KOITO INTEGRATED REPORT 2022

Lighting for Your SafetyL ig h t in g f o r Yo u r S a f e t y
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 varietyof traf ﬁc systems and contributes to social developmentin transpor tation such as automobiles, railways, aviation,
marine vessels and others, all guided by the theme of “Light.”

2

KOITO INTEGRATED REPORT 2022

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
employeesʼ dreams.

2. Trusted corporate activities

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

Corporate Policy
Innovative ideas and decisive action

3. Compliance with social conventions /Global management
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

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 2022

3

Value Creation Story

Editorial Policy

Contents

Corporate Principles / Corporate Message 2
Contents / Editorial Policy

4

Value Creation Story

5

The KOITO Groupʼs History

6

Message from Top Management

8

Value Creation Process

12

Materiality

14

Value Chain

16

Growth Strategies

18

Financial Strategy

22

Human Resource Strategy

24

KOITO has started to issue an “Integrated Report” from2021 to provide shareholders, investors and otherstakeholders with an understanding of our initiatives toincrease our medium- to long-term corporate value andto materialize a sustainable society. “Integrated Report2022” is edited according to the International Integrated
Reporting Framework by the International Integrated
Reporting Council (IIRC) and other various guidelines. In
this report, in addition to our business performance for
FY 2022 (ﬁscal year ended March 2022), we are improving our disclosures on our business strategies andinitiatives to solve social issues and our ESG (Environment, Social and Governance) initiatives.
In order to secure fair and effective disclosure, KOITO
issues integrated report both in Japanese and English.
We hope this report serves to deepen your understanding of the KOITO Group.

Business Overview

ESG Activities

Corporate Information

Value Creation Story
Staying true to our basic stance to adopt the perspective of customers,
the KOITO Group is contributing to materialize a safe and comfort society
by providing high-value products and services.

Corporate
Information
Philosophy andhistory etc.

Business Overview

26

JAPAN

28

NORTH AMERICA

30

SOUTH AMERICA

31

CHINA

32

EUROPE

33

ASIA

34

ESG Activities

36

Environmental Activities

38

Social Activities

48

Governance54

Corporate Information

69

Financial and Non-ﬁnancial Highlights

70

Financial Summary of the Last 11 Years

72

Consolidated Financial Statements

74

Stock Information

78

Corporate Information

79

Integrated
ReportCSR
Information

Environmental
Report and Corporate
Governance
Report etc.

IR
Information
Financialinformation

Reporting Period

FY 2022 (April 1, 2021 to March 31, 2022)*Certain parts of this report include content on our
activities other than the period above.

Scope of Report

The KOITO Group*Certain parts of this report include content on our
non-consolidated activities.

IssuedJuly 2022 (to be issued once a year)

Reference Guidelines

ISO 26000 (Guidance on social responsibility) International Organization for Standardization (ISO)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

Note on Future Projections
This report contains future statements including the
KOITO Groupʼs future plans, strategies and performance. These future statements are assumptions
and beliefs based on the current available data. We
therefore wish to caution readers that the actual
results may differ materially from our expectations.

4

KOITO INTEGRATED REPORT 2022

SASB Standards - Sustainability AccountingStandards Board (SASB)GRI Standards 2016 - Global Sustainability
Standards Board (GSSB)
Final Report: Recommendations of the Task Forceon Climate-related Financial Disclosures - Task Forceon Climate-Related Financial Disclosures (TCFD)

The KOITO Groupʼs History

6

Message from Top Management

8

Value Creation Process

12

Materiality

14

Value Chain

16

Growth Strategies

18

Financial Strategy

22

Human Resource Strategy

24

KOITO INTEGRATED REPORT 2022

5

Value Creation Story

Business Overview

ESG Activities

Corporate Information

900

The KOITO Group's History

800

600

The foundation of KOITO began in 1915 with the development andproduction of the Japanʼs ﬁrst fresnel lenses for railway signal lamps.

500

Since then, we have been contributing to the safe and comfortable

400

society by developing lighting equipment for all kinds of transports,

300

including automobiles, railways and even aircraft and ships.

200

Net sales (billion yen)

700

100

1915

1950

Founding Period 1915−1945
1915

1970

1980

Post-war Recovery and Developing Period 1946−1980

1990

2000

0

2010

2022 (FY)

Expanding Period 1981−1999

To be a “Global No.1 Supplier” 2000−Present
2001 Koito Czech s.r.o. established (Czech Republic)
2003 Production and sales of the worldʼs ﬁrst swivel AFS begins

1949

KOITO MANUFACTURING listed on both the Tokyo andOsaka Stock Exchange

1981

Production and sales of the worldʼs ﬁrst plastic lensheadlamps begins

1930 Koito Genrokuro Shoten becomes
KOITO MANUFACTURING

1955

Enacted1983

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

1935 Shinagawa Plant opens (Tokyo, Japan)

1985

1968

Chicago Representative Ofﬁce opens (Illinois, U.S.A.)“Innovative ideas and decisive action” corporate slogan
introduced

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)

1970

Headquarters building completed (Minato-ku, Tokyo)

1986

1972

Aircraft equipment and electronics plant opens(Shizuoka, Japan)

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

2012

1988

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

1977

Haibara Plant opens (Shizuoka, Japan)

1990

Production and sales of projector headlamps begins

1979

Production and sales of Japanʼs ﬁrst aerodynamic-type
headlamps begins

1992

Fujikawa Tooling Plant opens (Shizuoka, Japan)

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

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

1936 KOITO MANUFACTURING CO., LTD. incorporated(capital 2.5 million yen)1943 Shizuoka Plant opens (Shizuoka, Japan)

1915

Koito Genrokuro Shoten foundedFounder Genrokuro Koito founded Koito Genrokuro
Shoten in Kyobashi-ku, Tokyo (current Kyobashi,
Chuo-ku, Tokyo) to sell fresnel lenses for railway
signal lamps, which he succeeded in the Japanʼs ﬁrst
production in 1912.

1936

Entering the automotive lighting equipment business

Based on KOITOʼs experience in supplying headlamps to military
motorc ycle with side c ar s c alled “ Kurogane” in 1932 andthree-wheeled trucks in 1933, KOITO has started to produce
headl amps for four- whe ele d vehicle s . We have supplie dheadlamps for the AA passenger cars to the automotive department of Toyoda Automatic Loom Works, Ltd. (current Toyota
Motor Corporation) in 1936. This commemorates KOITOʼsparticipation in automotive lighting equipment business, which
contributes to safe and comfortable automotive society.

1950

Semi-sealed beam headlamps developed

Focusing on the brightness of U.S.-made all-glass
sealed beam headlamps, KOITO has developed andsucceeded in commercializing semi-sealed beam
headlamps in August 1950. Until all-glass SB wasdevelope d , s emi-s eale d b eam headl amps wereadopted in various domestic automobiles.

6

1960

KOITO INTEGRATED REPORT 2022

trademark1961 Transferred a head ofﬁce to Minato-ku, Tokyo

2010 PT. INDONESIA KOITO established (Indonesia)

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

Capital interest in Cepton Technologies, Inc. acquired (U.S.A.)KI HOLDINGS CO., LTD. absorbed and merged
KOITO Development Center opens (Aichi, Japan)

2022

Transitioned to Prime Market following the market
reorganization of the Tokyo Stock Exchange

1957

1979

Since 1951, KOITO has been developing all-glass SB headlamps withhigher luminous ﬂux than SSB headlamps. As a result of repeated trial
manufacture and improvement, KOITO succeeded in its commercialization in 1957. KOITO then started supplying the products to various
automotive manufacturers, including Toyota Motor Company(current Toyota Motor Corporation), from October 1957.

KOITO has begun developing uniquely shaped headlamps (a kind of SSB headlamps), which are shaped
to ﬁt individual vehicle designs. These lamps started
to be installed in the Nissan Skyline and the Toyota
Crown in June 1979.

1975

1985

2014

Cleaning dirt on headlamps is crucial for ensuring safety, and relevant regulations were started to drawn up in Europe. KOITO has develo p e d j e t- t y p e h e a dl a m p w a s h e r s , a n d i t s
installation to export vehicles began in August
1975.

As a result of steady efforts on headlampsʼ resiniﬁcation to reduce weight and improve design, KOITO has
succeeded in developing plastic lenses and a BMC
reﬂector with even higher heat resistance and molding accuracy in 1981. In Januar y 1985, the worldʼsﬁrst all-resin aerodynamic-type headlamp was adopted in Toyota Motor “Soara.”

KOITO has star ted producing and selling the worldʼsﬁrst LED Compact-Bi-function, capable of switching
hi g h b e a m a n d l o w b e a m w i t h a s i n g l e L ED a n dachieved lower power consumption and weight compared to conventional lamp units. In November 2014,
it was installed in the Toyota Prius Alpha, and contributed to the worldwide spread of LED headlamps, being
adopted by various vehicles.

1996

2019

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

Production and sales of uniquely
shaped headlamps begins

Production and sales of jet-type
headlamp washers begins

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

1978

Production and sales of
halogen headlamps begins
As halogen light bulbs with high luminous ﬂux
a n d e xc e l l e n t a n t i g l a r e p e r f o r m a n c e c a ncontribute to reduce traf ﬁc accident s , they
were standardized in Europe in 1971 and in the
U. S . in 1978 . KOITO has s t ar ted producing
halogen headlamps by incorporating halogen
light sources (originally impor ted products)
into SB and SSB headlamps in July 1978.

Reﬂector
Lens
Halogen bulb
Terminal

Production and sales of discharge
headlamps (GDHL) begins
With a light source that utilizes arc discharge between
electrodes, discharge headlamps (GDHL) were excellent in increasing light intensity, and has long life andhigh energy efﬁciency. As the next-generation lamp
contributes to improve vehicle fuel efﬁciency, KOITO
succeeded in developing discharge headlamps as well
as a control circuit called ballast, and were installed in
the Nissan Terrano and the Toyota Mark II in 1996.

Lens

Halogen bulb

Reﬂector

2007

Production and sales of the worldʼsﬁrst LED headlamps begins
KOITO has developed LED headlamp using white LEDs
as a low-beam light sources , which of fer s improved
visibility with higher luminous ﬂux, longer life, and lower
power consumption compared to GDHL and halogen
headlamps. In May 2007, they were installed in the Lexus
LS 600h, as the worldʼs ﬁrst LED headlamp in the market.

Production and sales of the worldʼs ﬁrst
LED Compact-Bi-function begins

Production and sales of the worldʼsﬁrst BladeScanTM ADB begins
KOITO has developed the worldʼs ﬁrst BladeScan T M
ADB (Adaptive Driving Beam) system, which is expected to further improve safety by enabling high-resolution light dis tribution than the conventional ADB
systems. It was installed in the Lexus R X in August
2019, becoming the worldʼs ﬁrst system in the market.

KOITO INTEGRATED REPORT 2022

7

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Message from Top Management
The KOITO Group will contribute to materialize
a sustainable society and resolve social issues throughour “Lighting for Your Safety” corporate message.
In April 2022, the Tokyo Stock Exchange has reorganized
its market structure into three new market segments,
and KOITO chose the “Prime Market” as a listing market.
Listed companies in this market are required to establish
a high level of sustainabi lity-relat ed systems and promote relevant activities. To meet these expectations andbuild a management system that can respond to changes
in the business climate, KOITO has established its management system to ensure objectivity and transparency.
We are striving to further grow the KOITO Group under a
new management system established in June 2022.
We are al s o wor king to s treng then SD G s and ESG
promotion activities in order to contribute to materialize
a sustainable society. In order to prevent global warming,
we have set the targets of reducing KOITOʼs CO 2 emissions
by 50% in FY 2031, compared to FY 2014, and achievingcarbon neutrality in FY 2051. In addition to accelerating
reductions in CO2 emissions more than ever before, KOITO
has signed up to support the “Task Force on Climate-Related Financial Disclosures” (TCFD) in December 2021.
We will continue to promote various activities which contribute to resolve social issues through our business activities.

Forecast for FY 2023
Although the outlook for global automobile productionis uncertain due to factors such as COVID-19 and semiconductor shortage, it is expected to gradually recover fromthe second half of the ﬁscal year, and the full year production volume is expected to increase from the previous year.
The KOITO Group is planning an increase in net sales
from the previous ﬁscal year due to an increase in automotive production, new orders, and an increase in salesof LED headlamps.
With regard to proﬁts, despite R&D investment for
the future, and capital investment for carbon neutrality
increases, operating income, recurring proﬁt, and proﬁt
attributable to owners of parent are expected to increase
from the previous ﬁscal year due to increase in sales,ongoing improvement and rationalization activities.
The KOITO Group will continue our efforts to improve
proﬁtability to meet the expectations of all stakeholders.
■The KOITO Groupʼs consolidated business results(ten thousand vehicles, million yen)

FY 2021
ResultFY 2022
ResultFY 2023
Plan*1

7,468

7,425

7,850

Net sales

706,376760,719871,000

Operating income

56,70753,43467,000

8.0%

7.0%

7.7%

Recurring proﬁt

61,10760,61369,000Proﬁt attributable to owners of parent

37,612

38,34046,000

Review of FY 2022
In FY 2022, despite the expectation of a recovery fromCOVID-19 pandemic, the domestic and overseas economic recovery was sluggish and the outlook was uncertain
due to the impact of the re-expansion of COVID-19 infections, a shortage of semiconductors, and soaring prices
for resources and raw materials, as well as geopoliticalrisks such as the situation in Ukraine.
Domestic automobile production also remained challenging, due in part to sudden production ﬂuctuations
caused by supply chain disruptions. Domestic production
declined for the third consecutive year, and overseas production also declined for the fourth consecutive year.
KOITOʼs domestic net sales declined from the previous
ﬁscal year due to a decrease in automobile production.
However, overseas, consolidated net sales increased fromthe previous ﬁscal year due to new orders in North America and Asia, progress in the shift of automobile lamps toLED, and the impact of foreign currency exchange.
With regard to proﬁts, despite the increase in net sales,
operating income and recurring proﬁt declined from theprevious ﬁscal year due to an increase in ﬁxed costs
caused by a sudden ﬂuctuation in production, soaring
prices for raw materials and electronic components, andinvestments in new orders and R&D for the future. However, net income attributable to owners of the parent
increased from the previous ﬁscal year due to gains onsales of investment securities and other factors.

8

KOITO INTEGRATED REPORT 2022

Global automobile production volume*2

Operating income ratio*1 Announced on April 27, 2022
*2 KOITOʼs estimates based on ﬁgures from Japan Automobile Manufacturers
Association, Marklines and etc.

New Challenge: To Illuminate the WorldThe KOITO Group aims to materialize a sustainable society and resolve social issues as a leading company ofautomotive lighting equipment and will strengthen its
business activities through our “Lighting for Your Safety”
corporate message.
Under our corporate slogan, “New challenge: To illuminate the world,” we will continue to develop the newest
and the best technologies, improve per formance andquality of our products, promote training for employees
to raise their performance and skills, as well as stay true
to our basic stance to adopt the perspective of customers
to supply produc ts and ser vices that will meet their
expectations. We would greatly appreciate your continued understanding and support.

Chairman and CEO

President and COO

Masahiro
Otake

Michiaki
Kato
KOITO INTEGRATED REPORT 2022

9

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Aiming to become a “Global No.1 Supplier,”
we are accelerating various activities.
The automotive industry is seeing accelerated movements toward the realization of a next-generation mobility society,including electriﬁcation and autonomous driving vehicles. We are facing many social issues as well, including climatechange, decarbonization, and growing social inequalities. Companies are required to implement activities related to Sustainable Development Goals (SDGs) throughout their business activities.
During this transformation, the KOITO Group aims to contribute to resolving social issues through its business activities and to achieve medium- to long-term growth by accelerating various initiatives with the goal of becoming a “Global
No.1 Supplier” under the keywords of “World-leading Technologies and Ingenuity,” “Sustainable Growth” and “A Trusted Company.”

Moreover, the KOITO Group will contribute to materialize a safe and secured next-generation mobility society
through promoting development of communication
lamps and smart infrastructures based on our lighting
and sensing technologies.

World-leading Technologies and Ingenuity

The KOITO Group has aggressively invested in future
growth-oriented areas, including capital investment and
R&D investment, based on the management resources it
has cultivated over the years. Although the current business climate is uncertain, we will aim to achieve sustainable grow th for the Group as a whole by promoting
growth investment, including digital transformation (DX)and carbon neutrality, and improving competitiveness inareas such as operational efﬁciency, productivity, andadded value creation, in order to quickly bring attractive
technologies and products to market and contribute tosociety.

The KOITO Group has created technologies and products
which have always pione ere d each generation andmarket, and developed its businesses by responding tocustomer needs to materialize a safe, reliable society oftransportation founded in our “innovative ideas and decisive action” corporate policy.
Technical capabilities are source of the KOITO Groupʼscompetitiveness. Therefore, we have established a global
network in all ﬁve major regions of the world, centered
upon KOITO Technical Center. In September 2022, weplan to open a Technical Center in GUANGZHOU KOITO
to expand new orders and strengthen our competitiveness in China.
We are working to expand sales of LED headlamps andAdaptive Driving Beam (ADB) headlamps in order to contribute to the reduction of trafﬁc accidents by providing
products that contribute to ensuring the visibility of night
drivers. Following the enactment of legislation in the U.S.
in February 2022, ADBʼs adoption ratio is expected to
expand in medium- to long-term. In response to these
expectations, the KOITO Group is striving to enhance
product variations and lowering prices. In addition, weare taking on challenges of developing sensing technologies that are essential for autonomous driving and are
responsible for surrounding detection. We are aiming tolaunch these technologies to the LiDAR market in 2023.

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

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 streng thens on-site
capabilities and investigates the true causes of defects
through information sharing about any problems or chal-

Sustainable Growth

KOITO recognizes that human resource development is
crucial to achieving sustainable growth. Based on theidea that “manufacturing is human development” andthat employees are the driving force behind corporate
growth, with the keyword of “communication and collaboration,” we encourage every employee to share theirknowledge, experience, ﬁndings, and problem awarenessthrough various means to build energetic work sites
where every member can work on tackling problems.
We strive to enhance work-life balance, promote diversity, expand human resource development programs andr e b uil d s y s t e m a t i c hum a n r e s o ur c e d e v e l o p m e n tachievement evaluations in an effort to ensure every employee can experience their growth and become motivated to take on new challenges.

lenges discovered, mutual understanding of pre- andpost-processes, and assurance of each product with thegoal of achieving a level of quality chosen by customers
through the quality and trust of being global No. 1.
In terms of the environmental activities, in order to contribute to materialize a carbon-free society, we aim toachieve carbon neutrality by 2050. To this end, we arepromoting measures to reduce CO 2 emissions and environmentally hazardous substances, and promote recycle
resources. Through these ef for ts, we are expanding“Eco-friendly Manufacturing for People and the Earth”
globally.
In December 2021, KOITO has signed up to support the“Task Force on Climate-Related Financial Disclosures”(TCFD), established by the Financial Stability Board in2015. Recognizing climate change as one of our key management issues, to enhance climate-related information
disclosures based on TCFD recommendations, we are collecting and analyzing the data we need and reﬂecting itin our business activities.
Throughout these activities, the KOITO Group will continue to strive to be a company trusted by all stakeholders.
July 2022

The KOITO Group will also strive to strengthen its supply
chain, including production and logistics, to prevent disruptions to its product supplies even in the face of global
supply network disruptions. At the same time, the Group
is striving to achieve sustainable growth throughout the
supply chain by promoting procurement activities thatincorporate SDGs perspectives, such as strengthening
disaster mitigation systems, environmental conservation,
respecting human rights, and complying with laws andregulations.

THAI KOITO
Technical Center

A Trusted Company
KCZ
Technical Section

KOITO
MANUFACTURING
Technical Center

NAL
Technical Center

To ensure thorough compliance with laws and regulations, social conventions, corporate ethics and internal
rules, the KOITO Group is striving to raise complianceawareness in each and ever y employee and fur therstrengthen our corporate foundation.

10

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022

11

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Value Creation Process
Throughout our business activities in the value chain centered on the automotive lighting business, the KOITO
Group aims to resolve various social issues to materialize a sustainable society and increase our corporate value.

Business Model of- A Leading Company in

the KOITO Group

Automotive Lighting Equipment Value Chain

Social Issues
Environment● Prevention of global warming● Reduction of environmental

impact substances and waste● Conservation of water resources

Safety / peace of mind
● Reduction of trafﬁc accidents● Technological development

contributes to materialize asustainable society● Enhancement of product quality

Corporate foundation● Compliance● Corporate governance● Information security● Human resource development● Healthy and safe working

environment● Workstyle reform● Respect for human rights● Disaster prevention

Managerial
resourcesautomobile industry● Progress in technologicalinnovation (IoT/AI)● Growing social demands for

decarbonization and ESG

Production andQuality Management

Marketing

Values provided to society(Safety / peace of mind / trust)Environment

Financial Capital● Reduction of CO 2 emissions of automobiles,

Total assets 855.2 billion yen
Net assets

627.3 billion yen

Manufacturing Capital
Capital expenditures 35.8 billion yen

Intellectual Capital
R&D expenditures 34.0 billion yen

3,090
Number of patents applied 867
R&D personnel

aircraft and railway cars

● LED Headlampʼs Contribution on CO 2

Automotive Lighting Equipment

Reduction: 365.5 thousand tons (FY 2022)● Reduction of environmental impact substances

Contributing to safety and peace ofmind of automotive society

Safety / peace of mind

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 safety and designs.
Our products are widely used by automobile manufacturers all over the world.

