on the statement,
we are promoting various activities.

●Donating Face Shields to Medical Associations and Institutions

Health and Hygiene

URL: https://www.koito.co.jp/english/csr/social/humanresourse.html

48

Five Safety Rules

KOITO Member Beneﬁt

For KOITO member beneﬁt in overseas subsidiaries, pleaserefer to our Human Resource Management website.

Corporate
Information

Respect for Human Rights

Occupational Safety and Health
KOITO adopts “Safety comes ﬁrst” as the basic approach to safety and health and aims to create thesafe, secure, and comfortable work environment withthe participation of all employees. Five Safety Rules
are also set as the standard actions to follow in all
activities that are to be practiced by the entire
Group.
The Safe and Environmental Committee chaired by
the Director meets monthly to discuss policies on
employee safet y and health measures, including
measures to prevent and recur problems or accidents, as well as other important issues. The matters
discussed at the Safe and Environmental Committee
are presented to every employee through the Safeand Health Committee, and the Safe and Environmental Committee of each production site, or thew o r ks i t e s a fe t y m e e t i n g s c o n d u c t e d a t t h e i rworksites.
Targeting all personnel working in the premise,
KOITO repeatedly provides education and accident
drills to develop human resources who follow safety
rules and increase their awareness. We are also conducting risk assessment and risk detection activities
to enhance the senses to ﬁnd potential risks at theworksites. In addition, Directors and Managers conduct on-site inspections, identify unsafe conditions,and take preventive measures with the goal of zerolabor disaster and trafﬁc accidents.

ESG
Activities

・Implementing training for hazardous chemical substances
・Preventing accidents and health impairment through special education for organic solvents or powder handlers
・Implementing health lectures during National Occupational Health Week
・Preventing collective infections at dining halls (sanitary inspections, etc.)

As part of our social contribution activities in the COVID-19 pandemic, we aresupporting medical professionals who are dedicating to diagnosing and treating the COVID-19 and to prevent the spread of infections. In FY 2021, KOITO
has manufactured 5,000 face shields and donated them to medical associations and institutions in Shizuoka and other areas.
The face shield was developed and manufactured by KOITO to prevent airborne
infection at manufacturing sites where it is difﬁcult to secure social distance.

■ KOITO's face shield●Participation in Regional Activities at
Production Sites
KOITO's production sites periodically holds roundtable sessions with residents of regional communities and open the sites to local community associations during summer festivals.
We also host site tours for the residents andaccept childrenʼs visits so that they can better understand our corporate activities.

■ Summer festival (2019)■ Children's visiting day (2019)■ Clean-up activities at Miho
coastline (2019)■ Weeding at Miho-no-Matsubara(2019)●Regional Environmental Beautiﬁcation
Activities
As a member of the local community, each factory
continuously engages in clean-up activities of surrounding communities to improve and protect the
nearby environment.

Stakeholder Engagement
With the recognition that our business activities are realized by the trust of various stakeholders, we declare in the KOITO Group Corporate Behavior Charter to conduct “fair information disclosure and constructive dialogue.”In FY 2021, KOITO held the 120th Ordinary General Meeting of Shareholders and an earnings release
conference for securities analysts and institutional investors. At the earnings release conference, we explained our Group's performance (results and plans), and received many questions and comments fromthe participants. Furthermore, we held a total of approximately 240 individual meetings with institutional
investors. In principle, a Director participates in all meetings. The content of the meetings and commentsor requests received from investors are reported to the top management, Directors and Corporate Ofﬁcers, and reported to the Board of Directors. We are utilizing the knowledge gained from our dialogue toimprove our management activities.
KOITO INTEGRATED REPORT 2021 49

Value Creation
Story

GovernanceCorporate Governance
General Meeting of Shareholders
Election/dismissal

Election/dismissal

Board of Directors
14 Directors(including 2
outside Directors)

Operational audit
Collaboration

Appointment/removal

Audit and Supervisory Board
4 Audit & Supervisory Board Members(including 2 outside Audit &Supervisory Board Members)
Election/dismissal

Election/dismissal
Collaboration

Directors
Corporate Ofﬁcers
Company-wide departments

Audit

Financial audit

Auditing Section

Independent Auditors

Collaboration
Inside Directors/Audit Members

Outside Directors/Audit Members

Board of Directors

Audit and Supervisory Board

14 Directors (12 inside Directors + 2 outside Directors)
Chaired by the President

4 Audit & Supervisory Board Members(2 inside members + 2 outside members)Frequency

Once per month in principle

Eight times (FY 2021)

Function

The Board of Directors discusses, reports, and makes decisions
on matters stipulated in the Board of Directors Regulations,
including those matters stipulated by laws, regulations, and the
Ar ticles of Incorporation, and super vises the execution of
Directorʼs business execution.

The Audit and Supervisory Board Members participate in the
Board of Directors and other important meetings and committees, review signiﬁcant authorization documents, and audit theperformance of directors. They are monitoring the structure
and operations of the internal control system.

● All Audit and Supervisory Board Members attend meetings of the● Other than the Board of Directors, the standing Audit and Supervi-

Composition

Structure

Board of Directors to monitor Directorʼs business operations.
●The Managing Committee (chaired by the President), a body to aid
the Board of Directors, is comprised of full-time Directors andCorporate Ofﬁcers. The committee meets, three times per month inprinciple, determines business execution, reports on progress, andfollows up on business execution.
●The governance structure is being reinforced; new proposal agendas
are required to be approved at the the Managing Committee andthen to the Board of Directors.

KOITOʼs policy is to elect a person who is capable of responding to expectations of shareholders as a Director,
has enough experience and advanced knowledge of business administration, and can fulﬁll the duties andresponsibilities of a Director as a Director candidate.
Based on this policy, the President prepares the draft of Director candidates and proposes it to the Board of
Directors which then ﬁnalizes the selection of Director candidates.
KOITOʼs policy on electing Audit and Supervisory Board Members is to select a person who has an excellent personality, as
well as great ethical values, to properly, justly, and efﬁciently carry out the auditing of the execution of duties by Directors.
Based on this policy, the Board of Directors selects Audit and Supervisory Board Member candidates uponreceiving an approval by the Audit and Supervisory Board.
The Board of Directors selects Director candidates who have been serving in important positions in their departments, are familiar with their tasks, as well as the overall operation of KOITO, and have made great contributions to improve the business performance and corporate values of KOITO. The General Meeting of Shareholders then reaches a conclusion on their appointments.
Reference Documents for the Notice of the General Meeting of Shareholders describe the reasons for selecting
individual Directors and Audit and Supervisory Board Members. Reference Documents for the Notice of the General Meeting of Shareholders also describe the reasons for the dismissal of Directors or Audit and Supervisory Board
Members. The Board of Directors makes decisions on the election and dismissal of individual Corporate Ofﬁcers.
If a dismissal procedure deviates from the above policy, the Board of Directors approves of the procedure,
which is then decided in a General Meeting of Shareholders. The Board of Directors' Regulations stipulate thatthe election and dismissal of Corporate Ofﬁcers shall be carried out upon a decision by the Board of Directors.

Outside Directors and Audit and Supervisory Board Members
KOITOʼs policy on electing outside Directors is to appoint persons who satisfy the requirements for outside
Directors in the Companies Act and requirements for independency in the independency standard for the independent ofﬁcer system of Tokyo Stock Exchange.
Outside Directors shall have abundant knowledge and experience in corporate administration. Outside Audit
and Supervisory Board Members shall have technical knowledge of laws and ﬁnance. Both outside Directors andAudit and Supervisory Board Members are elected upon a decision at a General Meeting of Shareholders.
When KOITOʼs own Directors and Audit and Supervisory Board Members also serve as ofﬁcers at other listedcompanies, they are obliged to limit their involvement within the reasonable range.
Notice of the General Meeting of Shareholders describes the status of Directors and Audit and Supervisory
Board Members as serving as ofﬁcers of other listed companies.
Individual Directors have thorough knowledge of business operations and administration. The knowledge,
experience, and abilities are well balanced among inside and outside Directors.

