TOLI INTEGRATED REPORT2023

TOLI Group Integrated Report

TOLI Corporation
5-125, Higashi-Arioka, Itami City, Hyogo Prefecture, Japan 664-8610

https://toli-overseas.com/

TOLI Corporation

It’s all about Trust.

Introduction
This integrated report focuses on business reports for FY2022, and provides information to investors andemployees about the philosophy and values that our group cherishes, as well as the entire value creation
process from the sources of value creation to management strategies. We have endeavored to produce
this report in a way that is easy to understand for all stakeholders.
As this is the first time that our group has published an integrated report, it is a good opportunity foreveryone from management to employees to seriously consider value creation. For executives andemployees, we aim to verbalize as much as possible what has been considered tacit knowledge within
the company and to further deepen their understanding of our group, by creating a careful and simple
structure, and expressing the current situation as it is without overreaching. We have endeavored to givea glimpse of the uniqueness of our group.
The contents of the CSR Report, which we published until last year, will be carried over into thisintegrated report, but we would like to express our gratitude for the valuable opinions we received frommany stakeholders through the CSR Report. We utilize this information in our business activities andreflect it throughout this integrated report.
We will continue to aim to achieve better reports through dialogue with our stakeholders.
All members of the production committee

01 Who We Are
02

03

The Trajectory of Value Creation (History)

05

Financial and Non-Financial Highlights

07

About TOLI Group

Reporting period

Value Creation
09

TOLI Group Value Creation Process

11

Message from the President

15

The Sustainability and Materiality of TOLI Group

17

The Strengths of TOLI Group

03 Management Strategy
04

19

Long-Term Vision and Mid-Term Business Plan

21

Manufacturing Strategy and Sales Strategy

23

Financial Strategy and Global Strategy

25

Business status by segment

TOLI INTEGRATED REPORT 2023

Photographs
taken

April 2022 to March 2023
*Includes some photos taken outside of
the applicable period

Subject
organizations

TOLI Corporation
Consolidated subsidiaries
and equity method affiliates

ESG

Month of publication

September 2023

Information on prospects
This integrated report contains a variety of
information including the Group’s futureplans, strategies, and outlook. These arebased on past facts and currently available
information, and may change depending on
factors such as future economic trends andthe business environment. Thank you for
understanding.

Position of information disclosure system and integrated report
Value creation story

Integrated report
Sustainability and
ESG information
Non-financial
information
Corporate governancereport*Information forshareholders and investors

Mid-term business plan

Financialinformation

IR information
websiteSecurities report*
Financial results briefing

Financial summary*Business report*

29

Materiality and Results of Initiatives

31

Global environment

35

Employment and Labor

38

Human Rights

39

Quality

42

Business Activities

43

Social contribution

44

Corporate Governance

47

Board of Directors and Auditors

49

Roundtable discussion by Outside Directors

05
01

April 2022 to March 2023
*Includes some information outside of theapplicable period* Statutory disclosure and timely
disclosure documents

ComprehensivenessWebsite information

DATA

TOLI Global Website
https://toli-overseas.com/

Point of contact for inquiries regarding integrated report

52

Financial and Non-Financial Data

54

Company Profile and Stock Information

Global Department:+81-3-5403-2078

TOLI INTEGRATED REPORT 2023

02Who We Are

The Trajectory of Value Creation (History)

The origin offlooring

The origin of
vinyl flooring

1957

●

1887

●

Vinyl sheet

1972

●

Succeeded in producing Japan’s firstcushion floor domestically. Thanks to ourcompany’s printing technology, it has a richfashion sense and is popular in residential
LDKs and commercial facilities.

The company started on thedevelopment and sale of flooringmaterials using PVC.

The company succeeded in the development of the
Yutaka Fabric carpet using discarded rice straw fibers
and managed to export it overseas. It later developed
Yutakaori which was also exported to overseas market.

Following the floor materials
business, we expanded our businessto curtains and wallcoverings.

“CF Sheet” Launched“Vinylart Tile” launched

Teranishi Yutakaori Company
established

Towards
total interiors

1984“TOLI Curtain” launched●“Matico V” launched“Floorleum” launched

The advent of
Office Automation
era

1986

●

1982

1919

Established“TOYO Linoleum Co., Ltd”
The company succeeded in the domestic productionof linoleum for the first time in Asia.
As a durable flooring material that was easy toclean and maintain, it dominated the market for
many years until after the postwar period.

Taking on thechallenge offiber-based flooring
Needle punch carpet“O.I.C.” launched

The company promoted the conversion to
no-wax (wax-free) versions of existing vinyl
sheets and tiles, including “Nonwaxleum,”which was launched in 2009.

2021

●

Start of operations of carpet
tile recycling plants

2022

●

Promote “TOLI Complete
Recycling”

Expansion of sales andmanufacturing bases
overseasWith the theme of establishing circular
economy business activities, productdevelopment and infrastructure construction
aimed at conserving the global environment arein full swing.

2014

●

Established TOLI (Shanghai) Corporation

Recycling

The company established the group’s firstoverseas sales base in China.

1991

●

This had excellent workability, durability
and quality, and was used in various
countries’ pavilions at the 1970 Japan
World Exposition.

This company promotes a “carpet tile off-location
system” that enables the long-term maintenance ofaesthetics by cleaning and rotating capet tile.

The three distributors Kamei Co., Ltd.,
Toko Co., Ltd., and Matsui Jin Co., Ltd.
merged to form LIC Co., Ltd.

The start of
TOLI

1967

Branding of the “NW Series”
flooring that does not require
wax maintenance1999

As offices become more office-automated,
we have developed carpet tiles that can bepartially removed and replaced after
installation for wiring changes orinspections.

●

2012

The company established TOLIOFUROKE Corporation* as a carpet tile
maintenance company.

●

Wallpaper“Vajradum” launchedGrand Art
“GA-100” launched●●

Strengthening of thegroup sales system●

Establishment

1992* The name of the company changed to TOLI Interior Service
Co., Ltd. in 2023.

The company launched the next generationof linoleum.

This became a beloved product for the
next 60 years as a vinyl flooring due to its
excellent durability, low cost and wide
variety of colors.

Every effort forenvironmental
conservation

●

●

1977

1963

●

Taking on thechallenge of
maintenance business

2019

●

The company name changed
from TOYO Linoleum to TOLI
Corporation

Established Singapore Branch Office

TOLI Complete
Recycling

2020

●

1970

●

Capital participation in Jiangsu
Changlong Decorative Material
Technical Co., Ltd.

Contract carpet“Grace” launched

Collect

Manufacturing

The company participated in a joint venturewith a Taiwanese company group to establish afull-scale vinyl tile manufacturing baseoverseas.

This became a key product in the
full-scale development of the carpet
business.

TOLI Corporation non-consolidated sales

1919-

1963-

●

1887

1957

1858
The United States-Japan Treatyof Amity and Commerce
concluded

TOLI INTEGRATED REPORT 2023

1945

●

The end of the Pacific War

1964
Holding of theTokyo Olympic Games
Opening of theTokaido bullet train line

1970

●

Japan World Exposition(Osaka)

1984
1986

●

Bubble economy

2008-

●

Shiga TOLI Corporation
Hiroka TOLI Floor Corporation

Full-scale expansion into vinyl flooringbusiness and development into acomprehensive flooring manufacturer
●

1987-

●

Atsugi Factory

Encounter withlinoleum andfounding

●

03

1984-

●

Itami Factory

1991
Collapse of the
bubble economy

Gifu TOLI Corporation

Jiangsu Changlong Decorative
Material Technical Co., Ltd.
*Equity-method affiliate

Taking on the challenge to
become a total interior
manufacturer
●

2020-

●

●

Santen TOLI Corporation

1997

●

Kyoto Protocol

2019

The SHINKA era

2020

2015

●

●

Paris Agreement

COVID-19 pandemic

2021

●

Holding of theTokyo Olympic GamesTOLI INTEGRATED REPORT 2023

04

Who We Are

Financial and Non-Financial Highlights

Key financial data

Operating income and net income attributableto owners of parent company (consolidated)

Net sales (consolidated)■ Net sales (100 million yen)

903.5

947.0

859.3

Key non-financial data

* The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March
31, 2020) has been applied since the beginning of FY2021.

885.1■ Operating income (100 million yen)
■ Net income attributable to owners of parent company(100 million yen)

952.3

23.8

19.9

CO2 emissions

Industrial waste/recycling■ CO2 emissions (1,000 t-CO2) Scope 1 + 2■ Industrial waste (1,000 tons) ■ Recycling at TOLI Group, valuable recycling, etc.
● Recycling rate (%)

75.6

35.3
25.6

34.4

32.1

71.7

75.3

79.8

73.0

32.9

20.5
15.9

13.4

13.8
8.7 7.2

2018

2019

2020

2021

2022

(FY)

2018

2019

2020

2021

2022

2020

(FY)

2021

2022

(FY)

* Parties involved: Headquarters, sales offices, Itami factory, Atsugi factory, TOLI Warehouseand Distribution Company, and other group companies

Earnings per share (EPS) (consolidated)

Total assets/net assets (consolidated)■ Earnings per share (EPS) (yen)

42.57

776.5

783.6

33.49
22.66

21.81

360.4

363.6

768.1

380.8

799.8

382.8

■ Number of employees: consolidated■ Number of employees: non-consolidated

847.9

1,833

408.9

876

1,849

874

1,869

883

2019

2020

2021

2022

(FY)

Annual dividend per share

2018

2019

2020

2021

2022

(FY)

ROE/ROIC (consolidated)■ Annual dividend per share (yen)● ROE (%) ● ROIC (%)

2018

2019

2020

1,874

10.00
8.00

3.8
3.1
2019

2020

2021

2022

* This includes a commemorative dividend of 3.00 yen for “100 years in business.”

05

TOLI INTEGRATED REPORT 2023

(FY)

2018

3.8
3.7
2.4
2019

2020

2021

2022

2020

* Parties involved: Headquarters, Itami factory, Atsugi factory, Hiroka TOLI Floor, Shiga TOLI,
Shiga TOLI Itami Office, Gifu TOLI, Santen TOLI, TOLI OFUROKE (*), TOLI Interior Planning,
TOLI Warehouse and Distribution Company (*) Currently TOLI Interior Service

885

2021

26.7

26.8

27.7

8.3

8.3

7.1

2018

2019

2020

28.9

30.4

9.6

8.1

2021

2022

882

2022

(FY)

* Number of employees on a non-consolidated basis excludes people seconded from TOLI togroup companies and part-time employees, and includes people seconded to TOLI fromgroup companies.

* Number of employees on a non-consolidated basis excludes people seconded from TOLI togroup companies and part-time employees, and includes people seconded to TOLI fromgroup companies.

Average length of service, turnover rate

Maternity/paternity leave acquisition rate(non-consolidated)(non-consolidated)

16.1

16.5

16.5

5.2

1.9

2.6

2.3
2022

(FY)

* Data as of the end of March, each FY

5.1

2021

(FY)

■ Female (%) ■ Male (%)

16.7

100.0

100.0

100.0

100.0

100.0
71.4

1.3
2018

2019

6.5

5.7

8.00

4.4

2018

* Data as of the end of March, each FY

16.1

10.00

5.6

1,856

■ Average length of service (years) ● Turnover rate (%)

13.00 *

4.6

● Ratio of female employees (%) ● Ratio of female managers (%)

11.79

2018

5.6

Ratio of female employees, ratio of female
managers (non-consolidated)

Number of employees■ Total assets (100 million yen) ■ Net assets (100 million yen)

4.9

(FY)

2018

3.5

4.2
14.7
0.0

2019

2020

2021

2022

(FY)

2018

0.0
2019

2020

6.9
2021

2022

(FY)

* Data as of the end of March, each FY* Data as of the end of March, each FY* Number of employees on a non-consolidated basis excludes people seconded from TOLI togroup companies and part-time employees, and includes people seconded to TOLI fromgroup companies.

* Number of employees on a non-consolidated basis excludes people seconded from TOLI togroup companies and part-time employees, and includes people seconded to TOLI fromgroup companies.

TOLI INTEGRATED REPORT 2023

06

Who We Are

About TOLI Group

Product Business

Segment performance (FY2022)

Product business consists of four fields: vinyl flooring, carpets, curtains and wall coverings, andwe provide products for a wide range of buildings, including detached houses, condominiums,
offices, hospitals, schools and accommodation facilities. We plan and develop a variety offunctions and designs to suit people’s respective lifestyles, and we conduct business consistently
from manufacturing to sales and distribution, always meeting the needs of our customers.

Net sales

57,971million yen(+10.3% YoY)

2,344million yen

Segment
income(+334.8% YoY)

■ Vinyl flooring
Vinyl flooring is used for the floors of various buildings and is an important building material indispensable to daily
life. By taking advantage of the rich functionality and design features unique to vinyl flooring, we support people’s
diverse lifestyles from the ground up.
Main related factories
and group companies

Supply chain and group framework
Raw material procurement

Manufacturing and inventory management

We procure a wide range of raw materials for manufacturing, including
vinyl chloride resin, plasticizers, and nylon fibers, and we collaborate
with numerous suppliers. Additionally, our group has been focusing on
green procurement for more than 40 years, including the recycling ofused agricultural vinyl, and the proportion of recycled raw materials
used has been increasing year by year.

Our group’s six manufacturing plants in Japan manufacture interior
products such as vinyl flooring, carpets, curtains, and wall coverings.
Production plans are centrally managed by TOLI and products arestocked at distribution bases adjacent to factories and depot
warehouses located throughout the country, ensuring a stable supply.

TOLI Corporation (Itami Factory, Atsugi Factory)
Hiroka TOLI Floor Corporation
Jiangsu Changlong Decorative Material Technical Co., Ltd.
(* equity method affiliate)

Vinyl tile

Vinyl sheet■ Carpet
Carpets are widely used in everything from offices to accommodation. In particular, we boast one of the top
market shares in the industry for carpet tiles, our long track record and proven high quality underpin this. Carpet
tiles can be used to add colors to a variety of spaces.
Main related factories
and group companies

Procurement

Shiga TOLI Corporation
Gifu TOLI Corporation
Roll carpet

Interior wholesaling and installation
business
The interior wholesale and installation business is doing supply and install of interior materials
mainly TOLI’s, from each area’s sales office to the clients. Many interior materials are completedwith skills of installers. Therefore, our Group’s expertise of “Installation” plays a key role in thisindustry of Japan. In order to maximize the value of interiors, we have rolled out an integrated
business model from product proposals to sales and installation.

LIC Co., Ltd
KIRONY Co.,Ltd.
Hokkaido TOLI Corporation

Paper wallcovering

TOLI Corporation

Group sales company
Group installation company

Group manufacturing
company
Interior-related products

Segment performance (FY2022)
Net sales

62,490million yen

TOLI products

TOLI products + other interior-related products

Communication with clients(+5.7% YoY)

Segment
income1,487million yen(+69.7% YoY)TECHNO KAMEI CORPORATIONTOLI (Shanghai) Corporation
TOLI Interior Service Co., Ltd.** TOLI Interior Service Co., Ltd. will be in the “Interior Wholesale and Installation Business” segment from FY2023.

End user

Installation

Santen TOLI Co.,Ltd.
Vinyl Wallcovering

Proposals using product catalogs

Carpet tile installation(*) Segment results shown includes transactions between segments

TOLI INTEGRATED REPORT 2023

Interior wholesaling

Online Stores andMass Retailers

Wall covering materials have a rich variety of designs that expand the spatial design and create a comfortableenvironment. In addition, it helps create a safe and secure environment with its various functionalities such as
antifouling, antibacterial, and antiviral properties.

Wall covering

Interior wholesaling andinstallation businessArchitect and Design Company■ Wall covering

CurtainConstruction Company andGeneral Contructor

Curtains for various facilities

Raw material manufacturer

TOLI Interior Planning Co., Ltd
Residential made-to-order curtain

07

Non-group sales companies

CarpetCurtains are essential for creating a gorgeous and comfortable space environment. Our curtains are fully made toorder at our own sewing factory, allowing us to provide products that are perfect for our customers’ lifestyles.

Main related groupcompanies

Consumption

Interior contractors anddistributors

Vinyl flooring■ Curtain

Main related factories
and group companies

Sales and logistics

Product Business
Carpet tile

Main related factories
and group companies

Manufacturing andinventory management

Sales and logistics

Sales and installation of
non-TOLI products (*)

The sales function of our group is handled by TOLI Corporationand group sales and installation companies. Approximately 65% ​​of our group’s consolidated net sales come from sales of TOLI
brand products, and the remaining 35% comes from purchasing,selling, and installing products from other companies. Our groupsales companies and group installation companies handle TOLI
brand products and other companies’ products, providing a
one-stop service for interior products.

Approx.

35%

FY2022

Consolidated
net sales

95.2

billion yen

Sales of TOLI
brand products

65%

Approx.

(*) Non-TOLI products ... products of other companies in the same
industry, curtain rails, blinds, housing equipment, etc.

TOLI INTEGRATED REPORT 2023

08

Value Creation

The TOLI Group Value Creation Process

Business model

Evolution to a Lifestyle Design Company

Business activities

With the rapidly changing social and business environments, our group aims for sustainablebusiness activities, identifies key issues (materiality) for the company and promotes initiatives fortheir realization. We will contribute to social and economic development through interior products
and services based on the capital we have cultivated over the long history since our founding.

Goods and services provided
Vinyl flooring

External environment
Environmental changes
in society as a whole● Increase in geopolitical risk
● Declining birthrate, aging
population, population decline● Lifestyle changes due to the
COVID-19 pandemic● Increasing awareness toward
decarbonization● Diversification of work styles
and penetration of diversity● Evolution of AI and IoT● Increasing severity of resource
shortages and natural disasters

The businessenvironment
surrounding our group● Soaring raw material prices● Instability of the supply chain● Decrease in the number of
installation workers● The 2024 problem in logistics
and construction

Materiality
Important issues forour group01

The development ofhigh value-added products

02

The provision of safe andsecure products and services

03

Contributing to sustainableglobal environmental
conservation

04

The creation of vibrantworkplace environments

05

Building of sound andtransparent governancesystems● Diversification of spatial design● Spread of construction technology

TOLI INTEGRATED REPORT 2023

Curtain

Wall covering

Value to the customer

Interior wholesaling

Interior installation

The TOLI Group’s capitalthat supports andcreates trust

Value to shareholders

Fundamental researchand technologicaldevelopment

Financial capital● The sustainableimprovement of corporate
value and stable returns● Consolidated net assets
40,894 million yen● Consolidated equity ratio 47.9％

Manufacturing capital● Vinyl flooring
Approx. 26 million m2/year● Carpet tile
Approx. 13 million m2/yearCore competency

After-sales
service

Design development
and marketing(Sources of innovation)

・Consolidated net sales
95,230 million yen
・Consolidated net income
2,562 million yen
6.5%
・Consolidated ROE

Value to employees

Intellectual capital● Intellectual property rights● The realization of healthy
activities and rich lifestyles(patents, design rights, trademarks)

Approx. 800● Research and development expenses
692 million yen

Resin processing technology

Product design ability

Human capital● Consolidated employees● Consolidated number ofpublic qualifications held

● The creation of a positive
space and environment
through interiors
・Safe and secure “TOLI quality”
・High value-added products that
add color to lifestyle

1,856
428

The comprehensive strengthof TOLI Group

Social and related capital● Sales companies
Approx. 370 companies● Suppliers
Approx. 550 companies

Brand power
Raw material
procurement

Installation

Natural capital

Customerengagement● Energy consumption 757,000 GJ● Water consumption 923,000 m3● Environmental
conservation costs
869 million yen

Stablesupply・Improvement of employee
satisfaction
・Average length of service
16.7 years
・Ratio of female managers 8.1%
・Maternity leave acquisition rate
100%
・Paternity leave acquisition rate
71.4%(*) All non-consolidated results

Value to society andthe environment● Contributing to global
environmental conservationand solving social issues

Salesand logistics

ESG PolicyLong-Term Vision and Mid-Term Business PlanTOLI Group Management Philosophy

09

CarpetInput● Decrease in domestic building
starts● Increasing needs forenvironmentally friendly
products

Outcomes

OutputManufacturing
and inventory

・Amount of industrial waste
20.5% reduction(Compared to FY2019)
・Recycling rate
79.8%
・CO2 emissions
Scope 1 + 2
2.5% increase
Scope 1 + 2 + 3
15.5% reduction(Compared to FY2020)TOLI Group ValueTOLI INTEGRATED REPORT 2023

10

Value Creation

Message from the President
Q. Could you please tell us about the progress of the “SHINKA Plus ONE” Mid-Term Business Plan?
A. FY2022 was a year of recovery from adversity, with increased revenues and profits. On the other hand,due to delays in the important capital investment at the core of this Mid-Term Business Plan anddramatic changes in the business environment, we amended the period settings of “SHINKA Plus ONE”
and revised the final year management indicators upwards.

