愛知製鋼

愛知製鋼レポート 2011（英語版）
表紙 オモテ

2011
9.21

DDW8I1

浦田

303
429

インクジェット（1 校）

赤

藍

墨

黄

Mission
Statement

1.We will strive to make a positive contribution to society
with safe, appealing, and useful technology andproducts.
2.We will nurture a corporate culture based on trust,reliability and the pursuit of excellence.
3.We will be a good corporate citizen, ever mindful of ourenvironment responsibilities.

CSR Policy

We will contribute to the sustainable progress of society
and the Earth through our sound corporate activities.

■ We will gain the trust and confidence of and give

CSR Vision2015

satisfaction to our customers and all other stakeholders.
■ We will develop employees who are open and fair,developing a corporate culture characterized by achallenging spirit.

C o n t e n t s
Business Update

Message from the President

2~5

Business Overview

6

Feature Story

Responding to the Great East Japan Earthquake
Passion for the Construction of No. 3 Bloom Continuous Casting Machine
Our Challenge to Save Rare Earth and Other Rare Metals“Lesson about Iron”
Projects Implemented as Part of Our 70th Anniversary Celebrations

7
8~9
10~11
12~13
14~15

Governance

CSR Management

16~17

Corporate Governance18

Compliance

19

Risk Management/Information Security

20

With Our Customers

21~22With Shareholders/Investors

23

With Our Suppliers

24With Employees

25~30With Community and Society

30~32

Environmental Activity Policy

33~35

Environmental Management

36~37

Global Warming Prevention

38~40

Resource Recycling

40~41

Biodiversity

42

Material Flow43

Environmental Data

44~45

Social Relations

Environment

F i n a n c eManagement’s Discussion, Analysis of Financial Conditions, and Results ofOperations
Five-year Summary

46~48
49

Consolidated Balance Sheets
Consolidated Statements of Income and Consolidated Statement ofComprehensive Income
Consolidated Statements of Changes in Net Assets

50~51

Consolidated Statements of Cash Flows

55

Third-Party View

56

In response to the Third-Party View

57

52
53~54

About Aichi Steel Report 2011
■ Editorial Policy
Aichi Steel Report 2011 focuses on disclosing as much as possible concerning the activities of Aichi Steel and the Aichi Steel Group during
fiscal 2010, including specific examples. As regards unattained objectives, contributory factors are analyzed, and the measures to be taken arereported.
■ Mark/Design
To render new and ongoing activities easily recognizable, new activities are marked with NEW .
■ ReadersThis Report is intended for our customers, suppliers, other business partners, shareholders and investors, residents in neighboring communities,
affiliated companies, and our employees.
■ Report Period and Scope
This Report covers activities conducted by the Aichi Steel Group during fiscal 2010 (April 2010 to March 2011). However, some activities
conducted before or after fiscal 2010 are also explained, as necessary.
■ Reference Guidelines
The Global Reporting Initiative “Sustainability Reporting Guidelines” (Version 3.0)
ISO 26000■ Release
October 2011

AICHI STEEL REPORT 20111

Message from the President

Growing as a group ofcompanies committed to
manufacturing, with humanresources development as
the basis of our business,
we aim to be a “company ofchoice” for society.
Takahiro Fujioka
President
Profile1979: Joined Toyota Motor Co., Ltd. (currently Toyota Motor Corp.)
Learned about the manufacturing of parts and vehicles at Tsutsumi Plant.
1987: Posted to TMMK (Toyota Motor Manufacturing, Kentucky, Inc.) in the U.S.
Worked with local employees as a quality control engineer for
five years to form the basic foundation for Toyota’s independent
vehicle production plant.
1997: Posted to TMMK (2nd assignment abroad)
Worked to enhance the autonomy of TMMK by promoting full-modelchange for cars and improving the plant’s mass-production system.
2002: Learned about plant management as the head of Administration Div. at
Tsutsumi Plant, Toyota Motor
2004: Posted to TMUK (Toyota Motor Manufacturing (UK) Ltd.) in Derbyshire,
U.K. (3rd assignment abroad)
As Senior Executive Director, he implemented breakthrough innovationsin product management and quality control.
2006: Appointed as a Managing Officer of Toyota Motor
Served as the General Manager of Tsutsumi Plant and Takaoka Plant, andfrom 2008 he was responsible for TQM (Total Quality Management).
His efforts were focused on the enhancement of plant capabilities to createhigh-quality products at competitive prices.
2011: Appointed as the President of Aichi Steel Corporation

The impact of the Great East Japan Earthquake and the subsequent nuclear power plant accident,
and the response of Aichi Steel and its Group companies to the unprecedented disaster
What effects did the Great East Japan Earthquake of March 11, 2011, have on Aichi Steel?
Firstly, let me say that Aichi Steel extends its deepest
sympathies to the many victims of the massive earthquake andtsunami that devastated large areas of northern east Japan andtook a heavy toll of lives. We sincerely pray for the health of all
those affected by the disaster and for the speedy recovery of all
regions.
There was no direct damage to our employees and theirfamilies, or to our operations and facilities. However, manyof our customers who have automobile production bases in
the Kanto and Tohoku region, as well as many of our steel
suppliers, were affected by the disaster. Immediately after theearthquake, the Aichi Steel Group assessed the extent of thedamage and began assistance activities. Our assistance efforts
included monetary donations by the company for disastervictims; fund raising by employees; provision of everyday
commodities to Kamaishi City (Iwate Pref.), a sister city of Tokai2

AICHI STEEL REPORT 2011

City (Aichi Pref.), through the Tokai municipal government;
participation in the Toyota Group’s disaster-relief volunteer
activities; and the provision of seven Toyota vehicles (Vitz) to theaffected areas through the Aichi prefectural government andthe Tokai municipal government. We will continue to extend asmuch assistance as possible, according to the situation in thedisaster areas.
Meanwhile, the massive earthquake and tsunami, which
devastated many parts manufacturers, forced Japanese auto
manufacturers to significantly reduce their production capacity.
As a result, we saw a decrease in output by approximately
10,000 tons in the fiscal year ended March 2011. However, theindustry’s restoration assistance brought about a quick recovery
in automobile production in July, and our operating capacity has
been returned to the level originally planned for the current fiscal
year.

Please tell us about the effects that power supply shortages in the wake of the suspended operation of
nuclear power plants have had on your business, and about the precautions the Group has taken against
the massive earthquakes that are predicted to occur off the Pacific coast of central and western Japan.
In May, Chubu Electric Power Company, which supplies electricity tous, suspended the operation of the Hamaoka Nuclear Power Plant (inShizuoka Pref.) until the necessary safety measures are completed.
In the face of a possible electricity shortfall, Toyota Motor and otherauto manufacturers have taken various efforts to curb electricity use
from July to September, including switching their weekly days off toThursday and Friday, and making further increases in electricity saving.
In line with this move, we have shifted workdays at our major
production bases and at the headquarters. We are also making
Group-wide efforts to enhance energy and electricity conservation,although our steel works have conventionally tried to level off electricity
consumption by operating during the night and on Saturdays andSundays as well.
For risk management against large-scale natural disasters, wehave in place an employee safety confirmation system and conduct
emergency drills on a regular basis with cooperation from theTokai City Fire Department, as part of our efforts to minimize

potential damage and ensure an early recovery from such an event.
However, the March 11 earthquake and tsunami went far beyond
any predicted worst-case scenario. Recognizing that it is urgent for
us to improve our Business Continuity Plan (BCP) in response to
the earthquake and tsunami that devastated northeastern Japan,
we launched a committee in May to discuss preventive measuresagainst earthquake disasters. With a particular focus on the Tokai
and Tonankai earthquakes that have a high probability of occurrence,the committee is currently working on the analysis of risk factors andthe preparation of a BCP with the safety of our employees as a toppriority, while promoting information exchange with other companies
and administrative organs. The committee consists of three working
sessions, in which appropriate measures for recovery in software,
hardware, and production in the event of a major earthquake are
discussed. The committee will prepare a medium to long-term roadmap within the current fiscal year and adopt full countermeasuresagainst natural disasters by 2015.

We will adhere to our corporate culture “1S” and “4S,” and develop them further.
You became the President of Aichi Steel with the business environment undergoing drastic change.
How are you planning to manage your company?
point out to each other any minor violations of rules and encourage
improvement. Fostering the “awareness, knowledge, and skills” thatenable individuals to point out any danger aloud is the basis for our
Company, which represents our corporate culture of “1S” itself.
The slogan “4S” represents Simple, Slim, Short, and Straight. The
keywords “Simple” and “Slim” convey our message that the least
required equipment be installed in light of necessary functions
to prevent any unnecessary costs and redundancy. “Short” and“Straight” convey the idea that a smooth process flow, including thephysical movement of goods and people, should be realized. The
keywords “4S” embrace all the elements necessary to realize thereform of our production process by 2015.
We are currently working on reengineering* through united efforts
across the Group, aiming to build a robust corporate structure thatenables us to generate profits at a factory-operating rate of 70%. I
believe that my task is to further develop and refine the corporate
culture of “1S” and “4S” introduced by Shokichi Yasukawa,
Chairman of Aichi Steel.

Business Update

I have only been here for a short time, but from my more than 30
years of experience engaged in manufacturing at Toyota Motor, I
was impressed to learn that Aichi Steel has firmly established a “1S”based corporate culture and a framework for manufacturing with “4S”
as its core. The slogan “1S” represents our message that our first (1st)priority should be on the three Ss, that is, “Shojiki” (Sincerity), “Seisou”(Cleanliness), and “Safety.” “Sincerity” is an important element toprevent serious mistakes or accidents. “Cleanliness” is the basis for
improving quality and productivity. “Safety” will ensure risk detection
and strict compliance with rules. These are the responsibilities that
individual employees should fulfill, and at the same time they serve
as a foundation for our Company as a whole.
Of these 1S elements, I set “Safety” as the first task to be done. If
we value safety first and improve product quality, it will lead to theimprovement of production efficiency and costs. If these are placedin the wrong order, serious accidents or customer complaints may
be allowed to arise. I believe that it is the most important element
for us to create a “safety-first” culture, which enables employees to*Reengineering: In this case, it means to implement a fundamental review of production lines.

Could you explain what efforts were made during fiscal 2010 and what results were achieved?
In 2010, when Aichi Steel celebrated the 70th anniversary of its
founding, the automobile industry saw an increase in overseas
production, especially in Asia, and a solid growth in demand forconstruction machinery, despite the strong yen and rising resource
prices. These positive results were brought about with the help of
the economic measures taken by the Japanese government and theeconomic booms enjoyed by China and ASEAN countries.
Aichi Steel also significantly increased the sales volume of steel
products and forgings. Moreover, we successfully increased both sales
and profits, which can be largely attributed to the results of Project
Z100, a Group-wide effort launched in 2008 to reduce production costs
by 10 billion yen by thoroughly cutting waste.
As a corporate strategy toward sustainable growth, we have created“Doctrine 1-3-7.” This is based around the idea that in our corebusiness, we create a financial structure that enables us to lower ourbreak-even point and generate profits at a factory-operating rate of
70% by 2011 (3rd year of the strategy), with 2009 as the starting point(1st year). This strategy also has a long term goal of reforming our
production processes and rebuilding our global sites by 2015 (7th year).
In 2010 (2nd year of the strategy), we promoted radical reforms ofour corporate structure, launched projects to develop new products

and create new markets, and commenced the operation of Seki Plant(Gifu Pref.), a new production site for “MAGFINE” for automobile use.
Furthermore, we promoted the expansion of our global presence,
including the opening of a Silicon Valley office and the establishment of
an affiliated company in South Korea for our electromagnetic products
business.
With regard to product development, we developed a high performancesteel for auto gears and shafts, as well as MAGFINE magnetic powder.
The former features high-strength steel without use of the rare metal,
Molybdenum (Mo). The latter is characterized by heat resistanceenhanced without using the rare-earth mineral, Dysprosium (Dy), for amagnetic material essential for auto motors. The development of theseproducts will contribute to addressing the global issues of resource
management and environmental conservation.
Our new businesses, especially those for magnetic sensors andmagnetic materials that are expected to be the core business of Aichi
Steel in the future, have experienced remarkable growth. In April 2011,
we launched an ultra-small motion control sensor (electronic compass),
which features the world’s first magnetic gyro, for use in smartphones.
MAGFINE magnetic powder is a new high-value product, which iscontributing to the further downsizing of motors.
AICHI STEEL REPORT 20113

Message from the President

We aim to become a globally valued company.
Development of business sites and human resources that respond to the global
optimization of the automobile production system
Automobile manufacturers have recently accelerated overseas operations to ensure global optimizationof their manufacturing operations. How are you responding to this trend?
Aichi Steel’s affiliated companies overseas include a total of
five plants in forging operations in the United States and the
Asian region. We consider Thailand and the United States to be
the most important for our global strategy. Thailand is growing
significantly as a global base for automobile production, andis expected to see an increase in demand for forgings as abase for supplying auto parts to Asian countries. At present,
Aichi International (Thailand) Co., Ltd. (AIT) machines theforgings purchased from our forging subsidiaries in Asia andships approximately one million units per month for Toyota
IMV engines and propeller shafts. In June 2012, AIT will
start operating a new factory that enables integrated forging
production. We will expand our business by establishing thisnew factory as a global production base, with cooperation fromour plants in China, the Philippines, and Indonesia.
In the United States, Aichi Forge USA, Inc. (AFU) supplies
forgings to the major production bases of Toyota Motor. AFU
offers a broad product lineup, from large forgings (crankshaftsetc.) to small and medium-sized forgings (gears etc.). With thesales of pickup trucks recovering recently, AFU has reinforced

its production system to supply quality products in a timely
manner.
What is most important in overseas development is to ensure
the stable supply of high value added and high-quality products
at competitive prices by applying the manufacturing expertiseat the mother plant in Japan to production sites in Asia and theUnited States. To this end, we have been bringing up people ofsubsidiary companies for proper quality control of forgings andsupply chain development. At the same time, we have also been
providing prospective leaders of subsidiary companies withwell-developed, content-rich education and training, covering
a wide range of areas – from our manufacturing philosophy toequipment and production engineering in Aichi Steel’s plant.
We have been making these efforts with the self-sufficiency
and independence of local plants in view. We believe that only
through such efforts, can we become a “true global company.”

In June 2011, the construction of Chita Plant’ No. 3 bloom continuous casting machine (No.3 CC) for
specialty steel was completed.
We invested about 25 billion yen in the construction of a
No.3CC for specialty steel, which was commenced in 2009.
This is a production line with a casting capacity of one million
tons per year, enabling improvements in product quality,
increased productivity by realizing a smooth process flow
and improving yield ratio, and a significant reduction in CO2emissions by achieving a proper balance of energy conservationand production capacity. This new high-efficiency continuous
casting machine will also contribute to enhancing ourcompetitive edge in terms of quality, costs, and environmental
conservation, marking a huge step forward for the reform of
all our production processes, with 2015 as the target year.
I attended the ceremony to celebrate the completion of thecontinuous casting machine, where I felt firsthand the strong
enthusiasm of our employees for this machine and how great
was their pleasure in operating it.

The Toyota Group considers “human resources development” essential to quality manufacturing. Could
you tell us about the measures taken by the company?
Kiichiro Toyoda established the forerunner of Aichi Steel, basedon the principle, “Great cars are made with great steel.” He alsoemphasized the importance of developing human resourcesthat are essential for developing high-quality products andoffering them at competitive prices. Eiji Toyoda (Honorary
Adviser of Toyota Motor) argues, “Because people make ourautomobiles, nothing gets started until we train and educate
our people.” I believe that our business management can besummed up in these words. This principle is also embodied in
our “1S” corporate culture and in our philosophy “Rebuilding
our business by changing ourselves.”
We need to learn and think for ourselves with a high problem
awareness, and act on our own initiative. To this end, we

4

AICHI STEEL REPORT 2011

should make constant efforts to keep our upward momentum.
I want to create a company in which individuals, systems, andorganizations make constant efforts to improve themselves,using the concept of the Plan, Do, Check, and Act (PDCA)
cycle, and then everyone will see how their efforts contribute to
the growth of their company. In this sense, I am very happy tolearn that Aichi Steel has many highly professional employeeswith open minds. I hope that Aichi Steel’s vision can be realized
through the achievement of individual employees’ self-fulfillment,by promoting deeper communications with individual employees
and bringing the direction Aichi Steel is taking into closeralignment with the growth direction of individuals.

We aim to be a “company of choice” through a well-balanced combination of defensive andproactive CSR activities.
Please tell us about what approach you will take in promoting CSR management.

Our CSR direction is twofold: defensive and proactive
approaches. Our defensive CSR is about ensuring adherence to
our corporate culture of “1S.” “1S” represents our message that
our first (1st) priority should be on the three Ss, that is, “Sincerity,”“Cleanliness,” and “Safety,” which are directly linked tocompliance, honesty and an open mind, and risk management,
respectively. In other words, “1S” also represents the essenceof our CSR management. These factors are the basis forearning the trust of all stakeholders, including our customers,
employees, local communities, shareholders, and suppliers.
Our offensive CSR is about contributing to resolving theenvironmental challenges confronting our societies—reducing
global warming and recycling resources—through our products
and business activities. Aichi Steel is a recycling-oriented
company, whose main business is to produce high value-added
specialty steel from useless scrap iron. We are also making
efforts to promote energy and resource saving by reforming our

production processes.
Our efforts in the area of product development include theimprovement of fuel efficiency and the reduction of CO 2
emissions by promoting weight saving, and the reduction of theuse of scarce resources by utilizing alternatives to rare metal
and rare earth minerals, all of which contribute to improving theenvironmental performance of automobiles.
Commemorating the 70th anniversary of our founding, welaunched a project to visit local schools to give a “lesson aboutiron” as part of our efforts to contribute to the local community.
The aim is to teach children more about the superior raw
material called “iron” and convey the pleasure and importanceof manufacturing. We will continue to play an active role inthe building of a sustainable society while facilitating both ourdefensive and proactive CSR activities, just like the two wheelsof one cart.

Business Update

What do you think about the relationship between Aichi Steel and its suppliers?
Our basic stance is to establish a win-win relationship with
our suppliers and to work together for coexistence and coprosperity. For that purpose, we need to work cooperatively
with our Group companies and business partners to build
a robust supply chain system through the reform of our
production processes. We have held various events, including

CSR lecture meetings, to enhance our suppliers’ understandingof our basic stance towards them. I want to continue to makeefforts to promote communications with our suppliers, suchas regular visits to them, and work together to address thechallenges facing us in terms of CSR, as well as manufacturing.

Finally, please tell us about your aspirations forthe future.
There are worries about the risk of an economic downturn in fiscal
2011 because of the Great East Japan Earthquake. We expectthat due to rising interest in compact cars and eco-cars, theautomobile industry will see a decrease in the quantity of specialty
steel used per vehicle. For ensuring the sustainable growthof our company under these circumstances, it is essential toaccelerate the Group-wide efforts of “reengineering,” developing
new products, and creating new markets. The key to success is a“workplace capability” for which individual employees need to play
an important role. I am confident that if this workplace capability
can be used to maximize the effects of reengineering, we will havea bright future ahead of us.
In terms of manufacturing and CSR activities, we need to becomea “company of choice” for our stakeholders, or we will not be able
to survive in the future. If we can be a “globally-valued company,”
which is continuously wanted and loved by local communities
around the world, it will also be a source of pride for our
employees. I truly hope that Aichi Steel will be such a company
group. As the first step to achieving this goal, I want to create aworkplace environment in which individual employees always treat
others with a gentle smile and kind words, as in the saying, “Wagen
Aigo. *”
*Wagen Aigo :a Buddhist term referring to “even if you are in moments of pain, always treat others with a gentle smile and kind words.”

AICHI STEEL REPORT 20115

Message from
Business
Overview
the President
Corporate Profile[Establishment]
March 8, 1940
[Capital]
25,016 million yen (as of March 31, 2011)[Representative] Takahiro Fujioka, President[Employees]
2,360 (as of March 31, 2011)[Business Description]
Production and sale of specialty steel products, forgings andelectromagnetic products[Offices]
Head Office: Tokai City, Aichi Pref., Japan
Sales Offices: Tokyo/Osaka/Fukuoka
Overseas Offices: Shanghai/Silicon Valley
Plants: Chita/Kariya/Forging/Higashiura/Gifu/Seki[Customers and Suppliers]
Major Customers: Toyota Tsusho Corporation/Toyota Motor
Corporation/Aisin AW Co., Ltd.
Major Suppliers: Toyota Tsusho Corporation/Mitsui & Co., Ltd.
Electromagnetic products/
TetsuRiki-AgriUsing our know-how in specialty
steel manufacturing, we develop
electronic components, magnets
and sensors. In addition,“TetsuRiki-Agri,” which promotes
plant growth through the latentpower of iron, has also beendeveloped.

Major Products
Specialty steel
Specialty steel is manufactured byadding alloys and metallic elements
to iron to improve material properties,
such as strength, hardness, toughness,wear resistance, corrosion resistance.
[Example products] structural steel, free-cutting
steel, spring steel, etc.

Business Update

Stainless steel
Tough and corrosion-resistant stainlesssteel is used in applications relating towater, such as dams, sluices and ships.
It is also used in chemical and nuclear
power plants, as well as in construction
materials and everyday utensils.
[Example products] Stainless steel shapes, round bars,
etc.

