INTEGRATED REPORT
2023
Tokyo Seimitsu Co., Ltd.

Tokyo Seimitsu Co., Ltd.
2968-2, Ishikawa-machi, Hachioji-shi, Tokyo 192-8515, Japan
Phone: +81 (0) 42-642-1701

Fax: +81 (0) 42-642-1798

URL: https://www.accretech.com/en/

CONTENTS

Introduction04

Sustainability42

Editorial Policy

Scope of the Report

About Tokyo Seimitsu

Our Approach to Sustainability....................................... 42

The Tokyo Seimitsu Group began publishing an integrated re-Period Covered

Tokyo Seimitsu’s Aspirations....................................... 04

Environment...................................................................... 43

port in fiscal 2022 to communicate its medium- and long-term

This report mainly covers the period from April 1, 2022 toTokyo Seimitsu’s DNA and Mission.............................. 05

Quality............................................................................... 51

activities for value creation to stakeholders including custom-

March 31, 2023. It also includes some topics from before and

The History of Tokyo Seimitsu......................................... 06

Support Services.............................................................. 52

ers, shareholders, and investors. In the Integrated Report forafter that period.

Message from CEO........................................................... 08

Supply Chain Management.............................................. 53

Message from COO.......................................................... 10

Work Styles....................................................................... 55

Overview of Tokyo Seimitsu’s Businesses..................... 14

Human Rights................................................................... 57

Financial and Non-Financial Highlights.......................... 16

fiscal 2023, we have aimed to provide readers with a deeper
understanding of our activities by presenting the progress ofOrganizations Covered

the mid-term business plan for fiscal 2022 to 2024 and specif-

The Tokyo Seimitsu Group, comprising Tokyo Seimitsu Co.,

ic examples of our efforts to enhance corporate value.

Ltd. and its consolidated subsidiaries.

In compiling data for this report, we have referred to the IIRC

In principle, reporting covers both Tokyo Seimitsu Co., Ltd. and(now IFRS Foundation) “International Integrated Reportingits consolidated subsidiaries. However, some non-financial

Framework” and the “Guidance for Collaborative Value Cre-data covers Tokyo Seimitsu Co., Ltd. only.

ation” from the Ministry of Economy, Trade and Industry.

Strategy18

Governance58

Value-Creation Process................................................... 18

Roundtable Discussion with External Directors............ 58

The Source of Tokyo Seimitsu’s Competitiveness......... 20

Directors and Executive Officers.................................... 62

Tokyo Seimitsu’s Business Model................................... 22

Corporate Governance..................................................... 64

Cautionary Note Regarding Forward-Looking Statements

Aiming for the Sustainable Growth................................. 24

Compliance....................................................................... 69

The plans, strategies, and future prospects described in thisAiming for the Sustainable Growth

Risk Management............................................................. 73~Tokyo Seimitsu's Technology Making the NEV Realm a Reality~..... 26

Materiality Issues.............................................................. 28

Accounting Standards
Unless otherwise stated, reporting is in accordance with Japan
GAAP.

report are based on certain assumptions that we consider reasonable at the time of disclosure. Actual results may differ due

Dialogue with Shareholders and Investors..................... 75

Information Disclosure Structure

Mid-Term Business Plan for Fiscal 2022 to 2024........... 30

Publication Date

Message from CFO........................................................... 32
Business-Specific Strategies

to various factors.

October 2023

Data76

Semiconductor Manufacturing Equipment Business... 34

Contact

Precision Measuring Instrument Business................... 36

Key Consolidated Financial Data.................................... 76

Intellectual Capital Strategy............................................ 38

Non-Financial Data........................................................... 80

Human Capital Strategy................................................... 40

Company Information and Stock Information................ 81

Integrated
ReportTokyo Seimitsu Co., Ltd.
2968-2, Ishikawa-machi, Hachioji-shi, Tokyo 192-8515, Japan
https://www.accretech.com/en/contact/index.html

Summary of key information

Financial
Non-ﬁnancial
information information<IR information><Sustainability>

IR Information
https://www.accretech.com/en/ir/
Plans are formulated by the Sustainability Committee
https://www.accretech.com/en/sustainability/index.html

02

INTEGRATED REPORT 2023

INTEGRATED REPORT 2023

03

Introduction

Introduction

Strategy

Sustainability

Governance

Data

About Tokyo Seimitsu
Tokyo Seimitsu’s DNA and Mission

Tokyo Seimitsu’s Aspirations
Looking forward, we will work with all stakeholders to
overcome challenges and create a sustainable future.

Providing the Highest-level Technology
to Achieve the World's No. 1 Manufacturing

PurposeGaging the future with Metrology,
Creating the future with Semiconductors

WIN-WIN RELATIONSHIPS CREATE
THE WORLD'S No. 1 PRODUCTS

Starting as a company with its precision equipment company in 1949, the Tokyo Seimitsu Group has been providing precision measuring instruments equipped with advanced measurement technology to industries since its
inception.
Even in the semiconductor manufacturing equipment business, ever since launching Japan's first wafer slicing
machine, our measurement technology has been utilized to meet the demand for advanced miniaturization, 3D
applications, and higher efficiency. Being "the only semiconductor manufacturing equipment manufacturer with ametrology business" makes us unique and serves as the source of our strength.
The Tokyo Seimitsu Group will continue to contribute to creating an enriched society of the future through both its
precision measuring instrument business and semiconductor manufacturing equipment business.

Our mission is to work with our customers toachieve the world’s best manufacturing activities.
Breakthrough technologies are needed to realize
next-generation products and bring them to market. We provide precision measuring instruments
and semiconductor manufacturing equipment thatleverage the world-class technological expertise
we have cultivated over more than 70 years since

VisionThe Tokyo Seimitsu Group is always committed to building a"future full of dreams."

Mission· Growing together with partners and customers by collaborating
technology, knowledge, and information to create the world’s
No. 1 products· WIN-WIN relationships create the world's No. 1 products

Value

We strive to create WIN-WIN relationships with all stakeholders, including customers, shareholders, suppliers, employees, local communities and the international community and to play an active role
in realizing a sustainable society and enhancing corporate value.

our founding to offer new possibilities for our customers’ manufacturing operations.

Semiconductor
Manufacturing Equipment“No Measurement,
no Manufacturing”
Measurement is an essential part to all manufactur-

Corporate Brand

ing. Based on the concept of “No measurement,
no manufacturing,” we support the development ofindustries around the world with our ultra-high-pre-

ACCRETECH

cision, high-speed measurement technology for all

A fusion of "Accrete" and "Technology," signifying "Grow Together."kinds of objects. This ability to measure precisely

Our symbol mark represents our Corporate Philosophy, which is "Growing together withalso supports the evolution of semiconductors inpartners and customers by collaborating technology, knowledge, and information tocreate the world’s No. 1 products."

04

INTEGRATED REPORT 2023

High Precision
Measuring Instrument

terms of high performance and miniaturization. We
contribute to affluence in people’s lives and a new
future by remaining abreast of the times.
INTEGRATED REPORT 2023

05

Introduction

Introduction

Strategy

Sustainability

Governance

Data

The History of Tokyo Seimitsu
Precision measurement capabilities, Tokyo Seimitsu’s core technologies, have brought about
various innovations during the history of Tokyo Seimitsu.
We will continue to hone our core technologies and challenge various possibilities to respond to
the needs of customers and society and solve their issues.
upporting the evolution of global manufacturing with a spirit of challenge
Our Growth Trajectory Stoward
technological innovation

In fiscal 2022, net sales

Semiconductor Manufacturing Equipment Business

1958
The Company develops
a germanium pellet automatic
thickness sorting machine
Utilized measurement technology
Technology for automatically andprecisely measuring the thicknessof small parts¥

Utilized measurement technology
The operator work that was previously required for the
initial needle alignment is now fully automated by utilizing
precision measuring technology for precise automatic
needle alignment using a CCD camera

Utilized measurement technology
The larger the diameter, the more difficult it isto produce a flat cut. In response, an innovative
cutting method that uses both a grinding wheel anda blade were employed. Measurement technology
and sensors were utilized for cutting and grinding

1964
The Company
develops a wafer
probing machine◦

1992
The Company develops the A-PM-90A
Next-Generation Probing Machine

1987
The Company develops
the S-LM-500 Large diameter
wafer slicing machine

1963
The Company develops aninternal diameter blade-type
wafer slicing machinereached a record high of

146.8 billion

2000
The Company develops the
PG200 Polish grinder

◦ ◦

◦

◦

◦

Precision Measuring Instrument Business

1979
The Company develops the
RONDCOM 5A, roundness
and cylindrical profile
measuring instrument

1969
The Company
develops a coordinate
measuring machine

1952
The Company develops
a high pressure flowtype air micrometer

◦

◦

◦ ◦

◦

1950

1960

1949
Tokyo Seimitsu Kogu Co.,
Ltd. is established◦
1962
Changes name to Tokyo Seimitsu
The Company’s stock is listed on
the Second Section of the Tokyo
Stock Exchange

1950s

1960s

◦
◦

◦

1980

1970
The Company makes a full-fledged
entry into the business of semiconductor processing instruments

1970s

◦

◦

◦

1990

1986
Listed on the First Section of
the Tokyo Stock Exchange

1980s

◦

◦ ◦

2000

1995
The Company enters aglobal partnership with
Carl Zeiss

1990s

◦ ◦

2010

2020

2012
The Company acquires a
precision blade businessfrom Mitsubishi Materials

2000s

2010s

(FY)

2019
The Company acquires
Fujitsu Telecom Networks
Fukushima Limited(now Accretech Powertro
System)2020s

Trends in the semiconductor industry
Birth of the integrated circuit (IC), semiconductors
become smaller and higher-performance

Birth of the transistor

Move toward large-scale
integrated circuits andmultifunctionality

Increased semiconductor
memory/PC proliferation

Smartphones become mainstream

Explosive spreadof IoT and 5G

Trends in the precision measuring instruments industry
Metric system
introduced

Wave of motorization

Issue of air pollution from automobile exhaust

The golden age ofJapanese cars

Automotive industry
restructuringHybrid vehicles emerge

New-energy vehicles are introduced

Restructuring of business by keeping
an eye on the future and building an
unshakable management foundation

Strategic investment and increased production
Reinforcement of policies to become asustainable company

Evolution of Tokyo Seimitsu
From the dawning of theCompany to the establishment of
its technological base
Entering the precision and semiconductor
fields・Based on the technical capabilities that weresuccessfully developed with cutting tools foradvanced sewing machines, we respond to
the sophisticated needs of the automotive
and sewing machine industries
・Entered the precision field with air micrometers
・Entered the semiconductor field with the development of a germanium pellet automatedthickness sorting machine06

INTEGRATED REPORT 2023

Period of full-scale development throughoriginal technological development
Development of groundbreaking
instruments based on the concept of“No measurement, no manufacturing”
・Accumulated various technologies to measure
all manner of things for Japanese industry
・The Company develops Japan’s first internal
diameter blade-type wafer slicing machine
and wafer probing machine

Recovery from recession andproactive development of unique
new products
Achieved position as the world’s leading
manufacturer of slicing machines
・The Company captured a 70 to 80% shareof the global market with the internal diameter blade-type wafer slicing machinedeveloped in response to the trend toward
larger-diameter silicon wafers
・R eceived acclaim for our roundness andcylindrical profile measuring instrument,
which employed the world’s most advanced
technology

Decisive implementation of management reforms and concentrated
investment in strategic products
Acquired a top share of the global market
for probing machines through our concentrated investment in strategic products・M ade aggressive R&D and capital investments in strategic products, such as wafer
slicing machines, probing machines, anddicing machines to rebuild management
following the prolonged recession causedby the collapse of the bubble economy
・T he Company captures top share of the
global probing machine market with the
A-PM-90A

Establishment of a management policy that
continues to the present and advocacy of
ACCRETECH・F ormed an alliance with Germany’s Carl
Zeiss to streamline product development
and expand sales through the mutual supply of products・Introduced an in-house company system
and an executive officer system, establishing the management foundation that continues to the present

Initiatives to become a truly global company and develop products that contribute tocarbon neutrality
・Established the Sustainability Committee toreinforce efforts toward creating a sustainable
society・Developed and launched a high rigid grinder
optimized for processing power semiconductors (compound semiconductors)
・E xpanded operations through acquisition of
precision blade, balancer, and charge/discharge testing system businesses
INTEGRATED REPORT 2023

07

Introduction

Introduction

Strategy

Sustainability

Governance

Data

Message from CEO"Participation in and contribution to local communities," and"Building and running a fair, transparent, and efficient corporate governance system," on which we based our materiality
issues.

● Basic Sustainability Policy
The Tokyo Seimitsu Group is always
committed to building a "future full of dreams."

Hitoshi Yoshida
Chairman and CEO

The world is currently facing a number of unprecedented challenges, like climate change and social instability arising from thegrowing gap between haves and have-nots. I can see first-handhow efforts are being made all over the world to address theseissues, including the United Nations and other international organizations issuing recommendations to various industries, andmore stringent regulations being enacted by each country. As amember of society, companies like ours need to fulfill our responsibility by keeping pace with these efforts and developing
new technologies and products in each respective field.
For around 75 years, the Tokyo Seimitsu Group has grown on
the back of semiconductor manufacturing equipment and precision measuring instruments that support the state-of-the-art
product development and manufacturing conducted by ourclient companies, and I want to coordinate efforts with our
stakeholders to help create a sustainable society and achieve
growth for our companies.

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INTEGRATED REPORT 2023

Sustainability of the Tokyo Seimitsu GroupTo ensure that the Tokyo Seimitsu Group expands its businessand builds up a presence deemed essential to society in the
future, I think it will be essential to supply the market withproducts that have minimal environmental impact and that
help people enhance their wellbeing. I also understand that it
is extremely important to ensure that stakeholders of the Tokyo Seimitsu Group live a healthy and affluent life, and we aremaking sure that this forms the very essence of our sustainability activities.
In 2021, we formulated the Basic Sustainability Policy and established the Sustainability Committee, which I chair to spearhead sustainability activities throughout our Group.
The Basic Sustainability Policy covers six key areas: "Efforts toaddress environmental issues," "Earning the trust of society,""Respect for human rights," "Human resource development,"

Efforts to addressenvironmental issues

Earning the trust of society

Respect for human rights

Human resource
development

Participation in andcontribution to
local communities

Building and running a fair,transparent, and efficient
corporate governance system"Efforts to address environmental issues" includes initiatives
for contributing to the environment by supplying environmentally friendly products and reducing GHG emissions from ourmanufacturing sites.
"Earning the trust of society," "Respect for human rights," "Human resource development," and "Participation in and contribution to local communities" focus on solving social issues
through the provision of high-value-added products and theestablishment of supply chains. At the same time, we haveembarked on activities in line with priority initiatives based onmateriality issues for creating a workplace where a diverse
range of people can play an active role and where they canenjoy a healthy and rewarding work environment, both physically and mentally, and with respect for human rights.
"Building and running a fair, transparent, and efficient corporate governance system" involves strengthening the management foundation, compliance, and risk management that underpins our corporate activities. As the chairman of the Boardof Directors, I am also rolling out initiatives to enhance theboard’s effectiveness.

Climate Change Initiatives
Climate change is considered a significant management risk
for our Group. In addition to the major impact on the socioeconomic sector that the increase in extreme weather events
caused by global warming will have, there are a range of otherpotential risks, such as rising costs due to more stringent regulations implemented to achieve decarbonization and shrinking target markets due to changes in the markets that ourGroup targets. In contrast, our products and services alsopresent major growth opportunities toward the realization of adecarbonized society—an example that illustrates this is theway we can contribute to the spread of NEVs.
As such, responding to climate change is viewed as a high-priority challenge, so we are focusing on building a cross-divisional framework to handle this. In 2022, we agreed to the rec-ommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD) and are analyzing and disclosing risks andopportunities based on this framework.
We aim to reduce our Group's 2030 Scope 1 and 2 CO2 emissions by 50% compared with fiscal 2018 and are focusing on
power-saving efforts with the primary aim of reducing the CO2
equivalent of electricity purchased, as a way of slashing ourgreenhouse gas emissions.

As a Global Company
Currently, overseas markets account for the majority of the Tokyo Seimitsu Group’s sales, and we have approximately 950
employees in 18 countries outside Japan. Regardless of thecountries or regions we operate businesses in, the Tokyo
Seimitsu Group aspires to be a global company that has common policies and goals that respects the differences in customs and ways of thinking among countries and regions. To
this end, we are working to strengthen ties between our employees.
Similarly, we believe that ensuring management discipline
throughout the Group is of the utmost importance, so we areenhancing global management toward all of our sites in any
country or region where the Group is operating.

Gaging the future with Metrology,
Creating the future with Semiconductors
The Tokyo Seimitsu Group is implementing our own style ofsustainability activities based on our mission of "Growing together with partners and customers by collaborating technology, knowledge, and information to create the world’s No. 1
products." Furthermore, by keeping to our purpose of "Gaging
the future with Metrology, Creating the future with Semiconductors," we aim to achieve an affluent society where everything in people's lives advances conveniently, and a sustainable society where we can enjoy the richness of nature andhappiness in various ways.
I am delighted to present this Integrated Report 2023, with thehope that it reinforces your understanding of the direction theTokyo Seimitsu Group is heading, and to grow together with
our stakeholders. I would appreciate you taking the time toread through the report and providing us with any feedback
you may have.
October 2023
Chairman and CEO

INTEGRATED REPORT 2023

09

Introduction

Introduction

Strategy

Sustainability

Governance

Data

Message from COO
es, and I believe we can contribute greatly to this kind of innovation.
In addition, an increasing number of countries are now pursuing national policies to strengthen semiconductor development
and production. While this move presents an opportunity for
the Tokyo Seimitsu Group to expand its market, it also carries
the risk of creating new competition. The Tokyo SeimitsuGroup is aiming to maintain its competitive advantage by investing in research and development to maintain its technological edge, as well as by developing its service structure andexpanding its production capacity to improve our response tocustomer needs.

Precision Measuring Instruments Available
for an Extensive Range of Manufacturing
Activities

Ryuichi Kimura
President and COO

The Industry’s Only Manufacturer of
Semiconductor Manufacturing Equipmentthat also has Measurement Technologies
I would like to begin by highlighting that measurement technology forms the core technology of the Tokyo Seimitsu Group.
Since our founding in 1949, it was our precision measuring instruments that enabled us to expand our business opportunities—the measurement technology that we developed overthis time is also utilized in our semiconductor manufacturing
equipment that continues to grow in market scale.
In light of this, I am keenly aware that the Tokyo SeimitsuGroup is the industry’s only manufacturer of semiconductor
manufacturing equipment that also has measurement technologies. In the past, we focused on sustaining stable earnings
from two key businesses, but with semiconductor devices
reaching the limits of technological advancements, we believe

10

INTEGRATED REPORT 2023

we can make further advances by applying our measurement
technology to semiconductor manufacturing equipment. This
has enabled even higher-precision inspection and processing,and our Company's core strengths are being harnessed in theworld’s No. 1 manufacturing activities.

Maintaining Technological Superiority in an
Intensifying Market Environment
The semiconductor market continues to experience rapid advances in functionality and quantitative growth. To date, needs
have been met through advances in front-end process technology for design shrinkage and larger diameter wafers. As
these now approach their technological limits, the industry isseeking new solutions, such as 3D packaging, that can be realized with post-processing technology. The Tokyo SeimitsuGroup offers a wide range of products for back-end process-In the area of precision measuring instruments, which are essential for high-quality manufacturing, the Tokyo SeimitsuGroup has maintained steady growth by capturing demand formeasuring the dimensions and shapes of high-precision parts,
especially for automobiles with internal combustion engines.
Industry shifts toward energy conservation, fuel efficiency, andthe unification of automobile platforms have also created new
demand.
While there was a temporary lull in demand caused by the
spread of COVID-19, the market for manufacturing activities
does remain stable, and growing demand for NEVs toward
decarbonization and greater sales in the robotics, medicalcare, and semiconductor industries mean these businesses
are slowly expanding. Our business for test systems of batteries and other secondary cells is beginning to take hold, withbusiness opportunities steadily increasing.

Capture Business Opportunities andStrengthen Initiatives in Growth Industries
The Tokyo Seimitsu Group has set the numerical targets forfiscal 2024, the final fiscal year of the three-year mid-term business plan, to reaching ROE of 15% or higher, consolidated net
sales of 170.0 billion yen, and consolidated operating profit of
37.5 billion yen.
The Group believes that the world of "Society 5.0," meaning an
integration of the virtual and physical society, will continue as
5G drives advances in communication technology. We also
expect the semiconductor market to grow rapidly by bothmonetary and quantitative measures. While the market for ICE
automobiles is tending to decrease, the precision measuring
instrument market is expected to grow due to the need for
new types of measurements for NEVs, aircraft, and other sectors.
In the semiconductor manufacturing equipment business, we
see business opportunities in the growing demand for testing
systems (probing machines) as semiconductor devices andelectronic components become more sophisticated and com-plex, and assembly equipment (dicing machines and polishgrinders) as devices are comprised of more individual components. We also anticipate expansion of the machining process
market related to new compound semiconductors, such as
those made of silicon carbide (SiC) and gallium nitride (GaN)with a view toward going carbon neutral. To this end, we will
promote development that matches the needs of our customers and expand our business by developing new products inthe processing equipment category.
In precision measuring instruments, we believe that the rapid
shift in direction toward carbon neutrality and the expansion of
the NEVs and renewable energy markets will stimulate new
demand for measurement, as well as demand for automationin manufacturing in response to the declining workforce. We
also believe the semiconductor-related market presents business opportunities. To this end, we will strengthen our efforts
in growth industries, as well as in the charge/discharge testing
business and solutions for automation.

Expanding Business with the Synergy of
Semiconductor Manufacturing Equipment
and Precision Measuring Instruments
We are creating unique new business opportunities throughthe fusion of semiconductor manufacturing equipment andprecision measuring instruments. By incorporating our precision measuring instruments into semiconductor manufacturing
equipment, we can provide fresh new solutions and greater
added value—we will also be able to expand our target markets by making our precision measuring instruments available
throughout semiconductor-related industries.
With these synergies, the Company is anticipating to increase
sales to around 13 billion yen in 2025.

Reviewing 2020 and Beyond
From fiscal 2018 to 2021, the Company expanded businesstoward its four-year mid-term management targets (ROE of
10%, operating profit of 22 billion yen, and sales assumption of
110 billion yen). Business assumptions made at the time included advances in 5G technology and demand from China
for the semiconductor manufacturing equipment business,
and automobile platform innovation for the precision measuring instrument business. Yet the sudden growth in EVs owing
to moves toward decarbonization, demand from people staying at home due to the outbreak of COVID-19, and the rapid
development of new working styles (WFH: Working From
Home) resulted in a major growth in demand for semiconductor devices and semiconductor manufacturing equipment.
Meanwhile, significant changes had unfolded, like difficulties insourcing the materials required for production, and thesemade me acutely aware that our businesses and industries related to the Company had become directly linked to the people's lives around the world and that the mission of the Tokyo
Seimitsu Group was to provide the products required by cus-

INTEGRATED REPORT 2023

11

Introduction

Message from COO

tomers exactly when they need them. This is why we havebeen expanding production capacity during the period of thecurrent mid-term business plan—to fulfill the responsibility wehave for our customers.
With global temperatures continuing to rise so quickly, theCompany recognized that it should be one of the members focusing on resolving these issues, endorsed the TCFD recommendations, and incorporated into the current mid-term business plan operations for achieving decarbonization and the
supply of products that contribute to decarbonization.

Business Performance for Fiscal 2022
While the direct impact of COVID-19 and the restrictions put inplace by various countries began to subside during fiscal
2022, inflation increased due to the disruption of the supply
chain and other factors. Countries around the world introduced monetary tightening as part of policies aiming to curbthese trends, resulting in major fluctuations in exchange rates.
The war in Ukraine also triggered an increase in the cost of
materials and energy, all of which led to an outlook of ongoing
economic uncertainty.
Given these circumstances, we increased production capacity
for the semiconductor manufacturing equipment department,
to ensure that existing orders could be shipped as per the required delivery schedules. Global demand for power semiconductors required for carbon neutrality also increased, and we
also responded to these changes. In the precision measuring
instrument department, a resumption in capital investmentsthat had slowed down led to signs of recovery in the market,
and we moved to diversify target markets by meeting demandfor charge/discharge testing systems and automation.
With these efforts, fiscal 2022 resulted in the third consecutive
year of increased revenue and profit, and the second consecutive year of all-time highs. We also paid special bonuses inrecognition of the considerable efforts made by employees toward giving form to customer feedback, despite such toughbusiness environments.

Full Year Operating Results(Unit: hundred million yen)

12

FY2020

FY2021

FY2022

Net sales

971

1,307

1,468

Operating profit(Operating margin)

156

283

345

(16%)

(22%)

(24%)

Recurring profit

159

292

353

Current net profit

122

213

236

INTEGRATED REPORT 2023

Introduction

Strategy

A Succession Plan is the Top Challenge forManagement

Aiming to Be the World's No. 1
Giving Shape to Engineers’ Ideas

Time flies so fast, and I turned 60 years old in 2022. At the moment, three of us hold positions with the most responsibility—
Chairman and CEO Yoshida, Executive Vice President and CFO
Kawamura, and myself as the COO—but this personnel structure will not continue forever. In a few years, we may have to
make the decision to hand over the reins to the next President.
The most important role for me as the COO is to ensure thatthe strengths and strategies developed by Tokyo Seimitsu
since its founding are passed on and implemented successfully, to nurture and cultivate a successor capable of sustainablegrowth for the Company.
I do not necessarily intend to name a successor from someone in the current management team. Instead, I hope to findskilled personnel, regardless of nationality or gender, and build
up their experience before handing over the reins.

I am of the firm belief that "people" are key assets of Tokyo
Seimitsu, and experienced engineers and the staff that assist
them are the source of growth for our Group.
The Company has developed a corporate culture where engineers tackle customers’ issues head-on and pursue innovation
based on their wisdom and experience.
I always tell our engineers that I want them to reflect their own
ideas in product development, and the Company has createdSustainability

GovernanceData

a system for executing development budgets in a way thatgives concrete form to their ideas. Going forward, we will continue to cherish "human resources" as our valuable assets,
and work alongside our customers to be the world's No. 1 inmanufacturing.
October 2023
President and COO

Lessons from Sales.
Giving Form to Customer Feedback
I joined Tokyo Seimitsu as a fresh graduate, where I was involved solely in the field of sales in the semiconductor manufacturing equipment department. Just like today, semiconductor devices were experiencing rapid growth, and device
manufacturers and manufacturing equipment manufacturers
had a mutually beneficial relationship.
The most valuable thing I learned during that time was to identify exactly what customers wanted—in other words, to listen
carefully to their needs. We need to pay special attention tocustomer feedback at every given opportunity, to leverage
their "requirements" to develop devices. This is what forms our
mission. While I was working in sales, this positive chain wasleveraged to deliver to customers numerous devices that became the world's first or Japan's first, and as a result, we wereable to achieve what they were seeking. I personally believethat such person-to-person connections, particularly thoseconnections leveraged for finding solutions to issues, are so
important—even now in my role as the President—and I am
trying to convey this level of importance to employees on adaily basis.

INTEGRATED REPORT 2023

13

Introduction

Introduction

Strategy

Sustainability

Governance

Data

Overview of Tokyo Seimitsu’s Businesses
Tokyo Seimitsu achieves stable earnings through operations in two fields of business: semiconductor manufacturing equipment and precision measuring instruments. By boosting the synergy
between these two businesses, we have earned a high share of the global market as the only producer of semiconductor manufacturing equipment that also has measurement technologies.
Business Portfolio

Tokyo Seimitsu’s Product Characteristics
Semiconductor Manufacturing Equipment

Automated
Charge/discharge testing systems
Precision
measurement
measuring Multipurpose
measurement
instruments

Semiconductor manufacturing equipment that isessential to producing next-generation and otherleading-edge devices

Inspection systems

Net sales￥146.8billionProcessing systems

Semiconductor
manufacturing
equipment◦Probing machines◦Dicing machines◦High rigid grinders◦Polish grinders◦CMPs (chemical mechanical planarizers)◦Edge grinding machines◦Sliced wafer demounting andcleaning machine

Precision Measuring Instruments
Supporting and ensuring manufacturing at automobile and other production sites by offering the world’s
highest level of precision, speed, and resistance toenvironmental factors◦Coordinate measuring machines◦Surface texture and contour measuring instruments◦Roundness and cylindrical profile measuring instruments◦Optical measuring instruments◦Optical shaft measuring instruments◦X-ray CT systems◦Charge/discharge testing
systems◦Machine control gauges

Probing machines

Coordinate measuring machines,
surface texture and contour
measuring instruments

Top share of the
global market

Top share of theJapanese market

Global Network Supporting the World’s Leading-Edge Manufacturing
Group companies globally expanding at 70 sites in 18 countries and regions provide on-site support for the world's leading-edge
manufacturing activities. Providing prompt and meticulous support is earning the strong trust of our customers.

