CSR Activities for the Future
To become a sustainable company while fostering and expanding a broader range of CSR activities, we began compiling a
CSR activity roadmap in FY2011, which we have subsequently implemented over time. In FY2012, we chose a number of key
issues based on international guidelines on corporate sustainability reporting published by the Global Reporting Initiative(GRI) as well as ISO 26000, an international standard on organizational social responsibility. We are currently working toresolve those issues.
● Activity report for FY2016
Each department discussed CSR issues in line with those key issues and developed its own action program. At the end of
the year, those departments then conducted self-evaluations to assess how well they had implemented their programs. (Thetable below outlines some of the results of that process.)

ISO 26000
core subjects
Organizational
governance

Key issue

CSR issue

Corporate governance

Verification of corporate administrative proceduresCompliance

Cultivation of a robust corporate culture

Department
Internal Auditing
Division
CSR Division

Risk management

Mitigation of risks to employee safety

General Affairs
Division

Improvement of risk management techniques (reduction of additional costs)

Engineering
Division

Consumer issues

Fair operating
practices

Labour practices
and human rights

39

Construction
Division

Information disclosure (fulfillment of accountability
requirements and assurance of transparency)

Appropriate disclosure of technical information to outside parties

Engineering
Division

Employee training on social responsibility

Promotion of employee understanding (awareness) of social responsibility

Marketing
Division

Stakeholder engagement

Development of trusting relationships with customers

Engineering
Division

Safety and quality of products and services

Provision of products that contribute to customer satisfaction

Marketing
Division

Preventive measures related to risk concerning the safety and quality of
products and services

Engineering
Division

Improvement of construction quality

Construction
Division

Provision of high-quality products that contribute to customer satisfaction

Manufacturing
Division

Compliance with the Antimonopoly Act

Understanding of the provisions of the Antimonopoly Act

Marketing
Division

Fair business relationships with customers andbusiness partners

Implementation of fair transactions with business partners

Administration
Division

Respect of property rights

Protection and utilization of intellectual property rights

Engineering
Division

Appropriate employment relationships and labor
conditions (including safety and health, social
dialog, etc.)

Initiatives to address occupational safety and health

Safety Control
Division

Pursuit of appropriate labor conditions and initiatives to balance work andpersonal life

Marketing
Division

Employee skill development (skill enhancement)

Leadership for young employees and efforts to pass down expertiseMarketing
Division

Environment

Contributions to resolving environmental problems

Energy-saving initiatives

Engineering
Division

Community
involvement anddevelopment

Impact of business activities on the local communityand society at large

Contribution to the communities around our worksites

Marketing
DivisionContribution to society

Community service and other volunteer opportunities

General Affairs
Division

TAKUMA CSR REPORT 2017

Going forward, we plan to implement CSR activities using techniques that we consider appropriate while relying on
guidance and advice from outside experts as we choose key issues and develop CSR issues and action programs.
The global business environment that characterizes the environmental and energy fields in which Takuma’s business
operates grows increasingly diverse day by day, and that environment remains one of intensifying competition. Our
technological capabilities in the environmental and energy fields, which we have refined over many years of experience, form
the basis of our CSR management as well as our greatest strength as we look to make a broad contribution to society. We
will continue to draw on this strength in our activities going forward.
FY2016 action program
Action plan

Self-evaluation of results

Verify whether corporate activities (general operations) are being carried out inaccordance with predetermined control procedures (such as rules) by means of aninternal audit.

We carried out an internal audit in accordance with the audit plan. We found that
activities were generally conducted according to plan and that they generated results.

Share formulations of Takuma’s basic approach, for example Management Principles,
the Takuma Group Ethics Charter, and the Takuma Group Code of Conduct, and work
to ensure that they permeate the organization and take hold.

We highlighted the Management Principles, the Takuma Group Ethics Charter, and the
Takuma Group Code of Conduct in the CSR Report 2016 and in internal education andworked to ensure that they permeate the organization and take hold.

Carry out activities to reduce the number of traffic accidents, including those causedby company vehicles and bicycles.

We worked to raise awareness, for example by holding training at a driving school for
individuals who have been involved in two traffic accidents and holding safety lectures
given by an outside instructor. We believe that awareness increased as a result.

Reduce the risk of incurring additional costs by enhancing partnerships withdepartments placing orders.

In addition to continuing preliminary studies, we worked to reduce the risk of incurring
additional costs by enhancing partnerships with departments placing orders.

Enhance the information included in construction plans for each project by identifying
risks associated with work in the field in order to eliminate accidents and disasters atconstruction sites, carry out audits to determine whether safety activities are being
conducted according to plan, and work to implement improvements.

Although we identified risks in our safety and health plans, incorporated that information into
construction plans, audited safety activities in accordance with those plans, and worked tomake improvements, accidents resulting in work stoppages still occurred, preventing us fromachieving our goal. Going forward, we will augment guidance and education for workers
with education for site managers.

Promote useful Takuma technologies and spread awareness outside the company byhaving employees apply for and win awards.

We applied for and received one award during this fiscal year. Combined with theresults of similar activities last year, we have now received two such awards.

Apart from companywide education, offer departmental education to deepen
employees’ understanding (awareness) of social responsibility.

We offered educational experiences such as holding readings of documents related tosocial responsibility and carried out initiatives to deepen employees’ understanding of
CSR in general.

Work to resolve issues by organizing and sharing customer information and examples
of problems encountered during past projects.

We worked to deepen trusting relationships with customers and to resolve issues byorganizing customer information and examples of similar problems that have occurredin the past and sharing that information with operational management.

Work to ensure effective communication with customers and comply with customer
requirements.

Customers who responded to this year’s customer satisfaction survey praised Takuma
for its fast, sincere service, and we were able to provide products that contribute tocustomer satisfaction thanks to the cooperation of involved departments.

Enforce precisely targeted safety guidance and safety patrols in the field.

We offered safety guidance and education by holding safety patrols and liaison
meetings.

Work to improve construction quality by carrying out voluntary inspections in the fieldand strengthening checks of the status of construction management in the field byinternal coordinators.

We worked to improve construction quality by carrying out voluntary inspections at all sites
in the field and having internal coordinators carry out checks of the status of construction
management in the field at least once a month, with the result that we had no orders ofadditional work due to defective construction.

Carry out process intermediate inspections in a reliable manner.

We carried out process intermediate inspections in a reliable manner, but inspection
mistakes led to the occurrence of defects.

Hold workshops about the Antimonopoly Act, for example as part of complianceeducation.

We held workshops about the Antimonopoly Act as part of compliance education andother programs.

Offer support for fair business practices in sales, manufacturing, procurement, andconstruction departments (support for transactions that comply with all applicablelaws and regulations).

Cost management department personnel offered support for fair business practices on
the part of ordering departments after carrying out cost assessments in a fair andappropriate manner.

Offer education about intellectual property rights and work to raise employee
awareness about protecting and utilizing those rights.

We worked to raise employee awareness by holding courses on patent basics for new
employees as part of new employee training and for all employees at company
branches.

Prevent the type of fatal accidents that occurred last year based on the FY2016 safety
and health plan.

We were able to prevent fatal accidents by implementing a variety of measures,
including by strengthening Safety and Health Committee structures.

Work to enhance the balance between work and personal life by encouraging
employees to make appropriate use of leave time.

Employees were aware of planned paid holidays and took paid time off while
coordinating their plans with coworkers in their department.

Work to improve the mastery of knowledge with an emphasis on participating in learning
opportunities such as OJT related to operations involving the export of parts to previously
delivered plants as well as seminars related to employees’ own departments, for example
with a focus on subjects such as English contracts and export controls.

Concerning the export of parts, we offered education for department employees witha focus on OJT. Despite handling a comparatively large volume of such exports during
the fiscal year under review, there were no incidents with detrimental effects.

Deploy systems that can be expected to (1) maximize generating capacity, (2) minimize
power consumption, and (3) reduce utility use.

We were able to orchestrate more deployments than we planned at the beginning of
the fiscal year.

Engage in activities that contribute to communities around worksites.

Worksite employees participated in cleanup activities and were able to make acontribution to the local community, however slight.

Actively participate in the activities of local organizations (disaster prevention, crime
prevention, safety, economic stimulation, etc.).

Department employees coordinated with events held by local groups and governmentorganization, participating whenever possible. This effort helped strengthen personal
relationships with local residents.