● Improving night vision and reducing trafﬁc

accidents by providing LED headlamps and ADB● Promoting development of energy-saving andlightweight products

Corporate foundation● Strengthening ESG activities● Promotion of workstyle reform● Contribution to local communities

Human Capital
Number of employees 23,454
Overseas employees

67%

Social and Relationship Capital

58.9 %

Extensive communication with employees

Natural Capital(KOITO MANUFACTURING)● Intensiﬁed competition in the

Procurement(FY 2022)

Overseas net sales

Business Issues

R&D

P.16

Resin materials 43,807tons

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.

Electricity

107,732,000kWh
Utility gas 1,902,000 ㎥
2,897tons
LPG
654,000 tons
Water

Corporate foundation to
support our value creation

Railway and Other Products

Creation of corporate value

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, frommarine vessels to the roadways and bridges that provide
daily transport, and even to theme parks and stadiums.

P.2
The KOITO Group Corporate
P.15
Behavior Charter
Corporate Governance
P.54
Corporate Principles(FY 2022)

Net sales

760.7 billion yen

Operating income

53.4 billion yen

Operating income ratio over net sales

7.0 %Proﬁt attributable to owners of parent 38.3 billion yen
ROE

6.8%

Materiality

P.14
12

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022 13

Value Creation Story

Materiality

Business Overview

ESG Activities

Corporate Information

The KOITO Group Corporate Behavior Charter

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 achieve these goals.
In order to accelerate these initiatives, we have referred to the GRI (Global Reporting Initiative) guidelines andidentiﬁed material issues (materiality) to be focused and SDGs to be solved among the various social issues, andpromoting relevant activities.
We will continue to promote our business activities that contribute to materialize a sustainable society.
For materiality assessment process, please refer to our Materiality website.
URL: https://www.koito.co.jp/english/csr/materiality/

The KOITO Groupʼs 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, andbusiness 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 through ourbusiness activities and fulﬁll our social responsibilities.

Sustainable growth and resolution

1 of social issues

Work practice and enhancement of workplace

P.48

6 environments

P.49

7 Engagement in environmental issues

P.60

8 Contribution to society

4 dialogue

P.53

9 Comprehensive risk management engagement P.60 P.62

5 Respect for human rights

P.52

10 implementation of this Charter

P.18

2 Trusted corporate activities
Compliance with social conventions /3 Global management

Fair information disclosure and constructive

P.20

P.24
P.38
P.53

Rejection of relations with anti-social forces /Role of top management and thoroughP.54〜58

Our Materiality and Initiatives
KOITO has set KPIs (key performance indicators) and targets for FY 2031 for each materiality. We are promoting activities
that contribute to solve social issues by incorporating them into speciﬁc activity plans.

Materiality
Environment
Safety / peace of mind

● Reduction of trafﬁc

Corporate foundation

F Y 2021
ResultF Y 2022
ResultCO2 emissions

59.8 thousand tons

56.7 thousand tons

VOC emissions

220 tons

192 tons(Iess than the amount in FY 2019)(continuous target by FY 2026)

Waste generated per unit
(tons per billion yen)

0.117

0.120

(7% reduction from FY 2019)(continuous target by FY 2026)● We will strive to achieve sustainable growth

Water usage per unit
(tons per million yen)

3.26

3.41

(7% reduction from FY 2019)(continuous target by FY 2026)● Looking ahead to autonomous driving society,

LED adoption ratio*

64%

70%

100%

ADB adoption ratio*

5%

5%

20%

Commercialization of LiDAR

ーーCommercializing next-generation product(FY 2026)

4 cases

0

0

91%

97％

100％

Number of serious violations of laws
and ordinances

0

0

0

Number of serious information
security incidents

0

0

0

9.6 hours

10.2 hours

More than 15 hours

0

0

0

1.3%

1.4%

More than 3.0%

Declaration of KOITOʼs Initiatives● We will promote reduction of CO 2 emissions● Prevention of

global warming

Relevant SDGs

P.20

P.42

● Reduction ofenvironmental impact P.44
substances and waste● Conservation of water

resources

accidents

P.45

P.48

● Technologicaldevelopment
contributes tomaterialize asustainable society● Enhancement of

product quality

P.18

P.49

● Compliance

P.60● Corporate governance

P.54● Information security● Human resource

development● Healthy and safe

P.63
P.24
P.52

working environment
P.24● Workstyle reform● Respect for humanrights● Disaster prevention

P.52
P.62

and environmental impact substances, andresource recycling guided by the theme of“Eco-friendly Manufacturing for People andthe Earth.”

KPI● We will contribute to the reduction of CO 2

emissions by further improving the lightemission efﬁciency and reducing the weight ofmainstay products.

and resolve social issues by developing andproviding socially beneﬁcial and safe products
and services.

we will promote produc t development ofsensors (LiDARs and cameras).

● We will gain customersʼ satisfaction and trust

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

● We will enhance corporate governance andstreng then compliance to establish soundmanagement 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 the humanrights of all persons.

● We will streng then our disaster prevention

system throughout the supply chain.

Number of recalls
Awareness of the KOITO Group
Corporate Behavior Charter

Training time per employee
Rate of lost-time injuries
Ratio of women in senior management

F Y 2031
Target36.9 thousand tons

(50% reduction from FY 2014)

Less than 299 tons

Less than 0.128

Less than 3.51

Commercialization (FY 2024)*Consolidated

14

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022 15

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Value Chain
With the aim of enhancing our corporate value and resolving social issues throughout our business activities, the KOITO
Group is strengthening initiatives in the respective value chain of R&D, procurement, production, quality management
and marketing.

R&D
The KOITO Group makes full use of optics, electronics andother cutting-edge technologies in the pursuit of safety
and reliability, and conducts research and development ofinnovative and environmentally friendly system products.
The KOITO Groupʼs R&D activities are broadly categorized into basic research and product development.

OutlineBasic researchCentered upon technical center in Japan, the KOITO
Group conducts research to commercialize a new generation of produc t s anticipating market needs throughfurther evolution of our core technologies such as optics,
electronics, machinery, and structures.

Procurement
The KOITO Group procures parts by selecting material andcomponent suppliers necessary for production.
This selection of suppliers is determined based on component speciﬁcations, monthly quantities, unit prices, estimated price of molds and other factors. In addition, we audit andapprove supplier plants when engaging in new procurement.
We formulate and manage procurement plans for materials
and components according to the KOITO Groupʼs productionplans.

Product development

Our Strength(Japan, Americas, China, Europe and Asia)● Clear understanding of needs through partnerships withcustomers, suppliers, external agencies and other suchorganizations, 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● Contributions to prevent global warming through energy
efﬁciency as well as smaller and light-weight reductions,
including the promotion of a transition to LEDs
● Rapid response to technical challenges based on a wealthof knowledge and experience● Educational system to develop and strengthen diverse
human resources in technical ﬁelds

16

Business Issues
Social Issues

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

to rapidly changing technical and market needs as well as
a ﬁercer development race from connectivity, autonomous driving, sharing and electric vehicles (CASE) to mobility as a service (MaaS)● Development of monitoring sensors such as LiDAR andall-weather cameras that contribute to safety and security
under ADAS (Advanced Driver Assistance System) and
autonomous driving● More efﬁcient product development through the use ofvarious simulations and promotion of digital transformation (DX)● Training and securing engineers to pass down and evolve technologies● Promotion of advanced technical development that helps

materialize a safe and reliable automotive society, andachieve carbon neutrality

KOITO INTEGRATED REPORT 2022

The KOITO Group manufactures the products it develops anddesigns using the materials and products purchased from subsidiaries and suppliers. We audit plants when starting the manufacture of new products or when changing manufacturing processes at subsidiaries.
We formulate delivery plans based on order estimates fromautomotive manufacturers and other customers as well as subsidiaries (unofﬁcial monthly, yearly, mid-term and other plans)in addition to conﬁrmed orders as well as production planstaking applicable inventory and other plans into account.

Marketing
The KOITO Group understands global customer needs, realizes
cooperation with relevant departments and conducts proposal
and marketing activities through presentations.
We make proposals of next-generation products that contribute to safety, reliability and reduction of environmental impact
based on good customer relationships founded in trust, aiming
to expand its sales channels and proﬁt.

KOITO engages in quality management operations to assure
quality throughout the entire Group and formulates quality
inspec tion criteria and quality control methods. Ever yone
involved in manufacturing engages in quality control activities
based on the criteria and quality control methods.

The KOITO Group not only proposes new technologies toautomotive manufacturers and other customers, but also
develops products accommodating development plans
and required speciﬁcations.
● Global R&D network in ﬁve major regions of the world

Production andQuality Management● Global procurement system that allows local sourcing fromsuitable procurement sites● Enhancement of local procurement to mitigate the impact
related to foreign exchange ﬂuctuations● Sustaining and strengthening of good relationships with
suppliers● Realization of high-level Quality, Cost, Delivery and Development (QCDD) through ongoing improvement activities
with the cooperation of suppliers● Establishment of a BCP system to quickly grasp the level ofdamage and problems faced by suppliers when disasters strikeand to cooperate with suppliers to take the necessary action● Promotion of CSR /ESG activities throughout the entire
supply chain to materialize a sustainable society, such as
preventing global warming● Stable procurement by securing a ﬂexible supply andstrengthening the effectiveness of Business Continuity
Plans (BCP) in the supply chain● Optimization of supplier portfolios (thorough cooperation
across industries and elements of competition)● Enhancement of CSR/ESG activities throughout the entire

supply chain● Strengthening supply chain activities to achieve carbon
neutrality● 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 the motherp l a n t a n d s u p p o r t f o r l au n c hin g o v e r s e a s p r o d u c t i o nsites/products and measures to address various problems● Drills and training to pass down and improve the technicalabilities and skills of employees throughout the entire Group● Strengthening and continuation of improvement activities for
production sites● G l o b al in f o r ma t io n g a t h e r ing an d s al e s s y s t e m in al lﬁve major regions of the world● Global top share sales capabilities● Clear under s t anding of changing and diver se cus tomer

needs as well as speciﬁc sales capabilities● Sus t aining and s treng thening of good , s trong rel ation-

ships based on close communication with customers● Product proposals of light sources and lighting technol-og y cultivated in the automotive lighting equipment
business for adoption in aviation, railway and infrastructure-related products● Strengthening of competitiveness by improving global QCDD

● Strengthening of marketing systems that reﬂect customer andadvanced and complex products● Enhancement of productivity through the use of AI, IoT and othertechnologies, such as the realization of smart factories● Strengthening of BCP at production sites, such as more resistant buildings and equipment and bet ter complimentar y
supply capabilities● Higher customer satisfaction● Shift to production equipment and processes that contribute● Proposals of attractive products that help materialize a safe,● Strengthening of quality management that adapts to moreto achieve carbon neutrality, reduce environmental impact
substances and effectively use resourcesmarket needs● Education and training to foster and strengthen complianceawarenessreliable automotive society and resolve social issues

KOITO INTEGRATED REPORT 2022 17

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Growth Strategies

Strategy 1 Development of Advanced Technologies

LiDAR
We are promoting product development that combines the KOITO Groupʼs lighting technologies and technologies on
product design and mass production that we have cultivated over the years with external collaborative organizationsʼadvanced LiDAR technologies.
KOITOʼs LiDAR, which uses the MMTTM (Micro Motion Technology) method of Cepton, Inc. (Cepton), achieves superior
detection capabilities and is scheduled to be commercialized in 2023. We are currently working to ensure the reliability
and improve productivity of products required for automotive sensors.

Looking forward the coming autonomous driving society, the
KOITO Group aims to materialize a safe and secure automobile
society by enhancing the performance of ADB (Adaptive Driving
Beam), developing sensing technologies for LiDAR and cameras,
products based on our lighting technologies, and smart infrastructure technologies.

■Roles of the KOITO Group and Collaborating Organizations in LiDAR Commercialization

Enhancement of ADBʼs Performance
The KOITO Group commercializes ADB, which can keep the driverʼs forward visibility in good condition by automatically control
the light distribution patterns of high beams and enabling drivers
to drive at high beams all times without glaring preceding andoncoming vehicles.
Since our Japanʼs ﬁrst production of ADBs in 2012, we have promoted performance improvement, costs and diversiﬁcation. In
2019, we have commercialized the worldʼs ﬁrst BladeScan TM ADB.
Currently, ADB adoption is expanding in a variety of vehicles,from luxury vehicles to mini vehicles and trucks. In 2022, the useof ADB was legislated in the United States, and expected to accelerate its adoption.
The current BladeScan ADB achieves high-resolution light distribution equivalent to using approximately 300 light sources with
12 LED light sources. To further improve performance, reduceweight and costs, we are striving to commercialize a next-generation BladeScan TM ADB that provides light distribution equivalent
to using 600 LED light sources. We are also promoting the development of high-resolution ADB, which achieves high-level of light
distribution equivalent to several thousand to tens of thousandsof light sources. We are working to further expand ADBʼs adoption
ratio within the KOITO Groupʼs headlamps, with the goal of 20%
in FY 2031.

The KOITO Group
Collaboratingorganization

R&D

Executive Vice President,
Engineering Headquarters

Kenji Arima■ADB penetration targets (Global)
（%）

TM

40

20

20

5

5

2021

2022

10
0

Development of Sensing Technologies
By installing sensors such as LiDAR in the headlamps and rear
combination lamps located at the four corners of the vehicle, efﬁcient 360 sensing around the vehicle can be achieved.
As one of our sensor developments, the KOITO Group is developing a high-precision LiDAR capable of sensing distances of 200
to 30 0 meters with high resolution. We are also developing
all-weather cameras capable of accurately detecting objects in
bad weather conditions such as heavy rain and snow.
The market scale for these ADAS, LiDARs and cameras for autonomous driving is forecast to grow by approximately 200 times in
LiDAR market and 2.5 times in the camera market over ten years
from 2020 to 2030.

18

KOITO INTEGRATED REPORT 2022

2031

(FY)

■Performance of sensors developed by KOITO

LiDAR

All-weather
camera

200m

150m

◯

◯

Object detection under
bad weather condition△
Insufﬁcient◯
Detectible

Autonomous driving level

Level 3 and 4

Level 4

Distance measurement
Object detection■Market scale of LiDARs and cameras(Index number)

LiDAR

500

Camera
450

400
200

300

230

200
100
0

100

1

215

Production

Development of Products Based on
Our Lighting Technologies

Quality assuranceMarketing■Communication lamp

KOITO is enhancing the added value of lamps by proposing
new products with a theme of “Light,” by utilizing the technologies cultivated in lamps development to peripheral products.
We are aiming to contribute to the safety and security of thesociety by reducing accidents and etc.

50
30

Performance evaluation

Communication Lamp
Communication lamps contribute to prevent accidents byquickly transit necessary information, such as vehicle movements and warnings, to surrounding vehicles and pedestrians.

Development of Smart Infrastructure Technologies
KOITO is working with KOITO ELECTRIC INDUSTRIES todevelop smart infrastructures. By installing in-vehicle sensors(LiDAR, cameras, etc.) on trafﬁc infrastructures such as trafﬁclights, those infrastructures enable to detect surrounding trafﬁc conditions and provide information to trafﬁc control systems and surrounding vehicles.
In addition to contributing to safety and security, such as
preventing trafﬁc accidents and alleviating trafﬁc congestion,
the system is expected to contribute to the environment by
reducing CO 2 emissions. We are aiming to commercialize thissystem in 2024.

■Telecommunicating image of smart trafﬁc lights
Smart trafﬁc lights andstreet lights

Trafﬁc controlling center

Trafﬁc controlling system
ControllingPC
Telecommunicationequipment

Surrounding vehicles

Providing information on
vehicles, pedestrians, etc.
in blind spots

Trafﬁc lights

Controlling trafﬁclights according to trafﬁc
conditions

Telecommunicationequipment in vehicle

15
250

99
2020

2025

2030

(CY)

KOITO INTEGRATED REPORT 2022 19

Value Creation Story

Executive Vice President,
Production Headquarters

Masami Uchiyama

100

50

0

Expansion of energy-saving facilities
Enforcement of energy-saving activities
Introduction of renewable energy

Introducing energy saving equipment
Promoting energy-saving activities

2014(Base year)

2017

2020

2022

50% decrease
from FY 2014

50
50

2031

(Intermediate target)

Achieve carbon
neutrality by
FY 2051

2051(Final target)(FY)

Reducing CO2 Emissions Considering Product Life Cycle
In order to contribute to materialize a decarbonized society, KOITO is working to reduce CO2 emissions from vehicles. We
are promoting several company-wide activities by promoting productsʼ power conservation, size reduction, and weight
reduction from the development and design phase, as well as introducing energy-saving facilities at production sites.
・Development of high-efﬁcient andpower-saving light sources

Development ・Reduction of the number of parts and weight・Development of plant-based plastics

Procurement

Product
Transportation

20

Production

・Procurement of materials and parts withlow environmental impact
・Efﬁciency of logistics in procurement

・Adoption of highly efﬁcient truck
vehicles with a large loading capacity
・Improvement in packaging
・Consideration of using EVs and FCVs
for transport vehicles

KOITO INTEGRATED REPORT 2022

Introduction of LED high-beam

150

Integration of low-beamand high-beam

100

50

on
)
ra

ne
h

(7
t

LE
D

h

LE
D

(6
t

ge

ge

ne

ne

ra

ra

ti

ti

on
)

on
)
ti

ti
ra
(5
th

ge

ne
ge
LE
D

LE
D

(4
t

h

d
(3
r

LE
D

on
)

on
)
ra

ne

ra
ne
ge

nd
(2

LE
D

ti

on
)
ti

ti
ra
ne

ge
(1
st

ge

ge
ch

ar

en

is

og

on
)

0

LED Headlampʼs Contribution on CO2 Reduction

Index number

77

200

LE
D

KOITO has promoted the introduction of energy-saving facilities
and energy-saving activities, mainly in the manufacturing process,and has worked to reduce CO 2 emissions. As a result, CO 2 emissions in FY 2022 was 23% lower than FY 2014, which is the baseyear for CO2 emissions.
We will vigorously promote environmental activities, such as
further introducing energy-saving facilities and considering the introduction of renewable energy. With our target of reducing CO 2 emissions by 50% in FY 2031 compared to FY 2014, which exceeds thegovernment target, and achieving carbon neutrality in FY 2051,
KOITO will further strengthen our activities to reduce CO2 emissions.

Introduction of LED low-beamal

CO2 Emissions Results and Targets

Corporate Information*Total amount of low-beam and high-beam

250

H

To accelerate our activities on “prevention of global warming,”
one of KOITOʼs materiality, the entire company is working together on environmental activities to reduce CO2 emissions in Scope 1
and Scope 2 by 50% in FY 2031 compared to FY 2014, and toachieve net-zero emission, or carbon neutrality by FY 2051.

100

Power consumption*(W/vehicle)

Aiming to reduce CO 2 emissions by improving the fuelefﬁciency of vehicles, and to respond to the accelerating
shift to EVs, KOITO has started to introduce LEDs as thelight source for headlamps ahead of its competitors. The
latest LED headlamps, consume about 80% less electricity than the conventional halogen headlamps and 70%
less electricity than discharge headlamps, contribute to
reduce vehiclesʼ battery load.
Due to their capabilities, the adoption of LED headlamps has expanded to a variety of vehicles, including
large-size and compact vehicles, mini vehicles, and motorcycles. In FY 2022, global LED adoption ratio among
the KOITO Groupʼs headlamps was approximately 70%,
and is expected to widespread further.
With the aim of commercializing even greater powersavings and lighter l amps , we are al so working to
improve the per formance of white LEDs, reduce thenumber of parts, and use resins efﬁciently.

Strategy 2 Initiatives to Achieve Carbon Neutrality

ESG Activities■Reduction of headlampʼs power consumption

Development-Reduction of headlampʼ s power consumption-

D

Growth Strategies

Business Overview

Customer Useof Products・Integration of production lines
・Energy conservation in production
equipment
・Utilization of natural light inproduction plants
・Consideration of introducing
renewable energy

・Reducing CO 2 emissions fromvehicles through power-saving,
lightweight lamps

The KOITO Group is contributing to improve vehicle fuele f ﬁ c i e n c y a n d r e d u c e CO 2 e m i s s i o n s b y p r o v i d i n g
eco-friendly products.
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 evolution of light sources and the spread of LED headlamps.