Technical Synergies Between Semiconductor Manufacturing
Equipment Business and Precision Measuring Instruments Business
Applying the measurement technology of the Precision Measuring Instrument Business tosemiconductor manufacturing equipment enables higher precision machining and inspections.

AD3000T-PLUS Opt-scope built in
Dicing machines are equipped with non-contact
measuring technology to support new inspection
functions● Dicing machines can be used for measuring machining groove profiles
First groove
Device▼Dicing machine

AD3000T-PLUS

Microscope

Step1

Step2

Si

Second groove

Tape

Grooving with a blade

Processed kerf checkNewprocess
Depth
60µm

Research sites
4 sites in Japan

Manufacturing sites
7 sites in Japan
5 sites overseas

Sales and service sites
65 sites in Japan
70 sites overseas

Step2
Kerf
25µm

Overseas
sales ratio

73

%

Step1
Kerf
36µm

Results of 2D kerf check

Groove shape determination from
Opt-scope measurement data

Example: Image of Step Cut process▲ Optical measuring
instrument

Opt-scope

Existing process: Second groove cannot be detected with kerf checks
New process: Results of Step1 and Step2 groove machining can bemeasured accurately

Manufacturing sites in Japan include the Hanno Plant that was completed in July 2023.

14

INTEGRATED REPORT 2023

INTEGRATED REPORT 2023

15

Introduction

Introduction

Sustainability

Strategy

Governance

Data

B Industrial water (groundwater)
Water usage conversion(m³/Millions of yen)

Financial and Non-Financial Highlights
Financial

Non-Financial• Net Sales
146,801(Millions of yen)
150,000• Operating Profit• CO₂ Emissions(Millions of yen)(t-CO ₂ )12,50034,49435,000130,702
120,000
101,520

15,562
14,00030,000

7,000

0

0

2018

2019

2020

2021

2022 (FY)

9,524

2020

2021

35,297

2018

2019

2020

32,00024,00020,805

12,360

8,000

5,000

0

0

2018

2019

2020

2021

2022 (FY)

40

98.6

98.5

98.5

30

14

13

12

11

10

10

0
2019

2020

2021

B 145,644

B 149,055

B 141,518

B142,161

0.60
A 22,484

A 26,062

A 20,818

A 22,144

2018

2019

2020

2021

2018

2022 (FY)2019

FY2019FY2020

FY2021

FY2022

99.0

1.4%

1.4%

1.5%

1.9%

2.4%

98.0

Percentage of female
officers

0.0%

7.7%

7.7%

7.7%

15.4%

97.0

Percentage of female
regular employees

6.5%

6.4%

6.5%

7.4%

8.5%

Cash flows from investing activities

Total assets (sum of liabilities and net assets)

Number eligible

Cash flows from financing activities

Equity ratio

Acquisition rate

0.0

2020

96.0

2022 (FY)

2021

95.0

• Patents Held

Number taking leave

Net assets

2022 (FY)FY2018• Percentage of Men Taking Childcare Leave

Cash flows from operating activities

A21,989

Percentage of female
managers

99.0

99.0

• Balance Sheet• Cash Flows

1.20

(%)
100

7,156

2018

164,150• Percentages of Female Employees and Female Managers

12,175

10,000163,662

1.80

Recycling rate

20

15,867

16,00023,63014,66515,00002022 (FY)(t)
50

20,00029,1602021• Recycling Rate and Final Disposal Amount

21,326

1.48

80,0002022 (FY)25,000169,873

171,706

157,375

0
2019

2.40
1.61

B 134,891(Millions of yen)

40,0002.29

2.05

160,000

2,500

2018

3.00

2.74

240,000

Final disposal amount(Millions of yen)

320,000

8,257

5,000

12,282• Net Profit (Net Profit Attributable to Owners of the Parent)• Recurring Profit

400,000

7,500

20,221

21,00060,00011,982

8,191

97,10587,92790,000A City water supply（m3） ※A＋B Water use

10,00028,32728,00012,312• Water Use

Free cash flow
(Millions of yen)

(Millions of yen)
25,00022,06220,00016,871

10,0005,000-10,000-15,000

16

240,000

180,000

5,443 5,965
1,000

△151
△1,020△6,116△5,191△6,375△8,282△13,952
20182019

157,573

120,000 107,403

146,549

109,674

161,556

116,777

131,081(Number of people)

38.5

40

(%)
40

69.0

68.1

73.9

190,2870-5,000

80

71.4

67.3

14,847

15,000 12,932(%)

300,000

23,837

209,032

64

32
25

48

24

32

16

16

8

146,028

3

941

1,000
832

32

23

(Number)

26
5
19.2

32

800

24

600

16

400

8

200

0

0

26

706

761

637

10

△2,174△8,990△10,346

2020

INTEGRATED REPORT 2023

2021

△7,421△8,4212022 (FY)60,000

0

2018

2019

2020

2021

2022 (FY)

0

0

9.4
0

0

2018

2019

2020

2021

2022 (FY)

2018

2019

2020

2021

2022 (FY)INTEGRATED REPORT 2023

17

Strategy

Strategy

Introduction

Sustainability

Governance

Data

Value-Creation Process
The Tokyo Seimitsu Group has been continuously providing the soil to cultivate technology and achieve innovation within the Group throughout its history, something that is reflected in the six elemental technologies that serve as the sources of the Group's core technologies. We believe that promoting business growth through synergies between our coretechnologies and our three strengths as well as continuing to evolve the Tokyo Seimitsu Group’s business model willlead to the realization of the creation of affluent society where everything in our daily lives advances conveniently andsustainable society where we can enjoy the richness of nature and happiness in various ways.

INPUT *1
Financial capital• Shareholders’ equity: ¥140.2 billion• Rating of A - Rating & Investment
Information, Inc（R&I）• ROE: 17.3%

PURPOSEOUTPUT

Gaging the future with Metrology,
Creating the future with Semiconductors

Creation of economic value(results for fiscal 2022)

Working alongside our customers
to achieve the world’s No. 1
in manufacturing

Manufactured capital• Cumulative capital expenditure: ¥63.3 billion*2• Capital expenditure as a percentage ofnet sales: 6.9%*2• Manufacturing sites: 12 in 5 countries
and regions*3• Sales and service sites:
65 sites in Japan
70 sites in 18 countries or regions outside Japan

Ability to solve diverse
technical issues
for customers

Net
sales

Ability to support
customers’
manufacturing
activities

Ability to uncovercustomer needs• Cumulative R&D expenditure: ¥70.5 billion*• Patents held: 941 (As of December 31, 2022)• Group Leader system• Technology transfer projects
2High-speed
automatic
control

Human capital• Number of Employees: 2,468
Of which, engineers: 1,494
Of which, in manufacturing departments: 557• Corporate culture where engineers cantry anything

Analysisof surface
properties
Non-contact
andnon-destructive

Operatingprofit¥34.5 billion

Shareholder
returns

Dividend payout ratio 40.3％

Ultraprecision
machining

Creating a workplace where a diverse range of
people can play an active role and are physicallyand mentally healthy and fulfilled in their work.

Providing the soil to cultivate technology
and achieve innovation

Inv

Inv

estm

estm

Initiatives to strengthen the management baseent inent m

R&D

etricsSurgical robots, remote medicine

Expansion of production capacity
Reinforcement of applications

Metaverse
Realization of carbon neutrality
through the conservation of
power and energy

Strengthen management foundation that
supports corporate activities, compliance,and risk management

Corporate culture

Natural capital

Smart factories

Build high-value-added products and supply
chains that address social issues

Core technologies• Strong trust-based relationships withcustomers and proposal-making capabilities• Alliances with top-level companies• Customer satisfaction

2022 results*12 Fiscal
cumulative figure*3 10-year
Includes the Hanno Plant* whichwas completed(¥112.4 billion from semiconductors/¥34.4 billion from measuring)

Precision
positioning

Social relationship capital• Total energy use: 288,544 GJ• Water use: 164,150 m3• Promotion of eco-factories andeco-products¥146.8 billion

Environmental contribution through products,
business activities, and products and services
provided that solve environmental problems

Ultraprecision
measurement

Precision
measurement
capabilities

17.3%

Society 5.0
Realization of human bounty
through the fusion of virtual andphysical spaces

Initiatives targeting important ESG issues

Creating value through three strengths

Intellectual capital

ROE

OUTCOME

Environm

nves
ental i

in
Susta

tme

abili

nt

Respect for human rights

Electric vehicles

ty

in July 2023

Sustainable growth18

INTEGRATED REPORT 2023

Environmentally friendly andefficient power generation

INTEGRATED REPORT 2023

19

Strategy

Introduction

Strategy

Sustainability

Governance

Data

The Source of Tokyo Seimitsu’s Competitiveness
The Tokyo Seimitsu Group aims to create the world's No. 1 products through WIN-WIN relationships with many stakeholders, including customers, business partners, and employees. Basedon our precision measurement capabilities, Tokyo Seimitsu’s core technologies, we have built thethree strengths of the Tokyo Seimitsu Group by making the five forms of capital that are deeply
correlated with our Group the source of our competitive strength and collaborating technology,
knowledge, and information.

WIN-WIN relationships create
Ability to uncover customer needs

Ability to solve diverse technical“Strengths andcharacteristics

Sources ofcompetitiveness

INTEGRATED REPORT 2023”

issues for customers

Ability to support customers’ manufacturing activities

Working alongside a host of like-minded people and combining
our mutual technology, knowledge, and information

Manufactured capitalIntellectual capital

Human capitalSocial relationship capital

Natural capital

A system that allows us to handle
production in-house

Know-how to develop new products using sophisticated technology
by combining knowledge of market
needs and the seeds of innovation

Human resources to support
customers’ manufacturing

Network with customers andbusiness partners as a foundation
for the co-creation of value

Technical capabilities that
contribute to the conservation ofenergy and resources

In-house production that integrates
processes from machining to
manufacturing, inspection, andshipping◦Technology and facilities thatenable consistent in-house production (production system that
integrates sales, engineering, andfactories)◦Flexible production system with amain location and assembly bases◦Nimble service system at domestic
and overseas sites

Rapid commercialization of products
from development to manufacturing
by concentrating human resources
and state-of-the-art facilities in ourown factories◦High-precision, high-speed
precision machining technology◦Application capabilities to solve awide range of issues◦Rapid development under theGroup Leader system◦High patent prosecution rate andpatent score◦Promotion of a technology transfer
project

Core technologies: Precision
20

the world’s No. 1 productsWorking together with a customer-oriented mindset in manufacturing, engineering, service, and sales
to provide high-quality services◦Corporate culture where engineers
can try anything◦E xperienced engineers with expertise in manufacturing, development, and service◦Sales force with strong negotiatingskills and high level of customer
trust◦Customer engineers who canprovide one-stop solutions to awide range of customer needs

Collaborative value creation basedon strong trust with customers andbusiness partners◦Strong trust-based relationships
with our customers (many achievements built into their technology
and production standards)◦Alliances, brand licensing, and joint
development with leading companies◦Strong relationships with suppliers
and business partners (ACCRETECH
and partner companies)

Reduce environmental impact
throughout the value chain, including
the lifecycle of the products weprovide◦Reduce environmental impact bybuilding low-carbon, resource-saving
eco-factories◦Promote eco-products by developing environmentally friendly products with low energy loss

measurement capabilities
INTEGRATED REPORT 2023

21

Strategy

Strategy

Introduction

Sustainability

Governance

Data

Tokyo Seimitsu’s Business Model
We address manufacturing issues with sincerity and thoroughness fromthe customer’s point of view by applying the core technologies (precision
measurement capabilities) we have refined and our three strengths
As we listen closely to our customers, we can delve deeply,
exploring needs and the seeds of innovation that no one has
yet addressed. We then combine the wisdom and experienceof our experienced engineers to develop innovative equipment.
Our strength lies in our relentless pursuit of technology andour thorough customer orientation.

Tokyo Seimitsu supports customers’ efforts to manufacture
semiconductors and automobiles with its unique measurement technologies through both its precision measuring instrument business and semiconductor manufacturing equipment business. These technologies include precision
positioning, ultraprecision measurement, and ultraprecision
machining.

Tokyo Seimitsu’s Core Technologies
Our products are composed of several key elemental technologies based on our core technologies (precision measurement
capabilities).
Through precise measurement, we are able to provide feedback for positioning, ultraprecision machining, high-speed automatic control, and even more advanced ultraprecision mea-

Creating cutting-edge equipmentwith original ideas

Conduct R&D on
innovative technologies that integrateknowledge andinformation

Precision
positioning
Analysis ofsurfaceproperties

Ability to
Ability tosolve diverse
supportcustomers’
technical
issues for
manufacturing
customers Core technologies
activities

Precision
measurement
capabilities

Achieve performance thatexceeds customer
expectations

High-speed
automatic
control

Identify potential
needs and theseeds of innovation

22

Strength

Strength

Strength

Ability to uncovercustomer needs

Ability to solve diverse
technical issues for customers

Ability to support customers’
manufacturing activities

We are able to identify diverse customer needs early on, based on ourstrong trust-based relationships
with customers.

Utilizing core technologies from theperspective of new markets and customers, we create innovative functions
by leveraging our creative technological development capabilities.

We leverage our advanced technological capabilities to help customers optimize and maximize theirproduction capacity.

Points of differentiation

Points of differentiation

Points of differentiation• Ability to identify diverse requests from
customers (ability to detect problems at
the slightest sign)▶
 A system in which engineering, manufacturing, sales, and customer engineers(CEs) work in unison to understandcustomer needs• Solution capabilities to meet a wide rangeof customer needs▶Technology taking the lead in marketingand planning under the Group Leader
system• A culture that encourages engineers totake on new challenges• E xperienced engineers who deliver onchallenging functional requirements (engineers with high-level skills)• Inheritance and standardization of craftsmanship (inheritance of quality control
know-how and formalization of knowledge)• Standardization Committee for cross-fertilization of electrical control technology anddesign methods across the organization• Deep trust between customer engineers
and customers (building WIN-WIN relationships ascertaining customers’ trueneeds)• Maximize equipment performance throughcustomization in the customer’s field• Quick response, customer-focused support system• Training of excellent customer engineersand flexible teamwork systems for eachdeviceINTEGRATED REPORT 2023

Core technologies

Precision
measurement
capabilities
Ultraprecision
machining

Tokyo Seimitsu's Product Manufacturing is Supported by Its Core Technologies

Tokyo Seimitsu’s Three Strengths
2

Ultraprecision
measurement

Non-contact
Nondestructive

Ability to uncovercustomer needs

1

surement. Depending on the application, we are expanding
into elemental technologies that are non-contact and non-destructive.
Through measurement, we are also developing elemental
technology in software areas, such as with algorithms that use
measurement data to discern the properties of an object.

3

Our core technologies—the ability to measure precisely—not
only increases the value of precision measuring instruments,
but also contributes to precision manufacturing throughout
society, as well as playing a key role as the foundation for developing Tokyo Seimitsu's products. Technologies that enableprecision measurements enable manufacturing of precisionparts at the Company and are also leveraged for the delicate
assembly of products and precision inspections and calibrations.
It was this ability to measure precisely that enabled the development and manufacturing of high-precision semiconductor
manufacturing equipment.
Going forward, Tokyo Seimitsu will continue enhancing thetechnical synergies between the semiconductor manufacturing equipment business and the precision measuring instrument business and contribute to manufacturing throughout
society.

Tokyo Seimitsu's product manufacturing
Semiconductor
manufacturing
equipment

Precision
measuring
instruments

Delicateequipment assemblyHigh-performance
product development

Precision parts
manufacturing

Accurate
inspections & calibration

Core technologies:

Precision measurement capabilities

INTEGRATED REPORT 2023

23

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Aiming for the Sustainable GrowthTokyo Seimitsu follows megatrends to ascertain risks and opportunities. We then formulate midterm business plans and identify important issues (materiality) with an eye toward sustainablegrowth.

Changing the future with semiconductors and precision measuring instruments

Daily life

VehiclesHealthcare

Manufacturing

Finance

Infrastructure

Logistics

Energy generation

Smart appliances,
online classes

Electric vehicles (EVs),
autonomous driving

Surgical robots,
remote medicine

Smart factories

Online payments,
virtual currencies

E-government,
intranetwork

Automated transport inwarehouses, delivery by drone

Environmentally Friendly andEfficient Power Generation

Megatrends

Increasing functionality, complexity ofsemiconductor devices and shift tothree-dimensional semiconductor devices

Society 5.0(Fusion of the cyber andphysical worlds)

An era of large-scale production andconsumption of semiconductors andelectronic components
Expanding needs for measurement in
non-automotive fields such as
semiconductors, aircraft, and healthcare

Business Opportunities

Increasing sophistication and importanceof inspection and measurement

Rising demand for high-precision
semiconductor processing systems

Increased demand for non-contact,high-precision measurement

Commercialization of next-generation
power semiconductors (SiC/GaN, etc.)
offering ultrahigh efficiency

Climate change

Demographic
change24

INTEGRATED REPORT 2023

Expansion of the NEV andrenewable energy markets with a view tocarbon neutrality

Increased need for semiconductors due toproliferation of DX and AI in response to
declining workforce

Shrinking workforce leading to greater
automation in manufacturing

Growing demand for processing systems
for SiC and other innovative materials

Owing to growth in NEVs, increased demandfor high-precision measurement and newneeds such as battery measurement

Need for total measurement ofhigh precision parts that combines robots
and measuring machines

Business Strategy

Aspirations

Mid-Term Business Plan for Fiscal 2022 to 2024

An affluent society where
everything in our daily lives
advances conveniently

Semiconductor manufacturing equipment• Department store strategy for inspection systems (probing machines)• Expansion and reinforcement of processing system business• Development and launch of products that match customer needs• Development and launch of high-value-added products byintegrating our measurement technology with our semiconductor
manufacturing equipment

Precision measuring instruments• Continual capturing of demand in existing fields• Battery measurement for NEVs and acquisition of contract business• Developing non-automotive sectors (such as semiconductors andmedical) and factory automation

Gaging the futurewith Metrology,
Creating thefuture with
Semiconductors

Important sustainability issues

A sustainable society where we canenjoy the richness of nature andhappiness in various ways

INTEGRATED REPORT 2023

25

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Seimitsu's Technology
Aiming for the Sustainable Growth ~Tokyo
Making the NEV Realm a Reality~

Tokyo Seimitsu's semiconductor manufacturing equipment and precision measuring instruments
create an extensive range of parts for new-energy vehicles (NEVs) and contribute to the development of a safe and secure carbon neutral society.

BANK
BA
N

K

1 Semiconductor manufacturing equipment
Commercialization of ultraefficient next-generation power semiconductors
and high-performance sensors contributing to energy conservation, safety
and security
High rigid grinders compatible with SiC and GaN contribute to making thinner wafers for power
semiconductors that ensure energy conservation. Even with high-performance sensors that makeautonomous driving possible, our semiconductor processing instruments and inspection systems
contribute to thinner wafers compatible with laminated structure and high-precision inspection.

2 Precision measuring instruments
Precision measurements contributing to the manufacturing of
high-efficiency, high-performance motors
The stators in motors that are the source of power for NEVs have a complex structure, and ourcoordinate measuring instruments equipped with contact and non-contact sensors are ideal forthe required measurements. A smaller, more uniform gap between the stator and rotor is essential
for better performing motors, and precision measurements with our coordinate measuring
instruments and roundness and cylindrical profile measuring instruments help make this possible.

3 Rechargeable battery charge/discharge testing system
Responding to new measurement needs in the NEV and renewable energy
market for achieving carbon neutrality
The charge/discharge testing system is essential for the development and production ofrechargeable batteries that are the key parts of NEVs. Our new charge/discharge testing systemequipped with our proprietary "energy sharing system" achieves more energy savings and lower
running costs compared to existing equipment. Our charge/discharge testing system and contract
battery measurement business is capturing demand and contributing to carbon neutrality.

26

INTEGRATED REPORT 2023

INTEGRATED REPORT 2023

27

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Materiality Issues

In line with the mid-term business plan (started in fiscal 2022)
for fiscal 2024, after reviewing the status of the value chain
surrounding the Group’s activities, its impact on the environment and society, and other issues to be taken into account,the Tokyo Seimitsu Group has revised its materiality as follows.

By presenting specific initiatives and goals, we have clarified
the issues that each employee needs to address and made iteasier for them to understand the value of their work, thereby
increasing their motivation. We will continue to revise our materiality as necessary and appropriate.

Changes in the businessenvironment

INTEGRATED REPORT 2023

• Resource-saving activities• Formation of a recycling-oriented society•R eduction in consumption of electricity,water, and paper• Reuse of waste as resources• Environmentally friendly products• Chemical substances control

S

Supply chain development• Product liability

Creating a workplace where a diverse
range of people can play an active role
and are physically and mentally healthy
and fulfilled in their work

• Prevention of human rights violations• Quality control• Stable supply of parts

S• Reduction of procurement risk

• Reinforcement of the supply chain• Working environment• Labor standards• Health and safety• Health and safety• Diversity• Increased diversity• Human resource development• Training program• Internal control

Management foundation that supports
corporate activities• Sustainable business growthG • Enhanced competitivenessGovernance28• Prevention of global warming• Respect for human rights

Respect for human rights

Priority initiatives• Reduction of CO₂ emissions

High-value-added products that resolve
social issues

G
Governance•E xpansion of EV and electrification
technology markets aimed at carbon
neutrality• Increased demand for product quality(Incorporation of quality in production
processes/elimination of the possibility of defective products being passed
forward for back-end processing)• Need for new measurement
technologies in expanding growthfields (e.g., semiconductor, aircraft,medical care)

Environmental contributions through theprovision of products and services

Society

Precision Measuring Instrument Business

Products and business activities that
contribute to resolving environmental
problems

E
Environment• Emergence of sophisticateddevices aimed at the realizationof Society 5.0• Increase in the number ofsemiconductors and electronic c
omponents• Innovation of power semiconductors(SiC/GaN) to contribute to decarbonization• Expansion of 3D mounting(Advanced packaging) due to thelimits of 2D package miniaturization

E

Sustainability Committee as well as teams and task forces
created to address important issues formulates and implements action plans based on their framework.

Sustainability objectives

Society

Semiconductor Manufacturing
Equipment Business

The Tokyo Seimitsu Group has established sustainability objectives and priority initiatives in order to incorporate important
issues (materiality) for the Group into concrete activities. The

Materiality issues

Environment• Climate change•R ealization of a digital society andthe diverse needs and regulations
associated with a digital society• Development of a highly efficient/
optimal social environment andinfrastructure• Awareness of the importance of asustainable society• Tokyo Seimitsu’s current andfuture business trends

Sustainability Objectives and Priority Initiatives

Compliance• Audit function• Corporate ethics and legal compliance• Fair, transparent, and prompt corporate activities • Information disclosure• Anti-bribery and anti-corruption• Whistleblower system• Compliance education• Crisis management against disasters• Business continuity plan

• Process of Defining the Materiality Issues
STEP 1

Stronger risk management

STEP 2

Organize Tokyo Seimitsu’s per- Extract business risks and opspective on sustainability
portunities in the value chain bysocial value

STEP 3
Based on the results extracted
in STEP 2• Evaluate and rank by impact
on the global environment andstakeholders• Evaluate and rank according torelevance to our value creationand management strategy

STEP 4Extract materiality issues fromthe results of STEP 2 and STEP 3
to realize our Purpose and Vision• D eliberation and approval by
the Board of Directors at the
May 2022 meeting on important matters

INTEGRATED REPORT 2023

29

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Mid-Term Business Plan for Fiscal 2022 to 2024
Overview of Mid-term Business Plan

Progress and Outlook of Quantitative Targets

Key Initiatives and Results in Fiscal 2022

Sustainability

Expand Field of Business by Grasping Change
Taking Place in the World, such as the Fusion of
Virtual and Physical Spaces

During fiscal 2022, the first year of the mid-term business plan,
the semiconductor manufacturing equipment business experienced steady shipments of devices throughout the year, while
the precision measuring instrument business saw a resumption of equipment upgrades throughout the manufacturing industry in Japan that had been put on hold due to the spreadof COVID-19. These trends reached all-time highs for net sales
and profits across both businesses, with both profits exceeding business forecasts made at the beginning of the year.
Based on these results, progress for the first year generally
advanced as planned.
R&D and plant construction for achieving the mid-term business plan have also progressed almost as planned, and efforts
have been made to enhance sustainability, including issuing
the Integrated Report, disclosing climate change response
strategies in line with TCFD (Task Force on Climate-related Financial Disclosures), and formulation and disclosure of the Human Rights Policy.

Production and shipments were maintained at a high level
throughout the first year, as a result of expanding manufacturing space and diversifying material procurement in order toturn existing orders into net sales. At the same time, construction of the Hanno Plant also progressed as scheduled in order
to meet future business expansion.
The precision measuring instrument business worked on capturing demand in the wake of COVID-19, and focused on expanding sales into non-automotive fields. The contract business for evaluations using the charge/discharge testing system
also began to take hold.

In addition to releasing the first Integrated Report, further initiatives were implemented to boost corporate value from asustainability perspective, such as establishing and implementing climate change response strategies in line with the
TCFD framework, promoting women's participation and advancement, holding an engagement survey for employees,
and establishing and disclosing our Human Rights Policy.
• Established and implemented climate change response
strategies in line with the TCFD framework• Promoted women’s participation and advancement• Held employee engagement survey• Established and disclosed Human Rights Policy, and began initiatives for human rights due diligence

The rapid progress of the 5G communication technology is
expected to drive further advances in Society 5.0, which refers
to the fusion of virtual and physical spaces. As semiconductors will be closely related to this technological convergence,
we assume that the semiconductor market will grow substantially in terms of both value and volume, ushering in an era ofmass production and mass consumption. We aim to expand
our business by promoting efforts to capture the changes in
the world through this fusion of virtual and physical spaces.

Respond to the Trend toward Carbon Neutrality,
Capturing New Business Opportunities
We expect the move toward carbon neutrality and digitalization to prompt rapid growth in demand for NEVs, renewableenergy, and automation. We also assume that demand for ultraefficient next-generation power semiconductors will stimulate new demand for measurement. We aim to increase our
performance by taking advantage of new business opportunities presented by moves toward carbon neutrality.

• Fiscal 2024 Quantitative Targets
ROE

15% or more

Companywide Strategy

Net sales

170.0 billion yen(132.0 billion yen from semiconductors,
38.0 billion yen from measurement)

The Tokyo Seimitsu Group as a whole will continue to invest in
R&D, expand production capacity, and enhance application
capabilities.
We will also step up sustainability efforts with the aim of contributing toward a sustainable society. For example, we will
push forward toward our goal of reducing CO2 emissions by
50% by 2030, compared with fiscal 2018 levels.

Operatingprofit37.5 billion yen(operating margin: 22%)

• Companywide Initiatives
Investment in R&D

Expansion of production capacity

Step up development of leading-edge technologies anddevelopments that respond to
customer needs

Operation of the Hanno Plant(fiscal 2023)
SPE capacity of 140.0 billion yen or more
Consider investing in the next factory

Environmental investment

Investment metrics

Consider investment needed
to reduce CO 2 emissions by
50% by 2030 (compared withfiscal 2018 levels)

Consider ROIC as an internal
assessment standard

Reinforcement of applications

Sustainability

Enhance demo facilities atindividual countries’ sites

Highly transparent management based on eco-awareness

Semiconductor
Manufacturing
Equipment
Business· Maintain high level of production and shipments· E xpand production capacity for the mid- tolong-term· Secure operating margin of 25% or more byincreasing added value of products

Precision
Measuring
Instrument
Business· E xpand sales to post-COVID-19 demand, domestic
demand, and non-automotive applications, andachieve existing peak orders and sales· Charge/discharge testing business achieved steady
growth in contracted measurements

Expansion of Production Capacity(Unit: hundred million yen)
FY2021

FY2022

FY2023(Forecast)

FY2024(Target)Net sales

1,307

1,468

1,290

1,700

Operatingprofit

283

345

240

375

Operatingmargin

21.7%

23.5%

18.6%

22.0%

Construction of the Hanno Plant in Hanno City, Saitama Prefecture progressed during fiscal 2022, with operations beginning as planned in July 2023. This plant increased production
capacity of mainly probing machines by 50%, ensuring capacity that was deemed required to achieve the targets set out inthe mid-term business plan.
Studies also began on the feasibility of constructing a newplant in the Nagoya region to be completed in fiscal 2025, withthe view to meeting further increases in demand for semiconductor manufacturing equipment.