[Example products] MAGFINE, MI sensors,
TetsuRiki-Agri, TetsuRiki-Aqua, etc.

■Sales Mix (Consolidated)
Electromagnetic products and others
4.8％

Forgings
Forgings, produced by pressing
and forging specialty steel, areused in automobiles, construction
machines and manufacturingmachines that require strength anddurability.

Forgings
39.8％

Steel
(Specialty steels/
stainless steels)
55.4％[Example products] Crankshafts, differential
ring gears, rear axle shafts, etc.

Please refer to our Website

Results for Fiscal 2010
Consolidated net sales: 215,454 million yen

http://www.aichi-steel.co.jp/ENGLISH/pro_info/index.html

Aichi Steel Group
Subsidiaries in Japan (9 subsidiaries)- Aiko Corporation- Aichi Ceratec Corporation- Omi Mining Co., Ltd.
- Aichi Techno Metal Fukaumi Company- Aichi Steel Logistics Co., Ltd.
- Aichi Information System Company- Aiko Service Co., Ltd.
- Aichi Micro Intelligent Corporation- Asdex Corporation

Please refer to our Website

6

AICHI STEEL REPORT 2011

Overseas subsidiaries (9 subsidiaries)- Aichi Forging Company of Asia, Inc. (AFC)- Aichi Forge USA, Inc. (AFU)- Aichi Europe GmbH (Ae)- Aichi International (Thailand) Co., Ltd. (AIT)- Shanghai Aichi Forging Co., Ltd. (SAFC)- PT. Aichi Forging Indonesia (AFI)- Aichi Magfine Czech s.r.o. (AMC)- AMIT, Inc.
- Aichi Korea Corporation (AKC)

http://www.aichi-steel.co.jp/ENGLISH/com_info/a_group.html

Feature Story 1

Responding to the Great East
Japan Earthquake
Aichi Steel offers its heartfelt
sympathies to everyone affected by
the Great East Japan Earthquakethat struck the northeast region of
the country on March 11, 2011.
We will provide every possible
assistance toward a quick recoveryof the disaster-stricken areas.

Our response to the outbreak of the crisis
Immediately after the earthquake hit on March 11, our Tokyo
Office, which suffered a tremor with an intensity 5 on theJapanese seismic scale, operated its Safety Confirmation System.
As a result, the safety of all our employees (including those away
on business) and their families, as well as all the facilities, wereconfirmed.

Our assistance activities*This is a system that allows employees to take a leave of absence when they are ill
or injured, when they are affected by a disaster, or when they engage in volunteer
activities.

Recently, stainless steel, which is excellent in durability, corrosion
resistance, and life cycle costs, has been widely used for theseismic strengthening of buildings. Our stainless steel shapes had
been used to increase the earthquake resistance of the Kakuda
Pumping Station (sewage treatment facility in Kakuda City, Miyagi
Pref.), constructed in September 2009, so that the facility canwithstand an earthquake with anintensity of upper-6. As a result,the facility survived the Great
East Japan Earthquake, providing
sewage disposal services to local
people.
Earthquake-proof structure of Kakuda
City’s sewage treatment facility

Feature Story

We implemented various assistance activities, including the
donation of money and resources, the provision of vehicles to theaffected local governments, volunteer activities, and production
support for affected companies. We have also provided
continuing support by participating in disaster-relief volunteer
activities organized by the Toyota Group Disaster Volunteer Net.
Following this massive earthquake and tsunami, some employees
used our welfare leave system* to raise money for helping disastervictims, sort clothing and other relief supplies, and engage inreconstruction assistance in affected areas.

Proposal for society – widespread use of stainlesssteel for the seismic strengthening of buildings

Safe and reliable products
To prevent the mixing of radioactive materials into our products,
we inspect all the iron scrap (raw materials) we receive and all themolten steel samples in the steel-making process. If radioactive
materials exceeding standard levels are detected, they are dealt
with according to the Company’s regulations.

Donations
Aichi Steel
Monetary donations by the Company: 20 million yen
Fund raising by employees: 2,759,606 yen
Relief supplies (clothes, retort packed rice, hardtack, medical
products, etc.)
Vehicles (seven Toyota Vitz to Miyagi and Iwate pref.)Group companies
Combined monetary donations by Group companies: 8,816,147 yen
Fund raising by employees: 1,653,795 yen
Relief supplies (masks, flashlights, drinking water, etc.)
Others: Aichi Steel Logistics carried relief supplies provided by
Tokai City (Aichi Pref.) to Kamaishi City (Iwate Pref.) on March 13.

Aichi Steel Logistics’ drivers
engaged in emergency
transportation

Monetary donation to the Philippine
Red Cross by Aichi Forging
Company of Asia, Inc. (AFC)VOICE
We will provide all possible
assistance to affected areas
Satoshi Nagiri, Chief of Staff
Human Resources Dept., Human Resources Div.
Thanks to the Company’s understanding and cooperation,
I used the welfare leave system to visit Ishinomaki City
(Miyagi Pref.) and Kamaishi City (Iwate Pref.) between
May 4 and 14, 2011 in order to help the earthquake
victims. I decided that I had to “do something for thedisaster victims,” and I visited affected areas as a Boy
Scout leader and helped with clearing and scraping out
mud from houses damaged by the tsunami. To provide
the assistance that meets the need of sufferers, we held
discussions with those who need our help before starting
work. Some local residents thanked us in tears, and I wasvery happy that we were able to be of some help to them.
Most of the affected areas are still short of workers, andmuch of the work there can be done by anybody. I hopethat more people can visit
there and lend a helping hand.
I’m also determined to visit
again to engage in activities
to help local people recoverfrom the disaster.
Visit to a disaster-stricken school (Mr. Nagiri on the right)

AICHI STEEL REPORT 20117

Feature Story 2

Passion for the Constructionof No. 3 Bloom Continuous
Casting Machine
The construction of No. 3 bloom continuous castingmachine (known as “No. 3 CC”), which will become thecenterpiece of Aichi Steel’s specialty steel manufacturing,
was completed in June 2011. Mr. Yamaguchi, Directorof Aichi Steel, talks about his passion for No. 3 CC which
undergoes the large-scale updating in about 30 years (thesecond-time experience for him).
Kenzo Yamaguchi
Director, Aichi Steel Corporation
Joined Aichi Steel in 1979, and engaged in theconstruction of No.1 CC in his second year at thecompany. Since then, he has been assigned to
specialty steel production technology. In 2010,
he was appointed as a Director of Aichi Steel.

Evolving Continuous Casting Machine
The construction of No. 3 CC for specialty steel is the first stepin reforming the production processes into an integrated steelmaking process. We are currently working on the reform of our
production processes under the slogan “4S,” which represents
Simple, Slim, Short, and Straight. With increasingly intensified global
competition and due to the capacity limitation of the aging No. 1
CC, we launched a project to construct No. 3 CC, which will enableimprovements in quality and productivity and a reduction in CO2emissions by integrating the upstream process of specialty steel
making to directly connect the electric arc furnace/smelting process
to the rolling process.
I had a chance to get involved in the construction of a continuous
casting machine for the first time in some 30 years. My primaryconcern is “pursuing the world’s best quality” as a global
manufacturer. In other words, we need to construct a facility thatenables a perfect steel-making process that is free from quality-

related losses or downstream operations. To this end, the divisions
responsible for production engineering, technical development,
and facility engineering, and Chita Plant worked together from anearly stage to create an easy-to-operate high precision facility, by
carrying out research and development and repeatedly performing
simulations using the existing No. 1 CC.
Our objective is not a one-off improvement of the facility. To achieve
the world’s best quality products, we have introduced a significant
amount of the latest equipment and measurement technologies
that enable us to move ahead of the times and carry out continuing
development and evolve steel making itself. In that sense, No. 3 CC
is still under construction as an evolving CC, although the ceremony
to celebrate the completion of the CC was held in June.
No. 3 CC will soon be put into full-fledged operation. I renew myresolve to work together with other staff to make optimal use of the
facility, which is the fruit of many years of our concerted efforts.

Major feature of No. 3 CC
Three-strand machine with higher
production capacity
A major feature of
No. 3 CC is that it
is a three-strand
continuous castingmachine, delivering
higher productivity
than the conventional
two-strand type.

8

AICHI STEEL REPORT 2011

Visitor-friendly factory
No.3CC is visitor-friendly and safety-conscious. The factory has some sections
from which helmet-less visitors can see
working processes through windows.
From the design phase of the facility,
special consideration was given to thelocation and size of these windows,
through which visitors can watch thesteel-making process.

Development of young people by offering a chance at the job
I believe that the construction of No. 3 CC is a good chance foryoung engineers to develop themselves. It is an important task forthem to set a high goal and try to develop the element technology
necessary to achieve the goal. For engineers, it is a challenging andvery meaningful task to incorporate the technologies developed bythemselves into a new facility and achieve results. It also gives thema chance for further growth. That’s why during the construction of
the new facility, I maintained the basic policy stance of involving
young engineers and respecting their ideas and opinions as muchas possible. Of course, that does not mean everything is left tothe young engineers. As one of the senior engineers, I participatedin discussions about what equipment or functions they thought
necessary and why they thought so, and we conducted thoroughdeliberations to the satisfaction of all those involved.
The results of No. 3 CC, constructed through the enthusiastic anduntiring efforts of the young engineers, have yet to be seen. If it
proves to be a success, I will share the pleasure with everyone, andif it proves to be a failure, I will think about why it goes wrong on an
equal footing with the young engineers. We will continue to work
together until desirable results are brought about. I think that thisapproach will really help the development of our younger engineers.
I believe that my mission as an engineer is to pursue the world’s top
quality, carry on development towards the goal, and also provide
the younger generation with a place and an opportunity to also dothe same.

Feature Story

Evolving eco-factory
I understand that it is the responsibility of those engaged in specialty
steel making, which requires a large consumption of electricity, topursue eco-friendly manufacturing activities and make our plants
more environment friendly. Regarding the construction of No. 3 CC
as a perfect opportunity to “go more green,” we have introduced
energy-saving technology-based equipment, and we will also makecontinued efforts to reduce CO2 emissions by promoting the reformsof all production processes under the “4S” slogan—Simple, Slim,
Short, and Straight. No. 3 CC is an eco-factory, and you will beable to see environment-friendly design in many places around theplant. Our efforts to create an ecologically sympathetic environment
include the adoption of green parking and rooftop gardening, andenergy saving by taking advantage of natural light and installing LED
lighting in the main areas of the factory.
We have just started our activities at No. 3 CC. Realizing that it is asymbolic and high-profile factory for Aichi Steel, we will continuously
strive to make it evolve into a more advanced eco-factory.

Better workplace environment

Rooftop gardening

Various efforts have been made to improve the workplace environment.
Wide glass windows provide
such abundant bright naturallight that employees canwork without turning on thelights during the daytime. A
special ventilating system has
also been installed to release
the heat inside.

As an eco-factory, we havepromoted rooftop gardening.
TetsuRiki-Agri, which
encourages the growth ofplants through the latentcapability of iron, has beenused to create a garden full oflush greenery.

AICHI STEEL REPORT 20119

Feature Story 3

Our Challenge to Save Rare Earthand Other Rare Metals
Mining and extracting rare earth and other rare metals place a great pressure on theenvironment. Aichi Steel has promoted efforts to reduce the use of rare resources for asustainable society.

Dysprosium-free heat resistant magnetic powder*Dysprosium is a rare earth element. At present, Japan totally depends
on imports from China for this metal. Addition of a small amount of Dy
is indispensable for ensuring high magnetic force of neodymium-basedmagnets at high temperatures.

14

Br/kG

Magnetic Force (→higher)

Our bonded magnet, “MAGFINE,” contributes to the
reduction of motors in size (50% less volume thanconventional models) and weight (40% less mass thanconventional models). In June 2010, we developed aneodymium-based anisotropic bonded magnet, a newalloy that can be used at temperatures of up to 150°C
without use of the rare earth Dysprosium (Dy).* Thismagnetic powder, which ends the need for Dy (about 5%
required at 150°C), is a groundbreaking invention, thereby
making a significant contribution to resolving the issue ofscare resources management.

15

13

MF15P

MFP-15AC
Standard

MF18P

12
New MAGFINE
powderStandard
11
12

14

16

MFP-19AC
Dy addition

18

20

22

iHc/kOeHeat Resistance (→higher)

The new Dy-free alloy has an equivalent heat resistance anda stronger magnetic force compared to the standard

VOICE
Chisato Mishima, Chief of Project (left) and Masao Yamazaki (right) Electro-Magnetic Products, Development Div.
The use of “MAGFINE” had been limited to car seat motors and motors for home electrical products at temperatures of up to 120°C.
The heat resistance property of a neodymium magnet is determined by how high the coercive force of the magnetic power is.
Magnetic coercivity is usually enhanced by adding Dysprosium (Dy). This time, however, we have found that the magnetic coercive
force can be significantly improved by forming a uniformly-dense nonmagnetic grain boundary
film in the grain boundary of the MAGFINE magnetic power.
Now that this discovery has enabled the use of MAGFINE at temperatures of up to 150°C,
MAGFINE can be applied to every type of automotive electronic control unit, including ABS(Antilock Brake System), EPS (Electric Power Steering), and fuel pumps. We expect that themagnet size reduction will eventually lead to the further downsizing and weight saving of in-car
motors necessary for the future development of eco-cars.

10

AICHI STEEL REPORT 2011

Molybdenum* (Mo) is often used as a raw material of speciality steel for vehicle
gears and shafts. However, we have developed Mo-free steel with high strength andmachinability equal to conventional Mo-added steel. We are promoting environmentfriendly manufacturing that facilitates the further development of automotive
manufacturing by pursuing both alloy saving and higher component performance.

Strength (→higher)

High-performance gear steel without useof the rare metal Mo

SCM420

Our developed
steel(JIS Chromium
Molybdenum
Steel)

SCr420(JIS Chromium Steel)*Molybdenum (Mo): One of the rare metal elements, and used as a raw material of specialty steelmaking toenhance the performance of automotive gears and other components that require high strength and toughness.

Quantity of Mo added (→higher)
Our newly-developed steel has a strength equal to SCM420
while reducing the quantity of Mo to the level of SCr420.

VOICE
Yuji Adachi, Senior Chief of Staff Development Dept. No.1, Technical Development Div.

Feature Story

Gears used for automobiles and industrial machinery are very important parts
that require highly manufacturability and durability. While ensuring the required
properties, however, we needed to promote the saving of natural resources
consumed for gear steel.
In developing this new steel, we took care to ensure that the product isversatile and can be used for various types of gears. As a result, we succeeded
in developing a product that is adaptable to a wide range of applications.

Duplex Stainless Steel Shape
EN1.4362
Strength (→higher)

We have developed duplex stainless steel shape (EN1.4362), which has thecharacteristics of, compared to austenitic stainless steel for general-purpose
applications, being low in the content of the rare metals Nickel* (Ni) and
Molybdenum (Mo); being equal or high in terms of corrosion resistance; andbeing double in strength. The development of duplex stainless steel shape, which
contributes to resource saving, is expected to be applied to offshore engineeringand various types of factories, as an alternative to conventional SUS316L.

23Cr-4Ni-0.3Mo

SUS304

SUS316L

18Cr-8Ni

18Cr-12Ni-2Mo*Ni: one of the rare metals. Used in metallic plating and as a material for coins because of its high corrosion
resistance.

Corrosion resistance (→higher)
Compared to general-purpose SUS304 and SUS316L, ournewly-developed product is low in the content of Ni and Mo; isequal or high in corrosion resistance; and double in strength.

VOICE
Kazunori Goto, Representative Manager Development Dept. No.2, Technical Development Div.
Our mission for this development was to commercialize duplex stainlesssteel shape that is superior in strength and corrosion resistance while at thesame time saving resources, ahead of our competitors across the world. In
developing duplex stainless steel shape, we took care to ensure that it canbe used in a wide range of applications. We expect that our unique duplex
stainless steel shape will help create a new market.

AICHI STEEL REPORT 201111

Feature Story 4“Lesson about Iron”~ Learn, Discover, and Experience ~Marking the 70th anniversary of our founding,
Aichi Steel launched a project to visit local schools
to give a “lesson about iron” to children who will
support the next generation in Tokai, a city of iron .
The aim is to encourage children’s interest in “iron”
and “monozukuri” (manufacturing) through theexperience of making something related to iron.
In October 2010, lessons about iron were given to
fifth graders (a total of 308 pupils in nine classes)
in three elementary schools in Tokai City, as partof a 90-minute curriculum. We visited schools andtaught children about iron, a metal that plays suchan important role in everyday life, and its potential
through lectures and experiments in an enjoyableand easy-to-understand way.
In fiscal 2011, we will give a “lesson about iron”
to all the elementary schools (12 schools) in Tokai
City.
In cooperation with:
Tokai City Board of Education; Aichi University of Education,
Department of Technology Education (Prof. Hideki Shimizu);
The Japan Iron and Steel Federation; Nippon SteelCorporation, Nagoya Works; Daido Steel Co., Ltd., Chita
Plant. (No special particular order)

12

AICHI STEEL REPORT 2011

Learn, discover, and experience
A “lesson about iron,” consisting of a lecture and a workshop to
make a magnet, was offered with an emphasis on the concept “learn,
discover, experience.”
To make a magnet, iron powder is mixed with an adhesive agent,

and after the adhesive dries, it is magnetized using a strong magnet.
In this process, the children are so surprised to see how quickly ironis magnetized. We hope children can find pleasure and develop aninterest in “manufacturing” through our lessons.

Learn

Discover

Experience

Learning about the roles played by iron inindustry and the properties of iron

Discovering (watching and touching) iron

Gaining firsthand experience of “manufacturing”
through an experiment or workshop

Lessons fully supported
by our employees- I really enjoyed the lesson. I was surprised to see how quickly the iron is magnetized
to become a magnet.
- It was good that our group’s instructor gave us an easy-to-understand explanationand that we were able to create our own magnets.
- I want to learn more about why magnetization occurs that quickly.
- I wondered why a magnet made of iron can attract iron.
- When I found that Tokay City is renowned for steel, I became interested in local
industries and in “creating products.”- I found that in Tokai City there are three steel-making plants. I wanted to learn more
about what is being manufactured in those plants.
- The entire surface of a plate magnet attracts metal clips, but for a round-shaped
magnet, only its north and south poles attract them. Why is that?

Feature Story

To ensure every child can make his/her own
magnet in a simple and safe manner, nine
employees from our company were sent
to each class as lecturers and assistants.
After the lesson, children submitted reports(including questions), and our staff gave plentyof feedback about their reports in order toencourage children’s interest in “iron” and“manufacturing.”

The Voices of Participants

VOICE
Participating in a “lesson about iron” as an instructor
Noriaki Iwamoto, Chief of Staff Development Dept. No.3, Technical Development Div.
When we were thinking about the project to give a “lesson about iron,” we placed priority on an“experience-based” lesson, in which every child can participate in making things. This is our firstattempt, and there were many hurdles to be overcome before implementing this project, such as
ensuring children’s safety, arranging the teaching methods, and improving our teaching skills. So,
I am very delighted to report that we gave lessons about iron to children as planned and were able
to encourage their interest in “monozukuri”. The workshop to create a magnet — magnetizing inparticular — brought new discoveries and surprises to many children. As a project member, I wasable to enjoy a great sense of fulfillment and satisfaction. I’m so happy to have the chance to bringiron closer to children and convey the pleasure of making things through these lessons.

Please provide more fresh and exciting experiences to children
Mr. Tatsuhiko Ono (right) Ms. Misaki Hanada (middle) Mr. Masahiro Yokoyama (left), Teachers Yokosuka Elementary School, Tokai City
The “lesson about iron” was a fresh, exciting, and meaningful experience for both children andteachers. This was our first experience to give such an experience-based lesson, but under thepainstaking guidance of lecturers and assistants, all the children were able to finish creating their own
magnets within a limited time, and shared the excitement of making one. After the lesson, they began
to take an interest in iron and tried to find things that contained iron in the classroom. They came tohave a very close feeling towards iron. In the lesson about iron next year, we would like you to give thechildren a more detailed explanation about the mechanism of magnetization to stimulate their curiosity
about science. As children rarely have the chance to learn about iron through a workshop, we dohope you can come to our school again to give another exciting experiment-based lesson to children.

AICHI STEEL REPORT 201113

Projects Implementedd
as Part of Our 70th Anniversaryy
Celebrations
Feature Story 5

To mark the 70th anniversary of our founding, we held various events forour stakeholders to convey our gratitude for their great support for us.

For our customers

For our shareholders

Appreciation event for the Aikokai
Association

Dividends

In line with a meeting held by the National Aikokai Association in
November 2010, we held an event in a Nagoya hotel to show ourdeep gratitude to our customers. At the event, a timeline showing
the history of our company was displayed, a video was presented
to review 70 years of our company’s history, and panels of new
products were also exhibited.

In commemoration of our 70th anniversary and as a token of
appreciation to our shareholders, we paid a dividend of one yen
per share of our common stock, in addition to an ordinary yearend dividend (five yen) for the fiscal year ended March 2010.

For our employees and their families
Aichi Fureai Festa

Aikokai Association: an association organized by the trading companies
and distributors handling our products

For our suppliers
Appreciation event for the Hokokai
Association
In line with a general meeting held by the Hokokai Association ina Nagoya hotel in May 2010, we held an event to show our deep
gratitude to our suppliers. We also promised further cooperation
to promote mutual prosperity.