Even during the COVID-19 pandemic, our group continued
investment for growth. Currently, in preparation for our next level ofgrowth, we are expanding our carpet tile recycling plant and nylon
spinning equipment for carpets, and in addition to implementing ourlong-term BCP plan, we are continuing efforts to develop uniqueproducts and strengthen our supply chain.
In terms of products, we launched our third flooring material,
ToughtecTile, in April. ToughtecTile, which combines the advantagesof vinyl and ceramic tiles, is attracting attention as a new genre ofresin-based floor tiles that uses our group’s resin processing
technology and expertise. The product is designed to meet thevarious needs of those involved in store management, and has beenpraised for its appropriate hardness, lightweight, and beautiful finish,
and is expected to be used in a variety of areas, especially in the store
renewal market. We will continue to focus on developing new
products with the aim of capturing these new markets, and will also
Product Business P25
work to expand our business area.
In addition, it goes without saying that continuous investment in
human capital is one of the most important factors. In FY2022, we
reviewed various human resources systems, including the childcare
leave system and the expert certification system, aimed at therealization of employees’ career development and work-life balance.
Notably, we revised the childcare leave system aimed at achieving a
100% male childcare leave acquisition rate. The previously single-digit
acquisition rate has increased to 71%. Promotion throughout theorganization has increased momentum of this leave and greatly
improve understanding among the target participants and thosearound them.
Promoting work-life balance P36▲

TOLI INTEGRATED REPORT 2023

P33

▲

11

P19

Promoting Reduction of Industrial Waste,
Resource Conservation/Promotion of Recycling■ Revision of management indicators for the final fiscal year of
Mid-Term Business Plan “SHINKA Plus ONE”.

Dear Stakeholders“We, in response to the trust in our business, will keep creating newvalue that contributes to the creation of the positive space andenvironment for the people in the world.” Based on this management
philosophy, our group is pursuing the improvement of lifestyle culture
and comfort, and pushing forward business activities that contributeto the realization of a sustainable society. Our company was founded
in 1919 as Asia’s first linoleum manufacturing company, and in 2019
we celebrated our 100th anniversary. As the next target for after “thecentury”, we have set out our ideal vision for 2030 <TOLI VISION▲

Long-Term Vision and Mid-Term Business Plan

As mentioned above, progress has been delayed from the initialplan, but in FY2022, apart from the full-scale operation of the carpet
tile recycling plant at Shiga factories, a new line for vinyl sheets will
start, leading to major product cost reductions and new productdevelopment. In addition to cost reductions, the full-scale operation of
the carpet tile recycling plant will greatly contribute to improving ourgroup’s recycling rate and reducing industrial waste emissions.
▲

Motohiro Nagashima,
President andRepresentative Director

In FY2022, the second year of the Mid-Term Business Plan, we
worked on the reduction of manufacturing costs, such as converting
upstream technologies to in-house production in response to soaring
raw material and energy prices, and also focus on revising selling
price to improve profit. We would like to thank all of our business
partners, including distributors and installation companies, for theirunderstanding and cooperation in making frequent revisions to sales
prices. As a result, consolidated sales was 95.23 billion yen (7.6%
increase year on year) and operating income was 3.531 billion yen(302.2% increase year on year), higher than the results for FY2019prior to the COVID-19 pandemic. Although sales and profits continued
to decline due to the market downturn and deterioration of the raw
material procurement environment due to the COVID-19 pandemic, it
was a year of recovery from adversity thanks to everybody’s support
and the efforts of group employees.
On the other hand, against the backdrop of significant changes inthe business environment surrounding our group, we decided torevise the period settings of the “SHINKA Plus ONE” Mid-TermBusiness Plan. The Mid-Term Business Plan “SHINKA Plus ONE” hasbeen hit by the prolonged COVID-19 pandemic since FY2021, thefirst year of the plan, resulting in delays in capital investment plans,
which are the pillars of key strategies, and efforts to respond tosoaring raw material prices. In particular, in view of the delays in the
progress of important capital investment plans (1) carpet tile recycling
plant, (2) nylon spinning equipment for carpets, and (3) a new flooringline at Hiroka TOLI Floor, we have revised each strategy in thethree-year Mid-Term Business Plan. We reviewed the time scheduleand revised the target period of Phase I from three years to four years.
In addition, with regard to the management indicators for the final
fiscal year of “SHINKA Plus ONE” following the revision of the period
settings, we revised important target indicators upwards in association
with the diffusion of manufacturing cost reduction activities and sales
price revisions. Regarding environmental impact reduction targets, inconsideration of delays in capital investment plans, we have decided
to revise the plan implementation period while keeping the target
values unchanged.

2030> - Evolution to a Lifestyle Design Company - and will be in its
first phase (2021-2024). We are currently promoting the Mid-TermBusiness Plan “SHINKA Plus ONE.”Currently, the domestic market accounts for most of the group’s
sales in both the residential and non-residential sectors. Amid sluggish
growth in the newly built domestic construction market, we will
enhance our ability to respond to renovation and renewal demand,
and work on the expansion of our global business and business field
by expanding our technological seeds.

Key
performanceindicators(After revision)

FY2024FY2023(Before revision)

Net sales

100 billion yen

95 billion yen

Operatingincome3.5 billion yen

3 billion yen

ROE

5.5%

Environmental Recycling rate
impactreduction
Amount ofindustrial
targetswaste

or moreor moreor more85%
or more40% or more
Reduction of(Compared to FY2019)or moreor more5.0%
or more85%
or moreReduction of40% or more(Compared to FY2019)TOLI INTEGRATED REPORT 2023

12

Value Creation

Message from the President

Q. Could you please tell us about industry trends?

Q. Could you please tell us about the company’s materiality and the initiatives based on them?

A. Although the business environment has improved as sales price revisions have spread throughout theindustry, we will continue to address issues such as labor shortages. While construction demand is
expected to recover in the future due to the Osaka/Kansai Expo and a recovery in inbound tourism, it isimportant to develop products that anticipate needs in order to achieve further growth.

A. Interiors have the “power to make people happy” and contributing to social issues through interiors
will lead to the growth of our group.

▲

Under these circumstances, we are taking advantage of ourgroup’s strengths to further enhance the functionality of our main
products, as well as developing products with less environmental
impact and easy-to-install products that solve the shortage of skilled
installers. We will continue to focus on developing innovative
products.
Another important issue is the stable supply of products. The entire
supply chain has been disrupted by the COVID-19 pandemic, and theraw material procurement environment for our products has changed
significantly. Our group aims to reduce costs and achieve stablesupply, including in-house production of upstream technologies, which
we have been working on since before the COVID-19 outbreak.
Expansion of global business is also essential. We will focus on
raising awareness of the TOLI brand in countries around the world,
expand overseas distributors and develop global strategic productsthat meet the needs, laws and regulations of each country, and focus
on the qualitative and quantitative expansion of global business.
				 Global Strategy P24

In addition to identifying materiality, it is important to apply policies
and goals to the organizational level and implement specific initiatives.
Thoroughly managing and disclosing the progress of these efforts willfurther improve the level. Materiality and Results of Initiatives P29
We think that interiors have “the power to make people happy,”
like building a new house makes people feel wonderful, renovation
makes people feel excited and redecorating a favorite room enriches
people’s lives. We will promote business activities with the belief that
contributing to society with interiors through the group’s products andservices will lead to our growth.

▲Construction demand is expected to recover due to a recovery in thestore and accommodation market as inbound demand picks up,
large-scale redevelopment projects mainly in the Tokyo metropolitanarea, and the 2025 Osaka/Kansai Expo. On the other hand,competition in the construction interior industry is expected to further
intensify as various issues such as a decline in the number of new
housing starts and a decline in the workforce due to the declining
birthrate, aging population are emerging.
Additionally, with the soaring prices of crude oil and naphtha thatbegan in the later half of 2020 and the rise in geopolitical risks
stemming from the Ukraine crisis, purchasing prices of raw materials
for our products have skyrocketed, resulting in three sales pricerevisions within two years. In FY2022, the sales price revisions
became more widespread, contributing significantly to increases insales and profits. In the future, we will focus our efforts onstrengthening cost reduction activities and developing high valueadded products in order to deal with further cost increase factors,
including energy costs.

As a manufacturing company, our group promotes business activities
with an emphasis on sustainability, and we believe that the sustainable
development of society will lead to our growth. Additionally, in order
to contribute to the achievement of the Sustainable Development
Goals (SDGs), we are promoting our business and activities by linking
our group’s materiality with the SDGs.
Our group’s materiality (important issues) for the current fiscal year
are based on our management philosophy and values, and areimportant issues that serve as a prerequisite for formulating mediumto long-term strategies, taking into account major trends in the world
as a whole and changes in the industry-specific environment. Thistime, in addition to an approach to identifying issues using the ISO
26000 framework, we examined the issues using an approach thatconsiders both risks and opportunities, and we endeavored tocommunicate this information in an easy-to-understand manner for all
stakeholders.

Q. Could you please tell us about TOLI’s DNA and what TOLI’s identity is?
A. “Trust” is the source of value creation for the group, and TOLI’s identity.

Q. Could you please tell us specifically your vision for “Evolution to a Lifestyle Design Company,” the goal
raised in <TOLI VISION 2030>?

A. We aim to become a corporate group that enables the design of various business models by having
each employee participate in value creation in line with various changes in sense of value, from theconsumption of goods to the consumption of experiences and meaning.

TOLI INTEGRATED REPORT 2023

The Strengths of TOLI Group▲

13

proactively and voluntarily submit proposals, we have set up “+vo!ce”(plus voice), which solicits social contribution ideas from all
employees, and “Idea Post”, which solicits new business ideas. To
realize <TOLI VISION 2030>, the creativity and ingenuity of each andevery employee is essential.
Social Contribution P43▲

In April 2021, we set the goal of “Evolution to a Lifestyle Design
Company” as the vision for our 110th year, our next target after 100
years in business. When formulating our Long-Term Vision, we asked
young and mid-career employees at the time to consider what theywant TOLI to be in FY2030 and submit proposals to management.
The proposals include a variety of ideas, including core businessexpansion and global business expansion, as well as contributions to
the SDGs, digital strategies, and personnel system revisions. Our goal
is to become a company that is indispensable to people’s lives
through our products and services. With this desire in mind, we haveestablished a Long-Term Vision, <TOLI VISION 2030> - Evolution to a
Lifestyle Design Company - and have decided to progressively
implement specific measures to realize this vision in our Mid-TermBusiness Plan.
For example, “Image Fit”, a spatial synthesis simulation systemthat utilizes AI and is available on our website, is a system that allows
you to easily synthesize our products into photos taken withsmartphones, etc. By further evolving “Image Fit,” we will make “homerenovation” more familiar to general users, allowing them to design
their own unique lifestyles. I look forward to that.
In addition, in order to encourage each and every employee to

We renewed our current management philosophy in April 2019. At thetime, executives and general manager-level employees were asked tofind words suitable for the management philosophy, and sublimate it
into content that would be easy for the next generation to understandfor the future.
Our group’s corporate mission is to propose the creation of richer
and more comfortable spatial environments through businesscentered on interiors and to contribute to the sustainable developmentof the people around the world. The lifeblood of our group is quality
and technology, and our group’s DNA lies in our continued pursuit of“reliable quality” and “reliable technology”.
Furthermore, the basis of our group’s philosophy is “customer
perspective”. Instead of the traditional customer-oriented approach, we
promote manufacturing from the customer’s perspective and create
new value together with our customers in a spirit of co-creation.
The strength of our group is that we are a manufacturing company.
All Group employees will continue to evolve together with ourcustomers, keeping in mind our pride as a manufacturing company.
P17

On the other hand, “challenge” is essential to further grow ourtraditional DNA. It is important to cherish the spirit of always taking onchallenges in the face of rapid change, and to transform “yesterday’s
dreams” into “today’s hopes”. And the “challenge” that connects“today’s hopes” to “tomorrow’s reality” will lead to the future of ourgroup.

TOLI INTEGRATED REPORT 2023

14

Value Creation

The Sustainability and Materiality of TOLI Group
Materiality identification process

The sustainability of TOLI Group

Step1

Policy formulation

We position “Trust” with our various stakeholders, which has been built over a century of history, as the “most important asset” of the group and arefocusing on initiatives for E (environment), S (society) and G (governance).
Above all, it is our responsibility as a manufacturing company to hone various technologies that contribute to society, including reducing
environmental impact, and to promote business activities based on world-class quality and technology, thereby enriching the hearts of people
around the world. We aim to contribute to the creation of a spatial environment.

Step2

Issue extraction
Step3

Judgement ofimportance
Step4

TOLI Group ESG policy

Classification by
theme

Globalenvironment

HumanrightsSocialcontribution
Corporate
governance

Employment
and labor

QualityBusiness
activities

Globalenvironment

Recognizing that global environmental conservation is an important issue
for all human beings, we will work to reduce the environmental impact ofour business activities and aim to contribute to a sustainable society.

Human rights

We recognize the importance of all human rights and aim to practicerespect for human rights in our business activities.

Employment
and labor

We aim to create and secure jobs and create a safe and pleasantworking environment.

Business
activities

We will promote fair and equal business activities and aim to build
better relationships of trust with all stakeholders.

Quality

We will promote manufacturing from the customer’s perspective
based on reliable quality and technology, and aim to provide safe andsecure products and services.

Socialcontribution

We aim to contribute to the development of society by promoting
more voluntary activities toward the goal of achieving a better society.

Corporate
governance

Recognizing the importance of corporate ethics, we aim to achievesound and highly transparent corporate management by actively
promoting the creation of systems to ensure the effectiveness ofgovernance.

The ESG promotion system
In order to improve the driving force of ESG activities, we have established an “ESG Committee” chaired by the President and Representative
Director. We have established an “ESG Executive Committee” consisting of executive officers for sales, manufacturing and adminstration, andare building a system to promote ESG management.

Step5

Discussion andapproval

We considered basic sustainability policies and the direction of initiatives with reference to various
frameworks.
In light of changes in the external environment (risks and opportunities), we utilized the ISO26000
framework to comprehensively identify issues facing our group.
We evaluated the identified issues on two aspects: “importance to society” and “importance to TOLI,”
and determined their importance.
We classified the important issues (materiality) into themes based on ESG evaluation items and ESG
evaluation criteria.
The Board of Directors approved the appropriateness of materiality through discussions by the ESG
Executive Committee and ESG Committee.

Identified materiality
development of
01 Thehigh value-added products
We will enhance the sustainability of our businessactivities further by developing high value-added
products that meet customer needs based on reliable
quality and technology.

provision of safe and secure
02 Theproducts and services
Globalenvironment

HumanrightsSocialcontribution
Corporate
governanceWe conduct business activities from the customer’s
perspective with reliable quality and high transparency in all
aspects of the value chain, from building relationships oftrust with suppliers and business partners, to manufacturing
and selling products and services, and after-sales support.

Employment
and labor

Quality

Globalenvironment

HumanrightsSocialcontribution
Corporate
governance

Employment
and labor

QualityBusiness
activities

Business
activities

to sustainable global
03 Contributing
environmental conservationof a vibrant workplace
04 Creation
environment

As a manufacturing company, we are responsible for
reducing the environmental impact of our products
and services throughout their life cycles.

We aim to create a workplace environment where all
employees can work with enthusiasm, and to achieve agood work-life balance and well-being of our employees.

Globalenvironment

HumanrightsSocialcontribution

Globalenvironment

HumanrightsSocialcontribution

Corporate
governanceCorporate
governance

Employment
and labor

Quality

Employment
and labor

QualityBusiness
activities

Board of Directors

Business
activities

Report and discussion

ESG Committee
Organizational structure

Roles

Chairman :● Formulation of basic policies
President and Representative Director ● Summary of ESG activities
Members : Directors (internal)● Approval of items from theObservers : Auditors (internal)
executive committee

Report and discussion

ISO Promotion Committee

ESG Executive Committee

Organizational structure

Roles● Sorting out risks and opportunities
associated with changes in the external
environment(Organizing risks and opportunities andsharing them company-wide)

Organizational structure

ReportChairman: President and Representative Director
Vice Chairman:
Senior General Manager of Manufacturing
headquarters, Executive Officer
Committee members:
18 general managers from each division

ESG representative :Manufacturing Executive officer (1 person)
Sales Executive officer (1 person)
Administrative Executive officer (1 person)
Roles● Setting of critical issues (materiality)● Formulation of measures related to system development and construction● Formulation of activity plans and targets, and monitoring activities status● Formulation of disclosure statements of annual activity results, reportingand presenting to the ESG Committee, etc.

Execution

Execution

Various divisions and committee

15

TOLI INTEGRATED REPORT 2023

* The Board of Directors
appoints the executive officer
to be responsible for
implementing ESG.

05 Building of sound and transparent governance systems
Secretariat

Globalenvironment

HumanrightsSocialcontribution
Corporate
governanceWe aim to build a highly transparent governance system for the purpose of healthy relationships with all stakeholders.

Employment
and labor

Quality

Organizational structure

Business
activities

Management Planning Department
CSR Promotion Department

The world we want to realize

Roles● Review of agenda● Preparation and distribution ofmaterials● Preparation and storage ofminutes, etc.

Create a positive
space andenvironment
through interiors

Contributing to
globalenvironmental
conservation andsolving social
issues

The realization ofhealthy activities
and rich lifestyles

The sustainableimprovement ofcorporate value
and stable returns

TOLI INTEGRATED REPORT 2023

16

Value Creation

The Strengths of TOLI Group

Value chain and corecompetencies that support
value creation

Fundamental research and technological development

Core competency (Sources of innovation)

After-sales
serviceResin processing
technology

The core technology that supports the evolution of
TOLI Group is resin processing technology (blending,molding, surface processing, equipment design, test
evaluation). We refine our resin processing technology
on a daily basis, which leads to the evolution of ourcore business, including high value-added products,
environmentally-friendly products and unique recycling
systems, and the expansion of our business field.