■LED headlampʼs contribution on CO2 reduction
Contribution on CO 2 reduction(thousand tons of CO 2)
400

365.5
287.0

300

KOITO has calculated the contribution by referring to the calculation methodologies on the EUʼs “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 JAPIAʼs “Second
Version of Regulation 2 of the Guidelines for Calculating LCI (Data Chartfor 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-CO 2/ℓ) Operating hours (hours/year) Usage factor the number of vehicles equippedwith the KOITO Groupʼs LED headlamps*Power consumption differences between LED headlamps and halogen headlamps

218.3
200

100

0

158.6
106.1

2018

2019

2020

2021

2022 (FY)

Production -Reduction of CO2 emissions by integrating surface treatment linesThe lenses of headlamps are processed in two processes: hard coating and anti-fogging coatings. Previously, hard coating
and anti-fogging coating were done on separate processing lines. Aiming to integrate conventional two lines into a single
line, KOITO is developing equipment and materials that can be processed with a single line. We are gradually integratingthese lines.
Following the integration, we are aiming to reduce power consumption by 65% comparing with conventional lines.
Previous (2 lines)
Coating

UV drying

Coating

Target for 2025 (1 line)
Hot-air drying

Simultaneous coating

Hot-air drying

New coating
material

Hot-air

Power consumption：100

Reduce power
consumption
by 65%

Hot-air

Hot-air

Power consumption：35

KOITO INTEGRATED REPORT 2022 21

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Financial Strategy

Aiming to build foundations for sustainable growth andenhance our corporate value
With regard to dividends, based on our basic policy of paying
stable and continuous dividends, we comprehensively consider our business performance and the business climate,aiming for a dividend payout ratio of 30%.
Despite our business climate remains uncer tain due toissues such as COVID-19 and a shortage of semiconductors,
we will work to make steady improvements in considerationof our business performance and the business climate, while
being conscious of a 30 % dividend payout ratio in themedium- to long-term perspectives.

Capital Policy
KOITO aims to build a foundation for medium- to long-termsustainable growth and increase corporate value throughout
management which is mindful of capital costs.
We are striving to strengthen our earnings structure byplacing more emphasis on ﬁnancial indicators such as operating income and recurring proﬁt rather than on net sales.
Although we have not set targets for return on equity (ROE)and other factors, we have achieved a consolidated operating
income ratio of between 11% and 12% around FY 2018 and2019, when global automobile production was robust, andwe are working to achieve these levels.
The current business climate is challenging due to factors
such as COVID-19 and the semiconductor shortage. However, we are working to improve our proﬁtability so that we canﬁrst secure an operating proﬁt ratio of 10% and achieve evenhigher ratio in line with the future recovery in the global
automobile production volume.
■Consolidated business results(million yen)

FY 2019

FY 2020

FY 2021

FY 2022Net sales

826,257

800,928

706,376760,719

Operating income

101,534

82,411

56,70753,434

12.3%

10.3%

8.0%

7.0%

Operating income ratio
Recurring proﬁt

105,494

85,264

61,10760,613Proﬁt attributable to owners of parent

72,89558,022

37,612

38,340Total assets

738,175

729,715

782,163855,237

Cash and time deposits

287,803271,774

303,887

323,943

Net assets

503,564

513,524

569,438

627,315

16.7%

12.3%

7.4%

6.8%

Return on equity (ROE)■Non-consolidated business results
FY 2019

FY 2020

FY 2021

FY 2022Net sales

364,104

356,505

312,201

294,463
743,000

Operating income

38,34625,574

21,13817,76052,000

10.5%

7.2%

6.8%

6.0%
7.0%

Recurring proﬁt

56,652

46,71338,18538,41656,000Net income

44,132

41,64438,04823,25335,000Total assets

419,791

430,006

469,849

475,170

Cash and time deposits

188,097

178,200

194,086

203,659

Net assets

303,560

324,311

365,178

379,654

15.2%

13.3%

11.0%

6.2%

Operating income ratio

Return on equity (ROE)

22(million yen)

KOITO INTEGRATED REPORT 2022

■Dividend amounts
Year-end dividendInterim dividend
Consolidated dividend payout ratio
(yen)

100

（%）

50

92
52

Senior Managing Director,
Finance & Accounting Headquarters

Hideharu Konagaya

80
60
40

Shareholder Return Policy

20

With the aim of returning proﬁts to shareholders andenhancing corporate value over the me dium- tolong-term, KOITO believes that we should allocate
funds to capital investment, R&D investment, andstrategic M& A investment that will contribute tofuture growth of the KOITO Group. In terms of ourshareholder composition, in par ticular, the ratio ofshareholders who hold and invest shares over the
medium- to long-term is increasing both domesticallyand overseas, and we are expected to improve total
returns over the medium- to long-term, ranging fromﬁve to seven years. We intend to continue to invest in
capital expenditures in response to the increase inorders and in R&D investments in ADB, sensor-related
and other areas.

0

In FY 2022, in addition to initial investment of $50
million, we have made an additional investment of $50
million to Cepton, a company that had been developing LiDAR in collaboration with the KOITO Group.
We will continue to invest aggressively in companies
that possess technologies that contribute to themedium- to long-term growth of the KOITO Group.

40

72
20

20.3
40

19.9

30

21.4

20

2019

2020

30

54

50
30

52

2021

22.6

20

24

10

2022 (FY)

Toward the Medium- to Long-Term
Growth of the KOITO Group
Looking forward to the KOITO Groupʼs medium- to long-term
growth, we need to accelerate our efforts in digital transformation (DX) and carbon neutrality, in addition to developing
advanced technologies for LiDAR, cameras, and other sensors
compatible with CASE (connectivity, autonomous driving,
sharing and electric vehicles).
In particular, with regard to the development of advanced
technologies, we believe that collaboration with other companies are also important in the ﬁelds of autonomous driving,next-generation mobility, AI and IoT. Through the Silicon
Valley Lab in the U.S. and funds in Israel, we are exploring not
only sensors, but also new technologies related to smar t
street lights and trafﬁc signals on a global basis, and scrutinizing and discussing the information. If there are good technologies or projects that contribute to the growth of the KOITO
Group, we will actively consider collaborations and alliances,including M&A.
Going forward, we will continue to use the generated funds
to build a foundation for growth that can continue to increase
corporate value even in an uncertain business climate, andachieving medium- to long-term and sustainable growth.

Enhancingshareholder value
and shareholder
returns0(million yen)

Net income (consolidated)
Net income per share

FY 2019

FY 2020

FY 2021

FY 2022

72,89558,022

37,612

38,340¥453.52¥360.99¥234.00¥238.53

Total amount of dividends

14,787

11,572

8,036

8,679

Dividend per share

¥92

¥72

¥50

¥54

Interim dividend

¥40

¥52

¥20

¥24

Year-end dividend

¥52

¥20

¥30

¥30

Consolidated dividend payout ratio

20.3%

19.9%

21.4%

22.6%

Expandingsales andproﬁtsMedium- tolong-term growth
Growthinvestment

KOITO INTEGRATED REPORT 2022 23

Value Creation Story

Human Resource Strategy

With the keywords of “communication and collaboration,”
KOITO encourages every employee to share their knowledge, experience, ﬁndings and problem awareness throughvarious means to build energetic worksites where ever ymember can work on tackling problems and can experience
their growth and become motivated to take on new challenges.
To achieve the KOITO Groupʼs fur ther grow th, we areworking to improve work-life balance. At the same time, weare revamping our human resource systems with the aim ofstrengthening our efforts to secure a diverse range of humanresources, including women, foreign nationals and mid-career hires and promote their active participation in our corehuman resources.

KOITO recognizes that various perspectives and values can bestrengths in securing sustainable growth, and promoting active
participation of diverse human resources. We have set KPIs andtargets for the promotion of women, foreign nationals, andmid-career hires in core human resources, and are working toprovide wide-ranging career support and improve working environment.

[Support for foreign employees]
・Employ foreign candidates to strengthen R&D・Strengthen the recruitment of exchange students by cooperating with universities etc.

Katsuyuki Kusakawa[Reduction of long working hours][Support for childcare, nursing care and others]

・Overtime working hours in each department is reported at

・Child-care leave can be taken up to the end of April after the[Acquisition of paid leaves]
employees to take paid leaves of 15 or more days per year
and conﬁrms the acquisition status by each department[Introduction of teleworking system]
・Applicants in administrative divisions can work from homechild reaches three years old

KOITO is working to enhance our member beneﬁt andimprove the workplace environment to increase our employeesʼ motivation.
As for beneﬁts, KOITO prepares dormitories, company
housing, and cafeteria facilities for employees. We also
introduce an employee stock purchase plan (ESPP) tosuppor t employeesʼ proper ty formation and share thecompanyʼs medium- to long-term growth.
T he improvement of the wor kpl ace environment
includes the installation of security cameras at entrance
gates and dormitories to enhance security, installation of
automatic ﬁre extinguishers as a ﬁre safety measure, andreplacing lights with LED lamps at work areas in production sites to reduce employeesʼ workload.

・Employees can voluntarily choose their attendance and leaving times under a ﬂexible working system
・Nursing care leave can be taken up to one year

For KOITO member beneﬁt in overseas subsidiaries,
please refer to our Human Resource Management
website.
URL: https://www.koito.co.jp/english/csr/social/humanresourse.html

Health and Hygiene

24

KOITO INTEGRATED REPORT 2022

Percentage of foreign nationals
in senior management

0. 3%

1.0%

Percentage of mid-careerhires in senior management

7.5%

10.0%

[Improve treatment for non-regular employees]
・Promote all non-regular employees as full-time employees(2019) etc.

[Support for staff with a disability]
・Creating a workplace where staff with a disability can play
active roles and expanding their employment[Activities on health]･ Implementing periodic medical checkups and providing results to employees･ Implementing workplace vaccination of COVID-19･ 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, weare providing “self-care” training for new employees
and applicants, and “line-care” training for Managers
and Chiefs. In FY 2022, a total of 167 employees participated in self-care and 76 in line-care training.
to encourage self-care, and support them by having
individual counseling.
In addition, we are improving our support system by
establishing an external consulting desk where emphone.

care for employees

KOITO engages in human resource development through a wide variety of curriculums, and provides job-rank based education, technical education, and global education.
The job-rank based education consists of management training for speciﬁc qualiﬁcations and positions. The technicaleducation includes 211 lectures in and outside of KOITO, such as advanced education on AI, IoT, and sensors. A total of
6,335 KOITO employees participated in these training and lectures in FY 2022.
The global education focuses on multi-culture training, e-learning and language training.

3.0%

ployees can consult on mental health issues over the・Implementation of seminars to balance work and nursing

Human Resource Development

1.4%

We conduct annual stress checks for all employees

・Employees and junior employees raising children under theage of nine can work under shortened working hours

Percentage of womenin senior management[Support for senior employees]with women staff etc.

KOITO has been improving the work-life balance to create awork environment where every employee can make the bestuse 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 “NewNormal” ways to work, following the COVID-19 pandemic.

FY 2026
Target・Rehiring of all applicants over 60 etc.

management, newly and mid-career hires

Senior Managing Director
In charge of Personnel Department

FY 2022
Result[Women empowerment]

・Provide education to women employees and for managers

Improvement of Work-life Balance

・The Committee for the Acquisition of Paid Leaves promotes

Corporate Information■Targets to secure dirersiﬁeed human resources

・Expanding the number of women in regular position, senior

Enhancement of Our Member Beneﬁt

being streamlined to reduce it

ESG Activities

Promotion of Diversiﬁed Human Resources

Aiming to secure a diverse range of human resources andpromote their active participation

the monthly Managing Committee, and work processes are

Business Overview

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

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

KOITO INTEGRATED REPORT 2022 25

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Other Businesses

Business Overview

15.0

The KOITO Group consists of a total of 31 companies, including 16 domestic companies and 15 overseas

companies in 12 countries. We provide products and services to customers all over the world, through ourglobal 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, allbillion yen

Non-automotive Electrical
Equipment Business

36.6

Consolidated sales
by business segmentsbillion yen

760.7

companies in the KOITO Group are expanding its development and production system. Based on the

stance of “customer-ﬁrst,” KOITO continues to pursue better operations to keep Quality, Cost, Delivery

Automotive Lighting
Equipment Businessbillion yen

and Development (QCDD) to the highest level.

Through our mutually complementary supply network among afﬁliated companies that leverage our

709.0(FY 2022)

global network, we are stably providing products and services to customers worldwide even amid thebillion yen

COVID-19 pandemic.

●Head Ofﬁce●Overseas Subsidiaries and Afﬁliates●Overseas Technical Associates●Overseas Representative Ofﬁces

CHINA

NORTH
AMERICA

14.5%

24.4%

EUROPE
Share of sales

4.4%

KCZ

Share of sales

Share of sales

P.33

P.32

KEL

JAPAN

P.30

41.1%

NAL Flora Plant

NAL Paris Plant

P.28

NAL Salem Plant

Detroit Ofﬁce

Share of sales

FUZHOU KOITO TAYIH
GUANGZHOU KOITO
BWVTHAI KOITO
Bangplee Plant
Belgium Ofﬁce

Hubei Koito

Seattle Ofﬁce
KOITO
MANUFACTURING

France Ofﬁce

KPS

R&D Lab in
Silicon Valley

NAL Indiana Tooling Plant
NAL Alabama Plant

Ta Yih Industrial
IJL Bawal Plant

THAI KOITO Prachinburi Plant

IJL Chennai Plant

INDONESIA KOITO

KOITO MALAYSIA

NAL Mexico

SOUTH
AMERICA
ASIA

Share of sales

14.5%

Share of sales

1.2%
P.31

NAL Brasil

P.34

26

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022 27

Value Creation Story

Business Overview

売上高
Net
sales

JAPAN
Sales in Japan decreased 8.4% year on year to ¥312.3 billion due to a decrease in the

400

364.6

Corporate Information

売上高構成比率
Share of net sales［Japan］
2021年度FY 2022(¥ billions)

In FY 2022, domestic automobile production declined for the third consecutive year due to the impact
of COVID-19 and semiconductor shortage.

ESG Activities

384.6

383.6
341.0
312.3

300
200

41.1%

automobile production volume.
100
0

2018

2019

2020

2021

KOITO MANUFACTURING

KOITO KYUSHU LIMITEDKOITO manufactures and supplies automotive lighting equipment at four plants in Shizuoka Prefecture,

KOITO K Y USHU wa s e s t a bl is h e d in 2 0 0 5 t ocentered on the Shizuoka Plant. We have introduced a production system that can efficiently operate

strengthen KOITO’s supply system to automobile

every phase from production to distribution, and have established a production system that incorporates

manufacturers in the Kyushu and Chugoku regions.

our unique know-how in high-variety and low-volume manufacturing.

The plant has commenced operations in 2006,

The Shizuoka Plant has an integrated production system from development of light sources to assemblyand has expanded in 2008 to produce and supply

and quality assurance. Centering Shizuoka Plant as our mother plant, we are deploying our own production

automotive lighting equipment.

systems at all domestic and overseas bases. We are striving to maintain and improve outstanding productivity

Throughout mutually complementar y supply

and high-quality. In R&D, the Technical Center within the Shizuoka Plant plays a central role in the KOITO

network and structure through collaboration withGroup’s R&D structure. In addition to development, design and testing, we are developing new light sources

KOITO, KOITO KYUSHU is streng thening QCD

and advanced technology for advanced driving systems and autonomous driving in the Technical Center. To

by improving production efficiency and reducing

further enhance quality, cost, delivery, and development and improve our response to the sophistication andlogistics costs, as well as being responsible for risk

complexity of product functions, we have opened the Koito Development Center in Aichi Prefecture in 2020.

diversification in the event of disasters.

Collaborating with the Technical Center, we are strengthening product development functions.

2022

(FY)

■ KOITO KYUSHU Head Office and Plant

Other Domestic Affiliated Companies
O ther domes tic af filiates are engaged intranspor tation and other businesses in addition
to automotive lighting-related businesses, suchas manufac turing rear combination lamps andsubsidiary lamps, various light bulbs, and electronic■ Shizuoka Plant■ Haibara Plant

components, as well as molds.
In addition to automotive lighting business,
KO I TO E L EC T R IC IN D US T R IE S a n d o t h e rcompanies are engaged in the railway vehicle
equipment business, including seats and control■ Head Officeequipment for railway cars, as well as transportation
systems business, including traffic lights and traffic
control systems. KOITO ELECTRIC INDUSTRIES■ Sagara Plant■ Fujikawa Tooling Plant■ KOITO ELECTRIC INDUSTRIES Head Office and Fuji Nagaizumi Plant

is a leading company in the domestic traffic lightbusiness, with a top domestic market share of
approximately 30%.

■ Technical Center
28

KOITO INTEGRATED REPORT 2022

■ KOITO Development Center
KOITO INTEGRATED REPORT 2022 29

Value Creation Story

Business Overview

売上高
Net
sales

NORTH AMERICA

売上高構成比率
Share of net sales

250
200

While the automobile production volume remained unchanged from the previous fiscal year, sales in

100

186.8

200.3

185.5

181.9
143.4

150

North America increased 29.4% year on year to ¥185.5 billion due to an increase in new orders and a

Corporate Information［NorthAmerica］
2021年度FY 2022(¥ billions)

In FY 2022, automobile production in North America remained sluggish at the 13 million unit level,
continuing from the previous fiscal year.
In North America, KOITO operates automotive lighting equipment business in the U.S.A. and Mexico.

ESG Activities

24.4%

50

shift in automobile lamps to LED.

0

2018

2019

2020

2021

2022

United States

MexicoNAL conducts production operations at four plants: Paris, Flora and Salem in Illinois, and a plant in Alabama. As the largest

Nor th American Lighting Mexico, S. A . de C.V.

independent lighting equipment manufacturer in North America, NAL supplies automotive lighting equipment to U.S.-based(NAL Mexico), which commenced its operations

automotive manufacturers and to local plants of Japanese automotive manufacturers. NAL also produces dies for plastic moldings

in September 2014, responds to the expanding

at a tooling plant in Indiana. In research and development, NAL develops products at the Technical Center in Michigan. At the R&D

automotive production in Mexico.

(FY)

lab in Silicon Valley, they are researching and gathering information on advanced driving support systems (ADAS) and autonomous
driving technologies.
In the non-automotive electrical equipment business, KPS N.A., INC. manufactures and sells electrical components for railroad cars.

■ NAL Mexico

SOUTH AMERICAIn FY 2022, automobile production in South America increased year on year to the 2.6 million unit level.
Sales in South America increased 97.9%
year on year to ¥9.0 billion due to an■ NAL Head Office (Paris)increase in automobile production, new■ NAL Paris Plant

orders, and a shift in automobile lamps
to LED.

Net sales

Share of net sales［South America］
FY 2022(¥ billions)

10

9.0

8
6

4.7

4.5

2020

2021

1.2%

4
2
0
■ NAL Flora Plant■ NAL Salem Plant■ NAL Alabama Plant

Brazil

2.5

2019

2022

(FY)

In order to respond to the growing automotive
market in South America, in Januar y 2017, the
KOITO Group established NAL do Brasil (NAL
Brasil), a manufacturing subsidiary in São Paulo
State, Brazil. The subsidiary commenced operationsin May 2018.

■ NAL Indiana Tooling Plant■ NAL Technical Center■ NAL R&D Lab in Silicon Valley■ NAL Brasil

30

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022 31

Value Creation Story

Business Overview

ESG Activities

Corporate Information

CHINA

EUROPE

Automobile production in China decreased from previous fiscal year to the 26 million unit level in FY
2022.

Automobile production in Europe decreased from the previous fiscal year to 11 million units in FY 2022.
In Europe, KOITO operates businesses in the U.K. and Czech Republic.

Although automobile production declined, sales in China increased 6.3% year on year to ¥109.9 billion.

Although automobile production declined, sales in Europe increased 20.7% year on year to ¥33.3
billion due to the impact of foreign currency exchange and other factors.

Net
sales
売上高
(¥ billions)

180
150

Net
sales
売上高

売上高構成比率
Shareof net sales［China］
2021年度FY 2022(¥ billions)

50

157.7

93.7

90

93.6

103.4

109.9

38.5

35.0

30

14.5%

33.3
27.6

4.4%

20

60

10

30
0

43.0

40

120

売上高構成比率
Shareof net sales［Europe］
2021年度FY 2022

2018

2019

2020

2021

2022

0

(FY)

2018

2019

2020

2021

2022

(FY)

United Kingdom
KOITO has been developing its automotive lighting equipment business in China through 3 companies:

In the U.K., KOITO has been producing automobile

GUANGZHOU KOITO AUTOMOTIVE LAMP CO., LTD. (GUANGHZOU KOITO), Hubei Koito Automotive Lamp

lighting equipment at Koito Europe Limited (KEL)

Co., Ltd. (Hubei Koito), and FUZHOU KOITO TAYIH AUTOMOTIVE LAMP CO., LTD. (FUZHOU KOITO TAYIH).

since 1996, as KOITO’s first production base in

In research and development, we will strengthen our response to local needs by opening a technical center

Europe.

in GUANGZHOU KOITO in September 2022.