Namesory Board Members attend the Managing Committee and otherimportant meetings, constantly monitor the Directorʼs businessexecution and express opinions as needed.
● Improving its auditing functions through close collaboration
between Audit and Supervisory Board Members, the Internal Audit
Department, and independent auditors by holding periodic meetings and let them exchange information and opinions as needed.

Status of Audits
Based on the annual audit plans, KOITOʼs Internal Audit Department, an independent organization, conducts audits of theoperations of internal control over ﬁnancial reporting, as well as audits of the legality and appropriateness of operations
against company-wide departments and KOITOʼs subsidiaries. The departments and subsidiaries implement the necessary
improvements to improve internal control. The Internal Audit Department reports the results of the audits to Directors andAudit and Supervisory Board Members, and exchanges information with the Audit and Supervisory Board Members and the
independent auditors on the status of audits to facilitate mutual cooperation.
The Audit and Supervisory Board comprises two standing Audit and Supervisory Board Members and two outside Audit
and Supervisory Board Members. The Audit and Supervisory Board Members participate in the Board of Directors andother important meetings and committees, review signiﬁcant authorization documents, and audit the performance of Directors. In addition, the Audit and Supervisory Board Member monitors the structure and operations of the internal control
system by site visiting plants and branches, interviewing the administrative divisions, and auditing domestic and overseas
subsidiaries. Moreover, the Audit and Supervisory Board Members attend the audits performed by the independent auditors and the Internal Audit Department, along with working to promote collaboration by exchanging information throughregular meetings with the independent auditors, the in-house Compliance Department, and the Internal Audit Department.
50 KOITO INTEGRATED REPORT 2021

Corporate
Information

Election Policy for Directors and Audit and Supervisory Board Members

To retain the trust of all of our stakeholders, KOITO recognizes the importance of ethical standards
and has identiﬁed enhancing “corporate governance” as one of our materialities. We are striving to establish a sound management structure.

Representative Directors

ESG
Activities

HaruyaUeharaOutsideDirector

Outside Audit
and Supervisory
Board Member

Attendance at theBoard of Directors(FY 2021)

All 12
meetings(100%)

Attendance at the Audit
and Supervisory Board(FY 2021)

Major activities‒

Mr. Haruya Uehara played an appropriate role in ensuring theadequacy and appropriateness of decisions by the Board of
Directors, such as providing opinions and other information
based on his knowledge and experience concerning corporate
management.
He also performed a supervisory function, such as sharing
information through meetings with the audit department.

Kingo
Sakurai

All 12
meetings(100%)‒

Mr. Kingo Sakurai played an appropriate role in ensuring theadequacy and appropriateness of decisions by the Board of
Directors, such as providing opinions and other information
based on his knowledge and experience as a certiﬁed public
accountant.
He also performed a supervisory function, such as sharing
information through meetings with the audit department.

Yukinobu
SuzukiAll 12
meetings(100%)

All 8
meetings(100%)Mr. Yukinobu Suzuki provided opinions primarily by using his
ﬁnancial and tax practice expertise and performed other activities for verifying the adequacy and appropriateness of decisions by the Board of Directors, etc. and offering other advice
and ideas.

Hiroshi
KimedaAll 12
meetings(100%)

All 8
meetings(100%)

Mr. Hiroshi Kimeda provided opinions primarily by using his
legal expertise and performed other activities for verifying theadequacy and appropriateness of decisions by the Board of
Directors, etc. and offering other advice and ideas.

KOITO INTEGRATED REPORT 2021

51

Value Creation
Story

Director and Audit and Supervisory Board Member Diversity Policy

Basic Policy of Internal Control System

Individual Directors have thorough knowledge of business operations and administration. Their diversiﬁed
knowledge, experience, and abilities are well balanced among inside and outside Directors. KOITO keeps seeking
a desirable structure of the Board of Directors.
Also, KOITOʼs policy on electing Audit and Supervisory Board Members is to select candidates who haveexcellent personalities, as well as great ethical values, to properly, justly, and efﬁciently carry out the auditing of
the execution of duties by Directors as Audit and Supervisory Board Members. Speciﬁcally, outside Audit andSupervisory Board Members are selected from those who have technical knowledge of laws and ﬁnance.

The Basic Policy of the Internal Control System is set as follows to improve and reinforce internal control.

Director Effectiveness Evaluation
KOITO conducts annual surveys to evaluate the effectiveness of the Board of Directors. The Board of Directors
evaluates itself based on the survey ﬁndings. The following is the outline of the results of analyzing and evaluating the effectiveness of the Board of Directors.
1. The Board of Directors meets monthly, in principle, and promptly and properly discusses important agenda items based on the
Board of Directors Regulations.
2. Annual meeting schedules are announced to all Directors and Audit and Supervisory Board Members, including outside ones,
before the start of the ﬁscal year. The schedule is designed for them to attend the meetings readily. Directors and Audit andSupervisory Board Members actively participate in discussions, and business topics are thoroughly examined.
3. The Board of Directors receives advice and suggestions from Directors who have worked in the various departments, such as
management, sales, technology, and production, and outside Directors who have experience and knowledge of corporate
administration. Outside Audit and Supervisory Board Members with technical knowledge of laws and ﬁnance also provide theiropinions. The Board of Directors thereby discusses and examines business topics from various angles by taking enough time.

The Board of Directors also operates by reﬂecting the opinions of outside Directors, such as adding the resultsof self-evaluations, contents put on the agenda of the Managing Committee, trends in the industry, and thelatest technical trends to the matters to be reported.
The Board of Directors will continue reinforcing its functions as the highest decision-making entity and improving the speed of making administrative decisions to increase its effectiveness.

Remuneration of Directors
The policy for determining remuneration, etc. for Directors has been decided by the Board of Directors, as follows.
It was approved at the 119th Ordinary General Meeting of Shareholders held on June 27, 2019 that the amount of remuneration, etc. for Directors shall be no more than ¥1.5 billion a year. In addition, it was approved at the 115th Ordinary General
Meeting of Shareholders held on June 26, 2015, that, apart from the amount of remuneration, etc., for Directors, the amountof remuneration, etc., related to subscription rights as stock compensation-type stock options for Directors shall be no morethan ¥200 million a year.
The Directorsʼ remuneration system consists of ﬁxed remuneration, paid monthly, and performance-linked remuneration.
Based on our internal standards on Directorʼs remuneration, KOITO comprehensively determines the amount of remuneration
by taking several factors into account: corporate performance, the amount of dividends to shareholders, remuneration
amount of other companies, the amount of employeesʼ salaries, as well as the Directorʼs management capabilities, achievements, and their contributions.
The ﬁxed remuneration amount is calculated by setting a basic amount in based on the size of the role of each Director andtheir position, then setting the upper and lower limit amount for each position, the status difference by position, and thedifference by the number of years in the position.
Performance-linked remuneration is evaluated and decided based on the belief that it is important to comprehensively consider the goals and achievements of each ﬁscal yearʼs performance (net sales, proﬁts, etc.) and each Directorʼs contribution.
The goal of stock compensation-type stock options is to motivate company managers to contribute to improving business performance and corporate value in the medium- to long-term by sharing the beneﬁt of rising stock prices and the risk of fallingstock prices with shareholders. The number of stock options granted is based on each Directorʼs status of business execution
and level of contribution, etc., and Directors are able to exercises their options once they have lost their position as Director.
The remuneration of each Director has been determined by consultations among the representative directors based on theauthorization of the Board of Directors. For Outside Directors, only ﬁxed remuneration is paid, and no performance-linked
remuneration is paid.
The remuneration of each Audit and Supervisory Board Members has been determined by consultations among Audit andSupervisory Board Members. For Audit and Supervisory Board Members, only ﬁxed remuneration is paid, and no performance-linked remuneration is paid.
Breakdown of remuneration

The number of
eligible members
Directors
Audit and Supervisory Board Members
Total

Fixed remuneration(million yen)

Performance-linked
remuneration (million yen)

Total remuneration(million yen)

14

730

345

1,076

4

103

ー

103

18

834

345

1,179

Notes: 1. Aggregate remuneration for the Outside Directors and Outside Audit and Supervisory Board Members, a total of four individuals, was ¥55 million（ﬁxed remuneration only).
2. Besides the above, an outside Audit and Supervisory Board Member receives executivesʼ remuneration of ¥0 million from Koito Insurance Services Co., Ltd., a subsidiary of KOITO.
3. For performance-linked remuneration, recurring proﬁt is used as an indicator since it reﬂects the overall results of the Companyʼs management activities, and the
remuneration is calculated giving consideration to the year-on-year change in this indicator.