TAKUMA CSR REPORT 2017

CSR Activities
for the Future

Review of risk management items in the field, evaluation and improvementof current conditions, and implementation of risk management● Future issues

40

Group Company CSR Topics
This section introduces messages from the presidents of major Takuma Group companies describing issues they haveidentified in the course of pursuing CSR activities and how they are working to address them.

NIPPON THERMOENER CO., LTD.
Established
Businesses
Employees

SUNPLANT Co., Ltd.

(The current name was adopted on April 1, 2005, after the company merged with Ebara Boiler Co., Ltd.)

Established
Businesses

Manufacture, sale, engineering, and maintenance of a wide range of boilers
and related equipment
395 (as of March 31, 2017)

Employees

August 1, 1961

President andRepresentative Director
NIPPON THERMOENER CO., LTD.

Keiki Kamada
President
SUNPLANT Co., Ltd.

Takuma Technos Co., Ltd.
Established September 27, 1967
Businesses Maintenance, management, and operation of waste treatment facilities,
water treatment facilities, industrial waste treatment facilities, boiler
facilities, power generation facilities, and other buildings
Employees 1,523 (as of March 31, 2017)

Kazunori Tsuji
President
Takuma Technos Co., Ltd.

41

TAKUMA CSR REPORT 2017

● Message from the President
Local government agencies in 59 communities throughout Japan entrust us with theoperation and management of their waste incineration, bulk waste treatment, recycling,
and other facilities. We maintain a worksite, branch office, field office, or administrative
office at each of those sites so that we can provide safe and secure service at all hours.
As a company that’s responsible for one aspect of government service and one that’s
engaged in business activities that are intimately related to the lives of community
residents, we realize that our mission is important, and we are confident that we canincrease our corporate value by carrying that mission out in a reliable manner.
Our executives and employees come together to ensure that everyone who is involved
with the company is satisfied. We emphasize the need to improve compliance and CSR
awareness, and we offer a systematic program of education and guidance in order toensure that attitude permeates every aspect of our organization. Going forward, we willcontinue to strive to become a company that can achieve sustained growth by makingsocial responsibility a core part of our approach.

● Message from the President
We’ve been involved with environmental optimization in the full range of building types
through the design and construction of air conditioning, water supply and drainage, andother equipment.
Rock-solid legal compliance is one of the CSR issues that we must fulfill as part of the
Takuma Group. We strive to observe all laws and regulations related to our operations, toengage in fair competition, and to operate in a fair and just manner. A second CSR issue
involves strengthening risk management. In addition to reliably carrying out technical patrols
to prevent quality-related accidents, we strive to ensure that all employees report relevant
information and communicate and consult with their colleagues and that issues are dealt within a timely manner. A third CSR issue is dealing with overwork. Overtime work for extended
hours has become the rule in the construction industry, and that trend is having an adverse
effect on healthy family life. It’s also had a major impact on our personnel planning, and we
can no longer afford to overlook it. We’re working to create a workplace environment inwhich employees can balance the competing demands of their jobs and their personal lives.
An accurate understanding of the legal system is necessary in order to address these issues.
Going forward, we will work to acquire legal knowledge and to ensure that a commitment tocorporate ethics permeates our organization.

CSR Activities
for the Future

Masato Fujita● Message from the President
Our management principle is “Service to the nation through boiler manufacturing,”
and we are committed to enriching all stakeholders in accordance with that principle.
Our vision calls on us to become a leading company in the public thermal energy sector,
and we define “leading” in this context in terms of thermal output and our ability to
reduce CO2. In short, our corporate activities are themselves CSR activities.
Thanks to support from our stakeholders, we have delivered close to 100,000 boilers
nationwide to date, and most of them remain operational today. Consequently, ourcustomers have a broad array of needs, and our products go beyond boilers to include
chemical agents and maintenance service. As a result, partnerships with numerous
stakeholders, including employees and business partners, play an extremely importantrole in our ability to offer fast, precise service. To enrich our customers and indeed all
stakeholders, we believe enhancing CSR activities is directly related to the company’s
continued evolution, and all of our employees will continue to come together to pursuethat goal.

September 15, 1941
Design, construction, and superintendence of air-conditioning
equipment, feed-water/drainage sanitation equipment, and electricalequipment
104 (as of March 31, 2017)

Dan-Takuma Technologies Inc.
Established
Businesses

Employees

August 21, 1969
Supply and maintenance of clean equipment, systems, and other products
for customers in the electronics and precision machining industries,
particularly the semiconductor industry in Japan and overseas
70 (as of March 31, 2017)

Chiaki Nagahama
PRESIDENT & CEO
Dan-Takuma Technologies Inc.

● Message from the President
We supply an extensive range of new products while carrying out the importantmission of creating a clean environment, which is an essential task in the electronics andprecision machining industries, by drawing on technology and experience gained insemiconductor-related industries over many years. As you know, semiconductor andelectronic devices are widely used in a broad range of industries, products, and social
systems, and they play a vital role in contemporary life. We help maintain the advanced,
clean environments used in production of these semiconductor and electronic devices
and improve rational productivity that helps solve global issues involving the environment
and energy resources while achieving a rich, safe, and secure society by supplying clean
devices and systems. We’re also striving to make an even greater contribution in otherfields that require a clean environment, including medicine and food products, based on
our accumulated technology and experience.
As part of the Takuma Group, which is a manufacturer of environmental and energy
plants, we work with customers to make a broad contribution to the resolution ofproblems involving the environment and energy resources in Japan and overseas bysupplying clean-running equipment and systems.

TAKUMA CSR REPORT 201742

Group Company CSR Activities
Spreading Takuma’s Company Motto and Management Principles among overseas
Group companies
To spur shared understanding of the Takuma Group’s basic approach, we have prepared Chinese and Thai translations of
key documents such as the Company Motto and Management Principles for overseas Group companies in order to deepen
local employees’ understanding of these important guides.
The Takuma Group will continue to cultivate a healthy and robust corporate culture throughout the Group going forward.

■ Takuma Group corporate policies● Chinese edition

This page introduces feedback from overseas Group company employees who have read the Takuma Group’s corporate
policies in their own language.

Taiden Environtech Co., Ltd. (Taiwan)
VOICE

Helping maintain and manage waste
treatment facilities in Taiwan

Chien-Lung Shen
President

Taiden Environtech Co., Ltd. has worked to protect and improve the environment in Taiwan as part of the Takuma
Group since its establishment in 1988. Four plants built by Takuma in locations such as Taipei together process morethan 4,000 tons of municipal solid waste per day. We’ve earned high praise for our earnest approach to maintaining
and managing these plants, and we’re currently offering similar services at other facilities as well. We strive tofacilitate the company’s development while satisfying all stakeholders, and in so doing to help protect the local
environment, by proposing equipment maintenance and construction plans that take the local environment into
consideration and by providing safe, secure products and services. Going forward, I look forward to continuing to
implement and utilize the Takuma Group’s corporate policies through daily operations such as these.
CSR Activities
for the Future● Thai edition

Siam Takuma Co., Ltd. (Thailand)
VOICE

Customer trust is our first priority

Siam Takuma is actively standing at the front of business activity of Takuma. It has
been over 50 years after starting supplying numerous Takuma boilers in Thailand andcustomers rely on Siam Takuma since we opened office in Bangkok.
In responding to the customers we shall present whole necessary information without
delay and do have an efficient strategy growing with the reliance ever. Through handlingenvironmental friendly equipment, the matter of reducing impact on Earth will be our
pride. The extensive experience will always keep customers feel confident in our safety andstable performance even competition is increasing nowadays. At the same time, we also
give appropriate advice on energy use and operating costs creating full satisfaction.
Above all, our boiler technology is particularly designed to generate lower carbon effectto the society and environment than those of others in term of pollution.
Besides that, we realize to be a giver to our society by donating old or unused officeequipment to temples or poor people as for recycling. We are, therefore, contributing toSociety through our businesses and products under clean energy. Customers, Society andEnvironment are the keys for the development in our service, and Takuma Group Ethics
Charter and Code of Conduct, etc. should be our underlying principles for our businessactivity.