Our group companies cover the entire value
chain, from product development tomanufacturing, inventory, sales, and after-sales
service.We combine the technology andwisdom of each group company to increase
our competitiveness and create new value.

Installation
Customerengagement

The comprehensive
strength of
TOLI Group

Strong ties with customers are one of TOLIGroup’s strengths. The high level ofengagement we have built with our customers
over many years of trust is the source of TOLIGroup’s evolution.

One of TOLI Group’s strengths is its product design
ability, which combines design and development
capabilities accumulated over a long history to create
attractive and long-loved products. The productdesign capabilities of our in-house designers andresearch and development staff who areknowledgeable about materials create TOLI’s uniqueexpressions and high value-added products.

Brand power

Product design
ability

Designdevelopment
and marketing

One of the strengths of TOLI Group is the brandpower backed by the “TOLI quality” that wehave accumulated since our foundation. “TOLI
quality” has led to a high market share in vinyl
flooring and carpet tiles.

Raw material
procurement

TOLI Group delivers safety and security to ourcustomers through a wide range of suppliers,
top-class production capacity in Japan for vinyl
flooring and carpet tiles, and the ability torespond flexibly to customer needs.

Stable supply

Business foundations that support value creation, financial foundations and human resource foundations

Sales and logistics

17

TOLI INTEGRATED REPORT 2023

Manufacturing and inventory

TOLI INTEGRATED REPORT 2023

18

Management Strategy

Long-Term Vision and Mid-Term Business Plan
Long-Term Vision

Mid-Term Business Plan

~Evolution to a Lifestyle Design Company~

Our group is promoting the Mid-Term Business Plan “SHINKA Plus ONE”, which is the first phase, in order to realize our vision for 2030 <TOLI<TOLI VISION 2030>“SHINKA Plus ONE”
VISION 2030>. With five priority strategies and 11 initiatives, we aim to maximize the TOLI Group’s corporate value by expanding economic value

We have set a Long-Term Vision <TOLI VISION 2030> - Evolution to a Lifestyle Design Company - as our vision forand social value toward the realization of a sustainable society.

2030: To become a company that designs lifestyles. Based on the manufacturing legacy built up over our 100-year
history, we aim to create new value and evolve into a corporate group that designs people’s lifestyles in any scene.

Five key strategies and 11 initiatives

Evolution to a Lifestyle Design Company

DA

Enhancement ofcapabilities acrossthe group

Reinforcement ofcore business

Evolution

Further strengthen
our business basethrough constantevolution.

Deepening

Digging deeper into
all issues with anever-ending desire
to improve.

Real
value

Promote businessactivities that contributeto society and enhance
corporate value centeredon people.

8

1

4

Strengthen“manufacturing ability”

Expanding global
business in terms of
quality and volume

7

2

5

Strengthen “planningand proposal ability”

Develop B-to-B(special sales) business

3

Creation ofa fifth business

Pursue creation
through seeds andcollaboration

6

Strengthen“selling ability”

a business base
E Buildingthat supports growth

Develop B-to-C
business

10

11

Revitalize people
and organizations

Improve corporate value

Net sales

100 billion yen

Operatingincome3.5 billion yen

ROE

5.5% or more

Phase II

Phase IIIor moreor more■ Environmental impact
reduction targets
Recycling rate

85% or moreAmount ofindustrial
waste

40% or more

Progress of management indicators

Growth Plan for Achieving the Long-Term Vision
Phase I

Strongly promote
digitalcommunication

C

Expanding the
growth ofpromising business

Integrate theresolution of social
issues intobusiness activities

9

Basic
policyB

Strengthening business-promotion power

We have shifted to an era in which lifestyles havechanged from the “consumption of goods” to the“consumption of experiences,” and in which lifestyles
are expressed as the “consumption of meaning” andthe “consumption of time.” Based on the “TOLI quality”
we have accumulated over the past 100 years, we will
aim for evolution from “a company that manufacturesand sells goods” into “a lifestyle design company.”■ Key performance indicators

Achieving theLong-Term Vision

Reduction of(Compared to FY2019)

Consolidated
net sales

Stable growth
as a company
with net sales of
100 billion yen■ Consolidated net sales (100 million yen)
●ー Consolidated operating income (100 million yen)

Operating income

Consolidated
net sales

Expansionof business field

100 billion yen

Expansion of value proposition

3.5 billion yen

6 billion yen
or more at an
early stage

or moreOperating income

Economic value

or moreStrengthening the management base995

Harmonize with society
Contribute to society by
resolving social issues

Social value

2021-2024

2025-2027

Stable growth as
a company with net sales of
100 billion yen
Operating income

6 billion yen or more at
an early stage

TOLI INTEGRATED REPORT 2023

ROE

10.0% or more

Environmental impact
reduction targets

Key performance indicators

19

Net sales903

2028-2030

Our ideal situation in 2030

859
19

CO2 emissions

Amount of industrial waste

30% or more

60% or more

Reduction of(compared to FY2020)
Recycling rate

90% or more

952

947

35

36

23
15
8

Reduction of(compared to FY2019)

885

2018

2019

2020

Previous Mid-Term Business Plan

“SHINKA-100” phase II

2021

2022

2023

(projected)(*)

Phase I

2024

2028-2030(target)(target)Phase II

(FY)

Phase III(*) Estimated figure at the time of disclosure on September 28

TOLI INTEGRATED REPORT 2023

20

Management Strategy

Manufacturing Strategy and Sales Strategy

Manufacturing strategy

Sales strategy

As a manufacturer of interior finishing materials, our group has strived to develop products that bring new value. Ourpassion for manufacturing stems from our pursuit of comfort in living spaces from the customer’s perspective, andby constantly pursuing challenging research and development themes, we have evolved the manufacturing
capabilities of our group. We will continue to lead the industry with our technological research and productdevelopment capabilities in manufacturing, and by creating numerous innovative products, we will contribute toincreasing the value of society as a whole.

For over 100 years, our group has grown with the support of many customers. In our sales activities, runningpromotional activities for building owners, general contractors, construction companies, design offices, andcompanies that handle interior finishing materials remains our core and most important activity. Although the shapeof our company has changed after the COVID-19 pandemic, we will continue to steadily advance our sales activities
step by step to “really convey the goodness of our products” based on the “trust” of our customers.

Director and Senior Managing
Executive Officer, Senior
General Manager of
Manufacturing headquarters

Hirofumi Amano

Basic
policyEndless pursuit of technologicaladvancement

MarketingConcept ofmanufacturing

Seed development<Core competencies>
Resin processing
technology

Product design ability

High value-added
・Functionality
・“TOLI quality”
・Design characteristics

The comprehensive
strength of TOLI Group● Enhancement of corporate value through the development of
unique products● Balancing of economic value and social value● Development of seeds for the expansion and strengthening of corecompetencies

Yoji Nakano

BasicpolicyAchieving customer trust andsatisfaction with meticulous services

Concept ofsales
activity

Unique product development

Expansion of share in the domestic market

Unique product development for sustainable improvement of corporate
value is our group’s most important strategy. The “Bathna Series”,
which was released in 2011, is a vinyl sheet for bathrooms andbathhouses, and is our original and unique product. Despite theconventional belief that “it is difficult to install vinyl sheets in bathrooms
where there is a lot of water”, we took on the challenge using resin
processing and surface processing technology, and have successfullycommercialized this product. Currently, we have a comprehensive
lineup and are active in the renewal market.

With 42 bases in Japan, sales personnel and floor sales (FS) havecontinued to work together on a daily basis to respond to requests
from customers in various categories, including general contractors,
design offices and contractors, thereby accumulating trust. In addition,

Environmental
consideration

The “Bathna Series” offlooring for bathrooms
and bathing facilities

・Use of recycled materials
・Longer life (aesthetic
maintenance, high durability)

・Reduced maintenance・Simple installation
・Weight reduction

Reduction of heat shock
Fall prevention
Suitable for renovation

Managing Executive Officer
and Senior General
Manager of Sales
Headquarters

Strengths

・Sales offices spread throughout the country
・A distribution network that covers a wide
area of the country● Implementation of area-specific sales strategies● Realization of customer needs● Co-creation with group sales companies

they also play the role of providing feedback on products, which leads
to new product development, and this kind of sales activity has led to
top-class sales volume in domestic markets.

・Strong relationships of trust with customers
・The know-how and installation capabilities
of group sales companies

42 basesnationwide(TOLI Corporation
sales bases)

Strategy

StrategyStrengthen sales channels andfocus on promising business

Qualitative and quantitative expansion ofsales promotion activities through digital use

・Promotion of area strategies that emphasize
regional characteristics
・Expansion of small market and B-to-C
business

・Evolution of AI simulation system “Image Fit”
・Enhancement of web marketing

13 basesnationwide(Logistics centers)

・Resolve social issues
・Expansion of business area

We succeeded in the development of unique products with our technical ability andthe spirit of challenge even in a space where the use of vinyl flooring was considereddifficult due to the harsh usage condition.

Balancing economic value and social value

Expanding domestic market shares

Expansion of business field

Expanding the use of recycled materials
By recycling used products that would otherwise have been discarded, we can contribute to reducing the amount of waste and conserving resources.
In addition, replacing newly purchased raw materials with recycled materials will reduce CO2 emissions generated during disposal and raw material
manufacturing, as well as lower manufacturing costs. Our group has been working on reusing used agricultural vinyl for over 40 years.

PVC products that were previously discarded

Social value
Reduction of industrial waste andCO2 emissions▲ Agricultural vinyl▲ Waste carpet tiles▲ Plant scrap materials ... etc.

21

TOLI INTEGRATED REPORT 2023

Economic value
Reduction of costs incurred during
normal disposal

Products using
recycled materials

Our group is a strong corporate group in the contract
market (non-residential), but expanding our businessfield, including BtoC business, is becoming
increasingly important. In our Mid-Term Business Plan,
we have set two of our five priority strategies:“expanding the growth of promising businesses” and“Creation of a fifth business.” In terms of “expanding
the growth of businesses,” we aim to expand thegrowth of our global business, special sales business,
and BtoC business. Furthermore, under the “Creationof a Fifth Business” initiative, we are looking for new
business seeds following vinyl flooring, carpets, wallcoverings, and curtains, and are taking on thechallenge of cross-industry business.

TOPICS

The development of “Connect Mat,” dedicatedflooring material for volleyball“Connect Mat,” a flooring material specificallyfor volleyball games, was jointly developedwith the Japan Volleyball League, and uses
resin processing technology and productdesign capabilities to solve the problems
faced by volleyball organizers and players.
With Connect Mat, we were able to capture a
new business field for our group: the sports
market. We also collect used Connect Mats
and recycle them as raw materials for our
products.

TOLI INTEGRATED REPORT 2023

22

Management Strategy

Financial Strategy and Global Strategy

Financial strategy

Global strategy

Under the Mid-Term Business Plan “SHINKA Plus ONE,” we aim to further strengthen our core businesses bydeveloping unique products, reducing costs, and making large-scale capital investments aimed at reducing
environmental impact in order to achieve sustainable growth for our group. We are also focusing on building amanagement foundation that supports growth, including investing in the use of information systems andstrengthening human capital. The basic concept of our group’s finances is to maintain a stable financial base that
supports growth investments. By implementing capital allocation that is both proactive and sound, we will support
our growth strategy from a financial perspective.

For the stable growth of our group, qualitative and quantitative expansion of global business is essential. Since the1980s, we have been focusing on exports, establishing sales offices in Shanghai in 2014 and Singapore in 2019,actively expanding our business. However, we are still in the process of growth, and there is significant untapped
potential in the vast global market. Armed with the dedication of ‘MADE BY JAPAN’ and the high quality andfunctionality associated with ‘MADE BY TOLI,’ we aim to elevate the ‘JAPAN TOLI brand’ and further advance our
global business to new heights.

Basic
policyMaintenance of stable financial
foundations that support growthinvestment

Concept offinancialstrategy

Financial position aiming for safety and efficiency

Masayuki Hashimoto

Basic
policy

41.6

35.9

23.2
10.5

9.4

● Further improvement of TOLI brand awareness● Strategic expansion of sales domains and increases in sales● Promoting vinyl tile joint venture in China● Enhancement of global human resources

Vision for 2024
Global business sales

2.8 billion yen

Vision for 2030
Global business sales

5.5 billion yen

OpenedSingapore Branch Office
Establishment of
TOLI (Shanghai) Corporation

3.2
Overseas distributors

(2.5)
2018

Globalstrategy
concept

Overseas net sales (100 million yen)Countries around the world have different lifestyles and laws
and regulations, and we work with overseas distributors who
are familiar with each country to devise sales methods to meetthe needs of each country. We supply the global market withproducts that have received high praise in the domestic
market, as well as products tailored for the global market.

49.6
39.0

Improvement and expansion of the“JAPAN TOLI brand”

Overseas distributor system

Consolidated operating CF (100 million yen)
Consolidated free cash flow (100 million yen) (operating CF - investment CF)

50.9

Director and Managing
Executive Officer andresponsible for Global
Department

Yozo Araki● Financial position aiming for safety and efficiency● The continuation of positive investment for growth● Stable shareholder returns- Generating stable free cash flows Free cash flow was negative in FY2018, but since FY2019, we havegenerated free cash flow steadily while continuing to make positive capital
investments, and are striving to maintain our financial foundations. We willcontinue to emphasize the creation of stable free cash flows as a source offunds for shareholder returns and growth investment.

Managing Executive Officer
and Senior General Manager of
Administration Headquarters

2019

2020

2021

2022

(FY)

20 countries and regions 30 companies(As of August 2023)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

2024

2030
(FY)

Consolidated capital investment (100 million yen)

The continuation of positive investment for growth- Further strengthening of core business and thebuilding of management foundations Apart from capital investment aimed at the further strengthening of corebusiness for sustainable growth, we continue to actively invest in building
information systems and other management infrastructure to support
growth. Under the Mid-Term Business Plan “SHINKA Plus ONE,” we will
focus on investments aimed at strengthening the competitiveness ofmanufacturing and reducing our environmental impact, particularly bybuilding a new vinyl flooring manufacturing plant and carpet tile recycling
plant. Please note that our capital investment plan has been delayed byapproximately one year due to the prolonged COVID-19 pandemic (please
see the “Message from the President” for details).

Stable shareholder returns- The realization of stable dividends in the long-term Our group positions the return of profits to shareholders as an importantmanagement issues, and our basic policy is to continue paying stabledividends. Regarding stable dividends, we aim for a payout ratio of 30% or
higher or a DOE of 1.5% or higher. Based on this policy, the annual
dividend per share for FY2022 was 10.00 yen (dividend payout ratio 23.5%,
DOE 1.5%). We will continue to enhance shareholder returns by continuing
to pay stable dividends.

38.0
30.9

TOLI INTEGRATED REPORT 2023

❶ Export of Japanese domestic products

23.8

2018

2019

2020

Consolidated dividend payout ratio (%)
Consolidated DOE (%)

45.8

38.8

2021

1.7

2019

2022

(FY)

Japanese aesthetics, traditions and culture are also evaluatedhighly around the world, and we can be proud of their quality.
Using the technological capabilities of our interior businesscentered on vinyl flooring and carpets, which maintains a highmarket share in Japan, we will develop global strategic
products with “TOLI quality” as a weapon and aim for the
improvement and expansion of the “JAPAN TOLI brand.”

67.9

Overseas strategic products Carpet Tile “YUTAKA” series
The history of TOLI Group spans more than
100 years, starting with “Yutakaori,” plain
woven rugs with elaborate designs madefrom rice straw, which were also exported
overseas. The word “Yutaka” represents thegroup’s “foundation”, “tradition” and “pride”.
The “YUTAKA Series,” which wasdeveloped as a global strategic product,
encapsulates more than 100 years of
manufacturing and conveys the spirit ofelegant hospitality to the world.

35.3
23.5

2.2

2018

23

Product strategy
31.7

30.6

1.3

1.3

2020

2021

1.5

2022

(FY)

❷ Evolution of global manufacturing bases
Jiangsu Changlong Decorative Material Technical Co., Ltd., (anequity method affiliate) located in Jiangsu Province, China,develops and manufactures vinyl tiles. We aim to develop
unique and attractive products by creating a synergistic effectbetween the joint venture’s global market knowledge andtechnological capabilities and our group’s manufacturing
technology.

Overseas strategic products Vinyl Tile “TOLI Select” series“TOLI Select” series is a vinyl tile developed by
Jiangsu Changlong Decorative Material TechnicalCo., Ltd., and TOLI Corporation for the global
market. With a wide range of products to meetoverseas needs, we will take on the challenge offurther improving and expanding the TOLI brand in
the global market.

TOLI INTEGRATED REPORT 2023

24

Management Strategy

Business activities by segment
FY2022 TOPICS

Product Business

Vinyl flooring

The product business is a business that manufactures and sells TOLI brand products, mainly vinyl flooring, carpets, curtains, and wall covering, andprovides related logistics and other services.

Launch of third flooring material, “ToughtecTile” (April 2022)
We have launched Luxury Hard Tile (LHT) “ToughtecTile” which combines the advantages of vinyl tiles and ceramic tiles. ToughtecTile, a new flooringmaterial created by combining our advanced technology and a pioneering spirit, is a product that is expected to expand the possibilities of vinyl
flooring.

Risks, strengths and value creation

Store market

Features of ceramic tiles

Business risk
● Sluggish growth in the domestic● Decreases in the working
construction market
population● Strengthening of chemical● The heightened risks ofsubstance regulations
climate change● Destabilization of the supply chain ● Decreases in construction
workers● Shortages of delivery drivers

Sources of value creation (strengths)● Improving competitiveness through unique product development● The development of technologies towards the creation of safe,
secure and comfortable spaces● Solving social issues through business activities

The value creation we focus on● Marketing activities coordinated by Planning Division and Sales
Division● Abundant technology and knowledge with regard to flooring● Manufacturing technology and capital to realize needs● Design development by in-house designers

High durability

Low maintenanceLightweight

Antiviral property

No indentations

Concealability

Hardly get tired

Can be installed on
existing flooring

FragileHeavy

Unevenness isconspicuous

Prone toindentation

Get tired easily

SlipperyLess durable and more slippery
than ceramic tiles● The development of high value-added products that are safe,
secure and comfortable● The realization of a circular economy society through recycling
technology● Expansion of business field through “seed-out”● Manufacturing based on global standards

Problems faced by owners,
designerss and users

Explore latent needs and create new value with vinyl tile
processing technology and extensive knowledge

POINT

Hard to break due tomoderate rigidity

POINT

POINT

Less slippery thanregular ceramic tiles

POINT

POINT

Lighter than regularceramic tiles

POINT

01

Performance highlights

TOLI brand lineup

02

FY2022 results (consolidated)
Net sales

Business

57,971million yen(+10.3% YoY)

Segment income

Vinylflooring

2,344 million yen(+334.8% YoY)

51,258
1,430

25

2019

Sheet
collection
NW

Tile
collection

Graphic
carpet tile

Roll carpet
collection

52,539TOLI Contract
Curtain

1,353

2020

TOLI INTEGRATED REPORT 2023

2021

[Roll carpet]
・Etweal・Royal Thai + TOLI Collection[Curtains for facilities]
・TOLI Contract Curtain[Vinyl wallcovering]
・TOLI Wall VS
・POWER1000

Wallcovering

2022

Beautiful finish not easily
affected by unevengroundwork

Acquisition of
new markets

03

06

Sanitary, safe space due toantiviral processing

Wall covering
Renewal of “Real Deco”, a non-combustible decorative finishing material (October 2022)
We have made a major renewal of our proprietary product, “Real Deco”, a non-combustible decorative finishing material. “Real Deco”, which
realistically expresses materials such as wood grain and stone grain, is a unique product of our group, and we aim to expand our share with thisoutstanding product in the wall covering market.