■ KEL

Czech Republic
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.

32

R&D activities are conducted at its Technical Section, and a wide range of businesses are being carried out,

■ GUANGZHOU KOITO■ GUANGZHOU KOITO Technical Center(scheduled to commence operations in September 2022)

from gathering technological information to developing and designing for local and Japanese automakers.

■ Hubei Koito■ FUZHOU KOITO TAYIH■ KCZ

KOITO INTEGRATED REPORT 2022

■ KCZ Technical Section

KOITO INTEGRATED REPORT 2022 33

Value Creation Story

Business Overview

売上高
Net
sales

ASIA

120
100

96.5

Corporate Information

売上高構成比率
Share of net sales［Asia］
2021年度FY 2022(¥ billions)

In FY 2022, as automobile production volume increased in Thailand, Indonesia, India, and othercountries, automobile production in Asia as a whole increased year on year.
In Asia, KOITO’s business is conducted in Thailand, Indonesia, Taiwan, India and Malaysia.

ESG Activities

106.3

110.4

101.7
86.2

80
60

Sales in Asia increased 28.0% year on year to ¥110.4 billion due to an increase in automobile

14.5%

40

production, new orders, and a shift in automobile lamps to LED.

20
0

2018

2019

2020

2021

2022

(FY)

ThailandIndia

In Thailand, which is the center of the Asian automotive industry, KOITO supplies automotive lighting

In India, where the automotive industry is expected to grow in the long term, KOITO is conducting businessequipment to all local Japanese automotive manufacturers. The products are manufactured in 2 plants

in INDIA JAPAN LIGHTING PRIVATE LIMITED (IJL). IJL manufactures automotive lighting equipment at 2

in THAI KOITO COMPANY LIMITED (THAI KOITO): Bangplee Plant and Prachinburi Plant. Furthermore,

plants: Chennai Plant and Bawal Plant.

KOITO is strengthening its development systems in the Asian region led by THAI KOITO Technical Center.

■ THAI KOITO Bangplee Plant■ THAI KOITO Prachinburi Plant■ THAI KOITO Technical Center■ IJL Chennai Plant

Indonesia

Taiwan

Malaysia

I n I n d o n e s i a , KO I T O p r o d u c e s l a m p s f o r

In Taiwan, operations are conducted by Ta Yih

In Malaysia, which is the third largest automotive

automobiles and motorcycles at PT. INDONESIA

Industrial Co., Ltd. (Ta Yih Industrial), in which

produc tion countr y in the ASEAN regions, the

KOITO. In March 2019, KOITO expanded plants in

KOITO took an equity interest in 1988.

KOITO Group established KOITO MALAYSIA SDN.

Indonesia to respond to increasing orders.

■ IJL Bawal Plant

BHD. (KOITO MALAYSIA) in October 2017. The
subsidiary commenced operations in November
2019.

■ KOITO MALAYSIA■ INDONESIA KOITO

34

KOITO INTEGRATED REPORT 2022

■ Ta Yih Industrial

KOITO INTEGRATED REPORT 2022 35

Value Creation Story

Business Overview

ESG Activities

Corporate Information

ESG Activities
The KOITO Groupʼs basic management policy is tocreate 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 thetheme of “Light.”

Environmental Activities
Environmental Management

38

Compliance with Environmental Laws and Regulations

41

Reduction of Greenhouse Gas Emissions

42

Reduction of Environmental Impact Substances

44

Resource Conservation and Recycling

45

External Evaluation on Our Environmental Activities

46

Disclosures according to the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD)

47

Social Activities

48

Activities to Improve Safety and Security

48

Quality and Product Safety49

Supply Chain Management50

Human Resource Management

51

Respect for Human Rights

52

Social Contribution Activities

53

Stakeholder Engagement

53

Governance

36

38

54

Corporate Governance

54

Compliance60

Risk Management

62

Information Security

63Intellectual Property Management

64

Tax Policy

65

Executive Management

66

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022 37

Value Creation Story

Environmental Activities

Business Overview

ESG Activities

Establishment of Environmental Management System

The KOITO Group declares in the KOITO Group Corporate Behavior Charter, our basic policy of the corporate activities, that
“guided by the theme of ʼEco-friendly Manufacturing for People and the Earth,ʼ 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” as well as built
environmental management systems. We are promoting environmental conservation activities throughout the KOITO Group.

The KOITO Group is building the environmental management system for the entire Group. We are aggressively acquiring
ISO 14001 and other environmental certiﬁcates primarily at our manufacturing sites. As of the end of March 2022, a totalof 24 companies out of 25 eligible for certiﬁcation have acquired environmental certiﬁcates: 12 in Japan, including KOITO
MANUFACTURING, and 12 overseas. The KOITO Group also recommends major suppliers to acquire certiﬁcates, such as
ISO 14001 and Eco-Action 21, in order to reinforce environmental management and conservation throughout the entire
supply chain.
■KOITOʼs ISO 14001 certiﬁcation in
production sites
Site
Shizuoka Plant

Environmental Policy

Koito Parts Center
Haibara Plant

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

Sagara Plant

Year-month of
The latest
initial registration renewal dates■Environmental certiﬁcation acquired in the KOITO Group
Domestic subsidiaries

January 2000
January 2021

July 2000

ISO14001

Fujikawa Tooling Plant January 2003
Scope of Environmental Management:
KOITOʼs 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.

Overseas subsidiaries
KOITO KYUSHU

North American Lighting (U.S.A.)

AoitecNorth American Lighting Mexico (Mexico)

Shizuokadenso

NAL do Brasil (Brazil)

Nissei Industries

Koito Europe (U.K.)

Fujieda Auto Lighting

Koito Czech (Czech Republic)

Shizuoka Wire Harness
KOITO ELECTRIC INDUSTRIES

Eco-Action 21
Green Management Certiﬁcate

ISO14001

FUZHOU KOITO TAYIH (China)

Shizuoka Kanagata

THAI KOITO (Thailand)

Takeda Suntech

INDONESIA KOITO (Indonesia)

Koito Transport

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

Environmental Targets and Performance

Environmental
objectives

Priority efforts and performance in FY 2022
TargetResultReduction of CO 2 fromproduction

Amount of CO 2 emissions: 16%
reduction from FY 2014
(amount of CO 2 emissions
61,900 t-CO 2)

Amount of CO 2 emissions: 23%
reduction from FY 2014
(amount of CO 2 emissions
56,700 t-CO 2)

Reduction of CO 2 fromlogistics

Energy usage per unit:
1% reduction per year

2% increase from FY 2021

Waste generated per unit:
3% reduction from FY 201913% reduction from FY 2019

Development ofrecycle-oriented
society

Reduction of theamount of waste

Reduction of water
consumption

Water usage per unit:
3% reduction from FY 20199% reduction from FY 2019

Reduction ofenvironmental Reduction of VOCemissions
impactsubstances

VOC emissions:Less than the amount in
FY 2019 (299 t)
Target for FY 2022: 247 tonsor less

Measures to alleviate
climate change

Priority

Resource and water
circulation

KOITO convenes the monthly Safe and Environmental Committee chaired by the Representative 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 to address speciﬁc environmental issues,
are implementing speciﬁc activities.
These activities are reported to the Safe and Environmental Committee, which follows up on progress and discussing various actions.

Contribution
to low-carbon
society

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

Energy and CO2 Reduction Subcommittee
Environmental Impact Substance Reduction Working Group
Recycle Promotion Working Group
Plant Emissions Reduction Working Group
Water Conservation Subcommittee
Environmental Conservation Committee at each plant

38

KOITO INTEGRATED REPORT 2022

(Secretariat) Safety andEnvironment Department and
CN Promotion Group,
Production Control Department

Enrichment of environmental management

The Board of Directors

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

Hubei Koito (China)

Haibara Machine and Tools

Management andreduction ofchemical substances

Management Structure for Environmental Activities

Environmental Audit
Committee

GUANGZHOU KOITO (China)

To implement “Eco-friendly Manufacturing for People and the Earth” and promote environmental conservation activities
effectively, KOITO has set quantitative medium-term targets and short-term targets every year for various indicators. The
progress of activities is managed and the degree of achievement of targets is evaluated by the Safe and Environmental
Committee and other bodies.

Environmental Management

Environmental Conservation
Committee

Corporate Information

Promotion of thereinforcement ofconsolidated
environment activities

Reinforcement of environmental
risk management
Thorough environment
compliance

Promotion ofenvironmental efforts
collaborating with
suppliers

Promotion of aggressive
environmental activities,
improvement of environmental
performance

Identiﬁcation of potential environmental
risks and reinforcement of preventive
measures (Identiﬁcation of and responseto near miss incidents)
Conﬁrmation of management
status and promotion of
improvement through information
sharing and on-site inspections

Global disclosure ofenvironmental information
Promotion of mutual understanding
with local communities

Disclosure of consolidated
information Hosting round-tablesession with local communities

Promoting compliance,
employee education andawareness-raising activities

Reevaluation of education structure
for manager, supervisor and newly
hired employees Implementing
training for contractors working in
the premises

Reinforcementof global
Disclosure of environmental
environmental information and enhancement
activities
of communication
Reinforcement ofenvironmental education
Developmentof society inharmony
with nature

192 tons(36% reduction from FY 2019)

Promotion of activities at
Promotion of biodiversity
individual ofﬁces and regions,and nature conservation
and biodiversity conservation
activities
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 2022
①Reduction of energy use and CO 2
emissions in production･Amount of CO 2 emissions in FY 2031: 50%
reduction from FY 2014
･Achieve carbon neutrality by FY 2051
②Reduction of energy use and CO 2
emissions in logistics･Energy usage per unit: 1% reduction per year
③Reduction of environmental impact substances in
the product life cycle①Development of recycle-oriented society･Reduction of amount of waste and effective
utilization of resources in production
Waste generated per unit in FY 2026:
7% reduction from FY 2019
②Minimization of water impact･Reduction of water consumption
Water usage per unit in FY 2026:
7% reduction from FY 2019
･Improvement of wastewater quality management①Reduction of environmental impact
substances in production･Amount of VOC emissions: Maintain theamount below FY 2019 (299 tons)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 withnature･Promotion of biodiversity and nature
conservation activities

KOITO INTEGRATED REPORT 2022 39

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 substancessuch as VOC (Volatile Organic Compounds) in KOITOʼs business activities are as follows.
KOITO keeps track of the material balance in its business activities to verify and evaluate activities to reduce theenvironmental 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 gaina 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 employeesʼ acquisition of ofﬁcial licenses and qualiﬁcations. Moreover,June and July of every year are designated as KOITO Environmental Months during which employees participate in local
clean-up activities and implement intensive environmental inspection to enhance the awareness of every employee.
KOITO also 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 2022)

Inputs

Outputs

Raw materials

Products･Electricity:
107,732,000 kWh･Utility gas:
1,902,000 m3･LPG: 2,897 tons
･Heavy oil: 0 kl

Parts modiﬁcation(resin molding, coating
and deposition)

Assembly

Emissions into theatmosphere･CO2: 56,700 tons
･Chemical substances that
require notiﬁcation under the
PRTR Act: 69.9 tons

■ Safety and environmental education for the work conducted within
the premises (2021)･VOC (Volatile Organic Compounds):
192 tons

Efforts throughout Supply Chain

Emissions into waters
Product packaging
Recycling

再原料化･Resin materials: 359 tons
樹脂材：457 t

Water･Municipal water:
182,000 tons
･Industrial water:
472,000 tons

･Wastewater: 142,000 tons
(discharged amount into
the sewer and wastewater
treatment facilities)

Emissions･Thermal use and recycling
in outside the company:
4,935 tons(including waste: 2,297 tons)･PRTR Act chemical substances:
5.9 tons*PRTR Act: Act to promote identiﬁcation and management of speciﬁc
chemical substancesʼ released amount to the exterior environment.

Environmental Audits
KOITO conducts annual external environmental audits and internal environmental audits to check the operational statusof the environmental management system. Improvement proposals are prepared and implemented to respond to the
aspects identiﬁed through those audits to maintain and operate the proper management system.

●External Environmental Audits
A registered external accreditation ﬁrm checks whether the environmental management system has been properly established andoperated based on ISO 14001.

●Internal Environmental Audits
To ensure the independence of internal environmental audits, an audit team composed of internal auditors other than thedepartment being audited is organized, and audits are conducted based on ISO 14001. The internal auditors are also
conducting audits at their departments for continuous improvements and enhance environmental awareness.

KOITO INTEGRATED REPORT 2022

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 green
procurement of raw materials, parts and equipments.
Aiming to materialize a sustainable society, KOITO is
working to strengthen supply chain management. We holdannual procurement policy brieﬁng session and monthly
information liaison meetings for suppliers to encouragethem to acquire environmental certiﬁcations, such as ISO
14001 and Eco-Action 21, and request compliance withenvironmental laws and regulations on environmentallyhazardous substances.
In FY 2022, KOITO held a supplier meeting on May 17,
2021 and 204 suppliers attended it.

■ Education for internal environmental auditors (2019)■ Procurement policy brieﬁng session (2019)

Compliance with Environmental Laws and Regulations
KOITO conducts thorough risk management, suchas specifying the sources of environmental risks,
detecting abnormalities in the early stages throughregular measurements, and establishing emergency
response measures to minimize environmental risks
by complying with environmental laws andregulations, 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 2022, neither violations ofenvironmental laws and regulations nor ﬁnes werereported at the KOITO Group.
The KOITO Group is committed to compliancewith environmental laws and regulations, andcontinue to work on environmental risk
management.

■Environmental risk management to comply with environmental laws and regulations
Risk management

Risk avoidance and removal

EnergyManufacturing

Prevention of
expanding risks･Resin materials:
43,807 tons
･Organic solvent andpaints: 747 tons
･PRTR Act* chemical
substances: 244 tons

40

Business Overview

Prevention ofenvironmental
pollution

Early
detection ofabnormality

Emergency
response

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 emergency
response procedures・Setting the abnormality handling procedures・Setting procedures to notify nearby residents
and public agencies

Implementation oftraining to handle
abnormality

・Implementation of periodic training

KOITO INTEGRATED REPORT 2022 41

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Reduction of Greenhouse Gas Emissions
In order to contribute to materialize a decarbonized society, KOITO is promoting the introduction of plant buildings andenergy-saving manufacturing facilities that emit less CO2 with the goal of achieving carbon neutrality in FY 2051.
Furthermore, we are working company-wide to reduce CO2 emissions throughout the product life cycle, promoting
productsʼ power conservation, size reduction and weight reduction from the development and design phase.

Efforts in the Production Process
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 andair conditioners, installing energy-efﬁcient facilities,
automatic power shutdown systems to kick in whenfacilities are not in use, and optimizing productionlines.
We are promoting several activities with the goal of
reducing CO2 emissions by 50% from FY 2014 by FY
2031 and achieving carbon neutrality by FY 2051.
Factories in Japan were streamlined by integratingproduction lines and conducting improvement workthat resulted in improved productivity and energy
efﬁciency. With this effort, the amount of KOITOʼs CO2
emissions in FY 2022 was 56.7 thousand tons, 23%
decrease from FY 2014.

Environmental Activities in Overseas Subsidiaries●Reducing CO2 Emissions by Introducing Renewable Energy / India Japan Lighting Private Limited (IJL/India)
IJL reduced annual CO 2 emissions by 13% through installing solar panels at the Bawal Plant and purchasing
renewable energy, including wind and solar power, at the Chennai Plant.

■Amount of CO2 emissions*
Amount of emissions(thousand tons of CO 2)
80

73.8

72.7

70.8

69.0
59.8

60

56.7

40

36.9

Wind power■ Solar panels at Bawal Plant

20
0

2014

2018

2019

2020

2021

2022

2031 (FY)(Target)Solar power

Chennai Plant■ Purchasing renewable energy at Chennai Plant●Reducing Electricity Consumption by Using LEDs / THAI KOITO COMPANY LIMITED (THAI KOITO/Thailand)*The amount of CO2 emissions are calculated by using CO2 emission factor of each electric powercompany for electricity, and using the factors based on the Act on Rationalizing Energy Use andthe Act on Promotion of Global Warming Countermeasures for city gas, LPG and heavy oil.

THAI KOITO has promoted the use of LEDs instead of metal halide lamps, which were conventionally used for on-site
passageway lighting. As a result, they have achieved to reduce annual electric power consumption of on-site passageway
lighting by 66%.

■Amount of CO2 emissions and energy usage per unit in logistics■ Plant lighting

Please refer to the Growth Strategies from P.20 toP.21 of this report.

Efforts in Logistics
The logistics of KOITO are mainly conducted by freighttrucks. A domestic subsidiary, Koito Transport, ismainly carrying out the logistics operations.
Koito Transport acquired the Green Business
Certiﬁcate in February 2004. Collaborating with
KOITO, Koito Transport aims to operateenvironmentally friendly transport business by
reducing environmental impacts focusing on reducing
the energy consumption of freight trucks, CO2
emissions, and waste emitted through the logistics
process.
In FY 2022, the amount of CO2 emissions from theentire logistics operation of KOITO was 12,300 tons
and energy per unit* was 0.157 kl per billion yen.

Amount of emissions(thousand tons of CO 2)

Amount of CO 2 emissions
Energy usage per unit*

Emissions intensity(kl per billion yen)

20

15

0.2
0.148

0.144

0.148

13.4

13.9

14.0

10

0.154

12.8

0.157

12.3

■ Metal halide lamp

●Reducing Water and Gas Consumption through Intermittent Operation of Boiler Facilities /North American Lighting Mexico (NAL Mexico/Mexico)
The four boilers at NAL Mexicoʼs production plants were operated in a manner that shifts to high combustion conditions
at high loads and to low combustion conditions at low loads, and was resulted in energy loss.

0.146

With the aim of reducing energy consumption, NAL Mexico switched the operation to intermittent operation control,in which the boiler can automatically stops according to the operating rate. They have achieved reducing annual water
0.1

consumption by 8% and annual gas consumption by 18%.
■Boiler system diagram

5■Boiler operation status (before improvement)

2018

2019

2020

2021

2022

0

2026
(FY)
(Target)No.1*Energy usage per unit: Amount of energy (kl in crude oil equivalent) consumed in logistics per unit in sales (billion yen).

No.2
Plant

No.3

No.4
Boiler room

42

KOITO INTEGRATED REPORT 2022

Operating ratio 20%

Operating ratio 40%

No.1

Low combustion

High combustion High combustion High combustion High combustion

No.2

Low combustion

Low combustion

High combustion High combustion High combustion

No.3

Low combustion

Low combustion

Low combustion

High combustion High combustion

No.4

Low combustion

Low combustion

Low combustion

Low combustion

Boiler0■ LED lighting■Boiler operation status(after improvement)

Operating ratio 60%

Operating ratio 80%

Operating ratio 100%

High combustion

After introducing a control systemthat can automatically stops the boiler

Operating ratio 20%

Operating ratio 40%

Operating ratio 60%

Operating ratio 80%

Operating ratio 100%No.1

Low combustion

Low combustion

High combustion High combustion High combustion

No.2

Non-operation

Low combustion

Low combustion

High combustion High combustion

No.3

Non-operation

Non-operation

Low combustion

Low combustion

High combustion

No.4

Non-operation

Non-operation

Non-operation

Non-operation

Low combustion

KOITO INTEGRATED REPORT 2022 43

Value Creation Story

Business Overview

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 will continue to actively engage in reducing environmental impact substances by promoting “Eco-friendly
Manufacturing for People and the Earth.”Throughout our product life cycle, KOITO is actively working to effectively use raw materials, energy and otherresources, and to reduce water consumption and waste.
The KOITO Group will continue to actively promote “Eco-friendly Manufacturing for People and the Earth,” and strives
to materialize a recycle-oriented society.

Effective Use of Water Resources

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 Chemical Substances Regulated
under the PRTR Act■Amount of released and transferred chemical substances
regulated under the PRTR Act in FY 2022

KOITO is keeping track of the amount of chemical
substances regulated under the PRTR Act handled ortransferred in the production processes while managing
them appropriately as well as reducing the amount to use
and replacing them with alternative substances.
In FY 2022, KOITO have handled six substances subject
to PRTR Act (Class 1 designated chemical substances),
including toluene and styrene. The amount of thesesubstances handled was 244.0 tons, and the amount of
atmospheric emissions and transfers as waste was 75.8
tons.