Initiatives for Future Growth Opportunities
In addition to the world of Society 5.0 that is the basis forachieving the goals of the mid-term business plan in fiscal
2024, a range of growth opportunities are anticipated, withmany growth opportunities also expected to be present fromfiscal 2025 and beyond.
Significant growth opportunities for the semiconductor manufacturing equipment business in particular include the spreadof hybrid bonding; expanding added value with high-precision
temperature control of inspection systems (probing machines);
demand changing from substrate processing to device processing for silicon carbide (SiC) semiconductors; synergistic
effects through the fusion of semiconductors and metrology(expected to be around 13 billion yen by fiscal 2025); and demand for NEV battery measurements. Efforts will be made forstrategies required for growth from fiscal 2024 and beyond.

• Future Growth Opportunities
Growth in grinders with Hybrid bonding

In fiscal 2023, while there were concerns in the semiconductor
manufacturing equipment business regarding the slowdown indemand for our devices caused by lower demand for consumer electronics, the precision measuring instrument business is
expected to achieve steady growth due to capital investments
throughout the overall manufacturing industry in Japan. A recovery in orders related to technological innovation of semiconductor devices and an increase in EV-related investments
are anticipated through the second half of the fiscal year.

High-precision temperature control of probing machines→ expansion of added value
SiC processing to shift from substrates to devices
Synergies from the fusion of semiconductors and metrology
Over 13.0 billion yen in 2025
Significant quantitative growth of NEV batteries
Hanno Plant

30

INTEGRATED REPORT 2023

INTEGRATED REPORT 2023

31

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Message from CFO

In addition, beginning with the current mid-term business plan,
we apply ROIC as an internal evaluation method, and use thismetric to determine whether the return generated from investment into each business unit is commensurate with investment
costs, and make use of it in management, including for making
investment decisions. We developed the framework required
for these calculations and management in fiscal 2022, and began reviewing the results of ROIC.

Growth Investments
We maintain capital investments at around 25% of EBITDA(operating profit before depreciation) normally, with 50% of
EBITDA as our maximum level. We are making the expansionof production capacity an urgent priority, particularly in thesemiconductor manufacturing equipment business, wherelong-term market growth is expected. The Hanno Plant (inHanno City, Saitama Prefecture) began operations in July
2023, and we began studies for the construction of a plant in
the Nagoya region to begin operating from 2025.
We also consider M&A to be an effective means of achieving
growth by utilizing retained earnings and are considering making acquisitions within the scope of our free cash flow.
To strengthen our relationship with stakeholders like subcontracting vendors who have been vital for the growth of theCompany, we are working on shortening the terms of payment
for accounts payable.

Approach to Shareholder Returns and theEquity Ratio

Koichi Kawamura
Executive Vice President and CFO

32

INTEGRATED REPORT 2023

generative AI, the shift to New Energy Vehicles (NEVs) and fastdevelopment of autonomous driving, digitalization and proliferation of DX. I feel that these will call for a response covering abroader scope than ever before.

Financial Discipline for Product Businesses
The industry in which the Tokyo Seimitsu Group operates requires us to maintain our technological superiority through research and development and to anticipate the needs of ourleading-edge customers. Accordingly, we regularly review R&D
expenditures and the profit/loss of each product business,taking into account future demand forecasts and customer
trends. From the results of reviews, we will make the decision
to withdraw from product businesses that have no potential
improvement in profitability within a certain period of time. As
an indicator for research and development, we aim to keep
R&D expenses around 10% of net sales.

Growth Opportunities and Risks
With the drastic changes occurring throughout society as awhole, semiconductors continue to play a greater role in somany areas, and measuring instruments remain essential
throughout the manufacturing sector—significant growth is anticipated in both of these industries. The semiconductor industry in particular has become the focus of national policies inmany countries around the world, which are boosting investment into the sector. This is a field in which significant growthis anticipated, but there are also concerns over risks potentiallycaused by unexpected situations.
Given these circumstances, as the CFO, it is my mission to ensure the Company survives in the face of global economic uncertainty and to maintain our financial condition to facilitatesmooth investments that contribute to growth. As a result, we
will continue to provide products that make full use of cutting-edge technologies, and thereby boost our corporate value.
October 2023
Executive Vice President and CFOTokyo Seimitsu considers the consistent return of profits toshareholders to be one of its most important managementtasks. From this perspective, we will use a system of paying
dividends in accordance with profit distribution, with 40% as
our target consolidated dividend payout ratio. The Company
regards share buyback as a flexible profit return that complements the payment of dividends from retained earnings, while
comprehensively taking into account cash flow, retained earnings, and other factors.

<Mid-Term Cash Allocation Targets>
Experimental
research
expenses

R&D spending within 10% of sales

Capitalexpenditure

Normally: 25% or less of EBITDA
Max:
50% of EBITDA(EBITDA = operating profit + depreciation and amortization)

Shareholder
returns

Dividends: Target a stable dividend payout ratio of 40%
Buy treasury stock, taking investment trends and otherfactors into account

M&A, etc.

Consider, but to the extent that FCF does not go negative• Financial and Shareholder Returns<Fundamental Considerations>Operating CF

Investing CF

Operating profit+ depreciation andamortization- changes inworking capital- income taxes paid
± Others- fixed assetsp urchase/sale± Others

Development
costs

Capitalexpenditure

Financing CF

FCF

The Tokyo Seimitsu Group conducts its semiconductor manufacturing equipment and precision measuring instrument businesses globally. As such, we are committed to developing
leading-edge products and elemental technologies that coveradvanced needs of our customers, despite the challenges ofdemand fluctuations, as well as macroeconomic and geopolitical risks. As CFO, I believe it is important to strike a balance
between making decisions on investments in tangible and intangible assets required for our future growth and boosting
corporate value, and returning profits to our shareholders, employees, and suppliers, all while maintaining the stability of our
financial base.
We are facing what is called a new normal across so many areas these days, particularly with our post-COVID-19 lifestyles,
our approach to work, and weather events. The business environment is also undergoing reform toward a new normal—increases in the prices of commodities and interest rates, sudden fluctuations in exchange rates, the rapid spread of

The Tokyo Seimitsu Group’s industry is subject to significant
market volatility. Accordingly, we believe it is important tomaintain a certain level of cash, deposits, and equity to absorb
the impact of market fluctuations. We manage cash and deposits based on cash flow trends, including investment projects, and take into overall consideration of the balance with investor returns.
Cash dividends per share for fiscal 2023 was 235 yen, with adividend payout ratio of 40.3%. We are also purchasing 2.5
billion yen of treasury stock through to the next fiscal year.

- dividend payments- purchase oftreasury stock± changes inborrowings
Shareholder
returns
M&A, etc.

INTEGRATED REPORT 2023

33

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Business-Specific Strategies
Semiconductor Manufacturing Equipment BusinessBusiness Overview

Market Trends and Business Opportunities

Mid-term Business Plan Progress and Future Measures

In the semiconductor manufacturing equipment business, weoffer probing machines to test the electrical characteristics ofchips on wafers, dicing machines to separate individual chips
from wafers, and polish grinders (grinders) to make wafers
thinner and flatter.
As semiconductor devices and electronic components continue to become smaller and more complex, the importance isrising for probing machines that can identify electrical characteristics in greater detail and dicing machines and grinders for
manufacturing higher quality semiconductor devices.

The pace of semiconductor development is growing at aneven faster rate to meet the ever-evolving needs of global markets, and these trends represent significant business opportunities for the Company.
Instead of ordinary silicon, there are an increasing range ofunits that are made of silicon carbide (SiC) that is hard to cut,for power semiconductors used to control currents towardachieving a decarbonized society. Tokyo Seimitsu has a rangeof grinders capable of machining this material, for which demand is expected to increase in the future.
The rise of high-performance devices is also expected forachieving Society 5.0 (the fusion of virtual and physical spaces), together with the actual volume of semiconductors andelectronic components. Semiconductor devices are likely to
become increasingly difficult to inspect, leading to longer inspection times—our inspection systems (probing machines)
will be able to cater to these needs with our strength in customization.
The increase in 3D stacking due to the limits of miniaturization
will result in the need for high-precision processing, for which
our processing systems can play a key role.
3D stacking requires high-precision bonding of wafers, chips,
substrate materials, and more, and is anticipated to increasedemand for such processing systems.

Throughout fiscal 2022, the first year of the mid-term businessplan, shipments remained steady for logic devices with existing orders, like 5G systems, servers and onboard systems forautomobiles. Strong demand for systems for increased production of SiC and silicon wafers resulting in all-time highsreached for net sales and operating profit.
Development of products that met customer needs also progressed, and efforts were made for plant construction and theenhancement of material procurement with the view of achieving the targets of the plan.
In contrast, demand for consumer electronics like smartphones, PCs and TVs dropped sharply in the latter half of fiscal 2022, resulting in a slowdown of demand for our systems
and a reduction in orders compared to the previous year.
Looking forward, to increase production capacity with operation of the Hanno Plant, we will focus on shipments and salesof existing orders after inventory adjustments of consumer
electronics products settle down, while aiming to achieve thetargets of the plan by securing business opportunities arisingfrom advances in semiconductors.

HRG3000RMX

(Unit: hundred million yen)
FY2021

FY2022

FY2023(Forecast)

FY2024(Target)Net sales

1,011

1,124

940

1,320

Operating profit

247

299

—

—

Operating margin

24.4%

26.6%

—

—

• Sales by Product¥ 132.0¥ 101.1

billion¥ 112.4

Consumables

billionbillionProcessing systems

Inspection systems

FY2021

FY2022

FY2024 target

Mid-term Business Plan
Processing systems: Dicing machines, grinders
Inspection systems: Probing machines

AP3000Technology Trends

34

Opportunities

Applicable Products

Innovation of power semiconductors(SiC/GaN) to contribute to decarbonization· Increased demand for machining difficult-to-cut materials like SiC
Achieve both high-efficiency output and high-precision machining

High rigid grinders
Edge grinders
CMP

Emergence of sophisticated devices
aimed at the realization of Society 5.0
Increase in the number of semiconductors and electronic components· Increase in measurement time and rise in inspection difficultyRise in added value related to inspections (temperature support,
improved throughput)· Increased demand for high-precision machining
Achieve both high-efficiency output and high-precision machining

Probing machines
Polish grinders
Ablation laser dicing machines
Built-in measurement instruments

Expansion of 3D mounting (advanced
packaging) due to the limits ofpackage miniaturization· Increased demand for high-precision polishing machining
Achieve both high-efficiency output and high-precision machining· Increased demand for bonding process precision
Increase in number of test processes

Polish grinders
Edge grinder and blade dicing machines
Probing machines

INTEGRATED REPORT 2023

FY2022 Overview

Future Strategy

Consumables· Overall softness, but maintained flat due to increased
demand for grinding consumables· Increase initiatives to capture demand for grinding
wheels for SiC with high consumption volume

Processing Systems(Dicing machines, grinders)· High level of demand for SiC/wafers· Started sales of ablation laser dicing machines· Strengthen grinders for SiC/GaN and advanced
packages and wafers· Sales promotions of ablation laser dicing machines

Inspection Systems(Probing machines)· Focus on high value-added fields and promote application
expansion based on “Respond to all needs” (HPC, packages, memory, power devices, etc.)· Providing high value-added in the high-end sector

Semiconductors x Metrology
Synergies based on long-term
strategy· Started sales of built-in measurement models· Strengthening synergies between semiconductor andmetrology

INTEGRATED REPORT 2023

35

Strategy

Introduction

Business-Specific Strategies

Strategy

Sustainability

Governance

Data

Precision Measuring Instrument BusinessBusiness Overview

Market Trends and Business Opportunities

Mid-term Business Plan Progress and Future Measures

In the precision measuring instrument business, we offer coordinate measuring machines that measure the dimensions ofobjects, surface texture and contour measuring instrumentsthat accurately calculate disparities in surfaces and cylindricalshapes, machine control gauges that perform measurements
inside machine tools, and systems used to test batteries andother secondary cells.
In manufacturing, precision measuring instruments are indispensable to confirm that products are manufactured correctly
and according to design. Recently, demand for new precision
measurement and automation is also increasing due to the
spread of NEVs with the move toward carbon neutrality.

The market for EVs and electrification technology is anticipated to grow with moves to carbon neutrality. In addition tophysical measurements of the length, roundness, roughness
and other characteristics of objects, assessments like electrical measurements and internal defects are also required, withgrowth in charge/discharge testing systems anticipated.
Growth in processing system sensors for inline measurements
and heavy-duty equipment is also expected with automatedmanufacturing processes, together with an increase in demand for high-precision inspection systems.
With expansion of the actual market for manufacturing, there is
expected to be an increase in needs for new measurement
technologies in fields other than automobiles, such as semiconductors, aircraft, and medical care.

Fiscal 2022 saw a gradual recovery in demand with the resumption of equipment upgrades throughout the manufacturing industry in Japan that had been put on hold due to the
spread of COVID-19. The recovery of capital investments in theautomotive industry was relatively gentle, but we captured demand in semiconductor manufacturing equipment for machinery applications in new fields that we had focused on, as well
as demand in fields like medical care and robotics.
New products were developed aimed at capturing new demand like coordinate measuring machines for measuring aircraft components and charge/discharge testing systems forrechargeable batteries of NEVs, and we also focused on proposing solutions tailored to requirements for automation for
manufacturing in general, and expanded into markets otherthan automobiles to reach all-time highs for both orders andnet sales.
Capital investments are expected to remain steady for theoverall manufacturing industry in Japan, while in the automotive industry, demand is expected to increase for measurements of parts and materials and measurement of batteries
due to the increase in EVs, so we will continue working on
strategies aimed at achieving the targets of the plan.

SURFCOM NEX

(Unit: hundred million yen)
FY2021

FY2022

FY2023(Forecast)

FY2024(Target)Net sales

296

344

350

380

Operating profit

36

46

—

—

Operating margin

12.3%

13.4%

—

—

• Sales by Product¥ 29.6¥ 34.4¥ 38.0billionbillionSemiconductors

billionMachinery
Aircraft
NEVs

ICEs
Others
FY2021

FY2022

FY2024 target

Mid-term Business Plan
ICE: Internal Combustion Engines

RONDCOM NEX

Technology Trends
Expanding the market for EVs andelectrification technologies toward
carbon neutrality
Increased demand for product quality(In-process quality and reduction of
defective products)
New measurement technology needsin high-growth areas (semiconductors,
aircraft, medical, etc.)36

INTEGRATED REPORT 2023

Opportunities

Applicable Products

FY2022 Overview

Future Strategy· Changing measurement demands
High-precision length measurement, electrical measurement,internal defect/impurity evaluations

Various high-precision measuring instrument
product groups
Charge/discharge testing systems
X-ray CT systems

Semiconductors·D evelop non-contact and multipurpose measuring instruments forsemiconductors·C ontinue to cultivate demand and develop solutions forsemiconductors

Machinery and Aircraft·R elease of specialized equipment for aircraft·D evelop and enhance non-contact measuring instruments for
medical applications·E xpand sales of non-contact shaft measuring machines·D evelop total solutions including equipment, SW, andservices to meet the demand for automation

NEVs

·P
 hysical measurement of EV gears, motors and other components,
development of demand for battery X-ray CT system·M aintain full operation of charge/discharge battery evaluation
contract service·T otal solution development of measurement for NEVs

ICEs

·S
 low recovery but steady demand·C apturing renewal demand·S olutions for automation, enhanced maintenanceinspection operations· Expanding demand for full inspection and on-site measurement
Automation support, process control, network/operation
monitoring· Growing demand for non-contact measurement technology
Non-contact sensor technology that achieves high resolution
and high speed

Inline coordinate measuring machines
Sensors for processing machines likemachine tools
Data management software
White light interferometer microscope
Non-contact distance sensors
Various non-contact laser/image sensors formeasuring instruments etc.

INTEGRATED REPORT 2023

37

Strategy

Introduction

Strategy

Sustainability

Governance

DataIntellectual Capital Strategy
Basic Policy on Intellectual Capital• Positioning of the Intellectual Capital Strategy

We will place an emphasis on intellectual property, which is amajor component of intangible assets, and will actively invest
in enhancing this value.
The Intellectual Property Department works closely with ourbusiness units and technology departments when formulating
and implementing effective intellectual capital strategies topromote management strategies from an intellectual property
perspective.

Business Plan

Development
Strategy

Business
StrategyManagement
StrategyIntellectual
CapitalStrategy

Promoting development strategy based on management strategy and intellectual capital strategy based on business strategy• Analysis of Current Conditions SurroundingIntellectual Capital

We are working on patent map analysis and inventorying of
our intellectual capital holdings to analyze the status of our intellectual property. This will be used to determine the strengthof our core technologies and to formulate policies for further
strengthening (portfolio expansion).
It will also be used to grasp where other companies are at interms of intellectual capital and explore the potential for expansion into new technological fields.
In addition, based on IP landscapes, which are integrated withinformation on market and technology trends, we will createtechnologies that better fit customer demand by comparingthat demand with our ability to supply technologies.
We are the only manufacturer in the industry that can integrate
measurement technology with semiconductor manufacturing
technology. The ability to incorporate the advanced measurement technology that has been cultivated since our founding
into semiconductor manufacturing equipment is a major
strength of our Company. This strength enables us to provide
support for developing new clients and new business areas,
selecting M&A targets in connection with such development
and contributing to execution of management strategies, suchas intellectual property due diligence.

A Fusion of Technologies That is Unique to the Industry• Expansion of Intellectual Capital

The quantity of intellectual property rights held by the Company has been increasing. We will continue to actively acquire
rights to enhance the value of our intellectual capital. We areable to confirm that our business performance is improving incorrelation with the expansion of intellectual capital. In particular, with the recent move for countries to produce semiconductors within their borders, new production bases are expected to be established in addition to conventional production
bases. Accordingly, we will focus on acquiring intellectual
property rights in countries where we have not currently focused on acquiring intellectual property rights.

Semiconductor
manufacturing
technology

Measurement
technology

The measurement technology we have built up
since our founding has been integrated withsemiconductor manufacturing technology

Our strength lies in our unique technological characteristics• R&D Expenditure and Net Sales(Number of R&D
expenditures)(Millions of yen)

(Millionsof yen)1,500

160,000

20,000160,000

1,200

128,000

16,000128,000

900

96,00012,00096,000600

64,0008,000

64,000300

32,0004,000

32,000

Number of patents held

Net sales02013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)* The number of patents held is determined as of the end of December of each year.
INTEGRATED REPORT 2023

0

R&D expenditure (left axis)

Net sales (right axis)

We ascertain the current status of our patent network by inventorying our intellectual property assets and acquire additional patents as necessary to build the ideal patent network.
This creates a tight barrier to entry and serves as a source ofcompetitive advantage. In particular, for inventions that are regarded as basic patents, we have acquired patents in a wide
range of countries around the world. In particular, for importantinventions that should be kept confidential, we strictly manage
information as confidential information. At the same time, weavoid excessive investment by preventing unnecessary acquisition and retention of patents.

Before reinforcement(Millions of yen)02013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)* Net sales and R&D expenditure ﬁgures are for the end of the ﬁscal year.

After reinforcement

Creating an idea patent portfolio through inventorying andself-analysis (conceptual images)• Patent Application Strategy (Comprehensive
and Stable Rights Acquisition)

We hold regular invention consultation meetings with the Technology Development Department to ensure that patent applications for inventions created through technical development
activities are filed in a timely manner without omission and inventions that inventors do not even recognize as inventions are
discovered.
We also strive to improve the quality of application specifications by enhancing embodiments and experimental data sothat we can obtain highly stable and defect-free rights. In addition, we take the utmost care in our prosecution work to avoid
unnecessary limitation amendments and opinion assertions,and to obtain a wide range of rights. The Company also files
applications for similar inventions from multiple perspectives
and strengthens the stability of rights so that even if a part ofsuch inventions is invalidated, the protection of the inventions
can be substantially maintained.
At the same time, we aim to create demand for licensing byacquiring rights in anticipation of technology transfer outside ofour business domains.

• Protecting the Brand• Correlation between Number of Patents Held and Net Sales

038• Enhancement of Our Patent NetworkIntellectual Capital Initiatives

We have obtained trademark rights for the names and logos of
our main products and other products in countries around theworld, and have established a system to protect our brand. We
also periodically monitor the status of other companies’ trademark registrations to ensure that we can respond in a timely
and appropriate manner to any potential confusion about theorigin of our products arising from other companies’ activities.
Furthermore, we register a wide range of domain names for individual countries in regions where we do business.

• Design Protection

Product features other than technical aspects, such as aesthetic product design and part design, are also protected as
intellectual capital. Through the intellectual property mix, we
protect our business from multiple angles and aim to synergize
the value of our intellectual capital.

• Promoting the Creation of Intellectual Capital

We regularly set up a forum where the managers of each department gather to think about the future society and explore
the possibilities of the Company's contribution to society.
Next, we regularly hold meetings where managers from eachdepartment gather to discuss solutions to issues identified
through this initiative, thereby promoting the creation of patentinventions. This opportunity is also a forum for young employees to come up with ideas, and by fostering a culture that encourages them to take on challenges from a young age, weare contributing to increased engagement and human resource development.
In addition, in order to stimulate intellectual creation activities
and ensure the protection of intellectual property, we award
departments and individuals who have filed numerous applications and provide incentive payments in compensation for employee inventions.
The Company also sets up opportunities for contributors topresent successful development cases to all engineers andshare the difficulties and setbacks leading up to success aswell as the history of overcoming them, thereby raising the
motivation for development. In this way, we are working to encourage the creation of new intellectual capital.

• Respecting Other Companies’ Rights

At each product development stage, development council
meetings are held to confirm that development does not infringe on the intellectual property rights possessed by othercompanies and to assess the risk of infringement. This allows
our intellectual property specialists to participate from the initial development stage to the sales activity stage to provide
support for a wide range of legitimate business activities, including support with patents, designs, trademarks, copyrights,
and unfair competition prevention.
In addition, we constantly monitor patent publications related
to our business activities. This enables us to assess the risk of
conflict and respond legally if necessary.
Furthermore, we cooperate with relevant departments to properly include intellectual property descriptions in product instruction manuals, catalogs, and other materials that we distribute.

• Intellectual Property-Related

Human Resource Development

In order to improve our intellectual property literacy, we conduct function-based intellectual property training. Each business unit of the Technology Development Department has amanager in charge of trademarks, designs, and copyrights, including patents, product names, catalogs, and exhibitions,who provide on-the-job training to employees of the department. Also, inventors deepen their knowledge of patents by filing patent applications and handling examinations together
with the Intellectual Property Department and the IP manager.

INTEGRATED REPORT 2023

39

Strategy

Introduction

Strategy

Sustainability

Governance

Data

Human Capital Strategy
Fundamental Considerations

Human Resource Development

To achieve the Tokyo Seimitsu Group's vision, "The Tokyo
Seimitsu Group is always committed to building a 'future full of
dreams,'" each and every employee, who are the Group's
most important assets needs to be provided with a safe andhealth workplace environment, so that they can make themost of their capabilities and grow in pursuit of their dreams.
Accordingly, our Group is promoting "Consideration for humanrights and compliance with labor-related laws and regulations,""Workplaces that are safe and healthy for employees to work,"and "An environment that promotes employee growth and allows diverse human resources to flourish" as we work to provide a better sense of fulfillment from work.

Based on the belief that the growth of each and every employee is essential for the Group to continue to grow sustainably,
we have established a human resource development policy.

• Fundamental Considerations of Human Capital
Increase
employeecapabilities

Realize
ourvisionCorporate
growth

Employee job satisfaction

Safe and health workplaces
for employees
Consideration for human rights and compliancewith labor-related laws and regulations

Basis for employee job
satisfaction

An environment that
promotes employee growth andallows diverse human resources
to flourish

VisionThe Tokyo Seimitsu Group is always committed to building a “future full of dreams.”
Semiconductor Company Contribute to the realization of an advanced networked
society with cutting-edge technology.
Metrology Company
Aim to become a future-creating company that supports“innovation in manufacturing.”

Engagement
In order for the Group to achieve significant growth in a rapidlychanging environment, it is important for employees to workwith high motivation, improve productivity, and generate innovative ideas to deliver high added value to customers.
To this end, we started an engagement survey in March 2023
to measure the state of employee engagement.
The survey examined the following factors to improve engagement, and we developed policies aimed at enhancing engagement.
• A re employees able to demonstrate their strengths andfeel a sense of job satisfaction?
• Do employees trust each other and are internal communications active?
• Do employees know the company well and are they attached to the company?

40

INTEGRATED REPORT 2023

Human Resource Development Policy
The mission of the Group includes: “Growing together
with partners and customers by collaborating technology,
knowledge, and information to create the world’s No. 1
products,” and “WIN–WIN relationships create the world’s
No. 1 products.”
To fulfill this mission, we need employees who can:• Gain a high level of trust by facing customers’ issues
and solving them;• Accept diverse values and see things from the otherperson’s point of view to draw out mutual strengths
and cooperate with each other; and• Connect their own ideas to technical and business innovations, aim for high goals, and grow autonomously
The Group supports the growth of its employees, who are
the most important asset, by creating a work environment
and implementing measures as described below:•P rovide educational programs, including training andeducation, according to the growth stage of individual
employees•P rovide employees with opportunities to take on challenges in the workplace and support through communication with their supervisors•P romote various measures and create an environment
in which diverse human resources can feel fulfilled intheir work and can play an active role

Training Programs
The Company has established career paths for each job
type—technology, sales, manufacturing, service, and management. In accordance with the Human Resource Development
Policy, we have established various training programs for employee skill development, which are incorporated into our HR
development system.

Enhancing Human Resource Development
Capabilities
The Company implements "human resource developmenttraining" for superiors, in which they can acquire "dialogueskills to promote growth" with the aim of nurturing employees
capable of developing independently.
A 360-degree feedback system is conducted once a year, withreview training also held to give superiors the opportunity toobjectively review their own actions.

• Toward Enhancing Human Resource Development Capabilities

Member development and increased
performance through regular dialogue

Ⅲ• Trends in Data for Promotion of Women’s Participation
and Advancement(%)
20

Percentage of female regular employee hires (left axis)
Percentage of female regular employees (right axis)
17.0

16

6.5

6.4

6.4

18.3
8.5

6
11.1

9.3

8

Ⅱ
Ⅰ

Awareness of exerting influence
through dialogue and careful listening

4
6.1

4

Awareness of promoting
independent growth0

Diversity & Inclusion

8

7.4

12

Awareness of goal integration

(%)
10

2018

2019

2020

2

2021

2022 (FY)0■ Initiatives for the Promotion of Women’s Participation

The Company believes that diverse perspectives and ideas
stimulate each other and create new value, resulting in synergies that extend beyond the sum of individual capabilities. To
this end, the Company prohibits any form of discrimination, including those based on age, gender, race, religion, national origin, or disability, and is focusing on creating a workplace environment where diverse human resources can work in a safeand healthy manner.
The Company respects the personalities of each and every
employee, and is creating an environment where employees
can make the most of their capabilities in a rewarding way.

Promotion of Women’s Participation andAdvancement
To increase the number of women among our core human resources, we believe we must urgently increase our recruitmentof full-time female employees and improve the environment forsuch employees. To drive this effort, we have formulated the“Action Plan for Promoting Employment and Careers of Women” (FY2021 to 2025) and set targets to be achieved by theend of fiscal 2025. In addition, we are working to create awareness within the Company toward the advancement of female
employees and to support them.

• Fiscal 2025 targets
Percentage of female regular employee hires (full-time)

20%

Percentage of female regular employees (full-time)10%

and Advancement

Hiring of women• Completely redesign the recruitment section of our website in order to increase the female recruitment rate andimprove students’ interests in the Company• During new graduate recruitment, conduct interviews for
women who are interested in the Company with female
employees so that they can have a clearer idea of what it
is like to work at the Company
Support for the career development of female employees• Conduct career development training for women• Raise awareness of the development of female subordinates through human resource development training forsuperiors• Introduction of external counseling services in April 2022
(these services can be utilized by all employees, not only
women)

Employment of Persons with Disabilities
We work to create environments in which persons with disabilities can be socially independent and play active roles.
Through collaboration with Hello Work job placement centers,
and cooperation with employment support centers, schools
for special needs education, and other parties, we provide
support so that hired employees will be assigned to work andworkplaces that fit their individual aptitudes.
We have established an organization centered on people withdisabilities who are working on certain indirect internal tasks,
and we support the development of each and every personwith disabilities to create a workplace environment that provides a sense of fulfillment from work.

Hiring of Foreign Nationals and Mid-career Workers
Mid-career workers are an indispensable part of our workforce. We also hire competent human resources, without regard for their nationalities. These mid-career workers andworkers with foreign nationalities play major roles in bringing
diverse perspectives and ideas and achieving close collaboration with overseas partners.
Among the managers of Tokyo Seimitsu, employees with foreign nationalities account for 1.4%, and mid-career employees
42.9%.