43

TAKUMA CSR REPORT 2017

Pornpetch
Petchsuwannakit(Joy)
Manager
General Affairs Section

TAKUMA CSR REPORT 201744

Corporate GovernanceCorporate GovernanceInternal Control

As of June 28, 2017, the Board of Directors wascomprised of six directors (excluding directors who aremembers of the Audit & Supervisory Committee) and four
directors (of whom three were outside directors). The Boardof Directors meets regularly once a month as a rule andwhenever else it is necessary to make decisions about
important issues related to business management andissues established by law and ordinances, as well as tooversee the execution of the directors’ duties.
In order to accelerate management decision-making andclarify where management responsibilities are placed, we
have adopted an operating officer system in which we
appoint operating officers who are entrusted with the
responsibility of executing our business activities. As of June
28, 2017, there were 14 operating officers (including those
who also serve as directors). Moreover, we have also established an Executive Execution Committee, which is chairedby the president/chief operating officer, as an organizationthat deliberates matters that are brought up at meetings ofthe Board of Directors and other important issues related tothe execution of our business activities. This committee
communicates and provides direction about items decided
by the Board of Directors and other important items related
to the execution of our business activities appropriately tothe divisions that are to execute them.

An Audit & Supervisory Committee that consists of four
members, of whom three are outside directors, is responsible for accounting and operational audits. Members of
the committee attend important meetings, including thoseof the Board of Directors and the Executive Execution
Committee, and they strive to understand and observe thestatus of business execution in a timely and appropriatemanner. Drawing on their professional background andexperience, they express their opinions as necessary from an
objective perspective, and they conduct strict auditing of
the business execution performed by the directors.
To facilitate the effectiveness of audits carried out by the
Audit & Supervisory Committee, the president holds regularmeetings with committee members to ensure goodcommunication, and we have established an Audit &Supervisory Committee’s Office to provide staff to help
carry out the committee’s work.
In addition to the above, we have established a Human
Resources & Remuneration Advisory Committee comprisedof independent officers, representative directors, and theofficer in charge of human resources. The committee works
to increase transparency and objectivity in the selection ofcandidates for director and operating officer positions andin the determination of compensation as well as toenhance the supervisory function of the Board of Directors.

Appointment
and removal

Appointment
and removal

Reporting

Auditing andsupervision

Board of Directors

Reporting andstatement ofviews

ReportingAppointment
and removal

Reporting

Reporting

Audit & Supervisory
Committee

Accounting Auditors
Cooperation

AdviceSelection,
dismissal,
andAppointment supervisionand removal

Assistance

Recommendations

Discussion
andHuman Resources &reporting

Remuneration
Advisory Committee
Cooperation

Representative
Directors
Committee of
Executive Officers
Deliberation of(important matters)
Issuance of
instructions andcommunicationof information

Discussion ofand reportingon importantmatters

Auditing ofaccounts

Audit & Supervisory
Committee’s Office

Reporting

ReportingInternal Auditing
Department

Internal auditing

Regular meetings are held once a year. The person in
charge of promotion receives reports on the status ofcompliance and CSR promotion company-wide, as well ason the status of the implementation of compliance and CSR
promotion education for the past year, etc., and participantsdeliberate on a promotion plan for the current fiscal year.
Promotion members convene departmental meetings
once a quarter, with educational training aiming at thepermeation of compliance and CSR in each department.
After departmental meetings, promotion members implement compliance and CSR promotion education in theirrespective departments using training materials or in-house
educational materials and report the result to the Secretariat.
(Details of the compliance and CSR promotion education
implemented in FY2016 can be found on page 59.)
We are also pursuing awareness-raising and educational
activities targeting Group companies through our Takuma
Group Coordinating Committee for Compliance & CSR
Promotion to ensure thorough compliance and risk
management throughout the Group.

Board of Directors
Variouscommittees

President

Compliance & CSR
Promotion Division

Committee of Executive Officers
Compliancep& CSR Promotion Organizationg

Chairman (Executive Manager of the Compliance & CSR Promotion Division)
Secretariat (CSR Department)
Education,
instructions,and reporting

Takuma Group
Coordinating Committee forCompliance & CSR Promotion

Each division andcenterCompliance & CSR Promotion Administrator (division or center manager)

Executive Officers

Observing
and guidanceEach department

Compliance & CSR Promoters (department manager)

Execution of
responsibilities

Enlightenment/education

Staff members

Divisions and centers

Corporate governance structure
TAKUMA CSR REPORT 2017

Led by the department in charge of compliance and CSR
promotion (CSR Department), Takuma aims at encouraging
that activity through the Compliance & CSR Promotion
Organization that was installed for the purpose of enabling
compliance and CSR to concretely permeate company-widethrough an in-house organization.
This organization is composed of a chairman (theExecutive Manager of the Compliance & CSR Promotion
Division), a secretariat (positioned in the CSR Department),
and an executing organization in each division, center, anddepartment.
As the person in charge of promoting compliance andCSR in his or her division, each division or center manager
is appointed as a Compliance and CSR Promotion
Administrator. As persons who implement awareness andeducation in compliance and CSR in their respective
departments, department managers are appointed as
Compliance and CSR Promoters.
The meetings conducted within this mechanism include
regular meetings and departmental meetings.

ReportingInternal auditing

45

Compliance & CSR Promotion Structure

Auditing
Reportingoccurs, emergency headquarters are established with thecompany president as the director in charge of risk
management, and an organization is put in place in orderto minimize and prevent further damage through prompt
action.
In this way, we are working to ensure thoroughcompliance while carrying out business properly andefficiently while also deepening risk management.
Internal control, constructed and evaluated in order toreport on and prevent misstatements in our financial
reporting, is based on the Financial Instruments andExchange Act. This internal control on financial reportingfor the Group has resulted in reports that indicate thissystem has been effective.

Corporate
Governance

General Meeting of Shareholders

Takuma has adopted a Basic Policy for Establishment ofan Internal Control System (the full text is available on our
website) in accordance with the Companies Act. We
continue to review and improve this policy in response tochanging circumstances.
Working towards thorough compliance, Takuma built acompliance promotion organization in FY2006 in order tocontinuously implement enlightenment and educational
activities that make corporate ethics, related laws andordinances, and internal rules fully understood. To control
the danger of loss, we have also prepared a “RiskManagement Code” that determines the person in chargeof each risk, and we set up our risk management
organization according to that Code. When the unexpected(As of June 28, 2017)

Compliance & CSR promotion structure
TAKUMA CSR REPORT 201746

Corporate GovernanceRisk Management Structure

Business Continuity Plan (BCP)

Takuma follows a “Risk Management Policy” that connects company-wide risks and separately classifies them into “projectrisks” related to our core business, i.e., plant construction; “DBO project risks” and “DBO project operation, maintenance andmanagement risks” related to our DBO business; and “potential risks,” “actualized risks,” and “financial reporting risks”
related to other corporate business activities.
We are also building the risk management organization shown below and constructing a system of risk management andpromoting the strengthening of management for group companies as well through our Takuma Group Coordinating
Committee for Compliance and CSR Promotion.

Takuma has formulated a “Business Continuity Plan” based on the following policies to ensure proper and appropriate
continuity of business operations in the event of a large-scale disaster, pandemic, or other emergency:

Risk Management Policy

1. In addition to implementing disaster-related measures to secure the safety of corporate officers and employees,
maintain structures so as to enable continuity of business operations while minimizing damage in an emergency.
2. Strive to respond to customer needs and recover from damage quickly by working closely with suppliers and partnercompanies to continue business operations.
3. Earn the trust of numerous stakeholders, including employees, their families, shareholders, and nearby residents, andfulfill social needs by continuing business operations.

Disaster rule system diagram

Basic purpose of risk management
Risk refers to all phenomena that interfere with the group’s ability to achieve its business objectives or cause losses orharm to the interests of stakeholders.
The Takuma Group practices risk management with the goal of increasing its corporate value by working tomaximize returns while minimizing the negative impacts of risk.

Risk Management Policy
Risk Management CodeCrisis Management CodeOverseas Risk Management CodeDisaster Prevention Management CodeFire Prevention Plan

∗Based on Fire Service Act Enforcement
Regulations

Earthquake Countermeasure Manual

BCP activation

Storm and Flood Damage Countermeasure Manual

Corporate
GovernanceRisk management action guidelines
1. The president and CEO is responsible for risk management at Takuma.
2. All officers and employees participate in risk management activities.
3. Risk management activities are carried out in accordance with applicable guidelines such as the Risk Management
Rules.
4. Risk management activities are carried out in line with the Medium-Term Management Plan and annual plan, andwe work to make improvements on an ongoing basis.
5. When risk manifests itself, we respond by taking responsible action quickly to minimize any damage and creating
provisional organizational entities as necessary.
6. Group companies carry out risk management activities in accordance with their own policies and plans, with support
from Takuma.

