TOYODA GOSE I REPORTContents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

We are a global company that delivers
satisfaction to customers worldwide
through safety, comfort, well-being andthe environment
The Toyoda Gosei Group continues to meet the needs ofsociety through the provision of automotive and otherproducts using rubber and plastic technology.
Company Creed

Boundless Creativity andSocial Contribution
Management Philosophy

Good corporate citizenship

Proper business operation

We, as a good corporate citizen, contribute to

We promote business operations withthe economy and society through community-

integrity through the establishment of abased business activities and social action

system founded on thorough compliance andprograms.

corporate ethics.

Sustainable growth

Customer satisfaction

We aim to build up the TG Group's

We aim to provide products and services

collective strength through an open andwith satisfying quality and price in a timely

fair relationship with suppliers, through amanner, through forward-looking R&D andmutually strengthened corporate structure andproduction engineering.

innovative management response to change.

Conservation of global
environment and resources

Respect for theindividual

We aim to conserve the global environment andWe aim to establish a vibrant corporate

resources in order to hand down a greener

culture through respect for individuality

world to our children through every businessand the value of enhanced teamwork,

activity, which includes cooperation withbased on shared responsibility andsociety and the development of anmutual trust between employees

environment friendly product andand management.

manufacturing process.

The company logo was modeled after the “benzene nucleus,”a chemical compound consisting of six carbon atoms. Even very active
and unstable chemical substances become stable in a hexagonal form,
and the logo symbolizes our vigor and stability.

2

3

Contents

Contents

About Toyoda Gosei
3

Company Creed / Management Philosophy

4Contents

5

Editorial Policy, Positioning of This Report

6

History of Toyoda Gosei

8

Businesses and Locations

TOYODA GOSEI REPORT 2022

Letter from the President

16

Value Creation Process

18

Management Capital

20

Competitive Advantages

21

TG Spirit

22

Materiality (Key Issues)

42

54

4

Value Creation Strategy

Foundation of Value Creation

Data

This report was compiled with the aim of providing shareholders, investors, and all otherstakeholders with a deeper understanding of the Toyoda Gosei Group. It describes the
FY2021 business performance of the Toyoda Gosei Group and explains the Groupʼs strategy
and initiatives for creating medium- and long-term value. Since the 2018 report was issued,
the Toyoda Gosei Report has been compiled as an integrated report. We have tried tomake it straightforward and globally understandable, with reference to the International
Integrated Reporting Framework (International Integrated Reporting Council (IIRC)) for
the IR section and the GRI Standards (Global Reporting Initiative) for the ESG section.
Period covered by report

Reference guidelines

Contributing to Environmental Preservation ThroughAll Our Business Activities / Building DecarbonizedSocieties / Building Circular Societies / Environmental
Preservation and Building Environmentally-Friendly
Societies / Environmental Management

April 1, 2021 to March 31, 2022
Past initiatives and the latest
information are given as needed
to promote understanding of disclosed content.

・International Integrated Reporting Framework(International Integrated Reporting Council (IIRC))
・GRI Standards (Global Reporting Initiative)
・Environmental Reporting Guidelines, 2018 Edition(Ministry of the Environment, Japan)
・Environmental Accounting Guidelines, 2005 Edition(Ministry of the Environment, Japan)

SocialScope

Human Resources Strategy / Human Rights Initiatives /Promotion of Human Resources Development / Active
Participation of a Diverse Workforce / Creating a
Pleasant Corporate Culture / Safety and Health / HealthManagement / Supply Chain Management / Uniform
Global Quality Assurance / Contributing to Local
Communities

68

Value Creation Story

Environment

In principle, this report covers 61
Toyoda Gosei Group companies:
Toyoda Gosei Co., Ltd. and its 60
domestic and overseas subsidiaries and affiliates.
The scope is outlined individually for some items.

GovernanceCorporate Governance / Interview with Outside Directors /Risk Management / Compliance / Management
Members

Data

Value Creation Strategy

Editorial
PolicyFoundation of Value Creation

Value Creation Story
10

About Toyoda Gosei

86

Financial and Non-Financial Highlights

88

Consolidated 10-Year Financial Summary

90

Financial Review

92

Consolidated Financial Statements

24

Feature1 Building Transportation Societies That
Protect Irreplaceable Human Life

26

Feature2 Developing Products for BEVs

28

Feature3 Moving From “Storage” and “Use”
to “Transport” and “Production” forHydrogen Societies