52

ESG
Activities

KOITO INTEGRATED REPORT 2021

1. System ensuring that Directors and employees
execute their business duties in compliance withlaws and regulations and the Companyʼs Articles
of Incorporation
The Compliance Committee, the Compliance Department, the Internal Audit Department, whistle-blower
internal reporting system, and other organizations andsystems, as well as the Code of Corporate Ethics andother relevant regulations, will be developed andenhance d base d on t he KOI TO G roup C o r p o ra te
Behavior Charter.
At the same time, KOITO's Directors, Corporate Ofﬁcers, and employees will receive education familiarizingthem with the organizations, systems, and regulations.
2. System for the preservation and administration of
information on Directors executing their businessdutiesRegulations will be developed and enhanced to appropriately preserve and administer minutes of the General Meeting of Shareholders, the Board of Directors, theManaging Committee, and other information on the
Directors executing their business duties.
3. Regulations and other systems for managing therisk of loss
Risk Management Regulations and other regulations
and systems for managing risk will be developed to
avoid and eliminate material risks that could threaten
the Companyʼs viability, and to minimize the impact
when they arise. At the same time, KOITO's Directors,
Corporate Ofﬁcers, and employees will receive education and training on risk management.
4. System for ensuring the efﬁcient execution ofbusiness duties by Directors
The Board of Directors and the Managing Committee
meetings will be held regularly. Meanwhile, the Boardof Directorsʼ Regulations, the Managing Committeeʼs
Regulations, and other regulations pertaining to the
execution of business duties by the Directors, as wellas the Corporate Ofﬁcer system and other organizations and systems, will be developed and enhanced toensure the efﬁcient execution of business duties by
the Directors.
At the same time, the business duties will be executed according to speciﬁc plans that each division develops every ﬁscal year based on the Presidentʼs policy.
5. System for ensuring appropriate business execution by the corporate group comprising KOITO andits subsidiaries
KOITO and its group companies will acknowledge the
KOITO Group Corporate Behavior Charter and develop
a system for ensuring and administering the appropriate execution of business duties as follows.
ａ.KOITO clariﬁes matters to be reported in the Subsidiar y Company Management Regulations andother regulations and improves reporting system.
Also, KOITO requests regular business reports to
the group companies.
ｂ.KOITO comprehensively and thoroughly manages
risks of the entire group based on the Subsidiary
Company Management Regulation and other regulations.
I f ac t ions of t he group companie s are insu f ﬁ cient, KOITO provides instructions and corrective
actions.

Corporate
Informationｃ.KOITO requests its group companies to develop
and improve regulations, organizations, andsys te ms fo r re gula r me et ings of t he Boa rd of
D i re c to r s a n d t h e exe c u t i o n o f d u t i e s by t h e
D i re c to r s . O f ﬁ c e r s s e r ve i n m u l t i p l e p o s t s i nimportant group companies.
ｄ.KOITO ensures that group companies stay in compliancewith laws and regulations based on the KOITO Group
Corporate Behavior Charter and other regulations. Also,
KOITO's Management Department and Internal Audit
Department conduct audit and ﬁnancial audit of groupcompanies. KOITO also clariﬁes matters requiring
approvals in the Subsidiary Company Management
Regulations and other regulations so that the applicablebusiness operations are to be executed upon approval by
KOITO.
6. Matters pertaining to the status of certain employees, independence from Directors, and the effectiveness of instruction in the event the Audit andSupervisory Board Members request such employees to assist in the execution of their duties
An Audit and Supervisory Board Membersʼ Ofﬁce willbe established to help the Audit and Super visor y
B o a rd M e m b e r s exe c u te t h e i r d u t i e s u n d e r t h e
instructions and orders of the Audit and Supervisory
Board Members and the Audit and Supervisory Board.
Moreover, assignment of personnel to the Audit andSupervisory Board Membersʼ Ofﬁce shall be decided
upon approval by the Audit and Supervisory Board toensure independence from the Directors.
7. System for Directors and employees of KOITO andits subsidiaries to report to the Audit and Supervisory Board Members and for preventing unfair treatment of the Directors and employees for reportingto the Audit and Supervisory Board Members
Directors, Corporate Ofﬁcers, and employees of KOITO
and its group companies shall report to the Audit andSupervisory Board Members when they learn of matters of material impact on the Company, serious violations of laws, regulations, and the Companyʼs Articles
of Incorporation, and other issues of compliance.
M o re ove r, e a c h Au d i t a n d S u p e r v i s o r y B o a rd
Member shall exercise their own discretion in reporting
the ﬁndings from such reports to the Audit and Supervisory Board. Meanwhile, the Companyʼs organizationand systems will be developed and enhanced to rigorously prevent the unfair treatment of the Directors,
the Corporate Ofﬁcers, and the employees for reporting to the Audit and Supervisory Board Members.
8. Policy on expenses arising when the Audit and Supervisory Board Members execute their duties andsystem for enabling the Audit and Supervisory
Board Members to conduct effective audits
The Company will pay all necessary expenses involvedin the Audit and Supervisory Board Membersʼ execution of their duties.
The Audit and Supervisory Board Member will monitor and audit the execution of business duties at theCompany by means that include attending the Boardof Directors, the Managing Committee, the Compliance
Committees and other relevant conferences and committees, and examining important documents.
The Audit and Super visor y Board Members will
exchange opinions periodically or as needed with
Directors, Corporate Ofﬁcers, ﬁnancial auditors, andthe Internal Audit Department, among others.

KOITO INTEGRATED REPORT 2021 53

Value Creation
Story

Compliance

Whistle-blowing System

KOITO aims to continue being a company that is trusted by all stakeholders and declares in the KOITO
Group Corporate Behavior Charter that “we will comply with all applicable laws and regulations and will
engage in fair, transparent, and free market competition, as well as proper trade, and responsible procurement,” and “in our global corporate activities, we will also comply with international rules and local laws,
respect local culture and customs, and maintain sound relationships with government and government
agencies.” KOITO has identiﬁed reinforcement of “compliance” as one of our materialities. To foster anorganization and atmosphere to place importance on compliance, the entire KOITO Group is committed toengage in compliance activities.

KOITO has established “corporate ethics consulting ■Number of consultations received
desks” inside and outside the company which allows (cases)
employees to report or consult on compliance and ha■Inside consultation desk
■Outside consultation desk
rassment issues. After investigating all cases reported
40
or consulted, we are taking appropriate measures and3report them to the Board of Directors and the Compliance Committee.
30
When operating the Corporate Ethics Consultation
Desk, we are strictly managing information on whis1
tleblowers so that users can report and consult with32
peace of mind. In addition, we are prohibiting disad20
2
25
vantageous treatment of whistleblowers, and stipulat22
ing penalties for its violations in our internal regulations.
15
10

Compliance Management Structure
KOITO has formed the Compliance Committee chaired by a Representative Director to improve compliance. The Compliance Committee establishes a Compliance Policy, supervises the appropriate operationof “corporate ethics consulting desk,” and determines countermeasures and preventive measures in caseimportant compliance issues occur.
Personnel in charge of compliance are also appointed at the domestic and overseas subsidiaries tostrengthen compliance and grasp the compliance status in close collaboration. In this way, KOITO promotes compliance-related initiatives in the entire Group.

0

2017

2018

2019

Corporate
Information

ESG
Activities

2020

1

36

2021

(FY)

Reinforcement of Compliance●Fostering Compliance Awareness and Promoting Education
The KOITO Group Corporate Behavior Charter is printed on portable cards and distributed to all employees for use as the guideline for their actions and to foster their awareness of compliance. Surveys targeting all employees are conducted every year to measure their knowledge and understanding of the Charter.
Results are then reported to the Board of Directors and Compliance Committee.
As for education on compliance, KOITO provides various training for different roles and job duties. As
for employees, KOITO provides education in the job-rank based and theme-based training in various ﬁelds,such as the Antimonopoly Act, the Subcontract Act, and harassment for employees. Compliance trainingby outside instructors is also provided to Directors and Corporate Ofﬁcers.
In addition, KOITO also provides compliance education to suppliers. We are asking suppliers to ensurecompliance at the annual procurement policy brieﬁng session.