Business Continuity
Plan (BCP)

Novel Influenza Countermeasure Manual
Safety Confirmation System Administration Rules

ReportingpgPresident
Committee of
Executive Officers

Board ofDirectors

Request for
decision/
reporting

Evaluation
Report oninternal
controlevaluation
concerning
financialreporting

Request for
decision/
reporting

Reporting

Reportingpg
Risk Management
Department

Internal Auditing
Department

Planning/
reporting

Risk Management Code, Crisis Management Code
Project Risk Management CodeDBO Project Risk Management CodeRisk Management Code for DBO Project Operation,
Maintenance and ManagementgProject risk
DBO Project risk
DBO Project operation, maintenanceand management risk
Actualized risk

IR Activities
Risks
concerning
corporate
activities

In keeping with the “Takuma Group Code of Conduct,” we provide our shareholders and investors with accurate corporate
information in a timely and fair manner. As a part of this, we provide notifications on the convening of General Meetings ofShareholders, balance sheet information, timely disclosure information, marketable securities reports, annual reports in
English and other business information, all on our website.
[Takuma website > IR information]
http://www.takuma.co.jp/english/investor/index.html

Eachdivision

Potential risk

Individuals,
others:10.7%

Financialreportingrisks

Evaluation

Other
corporationsin Japan:
15.0%

Evaluation
Takuma Group Coordinating
Committee for Compliance & CSR
Promotion (including risk matters)

Financial
institutions andstock brokerages:
46.9%

Group
companies

Foreignindividuals:
27.4%

Shareholders Report∗ Excluding treasury stock

Composition of shareholders (as of March 31, 2017)

Risk management structure

47

TAKUMA CSR REPORT 2017

TAKUMA CSR REPORT 201748

Corporate GovernanceDirectors and Executive Officers(as of June 28, 2017)

Directors

Executive Officers

Ryoji Tani

Norito Uchiyama

Managing
Executive Officer

Executive Officer

Executive Officer

Masahiko Izumi

Yoshiki Kita

Mitsuaki Adachi

Executive Officer

Executive Officer

Executive Officer

Hideki Takeguchi

Akira Taguchi

Hidetoshi Tomita

Director
Executive Officer

Executive Officer

Executive Officer

Corporate
GovernanceTakashi Manabe(Back row, from the left)

Minoru Murata

Hiromichi Satake

Koji Tanaka

Tsuyohito Nishiyama

Outside Director
Audit & Supervisory
Committee Member

Outside Director
Audit & Supervisory
Committee Member

Director
Executive Officer

Director
Executive Officer

(

)

(

Osamu Iwahashi
Outside Director
Audit & Supervisory
Committee Member

(

)

)

Yasushi Enomoto
Director
Audit & Supervisory
Committee Member()(Front row, from the left)

49

TAKUMA CSR REPORT 2017

Kengo Numata

Takaaki Kato

Hiroaki Nanjo

Director
Senior Managing
Executive Officer

Representative Director
President andChief Executive Officer

Director
Managing Executive Officer

TAKUMA CSR REPORT 201750

Human Rights and Labor Practices
Respect for Human Rights and the Abolition of Discrimination
Our company sets out its respect for basic human rights
and prohibition of discriminatory acts in the Takuma Group
Ethics Charter, Takuma Group Code of Conduct and labor
regulations. In addition, we also support respect for humanrights, without contributing to human rights violations,elimination of forced labor/child labor and the abolition of
discrimination through participation in the UN Global
Compact. We are also working to promote employment of
disabled and elderly individuals.

● Takuma Group Ethics Charter (excerpt)

4. We shall respect fundamental human rights andnever practice discrimination.
● Takuma Group Code of Conduct (excerpt)
Respect for basic human rights
9. Prohibition of discriminatory actions
10. Respect of individuality, personal quality and privacy
11. Safe work environment

Our company sets “establishing a work environment allowing each employee to challenge their goals, as well as getting onwith their work through appropriate assessment” as its basic policy. Specifying the following three approaches as criticalitems, we introduce various systems for each.

1 Increase employee motivation by ensuring transparency as well as satisfaction withHR assessments

We have created a work group transfer system tofacilitate movement from clerical and labor positions to
the main career track so that motivated and skilledemployees can pursue success regardless of their genderor academic background. We also provide opportunities
for employees to be promoted to management positions.

● In-house commendation system

Every year on the anniversary of the company’s founding on June 10, we recognize employees with the following awards:• Takuma Prize∗• Invention and idea commendations• Safety and Health Award in Construction Division• Qualifications acquisition commendations• Takuma Technical Review Outstanding Paper Award• Years-of-service commendations∗ The Takuma Prize is awarded to
employees who have demonstrated outstanding achievementsin their work or in their efforts onbehalf of society outside of work,
including lifesaving, disaster prevention, and volunteer service.

2 Provide capacity building assistance to employees● Junior employee exhibition

As a part of the education of our junior staff, ten-yearcompany employees give presentations that reflect on
their experiences and indicate the future growththat they are looking for,and second-year employees
hold technological exhibitions in order to improvetheir ability to make presentations.

● Technical training sessions

We hold technical training sessions to provide
opportunities for employees to increase their technicalknowledge. These events range from inviting outside
researchers or university professors to give lectures tohaving employees in technical positions give presentations on issues on which they are currently working.

51

TAKUMA CSR REPORT 2017

Takuma offers the following programs in order to help employees harmonize their jobs and private lives, balance theirwork and child-raising responsibilities, and make the most of their skills and abilities:• Paid time off in half-day increments• Childcare leave• Nursing care leave• Discretionary work
• Flextime∗• Telework● English education support

We periodically administer the TOEIC test at thecompany to help employees improve their language skills.
Employees who earn a high score are eligible to receive abonus from the company.

● Support for self-study

Takuma encourages employees to acquire various
licenses and certifications as part of the skill development
process, for example by reimbursing them for the cost of
testing needed to earn official certifications and licenses
that are necessary for operational reasons and offering
incentives for successful completion of such tests. We
also provide information about a range of distancelearning and e-learning opportunities.

● Grade-specific educational programs• New employee training• General employee training• Line manager training

Takuma carries out the following health management measures:• Improvement program for lifestyle-related diseases• Lifestyle-related disease prevention checkups• Mental health measures• Health consultations• Dissemination of health information (in-house newsletter and website)• Wellness Fair (cosponsored with the Health Insurance Union and cafeteria operator)● Labor-management relations
The labor union is an organization which conducts periodic deliberations and collective negotiations in terms of annual
salary, working hours and other working conditions and establishing a stable employee-employer relationship.

● Initiatives to create a workplace environment where employees can more easily taketime off
We are working to create a workplace environment where employees can more easily take time off by planning their
desired vacation dates, making those plans known to their coworkers, sharing associated information, and offering
each other support.

● Initiatives to promote the participation of female employees in the workplace
In March 2016, Takuma adopted an action plan with the goal of doubling to 20 the number of female employees incore and general management positions by March 31, 2021, and we are pursuing the following initiatives to achieve thatgoal:

Human Rights andLabor Practices● Work group transfer system● Work-life balance● Employee health management

Approaches toward employees

We utilize an objective management system in which
work objectives are set at the beginning of the fiscal year
and the degree to which they are achieved is evaluatedat the end of the fiscal year. The objectives, which are
based on company policies, are decided throughmeetings and interviews with superiors to include thework tasks that each individual is to undertake over theyear and the roles they are expected to fill.

tasks without anxiety∗ The Flextime program has been expanded to cover employees raising children up to the end of third grade in order to make iteasier for them to balance the competing demands of work and raising children.

Working with Our Employees● Objective management system

3 Improve the work environment, facilitating employees’ efforts to address business• Female employees hold talks to paint a picture of what it’s like for women towork at Takuma, and there is information about those talks on the website.
[Takuma top page > New-graduate hiring information >Takuma jobs and employees > Talks by female employees]
http://www.takuma.co.jp/recruit/newgraduates/work/talk.html(content in Japanese)• We hold company information sessions for female students, and we provide opportunities for students to talkdirectly with female employees of Takuma.

● Other enhancements to workplace environments• Measures to counter sexual/power harassment• Listening to opinions within the company∗∗ To enhance ideal working conditions for employees, our company absorbs a wide range of views from employees by placing an“opinion box,” as well as communication via e-mail and telephone concerning their working environments.

● Cafeteria plan
We offer a “cafeteria plan” as an employee benefit program as part of our effort to meet the full range of diverse
employee needs. Employees can choose from a menu of programs including support for skill development, child-raisingand nursing care, and health maintenance and promotion. The company then reimburses them for the cost of using
those services, subject to an annual cap. The selection of programs is reviewed on an ongoing basis.

