Digest Edition

CSR Report

Aiming to live together in harmony with the people, society and the EarthCSR of SAWAFUJI
President’s Message

Since its establishment in 1934, Sawafuji Electric Co., Ltd. has steadily
developed its electric equipment, generator, refrigerator and services
for customers in more than 100 countries overseas, as well as Japan.
We will continue in the future to fulfill our social responsibility from a
global perspective based on our business philosophy, and strive tobecome a trusted company.
The economic climate is very uncertain due to concerns over thedeterioration of the global economy and other unpredictable elements.
We will take several steps to deal with this environment. They include
working together to establish an organization that allows us to operate
as a global company, improve our competitiveness, strengthen theability of the entire Sawafuji group to withstand changes, enhance

Basic Philosophy
Company Policy (established in July 1960)●● Let’s proceed with research, practice skills and make rapid progress
brightly.
●● Let’s keep responsibility toward and faith with customers andcontribute to the society.
●● Let’s establish bright workplace based on labor-management
cooperation and mutual trust.

CSR Efforts

Under its basic philosophy, Sawafuji will endeavor to continuously
raise corporate value by fulfilling corporate social responsibility incooperation with many stakeholders.
We believe our relationship with our suppliers is important, so wehave asked our suppliers to work with us to fulfill our corporate social
responsibilities.

Sawafuji Electric Co., Ltd.
President Hideki Ueda
our technical capabilities to enable us to maintain growth, build
a global production system, reform and deepen our commitment
to craftsmanship, and train personnel capability working in aninternational context.
Other important challenges for our business activities include
environmental protection and reducing their burden on the environment.
We will therefore continue our efforts to improve and contribute to asustainable society.
We would appreciate your frank opinions on this report about Sawafuji’sefforts for CSR.

Management Creed (established in October 1990 revised in April 2001)

SAWAFUJI ELECTRIC CO., LTD. produces good products, performssocial responsibility as a corporation and provides prosperity to allpeople concerned.
* Make an impression on customers.
* Bring purity to nature.
* Bring prosperity to people engaged in the company work.

Customers
Shareholders
and investors

Suppliers

CSR

1) Creation of useful products and services2) Coexistence with the global environment3) Contribution to society; ensuringconfidence in the Company
4) Realization of an excellent working
environment

Publicinstitutions

Special Feature

Risk Management for Business Continuity

After the East Japan Earthquake, Sawafuji began reviewingand strengthening risk management countermeasures from theperspective of Business Continuity Plan in the event of a large-scale
natural catastrophy.

Localcommunities

Distributorsand Dealers

Employees

TopicsDialogue with stakeholders

We place great importance on our dialogue with stakeholders, asevidenced by the address President Ueda delivered to a special training
session for management personnel with local governments, and theregular meetings held to exchange information with stakeholders inregional areas.

Established a subsidiary company “SAWAFUJI ELECTRIC (THAILAND) CO., LTD.”We established a manufacturing and sales company in Thailand inJanuary 2012 for electric components and devices for generators.

Earnings Results for FY 2011
The economic climate for the Sawafuji group in FY 2011 was extremely
harsh. Though demand in China, Asia, and Japan was initially firm, thedownturn in the Chinese economy, the continued appreciation of theyen, the European debt crisis, the soaring rare earth prices, and thefloods in Thailand were negative factors.
In this climate, we strived to improve earnings in all our operations,improve business efficiency and productivity, and reduce costs.

Relations with Customers

Sawafuji strives to provide products and services those meet customers’
needs, with the highest priority given to customer satisfaction and trust.

Development of products

To be highly evaluated by customers around the world, the Development
Division tackles development issues, striving to establish its position
as No.1 of the industry in the fields of electric equipment for trucks
and buses, engine generators and vehicle-mounted refrigerators, andcontribute to the development of these fields.

Consolidated earnings results for FY 2011 (116th term) were asfollows.
- Net sales: 29,200 million yen- Ordinary income: 944 million yenMonozukuri

Sawafuji strives every day to achieve craftsmanship capable of moving
our customers emotionally.

Quality control system and Service network

Sawafuji continues to improve ourselves by creating a quality control
system that conforms to the ISO 9001 management system. We
have also created a service network enabling a prompt response todifficulties.

Relations with Global and Local Communities
Sawafuji contributes to the community and international society byconducting itself as an engaged member of the community with due
consideration for environmental concerns.
Major efforts made during FY 2011 are as follows:

Refer to the last page of this booklet- Working with the Japanese Red Cross Society in their blood
donation drives- Assistance for dealing with flood damage in Thailand- Volunteer for traffic safety
near our factory- Offering vaccines to thechildren of the world- Participating in local events

The goods we sent to Thailand

Relations with Shareholders and Investors
To ensure fairness and transparency, Sawafuji discloses appropriate
information in a timely manner to shareholders and other stakeholders.