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41

Sustainability

Introduction

Our Approach to Sustainability

Strategy

Sustainability

Governance

Data

Environment

Aiming to Realize a Sustainable Society and the Sustainable Growth of the Tokyo Seimitsu GroupAs the corporate operating environment is undergoing drasticchanges, this has prompted us to reaffirm the importance ofsustainability as a management issue and promote the activities of sustainability more than ever.
For this reason, in November 2021, we formulated the Basic
Sustainability Policy and established the Sustainability Committee. We will strengthen our sustainability promotion structure to realize our purpose and aim to realize a sustainable society and the sustainable growth of the Tokyo Seimitsu Groupthrough dialogue and collaboration with our stakeholders.

Basic Sustainability Policy
Under its corporate philosophy, the Tokyo Seimitsu Group has
helped to make society more convenient and reduce environmental impacts by providing precision measuring instruments
and semiconductor manufacturing equipment that are indispensable to the manufacturing processes and energy- and resource-saving products of the manufacturers that are its customers.
In contrast, as the corporate operating environment is undergoing drastic changes, the Group recognizes that sustainability is an important management issue and has established the
Basic Sustainability Policy to guide its efforts to realize a sustainable society and enhance corporate value.

Basic Sustainability Policy
1. Efforts to address environmental issues
2. Earning the trust of society
3. Respect for human rights
4. Human resource development
5. Participation in and contribution to local communities
6. Building and running a fair, transparent, and efficient
corporate governance system
For details, please visit the website listed below.
Basic Sustainability Policy
https://www.accretech.com/en/sustainability/esg/guideline.html

Disclosure Related to Climate Change

Sustainability Promotion Structure
We have established the Sustainability Committee to promoteand manage sustainability activities appropriately. The newcommittee, which is chaired by the Chairman and CEO, oversees the drafting, formulation, planning, and implementation ofsustainability activities.
In addition, the committee gives specific issues special focus
through working groups (WGs) and projects. In July 2023, weestablished a new Supply Chain WG to strengthen our supply
chain initiatives. From August 2023, we will assign projects forresponding to TCFD to the permanent climate change response working group to address issues related to climatechange.

In August 2021, the Tokyo Seimitsu Group launched the TCFD
(Task Force on Climate-related Financial Disclosures)-Response Project, which it promoted as a key activity for the
Sustainability Committee. From August 2023, this project will
be changed to the Climate Change Response Working Group,
an ongoing entity, to analyze the risks and opportunities thatclimate change poses to the Group's business, share and develop issues, and promote the disclosure of climate-related financial information based on the TCFD framework.

The Climate Change Response Working Group identifies andassesses risks (transition/physical) related to climate change.
In principle, this working group involves monthly meetings,
with others held if urgently needed, and reports to the Sustainability Committee. Matters that may affect business management are promptly reported by the committee to the Board of
Directors for deliberation.
Such information is also shared with the Risk Management
Committee, which is responsible for business risk management, to ensure that appropriate measures are implemented
on a Group-wide basis.

• Working Group Structure to Respond to Climate Change
Board ofDirectors

Strategy

Board of Directors

Sustainability Committee
Executive
Management
Meeting

Committee Chairman
Chairman and CEO
Committee Vice-Chairman
President and COO

Risk
Management
Committee

Executive
Management
Meeting

Sustainability
Committee

Risk
Management
Committee

The Climate
Change Response
Working Group<Operation>
Regular meetings held twice
each year, additionally as needed[The Climate Change Response Working Group]
Sustainability Activities Team

Human Rights, Quality,
Health and Safety,
Technology, and Environment

Subcommittees
Working Group on Response to
Climate Change
Working Group for Information
Disclosure
Supply Chain Working Group
Human Rights Activity Project

Led mainly by the Sustainability Committee and comprising
related personnel from the production, sales, technology, andmanagement departments. Members of the project researchand discuss issues related to climate change and regularly
submit reports to the Sustainability Committee.

Governance
The Tokyo Seimitsu Group recognizes climate change as animportant management issue. The Sustainability Committee
deliberates on and manages the risks and opportunities related to climate change issues, and regularly submits proposals
and reports to the Board of Directors.
The Sustainability Committee, which is chaired by the CEO,deliberates twice a year at regular Sustainability Committee
meetings, and submits proposals and reports to the Board of
Directors when deemed necessary by the chairperson.
The Board of Directors shares risks and opportunities related
to climate change among its members and discusses how tomanage targets and resolve issues. Each director gathers information and gains knowledge, taking advantage of various
opportunities and methods in order to keep abreast of the ever-changing landscape surrounding climate change.

In fiscal 2021, we conducted a Scope 1 and Scope 2 analysis
of Tokyo Seimitsu’s domestic business sites. Going forward,
we will progressively monitor the GHG emissions of Group
companies (domestic and overseas subsidiaries) and promote
an understanding of Scope 3 emissions (Category 1 and Category 11) based on Life Cycle Assessment (LCA) of products.
(We will promote an understanding of Scope 3 emissions, including those of suppliers.)[Risks and Opportunities Associated with Climate Change]
Our scenario analysis considered the uncertainty of future projections and referred to multiple scenarios. International public
opinion is moving toward the view that a 2°C scenario response is insufficient, so we conducted our analysis with a
1.5°C scenario in mind. However, as a 1.5°C scenario response would dilute our awareness of physical risks, we also
assumed a business environment under the 4°C scenario, thelevel to which temperatures would rise if current economic activity were to continue.

* Reference scenarios
1.5°C scenario: [IEA] NZE, 1.5°C special report [IPCC] SSP1 - 1.9
4°C scenario : [IEA] STEPS [IPCC] SSP2-4.5, SSP3 - 7.0[Strategy for Opportunities]
Opportunities in the Semiconductor Manufacturing
Equipment Business Related to Climate Change
In the process of achieving carbon neutrality across all industries, we predict demand for the following:• Efficiency and energy conservation in production activities (mainly through digitalization)• Transition to decarbonized energy (mainly through electrification)
As a result of the above two measures, the scope of application of digital and communication technology will expand, andthe quantity of electronic devices and electronic components
used throughout society will increase rapidly. Accordingly, demand for semiconductor devices, which are components foundin these products, is expected to increase continuously, andthe demand for the semiconductor manufacturing equipment
we provide is expected to increase dramatically in the future.
In addition, the quantity of electronic devices and components▲▲<Function>
The Sustainability Committee is responsible for designing,
formulating, planning, and implementing sustainability activities, specifically promoting the following activities:• F ormulation of basic policy, operational framework, andgoals as well as monitoring of information• Establishing and managing plans and projects• Organizing, reporting to the Board of Directors, etc.
• Matters related to various reports and information disclosure• Convening and operating a sustainability promotion council

INTEGRATED REPORT 2023

Risk Management• Sustainability Promotion Structure[About the Sustainability Committee]

42(Disclosure Based on TCFD)INTEGRATED REPORT 2023

43

Sustainability

Introduction

Environment

Scenarios

Risks andopportunities
Regulations

Risks

Markets

1.5°C

Reputation

Markets

Financial
impactData

1. Electric power sector▲▲▲

Medium term•D
 ecrease in demand for the conventional business and products(measuring instruments for internal-combustion engine parts)▲▲

Medium term

In order to meet the rapidly increasing demand for semiconductor
devices, we will steadily strengthen our production system for semiconductor manufacturing equipment. The Hanno Plant began operations in July 2023, and the Company is considering the construction of a new plant in the Nagoya area.

1-1. Adoption of renewable energy➡ Bearing measurement technology for offshore wind power
generation
1-2. Expansion of the storage battery industry➡ Charge/discharge testing system (Accretech Powertro
System Co., Ltd. (APS))•D ecarbonization resulting in surges in material costs, difficulty inprocurement, and extra costs being incurred to procure alternative
products•D ifficulty in procurement of non-fossil energy and rise in procurement costs▲▲

Delayed response todecarbonization•D elays in climate change action and other ESG efforts affecting
financing and business relationships▲

Medium term

Shift to EVs
Electrification/
digitalization•E xpanding measurement demand for new EV materials andcomponents; increased use of semiconductors and expansion of
production capacity▲▲▲

Medium term▲Long term

Carbonpricing•R ises in costs of materials, equipment, energy, transportation, etc.
due to the introduction of a carbon tax•R estrictions on product exports due to the introduction of a carbon
border tax

Shift to EVs

Decarbonization
premiums

2. Sales activities that are thoroughly customer-oriented
Medium term

4°C•E nergy-saving measures in factories (equipment and processes)
and recycling of resources leading to increase productivity andmeet the customer need for decarbonization▲

Short term

Products
andservices

Low-carbon products
and services•E nhance the product reputation and competitiveness on the market
by reducing environmental impact from the LCA perspective•M eet the customer need for lighter products (increase demand formeasuring products)▲▲

Short term

Risks

Physical(acute)Detection of
intensifying disasters• Increase in risk management costs (BCP response)•P roperty damage and restoration costs due to disasters• Suspension of operations due to disasters (own and supplier factors)▲▲▲

Medium term

Opportunities

Resilience

Disaster response• Stable supply of products and services during disasters to help
customers maintain their production systems▲▲

Medium term

Legend Financial impact: ▲▲▲＝Large, ▲▲＝Moderate, ▲＝Small
2030–

Manifestation periods: Short-term: 2022–2024, Medium-term: 2025–2029, Long-term:

Emerging Needs and the Value We Offer
As mentioned above, in order to achieve carbon neutrality, we
believe that new challenges will emerge, and customer needs
will also constantly change. In response to these needs, wewill continue to provide new value by comprehensively responding to a wide range of products covering inspection andprocessing equipment.

INTEGRATED REPORT 2023

Expectedchanges insociety

1

Increased
production ofsemiconductor
devices2

Increasing
complexity ofsemiconductor
device designs

3

Spread ofnext-generation
power semiconductors

New challenges

Value we provide(examples)

Extended inspection
times

Increased throughput ofprobing machines

Further installationof semiconductor
manufacturing
equipment

Stable supply of semiconductor manufacturing
equipment

Increased heatdissipation during
measurement

Probing machines that
support high-precision
temperature control

Higher machining
accuracy

High-precision high rigid
grinders, ablation laser
dicing machines

Increased demandfor difficult-to-cut
material processing

High-precision high rigid
grinders, edge grinders,and CMPs (chemicalmechanical planarizers)

Semiconductor Manufacturing Equipment Business Strategies and Goals
We will accurately seize business opportunities related to climate change and achieve sustainable growth in the semiconductor manufacturing equipment business.In other words, 1.
We will make appropriate capital investments in line with theincrease in demand, 2. Conduct sales activities with a thorough customer-oriented mindset, and 3. Participate in industry
associations and joint research.

Since our strength lies in our thorough customer-oriented approach,
our manufacturing, engineering, service, and sales teams work inunison to listen to our customers on a daily basis. Through these initiatives, we will not only quickly grasp the quantitative and qualitativeneeds of semiconductor manufacturing equipment but also pursue
products and services that satisfy our customers, aiming to create
relationships that enable us to grow together with our customers.

3. Participation in industry associations and joint research
Tokyo Seimitsu is a Regular Member of the Semiconductor Equipment Association of Japan (SEAJ) and leads discussions on energy
and CO2 in SEAJ’s Environment Subcommittee. We also participate
in the Semiconductor Equipment and Materials International (SEMI)
as a Semiconductor Climate Consortium Founding Member.
In addition, we will actively work on the development of next-generation technologies. As a member of Tsukuba Power Electronics
Constellation (TPEC), a joint research consortium for power electronics that contributes to energy conservation in a wide range of industries and households, we are participating in R&D and humanresource development. We are also participating in R&D with theCenter for Innovative Integrated Electronic Systems (CIES), Tohoku
University.
Through these initiatives, we will also strive to develop products froma medium- to long-term and seeds perspective, and capture thetechnological breakthroughs and industry changes that accompany
them.

Based on the policies (1, 2, and 3) above, we aim to increase
sales in the semiconductor manufacturing equipment businessto 132 billion yen by fiscal 2024 (fiscal 2021 results: 101.1 billion yen).
In addition, the Tokyo Seimitsu Group is the industry’s only
manufacturer of semiconductor manufacturing equipment that
also has measurement technologies. By incorporating measuring equipment into semiconductor manufacturing equipment, it is possible to carry out more accurate inspection andprocessing, providing unique value. We expect synergies between the two businesses through this initiative to amount tosales of around 13 billion yen by 2025.
▲

will increase with designs becoming more complex as thefunctionality becomes more sophisticated. As a result, there isa growing need to solve new issues in manufacturing processes. Tokyo Seimitsu develops and provides products that meetthese needs. For example, we support manufacturing processes by providing high-precision processing equipment for
the enhancement of SAW filters and sensor functionality.
On the other hand, the progress of digitization and electrification will lead to:• Increase in power consumption due to the expansion ofdata and computation (the spread of IoT devices and AI)• Increase in power loss due to the expansion of the useof electric motors
Therefore, it is necessary to promote energy conservation by
semiconductors themselves in a two-fold manner. As a result,
there are expectations for the spread of next-generation power
semiconductors (GaN, SiC, etc.) that achieve high energy efficiency, and we are also promoting the development of related
technologies and products.

44

Governance

1. Appropriate capital investment to meet growing demand

Description

Production facilities

Resource
energyefficiency

Sustainability

Manifestation
periodEvent

Expansion of renewable • Growing demand for measuring instruments due to expanding
energy markets
renewable energy markets
Opportunities

Strategy

 pportunities in the Precision Measuring Instrument
O
Business Related to Climate Change

In order to achieve carbon neutrality by 2050, it is necessary
not only to decarbonize electric power sectors, which emit
large amounts of greenhouse gas, but also to electrif ynon-electric power sectors (consumer, industrial, and transportation).
Our measurement technology plays a fundamental role in carbon neutrality measures in a wide range of fields, both in theelectric power and non-electric power sectors.

2. N on-electric power sectors (consumer, industrial, andtransportation)
2-1. (Overall) Progress of electrification and digitalization➡ Measurement technology for semiconductor manufacturing
equipment and electric vehicles
2-2. (Industrial) Compatibility of temperature adaptation and energy conservation➡ Measurement products that are resistant to temperaturechanges2-3. ( Transportation) Contribution to weight reduction andefficiency➡ Measurement technology for complex engine parts

1. Electric power sector
1-1. Adoption of renewable energy
It has been noted that a combination of multiple sources of power, including renewable energy, is needed to achieve electricity
decarbonization and still provide sufficient electricity demand.
Among them, offshore wind power generation plays an important role. Offshore wind power generation is expected to
be introduced in large quantities around the world, and by
2040, the amount of power generated is expected to increaseby about 20 times, with an investment of about 1 trillion USD.
In Japan, its growth potential and economic ripple effects areemphasized, and in the Offshore Wind Industry Vision (Phase1), it is positioned as a trump card for making renewable energy a mainstream power source.
Bearings are components that affect the power generation efficiency of wind power generators. Those used in large wind
power generators are several meters in size. With our highly
accurate roundness and cylindrical shape measurement technology, we measure the shape of the bearing and whether
there is any internal distortion or inclination, maximizing the effect of introducing wind power.
1-2. Expansion of the storage battery industry
Production of lithium-ion and other rechargeable batteries* is
expected to grow dramatically due to the global spread of EVs
and the stabilization of the electric power system accompanying the expansion of the introduction of renewable energy.
he global market for rechargeable batteries (for stationary and auto* Tmotiveuse) is expected to grow significantly from approximately 5 trillion
yen in 2019 to approximately 40 trillion yen (8 times higher) by 2030, andapproximately 100 trillion yen (20 times higher) by 2050
(Source: Strategy for the Storage Battery Industry, Ministry of
Economy, Trade and Industry)
https://www.meti.go.jp/policy/mono_info_service/joho/conference/battery_strategy/battery_saisyu_torimatome.pdf

A charge/discharge testing system that measures the performance and reliability of rechargeable batteries is developedand sold by Accretech Powertro System Co., Ltd., a Group
company.
Charge/discharge tests involve repeated charging and dis-

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45

Sustainability

Introduction

Environment

charging of batteries, and thus consume a large amount ofelectricity. However, our unique "energy sharing method," inwhich electricity is shared among multiple batteries under test,
has realized energy conservation of up to 30% (in-house comparison). In addition to battery research and development, thisproduct is used for a wide range of applications, such as quality inspections during mass production, and contributes to the
reduction of CO2 emissions and power costs for customers.
Accretech Powertro System Co., Ltd. not only manufacturesand sells test equipment but also provides battery evaluation
services for contract testing using the equipment.
These WIN-WIN products and services contribute to climatechange countermeasures by reducing customers’ CO2 emissions during testing and by accelerating R&D and dissemination of rechargeable batteries while at the same time contributing to our growth.

2-2.Contribution to energy conservation and productivity
improvement by adapting the temperatures of precision measurement
While countries around the world are working to achieve carbon neutrality by 2050, the average global temperature is expected to rise between 0.5 and 1°C even if the goals set byeach country are met. Furthermore, if the world does not move
forward with climate change countermeasures, it is expectedthat the average temperature will rise by more than 4°C andthe probability of extreme weather events will increase.
In response to these risks, we provide measurement productsthat are resistant to temperature changes in the measurement
environment and contribute to the sustainable production activities of the manufacturing industry. Specifically, we provide
value in the following ways.

2. Non-electric power sectors (consumer, industrial, andtransportation)

Measurement environments in which it is difficult tocontrol the temperature:46

INTEGRATED REPORT 2023

Our products can handle constant temperature rises above the conventional accuracy-guaranteed ambient temperature to a certain
degree. In addition, the ease of constraints on environmental temperature at the time of measurement enables flexible design of measurement and inspection processes in the factory. As a result, measurement and inspection can be performed earlier in the production
process, contributing to higher productivity.

Measurement environments in which it is possible tocontrol the temperature:
By expanding the range of the accuracy-guaranteed ambient temperature and being less strict with air conditioning temperature settings, our systems contribute to energy and cost savings while
maintaining measurement accuracy.

The following products enable measurement over a wide temperature range. Also, it is assumed that the automation of production processes will accelerate in the future for the purposeof avoiding work in hot environments, and demand for theseproducts is expected to increase because they are also compatible with automation.
• C oordinate measuring machines — DuraMax, XYZAXAXCEL• S urface texture and contour measuring instruments —SURFCOM NEX
In the future, we will continue to support the production bases
for more industries and products by responding to customers'
needs for temperature adaptation and automation with a wide
range of products.

2-3. Fuel conversion and contribution to weight reductionand efficiency in the transportation sector
In order to decarbonize the transportation sector, further
weight reduction and efficiency of transportation equipment
are required. Especially in the aircraft sector, while electrification and fuel conversion are progressing, reviewing the structure and engines of airframes continues to be an importantdevelopment issue. For example, BLISK, a component that integrates the blade and rotor disc of an engine, plays an important role in reducing the weight of aircraft engines and the
air resistance inside the engine.
The development and production of blisks requires high-precision metal processing and it has been a challenge to accurately measure their shapes (especially the edges of theblades). We offer XYZAX Opt-BLISK, a product that enables
accurate measurement in a short amount of time by utilizing a
non-contact sensor. Our highly accurate measurement technology will contribute to the efficiency and decarbonization of
the transportation sector.

[Strategy for Risks]▲2-1. Progress of electrification and digitalization
In the decarbonization of non-electricity sectors, measures for
dealing with combustion equipment and facilities using fossil
fuels are the main focus, with conversion to decarbonized energy through electrification (direct heating with electricity, heatpumps, electrification of vehicles, etc.) and efficiency improvements through digitalization, playing a major role toward decarbonization.
These measures will result in a rapid increase in the number ofelectronic devices and sensors used in society as a whole,with demand for semiconductor devices expected to growcontinuously.
We provide precision measuring instruments that are indispensable for the development and production activities ofsemiconductor device manufacturers, electronic component
manufacturers, semiconductor and electronic component
manufacturing equipment manufacturers, and inspection system manufacturers. With the increase in demand for semiconductor devices mentioned above, the need for our productsthat support semiconductor manufacturing processes is expected to increase in the future.
In addition, since reducing CO2 emissions from automobiles is
an important theme toward achieving carbon neutrality, related
policies are being launched one after another in countries
around the world. The Japanese government is also aiming for
only electric passenger cars to be sold by 2035. In line with
this, it is tasked with restructuring the automobile industry, including the development and popularization of storage batteries. The unit configuration, development, and production
methods for HEVs and EVs are very different from those forconventional automobiles. In particular, the market for drive
motor units, inverters, batteries, and other components uniqueto electric vehicles is expected to expand rapidly. We support
high-precision measurement of drive system motor units andbatteries by utilizing measurement technology with Coordinate
measuring machines and X-ray CT systems. In the future, wewill grow together with customers in the automotive industry,
which is undergoing major changes, and contribute to the
spread of new energy vehicles from the aspect of measurement technology.

StrategyStrengthening BCP and BCMS
• In addition to the increasing risk of natural disasters due

to climate change, there is a growing need for business
continuity in emergencies from the perspective of economic security. Against this backdrop, we are working
to strengthen our Business Continuity Plan (BCP) andBusiness Continuity Management System (BCMS). (SeeP73, "Risk Management.")• In preparation for the intensification of disasters causedby climate change, we are implementing the following
planning and management in anticipation of the suspension of operations at our plants and the damage to suppliers and subcontractors.
• Assumption of damage to our own plants: We have assessed the risk of flooding at our plants (Hachioji,
Tsuchiura, Hanno) based on hazard maps and other information from local governments and confirmed thatthe risk of flooding is sufficiently small.
• S uppliers and subcontractors: We evaluate the risk offlooding using local government hazard maps and assessment tools such as the World Resources Institute'sAqueduct Floods taking into account the magnitude of
the impact on our business, including transaction value
and the inability for other companies to supply the same
products and services.

Sustainability

Governance

Data[Strategy for Scope 3 emissions (Category 11)]
As a result of calculating Scope 3 emissions (Category 1 and11) based on Life Cycle Assessment (LCA), it was found that
Category 11 emissions related to semiconductor manufacturing equipment had the greatest impact and that emission reduction efforts are highly important.
In the semiconductor manufacturing process, in addition to
the power consumption of our products, energy is also consumed in the production of ultrapure water, which is necessary
for clean room maintenance, temperature control, and semiconductor cleaning.
In addition, based on our LCA results, CO2 emissions associated with indirect emissions from dicing machines can be as
high as or several times higher than CO2 emissions associatedwith electricity consumption during product use. Therefore, it
is also important to reduce these emissions.
We are also working to reduce the footprint of our products to
reduce the energy required for air conditioning, and to develop
products that enable semiconductor cutting and processing
using smaller amounts of water (ultrapure water).
Our design principles for new product development include
compactness, design that achieves energy conservation
throughout the product life cycle, and resource-saving design,
and we evaluate LCA and set targets for indirect emissions, including CO2 emissions, during product development.

Targets and Indicators
By 2030, we aim to reduce our Scope 1 and 2 CO2 emissions
by 50% compared with fiscal 2018 levels.
We expect demand for semiconductors to continue growing intandem with advances in electrification and digitization. We
recognize that semiconductors will play a major role in the realization of a decarbonized society and that it is important for
our Group to meet those needs. In light of the current situation, we plan to expand production capacity. Although energy
consumption is thus expected to increase, we will promotedecarbonization efforts by utilizing low-carbon energy sources,
including renewable energy, in addition to mounting energy
conservation efforts.

Column: Control Function that Contributes toEnergy Conservation· O ur measurement products are equipped with a function (Air
Saver function) that automatically stops the supply of compressed air when the main unit is in standby mode, contributing
to energy conservation without extra labor for operators.
· In addition, customers who are already using our products canalso add this function to their existing equipment to save energy
at their existing facilities.

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47

Sustainability

Introduction

Environment

Eco-Factory

The Tokyo Seimitsu Group contributes to the realization of asustainable society based on the Group’s Basic Environmental
Philosophy, which is “Recognizing environmental conservation
as an important theme common to all humankind, Tokyo
Seimitsu makes environmental conservation an integral element of all product development, design, manufacturing, andservice activities.”

Tokyo Seimitsu is a machinery manufacturer that performs
tooling of precision parts in-house. Over 99% of the energythat we consume consists of power for our production plants,
and the amount of water that we use for cutting and processing is considerable as well. Production volume is increasing for
products that process semiconductors using water, as is thevolume of water used for inspection, adjustment, test processing, and other work. We are striving to reduce the consumption of electricity and water. Moreover, as the equipment haslarge numbers of mechanical parts and many paper drawings
are used for parts processing and assembly, we are working
to use electronic data in processing and assembly to reduce
the use of paper. We are also striving to recycle metal processing scrap and waste liquid from processing as much as
possible.

Environmental Management System
The Company has created an Environmental Management
System (EMS) which conforms to ISO 14001. Each Environmental Subcommittee, established as part of the Semiconductor Company and Metrology Company, conducts an annual sur vey of environmental aspects of the organization,
products, services, and facilities in accordance with the Environmental Monitoring and Measurement Management Regulations. We evaluate their environmental impacts and prepare,approve, implement, evaluate, and report on our Environmental Objectives Implementation Plan and Environmental Management System Programs based on legal requirements, ourEnvironmental Policy, and stakeholder requirements.
Internal audits are conducted twice a year to confirm the status of management and compliance with laws and regulations.

Environmental Objectives Implementation Plan/
Environmental Management System Programs
The divisions affiliated with each Environmental Subcommittee
prepare an Environmental Objectives Implementation Plan thatspecifies the details of efforts, deadlines, and evaluation methods to achieve the environmental targets of the Semiconductor
Company and Metrology Company. Based on this plan, they
prepare Environmental Management System Programs thatprovide annual implementation plan and progress information.
In fiscal 2022, we planned 69 programs, achieving our objectives in 65 of them (94.2% achievement rate).

• Environmental management system programs in fiscal
2022 that achieved objectives
Main initiative

48

Resource Recycling and Waste Reduction

Environmental Management

Basic Environmental Philosophy, Basic Environmental Policy, Environmental Policy
https://www.accretech.com/en/sustainability/esg/management.html

Cases

Power reduced due to equipment efficiencies

29

Reduction in power consumed during processing andproduction

3

Power reduction due to improvement proposals andsmall-group activities

7

Reduction in water and air consumption during production

4

Reduction in the use of organic solvents

2

Reduction of hazardous chemical substances

3

Reduction of CO2 through gas substitution

1

Reduction in waste

2

Reduction of CO2 emissions through use of Company vehicles

1

Others13

INTEGRATED REPORT 2023

Strategy

Various resources are used for the products and business activities of the Tokyo Seimitsu Group. In order to contribute to
the formation of a sustainable recycling-oriented society, we
have declared in our Environmental Policy that we will makeeffective use of all resources and work on resource saving,waste reduction, and recycling.

Reduction of waste emissions, reuse as resources
Plan

Recycling rate of 95% or higher by FY2024

ResultRecycling rate����������� 99.0%
Total emissions��������� 1,071 t
Amount reused as
Cardboard : Reduced by 88,549 kg
resources����������������1,061 t Bubble wrap : Reduced by 13,542 kg
Final disposal amount����� 10 t Wood scraps : Reduced by 9,920 kg

Paper procurement volume production volume intensity reduction

Promotion of Global Warming Prevention(Toward a Carbon-Free Society)Plan

5% reduction compared to FY2019 by FY2024
Benchmark usage : 0.443 kg/million yen
Reduction target : 0.421 kg/million yen

Almost all the greenhouse gases emitted by the Company arefrom the CO2 equivalent of electricity purchased and used in
the operation of the Hachioji Plant and Tsuchiura Plant. As a
global warming prevention measure, we are focusing on conserving electricity.

Result0.310 kg/million yen (30% reduction compared to FY2019)■ CO Emission Reduction Targets
2

35% reduction compared to FY2018 by FY2025
50% reduction compared to FY2018 by FY2030● Fiscal 2022 Targets and Results
Reduction of CO2 emissions
Plan

35% reduction compared to FY2018 by FY2025
Benchmark emissions: 12,312 t-CO2
Reduction target: 8,003 t-CO2

Result8,257 t-CO2 (33% reduction compared to FY2018)

In order to reduce waste, we are implementing various initiatives, such as replacing cardboard boxes for packaging delivered parts with reusable plastic boxes, and having pick up
wooden pallets picked up by shipping companies. All wastefrom the Hachioji Plant is recycled, by means including thermal
recycling. We are also working to increase the recycling rate at
the Tsuchiura Plant by switching to a vendor that treats liquid
waste for recycling.