TAKUMA CSR REPORT 201752

Human Rights and Labor Practices

Efforts for Occupational Safety and HealthOccupational safety and health initiatives

Safety and health education (education for construction site representatives)

Since FY2006, we have introduced TK-COHSMS based on an occupational safety and health management system for theconstruction industry and worked actively and independently to improve our safety and health activities. We believe thatamong these efforts, the manner in which (1) safety inspections, (2) mandatory safety and health education (education for
construction site representatives), and (3) creation of pre-work safety procedure checklists known as SSAs have been steadily
adopted by all departments and used to consistently improve the level of knowledge about Takuma’s safety and health isparticularly noteworthy.
We have adopted the following safety and health objectives for FY2017: for construction sites, eliminating accidents that
result in work stoppages (of four or more days); for branches, pursuing a thorough program of safety and health education,
ensuring adherence to safety inspection guidelines, and achieving at least 90% of the objectives set forth in the safety patrol
plan; and for the Safety and Health Cooperative Association, strengthening collaboration with partner companies. We will
work to revitalize safety and health activities throughout the company by carrying out that role.
Instead of resting on our laurels, we will redouble our safety and health activities going forward with a focus on each andevery employee so as to ensure that all workers are aware of the vital importance of Takuma’s philosophy of respecting
people, which forms the foundation of our safety and health policies.

We continuously provide specialized safety and health education at branches andworksites to increase the levels of safety awareness and knowledge of our employees
and partner companies. As indicated below, more than 14,000 trainees have passed
the completion exam. We are involved in a variety of initiatives to put in placemechanisms for preventing accidents, including by assigning workers with extensive
knowledge in areas such as safety-related laws and ordinances to individual
construction sites.
• April, 2004 to March, 2017
Cumulative number of trainees: 30,743
Number of trainees passing the completion exam: 14,639
Education for construction site
representatives■ Message from a partner company

Safety and health activities and their results
1. Safety inspection system
We maintain a system where any construction or installation work starts only after
the safety and health manager or other responsible official in each department
conducts a successful safety inspection based on safety and health plans for theconstruction or installation work as prepared by our primary partner companies.
We strive to ensure a safe work environment at all construction sites by eliminating
potential hazards and risk factors identified by those inspections before work begins.
• FY2016
Number of safety inspections done: 159(Initial inspection pass rate: 93%)

Mr. Takeshi Ito
A safety inspection

2. Safety patrols and field education(From a Takuma construction site representative)

Safety patrols and field education

Takuma’s safety results in recent years
Despite a tight labor market in the construction industry nationwide, business continued to be brisk in 2016. We saw oursafety track record improve from the dip in performance that occurred in 2015 as a variety of safety and health activities
began gradually to bear fruit. Nonetheless, we will not rest on these accomplishments, but rather will work to ensure evenmore thorough risk management, to strengthen and enhance our safety and health management system, and to redouble
our resolve to eliminate occupational accidents.
3.86

15

2.79

Number ofcasualties(persons)

2.75

10

11

1.44
5

4
0

0.08
2012

1.13
0.37
1

3

2013

2014

0.02

0.03
2015

Takuma’s safety results
53

TAKUMA CSR REPORT 2017

4.0

Takuma’s
accident
frequency
2.0 rate
and0.80 1.0 severity
rate
3.0

3

0.0

2016 (Year)

Human Rights andLabor Practices

Based on an annual plan, safety patrols are carried out at worksites by the Safety and
Health Committee (comprised of committee members and advisors), Safety Control
Department, and construction division along with safety education in the field in a
precisely targeted and efficient manner.
By focusing on the early discovery and elimination of risk in safety patrols and on the
improvement of safety awareness among workers through communication skills in fieldeducation, these activities help ensure the safety of Takuma’s workplaces.
• Number of safety patrols implemented in FY2016
By Safety and Health Committee (members, advisors): 51
By Safety Control Department: 342
By construction division: 310

Site Manager
Kizugawa OfficeKansai Branch, West Japan
Regional Headquarters
Nishimatsu Construction
Co., Ltd.

Thanks to Takuma’s education for construction site representatives, we learned that themission of such representatives is to ensure safety and health at companies by raising thelevel of safety in order to create a healthy workplace environment in accordance with
Takuma’s commitment to respecting life and health to create a healthy workplaceenvironment. Our site foremen have also received that education, and all of our branchcompanies now understand the importance of SSAs, although they were a little confused
at first. It is clear now that the lesson is the same as what our predecessors used to teach,that preparation is 80% of the job, and indeed those measures provide a useful way toensure safety in advance. I think that good communication among foremen and anunderstanding that safety is a priority that must be pursued actively are bringing optimismand motivation to the workplace environment.
Furthermore, Takuma’s site safety patrols have provided education and guidance on
how to enhance safety equipment so that it can withstand human error while raising
employees’ safety awareness so that such errors will not occur. We’re extremely gratefulthat those inspections have also served to cultivate autonomy on the part of workers andenabled worksites as a whole to think seriously about safety.

Year

Accident Accident
frequency severity
rate
rate

2012

0.83

0.05

2013

1.25

0.23

2014

0.91

0.07

2015

0.92

0.21

2016

0.64

0.11

∗ Accident frequency rate

Indicates the frequency with which accidents
occur as the number of fatalities caused byoccupational accidents per 1 million actual
working hours.
Number of fatalities
× 1,000,000
Total actual working hours

Because Takuma chooses the primary contractor when it’s the prime contractor but notsecondary or subsequent contractors, we’ve adopted a system in which we haveconstruction site representatives pass on our approach to safety and health to foremen(safety and health managers). If this education leads site workers to recollect what Takuma
says about safety and health issues and therefore empowers them to nip hazards in thebud, we will consider it to have been successful.
Your company was confused about SSAs at the start of work at the site, and you asked
many questions before you finally became convinced of the effectiveness of that approach.
However, I’m extremely grateful that now you create samples yourselves and explain thesystem to other companies. You’ve proposed and organized foremen’s meetings, and yourbelief that site personnel, particularly foremen, must play the lead role in safety andenvironmental issues is apparent. I can understand why our safety patrols always praise
the Kizugawa construction site for its clean and organized appearance.
In closing, let me mention that I find many aspects of your safety management systeminteresting and look forward to managing sites with you again in the future while learningfrom one another.

Tatsuya Kawamura
Site Manager
Kizugawa Construction Site
Takuma Co., Ltd.

∗ Accident severity rate

Indicates the seriousness of accidents as thenumber of work-days lost per 1,000 actual
working hours.
Total work-days lost
× 1,000
Total actual working hours

Reference: Nationwide accident frequency and severity rates
for the construction industry (general construction)
TAKUMA CSR REPORT 2017

54

The Environment
Basic Environmental Policy

Takuma’s CO2 Reduction Technologies

Our company has established the “Basic Environmental Policy” as follows, aiming to ensure employees contribute to global
environmental conservation. This basic policy applies to the activities of all company departments.

We convert waste/biomass into energy and reduce CO2!

Environmental Philosophy

In 1 year,
uma products
p
produ
du
TakumaTakuma is committed to preserving the environment and realizing an affluent society
through business activities under the Company Motto: “Value Technology, Value People,
Value the Earth.”

abouttOperational Guidelines

cut

5

milliontons!

(Equivalent to the CO2 absorbed
by about 350 million Japaneseedar tre
ee ∗)
cedar
trees

1. All Takuma Group companies will recognize the importance of maintaining a balance between
preservation of the environment and business activities.
2. Continuously develop activities to preserve the environment that comply with applicable environmental laws and ordinances, and ensure environmental control and assessment systems conformto international environmental standards.

∗Assuming one Japanese cedar
tree absorbs 14 kg of
CO2 per year.

3. Promote development of improved technologies and products for society that preserve theenvironment.
4. Address resource conservation, energy efficiency, recycling, and minimization of waste generated
by all business activities.

Reducing CO2 with biomass power generation boilers
rss

5. Improve employee awareness and understanding about the importance of preserving the environment through environmental education and internal promotional activities.

A classic example of biomass power generation can be found in sugar factories.
Factories that make sugar produce large quantities of residue from sugarcane, the raw
material used to make sugar. Sugarcane is crushed into a pulp, and sugar is extracted ina mill. The remaining fiber is called bagasse and can be used as boiler fuel. The steam
produced is used as the plant’s heat source, and any remaining steam is used togenerate electricity that is utilized to operate the plant and, if any remains, sold to theelectric power company. The amount of power generated at sugar factories has grown
greatly, with examples of single plant that generates 50,000 kW.