54●Anti-corruption Initiatives●Prevention of Anti-competitive Practices

Through establishing the “Anti-bribery Regulations” and implementing internal education, KOITO
is working to prevent corruption, such as bribery,
extortion, fraud, embezzlement, money laundering,
conﬂicts of interest, illegal ﬁnancing to political parties and facilitation payments.
The penalties imposed in the event of violationsof laws are stipulated in our internal regulations.
Nobody in the Group was ﬁned or dismissed forcorruption in FY 2021.

Through establishing the “Antimonopoly Act Regulations” and implementing internal education,
KOITO is working to prevent anti-competitive practices, such as market division, price-ﬁxing, abuse of
dominant position and dumping.
With the attendance of Audit and Supervisory
Board Members, the Internal Audit Department
conducts annual audit to departments concernedwith the Antimonopoly Act and Subcontract Act,and the ﬁndings are reported to the Compliance
Committee. If any problems were found during theaudit, the details of the improvement are also
reported to the Committee.
The penalties imposed in the event of violationsof laws are stipulated in our internal regulations.
Nobody in the Group was ﬁned or dismissed foranti-competitive practices in FY 2021.

KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021 55

Value Creation
Story

Corporate
Information

Risk Management

Information Security

KOITO enriches and reinforces general risk management to properly identify diversifying and complex
risks, prevent risks from becoming materialized, and minimize damage in case problem occurs.
Departments are assigned to risk management, including the implementation of measures to reduce andavoid risks and daily management. The Quality Assurance Department is assigned risks associated withthe safety of products, the Purchasing Department handles risks in the supply chain, and the Safety Environment Department handles risks of natural disasters. As such, each department assess relevant risks
and implement preventive measures. Ofﬁcers of assigned responsible departments act as the generalmanagers. In addition, training on individual risks is provided to employees.
If risks become actual problems, the basic protocol is to report the incidents to the Board of Directors,
the highest decision-making entity of the business administration, and such problems are swiftly andproperly handled under the direction of the top administrators.

KOITO has identiﬁed “information security” as one of our materialities, and ensures the protection of personal information and conﬁdential information based on the Information Security Policy while implementing proper information security measures to materialize safe and thorough management.

Natural Disaster Risks
Based on our basic policy “to prioritize human lives and maintain business
continuity,” KOITO examines disaster control, initial response, and restoration work to ﬁnd problems and re-evaluate and reinforce response measures based on lessons learned through natural disasters such as the Great
East Japan Earthquake, Kumamoto Earthquake, heavy rains, typhoons, andexpected damage caused by the Nankai Trough Earthquake.
To control damage from natural disasters, such as earthquakes, KOITO
implements aseismic reinforcement of production site buildings, anti-fallmeasures for facilities and equipment, installation of emergency earthquake notiﬁcation systems, regular disaster drills including evacuation andﬁreﬁghting, all-employee safety conﬁrmation drills, and general inspectionsof the maintenance and management of evacuation routes. KOITO also
intends to minimize the damage caused by disasters by hosting lectures on
how to check hazard maps and evacuation.
To prevent ﬁre, KOITO makes efforts to reinforce the system to ensure
quick extinguishing through thorough management of hazardous materials
and combustibles, such as organic solvents, increased installation and rearrangement of ﬁre extinguishing equipment to prepare for ﬁre, and implementation of initial ﬁreﬁghting training.
In addition, on-site inspections on safety, ﬁre, and disaster prevention arebeing conducted at subsidiaries and suppliers. Subsidiaries in Japan are
also mutually inspecting and improving each otherʼs production sites in
Subsidiaries Mutual Safety Inspections to improve the safety, ﬁre, anddisaster prevention level in the entire Group and the supply chain.

■ Fire ﬁghting training using ﬁre hydrant■ Online disaster control seminar by Regional
Management Center of Central Shizuoka

・Hygiene in prevention (wearing masks and hand sanitizing)・Periodically disinfecting areas where an unspeciﬁed number of people touch, such as doors, switches, etc.
・Installing partitions in ofﬁces, meeting rooms, and dining halls
・Implementing staggered eating
・Avoiding three Cs (closed spaces, crowded places, and close-contact settings) in daily life and implementing “new normal”
・Actions in line with the measures requested by the prefectural governments to prevent infectious diseases[Commuting]

KOITO INTEGRATED REPORT 2021

KOITO MANUFACTURING CO., LTD. (“KOITO”)
recognizes that the appropriate managementof information is a critical management issue,and has formulated an “Information Security
Policy” to gain the trust of customers and society at all times.
KOITO intends, from now on, to comply withthis Information Security Policy, maintaining
and improving information security by protecting information assets from various threats
and handling information appropriately.

KOITO has appointed a Chief Information Security
Ofﬁcer (CISO) and established an information security
management system that enables prompt implementation of security information measures, to gain thetrust from the society at all times. This management
system shall be reviewed and improved regularly. With
this CISO and management system, KOITO makes
every possible effort to protect all information assets
held by us and comply with laws, regulations, andother rules related to information security.

2. Development of internal information
security-related rules

Putting the highest priority on the safety of customers, business partners, employees and their families, the
KOITO Group implements various measures based on requests from the government and local governments forthe purposes of preventing the spread of the COVID-19 pandemic.

・Re s t r i c t i n g e m p l oye e s to u s e p u b l i ctransportation for commuting regarding
the infection status at our site location
・Promoting teleworking in administrativeand indirect departments and let smallest
number of employees to come to ofﬁce
・Measuring employees' temperature whenentering the ofﬁce etc.

Information Security Policy

1. Establishment of information security
management system

KOITO's Response to the Spread of COVID-19 Infections

56

ESG
Activities[Business travels and meetings]

・Prohibiting employees to make overseas business travels
・Only allowing essential or urgent domestic business travels (businesstravelers must submit application and receive permission in advance,and comply with implementing infection prevention measures)
・Promoting online meetings
・Self-restraint in face-to-face meetings with people outside the company
・Measuring temperature and requesting hand sanitizing, submitting temperature record for the past two weeks, and wearing mask for outside
visitors when entering the manufacturing sites etc.

KOITO develops internal rules based on our Information Security Policy to have a clear policy for the handling of not only personal information but also allother information assets, and makes all employees
and business partners fully aware of KOITO's strictmeasures against information leaks etc.

3. Implementation of appropriate
information security measures

KOITO implements organizational, physical, technological, and personal security management measures sothat information assets of KOITO are not subjected tounauthorized access, destruction, leakage, or alteration. These measures shall be adjusted and adapted
to changes when technological and social needs arise.

4. Implementation of internal information
security audits

KOITO regularly conducts internal information security audits to verify that security measures are functioning effectively in the course of business operations, in accordance with relevant laws and internal
regulations and rules.

5. Enhancement of information security
literacy

KOITO provides thorough security education/training
to employees etc. so that all people dealing with our
information assets perform their duties with information security literacy. KOITO also continues to provide
its employees with education/training to respond toever-changing circumstances.

Organization for Information
Security Activities
The KOITO Group's information security is managed by the Information System Depar tment,along with General Affairs Department and Compliance Promotion Ofﬁce. Company-wide computers and networks are monitored on a daily basis.
Furthermore, each department periodically checks
for information security risks and implements a
PDCA cycle to continuously improve security.

Information Security
Management System
In order to protect information assets from therisk of leaks, theft, alternation, etc., the KOITO
Group operates information security management
based on management standards for the conﬁdentiality, integrity, and availability of information. In
particular, major functional divisions are assuring
information security and promoting the improvement of security reliability. In 2020, divisions fordesigning and developing automotive lighting
equipment and others have acquired ISO 27001,
an international standard for information security.
The KOITO Group will continue to strive to further maintain and improve information security by
improving our information security management
system through continuous PDCA cycle and by expanding the scope of cer tiﬁcation within theGroup.