Amount of
atmosphericemissions

69.9
tons

Amount transferred
as wasteAmount handled

244.0 tons

5.9 tons

Discharge
into waters

0 tons■Amount of water consumption and water usage per unit
Amount of water
consumption(thousand tons)

Amount of water consumption

Usage per unit

Recognizing the importance of water resources in(tons per million yen)
Water usage per unit
production activities and the risks that future economic
878
900
5.0
837
growth, population growth, and climate change would have780
800
effect on water resources, KOITO has identiﬁed
4.0
672
700
654
4.12
“conservation of water resources” as one of our materiality.
3.76
600
3.58
3.41
KOITO is working on the effective use of water resources and
3.0
3.26
500
protecting water quality.
400
2.0
We have set our target for water consumption per unit of300
production*, to reduce 7% from the amount in FY 2019 (3.51200
1.0
tons per million yen) by FY 2026, and we are promoting
100
activities aimed at further reductions.
0
0.0
2018
2019
2020
2021
2022
We have worked to enhance the awareness of employees(FY)
toward water conservation and improving the efﬁciency ofwater consumption in the production processes. As a result,■Amount of wastewater and wastewater per unit
the water usage per unit in FY 2022 was 9% lower and theAmount of
Wastewater per unit
wastewateramount of water consumption was 22% lower than FY 2019.
Amount of wastewater(tons per million yen)
KOITO is also conducting water quality monitoring on the (thousand tons)
Wastewater per unit
250
2.0wastewater discharged from production sites to prevent
221
207
water pollution in rivers or other bodies of water into which
200
200
production sites wastewater is discharged.
1.5
163●Reduction of VOC (Volatile Organic Compounds)■Amount of VOC emissions and VOC emissions per unit

As a target for FY 2026, KOITO is working to maintain
Amount of
VOC emissions below 299 tons, the amount in FY 2019, a emissions (tons)
400
base year, and to further reduce emissions per unit*1.
In FY 2022, VOC emissions were reduced by 36%
307
compared to FY 2019. In addition, we have achieved 13%
300
reduction in emissions per unit compared to FY 2019.
13.6
In addition, KOITO has not used the three major
200
hazardous air pollutants*2 since we had eliminated its use
in March 2003.

Amount of emissions
Emissions per unit

299
13.9

272
12.8

Emissions per unit
(kg per million yen)
20

*Water usage per unit: The amount of water consumption (tons) per production
output (million yen)

100

220

12.1
192

10

2022

(FY)

0.97

1.00

1.0
0.92

0.79

0.75

2021

2022

50
0

12.9

142

150

2018

2019

2020

0.5

0.0

(FY)

100
*1 VOC emissions per unit: The amount of VOC emissions (kg) per production
in monetary amount (million yen)
*2 Hazardous air pollutants: Dichloromethane, trichloroethylene andtetrachloroethylene

44

KOITO INTEGRATED REPORT 2022

0

2018

2019

2020

2021

0

KOITO INTEGRATED REPORT 2022 45

Value Creation Story

Efforts in Reducing Wastes and Recycling
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 5,293 tons of waste from plants in FY
2022, among which 2,297 tons were processed aswaste*1.
KOITO is promoting activities with the aim of further
reducing waste per unit*2 by 7% from the unit in FY 2019(0.128 tons per billion yen), a base year, as a target by FY
2026.
The waste generated per unit (the amount of waste per
production output) was 0.120 tons per billion yen in FY
2022, which was 34% lower than FY 2019 due to thecontinuous efforts to reduce the loss of defective resins.
*1 Waste: Generated material that requires processing costs, and theprocessing is outsourced to disposal businesses contractors*2 Waste generated per unit: The amount of waste (tons) per production
output (million yen)■Amount of emissions and waste (per unit)
from production sites
Amount of emissions
and waste (tons)
8,000
6,000
4,000

7.314
6,934
0.138

2,949

Waste generated per unit
(tons per billion yen)Amount of emissions
Amount of waste
Waste generated per unit
6,946
0.137

3,055

0.2

2019

0.133
2,909

5,544
0.117

KOITO is working to improve the recycling rate
(reduction of heat-utilizing waste, etc.). In FY 2022, theamount recycled was 4,985 tons, maintaining a recycling
rate of over 90%.

Amid the increasingly severe impacts of climate change around the world, the Financial Stability Board established TCFD in
December 2015 in response to a request from the G20.In June 2017, TCFD issued TCFD Recommendations, which requirecompanies and others to disclose information on the risks and opportunities that climate change may have on their company
based on four themes.
In December 2021, KOITO has signed up to support the TCFD and isactively promoting activities to reduce CO 2 emissions and disclose
related information in order to materialize carbon neutrality in FY 2051.
We will continue to analyze the risks and opportunities that climatechange may pose to us and identify their impacts, and will work tofurther enhance information disclosures.
■Items Recommended for Disclosure by TCFD and KOITOʼs Compliance

5,293
0.120
0.1

2,407

Recommended Disclosures
Governance

2,297

2020

2021

2022

0

(FY)

■Amount of waste discharged at plants (FY 2022)●Promotion of recyclingb)Managementʼs role in assessing and managing
climate-related risks and opportunities

Recycling(material recycling)
4,626 tons
Heat utilization(thermal recycling)
309 tons

External Evaluation on Our Environmental Activities
KOITO evaluates its own initiatives by identifying key domestic and overseas external indicators and evaluations, andanalyzing the results. We are actively disclosing information by responding to external evaluations, including ESG(Environmental, Social and Governance) rating agencies.
In January 2022, the CDP Climate Change Report 2021, a survey of global companies on
their strategies for climate change and speciﬁc greenhouse gas emissions, was publishedby 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 CO2 emissions and setting medium- to long-term targets,
as well as its disclosures.

The KOITO Group identiﬁes materiality including “prevention of global warming”
through discussions at the Board of Directors and promotes business activities that
contribute to materialize a sustainable society.
KOITO convenes the monthly Safe and Environmental Committee chaired by the
Representative Director to supervise environmental activities of the entire Groupand 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
CO 2 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 and discussing various actions.

a)The climate-related risks and opportunities theorganization has identiﬁed over the short,medium, and long termb)The impact of climate-related risks andopportunities on the organizationʼs businesses,
strategy, and ﬁnancial planningWe will analyze and disclose the risks and opportunities that climate change may
have on KOITO in the future based on climate-related scenarios and other factors.

c)The resilience of the organizationʼs strategy, taking
into consideration different climate-related
scenarios, including a 2 C or lower scenario

Risk Managementa)The organizationʼs processes for identifying andassessing climate-related risksb)The organizationʼs processes for managing
climate-related risksc)How processes for identifying, assessing, andmanaging climate-related risks are integrated into
the organizationʼs overall risk management

Metrics and Targetsa)The metrics used by the organization to assessclimate-related risks and opportunities in line with
its strategy and risk management processb)Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risksc)The targets used by the organization to manage
climate-related risks and opportunities andperformance against targets

KOITO INTEGRATED REPORT 2022

Compliance

Strateg yIn-house recycling(material recycling)
359 tons
Waste from outside
the company

46

Corporate Information

Disclosures According to the Recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD)a)The boardʼs oversight of climate-related risks andopportunities
2018

ESG Activities

6,651

2,000
0

Business Overview

Departments are assigned to risk management, including the implementation of
measures to reduce and avoid risks and daily management. The Quality Assurance
Department is assigned risks associated with the safety of products, theProcurement Headquarters handles risks in the supply chain, and the Safety
Environment Department handles risks of natural disasters. As such, eachdepartment assess relevant risks and implement preventive measures. Ofﬁcers ofassigned responsible departments act as the general managers. 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 businessadministration, and such problems are swiftly and properly handled under the
direction of the top administrators.
【Target for FY 2031】･CO 2 emissions (Scope 1+2): 36,900 tons (50% decrease from FY 2014)【Monitoring metrics】･Scope 1 (direct) and Scope 2 (indirect) CO 2 emissions【Result for FY 2022】･Scope 1 CO 2 emissions: 12,900 tons
･Scope 2 CO 2 emissions: 43,700 tons
We are currently in the process of calculating Scope 3 CO 2 emissions.

KOITO INTEGRATED REPORT 2022 47

Value Creation Story

Social Activities

Development of Technologies and Products Contribute to Improve Safety and Security●LED Headlamps■Evolution of light sources

KOITO has been developing high-output andhigh-performance light sources to create headlamps thatprovide brighter light to greater distances for safenighttime driving.
LED headlamps are KOITOʼs main products. They help
drivers to gain clear night views as they are bright, turn on
instantly and are close to daylight. KOITO is also
developing laser headlamps to further improve distancevisibility.

Luminous ﬂux (lm)
10 4

Gas discharge
bulb

LED

Halogen bulb

10 3

Semi-sealed
beam

Sealed beam

Incandescent bulb

10 2
10 1
10 0

Acetylene
gas lamp
Kerosene
lamp

Candle●Adaptive Driving Beam (ADB)

Semi-sealed beam
headlamp

1900

Sealed beam
headlamp

Halogenheadlamp

1940

1960

1920

Gas discharge
headlamp

1980

LED headlamp

2000

2020 (CY)■Image of ADB photometry

48

KOITO INTEGRATED REPORT 2022

The KOITO Group declares in the KOITO Group Corporate Behavior Charter that “we will gain customersʼ satisfaction andtrust through developing and providing safe and high-quality products and services,” and identiﬁed “enhancement of
product quality” as one of our materiality. We strive to create products with a customer-ﬁrst attitude to maintain andfurther 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 and will keep
contributing to materialize a sustainable society through maintenance and improvement of the product quality.

Quality Management Structure
KOITO has established a quality management system
based on ISO 9001 and IATF 16949 which areinternational standards to ensure seamless operations.
Internal Quality Audits with the Quality AssuranceManager as the chair are conducted at least once a year
to make decisions on the quality management aspects
and to monitor the quality management status of theentire KOITO Group.
The progress of these activities is reported to theBoard of Directors and the Managing Committee byDirector or Corporate Ofﬁcer who are in charge of
Quality Assurance Department to reinforce themanagement system through monitoring by the
management. KOITO is building a system to ﬁnd thecauses of any defects found and implement prevention
measures in case any defects are found through quality
tests and evaluations.

■Quality Management System

The KOITO Group
Customer-ﬁrst Production
KOITO
MANUFACTURING

The Board of Directors /Managing Committee
ReportDirection
Requests,
comments

Quality Assurance Department
Quality audit

Quality meeting

Prevention of recurrence

Quality monitoring

System reinforcement

Quality improvement activity

Production
sites

Engineering
Headquarters

Overseas Subsidiaries

Procurement
Headquarters

Management
Divisions

High-quality
products andservices

Domestic Subsidiaries

High-beam lighting range

Acquisition of Quality Management System Certiﬁcates
The table on the right is a list of Group companies,
including overseas subsidiaries, that have acquired
ISO 9001 or IATF 16949.
All the subsidiaries and departments of KOITO willcontinue to carry out a thorough PDCA cycle, andensure product safety and quality throughenhancement of the quality management system.

Please refer to the Growth Strategies from P.18
to P.19 of this report.

The number of trafﬁc accident deaths in Japan is about
3,000 per year. Among them, fatal accidents occur mostfrequently at dusk, from 17 to 19 oʼclock, and in particular,“vehicle-to-pedestrian” accidents occur two to four times
larger than those in daytime. It can be inferred that
deterioration of driversʼ visibility can be one of the causes
for trafﬁc accidents with pedestrians. In addition, ananalysis 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.

Corporate Information

Customers

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 our materiality, the KOITO Groupdevelops products which contribute 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 arecompatible 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 using our technologies.

High Beam Contributes to
Reduce Accident Mortality

ESG Activities

Quality and Product Safety

Activities to Improve Safety and Security

KOITO has developed a headlamp system called Adaptive
Driving Beam (ADB) that automatically controls the light
distribution pattern of the high beam and ensures wide
front visibility for drivers by enabling driving with highbeams 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.

Business Overview■Number of “vehicle-to-pedestrian” death accidents bytime period (2015‒2019 cumulative)
Daytime(excluding dusk)

Nighttime

153

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)
THAI KOITO (Thailand)
INDONESIA KOITO (Indonesia)
Ta Yih Industrial (Taiwan)
INDIA JAPAN LIGHTING (India)

295.2
595

(Cases) 0

100

200

300

400

500

600

■Probability of collision avoidance by high beam

126

（56%）

IATF 16949
North American Lighting (U.S.A.)

Approx. 4 times

Dusk

99

ISO 9001
KOITO KYUSHUApprox. 2 times(excluding dusk)（44%）■Environmental certiﬁcation acquired in the KOITO Group■Accidents that are likely to havebeen avoided■Accidents with a low probabilityof collision avoidance
225 (cases) in total*Prepared based on the National Police Agencyʼs “Prevention of Nighttime
Pedestrians Accidents through the Advanced Use of High Beam”
https://www.npa.go.jp/bureau/trafﬁc/anzen/highbeam.html

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 improvetheir 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 to further
improve quality management.

■ Staff QC Meeting (2019)

KOITO INTEGRATED REPORT 2022 49

Value Creation Story

Business Overview

ESG Activities

Supply Chain Management

Human Resource Management

KOITO believes that it is important to fulﬁll its social responsibility throughout the entire supply chain to practice“Eco-friendly Manufacturing for People and the Earth” through all business activities. Therefore, we have established theProcurement 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 to each supplier toachieve goals together.
For Procurement Policy, please refer to our Supply Chain
We are aiming to materialize a sustainable societyManagement website.
throughout the entire supply chain while cherishing theclose relationship with our suppliers.
URL: https://www.koito.co.jp/english/csr/social/supplychain.html

KOITO has identiﬁed “human resource development,” “healthy and safe working environment,” “workstyle reform” and“protection of human rights” as part of our materiality. 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 can work on tackling problems.
Please refer to the Human Resource Strategy from P.24 to P.25 of this repor t.

Personnel Data

Initiatives to Strengthen Cooperation with Business Partners and Promote Co-existence and Co-prosperity
In March 2022, KOITO formulated and announced its Declaration of Partnership Building
to strengthen collaboration with our business partners and promote mutual prosperity, as
well as to contribute to sustainable growth of the society throughout the supply chain.
The following individual items are clearly indicated as KOITOʼs initiatives in the declaration.

(KOITO MANUFACTURING)FY 2019

Total workforce●We will Strengthen collaboration with other companies to accelerate open
innovation in order to respond to the transformation of automobiles and mobility.
●We will promote information sharing and digitization using IT to improve operational efﬁciency with related
business partners.

Reinforcement of CSR in the Supply Chain
KOITO holds annual Procurement Policy Brieﬁng Session
and monthly Supplier Information Liaison Meetings andother opportunities to help our suppliers understand our CSR
initiatives. We are also providing consultation as necessary.
At the Procurement Policy Brieﬁng Session, we share policies
on sales, technology, production, quality and other matters,
and also ask our suppliers to thoroughly comply with laws
and regulations. We have established a system for suppliers
so that they can inform us and promote compliance in theevent of their violating the law.
In addition, we encourage our suppliers to actively acquire
environmental certiﬁcation, and check the status ofcertiﬁcation every year. In FY 2022, approximately 430
suppliers were eligible for the survey. During ﬁre and disasterprevention inspections to our suppliers, KOITO also conﬁrms［KOITOʼs CSR activities］①Measures based on the “Guideline for the Right Transactionof 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.)

Regularrecruitment

the management system or the amount of organic solventsused by suppliers. In the event that there is a problem with
suppliersʼ management system or others, we request them tosubmit an improvement plan and supporting their measures.
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.
In addition, we are conﬁrming some of our suppliersʼ
implementation status of overall CSR activities, including
quality, human rights, environment, compliance and others.

［ Environmental requests ］

・Acquire external environmental certiﬁcations such as 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 the automobile
industryʼs 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

Measures on Conﬂict Minerals
It has become an international concern that some minerals mined in the Democratic Republic of the Congo and nearby
nations have been the source of ﬁnancing for armed forces engaging in human rights violations. The United Statesdeﬁned four types of minerals of tin, tantalum, tungsten and gold produced in these regions as “conﬂict minerals” in the
Dodd-Frank Wall Street Reform and Consumer Protection Act and mandated annual investigations of the use of theseminerals 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.

50

Corporate Information

KOITO INTEGRATED REPORT 2022

FY 2022

3,534

3,471

3,551

3,570

Female

907

908

912

883

Total

4,378

4,459

4,482

4,417

Total (male and female)

Practical
positions

Total (male and female)

Ratio of female
Total (male and female)
Ratio of female
Ratio of female

17

19

25

0

47.0%

52.6%

32.0%

0.0%

71

81

70

27

7.0%

12.3%

8.6%

11.1%

43

47

47

24

25.6%

31.9%

29.8%

20.8%

131

147

142

51

18.3%

23.8%

19.7%

15.7%

Male

580

582

607

612

Female

6

6

8

9

1.3%

1.4%

Total (male and female)
Ratio of female

Number of employment ofstaff with a disability

FY 2021

Male

Generaladministrative
positions
Generaltechnical
positions

Number of employees
in senior management

FY 2020

Ratio of female
Ratio

1.0%

1.0%

80

85

84

82

2.27%

2.37%

2.31%

2.25%

19.7%

17.9%

17.7%

15.9%

Male

19.7

19.2

19.3

19.6

Female

21.8

21.3

21.5

21.7

Total

20.0

19.6

19.7

20.0

Senior management

91.7%

88.9%

100.0%

93.3%

Union members

75.4%

77.5%

85.7%

81.4%

Total

78.3%

79.4%

88.5%

84.3%

1.1%

1.1%

1.1%

1.6%

2,044.0

1,998.5

2,324.1

2,064.0

Monthly average overtime hours

23.7

20.6

9.9

9.3

Number of paid leave per employees

16.0

16.2

14.7

16.5

77.3%

78.2%

70.8%

82.5%

34

33

28

Ratio of dispatched employees
Average years employed by
the company

Re-employment ratio

Employee turnover rate (voluntary resignation)
Working hours

Paid leave taken
Number of employees taking maternity leave
Number of employees
taking child care leave
Number of employees
working reduced hours toaccommodate childcare
Number of employees using
taking family-care leave

37

Male

4

4

14

25

Female

59

58

65

65

Total

63

62

79

90

Male

1

1

0

2

Female

58

61

54

67

Total

59

62

54

69

Male

0

0

0

3

Female

3

0

1

2

Total

3

0

1

5

63,18175,24142,96044,953
10.2

Employee training time (hours)
Average training time per employee

14.4

16.9

9.6

Number of employees taking mental health training

1,028

682

239

243

Labor union membership rate

95.4%

98.3%

98.8%

98.1%

KOITO INTEGRATED REPORT 2022 51

Value Creation Story

Occupational Safety and Health
KOITO adopts “Safety comes ﬁrst” as the basic approachto safety and health and aims to create the safe, secure,and comfortable work environment with the participationof all employees. Five Safety Rules are also set as thestandard actions to follow in all activities that are to bepracticed by the entire Group.
The Safe and Environmental Committee chaired by the
Representative Director meets monthly to discuss policies
on employee safety and health measures, including
measures to prevent and recur problems or accidents, aswell as other important issues. The matters discussed at
the Safe and Environmental Committee are presented toevery employee through the Safe and Health Committee,
and the Safe and Environmental Committee of eachproduction site, or the worksite safety meetings
conducted at their worksites.
Targeting all personnel working in the premise, KOITO
repeatedly provides education and accident drills todevelop human resources who follow safety rules andincrease their awareness. We are also conducting risk
assessment and risk detection activities to enhance thesenses to ﬁnd potential risks at the worksites. In addition,
Directors and Managers conduct on-site inspections,
identify unsafe conditions, and take preventive measureswith the goal of zero labor disaster and trafﬁc accidents.

■Process safety total incident rate (lost worktime)
KOITO MANUFACTURING
Electric machinery and equipment
manufacturing industry*

0.6
0.4
0.2
0

0.51

0.58

0.54

0.54

0.52

Corporate Information

2018

2019

0

0

0

2020

2021

2022

Process safety Numbers of workers due to industrial accident
total incident ＝Total working hours
rate

(FY)

●Purchase of ESG Receivables
For fund management, in addition to investment efﬁciency and ratings, we assume the degree of contribution to ESG andsociety as one of the selection criteria. In order to contribute to materialize a sustainable society, KOITO has purchased
green bond and social bond from two organizations in FY 2022.

■Process safety incident severity rate (lost worktime)

0.04
0.03

KOITO MANUFACTURING
Electric machinery and equipment
manufacturing industry*
0.02

0.02

0.01

0.01

0.02
0.01
0

2018

2019

Process safety incident＝
severity rate

KOITO made 100 thousand euros of donations to UNHCR, the UN Refugee Agency, as
support for safety and livelihoods of people who are facing extremely harsh difﬁculties
due to the crisis in Ukraine. The donation will be used to support humanitarian activities
in Ukraine and its neighboring regions through UNHCR.

1,000,000*Source: The Ministry of Health, Labour and Welfare

0.05

To materialize one of our management philosophies, “fostering mutually beneﬁcial relationships with all stakeholders asa 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.