6. Provide the community with information on the activities of Takuma to preserve the environment.

■ The situation concerning the acquisition of ISO 14001

Our Harima Factory has acquired ISO 14001 certification and has been implementing environmental management
activities based on an environmental management system established to comply with international standards. Our groupcompanies Nippon Thermoener Co., Ltd., Takuma Technos Co., Ltd., and Dan-Takuma Technologies Inc. have also acquired
ISO 14001 certification.

Wood
chips

4

milliontons!

CO2 reduction achieved by
Takuma’s biomass power
generation boilers(as of end of FY2016)

EnergyPalm
Bagasse kernel
shellsBiomass is any recyclable organic material derived from a livingorganism, but does not include fossil fuels, such as oil and coal. For
example, even though CO2 is emitted if wood waste products areincinerated, when trees grow again, they absorb CO2 to offset theemissions from incineration, so there is no increase in CO2 in theatmosphere. By using the heat produced by incinerating biomass togenerate power, the amount of power generated using fossil fuels
can be reduced, and this contributes to decreasing CO2.

CO2 reduction from waste incineration plants
Garbage, or waste, is an important source of energy. About 500 kW∗∗ of power canbe generated from one ton of garbage. In Europe and the Americas, waste incineration
plants are often called Energy from Waste (EfW) plants, and recovering energy fromgarbage has become the norm. Waste must be seen as a “resource,” so Takuma isseeking to be the best in the world with our technologies to convert waste into energy
and reduce CO2.
∗∗Presumes waste with a calorific value of 8,800 kJ per kg and a power generation efficiency of 20%

1 ton ofgarbage

TAKUMA CSR REPORT 2017

about

What is biomass?

Biomass-fueled power
generation boiler

55

down

The Environment

Environmental Management

In 1 year,

Waste
combustion

In 1 year,

down

about

1

milliontons!

CO2 reduction achieved by Takuma’smunicipal solid waste incineration
plants and industrial waste
incineration plants(as of end of FY2016)

About
500 kW of
power
generated

TAKUMA CSR REPORT 2017

56

The Environment

Environmental Reporting

Environmental accounting

Takuma reports the environmental impact of its business activities as well as the manner in which it takes environmental
considerations into account in accordance with the Environmental Reporting Guidelines (issued by the Ministry of the Environment). This environmental reporting program includes not only environmental information extracted from our overall businessactivities from an environmental standpoint, but also information about related economic and social aspects of those
activities.

Environmental data (non-consolidated)● Total energy consumption(Tons-CO2 per year)(GJ per year)

According to the “Environmental Accounting Guidelines,”
environmental conservation costs measure on a monetary basis
investments and expenditures on preventing, controlling, or
avoiding environmental impacts, eliminating their effects, recovering from associated damage, and initiatives to aid in the same.

6,000

80,00040,0000● Environmental conservation cost

● Greenhouse gas emissions

120,000

2012

2013

2014

2015

2016

4,000

Item

2,000

0

(FY)

2012

2013

2014

2015

2016

(FY)

The total energy consumption of the fuel and theelectricity consumed at Takuma during FY2016 rose slightly
compared to FY2015 levels. We will continue to promoteenergy savings from here on out.

The greenhouse gas emissions created by our company
are limited to carbon dioxide (CO2). The amount of CO2
emissions in FY2016 rose slightly compared to FY2015
levels. We will continue striving to reduce CO2 emissions.

● Waste generation● Water usage

600(m3 per year)(Tons per year)

Waste generation
Recycling
Final disposal treatment

300

2012

2013

2014

2015

2016

30,000(FY)

Our company sells recyclables and reusables from thewaste generated through its business activities to scrap
dealers, while outsourcing the treatment of non-recyclables
and non-reusables to haulers, processors and final disposal
dealers, in accordance with the Industrial Waste Control
Manifest system.

2012

2013

2014

2015

2016

(FY)

Takuma’s water consumption during FY2016 held steadyat FY2015 levels. Going forward, we will continue to work
to lower our water use.

PRTR target substance emissions
Although our business activities do not involve a wide variety of chemical substances on a massive scale, we use a few
designated chemical substances. Consequently, we report and register such chemical substances designated under the
Pollutant Release and Transfer Register (PRTR), in accordance with relevant laws and ordinances, with the local government.

● Dichloromethane (CAS No. 75-09-2)
FY
Emissions(tons per year)

2012
0

2013
0

2014
0.3

2015
0.4

● Toluene (CAS No. 108-88-3)
2016

FY

0.4

Emissions(tons per year)

2012
0.05

2013
0.08

2014
0.08

2015
0.26

2016
0.09

● Xylene (CAS No. 1330-20-7)
FY

2012

2013

2014

2015

2016

Emissions(tons per year)

1.8

1.4

3.4

2.2

2.9

1,610
4,754
—
—
36,866—43,230

These materials are used for antirust painting of boiler
structures and so on.

Item
FY2015FY2016(1) Environmental conservation effect concerning resources input
for business activities
Total energy input (GJ)
92,458
101,684
Water resources input (m3)44,34250,584(2) Environmental conservation effect concerning environmentalloads and wastes created by business activities
Greenhouse gas emission volume (tons-CO2)
4,337
3,883
Waste generation (tons)
976
834
Final disposal volume (tons)
163
77
Total drainage volume (m3)48,29942,482
BOD emissions (kg)
2,720
2,273
COD emissions (kg)
2,898
2,443
T-N emissions (kg)698
626
T-P emissions (kg)119
111

TAKUMA CSR REPORT 2017

● Period covered:
April 1, 2016, to March 31, 2017
● Companies targeted[12 domestic companies]• Takuma Co., Ltd. (Head Office, other offices
including overseas sites and the Harima Factory)• NIPPON THERMOENER CO., LTD.
• Takuma Technos Co., Ltd.
• Hokkaido Sanitary Maintenance Co., Ltd.
• Takuma Technos Hokkaido Co., Ltd.
• SUNPLANT Co., Ltd.
• Takuma Engineering Co., Ltd.
• Takuma System Control Co., Ltd.
• Dan-Takuma Technologies Inc.
• Kyoritsu Setsubi Co., Ltd.
• Kankyo Sol-Tech Co., Ltd.
• Takuma Plant Service Co., Ltd.
[2 overseas subsidiaries]• Taiden Environtech Co., Ltd.
• Siam Takuma Co., Ltd.

Environmental efficiency
Even as total environmental impacts must be reduced, it isnecessary from a business management standpoint to pursue
environmental initiatives that are characterized by a high degreeof economic efficiency. We report environmental efficiency using
an index calculated in accordance with examples provided by the
Ministry of the Environment in its Environmental Performance
Indicators Guidelines for Organizations.
At the Takuma Group, we calculate environmental efficiency as
the ratio of consolidated net sales to greenhouse gas emissions.
In FY2016, this value declined compared to FY2015.

The Takuma Group’s definition of environmental efficiency
Consolidated net sales (million JPY)
Greenhouse gas emissions (tons-CO2)

57

17,51823,96812,524
46,386
1,675,842
3,377
1,779,615

According to the “Environmental Accounting Guidelines,”
environmental conservation effects measure on a material basis
the effects of preventing, controlling, or avoiding environmental
impacts, eliminating their effects, recovering from associateddamage, and initiatives to aid in the same.

60,0000

Business area costs
Pollution prevention costs
Global environmental conservation costs
Resource recycling costs
Management activity costs
Research and development costs
Social activity costs
Total

Costs
(thousand JPY)

Scope of data collected

The Environment

0Investment(thousand JPY)

● Environmental conservation effect90,000900

Environmental accounting is the process by which companies and other entities recognize the cost of environmental
conservation in their business activities as well as the effects of those activities and measure and communicate them in as
quantitative a manner as possible (either in terms of monetary amounts or amounts of materials) with the goal of pursuingenvironmental conservation initiatives in an efficient and effective manner while maintaining a good relationship with society
so as to facilitate sustainable development.
In FY2006, we introduced and disclosed our own environmental accounting system based on the “Environmental Accounting Guidelines 2005” issued by the Ministry of the Environment. As our business activities mainly involve environmental
conservation plants and their equipment, Takuma Group employees have a significant awareness of the need for environmental conservation, and we have been implementing approaches toward such issues within the Takuma Group.