Information Security Measures
In order to reinforce our information security toprotect information from cyberattacks, KOITO hasestablished internal regulations based on its Information Security Policy and is implementing various
cyber security measures, including the establishment of a Group-wide monitoring system and an
incident response system. We are seeking to build
a strategic information management system that
not only appropriately manages conﬁdential andpersonal information, but also manages and utilizes intellectual proper t y and other intangible
assets.

KOITO INTEGRATED REPORT 2021 57

Value Creation
Story

ESG
Activities

Corporate
Information

Intellectual Property Management

Tax Policy

The KOITO Group places intellectual properties as the source of international competitiveness and develops business strategies by integrating R&D and intellectual property strategies. KOITO will continue to encourage activities to create intellectual properties and work to protect and utilize the intellectual property
rights appropriately. At the same time, we will respect the intellectual property rights of others and strive
to prevent infringements.

The KOITO Group recognizes the importance of paying appropriate taxes and promotes sound tax activities in accordance with the tax laws and policies of each country and region while striving to build theproper tax governance system.

■R&D expenditures and number of patents

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

R&D expenditures (billion yen)

34.2

36.1

34.0

36.1

32.6

Number of patents applied

600

800

1,230

1,130

938

2,490

2,630

2,890

2,830

2,813

Number of patents held

Organization for Intellectual
Property Management

Measures to Prevent Violationof Intellectual Property

The KOITO Group makes effort to reinforce theintellectual property management system of theentire Group to acquire intellectual property rights,
conclude licensing contracts, and respond to theviolation of rights globally by developing a management system with KOITO MANUFACTURING at
the center to establish and execute intellectual
property strategies integrated with business strategies.

Given the importance of intellectual properties, the
KOITO Group provides training on intellectual
property rights through the job-rank based education to increase the awareness of every employee.
In addition, KOITO has introduced a patent
research system available to all researchers anddesigners to avoid violating intellectual property
rights of others and preventing future conﬂicts.

Tax Policy
1. Tax Compliance

KOITO MANUFACTURING CO., LTD. (“KOITO”) and its subsidiaries (“the KOITO Group”) comply with tax codes aswell as relevant laws and regulations, ﬁle the proper tax returns and pay taxes in each country and region where
we conduct businesses.
The KOITO Group does not engage in tax avoidance using tax havens, or use tax planning that does not coincidewith business conditions.

2. Tax Governance System

The KOITO Group strives to properly comply with the tax laws, systems and administrative operations in eachcountry with the cooperation between Group companies in an effort to minimize tax risks.
The tax risks of the KOITO Group are managed under the discretion of the Chief Financial Ofﬁcer according toreports from each Group company.
In addition, the KOITO Group will seek the advice and guidance of external experts for any complex risks or
grave matters of concern to respond after investigation, evaluation and deliberation.

3. Transfer Pricing

The KOITO Group will adhere to arm's length transaction principles with understand of the OECD Transfer Pricing
Guidelines and domestic tax Base Erosion and Proﬁt Shifting (BEPS) to set the price of transactions between
Group companies.
In addition, the KOITO Group will seek the advice and guidance of external experts as necessary to reduce thetax risks related to transfer pricing.

4. Elimination of Dual Taxation

The KOITO Group applies tax treaties to eliminate dual taxation on the same economic proﬁts from multiple countries and regions.

5. Relationship with Tax Authorities

KOITO's "Area Marker" was Registered as theFirst Domestic Design of Images■Image of "Area Markers"

The KOITO Group properly responds to any inquiries and requests for information from the tax authorities in eachcountry and region where it does business with good faith and in a timely manner in an effort to build and maintain good relationships founded in trust with tax authorities.
If any question arises between the KOITO Group and tax authorities about tax practices, the understanding oftax codes or other tax-related matters, the KOITO Group will work together with each tax authority to resolve thematter in question.

With the revision of the Design Law in April 2020, designs for buildings and images have been newly protected as intellectual property, and the Area Marker devisedby KOITO has recently been registered as the ﬁrst domestic design of images.
The projector mounted on the vehicle displays imagesof the vehicle's width on the road surface. It makes thesurroundings easier to recognize the vehicle and also
helps drivers to check the road surface conditions, andis expected to contribute to improve safety.

58

KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021 59

Value Creation
Story

ESG
Activities

Corporate
Information

Executive Management (as of March 31, 2021)
Chairman and CEO

President and COO

Masahiro Otake

Hiroshi Mihara

April
June
June
June
June
June
June

April
June
June
June
June
June

1977
1987
1993
1999
2005
2007
2 015

Joined KOITO
Director
Managing Director
Senior Managing Director
Executive Vice President
President
Chairman (present position)

Executive Vice President

1978
2003
2006
2 011
2 013
2 015

Joined KOITO
Director
Managing Director
Senior Managing Director
Executive Vice President
President (present position)

Executive Vice President

Koichi Sakakibara

Kenji Arima

April 1975 Joined KOITO
June 1999 G e n e ra l Ma na g e r o f P ro du c t
Development Department
June 2001 Director
June 2007 Managing Director
June 2009 Senior Managing Director
June 2 013 Executive Vice President (present
position)
In charge of Personnel Department, General Affairs Departm e n t , Shizu o ka , P u rcha s in g
Department (present position)

April
January
June
June
June

Senior Managing Director

1977
2005
2005
2 011
2 012

Joined KOITO
Director, Koito Europe NV (KENV)
Director, KOITOManaging Director
Director and Managing Corporate Ofﬁcer
June 2 013 Senior Managing Director
June 2019 Executive Vice President (present position)
Engineering Headquar ters, In
cha rg e o f M o b i l i t y S t ra te g y
Department, Research & Development Department, Intellectual
Property Department (present
position)

Senior Managing Director

Director and Senior Adviser

Takashi Ohtake

Director and Managing Corporate Ofﬁcer

Hideo Yamamoto

Joined KOITO
Director
Managing Director
Senior Managing Director
Executive Vice President
President
Chairman
Dire c tor and Senior Ad v iser(present position)

April 1980 Joined The Mitsubishi Bank, Ltd.
(currently MUFG Bank, Ltd.)
June 2008 G e n e r a l M a n a g e r o f A s i a n
Investment Banking Division,
MUFG Bank, Ltd.
October 2010 Standing Adviser, KOITO
June 2 011 Managing Director
June 2 012 Director and Managing Corporate
Ofﬁcer (present position)
In charge of G eneral Af fairs
Depar tment, Public Relations
Depar tment, Information
System Department and Internal Audit Department (present
position)

Director and Managing Corporate Ofﬁcer

Director and Managing Corporate Ofﬁcer

April
January
June
June
June
June

April
January
April
June
June

April
June
June
June
July
June
June
June

1962
1979
1983
1985
1992
2003
2007
2 015

Jun Toyota
1983
2005
2005
2 012
2 013
2 015

Joined KOITO
Director, Koito Europe NV (KENV)
Director, KOITO
Corporate Ofﬁcer
Managing Corporate Ofﬁcer
President, Nor th American
Lighting, Inc. (NAL)
June 2 017 Director and Managing Corporate
Ofﬁcer, KOITO (present position)
June 2019 International Operations Headquarters (present position)

Outside Director

Takayuki Katsuda
1985
2010
2016
2016
2019

Joined Toyota Motor Corporation
Chief Engineer, Lexus Center
Standing Adviser, KOITOManaging Corporate Ofﬁcer
Director and Managing Corporate
Ofﬁcer (present position)
Engineering Headquar ters, In
charge of Project Management
Depar tment, System ProductDevelopment Depar tment,
Shizuoka 1s t De sign Depar tment , Toyota Design Depar tment and Mobilit y Strategy
Department (present position)

Outside Director

Masami Uchiyama

Michiaki Kato

Haruya Uehara

Kingo Sakurai

April 1983 Joined KOITO
June 2005 General Manager of Personnel
Department
June 2007 Director
June 2 011 Managing Director
June 2 012 Director and Managing Corporate Ofﬁcer
June 2 017 Senior Managing Director (present position)
Production Headquar ters, Shizuoka
Plant, Haibara Plant, In charge of Logistics Department, Safety Environment
Department, Production Control Department and Electronics Products Production Department (present position)