CurtainTOLI Curtain
Fuful

(FY)

05

More durable than regularvinyl tiles[Vinyl Sheet]・Floorleum・CF sheet
・Mature NW・Hitoe[Curtains for residential]
・Fuful2,344

04

Main products[Vinyl tile]
・Matico V
・Royal Stone, Royal Wood・Loose Lay Tile
・ToughtecTile[Carpet tile]
・GA-100 Series
・GA-3600 Sustive Back
・GX Series/MTE・EXC
GA-100
Series

539
2018

Sheet
collection
CF

57,97156,5491,651

Main sample books

Carpet■ Net sales (million yen) ●ー Segment income (million yen)

54,073

Features of vinyl tiles

The value creation we aim for

POWER
1000

VS

Real Deco[Paper wallcovering]
・Real Deco

POINT

01

High quality
texture andrealistic
expression

POINT

02

High
functionalitythat expands
the range of
product
selection

ScratchresistantStainresistantNon-combustible
certified product

Mildew
resistant

Expandmarket sharewith uniqueproducts

TOLI INTEGRATED REPORT 2023

26

Management Strategy

Business status by segment

Interior wholesaling and installation business

FY2022 TOPICS

Interior wholesale and installation business consist of the purchase and sale of interior-related products, including TOLI brand products, by the

Carpetgroup’s sales and installation companies, as well as installation business. The group’s sales and installation companies provide one-stop solutions
for interior products that meet customer needs.

Launch of the environmentally-friendly “GA-3600 Sustive Back” carpet tile (June 2022)
The “GA-3600 Sustive Back” has adopted a “Sustive Back” for environmentally-friendly carpet tiles. “Sustive Back” has a carpet tile backing thatuses recycled chips as part of the backing layer. The “TOLI Complete Recycling” will reduce the amount of industrial waste and greenhouse gas
emissions.
TOLI’s environmentally-friendly carpet tile backing

POINT

01

Sustive Back

Adopted “Sustive Back,” which uses recycled
carpet tile material in the backing layer

We carry out horizontal recycling of scraps generated in the carpet tile
manufacturing process, etc., and used carpet tiles collected from the market
using a wide-area certification system, and these are reborn as “Sustive Back.”
This leads to the effective use of resources and reductions in the amount ofindustrial waste discharged and CO2 emissions throughout the supply chain.

Factory scraps,
market waste, etc.

POINT

02

RecycleTo the backing
layer

Business risk

The value creation we aim for● Aging of interior installers● Sluggish growth in thedomestic construction market● Intense price competition● Shortages of delivery
drivers● The creation of safe, secure and comfortable spaces throughinterior services● The creation of customer value through high level of expertise● Contributing to society through sales of interior products

Sources of value creation (strengths)

The value creation we focus on● Strong customer foundations rooted in the region● Realization of diverse needs with TOLI brand + products fromother companies● Extensive network with interior installers● Abundant knowledge and experience in interior● Realization of customer needs through one-stop service● Creation of new interior services● Strengthening the network of interior installers

Performance highlights

Internalizing a portion of the nylon production for carpet manufacturing
We have introduced spinning facilities for nylon for carpet tiles at ShigaTOLI Corporation and are using that nylon in some of our GA-3600
Sustive Back products. This will contribute to the stable supply of
products in response to the unstable raw material procurement
environment. Moreover, we have also started on the reinforcement ofnylon spinning facilities aimed at improvement of the in-houseproduction ratio and new product development, which will lead to thedevelopment of unique products.

Risks, strengths and value creation

Products handled

FY2022 results (consolidated)
Net
sales

62,490

Segment

million yen income(+5.7% YoY)

1,487

TOLI brandmillion yen(+69.7% YoY)

■ Net Sales (million yen) ●ー Segment income (million yen)

▲ “GA-3600 Sustive Back” using in-housespun yarn

942
59,27061,878Other
companies’
products

1,487

1,124
862
57,442876

62,49059,123Curtain2018

Launch of “Contract Curtain Vol.15” for various facilities (October 2022)
We launched “Contract Curtain Vol.15,” which has a wide variety of functionality and design features required in the contract (non-residential) market,
such as medical, welfare and educational facilities. We aim to increase our share of the curtain market by expanding our lineup to meet various
needs, including products processed with antiviral agents and products that comply with the Green Purchasing Law in Japan.

2019

2020

2021

2022

01

Newly released products withantiviral treatment

POINT

02

Functional curtains for various scenes

These curtains have been treated to reduce thenumber of specific viruses on the fibers.

Expanding ourshare in the
curtain market
based onfunctional
products

New launch of 23 items with seven patterns
Japan Textile Evaluation Technology
Council certification markAntiviral Finished
Product

27

TOLI INTEGRATED REPORT 2023

“Ecomimona,” darkens the room moderately
This curtain would not interfere with watching over an infant taking a nap.

(FY)

[Interior products of other companies in the same industry]
Purchase and sale of TOLI brand equivalent products[Window treatment]
Purchase and sale of window products such as blinds,
curtain rails and roller blinds

Building
materials andhousingequipment

Purchase and sale of housing equipment and building
materials related to interiors

Installation
services

Provision of interior finishing installation services byspecialized techniciansRole of group sales company
To provide “abundant living space”

POINT

Purchase and sale of TOLI brand products by groupsales companies

LIC Co., Ltd. was born through the merger of three historic interior
product wholesale trading companies, and has continued totransform and evolve in line with changes in the interior business.
Currently, we have added housing equipment and building
materials to our business field, and are continuing to take on thechallenge of becoming a “general trading company specializing ininterior, housing and building materials.”
Today, Japan is at a major turning point in society, such as thedeclining birthrate and aging population and the response to the
COVID-19 pandemic, and lifestyles and values are​​ about to change

Toshiki Murayama, President and Representative Director, LIC Co., Ltd.

significantly even in our business area of “living​​
space.” In order toprovide “rich living spaces” that are in line with the changing times,
we must use our “customer responsiveness” based on ourstrengths in “the number of products we handle and the ability toprovide information” to “support our suppliers and customers.” We
believe that it is increasingly important to hone the capabilities ofthe supply chain that connects our customers.
We will continue to make further efforts to demonstrate our ability tocollect and disseminate information nationwide, expand the circle ofwin-win relationships, and meet the expectations of our customers.

TOLI INTEGRATED REPORT 2023

28

ESG

Materiality and Results of Initiatives
Materiality (important issues)

The development of highvalue-added products
Using reliable quality and technology,
we develop high value-added productsthat meet customer needs and further
enhance the sustainability of ourbusiness activities.

Globalenvironment

HumanrightsSocialcontribution

TargetBusiness
activities

Enhance customer
satisfaction level

Responding to digital contents

・Expand digitization of promotions

・New version of “Image Fit”
・New web product presentation held in FY2022

Protection and utilization of
intellectual property rights

Set award system for invention by employees

・Holding of meetings of the Intellectual Property
Evaluation Committee

・Rewards for three patents and two designs
・Six training sessions, 23 participants

Corporate activities
considering safety andsecurity

Development of products mindful of indoor
environment

Globalenvironment

HumanrightsSocialcontribution
Corporate
governance

Strengthen supply chain
Employment
and labor

Quality

Hold study sessions on intellectual property rights
for technical and planning staff

Promoting environmental globalization

・Collection of information on domestic and overseas
hazardous chemical substances and prompt
response

Strengthening and stabilization of the raw material
procurement system

・Establishment of a multi-company purchasingsystemPlanned repairs of aging equipment andimplementation of seismic reinforcement work

・Implementation of long-term repair plans (FY2022)
・Promoting in-house production of nylon spinningfor carpets

In-house production of main raw materials

Related SDGs

・Market-specific marketing project activities
・Updating of “Real Net” (information provision system for
distributors)

・Strengthening of product planning abilities in
response to market needs

Employment
and labor

Quality

FY2022 results

Improve the level of product planning and productdesignCorporate
governance

The provision of safe andsecure products andservices
We conduct business activities fromthe customer’s perspective withreliable quality and high transparency
in all aspects of the value chain, frombuilding relationships of trust with
suppliers and business partners, tomanufacturing and selling products
and services, and after-sales support.

Initiatives

・All products launched in FY2023 comply with 4VOC standards
・Acquisition of Eco-Leaf environmental label for GA-3600
Sustive Back
・Maintenance of ISO14001 certification in FY2022
・Continuation of procurement from multiple suppliers for
key raw materials
・100% completion of planned repair projects in current
fiscal year
・Stable operation of the first nylon spinning machine for
carpets and start of expansion

Business
activities

Upgrading quality
assurance systems

Quality maintenance and improvement at quality
meetings and quality control committees
Alignment of management indicators with
subcontractors, regular audits and meetings

・Total number of quality complaints from 5 factories(carpet and vinyl flooring): less than 120/year

・Number of quality complaints in FY2022: 142
Complaint incidence rate: 0.005%(based on number of cases)

By FY2024

Contributing to sustainableglobal environmental
conservation
As a manufacturing company, we areresponsible for reducing theenvironmental impact of our products
and services throughout their life
cycles.

Globalenvironment

HumanrightsSocialcontribution

Promoting reduction ofindustrial waste, resource
conservation/promotion ofrecycling

Promoting recycling in business activities andreducing industrial waste emissions by promoting
recycling
Expansion of “TOLI Complete Recycling” system

Corporate
governance

Employment
and labor

Quality

Promote reduction ofgreenhouse gas emissions
and energy saving

Business
activities

・Recycling rate to be 85% or more・Reduce industrial waste by 40% or more(Compared to FY2019)
By FY2030
・Recycling rate to be 90% or more・Reduce industrial waste by 60% or more(Compared to FY2019)

Development and supply of eco-friendly products
and services

By FY2030

Promote energy-saving measures at businesslocations, upgrade to high-efficiency equipment, andintroduce new equipment

・Reduce greenhouse gas emissions (Scope 1 + 2)
by 30% or more(compared to FY2020)

・Recycling rate 79.8%
・Reduce industrial waste by 20.5%(compared to FY2019)
・Start of operations of carpet tile recycling plants
・Start of sample recycling center・Reduce greenhouse gas emissions (Scope 1 + 2)
2.5% increase (compared to FY2020)* 4.4% reduction year-on-year

Improving the efficiency of transportation and delivery

Promoting work-lifebalanceCreation of a vibrantworkplace environment
We aim to create a workplaceenvironment where all employees canwork with enthusiasm, and to achievea good work-life balance and wellbeing for our employees.

Building of sound andtransparent governancesystem29

TOLI INTEGRATED REPORT 2023

・Reduced average overtime hours: 1.8 hours/month year
on yearSetting and utilizing maternity and childcare leave
periods longer than legally mandated periods

・Paternity leave acquisition rate of 20% or more (FY2022)
・Early acquisition of the “Tomonin” mark・Paternity leave acquisition rate 71.4%
・Acquisition of “Tomonin” mark (August)

Establishment and continuous operation of
education systems by level and job type・Training satisfaction and effectiveness: 4.0 points
or more (out of 5.0) (FY2022)

Globalenvironment

HumanrightsSocialcontribution
Corporate
governance

Employment
and labor

Quality

Well-planned training
programs

Support for obtaining official qualifications andself-development support through correspondence
education system

・Completion rate of correspondence courses: 80%
or more (FY2022)

Business
activities

Globalenvironment

Promoting diversity
management

Active promotion of women to management positions

Strengthening soundgovernanceSet Basic approach to corporate governanceHumanrightsSocialcontribution
Corporate
governance

We will aim to build a highly
transparent governance system forsound engagement with all
stakeholders.

・Reduce average overtime hours by 4 hours/monthyear on year (FY2022)

Promoting TOLI work styles

Employment
and labor

QualityBusiness
activities

Compliance with fairtransactions

Enhancement of
information disclosure

Continuous efforts for employing people withdisabilities

Analyzing and evaluating the effectiveness of theBoard of Directors
Thorough implementation of TOLI Group Code of
Conduct
Implementation of (Japan’s) Antimonopoly Act
training
Conducting scenario analysis on climate change
based on TCFD

・Ratio of female managers: 10% or more (FY2022)
・Employment rate of people with disabilities: 1.9%
or more (FY2022)

・Disclosure through corporate governance report(FY2022)

・Continuation of business activities in compliancewith the Antimonopoly Act and Subcontracting Act(Japan)・Information disclosure based on TCFD
recommendations (FY2022)

・Level-specific training satisfaction level: 4.4 points(133 participants, 9 sessions in total)
・Job-specific training satisfaction level: 4.6 points(87 participants, 7 sessions in total)
・Effectiveness of public training: 4.2 points (68 people)
・Completion rate of correspondence courses: 80.7%
・Ratio of female managers 8.1%
・Employment rate of people with disabilities: 2.1%
(0.2 point improvement)

・Disclosure of corporate governance reports(June and November)・Analyze and evaluate the effectiveness of the Board of
Directors
・Implementation of (Japan’s) Antimonopoly Act andSubcontracting Act training
・Implementation of outsourced training
・Implementation of outsourcing survey
・Information disclosure based on TCFD
recommendations (June)

TOLI INTEGRATED REPORT 2023

30

ESG

ESG policy (global environment)

Global environment Recognizing that global environmental conservation is
an important issue for all human beings, we will work to
reduce the environmental impact of our businessactivities and aim to contribute to a sustainable society.
● Environmental impact reduction targets, performance trends, and TOLI
products’ environmental philosophy Page 31● Responding to climate change issues Page 32● Promoting reduction of industrial waste, resource conservation/promotionof recycling Page 33● Promoting reduction of greenhouse gas emissions and energy saving Page 34

Responding to climate change issues
Thoughts on climate change issues
Extreme climate change is a major problem that threatens people
around the world and the global environment, and it has a major
impact not only on corporate business activities but also on people’s
lifestyles. While responding to climate change poses risks forcompanies, such as increased costs and business interruption, we
also see it as an opportunity to create new value. In FY2022, we

appointed one climate change response project manager with the aimof strengthening climate change countermeasures within our group. In
order to contribute to the creation of a positive space and environment
for people around the world, our group is working together as one totackle climate change.

Information disclosure based on TCFD recommendations
In 2022, we declared our support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) by Financial Stability Board (FSB) and our participation in the
consortium. As a scenario for future climate change, we assumed a temperature increase of 2°C to
4°C, conducted a scenario analysis for FY2030 (*), identified risks and opportunities for businessbrought about by climate change, and established strategies. In the future, we will enhance thequality and quantity of related information, and further strengthen our analysis and efforts against
climate change.

1. We will actively work on products and services which are eco-friendly and are safe and secure to use.
2. We will continuously strive to conserve energy, resources, and recycle.
3. We will comply with environmental laws and regulations and fulfill our corporate social

Environmental
Activities
Guidelines

responsibilities.

4. We will set environmental targets and strive to utilize the environmental management system andachieve targets.

5. We will regularly disclose our environmental policy, environmental activities guidelines, and theresults of our initiatives.

(*) We began conducting scenario analysis for our domestic business which accounts for a large share of total sales.

Environmental impact reduction targets

Information disclosure basedon TCFD recommendations■ Risks and opportunities
Recycling rate*
TargetAmount of industrial waste

Target85%

90%

or moreTargetreduction byor moreor more40%

or more60%30%

FY2030

FY2024

Category

FY2030* Compared to FY2019 * Compared to FY2019* Ratio of recycled materials within the group + valuable recycledmaterials in total emissions

We identified the risks and opportunities envisioning each stage of the supply chain for each factors behind risks and opportunities. From these, we
identified seven risks and six opportunities that would significantly impact our business and that have a high probability of actually occurring.

(compared to FY2020)

75.6

25
20

(compared to FY2020)

75.3

71.7

73.0

15

65

Parties involved

2021

14.7

2022

55

5

2030

2050 (FY)

0

4.9

5.6

4.6

5.6

4.4

2018

2019

2020

2021

2022

45
(FY)

* Currently TOLI Interior Service Co., Ltd.

TOLI products’ approach to the environment[2] Manufacturing: recycling

Procurement of waste materials fromthe market

Reuse of waste materials in themarket, scraps in factories, etc.

[4] Installation:
resource and energy
saving[5] Use:longer life (aesthetic

Simple installation

31

TOLI INTEGRATED REPORT 2023

maintenance, high durability)

Low maintenance[3] Transportation:energy saving
Product weight reduction[6] Disposal: recycling
Collection and reuse of usedproducts through a wide-areacertification system

Procurement

RecycleUsage

Higher capital investment and development costs
as a result of rising raw material prices and theadoption of in-house manufacturing measures.

Rising raw material
pricesIncrease in the severity
Disasters cause supply chain disruptions, leading toand frequency ofthe suspension or scaling-back of business
abnormal weather events
activities and decline in sales. Disastersuch as typhoons andcountermeasures also lead to higher costs.
floodsEcofriendly
products
Lightweight

Ecofriendly
products

Small

Large

Large

Reduction of energy
By introducing highly efficient equipment thatcosts through energy
contributes to reducing CO2 emissions, reducing thesaving measures such as weight of products, and improving the efficiency of
the introduction of high transportation and delivery, energy costs in each supply
efficiency equipment
chain will decrease and profits will increase.

Small

Establishment ofcircular economy
business

Development of new
products and services
through R&D andinnovation

Establishment of technologies to meet needs for
expansion in the recycling rate, reduction of CO2
emissions and reduction of manufacturing costs, andexpansion of eco-friendly products and services applying these technologies leads to increased sales.

Large

Higher levels of technology to meet needs for low
carbon materials and various other raw materials. To
process them efficiently and more options for the
procurement of raw materials strengthen business
continuity capabilities and also reduce manufacturingcosts.

Small

Provision of new products and services that help reduce
MediumCO2 emissions leads to increased sales.