40
29.12

30
21.04

22.46

24.42

26.82

20

10

0

2012

2013

2014

2015

2016 (FY)

Environmental efficiency

TAKUMA CSR REPORT 201758

Fair Business Practices
Compliance/CSR Promotion Education

CSR Awareness Survey

Takuma offers compliance and CSR promotion education through the Compliance & CSR Promotion Organization (seepage 46), which was established in order to spread awareness of compliance and CSR issues among employees.
During FY2016, we implemented education focusing on compliance and CSR promotion in four separate stages (seebelow) in keeping with our policy of pursuing a sustained and thorough program of improving compliance and CSR
awareness and risk management based on a consideration of internal conditions and the characteristics of Group companies
in response to social requirements and expectations in accordance with our priorities of cultivating a robust corporate
culture, accommodating environmental change, and practicing risk management as set forth in the Compliance & CSR
Promotion Division’s medium-term plan under the 11th Medium-Term Management Plan.

As a means of understanding the level of awareness of compliance and CSR and the level of permeation of education that
promotes these priorities, and employing that data as reference for the integrated activities carried out during each fiscal year
and for the following fiscal year’s action plan, we have conducted the “CSR Awareness Survey” every year since FY2008 withthe end goal of utilizing that information for future compliance and CSR promotion activities. The survey has included Group
companies since FY2013.
We actively use survey results in our activities, for example by offering additional education in areas that received lower
scores than in the previous survey.
We will continue to offer this survey and use its results to improve compliance and CSR promotion education on an
ongoing basis.

1st term: Insider trading

2nd term: Corporate scandals

We offered education to prevent insider trading,
addressing such topics as the definition of insider trading,penalties imposed in response to violations, example
violations, and Takuma’s rules on the subject.

This program introduced recent corporate scandals,
many of which have been coming to light recently;
explained the importance of compliance, mechanismsthat lead to scandals, and measures for preventing them;and raised awareness in order to prevent them.

3rd term: Overview of security export controls;
measures to prevent maternity harassment,paternity harassment, and care harassment

4th term: Business continuity planning (BCP);
Forward-looking CSR activities:
CSR issues and action programs

We offered an educational program addressing security
export controls, including their purpose, examples ofviolations and associated penalties, and internal export
control-related operations and associated procedures.
We also offered education about maternity, paternity,and care harassment in response to the announcement ofrevisions to Japan’s Act on Securing, Etc. of Equal
Opportunity and Treatment between Men and Women in
Employment and the Act on Childcare Leave, Caregiver
Leave, and Other Measures for the Welfare of Workers
Caring for Children or Other Family Members. In addition
to the specific provisions of the revisions in question, theprogram addressed topics such as problematic behavior
and Takuma’s approach to dealing with related issues.

We offered education about business continuity
planning (BCP) based on the results of the FY2016 CSR
awareness survey that was conducted during the thirdterm.
We also offered education about forward-looking CSR
activities and conducted a self-assessment of our implementation of FY2016 action programs as planned byeach department.

We hold regular training sessions about the Antimonopoly
59

TAKUMA CSR REPORT 2017

Response

Consultation
or report

Outside report contact(Anonymous e-mail)Law officeCompliance & CSR Promotion Division(Investigation and response)

Act to deepen participants’ understanding of the act and toascertain the latest information about it.

● Introducing a Legislation Alert Service
In order to allow its employees to gain a continuous
grasp of the latest information on revised laws and ordinances, Takuma introduced a Legislation Alert Service. In
this system, legislation alerts highlighting changes to laws
and ordinances are sent by e-mail in advance to employees,
who can also review detailed information about the corresponding law or ordinance on the website as needed.
In addition to current laws and ordinances, the systemlets users search for legal precedents and public comments
to facilitate an even greater understanding of relevant laws
and ordinances.

Takuma carries out procurement activity in accordancewith its Material Procurement Policy.
We provide fair opportunities for all suppliers,
irrespective of nationality, company size, or transaction
history. Suppliers are selected based on our comprehensive
evaluation of their reliability and safeness in terms of
quality, price, delivery, etc., as well as their abilities intechnological development and supply capabilities.
Long-term stable transactions with dependable suppliers
result in improved product reliability and greater corporate
value. We, therefore, seek to establish relationships of
mutual trust and mutual development with our suppliers.
While also respecting relevant laws and regulations aswell as social norms, we strictly control and maintain any
confidential information that we obtain through ourbusiness transactions.
Takuma procurement procedures and required items areposted on the following website.

Material Procurement Policy
1. Treat all candidates fairly when selecting a supplier.
2. Strive to discover new manufacturers.
3. Strictly control confidential information.

Fair Business
Practices

Compliance Measures● Holding training sessions about the Antimonopoly Act

Persons seeking consultation or making reports

Material Procurement Policy

In November 2016, we invited attorney Izumi Sato, who is an expert on environmental issues, to give a lecture for management-level employees entitled “Takuma’s
Environmental Business, Compliance, and Risk Management.”
In her talk, which was extremely useful for participants as they prepared to chart the
future course of Takuma’s environmental business, Ms. Sato addressed current trends
with regard to environmental issues, revisions to environment-related laws andregulations in Japan, examples of instances in which those laws and ordinances havebeen violated, and the future direction of the environmental business.

Towards ensuring permanent compliance with the
Antimonopoly Act, Takuma enacted “Regulations Concerning Management of the Pledge of Antimonopoly Act
Compliance,” which provides for the submission of awritten oath in regard to observing the Antimonopoly Act.
“Rules on Controlling Contact with Competitors’ Sales
Departments, Etc.,” defines the procedure for an employee
to contact the sales department, etc., of a competitor andspecifies that an application should be made to and an
approval should be obtained from the affiliated division orcenter manager in advance to ensure fair business contact.

Takuma has been operating an in-house reporting
system since FY2006, with the aim of promoting compliance management by uncovering illegal or unfair acts as
early as possible and undertaking corrective measures.
Reporting contacts are set up at our Compliance & CSR
Promotion Division and at an outside law office, as well as
a dedicated outside report contact for anonymous e-mailreporting. Our “In-house Reporting Code” and the Takuma
Group Code of Conduct further declare that no informant
shall be subjected to disadvantageous treatment simply due
to his or her having filed a report.
Furthermore, in order for this system to be correctly
understood and utilized, we distribute a card to all employees with information on the reporting contacts andregularly publicize the system.

In-house reporting process● CSR lectures for management-level employees● Initiatives to ensure compliance with the Antimonopoly Act

In-house Reporting System

4. Strive to acquire new and pertinent information.
5. Promote green procurement.
6. Comply with laws and ordinances related tobusiness dealings.
7. Always keep VA and VE in mind.
8. Strive for self-development.

[Takuma website > Material Procurement] http://www.takuma.co.jp/procurement/ (content in Japanese)

TAKUMA CSR REPORT 201760

Consumer Issues
Activities Involving Product Quality
In addition to defining our Quality Policy (see below), registering for “ISO 9001: Management Systems” certification(Registration No.: JQA1952), and improving product quality based on our quality management system, we carried out
concrete activities to enhance customer satisfaction. The present status for ISO 9001 certification includes having switched to
ISO 9001:2000 in FY2002 and to ISO 9001:2008 in FY2010, as well as a transition to ISO 9001:2015 that we plan tocomplete in FY2017.

Takuma Co., Ltd. has adopted the following Quality Policy in order to provide satisfying products thatmeet customer expectations and earn a high level of trust while continuously improving theeffectiveness of its quality management system.

Quality Policy

For customers targeted for problem analysis and consideration of preventive measures based on the survey results,
we also conduct a follow-up survey to discern whether
those measures were reliably implemented and whether
their level of satisfaction has indeed improved.
Since the second year, the average score for thesequestionnaires has been 80 points or higher, as shown in
the table to the right. We believe that the rising trend forscores indicates that our initiatives are functioning
effectively.
In this way, we work to improve quality so that all
customers are satisfied.

Number of surveys(Points)
100

Average score

37
90

80.2
80
70
60

83.5 82.3

85.5 85.9 85.8

26

73.4
18

25

16

18

(Surveys)40

87.7 88.2 86.8
30

27

27
23

20

19

10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)

Number of questionnaire surveys and average score

Manufacturing products that result in customer satisfaction■ Message from a customer
In order to produce products that customers truly appreciate, it is necessary not only to boost the quality of the product itself,
but also to improve the content of that work as well as each individual’s ability to create a good product in each process fromplanning up to delivery (planning, development, sales, design, procurement, manufacture, construction, and management).
Based on that Quality Policy and the three priority items described below, Takuma is working to improve the quality of its
products and services through such measures as improving organizational operations, improving individual employees’capabilities, carrying out internal quality audits, and reviewing quality control and processes.