Hokokai Association:
an association organized byour major suppliers

14

AICHI STEEL REPORT 2011

In February 2011, we held the “Aichi Fureai Festa” jointly with ourlabor union to celebrate the 70th anniversary of the company’s
founding and the 65th anniversary of the labor union’s formation.
At the festival, various events were held to wish for the continued
success of our company and the happiness and growth of ouremployees, and to thank our employees, and their families, aswell as the local people who have provided support to us.

For local communities

Others: PR design

Clock tower presented to Tokai City

“Aichi Steel Corporate Message”
and “Symbol for the 70th
Anniversary of Our Founding”

In November 2010, we presented a clock tower to Tokai City,
which was installed at the rotary in front of Meitetsu Shurakuen
Station, to contribute to the beauty and revitalization of the local
community. We hope that the clock tower will become a landmark
in front of Shurakuen Station.

In March 2010, we invited message and design proposals fromour employees and their families, and the following message anddesign were chosen.

← Corporate message← Symbol

Unveiling ceremony with the participation of representatives
from the local community, local government, and ourcompany

Corporate PR design“Lesson about iron”
See Feature Story 4.

Support of forest restoration
In March 2011, we made a donation to the C.W Nicol Afan
Woodland Trust, a Japanese foundation working for forest
restoration in the town of Shinano in Nagano Prefecture. As
an official sponsor of the Trust, we will support its reforestation
activities that contribute toecological preservation.

Feature Story

Taking advantage of our 70th anniversary, we renewed our PR
design. The new design conveys Aichi Steel’s strong commitment
to contributing to the realization of the dream of mankind tobuild a peaceful and prosperous society through the harmonious
coexistence of nature and people.

Afan Woodland(Photo by Kimio Kawasaki)

VOICE
After the Completion of a Series of Anniversary Projects
Kiyoaki Kanamoto, General Manager General Affairs Div.
Prior to the planning of a series of projects to mark the 70th anniversary of our company’s founding, we
reviewed our conventional approaches to anniversary projects, and decided to hold separate eventsfor different groups of stakeholders to thank them for their support. To increase the satisfaction of all
stakeholders, we organized project teams for individual stakeholder groups to design, plan, and implement
the anniversary events.
As a result, I believe that due to the good teamwork of employees, we were able to achieve success in all
our anniversary projects, and that our events were enjoyed and appreciated by all the stakeholders. Throughthese projects, I have realized the fundamental strengths of our company, which are supported by theenthusiasm and commitment of individual employees. We, at the General Affairs Division, were very pleased
to be a part of the anniversary projects, and would like to express our heartfelt appreciation to all those
involved.

AICHI STEEL REPORT 201115

CSR Management
Basic policy

Cultivation of the “1S” culture

We practice CSR management to gain trust from all our
stakeholders by implementing measures in accordance with theMedium-Term CSR Plan based on the 2015 CSR Vision.

CSR Enhancement Month
To disseminate and enhance CSR consciousness throughout
the Group, we set October as the Aichi Steel Group CSR
Enhancement Month and organize various events.
CSR lecture
As part of our CSR education, we
invited Ms. Motomi Hashimoto of
Nomura Securities Co., Ltd. togive a lecture for our directors,
managers, and group company
directors on the theme, “Market
Expectation for CSR Activities.”

In line with CSR Enhancement Month, we issued the “1S
Guidebook” to encourage every Aichi Steel employee tothoroughly understand the concept of “1S” and to promotecultivation and settlement of the “1S” culture. The 1S Guidebook
is used to help employees’ understanding and for workshops andtraining at worksites.
We also revised the Aichi Steel Action Guidelines/Aichi Steel
Employee Action Guidebook into the “Guidebook of Corporate
Action Guidelines” with the aimof making it more reader-friendly
and to match changes in the law.
We will strive to gain the trust of
our stakeholders by undertaking
CSR-oriented action to ensure
thorough compliance.

Group Company Pickup

NEW“1S” workshop
We held a workshop to raise the awareness of directors andmanagers concerning matters requiring care associated withchanges in society, so as to further promote the “1S” culture.
Themes: “Worksite Management (creating healthy work
environment, preventing sexual/power harassment)”; “Compliancewith the Industrial Safety and Health Act.”
Clean Aichi Day
A total of 515 employees at ten sites cleaned the neighborhoodsof their worksites before work in the morning, at lunch breaks andafter work. Our group companies also held a similar program, inwhich 265 people participated.

AIT (Thailand)“1S” culture cultivation
In July 2010 AIT started
inserting the 1S symbol in
employee ID cards and also
created a mobile card inThai to help every employee
understand the conceptof “1S.” The “1S” concept
is repeatedly explained atmorning meetings so as topromote its dissemination.

■CSR concept

Sound corporate culture that is brimming with a desire to take on new challenges“1S” Culture/AICHI Spirit*3/Action Guidelines*4*1 J-SOX: The Japanese version of the U.S. SOX (Sarbanes-Oxley Act). This Act was created using SOX as a model and was designed to improve the accounting auditing system and internal
control of companies in Japan.
*2 Internal control: Activities and systems to control, monitor, and secure the soundness and efficiency of operations, as part of corporate governance, by following standards and procedures
established for individual operations.
In particular, standards and systems to prevent improper financial accounting should be established, and auditing should be conducted to verify that they are operated properly.
*3 AICHI Spirit: A slogan presenting, in an easy-to-understand manner, the management philosophy, sense of value, and other basic ideas upheld by Aichi Steel as its corporate “genes”
inherited from predecessors (established in July 2006).
*4 Aichi Steel Group Action Guidelines: Practical guidelines that must be followed during business activities (revised in January 2007)

Please refer to our Website

16

AICHI STEEL REPORT 2011

http://www.aichi-steel.co.jp/ENGLISH/com_info/index.html (Aichi Steel Group Action Guidelines)

○ : Target or significant result achieved△ : Target not achieved or poor activity result
× : Serious problem or improvement suggested

Medium-Term CSR Plan priority issues and major
activities in fiscal 2010
Category

Priority items

Priority activities in fiscal 2010

Ⅳ Employees/
corporate culture
supporting growth

8. Human resources development
and creation of motivating
worksites to improve job quality

9. Creation of a safe/comfortableworkplace environment◇ Organizational management aiming to improveabilities and motivation• Message from senior management and cultureof “learning from each other, developing eachother, and correcting fundamental posture .”• Communicated the message from the top
and the concept of A3 Principle to young
employees throughout the company.
◇ Promoting operation of OSHMS (Occupational
Safety & Health Management System)

Future plan
Promote CSR more deeply and widely
throughout the supply chain.
(Secondary suppliers, overseas
subsidiaries)○○

Related the seven core
subjects of ISO 26000
Organizational
governanceFair operating
practices

Promote integrated sales expansion
activities through sales/engineering
cooperation.
Promote development of high-strength
steel(Con rods, gears)

Consumer issues

Start all-Toyota Working Group activities.
(Leader: Aichi Steel)

The environment

Make donations to C.W. Nicol Afan
Woodland Trust.
Continue “Lesson about Iron” tocommunicate joy of manufacturing.

Community
involvement anddevelopment
The environment

List up risks in departments andsubsidiaries.

Fair operating
practices

○

○

○

1

△*

Increase in compliance-related incidents is Fair operating
practices
expected.
Human rights→ Prevent recurrence.
Improve efficiency mainly in furnaces and The environment
cooling water pumps.

○

Continue activities.

Labor practices
Human rights

Start re-education on basic matters.
(Risk Prediction, OSHMS)

Labor practices

Governance

Ⅰ Activity management 1. Diffusion of and strict adherence ◇ Promoting activities for diffusion of 1S:
Distributed 1S Guidebook.
to CSR Policy among all relevant
parties, including suppliers◇ 70th anniversary activities: Donated a clock
tower, organized the “Aichi Fureai Festa”.
◇ Organized CSR lectures.
◇ Development of materials/parts with advanced
Ⅱ Contribution through 2. Development and provision offunctions ahead of automobile evolution.
business activities
products/technologies that can• Increased sales of products for eco-cars andsatisfy eco-minded customers
HVs.
• Developed high-strength, light-weight
products to contribute to the next-generation
environmental vehicles.
3. Innovation for environment◇ Evolving into a recycling-oriented enterprise by
pursuing the 3Rs.
conscious manufacturing and• Contributed to resources recycling within
contribution through resources
Toyota Gr.
recycling• Developed magnets containing no Dy, a rareearth.
4. Community activities resulting in ◇ Planning unique, attractive events andenvironmental/social contribution
donations◇ Enhancing regional contribution activities• Held a workshop “Lesson about Iron” forelementary school children.
• Made donations concerning support forbiodiversity.
5. Prevention of risks pertaining to ◇ Implementing thorough compliance according
Ⅲ Sound corporate
management
environmental changes
to social trends.
• Revised the employees Action Guidebook.
• Reviewed risk maps for the entire Company.
6. Enhancement of internal control ◇ Sharing common goals throughout the Group• Hosted “1S” workshop.
systems and improvement of• Made compliance risks visible.
compliance consciousness
7. Activities to preserve local and◇ Continuing activities to prevent global warming
global environments
and preserve the environment• Reduced CO2 emissions by improving heatefficiency.

Assessment

○

2

△*

■Reasons for judgments of “Target not achieved or poor activity results” concerning priority activities, and countermeasures*2 Creation of safe/comfortable workplace environment
Reason why the target of “Promoting operation of OSHMS” was judged unachieved:
Effort to make worksite strengths/weaknesses visible was judged as “Target not achieved” insafety/health assessment of priority activities for both inside the Company and the General Safety
Association.

*1 Compliance-related incidents
Fiscal year
Number of incidents related tocompany activities
Total

2006

2007

2008

2009

5

3

2

3

2010
5

11

5

7

7

8

Causes1) Lack of understanding of the contents of modifications in laws/regulations
2) Increase in the number of reports due to improved compliance awareness ineach department
3) Improvement in problem-finding ability due to enhanced internal auditing
Measures
1) Timely discovery and proper interpretation of modifications in laws/regulations
2) Explaining interpretation/application of laws/regulations in internal auditing
Conclusion
Overall compliance level is judged to be improved.

Countermeasures1) Since weaknesses are clarified in both inside the company and the General Safety Association,
overcome the weaknesses.
2) Inside company: Teach the concept of OSHMS and provide ability improvement education.
3) General Safety Association: Provide instructions and support for 4 companies with lowest
evaluations.

■CSR system
CSR Committee
Chairperson: President
Members: Standing Directors and Corporate Auditors
Secretariat: Corporate Planning Division, General Affairs Division

Subjects discussed
1) Medium-Term CSR Plan, annual policy, and their progress2) Compliance3) Risk management
4) Social contribution5) Other CSR-related matters

Relevant parties
Our Company GroupOur major suppliers

Training
1) CSR training
For our directors and employees, directors of our Group companies, executives of our major suppliers
2) Action Guidelines workshop(Mission statement, CSR Policy, compliance, risk management, etc.)
Training sessions are provided for all employees at each job ladder (total eight ladders.)

AICHI STEEL REPORT 201117

CSR Management
Corporate
Governance
Basic policy

Internal control system

Upholding the CSR basic policy “We will contribute to thesustainable progress of society and the Earth through our soundcorporate activities,” we are striving to establish/maintain an
organizational structure capable of responding promptly tochanges in the business environment and a fair and transparent
management system. By doing so, we hope to gain the trust of
our shareholders. We aim to become a company with dignity by
sharing the AICHI Spirit, which represents the values and code of
conduct for our employees.

Meetings of the Board of Directors
and the Board of Corporate Auditors
The Board of Directors, consisting of the Directors appointedby shareholders, makes decisions concerning the company’s
critical issues from the viewpoints of necessity, legality, efficiency,
etc., after having discussions and mutual monitoring. Corporate
Auditors and the Board of Corporate Auditors then examine
whether there is any violation of laws/regulations in suchdecisions.
A regular meeting of the Board of Directors is held every month,and special meetings are called as needed, where important
decisions are made and the operating status of the Company isreported.

■Attendance rates in fiscal 2010

Meetings

Director
attendancerate

Board of Directors

16 times

97%

Board of Auditors

10 times

Corporate auditor
attendance rate
Standing
corporate
auditors

Outsidecorporate
auditors

100%

71%

100%

93%

Note: In addition to the above, a written resolution by the Board of Directors was issued.

■Corporate governance system

Board of Managing
Directors,
Management Committee(Deliberation ofcritical issues, etc.)

18

AICHI STEEL REPORT 2011

Whether the Basic Policy for the Internal Control System requires
revision or not is determined every year, and the operation statusis reported to the Board of Directors. With regard to compliance,risk management, and operational efficiency, improvement efforts
in 2010 were confirmed to be properly maintained/improved, andit was therefore decided to maintain the current basic policy.

Effective auditing
To ensure effective auditing, corporate auditors meet the
President and the Accounting Audit Team separately on a regularbasis to exchange opinions.
To enhance the internal auditing function, the Audit Department is
positioned to conduct internal auditing concerning mainly internal
control system development. Corporate auditors receive reportson the results of the internal audits undertaken by the Audit
Department.
The Accounting Audit Team conducts audits on internal control
concerning financial reports in cooperation with the Audit
Department, as necessary.
NEW

Revision of the “Action Guidebook for Directors”
In October 2010, we revised the “Action Guidebook for
Directors” to respond to revisions in the law and changes insocial trends. The revised guidebook was distributed to all our
directors and executive officers, as well as the directors of ourgroup companies, with theaim of helping them deepen
their understanding of theimportance of compliance bydirectors and the Company
itself.
Moreover, newly appointed
directors regularly participate
in a special seminar organizedby an outside institution.

Compliance
Promotion system“Compliance Close Call” activities

We aim to be a reliable company through protection of humanrights and compliance with laws and regulations, and byrespecting public decency. To enhance the overall compliance of
our Group, the CSR Committee — headed by the President —decides and reviews compliance policies on a regular basis.

Entire Company members were encouraged to report theirexperiences close to compliance violation and predicted risks, anda total of 414 cases were reported. These cases were presented
as cases requiring caution at the Compliance Liaison Meetings(four times a year) to discuss specific advice for each case.

■Compliance promotion system■Classification of cases

General Legal
Compliance Site
General Affairs Div.

Various department

Compliance education program
To enhance the compliance awareness of employees, we provide
education on compliance in the Action Guidelines Training for all
job ladders of employees. We also issue “Legal Affairs News” todeliver information about compliance issues closely related to ourdaily lives.

Issuance of Legal Affairs News:
6 times for employees (Themes: Information security
control, actions against antisocial forces, internal approval
procedures)
3 times for directors (Theme: Other companies’ cases ofviolation of laws involving directors)

NEW

Promotion activities for group companies
Aichi Group CSR/TQM Liaison Meeting was held in September
2010 and March 2011 to promote sharing of the status of CSR
activities within the Aichi Group. In February, group companies
filled in their second CSR self-assessment sheet to ascertain theircurrent status. We will continuously offer follow-up support.

Traffic
safetyPurchasing

Labor

Safety/environment

Other

Total

152

97

40

4

74

47

414

Operation status of the “Hotto” Lineand whistle-blower protection
Aichi Steel “Hotto” Line is a hotline system to encourage internalreporting of improper actions. During fiscal 2010, the “Hotto” Line
received nine internal reports. Reported facts were investigated
and the necessary measures to correct the improper actions
were taken. A notice was distributed throughout the Company toprevent recurrence.
Rules for operation of the Line and protection of the privacy of
callers are provided in the Corporate Ethics Rules, and are also
put on bulletin boards placed at employees’ restaurants, etcd., sothat all employees are made aware of them.

■Calls to “Hotto” Line
Fiscal year

2006

2007

2008

2009

2010

No. of calls

11

5

5

9

9

GovernanceTraining sessions for each job ladder:eight ladders (303 participants ranging from freshman
employees to managers)
CSR lectures, 1S workshop (See p. 16.)

Information
security
controlGroup Company Pickup

Asdex
Compliance workshops
Asdex provides quarterly compliance workshops
targeting all employees, separately for the head officeand the Higashiura Plant. At the workshops, actual cases
are presented under the themes of legal complianceand corporate violation, aiming to promote thoroughunderstanding of the importance of complying with laws
and regulations.

AICHI STEEL REPORT 201119

CSRManagement
Risk
Management/ Information Security
Progress status

Education on information security

We make efforts to develop a complete system to avoid risks
pertaining to our businesses, in response to changes in the businessenvironment. At the meeting of the CSR Committee in September
2010, the progress of risk management efforts was reported andfollow-up actions to be taken were confirmed. The risk items for theentire Company were reassessed and the risk map was revised.

Emergency drills
To be prepared for the occurrence of an earthquake, simulation
training for safety confirmation using mobile phones and e-mail washeld in August and a company-wide emergency drill was held in
September 2010. Led by the company emergency headquarters,
an information communication simulation using radios after setting
up a regional emergency headquarters, and a fire fighting drill were
held in collaboration with the Tokai City Fire Department.
Emergency drills are also held at our group companies.

AFC (Philippine)

Aichi Steel Logistics: Participated ina disaster transportation drill.

Governance

Information security promotion system
We have established the following rules to control confidentiality
and prevent leakages of private information.
• Document control rules• Information security control rules• Information disclosure rules• Private information protection rules, etc.
We carefully handle and strictly control any information held in the Company
or any Group company, and any information obtained from our customers,
suppliers or employees, etc., in accordance with our internal rules.

■Management system and roles of each department
Overall control

Director in charge of General Affairs Div.
s 0ERSON RESPONSIBLE FOR CONFIDENTIALITY MANAGEMENT

Administrative
departments'ENERAL !FFAIRS $IV AND )4 -ANAGEMENT $IVs #REATES AND REVISES MEASURES RELATED TO THE
MANAGEMENT OF CONFIDENTIAL INFORMATION
s !UDITS AND PROVIDES GUIDANCE ACCORDING TO THE CONFIDENTIALITYMANAGEMENT STATUS ACROSS THE ENTIRE COMPANY
s -ANAGES SYSTEMS BOTH TECHNICAL AND HUMAN ASPECTS

In each department

Role

Confidentiality
management
supervisor(General managers
of individual divisions)s !SSUMES ALL RESPONSIBILITY FOR CONFIDENTIAL INFORMATIONWITHIN THE DIVISION
s $ESIGNATES PEOPLE IN CHARGE OF CONFIDENTIALITY MANAGEMENTs (AS THE FINAL SAY IN CONFIDENTIALITY CLASSIFICATION
s $ESIGNATES EMPLOYEES AUTHORIZED TO CREATE TOP SECRET DOCUMENTSs )MPLEMENTS VOLUNTARY AUDITING OF CONFIDENTIALITYMANAGEMENT STATUS
s %STABLISHES RULES FOR THE DIVISION

Person in charge ofs !CTS UNDER THE AUTHORITY OF THE CONFIDENTIALITY
confidentiality management
MANAGEMENT SUPERVISOR(Manager or supervisor
$ESIGNATES CONFIDENTIALITY CLASSIFICATIONS AND SETS THE
named by the division
OPERATING RULES WITHIN THE DIVISION
general manager = Keys 7ORKS TO PROMOTE AND FULLY ESTABLISH CONFIDENTIALITY
person in laws/regulations
MANAGEMENT IN THE DIVISION
Representative
managers,
GMs, etc.

s &OLLOWS LAWS REGULATIONS AND COMPANY RULES RELATEDTO CONFIDENTIALITY MANAGEMENT
s 'IVES APPROVAL INSTRUCTION AND GUIDANCE RELATED TOCONFIDENTIAL INFORMATION USED IN THEIR LOCATION

Department employees s &OLLOWS LAWS REGULATIONS AND COMPANY RULES RELATED TOCONFIDENTIALITY MANAGEMENT
s 2EPORTS ACCIDENTS DAMAGE ILLEGAL ACTS AND
WRONGDOING TO HISHER SUPERIOR20

AICHI STEEL REPORT 2011

Recognizing the importance of information security control, weconstantly promote notification, education, and inspection of rules.
Particularly, we set May and October each year as “Information
Security Control Enhancement Months,” during which intensive
educational activities to improve employee awareness are conducted.
• “Clear Desk, Clear Screen” campaign• Information security control educational programs for each job
ladder (for 303 employees in 8 ladders)• Notification/confirmation of procedures for bringing in andremoving confidential information/information devices to andfrom the Company.
• Auditing of e-mails sent outside of the Company• Presenting cases from both inside and outside the Company todraw attention
NEW

Promoting information security
control in domestic group companies
In November 2010, a survey was conducted on our domestic groupcompanies using a self-assessment sheet containing 114 questionsin 15 categories concerning information security control. Basedon the results of the survey, direct hearings were held for somecompanies. We gave feedback on the survey results to all companies
in March, requesting the necessary improvements to be made.

Protection of personal informationand education
We experienced no incidents of personal information leaks in fiscal
2010. Educational programs concerning personal information
protection are integrated within “Information security control
education” and provided through training sessions for each job
ladder.
Please refer to our Website
http://www.aichi-steel.co.jp/ENGLISH/p_pol/indexl.html

Intellectual property protection Basic policy
Aichi Steel Group respects the intellectual property of all othercompanies, while also protecting its own intellectual property.