96

Company and Investor Information

30

Feature4 New Value Creation for the Future

97

External Recognition

32

Initiatives and Progress in Our 2025 Business Plan

40

Message from the Officer in Charge of FinanceConsolidated statement of financial position /Consolidated statement of profit or loss /Consolidated statement of comprehensive income /Consolidated statement of changes in equity /Consolidated statement of cash flows

Date of issue
January 2023
Last published in December
2021; issued once a year

Positioningof This Report* Environmental data/examples are available on our website.
For CO2 emissions we received third-party verification.
https://www.toyoda-gosei.com/csr/environmental/report1/

Disclaimer
Careful attention was paid to the content of thisReport, but accuracy and the timing of updates are
not guaranteed and Toyoda Gosei shall bear no
responsibility for trouble, loss, or damage resulting
from updates or errors in the information herein.

Financial information

Non-financial information

Website Shareholder and investor information

Website Sustainability

https://www.toyoda-gosei.com/ir/

https://www.toyoda-gosei.com/csr/

Financial statement, securities report, more

Environment/Social/Governance, more

Toyoda Gosei Reporthttps://www.toyoda-gosei.com/csr/dl/

5

Contents

About Toyoda Gosei

History of Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

2022 Miyagi Ohira Plant of Toyoda Gosei

East Japan Co., Ltd. begins operation

Toyoda Gosei has exploited its expertise in rubber and plastics and provided new value to the worldthat meets the needs of the times.

2016 Bawal plant of Toyoda Gosei Minda
India Pvt. Ltd. begins operation2018 Gujarat plant of Toyoda Gosei Minda
India Pvt. Ltd. begins operation
PT Toyoda Gosei Indonesia isestablishedestablished1982 Bisai Plant begins operation2005 ISO /TS16949 certification

1985 Capital participation in Tai-yue

2006 Toyoda Gosei (Shanghai) Co., Ltd.
is established

Rubber Industrial Co., Ltd.
Company wins Deming Prize for
Total Quality Management

1949 Nagoya Rubber Co., Ltd. isestablished as a spin-off of therubber research division of Toyota
Motor Industry Co., Ltd.

is established2009 Miwa Technical Center isestablished1957 Haruhi Plant begins operation

established1997 Company obtains ISO 9001

1967 Inazawa Plant begins operation

Present Kitajima Technical Centeris completed

1973 Company name is changed to
Toyoda Gosei Co., Ltd.

2013 Toyoda Gosei East Japan Co., Ltd. is

Stock Exchange
Company obtains ISO 14001
Toyoda Gosei North America
Corporation is established1977 US Office is established in Illinois
1978 Company is listed on the Nagoya
Stock Exchange

2021 Monterrey plant of TAPEX Mexicana,

S.A. de C.V. begins operation
New plant of Hubei Toyoda Gosei
Zheng Ao Rubber & Plastics Sealing
Technology Co., Ltd. begins operation

establishedGDBR Industria e Comercio deComponentes Quimicos e de
Borracha Ltda. is established1999 Company is listed on the Tokyo

1976 Morimachi Plant begins operation

Rubber & Plastics Sealing Technology
Co., Ltd. is established
Thai Binh plant of Toyoda Gosei
Haiphong Co., Ltd. begins operation

2020 Inabe Plant begins operation

2008 Toyoda Gosei Minda India Pvt. Ltd.

1986 TG Missouri Corporation is2019 Hubei Toyoda Gosei Zheng Ao

Net sales (Billions of yen)

2001 Toyoda Gosei Asia Co., Ltd. is2014 Toyoda Gosei Irapuato Mexico, S.A.
de C.V. is established2000 Toyoda Gosei Europe N.V. isestablished1980 Headquarters is relocated topresent location (Kiyosu, Aichi
Prefecture)

Development history of technologies and products
Automotiveparts
Rubber1953
Brake hoses

1961
Piston cups

1977
Constant velocity
joint boots

2011Lightweight radiator hoses

1983
Nylon fuel hoses

1963
Flocked glass runs
1950
Weatherstrips

1982
Sound insulating glass runs

2010
Lightweight opening
trim weatherstrips

2003
Two-color molded
opening trims

2017
Glass runs for flush
surface door

Plastics
1954
Plastic injection
steering wheels

1960
PP steering wheels

1974
Instrument panels

1982
Plastic fuel filler caps

1989
Driver-side airbags

2000
Noise absorbing
air intake ducts

1998
Curtain airbags

2008
Plastic fuelfiller pipes

2008
Rear-end impact
airbags

New fields
1986
Start of R&D forblue LEDs

6

1991
Success indevelopmentof blue LEDsis certified

2014
Plastic water pipes

2010
Start of R&D for GaN
power devices

2015
Caplessfuel fillers

2017
Large radiatorgrilles

2017
Steering wheels with grip sensor /New type of side airbags

2014
Profs. Isamu Akasaki and Hiroshi Amano(Toyoda Gosei technical advisors) receive
Nobel Prize in Physics
2007
Start of R&D
for e-Rubber