Priority items• Creating value to earn customer satisfaction (ascertaining customer needs and making improvements based on pastexperience)• Carrying out risk management (addressing changes in the business environment and human error)• Implementing human resources management (implementing human resources development and ensuring skills are
passed down to younger employees)

Mr. Kyoji Takahashi
Executive Managing Director& Factory Manager
Sanyo Paper MFG. Co., Ltd.

● Customer satisfaction survey
We have conducted a customer satisfaction survey each year since FY2007 to obtain unfiltered customer feedback concerning delivered products and the level of service provided by Takuma coordinators. We use that information to improve quality.

61

TAKUMA CSR REPORT 2017

Decide where to conduct the questionnaire survey
Conduct the questionnaire survey
Investigate the questionnaire results
Analyze problem factors and investigate
recurrence prevention countermeasures(if results are lower than our standard)(Particularly praiseworthy aspects)
Analyze praiseworthy factors
Apply recurrence prevention measures andpraiseworthy factors across the organization(From the sales manager)

Consumer Issues

The figure to the right illustrates how the survey is administered.
First, we administer questionnaires targeting customers
who had construction work done by asking them to assess theoverall experience after the work is completed, including thenature of the work performed, suitability of delivered equipment, and the level of service provided by Takuma staff.
Next, the committee calculates a score for each item basedon the survey results as well as a report and explanation fromthe responsible department. The committee then analyzes theresulting data.
If we find a problem, for example an item receiving anevaluation score of less than 70 or a score of 1 (dissatisfied) or
2 (rather dissatisfied) on a 4-point scale, the committee
analyzes the cause of the problem and studies measures toprevent recurrence based on interviews with the department
in question. We also evaluate aspects of our products andservices that receive especially high praise from customers andwork to further enhance customer satisfaction by combining
problem areas and praiseworthy areas and applying themhorizontally across involved departments at the company.

We began studying the possibility of having Takuma build a biomass power plant for us
at the start of 2014 as part of our environmentally responsible fuel conversion business.
We began civil and foundation work for the project in 2015 and then began constructionof the plant itself in 2016. The new plant began operation in January 2017. In this way,
the project lasted about three years.
In studying construction of a biomass power plant, we identified requirements such as
the following after touring numerous such facilities and ultimately determined that a
Takuma progressive stoker furnace would best meet our needs:
1. That site requirements be satisfied
2. That the facility operate in a stable manner since it will also be used to supply heat toproduction equipment
3. That the facility be capable of using various types of fuelAfter starting this study process, we held numerous meetings to flesh out the various
constraints, and we were impressed with how Takuma’s sales coordinators and technicalcoordinators were able to draw on their extensive experience to offer a fast, precise
response based on knowledge and information about past projects. I think the quality ofthat response is apparent in the stability of the facility.
In addition, Takuma was able to complete the removal of plant equipment according toplan despite space constraints. The fact that the new facility is operating in such a stablemanner is a testament to the high level of technical skill that Takuma’s construction site
representatives and supervising engineers brought to the project.

First of all, I’d like to thank you for choosing a Takuma progressive, water-cooled stoker
furnace.
Although the construction process presented a variety of challenges, it is thanks to yourcooperation as well as the cooperation of everyone else who was involved that we wereable to complete the project without any accidents, and I’d like to express my gratitude forthat.
We look forward to working hard to ensure that the facility generates power for the
feed-in tariff program in a way that inspires peace of mind while working withmaintenance department personnel and taking into account the wishes you indicated on
our customer satisfaction survey.

Kentaro Araki
Follow up with recurrence prevention measures
Follow up on results
Customer satisfaction survey process

Manager, Section 1
Plant Sales Department 2
Energy Plant Division
Takuma Co., Ltd.

TAKUMA CSR REPORT 201762

Participation in the Community● Group company activities• Anan High Trust Co., Ltd.

Group company Anan High Trust is striving to open itself to the surrounding community
through a series of initiatives that include cleanup activities in the area around its facilities,
environmental learning sessions and workplace tours held at its on-site management
education center, and a variety of other events.

• Kashihara High Trust Co., Ltd.

Activities by Group company Kashihara High Trust include cleaning and beautifying
nearby roads, weeding in the surrounding area, conducting patrols for illegal dumping,manning a booth at local business meetings, and cooperating with locally held events.

● WFP fundraising activities
Takuma serves on the Board of Trustees of the Japan Association for the World Food
Programme, the official supporting partner of the World Food Programme in Japan.
Each year, we display WFP posters at the entrances to company buildings and in cafeterias
during a campaign that lasts from June through August. The campaign serves both to increase
employee interest in the world’s food problems and to collect donations to address them.
According to the UN WFP, about 800 million people suffer from hunger worldwide. Throughthe Japan Association for the World Food Programme, we will continue to raise funds to help
people suffering from food scarcity.

● Contributions to NPOs

• Purchasing UNICEF Christmas cards

Takuma purchases UNICEF Christmas cards. A portion of the proceeds is used to fund UNICEF in their work to help
children around the world.

• Donating calendars to a charity calendar market∗ Activities by Group companies Kurume High Trust Co., Ltd., Hokutan High Trust Co., Ltd., and Suwako High Trust Co., Ltd.
are introduced in the “Striving to Coexist with Local Communities” feature on pages 17 to 22.

Takuma donates unused calendars to a calendar market sponsored by the NPO “Nippon Volunteer Network Active inDisasters.” In FY2016, we donated more than 100 calendars. The proceeds are used to provide aid for victims of natural
disasters and other crises.

● Publications• Publication of the Takuma Technical Review

Contribution to Society

We publish the Takuma Technical Review twice a year to introduce technologies that
Takuma has developed. Contents in FY2016 included a report on research into sewage
sludge incinerator, a report on the operation of biomass boiler power generation facilities,
a report on the operation of waste incineration facilities, a report on a survey of overseas
recycling facilities, and introductions to new products. Abstracts are available on Takuma’s
website.
[Takuma top page > Technical Information > Technical Review]
http://www.takuma.co.jp/english/gijutu/gihou.html● Contribution to society• Takuma Group coordinated cleanup activities

The Group participated in an initiative to clean up the area around its worksites tocontribute to the local community and beautify the surrounding environment. Each year,
the entire Group participates on a volunteer basis. During FY2016, a total of 534 employees
participated in two cleanup initiatives, one in May and June and the other in September.
The activities provided an opportunity for employees to think afresh about waste-related
issues and their connection to the community. Going forward, the Takuma Group willcontinue this initiative.

• Publication of Air Pollution Prevention Technology

The Takuma Environmental Technology Society, which consists of Takuma employees
who are experts in the field, published Air Pollution Prevention Technology in April 2016.
The book presents its subject matter using plain language and extensive pictures anddiagrams so that it will be accessible to general readers with an interest in preventing
pollution while simultaneously serving as a reference for engineers and students in related
fields.

• Participation in the “Osaka Marathon ‘Cleanup’ Campaign”

In October 2016, volunteers from Takuma’s Plant Service Department (Osaka) participated in the “Osaka Marathon ‘Cleanup’ Campaign,” a cleanup activity that is held every
year in Osaka City.
The activity, which brought together organizational, group, and individual volunteers tobeautify public spaces such as roads, promenades, parks, and station plazas throughout
the city, is held every year as part of a tie-up with the Osaka Marathon.

Takuma supports blood donation activities through the Japanese Red Cross Society. Our
Head Office and Harima Factory held spring and autumn blood drives, and President Kato
participated. During FY2016, a total of 177 employees took part in the campaign. Harima
Factory has cooperated with the Japanese Red Cross Society’s blood drives for many years,
earning it a letter of appreciation from the organization’s Hyogo Branch. Donors cansimultaneously register as bone marrow donors, and this year nine employees did so. We
plan to continue this activity in the future.

63

TAKUMA CSR REPORT 2017

• Tour of Kankyo Sol-Tech Co., Ltd.

[Kankyo Sol-Tech Co., Ltd.]In November 2016, Takuma Group company, Kankyo Sol-Tech Co., Ltd., hosted a tour by
35 students of the Osaka Institute of Technology together with the Shirokita Club∗. In
addition to introducing the company, the students learned about instruments used inenvironmental analysis and the processes by which such analysis is carried out. For most of
the visitors, it was their first time to see an analytical laboratory, and they reacted with greatinterest.

Participation in theCommunity /Contribution to Society• Blood donation campaign● Group company activities∗ Shirokita Club: A group of business executives consisting of graduates of Josho Gakuen, which consists of the
Osaka Institute of Technology, Setsunan University, Hiroshima International University, etc.

TAKUMA CSR REPORT 201764