Education on intellectual property rights
We offer educational programs, mainly for engineers, in threestages according to their experience. The “Legal Affairs News”
focuses on copyrights, which sound familiar to most of us, toraise awareness and caution.
Fiscal 2010
Introductory program: 1st-year engineers (9 trainees), Practical program: engineers withexperience of 3 to 5 years (32 trainees)
Program for managers: provided at promotion to the management class (13 trainees)With Our Customers / Quality
NEW

Quality Management System (QMS)
Basic policy and quality assurance system
In accordance with our policy of “Quality First,” we strive toestablish a business structure trusted by customers on the basisof our ISO 9001 certification, and deliver attractive products thatmeet customers’ expectations and needs.
Under our Medium-Term Global Quality Plan 2012, we will makecompany-wide united efforts to establish a quality assurance
system that enables us to lead other companies in quality
competition.

Promoting quality improvement
activities in group companies
To support the quality improvement activities of mainly overseas
Group companies, a monthly TV conference is used to listen to
their problems and provide follow-up advice.
At the AVI-21 Exhibition held in November 2010, quality
improvement cases of five overseas group companies were
presented in panels and prizes were awarded for their activities,
thereby demonstrating the important activities of overseas Group
companies to all members.

■Quality assurance system
Board of Directors,
Management Committee,
Board of Managing Directors
Policy control
Quality Assurance Division

ISO Review Committee

Exhibition of quality improvement Presenting AIT (Thailand) with thecases at AVI-21
Gold Prize
Implementing activities
Quality Control Departmentof each plant

Quality/Technology Committee

ISO 9001
Our group companies have been striving to acquire ISO
certification. We will make continuous efforts to improve our QMS.

■ISO certification acquisition
Production engineering
departments

Relevant departments

Quality assurance activities
In fiscal 2010, we experienced no serious problems related toquality defects, etc. Quality losses decreased by approx. 30%
from the 2008 result. Based on a review of the results of quality
activities and the Medium-Term Quality Plan policies, we will
promote the actions listed below as our priority items for fiscal
2011 under the slogan, “Quality is the life of a company.”• Prevent occurrence of serious quality problems• Take actions in response to major changes(great earthquakes, No. 3 CC, etc.)• Address quality requests/complaints• Tackle higher targets in reducing quality losses• Enhance global quality control system
NEW

Quality education
Aiming to develop human resources with sufficient knowledgeof quality management from the viewpoint of customers, we
promote various quality-related educational activities, including
lectures by our important customers for younger staff members,
and held a meeting to explain past troubles/serious defects during
Quality Month in November 2010. In addition, we provided job
ladder-based quality education (for 215 employees in six ladderson the job ladder from freshmen to managers.)
In January 2011, the Process
FMEA* Workshop was held forengineers, inviting contributions
from external lecturers. About
50 people participated in theworkshop to learn more about
Quality lecture
process control.
*Failure Mode and Effect Analysis

Kariya Plant

ISO 9001

Apr. 1993

Chita Plant

ISO 9001

Dec. 1995

Forging Plant

ISO 9001

Nov. 1997

Electromagnetic products

ISO 9001

Mar. 1998

Dental materials

ISO 13485

July 1999

Dental materials

EC Directive

July 1999

Analysis & Testing Dept.

ISO 17025

Sep. 2007

Social Relations

Plant departments■Consolidated subsidiaries
Omi Mining

ISO 9001

Aiko

ISO 9001

Apr. 2005

Asdex

ISO 9001

June 2008

A

F

C

May 2002

ISO 9001

Apr. 2003

S A F C

ISO/TS 16949

Aug. 2006

A

I

T

ISO/TS 16949

Mar. 2008

A

F

I

ISO 9001

Nov. 2008

A

F

U

ISO/TS16949

Sep. 2009A

M

C

ISO/TS 16949

Scheduled to acquire in Sep. 2012

ISO/TS 16949 is a quality management system standard for automobile businesses.

Certification by third-party organizations
We have received various third-party labeling certifications for
product quality based on our QMS.
• JIS mark• Marks issued by shipping classification societies• Marks issued by TÜV(Technical Inspection Association in Germany)

JIS mark certification
maintenance audit

AICHI STEEL REPORT 201121

With Our Customers/Enhancement of CS
NEW

Gathering the opinions of major customers
A survey to gather our major customers’ opinions and evaluations
is conducted on a regular basis regarding the quality of our
specialty steel, forgings, and stainless steel products. Basedon this survey, we determine the quality issues that require
improvement and take actions, so as to further improve customer
satisfaction. The results of this program were also reported at
the ISO Review Committee meeting held in March. We will makecontinuous efforts to pursue spiraling enhancement of customer
satisfaction.

Issuance of “Action Guidelines for
Salespersons” to improve sales skills
In June 2010, to further enhance customer satisfaction throughimproved sales skills, the “Action Guidelines for Salespersons”
was issued. Actions that a sales person
should take, which have been taught
through OJT, are provided in theguidelines. To enable every salesperson
to provide high-quality services, newly
assigned sales persons are required toread the guidebook and ask questions
during their training.

NEW

Communication with our customers
In January 2011, New Year parties were held for the first time inten years in Tokyo, Osaka, and Nagoya, each of which had over
100 participants. Future outlook and strategies of our businesses
were explained, and the participants pledged mutual development
toward the realization of a sustainable society.

Providing educational opportunities
and enhancing awarenessWe offer various opportunities
to help our customers correctly
evaluate our products, such asworkshops and plant tours.
- Workshop hosted by Tokyo
Branch (Dec.)- Stainless steel seminar in
Okinawa and Hokkaido incooperation with the JapaneseSociety of Steel Construction(July, Feb.)
Explaining application cases ofreinforcing stainless steel

Access by customers
The various inquiries from customers are answered mainly
through our sales representatives. For our close-to-consumer
products, TetsuRiki-Agri/TetsuRiki-Aqua and dental magnetic
attachments MAGFIT, special toll-free phone numbers and e-mailaddresses are established for inquiries, to provide customers witheasy access.

Plant tours during fiscal 2010
A total of 2,762 people from our major customers visited ourplants in 357 tours. Our quality-related approaches wereexplained to them to deepen their understanding.

VOICE
Following the “Action Guidelines for Salespersons”
Naoki Sato Sales Dept. No.1, Toyota Sales Div.
The “Action Guidelines for Salespersons” contains only basic matters. Since we are seldom taught
basics, it is useful to confirm and share what is primarily important. The Action Guidelines consist of ten
basic attitudes for our sales activities including “meeting customers” and “making quick responses.”
All salespersons attended a workshop on the guidelines. Through the workshop, I found a problem
in my way of gathering information and announced in “My Action Declaration”* that I would visit thosecustomers with whom I was not able to make sufficient contact on a regular basis. During 2010, I had
the implementation status of my announcement reviewed every month in the sales department.
*Activity in which each salesperson announces and implements his/her tasks.

22

AICHI STEEL REPORT 2011

With Our Shareholders/Investors

Group Company Pickup

AFC (Philippines)
100% on-time delivery
In line with the commencement of operations of a newshipping site, AFC introduced a small-lot delivery system
and reviewed its inspection system. As a result, 100% ontime delivery was achieved. Introduction of the small-lot
delivery system has reduced man-hours required at ourcustomers, contributing to improved customer satisfaction.

Returning profits to shareholders andcreation of corporate value
We believe that one of the most important actions in business is
to return profits to shareholders.
To respond to the trust and expectations of shareholders,we will
make efforts to create attractive corporate value for investors
through establishing a high profit-earning foundation for key
businesses and promoting business structure reform focusing
on one and only products. We believe it is important to conductbusiness activities in accordance with our Mission Statement andCSR Policies, and to meet the expectations of all stakeholders.

Timely and proper disclosure
We strive to ensure timely and proper disclosure of our corporate
information for investors and to enhance the internal system
related to correct and fair information disclosure.
In fiscal 2010, to help deepen understanding of our management
and business strategies, we actively disclosed timely information,
taking the opportunities of the shareholders’ meetings, financial
results briefings, and press releases of the financial results.
Independent meetings with analysts and institutional investors
were also held.
Shareholders’ meeting (June)
Financial results briefing (May, Nov. in Tokyo)
Press release of financial results (Apr., July, Oct., Feb. in Nagoya, Tokyo)

Information disclosure is handled under the system below, toensure timely, complete and correct disclosure.

SAFC (China)
The 3rd Asia forge meeting
Forging Association delegation
visits SAFC
In September 2010 for the purpose of mutually improving
forging technologies in Asia, the 3rd Asia Forge Meeting
was held, and a forging association delegation consisting of
44 inspectors from seven countries visited SAFC. Though
the preparation for accepting the delegation was not easy
since their official languages were Chinese and English, it
was a good opportunity to have our customers actually see
our plant and help them deepen understanding of forging
technologies.

Social Relations

Disclosure■Information Disclosure Preliminary Review
Committee
Chair: Information manager (Director in charge of General Affairs Div.)

Administrative office (General Affairs Div.)

Members:
Managers of functions, including the head office, technical, marketing andproduction functions, appointed by the Chair; managers of departments from which
the disclosed information originates and related departments

AICHI STEEL REPORT 201123

With Our Suppliers■Aichi Steel Purchasing Policy• Sound corporate activities• Selection of suppliers based on the open-door policy*• Co-existence and co-prosperity based on mutual trust• Creation of environmentally friendly products throughpromotion of “Green Purchasing”*Fair and just attitude of selecting suppliers

Supply chain CSR
We promote CSR activities together with our suppliers. After the
first supplier self-diagnosis using the “supplier diagnosis sheet”
prepared by Aichi Steel in 2009, various follow-up activities havebeen implemented.* In February 2011, we asked our suppliers toevaluate their CSR promotion status for the second time. Basedon the results of this analysis, we will take follow-up actions toraise the level of all suppliers.

Green Purchasing
Aichi Steel actively exercises Green Purchasing by employing its
own “Green Purchasing Guidelines” to purchase environmentfriendly products and services from suppliers who are considerateof global environmental protection.
Introduction of bio-diesel fuelTo reduce CO2 emissions, we are promoting the introduction of
bio-diesel as fuel for forklifts.
Recommending products compliant with the Act on
Promoting Green Purchasing
In the system for purchasing of office supplies, products compliant
with the Act on Promoting Green Purchasing are indicated with asymbol so as to widen usage of such products.

*Establishing and disseminating CSR policies for each supplier, clarifying thedepartments/persons in charge of CSR, listing up of documents to be submitted togovernment offices, etc.

Fair transactions
Internal purchasing audit
An internal audit was held in October 2010 to check thecompliance status of the purchasing-related rules onsite. For
departments with many problems found, follow-up activities,
including intensive instructions, were undertaken.
Selection of suppliers based on the open-door policy
We promote policies within the purchasing departments andthroughout the Company to ensure fair purchasing and to prevent
excessive orders being placed on specific suppliers.

NEW

Compliance Seminar
In March 2011, a seminar to study laws and regulations relating topurchasing, such as the Subcontractors Act, was held for persons
engaging in purchasing inside the Company. 78 staff members
participated in the seminar.

Approach to ensure stable purchasing
To ensure stable operation of businesses through risk
diversification, we promote ordering from several companies/
suppliers on a global basis.

24

AICHI STEEL REPORT 2011

Please refer to our Website
http://www.aichi-steel.co.jp/ENGLISH/over_proc/index.html

Improving environmental awarenessof suppliers
We ask our new suppliers to fill in a “Green Purchasing/Trading
Survey Sheet” to assess their environmental attitudes. For
suppliers with a low evaluation, we provide instructions andsupport for their further improvement.

With Employees/Labor Safety and Health
Establishment of safe operation
procedure manuals

Basic labor safety/health concept(1) Strengthening of “heart, mind, and body”
Heart: Strong belief and tension to pursue safety
Mind: Careful observation and thorough investigation of truecausesBody: Powerful actions, dedicated efforts(2) Visualization
Visualization of problems (negative issues, poor conditions)
Visualization of good points (improvement cases, knowledge,
experiences)
Visualization of standards, changed points, or other status
Basis of activities
Focusing on comprehensive safety and health management,
make straightforward efforts for improvement, aiming to achieve“zero accidents in all workplaces throughout Aichi.”Development of safety-conscious
human resources
Small group activities
About 279 small groups, including in-plant associated business
operators, are engaged in activities on their registered themes,such as risk prediction training and correction of dangerous
points, with the aim of developing human resources capable ofthinking seriously about safety and taking appropriate actions (assafety-conscious human resources).

①②Creation of safe worksites
We take improvement actions according to the annual plan
concerning common targets for the entire Company, such as“reducing non-stop operations” and “eliminating crowbars andlarge hammers in operations.” There are also targets for eachdepartment, such as “eliminating unevenness and cracks insurfaces” and “improvement of operations that the operators
feel are difficult or dangerous,” as well as giving attention toserious accidents in other companies, so as to reduce dangerous
locations.

Prevention of accidents in affiliates
NEW

Safety and Health Brush-Up Seminar to prevent accidents
resulting in work time losses
The “Safety and Health Brush-Up Seminar” was held separately
for in-plant associated business operators and the Aichi SteelGroup with the aim of preventing recurrence of accidents resulting
in work time losses. The Safety and Health Brush-Up Seminarfor in-plant associated business operators had 35 participantsfrom 12 companies, discussing countermeasures to past
accidents. The brush-up seminar for the Aichi Steel Group had 21
participants from 9 companies, conducting on-site monitoring ofsafety activities and accident prevention measures.

Social Relations

NEW

Development of human resources capable of predicting risks
through “safety dojo (training hall)” program
A person is certified as a “dan ” belt earner if he/she identifies acertain number of unsafe conditions or problems within a limited
period of time in six areas set up in the safety dojo .
The dan belt earners then engage in finding unsafe conditions or
problems in their own worksites to promote improved safety while
those who could not earn the dan certification retry the safety
dojo course after undergoing training at their worksites. About
700 employees participated in the course, 20% of which haveearned their dan belts.

While drawing up operational manuals focusing on the operator’s
movement lines of their eyes, hands, and legs, we also ask theactual operators to prepare manuals for operations without
sufficient documentation, so as to completely eliminate operations
without manuals.

③④

Danger-spotting
training course⑤⑥

Safety and Health Brush-Up Seminar Safety and Health Brush-Up Seminarfor in-plant associated business for Aichi Steel Group
operators■Frequency of accidents and work time losses

1.00

5
4

0.71

0.75

3

0.52
0.36

0.50

2
0.18

1

0.20

0.25

2009

0.00
2010 (Fiscal year)

0.00
0
2005

2006

2007

2008

Number of accidents resulting in work time loss

Work time loss frequency rate

Basic education training
Considering that the basic education on safety was insufficient,
the Company restarted the 4-round Risk-prediction training
course for young employees and the group training on OSHMS*
concept and operation for management-level staff. A guidebook
on the concept of risk assessment was also issued, and delivered
to employees and associated business operators for education.

（％）(Accidents)

Number of accidents

Safety dojo

Work time loss frequency rate

*OSHMS:Occupational Safety & Health Management System

AICHI STEEL REPORT 201125

With Employees/Labor Safety and HealthNEW

Mental health

Efforts for improvement of traffic safety
As a company that plays a role in car-manufacturing, we promote
activities to help prevent our employees from being involvedin traffic accidents, and also activities to raise local residents’awareness of the importance of accident prevention.
• Traffic safety ladies’ activities (four times annually)• Aichi Steel safe driving competition (November, with 98
participants)• Standing guard on 10th, 20th, and 30th every month (21 times
annually, with 423 participants)

To provide well-considered mental care, we appointed two fulltime mental care staff members. Free mental health counselingby a psychiatrist is provided every month, and an industrial
physcician and mental health staff are dispatched to remoteareas including overseas, so as to help prevent the occurrence ofmental illness.

■Rate of work time loss resulting from mental health problems

Work time loss rate

（％）
0.50
0.40
0.30
0.20
0.10

Standing guard

0.26
0.19

0.13

0.11

0.08

0.00
2006

2007

2008

2009

2010
(Fiscal year)

Safty driving competition

Health Guidance for lifestyle improvement

Group Company Pickup

Aichi Steel Logistics

NEW

Personal guidance by health nurses
To prevent diseases resulting from lifestyle, we offer guidanceby health nurses to improve daily living habits for the employees
who marked values exceeding the standards (specified by theCompany) in a medical checkup. In fiscal 2010, 138 employees
received guidance and 54 achieved improvement.
35-Year-Old Lifestyle Seminar
The “35-Year-Old Lifestyle Seminar” is provided every year for
employees who turn 35 during the year. The purpose of thisseminar is to encourage employees to review their lifestyle habitsfrom the early stage so as to prevent lifestyle-related diseases.

Efforts for improvement oftraffic safety
Aichi Steel Logistics, engaging mainly in transport, hasbeen making particularly strengthened efforts to improve
traffic safety, including installing tachographs in trucks,
providing education for drivers on self-inspection ofvehicles and driving skills (eco-driving), and participatingin the standing guard campaign.

NEW

Recommending quitting smoking
Considering the impact of smoking on health, we set smoking
areas outside the office to avoid the effects of second-handsmoke, while encouraging smokers to quit smoking. In fiscal
2010, activities such as lending of DVDs encouraging no smoking
and introducing hospitals that support quitting smoking were
implemented.

VOICE
Healthy life through health care advice
Masako Sahashi, Health nurse Health Insurance Association(Left) Health nurse Ms. Sahashi(Right) Her supervisor, Mr. Furusato

26

AICHI STEEL REPORT 2011

I give guidance concerning diet and exercise to employees based on the results ofmedical checkups. Since the family structures and life patterns vary among employees, I
try to give advice appropriate for each person’s lifestyle so that they can continue to takethe recommended actions. Knowing it is difficult to change longtime habits, I find great
pleasure in seeing employees make steady efforts and achieve the targets that they set.
Besides the personal guidance, I am also engaged in personal counseling, the 35-YearOld Lifestyle Seminar, and holding lifestyle-related diseases seminars (at Chita Plant) withmy supervisor. I will go anywhere to listen to you. So why don’t you strive to improveyour health with me?

With Employees/Employment and Human Resources Development
NEW

Respecting human rights/Prohibitionof discrimination
The Aichi Steel Group announced in its “Aichi Steel Group Action
Guidelines” and the “Guidebook of Corporate Action Guidelines”
that it will comply with the laws and rules as well as their spirit, andrespect human rights. The diversity, personality, and characterof employees must be respected and discriminatory words andactions, harassment, and slander are strictly prohibited.
A “Hotto” line is in place ready for consultation with employees
concerning human rights.

Human rights workshop
In our training sessions for each job ladder (for 7 ladders, 268
participants from freshmen to managers), a course on humanrights is provided to cultivate awareness of the importance ofrespecting human rights. In fiscal 2010, a seminar was held in
October targeting all managers to prevent any form of sexual andpower harassment, which is considered as the most critical issue,
based on cases occurring at other companies.

Balancing work and life
In January 2011, to achieve more value-added work by promoting
efficient working styles, the Welfare & Labor Management(WLM) Department was established. The department engages
in enhancing systems to support child-raising and nursing
care, reviewing welfare systems, creating a worksite culture toallow easy access to such systems, and ensuring a worksite
environment where diverse people can work in diverse ways
with mutual support through teamwork, so as to reduce the total
working hours.

Systems to enable diverse ways ofworking
We have established and operated the “Nice Family System” (tosupport child raising) and the “Nice Senior System” (concerning
the re-employment of retirees) which enable employees to selectthe most appropriate way of working according to the various life
stages of the employees themselves.

NEW

Eliminating child labor and forcedlabor in foreign subsidiaries

NEW

To support global human resources development, including
employment of foreigners, labor/recruitment of overseas groupcompanies, and the life and health of dispatched employees,
so as to realize an equally comfortable working environment at
all worksites around the world, we have set up a Global Human
Resources Dept.

Social Relations

We investigate our subsidiaries in Indonesia and Thailand every
year to confirm that there are no child labor or forced labor cases,
and no problems were found in the investigation in fiscal 2010.
To continue conducting periodical investigations in the future, wehave set up a Global Human Resources Dept.

Realization of diversity and supportinga comfortable working environment
for all domestic and overseas staff

Respecting diversity
NEW

As a part of the efforts to promote diversity of age, sex, nationality,
etc. in the workplace, which enables everyone to continue to work
actively, we launched a 3-year project in March 2011 to improve
the worksite environment for women, retirees, foreigners, thedisabled, etc.
A working group—consisting mainly of women—has been
established as the first step to disseminate the importance ofdiverse management among women.

Making the Company a comfortable
place to work for the disabled
In December 2009, as a part of our approach to creating a
comfortable working environment for the disabled, we drew amap of places where passage with a wheelchair was difficult, by
actually checking the places using a wheelchair. Based on thismap, we are now making plans to renovate these problematic
locations, aiming to achieve completely barrier-free areas.

Working group members

AICHI STEEL REPORT 201127

With Employees/Employment and Human Resources Development
Supporting enhancement of private lives
As a person’s life is said to be 80 years long, we have regularly
offered the seminars below targeting employees in specific age
groups as an opportunity to think seriously about their future plans
and those of their family members, including after retirement.
From fiscal 2010, a course to encourage young employees tothink about their life plan has been added to all training sessions
for each job ladder.
“Happy Life” Seminar(Jun., attended by 72 employees of the age of 55 and their spouses)

Basic concept of human resources
development
With the aim of contributing to the development of society andbusinesses under our mission statement and the Aichi Spirit, we
promote human resources development for the purposes below:
1) To develop business people with a broad view and mature personality
2) To cultivate positive motivation, vitality, and creativity for work3) To provide/improve knowledge and skills necessary to pursue jobs

Enhancing training activities at each
worksite“Money Plan for Employees in Their 40s” Seminar(Nov., attended by 15 employees in their 40s and their spouses)

Diversification of employment
To enable workers to select diverse ways of working, we flexibly
review the workers’ employment opportunities. During fiscal 2010,
we switched the status of 30 interested workers from temporary
staff to contract employees with the aim of expanding their rangeof work.