■ Reduction of Resource (Paper) Use

Promotion of energy conservation (reduction of electricity during use)Plan

140 MWh reduction through Environmental Management
System Programs

Result238 MWh reduction (achievement rate: 170%)● Tokyo Seimitsu’s CO emissions and electric power used2

Previous
five-year plan

■ Waste Reduction and Reuse of Waste as Resources

In order to reduce our use of paper, we are creating an environment in which work can be performed during every process within the company using electronic data.
• Spreading Information about Our Public Relations Activities and IR Initiatives in Digital Formats Without Using
Paper• Comprehensive Management System for Multifunction
Machines and Printers• Initiatives for Creating a Paperless Supply Chain

Water Resources

New five-year plan*

2018
(FY)

2019
(FY)

2020
(FY)

2021
(FY)

2022
(FY)

FY2023(Target)Emissions(t-CO2)

12,312

11,982

9,524

8,191

8,257

10,900Electricity
consumption(MWh)25,76525,448 28,843 29,835 29,546

35,580CO2 emissions
Production
volume intensity(t-CO2/million yen)

0.160

Water is a valuable resource that is directly linked to people's
lives and livelihoods. Since the Hachioji Plant, which manufactures semiconductor manufacturing equipment, uses a large
amount of water (pure water), we are working to conserve water resources by reducing water consumption and promoting
water recycling.
Water consumption production volume intensity reduction

0.191

0.129

0.080

0.074

—

Organizations covered: Tokyo Seimitsu Co., Ltd. (non-consolidated basis)
In 2021, we revised our reduction target and extended the period by one year.

Plan

5% reduction compared to FY2019 by FY2024
Benchmark usage : 2.74 m3/million yen
Reduction target : 2.60 m3/million yen

Result1.48 m3/million yen (46% reduction compared to FY2019)

Sustainability

Governance

Data■ Reduction of Water Consumption and Water Recycling
All of the water we use is provided using city water (surface
water) and groundwater. In fiscal 2022, we used 164,150 m3 ofwater. At the Hachioji Plant in particular, wastewater volumes
are increasing as the production volume of semiconductor
manufacturing equipment that use a large amount of water(pure water) increases. As a result, a portion of the wastewater
is collected and filtered to promote water recycling as raw water to serve as pure water.

● Water usage
FY2018
performance

FY2019FY2020

FY2021

FY2022

Water usage (m3)

157,375

171,706

169,873

163,662

164,150

Water usage
production volume
intensity(m3/million yen)

2.05

2.74

2.29

1.61

1.48

Locations covered: Hachioji Plant and Tsuchiura Plant● Water recycling rate from pure water production facilities*
FY2019FY2020

FY2021

FY2022

16.3%

17.2%

17.2%

17.6%

Locations covered: Hachioji Plant
mount recycled/amount used (= raw water* Wastewater recycling rate: Ainput+ amount recycled)

Chemical Substances Control
With regard to the chemical substances, the Tokyo SeimitsuGroup uses and that are contained in component materials,
the Group complies with the laws and regulations of Japanand of the regions to which it exports. For chemical substances that are not regulated, we perform management based onvoluntary standards to minimize impacts on people and theenvironment.

■ Chemical Substances Control Based on VoluntaryStandards

In our internal regulations, we stipulate substances with thepotential to pollute the environment, and mandate notification
to the person responsible for environmental management
when handling such substances. In addition to keeping trackof the amount of each substance handled, storage location,
maximum storage volume, etc., we have SDSs* and emergency response tools, conduct periodic drills to prepare for emergency situations, and are promoting the use of non-toxic or
low-toxic alternatives to organic solvents and other hazardous
chemical substances. In fiscal 2022, we reduced the numberof chemical substances by 45 compared to the reduction target of 10 substances.
data sheets (SDSs): provide information on the hazards, toxic* Sity,afety
storage, disposal methods, and other information on the handling ofchemical substances.

*

INTEGRATED REPORT 2023

49

Sustainability

Introduction

Environment

Strategy

Sustainability

Governance

Data

Quality
Eco-products(products that reduce environmental impact)
We believe that it is important for the products of the Tokyo
Seimitsu Group, which are indispensable to our customers'
production processes, to contribute to energy conservation in
our customers' manufacturing. Through our eco-products(products that reduce environmental impact), we will contributeto the resolution of customers' environmental issues and therealization of carbon neutrality.

rotational probes, measurement time has been reduced byapproximately 60% compared to conventional contact-type
sensor measurements, and power consumption during measurement has been reduced.
It also contributes to improving aircraft fuel efficiency by accurately measuring blisk edge shapes.

Life Cycle Assessment (LCA)
In the development of new products, we set LCA (Life Cycle
Assessment: a calculation standard that converts the environmental impact of each stage of a product's life cycle, frommanufacturing to disposal, into CO 2 emissions) targets andaim to reduce CO2 emissions from conventional machines. We
are also working to reduce total CO2 emissions by calculating
the LCA of existing products.

System that Reduces Environmental Impact
HRG3000RMX high rigid grinder
In the manufacture of semiconductors, wafers are becoming
thinner as semiconductor packages become thinner and chips
become multilayered.
The HRG3000RMX high rigid grinder achieves mirror surface
processing comparable to a polish grinder by increasing rigidity with original technology and has improved machining speed
and productivity three times that of a polish grinder.
As a result, compared to conventional polish grinders, power
consumption per wafer processing is reduced by 61%, waterand air consumption are reduced by 57%, and the installation
area of the equipment in the clean room is reduced by 65%.
In addition, polish-less (chemical-less) processing contributes
to cost reduction and reducing environmental impact.

Energy Sharing Method-Based Charge/Discharge Testing System
Charge/discharge Testing System are used for charge/discharge tests in a wide range of applications such as the R&D
of rechargeable batteries and capacitors and quality inspections during mass production. Although our charge/discharge
testing system have traditionally also regenerated energy backto the commercial power source, our unique energy sharing
method that accommodates surplus power among multiple
batteries in the device being tested and between devices hasrealized energy savings of up to 30% (in-house comparison).
This contributes to the reduction of CO2 emissions and power
costs for customers.
Charge/discharge
systemCHG

CH

DisCHG

Only insuﬃcient/excess energy
shared between systems or
between CH is supplied/
regenerated from or to thecommercial power source.

Power consumption:
smallTarget and FY2022 Result

Supplier Quality Audits● Customer Satisfaction Survey

Suppliers who supply many of the parts and components required for our products cooperate in the quality audits that we
conduct using our ISO 9001-compliant checklists. In fiscal
2022, supplier quality audits were conducted at 11 companies(cumulative total of 208 companies), and follow-up audits wereconducted for suppliers that did not comply with our quality
control standards and/or quality requirements.

TargetResultAchieve a satisfaction rating of
94.8% or more by FY2025

Percentage of satisfactory ratings
in FY2022: 93.3%

Quality Control Structure(Quality Management Committee)

Customer Satisfaction Surveys

The Quality Management Committee consists of eight members: One Quality Officer, two officers in charge of business,
two quality control managers, and three Sustainability Department members. The Quality Management Committee meets
twice a year to review the performance, effectiveness, and appropriateness of the Quality Management System. The Quality
Officer reports to the Board of Directors and receives instructions and supervision. In fiscal 2022, there were no quality man-

To incorporate customer feedback into the improvement andenhancement of our products and services, we conduct customer satisfaction surveys to ascertain customer satisfaction
and strive to strengthen it. The percentage of satisfactory ratings in the FY2022 customer satisfaction survey was 93.3%,
and we are analyzing factors and implementing countermeasures for items that we believe need improvement.

Customer's
test battery

SHARE

INTEGRATED REPORT 2023

The internal audit team conducts Internal Quality Audits twicea year. Certified auditors conduct audits in accordance with
the quality manual under the direction of the Quality Control
Managers of the Hachioji and Tsuchiura Plants, who report theaudit results and the effectiveness of the Quality Management
System to the Quality Management Committee. During the Internal Quality Audits performed in fiscal 2022, the auditors did
not indicate that corrective actions needed to be taken.

SHARE● Provision of Stable and Reliable Product Quality and Prompt and Meticulous Support Quality

betweensystems

50

Quality Policy
At both of our plants, we set quality targets and conduct
quality control in line with the Quality Policy, and work to
improve the quality of products and support.

Internal Quality Audits

betweenCommercial
power source*
Regeneration device

A blisk, which consists of a rotor disk and multiple blades, is acomponent of the aircraft engine. The integrated structure has
reduced the number of parts and reduced the weight of theparts while the measurement technology required by the complex structure has also become more sophisticated.
Opt-Blisk's unique measurement path generation technology
and 4-axis synchronous control of the XYZ and rotational
probes enable high-speed scanning measurements with optimal measurement paths that maintain sensitivity even in blisks
with narrow areas where blades overlap.
By combining AXCEL, a Coordinate measuring machine that
achieves high acceleration, and a non-contact, high-precision

agement issues that required corrective actions to be taken.
Since obtaining ISO 9001 certification at the Hachioji andTsuchiura plants in 1994, we have established the Tokyo Seimitsu Quality Management System (QMS) and have been promoting quality improvement activities through the PDCA cycle
based on quality policy and quality targets.

Quality Policy (full text)
https://www.accretech.com/en/sustainability/esg/product_quality.html

Commercial
power source

Opt-Blisk

As Tokyo Seimitsu Group products are incorporated into production equipment, we consider outstanding quality as meaning the provision of stable and reliable product quality andprompt and meticulous support quality. In order to fulfill our
responsibility to protect the social status and interests of ourGroup customers, we are promoting initiatives to improve andupgrade quality and services.

CHG

SHARE

Regenerationenergy is
expected to
be used at theoperation site

between

CH

DisCHG

Customer's
test battery

Quality policy andquality targets

Support and operation

・Initiatives aimed at risk and opportunity
・Planning of quality management system(quality target implementation plan/quality management system program)

PDCA
cycle

Charge/discharge system* The commercial power source regeneration device can be installed separately
within the system in the same way as our conventional systems.

Improvement

・Instructions from management review
・Corrective action for non-conformities
・Continuous improvements

・Tokyo Seimitsu Engineering Standards (TES), resources,
competencies, education and training, legal information
・Creation of products and services
・Determination of requirements, design and development,
management of manufacturing and service provision (change
control) and release, defective product management
・Quality improvement activities
・Quality management system program execution
・Communication with suppliers

Monitoring, measurement, analysis, evaluation
・Customer satisfaction surveys
・Management reviews
・Internal audits
・Quality Subcommittee and QC meetings
・Supplier performance surveys

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51

Sustainability

Introduction

Support Services

The Semiconductor Company’s CE (Customer Engineer) Department is responsible for maintaining and improving thequality and productivity of the Company’s semiconductor
manufacturing equipment used in semiconductor manufacturing and processing operations around the world, from installation setup to maintenance and training support, as well as
supplying maintenance parts. In addition, based on a deep relationship of trust with our customers, we strive to understandtheir needs and support their manufacturing activities. In order
to contribute to our customers’ profits and increase customer
satisfaction by providing high-performance products andhigh-quality support, we have established a global support
structure based on the teamwork of the entire CE Department.

The Semiconductor Company’s Customer Engineering (CE)
Department provides a high level of customer responsivenessand value-added services through the Service Division andparts supply without delay through parts centers that enable
customers to realize their targeted production.

Customer

Salesperson

Sales
proposals

Follow-up

Precision Measuring Instrument Business
Adopting the slogan “No Measurement, no Manufacturing,”
the precision measuring instrument business provides support
for creating our customers’ futures through our precision measuring technology based on the idea that providing precisionand reliability is the origin of manufacturing.

Support Structure
The Metrology Company has established Metrology Centers atfour locations in Japan and nine showrooms overseas, building a system capable of providing technical support to customers while becoming closer to them.

● Support Structure
Tsuchiura Metrology Center

Support StructureSales
adviceCustomer engineer

Technical
adviceTechnical
proposals

Technology
engineer

On-site response, Information
feedback
sharing

Manager in charge of products

Metrology
Business
Development Div.

Hachioji Metrology Center

Sales

Nagoya Metrology Center

Customer

Osaka Metrology Center

Overseas
ServiceTeam

Accretech-Tosei do Brasil

Accretech Korea

Accretech Malaysia

Accretech Europe

Accretech Taiwan

Accretech Indonesia

Accretech China

Accretech Thailand

Accretech Vietnam

Follow-up

Metrology Centers
Education and Training
The CE Department is required to have a high level of expertise so that it can respond to various customer issues. In order
to continue to provide high-quality support, the CE Department is also helping to standardize work levels (accuracy, operation assurance, knowledge, etc.) by conducting training foryoung engineers and leadership training. In addition, skill
sheets are used to clarify the status of employees' acquisitionof knowledge and skills, which is useful for human resource
development.
The GSM (Global Service Meeting), which is held annually by
the GSE (Global Service Engineer) Team, was conducted online in fiscal 2022. 67 service engineer representatives from 12
countries and overseas subsidiaries participated in the event,which included a video streaming of start-up operations,demonstrations of AI big data functions using webcams andsmart glasses, and equipment and product-specific training.

52

INTEGRATED REPORT 2023

Sustainability

Governance

Data

Supply Chain Management

Semiconductor Manufacturing Equipment
Business

On-site response, Requests
feedback

Strategy

Our Metrology Centers are staffed by engineers who have ample expertise in measurement technology and instrument operation, and provide "technology" (place for learning), "sincerity" (proposal of solutions), and "reliability" (customer-friendly
support) to meet the various needs of customers.

Training of Engineers Overseas
In order to strengthen the global support structure, the overseas service team invites service engineers from various countries to the Metrology Center located in the Tsuchiura Plant for
intensive training and drills. In fiscal 2022, 11 people from 4
countries participated in the basic training for new engineers,and 9 people from 6 countries participated in the advanced
training for skilled and experienced engineers.

The Tokyo Seimitsu Group considers all of our
suppliers to be our valued partners. Throughcollaboration with our suppliers, we aim todevelop a strong supply chain that contributes to a sustainable society by autonomously
responding to the needs of the international
community as a responsible company.
Procurement Policy
In providing high-performance, high-quality products andservices to customers, the Tokyo Seimitsu Group deepens partnerships with all suppliers through procurement,
builds mutual cooperation and trust, and forges relationships that allow us to grow and develop together.
In addition to quality, we comply with laws and social
norms, and engage in procurement activities that fulfill social responsibilities such as human rights, labor, safety
and health, global environmental protection, and information security throughout the supply chain.
Through fair and impartial evaluation processes and communication, we will respond to market changes and promote high-value-added manufacturing together with reliable suppliers.

Promotion Structure
In order to strengthen our supply chain, we established a Supply Chain Working Group under the Sustainability Committee
in July 2023. Formed by members of Production Control Dept.,
Quality Assurance Dept., Sustainability Dept., Environmental
Product Promotion Department, Technology Development Department, Sales Department, Legal Department, and Information Systems Department, the Supply Chain Working Groupgrasps supply chain requirements internally and externally andpromotes sustainable procurement.

Supplier CSR Guidelines
We have declared our compliance with the Responsible Business Alliance (RBA) to meet the demands of the international
community, including corporate responsibility for the safety of
the working environment, worker dignity and environmental
impact throughout our supply chain.
Based on the RBA Code of Conduct, we have formulated the“Tokyo Seimitsu Supplier CSR Guidelines” that set out our requirements with regard to procurement policy, human rights
and labor, occupational safety and health, the environment,
ethics, safety and quality, and information security. We ask
that our suppliers understand the purpose of these guidelines
and cooperate with us in promoting sustainable procurement
activities.

Supplier CSR Survey
We have reviewed the SCM (Supply Chain Management)
check sheets that have been utilized since fiscal 2016 andhave been conducting sustainability assessments with newcontent based on the RBA Code of Conduct since fiscal 2022.
In fiscal 2022, a survey was conducted for the top 56 companies (26%) in terms of percentage of procurement value withresponses received from 53 companies (response rate:
94.6%). The results of the assessment analysis are provided tosuppliers as feedback. For items with low scores, suppliers arerequested to take corrective actions and measures for improvement.

● Sustainability assessment items
Type

Number ofquestions

Assessment items

Labor

19

Items related to human rights, such as foreign
workers, child workers, overtime labor, forcedlabor, abuse, and discrimination

Healthand
Safety11

Items related to occupational safety, work thatuses chemicals, or work that is physicallydemanding

Environment

8

Items related to understanding the company's
greenhouse gas emissions and reduction targets

Ethics9

Items related to bribery and corruption, privacy
and information security

Management
System12

Items related to the establishment of processes
for continuous improvement in labor, health andsafety, the environment, and ethics● Target and result
TargetFY2022 result

Suppliers connected with 80% of
procurement amount in FY2023(126 companies)

Suppliers connected with 26% ofprocurement amount(56 companies)

Curtailing and Managing Environmental Impact (Risk)
We ask our suppliers to use the "Environmental Management
Structure Survey Sheet" or "Environmental Management
Checklist" for survey and evaluation purposes, and to develop
and manage systems to avoid environmental risks in the supply chain. Suppliers that outsource product manufacturing orservices are required to participate in a survey conducted by
our Company every two years regarding human health and living environments, including air pollution, water pollution, theOffensive Odor Control Act, vibration and noise facilities, andspecially controlled wastes.

INTEGRATED REPORT 2023

53

Sustainability

Introduction

Supply Chain Management

Strategy

Sustainability

Governance

Data

Work Styles
Training for Employees

Web-Based System for Suppliers

Health Management

Work-Life Balance

We conduct training for employees in Procurement Section
and Procurement Team to develop human resources who promote responsible procurement. In fiscal 2022, we provided
training on the Subcontract Act, Business Partnership Building
Declaration, and the invoice system.
We also provide all employees with e-learning training on the
ACCRETECH Group Code of Conduct.

We are developing a “web-based system for suppliers” toshare information with suppliers, broadly and without redundancy. This system will address the ever-growing need for information sharing, including supplier CSR questionnaires, notifications of disasters such as earthquakes and heavy rains,
surveys of damage conditions, and communication of various
notifications. We will use this system to build a structure formore sustained and active communication with suppliers.

In order for people to make the most of their capabilities andwork with a sense of purpose, the Tokyo Seimitsu Group believes it is important for those people and their families to bephysically and mentally healthy. Tokyo Seimitsu has taken initiatives in line with the Health Company Declaration and received a silver certificate as an “Excellent Health Company” inAugust 2020. We work to create comfortable workplaces bymeans including strict working hour management to avoid
long working hours.

The Tokyo Seimitsu Group has developed a system that enables all employees to be active while balancing work and life.
By promoting diverse and flexible work styles, we aim to improve productivity, achieve work-life balance, and create awork environment that is comfortable for everyone.

CSR Seminars
Every year, Tokyo Seimitsu offers CSR seminars at workshops
hosted by suppliers. In order to promote understanding of theimportance of fulfilling social responsibilities throughout the
supply chain, we explained about the new Sustainability Assessment for FY2022 with reference to the RBA Code of Conduct provided by the Responsible Business Alliance (RBA) andasked for cooperation in surveys in response to the demandsof the international community.
FY2015 Policy on CSR<Web-Based System for Suppliers>
Tokyo Seimitsu

Supplier

Main communications
Information/survey concerning CSR
procurement(CSR Guidelines, CSR Assessment, survey
on the use of non-compliant products)
Damage impact survey(earthquake, typhoon, ﬂood, plant ﬁre)Miscellaneous notices(celebratory get-togethers, summer
holidays, New Year's celebration, plant
regulation information)

Arriving email

Registration/response

Download

Trends in CSR/Results of the Previous Year’s “SCM Check Sheet”/
Tokyo Seimitsu’s CSR Activity Report

Tokyo Seimitsu’s CSR Activity Report/Trends in CSR/
Initiatives for the Supply Chain/
FY2018Supplier CSR Guidelines (First Edition) Overview and request
for submission of “Check Report”
Trends in Prohibited Substances in Products in 2020/
Sharing of Information on Typhoon Damage in 2019/
FY2019
Review of BCP/
Introduction to Disaster Countermeasures
Overview of Web-based System for Suppliers/
FY2020 Trends in Environmental Laws and Regulations for Products/
CSR Questionnaire
FY2021

Seminars canceled due to prevention of new coronavirus
infection

FY2022

Transition from CSR to Sustainability Activities/
Self-Assessment Referencing the RBA’s Code of Conduct

Supplier Evaluation System
Once a year, the Company conducts commendations for suppliers. We commend outstanding suppliers based on evaluations of five items: quality, cost, delivery time, rate of cooperation, and management. In fiscal 2022, we commended twobusiness partners and presented them with certificates of recognition.

Health Declaration

Actual Details and Results

100% of medical checkups
will be taken

Achieved periodical medical examination
rate of 93.7%

We will utilize the results ofhealth checkups

A total of 105 people were encouraged toreceive specified health guidance

We will create a healthy
environment

Video dissemination addressing healthy
company declaration themes: 12 times(monthly)

We will promotebetter diet

Provided Healthy Company Declaration
Collaborative Menu in cafeterias (once aweek)

We will encourage exercise

Introduced the web walk rally sponsoredby the Health Insurance Association

Percentage of
employees taking
childcare leave(number of people
taking leave/numberof people eligible)

We will promote
nonsmoking

Dissemination of health information on theharmfulness of tobacco
Introduced counseling services

Business Partnership Building Declaration
On February 1, 2023, Tokyo Seimitsu announced its Business
Partnership Building Declaration in support of the aims of the"Council for Promoting Partnership Building for the Future*”.
We aim to build new partnerships by promoting collaboration,
coexistence, and co-prosperity with business partners in the
supply chain and businesses seeking to create value.

We will promotemental health100% acquisition rate
(five days of annual leave)

Annual Paid Leave

Eligible employees who are granted at least 10 days of paid leave per year.
This does not include special paid leave or other leave other than annual
paid leave.

● Fiscal 2022 Results

FY2016 Overview of the “SCM Check Sheet” and Survey Request
FY2017● TargetAchieved 99.1% examination rate for stresslevel checks

Measures to address long working hours
As measures to address long working hours, we manage
working hours through entry/exit systems, encourage our employees to take annual paid leave, and promote industrial physician consultations and the taking of annual paid leave for
employees who have a high level of total working hours withina month or three months. We introduced the entry/exit system,
which uses IC card-based employee ID cards in fiscal 2020,
strengthening company-wide management of working hours.
In fiscal 2022, average monthly overtime hours per person decreased by 3.0 hours from the previous year.

● Result
FY2020

FY2021

FY2022

Annual paid leave acquisition rate

65.9

69.8

76.7

Rate of taking five days of annual
paid leave

100

100

100

Number of employees taking
refreshment leave

6

14

34

Women

100 (2/2)

Noneeligible100 (2/2)Men

9.4 (3/32)

Return towork rate

19.2 (5/26) 38.5 (10/26)

100

100

100

Number of employees taking
child-nursing leave

4

7

11

Number of employees who
utilized the nursing care leavesystem100Number of employees who took
nursing care leave

1

4

9

Scope: Full-time employees of Tokyo Seimitsu Co., Ltd. (non-consolidated
basis)

https://www.biz-partnership.jp/declaration/22838-05-18-tokyo.pdf
ouncil for Promoting Partnership Building for the Future: This
* Ccouncil
conducts activities to promote co-existence and co-prosperity
for companies throughout the entire supply chain and new cooperative
relationships where size, affiliation, and other factors are irrelevant. Members include relevant cabinet ministers (from the Cabinet Office, METI,MHLW, MAFF, and MLIT as well as the Deputy Chief Cabinet Secretary),
Keidanren Chairman, NCCI Chairman, and Rengo Chairman.

54

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INTEGRATED REPORT 2023

55

Sustainability

Introduction

Work Styles

Strategy

Sustainability

Governance

Data

Human Rights
Occupational Accidents

Many devices, parts, tools, and processing machines from theTokyo Seimitsu Group, a manufacturer of machinery, can befound at manufacturing and distribution sites. As our products
consist of equipment used in production, many tasks such asdelivery, installation, maintenance, and inspection occur in theunfamiliar environments of customers’ production sites. By
carefully investigating risks associated with these, observing
and predicting the movement and flowline of workers, and implementing measures to minimize safety risks, we promote occupational health and safety initiatives so that everyday work
actions can be carried out safely and rationally.

By accident type, “flying or falling objects” and “cuts or abrasions” accounted for the majority of accidents. In response,
we are continuing our efforts to prevent recurrence and raisesafety awareness through education and guidance on equipment handling, thorough implementation of protective equipment wear, and thorough implementation of the 5S.

● Frequency of Accidents Resulting in Leave*

1

Tokyo Seimitsu (non-consolidated basis)

1.5

1.20

1.20

1.25

1.21
1.31

1.0

0.71

0.53

0.5
0.00
0.0

2018

0.00
2019

2020

2021

0.26
2022
(FY)

1 Frequency rate for accidents resulting in leave:*	Indicates the frequency of injury or death due toTargetFY2020

FY2021

FY2022

Accidents
resulting in leave

0

0

2

1

Accidents not
resulting in leave

0

6

10

12

Locations covered: Hachioji Plant and Tsuchiura Plant

See the following site for details.
Human Rights Policy
https://www.accretech.com/en/company/humanrightspolicy.html

occupational accidents.
Formula: (Casualties / total hours worked) × 1,000,000
of Health, Labour and Welfare*2 Ministry“Survey on Industrial Accidents”● Severity rate for accidents resulting in leave*

Occupational Health and
Safety Promotion Structure

1

Average for manufacturing companies in Japan*2
Tokyo Seimitsu (non-consolidated basis)

0.15● Target and result

Human Rights Policy
1. Basic views on human rights
2. S upport and respect for international human rights
norms; compliance with local labor laws and regulations
3. Scope
4. Prohibition of child labor and forced labor
5. Prohibition of discrimination and acceptance of diversity
6. Respect for freedom of association and right to collective bargaining
7. Prohibition of harassment
8. Human rights due diligence and relief efforts
9. Education on human rights
10. Information disclosure and dialog

Average for manufacturing companies in Japan*2

Promotion Structure
At the Hachioji and Tsuchiura plants, we have established
Safety and Health Committees, with each plant manager serving as the general safety and health manager. The committee
plans and deliberates on major health- and safety-related matters in a bid to maintain and improve a safe and comfortable
work environment. To raise employees’ awareness of healthand safety in the workplace and in the interest of maintaining
and promoting their health, the committee meets once amonth, in principle, and on an ad hoc basis when the generalsafety and health manager deems necessary.
We also conduct internal audits twice a year, with results submitted to the Audit Department and reported to the Board of
Directors. The Health and Safety Committee is subject to audits by the Audit Department.
In addition, we conduct internal education and training for various types of work as needed. We actively participate in occupational safety courses offered by outside educational institutions to avoid hazards.

The Tokyo Seimitsu Group established the Tokyo SeimitsuGroup Human Rights Policy on October 3, 2022 with the aimof realizing sustainable growth of our business and organization and a sustainable society by striving to correctly understand and recognize the laws, regulations, cultures, religions, and values of the countries and regions in which we
operate.

▲Occupational Health and Safety

0.10

0.10

0.10
0.07

0.06

0.05
0.00

0.000

0.003 0.000

0.04

2018

2019

2021

2020

0.08
0.000

The Company has established the Human Rights Activity Project, which consists of members from the Human Resources
Department, Management Support Department, Production
Control Department, and General Affairs Department, to address human rights across the board involving all of our Group
companies, suppliers, and local communities.

Human Rights Due Diligence
Based on the Tokyo Seimitsu Group Human Rights Policy, theCompany started human rights due diligence initiatives in fiscal
2022 to identify, prevent, and correct risks to human rights
posed by the Group’s business activities. In fiscal 2022, we
conducted a status survey of Tokyo Seimitsu Co., Ltd., five domestic Group companies, and 23 overseas Group companies
in accordance with the Responsible Business Alliance (RBA)
Code of Conduct and the Self-Assessment Questionnaire(SAQ). In the future, we will analyze the results of the survey
and work toward taking corrective actions, and plan to conduct a similar survey of major suppliers from fiscal 2023.

Human Rights Education and Training
We provide education and training on respecting human rights
so that each and every employee can understand and practice
the Tokyo Seimitsu Group Human Rights Policy. In fiscal 2022,
we conducted e-learning for employees of five domestic
Group companies and held the Tokyo Seimitsu Group Human
Rights Policy workshops at 23 overseas group companies.

Consideration of Human Rights and Compliance with Labor-related Laws and Regulations
The ACCRETECH Group Code of Conduct addresses matters
including compliance with laws and social norms related to labor standards, occupational safety and health, and the prohibition of acts that infringe on human rights. e-learning related
to the ACCRETECH Group Code of Conduct is conducted ona regular basis.
The Company has a labor union whose collective bargaining
rights are guaranteed by a collective bargaining agreement,
and elected employee representatives are working directlywith management to improve the workplace environment
through discussions and consultations. We have confirmedthat legal working hours and legal minimum wages are being
observed.