Small

Use of public sector
incentives

Renewal and rebuilding demand arise leading toincrease in sales

Small

Transportation

Details

・Reduce greenhouse gas emissions by steadily
implementing groupwide plan(1) “Reduce”...<Scope 1 and 2> Install energy saving/energy efficient equipment, review processes <Scope 3> reduction of transportation energy(2) “Create”...Install solar power generation facilities(3) “Replace”...<Scope 1 and 2> Switch to low emission energy sources, renewable energy sources, etc., <Scope 3> Switch to raw materials with a low
emission factor

・Expand eco-friendly products and services andimprove profit margins(1) Expand Eco Mark products and other products made from recycled raw materials(3) Expand easy to install products (flooring which does not require adhesive, etc.)(5) Expand new eco-friendly products and services

・Procure and use recycled raw materials(1) Collect waste materials in the market through the wide area certification system, etc. (2) Pursue zero emission in carpet tile business(3) Establish stable procurement routes for recycled raw materials(4) Improve technologies for optimum use of recycled raw(5) Promotion of cross-factories utilization of raw materials
materials

・In-house production of upstream processes(1) Establish technologies for the in-house production of upstream raw materials(3) Expansion of technology compatible with various raw materials

・Strengthen supply chain BCP(1) Strengthen Business Continuity Plan (BCP) including supply chain

・Improve transportation and delivery(1) “Reduce”...<Scope 3> Reduce transportation and delivery energy costs
・Reduce the weight of products ・Improve transportation and delivery efficiency ・Improve storage and cargo handling efficiency
・Request outsourcing logistics companies to improve their transportation and delivery efficiency

Simple installation

Installation

Large

Financial
impact■ Strategy

Manufacturing

EcoEcofriendly friendly
products products
LongerLow
lifespan maintainence

Ecofriendly
products
RecycleDisposal

Shift to recycling oriented business results in higher
capital investment and development costs.
Upfront costs associatedwith transition to ecoHigher costs for the development and procurement
friendly technologies
of energy saving products, products with a long
lifetime, and easy-to-install and lightweight
products.

Details
Establishment of recycling business that turns wastematerials in the market and scrap, etc., generated
in-house into recycled raw materials leads to lower raw
materials costs. Corporate reputation improves as aresult of contribution to reduction of CO2 emissions andsales increase.

Countermeasures

RecycleEcofriendly
products

Large

Factors behind
opportunities

We will continuously implement medium- and long-term countermeasures to address risks and opportunities identified based on scenario analysis andwill increase the resilience of our business activities.

Ecofriendly
products

Our group aims to build circular economy business activities throughout the group. Aimed at
reducing the environmental impact in each cycle from product procurement to disposal, we would
like to provide products focusing on six initiatives: recycling; longer life (aesthetic maintenance, highdurability); low maintenance; simple installation; and weight reduction.

[1] Procurement: recycling

Headquarters, Itami factory, Atsugi
factory, Hiroka TOLI Floor, Shiga
TOLI, Shiga TOLI Itami Office, Gifu
TOLI, Santen TOLI, TOLIOFUROKE,* TOLI Interior Planning,
TOLI Warehouse and Distribution
Company

Switch from raw materials with a high emission
Replacement of existing
factor to raw materials with a low emission factor
products and services
leads to higher capital investment and developmentwith eco-friendly options
and procurement costs.

Market2020

15.2

Waste that was sold as valuable
materials

75

10

14.5

Valuable recycling

Small

Category

Products and services

18.2

30%
reduction

85

Large

Acute

19.2

32.9

(%)

79.8

30

Physical risks

17.6(Thousand tons)

FY2030 target

Financial
impactAs a result of the introduction of carbon pricing,
private sector demand stagnates and sales decline.

Introduction ofcarbon pricing

Market32.1

34.4

Amount of waste returned to the
manufacturing process within TOLIGroup

Details
The introduction of carbon pricing and rising carbon
prices lead to higher energy costs and raw materials
costs.

Opportunities(x 1,000t-CO2)

40
35
30
25
20
15
10
5
0

■ Industrial waste ■ Recycling within the TOLI Group, valuable recycling, and others●ー Recycling rate

Recycled
materials in TOLIGroupTechnology■ Scope 1 (fuel-related) ■ Scope 2 (electricity)

Industrial waste/recycling

Risks

TOLI’s CO2 emissions andenvironmental impact reduction targets

Transition risks

Actual trends

Factors behind risks

Resource efficiency Energy sources

FY2030Targetreduction by

Regulation policy

FY2024

Targetreduction by

CO2 emissions (Scope 1 + 2)

(2) Expand products with a long lifetime and low maintenanceproducts (NW series, etc.)(4) Promote shifting to lightweight products(6) Improve technologies for optimum use of recycled materials(2) Install new raw material manufacturing equipment(4) Invest in new equipment for intermediate processing andrecycling, put into stable operation

TOLI INTEGRATED REPORT 2023

32

ESG

Global environment

Promoting reduction of industrial waste, resource
conservation/promotion of recycling

Expansion of eco-friendly products

Establishment of circular economy businessOur group has set business activities aimed at realizing a circular
economy society as one of our strategies. In addition to reusing scrap
materials generated from business activities within the group, we arecontributing to the realization of a circular economy society throughinitiatives such as recycling of waste materials that were discarded andhorizontal recycling of sold products. Furthermore, we have positioned
reductions in industrial waste, improved recycling rates, and reductions
in greenhouse gas emissions as important medium to long-term
environmental impact reduction goals, and will regularly disclose ourefforts and results.

Aiming to reduce our environmental impact, we are promoting six
initiatives: use of recycled materials, longer lifespan (maintaining
aesthetics and high durability), reduced maintenance, simple
installation, and weight reduction. As a result, many products, including
vinyl flooring and carpet tiles, are now environmentally friendly.
In addition, in product development, we are actively working on

Prolonged lifespan through reduced maintenanceand aesthetic preservation

NW Series, NW-EX Series

Promoting “TOLI Complete Recycling” (Circular recycling of carpet tiles)of complete resource recycling
01 Establishmentof carpet tile waste

of in-house carpet tiles using
02 Collection(Japan’s) wide-area certification system

Our group has established unique carpet tile recycling technology that
does not separate the pile layer from the backing layer. With theoperation of the carpet tile recycling plant at Shiga TOLI Corporation in
2021, it has become possible to perform circular horizontal recyclingthat returns almost 100% of the used carpet tiles that can beprocessed into raw materials. In order to further increase ourcompetitiveness in the carpet tile business, which boasts a high market
share in Japan, we will continue to expand the “TOLI complete
recycling system”. Promoting recycling will increase CO2 emissions(Scope 1 and 2) by our group, but will reduce CO2 emissions related to
raw material procurement (Scope 3), contributing to the realization of asustainable society. TOLI Group, which boasts one of the top domestic
distribution volumes of carpet tiles, has an obligation to promote
recycling, and we believe that our contribution to society is significant.

In addition to recycling factory scraps, etc., we have been certified by
the Minister of Environment (in Japan) as a wide-area certified businessthat collects our own products that have become waste and properly
processes them into product materials, etc. We collect and recycle
carpet tiles.

The role of TOLI Complete Recycling● The realization of a circular economy● Effective use of resources● Reduction of the CO2 emissions generated during the manufacturing
and procurement of raw materials (Scope 3)● Reducing CO2 emissions (Scope 3) generated when disposing usedcarpet tiles● Fostering an environmentally friendly culture in the constructionindustry
TOLI’s environmentally-friendly carpet tile backing

Sustive Back

Manufacturingof environmentally-friendly
carpet tiles

Collectionof used carpet
tiles
Carpet tiles
TOLI Complete
Recycling

Recycling plant

03

Development of carpet tiles using
recycled chips“GA-3600 Sustive Back” was created using the technology of turning
factory scraps and used in-house carpet tile waste into chips andusing them as raw materials for carpet tiles. Due to the use of recycledmaterials, we have received Eco Mark certification and compliancewith the Green Purchasing Law (in Japan). We are working to further
expand the TOLI Complete Recycling System and expand the range of
products that comply with the Eco Mark and Green Purchasing Law.

Employee interview

Breakthrough in building the system
In order to increase the economic efficiency of recycling, it is necessary
to establish technology to recycle the pile layer and backing layer
without separating them. There were many issues to overcome inestablishing the technology, but among them, when designing theequipment to produce recycled chips from carpet tiles, it was difficult totreat the fibers in the pile layer, and it
was difficult to find a way to pass theprocess without problems. We went
through a lot of trial and error with the
project members. From now on, we will
actively collect used carpet tiles,
increase production of recycled chips,
reduce industrial waste, and expand ourrange of Sustive Back products.

Yushiro Yasuda, Manager,
Technical and Development Department Carpet Group,Longer lifespan due to high durability

Homogeneous vinyl sheet“HITOE Granza” “HITOE Fine”
Single-layer structure with a pattern that lasts
throughout the entire layer. In addition to the“all-layer no-wax specification” that is easy tomaintain, it also has a resin-rich structure that is
highly wear resistant, making it extremely durable.
By continuing to develop and sell productswith longer lifespan, we will extend the life cyclefrom installation to replacement, contributing toresource conservation and waste reduction.

Antibacterial
functionthroughout
entire sheetSamepatternthroughout
entire sheet

Nondirectional
chip pattern

Environmental certification by third-party certification organizations, etc.
Green Purchasing Law: FabricGreen Purchasing Law: Vinyl flooring

An unified label for“Products compliant with
the Green Purchasing
Law” as determined by
the Interior Fabric Industry
Revitalization Council.

A label for “Products
compliant with the Green
Purchasing Law” asdetermined by the Plastic
Flooring Subcommittee of
the Nippon Interior
Association.

Eco Mark

Eco Leaf

This mark is for products
examined and certified by
the Japan Environment
Association.

A mark for products
certified by SuMPO
Environmental Labeling
Program operated by the
Sustainable Management
Promotion Organization.

Promote reduction of greenhouse gas emissions
and energy saving
The movement to become carbon neutral by 2050 is gaining
momentum around the world, and our group has also set reduction
targets by 2030. CO2 emissions reduction targets are also an importantmanagement indicator in the Mid-Term Business Plan “SHINKA PlusONE.” In addition to dilligent efforts such as energy-saving activities

Recyclingof used carpet
tiles

The NW Series and NW-EX Series are flooringmaterials that “do not require wax maintenance”
because their surfaces are covered with a highly
durable protective layer, making them difficult to getdirty and easy to clean. Because of that, theamount of electricity and water required, and theamount of wastewater generated when carrying out
maintenance decreases compared to floor materials
that require wax maintenance, contributing to the
reduction of environmental impact.

obtaining environmental certification from third-party organizations anddeveloping compliant products. For products that use recycledmaterials, we display environmental information such as recycledmaterial weight ratio, CO2 emissions, and CO2 emissions reduction
rate, in an effort to help our customers use our products with peace ofmind.

R&D that leads toenvironmental impact
reductions
We exhibited biomass tile (flooring material)with a biomass content of 96% using only
non-edible materials as a reference at theinterior trend show “JAPANTEX” held in
October 2022. Biomass minimizes the use offossil-derived raw materials and absorbs CO2
emitted during production and disposal during
the growth process of the plants that serve as
raw materials, so it has the effect of offsetting
emissions.
Our company focused on this biomass andleveraged our knowledge and technology frommany years of using recycled materials to
consider the possibility of turning it into vinyl
tiles. We will continue to engage in
multifaceted R&D to address environmental
issues and contribute to the realization of asustainable society.

that we have undertaken so far, we are aiming to achieve our CO2
emissions reduction target, including investment in equipment toimprove energy efficiency. Going forward, we will continue to discuss
long-term goals and take on the challenge of becoming a zeroemissions company.

CO2 emissions reduction results born from insights at
the factory
Employee interview Our factories have equipment that burns a portion of the exhaust before
releasing it into the atmosphere. After this treatment, the exhaust gas has high temperatureand contains energy, so it is passed through a heat recovery device called a waste heatboiler before being released into the atmosphere. This waste heat boiler generates steam
through heat exchange and reuses it in the process, but depending on the amount ofemmission, the steam pressure can sometimes be low. At that time, the low-pressure
steam was discarded without being used. There was a period when the steam was rising.
We realized the possibility of reusing thissteam and began considering it. It was difficult
to deal with fluctuations in the pressure of thesteam used, but by dividing the parts of thefactory that use steam into low-pressuresections and high-pressure sections andreusing the steam for the low-pressuresections, energy efficiency was improved andCO2 emissions were reduced.

Satoru Isayama, Vice Plant Manager
TOLI Corporation Itami Factory
Shingo Yabushita, Soushi Toya, Mechanic Section

TOLI Corporation

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TOLI INTEGRATED REPORT 2023

TOLI INTEGRATED REPORT 2023

34

ESG

Employment and labor

ESG policy (employment and labor)

We aim to secure and create employment
while creating a safe and comfortableworking environment.
● Building an organizational foundation that supports growth● Promoting work-life balance Page 36● Well-planned training programs Page 37

Page 35

Promoting work-life balance
Basic approach to work-life balance
While improving work results, we are reducing chronic long working
hours, expanding flexible work styles so that people can continue
working without interrupting their careers in various life events,
encouraging the acquisition of annual paid leave, and utilizing thechildcare leave system. We aim to promote these in a well-balancedmanner. Promoting these initiatives will increase job satisfaction andengagement, and will lead to securing talented human resources.

Policy on the development of the internal environment

Basic policy on“TOLI Work Style”

1. Create an environment where all employees can work in good physical and mental health.
2. Aim to achieve both work-life balance and productivity improvement.
3. Make use of the “spirit of co-creation” by company and employees as the driving force.

Building an organizational foundation that supports growth
In order for each employee to continue to work and grow withsatisfaction and a sense of fulfillment, it is necessary to be able tochoose and realize a variety of work styles depending on each stage oflife, from child-rearing to middle age and old age, in both family and

Improvement ofengagement
Promotingwork-life
balance

Well-planned
training
programs

community life. By respecting various values ​​and aiming to realize
employee career development and work-life balance, we will enhance
the motivation and abilities of individual employees, maximize theorganizational results as a synergistic effect for the group to grow.

Increase
corporate
value

Revitalize
peopleandorganizations

Promotingdiversity
management

Implementation of the “TOLI Work Style Promotion Project” with the aim of promoting work-life balance
We established the “TOLI Work Style” basic policy in September 2019,with the aim of promoting work styles that suit each job content. In
FY2022, we implemented the “TOLI Work Style Promotion Project,”centered on employees who have first-hand experience of the actual
situation in each headquarter will take the lead in identifying factors thatare hindering the improvement of awareness of operational efficiency,
and propose ideas for reforming awareness, improving work flow, andways to disseminate awareness from a variety of perspectives.

Based on the idea that improving work efficiency has two aspects:
reducing workload and improving the quality of work, we will implement
specific measures company-wide from now on aimed at the“improvement of individual skills,” “the use of digital tools,” “the sharingof wisdom” and “reform of awareness for people to implement workwith a sense of ownership,” and by doing so, make it easier to work
and improve work efficiency.

Aiming to create a working environment where both men and women can balance work withchildcare and nursing care
We aim to create a working environment where both men and women
can balance work with childcare and nursing care. In FY2022, we newly
established an “extension of the period of use of the reduced working
hours system for childcare up to the first year of elementary school” anda “special paid leave system for spouse giving birth.” These company
policies have permeated our employees, and men’s awareness andenvironment regarding childcare have changed significantly, resulting ina significant increase in the rate of male employees taking childcare

leave and annual leave for childcare purposes.
In FY2022, we acquired “Tomonin”, a mark given to a company
that promotes an environment that allows employees to balance workand nursing care. In addition to allowing stock leave to be used for
nursing care purposes, we also take into account work location andworking conditions through a voluntary application system, and are
implementing unique initiatives to support employees who are in theposition of providing nursing care.

● Numerical targets to be achieved by FY2024

Percentage of male employees taking childcare leave and paid leave forchildcare purpose: 70% or more

Initiatives for the improvement of engagement
As attitudes toward companies and work styles change dramatically,in order for employees with diverse values to​​ continue working withenthusiasm, it is necessary to build highly engaged relationships thatunite them with the company. Therefore, we introduced an
engagement survey from FY2023 to visualize the extent to which there
is a difference between what employees want from the organization

Voluntary
application
system35

Engagement
surveyTOLI INTEGRATED REPORT 2023

Stresschecksand the direction of the organization, to recognize organizational
issues, and to implement improvement measures. We will also makemore effective use of stress checks and voluntary application systems,
learn about the attitudes of various employees, and confront
organizational issues to promote the revitalization of people and theorganization.

Implementationofmeasures

Verification of
results

FY2021

FY2022 results

6.9 %71.4 %

Employee interview
My boss embodies the idea of balancing​​
work andchildcare, and is easy to talk to, allowing me to discuss
taking childcare leave from an early stage. We compiled
documents on the progress of our work, prepared theinformation so that it could be shared among
departments, and while I was on leave, everybody inthe department handled my work for me. I felt thatteamwork is essential, both at home and at work,
helping each other while fulfilling our roles.

I believe that superiors have a role to play in creating a work
environment that makes it easy for both men and women to
take childcare leave. However, for those of us in the sales
postion, connections between people are important, andthere are many situations where you cannot be replaced, so
I think we are still in a transition period in creating an internal
system for taking childcare leave. It is necessary to create awork environment where everyone can pool their knowledge
and support each other throughout the company.

Yuta Maegawa,
Sales Development for commercial,
East Japan Sales Development Department, TOLI Corporation

Miyoko Hamamoto, Manager,
Sales Development for commercial,
East Japan Sales Development Department, TOLI Corporation

TOLI INTEGRATED REPORT 2023

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ESG

ESG

Employment and labor

Human rights

ESG policy (human rights)

Well-planned training programs

Recognizing the importance of all human rights and aim
to practice respect for human rights in our businessactivities.

Development of highly specialized specialists and generalists with high management capabilities
Our human resource development philosophy is to “realize the growthand happiness of our employees and contribute to the development of
the company and society,” and we support our employees withrespect as they act with the right mindset and aim to achieve theirgoals. We are enhancing our education system to support careerdevelopment and encourage the development of autonomous humanresources, while also working to foster an organization and culture thathelps employees maintain a proper work-life balance.

Human
resourcesdevelopment
policyIn addition, we believe that the development of the humanresources who will be responsible for the company ten or twenty years
from now is our most important mission, and we are putting effort intodeveloping the next generation to ensure that they inherit the intangible
assets (value) that we have accumulated over our long history,
including technology and skills related to manufacturing and productdevelopment, and relationships of trust with suppliers, and create newvalue from them.

1. We respect and support our employees in achieving their goals of “growth and pursuit of happiness”.
2. We will promote management that enables employees to improve their performance and demonstrate their abilities.
3. We strive to create opportunities for growth by promoting training systems that foster the improvement of each and every
employee’s abilities and skills, and systematic job rotations that improve organizational capabilities.

● Promoting diversity management

Promoting diversity management
Basic approach to diversity management● Career development leave

Career formation support

Careerdevelopment
leave

Careeradvancement
systemTraining andglobal education
by job typeand grade

Careerdevelopment
supportCrossorganizational
projects

Correspondence
courses

Job rotation

Public training

Expertcertification
systemThis system, in the form of a leave of absence, supports
employees in acquiring difficult qualifications, reskilling, andstudying abroad. After returning to work, the aim is for theemployees to utilize the skills they have acquired in thecompany’s business and to play a more active role.

● Cross-organizational projects
For the “NexT Project,” which transcends age andoccupation barriers, motivated employees gather by open
recruitment, and the name incorporates the meaning of“TOLI continuing to advance towards the next generation(Next TOLI).” Through a wide range of human resources
exchanges and experience in presenting business proposals
to management, we are aiming for young employees to feel a
new sense of accomplishment in their work and acquire
opportunities for their own growth.