Thorough control of working hours
To avoid overwork of employees, we have established a system
to thoroughly monitor working hours using IC cards.
In addition to the system control, interview surveys on the working
conditions in cooperation with the labor union and self-inspections
by each department chief are also conducted to avoid voluntary
overtime work.

Workplace management survey
To clarify the current management capacity and the problemsof each workplace, a questionnaire survey on workplace
management is conducted in April every year. The survey
evaluates seven items below and the results of fiscal 2010 wereabout the same as or better than the results for fiscal 2009.
We will continue this annual survey to promote improvements in
our workplace culture.

To help freshman workers assigned to administrative departments
to quickly become familiar with the Company and learn thejob, some senior workers at each worksite are appointed “OJT
trainers,” who take responsibility for training the newcomers.
During fiscal 2010, to make all members of each worksite awareof training issues, the OJT training program targeting evendepartment managers was held, with the aim of improving thehuman resources development activities at worksites.
For freshman engineers (graduating from Aichi Steel TechnicalTraining Institute), consultants are appointed to support their earlyadjustment to changes in their working environment, including
their daily life.

Group Company Pickup

Aichi Ceratec
Continued employment of those over 65
Respecting diverse working styles, Aichi Ceratec has
established a system to allow employees over 65 tocontinue to work if they desire to do so. At present, sevenworkers are employed under this system. Even those
who are 70 can be employed if they are healthy andmotivated.

■Survey results
Understanding of top management policies
（％）
100
80
Sharing and useof information

60

Understanding ofworksite mission40
200Operation of work
processes

70-year-old Mr. Sugiura (center)
Exercising leadership
2009
2010

Human resources development
and workplace culture

Deciding andimplementing policies

Response to each question was given as a percentage,
from “Not affirmative: 0%” to “Affirmative: 100%”.

28

AICHI STEEL REPORT 2011

AFU (USA)
Harassment workshop
AFU offers workshops on harassment for employees
every year. During fiscal 2010, three workshops
were held with 182 participants. Points to be careful
about in instructing subordinates and having proper
communications within worksites were explained, withthe aim of preventing all forms of harassment.

NEW

NEW

Promoting the “A3 Principle”
throughout the Company
The “A3 Principle” project was launched throughout theCompany, the purpose of which is to make visible and mutually
examine each person’s ideas about progressing the work, so as
to deepen understanding of the key points of each task and toenable fundamental revision of the way of handling the job.
The name of this project, the “A3 Principle,” comes from thesingle piece of A3-size paper used to summarize the overall
processes for each job. We believe that by continuing to promote
this project, we will be able to offer our customers services ofeven higher quality.

T-PK (Toyota Process Kaizen)
education expanded to domestic
group companies
The T-PK education program, which was implemented inside theCompany from fiscal 2009 to improve business efficiency, waslaunched in September 2010 for domestic group companies.
Through the united efforts within the Aichi Steel Group, we will
strive to achieve improved business efficiency through a slim androbust corporate structure.

NEW

Problem-Solving Presentation
The “Problem-Solving Presentation” meeting is held once a monthfor engineers in the forging section. With the aim of acquiring
the ability to think and proceed with problem-solving processes,
participants present their technology reports, on which directors
and managers then give advice, so as to improve the skills ofengineers and help them accumulate new technology.

Management seminar
Social Relations

Aiming to develop management staff who will play important rolesin the management of the Company, the management seminars
are held targeting young directors and general managers. In
fiscal 2010, three seminars were held inviting external lecturers
to provide studies on themes such as “The Situation in Asia,
including China, and the Challenges Facing Japanese Corporate
Managers” and “The Relationship between Global Environmental
Issues and Business Activities.”

Enhancement of collaboration between
the Company and the workers’ union
Aichi Steel adopts the union shop system, under which periodical
meetings are held in June, September, and December, to facilitatesmooth communications between the Company and the workers’
union. The current situation and problems in the Company are
explained so as to be shared between both sides.
An extraordinary meeting may also be held in response to a rapidchange in the economic environment.
NEW

The Day of an Aichi Steel Engineer
In February 2011, an event titled, “The Day of an Aichi SteelEngineer” was held to encourage every one to think about thetechnology of Aichi Steel. Various activities, including a technology
exhibition, a speech by the President, and commemorative
lectures by external lecturers were held.

Technology
exhibition

Communication events
Various events are held to promote communications among
employees and their family members.
• Various sport events (dodge ball competition, mini sport festival, etc.)• Forging communication festival• All-Chita Plant summer festival• “Fureai Festa” through collaboration between the Company andthe workers’ union (See p.14)

All-Chita Plant summer festival

Forging communication festival

AICHI STEEL REPORT 201129

CSR Management
With
Employees

With Community and society■Social contribution policyGroup Company Pickup

Aichi Information System

Setting the four keywords of “Clean,” “Green,” “Creative,”and “Volunteer” as our focuses for social contribution
activities, we promote community-oriented social activities.

Omi Mining
Meeting with the President

Volunteer Center

Aichi Information System and Omi Mining hold meetings
between employees and the President to revitalize theworkplaces with a frank and comfortable atmosphere.

The Volunteer Center is placed in the General Affairs Division toprovide information and promote educational activities, with theaim of encouraging corporate/individual volunteer activities.

■Number of participants in volunteer activities(cumulative total)(Persons)
3,000

2,972

2,500
2,000
1,637

Omi Mining dialogue meeting, “Fresh Talk”

1,500

1,271

1,000

Labor Data

917

920

2006

2007

500
0

■Labor composition
FY2006

FY2007

FY2008FY2009FY2010

2,327

2,328

2,331

2,330

2,360

241

247

253

263

269

2,233

2,224

2,227

2,221

2,244

Total workers (persons)Managers (persons)Male (persons)Female (persons)

94

104

104

109

116

Average age (years)

39.2

39.3

39.4

39.5

39.7

Average service (years)

19.7

19.3

19.8

20.0

20.1

Turnover rate (%)

0.4

0.8

0.8

0.3

0.3

Voluntary resignation for
personal reason (persons)

10

18

17

10

8

New graduates employed(female) (persons)

63(2)

58(2)

60(1)

78(5)

53(3)

■Users of the Nice Family System
FY2006

FY2007

FY2008FY2009FY2010Child care leave (male)(persons)

9

8

8

11

4(1)

Shorter work hours (male)(Persons)

7

13

7

6

10(1)

2008

2009

2010 (Fiscal year)

The number of participants increased due to the introduction of Charity Menu, a
new program (See P32).

Volunteer education
To enhance understanding of volunteer activities and promote
active participation, a training session was held targeting freshman
workers assigned to administrative departments (14 people) in
September 2010.
NEW

Questionnaire survey on volunteer activities
In December 2010, a survey on awareness of volunteer activities
was conducted, targeting mainly Company staff members. Basedon the results of the survey, we will review the projects and plan
new events to attract participation by more employees.

■How employees see participation in social contribution
Not important
6%

Number of persons who started using the system in each year
Very important
22%■Registrants to the Nice Senior* System
FY2006

FY2007

FY2008FY2009FY2010

25

50

69

55

51

Nice Seniors (persons)

Important72%*Those who are re-employed between the ages of 60 and 64.
The figures above are the number of registrants in the Nice Senior System as of the endof each fiscal year.

Over 90% of employees
see participation in social
contribution activities asimportant.

n=606■Employment of persons with disabilities
FY2006

FY2007

FY2008FY2009FY2010

Employees with disabilities(persons)

31

30

29

34

35

Employment rate (%)

1.6

1.6

1.5

1.8

1.65

Achievement status of thelegal employment rate (%)

91.2

88.2

85.3

100

92.1

The employment rate decreased in fiscal 2010 because the redemption rate was lowered by 10%.

■Usage rate of annual paid vacations
FY2006

FY2007

FY2008FY2009FY2010

50.5

48.0

69.0

54.0

46.0

Usage rate (%)
Usage rate against 20 days granted

30

AICHI STEEL REPORT 2011

Clean
Nishi-Chita Industrial Road Clean-Up
Campaigns (every two months)

Clean Aichi Day (See P16)

GreenParticipating in an NPO activity,“Forest Creating Volunteers”
In May and September every year, we participate in a projectof improvement cutting of trees to nurture the forests that will
become water sources in Nagano Prefecture, in support of theNPO, “Green Challenger.”

Seki Plant

Higashiura Plant

Planting flowers in front of Meitetsu
Shurakuen Station
In June and December 2010, students of the Aichi Steel TechnicalTraining Institute planted flowers in front of Meitetsu Shurakuen
Station, the closest station to our offices.

Aiko Corp.

Group Company Pickup

Aiko Service

Tree planting activities by group companies

We voluntarily clean the area around the company in earlymorning twice a month.

Aichi Ceratec

Social Relations

Cleaning volunteer

Omi Mining (Planting trees on the slopes of Mt. Ibuki in May)

Every month, in addition to cleaning around our offices,
we clean the prefectural road in front of the head officeand sweep the side ditches.

AFC (Philippines, July)AICHI STEEL REPORT 201131

With Community and Society

Creative

Coexistence with the local community

Support for Tokai City “Invention Club
for Boys and Girls”

Major donations by group companies

Every month, five students from the Aichi Steel TechnicalTraining Institute participate
as instructors at the Invention
Club for Boys and Girls, a
program sponsored by Tokai
City targeting elementary
school kids.

(donations for the Great East Japan Earthquake are excluded)

AFU
(US)
SAFC
(China)Donated $5,000 for Red Cross (Mar.)

AFI(Indonesia)

Donated meat equivalent to a whole cow (12.5
million rupiah) for local residents for ‘Id al-Adha (Nov.)
Provided scholarships worth 4.08 million rupiahs
for local primary school and junior high school
students (Jan., Nov.)
Donated 611,000 rupiahs for victims of the Merapi
volcano eruption (Nov.)

Aiko, Aichi
Ceratec

Donation for local festivals, donation through the
red feather campaign, etc.

Omi Mining

Donation to local government

NEW

Track-and-Field Club volunteer in the
1st Tokai City Ekiden Relay Race
Aichi Steel Track-and-Field Club members and ex-members
supported the 1st Tokai City Ekiden Relay Race held in Tokai
City in March 2011. As agood opportunity for the clubmembers, who have been
supported by local community
residents, they made some
contribution to the community.

Volunteer activities

Periodically donated clothes, etc. for earthquakehit areas

Communication with the local community

NEW

Charity Menu
In October 2010 in line with the Aichi Steel Group CSR
Enhancement Month, the Charity Menu system was introducedon Company restaurant menus. The Charity Menu is a system
in which 10 yen out of the price of each Charity Menu dish is
donated to the Aichi Steel Volunteer Fund. During the Charity
Menu period, 14,855 yen was donated.

Activities of the Aichi Steel Volunteer FundIn fiscal 2010, the Fund donated charity gifts worth about 3.07
million yen, including those contributed through our Matching
Gifts Program.**Under this program, we donate an amount equal to the amount already collected to
the Volunteer Fund.

Community Meeting is held every
year in Tokai City (Apr.) andKariya City (Dec.) to enhancecommunication with local
residents.

Ongoing activities
Support for Nagoya Philharmonic Orchestra welfare concert (Sep.)
Blood donations (Sep., Mar.)
Support for the Japan Blind Tennis Tournament (Nov.)
Support for the Tokai City Marathon (Dec.)
Support for the Tokai Junior School Indoor Tennis Tournament (Feb.)
Facilities made open for community events- ASCOM gymnasium: Always open for local residents- Kariya Plant: Kariya Daimyo Procession, Float Festival (May), Kariya
Mando Festival (Aug.), Kariya Citizens Dance Festival (Sep.)

VOICE
Volunteer firefighting activities– supporting security and safety in the local community

Ms. Hayashi (left)

Chieko Umeda New Business Planning Dept., Corporate Planning Div.
Keiko Hayashi General Affairs & Public Relations Dept., General Affairs Div.
From left: Ms. Umeda,
Mr. Uto, and Mr. Fujita

Motohisa Fujita Forging Sect. No. 3, Forging Plant
Yoshikazu Uto Gifu Plant, Electro-Magnetic Production Div.
As local volunteer members, we participate in a firefighting team. Our activities include various
roles, such as supporting official firefighters, organizing watering training and human life rescuingtraining, promoting local residents’ awareness of the importance of disaster prevention, andteaching first-aid treatment.
Though the activity is sometimes very hard, once we listen to the local people saying to us “Thankyou,” we forget about our tiredness and feel like working hard again. Keeping a pride in supporting
the secure and safe life of the local community, we will continue to engage in this activity.

32

AICHI STEEL REPORT 2011

Environmental Activity Policy
Overview and evaluation of theEnvironmental Action Plan 2010

Basic approach
We view environmental preservation activities as one of the
top priority issues in corporate management. The Aichi Steel
Environmental Charter was developed in June 1996 to clarify
our sincere approach in environmental efforts. The Behavior
Guidelines on Environmental Issues (current Environmental ActionPlan) was established in June 1993, and we continuously andactively aim to achieve our goals.

Aichi Steel Environmental Charter
Please refer to our Website

The Environmental Action Plan 2010, our action plan regarding
environmental efforts from FY2006 to 2010, was established in
March 2006. With goals set high, we have been making steady,step-by-step efforts in order to achieve them, and in our final year
of FY2010, our efforts were further intensified.
After five years of activities, we were able to achieve the CO2
emissions reduction target for prevention of global warming, butthree items remain unachieved. Please see the table below for
details.

http://www.aichi-steel.co.jp/ENGLISH/com_info/envi.html○ :Target achieved△ :Target achieved but improvement needed
× :Target not achieved

Environmental Action Plan 2010: Results and evaluation
Item

Action item
Spiraling increase inenvironmental activities

TargetMajor efforts
Results● Support for certification acquisition for consolidated
Only AFC is uncertified
All consolidated manufacturing
companies
companies to acquire ISO
Continued no material non-conformances in● Continued internal audit with clear priority agenda
14001 certification
external audit● Improvement of material environmental aspects

facilities/procedures● Promotion of proactive efforts by anticipating theEnvironmental
management
Promotion of environmental
preservation

Reporting/guidance/complaints from outside thecompany(None/year)

future movement of environment-related laws andregulations● Promotion of activities for compliance withenvironment-related laws
- Implement strict management and actions toachieve 80% or below regulation values set byenvironment-related laws
- Practice “Environmental Near Miss” activities

ReportingComplaints(cases)5
Guidance
Enviornmental incident
4
3
2
1
0
2006 2007 2008 2009 2010 FY

Evaluations
×
*1
○

×
*2

Intensify inspection and make improvements
regarding enviornmental incident

CO2 emissions frommanufacturing departmentsby 10% from 1990 levels
Global warming Promotion of global warming
prevention
prevention

Reduction ofenvironmental
burden● Promotion of CO2 emissions reduction by

improving logistics efficiency- Modal shift- Improvement on loading ratio, promote direct
delivery○

kg-CO2/t
CO2 emission intensity
Target (Act on the Rational Use of Energy)
109872006 2007 2008 2009 2010 FY○

50,000Landfill volume: 2% or less of ● Promotion of 3R activities
40,000
FY1990 level30,000
Promotion of achievement of(FY1990: 58,000 tons/year) ● Promotion of development of recycling technology 20,000
zero landfill waste
Total landfill volume: 1,160- Recycle slag with ANRP
10,000tons/year or less
- Establish method to recycle fluorine-containing slag
0Promotion of product/
technology development-

Reduction of substances ofenvironmental concern during manufacturing process
Efforts toward biodiversity

Socialcontribution

efficient facilities and furnaces● Implementation of new energy-efficient facilities● Promotion of implementation of clean energy

CO2 emission levels of the
Logistics Division
Average of 1% reduction peryear since 2006

Recyclingsaving efforts● Change to, or concentrate processes on, energy-

CO2 emissions(Target: 717)
1,000
800 797 686 678600
544 514 600
400
200
0
1990 2006 2007 2008 2009 2010 FY-

Enhanced disclosureand communication ofenvironmental information-

Environmental education/
motivation activities-

Contribution activities forsociety and local communities● Creation of evaluation index at time ofdevelopment/designing● Increase on green purchasing● “Declaration of Biodiversity by Nippon Keidanren”

Promotion Partners

Environment

1,000 tons CO2/year● Promotion of CO2 emissions reduction by energy-

Landfill volume
Target×*3
2006 2007 2008 2009 2010 FY- Evaluation and calculation of major products(CO2)- Development of evaluation index ideas to be
used for DR○- Review and systemization of green purchasing○

Active participation in COP10 events○

Approx. 5,000 copies published (once/year),● Publication of Aichi Steel Reportand disclosed on Website● Holding CSR community meetings
Meeting with neighborhood associations(once/year)
Expansion of research targets, increase of● Enhancement of in-house environmental education internal auditors● Motivation through in-house publications andEducation and motivation in every inhouse publication, and implementation ofseminars
environmental seminars (once/year)● Participation in local environment beautification activities● Employee volunteers’ participation in NPO tree cutting
Continued
activity for forestation improvement (from 2007 and on) See P30 for transition of number of volunteer● Employee volunteers’ participation in Tokai Forestation
participants
for the 21st Century Campaign (from 2008 and on)

○

○

○

*1 Improvements will be made to acquire certification in FY2011.
*2 Received one complaint in FY2007. There were flaws in the control manifest necessary for receiving waste and in the delegation of authority, which were pointed out by the client. Theseissues have been corrected, and we voluntarily reported and notified the administration of the matter. We are striving to prevent recurrence by thoroughly implementing in-house education
concerning manifests, etc.
*3 In response to the Guideline for Proper Use of Recyclable Resources (Aishi Pref.), what had been recycled is now discarded as waste since FY2008, resulting in a sudden increase in the
direct and indirect landfill volume. We will promote 3R activities so as to achieve 1,800t/month by FY2012. (See P35, 40.)AICHI STEEL REPORT 201133

Environmental Activity Policy
For the success of the Environmental Action Plan 2015
With the results of the Environmental Action Plan 2010, the Aichi
Steel Group came together as one to develop the Environmental
Action Plan 2015 towards realizing a sustainable society.
Upon developing the Action Plan, the basic philosophy employed
is “to contribute to the sustainable development of society andthe global community” through manufacturing. To this end, we
have placed “environmental management” involved in social
contribution as the basis of all environmental activities.

Specifically, the three pillars of implementation will be “reductionof environmental burdens,” “promotion of low-carbon society,”and “improvement of resource recycling,” and our activities will be
conducted from many different directions, including production,technology development, coordination with society, and logistics.
Unachieved items from the Environmental Action Plan 2010 havebeen reviewed and included in the 2015 plan.

Structure of the Environmental Action Plan 2010
- Outline set for three major themes of “global warming prevention,” “recycling,” and “reduction of environmental burden”

Basic approach - Basic activities coordinated with these three themes are “environmental management” and “social contribution”- There are 10 main action items (*one itme added in 2010)
Global warming prevention

Recycling[1] Promotion of global warming prevention[2] Promotion of achievement of zero landfill waste[3] Promotion of product/technology development[4] Reduction of substances of environmental concern during
manufacturing processes
Reduction of environmental burden

Environmental management

Social contribution[7] Efforts toward biodiversity*[8] Enhanced disclosure and communication ofenvironmental information[9] Environmental education/motivation activities[10] Contribution activities for society and local communities[5] Spiraling increase in environmental activities[6] Promotion of environmental preservation[Action items]
15 items
Scrutinize content and renew

Structure of the Environmental Action Plan 2015
Basic approach- To aim for “sustainable development of society and the global community,” the three pillars of improvements will be“promotion of low-carbon society,” “improvement of resource recycling” and “reduction of environmental burdens.”- Basis of activities is environmental management.

“Contribute to the sustainable development of society and the global community” through manufacturing

Reduction of environmental burden
Coordination with society[1] Promotion of environmental activities in coordination with business partners
Technology development[2] Development of technologies to reduce substances of environmental concern[3] Enhanced control of environmental burden for each product
Technology development[4] Development of eco-friendly products that reduce
CO2 emission by our customers
Production[5] Thorough implementation of energy conservation
practices in production activities
Logistics[6] Seeking better transportation efficiency in logistics
Promotion of low-carbon society[9] Promotion of activities for “zero abnormalities/complaints”[10] Enhancement of consolidated environmental management[11] Promotion of global CO2 management

Production[7] Reduction of by-products during production and further
effective utilization of resources
Coordination with society[8] Promotion of projects that benefit
resource-recycling corporations
Improvement of resource recycling[12] Efforts toward biodiversity[13] Enhancement and promotion of environmental education activities[14] Active disclosure of environmental information andenhanced communication activities[15] Revitalization of regional contribution activities
Social contribution
Environmental management

34

AICHI STEEL REPORT 2011

Environmental Action Plan 2015 Action items, items of implementation and targets
Theme
Three
pillars

Action items[1] Promotion of environmental activities in
Reduction of
coordination with business partners
environmental
burden[2] Development of technologies to reduce
substances of environmental concern

Products[3] Enhanced control of environmental burden foreach product[4] Development of eco-friendly products that reduce
CO2 emission by our customers

Promotion of [5] Thorough implementation of energy conservation
practices in production activities
low-carbon
society

Specific items of implementation, targets, etc.