●Donation to Support Humanitarian Efforts in Ukraine and Neighboring Regions

0.18
0.09

0.05

0.01

●Domestic Environmental Beautiﬁcation Activities

0.01

0

0

0

2020

2021

2022

Total lost working hours
Total working hours

(FY)

1,000

Initiatives between Management and Employees
A strong relationship based on mutual trust between management and employees is essential for building the workplaceenvironment where individual employee can make the best use of their capabilities, and maintain and improve highproductivity and motivation.
“KOITO Labor Union,” which consists of 3,878 KOITO employees, is a member of the “JAM Shizuoka.” In principle,
KOITO holds monthly labor-management meetings with KOITO Labor Union to discuss various issues such as businessperformance and labor conditions.
In addition, the labor union regularly conducts a union employee awareness survey on workplaces, operations andcareers targeting all union members. The labor union uses the ﬁndings to improve union activities and recommendations
to KOITO.

Respect for Human Rights
One of our management philosophies is to “stepping forward to realize our employeesʼ 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 andemployees, 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 employeeʼs awareness on respecting
human rights.

KOITO INTEGRATED REPORT 2022

ESG Activities

Social Contribution Activities

As part of its efforts for environmental conservation andbiodiversity, KOTIO is conducting activities such as
weeding at Miho-no-Matsubara, the constituent propertyof Mt. Fuji, the global cultural heritage, and cleaning thesurrounding coasts.

*Source: The Ministr y of Health, Labour and Welfare

52

Business Overview■ Weeding at Miho-no-Matsubara(2019)■ Cleanup Activities at Miho-noMatsubara Coast (2019)■ Exchanges with local schools (2019)■ Afforestation activities (2019)■ Summer festival (2019)■ Childrenʼs visiting day (2019)●Overseas Environmental Beautiﬁcation Activities
India Japan Lighting Private Limited (IJL) strives tobeautify and protect the environment by holding
exchange meetings and cleaning activities with local
residents.

●Participation in Regional Activities at Production Sites
KOITOʼs production sites periodically holds roundtablesessions with residents of regional communities and open
the sites to local community associations during summer
festivals.
We also host site tours for the residents and accept
childrenʼs visits so that they can better understand our
corporate activities.

Stakeholder Engagement
KOITO declares in the KOITO Group Corporate Behavior Charter that “we will disclose corporate information in an
appropriate, effective, and fair manner and engage in constructive dialogue.” In order to achieve our sustainable growthand increase corporate value over the medium- to long-term, we engage in constructive dialogue while fairly providing
accurate information to our shareholders and investors.
In FY 2022, KOITO held the 121st Ordinary General Meeting of Shareholders and an earnings release conference forsecurities analysts and institutional investors. At the earnings release conference, we explained our Groupʼs performance(results and plans), and received many questions and comments from the participants. Furthermore, we held a total of
approximately 220 individual meetings with institutional investors. In principle, a Director participates in all meetings.
The content of the meetings and comments or 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 ourdialogue to improve our management activities.

KOITO INTEGRATED REPORT 2022 53

Value Creation Story

Business Overview

ESG Activities

Corporate Information

GovernanceTo retain the trust of all of our stakeholders, KOITO recognizes the importance of ethical standards and theestablishment of a sound management structure. We have identiﬁed enhancing “corporate governance” as one ofour materiality and promoting several activities.

Members of the Board of Directors, Audit and Supervisory Board,
Nomination Committee and Remuneration Committee (as of June 29, 2022)◎ChairCorporate Governance

Board of Directors

Board of Directors
9 Directors(including 3 Outside
Directors)

Consult

Appointment/removal

Consult**

Representative Directors

Nomination Committee
5 Directors(including 3 Outside
Directors)

Audit and Supervisory Board
4 Audit & Supervisory Board Members(including 2 Outside Audit &Supervisory Board Members)

Remuneration Committee
5 Directors(including 3 Outside
Directors)*Deliberate and resolve
draft and policy

Directors

Operational
audit

Collaboration

Collaboration

Corporate Ofﬁcers
Each Department

Audit

Auditing Section

Financial audit

Independent Auditors

Audit & Supervisory
Board Members

Election/dismissal

Election/dismissal

Election/dismissal

Election/dismissal

Directors

General Meeting of Shareholders

Audit andSupervisory Board○Members

Nomination
Committee

Remuneration
Committee

Chairman and CEO

Masahiro Otake

○

◎

◎

President and COO

Michiaki Kato

◎

○

○

Executive Vice President

Kenji Arima○

Executive Vice President

Masami Uchiyama○

Senior Managing Director

Hideharu Konagaya○

Senior Managing Director

Katsuyuki Kusakawa○

Outside Director

Haruya Uehara

○

○

○

Outside Director

Kingo Sakurai

○

○

○

Outside Director

Chika Igarashi

○

○

○

Standing Audit & Supervisory Board Member

Mitsuo Kikuchi○◎

Standing Audit & Supervisory Board Member

Koichi Sakakibara○○

Outside Audit & Supervisory Board Member

Yukinobu Suzuki○○

Outside Audit & Supervisory Board Member

Hiroshi Kimeda○○

Collaboration

Inside Directors/Audit Members

Board of Directors

Outside Directors/Audit Members

Audit and Supervisory Board

Ratio of Outside Directors
Board of Directors

Composition

Frequency

Function

Structure54

9 Directors (6 inside Directors + 3 outside Directors)
Chaired by the President

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

Once per month in principle

Eight times (FY 2022)

The Board of Directors discusses, reports, andmakes decisions on matters stipulated in the
Board of Directors Regulations, including thosematters stipulated by laws, regulations, and the
Articles of Incorporation, and supervises theexecution of Directorʼs business execution.

The Audit and Supervisory Board Members
participate in the Board of Directors and otherimportant meetings and committees, review
signiﬁcant authorization documents, and audit
the performance of directors. They aremonitoring the structure and operations of theinternal control system.

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

meetings of the 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, threetimes per month in principle, determines
business execution, reports on progress, andfollows up on business execution.
●The governance structure is being reinforced;
new proposal agendas are required to beapproved at the Managing Committee and thento the Board of Directors.

KOITO INTEGRATED REPORT 2022

Audit and Supervisory Board Members attend
the Managing Committee and other important
meetings, constantly monitor the Directorʼsbusiness execution and express opinions asneeded.
●Improving its auditing functions through close
collaboration between Audit and Supervisory
Board Members, the Internal Audit
Department, and independent auditors byholding periodic meetings and let themexchange information and opinions as needed.

67%

33%

3 Outside
Directors

6 Inside
Directors

Audit andSupervisory Board

50% 50%2 Inside
Directors

2 Outside
Directors

Remuneration
Committee

Nomination Committee

40%

2 Inside
Directors

40%

60%

2 Inside
Directors

3 Outside
Directors

60%

3 Outside
Directors

Main Proposals and Reports at the Board of Directors (from April 2021 to March 2022: 12 meetings)
Proposals

Reports

Total

Ratio

Business strategies, sustainability and governance

18

9

27

33%

Settlement, dividends and other ﬁnancial matters

7

9

16

19%

Internal control, risk management and compliance

4

4

8

10%

HR, appointment and remuneration

15

3

18

22%

Other matters

3

10

13

16%

47

35

82

100%

Total

KOITO INTEGRATED REPORT 2022 55

Value Creation Story

ESG Activities

Corporate Information

Election Policy for Directors and Audit and Supervisory Board Members

Director Effectiveness Evaluation

KOITOʼs policy is to elect a person who is capable of responding to expectations of shareholders as a Director, hasenough experience and advanced knowledge of business administration, and can fulﬁll the duties and responsibilities of a
Director as a Director candidate.
Based on this policy, the nomination committee deliberate and resolve a draft of Director candidates, and then the
Director candidates are determined by the Board of Directors. As a consultative body of the Board of Directors, thenomination committee consists of three independent outside Directors and two inside Directors, in order to ensure
objectivity and transparency of the nominations of the director candidates.
Each Director has a thorough knowledge of the respective business management. Including outside Directors, KOITO
regards Directorʼs knowledge, experience, and capabilities as diverse and well balanced. KOITO will continue to consider
the appropriate structure for the Board of Directors.
As for the election of Audit and Supervisory Board Members, KOITO expects candidates to have a good personality anda strong sense of ethics to accurately, fairly, and efﬁciently execute the audits of the execution of Director duties.

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.

Specialties and Experience of Directors
Corporate
Sales,Engineering,
Management Procurement
R&D

Production, Quality
Management,
Safe & Environment

Overseas
Segment

Finance &Accounting

Corporate
Planning,
Legal, Personnel○○

Chairman and CEO

Masahiro Otake

○

○

○

President and COO

Michiaki Kato

○

○

○

Executive Vice President

Kenji Arima○○

Executive Vice President

Masami Uchiyama○

Senior Managing Director

Hideharu Konagaya○

Senior Managing Director

Katsuyuki Kusakawa○

Outside Director

Haruya Uehara○

Outside Director

Kingo Sakurai

Outside Director

Chika Igarashi

○

○

○

○
○

○
○

○

○

○
○

○
○
○
○

*Note: Above chart does not represent all skill of each Director.

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 andSupervisory Board Members shall have technical knowledge of laws and ﬁnance. Both outside Directors and Audit andSupervisory Board Members are elected upon a decision at a General Meeting of Shareholders.

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. Prior to the beginning of the ﬁscal year, the annual meeting schedules are announced to Directors and Audit andSupervisory Board Members, including its outside members, making it easier for them to attend the meetings. To
facilitate discussion on management issues of the Board of Directors, the matters to be deliberated and reported
at the meeting and the content of the materials are discussed in advance.
3. In addition to Directors, who have experience in the various business divisions such as management, sales, technical,
production and others, the Board of Directors also receives advice and proposals from outside Directors with extensive
knowledge and experience of corporate management, or with expertise in legal and ﬁnancial matters. The Board of Directors
ensures sufﬁcient time and discusses management issues from a variety of perspectives.

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

Remuneration of Directors
It was approved at the 119th Ordinary General Meeting of Shareholders held on June 27, 2019 that the amount of remuneration, etc. for Directors shallbe 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 amount of remuneration, etc., related to subscription rights as stock compensation-type
stock options for Directors shall be no more than ¥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 wellas 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 and their position, thensetting the upper and lower limit amount for each position, the status difference by position, and the difference 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 andachievements 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 andcorporate value in the medium- to long-term by sharing the beneﬁt of rising stock prices and the risk of falling stock 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 toexercises their options once they have lost their position as Director.
The Board of Directors consults with the remuneration committee regarding the policy to determine the remuneration of all and each Director.
The remuneration of each Director is determined by consultations among the Representative Directors, based on the above determination policy
authorized by the Board of Directors. To ensure objectivity and transparency of the Directorsʼ remuneration determination procedure and others, theremuneration committee, an advisory body to the Board of Directors, consists of two inside Directors and three independent outside Directors.
The remuneration of each Audit and Supervisory Board Members has been determined by consultations among Audit and Supervisory Board
Members. For outside Directors, only ﬁxed remuneration is paid, and no performance-linked remuneration is paid.

Status of Audits
Based on the annual audit plans, KOITOʼs Internal Audit Department, an independent organization, conducts audits of
the operations of internal control over ﬁnancial reporting, as well as audits of the legality and appropriateness ofoperations 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 and Audit 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.
Other than attending and expressing opinions at the Board of Directors, Audit and Supervisory Board Members audit
the execution of Directorsʼ duties, legality and appropriateness of KOITOʼs decision-making based on their knowledge
and experience in each specialized ﬁeld. In addition to Audit and Supervisory Board Membersʼ on-site audits andinterviews with administrative divisions, Audit and Supervisory Board Members attend the audits performed by the
independent auditors and the Internal Audit Department. Audit and Supervisory Board Members strive to improve theeffectiveness of audit by maintaining collaboration with relevant parties, including outside Directors by exchanging
information as needed.

56

Business Overview

KOITO INTEGRATED REPORT 2022

The number of
eligible members

Breakdown of remuneration
Fixed remuneration(million yen)

Performance-linked remuneration(million yen)

Total remuneration(million yen)

Directors

15

786

349

1,136

Audit and Supervisory Board Members

5

103

ー

103

Total

20

890

349

1,239

Notes: 1. The above table includes one retired Director and one retired Audit and Supervisory Board Member at the conclusion of the 121st Ordinary General Meeting of Shareholders
held on June 29, 2021.
2. Aggregate remuneration for the outside Directors and outside Audit and Supervisory Board Members, a total of four individuals, was ¥55 million (ﬁxed remuneration only).
3. In addition to the above, KOITO resolved to abolish its Directorsʼ and Audit and Supervisory Board Membersʼ executive retirement bonuses payment system at the conclusionof the 112nd Ordinary General Meeting of Shareholders held on June 28, 2012 and to grant executive retirement bonuses, at the time of the retirement of each person involved,
to cover the period in post up to the abolition of the system to Directors and Audit and Supervisory Board Members continuing in post subsequent to the conclusion of theaforementioned General Meeting of Shareholders. On the basis of this resolution, an executive retirement bonus of ¥63 million was paid to one retired Director.
These amounts included ¥40 million, which were transferred from provision for Directorsʼ retirement beneﬁts included in the total remuneration, etc. to executives in thebusiness report for past years.
4. Besides the above, one outside Audit and Supervisory Board Member receives executivesʼ remuneration of ¥0 million from Koito Insurance Services Co., Ltd., KOITOʼs
subsidiary.
5. For Performance-linked remuneration, recurring proﬁt is used as an indicator since it reﬂects the overall results of KOITOʼs management activities, and the remuneration is
calculated giving consideration to the year-on-year change in this indicator. The amounts listed for recurring proﬁt for the ﬁscal year under review and for the previous ﬁscal
year are the amounts presented in the non-consolidated statements of income.

KOITO INTEGRATED REPORT 2022 57

Value Creation Story

ESG Activities

Corporate Information

Basic Policy of Internal Control System

Shareholdings

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

Based on KOITOʼs management strategies and plans, we believe that strengthening business relations with othercompanies is essential to expanding our business and achieving sustainable growth.
From this perspective, we comprehensively consider the issues and hold shares that are held for purposes other thanpure investment. With regard to shareholdings, we regularly scrutinize and verify whether they are commensurate withdividend yields and the cost of capital, while also keeping in mind reductions, in order to determine the appropriatenessof stockholdings.

1. System ensuring that Directors and employees execute
their business duties in compliance with laws and regulations and the Companyʼs Articles of Incorporation
The Compliance Committee, the Compliance Department,
the Internal Audit Depar tment, whistle-blower internalreporting system, and other organizations and systems, aswell as the Code of Corporate Ethics and other relevant regulations, will be developed and enhanced based on the
KOITO Group Corporate Behavior Charter.
At the same time, KOITOʼs Directors, Corporate Ofﬁcers,
and employees will receive education familiarizing themwith the organizations, systems, and regulations.
2. System for the preservation and administration of information on Directors executing their business duties
Regulations will be developed and enhanced to appropriately preserve and administer minutes of the General Meeting of Shareholders, the Board of Directors, the Managing
Committee, and other information on the Directors executing their business duties.
3. Regulations and other systems for managing the risk of loss
Risk Management Regulations and other regulations andsystems for managing risk will be developed to avoid andeliminate material risks that could threaten the Companyʼsviability, and to minimize the impact when they arise. At thesame time, KOITOʼs Directors, Corporate Ofﬁcers, and employees will receive education and training on risk management.
4. System for ensuring the ef ﬁcient execution of businessduties by Directors
The Board of Directors and the Managing Committee meetings will be held regularly. Meanwhile, the Board of Directorsʼ Regulations, the Managing Committeeʼs Regulations,and other regulations pertaining to the execution of business duties by the Directors, as well as the Corporate Ofﬁcer system and other organizations and systems, will be
developed and enhanced to ensure the efﬁcient executionof 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 and its subsidiaries
KOITO and its group companies will acknowledge the
KOITO Group Corporate Behavior Charter and develop asystem for ensuring and administering the appropriate execution of business duties as follows.
ａ.KOITO clariﬁes matters to be reported in the Subsidiary
Company Management Regulations and other regulations and improves repor ting sys tem. Al so, KOITO
requests regular business reports to the group companies.
ｂ.KOITO comprehensively and thoroughly manages risks ofthe entire group based on the Subsidiary Company Management Regulation and other regulations.
If actions of the group companies are insufﬁcient, KOITO
provides instructions and corrective actions.
ｃ.KOITO requests its group companies to develop andimprove regulations, organizations, and systems for regular meetings of the Board of Directors and the executionof duties by the Directors.
Ofﬁcers serve in multiple posts in important group companies.

58

Business Overview

KOITO INTEGRATED REPORT 2022

ｄ. KOITO ensures that group companies stay in compliancewith laws and regulations based on the KOITO Group
Corporate Behavior Charter and other regulations. Also,
KOITOʼs Management Depar tment and Internal Audit
Department conduct audit and ﬁnancial audit of groupcompanies.
KOITO also clariﬁes matters requiring approvals in theSubsidiary Company Management Regulations and otherregulations so that the applicable business operations areto 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 and Supervisory Board Members
request such employees to assist in the execution of theirdutiesAn Audit and Supervisory Board Membersʼ Ofﬁce will beestablished to help the Audit and Supervisory Board Members execute their duties under the instructions and ordersof 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 Super visor y Board to ensure
independence from the Directors.
7. System for Directors and employees of KOITO and its subsidiaries to repor t to the Audit and Super visor y Board
Members and for preventing unfair treatment of the Directors and employees for reporting to the Audit and Supervisory Board Members
Directors, Corporate Ofﬁcers, and employees of KOITO andits group companies shall report to the Audit and Supervisory Board Members when they learn of matters of material
impact on the Company, serious violations of laws, regulations, and the Companyʼs Ar ticles of Incorporation, andother issues of compliance.
Moreover, each Audit and Supervisory Board Member
shall exercise their own discretion in reporting the ﬁndings
from such repor ts to the Audit and Super visor y Board.
Meanwhile, the Companyʼs organization and systems will
be developed and enhanced to rigorously prevent the unfair
treatment of the Directors, the Corporate Ofﬁcers, and theemployees for reporting to the Audit and Supervisory Board
Members.
8. Policy on expenses arising when the Audit and Supervisory
B o ar d M e mb e r s e xe cu t e t he ir du tie s and s y s t e m f or
enabling the Audit and Supervisory Board Members to conduct effective audits
The Company will pay all necessary expenses involved in
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 the Company
by means that include attending the Board of Directors, theManaging Committee, the Compliance Committees andother relevant conferences and committees, and examining
important documents.
The Audit and Supervisory Board Members will exchange
opinions periodically or as needed with Directors, Corporate Of ﬁcers, ﬁnancial auditors, and the Internal Audit
Department, among others.

●Basic Standards and Policy for Classiﬁcation of Investment SharesWith respect to the classiﬁcation of investment shares held for pure investment purposes and otherwise, KOITO
designates shares held solely for the purpose of receiving proﬁts from changes in the value of shares or dividends onshares as investment shares for pure investment purposes, and as other shares for investment shares held for purposes
other than pure investment.

●Basic Policy for Voting Rights
The exercise of voting rights is not based on a uniform standard, but rather is based on the perspective of whether it willlead to sustainable corporate growth and enhancement of corporate value over the medium- to long-term.
■Number of brands and amount posted in balance sheet

Unlisted shares

Other shares

Amount posted inbalance sheet(March 31, 2021)

Brands for which we
increased ourshares in FY 2022

Brands for which we
decreased ourshares in FY 2022

Amount posted inbalance sheet(March 31, 2022)

16 brandsーー

16 brands¥ 2,104 millionーー¥ 2,102 million

49 brands

1 brand

11 brands

43 brands¥ 22,987 million¥ 5,787 million¥ 1,606 million¥ 29,214 million*Stocks whose number of shares ﬂuctuated due to the consolidation of shares, stock splits, stock transfers, stock exchanges, mergers, and otherorganizational reorganizations are not included.

KOITO INTEGRATED REPORT 2022 59

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Compliance
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, andfree 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 soundrelationships with government and government agencies.” KOITO has identiﬁed reinforcement of “compliance” as one ofour materiality. To foster an organization and atmosphere to place importance on compliance, the entire KOITO Group iscommitted to engage in compliance activities.

Compliance Management Structure
To strengthen our compliance system, KOITO has established the Compliance Committee, Compliance Promotion Ofﬁce,
Internal Audit Ofﬁce, and whistle-blowing desk (Corporate Ethics Consulting Desk). The Compliance Committee meetsregularly to conﬁrm and follow up on the action plans and results of the Compliance Promotion Ofﬁce and the Internal
Audit Ofﬁce, the operational status of the Corporate Ethics Consulting Desk, and responses to risks.
Personnel in charge of compliance are also appointed at the domestic and overseas subsidiaries to strengthen
compliance and grasp the compliance status in close collaboration. In this way, KOITO promotes compliance-related
initiatives in the entire Group.

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

Through establishing the “Antimonopoly Act
Regulations” and implementing internal education
periodically, KOITO is working to prevent corruption, suchas bribery, extortion, fraud, embezzlement, money
laundering, conﬂicts of interest, illegal ﬁnancing topolitical parties and facilitation payments.
The penalties imposed in the event of violations of laws
are stipulated in our internal regulations.
Nobody in the Group was ﬁned or dismissed forcorruption in FY 2022.