● Public training
In order to support employees in realizing their career plans
and relearning, this system supports employees by providingthem with the opportunity to choose and attend educationalcourses on their own initiative, regardless of their career or
job type. It matches the needs of employees, and is
especially actively used by employees in their 30s and 40s,
who often think about their career plans.

Diversity of the organization is an essential condition in order to respond flexibly to changes in the business environment. We are working to promote
diversity management so that our employees’ abilities, individualities, values, and ways of working will lead to growth without being limited bynationality, race, gender, age or disability.

The success of female employees
We actively hire talented people regardless of gender in order todiversify the way we think about manufacturing and improve our“technological capabilities”, which are an asset for manufacturers.
Additionally, some female employees expand their career opportunities
to other departments after gaining experience as engineers for acertain period of time. We are working on the creation of a diverse
Employee interview
Gender does not matter when it comes to manufacturing. We need diverse perspectives because we are a
manufacturer of interior materials that support people’s lives.
In addition, manufacturing requires research, ideas, and ways of thinking that are not limited to internal
evaluations but are also applicable externally. We believe that having a variety of “metrics” will be useful inproduct development. Additionally, when faced with a difficult research topic, I always discuss with mysubordinates to think of ways to make it possible instead of thinking about why it can’t be done from the
beginning.
I believe that awareness of diversity will encourage our own growth and revitalize communication both within
and outside the company, and will lead to the expansion of TOLI Group’s product range.
Kohei Kajimura, Manager,
Research and Development Group,Technical and Development Department, TOLI Corporation● Expert certification system● Job rotation
The purpose is to improve the level of employees and develop their careers. We
hope that employees will utilize the knowledge and experience they have cultivatedin each division to succeed in other divisions, and we also provide support forcareer development with an eye to the future.

Revision of personnel treatment systems
With the diversification of values ​​regarding work styles and lifestyles,
and the increase in the number of dual-income households, the way
people think about personnel transfers is changing dramatically. Ourgroup believes that a certain degree of job rotation is necessary fromthe perspective of technology and personnel exchange and humanresource development within the group. Consequently, in

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TOLI INTEGRATED REPORT 2023

This system certifies as expert human resources who havespecialized knowledge and experience and are able to makegreat use of this in their work. The aim is to secure humanresources and raising the level of the organization byevaluating the acquisition of difficult qualifications andperformance in the workplace.

work environment so that they can demonstrate their specialized areasand sensibilities freely without being restrained by gender. In the action
plan created based on the “Act on Promotion of Women’s Participation
and Advancement in the Workplace”, we aim to “achieve and maintainand improve the ratio of women in managerial positions to 10%”, andwe will actively utilize human resources.

Retention of foreign employees
We have set the goal of “Evolve from Global Perspective” as an important value in our management philosophy (TOLI Group Values). We are working
to recruit and retain foreign employees in order to foster a global mindset by actively incorporating diverse human resources and values.

consideration of fairness among employees and the reduction of
burdens upon them, we reviewed the “system for working away from
home,” “the company housing system” and “the R course system(limiting the range of transfers to a restricted area for a certain periodof time)” aimed at expanding flexible work style options. We willcontinue to develop system designs that expand the work style options
suitable for each and every employee.

Employment of people with disabilities
It is important that employees with disabilities are able to work withenthusiasm. We will make improvements to the workplace environment
to ensure retention and take steps to increase the number of
employees.
The creation of employment for people with disabilities is a social

mission, and we are working actively to create employment for people
with disabilities by participating in fairs sponsored by Hello Work andaccepting people to gain work experience by cooperating with local
support schools.

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ESG

Quality

ESG policy (quality)

Concept of quality from the customer’s perspective, “TOLI quality”

We will promote manufacturing from the customer’s
perspective based on reliable quality and technology, andaim to provide safe and secure products and services.
● Upgrading quality assurance systems Page 39● Providing and disclosing appropriate information● Enhance customer satisfaction level Page 41

Page 40“TOLI quality” aims to ensure trusted quality not only at the stage where the customer uses our
products and services, but throughout the entire lifecycle from the “procurement of raw
materials,” to the “manufacturing stage at the factory,” “transportation stage from thewarehouse,” “installation stage on-site,” and “disposal stage.”In terms of quality assurance, we not only meet the quality standards stipulated by theJapanese Industrial Standards (JIS), but also utilize TOLI’s technical capabilities cultivated overmany years as a manufacturer to achieve quality standards that exceed JIS standards and
TOLI’s unique quality according to the intended use. Furthermore, we would like to refine ourtechnical capabilities so that we can realize the quality required based on the opinions andrequests of our customers, and build up the trust of our customers with reliable quality andtechnology.

TOLI quality
Stability of raw material procurement
Safety at the manufacturing stage
Quality at the transportation stage
Quality at the installation stage
Quality in use stage
Safety and environmental impact at
the disposal stage

Upgrading quality assurance systems

TOLI’s quality improvement initiatives (small group activities: PI activities)

Thoughts on enhancing the quality assurance systems

As part of our efforts to improve quality, we conduct small group
activities (PI activities: Product Innovation Activities) at our production
plants. The process managers themselves select themes that will lead

We believe it is important to appropriately and speedily reflect
customer requests and opinions in manufacturing and services basedon a quality assurance system that allows each department tocollaborate in all processes. Departmental and individual goals are set
in accordance with the president’s policy and each department’s

Quality
Actions
Guidelines

policy, and by implementing the PDCA cycle, we have improved thequality of the products and services we provide to customers. We willcontinue to sincerely promote business activities that earn the trust of
our customers by manufacturing and selling products from thecustomer’s perspective.

President’s policy

Look toward future, connect the evolution with “tomorrow’s growth.”

Senior GM of manufacturing
headquarters’ policy
Senior GM of sales
headquarters’ policy
Senior GM of administration
headquarters’ policy

Aim to maximize customer satisfaction by continuing to produce high-quality, high valueadded products.
Earn customer trust and satisfaction with our ever-evolving and detailed services.
Strive to develop our company by establishing a compliance system and cultivating
human resources.

TOLI quality assurance system chart

to improved product quality, carry out improvement activities based on
QC stories, and strive to improve “quality” and “field capabilities”.

Employee interview

Realizing a sense of unity in the field aimingfor quality improvement
Our team aimed to improve the quality of homogeneous vinyl sheets and worked on the themeof “reducing surface defects,” which were relatively common during manufacturing. Up until
now, we have focused on removing defective products that have occurred, but through PI
activities we have analyzed the causes of the occurrence, identified the causes, and come up
with countermeasures. Although there were times when things did not go as planned, we wereable to come together as a team and pool our knowledge to solve the problem and significantly
reduce the defective rate. I think the great thing about PI activities is that you can consider
causes and countermeasures from various angles, and that you can feel a sense ofaccomplishment as a team. We will continue to utilize our field capabilities in various situations
to improve quality.

Sota Takada, Carpet Tile Section, Gifu TOLI Corporation

TOLI Group ESG policy (quality) Development Division, Manufacturing Division, Quality Assurance Division
Quality Actions Guidelines

Planning Division
New product development(Design quality)

Externalorganization
ISO9001 certification
JIS certification

Product planningproposal

Product
designSales Division

Customer

Information
gathering

Needs

Sales

Use

Trial
production

We established the “QC Management Group” aimed at preventing
unauthorized tampering. Regular meetings are held centered on
Quality Assurance Division and Development Division to raiseawareness of quality risks. We help prevent unauthorized tampering bycommunicating about “risks during manufacturing,” “risks during

inspection and shipping,” “risks during product development,” etc.,
and about “legal compliance,” and evaluating risk levels. We strive tofoster a culture of sincere manufacturing by sharing each “realization”
discovered through communication and deepening awareness of theimportance of prevention.

Provision and disclosure of appropriate information

Inspection
Nonconformity

Quality Control Committee
Technical Data Committee

Management review

TOLI INTEGRATED REPORT 2023

Prevention of unauthorized tampering (QC Management Group)

Design review

Environment and Safety Committee

39

Quality Assurance
Division

Production
Production(Manufacturing quality)

Qualitymonitoring
QC management
group

Manufacturing
Division

Market Information
research
sharing

Internal audit
Internal audit

Development
Division

Investigation
and response

Inquiries

Response

Technical Data Committee

Environment and Safety Committee

The “Technical Data Committee” is an internal organization that
deliberates on whether disclosed information and data are appropriate
and easy to understand for customers, such as whether productperformance evaluation tests are conducted using test methods that
more closely reflect actual conditions. We examine various regulations,laws, and customer requests, and strive to provide easy-to-understandexpressions for installation, maintenance methods, technical data, etc.

In order to ensure that our customers can use our products safely andsecurely, the “Environment and Safety Committee” proactively obtainand share domestic and international chemical substance regulatory
information with the relevant departments. We promptly respond to
regulatory information related to products, ensuring swift incorporationand disclosure in documentation such as SDS (Safety Data Sheets)
and AIS (Article Information Sheets) as well as in promotional materials.

Requests

TOLI INTEGRATED REPORT 2023

40

ESG

ESG

QualityBusiness activities

Enhance customer satisfaction level

We will promote fair and equal business activities andaim to build better relationships of trust with all
stakeholders.

Renewal of “Real Net” information provision system for distributors
In October 2022, we implemented a major renewal of our “Real Net”
information provision service for distributors. Aimed at improving
customer convenience and work efficiency, we rebuilt the systemcentered on the enhancement of the inquiry function and the expansion

ESG policy (business activities)of the information provided. We aim to further improve customer
satisfaction by increasing the usage rate of the highly convenient “RealNet” and making improvements through user interviews.

● Supply chain management● Compliance with fair transactions

Employee interview

Experience improved work efficiency and accuracy
In the past, inquiries such as checking inventory and delivery status, making product reservations, and issuing shipping certificates were mainly done
through telephone. With the recent renewal of “Real Net”, distributors can now obtain information through “Real Net” for operations that previously
required telephone inquiries, leading to improved operational efficiency for both customers and TOLI.
Additionally, as a result of the reduction in the number of telephone calls, more time can be devoted
to order processing, which has improved the accuracy of shipping arrangement.
The use of “Real Net” has progressed greatly at Kobe Sales Office as the method of use was
explained from the perspective of order personnel and a consultation desk on how to use the system
was established. We will continue to communicate with customers and promote the use of “RealNet” from now on.
All sales floor staff at Kobe Sales Office, TOLI Corporation

Collecting and sharing information on needs and concerns
Opinions and impressions obtained through sales activities are shared
daily with management and related departments through a systemcalled the “Sales Information Sheet”. The “customer feedback”

collected by the sales department is used to plan products andimprove quality, and in FY2022, 3,752 customer comments werereflected in manufacturing.

● Number of customer feedback: 3,752 in FY2022● Main opinions: Expansion of antiviral products, enhancement of eco-friendly products, opinions and advice on installation,
evaluation of sample books, etc.

TOPICS

Creation of new designs through“technology capabilities” x “quality” x “design”

Development background of “Royal Series” Tetra, TOLI’s original design that reflects trends
We believe that what is required of a designer is an attitude of
constantly coming up with new proposals. In order to satisfy ourcustomers who look forward to the new products we release every
year, we must commercialize TOLI’s “technology” and “quality” andcontinue to propose “new designs”. Communication is important in
the design thinking that is valued by the Product Design Group,
which is responsible for design development in productdevelopment. We brainstorm various ideas, create and propose
new designs from among the many ideas. The result of close
communication was “Tetra”, a trapezoid vinyl floor tile.
The next step was to communicate closely with Technology
Division towards commercialization, and the new concept “Tetra”
was finally realized. The designers, members of the design group,

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TOLI INTEGRATED REPORT 2023

shared many ideas while asking what design could make use of thisunique shape to create the various designs of the Tetra series.

Supply chain management
As a manufacturer, we strive to provide a stable supply of products and disclose product safety information so that our customers can use TOLI productswith peace of mind. In order to gain further trust from our customers, we will manage risks both upstream and downstream in the supply chain.

Creation of a safe and secure procurement environment
Our group procures many raw materials and products to manufactureand sell. In addition to complying with domestic and international laws
and regulations, we also need to respond quickly to information on
regulated substances. In procurement activities, we identify productswith procurement risks, utilize a wide range of suppliers to obtain
substitute products, and achieve a stable supply of products throughproduct development activities.
Nylon fiber for carpet tiles was formerly procured from a major
overseas yarn manufacturer, but the supplier’s withdrawal from thebusiness resulted in a major procurement risk. At that time, we

decided to switch to domestically produced yarn and manufactureyarn in-house in an effort to ensure a stable supply of products. In the
future, we will leverage our strengths as a yarn manufacturer not onlyin terms of supply, but also in new product development andtechnological innovation. Relevant laws and regulations regarding
chemicals, which are the main raw materials of our group, are being
reviewed on a daily basis, and companies are required to raise thelevel of their responsibilities. We will quickly grasp these trends andstrive to provide products that our customers can feel at ease byswitching to safer raw materials and thorough disclosure.

Implementation of CSR procurement
Conducting a survey of business partners toward sustainable procurement activities
As part of our procurement activities that take human rights, society,and the environment into consideration, we ask our major business
partners to respond to a CSR procurement questionnaire that focuseson priority items (1) to (6) on the right.
Mutual understanding and cooperation with business partners isessential, and we will use questionnaire surveys to help avoid humanrights, social, and environmental risks in our procurement activities.

● Priority items in CSR procurement(1)
Procurement
principles

(2)

(3)

(4)

(5)

(6)

Human Employment
GlobalBusiness
Qualityrightsand labor environment activities

Compliance with fair transactions
Implementation of (Japan’s) Antimonopoly Act training
Our group’s Code of Conduct states that we will engage in fair, transparent, and free competition
and fair transactions. In particular, regarding the Antimonopoly Act (in Japan), which is an
important law related to transactions, we have held Antimonopoly Act training every year since2006 for executives employees by lawyers who specialize in the law. We promote fair businessactivities by continuously working to raise awareness about compliance with the law.

● Trainees:

Directors, Auditors, Executive Officers, Executives from sales, procurement, planning andother departments● Training themes

・2022 Points to be noted in alliances with regard to competition law
・2021 Outline of subcontracting regulations - focusing on construction industry law and regulations
・2020 Trends in antimonopoly laws and regulations in recent years and points to be noted in corporate confidentiality management

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ESG

ESG

Social contributions

Corporate governance

ESG policy (social contributions)

ESG policy (corporate governance)

Recognizing the importance of corporate ethics,
we aim to achieve sound and highly transparent
corporate management by actively promoting thecreation of systems to ensure the effectiveness ofgovernance.

We aim to contribute to the development of society bypromoting more voluntary activities toward the goal ofachieving a better society.
● Support for developing countries● Supporting and participating in local communities● Risk management Page 44● Strengthening sound governance● Thorough compliance Page 46

Support for developing countries

Risk management

Support for children in developing countries

Basic concept of risk management

LIC CO.,LTD., a sales company of the TOLI Group, is continuously
implementing initiatives that contribute to the achievement of multiple
SDGs. In May 2020, they started the “One Card, One Meal” project,
and to FY2022, had supported children in Rwanda, Tanzania, Kenya
and the Philippines with a cumulative total of 4,237 meals throughTFT*. This initiative is a unique LIC program, and is based on a system
where each “thanks card” that conveys appreciation and praise among
employees becomes a “school meal” in a developing country. Thisinitiative, in which conveying feelings of “thanks” to each other in theworkplace is linked directly to supporting the health and education ofchildren in developing countries, won second place at the TFT Awards
2021 in the “Mental and Physical Health Promotion” category.

Our group has established a “Basic Policy on Risk Management” and “Action Guidelines for Risk Management” aimed at contributing to its
sustainable development and increasing corporate value. Based on this policy and related internal regulations, we are working to grasp the various
risks that would have a significant impact on the smooth operation of business, and take countermeasures against them.

Basic Policy on
Risk Management* TFT: TABLE FOR TWO: This is a certified NPO established in 2007 to support school meal
programs and vegetable and plantation productivity improvement programs in five countries in
East Africa and Southeast Asia.

Action Guidelines
for RiskManagement

Employees send each other feelings of gratitude and praise using “thanks” cards.

Page 45

1. Fulfillment of corporate social responsibility
2. Ensuring the trust of stakeholders and society
3. Business continuity
1. If a risk materializes, we will promptly respond and recover, and take measures to prevent recurrence.
2. We will strive to protect our assets while giving due consideration to the safety and health of our executives,
employees, families, customers, and local communities.

3. Strive to prevent damage and improve risk handling capabilities through the sharing of risk information and thedevelopment of management systems.

4. Always be conscious about contributing to society and strive to improve TOLI Group’s social reputation.
Employee health promotion

The company donates one meal for each“thanks” card.

Promotion of children’s
health and improvement ofeducational opportunities
through school meals

Risk management promotion system
Board of Directors

As a result,the expansion of
futurepossibilities©TABLE FOR TWO

Supporting and participating in local communities
We actively participate in the local community through “social gatherings and social events with local people” planned and held through the “+vo!ce”*
system for employees to submit social contribution ideas.
* Social contribution idea submission system “+vo!ce”:
The “+vo!ce” system, which solicits ideas for social contribution activities from all TOLI employees, was started based on an idea of the president in autumn 2021. Based on the ideas submitted, eightsocial contribution activities including “participation in local communities” were realized in FY2022. We will continue to use the “+vo!ce” system to contribute to the achievement of the SDGs.

43

ESG Committee(Chairman)
President and Representative Director(Members) Directors (internal)(Observer) Auditors (internal)

ESG Executive Committee(Members) Officers responsible for ESG
One executive officer each frommanufacturing, sales andadministration headquarters

Person responsible forrisk management(ESG executive officer)

Person in charge ofrisk management(Division general managers,
Presidents of group manufacturingsubsidiaries and plant managers)

Determination of basic policy, etc.
Overview of risk management
Deliberations on risk evaluations,risk management plans, etc.

Risk management supervision andpromotion of initiatives
Risk management monitoring,level checking, etc.
Monitoring (supervision), level checking, etc.,
related to the risks of the headquarters
under their control

Implementation of monitoring related to risks
in the business under their jurisdiction,
preparation of response plan (draft), etc.

01 Holding of an interior experience workshop

02 Participate in “TRY-YARU week”

Cybersecurity

With the aim of letting local children
become familiar with interior, we
held a “TOLI fabric floor experience
event” at a community seminar at
Itami City Library. The children also
experienced the fun of DIY laying
carpet themselves and the fun of
thinking while playing with the “Kids
Road” educational carpet.

We participated in “TRY-YARU Week,” a weekwhere junior high school students learn from thelocal community and get hands-on activities, andin FY2022, two students from public junior highschools in Itami City visited for work experience.
The participants helped create presentation
boards used for design proposals and experienced
customer service in the showroom, giving them areal sense of the fun and meaning of work.

As the threat of cyberattacks has increased in recent years, we havestrengthened our defense capabilities by introducing systems toprevent various risks such as unauthorized access from outside thecompany, computer viruses, and spam email, as well as to restrictwebsite viewing. At the same time, we have established a system toquickly detect and respond to attacks. In addition, with the aim of* TOLI Fabric Floor is a carpet tile forresidential use.