IR information

Sawafuji believes that it is important manner for the sharehoulders andinvestors to better understand Sawafuji.

As a part of our investor relations (IR) activities, we issue a biannual
Shareholders Newsletter in addition to materials released at the timeof business results announcements.
The newsletter, which contains topics on our environmental activities
and new products, is intended to help shareholders and investors
broadly understand our activities.

Relations with Distributors and Dealers
Sawafuji which has established systems to sell commercial partsand components, collect market information and provide services byusing the networks of its distributors and dealers to fulfill its social
responsibilities in every business situation.
In FY 2011, the Company held meetings at its 10 bases nationwide,
explaining our policies and strengthening communication with ourdistributors.

We also held technical lectures
to enhance services at these
distributors and dealers.

Technical lectures to enhance services

Relations with Suppliers

Sawafuji pursue fairness in the transaction process and procure
optimal articles. To this end, we establish trusting relationships with oursuppliers under the basic philosophy of “mutual trust and prosperity,”and aim for mutual development and growth.
We are actively communicating with our suppliers by holding
procurement policy briefings, general meetings of cooperating
associations of Sawafuji, and joint training sessions on a regular basis,
and information exchange meetings on a monthly basis.

We also actively cooperate with
our suppliers in areas such as
quality improvement and costreduction.

Associations of Sawafuji
Fall training session

Relations with Employees

Sawafuji values the self-reliance and creativity of each of its employees.
We have established the following systems and measures to ensurethe safety of the workplace , health of employees and to provide a richworkspace environment

Diversity of employment efforts

Employment

Safety and sanitation management and health care

We are committed to personnel training based on our policy ofemployment stability.

Human rights

We maintain a corporate environment conducive to eliciting the desire towork through our response for human rights and a fair personnel system.

Environmental Report

In 1997, Sawafuji obtained the ISO 14001 Environmental Management
System certificate. Since then, it has done its utmost to achieveenvironmental activity goals, which are set every FY, in line with theEnvironmental Policy.
Major efforts include reducing CO2 in production activities, providing
miniaturized and lightweight products that are energy efficient,managing and reducing substances that damage the environment,

To support employees’ diverse working style, we have developed,
employing disabled people, offering child-care leave and volunteer
leave system.
We give preference to safety in all matters, and our objective is tocreate a workplace where our employees can perform their duties insafety and with enjoyment.
We make every effort to give consideration to our employees’ health,because we believe the health of each employee is paramount.

decreasing waste, saving resources
and saving water.
We have compiled the results ofour environmental work in a reportthat is presented as part of ourCSR report.
Solar power panels are installed on the roof ofour factoryWe contribute to local industries and communities, and provide products that satisfy the world.
Contribution to local industries and communities
Sawafuji was honored by Ota City, Isesaki City andTomioka City, Gunma Prefecture, where it is in theneighborhood, as a company contributing to industrialdevelopment.

Sawafuji works to strengthen our ties with the local community.
Our efforts include get-togethers with the people from sheltered workshops,
inviting neighborhood schools for plant tour, cleaning the area near our factory,
volunteer activity and participating in local events.

Ota City’s certificate recognizing
Sawafuji as a company contributing toindustrial development

Isesaki City’s certificate recognizing
Sawafuji as a company contributing toindustrial development

Plant tour for people from sheltered workshops

Gunma Interactive Festival

Cleanup activity near our factory

Volunteer for traffic safety

Tomioka City’s certificate recognizing
Sawafuji as a company contributing toindustrial development

Provision of products that satisfy the world
Sawafuji’s products are helpful to people around the world.

Generator

Automotive electrical equipment

Refrigerator

Starter

Generator actively involved in a rally in Mongol

Refrigerator for leisure

Generator being used for cleaning work

Refrigerator for leisure

Alternator

Computer for onboard use

WEBSITE

http://www.sawafuji.co.jp/kankyo/kankyo_index.php

All contents of the Social Report, Environmental Report, andother materials are posted on Sawafuji’s website (JAPANESE).

SearchInquiries:

3 Nittahayakawa-cho, Ota-shi, Gunma 370-0344, Japan

Internal Control Department
Environment Safety Department

TEL. +81-276−56−7338
TEL. +81-276−56−7334

FAX. +81-276−56−6413
FAX. +81-276−56−7394