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 dominantposition and dumping.
When KOITO employees come into contact withcompetitors, we conduct ex-ante and ex-post reviews toensure that they do not engage in conduct that may
violate the Antimonopoly Act.
With the attendance of Audit and Supervisory Board
Members, the Internal Audit Department conducts annual
audit to departments concerned with the Antimonopoly
Act and Subcontract Act, and the ﬁndings are reported to
the Compliance Committee. If any problems were foundduring the audit, the details of the improvement are also
reported to the Committee.
The penalties imposed in the event of violations of laws
are stipulated in our internal regulations.
Nobody in the Group was ﬁned or dismissed foranti-competitive practices in FY 2022.

Reinforcement of Compliance●Fostering Compliance Awareness
KOITO strives to foster employee awareness of compliance by distributing a portable “Ethics Card”
to all employees so that the KOITO Group Corporate Behavior Charter can be a behavior standard
for employees. We also conduct an annual Corporate Ethics Survey for all employees to gauge thelevel of awareness, understanding, and implementation of the KOITO Group Corporate Behavior
Charter. Results of the survey are reported to the Board of Directors and Compliance Committee.
According to the results of the FY 2022 survey, awareness of the KOITO Group Corporate Behavior
Charter was 97%, and employeeʼs ratio who “act to gain customersʼ satisfaction and trust,” “comply
with relevant laws and internal rules,” and “respect human rights” all accounted for 100%,
maintaining a high level of awareness, understanding and implementation.

●Compliance Education●Prevention of Harassment

KOITO provides compliance education in the job-rankbased and theme-based training in various ﬁelds, such as
the Antimonopoly Act, the Subcontract Act, andharassment for employees. Compliance training byoutside instructors is also provided to Directors,
Corporate Ofﬁcers, Deputies and Managers.
In addition, KOITO also provides compliance education
to suppliers. We are asking suppliers to ensure complianceat the annual procurement policy brieﬁng session.

KOITO regularly conducts harassment surveys for all
employees. In the survey, subordinates evaluate thebehavior of supervisors (managers such as department
managers and section chiefs, as well as management
supervisors such as subsection chiefs) in the workplace.
Supervisors assess the differences between theirperceptions and evaluation results, and work to prevent
harassment by formulating and posting “My Pledge to
Eliminate Harassment.”

Strengthening Compliance in the Supply Chain
In order to further strengthen our fair procurement activities, KOITO periodically holds “Compliance training session” foremployees of relevant administrative divisions and business partners (subcontractors and others). In FY 2022, a total of
314 people participated in this training, and we are working to improve their knowledge of procurement activities.

Whistle-blowing System
KOITO has established “corporate ethics consulting
desks” inside and outside the company which allows
employees to report or consult on compliance andharassment issues. After investigating all cases reported
or consulted, we are taking appropriate measures andreport them to the Board of Directors and the Compliance
Committee.
When operating the Corporate Ethics Consultation
Desk, we take thorough care of human rights, such asprotecting the privacy of whistle-blowers and consultants
and preventing disadvantages, so that users can reportand consult with peace of mind. The penalties for
disadvantageous treatment of whistleblowers are clearlystipulated in our internal regulations.

■Number of consultations received(cases)50

KOITO INTEGRATED REPORT 2022

4

1

42

40
3

36

30

32
1

20

25

22

10

0

60

■Inside consultation desk
■Outside consultation desk

2018

2019

2020

2021

2022

(FY)

KOITO INTEGRATED REPORT 2022 61

Value Creation Story

ESG Activities

Corporate Information

Risk Management

Information Security

KOITO enriches and reinforces comprehensive 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 and avoid risks anddaily management. The Quality Assurance Department is assigned risks associated with the safety of products, theProcurement Headquarters handles risks in the supply chain, and the Safety Environment Department handles risks ofnatural disasters. As such, each department assess relevant risks and implement preventive measures. Ofﬁcers of assigned
responsible departments act as the general managers. 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 and properly handled under the
direction of the top administrators.

KOITO has identiﬁed “information security” as one of our materiality, and ensuring 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.
We have established a cyber security system that can detect the latest viruses and abnormal conditions at all sites,
including domestic and overseas afﬁliates. At the same time, we have established CSIRT (specialized team that deals withinformation security issues) at each site to ensure an immediate response in the event of an emergency.

recognizes that the appropriate management of

Based on our basic policy “to prioritize human lives and maintain business
continuity,” KOITO examines disaster control, initial response, andrestoration work to ﬁnd problems and re-evaluate and reinforce BCP
activities based on lessons learned through natural disasters such as theGreat East Japan Earthquake, Kumamoto Earthquake, heavy rains,
typhoons, and expected 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 and ﬁreﬁghting, all-employee safety conﬁrmation drills, andgeneral inspections of the maintenance and management of evacuationroutes. 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 andrearrangement of ﬁre extinguishing equipment to prepare for ﬁre, andimplementation 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.

information is a critical management issue, and has
formulated an “Information Security Policy” to gain thetrust of customers and society at all times.
KOITO intends, from now on, to comply with thisInformation Security Policy, maintaining and improving
information security by protecting information assets
from various threats and handling information
appropriately.

systemKOITO has appointed a Chief Information Security Ofﬁcer■ Fireﬁghting training using ﬁre hydrant

reviewed and improved regularly. With this CISO andmanagement system, KOITO makes every possible effort
to protect all information assets held by us and comply
with laws, regulations, and other rules related to
information security.
2. Development of internal information security-related
rules
KOITO develops internal rules based on our Information■ Online disaster control seminar by Regional
Management Center of Central Shizuoka

Security Policy to have a clear policy for the handling of
not only personal information but also all otherinformation assets, and makes all employees and business
partners fully aware of KOITOʼs strict measures against
information leaks etc.
3. Implementation of appropriate information security

The KOITO Group monitors computers and networks of
the Group as a whole, including its domestic and overseas
afﬁliates, and is building CSIRT (Computer Security
Incident Response Team), capable of responding
immediately to any cyber-attacks or abnormal conditions
on a global basis.
KOITOʼs information security is managed by the
Information System Department, along with General
Affairs Department and Compliance Promotion Ofﬁce.
Furthermore, each department periodically checks for
information security risks and implements a PDCA cycle
to continuously improve security.

・Formulating rules for domestic and overseas business trips,
and implementing measures to prevent infectious diseases
・Introducing online meetings
・Measuring outside visitorsʼ temperature and requesting them tohand sanitizing and wearing mask.

Information Security Management System
In order to protect information assets from the risk ofleaks, theft, alternation, etc., the KOITO Group operates
information security management based on management
standards for the conﬁdentiality, integrity, andavailability of information. In particular, major functional
divisions are assuring information security and promoting
the improvement of security reliability. Divisions fordesign, development, sales, purchasing and quality
management of automotive lighting equipment andothers 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 throughcontinuous PDCA cycle and by expanding the scope of
certiﬁcation within the Group.

measures
KOITO implements organizational, physical,
technological, and personal security management
measures so that information assets of KOITO are notsubjected to unauthorized access, destruction, leakage, oralteration. These measures shall be adjusted and adapted

・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

KOITO INTEGRATED REPORT 2022

management system that enables prompt implementation
the society at all times. This management system shall be●Major countermeasures against infections

・Restricting employees to use public
transportation for commuting regarding theinfection status at our site location
・Introducing teleworking in administrative andindirect departments
・Measuring employeesʼ temperature whenentering the ofﬁce etc.

(CISO) and established an information securityof security information measures, to gain the trust from

Putting the highest priority on the safety of customers, business partners, employees and their families, the KOITO Grouphas implemented various measures based on requests from the government and local governments for the purposes of
preventing the spread of COVID-19 infections. We will continue to utilize telework and online meetings to reduce the riskof infections and to promote smooth operations and improve efﬁciency.

●Business travels and meetings

Organization for Information Security Activities

1. Establishment of information security management

KOITOʼs Response to the Spread of COVID-19 Infections●Commuting

Information Security Policy
KOITO MANUFACTURING CO., LTD. (“KOITO”)

Natural Disaster Risks

62

Business Overview

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, inaccordance with relevant laws and internal regulations andrules.
5. Enhancement of information security literacy
KOITO provides thorough security education/training toemployees 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 to

Information Security Measures
To strengthen information security measures against
cyberattacks, KOITO has established 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 and personal
information, but also manages and utilizes intellectual
property and other intangible assets.
In addition, KOITO periodically conducts internal andexternal intrusion tests by external specialist agencies tothoroughly inspect and conﬁrm security vulnerabilities
and strive to improve information security.

ever-changing circumstances.

KOITO INTEGRATED REPORT 2022 63

Value Creation Story

Fostering Awareness of Information Security

Business Overview

ESG Activities

Corporate Information

Tax Policy

To prevent information security incidents, KOITO strives to foster awareness within the company by holding annual
information security training sessions for all employees.
In addition, targeted email drills are conducted once a year for all employees. The results are reported to Managing
Committee and IT Meetings, and necessary measures are taken.
Moreover, KOITO periodically provides information on information security to all employees via email, introducing
examples of information security, precautions for teleworkers and alert anticipated targeted email attacks.
To our suppliers, we are asking them to implement information security-related measures, and conducting necessary
assessments and improvements using checklists and other means.

The KOITO Group recognizes the importance of paying appropriate taxes and promotes sound tax activities inaccordance with the tax laws and policies of each country and region while striving to build the proper tax governancesystem.

Tax Policy
1.Tax Compliance
KOITO MANUFACTURING CO., LTD. (“KOITO”) and its subsidiaries (“the KOITO Group”) comply with tax codes
as well as relevant laws and regulations, ﬁle the proper tax returns and pay taxes in each country and region

Intellectual Property Management

where we conduct businesses.

The KOITO Group places intellectual properties as the source of international competitiveness and develops businessstrategies 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, wewill respect the intellectual property rights of others and strive to prevent infringements.

64

The KOITO Group strives to properly comply with the tax laws, systems and administrative operations in each country
with the cooperation between Group companies in an effort to minimize tax risks.
from each Group company.

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

R&D expenditures (billion yen)

36.1

34.0

36.1

32.6

34.0

Number of patents applied

800

1,230

1,130

938

867

2,630

2,890

2,830

2,813

2,900

Organization for Intellectual Property
Management

Measures to Prevent Violation ofIntellectual Property

The KOITO Group makes effort to reinforce theintellectual property management system of the entire
Group to acquire intellectual property rights, conclude
licensing contracts, and respond to the violation of rights
globally by developing a management system with
KOITO MANUFACTURING at the center to establish andexecute intellectual property strategy integrated withbusiness 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 researchsystem available to all researchers and designers to avoid
violating intellectual property rights of others andpreventing future conﬂicts.

KOITO INTEGRATED REPORT 2022

2.Tax Governance System

The tax risks of the KOITO Group are managed under the discretion of the Chief Financial Ofﬁcer according to reports■R&D expenditures and number of patents

Number of patents held

The KOITO Group does not engage in tax avoidance using tax havens, or use tax planning that does not coincidewith business conditions.

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 armʼs 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 the tax
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
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 of tax
codes or other tax-related matters, the KOITO Group will work together with each tax authority to resolve the matter inquestion.

KOITO INTEGRATED REPORT 2022 65

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Executive Management (as of June 29, 2022)
Chairman and CEO

President and COO

Outside Director

Masahiro Otake

Michiaki Kato

Haruya Uehara

Kingo Sakurai

April
June
June
June
June
June
June

April 1982 Joined KOITO
October 2004 General Manager ofEuro-American Operations
June 2005 Director
June 2011 Managing Director
June 2012 Managing Corporate Ofﬁcer
June 2013 Director and Managing
Corporate Ofﬁcer
June 2017 Senior Managing Director
June 2021 President (present position)

April 1969 Joined The Mitsubishi Trustand Banking Corporation (currently Mitsubishi UFJ Trus t
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 P r e s i d e n t , M i t s u b i s hi UFJ
Trust and Banking Corporation
June 2008 Chairman
April 2012 Senior Adviser
June 2013 O u t s i d e D ir e c t o r, KOI T O(present position)
J u l y 2018 Senior Advisor, Mit subishi
UFJ Trust and Banking Corporation (present position)

March 1972 Registered as certiﬁed public
accountant
June 1983 Independent Auditor, KOITO
June 2009 Resigned Independent AuditorJ u l y 2009 Adviser (part time), KOITO
June 2017 Out side Dire c tor (pres ent
position)

1977 Joined KOITO
1987 Director
1993 Managing Director
1999 Senior Managing Director
2005 Executive Vice President
2007 President
2015 Chairman (present position)

Reason for appointment：

Reason for appointment：

Mr. Masahiro Otake has acquired extensive experience and a high level of
insight through previously serving as President. He has also been involved
with KOITOʼs management as a Director, and has contributed signiﬁcantly tothe improvement of KOITOʼs performance and corporate value.

Mr. Michiaki Kato has acquired extensive experience and a high level of insight
through serving as President and in other positions. He has also been involved
with KOITOʼs management as a Director, and has contributed signiﬁcantly tothe improvement of KOITOʼs performance and corporate value.

Number of the Board of
Directors attended (FY 2022)

12/12 (100%)

Number of the Board of
Directors attended (FY 2022)

12/12 (100%)
Reason for appointment：

Executive Vice President

Executive Vice President

Kenji Arima

Masami Uchiyama

April 1977 Joined KOITO
January 2005 Direc tor, Koito Europe NV(KENV)
June 2005 Director, KOITO
June 2011 Managing Director
June 2012 D i r e c t o r a n d M a n a g i n g
Corporate Ofﬁcer
June 2013 Senior Managing Director
June 2019 E x e c u t i v e V i c e P r e s i d e n t(present position)
Engineering Headquar ters,
Sales Headquarters, In chargeof Mobility Strategy Department, Research & Development D ep ar tment and DX
Promotion (present position)

Reason for appointment：

Reason for appointment：

April 1983 Joined KOITO
June 2005 General Manager of Personnel Department
June 2007 Director
June 2011 Managing Director
June 2012 D i r e c t o r a n d M a n a g i n g
Corporate Ofﬁcer
June 2017 Senior Managing Director
June 2021 E x e c u t i v e V i c e P r e s i d e n t(present position)
Produc tion Headquar ter s ,Shizuoka Plant, In charge of
S hi z u o k a G e n e r al A f f a ir s
Depar tment, Logistics
Department, Safety Environment Depar tment, Production Contr ol D ep ar tment ,Electronics Products Production D epar tment and CN
Promotion (present position)

Since joining KOITO, Mr. Kenji Arima has acquired extensive experience and ahigh level of insight through serving as Head of Engineering Headquarters,
Sales Headquar ters and in other positions. He has also been involved with
KOITOʼs management as a Director, and has contributed signiﬁcantly to theimprovement of KOITOʼs performance and corporate value.

Since joining KOITO, Mr. Masami Uchiyama has acquired extensive experiencea n d a hi g h l e v e l o f in si g h t t hr o u g h s e r v in g a s H e a d o f P r o du c t i o n
Headquarters and in other positions. He has also been involved with KOITOʼsmana g em e n t a s a Dir e c t or, and ha s co n tr ibu t e d sig ni ﬁ c an tly t o t h eimprovement of KOITOʼs performance and corporate value.

Number of the Board of
Directors attended (FY 2022)

12/12 (100%)

Number of the Board of
Directors attended (FY 2022)

66

Katsuyuki Kusakawa

April 1987 Joined KOITO
April 2006 General Manager of Accounting Department
June 2009 Director
June 2012 Corporate Ofﬁcer
June 2013 Managing Corporate Ofﬁcer
June 2015 D i r e c t o r a n d M a n a g i n g
Corporate Ofﬁcer
June 2017 S enior Managing Dir e c tor(present position)
Finance & Accounting Headquarters, Procurement Headquarters (present position)

Reason for appointment：

Reason for appointment：

April 1980 Joined Toyota Motor Co., Ltd.
(c u r r e n t l y To y o t a M o t o r
Corporation)
January 2009 Seconded to Toyota Motor
Sales, U.S.A., Inc.
March 2011 Standing Adviser, KOITO
June 2011 Managing Director
June 2012 D i r e c t o r a n d M a n a g i n g
Corporate Ofﬁcer
June 2019 S enior Managing Dir e c tor(present position)
In charge of Corporate Planning Depar tment , Compliance Department, Personnel
Depar tment, Cost Administration Depar tment and DX
Promotion (present position)

Since joining KOITO, Mr. Hideharu Konagaya has acquired extensive experienceand a high level of insight through serving as Head of Finance & Accounting
Headquarters, Procurement Headquarters and in other positions. He has also
been involved with KOITOʼs management as a Director, and has contributed
signiﬁcantly to the improvement of KOITOʼs performance and corporate value.

Since joining KOITO, Mr. Kat suyuki Kusakawa has acquired ex tensive
experience and a high level of insight through ser ving as Deputy Head ofEngineering Headquarters and in other positions. He has also been involved
with KOITOʼs management as a Director, and has contributed signiﬁcantly tothe improvement of KOITOʼs performance and corporate value.

KOITO INTEGRATED REPORT 2022

12/12 (100%)

Number of the Board of
Directors attended (FY 2022)

11/12 (92%)

Outside Director

Chika Igarashi
April 1997 Registered as an attorney
Joined a law ﬁrm in TokyoJ u l y 2006 Jo in e d A s a hi L a w O f ﬁ c e s(c ur r e n tl y Nis himur a &Asahi) (present position)
June 2007 Registered as an attorney atlaw in New York State
June 2022 O u t s i d e D ir e c t o r, KOI T O(present position)
Reason for appointment：
Ms. Chika Igarashi is an attorney so that her knowledge and experience may
be re ﬂec ted in KOITOʼs management and she may fulﬁll a super visor yfunction from this perspective.

Senior Managing Director

Senior Managing Director

12/12 (100%)

Number of the Board of
Directors attended (FY 2022)

Reason for appointment：
Mr. Kingo Sakurai is a certiﬁed public accountant, so that his knowledge andexperience may be reﬂected in KOITOʼs management and he may fulﬁll asupervisory function from this perspective.

11/12 (92%)

Hideharu Konagaya

Number of the Board of
Directors attended (FY 2022)

Mr. Haruya Uehara ser ves as Senior Advisor to Mitsubishi UFJ Trust andBanking Corporation, so that his knowledge and experience may be reﬂectedin KOITOʼs management and he may fulﬁll a supervisory function from thisperspective.

Outside Director

Number of the Board of
Directors attended (FY 2022)

12/12 (100%)

KOITO INTEGRATED REPORT 2022 67

Value Creation Story

Reason for appointment：

Standing Audit and Supervisory Board Member

Standing Audit and Supervisory Board Member

Mitsuo Kikuchi

Koichi Sakakibara

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 2013 Standing Audit and Supervisory Board Member (present
position)

April 1975 Joined KOITO
June 1999 General Manager of ProductDevelopment Department
June 2001 Director
June 2007 Managing Director
June 2009 Senior Managing Director
June 2013 Executive Vice President
June 2021 Standing Audit and Supervisory Board Member (present
position)

68

Reason for appointment：

12/12 (100%)

Number of the Board of
Directors attended (FY 2022)

12/12 (100%)

Number of Audit and Supervisory
Board attended (FY 2022)

8/8 (100%)

Number of Audit and Supervisory
Board attended (FY 2022)

6/6 (100%)

Outside Audit and Supervisory Board Member

Outside Audit and Supervisory Board Member

Yukinobu Suzuki

Hiroshi Kimeda

April 1965 Joined Sendai Regional Taxation Bureau
J u l y 1990 A s sis t a n t D ir e c t o r, L ar g e
Enterprise Examination Division, Large Enterprise Examination and Criminal Investigation Department, National
Tax Agency
J u l y 1995 D e p u t y D is t r i c t D ir e c t o r,
Hachioji Tax Ofﬁce
December 1995 A c quir e d qu al i ﬁ c a t i o n a s
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 Supervisory Board
M e mb e r, Koi t o Insur an c e
Ser vices Co. , Ltd. (present
position)
June 2016 Outside Audit and Supervisor y B o ar d M e mb e r, KOITO(present position)

Reason for appointment：

Reason for appointment：

April 1993 P ub l i c P r o s e c u t o r, To k y oDistric t Public Prosecutors
Ofﬁce
April 1997 Public Prose cutor, Spe cial
Inves tigation Depar tment ,Tokyo District Public Prosecutors Ofﬁce
August 1998 Visiting scholar, Notre Dame
Law School in U.S.A.
June 1999 Public Prosecutor, Criminal
Af fairs Bureau, Minis tr y ofJustice
June 2001 Assistant Division Chief, Planning and L e gal Division ,Financial Services Agency
August 2002 Re gis ter e d as an a t tor ney
Joined Nishimura & Partners(c ur r e n tl y Nis himur a &Asahi) (present position)
December 2011 Out side Direc tor, Advance
Create Co. , Ltd. (present
position)January 2019 Outside Audit and Supervisor y B o ar d M e mb e r, KOITO(present position)

Mr. Yukinobu Suzuki is a certiﬁed tax accountant, so that his knowledge andexperience may be reﬂected to strengthen KOITOʼs auditing activities.