* Experiencial activity learning sponsored by the Hyogo
Prefecture Board of Education

TOLI INTEGRATED REPORT 2023

Risk management process
Based on the belief that “implementing appropriate risk countermeasures is an
important sustainable activity”, our group promotes risk management throughthe following process.
Implementation of monitoring (once a year), risk evaluation, consideration of countermeasures
Person in charge of risk management:
Implementation of risk monitoring related to work under their control, preparation of (draft) response plans, etc.
Person responsible for risk management:
Checking the level of risk monitoring, consideration of response policies, etc.
ESG Executive Committee:
Supervision of company-wide monitoring, level checking, deliberation of items to be submitted
to the ESG Board, etc.

Determination of response policy
ESG Committee: Reviews and summarizes matters such as determining the importance andpriority of risk countermeasures, diagnosing effectiveness, and confirming
the progress of countermeasures and the results of initiatives, based on the
results of deliberations by the ESG Executive Committee.
Board of Directors: Sharing of monitoring results, determination of response policies, etc.

Implementation of risk countermeasuresraising the awareness of each and every employee, we haveestablished an “Information Security Policy” and “10 Information
Security Measures,” and are working to disseminate them throughregular compliance checks and distribution of cyber risk information (ITNewsletter). In FY2022, we began “targeted attack email training” andare working to improve the IT literacy of our employees.

● Targeted attack e-mail training Implemented for 861 employees in FY2022● IT newsletter FY2022 themes: A total of 6 distributions including Emotet threats,
fake security alert threats, ransomware threats, etc.

TOLI INTEGRATED REPORT 2023

44

ESG

Corporate governance

Strengthening sound governanceAnalysis and evaluation of the effectiveness of the Board of Directors

Basic approach to corporate governance

To improve the functioning of the Board of Directors further, weanalyze and evaluate the effectiveness of the board of directors as awhole annually, based on the opinions of outside officers. This is done
through discussions at the Board of Directors’ meeting on thecomposition and operation of each director, including the self-

We have positioned the strengthening of corporate governance as a key management issue for sustainable growth and the improvement of medium
to long-term corporate value, and are working on the enhancement of corporate governance in line with the following basic approach.

evaluation of each individual director. In addition, we also expect
outside directors to assess the appropriateness, etc., of the group’s
management decisions and business execution from an objective
perspective and express their views.

Summary of analysis and evaluation results

1. We will respect the rights of our shareholders, ensure their equality, and strive to create an environment in which they can exercise their rights

appropriately.
2. We will strive for appropriate cooperation with various stakeholders, including customers, employees, and local communities.
3. We will strive to ensure management transparency through appropriate information disclosure (including non-financial information) and dialogue withshareholders.
4. We will strive to improve the effectiveness of corporate governance by clarifying the roles and responsibilities of the Board of Directors and Audit &Supervisory Board Members (Board of Auditors), and by utilizing highly independent outside officers.

IssuesPromoting understanding of ourbusiness by outside directors

Initiatives● Enhancement of meeting materials for the Board of Directors and thoroughdistribution in advance● Preliminary deliberation of important measures and risk issues● Setting opportunities for periodic discussion of company-wide issues, etc.

Activities status of Outside Directors

Corporate governance structure

Position

We have established the following structure aimed at building a management organization that can balance the speeding up of management and thestrengthening of audit and control functions.

Corporate governance structure (as of the end of June 2023)

InsideOutsideOutside Director

Name

Activity status

Eri Yokota

We expect her to play a role in reflecting her deep insight and wide-ranging experience as a university professor in the
management of our company. In order to fulfill this role, the director attended all 16 Board of Directors meetings held
in FY2022, and provided advice and recommendations regarding the Company’s overall management from an
objective and professional perspective as a university professor. In addition to actively implementing these measures,
she also strives to supervise management.

Outside Director Chikako Sekine

We expect her to play a role in reflecting her extensive experience and wide-ranging insight as a corporate manager
and outside director of other companies in the management of the Company. In order to fulfill this role, the director
attended all 16 Board of Directors meetings held in FY2022, and actively provided advice and recommendations
regarding the Company’s overall management from a multifaceted perspective based on her diverse background. In
addition to actively implementing these measures, she also strives to supervise management.

Outside Director Hidenobu Fujii

We expect him to play a role in reflecting his extensive experience and wide-ranging insight in corporate management
into the management of our company. In order to fulfill this role, the Director attended all 16 Board of Directors
meetings held in FY2022, and provided advice and recommendations regarding the Company’s overall managementfrom the perspective cultivated as a corporate manager. In addition to actively implementing these measures, he also
strives to supervise management.

Shareholders Meeting
Appointment/dismissal

Appointment/dismissal

Board of Directors
6 personsNomination and Compensation Committee
5 people
ReportAudit

50 % 50 %50 % 50 %* % of female:approx. 33%

Management Meeting
6 persons

60%

40%

(*) In addition to the committee members,
2 outside auditors attend as observers.

45

Operational
Departments

Board of Directors

Board of Auditors

The Board of Directors currently consists ofsix directors (including three outside
directors), who make decisions on importantmatters related to management andbusiness execution, and supervises the stateof business execution through reports, etc.,
by each managing director (excluding
outside directors) on the status of businessexecution and matters deemed necessary
by the Board of Directors.

The Board of Auditors currently consists offour auditors (including two outside auditors),
and audits the execution of duties by the
directors from an objective and independent
standpoint in order to contribute to thesound and sustainable management of thecompany. In addition, it also makes
decisions on auditing policies, investigates
into the state of the company’s business andassets, and other matters related to the
execution of duties by the auditors.

TOLI INTEGRATED REPORT 2023

Accounting Auditor

Audit

Audit
Department

Details of the activities of the Nomination and Compensation Committee
The Nomination and Compensation Committee has been established and operated as an advisory body to the Board of Directors to enhance thetransparency and objectivity of the decision-making process regarding matters related to the nomination and compensation systems, where
meetings are held whenever required.

● Specific agenda

Appointment/dismissal

Representative
Director

Executive
Officers
Committee of
Executive Officers

Appointment/dismissal

Board of Auditors
4 persons・Composition of board members, expected business field to each director, skill matrix, etc.
・Policies for the election and retirement of directors, executive officers and corporate auditors, and proposals for each candidate(including reappointment)
・Appointment and removal of executive officers (directors and executive officers)
・Succession plan of the representative director and the president (Successor Plan)
・Items related to the compensation system for the board members and executive officers (including, but not limited to, thecomposition, individual compensation, evaluation method, bonus amount, calculation standards, etc.)

Thorough compliance
In order to foster a culture of compliance, it is important for each officer and employee to understand and raise their awareness, so we are actively
working to educate and disseminate awareness among officers and employees, including the initiatives listed below.

Nomination andCompensation Committee
The Nomination and Compensation
Committee currently consists of five directors
and auditors, and as an advisory body to theBoard of Directors, it deliberates on theappropriateness of matters related to officer
nominations and compensation, and reports
to the Board of Directors. In order to ensuretransparency and objectivity, the majority ofthis committee is comprised of independent
outside directors.

Dissemination and thoroughimplementation of the Code of Conduct

Establishment andoperation of hotline

Planning and implementationof various training programs

We have established the “TOLI Group
Code of Behavior” and the “TOLI Group
Code of Conduct” as a basis for fosteringcommon values among officers andemployees, and are required to distributeand carry a pamphlet containing theabove. We are working to disseminate thisinformation through measures such as
conducting annual readings.

We have established and operate the “TOLIGroup Hotline (whistleblower hotline)” for the
early detection and correction of legal violations
etc. By setting up internal and external (lawyers)
contact points, we will take into account theconvenience of whistleblowers, as well as
stipulate confidentiality and prohibition ofdisadvantageous treatment of informants in ourinternal regulations and code of conduct, andensure that these policies are implemented
thoroughly. Through this, we aim to protect
whistleblowers.

We strive to promote and enforce
compliance awareness among our officers
and the sales department throughantimonopoly law training sessions
targeting executives and department
heads. Additionally, we conduct
compliance training sessions structured
according to hierarchy, specifically for
newly appointed positions and new
employees. Through these initiatives, we
aim to raise and instill a strong culture ofcompliance among our staff.

TOLI INTEGRATED REPORT 2023

46

ESG

Board of Directors and Auditors

Director

MOTOHIRO NAGASHIMA,
President and Representative Director
April 1982 Joined the Company
April 2003 General Manager of Corporate
Planning Department
June 2007 Executive Officer,
General Manager of Management
Planning Department andHuman Resource Department
June 2008 Director of the Company
April 2009 Director,
Sales Senior General Manager
April 2012 President and Representative
Director (current position)

MASAYUKI HASHIMOTO,
Director and Managing Executive Officer
April 1983 Joined Nissho Iwai Corporation(now: Sojitz Corporation)
April 2009 General manager, Osaka Chemicals
Department, Chemicals Unit, Sojitz
Corporation
April 2016 Vice COO, Chemicals Division,
Sojitz Corporation
April 2018 Full-time Advisor of the Company
June 2018 Director of the Company
April 2019 Director, General Manager of
Global Department
April 2021 Director and Managing Executive
Officer, General Manager, Global
Department
April 2023 Director and Managing Executive
Officer, responsible for Global
Department and Climate Change
Response Project Manager(current position)

CHIKAKO SEKINE,
Outside Director
April 1972 Joined Shiseido Yamagata Sales
Co., Ltd.
April 2012 Executive Officer,
Shiseido Company, Limited
April 2014 Managing Executive Officer,
Shiseido Company, Limited
January 2016 Corporate Advisor,
Shiseido Company, Limited
February 2016 Outside Director,
E-SUPPORTLINK, Ltd.
February 2018 Representative Director,
B-mind Co., Ltd. (current position)
June 2018 Outside Director, NIPPON VALQUA
INDUSTRIES (Now: VALQUA Ltd.)(current position)
May 2019 Outside Director,
FamilyMart UNY Holdings Co., Ltd.
(the current FamilyMart Co., Ltd.)
August 2019 Outside Director, Takara Printing
Co., Ltd (now: TAKARA &COMPANY LTD.) (current position)
June 2021 Director of the Company(current position)

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TOLI INTEGRATED REPORT 2023

Auditors

HIROFUMI AMANO,
Director and Senior Managing Executive Officer
April 1984 Joined the Company
April 2005 General Manager of Planning andPromoting Division
April 2009 General Manager of Planning andMarketing Department
April 2011 General Manager of Floor
Development Department
April 2012 Executive Officer,
General Manager of
Floor Development Department
June 2015 Director of the Company
April 2016 Director, Senior General Manager of
Manufacturing Headquarters
April 2018 Managing Director,
Senior General Manager of
Manufacturing Headquarters
April 2021 Director and Senior Managing
Executive Officer, Senior General
Manager of Manufacturing
headquarters (current position)

ERI YOKOTA,
Outside Director
February 1997 Obtained a Ph.D. in Business
Administration from Keio University
April 2005 Appointed as a professor of Facultyof Business and Commerce,Keio
University (current position)
June 2014 Director of the Company(current position)
June 2014 Outside Director,
Idemitsu Kosan Co., Ltd.
June 2023 Outside Auditor, STANLEYELECTRIC CO., LTD.
(current position)

HIDENOBU FUJII,
Outside Director
April 1979 Joined The Sanwa Bank, Limited.
June 2006 Executive Officer,
The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (now: MUFG Bank, Ltd.)May 2009 Managing Executive Officer,
The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (now: MUFG Bank, Ltd.)
June 2010 Member of the Board of Directors,
Managing Director, The Bank ofTokyo-Mitsubishi UFJ, Ltd.
(now: MUFG Bank, Ltd.)
June 2013 President and Representative
Director, Mitsubishi UFJ Researchand Consulting Co., Ltd.
June 2017 Director and Vice Chairman,
Hitachi Zosen Corporation
June 2021 Director of the Company(current position)
August 2021 Outside Auditor,
NAKAKITA SEISAKUSHO Co.,Ltd.
(current position)

JUN SUZUKI,
Full-time Auditor

WATARU MATSUMOTO,
Full-time Auditor

April 1980 Joined the Company
July 2001 General Manager,
Promotion of IT Department
April 2007 General Manager, Accounting and
Finance Department
April 2009 Executive Officer,
Deputy General Manager of
Administration Headquarters
June 2011 Director, Deputy Senior Genaral
Manager of Administration
Headquarters
April 2013 Director, Senior General Manager of
Administration Headquarters
April 2015 Managing Director,
Senior General Manager of
Administration Headquarters
April 2018 Senior Managing Director,
Senior General Manager of
Administration Headquarters
April 2021 Director, Assistant to the President
June 2021 Auditor (current position)

April 1980 Joined the Company
April 2003 General Manager,
Accounting Department
April 2005 General Manager for Chubu Area
December 2006 President and Representative
Director, DIA CARPET Co., Ltd.
April 2010 Executive Officer, General Manager,
Management Planning Department
and General Manager, General
Affairs and Personnel Department
June 2011 Director of the Company
April 2012 Director, Senior General Manager,
Sales Headquarters
April 2015 President and Representative
Director, LIC Co., Ltd.
April 2022 Chairman and Representative
Director, LIC Co., Ltd.
April 2023 Chairman and Director, LIC Co., Ltd.
June 2023 Auditor (current position)

TAKU MORIKAWA,
Outside Auditor

TERUO WATANUMA,
Outside Auditor

October 2001 Lawyer Registration
February 2005 Principal, Masahiko Takimoto Law
Office (now: Hyogo Law Office)(current position)
June 2015 Auditor (current position)

August 1984 Certified Public Accountant
Registration
June 2005 Representative Partner,
KPMG AZSA (now: KPMG AZSA
LLC)
October 2016 Representative,
Watanuma CPA Firm
(current position)
January 2018 Outside Auditor,
Teijin Frontier Co., Ltd.
(current position)
June 2019 Auditor (current position)■ Skill matrix◎：Areas of high expectation ○：Areas of expectation
Corporate
management

Manufacturing
Innovationand technology Research andManagement
Quality control development
strategy

MOTOHIRO NAGASHIMA◎HIROFUMI AMANO○

MASAYUKI HASHIMOTO○ERI YOKOTA○

CHIKAKO SEKINE○

HIDENOBU FUJII◎JUN SUZUKI○WATARU MATSUMOTO

○

◎

Sales

Finance

Marketing◎

Personnel

Accounting

GlobalRiskmanagement

ESG

○

○

○

○

○

◎
○
◎
◎
○
○
○

Legal affairsHRdevelopment

○
○

○
○

○

○

TERUO WATANUMA

◎

○

○
○
○

○

◎
○

○

TAKU MORIKAWA

○

○
○

○
○
◎
○

TOLI INTEGRATED REPORT 2023

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Roundtable Discussion by Outside Directors
An established governance framework andfully thought out business plans
Q. How do you evaluate the company’s governance framework?
Fujii: TOLI has a corporate culture of seriously tackling various issues.
There are no major concerns regarding the governance structure. As
for what I’m a little concerned about, I feel that there will be a need forfurther management and control in terms of group-wide governanceand global expansion.

Outside Director

Outside Director

Outside Director

Chikako Sekine

Eri Yokota

Hidenobu Fujii

Tradition and history, and taking on challenges for the future
Toward further development of the TOLI brandWe asked three outside directors, who are responsible for TOLI’s governance, to speak from a variety of perspectives on
the theme of how TOLI Group should develop for the future, based on its history and current situation.

Board of Directors meetings where themes areactively discussed
Q. How do you feel about the atmosphere of the company’s
Board of Directors?
Sekine: I am also an outside director at other companies, but in
TOLI’s case, rather than concluding matters after seeking the opinionsof the outside directors, questions and opinions are also raised
actively by the directors and auditors. The Board of Directors also
serves as the forum for final decisions on matters that have alreadybeen approved during Management Meeting, and we evaluate
matters that need to be discussed further.
Fujii: This is my second year in office, and my understanding ofvarious things has deepened because we are able to get accurate
answers to the questions and confirmation we ask as outside
directors. I have no major concerns or anxieties about the operationof the Board of Directors. Management Meeting materials are stored
in a shared file for officers, and we can confirm the deliberation
process in advance.
Yokota: The current Board of Directors meetings are taking up moretime than when I first took office. I feel that the discussions havebecome more lively and fruitful.
Fujii: On the other hand, if I had to go into detail, I would say that theagenda should be a little more selective. There are many agendas,some of which are formal reports or administrative matters that do not
require much discussion. For example, it would be a good idea todelegate the authority to approve agenda items related to internalbusiness execution to a meeting other than the board of directors,
and have the board of directors focus on issues such as management
policy and business portfolio. If necessary, discussions may be held
off-site in advance.

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TOLI INTEGRATED REPORT 2023

Sekine: That’s right. It would be good if we could organize theagenda a little more, take a broader view of what is important tomanagement, and focus our time on the agenda items that we should
monitor. If our role is to supervise management, I think it is importantthat we should discuss how the management thinks about increasing
corporate value, what the progress is, and what the differences arewhen things are going well and when they are not.
Yokota: It may be time to reconsider the content of board meetingsand discussions. I believe that some of the agenda that have been
generally decided by the management meeting but have not yet beenreported to the board of directors have implications for TOLI’s future. I
think it is important to discuss such agenda items further and returnthem to management.
Q. What topics should be discussed at the Board of Directors
meetings in the future?
Fujii: This year, we have been provided with a monthly list of annual
themes for the Board of Directors. This made it easier to prepare foragenda items. For example, recently, contributions to the environment
and the field of DX have been highlighted. It may be difficult to discussmatters such as compliance and risk management without specificexamples, but it would be nice to have regular reports on the status
of initiatives.
Sekine: The themes of governance structure and human resource
development are also important. Firstly, it would be a good idea forthe company to come up with what they think is an issue, and thenexchange opinions from various angles during the board of directors
meeting.

Sekine: As Mr. Fujii said, TOLI is a company with a sincere attitude. I
believe that the governance system is in place, with various risks
being discussed during board meetings. What I think the company
should do in the future is to create a system to prevent scandals fromoccurring in the field, and to promptly report them to top management
when they occur. We can monitor things that have occurred, but wecannot be involved in things that have not yet manifested. How can
we create a system that brings latent risks to the surface? I think thisis important for further strengthening governance.
Yokota: TOLI has many subsidiaries, so it is important to be aware of
the risks of the TOLI Group as a whole, and President Nagashima
also makes an effort to obtain information himself. We can see himtrying to learn about the field in various ways.
Q. Please give us your opinion on the content and approach of
our Medium- to Long-Term Business Plan.
Fujii: Regarding business plans, TOLI has a Long-Term Vision called<TOLI VISION 2030> and a Mid-Term Business Plan called “SHINKA
Plus ONE”, under which five key strategies and 11 initiatives are laidout. I think it’s a very well organized plan.

Sekine: That’s true. People work dilligently and take pride in theirwork and pass down the duties. In addition, there is a spirit of taking
on challenges that does not allow us to be contented with our position
as a long-established company. I once had the opportunity to speakwith young employees of TOLI, and I felt that within a company with along history, they were determined to continue to connect history to
the future and create new value. I believe that by matching tradition
with the challenge of the future, TOLI brand will move to the nextstage.
Fujii: While the company has many good points, but there is also aweakness, which may be that it is conservative. To put it harshly, thecompany’s culture of being serious, down-to-earth, and sincere canlead to a rigid constitution. This may be a future issue.
Yokota: However, I think it also has the ability to respond quickly
without being constrained by the past when it is necessary. As an
example, when the world was not yet used to online meetings during
the COVID-19 pandemic, TOLI started online meetings at an earlystage. I think the company has the attitude of not being bound by
precedent.