Involved organization*- Request to suppliers regarding ensured compliance, enhanced control oversubstances of environmental concern contained in components, raw materials,
and supplies, and voluntary activities to improve environmental performance- Promotion of technology development that leads to reduction of substances of
Product and Environment
environmental concern
Subcommittee- Promotion of control for environmental burden for each product- Reduction in CO2 emission by our customers through reducing weight, etc.
- Promotion of efforts under the 3R principle･ Reduce (higher efficiency, re-engineering)･ Reuse (reusing exhaust heat)･ Recycle (heat → energy conversion)<Energy-origin CO2>
Item

Reference year

Target (2012)

Total CO2 emissions

1990

10% reduction*

Global Warming
Prevention Committee* Average from 2008 to 2012 Based on the Japan Iron and Steel Federation
Voluntary Action Plan
[6] Seeking better transportation efficiency in logistics

Improvement [7] Reduction of by-products during production andfurther effective utilization of resourcesof resource
recycling- Promotion of CO2 emission reduction activities with improved loading ratio
Item

Reference year

Target (2012)

Emission volume pertransportation amount2006

6% reduction- Promotion of efforts through 3R･ Reduce (reduction of generated volume and resource losses)･ Reuse (reusing within the process)･ Recycle (reclaiming resources)
Item

Environmental
management

Socialcontribution

Target (2012)
Resource Recycling
Subcommittee
1,800 t/month[8] Promotion of projects that benefit resourcerecycling corporations- Promotion of technology development toward environmental improvement andbuilding a recycling society[9] Promotion of activities for “zero abnormalities/
complaints”- Zero abnormalities/complaints- Improvement of material environmental aspects facilities/procedures- Reduction of environmental burdens, promote environmental contribution- Promotion of activities for compliance with environmental-related laws[10] Enhancement of consolidated environmental
management- Enhancement of preventive measures to reduce environmental risks- Revitalization of environmental activities by non-manufacturing consolidated
subsidiary[11] Promotion of global CO2 management- Planning and promotion of total CO2 management[12] Efforts toward biodiversity- Participation in greening/forestry activities in coordination with NPOs,
government, etc.

[13] Enhancement and promotion of environmental
education activities- Systemization and implementation of environmental education to enhanceenvironmental awareness in employees[14] Active disclosure of environmental informationand enhanced communication activities- Enhancement of provision of environmental technology information for
products- Continued publication of Aichi Steel Report and further enhancement of its
content- Enhancement of environmental communication activities[15] Revitalization of regional contribution activities- Expansion of contribution activities for society and local communities- Promotion of activities to heighten environmental awareness

Environment

Landfill volume incorrespondence withfluorine-containing slag
regulations

Environmental
Conservation
Subcommittee

Awareness and Publicity
Subcommittee*See P36.

AICHI STEEL REPORT 201135

Environmental Management
System for environmental
management promotion

Certification status of Environmental ISO

Our environmental management structure has been developed tocarry out environmental preservation activities based on the Aichi
Steel Environmental Charter. The Environmental Working Groupstrongly promotes all environmental preservation activities in an
organized and systematic manner.

■Environmental management promotion
organizations (FY2010)

ISO 14001

January 1997

Consolidated subsidiary

Resource Recycling Subcommittee
Product and Environment Subcommittee
Awareness and Publicity Subcommittee(Chair: President)■ISO certification status
Aichi Steel

Environmental Conservation Subcommittee

Environmental
Working Group(Meets twice/year)

We aim for 100% ISO 14001 certification for consolidated
subsidiaries with manufacturing sites.
In FY2010, Aichi Techno Metal Fukaumi and AFI were certified,
and for the one remaining company, we will continue to provide
support so as to realize certification in FY2011.

Global Warming Prevention committee(Meets twice/year)(Chair: Director in charge of Safety andEnvironmental Division)

Aichi Ceratec

ISO 14001

March 2003

Aiko

ISO 14001

January 2004

Omi Mining

ISO 14001

October 2004

Aiko Service

ISO 14001

January 2005

Aichi Steel Logistics

ISO 14001

March 2005

Asdex

ISO 14001

May 2007

Aichi Techno Metal Fukaumi

ISO 14001

December 2010

A F U

ISO 14001

April 2003

A I T

ISO 14001

November 2006
December 2009

Process Energy Reforming Subcommittee

SAFC

ISO 14001

Energy-Saving Production Subcommittee

A F I

ISO 14001

May 2010

A F C

ISO 14001(Planned certification in 2011)

Logistics Energy Conservation Subcommittee
Eco Life Subcommittee
Administrative office- Environmental
Management Sectionof the Safety andEnvironmental Division- Individual sites

Aichi Steel Group Environmental Committee
Chita Site
Kariya Site
Forging Site

Environmental ISO
Review Committee(Meets twice/year)

AFI

Higashiura Site
Gifu Site(Chair: Director in charge of
Safety and Environmental Division)

Other relevant sites
Site environmental meeting(Chair: Head of each site)

Aichi Techno Metal Fukaumi

Practicing “Environmental Near Miss”
activities and compliance measures
Environmental Working Group (March)■Environmental conservation costs

We received no complaints from outside the company during
FY2010. We will continue our “Environmental Near Miss” activities
within the Company to enhance employees’ awareness about
preventing environment-related accidents.
Unit: Million yen

Classification

Major efforts

Environmental conservation costs necessary for controlling environmental
burdens arising within our operational areas from production or service activities(Operational area costs)
Costs necessary for controlling environmental burdens arising upstream or
downstream of our operational areas in connection with production or service
activities (Upstream/downstream costs)

Power for dust collectors/repair costs for dust collectors, wastewater treatment costs,
investment and maintenance of energy-saving facilities, costs of disposal and recycling ofindustrial waste and general waste discharged from business operations
Simplified packaging (reducing packing materials and reducing packing time)Amount2,941

0

Costs for employee environmental education, and costs necessary to acquire and maintain
Environmental conservation costs arising from our administrative activities
ISO certification(Administrative costs)
Labor costs and related costs of environmental action organizations

287

Environmental conservation costs arising from our R&D activities (R&D costs)

39

Research costs for environmental conservation

Environmental conservation costs arising from our social-relation activities
Site greening and industrial road cleaning activities(Social-relation costs)

28
Total 3,295

36

AICHI STEEL REPORT 2011

Environmental communication
The Company undertakes environmental communications withsociety not only through CSR community meetings but also by
accepting requests for site visits from the government. In FY2010,
the Living andEnvironment Divisionof Chita City visitedin August, and the
Pollution Prevention
Council of Tokai City
visited in February.

Technical conference/Seminar
An external lecturer from Chunichi Shimbun, was invited in May
2010 to speak in a seminar titled, “Environmental Problems Seenfrom the Media Perspective,” in 113 people participated.

Environmental Education
Environmental activities are one of the priorities in corporate
management and CSR activities, and therefore, we take an active
part in environmental education.
Environmental training
Held three times, targeting newly employed graduates assigned
to administrative departments (April: 14 freshmen), Assistantmanagers (June: 20 Assistant managers), and newly-promoted
Foremen (March: 19 Foremen).

Educating internal environmental auditors
Twenty new internal environmental auditors who support theefficient operation of the environmental management system werecertified for FY2010, making a total of 179. Also, we conduct
internal environmental auditor education for those scheduled foroverseas dispatch on an as-needed basis.

The results of the FY2010 internal audit and the surveillance auditof the environmental management system were as follows. There
were no material non-conformances.

■Results of internal audits
Classification

FY2006

FY2007

FY2008FY2009FY2010Material non-conformance(incidents)

0

0

0

0

0

Minor non-conformance(incidents/department)

0.9

0.7

0.7

0.7

0.6

■Results of audits by independent auditors
Classification
Minor non-conformance(incidents)
Opportunity for improvement
and other observances(incidents/department)

FY2006

FY2007

FY2008FY2009FY2010

1

1

1

1

0

21

12

20

31

14

(0.5)

(0.3)

(1.0)

(0.8)

(0.6)

Environment

Environmental law education
We invited an external lecturer (from Daiseki Eco. Solution
Co., Ltd.) to give a seminar titled, “An Overview of and How toComply with the Amended Soil Contamination Countermeasures
Act,” mainly targeting staff involved with central facility planning.
(October, 32 participants)

Audit resultsGroup Company Pickup

Aichi Techno Metal Fukaumi“I will _______” card

Manifest education
For the purpose of increasing awareness concerning theimportance of manifest control, we generally hold two education
sessions per year for newly assigned manifest staff on how to issue
manifests, etc. Passing the comprehension test given after thesession gives the participant the qualifications to issue manifests.

As part of environmental management, each and every
Aichi Techno Metal Fukaumi employee declares that “I will_______” on a card and executes what he/she declared
so that 5S, energy conservation, and 3R are firmly rooted
in everyone. We aim to achieve in-house goals by having
everyone participate in specific efforts. As an eco-friendly
manufacturer, we see ISO 14001 certification as merely
the starting point and will continue to strive towards “allparticipatory improvement of management abilities.”

AICHI STEEL REPORT 201137

Global Warming Prevention
NEW

Targets and results for FY2010
Based on the Environmental Action Plan 2010, we are currently
striving for 10% reduction compared to 1990 levels, which is afigure better than the target of the Kyoto Protocol.
Energy efficiency improvement measures, among others, weretaken in FY2010, but due to increases in production, we wereunable to achieve our target for the fiscal year.
Item

FY2010 target

Results

CO2 emissions

527,000 tons/year

600,000 tons/year

Scope of CO2 emissions and criteria
The scope of CO2 emissions volume is “energy-origin CO2 for theentire company (each site, headquarters, branches, sales offices),and energy use is based on the Energy Consumption Status
Report submitted regularly to the Ministry of Economy, Trade andIndustry. CO2 emission coefficient is based on the Japan Iron andSteel Federation Voluntary Action Plan.

Mottainai (That's a waste!) Card
In February 2011, we created the Mottainai Card to heighten
interest towards eco-friendliness in our surroundings, and solicitedcomments from our employees. We will take the comments (55comments) and analyze them so that they can be reflected onto
the energy conservation plan by the Eco Life Subcommittee.
- Cool Biz (June to September)- Warm Biz (December to March)- Close laptops when leaving the desk
- Turn off lights whenever possible- Reduce waste (recycle)- Participate in light-down campaign (June 21 to July 7)

NEW

Energy conservation in the office
We promote energy conservation activities that can be carried out
within the office.
NEW

Individual air-conditioning in the main building
The central-control air-conditioning of the administrative mainbuilding, which had used boilers, has been converted to individual
air-conditioning. This enables temperature control by floor, and weare expecting approximately a 40% reduction of CO2 emissions
compared to the conventional method.

Eco factory
The Seki Plant, completed in May 2010, is operating as a trueeco factory, with the factory itself-as well as facilities andmanufacturing line-all designed to conserve energy.
- Line design with reduction in logistics energy- Improved steel roof for better air conditioning efficiency- Installed with energy-conserving air conditioning units
Also, conversion to energy conserving equipment, changing
heating furnace to alternative energy (heavy oil → city gas), andother efforts are currently being made at the Chita Plant and theForging Plant to transform them into eco-friendly plants.

Seki Plant

NEW

Technical Center: updating to energy-conserving equipment
Equipment within the Technical Center is being updated gradually
to energy-conserving equipment. In FY2010, eco-lighting was
installed in the quality control meeting room which should result in
41% reduction, and the air conditioning unit in the laboratory waschanged to an energy-conserving one for 40% reduction.

38

AICHI STEEL REPORT 2011

NEW

Life Cycle Assessment
To realize eco-friendly manufacturing, we are striving for energy
conserving design that takes into consideration the entire life
cycle of our products. We try to calculate and evaluate theCO 2 emissions volume of the product for its life cycle at thedesign/development stage using a Life Cycle Assessment (LCA)
evaluation sheet, so as to make our CO2 reduction activities more
visible.
NEW

Energy Conservation Practices Class
Starting from February 2010, an Energy Conservation Practices
Class is being held twice a month with the aim of reducing
electricity/energy costs at the Chita Plant, and promoting humanresource development for young engineers. Approximately ten
young engineers learn the basic principles of energy conservation
and receive guidance from senior members of the company,
as well as external lecturers, so as to make daily improvementsin their respective workplaces. The aim is not only installationof energy conserving equipment through construction work
conducted during consecutive holidays, but also implementation oflarge-scale investment in energy conservation at the re-engineeringlevel. Further, through the class,participants become qualified inenergy management.

In fiscal 2010, the total freightage of the Company reachedapproximately 150 million ton-kilometers*. Improvement activities
resulted in 5% improvement y/y of the loading ratio, but because
shipments to distant locations increased and transportation
distance was elongated, CO2 emission intensity saw an increaseof 0.6% y/y (average reduction of 1% per year since 2006 is still
being achieved). We will continue to strive for improved loading
ratios and to promote modal shifts.

In August 2010, an exhaust heat recovery device was installed
to reuse the high-temperature exhaust gas (approximately 300
degrees Celsius) from the hot rolling furnace. This device reuses theheat of the exhaust gas, which had been discarded until now, toraise the temperature of the boiler water from 30 degrees Celsius
to 80 degrees Celsius and conserve energy. This resulted in a 4.4%
Boiler water entrance
reduction in boiler fuel, and a 230ton reduction in CO2 per year.
■Exhaust heat recovery

diagram
Conventional
Water
30
degrees
CelsiusHeating by gas

Steam
195
degrees
Celsius

Hot water
80
degrees
CelsiusSteam
195
degrees
Celsius

Exhaust gas

Now
Water
30
degrees
Celsius

Exhaust heat recovery

Boiler water exit

Heating by gas

Group Company Pickup

Aiko
Eco-office activities
Aiko is promoting conversion to eco-offices. Officewindows are now double-glazed to improve insulation,
indirectly reducing CO2 emissions.
In addition, air conditioning units are updated to energyconserving ones, and ceiling fans are used to circulate
the air in the room to improve the efficiency of the heating
and air conditioning. We contribute to the achievement ofa low-carbon society from many aspects, including officeenvironment.

Environment

Energy conservation activities forlogistics operations

CO2 reduction through use of exhaust
heat from the hot rolling furnace* Ton-kilometers (freightage volume) = Shipped quantities (tons) × Transportation
distance (kilometers)

AIT (Thailand)NEW

Forging Plant “Cargo Station” completed
In March 2011, the Cargo Station of the Forging Plant wascompleted. By consolidating the in-plant driving areas forshipment trucks, logistics within the premises has been betterorganized and streamlined, resulting in a 42-ton reduction in CO2emissions per year.

Conversion to eco-cars
At AIT, company cars are being converted to eco-cars as
they reach their maximum years of use. All three trucks
have already been changed to CNG (gas) trucks, andsome of the company cars have been adapted fromgasoline to hybrid cars to reduce CO2 output.

AICHI STEEL REPORT 201139

Global Warming Prevention

Resource recycling■Change in CO2 emissions

Targets and results for fiscal 2010

1,000 tons CO2/year
1000

800

As a law-abiding member of society, the company promotes
3R activities (reduce, reuse, recycle) to make efficient use ofresources.
In FY2010, we complied with the Guideline for Proper Use of
Recyclable Resources (Aichi Pref.) and promoted reduction ofgenerated volume as well as recycling, but we were unable toachieve our targets.

797
723

695

686

681

678

600

600

544

514

400

200

Item

FY2010 target

Results

Direct landfill

37,900 t/year

47,316 t/year

Indirect landfill

1,780 t/year

2,442 t/year

0
90

95

00

05

06

07

08

09

10

(FY)

■Change in CO2 emissions from the Administrative Division
Tons CO2/year
4,000

In FY2010, which saw a drastic increase in production volume
compared with FY2009, there was also a significant increase in
the volume of generated by-products. To maintain quality of steels
while decreasing landfill volumes, we have been increasing therate of slag recycling using the ANRP method,* and promoting inhouse usage.
Also, we have actively searched for slag recycling methods andrecyclers outside of the company, and now have in place a plan
to drastically reduce direct landfill volumes from FY2011.

3,456

3,500

3,000

3,084 2,976* Measured since FY2007
2,613

2,500

Efforts to reduce landfills

2,000*Aichi New Hot Slag Recycling Process
0
07

08

09

10

(FY)

■Breakdown of energy used in FY2010 (CO2 emissions)
Oxygen1.6％
Heavy oil class A
3.4％
Coke
5.9％

Other
0.6％

City gas Total CO2 emissions Electric power
28.9％ 600,000 tons CO259.6%

CO2 balance
CO2 emissions for FY2009

514,000 tons CO2/year
600,000 tons CO2/year

Difference–86,000 tons CO2/year■Breakdown–107,000 tons CO2/year

Improvements (A) - Aggravations (B)21,000 tons CO2/year

Total–86,000 tons CO2/year■Improvements (A)[1] Improved energy efficiency of the electric furnace

13,000 tons CO2/year[2] Energy conservation of hot rolling furnace

3,000 tons CO2/year[3] Loss reduction in induction heating forging furnace

2,000 tons CO2/year[4] Loss reduction through higher yield rate

4,000 tons CO2/year[5] Loss reduction during suspension of operations

1,000 tons CO2/year

Total

23,000 tons CO2/year■Aggravations (B)40[1] Changes in product composition

2,000 tons CO2/year

Total

2,000 tons CO2/year

AICHI STEEL REPORT 2011

The current 3R activities are promoted in coordination withcompanies of the Toyota Group.
We already make efforts such as reusing Automobile Shredder
Residue (ASR), including iron scraps, and in addition to such
existing activities, we are developing recycling technologies for
nonferrous metals, glass, etc. Also, we are considering methods
to exchange information within the Group to promote recycling,
as well as the reuse of by-products as resources.

Continued recycling technologies

CO2 emissions for FY2010

Increase due to greater production

Recycling with the Toyota Group- Production of abrasives (AS shot)- Recycling of electric arc furnace reducing slag (ANRP method)- Recycling of nickel from by-products

NEW■Recycled nickel

3R Contest
Starting September 2010, each plant conducts a 3R Contest,
where 3R activities at manufacturing sites are promoted andcompetitions on eco-friendly manufacturing take place. An
exhibition of improvement cases, solicitation of slogans andcatch-phrases, and many other diverse events are held at eachplant, and superior examples are recognized with awards.

(tons/FY)
150
134

123
100
94

87
78
50
5
0

2000

2006

2007

2008

2009

2010

■Change in direct landfilled waste(1,000 tons/FY)
60
52.0
50

47.3
44.3

40

Don’t discard, reuse!

29.4

30

As a part of the 3R activities of the administrative divisions, wehave implemented the “Don’t discard, reuse!” system. In thissystem, when there are goods-such as office supplies-thatare needed/not needed by a particular division, that divisionannounces such information so that these goods may be tradedamong them. The aim is to reduce waste from the office and to
reduce new purchases.

26.1

20
13.2
10
0.5

0.3

2006

2007

0
1990

1995

2000

2008

2009

2010

Environment

Corresponding with the Guideline for Proper Use of Recyclable
Resources (Aichi Pref.), for FY2010, we tackled reduction ofslag generation and especially focused on developing recycling
methods and use for fluorine-containing slag, which has
contributed to increased landfills. Recycling begins in FY2011,
and we expect reduction in landfill volume.

■Change in indirect landfill waste(1,000 tons/FY)
30
25.5
20

Group Company Pickup

Aichi Steel Logistics
Reusing waste block lumber

10
4.0
0

2000

2.3

2.2

2006

2007

2008

2.4

2.4

2009

2010

Aichi Steel Logistics reuses old lumber (waste blocklumber*) within the park facility of the Facility Management
Association of Chita City, Aichi Prefecture. This activity
began in December 2009, and in cooperation with the
Association, the waste block lumber is reused in the
sidewalks of parks within Chita City, among other places.

Loaded waste block lumber

Reused in sidewalks within a park

*Block lumber is used as cushioning material or spacing material whenloading steel stock etc. onto a trailer deck or for storing in warehouses. After
years of use, deteriorated or broken block lumber has conventionally been
discarded as waste block lumber.

AICHI STEEL REPORT 201141

Biodiversity
NEW

NEW

Supporting COP 10
In agreement with the Tenth Meeting of the Conference of theParties to the Convention on Biological Diversity (COP 10), we
provided support in August 2010 as an Aichi-Nagoya COP 10
supporting company.

Regeneration of satoyama(socio-ecological production landscapes)
Donation of used refractory bricks forcharcoal kiln
In April 2010, approximately 10 tons of refractory bricks previously
used for steelmaking ladles were donated to the Nagoya
Higashiyama Forest Conservation Group, a volunteer groupinvolved in the conservation of forests in the Higashiyama Park
green area. The donated bricks were used for a charcoal kiln
located within the Higashiyama Park, as a part of the satoyama
regeneration efforts.

Exhibiting at Messe Nagoya 2010
In October 2010, we participated in Messe Nagoya 2010, an
event related to COP 10 hosted, where we exhibited our products
and efforts related to biodiversity.