2022
(FY)

everity rate for accidents resulting in leave:*1 SIndicatesthe percentage of the degree of loss
caused by occupational accidents.
Formula: (Total lost workdays / total hours worked) × 1,000
of Health, Labour and Welfare*2 Ministry“Survey on Industrial Accidents”

56

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INTEGRATED REPORT 2023

57

GovernanceIntroduction

Roundtable Discussion with External Directors

Five external directors held a roundtable discussion covering topics such as the improvements to
the Group's governance, mid-term business plan, long-term strategies, and challenges faced toward achieving sustainability.

external directors, and it feels like the Company is listening
more to our opinions. I feel that Board of Directors' Meetings that are as vibrant as this are effective for achieving agood balance throughout the company. Meanwhile, enhancing indirect departments and boosting awareness ofmanagement strategies from a shareholders' perspective
will likely continue to remain a challenge going forward. I
think it will be great if the Company's purpose and concepts become more entrenched, and there is greaterawareness of overall governance.
Murata : It has only been a year since I was appointed as
an external director so I am unable to make any comparisons with previous performance, but in that time, I have attended various meetings, observed operations at plants,
and conducted interviews during site visits as part of audits. From these experiences, I can see that the management team takes our opinions as external directors seriously, and is applying them to make a difference. Group
governance will definitely prove essential for further enhancing governance and ensuring transparency. The ratio
of investments between the Semiconductor Company, Metrology Company, and overseas subsidiaries in particularshould be made simpler, with a better system put in place
for reporting key information back to the Tokyo Seimitsu
head office. To help achieve this, the personnel structure ofindirect departments of the Tokyo Seimitsu head office will
likely need to be enhanced.

Appointment as External Director

Overview of First Year of Mid-term Business Plan
and Long-term Strategy

External director

KiyoshiTakamasu

External director

Kazuya Mori

External director(Audit and Super visor y
Committee member)

External director(Audit and Super visor y
Committee member)

External director(Audit and Super visor y
Committee member)

Yuriko Sagara

Masaki Sunaga

Tsuneko Murata

Mori : I have been involved in development and management of manufacturing processes at semiconductor device
manufacturers for around 35 years. During that time, I haveplayed a role in the development of various process equipment together with semiconductor device manufacturers,
and have a good understanding of what types of devices
customers are actually seeking. I hope to apply as much ofthat knowledge to contribute to the Company.
I attended my first Board of Directors' Meeting on July 5,
and noticed that it differed from other meetings I have taken part in thus far, in that the external directors were very
active in asking questions regarding the discussed matters.
I found that it was a very lively Board of Directors' Meeting
owing to the effort made by participants to properly identify
and understand matters before coming to resolutions. This
meeting resolved matters including compensation for parttime hiring of senior management after they retire, and it
was excellent to see a corporate culture aiming to makeactive use of competent human resources.

Improvements to GovernanceTakamasu : In the time since I was appointed, I feel that
the Company has enhanced its governance structure, withimprovements seen in the effectiveness of Board of Directors' Meetings. In the sense of transparency in particular,
an extensive range of data is disclosed at Board of Directors' Meetings, and the Company discloses sufficient infor-

58

Strategy

INTEGRATED REPORT 2023

mation externally by publishing its Integrated Report andSustainability Report. On the other hand, I feel that there isa lack of support for human capital at indirect departments,and making further improvements to intellectual property
and audits at group companies and overseas subsidiaries
will be a challenge.
Sunaga : The way the Company is steadily implementing
a broad range of policies is certainly worthy of a high levelof praise. With growing pressures for policies aimed atboosting shareholder value, like enhancing business-specific portfolio strategies and capital efficiency based on
opinions received from shareholders and institutional investors, I feel there is growing importance on accountability
pertaining to strategies harnessing the Company's characteristics and business deployment. I would like to point out
how crucial the Group's governance is, given that there
may be various areas suffering from a lack of communication during the COVID-19 pandemic that ravaged for threeand-a-half years. I want to draw particular attention to instilling the Group's management policy and strategies,
maintenance and operation of the Internal Control System,and strengthening its management system for overseas
subsidiaries. In the past, the Company recognized the independence and uniqueness of subsidiaries and provided
them with capital required for operations, but I would like to
see greater effort improving the Group's governance, including designing standardized uniforms.
Sagara : This is my third year since being appointed as anexternal director, and I feel that there has been progresswith the Company's governance. There is a greater ratio of

Sunaga : Fiscal 2022 marks the first year of the mid-termbusiness plan, in which an ROE of 17.3%, net sales of 146.8
billion yen, and operating profit of 34.5 billion yen (operating
margin of 23%) were achieved, making it the second consecutive year of record profit. This is a very positive start. Increasing business performance over the past two years—
despite being unable to travel overseas due to the COVID-19
pandemic—and completing construction of the Hanno Plant
almost as scheduled can certainly be commended. A dropin revenue and profit is expected in fiscal 2023 due to a
slowdown in the market, but I think this would be a good
opportunity to make the necessary preparations to develop
the framework in the lead-up to fiscal 2024.
At the Long-term Strategy Review Committee, I felt the renewed sense of importance for discussing strategies to put
in place for 2030, 2040 and beyond. Creating various policies and a development environment that leverages theCompany's precision measuring technology and precision
machining technology will be crucial in order to adapt tochanges in the business environment anticipated with thesignificant increase in demand for semiconductors owing to
the shift to EVs and growing spread of quantum computers.
Over the long term, building a supply chain structure thatcan be rolled out on a global scale will be something thatneeds to be considered. There are many small and medium companies in Japan with no viable successors in place,so one issue to address will be developing a stable produc-

Sustainability

GovernanceDatation structure through technology support and M&As.
Murata : One of the financial strategies in the mid-termbusiness plan is adopting ROIC (return on invested capital)
as an internal assessment standard for investment metrics.
The next step required after calculating ROIC and WACC
(weighted average cost of capital) will be to utilize them as
evaluation indicators for performance compensation for directors. Leading companies already use the level of contribution to sustainability and ESGs, or the improvement ratioof employee engagement scores as a performance compensation for directors.
Takamasu : The Long-term Strategy Review Committee
was held twice in fiscal 2022, where there was a generalagreement of plans. I hope to see those plans being implemented in detail from this fiscal year. While the mid-termbusiness plan is proceeding in the right direction, I feel thatthe underpinning structure is insufficient to become a 200or 300-billion-yen company in the future. Rather than simply continuing to press ahead with the precision measuring
instrument business and semiconductor manufacturing
equipment business, it will be crucial to come up with synergies like businesses that can become new mainstays. To
achieve this, the Company should consider seeking M&As.
At its core, Tokyo Seimitsu is primarily a technology-based
company, which means it can easily adapt to trends arisingfrom DX, GX, digitalization, and AI, so I think the Company
will need to explore new businesses to expand into going
forward.
Sagara : The first year of the mid-term business plan isproceeding smoothly. While I do have concerns like operations and securing skilled personnel to meet growing future
demand for semiconductors, the good thing is that the
Hanno Plant was completed successfully to create a reliable production system.
For long-term strategies, there are positive signs like the increased awareness of intellectual property, with the management team taking a sense of urgency and leveraging intellectual proper ty in a strategic manner. The Company's
proprietary technology will definitely play a key role in order toremain in business, despite the presence of many other competitors. As demand for semiconductors grows, a strategic
approach should be taken to establish its intellectual capital,
rather than staying in the tight market for manufacturing
equipment. There is a greater sense of awareness amongst
employees, and I have heard that the Company is working toensure time is set aside for building up intellectual property.
Mori : The first year of the mid-term business plan has
started out in a very positive direction. In its move towardachieving carbon neutrality, the Company applies its grinding technology to supply high-productivity equipment for
SiC power semiconductors that use wafers which are very
difficult to cut. Yet other companies in the same sector
possess similar technology, so the key challenge will be toidentify how to create a sense of differentiation and thetypes of improvements and modifications that need to be
made. A crucial factor for developing long-term strategies
in the future will be how to secure capable human resources. In the past, operations used to be impossible without

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59

GovernanceRoundtable Discussion with External Directors

External Director

Kiyoshi Takamasu
Has professional expertise and abundant experience at universities and research institutes, having
served as President and other positions of academic organizations related to precision measurement.

External Director

Kazuya Mori

Has excellent knowledge in relation to semiconductor and process technologies and experience in corporate management.

sufficient capital, but these days operations cannot continue without the required personnel. To this end, the Company should partner with universities and other institutions toensure it can find the skilled personnel it needs.

To Achieve Sustainability
Sagara : Naturally, human resource development is crucial, and I am aware of the need to urgently nurture thenext generation of human resources who have a sense ofmanagement. I would also like to see greater advances
made for the employment of women. Actively hiring more
women naturally changes the atmosphere, culture and other aspects of the entire Company. I feel there needs to be amore active approach to ensuring women's participation
and advancement, whether through mid-career recruitment
or drastic selection processes.
Murata : Health management is a vital aspect of humancapital management, and I would like to see enhancementsin this area implemented over the short term. Flexible working styles are also important, including reducing theamount of overtime or the introduction of a work-interval
system. Ensuring that employees get enough time for aproper sleep, and working while maintaining a work-life balance has positive effects from a mental health perspective,
and is also said to be able to prevent power harassment
from superiors. I think applying for the Ministry of Economy,
Trade and Industry's Nadeshiko Brand, DX brand and SX
brand or obtaining certification from third party institutions
like "Kurumin" certification, and promoting these public relations activities by including them on business cards or inadvertisements will help boost the Company's image

60

INTEGRATED REPORT 2023

amongst students and society, and be an effective way of
securing skilled human resources. In addition to the percentage of female employees, a vital aspect of promoting
women's participation and advancement is focusing on
how to increase the number of female managers. As an
External Director, I hope to make a positive contribution toensure women at the Company continue working here witha higher sense of motivation.
Takamasu : I think the most significant risks the Company
faces are that of determining successors and human resource development. The challenge of women's participation and advancement is of course closely related, but securing highly skilled personnel is of the utmost importance.
From its inception, Tokyo Seimitsu has operated with thefusion of precision measuring instruments and semiconductor manufacturing equipment, and one of the people
who pioneered those efforts, Kengo Ikai, was actually mysenior at the faculty I graduated from. The Company history
even has a note highlighting the fact that Mr. Ikai, a leader
in the field of measurement, attracted people from aroundthe country because they wanted to work with him at Tokyo Seimitsu. I also plan to play a role in assisting with thedevelopment of engineers who will lead the Company inthe future, by helping to boost the motivation of young researchers at societies, international conferences andthrough joint research with universities, to ensure training ofhighly skilled human resources.
As an External Director, I will also be assisting efforts to
identify ways of nurturing new successors and promoting
women’s participation and advancement.
Sunaga : As a certified public accountant, I have always
been involved with financial information, but disclosure of
non-financial information is also vital these days, and I havebeen taking training related to fields like carbon neutrality
and TCFD. Developments around the world, and in Europe
in particular, are progressing so quickly in this regard, and I
feel that a sense of urgency is always needed. The Company is already disclosing its results with Scope 1 and 2
greenhouse gas (GHG) reductions, and is also considering
the disclosure of Scope 3 figures. With the construction of
new plants and other moves for expanding its businesses,
it will be essential for the Company to keep an eye on themost recent trends and focus on the specifics, like actively
making investments into energy conservation and rollingout energy-saving policies based on the advice of experts,
in addition to reducing greenhouse gas emissions.
Mori : There are a range of legal revisions slated to comeinto effect by 2025. This year, small and medium companies will be required to increase wage rates for overtime
work exceeding 60 hours in a month, and they will need todisclose the acquisition rate of male employees taking
childcare leave as well as information on human capital—
shareholders and investors also demand that such information is disclosed properly. In February 2023, the Government Pension Investment Fund selected six companies
with outstanding integrated reports. Companies that provided a wealth of details on human capital investments aswell as how they are promoting women's participation andadvancement were regarded highly, so I think it will be im-

Introduction

Strategy

portant for the Company to ensure such systems are welldeveloped.

Expectations of the Group
Takamasu : Production capacity will increase following
completion of the Hanno Plant and plans for a new plant in
the Nagoya region, and the Company is well poised toachieve its mid-term business plan. Business expansion
has also led to an increase in employee salaries, andyounger workers in particular seem to be proud to say they
are working at Tokyo Seimitsu.
Sagara : The semiconductor industry is especially important for Japan, so I hope Tokyo Seimitsu becomes better
known as one of the companies playing a role in this sector. I view the Company as one with exceptional technological capabilities that is making a sincere effort to support
the manufacturing industry, and I hope it achieves greater
recognition by steadily strengthening its governance anddeveloping its management strategies, to boost the senseof pride its employees have and increase the level of engagement.
Sunaga : A key characteristic of the Company is that the
majority of its sales are in Southeast Asia, with a high ratioof customers in China and Taiwan. With the Russia's invasion of Ukraine, economic friction between America andChina, and the rise of economic blocks in each region, international affairs are bound to become more unstable.
This will not only make sourcing materials more complex
and introduce exchange rate risks, but I feel that there area lot more risks in doing trade itself.
There will be a growing need for the semiconductor business to be prepared well in advance to respond to risks likethe fast pace of technological innovations and sudden market changes, as well as disasters caused by climate change
and other natural catastrophes. In light of these risks, theHanno Plant equipped to produce semiconductor manufacturing equipment was completed in July this year, boosting production capacity by 50%. Steady and continual
progress needs to be made to introduce new production
facilities, secure skilled personnel, and implement education that addresses issues like harassment, for which I
hope we can play a useful role.
Murata : The Company is backed by excellent policies
and concepts like "WIN-WIN Relationships Create theWorld's No. 1 Products" and its purpose, vision, and "ACCRETECH" corporate brand, and its vision is well known byboth customers and employees alike. I want to see theCompany become better recognized throughout society,and expect business to grow accordingly.
The first step is to focus on the employees' workplace.
While diversity is becoming more important, a workplaceenvironment that is comfortable for women to work at refers to a workplace culture that is also comfortable for men
to work at. There is an increasing number of Generation Z
who consider it normal to take childcare leave and assist in
raising their children. If Tokyo Seimitsu is a company thatproperly focuses on improving the wellbeing of its employ-

Sustainability

GovernanceDataees, it will help boost engagement with and be selected byyounger generations who will be the leaders of tomorrow.
Fostering an internal culture that provides psychologicalsafety where employees can easily raise concerns about
any issues or simple questions they have is the key to
growing into an even better company.
Mori : I actually attended one of the in-house SuccessStory Meetings. Employees had an immense sense of pride
when explaining how they achieved success, and there is
no doubt that it will help boost motivation amongst others.
Passing down and nurturing knowledge is essential as atechnology-based company, and from what I experienced
at the Success Story Meeting, I can see that Tokyo Seimitsu definitely has the bright future ahead.

External Director(Audit and Supervisory Committee member)

Yuriko Sagara
Has sophisticated skills and knowledge in a
global perspective regarding the law as an attorney, in addition to deep insight into intellectual property.

External Director(Audit and Supervisory Committee Member)

Masaki Sunaga
Has engaged in audit and tax operations for avariety of companies as a certified public accountant and a tax accountant, and in addition to his
sophisticated skills and knowledge in the fieldsof accounting, audit and tax operations, he hasabundant experience of management consulting.

External Director(Audit and Supervisory Committee Member)

Tsuneko Murata
Has deep insight mainly into governance which
she gained through serving as an Auditor, etc. atbusiness companies and governmental corporations, in addition to her experience of engagement in legal affairs and CSR, compliance andrisk management in corporate management.

INTEGRATED REPORT 2023

61

GovernanceIntroduction

Sustainability

Strategy

Governance

Data

Directors and Executive Officers (as of June 26, 2023)

Hitoshi Yoshida

Ryuichi Kimura

Koichi Kawamura

Takahiro Hokida

Kazuya Mori

Yuriko Sagara

Masaki Sunaga

Tsuneko Murata

Chairman and CEO

President and COO
Head of Semiconductor Company

Executive Vice President and CFO
Head of Administration Company

Director
Managing Executive Officer of
Semiconductor Company

External director

External director

External director

External director

Company shares held

Company shares held 10,900

Company shares held

April

July
1986 Joined YDK Co., LTD
October 1995 Joined the Company
April2010 Executive Officer,
Semiconductor Company
April2012 General Manager, Test
Technology Department,
Technology Division,
Semiconductor Company(to present)
April
2014 Managing Executive Officer,
Semiconductor Company(to present)June2015 Director (to present)

Company shares held

9,900

April
April

1983 Joined the Company
2002 Executive Officer, Metrology
Company
June 2005 Director
October 2007 President, Metrology
Company
June2011 Representative Director
April2015 President and CEO
April
2022 Chairman and CEO(to present)

4,812

April
April

1986 Joined the Company
2005 Executive Officer,
Semiconductor Company
June 2005 Director
August 2007 President, Semiconductor
Company
June2011 Representative Director
April2015 Executive Vice President
and COO
April
2019 Head of Semiconductor
Company (to present)
April
2022 Chairman and COO(to present)

April
June
April
June
April
April

1980 Joined The Fuji Bank,
Limited (now Mizuho Bank, Ltd.)
2008 Joined the Company,
Executive Officer,
Administration Company
2009 Director
2011 President, Administration
Company
2015 Representative Director and
CFO, in charge of
Administration Company
2019 Head of Administration
Company (to present)
2022 Executive Vice President
and CFO (to present)

3,200

Company shares held
April
April
June
June

─

2014 Plant Manager, Oita
Operations, Toshiba Corp.
2016 President, Japan
Semiconductor Corporation
2021 Full-time Audit & Supervisory Member, NuFlareTechnology, Inc
2023 Director (part-time) of theCompany (to present)

Company shares held─

October 2001 Admitted to the bar, Joined
Nakamura & Partners
August 2005 Registered as a patent
attorney
January 2013 Partner, Nakamura &Partners (to present)
April
2015 Advisory Councilor for Unfair
Competition Prevention
Law, Ministry of Economy,
Trade and Industry(to present)June2017 Intellectual Property
Committee, The Japan
Federation of Bar
Associations (to present)June2019 Director (Serving as Audit
and Supervisory Committee
Member) of the Company(to present)

Company shares held─

October 1985 Joined Aoyama Audit Corporation (now PricewaterhouseCoopers Aarata LLC)
April
1989 Registered as a certified
public accountant
August 1995 Partner, Sunaga Certified
Public Accountant Office
September 1997 Registered as a tax
accountant
August 1999 Representative Partner,
YUSEI Audit & Co.
January 2012 Representative Partner, Tax
Accountant Corporation
Marunouchi Business
Consulting (to present)June2016 Auditor, General Incorporated Association The Tokyo
New Business Conference(to present)
July
2018 Partner, Grant Thornton
Taiyo LLC
June 2021 Director (Serving as Audit
and Supervisory Committee
Member) of the Company(to present)
January 2022 Director (Serving as Audit
and Supervisory Committee
Member) of the Company(to present)

Company shares held

─

April

1982 Joined Matsushita ElectricIndustrial Co., Ltd. (nowPanasonic Corporation)
April
2007 Senior Councilor & General
Manager, Legal Affairs &CSR Department of Home
Appliances Company
October 2009 Senior Councilor, Corporate
Legal Affairs Division ofPanasonic Corporation
January 2016 Auditor, Japan Pension
ServiceJune2018 External Audit & Supervisory Board Member, Japan
Finance Corporation
March 2021 Outside Director, Milbon
Co., Ltd. (to present)
June 2021 External Director, Kakuyasu
Group Co., Ltd. (to present)
June 2022 Outside Director, Audit &Supervisory Committee
Member, Sun Frontier
Fudousan Co., Ltd. (topresent)
June 2022 Director (Serving as Audit
and Supervisory Committee
Member) of the Company (topresent)● Company System and Executive Officer System
Shuichi Tsukada

Shinji Akimoto

Romi Pradhan

Kiyoshi Takamasu

Director
Head of Metrology Company

Director

Directors

External director

Company shares held

Company shares held

April
April
April
June

2,300

1983 Joined the Company
2015 Executive Officer,
Metrology Company
2021 Head of Metrology
Company (to present)
2021 Director (to present)

April
April
April
April

June
June

62

INTEGRATED REPORT 2023

2,612

1987 Joined the Company
2000 General Manager, Human
Resources Planning Dept.,
Planning Div.
2002 General Manager,
Human Resources Dept.,
Administration Company
2007 Executive Officer,
General Manager,
Human Resources Dept.,
Administration Company
2018 Auditor
2019 Director (Audit andSupervisory Committee
member) (to present)

Company shares held

540

January 1991 Joined California Energy
Commission (US)October 1992 Joined Bridgestone
Corporation
August 2000 Joined Teradyne Inc. (US)August 2001 Joined ACCRETECHAMERICA INC.
(US subsidiary of Tokyo
Seimitsu)
April
2012 Executive Vice President,
ACCRETECH AMERICA
INC.
April
2013 Executive Officer of
Semiconductor Company,
Tokyo Seimitsu andSupervisor for World Wide
Accounts (to present)June2016 Director and President,
ACCRETECH AMERICA
INC. (to present)
June 2023 Director (part-time) of theCompany (to present)

Company shares held
April

Semiconductor Company

─

1982 Assistant, The Department ofPrecision Machinery Engineering,
School of Engineering, The
University of Tokyo
October 1987 Associate Professor,
Department of Precision
Mechanical Engineering,
School of Engineering,Tokyo Denki University
March 1990 Visiting Researcher, The
University of Warwick, U.K.
November 2001 Professor, The Department ofPrecision Machinery Engineering(currently The Department ofPrecision Engineering), Graduate
School of Engineering Research,
The University of Tokyo
March 2020 President, The Japan
Society for Precision
Engineering
June 2020 President, The Japan
Society for Precision
Engineering
June 2020 Professor Emeritus, The
University of Tokyo
June 2021 Director (part-time) of theCompany (to present)

Metrology Company

Administration Company

Head of
Semiconductor
Company

Ryuichi
KimuraExecutive Officer

Keng
Hooi
Tee

Head of
Metrology
Company

Shuichi
TsukadaHead of
Administration
Company

KoichiKawamuraManaging
Executive Officer

Takahiro
HokidaExecutive Officer

Hiroyuki
Sakai

Managing
Executive Officer

Taichi
FujitaManaging
Executive Officer

KenichiTamuraManaging
Executive Officer

Akio
Mitsuhashi

Executive Officer

Masayuki
Azuma

Executive Officer

Hao
Chen

Managing
Executive Officer

Asashi
Kato

Managing
Executive Officer

Nobukazu
Aoshima

Executive Officer

Toshihiko
Eto

Executive Officer

MasatoMineoManaging
Executive Officer

KimitoKoizumiManaging
Executive Officer

Yuichi
Kubo

Executive Officer

Ryoichi
Ide

Executive Officer

Takashi
MasudaExecutive Officer

Shinichi
Usuda

Managing
Executive Officer

MasakiKanazawa

Executive Officer

Kazumasa
Ishikawa

Executive Officer

MutsumiOno

Executive Officer

Romi
Pradhan

INTEGRATED REPORT 2023

63

GovernanceIntroduction

Governance

Sustainability

Strategy

Data

Corporate Governancesion-making process by delegating a large amount of authority
to Head of each company after defining their scope of duties
and authority in accordance with the relevant regulations of
the Company. In addition, the Executive Management Committee strives to share information and enhance deliberations
across company divisions. In addition, various cross-company
committees such as the Risk Management Committee and theCompliance Committee have been established to examine andmonitor material issues from various perspectives to make appropriate decisions.

As a corporate citizen trusted by the international community, the Tokyo Seimitsu Group recognizes that enhancing
corporate governance to develop fair and highly transparent
management activities is vital, and, following corporate governance basic policy, is working to build effective corporate
governance structures and systems.
Basic Policy on Corporate Governance(1) The Board of Directors strives to properly perform its
roles and responsibilities to make transparent, fair,timely, and committed decisions.
(2) The Group respects the rights of shareholders and ensures the equality of shareholders.
(3) The Group strives to have constructive dialogue withshareholders on investment policy that considers midto long-term returns for shareholders.
(4) T he Group strives to maintain appropriate collaboration with stakeholders (customers, suppliers, employees, creditors, local communities, etc.) other thanshareholders.
(5) The Group strives to ensure proper information disclosure and transparency.

Board of Directors
The Board of Directors is composed of eight directors who are
not Audit and Supervisory Committee members (two of whomare external directors) and four directors who are Audit andSupervisory Committee members (of whom three are external
directors). The Board of Directors holds regular monthly meetings, and extraordinary meetings are also held as necessary.
The Board of Directors deliberates on important matters related to management as stipulated by laws and regulations, theArticles of Incorporation, and the Board of Directors Regulations, as well as monthly, periodic, and annual business results
and supervises the execution of business by each director.

Basic Policy on Corporate Governance (in full):
https://www.accretech.com/en/company/basicpolicy.html

Audit and Supervisory Committee
As an independent body, the Audit and Supervisory Committee audits and supervises the execution of business by Directors other than Audit and Supervisory Committee Members.
The Audit Department and the accounting auditor exchange
opinions on the audit system to determine whether there areproblems in auditing, issues, and other matters as needed,and strive to enhance the effectiveness of audits. At the sametime, the Audit and Supervisory Committee receives regular

Corporate Governance Structure
Tokyo Seimitsu has adopted a company structure with an audit and supervisory committee.
For dealing with matters that do not fall under the criteria forsubmission to the Board of Directors, the Company has adopted an Executive Officer System to speed up the deci-● Corporate Governance Structure

Appointment/Dismissal

Appointment/Dismissal
Brieﬁng

Directors not serving as Audit andSupervisory Committee Members
Audit/Oversight
8 Directors

Reply, etc.
Appointment/
Dismissal/
Request for
consultation(including 2 external directors)

Compensation policy,
Request for consultation
on standards, etc.

Nomination andCompensation
CouncilRequestfor
consultation

Reply

Instruction/
Oversight

Audit andSupervisory Committee

Appointment/Dismissal/
Oversight

Brieﬁng

Brieﬁng

Accounting Auditor

Determination of appropriateness ofaccounting audits
Decision on appointment/
reappointment/dismissal proposals(4 members)(including 3 external directors)
Instruction/
Oversight

Assistant to Audit and Supervisory
Committee and other members

Representative
Director
Brieﬁng

Executive
Management
Meeting
ExecutiveOﬃcers’Meeting
Instruction/
Oversight

Discussion/
ReportExecutive Oﬃcers
Business Execution

Audit

Brieﬁng

Sustainability Committee

Audit

Instruction/
Oversight

Instruction/
Oversight
Brieﬁng
Brieﬁng

Audit Department
Export Control Department
New Business Planning
Department
Management Support
Department
Sustainability Department

Brieﬁng

Instruction

Brieﬁng

Compliance Committee
Risk Management Committee

INTEGRATED REPORT 2023

Executive Management Meeting and Executive
Officers' Committee
The Company has in place an executive officer system tomake speedy decisions on product development planning to
respond quickly and flexibly to market trends. In addition tosupervising the progress of business plans at regular monthly
meetings of the Executive Management Meeting and Executive Officers' Meeting, the Executive Officers’ Meeting aims toshare information across the Company and enhance Executive
Officers’ Meeting deliberations.

Director Compensation
With the aim of functioning appropriately to realize our Corporate Philosophy, the compensation system is designed to motivate each Director and Executive Officer to improve performance and medium- to long-term corporate and shareholder
value in accordance with the roles, responsibilities, andachievements they assume.
The decision-making process is highly objective and transparent by conducting timely and appropriate reviews based on
economic conditions, business performance, external surveys,
and other factors.