Yokota: Yes. It is important that this Long-Term Vision and Mid-TermBusiness Plan are shared with employees in the field. In particular, I
would like to focus on implementing the Mid-Term Business Plan.
Sekine: Due to changes in the environment, progress in capital
investment has been delayed, and the period of the Mid-TermBusiness Plan has been extended by one year. The causes are clear,and information on issues and progress is also being properly shared.
I think this is a promotion system that is down to earth.
Fujii: TOLI has a history of over 100 years, and discussions areunderway for the next 100 years. More themes will likely be added in
the future as new social issues emerge.

A company culture that values people andthe basic policy on work styles
Q. Could you please tell us your opinions on
the company’s use of human capital?

Q. What are the company’s strengths from the perspective ofan outside director?

Sekine: As I mentioned earlier, TOLI has a corporate culture thatvalues people.
​​
A concrete example of this is the “TOLI Work Style”
basic policy established in 2019. It consists of three elements:“Creating an environment in which all employees are healthy both
physically and mentally and able to engage in work actively”, “Aim forthe enhancement of work-life balance and improve productivity”,
using the “spirit of co-creation” between the company’s organizationand employees as a driving force”. It has been four years since thepolicy was enacted, so as an outside director, I would like to see ifthese policies are understood, how they are being implemented, andwhether employees’ work environment and productivity have
improved as a result.

Fujii: TOLI has many strengths. Firstly, we are a manufacturing
company. We have steadily improved our technology and quality, andhave taken time to cultivate strong relationships with our customers.
The value chain is well established, starting with research anddevelopment technology, and includes product planning toprocurement, manufacturing, sales, logistics, and after-sales followup. I want the company to be self-confident.

Fujii: There is no silver bullet for utilizing human capital. People are agreat intangible asset, so it is important to face them properly andrespond accordingly. I hope they will develop our people by changing
recruitment, personnel systems, work environment, etc. to be in linewith or ahead of times. I would like to see the Board of Directors
continue to report on systematic human resource development andimprovements in employee work engagement.

TOLI’s strengths, cultivated by the tradition andhistory of more than 100 years

Yokota: For example, many companies are now taking steps toaddress environmental issues, but TOLI has already been working on
recycling for quite some time. And they don’t even try to promote it. I
admire this sincere approach, looking at what’s important and doing
what needs to be done, rather than trying to use it to promote thecompany.

TOLI INTEGRATED REPORT 2023

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DATA

Roundtable Discussion by Outside Directors

Financial/Non-Financial data
(FY)

Yokota: I think the company is currently at the stage where they arecompiling past achievements and ideas and organizing them in order
to disseminate them to the outside world. TOLI is a company that has
demonstrated its strength in the domestic field in Japan. There may
be some trial and error and difficulties in deciding how to approachhiring foreigners and expanding globally. Regarding diversity, althoughmany women are active in design-related departments, there are still
fewer women in management positions. I think one of our challenges
going forward will be to develop women’s management skills.

can we fight against this situation with a strategy that is
unconventional? In the future, we will likely need to review ourbusiness portfolio through M&A or separation. I would like toparticipate in such discussions and share my advice and thoughts.

Fujii: Utilizing young employees is also an issue. It is a common trend
in today’s world for young employees to leave the company after arelatively short cycle, but it is important to hire people with as muchawareness of their strengths as possible and utilize them within thecompany. It must also change the personnel system based on job
description in response to that.

Yokota: Communication after joining the company is also important. I
have had the opportunity to visit factories and other sites, and I feelthat the management and the people working there are very close.
There are many opportunities for communication, and they
communicate their thoughts while understanding each other’s
positions.

Proactively provide strategic opinions tomanagement
Q. How will you be involved in the management of the company
as an outside director from now on?
Fujii: The mission of outside directors is to supervise and monitor
corporate management. It would be great if this led to an increase incorporate value. Although the domestic market size is not expected
to expand much in the future, TOLI has a large market share. How

2019

2020

2021

2022

410
15
18
377
319
12
7
12
3
23
1

Environmental indicators
Greenhouse gas emissions
CO2 emissions(1,000t-CO2)

486

442

Scope 1

(1,000t-CO2)

14

15

Scope 2

(1,000t-CO2)

18

19

Scope 3

(1,000t-CO2)

453

408

Category 1 (purchased products, services)(1,000t-CO2)

399

348

Category 2 (capital goods)(1,000t-CO2)

6

10

Category 3 (energy-related activities)(1,000t-CO2)

7

7

Category 4 (transport, delivery: upstream)(1,000t-CO2)

13

13

Category 5 (waste from business)(1,000t-CO2)

3

4

Category 12 (disposal of sold products)(1,000t-CO2)

24

25

Others(1,000t-CO2)

1

1

Industrial waste

Yokota: It would be great if there is a way to draw out the talent andmotivation of young employees and guide those who are working
hard. The company should create a system to accommodate people
who wants to maintain a balance between work and life, while at thesame time showing them the appeal of work. Fortunately, TOLI has avariety of departments, so we have the environment to accept them.
Sekine: The company needs to create a system where people whojoin the company can envision their own dreams and thoughts. If
personal growth and company growth are parallel, it is attractive thatyou can find what you want to do and learn the skills within TOLI. It
would be great if the company can provide opportunities for
employees to voluntarily learn skills and demonstrate their abilities
within the integrated business operations from research anddevelopment to sales.

2018(1,000 tons)

4.9

5.6

4.6

5.6

(%)

75.6

71.7

75.3

73.0

4.4
79.8

(x 1,000GJ)

693

699

712

756

757

Water consumption(10,000 m3)

90.0

91.1

85.7

88.8

Amount of wastewater(10,000 m3)

54.7

52.6

45.9

49.0

92.3
44.7

Amount of industrial waste
Recycling rate
EnergyEnergy consumption
Water resources

Sekine: Perhaps TOLI’s company culture has been around for a longtime, but they place great importance on relationships with people. It
is easy to communicate with the president, directors, and executive
officers. Because of this corporate culture, I am able to makejudgments from a neutral standpoint and express my opinions frankly
as an outside director. I have experience in a company with a similarbusiness process to TOLI’s, so I would like to use the knowledge I
have gained from that experience to ask questions, paying close
attention to any small differences. In this way, I hope to contribute toincreasing TOLI’s corporate value.
Fujii: As Ms. Sekine said, I feel that TOLI is an organization with goodcommunication. On the other hand, it is also important to clearly pointout and confirm with each other what is not being done.
Communication is done through friendly and mutual competition. I
think that in this area, TOLI relies a lot on the lead from the top
management. In the future, I would like to see more communication
within each department. I also believe that the role of an outside
director is to be involved in personnel affairs at the management level.
If there are any issues that are difficult for management to express ontheir own, such as methods of evaluating management, treatment
and incentives for executives, and mechanisms for motivating them, I
will also speak out.
Yokota: What I am conscious of is to ask frankly whenever I have any
questions. What is common sense to people who have been in thecompany for a long time may not be common sense to those outside
the company. As Mr. Fujii said, outside directors are in a position to
say things that are difficult to say to the president and top
management, so I try to convey opinions even if they seem to go
against the wishes of top management.
Fujii: The future of the company will require both the ability to protect
tradition and trust, and the ability to take on new challenges. I havehigh hopes for the power of young people.

Supplementary explanation on the calculation of environmental indicators■ In the calculation of CO2 emissions
・Calculated based on “Basic Guidelines for Calculating Greenhouse Gas Emissions Throughout
Supply Chain (Ver. 2.4)” by the Ministry of Environment and the Ministry of Economy, Trade andIndustry in Japan.
・Transport between factories and warehouses within our group, and cargo handling, storage,
and transportation at outsourced warehouses associated with shipments were calculated as
Category 4 of Scope 3 in accordance with the Ministry of Environment’s guidelines.
・Scope 3 is calculated based on business activities related to products sold by TOLI. Purchases
and sales from other companies by TOLI Group’s sales companies are not included in thecalculation.
・We are continually reviewing CO2 emissions in an effort to improve the accuracy of ourcalculations. The figures may differ from past disclosures.
Category 1: Emissions associated with the production activities of the raw materials, parts,
containers and packaging for purchased products and services
Category 2: Emissions associated with the building and manufacture of
the company’s capital goods
Category 3: Activities related to fuel and energy consumption not included in Scope 1.2(emissions associated with upstream processes such as procured fuel and electricity)

Category 4: Emissions associated with the logistics (transportation, cargo handling, storage) ofproducts and services purchased in the reporting year from suppliers to thecompany, and emissions associated with other logistics services (emissions
associated with logistics carried out at the company’s expense)
Category 5: Emissions from transporting and processing waste generated in-house
Category 12: Emissions associated with disposal of products by users■ In calculating the amount of industrial waste discharged
・Parties involved: Headquarters, Itami factory, Atsugi factory, Hiroka TOLI Floor, Shiga TOLI,
Shiga TOLI Itami Office, Gifu TOLI, Santen TOLI, TOLI OFUROKE (*), TOLI Interior Planning,
TOLI Warehouse and Distribution Company■ In calculating energy consumption
・Parties involved: Headquarters, sales offices, Itami factory, Atsugi factory, TOLI Warehouse andDistribution Company, and other group companies■ In calculating water consumption and the volume of wastewater・Parties involved: Headquarters, Itami factory, Atsugi factory, Hiroka TOLI Floor, Shiga TOLI,
Shiga TOLI Itami Office, Gifu TOLI, Santen TOLI, TOLI OFUROKE (*)(*) Currently TOLI Interior Service Co., Ltd.

Environmental accounting
Environmental conservation costs(million yen)Classification

FY2021Main initiatives

Expenses

Operational area costs
Introduction and maintenance of pollution
prevention equipment(1)
Breakdown (1)-2 Global environmental conservation costs Introduction and maintenance of energy-saving
equipment(1)-1 Pollution prevention costs

FY2022

Investment

423

68

135

17

48

51
0
0

(2) Upstream/downstream costs

Eco Mark usage fees

2409(3) Administrative costs

Maintenance of environmental management
systems and planting management300(4) R&D costs(5) Social activity cost(6) Environmental remediation costs

Develop green products

81
0
1
544

129
0
0
197

(1)-3 Resources recycling costs

Recycling, waste disposal, and pre-cuttingーPollution load levy (air)Total

Effect of environmental conservation
Effectiveness Metrics

FY2022(x 1,000GJ)

717.0(Thousand tons)

32.1

Amount of industrial waste *1 (Thousand tons)

5.9

Recycling rate *1

72.7

723.2
30.9
4.7
78.8

CO2 emissions

*1

(%)

Investment

390
130

293
31

48
212
13
42
123
0
1
569

35
227
0
0
7
0
0
300

Economic effect by environmental conservation
FY2021

Energy consumption *1

Expenses*1 Pages 6, 9, 10, 31, 52 The values differ from those in the upper graph andtable because the scope of aggregation is partially different.

Effectiveness Metrics
Revenue *2 Revenue from sale of valuables
Energy cost reduction

Cost
reduction *3 Reduction of expenses for industrial waste
treatment or disposal

Total(million yen)

FY2021

FY202242.5(171.6)6.8(446.4)30.1(409.5)(24.6)(153.7)*2 Estimated cost when disposing valuables + actual revenue*3 Year-on-year differences in actual figures (+: reduced expenses, -: increased expenses)

Parties involved: Headquarters, Sales Offices, Itami factory, Atsugi factory, Hiroka TOLI Floor, Shiga TOLI, Shiga TOLI Itami Office, Gifu TOLI, Santen TOLI, TOLI OFUROKE (*), TOLI Interior Planning, TOLI Warehouse and Distribution Company
Referred guideline: Environmental Accounting Guideline 2005 edition (Ministry of Environment) (*) Currently TOLI Interior Service Co., Ltd.

51TOLI INTEGRATED REPORT 2023

TOLI INTEGRATED REPORT 2023

52

DATA

Financial/Non-Financial data
(FY)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

95,230
3,531
3,640
2,562
2,340
3,175
692

Management performance
Net sales (consolidated)(million yen)

84,912

89,70790,806

91,84091,46691,29190,35594,70185,931

88,513Operating income (consolidated)(million yen)

1,931

2,552

3,152

3,825

4,249

3,522

1,991

2,382

1,595

878

Ordinary income (consolidated)(million yen)

1,923

2,633

3,281

3,907

4,367

3,681

2,243

2,639

2,026

1,244

Profit attributable to owners of parent company (consolidated) (million yen)

1,038

1,339

1,978

2,420

3,031

2,479

1,345

2,059

1,386

720

Depreciation (consolidated)(million yen)

1,235

1,230

1,236

1,276

1,302

1,431

1,634

1,921

1,954

2,167

Capital investment (consolidated)(million yen)

1,245

1,064

2,910

2,400

1,879

2,685

3,094

2,383

3,064

3,805

R&D expenses (consolidated)(million yen)

505

452

521

611

588

708

599

654

655

666

Total assets (consolidated)(million yen)

66,94768,80072,04972,92375,49877,70377,65478,36976,817

79,982

Net assets (consolidated)(million yen)

25,57526,043

28,68130,32333,55535,89436,04236,36338,08738,285Equity capital (consolidated)

Financial situation(million yen)

25,36925,93628,56130,16233,37635,70335,83336,12437,82538,013Equity ratio (consolidated)

(%)

37.9

37.7

39.6

41.4

44.2

45.9

46.1

46.1

49.2

47.5

DE ratio (interest-bearing debt/equity) (consolidated)

(%)

39.3

38.0

33.1

30.7

26.8

24.6

24.4

24.4

23.1

23.5

Cash flows from operating activities (consolidated)(million yen)

1,740

4,000

3,324

4,426

5,187

2,668

2,321

5,095

4,161

4,962

Cash flows from investing activities (consolidated)(million yen)

(701)

(1,283)(1,671)(2,571)(2,254)(2,690)(2,575)(1,190)(3,106)(4,016)

Cash flows from financing activities (consolidated)(million yen)(812)

(1,152)(1,207)(1,145)(1,547)(1,231)(1,187)(1,486)(987)(1,060)Free cash flow (operating CF - investment CF) (consolidated) (million yen)

1,038

2,716

1,652

1,854

2,933

(22)

(253)

3,905

1,054

945

Cash and cash equivalents at end of year (consolidated)(million yen)

6,218

7,792

8,276

8,955

10,353

9,176

7,749

10,155

10,268

10,189(1,000 shares)

66,82966,82966,82966,82966,82966,82966,82966,82966,82966,829Dividend per share

(yen)

5.00

5.00

7.00

9.00

10.00

10.00

10.00

13.00

8.00

8.00

Dividend payout ratio (consolidated)

(%)

29.9

23.2

21.8

22.9

20.4

24.9

45.8

38.8

35.3

67.9

DOE (consolidated)

(%)

1.3

1.2

1.6

1.9

1.9

1.8

1.7

2.2

1.3

1.3

Net assets per share (consolidated)(yen)

407.77420.29462.90488.92541.03578.76580.88590.38618.20630.05

Profit per share (consolidated)

(yen)

16.70

21.55

32.07

39.23

49.14

40.20

21.81

33.49

22.66

11.79

ROA (consolidated)

(%)

2.9

3.9

4.7

5.4

5.9

4.8

2.9

3.4

2.6

1.6

ROE (consolidated)

(%)

4.2

5.2

7.3

8.2

9.5

7.2

3.8

5.7

3.8

1.9

84,79140,894
40,613
47.9
22.2

Cash flows

3,599(3,275)
(934)
323
9,587

Stock information
Total number of issued shares

66,829
10.00
23.5
1.5

Per-share data

674.8042.57

Management indicators

ROIC (consolidated)
EBITDA (consolidated)

(%)

3.1

3.9

5.3

6.7

7.4

5.7

3.1

3.7

2.4

1.3

(million yen)

3,265

3,614

4,606

5,052

5,736

5,140

3,740

5,059

4,086

3,832

4.4
6.5
5.1
6,199

* The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) has been applied since the beginning of FY2021.

(FY)

2018

2019

2020

2021

2022

Number of employees (consolidated)(people)

1,833

1,849

1,869

1,874

1,856

Number of employees (non-consolidated)(people)876[234]874[234]883[245]885[256]882[268]

Social indicators[ ] indicates the number of female employees

(%)

26.7

26.8

27.7

28.9

(people)

9

9

8

11

(%)

8.3

8.3

7.1

9.6

Average age (non-consolidated)(years)

40.8

41.1

41.7

41.7

Average length of service (non-consolidated)(years)

16.1

16.1

16.5

16.5

30.4
9
8.1
42.2
16.7

Number of new graduates hired (non-consolidated)(people)32[13]

30[12]

27[14]

34[13]

27[5]Turnover rate (non-consolidated)

(%)

2.3

5.2

2.6

3.5

Maternity leave acquisition rate (non-consolidated)

(%)

100

100

100

100

4.2
100
71.4
100
2.1

Female employee ratio (non-consolidated)
Number of female managers (non-consolidated)
Ratio of female managers (non-consolidated)[ ] indicates the number of female new graduate employees

Paternity leave acquisition rate (non-consolidated)

(%)

0.0

0.0

14.7

6.9

Rate of returning to work after taking childcare leave (non-consolidated)

(%)

100

100

100

100

Employment rate of people with disabilities (non-consolidated)

(%)

2.1

1.9

1.9

1.9

* The number of non-consolidated employees excludes employees seconded to TOLI Group companies and part-time employees. In addition, it includes employees seconded from group companies to TOLI.
* Childcare Leave: Long-term and short-term childcare leave

53

TOLI INTEGRATED REPORT 2023

Company Profile and Stock Information
Company information

Stock information

Company nameTOLI Corporation

Ordinary General Meeting of
Shareholders

June every year

Founding

1st December 1919

Capital6,855 million yen

Shareholder register
administrator

Mitsubishi UFJ Trust and Banking Corporation,
Osaka Securities Agency Division

Fiscal year

April 1 each year to March 31 the following year

Number of shares per unit

100 shares
141,603,000 shares (as of March 31, 2023)

Head Office

5-125, Higashi-Arioka, Itami City, Hyogo Prefecture, Japan

Total number ofauthorized shares

Tokyo Headquarters

2-10-4 Higashishimbashi, Minato-ku, Tokyo

Total number of issued shares

66,829,249 shares (as of March 31, 2023)

Factories

Itami, Atsugi

Listed stock exchangeTokyo Stock Exchange, Standard Market*

Showrooms

Sapporo, Tokyo, Nagoya, Osaka, Okayama, Takamatsu,
FukuokaSecurities code

7971

Sales Offices

Sapporo, Sendai, Morioka, Koriyama, Niigata, Nagano,
Tokyo, Omiya, Chiba, Mito, Hachioji, Yokohama, Nagoya,Shizuoka, Kanazawa, Osaka, Kyoto, Kobe, Okayama,
Hiroshima, Takamatsu, Matsuyama, Fukuoka, Kitakyushu,
Kagoshima, Okinawa, Singapore* The company applied to the Tokyo Stock Exchange on August 23, 2023 to be shifted to thestandard market. The market classification change to Standard Market took place on October
20, 2023.

TOLI INTEGRATED REPORT 2023

54