NEW

Increased knowledge in biodiversity
In September 2010, we distributed to managers a book titled“Inochi no Tsunagari ” (Circle of Life ) by Associate Professor
Ryo Kohsaka of Nagoya City University, who gave a lecture at
our Company in June 2009, aiming to increase awareness andknowledge of biodiversity.

Forest Conservation Volunteering→ See P31.

Supporting the C. W. Nicol Afan
Woodland Trust→ See P15.

Group Company Pickup

Omi Mining
Sponsorship and support for the Amanogawa Firefly Festival
Omi Mining sponsors and supports the annual Amanogawa Firefly Festival (hosted by
Maibara City) held every June in Maibara City, Shiga Prefecture. Fireflies are found only inan environment with very clean air, water, and soil, and the city is making efforts to maintaintheir habitat for future generations. We sympathize with this effort, and will continue our
support. In 2010, we sponsored the event, and also hosted an environmental efforts
exhibition booth during the event period as a PR activity in cooperation with TetsuRiki-Agri/
Aqua which promotes greening, and slaked lime used for incineration exhaust neutralization,soil improvement, and fertilizer.

42

AICHI STEEL REPORT 2011

Material Flow

Recycled materials

Raw materials

Scrap iron:
714,000 tons
Internally recycled scrap:
223,000 tons
Primary and secondary materials: 16,000 tons
RP (*1):
28,000 tons

Iron alloy, etc.:
49,000 tons
Slag flux:
33,000 tons
Reducing agents: 20,000 tons

Purchased slab and steel

981,000 tons 102,000 tons 442,000 tons

AICHI STEEL
manufacturing process

EnergyUtilities

Byproducts 219,000 tons

Steelmaking

Electricity:
961 GWh
Fuels:
24,200 kl (*2)
Oxygen: 37,958,000 km3N
City gas: 81,760,000 km3N

Melting
Refining
Casting

RollingHeating

Waste
147,000 tons

Scale, etc.

Slag/dust
Headrace sludge
Reuse outside
the Company(Free assignment
or disposal cost)
98,000 tons

Reuse outside
the Company(Sale to outsidebusiness operators)
56,000 tons

Rolling
Recycled by outside companies

Pickling and heat treatment

Environment

Industrial water: 4,710,000 km3
Nitrogen:7,324,000 km3N
Argon:
1,601,000 km3N

Scrap ironScrap iron for internal recycling: 223,000 tons

Landfill: 49,000 tons
Direct Slag, sludge
landfill

ForgingHeating

Forging

Internal treatment:
Indirect Waste acid and dust
landfill Contractor treatment:
Waste acid and waste plastic

Industrial waste water
Waste water: 3,180,000 m3

Atmospheric output

Products
1,070,000 tons

CO2: 600,000 tons-CO2
SOx: 8.66 tons (*3)
NOx: 67 tons (*4)

Steel Products: 822,000 tons
Forgings:
248,000 tons

MarketScrap materials(Scrap iron)
714,000 tons

*1 RP: Recycle plastics*2 Heavy oil equivalent*3 Emissions from January to December 2010
*4 Emissions from April 2009 to March 2010AICHI STEEL REPORT 201143

Enviornmental Data
PRTR Data(Unit: tons)

Govt.
Ordinance
No.

Discharged
Substance name

Transferred

Amount handled
Atmosphere

Water

Outside of premises(as waste, etc)

1

Water-soluble zinc compound

1.2

-

0.180

0.310

53

Ethyl benzene

1.0

0.040

-

-

80

Xylene

4.7

0.240

-

-

87

Chromium and trivalent chromium compounds

25000

0.070

0.011

2100.000132

Cobalt and cobalt compounds

150

-

-

2300.000

243

Dioxins

44.00

44.000--300

Toluene

6.7

0.420

-

-

304

Lead

92

-

-

-

305

Lead compounds

220

0.130

-

150.000

308

Nickel

6300

-

-

-

309

Nickel compounds

890

0.011

0.120

49.000374

Hydrogen fluoride and its water-soluble salts

6.5

0.001

6.300

0.180

384

1-bromopropane

7.2

5.200

-

2.000

400

Benzene

0.55

0.028

-

-

405

Boron and boron compounds

71

-

-

17.000412

Manganese and manganese compounds

12000

0.310

0.690

1600.000

453

Molybdenum and molybdenum compounds

7600

-

0.570

0.290

87

Chromium and trivalent chromium compounds

960

-

0.024

53.000309

Nickel compounds

470

-

0.026

29.000374

Hydrogen fluoride and its water-soluble salts

120

0.042

1.100

69.000453

Molybdenum and molybdenum compounds

16

-

0.290

1.800

Gifu Plant

80

Xylene

1.1

0.230

-

0.900

Seki Plant

392

Normal hexane

1.1

1.100

-

-

Chita andForging
PlantsKariya Plant

Higashiura Plant: No regulated substances used
A hyphen (-) indicates a quantity of 0 (zero). The volumes were calculated according to the PRTR system.
Unit is tons/year (however, unit for Dioxins is mg-TEQ/year).

■Material balance of PRTR substances in theentire organization of the Company
8 tonsChemicals in
raw materials
and secondary
materials
54,158 tons

Steel andother products(consumed)

Atmospheric emissions
Decomposition /Wasteneutralization
Discharge
to waters (transferred) (elimination)

9 tons

4,043 tons

49,261 tons

837 tons

PCB control
Based on the Act on Special Measures concerning Promotionof Proper Treatment of PCB Wastes, we keep a ledger of alltransformers, condensers, waste oil, etc. that contain PCBs, andimplement strict storage and control measures.

44

AICHI STEEL REPORT 2011

■Breakdown of discharged PRTR substances
Molybdenum andmolybdenum compounds
5%
Manganese andmanganese compounds
6%
Normal hexane
6%

Other 4%
Toluene 2%
Xylene 3%
Hydrogen fluoride
and its water-soluble
salts
44%
1-bromopropane
30%

Atmospheric Quality Data

Water Quality Data

Regulated by the Air Pollution Control Act
and Prefectural ordinances

Regulated by the Water Quality Pollution Control Act
and Prefectural Ordinances■Chita and Forging Plants■Chita and Forging Plants

Substance

Facility

BoilerLimit

Actual level (max)

Item

Limit

Max.

Min.

Average

130

95.4

pH

5~9

7.6

6.3

6.8

150

25.8

COD

25(20)

7.2

1.4

4.6

180

58.7

SS

40(30)

4.5

Less than 0.1

1.2

130

65.7

Nitrogen120(60)

2.1

0.9

1.5

150

43.4

Phosphorus

16(8)

0.1

Less than 0.1

0.03

170

55.2

180

61.6

200

42.0

0.05

0.001

0.15

0.001

Item

Limit

Max.

Min.

Average

0.08

0.003

pH

5.8~8.6

7.3

6.3

6.7

0.10

0.003

BOD

25(20)

8.8

0.5

2.6

0.20

0.003

SS

40(30)

18.0

1.0

6.7

0.25

0.002

Nitrogen120(60)

6.8

0.8

4.0

0.30

0.005

Phosphorus

16(8)

0.5

Less than 0.1

0.12

NOx

Heating furnace■Kariya Plant

BoilerHeating furnace
Soot

0.001

0.08

0.001

0.10

0.001

(Total limit)

34.35

3.935

Facility
BoilerNOx■Higashiura Plant
Item

Limit

Max.

Min.

AveragepH

5.8~8.6

7.3

6.7

6.9

Actual level (max)BOD

25(20)

3.5

1.0

2.3

180

69.1

SS

30(20)

3.0

Less than 0.1

0.7

130

49.7

Nitrogen120(60)

2.3

0.4

1.5

150

41.2

Phosphorus

16(8)

0.2

Less than 0.1

0.15

170

60.7

■Kariya Plant
Substance

Environment

SOx

0.05
Electric furnace

Limit

Heating furnace

Boiler
Soot

200

54.3

0.30

0.003

0.20

0.003

0.25

0.003

Item

Limit

Max.

Min.

Average11.622

4.941

pH

5.8~8.6

7.4

6.3

6.9

BOD

30(20)

2.5

1.3

1.9

SS

60(50)

7.0

Less than 0.1

1.2

Nitrogen120(60)

5.1

0.4

3.5

Phosphorus

16(8)

0.2

Less than 0.1

0.18■Gifu Plant

Heating furnace

SOx(Total limit)■Higashiura Plant : No regulated facility■Gifu Plant
Substance

Facility

Limit

Actual level (max)NOx

Boiler150

84.0■Seki Plant : No regulated facility- The actual levels of NOx and soot indicate the maximum
values actually measured for each regulated facility.
- Units used are as follows. NOx: ppm, soot: g/m3N, SOx:
m3N/h (total volume control as stipulated by the Air Pollution
Control Act)- Unit: mg/liter (except for pH)- Levels of other regulated substances not shown in these tables were
all below the regulation limits or below the minimum measurable
amounts (or not detected at all).
- Figures in parentheses ( ) are daily averages.
- pH: Hydrogen-ion density- COD: Chemical oxygen demand- BOD: Biochemical oxygen demand- SS: Suspended solids in water

AICHI STEEL REPORT 201145

Management’s Discussion, Analysis of Financial Conditions, and Results of Operations
Sales by business segment represent sales to outside customers.
Parenthesises represent negative figures.

Summary
During the consolidated fiscal year under review, the Japanese
economy saw a continuous recovery in production and an
improvement in corporate profits, partly due to the resultof economic policies implemented by the government, andpartly due to the strong economic expansion in China andother emerging nations. However, in the second half, a partial
cutback in the economic stimulus package and prolonged yen
appreciation, among other factors, resulted in stagnation. It wasamidst such circumstances that the Great East Japan Earthquake
occurred in March, causing extensive damage and resulting inthe suspension of the supply chain function (supply network ofmaterials and components) and electricity supply issues, which
may result in further recession risks.
The Aichi Steel Group was helped by an increase in productionin the automobile industry, our number one business, in Asiaand other countries, as well as solid demand in fields outside ofautomobiles, such as construction machinery. The sales volumeof steel materials and forgings, our main products, has greatly
increased in comparison to the previous fiscal year.
Against such circumstances, the Group has aimed to establish
a structure that can yield profits even when the operating rate ofour key business is at 70%, emphasizing an enhanced control ofthe break-even point with the two axes of reduction of fixed costs■Sales volume (non-consolidated basis)in proportion to production volume and thorough cost-cutting—especially for variable expenses. Also, as the closing year of
the Z100 Project, our profit structure reform, we dynamicallypromoted all-company activities to create profits—ranging fromreducing quality losses and improving yield rates to revamping our
procurement and logistics systems.
These efforts resulted in consolidated net sales of 215,454 million
yen, a 23.6% increase from the previous fiscal year (174,279
million yen).
Even though raw material costs increased, Aichi Steel Group
posted an operating income of 14,073 million yen (4,314 million
yen in the previous fiscal year) and ordinary income of 12,873
million yen (3,906 million yen in the previous fiscal year), mainly
boosted by increased sales volume and reduced costs. The
Group fully reversed the deferred tax assets in the March termof FY2009, and with recovery of profits that occurred later on,
rerecorded a portion during the first term. The Group decided
that the schedulable future deductible temporary differences canbe recorded in their entirety as deferred tax assets, and recorded(8,343) million yen as deferred income taxes for this fiscal year.
This resulted in a net income of 15,205 million yen (6,625 million
yen in the previous fiscal year).

■Net sales
Millions of yen

Thousand tons

253,462250,000
235,637

222,060
215,4541,500

200,000
174,279
1,147

1,000

Forgings
317

1,204
1,070
320

968
234

840
100,000

226
500

Specialty steel
829

884

822

734
614

0

46

March
2007

March
2008

AICHI STEEL REPORT 2011

March
2009

150,000

248

March
2010

March (Fiscal year)2011

50,000

0

March
2007

March
2008

March
2009

March
2010

March (Fiscal year)
2011

Operating Income and Net Income
Net sales for the consolidated fiscal year under review saw a
23.6% increase from the previous fiscal year to 215,454 million
yen. Cost of sales was 182,191 million yen and the cost-to-sales
ratio was 84.6% (87.7% for the previous fiscal year), showing
improvement for both compared to the previous fiscal year.
Selling, general and administrative expenses totaled 19,190 million
yen, which accounted for 8.9% (9.9% for the previous fiscal year)of the net sales.
As the result, the operating income for the fiscal year under review
was 14,073 million yen. Net income was 15,205 million yen, andreturn on equity (ROE) was13.4%.

Sales by Business Segment
Specialty steel
Specialty steel is a mainstay product of the Aichi Steel Group. Due
to increased sales volume and improved sales prices, net sales
in this segment saw a 33.0% increase to 119,347 million yen forthis consolidated fiscal year (89,706 million yen for the previous
period).
Forgings
Closed-die forgings for automobiles account for a major partof this segment. Due to increased sales volume, net sales inthis segment saw a 13.3% increase to 85,857 million yen forthis consolidated fiscal year (75,754 million yen for the previous
period).

Other businesses
Aichi Steel’s subsidiary companies provide various services andengage in software development, etc. Net sales in this segment
saw an 8.2% increase to 3,457 million yen for this consolidated
fiscal year (3,196 million yen for the previous period).

■Operating income or operating loss

■Net income or net loss

Millions of yen

Millions of yen

20,00020,00015,00014,073

10,611

Financial Section

Electromagnetic components
Aiming to turn this segment into the Company’s core businessin the future, Aichi Steel has been nurturing and promoting new
industrial fields for its sensors and magnetic products. Due toan increase in the sales volume of MI Sensors and MAGFINE
magnets, net sales in this segment saw a 20.8% increase to 6,793
million yen for this consolidated fiscal year (5,623 million yen forthe previous period).

15,20515,00010,88410,00010,000

6,625

5,693
4,314

5,000

5,000

4,922

0

0
(483)

-5,000(14,105)-15,000
March
2007

March
2008

March
2009

March
2010

March (Fiscal year)
2011

March
2007

March
2008

March
2009

March
2010

March (Fiscal year)
2011

AICHI STEEL REPORT 201147

Management’s Discussion, Analysis of Financial Conditions, and Results of Operations
Financial Position

Consolidated Cash Flows

The Aichi Steel Group’s financial position as of the end of March2011 was as follows.
Total assets were 240,218 million yen, a decrease of 2,132 million
yen from the end of the previous fiscal year.
Current assets decreased by 9,779 million yen to 119,437
million yen. This is mainly the result of decreased deposits due toredemption of convertible bonds with stock acquisition rights to avalue of 30,000 million yen.
Property, plant and equipment increased by 6,854 million yen
from the previous fiscal year. Investments for this fiscal year
totaled 20,528 million yen. Depreciation and amortization
amounted to 12,475 million yen.
Current liabilities decreased by 18,394 million yen from theprevious fiscal year. This is mainly due to the redemption of theconvertible bonds, as described above.
Non-current liabilities increased by 4,967 million yen from theprevious fiscal year, mainly due to long-term debt totaling 10,000
million yen.
Net assets at the end of March 2011 totaled 123,671 million yen,
an increase of 11,295 million yen from the end of the previous
fiscal year. Net assets per share were 604.43 yen (547.85 yen in
the previous fiscal year), and capital adequacy ratio was 49.4%(44.4% in the previous fiscal year).

■ROE

Despite increases in notes and accounts receivable-trade of
5,002 million yen, as well as in inventory of 6,034 million yen, net
cash provided by operating activities amounted to 19,787 million
yen due to net income before income tax of 11,948 million yen,depreciation and amortization of 12,475 million yen, notes andaccounts payable-trade of 4,481 million yen, etc. Net cash used
in investment activities saw a decrease of 17,445 million yen,mainly due to property, plant and equipment purchases of 16,351
million yen. Net cash provided by financing activities resulted ina decrease of 22,848 million yen, mainly due to expenses forredemption of convertible bonds with stock acquisition rights toa value of 30,000 million yen, and proceeds from long-term debt
of 10,643 million yen. Consequently, cash and cash equivalents
as of the end of March 2011 amounted to 31,137 million yen,a decrease of 21,212 million yen from the end of March 2010
(52,350 million yen).

Available-for-Sales Securities
Of the total available-for-sales securities owned by the Company
and its consolidated subsidiaries, the historical cost of thosereported on the consolidated balance sheet at fair market value
amounted to 2,590 million yen (the fair market value of thesesecurities was 9,117 million yen).

■Net assets, capital adequacy ratio％％

Millions of yen
150,000

15

70

13.4
127,329

13

128,155

123,671
112,3778

6

50

104,396

100,000

6.4

44.4

46.4

45.3

49.4
44.4

4.7
4

60

40

4.1
30
50,000220
010(12.7)

-15
March
2007

48

March
2008

AICHI STEEL REPORT 2011

March
2009

March
2010

March (Fiscal year)
2011

0

March
2007

March
2008

March
2009

March
2010

0
March (Fiscal year)
2011

Five – year Summary (Consolidated & Non-Consolidated)
Five – year Summary (Consolidated)Thousands of U.S.

Millions of Yen

Dollars

2011

2010

2009

2008

2007

2011

¥ 215,454¥ 174,279¥ 222,060¥ 253,462¥ 235,637$ 2,595,827

14,073

4314

(483)

10,884

10,611

169,548

11,9493,730(2,618)

9,055

9,037

143,960

Net income (loss)

15,205

6,625(14,105)

5,693

4,922

183,196

Property, plant and equipment

89,761

82,906

88,796

93,092

96,076

1,081,453

Total assets

240,218

242,350

220,017

264,048274,608

2,894,188

Net assets

123,671

112,377

104,396

128,155

127,329

1,490,018

Net sales
Operating income (loss)
Income (loss) before income
taxes and minority interests

Per share data

Yen

U.S. Dollars

Net income (loss):
Basic¥ 77.49¥ 33.77¥ (71.89)¥ 29.00¥ 24.97$ 0.9

Diluted

77.44

30.54

-

26.23

22.56

0.9

Number of employees (Persons)

4,351

4,282

4,467

4,539

4,637

Financial Section

Notes:
1. Net sales are presented exclusive of consumption taxes.
2. Scope of Consolidation:
All subsidiaries are consolidated. The 18 subsidiaries are:
Aiko Corporation, Aichi Ceratec Corporation, Omi Mining Co., Ltd., Aichi Techno Metal Fukaumi Company, Aichi Steel Logistics Co., Ltd., Aichi Information System
Company, Aiko Service Co., Ltd., Aichi Micro Intelligent Corporation, Asdex Corporation, Aichi Forging Company of Asia, Inc., Aichi Forge USA, Inc., Aichi Europe
GmbH, Aichi International (Thailand) Co., LTD., Shanghai Aichi Forging Co., Ltd., PT. Aichi Forging Indonesia, AichiMagfine Czech s.r.o., AMIT, Inc. and Aichi
Korea Corporation. Of these, Aichi Korea Corporation is included in the scope of consolidation because it was newly established within this consolidated fiscal
year.
3. Net income per share is computed by dividing income available to shareholders of common stock by the weighted-average number of shares of common stock
outstanding during the respective years.
4. Each fiscal year end date is March 31.
5. The U.S. dollar amounts above represent translations of yen, for convenience only, at the rate of ¥83=U.S.$1.

Five – year Summary (Non-Consolidated)Thousands of U.S.

Millions of Yen

Dollars

2011

2010

2009

2008

2007

2011

¥ 179,183¥ 141,093¥ 181,317¥ 202,860¥ 187,076$ 2,158,833

11,441

3,153(3,209)

6,559

7,012

137,849

10,0482,351(3,877)

5,811

6,929

121,061

Net income (loss)

13,181

5,967(14,573)

3,838

4,017

158,808

Property, plant and equipment

78,20069,80975,25077,53979,575942,173

Total assets

218,974

222,210200,006

236,098

250,8442,638,243

Net assets

113,097

102,593

95,919115,615

117,709

1,362,614

Net sales
Operating income (loss)
Income (loss) before income
taxes

Per share data

Yen

U.S. Dollars

Net income (loss):
Basic¥ 67.17¥ 30.41¥ (74.28)¥ 19.55¥ 20.38$ 0.8

Diluted

67.13

27.51

-

17.68

18.42

0.8

Cash dividends

10.00

8.50

7.50

10.00

10.00

0.1

Number of employees (Persons)

2,360

2,330

2,331

2,328

2,327

Notes:
1. Net sales are presented exclusive of consumption taxes.
2. Net income per share is computed by dividing income available to shareholders of common stock by the weighted-average number of shares of common stock
outstanding during the respective years.
3. Each fiscal year end date is March 31.
4. The U.S. dollar amounts above represent translations of yen, for convenience only, at the rate of ¥83=U.S.$1.