Nomination and Compensation Council
The Company has established a Nomination and Compensation Council as a voluntary committee for the purpose of clarifying the independence, objectivity, and accountability of theBoard of Directors functions, especially in nomination of andcompensation to the directors. Independent external corporate directors are in the majority (now all five members are external corporate directors) on the council, helping to realize deliberations fully independent from management.
Regarding the nomination of directors, the council deliberates■ Compensation Structure
Compensation for directors who are not Audit and Supervisory
Committee members and are not outside directors (directors
responsible for business execution) consists of base compen-● Board of Directors and Committee Composition and Activities
Composition
Chair

Internal directors External director● Diversity of the Board of Directors

Meetings convened(FY2022)

CEO

7*

5**

17 times

Audit and Supervisory
Committee

Internal
directors

1

3

12 times

Nomination andCompensation Council

External
directors

0

5

11 times

Board of Directors

External
directors

Foreigners(percentage of directors
holding foreign nationality)

Femaledirectors

5

1 (8.3%)2 (16.7%)

Compliance Committee

Risk Management Committee

Chairman : Executive Vice President and CFO
Frequency:	Six times a year (seven times in fiscal 2022, including one extraordinary meeting)
Functions :	R evises the ACCRETECH Group Code of Conduct and other rules
and regulations
		Deliberates on compliance-related education/training plans and thestatus of related initiatives
		Establishes relevant sections and related organizations that deal withmajor laws, regulations, and social norms related to business operations, and ensures thorough compliance with laws and regulations

Chairman : President and COO
Frequency: 6 times a year plus extraordinary meetings as necessary
Functions :	R eceives reports on the prevention of the occurrence of potential risks from sections related to risk, etc.
		Reports to the Board of Directors on the agenda of regularcommittee meetings as necessary		Reports the details of the risk and countermeasures to theBoard of Directors the Audit and Supervisory Committee
when a report on the materialization of a risk is received and
immediately establishes a Risk Response Team as necessary

Information Security Committee

Quality Management Committee

Chairman : Executive Vice President and CFO
Frequency: Twice a year
Functions : Establishes information security management systems
		 Establishes information security regulations
		Promotes and maintains a system for implementing information security measures, related education and training, regular evaluation,and continuous improvement

Chairman : Director in charge of Quality (Executive Vice President and CFO)
Frequency: Twice a year
Functions :	D eliberates on the adequacy and ef fectiveness of the ofquality management system		Continuously improves the performance and effectiveness ofthe quality management system
		Promotes the continuous maintenance and improvement of
the quality of our products, services, and operations

Brieﬁng

Information Security Committee

Environment Management Committee

Safety and Health Committee

Brieﬁng

Quality Management Committee

Chairman : Executive Vice President and CFO
Frequency: Twice a year
Functions :	D eliberates on and promotes environmental management activities
performed at the Tsuchiura Plant and the Hachioji Plant
		Checks status of compliance with environmental laws and regulations and the progress of environmental impact reduction activities
		Creates and implements Environmental Management System andcontinuously improves it

Chairman :	G eneral Safety and Health Manager (Plant Manager, Tsuchiura Plant and Plant Manager, Hachioji Plant)
Frequency: Once a month
Functions :	Maintains and improves safe and comfortable work environments
		Establishes a system for ensuring safety and managing thehealth of our employees by appointing legal managers andspecialized committees to raise awareness of safety andhealth in the workplace and to maintain and promote health

Audit/Guidance

Environment Management Committee
Safety and Health Committees
Whistleblower system
Planning/Report

Instruction/OversightCompanies (Semiconductor Company, Metrology Company, and Administration Company) and Group subsidiaries

64

and reports to the Board of Directors on matters related tonomination of directors, including appointments and dismissals.
With regard to director compensation, the council deliberates
on and resolves classification of compensation per post, anddeliberates and reports to the Board of Directors on mattersrelated to compensation policies.

whom, one standing Audit and Supervisory Committee member* Of** Of whom, three Audit and Supervisory Committee members

General Meeting of Shareholders

Board of Directors

reports on findings and related information from internal audits
conducted in accordance with the annual audit plan.

INTEGRATED REPORT 2023

65

GovernanceIntroduction

Corporate Governanceaccording to the position based on the position of President was formulated by the Compensation Planning Committee and determined by the Nomination and Remuneration Committee

sation, which is fixed compensation, performance-linked compensation, which are variable remuneration, and stock comp e n s ati o n. I n c o ntr a s t, c o m p e n s ati o n fo r Au d i t a n d
Supervisory Committee members and outside directors shallbe limited to base compensation in view of their duties of supervising business execution and auditing.
The basic compensation paid to directors shall be fixed monetary compensation paid monthly during their term of office,and the total annual payment of base compensation and performance-linked compensation shall be within the upper limit
range approved by the General Meeting of Shareholders. Basecompensation is paid to individual directors based on thestandard amount per post*.
Performance-linked compensation paid to directors responsible
for business execution shall be short-term performance-linked
monetary compensation paid at a certain time every year during
their term of office, and the total annual payment of base compensation and performance-linked compensation shall be within the upper limit range approved by the General Meeting of
Shareholders. Stock compensation shall be a medium- to longterm incentive that can be shared with shareholders at a certain
time each year during the term of office, and the total annual
payment shall be within the upper limit range (the upper limit
range of the amount of compensation, the number of shares,
and the number of stock options) approved by the General
Meeting of Shareholders. The following formula is used to calculate performance-linked compensation paid to directors responsible for individual business execution, restricted stock andstock compensation-type stock options, respectively.

Performance-linked compensation
Base bonus amount × Group business performance coefficient × individual intercompany performance coefficient

Basic bonus amount: C onsolidated net profit x 1% x basic
compensation coefficient*asic compensation coefficient: Ratio of base compensation per* Beachdirector, divided by total amount base compensation of Directors incharge of business execution

Group Business performance coefficient: Calculated fromtheir Operating profit results against FY target
Within +/- 10% of target: 1,
more than +10% and up to +30%: 1.1,
more than +30% and up to 50%: 1.2,
more than +50%: 1.3,
-30% or more and less than -10%: 0.9,
-50% or more and less than -30%: 0.8,
less than -50%: 0.7(When OP falls YoY, this coefficient is 1 or less.)
Company-specific performance coefficient: Comprehensively evaluate from 0.9 to 1.1 based on the Intercompany business results and other significant achievements.

Calculation formula for restricted stock
Base stock amount × Capital efficiency coefficient ×
RS performance coefficientof compensation amount per post: *TheStandard
amount of compensation based on the compensation ratio determined● Constitution of the Board of Directors (Skills Matrix and Attendance)
Skills and experiences

Financial institutions

◦

◦

17/17

Semiconductor technology

◦

◦

◦

Shuichi Tsukada

64

17/17

Metrology equipment
production

◦

◦

◦

Romi Pradhan

54

–/–

Overseas subsidiarymanagement

◦

17/17

◎

Academic

◦

◦

–/–

◎

Corporate management◦◦

Shinji Akimoto

59

17/17

Human resources

◦

◦

◦

Yuriko Sagara

48

17/17

◎◦

Attorney◦◦◦

Masaki Sunaga

61

17/17

◎

Certified public accountant/Tax accountant

◦

◦

◦

◦

Tsuneko Murata

64

13/13*◎◦

Corporate management

◦

◦

◦

◦

◦

◦
◦

◦

◦

◦

◦

◦

◦

◦

◦

◦

◦

◦

◦

◦

◦
◦

◦

◦
◦

◦

◦
◦

◦
◦

Ages current as of the end of June 2022/Independent External Corporate Director: ◎ Female: ◦ Foreigner: ◦(Note1) T his matrix represents the areas in which we expect each Director to have more expertise and play a more active role, based on their experience and other factors. This matrix
does not represent all the knowledge and experience of each person.
(Note2) Board of Directors meeting attendance data is for fiscal 2022.
Since Ms. Murata was newly appointed as External Director at the 99th Annual General Meeting of Shareholders held on June 20, 2022, her attendance at Board of Directors meetings held after taking assuming her position is shown.

*66

INTEGRATED REPORT 2023

Base stock amount per post: 
The Compensation Planning Committee formulates the basestock amount per post with reference to the standard of compensation amount per post, and the Nomination and Compensation Council determines the amount of remuneration.
Capital efficiency coefficient :Most recent three Fiscal years' average consolidated ROE Above 15%: 1.2, 10-15%: 1, and below 10%: 0.8
RS performance coefficient:Corresponding to achievement of medium-term operating profit target
Core coefficient: 1
when Mid-term Operating Profit Target is achieved: 2

Stock compensation-type stock options
Basic stock unit × performance coefficient and others

Basic stock unit: 
The Compensation Planning Committee formulates the basestock amount per post with reference to the standard of compensation amount per post, and the Nomination and Compensation Council determines the amount of remuneration.
Performance coefficient and others: Compensation is determined by the Nomination and Compensation Council based on a comprehensive evaluation of business performance, stock price, and other factors.

■ Process for Determining Compensationi T he Board of Directors delegates the task of determining thecompensation structure and compensation standards for eachposition to the Compensation Planning Committee, consistingof the representative directors and some other directors.
ii	To ensure transparency and objectivity, the proposal of Directors’ compensation amounts and related matters (suchas compensation amount per post), and the amount foreach directors’ base compensation, performance-based
compensation and stock compensation shall be deliberated
on by the Nomination and Compensation Council, consisting of directors serving as an Audit and Supervisory Committee members and external corporate directors.
iii C ompensation amounts for directors serving as an Audit
and Supervisory Committee members will be mutually discussed and resolved among directors served as an Audit
and Supervisory Committee members.
Among the remuneration paid to directors responsible forbusiness execution, the formula for restricted stock, which is amedium to long-term incentive to share profits with shareholders, was revised to incorporate capital efficiency (ROE).

● Total amount of compensation
◦

◦

IT/
Information systems

17/17

61

63

◦

◦

Personnel/Labor/Human
resource development

65

Takahiro Hokida

68◦

Legal/
Risk Management

Koichi Kawamura

Kazuya Mori◦

Accounting/Finance◦Kiyoshi Takamasu

International Business/
Global Experience

Industry knowledge◦◦◦

Sales/Marketing

Corporate management/
Management strategy◦◦◦

Technology/Intellectual
property/Manufacturing

Board of Directors◦

Semiconductor Sales

Nomination andCompensation Council

Major pastexperience
Measurement technology

17/17

Audit and Supervisory
Committee

Board of Directors'
Meeting Attendance
17/17

60

External Director
Diversity

Age
63

Ryuichi Kimura

NameHitoshi Yoshida

Strategy

Governance

Data

Notes
1.	T he number of directors (Audit and Supervisory Committee members)
includes one person who retired at the conclusion of the 99th Regular
Shareholders’ Meeting held on June 20, 2022.
2.	T he maximum amount of compensation for directors (excluding directors who are Audit and Supervisory Committee members) was resolved
at the 98th Regular Shareholders’ Meeting (held on June 21, 2021) tobe no more than 480 million yen per year (including 70 million yen foroutside directors) and a separate limit of 300 million yen per year for
non-monetary compensation (restricted stock and stock options). At
the conclusion of the general meeting of shareholders, there were nine
directors (excluding directors who are audit and supervisory committee
members) (including two outside directors).
3.	The maximum amount of remuneration for directors who are members of
the Audit and Supervisory Committee was resolved at the 96th Regular
Shareholders’ Meeting (held on June 24, 2019) to be within 60 million yen
per year. At the conclusion of the general meeting of shareholders, there
were four directors that are Audit and Supervisory Committee members.
4.	Individual compensation for directors (excluding directors who are Audit
and Supervisory Committee members) is determined by the Board of
Directors after consultation with the Advisory Council in accordancewith the basic compensation policies, compensation structure, and decision-making process for compensation. The Company has determinedthat this is done in accordance with the basic policy.
5.	The indicator for performance-linked compensation is net profit attributable to owners of the parent that is directly linked to the return of profits
to shareholders.

Related Party Transactions, Etc.
The Company shall not be engaged in any transactions with
Directors and/or major shareholders that may damage the interests of the Company or the common interests of the shareholders, as indicated in “(7) Related Party Transactions” in the
Directors and Boards section of the Basic Policy on Corporate
Governance. When a Director is intending to enter into a transaction with the Company for him/herself or for any third parties, the Director shall obtain prior approval of the Board of Directors according to the rules of the Board of Directors, andreport important facts in that transaction at the board meeting.
Terms and conditions for the transaction may be determined in
the same manner as a transaction with third parties.
To identify any transactions involving a conflict of interest byDirectors, the Company checks annually and regularly existence of such transactions (excluding compensation) between
the Company Group and Directors or their family members
within the second degree of kinship.
When the Company is intending to enter transactions between
the Company and major shareholders or other related parties,
then it shall be approved in advance by personnel with authority commensurate with the importance and scale of the transaction in accordance with internal regulations determined by
the Board of Directors.

Cross-Shareholdings(Millions of yen)

Number
Total
Monthly
PerforNonof
compenfixedmance-linked
monetary
peoplesation compensation compensation compensation
Directors(excluding directors who
are Audit and Supervisory
Committee members)(figures for included
external directors)
Directors(Audit and Supervisory
Committee members)(figures for included
external directors)

Sustainability

9

579

229

250

99

2

18

18

—

—

5

41

41

—

—

4

20

20

—

—

The Board of Directors comprehensively examines whether
shares held as cross-holdings are worthwhile based on risk andreturn from perspective of medium- to long-term economic rationality, and qualitative considerations such as the purpose ofholding and credit status. If this examination results in the judgment that it is not worthwhile to retain cross-holdings, in principle such holdings are reduced. However, if it is determined thatholding of such shares will contribute toward the improvementof medium- to long-term corporate value, they are retained. As
a result of such deliberation, the Company sold 16 cross-share-

INTEGRATED REPORT 2023

67

GovernanceIntroduction

Corporate Governance

Strategy

Sustainability

Governance

Data

Complianceholdings (including shares subject to deemed holding) for 7.55
billion yen between April 2015 and March 2023.

Assessing the Effectiveness of the Board of
Directors
The Company conducts questionnaire surveys of all directors(including Audit and Supervisory Committee members) regarding the roles, functions, and operations of the Board of Directors. The Board of Directors discusses among the internaland external directors the results of the responses being summarized and analyzed, and then the Board of Directors evaluates its effectiveness and discusses future actions.
1. Method of evaluation
The Company conducted a questionnaire survey of all directors (including those who are members of the Audit and Supervisory Committee) on the items shown below. The Board of
Directors discussed among the internal and external directors
the results of the responses being summarized and analyzed,
and then the Board of Directors evaluated its effectiveness anddiscussed future actions.
In preparing the questionnaire as well as compiling and analyzing the results of the questionnaire, the Company utilizes external organizations to ensure transparency and effectiveness.
[Questionnaire items] 7 items, 27 questions in total
Roles and functions of the Board of Directors/Constitution
and scale of the Board of Directors/Management of theBoard of Directors/Cooperation with auditing organizations/Relationship with External Directors/Relationshipwith shareholders and investors/Progress in the governance system relative to the previous year
The questionnaire includes the evaluation on each item with
open questions on the strength of the Board of Directors andthe areas for its improvement, reflection by individual Directors
on their respective contribution to the Board of Directors andother comments and suggestions.
2. Results of analysis and evaluation of the effectiveness of
the Board of Directors
The results concluded that the effectiveness of the Board of
Directors was largely ensured, as shown in, for example, active
discussions under mutual collaboration of members with diverse experience and expertise, and active discussions in the
Nomination and Compensation Council.
Regarding the issues of last year, specific measures for succession planning and training were formulated based on discussions at the Nomination and Compensation Council, and along-term strategy review committee was established as a forum for discussions on long-term issues.
At the same time, some issues have been identified from thisyear’s questionnaire as follows.
• N eed for further strengthening of internal control systems such as group-wide governance• Need for further clarification of development and training plans for Directors and Officers• Need for further enhancement of medium- to long-term
discussions at Board of Directors meetings (on topics
including our business portfolio, human capital, and IP
strategies)

68

INTEGRATED REPORT 2023

• Need for discussions to address feedback from share-

holders and investors
3. Future actions
In order to strengthen governance throughout the Group, theBoard of Directors of the Company will continue to work tostrengthen and improve the internal control and conduct effective supervision through collaboration. With regard to succession planning and executive training, discussions will be heldby the Nomination and Compensation Council for further clarification.
In addition, the Company will consider devising management
methods from the viewpoint of enhancing discussions at theBoard of Directors' meetings. Furthermore, from the viewpointof deepening our shareholders' and investors' understandingof our company, we will use the Integrated Report and otherdocuments prepared in the previous fiscal to enhance dialogue and share feedback with the Board of Directors for use
in our efforts to achieve sustainable growth in the future.
Through these initiatives, the Company is committed to ensure
further improvement for the effectiveness of the Board of Directors.

The Tokyo Seimitsu Group complies with laws and social
norms and acts with integrity and ethics to meet the expectations of all its stakeholders. To this end, we have established the “ACCRETECH Group Code of Conduct,” whichsets forth principles of conduct based on our corporate philosophy and the code of conduct that all executives andemployees should adhere to. Through this code, we areworking to instill and establish an awareness of corporate
ethics among the Group’s executives and employees.

Compliance Management Structure
The Company has established the Compliance Committee,
which is chaired by the Company’s vice president. This committee assigns compliance officers and compliance managers
at the Company and each subsidiary.

Compliance Committee

Based on the basic policy for internal control systems resolvedby the Board of Directors, we are working to strengthen corporate governance and compliance. We are also reinforcing
the internal control structure and system to ensure management soundness and transparency.

The Compliance Committee engages in reporting and deliberation concerning compliance measures and their implementation status, including revision of the “ACCRETECH Group
Code of Conduct,” enactment and revision of regulations, andplanning for education and training related to compliance. In
the event of violation of or potential conflict with laws and regulations, the committee promptly issues a report to the Boardof Directors and the Audit and Supervisory Committee anddiscusses response measures and recurrence prevention
measures.
In fiscal 2022, the Compliance Committee convened seventimes.

Basic Policy on Internal Control Systems
https://www.accretech.com/en/company/internal_control.html

Compliance Awareness Survey

Audit Function (Internal Audits)

The Group conducts a “Compliance Awareness Survey” toconfirm employee awareness and the status of complianceand to reflect survey results in future initiatives.

Internal Control

The Audit Department systematically conducts audits of theCompany and its subsidiaries to verify compliance with laws,
the Articles of Incorporation, and corporate regulations, as well
as of administrative adequacy.
If the Audit Department finds any violation of laws, regulations,
the Articles of Incorporation or internal rules, or any performance of duties that may cause a loss due to some other reasons at the Company or its subsidiaries, the general managerof the Audit Department immediately notifies the president and
COO and tells employees to implement corrective or improvement actions. The Audit Department periodically reviews andrevises, as necessary, the items to be audited and the methodof conducting the audits.
In fiscal 2022, internal audits were conducted within a total of
six internal departments and subsidiaries with the primary objective of confirming the status of the development and operation of internal controls and rules, and the results of each audit
were reported to the President, the Board of Directors, and the
Audit and Supervisory Committee. Due to the COVID-19 pandemic, audit work for some subsidiaries (at three overseas
subsidiaries) was outsourced as in the previous year. All audits
were reported to the Executive Management Meeting, and thestatus of each department and subsidiary and areas requiring
improvement were shared within the Company and the improvement status was followed up.

● Issues Brought to Light by the Compliance Awareness Survey• Need to reinforce efforts related to the compliance system• Need to strengthen efforts to eliminate harassment anddiscrimination• N eed to enhance efforts to increase awareness of thewhistleblower contact point• N eed to improve the organizational climate, including

communication• N eed to reduce workloads related to goal setting andamount of operations

Anti-bribery and Anti-corruption
In January 2020, the Tokyo Seimitsu Group announced its Anti-Bribery and Anti-Corruption Policy that follows the provisionsof the ACCRETECH Group Code of Conduct. In fiscal 2022,
no violations were found.
Anti-Bribery and Anti-Corruption Policy
https://www.accretech.com/en/company/anti-bribery_anti-corruption_policy.html

Compliance Education
The Tokyo Seimitsu Group provides varied educational opportunities to enhance knowledge of compliance and to maintainand improve the level of compliance awareness. Along with“new employee training,” “training for managers,” and otheropportunities for level-specific training, the Company has introduced an e-learning-based compliance training mechanism
in Japan.

● FY2022 Compliance Training• Number of attendees: 2,974• N umber of attendees at Group companies including

overseas subsidiaries: 1,795• Participation rate: 100%

● FY2021 Questionnaire-based Survey

In fiscal 2021, the Company conducted an online, anonymous
survey of all employees in Japan and overseas, and is working
to resolve issues that came to light.

INTEGRATED REPORT 2023

69

GovernanceIntroduction

Compliance● Actions That Can be Reported or Consulted on

Whistleblower System

Sustainability

Strategy

Governance

Data

Group Company Management System• Any action that endangers the safety or health of em-

The Group has introduced a whistleblower system to facilitate
reporting and consultation on infractions of laws and regulations, human rights violations, harassment, corrupt practices
such as bribery and other illegal transactions, and other inappropriate behavior. In addition to an employee’s superior, theorganization provides various internal and external contacts,
including Compliance Committee members, the secretariat,
the Personnel Counseling Department, external lawyers, external directors, and directors serving as Audit and Supervisory Committee members.
We ensure the anonymity and protection of privacy of whistleblowers and take care to prevent them from disadvantageous treatment. The content and handling of whistleblower
reports are reported and deliberated in Compliance Committee meetings.
In August 2022, Whistleblower System Regulations were revised as follows.
• E xpanded the scope of whistleblowers (line with theWhistleblower Protection Act)• Clarified that anonymous reports will not be accepted or
rejected based on the fact that they are anonymous• Revision made which requires the whistleblower contact
as well as all parties involved in the investigation to keep
matters confidential• Clarified the prohibition of the provision of false information, slander, or other improper actions by persons requested to cooperate in the investigationployees, business partners, or other stakeholders• Actions that cause deterioration or destruction of the lo-cal environment• Serious violations of the Company’s Code of Conduct,

compliance regulations, employment regulations, orother Company rules• Various types of harassment• O ther violations of laws and regulations, inappropriate
acts, or acts contrary to social justice• Concealment, destruction of evidence, or leakage of information, related to any of the acts listed in the preceding items

Compliance Status
In fiscal 2022, evaluations conducted through internal and external audits found no illegal behavior, legal violations, compliance violations, or other problems that could affect businessactivities, with regard to adequacy of financial reporting, product quality and environmental initiatives, handling of stakeholders inside and outside the Company, and other matters of theTokyo Seimitsu Group.

Fundamental Considerations
In accordance with the Basic Policy on Internal Control Systems, the Group Company Management System is introduced
throughout the Group under the leadership of the Head Officein establishing governance frameworks and concepts necessary for sound corporate management. With regard to risk

management and compliance, the subsidiaries take the lead in
their implementing, taking into account the laws, regulations,characteristics, and business activities specific to the regionsin which the subsidiaries operate. In addition, matters that canbe implemented only by the judgment and approval of subsidiaries and matters that require application, approval, and reporting to the head office are clearly defined in the regulations,and the head office monitors, confirms and verifies whether
the functions and operations are actually sound.
By clarifying the roles and responsibilities of each of the head
office and subsidiaries, we will promote effective operational
management and aim to enhance corporate value as a unified
Group.

● Group Company Management System

Clarification of roles and responsibilities ofHead Office and subsidiaries<Fundamental Considerations><Introduction>
Introduce for theentire group, led by
the Head Office

Head Office<Verification>
Head Office monitors toensure actual functioning■(G) Governance

d
Han
off

● Whistleblower System

2. Monitor and verify that subsidiaries are adequately
controlling critical risks that could hinder mission
accomplishment and business continuity(R) Risk Management(C) Compliance

3. Take firm action if a subsidiary is found to be deviatingfrom the Group's values■

Target group

Whistleblower
contact point

2. Establish a compliance system
3. Implement management practices that enhance corporate
value<Matters that require application and reporting on the part of subsidiaries>• Compliance Committee

members and Secretariat

Notify• Personnel Counseling

Department

ReportCompliance Committee

ReportBoard of Directors

Matters requiring Board of Directors resolution
or CEO approval• E xternal lawyer• E xternal directors anddirectors who are Audit andSupervisory Committee
members

Subsidiaries’ roles and responsibilities

1. Avoid the risk of bankruptcy

on Internal Control Systems• O fficers of the Tokyo Seimitsu

Head Office's roles and responsibilities

1. Present the Group's overall strategy and values, andcommunicate them as a mission to subsidiaries

Handled bysubsidiaries

Led by the Head Office, the Head Office andsubsidiaries share roles and responsibilities,
and work together to improve the corporate valueof the entire Group in accordance with the Basic Policy

In fiscal 2022, although there were eight whistleblowing cases,
there were no compliance issues affecting our business activities.

Group• Employees• Temporary employees working
for the Tokyo Seimitsu Group(includes persons for whom it
has been less than one year
since resigning, retiring, or
having their dispatch assignment terminated)

In order to maintain and strengthen group governance andmaximize the corporate value of the entire Group on a sustainable basis, we have established a basic approach to group
governance, which covers Group companies in Japan andoverseas, and have established and developed the Group
Company Management System.

Matters that need to be reported to the head office
Chairman: Executive Vice
President and CFO

Established andBriefing sessions for subsidiaries are held byoperated in accordance

the department in charge at the Head Officewith regulations

in order to ensure appropriate and timely

regarding application

implementation of the regulations

and reporting matters(held 9 times at 29 locations with a total of

from subsidiaries

102 participants)

Matters requiring resolution by subsidiary directors
Matters that may be resolved by the CEOof a subsidiary

Subsidiaries

Head Office

Matters for which subsidiaries can maintainregulations and self-management70

INTEGRATED REPORT 2023

INTEGRATED REPORT 2023

71

GovernanceIntroduction

Compliance

Strategy

Sustainability

Governance

Data

Risk Management● Matters to be Monitored
Matter for monitoring

Monitoring
frequency

Business management self-inspection and reporting

Quarterly

Report on the status of accounts receivable management

Monthly

Report on the management of long-term uncollectedaccounts receivable

Monthly

Consideration of profit allocation (dividends)
Business plans(orders, profit/loss, facilities/development, personnel)

Individual audit plan development andpreparation for actual audit⇒ Schedule coordination, audit notification,
request for pre-submission of materials,
conduct risk assessment, add audit points

Annually
Semi-annually/quarterlyMonthly business plans

Monthly

Monitoring of local accounting audits of overseas
subsidiaries

Annually

Subsidiary management briefings

AnnuallyCompanywide internal control/business process control
related to financial results and financial reporting

Annually

Response to individual cases

Each time

Global monitoring of transfer pricing

Quarterly

Review of accounting, tax, and legal compliance systemsof overseas subsidiaries

Annually

Monitoring of status of local laws and regulations,and their revisions and repeals

As needed

Application before implementation of salary revision andbonus payment

Once or twicea yearSpot investigation and report requests

As needed

Business trips to support establishment andmaintenance of business management system

As needed

Gathering information through participation in externalseminars and providing this information to subsidiaries

As needed

Conduct audit⇒ Document inspection, interviews, on-site
inspections, physical inspection, sampling,
walk-throughs
Compilation of audit results⇒ Determination of findings and items to beconsidered⇒ Preparation of audit report⇒ Confirmation of audited department⇒ Report to be submitted to the President

Implementing
a ThoroughRisk-BasedApproachPrepare to follow up on findings and items to
be considered⇒ Confirmation of completion

Reporting of Audit Results and
Implementation Status to
the Board of Directors

Internal Audits

Enhancement of Future Actions

Internal audits are conducted for the purpose of verifying andevaluating the effectiveness of internal controls from an objective and independent standpoint (assurance), and advising andrecommending the establishment of a system to control risks
more appropriately through improvements and the establishment of rules.
The Group Company Management System provides guidance
and follow-ups on the development and operation of the risk
management cycle through internal audits of Group companies.

We will promote the following measures in the future.
• Continue to thoroughly implement group governance inaccordance with the regulations concerning application
items from subsidiaries and reporting items• S upport for timely and appropriate responses to business operation risks at overseas subsidiaries by enhancing and establishing GRC reviews• Promote the development of overseas laws and regulations related to business management and procedures• C ontinuous sharing of information for risk assessment
by strengthening cooperation among the Management
Support Department, Legal & Intellectual Property Department, and Audit Department[Objectives of internal audits]
1. Verify and evaluate the effectiveness of internal controls
from an objective and independent standpoint (assurancefunction)• Ensure that risks are being controlled effectively
2. Advise and recommend improvements and rules and regulations• Advise and follow up on more appropriate control of risks⇒ part of risk management

72

The Tokyo Seimitsu Group has established “Risk Management Regulations” and the Risk Management Committee,
which is headed by the president and COO, to identify andmanage risks associated with business execution. Systems
are in place to prevent potential risks from manifestingthemselves and to prepare for crises. If a risk manifests itself, a “Risk Task Force” headed by the president and COO
is immediately established to respond to that risk and takeaction to quickly settle the situation.

Formulate annual audit plan=>
Board of Directors approval

INTEGRATED REPORT 2023

Risk Management Policy
1. The Tokyo Seimitsu Group strives to prevent the occurrence of potential risks. If any risk has become apparent, President & CEO and all employees work in unison
to take prompt and prudent action.
2. If any risk has become apparent, priority is given toprotection and saving of human life.
Risk Management Policy and Risk Topics
https://www.accretech.com/en/sustainability/esg/risk_management.html

Risk Management System

Business Continuity Plan
The Group has formulated a “business continuity policy” thatplaces the highest priority on confirming and ensuring thesafety of employees and their families, maintaining the supplyof parts and materials necessary for customers to continue
operations, and protecting human life and conducting rescue
and recovery activities in the region. We review and adjust theCompany’s business continuity plan (BCP) and plant BCPs on
this basis. In fiscal 2022, as in the previous year, we continued
to analyze assumptions of damage and vulnerabilities of current countermeasures in the event of a threat to each company and plant. Taking changes in the external environment into
account, we reviewed and detailed BCPs and manuals from apractical standpoint, as well as measures to ensure the continuity of product supply and service provision, in addition toseismic reinforcement measures at the level of each department, including general affairs, production management, manufacturing, and IT.