Mr. Hiroshi Kimeda is an attorney, so that his knowledge and experience may
be reﬂected to strengthen KOITOʼs auditing activities.

Number of the Board of
Directors attended (FY 2022)

12/12 (100%)

Number of the Board of
Directors attended (FY 2022)

11/12 (92%)

Number of Audit and Supervisory
Board attended (FY 2022)

8/8 (100%)

Number of Audit and Supervisory
Board attended (FY 2022)

8/8 (100%)

Senior Managing
Corporate Ofﬁcer

Managing
Corporate Ofﬁcer

Corporate Ofﬁcer

Jun Toyota

Hideo Yamamoto

Koichi Toyoda

Kohei Yamasaki

Takayuki Katsuda

Mamoru Murakoshi

Kirk Gadberry

Atsushi Inoue

Masahiro Otake

Kazuhiro Aoshima

Masatoshi Yoneyama

Yuji Higashi

Masayasu Ito

Toshiyuki Katsumata

Hideki Ochiai

Masayuki Otake

Kakuya Yamamoto

Masataka Choji

Koji Shimakura

Takahito Otake

KOITO INTEGRATED REPORT 2022

Corporate Information

Since joining KOITO, Mr. Koichi Sakakibara has acquired extensive experiencea n d a hi g h l e v e l o f in si g h t t hr o u g h s e r v in g a s H e a d o f P r o du c t i o n
Headquarters and in other positions. He has also been involved with KOITOʼsmanagement as a Director, so that his knowledge and experience may bereﬂected to strengthen KOITOʼs auditing activities.

Number of the Board of
Directors attended (FY 2022)

Eisuke Shibata

ESG Activities

Corporate Information

Executive Management (as of June 29, 2022)

Since joining KOITO, Mr. Mitsuo Kikuchi has acquired extensive experienceand a high level of insight through serving as Head of Sales Headquar ters,
Deputy Head of Production Headquarters and in other positions. He has also
been involved with KOITOʼs management as a Director, so that his knowledge
and experience may be reﬂected to strengthen KOITOʼs auditing activities.

Business Overview

Financial and Non-ﬁnancial Highlights

70

Financial Summary of the Last 11 Years

72

Consolidated Financial Statements

74

Stock Information

78

Corporate Information

79

KOITO INTEGRATED REPORT 2022 69

Value Creation Story

価値創造ストーリー
Business Overview

ESG への取り組み
ESG Activities

会社情報
Corporate Information

Financial and Non-financial Highlights
Financial Highlights

Non-ﬁnancial Highlights■Net sales, operating income and operating income
ratio on sales
Net sales
Operating income
Operating income ratio(¥ billions)

1,000
848.8

800

■Proﬁt attributable to owners of parent

826.2

12.2%

10.3%

(¥ billions)

15.0

100

706.3

760.7

600
8.0%

12.0

80

9.0

60

75.0

58.0

6.0

38.3

40

0.157
70.8

14.5

69.0

13.5

59.8

60.0

0

103.7

101.5

2018

2019

82.4

56.7

2020

2021

3.0

20

0.0

0

2022 （FY）

36.0

33.732.2

20202022 （FY）

2021

37.8 37.9

32.0

0.152

1.48

0.148

0.148

0.148

34.8 35.7

4.6%

36.1 4.5%

36.1

50.0

2018
*Non-consolidated

2019

2020

（%）

Amount of waste（tons）

5.0

4,000

4.5

3,000

4.5%

4.3%

0.138

2,949

3,055

4.0

2,000
0.117

32

3.5

2018

2019

2020

0.140

400

2022 （FY）

0.136

0.130

300

0.120

200

Per unit(kg per million yen)

16.0
299

15.0

272

2,297
0.120

2021

Amount of VOC emissions
Emissions per unit

Amount of VOC emissions（tons）

307

0.133
2,909
2,407

34.0

12.0

0.140

12.3

■Amount of VOC emissions and VOC emissions per unit

Per unit(tons per billion yen)

0.137

32.6

20

2022 （FY）

Amount of waste
Waste generated per unit

4.1%
34.0

34

2021

0.144

12.8

0.144

12.5

■Amount of waste and waste generated per unit

38

36
40

2019

R&D expenses
R&D expenses ratio on net sales(¥ billions)

56.7

54.0

2018

■R&D expenses and R&D expenses ratio on net sales

Capital expenditures
Depreciation

60

13.4

14.0

53.4

■Capital expenditures and depreciation(¥ billions)

13.9

13.0

55.0

0.156

0.154

14.0

56.7

200

0.160

15.0

65.0
37.6

Amount of CO2 emissions in logistics
Per unit
Energy usage per unit
(kl per billion yen)Amount of CO2 emissions(thousand tons of CO2)

72.7

70.0

72.8

7.0%

400

■Amount of CO2 emissions and energy usage perunit in logistics

Amount of emissions(thousand tons of CO2)

83.3

800.9

12.3%

（%）

■Amount of CO2 emissions

220
13.9

192

14.0

13.6

0.110

1,000

13.0

12.9

100
12.8

0

2018

2019

2020

2021

2022 （FY）■Earnings per share (EPS)

30

2018

2019

2020

2021

2022 （FY）

3.0■Dividends and dividends payout ratio

(yen)

120

600.0020182019*Non-consolidated（%）(Persons)

45.0

25,00024,60896400.00234.0040

200.0024,769

30.0

72
19.9%

21.4%
50

18.5%

24,000

21.4%
22.6%
54

69.7%

70.0%

69.6%

23,462

15.0

23,799
68.0%

67.4%

2018
*Non-consolidated

2019

2020

2021

12.0

2022 （FY）■Rate of lost-time injuries

（%）

（%）

80.0

0.80

70.0

23,454

12.1

0

0.60

20.3%

238.532022（FY）

92

80

360.992021

Number of employees
Ratio of overseas employees

518.90453.52

2020■Number of employees and ratio of overseas employees

Dividends per share
Dividends payout ratio

(yen)

0.100

0

KOITO MANUFACTURING
Electric machinery and equipment
manufacturing industry

0.58
0.51

0.54

0.52

0.54

0.40
60.0

23,000

0.18

0.20
0.09

0.00

70
70

2018

2019

KOITO INTEGRATED REPORT 2022
KOITO INTEGRATED REPORT 2022

2020

2021

2022（FY）

0

2018

2019

2020

2021

0.0

2022（FY）

22,000

50.0
2018

2019

2020

2021

2022（FY）

0.00

2018

2019

0.00

0.00

0.00

2020

2021

2022 （FY）

KOITO INTEGRATED REPORT 2022 71
KOITO INTEGRATED REPORT 2022 71

Value Creation Story

Business Overview

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 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022Net sales

430,929472,843597,502706,470

813,477

841,456

848,868

826,257

800,928

706,376760,719

Operating income

31,72537,66849,50664,15582,21892,523

103,785

101,534

82,411

56,70753,434

7.4

8.0

8.3

9.1

10.1

11.0

12.2

12.3

10.3

8.0

7.0

Recurring profit

31,49640,00751,89566,88084,296

95,336

107,945

105,494

85,264

61,10760,613

Profit attributable to owners of parent

13,391

16,625

21,37836,06046,30356,692

83,39772,89558,022

37,612

38,340Cash flows from operating activities

32,074

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

96,666

84,972

74,96265,707

Cash flows from investing activities△ 27,185△ 41,947△ 36,030△ 55,526△ 62,777△ 72,486△ 67,260△ 25,906△ 44,728△ 1,093△ 52,151

Cash flows from financing activities△ 4,604△ 2,8125,377△ 14,376△ 10,062△ 16,624△ 17,633△ 13,063△ 32,010△ 18,324△ 8,491

Cash and cash equivalents at end of year

23,21721,992

27,75033,082

31,88639,50041,05097,993

104,202

161,855

169,581

Capital expenditures

21,44522,28534,561

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

34,842

Depreciation

19,517

17,827

21,522

25,91931,71931,72132,28732,06036,06637,96235,811R&D expenses

17,611

20,08524,761

27,95532,642

34,226

36,101

34,024

36,121

32,671

34,024

4.1

4.2

4.1

4.0

4.0

4.1

4.3

4.1

4.5

4.6

4.5

Total assets

363,273

418,087

483,093575,268

588,683

658,341

672,055

738,175

729,715

782,163855,237

Net assets

182,916

218,131

256,072

316,826

329,671

381,000

444,808

503,564

513,524

569,438

627,315

Property, plant and equipment

85,06899,193

114,080

140,859

139,300

141,538

133,935

158,769

170,082

171,615

23,021

Interest-bearing liabilities

25,73730,09743,51041,50041,24935,05728,92932,482

29,526

20,94525,021

Operating income ratio on sales

R&D expenses ratio on sales

（％）

（％）

As of the End of the Fiscal Year:

Data Per Share:
Net income

（yen）

83.33

103.46133.04224.41

288.15352.80518.90453.52360.99234.00238.53

Dividends

（yen）

19

22

26

40

36

54

96

92

72

50

54

（％）

22.8

21.3

19.5

17.8

12.5

15.3

18.5

20.3

19.9

21.4

22.6

（yen）

997.38

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

3,676.47

Equity ratio

（％）

44.1

45.4

45.5

46.8

48.6

51.0

61.0

62.5

65.8

68.7

69.1

Return on equity (ROE)

（％）

8.7

9.5

10.4

14.8

16.7

18.2

22.4

16.7

12.3

7.4

6.8

Return on assets (ROA)

（％）

3.7

4.2

4.7

6.8

8.0

9.1

12.5

10.3

7.9

5.0

4.7

Price earnings ratio (PER)（times）

16.1

15.8

13.1

16.1

17.7

16.4

14.2

13.8

10.1

31.7

20.9

Price book-value Ratio (PBR)（times）

1.3

1.4

1.3

2.2

2.9

2.8

2.9

2.2

1.2

2.2

1.4

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 those after
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.”

72

KOITO INTEGRATED REPORT 2022

KOITO INTEGRATED REPORT 2022 73

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Consolidated Financial Statements
Consolidated Balance Sheets(¥ millions)(¥ millions)74

FY 2021 (As of March 31, 2021)

FY 2022 (As of March 31, 2022)

AssetsCurrent assets
Cash and time deposits
Trade notes and accounts receivable
Trade notes
Electronically recorded monetary claims-operating
Accounts receivable
Contract assets
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

538,416
303,887
115,950－
12,957－－73,751
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

579,086
323,943
－
3,797
9,888
113,437
918
90,76036,723△ 382
276,150
182,608
55,83175,334
17,453
16,181
17,054752
3,103
90,43873,85616
10,863
2,804
3,034
△ 136
855,237

Liabilities
Current liabilities
Trade notes and accounts payable
Electronically recorded monetary obligations-operating
Short-term loans
Accrued expenses
Income taxes payable
Allowance for employees’ bonuses
Reserve for product warranties
Other current liabilities
Non-current liabilities
Long-term debt
Deferred income tax liabilities
Allowance for directors’ and corporate auditors’ retirement benefits
Reserve for product warranties
Allowance for environmental strategies
Net defined liability for retirement benefits
Other non-current liabilities
Total liabilities

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

181,404
102,641
5,050
24,531
23,781
7,319
5,527
3,108
9,445
46,517490
15,473298
5,151
10
23,097
1,995
227,922

KOITO INTEGRATED REPORT 2022

FY 2021 (As of March 31, 2021)

FY 2022 (As of March 31, 2022)

507,813
14,27013,380480,214△ 52
29,792
23,690
4,291
1,810
222
31,610569,438
782,163

537,578
14,27013,399509,958△ 49
53,37923,56027,924
1,895
199
36,157627,315855,237

Net assets
Shareholders’ 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

Consolidated Statements of Income and Loss(¥ millions)

FY 2021Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends
Foreign exchange gains
Gain on operation of investment business association
Royalty income, otherSubsidies for employment adjustment
Other non-operating income
Non-operating expenses
Interest expenses
Shares of loss of entities accounted for using equity method
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 2022706,376
609,132
97,24440,53756,707
6,100
1,190
1,050
10
－
475
676
2,697
1,700
581
595
524
61,107265
1,943
59,42918,96940,460760,719664,669
96,05042,61553,434
9,157
1,329
1,271
1,793
1,092
553
350
2,766
1,978
781
656
539
60,613
1,117
558
61,172
19,18841,984

37,612
2,848

38,3403,644

KOITO INTEGRATED REPORT 2022 75

Value Creation Story

Business Overview

ESG Activities

Corporate Information

Consolidated Financial Statements
Consolidated Statements of Changes in Shareholders’ Equity
FY 2021(April 1, 2020 to March 31, 2021)(¥ millions)Shareholder’s equity
Additional
Common stock
paid-in capital
14,27013,373

Balance at beginning of yearCumulative effects of changes inaccounting policies
Restated balance
Changes during fiscal year
Dividends from retained earnings
Profit attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stockC hanges in items other than shareholders’equity during fiscal year (net)Total changes during fiscal year
Balance at fiscal year-end

－

－

－

－

－

14,27013,373449,031△ 53

476,622

－
－
－
－

－
－
－
7

△ 6,429
37,612
－
－

－
－
△1
1

△ 6,429
37,612
△1
9

－

－

－

－

－

－
14,2707
13,38031,182
480,2140△ 52

31,190507,813

Accumulated other comprehensive income

Balance at beginning of yearCumulative effects of changes inaccounting policies
Restated balance
Changes during fiscal year
Dividends from retained earnings
Profit attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stockC hanges in items other than shareholders’equity during fiscal year (net)Total changes during fiscal year
Balance at fiscal year-end

Accumulated other comprehensive income

Retained
Treasury common Total shareholders’earnings
stock, at costequity449,031△ 53
476,622

Valuation adjustment
Adjustments of Total accumulated
Translation
on marketabledefined benefit other comprehensive
adjustments
securities
plans
income14,822△ 9,333△ 1,608
3,880

Subscription
NonTotal net
rights to controlling
assetssharesinterests
231

32,789513,524

－

－

－

－

－

－

－

14,822△ 9,333△ 1,608

3,880

231

32,789513,524

－
－
－
－

－
－
－
－

－
－
－
－

－
－
－
－

－
－
－
－

－
－
－
－

△ 6,429
37,612△1
9

8,867

13,625

3,418

25,911△ 9 △ 1,178

24,723

8,867
23,69013,625
4,291

3,418
1,810

25,911
29,792△ 9 △ 1,178
222
31,61055,914569,438

FY 2022(April 1, 2021 to March 31, 2022)(¥ millions)Shareholder’s equity
Additional
paid-in capital
14,27013,380Common stock
Balance at beginning of yearCumulative effects of changes inaccounting policies
Restated balance
Changes during fiscal year
Dividends from retained earnings
Profit attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stockC hanges in items other than shareholders’equity during fiscal year (net)Total changes during fiscal year
Balance at fiscal year-end

76

KOITO INTEGRATED REPORT 2022－－

Retained
Treasury common Total shareholders’earnings
stock, at costequity480,214△ 52
507,81383－

83

14,27013,380480,297△ 52

507,897

－
－
－
－

－
－
－
18

△ 8,679
38,340
－
－

－
－
△1
4

△ 8,679
38,340
△1
23

－

－

－

－

－

－
14,27018
13,39929,660509,958

3△ 49

29,681
537,578

Balance at beginning of yearCumulative effects of changes inaccounting policies
Restated balance
Changes during fiscal year
Dividends from retained earnings
Profit attributable to owners of parent
Purchases of treasury stock
Disposal of treasury stockC hanges in items other than shareholders’equity during fiscal year (net)Total changes during fiscal year
Balance at fiscal year-end

Valuation adjustment
Adjustments of Total accumulated
Translation
on marketabledefined benefit other comprehensive
adjustments
securities
plans
income23,6904,291
1,810
29,792

Subscription
NonTotal net
rights to controlling
assetssharesinterests
222

31,610569,438

－

－

－

－

－

－

83

23,690

4,291

1,810

29,792

222

31,610569,522

－
－
－
－

－
－
－
－

－
－
－
－

－
－
－
－

－
－
－
－

－
－
－
－

△ 8,679
38,340
△1
23

△ 129

23,632

84

23,587

△ 23

4,546

28,110△ 129
23,56023,632
27,92484
1,895

23,58753,379

△ 23
199

4,546
36,157

57,792
627,315

Consolidated Statements of Cash Flows(¥ millions)

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

FY 2022(April 1, 2021 to March 31, 2022)

Income before income taxes

59,42961,172

Depreciation

37,96235,811

Increase or decrease in trade notes and accounts receivable△ 7,796

7,213

Increase in inventories△ 8,429△ 10,191

7,635△ 1,892

Increase or decrease in trade notes and accounts payable△ 16,567△ 13,392

Others2,728△ 13,014

Cash flows from operating activities

74,96265,707

Increase or decrease in time deposits

29,101△ 7,714Acquisition of property and equipment△ 33,533△ 28,932

3,339△ 15,505

Cash flows from investing activities△ 1,093△ 52,151

Increase or decrease in loans△ 9,501

1,194

Dividends paid

△ 8,820△ 9,682△3△3△ 18,324△ 8,491

Income taxes paid

OthersOthersCash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents

2,108

2,661

Increase in cash and cash equivalents

57,652

7,726

Cash and cash equivalents at beginning of year

104,202

161,855

Cash and cash equivalents at end of year

161,855

169,581

KOITO INTEGRATED REPORT 2022 77

Value Creation Story

Stock Information (as of March 31, 2022)

Corporate Information (as of March 31, 2022)

Number of shares authorized

320,000,000 sharesCompany Name

KOITO MANUFACTURING CO., LTD.

Number of shares issued

160,789,436 shares

FoundedApril 1, 1915

Number of shareholders

6,276

Incorporated

April 1, 1936

（Number of unit shareholders’ in the above

5,742）

Capital¥ 14,270 million

Number of employees[consolidated]

23,454[non-consolidated]

4,417●State of Distribution of Stocks by●Major Shareholders

Shareholders (in number of stocks)
Individual andother investors

Securities
companies

3.4%

Domestic
corporations

25.5%

1.0%

Financial
institutions

36.6%

Overseas
corporations

33.5%

Shares(thousand stocks)

Shareholders
Toyota Motor Corporation

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

19,678

Sumitomo Mitsui Banking Corporation

5,442

STATE STREET BANK AND TRUST COMPANY 505223

5,354

Custody Bank of Japan, Ltd. (Trust account)

5,332

MUFG Bank, Ltd.

5,154

Nippon Life Insurance Company

4,844

The Dai-ichi Life Insurance Company, Limited

4,000

JP MORGAN CHASE BANK 385632

3,736

Aioi Nissay Dowa Insurance Co., Ltd.

2,851

FY

10,500

2018
2019
2020
2021
2022

9,500

Full year dividend per share (yen) Total shareholder returns (TSR)
96
92
72
50
54

129%
111%
68%
134%
92%

Notes: 1. TSR is calculated based on March 31, 2017.
2. Full year dividend in FY 2018 includes ¥20 ofextraordinary dividend.

8,500

7,500

Phone: +81-3-3443-7111

5,500

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

Takeda Suntech Co., Ltd.

15 million yen

Manufacturing and marketing of resin metal molds

New Fuji Co., Ltd.

10 million yen

Service businesses

KOITO ELECTRIC INDUSTRIES, LTD. 

90 million yen

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

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

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

KOITO INTEGRATED REPORT 2022

2019/32020/32021/32022/3303 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

9,000 thousand USD

Manufacturing and marketing of automotive lighting equipment

365.2 million Thai Baht

Manufacturing and marketing of automotive lighting equipment

PT. INDONESIA KOITO

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.

2018/3

Manufacturing and marketing of automotive lighting equipment

North American Lighting, Inc.

THAI KOITO COMPANY LIMITED

3,500

Business Lines

Koito Transport Co., Ltd.

FUZHOU KOITO TAYIH AUTOMOTIVE LAMP CO., LTD.

4,500

Capital3 billion yen

NAL do Brasil Indústria e Comércio deComponentes de Iluminação Ltda.

2017/3

Fax: +81-3-3447-1520

KOITO KYUSHU LIMITEDKPS N.A., INC.

6,500

2,500

Corporate Information

4-8-3 Takanawa, Minato-ku, Tokyo 108-8711 Japan

Company Name

Stock Price Transition/Total Shareholder Returns (TSR)
Stock price (yen)Head Office

ESG Activities

The KOITO Group’s Subsidiaries and Affiliates

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

78

Business Overview

BrightWay Vision Ltd.

200 million Ringgit

Manufacturing and marketing of automotive lighting equipment

69 thousand USD

Developing and manufacturing of Forward Monitoring System for ADASKOITO INTEGRATED REPORT 2022 79

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

Printed in Japan