AICHI STEEL REPORT 201149

Consolidated Balance Sheets
As at March 31, 2011 and 2010
Millions of Yen
2011

Thousands of U.S. Dollars
2010

2011

AssetsCurrent assets:
Cash and deposit
Notes and accounts receivable
Short-term investments¥ 31,214¥ 51,863$ 376,070

46,87742,211

564,777

215

659

2,591

Finished goods

7,508

5,723

90,460Work in process

18,431

15,259222,072

Raw materials and supplies

8,466

7,811

102,005

Deferred tax assets

4,931

3,439

59,410

Other assets

1,937

2,386

23,335

Less: allowance for doubtful receivables

(142)

(135)

(1,720)

119,437

129,216

1,439,000

Building and structures

58,107

57,108700,084

Less: accumulated depreciation(39,616)(37,854)(477,311)

Total current assets
Fixed assets:
Property, plant and equipment:

Machinery, equipment and vehicles

242,335

243,396

2,919,699

Less: accumulated depreciation(204,939)(201,314)(2,469,154)

Equipment

12,241

11,974147,489

Less: accumulated depreciation(10,855)(10,520)(130,785)

Land

14,26814,242

171,904

Lease assets

130

97

1,574

Less: accumulated depreciation

(41)

(19)

(497)

Construction in progress
Net property, plant and equipment

18,131

5,796

218,450

89,761

82,906

1,081,453

Intangible fixed assets:
Telephone rights

12

12

142

Other assets

208

230

2,514

220

242

2,656

13,903

13,582

167,500

Total intangible fixed assets
Investments and other assets:
Investment securities
Long-term loans
Prepaid pension cost

1,146

11,39014,255

172,612Deferred tax assets

916

191

11,042Other assets

741

887

8,916

Less: allowance for doubtful receivables

(32)

(75)

(381)

Total investments and other assets

30,80029,986

371,079

Total fixed assets

120,781

113,134

1,455,188¥ 240,218¥ 242,350$ 2,894,188

Total assets

50

945
14,327AICHI STEEL REPORT 2011

Millions of Yen
2011

Thousands of U.S. Dollars
2010

2011

Liabilities and net assets
Liabilities
Current liabilities:
Notes and accounts payable
Short-term borrowings
Current portion of long-term debt
Current portion of convertible bond with stock acquisition rights
Lease obligations
Income taxes payable
Accrued bonuses for directors and corporate auditors
Other liabilities
Total current liabilities¥ 25,238¥ 21,301$ 304,074

1,556

2,393

18,750

71

683

861

-

30,000

-

27

21

324

4,525

311

54,522

230

186

2,774

16,408

11,554

197,668

48,05566,449578,973

56,14645,647

676,461

70

63

849

Long-term liabilities:
Long-term debt
Lease obligations

7

633

83

Deferred tax liabilities

439

6,862

5,285

Employees’ retirement benefit liabilities

9,857

9,200

118,757

Retirement benefit obligation for directors and corporate auditors

1,250

1,026

15,059

645

-

7,767

Asset retirement obligations
Other liabilities

77

93

936

Total long-term liabilities

68,491

63,524825,197

Total liabilities

116,546

129,973

1,404,170

25,01725,017

301,407

Capital surplus

27,89927,899336,130

Retained earnings

65,78052,738792,532

Less, treasury stock, at cost

(1,516)(1,611)(18,258)

117,180

104,043

1,411,811

Net unrealized gains on available-for-sale securities, net of taxes

3,993

4,607

48,113Foreign currency translation adjustments(2,490)(1,162)(30,009)

1,503

3,445

18,104

Net assets

Financial Section

Long-term payables

Shareholders’ equity:
Common stock, no par value:
Authorized: 476,000,000 shares;
Issued: 198,866,751 shares in 2011 and 2010

2,511,020 shares in 2011 and 2,668,238 shares in 2010
Total shareholders’ equity
Valuation and translation adjustments

Total valuation and translation adjustments
Subscription rights to shares

183

180

2,201

4,806

4,709

57,902

Total net assets

123,672

112,377

1,490,018

Total liabilities and net assets¥ 240,218¥ 242,350$ 2,894,188

Minority interests in subsidiaries

Notes:
1. The Accounting Standards for Asset Retirement Obligation (ASBJ Statement No. 18, March 31, 2008) and the Guidance on Accounting Standards for Asset
Retirement Obligation (ASBJ Statement No. 21, March 31, 2008) have been adopted from this consolidated fiscal year.
2. The Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, June 30, 2010) has been adopted from this consolidated fiscal
year. However, the figures presented in the fields of “Accumulated other comprehensive income” and “Total accumulated other comprehensive income” for theprevious fiscal year are taken from “Valuation and translation adjustment” and “Total valuation and translation adjustment” respectively.

AICHI STEEL REPORT 201151

Consolidated Statements of Income and Consolidated Statement of Comprehensive Income
For the Years Ended March 31, 2011 and 2010(Consolidated Statements of Income)Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses:
Freight expenses
Sales commission
Salaries and allowances and welfare expenses
Retirement benefit expenses
Provision of allowance for directors’ bonuses
Provision of allowance for directors’ retirement benefits
Provision of allowance for doubtful receivables
Depreciation
Research and development expenses
OthersTotal selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Gain on sales of goods
Foreign exchange gain
Earnings of subsidies
OthersTotal non-operating income
Non-operating expenses:
Interest expenses
Loss on disposal of property, plant and equipment, net
Foreign exchange loss
Loss on valuation of derivatives
OthersTotal non-operating expenses
Ordinary income
Extraordinary income:Compensation for transference
Extraordinary expenses:
Impairment loss on fixed assets
Loss on investment securities
Loss on valuation of subscription
Effect of adoption of accounting standard for asset retirement obligations
Loss from disasters
Removal cost of overseas subsidiary’s factory
Total extraordinary expenses
Income before income taxes and minority interests
Income taxes:
Current
For prior periods
Deferred
Total income taxes
Minority interests in net income of subsidiaries
Net income

Millions of Yen
2011¥ 215,454
182,191
33,2632010¥ 174,279
152,793
21,486

3,055
982
6,454
655
230
266
2
607
2,776
4,163
19,19014,073

2,390
853
6,051
658
186
245
8
662
2,532
3,587
17,172
4,314

36,80911,83677,755
7,886
2,770
3,202
18
7,319
33,45250,158231,205
169,548

125
233
278
153
363
1,152

120
136
132
235
618
1,241

1,506
2,809
3,346
1,839
4,384
13,884

655
354
817
36
490
2,352
12,873

727
515
115
292
1,649
3,906

7,888
4,269
9,844
438
5,895
28,334
155,098

-

744

-

200
88
593
43
924
11,949

230
60
630
920
3,730

2,417
1,070
7,139
512
11,138143,960

4,711(8,343)(3,632)376¥ 15,205416(63)(3,372)(3,019)124¥ 6,625

56,761(100,524)(43,763)4,527$ 183,196
U.S. Dollars
2011

Yen
Per share
Net income:
Basic
DilutedCash dividends

Thousands of U.S. Dollars
2011$ 2,595,827
2,195,074
400,7532010¥ 77.49
77.44
10.00

2010
¥ 33.77
30.54
8.50

$ 0.9
0.9
0.1

For the Years Ended March 31, 2011 and 2010(Consolidated Statement of Comprehensive Income)Net income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total of other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

Millions of Yen
2011¥ 15,581

2010-

Thousands of U.S. Dollars
2011$ 187,723(615)(1,573)
2,188
13,392-(7,413)(18,960)
26,373
161,351

13,262
129-

159,792
1,559

Note:
1. Indicated as “Net income before minority interests” starting from this consolidated fiscal year, due to the application of the Cabinet Office Ordinance of Partial Amendment to Regulations
for Terminology, Forms and Preparation of Financial Statements (Cabinet Office Ordinance No. 5, March 24, 2009) based on the Accounting Standard for Consolidated Financial Statements(Accounting Standards No. 22, December 26, 2008).

52

AICHI STEEL REPORT 2011

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2011 and 2010
Millions of Yen
2011

Thousands of U.S. Dollars
2010

2011

Shareholders’ equity
Common stock
Balance at the beginning of year

¥ 25,017¥ 25,017$ 301,407

25,01725,017

301,407

Balance at the beginning of year

27,89927,899336,130

Balance at the end of year

27,89927,899336,130

52,73847,093635,393

Cash dividends(2,158)(981)(26,002)

Net income for the year

15,205

6,625

183,196

(5)

-

(55)

Balance at the end of year
Capital surplus

Retained earnings
Balance at the beginning of year
Change of items during the period

Disposal of treasury stock due to exercise of stock options
Total changes of items during the period

13,042

5,645

157,139

Balance at the end of year

65,78052,738792,532(1,611)(1,610)(19,404)

Purchase of treasury stock and fractional shares

(0)

(1)

(10)

Disposal of treasury stock due to exercise of stock options

95

-

1,156

Treasury stock
Balance at the beginning of year
Change of items during the period

95

(1)

1,146

(1,516)(1,611)(18,258)

104,043

98,3991,253,526

Cash dividends(2,158)(981)(26,002)

Net income for the year

183,196

Total shareholders’ equity
Balance at the beginning of year

Financial Section

Total changes of items during the period
Balance at the end of year

Change of items during the period

15,205

6,625

Purchase of treasury stock and fractional shares

(1)

(1)

(10)

Disposal of treasury stock due to exercise of stock options

91

-

1,101

Total changes of items during the period
Balance at the end of year

13,137

5,644

158,285¥ 117,180¥ 104,043$ 1,411,811

AICHI STEEL REPORT 201153

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2011 and 2010
Millions of Yen
2011

Thousands of U.S. Dollars
2010

2011

Accumulated other coperhensive income
Net unrealized gains on available-for-sale securities, net of taxes
Balance at the beginning of year

¥ 4,607¥ 2,950$ 55,506

(614)

1,657

(7,393)

Change of items during the period
Net changes of items other than shareholders’ equity
Total changes of items during the period

(614)

1,657

(7,393)

Balance at the end of year

3,993

4,607

48,113(1,162)(1,648)(13,997)

Net changes of items other than shareholders’ equity(1,329)486(16,012)

Total changes of items during the period(1,329)486(16,012)

Balance at the end of year

(2,491)(1,162)(30,009)

3,445

1,302

41,509Net changes of items other than shareholders’ equity(1,943)

2,143(23,405)

Total changes of items during the period(1,943)

2,143(23,405)

Balance at the end of year

1,502

3,445

18,104

180

149

2,163

Foreign currency translation adjustments
Balance at the beginning of year
Change of items during the period

Total accumulated other comprehensive income
Balance at the beginning of year
Change of items during the period

Subscription rights to shares
Balance at the beginning of year
Change of items during the period
Net changes of items other than shareholders’ equity

3

31

38

Total changes of items during the period

3

31

38

183

180

2,201

4,709

4,546

56,739Net changes of items other than shareholders’ equity

97

163

1,163

Total changes of items during the period

97

163

1,163

4,806

4,709

57,902

112,377

104,396

1,353,937

Cash dividends(2,158)(981)(26,002)

Net income for the year

15,205

6,625

183,196

Purchase of treasury stock and fractional shares

(0)

(1)

(10)

Disposal of treasury stock due to exercise of stock options

90

-

1,101

Net changes of items other than shareholders’ equity(1,843)

2,337(22,204)

Total changes of items during the period

11,294

7,981

136,081¥ 123,671¥ 112,377$ 1,490,018

Balance at the end of year
Minority interests in subsidiaries
Balance at the beginning of year
Change of items during the period

Balance at the end of year
Total net assets
Balance at the beginning of year
Change of items during the period

Balance at the end of year

54

AICHI STEEL REPORT 2011

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2011 and 2010
Millions of Yen
2011

Thousands of U.S. Dollars
2010

2011

Cash flows from operating activities:
Income before income taxes and minority interests¥ 11,949¥ 3,730$ 143,960

12,476

13,370150,312Adjustments for impairment loss on fixed assets

200

230

2,417

Income/Loss on investment securities

88

-

1,070

-

60

-

593

-

7,139

Adjustments for depreciation

Loss on valuation of subscription
Effect of adoption of accounting standard for asset retirement obligations
Loss from disasters

43

-

512

Decrease (increase) of prepaid pension cost

(72)

103

(869)

Increase of employees’ retirement benefit obligation

663

33

7,984

Decrease in defined contribution pension payable

(322)

(380)

(3,883)

Increase of allowance for doubtful receivables

(29)

11

(354)

Interest and dividend income

(358)

(256)

(4,315)Interest expense

655

728

7,890

Foreign exchange (gain) loss

348

(107)

4,189

Gain on sale of property, plant and equipment, net

(35)

(2)

(421)

Loss on disposal of property, plant and equipment

221

430

2,659

Notes and accounts receivable(5,002)(15,185)(60,268)

Inventories(6,035)

6,562(72,707)

Notes and accounts payable

4,481

9,415

53,991Other, net

628

1,481

7,587

Subtotal

20,492

20,223

246,893

Increase/ Decrease in operating assets and liabilities:

361

258

4,345

(645)

(733)

(7,778)

Income taxes paid
Net cash provided by operating activities

(420)

(321)

(5,055)

19,78819,427

238,405

(120)

(10)

(1,445)0-0(16,352)(8,157)(197,012)

124

32

1,496

(1,353)(1)(16,312)

Cash flows from investing activities:
Net increase in time deposits
Proceeds from sales of Available-for-Sales Securities
Payments for purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchase of investment securities
Proceeds from sales of investment securities

5

-

60

Collection of subscriptions

50

-

607

Payments for loans

(1)

(300)

(9)

Collections of loans

202

159

2,437

Other, net
Net cash used in investing activities

(0)

(11)

(6)

(17,445)(8,288)(210,184)

Financial Section

Interest and dividend received
Interest paid

Cash flows from financing activities:
Net increase (decrease) in short-term borrowings

(695)

(149)

(8,363)

10,64410,000128,240

Repayments of long-term debt

(663)

(5,131)(7,990)

Payments for bond redemption(30,000)-(361,446)

(21)

(14)

(247)

-

20

-

(0)

(1)

(10)

Proceeds from long-term debt

Payments for refund of lease obligations
Proceeds from minority shareholders of subsidiary
Payments for acquisitions of treasury stock
Proceeds from exercise of stock options
Cash dividends paid
Cash dividends paid to minority shareholders
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

77

-

931

(2,158)(983)(26,004)

(33)

(25)

(399)

(22,849)

3,717(275,288)

(706)

98

(8,504)(21,212)

14,954(255,571)

52,35037,396

630,727¥ 31,138¥ 52,350$ 375,156

AICHI STEEL REPORT 2011

55

Text
Third-Party
View
The report for this fiscal year presents a clearer view of governance under
new management through interviews with the President, rearrangement of
the “CSR Management” and “Social Relations Section” from the previous
report, and five feature articles.

Clear message from the top and workplace capabilities (P2 - 5, etc.)

Mr. Satoshi Chikami
Professor, Faculty of International
Welfare Development, Nihon
Fukushi University
Ad-hoc member, General
Policy Planning Panel, Central
Environmental Council
Nagoya Environmental Council
memberAdvisor, Tokai Basic Environment
Plan Promotion Committee, etc.
Mr. Chikami conducts researchon the ideal state for creating an
ecological community, environmental
learning, regional development, andenvironmental management in semimountainous regions, environmental
conservation in reservoir areas,
creating comfortable cities, forming
independent actors for regional
development etc., within Japan.
Outside Japan, he conducts
empirical investigation and research
to realize the forestry regeneration,watershed management,
improvement of living environment,
creation of small-scale industry, andintegration of social development in
the swidden farming region of Laos.

Business policy, including environmental and CSR activities under the new top management is clearlypresented from both offensive and defensive aspects. From the perspective of continuing healthy andsolid corporate business activities and sustaining the company amidst connections with society and the
local community, a clear indication of the will at the top of the corporation is very important, especiallyin a harsh business environment. In particular, the resolve to become a “company of choice” with the
new concept of “workplace capabilities” of the employees is an attitude that greatly contributes to thefortification of operating foundations, such as further promoting the “1S” and “4S” corporate culture
and realizing solid compliance, and influences CSR in a positive way. This already shows in the factthat the voices of employees and external third parties appear in various places in this year’s report.

Evaluation of emphasized efforts in the medium-term CSR plan (P17)
Activity results and evaluation based on the CSR Vision 2015 and future direction are summarized in an explicit
manner. Specifying causes and future measures for unachieved targets, even though placed in the margins,
should be credited as an indication of the Company’s serious attitude. Also, linking the CSR action agenda withthe core subjects of ISO 26000 for the first time this fiscal year deserves special mention. Social interest for ISO
26000 is expected to heighten in the future, and I believe that efforts with this standard in mind are necessary.

Environmental Action Plan 2015 (P34 – 35)
The new Environmental Action Plan 2015 contains important matters in driving forward the Group’s
corporate activities. The fundamental policy is to “contribute to the sustainable development ofsociety and the global community,” and the Group’s resolve to achieve this through manufacturing isimpressive in that it follows on from the prior management principle while demonstrating more active
awareness towards corporate social responsibilities. Strengthening of the three pillars (“promotion of
low-carbon society,” “improvement of resource recycling,” and “reduction of environmental burden”)
and provision of information on efforts made by the company in connection with its relationship withsociety are important part of the Group’s commitment to realize its fundamental policy. Further,inclusion of “Social Contribution” into Environmental Management in a broad sense allows corporate
activities themselves to answer questions like why social contribution is necessary and why society
expects this from companies.

Enriched global perspective
In the aforementioned Environmental Action Plan 2015, promotion of global CO2 management is
professed. Also, fostering the 1S corporate culture at AIT (Thailand) (P16), CS improvement throughdeadline observation at AFC (the Philippines) (P23), thorough elimination of child labor etc. in overseas
group companies (P27), and ISO 14001 certification of overseas consolidated subsidiaries (P36)
are now included in the report. As a company active both domestically and internationally, this clear
manifestation of its global perspective is important and must be commended.

Response to the Great East Japan Earthquake (P2–3, P7)
The Great East Japan Earthquake on March 11 brought extensive damage and repercussions to ourlives and corporate activities. We, as a country, must pull together and make every effort for the earliest
possible recovery. The report summarizes multi-faceted support activities conducted after the disaster by
the company and its employees. Relief activities in the disaster area utilizing the welfare vacation systemamong other efforts show the high awareness of company employees. I hope the experience and lessons
learned from this disaster will aid in countermeasures against any large-scale earthquake expected to hit
the Tokai Region, such as drafting and improving BCP, and coordinating with the local community.

In conclusion
To make this report even better in the future, I would like to suggest enriching the content of the following points.
- How the “1S” corporate culture is disseminated throughout the entire company, and what results are being attained.
- Introduction of environmental data, environmental activities, and CSR activities on the Website in conjunction with the Aichi Steel Report.
- Enhancement and introduction of efforts in waste reduction and recycling in coordination with the entire Toyota Group.
This Third-Party View is based on interviews with relative parties, observation of production sites, etc.

56

AICHI STEEL REPORT 2011

In response to the Third-Party View
Comments from readersThank you for your cooperation in the questionnaire survey regarding the Aichi Steel Report 2010. We value your input and views and will putthem to good use in our improvement activities in the future. Here, we would like to introduce some of the answers and comments we received.

■Understandability
Difficult 0%■Content■Readability (design, etc.) ■Understanding of our
CSR activities

Insufficient 3%

Difficult to read 0%

Poor 3%
Average
21%

Average
46%

Easy
54%

Average
41%

Satisfactory
56%

Average
44%

Very good18%

Easy to read
56%
Good
58%

n=39

Comments and opinions- Informative booklet on your company’s efforts.
- Thank you for visiting our company to provide us with detailed explanations. Such careful responses must be reflected inyour CSR activities as well.
- Difficult to understand the medium to long-term developments.
- I think your attitude towards the realization of sustainable operations should be better presented.

In response to the Third-Party View

Mr. Masao Ukai
Director, General Affairs Div.

I would first like to extend my deepest appreciation to Professor Chikami for providing us hisvaluable opinion for two consecutive years. His suggestions from the previous year were referenced
in our activities and reviews of FY2010 and later, and we tried to make sure that such efforts andimprovements were disclosed in a clear manner in this report. (Improvements in method of disclosure
are indicated in the margins.)
Recognition on linking ISO 26000 with emphasized efforts of the medium-term CSR plan,
Environmental Action Plan 2015, and CSR activities conducted with a global perspective is muchappreciated, and we will strive for achievement of our vision with renewed commitment. Regarding
countermeasures against major earthquakes, through solid BCPs and coordination with the local
communities in response to the Great East Japan Earthquake, we have set out definite goals andimplemented a PDCA cycle, and are currently putting forth our full efforts.
Lastly, we intend to take the content of this Third-Party View very seriously, and will tackle issues in an
aggressive and continuous manner while maintaining communications with our stakeholders so as tobecome a company with ensured sustainable growth.

Matters pointed out by Professor Chikami in the Third-Party View from the previous report are disclosed below.
1. Regarding the Medium-Term CSR Plan, attainment level assessment should provide reasons why some items were unattained, and how this can be remedied.
→ Reasons and measures regarding increase in compliance cases and creating a safe and comfortable environment are now provided. See P17.
2. Promotion of environmental management and CSR activities, including the supply chain→ Followed up on the CSR activities of our clients using the Client Diagnosis Sheet.
We asked new clients to fill in the “Green Purchasing/Trading Survey Sheet” to support their activities. See P24.
3. Calculation basis and scope of CO2 emissions→ The scope of CO2 emission volume is energy-origin CO2 for the entire company ; and energy use is based on the Energy Consumption Status Reportsubmitted regularly to the Ministry of Economy, Trade and Industry.
CO2 emission coefficient is based on the Japan Iron and Steel Federation Voluntary Action Plan. See P38.
4. Environmental preservation and CSR efforts by overseas consolidated subsidiaries→ Group Company Pickup section has been added to introduce CSR activities by various subsidiaries. See P16, 23, 28, 39.

AICHI STEEL REPORT 2011

57

愛知
製鋼

愛知製鋼レポート 2011（英語版）
表紙 オモテ

2011
9.21

DDW8I1

浦田

303
429

インクジェット（1 校）

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