April 1982 Joined KOITO
October 2004 General Manager of Euro-American
Operations
June 2005 Director
June 2 011 Managing Director
June 2 012 Managing Corporate Ofﬁcer
June 2 013 Director and Managing Corporate Ofﬁcer
June 2 017 Senior Managing Director (present position)
Sales Headquar ters and International Operations Headquarters (present position)

April 1969 Joined The Mitsubishi Trust andBanking Corporation (currently
Mitsubishi UFJ Trust and Banking
Corporation)
June 1996 Director
June 1998 Managing Director
June 2001 Senior Managing Director
June 2002 Director, Deputy President
April 2004 President
October 2005 President, Mitsubishi UFJ Trustand Banking Corporation
June 2008 Chairman
April 2 012 Senior Adviser
June 2 013 Outside Director, KOITO (present
position)J u l y 2018 Senior Advisor, Mitsubishi UFJ
Trust and Banking Corporation(present position)

March 1972 Registered as cer tiﬁed public
accountant
June 1983 Independent Auditor, KOITO
June 2009 Resigned Independent AuditorJ u l y 2009 Adviser (part time), KOITO
June 2 017 Outside Director (present position)

Senior Managing Director

Senior Managing Director

Hideharu Konagaya

Katsuyuki Kusakawa

April 1987 Joined KOITO
April 2006 General Manager of Accounting
Department
June 2009 Director
June 2 012 Corporate Ofﬁcer
June 2 013 Managing Corporate Ofﬁcer
June 2 015 Director and Managing Corporate
OfﬁcerJune 2 017 Senior Managing Director (present position)
Finance & Accounting Head quarters, In charge of Purchasing Department (present position)

April 1980 Joined Toyota Motor Co., Ltd.
(currently Toyota Motor Corporation)
January 2009 S e c o n d e d t o To y o t a M o t o r
Sales, U.S.A., Inc.
March 2 011 Standing Adviser, KOITO
June 2 011 Managing Director
June 2 012 Director and Managing Corporate Ofﬁcer
June 2019 Senior Managing Director (present position)
Engineering Headquar ters, In
cha rg e o f C o r p o ra te P l a n n i n g
Department, Compliance Department, Cost Administration Department , Engineering Depar tment
and Mobility Strategy Department(present position)

60 KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021

61

Value Creation
Story

Executive Management (as of March 31, 2021)
Standing Audit and Supervisory Board Member

Standing Audit and Supervisory Board Member

April 1968 Joined KOITO
April 1995 General Manager, Production
Control Department
June 1999 Director
June 2005 Managing Director
June 2006 Senior Managing Director
June 2009 Executive Vice President
June 2 013 Standing Audit and Supervisor y Board Member (present
position)

April 1974 Joined KOITO
April 2002 General Manager of Purchasing
Department
June 2003 Director
June 2006 Managing Director
June 2 012 Managing Corporate Ofﬁcer
June 2 013 Senior Managing Director
June 2 017 Standing Audit and Supervisor y Board Member (present
position)

Mitsuo Kikuchi

Hiroshi Kimeda

April 1965 Joined Sendai Regional Taxation Bureau
J u l y 1990 Assistant Director, Large Enterprise Examination Division, Large
Enterprise Examination andCriminal Investigation Depar tment, National Tax Agency
J u l y 1995 D e p u t y D i s t r i c t D i r e c t o r,
Hachioji Tax Ofﬁce
December 1995 Acquired qualiﬁcation as certiﬁed tax accountant
J u l y 2005 Director- General, Takamatsu
National Tax Tribunal
J u l y 2009 Adviser (part time), KOITO
January 2010 Audit and Super visor y Board
M e m b e r, K o i t o I n s u r a n c e
Ser vices Co., Ltd. (present
position)
June 2016 Outside Audit and Supervisory
Board Member, KOITO (present
position)

April 1993 Public Prosecutor, Tokyo District
Public Prosecutors Ofﬁce
April 1997 Public Prosecutor, Special Investig a t i o n D e p a r t m e n t , To k y oDistrict Public Prosecutors Ofﬁce
August 1998 Visiting scholar, Notre Dame
Law School in U.S.A.
June 1999 Public Prosecutor, Criminal Affairs
Bureau, Ministry of Justice
June 2001 Assistant Division Chief, Planning and Legal Division, Financial Services Agency
August 2002 R e g i s t e r e d a s a n a t t o r n e yJoined Nishimura & Par tners(currently Nishimura & Asahi)(present position)
December 2 011 Outside Director, Advance Create
Co., Ltd. (present position)
January 2019 Outside Audit and Supervisory
Board Member, KOITO (present
position)Managing Corporate Ofﬁcer

Corporate Ofﬁcer

Atsushi Inoue

Koichi Toyoda

Kohei Yamasaki

Masatoshi Yoneyama

Masahiro Otake

Eisuke Shibata

Toshiyuki Katsumata

Yuji Higashi

62

KOITO INTEGRATED REPORT 2021

Kirk Gadberry

Takahito Otake

Hideki Ochiai

Kazuhiro Aoshima

Kakuya Yamamoto

Manabu Kobayashi

Masataka Choji

Corporate Information

Outside Audit and Supervisory Board Member

Yukinobu Suzuki

Mamoru Murakoshi

Corporate
Information

Yohei Kawaguchi

Outside Audit and Supervisory Board Member

Kiyoshi Sato

ESG
Activities

Masayasu ItoFinancial Summary of the Last 11 Years

64

Consolidated Financial Statements

66

Stock Information

70

Corporate Information

71

KOITO INTEGRATED REPORT 2021 63

Value Creation
Story

ESG
Activities

Corporate
Information

Financial Summary of the Last 11 Years
KOITO MANUFACTURING and its consolidated subsidiaries

Financial Data of the Last 11 Years(¥ millions)

FY 2011

FY 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021Net sales

428,977

430,929472,843597,502706,470

813,477

841,456

848,868

826,257

800,928

706,376

Operating income

37,43431,72537,66849,50664,15582,21892,523

103,785

101,534

82,411

56,707

Recurring proﬁt

34,31931,49640,00751,89566,88084,296

95,336

107,945

105,494

85,264

61,107

Proﬁt attributable to owners of parent

10,012

13,391

16,625

21,37836,06046,30356,692

83,39772,89558,022

37,612

Cash ﬂows from operating activities

50,98832,074

42,13835,57273,28973,82898,38894,793

96,666

84,972

74,962

Cash ﬂows from investing activities△37,787△27,185△41,947△36,030△55,526△62,777△72,486△67,260△25,906△44,728△1,093

Cash ﬂows from ﬁnancing activities△20,023△4,604△2,812

5,377△14,376△10,062△16,624△17,633△13,063△32,010△18,324

Cash and cash equivalents at end of year

22,902

23,21721,992

27,75033,082

31,88639,50041,05097,993

104,202

161,855

Depreciation

21,253

19,517

17,827

21,522

25,91931,71931,72132,28732,06036,06637,962

Capital expenditures

16,466

21,44522,28534,561

48,47041,32240,28433,75954,05356,73737,887

R&D expenses

17,177

17,611

20,08524,761

27,95532,642

34,226

36,101

34,024

36,121

32,671

Total assets

338,760

363,273

418,087

483,093575,268

588,683

658,341

672,055

738,175

729,715

782,163

Net assets

168,414

182,916

218,131

256,072

316,826

329,671

381,000

444,808

503,564

513,524

569,438

Property, plant and equipment

81,49085,06899,193

114,080

140,859

139,300

141,538

133,935

158,769

170,082

171,615Interest-bearing liabilities

26,22925,73730,09743,51041,50041,24935,05728,92932,482

29,526

20,945

As of the End of the Fiscal Year:

Data Per Share:
Net income

（yen）

62.30

83.33

103.46133.04224.41

288.15352.80518.90453.52360.99234.00

Dividends

（yen）

19

19

22

26

40

36

54

96

92

72

50

（%）

30.5

22.8

21.3

19.5

17.8

12.5

15.3

18.5

20.3

19.9

21.4

（yen）

912.55997.38

1,180.61

1,368.72

1,674.91

1,780.94

2,090.87

2,551.48

2,870.24

2,989.43

3,344.65

Operating income ratio on sales

（%）

8.7

7.4

8.0

8.3

9.1

10.1

11.0

12.2

12.3

10.3

8.0

Equity ratio

（%）

43.3

44.1

45.4

45.5

46.8

48.6

51.0

61.0

62.5

65.8

68.7

Return on equity (ROE)

（%）

6.8

8.7

9.5

10.4

14.8

16.7

18.2

22.4

16.7

12.3

7.4

Return on assets (ROA)

（%）

1.7

3.7

4.2

4.7

6.8

8.0

9.1

12.5

10.3

7.9

5.0

Price earnings ratio (PER)(times）

21.4

16.1

15.8

13.1

16.1

17.7

16.4

14.2

13.8

10.1

31.7

Price book-value Ratio (PBR)（times）

1.5

1.3

1.4

1.3

2.2

2.9

2.8

2.9

2.2

1.2

2.2

Consolidated dividends payout ratio
Net assets
Financial Indicators

Notes: 1. “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, revised on February 16, 2018) has been adopted from the
beginning of the ﬁscal year ended March 31, 2019, therefore, the key performance indicators, etc., pertaining to the ﬁscal year ended March 31, 2018 are thoseafter retrospective application of the relevant accounting standard.
2. Return on assets (ROA) is calculated by “proﬁt attributable to owners of parent / average total assets during the period.”

64

KOITO INTEGRATED REPORT 2021

KOITO INTEGRATED REPORT 2021 65

Value Creation
Story

ESG
Activities

Corporate
Information

Consolidated Financial Statements
Consolidated Balance Sheets(¥ millions)

AssetsCurrent assets
Cash and time deposits
Trade notes and accounts receivable
Electronically recorded monetary claims-operating
Inventories
Other current assets
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings and structures (net)
Machinery and transportation equipment (net)Fixtures, equipment and tools (net)Land
Construction in progress
Other property, plant and equipment
Intangible ﬁxed assets
Investments and other assets
Investment securities
Claims provable in bankruptcy, claims provable in rehabilitation and other
Deferred income tax assets
Net deﬁned assets for retirement beneﬁts
Other investments
Allowance for doubtful accounts
Total assets
Liabilities
Current liabilities
Trade notes and accounts payable
Electronically recorded monetary obligations-operating
Short-term loans
Accrued expenses
Income taxes payable
Allowance for employeesʼ bonuses
Reserve for product warranties
Allowance for expenses for damages
Allowance for environmental strategies
Other current liabilities
Non-current liabilities
Long-term debt
Deferred income tax liabilities
Allowance for directorsʼ and corporate auditorsʼ retirement beneﬁts
Reserve for product warranties
Allowance for environmental strategies
Net deﬁned liability for retirement beneﬁts
Other non-current liabilities
Total liabilities

66

KOITO INTEGRATED REPORT 2021

FY 2020 (As of March 31, 2020)

FY 2021 (As of March 31, 2021)

492,150
271,774
107,872
12,81665,54434,505△362
237,564
170,082
49,552
66,417
17,05016,02821,033−
3,193
64,28845,70159
14,711
1,599
2,504
△288
729,715

538,416
303,887
115,950
12,95773,751
32,239△370
243,747
171,615
53,49369,993
14,391
15,561
17,457718
3,125
69,00556,570
18
7,755
2,556
2,244
△139
782,163

173,690
85,737
8,692
29,171
21,073
7,147
5,332
2,517
91
40
13,88842,500
355
6,221
266
5,796
4
28,027
1,827
216,190

171,928
95,9897,867
20,71523,366
5,267
5,420
2,622
−
−
10,67940,796
230
7,938
275
5,641
17
24,701
1,991
212,724(¥ millions)

Net assets
Shareholdersʼ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury common stock, at cost
Accumulated other comprehensive income
Valuation adjustment on marketable securities
Translation adjustments
Adjustments in deﬁned beneﬁt plans
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

FY 2020 (As of March 31, 2020)

FY 2021 (As of March 31, 2021)

476,622
14,27013,373449,031△53
3,880
14,822△9,333△1,608231
32,789513,524
729,715507,813
14,27013,380480,214△52
29,792
23,690
4,291
1,810
222
31,610569,438
782,163

Consolidated Statements of Income and Loss(¥ millions)

Net sales
Cost of sales
Gross proﬁt
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends
Subsidies for employment adjustment
Royalty income, otherForeign exchange gains
Other non-operating income
Non-operating expenses
Interest expenses
Shares of loss of entities accounted for using equity method
Foreign exchange losses
Other non-operating expenses
Recurring proﬁt
Extraordinary gains
Extraordinary losses
Income before income taxes
Total income taxes
Net income(Breakdown)
Proﬁt attributable to owners of parent
Proﬁt attributable to non-controlling interests

FY 2020

FY 2021
800,928
672,890
128,038
45,62682,411
5,289
1,724
1,274
−
597
−
1,692
2,436
870
350
814
401
85,26452
1,258
84,05821,97062,087

706,376
609,132
97,24440,53756,707
6,100
1,190
1,050
676
475
10
2,697
1,700
581
595
−
524
61,107265
1,943
59,42918,96940,46058,022
4,065

37,612
2,848

KOITO INTEGRATED REPORT 2021 67

Value Creation
Story

ESG
Activities

Corporate
Information

Consolidated Financial Statements
Consolidated Statements of Changes in Shareholdersʼ Equity
FY 2020 (April 1, 2019 to March 31, 2020)(¥ millions)

Accumulated other comprehensive income

Shareholder's equity
Additional paid-in
Treasury common Total shareholdersʼ
Retained earnings
capitalstock, at costequity16,759407,725△55
438,700

Common stock
Balance at beginning of year
Changes during ﬁscal year
Dividends from retained earnings
Proﬁt attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stock
Changes of equity interest inconsolidated subsidiaries
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
Changes in items other than shareholdersʼ
equity during ﬁscal year (net)Total changes during ﬁscal year
Balance at ﬁscal year-end

14,270
−
−
−
−

−
−
−
11

△16,716
58,022
−
−

−
−
△0
2

△16,716
58,022
△0
13

−

△0

−

−

△0

−

△3,396−−△3,396

−

−

−

−

−

−
14,270△3,385
13,37341,306
449,0311△53

37,922476,622

Balance at beginning of year
Changes during ﬁscal year
Dividends from retained earnings
Proﬁt attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stock
Changes in items other than shareholdersʼ
equity during ﬁscal year (net)Total changes during ﬁscal year
Balance at ﬁscal year-end

Subscription Non-controlling Total net
interests
assetsValuation adjustment on Translation Adjustments of deﬁned Total accumulated other rights tomarketable securities adjustments
beneﬁt planscomprehensive income shares
14,822△9,333△1,608

3,880

−
−
−
−

−
−
−
−

−
−
−
−

−
−
−
−

8,867

13,625

3,418

8,867
23,69013,625
4,291

3,418
1,810

231 32,789 513,524−−−−△6,42937,612△1
925,911△9 △1,178

24,72325,911
29,792△9 △1,178 55,914
222 31,610 569,438

−
−
−
−

Consolidated Statements of Cash Flows(¥ millions)

Accumulated other comprehensive income

Balance at beginning of year
Changes during ﬁscal year
Dividends from retained earnings
Proﬁt attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stock
Changes of equity interest inconsolidated subsidiaries
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
Changes in items other than shareholdersʼ
equity during ﬁscal year (net)Total changes during ﬁscal year
Balance at ﬁscal year-end

Subscription Non-controlling Total net
Valuation adjustment on Translation Adjustments of deﬁned Total accumulated other rights tointerests
assetsmarketable securities adjustments
beneﬁt planscomprehensive income shares
245 41,981 503,564

19,857

3,473

△694

22,636

−
−
−
−

−
−
−
−

−
−
−
−

−
−
−
−

−
−
−
−

− △16,716
58,022
−
△0
−
13
−

−

−

−

−

−

−

△0

−

−

−

−

−

−

△3,396△5,034△12,807△913△18,755△13 △9,192 △27,961△5,034
14,822△12,807△9,333△913△1,608△18,755
3,880