● FY2022 BCP Performance• Reinforced buildings and equipment > Seismic reinforce-

ment work in FY2022: ACCT Tower• Diversified suppliers of maintenance parts and consum-

ables for semiconductor manufacturing equipment

Risk Management Committee• Established a customer allocation plan for in-house inven-

Committee Chairman : President and COO
Members :Committee Chairman, Audit and Supervisory Committee
members, managing directors, managing executive officers,
senior management, group leaders, directors of subsidiaries,
department heads, section chiefs, and advisers

tory in the event of a disaster for measuring equipment
maintenance parts• C onducted annual DR (Disaster Recovery)* test of the
ERP system• Performed management of stockpiles and storage ateach plant in accordance with rules for managing stockpiles in the event of a major disaster• T he Hachioji Plant has stockpiles sufficient for 1,583
people for three days. The Tsuchiura Plant had quantities
sufficient for 30 people for two days.

Risk Items and Content
The following risks are assumed to be the risks revolving
around the business.
1.	Risks of occurrence of natural disasters and sudden
events (earthquake, fire, storm and flood damage, terrorism, etc.)
2.	Risks caused by economic and financial market trends(business trends, fluctuation of currency rates, etc.)
3.	Risks caused by changes in customer investment
trends (changes in semiconductor industry, automotive industry, etc.)
4.	Risks caused by competitor and industry trends (pricecompetition, development competition, intellectual
property rights, etc.)
5.	Risks concerning public regulations, policies and taxation (country risk, etc.)
6.	Risks concerning human resources (industrial accident, unexpected incident and accident, etc.)
7. Risks concerning capital providers (changes in shareownership, etc.)
8.	Risks concerning IT system (IT system failure, etc.)
9.	Risks concerning the quality of products and services
10. Other risks associated with business execution

R (Disaster Recovery): Refers to the ability to mitigate damage, main* Dtainfunctions, or recover and restore an information system that is seriously damaged by a natural disaster or other events. It also refers to thefacilities, systems, and measures that are in place to prepare for such asituation.

Safety Confirmation System
We have introduced a Safety Confirmation System for confirming people’s safety via mobile phones and smartphones following a disaster or accident. We explain the system to new
employees and enforce early registration. We carry out operation drills twice a year (in June and December) to confirm thesystem’s effectiveness and to raise awareness of the systemamong all employees and use the drill results to perform reviews and disseminate information. In fiscal 2022, we continued to collect final response rate and elapsed time data, andimplemented measures for improvement.

INTEGRATED REPORT 2023

73

GovernanceIntroduction

Risk Management

Strategy

Sustainability

Governance

Data

Dialogue with Shareholders and Investors
Information Security
We believe that it is our responsibility to protect the information
assets entrusted to us by our important customers and business partners as well as our own information assets. Accordingly, we have established the Information Security Policy as a
guideline for information protection. In response to increasingly
complex and sophisticated cyber-attacks in recent years, we
are working to strengthen security for information assets, prevent leaks of confidential company information and personal
information due to the expansion of the scope of traditional
activities, including remote work (working from home), andprovide education to improve individual employee literacy. In
fiscal 2021, we restructured the Information Security Subcommittee, assigning a director in charge of security, a security
manager, and a security subcommittee to each company.
Group (consolidated) companies also participate on the committee and work together to implement security measures.

Tokyo Seimitsu is committed to investor relations (IR) activities that enable shareholders and investors to better understand the Company through timely and appropriate information disclosure and constructive dialogue.

Basic Policy on Information Security
https://www.accretech.com/en/company/securitypolicy.html● Information Security Targets and Results
TargetResultNumber of regular information exchange
meetings on information security

18 times

42 times

Number of serious incidents

0 incidents

0 incidents

Proper management of personal information,
number of serious personal information leaks

0 incidents

0 incidents

Participation in security-related seminars

Twice
per year

Twice peryear

Provision of specialized security-related
training

Twice
per yearThree times
per year

Information security training participation rate

98% orhigher99%● Information Security System Chart
Board of Directors
President
Risk Management and Compliance Committees
Information Security Committee(chairman, vice chairman, secretariat, committee members)

Subcommittees
Semiconductor Company
Oﬃcer in charge of security

Metrology Company
Oﬃcer in charge of security

Administration Company
Oﬃcer in charge of security

Information security
manager

Information security
manager

Information security
manager

Security
Subcommittee

Security
Subcommittee

Security
Subcommittee

IT
Subcommittee

Human Resources
Department

Accounting and
Finance Department

Technology
Division

Sales
Department

Technology
Division

Sales
Department

Metrology Company

Administration Company

ACCT
CSIRT
Preparing forestablishment（ ACCT CSIRT : Accretech Computer Security
Incident Response Team ）TSS

Semiconductor Company

Audit
Subcommittee

Information security
manager

TSE
Information security
manager

ISMS Secretariat

Aﬃliated companies/overseas subsidiaries(TSS: Tosei Systems Co., Ltd. )(TSE: Tosei Engineering Corp. )74

INTEGRATED REPORT 2023

Basic Policy on IR Disclosure
The Tokyo Seimitsu Group will disclose and provide fair
and accurate information in a timely manner in accordance with various laws and regulations as well as the
ACCRETECH Group Code of Conduct.
In addition, with the aim of promoting constructive dialog
with shareholders, investors, and other stakeholders, theCompany discloses information deemed effective for further understanding of the Tokyo Seimitsu Group as appropriate.

Opportunities for Dialogues
We provide the following opportunities for our shareholders
and investors to gain a deeper understanding of the Tokyo
Seimitsu Group. The opinions obtained through dialogues withshareholders and institutional investors are summarized as appropriate, reported to the Board of Directors and at the Executive Management Meeting, and shared with relevant departments.

● Fiscal 2022 Results
Times held
100th Regular Shareholders’ Meeting

1 timeRate of exercise of
voting rights: 81.8%

Handling coverage
by institutional investors/analysts

Total of 340 times

IR Disclosure Policy (full text)
https://www.accretech.com/en/ir/irpolicy.html

Conferences for overseas investors

4 times

Disclosure Policy

Business results briefings/
press conferences

In accordance with laws, regulations, and stock exchange
rules, in addition to providing electronic public notices, wepublish notices on TDnet, the Timely Disclosure network of
corporate information operated by the Tokyo Stock Exchange,and on EDINET (Electronic Disclosure for Investors' NETwork),
the Financial Services Agency's electronic disclosure system
for securities reports and other disclosure documents under
the Financial Instruments and Exchange Act. Information that
we publish on TDnet is also provided on the IR informationsite on the Company’s website.
In addition, financial information and other information are arranged in a form that can be downloaded from the top page of
the IR website, and important information to stakeholders,such as rating information, is disclosed through IR News on
the Company’s website.

Briefings for individual investors

1 time(online participants: 1,315)
8 times

Insider Information
In accordance with all laws and regulations, the ACCRETECHGroup Code of Conduct, and internal regulations, the Company shall not disclose insider information until it is disclosed by
TDNet or by the means prescribed by laws and regulations.
For this, we will conduct strict management and work to prevent insider trading.
In addition, when a person in charge of investor relations engages in dialog with a specific stakeholder, they shall take care
not to unintentionally transmit insider information or undisclosed information that is highly likely to have a significant impact on the value of securities.
IR Information Site

• C onsolidated financial results information (financial re-sults summary, summary presentation, briefing Q&A
session, etc.)• Securities report, quarterly report, extraordinary report,
and confirmation report• N otice of convocation for shareholders’ meeting, othermatters to be provided electronically, and resolution notice• Corporate Governance Report• Internal control report• Notice of independent officers• Electronic public notice• Articles of incorporation• Integrated Report• O ther information on the business, operation, or business performance of the Company that has significant
influence on investment decisions· Japanese site
https://www.accretech.com/jp/ir/· Global site
https://www.accretech.com/en/ir/

INTEGRATED REPORT 2023

75

Data

Introduction

Sustainability

Strategy

Governance

Data

FY2021(FY2022/3)
130,702
101,145
29,556
77,69453,00828,327
24,698
3,628
987
153
29,160390
34
29,516
8,132
21,38457
21,326
1,026
22,411
17.4
12.1
3,187.39
522.52517.51
40.6
21.7
24.4
12.3
22.3
16.3
133,82956,457
190,287
55,641
3,564
131,081
190,287
68.1
43,535185

FY2022(FY2023/3)
146,801
112,365
34,436
84,967
61,83434,49429,866
4,628
965
162
35,297103
2,099
33,301
9,607
23,69362
23,6301,051
24,74517.3
11.8
3,573.81
581.33575.62
42.1
23.5
26.6
13.4
24.0
16.1
143,972
65,060209,032
50,947
12,057
146,028
209,032
69.0
25,888
235
ー
1,583
40.3
41,903,281
1,529,552
1,000（8,421）（2,174）
136,326
99,36636,960101,799
89,371
12,428
0.88
1.07
0.93
69.3
79.5
36.1

Key Consolidated Financial Data
Note: Figures in millions of yen are rounded down to the nearest million yen and percentages are rounded to the nearest
decimal place. As a result, the sum of individual items may differ from the totals presented.

Net profit attributable to minority interests

millions of yenーー

Net profit attributable to owners of the parent

millions of yen

Accumulated other comprehensive income

millions of yen

Comprehensive income

millions of yen

Return on equity (ROE)

%

Yen

8,607
（246）
8,361
17.7
11.5
1,276.39
208.83208.54
32.2
16.8
14.1
21.8
16.1
14.9
52,42725,417
77,84519,047
6,008
52,78977,845
67.6
8,159
16

3,995
723
4,718
7.3
5.1
1,384.43
96.93
96.72
35.2
14.7
9.6
21.7
15.5
7.8
51,80926,052
77,862
17,403
3,154
57,304
77,862
73.3
13,20216

FY2013(FY2014/3)
55,26831,36023,90834,845
20,422
8,466
3,720
4,745
626
68
9,024
79
12
9,090
3,201
5,889
30
5,858
1,278
7,168
9.7
7.3
1,557.28
142.06141.49
37.0
15.3
11.9
19.9
16.3
10.6
55,865
26,69982,565
15,571
2,324
64,66882,565
77.8
17,926
23

Yen

ー

ー

ー

ー

ー

ー

ー

0
7.7
41,253,981
32,147
8,914（3,298）（5,327）53,50232,651
20,85011,323
6,768
4,554
0.93
0.87
1.03
19.6
18.1
22.5

0
16.5
41,254,781
32,292
8,337（3,019）（4,322）
52,13529,961
22,174
12,445
7,275
5,169
1.02
1.02
1.03
24.4
24.7
24.0

2
16.2
41,278,381
33,542
6,434（1,374）（3,244）57,69233,43424,257
14,866
9,349
5,516
1.04
1.07
1.01
26.9
29.8
23.1

2
25.2
41,340,681
34,60910,820（2,958）（1,762）
70,241
43,297
26,943
18,662
12,467
6,194
1.06
1.08
1.03
28.1
31.0
23.6

2
25.2
41,423,381
35,393
7,210（3,823）（2,851）
69,15941,03328,12617,994
11,706
6,288
0.98
0.98
0.99
25.6
28.0
22.1

1
30.1
41,495,581
35,81912,809（3,486）（2,953）83,48756,232
27,254
23,663
17,647
6,015
1.07
1.12
0.99
30.4
35.1
21.9

2
30.0
41,575,881
36,251
10,931（4,649）（3,163）103,979
73,32730,651
39,44831,452
7,996
1.18
1.23
1.07
44.7
52.8
27.9

(Unit)
millions of yen

Net sales
Semiconductor manufacturing equipment

millions of yen

Precision measuring instruments

millions of yen

Cost of goods soldmillions of yen

Gross profit on sales

millions of yen

Operating profit

millions of yen

Semiconductor manufacturing equipment

millions of yen

Precision measuring instruments

millions of yen

Non-operating income

millions of yen

Non-operating expenses

millions of yen

Recurring profit

millions of yen

Extraordinary gains

millions of yen

Extraordinary losses

millions of yen

Current net benefits before tax citation
Income tax and others

millions of yen
millions of yen
millions of yen

Net profit

Return on assets (ROA)%

Book value per share (BPS)Yen

Earnings per share (EPS)

Yen

Diluted net profit per share

Yen

Gross profit margin ratio%

Operating margin%

Semiconductor manufacturing equipment%

Precision measuring instruments%%

Recurring profit margin
Net profit margin%

Current assets

millions of yen

Fixed assets

millions of yen

Total assets

millions of yen

Current liabilities

millions of yen

Fixed liabilities

millions of yen

Net assets

millions of yen

Total liabilities and net assets

millions of yen

Equity ratio
Net cash and deposits%
millions of yen

Dividend per share (ordinary dividend)
Dividend per share (commemorative dividend)
Purchases of treasury stock

millions of yen

Dividend payout ratio%

Total shares issued

SharesAmount of treasury stock among shares issues

SharesCash flows from operating activities

millions of yen

Cash flows from investing activities

millions of yen

Cash flows from financing activities

millions of yen

Ordersmillions of yen

Semiconductor manufacturing equipment

millions of yen

Precision measuring instruments

millions of yen

Order backlog

millions of yen

Semiconductor manufacturing equipment

millions of yen

Precision measuring instruments

millions of yen

Ratio of orders to sales (BB ratio)ーPrecision measuring instrumentsー

Ratio of order backlog to net sales

76

ーSemiconductor manufacturing equipment%

Semiconductor manufacturing equipment%

Precision measuring instruments%

INTEGRATED REPORT 2023

FY2011(FY2012/3)
57,727
37,463
20,26339,152
18,575
9,704
5,297
4,407
503
906
9,301
289
45
9,544
936
8,607

FY2012(FY2013/3)
51,01329,454
21,55933,041
17,971
7,505
2,832
4,673
519
132
7,892
13
2,098
5,807
1,812
3,995

FY2014(FY2015/3)
66,44540,17926,26640,275
26,16912,124
6,963
5,160
726
59
12,7919
4
12,796
3,767
9,028
35
8,993
1,940
10,96913.0
9.9
1,787.05
217.97216.93
39.4
18.2
17.3
19.7
19.3
13.5
67,87330,58498,457
21,7182,367
74,371
98,45775.0
24,75455

FY2015(FY2016/3)
70,274
41,77328,50042,18528,08913,222
7,339
5,883
243
232
13,2328
013,240
3,484
9,756
52
9,704
（2,557）
7,199
12.7
9.7
1,903.29
234.58233.29
40.0
18.8
17.6
20.6
18.8
13.8
72,71029,223
101,933
21,416
1,099
79,418
101,933
77.3
25,76859

FY2016(FY2017/3)
77,79250,291
27,501
48,152
29,64013,659
8,820
4,839
318
112
13,864583
32
14,415
4,464
9,951
41
9,909
420
10,37112.0
9.2
2,083.40
239.32237.80
38.1
17.6
17.5
17.6
17.8
12.7
82,792
31,670114,463
26,570698
87,194
114,463
75.5
32,52172

FY2017(FY2018/3)
88,19459,52328,67153,81834,375
17,283
11,292
5,990
170
138
17,3164
2
17,318
4,542
12,77558
12,717
2,348
15,12413.8
10.3
2,367.92
306.41304.02
39.0
19.6
19.0
20.9
19.6
14.4
94,99037,902
132,893
32,807731
99,354
132,893
74.0
35,86992

FY2018(FY2019/3)
101,520
69,11732,40360,43041,09020,221
13,195
7,025
688
104
20,80558419
20,443
5,719
14,72458
14,665（2,483）
12,24014.4
10.1
2,551.20
352.92350.23
40.5
19.9
19.1
21.7
20.5
14.4
110,094
47,478
157,573
40,9489,220
107,403
157,57367.3
30,102
105
20
1
35.4
41,598,381
36,791
12,932（13,952）
5,443
98,90965,33533,57336,836
27,670
9,165
0.97
0.95
1.04
36.3
40.0
28.3

FY2019(FY2020/3)
87,92756,19831,72853,452
34,474
12,282
7,915
4,366
255
177
12,36057
1,712
10,705
3,598
7,106
（49）
7,156
（722）
6,384
6.7
4.7
2,601.10
171.89170.72
39.2
14.0
14.1
13.8
14.1
8.1
97,771
48,777
146,549
29,017
7,857
109,674
146,54973.9
24,99976

FY2020(FY2021/3)
97,10571,74525,35960,19036,914
15,562
13,565
1,996
540
235
15,8671,354
1,074
16,147
3,978
12,169（6）
12,175849
13,01810.9
7.9
2,810.79
293.83291.43
38.0
16.0
18.9
7.9
16.3
12.5
111,516
50,039161,556
39,296
5,482
116,777
161,556
71.4
36,076
104

ー

ー

ー

1
44.2
41,695,381
37,207
5,965（6,116）（6,375）87,57657,70929,86636,96529,182
7,782
1.00
1.03
0.94
42.0
51.9
24.5

3,002
35.4
41,759,981
715,164
22,062（5,191）（8,282）
117,060
93,181
23,87856,92050,619
6,301
1.21
1.30
0.94
58.6
70.6
24.8

2,501
35.4
41,869,581
1,222,956
23,837（8,990）（10,346）
186,056
152,896
33,159112,274
102,370
9,904
1.42
1.51
1.12
85.9
101.2
33.5

INTEGRATED REPORT 2023

77

Data

Introduction

Key Consolidated Financial Data

(Unit)FY2012(FY2013/3)

FY2013(FY2014/3)

FY2014(FY2015/3)

FY2015(FY2016/3)

FY2016(FY2017/3)

FY2017(FY2018/3)

FY2018(FY2019/3)

FY2019(FY2020/3)

Governance

FY2020(FY2021/3)

FY2021(FY2022/3)

Data

FY2022(FY2023/3)

millions of yen

3,544

4,255

4,979

5,744

6,292

6,791

7,194

7,469

8,234

7,193

8,146

8,542

Semiconductor manufacturing equipment

millions of yen

2,808

3,419

4,087

4,645

5,104

5,443

5,826

6,154

6,216

5,748

6,728

6,798

Precision measuring instruments

millions of yen

736

836

891

1,098

1,187

1,347

1,368

1,314

2,017

1,445

1,418

1,743

millions of yen

2,816

2,795

1,803

3,249

3,795

4,145

3,547

13,872

7,477

5,950

9,793

9,725

Semiconductor manufacturing equipment

millions of yen

2,337

1,955

874

2,459

2,940

3,647

2,543

12,235

3,832

3,499

9,223

7,248

Precision measuring instruments

millions of yen

479

840

929

789

855

498

1,003

1,636

3,644

2,450

569

2,476

millions of yen

1,985

1,873

1,830

1,837

2,012

2,380

2,541

2,655

3,450

3,516

3,551

3,832

Semiconductor manufacturing equipment

millions of yen

1,414

1,391

1,304

1,238

1,340

1,668

1,824

1,909

2,450

2,343

2,447

2,642

Precision measuring instruments

millions of yen

571

481

525

599

671

711

716

746

1,000

1,172

1,103

1,189

millions of yen

332

396

427

427

261

102

102

226

41

28

29

42

Semiconductor manufacturing equipment

millions of yen

74

110

140

133

119

102

102

102

39

7

7

8

Precision measuring instruments

millions of yen

258

285

287

294

141

ー

ー

123

1

20

21

34

R&D expenditure as a percentage of net sales

%

6.1

8.3

9.0

8.6

9.0

8.7

8.2

7.4

9.4

7.4

6.2

5.8

Semiconductor manufacturing equipment

%

7.5

11.6

13.0

11.6

12.2

10.8

9.8

8.9

11.1

8.0

6.7

6.1

Precision measuring instruments

%

3.6

3.9

3.7

4.2

4.2

4.9

4.8

4.1

6.4

5.7

4.8

5.1

Capital expenditure as a percentage of net sales

%

4.9

5.5

3.3

4.9

5.4

5.3

4.0

13.7

8.5

6.1

7.5

6.6

Semiconductor manufacturing equipment

%

6.2

6.6

2.8

6.1

7.0

7.3

4.3

17.7

6.8

4.9

9.1

6.5

Precision measuring instruments

%

2.4

3.9

3.9

3.0

3.0

1.8

3.5

5.1

11.5

9.7

1.9

7.2

Depreciation and amortization as apercentage of net sales

R&D expenditure

Capital investment

Depreciation

Goodwill amortization

%

3.4

3.7

3.3

2.8

2.9

3.1

2.9

2.6

3.9

3.6

2.7

2.6

Semiconductor manufacturing equipment

%

3.8

4.7

4.2

3.1

3.2

3.3

3.1

2.8

4.4

3.3

2.4

2.4

Precision measuring instruments

%

2.8

2.2

2.2

2.3

2.4

2.6

2.5

2.3

3.2

4.6

3.7

3.5

People

1,144

1,275

1,393

1,447

1,559

1,784

1,933

2,119

2,250

2,293

2,354

2,468

Non-consolidated basis

People

582

613

618

637

679

726

809

868

912

944

992

1,054

Consolidated subsidiaries

People

562

662

775

810

880

1,058

1,124

1,251

1,338

1,349

1,362

1,414

People

470

495

540

620

690

720

820

980

980

996

1,123

1,258

Non-consolidated basis

People

280

285

330

380

440

445

500

620

610

611

712

783

Consolidated subsidiaries

People

190

210

210

240

250

275

320

360

370

385

411

475

People

1,614

1,770

1,933

2,067

2,249

2,504

2,753

3,099

3,230

3,289

3,477

3,726

Non-consolidated basis

People

862

898

948

1,017

1,119

1,171

1,309

1,488

1,522

1,555

1,704

1,837

Consolidated subsidiaries

People

752

872

985

1,050

1,130

1,333

1,444

1,611

1,708

1,734

1,773

1,889

Average age (non-consolidated basis)

Age

41.8

41.8

42.1

41.8

41.3

41.4

40.9

40.4

40.0

39.9

39.8

39.6

Average years of service (non-consolidated basis)

Years

14.2

13.2

13.5

13.2

12.7

12.5

12.1

11.6

11.2

11.2

11.1

11.1

Average annual salaries (non-consolidated basis)

Yen

7,471,535

7,090,578

7,158,712

7,329,971

7,523,864

7,426,572

7,815,525

7,582,169

7,152,806

7,013,791

7,496,101

7,984,646
17

Total regular employees

Total temporary employees

Number of employees

Companies

10

12

13

13

14

16

16

17

17

17

17

Consolidated subsidiaries in Japan

Companies

5

5

5

5

5

5

5

6

6

6

6

6

Consolidated subsidiaries overseas

Companies

5

7

8

8

9

11

11

11

11

11

11

11

Non-consolidated subsidiaries

Companies

15

14

13

16

17

15

14

14

16

16

13

12

Affiliated companies

Companies

ー

ー

ー

ー

ー

ー

1

1

1

1

1

1

Consolidated subsidiaries

78

FY2011(FY2012/3)

Sustainability

Strategy

INTEGRATED REPORT 2023

INTEGRATED REPORT 2023

79

Data

Introduction

Non-Financial Data

Strategy

Sustainability

Data

Governance

Company Information and Stock Information● Environment-Related

Company Information
FY2018FY2019FY2020

FY2022

FY2021Company name : Tokyo Seimitsu Co., Ltd.
URL
: https://www.accretech.com/en/
Head office: 2968-2 Ishikawa-machi, Hachioji-shi, Tokyo
Established: March 28, 1949
Paid-in capital : 11,064 million yen (as of March 31, 2023)

CO2 emissions and electric power used
CO2 emissions (t-CO2)

12,312

11,982

9,524

8,191

8,257

Electric power used (MWh)25,76525,44828,84329,83529,546CO2 emissions per unit of production(t-CO2 /million yen)

0.160

0.191

0.129

0.080

0.074

157,375

171,706

169,873

163,662

164,150

2.05

2.74

2.29

1.61

1.48

Number of employees : 
1,054 (non-consolidated), 2,468 (consolidated)(as of March 31, 2023)
Major business lines : 
Manufacture and sale of semiconductor manufacturing
equipment and precision measuring instrument

Amount of water usage
Amount of water usage (m³)
Water usage per unit of production(m³/million yen)Affiliated Companies(Japan)(Overseas)● Human Resource Data (Non-consolidated)
FY2018Average age of regular employees

FY201940.4

FY202040.0

FY202139.9

FY2022
39.8

39.6

Tosei Engineering Corp.

Tosei Box Corp.

Tosei Systems Co., Ltd.

Accretech Finance Co., Ltd

Accretech Create Corp.

Accretech Powertro System Co., Ltd.

Accretech America Inc.

Accretech SBS UK Ltd.

Accretech（Europe）
GmbH

Accretech-Tosei Hungary Kft.

Accretech (China) Co., Ltd

Accretech SBS Inc.

Accretech Korea Co., Ltd.

Tosei Engineering (Pinghu) Co., Ltd

Accretech（Malaysia）
Sdn. Bhd.

TOSEI（Thailand）
Co., Ltd.

Accretech Taiwan Co., Ltd.

PT TOSEI Indonesia.

Accretech（Thailand）Co., Ltd.

TOSEI Philippines Corp.

Average years of service for regular
employees

11.6

11.2

11.2

11.1

11.1

Men

11.8

11.4

11.4

11.4

11.5

Accretech Adamas（ Thailand）Co., Ltd.

TOSEI Engineering Pvt. Ltd.

7.3

Accretech（Singapore）Pte. Ltd.

TOSEI Mexico, S.A. de C.V.

Accretech Vietnam Co., Ltd.

Tosei Technology Development (Shanghai) Co., Ltd.

7.9

Women

7.8

7.8

7.5

6.5%

6.4%

6.4%

7.4%

Percentage of female managers

1.4%

1.4%

1.5%

1.9%

2.4%

Percentage of female officers

0.0%

7.7%

7.7%

7.7%

13.3%

New graduate retention rate (three years
after entering the Company)

96.4%

80.0%

90.9%

87.7%

88.4%

Turnover rate of regular employees

2.7%

4.6%

3.3%

4.1%

3.7%

Percentage of female regular employees

8.5%

Percentage of employment of persons
with disabilities*

1.9%

2.0%

1.9%

2.0%

2.1%

Percentage of paid leave taken

66.0%

73.1%

65.9%

69.8%

76.7%

Childcare leave acquisition rate

10.7%

0.0%

14.7%

19.2%

42.9%

Men

0.0%

0.0%

9.4%

19.2%

38.5%

Women

100%

None eligible

100%

None eligible

100%

Total training hours——

3,385.1

6,445.9

9,938.7

Average number of training hours perperson

—

—

3.6

7.0

9.4

Education investment per person (yen)——22,432.3

29,415.3

35,576.5

PT Accretech Indonesia.
Accretech-Tosei do Brasil Ltda.
Accretech (Pinghu) Co., Ltd

Stock Information● Overview (as of March 31, 2023)

Foreignshareholders

Securities code7729

Stock market listing

Prime Market, Tokyo Stock
Exchange

Number of shares issued

41,903,281 shares

Number of shareholders

25,11031.32%

Name

Number ofshareholders

25,110Total shares issued

Other
corporations

6.14%● Principal Shareholders (as of March 31, 2023)

depicted in the table are current as of June 1 of each year. The Act to Facilitate the Employment of Persons with Disabilities stipulates that employment* Dofata
one individual with a serious disability is equivalent to employing two individuals for purposes of calculating the number of associates with disabilities andpercentage of employment.

Status of Share Distribution by Owner(as of March 31, 2023)

41,903,281
sharesIndividuals
and other

26.95%

Financial
institutions
and Securities
Companies

35.59%

Number of Percentage ofshares held shares held
(thousand)(%)

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

6,768

16.76

Custody Bank of Japan, Ltd. (Trust account)

3,275

8.11

The Precise Measurement Technology
Promotion Foundation

1,058

2.62

JP MORGAN CHASE BANK 385632

1,007

2.49

SSBTC CLIENT OMNIBUS ACCOUNT

946

2.34

Mizuho Bank, Ltd.

672

1.66

Ayako Yano

614

1.52

STATE STREET LONDON CARE OF STATE STREETBANK AND TRUST, BOSTON SSBTC A/C UK
LONDON BRANCH CLIENTS-UNITED KINGDOM

591

1.46

STATE STREET BANK AND TRUST COMPANY 505223

552

1.37

STATE STREET BANK WEST CLIENT-TREATY 505234

525

1.30

Treasury stock excluded80

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81