9,960
△13 △9,192
231 32,789 513,524

FY 2021 (April 1, 2020 to March 31, 2021)(¥ millions)Shareholder's equity
Common stock
Balance at beginning of year
Changes during ﬁscal year
Dividends from retained earnings
Proﬁt attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stock
Changes in items other than shareholdersʼ
equity during ﬁscal year (net)Total changes during ﬁscal year
Balance at ﬁscal year-end

68

KOITO INTEGRATED REPORT 2021

14,270Treasury common Total shareholdersʼ
Additional paid-in
Retained earnings
stock, at costcapitalequity449,031△53
13,373476,622

−
−
−
−

−
−
−
7

△6,42937,612
−
−

−
−
△1
1

△6,42937,612
△1
9

−

−

−

−

−

−
14,2707
13,38031,182
480,2140△52

31,190507,813

FY 2020(April 1, 2019 to March 31, 2020)

FY 2021(April 1, 2020 to March 31, 2021)

Income before income taxes

84,058Depreciation

36,06659,429

Increase or decrease in trade notes and accounts receivable
Increase in inventories

7,339△2,161

Increase or decrease in trade notes and accounts payable△8,621

Income taxes paid

△19,695

Others△12,014

Cash ﬂows from operating activities

84,972

Increase or decrease in time deposits

19,596

Acquisition of property and equipment△54,796

Others△9,528Cash ﬂows from investing activities△44,728

Increase or decrease in loans△1,146

Dividends paid

△19,100

Others△11,764

Cash ﬂows from ﬁnancing activities△32,010

Effect of exchange rate changes on cash and cash equivalents
Increase in cash and cash equivalents△2,024
6,209

Cash and cash equivalents at beginning of year

97,993

Cash and cash equivalents at end of year

104,20237,962△7,796△8,4297,635△16,567
2,728

74,962
29,101△33,533
3,339△1,093△9,501△8,820△3△18,3242,108

57,652104,202
161,855

KOITO INTEGRATED REPORT 2021 69

Value Creation
Story

Stock Information (as of March 31, 2021)

Corporate Information (as of March 31, 2021)

Number of shares authorized

320,000,000 sharesCompany Name

KOITO MANUFACTURING CO., LTD.

Number of shares issued

160,789,436 shares

FoundedApril 1, 1915

Incorporated

April 1, 1936

Capital¥ 14,270 million

Number of employees[consolidated]
23,799[non-consolidated] 4,482

Head Ofﬁce

4-8-3 Takanawa, Minato-ku, Tokyo 108-8711 Japan
Phone: +81-3-3443-7111 Fax: +81-3-3447-1520

Number of shareholders
5,547(Number of unit shareholders' in the above: 5,067)●State of Distribution of Stocks by
Shareholders (in number of stocks)
Securities
companies

Individual andother investors

3.3%

Domestic
corporations

25.5%

0.8%

Financial
institutions

38.4%

Overseas
corporations

32.0%●Major Shareholders
Shares(thousand stocks)

Shareholders
Toyota Motor Corporation

32,158The Master Trust Bank of Japan, Ltd. (Trust account)

12,653Custody Bank of Japan, Ltd. (Trust account)

6,115

Sumitomo Mitsui Banking Corporation

5,442

Nippon Life Insurance Company

5,382

MUFG Bank, Ltd.

5,154

STATE STREET BANK AND TRUST COMPANY 505223

4,914

The Dai-ichi Life Insurance Company, Limited

4,000

Aioi Nissay Dowa Insurance Co., Ltd.

2,851

JP MORGAN CHASE BANK 385632

2,701

Note: Fractions of less than one thousand stocks are disregarded.

Stock Price Transition/Total Shareholder Returns (TSR)
Stock price (yen)10,000

9,000

8,000

The KOITO Group's Subsidiaries and Afﬁliates
Company Name
Koito Transport Co., Ltd.

40 million yen

Transportation services and logistics

Aoitec Co., Ltd.

100 million yen

Manufacturing and marketing of electronic components, electricaldevices, telecommunications equipment and precision machinery

Shizuokadenso Co., Ltd.

76 million yen

Manufacturing and marketing of automotive lighting equipment

Nissei Industries Co., Ltd.

51 million yen

Manufacturing and marketing of miniature bulbs and electrical equipment

Fujieda Auto Lighting Co., Ltd.

100 million yen

Manufacturing and marketing of automotive lighting equipment

Shizuoka Wire Harness Co., Ltd.

100 million yen

Manufacturing and marketing of automotive lighting equipment

Haibara Machine and Tools Co., Ltd.

50 million yen

Manufacturing and marketing of resin metal molds

Shizuoka Kanagata Co., Ltd.

20 million yen

Manufacturing and marketing of resin metal molds

Koito Insurance Services Co., Ltd.

10 million yen

Insurance agent

54

115%

Takeda Suntech Co., Ltd.

15 million yen

Manufacturing and marketing of resin metal molds

2018

96

148%

New Fuji Co., Ltd.

10 million yen

Service businesses

2019

92

128%

2020

72

78%

KOITO ELECTRIC INDUSTRIES, LTD.

90 million yen

Manufacturing and marketing of railroad car control equipment, road
trafﬁc signals and trafﬁc control systems, and seats for railroad cars, etc.

2021

50

153%

Minatsu, Ltd.

40 million yen

Maintenance and upkeep of trafﬁc signals and safety equipment

Okayama Industry Co., Ltd.

50 million yen

Manufacturing and marketing of railroad car seats

North American Lighting, Inc.

130 million USD

Manufacturing and marketing of automotive lighting equipment

North American Lighting Mexico. S.A. de C.V.

750 million MXN

Manufacturing and marketing of automotive lighting equipment

400 thousand USD

Manufacturing and marketing of railroad car electric components

303 million Real

Manufacturing and marketing of automotive lighting equipment

Koito Europe Limited

65 million Pound Sterling

Manufacturing and marketing of automotive lighting equipment

Koito Czech s.r.o.

1,000 million Czech Koruna

Manufacturing and marketing of automotive lighting equipment

GUANGZHOU KOITO AUTOMOTIVE LAMP CO., LTD.

4,000 million yen

Manufacturing and marketing of automotive lighting equipment

Hubei Koito Automotive Lamp Co., Ltd.

5,000 million yen

Manufacturing and marketing of automotive lighting equipment

FUZHOU KOITO TAYIH AUTOMOTIVE LAMP CO., LTD. 9,000 thousand USD

Manufacturing and marketing of automotive lighting equipment

THAI KOITO COMPANY LIMITED

365.2 million Thai Baht

Manufacturing and marketing of automotive lighting equipment

NAL do Brasil Indústria e Comércio de Componentes
de Iluminação Ltda.

6,000

5,000

4,000

60 million USD

Manufacturing and marketing of automotive lighting equipment

Ta Yih Industrial Co., Ltd.

762.3 million Taiwan Dollar

Manufacturing and marketing of automotive lighting equipment

INDIA JAPAN LIGHTING PRIVATE LIMITED

4,099 million Indian Rupee

Manufacturing and marketing of automotive lighting equipment

KOITO MALAYSIA SDN. BHD.

200 million Ringgit

Manufacturing and marketing of automotive lighting equipment

BrightWay Vision Ltd.

69 thousand USD

Developing and manufacturing of Forward Monitoring System for ADAS

PT. INDONESIA KOITO
3,000

KOITO INTEGRATED REPORT 2021

2018/3

Manufacturing and marketing of automotive lighting equipment

2017

KPS N.A., INC.

2017/3Business Lines

3 billion yen

Total shareholder
returns (TSR)

Notes:1. TSR is calculated based on March 31, 2016.

2016/3

Capital

KOITO KYUSHU LIMITED

Full year dividend
per share (yen)

7,000

2,000

Corporate
Information

FY

2. Full year dividend in FY 2018 includes ¥20 ofextraordinary dividend.

70

ESG
Activities

2019/32020/32021/3

KOITO INTEGRATED REPORT 2021

71

KOITO MANUFACTURING CO., LTD.
https://www.koito.co.jp/english

Printed in Japan