2018
Air conditioner
registers with
LED lighting

2019
Plastic turbo ducts /Battery cases

2020
Extra-large
spindle grilles

2020
UV-C space disinfectors, which
use UV-C (deep UV) LEDs, arelaunched
UV-C (deep UV) LEDs
are confirmed to be highly
effective in inactivating
COVID-19
2019
Development with
EBM Corp. of theSupeR BEAT heart
surgery simulator
that uses e-Rubber

High pressurehydrogen tanks

2022
CNF-Reinforced
Plastic

2021
Driver-side airbags for better protection in angled
frontal collisions ／ Pedestrian protection airbags

2021
UV-C high-speed
surface disinfectors

2022
Success in making
larger GaN substrates
for next-generation
power devices

2021
Smart insoles

7

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Businesses and Locations
We supply rubber and plastic automotive parts globally.

Global network

Product area

■ Automotive parts
Weatherstrips

Functional
Components¥93.7 billion（11.3％）

With 61 group companies in 16 countries and regions, Toyoda Gosei swiftly meets the needs of customers
around the world.
We have established sales and engineering systems that are customer-oriented and community-based with
globally optimal systems of production and delivery.

¥145.2 billion（17.5％）
Door glass runs

Plastic fuel ﬁller pipes¥

Opening trim
weatherstrips

830.2

Americascompanies

companies

17

Plastic turbo ducts

Revenue by
product area

Japan

Brake hoses

Sales

Employees¥399.5 billion

9,383

18

Group Companies ＊61billion（FY2021）High pressure hydrogen tanks

Interiors and Exteriors¥328.0 billion（39.5％）

companiesAsia¥263.1 billion（31.7％）

4

companies
Sales

companies

Employees¥226.0 billion 14,125

Instrument panel modules andcomponents

Sales by region (FY2021)

Steering wheels(with built-in airbags)

Radiator grilles¥

Pop-up hood actuators

830.2

D
C

■ Other products

Employees

1,343

General industry products

e-Rubber products

Re-S eco-brandEmployees by region (FY2021)

billionA Japan

A
B

8

Sales

¥26.9 billion

Airbags
Console boxes

LEDs

Employees

Europe & Africa*Companies for consolidation

22

Safety Systems

Sales¥240.7 billion 14,660

D Europe &AfricaD¥399.5 billion

B Americas ¥240.7 billion
C Asia39,511¥226.0 billion¥26.9 billion

A
C
B

9,383
B Americas 14,660
C Asia14,125D Europe & 1,343
A JapanAfrica*Rounded down to the nearest one hundred million yen*Sales by region includes amounts for internal transactions within the Toyoda Gosei Group, and so does not match the total value for consolidated sales

9Contents

Letter from the President

About Toyoda Gosei

Value Creation Story▲

Toyoda Gosei has been offering high-quality automotive
parts with synthetic rubber and plastics using our rubber
and plastic material technologies for more than 70 years.
The word “Gosei” (synthesis) expresses our philosophy ofcreating new things with these materials. That mindset
has been passed on to the present day.
Under the company creed of “Boundless Creativity
and Social Contribution,” Toyoda Gosei's mission is topromptly grasp society’s needs and help to solve social
issues with the leading-edge technologies and products
we have cultivated and contribute to a sustainable
environment and society. This will lead to sustainablegrowth for our company. It is important for us toanticipate changes and social issues five to ten years
into the future, form an image of how we can contribute
solutions and the strengths we can leverage, and promote
our business models and grow our company while
enhancing our competitive advantages ( P.20) (Value
Creation Process P.16).
▲

For example, one of our longstanding goals has beena safe, secure, and comfortable mobility society by
reducing traffic fatalities, as expressed in the section onmateriality( P.22). Through this, our airbag business hasgrown to acquire the top market share in Japan and 4th
globally.
In Toyoda Gosei’s first project to develop a driver's airbag in the late 1980s, I was involved as one of its members working.
At that time, we had experience with steering wheels,
instrument panels and associated material technology,
but airbags were completely new to us. Our knowledgeof vehicle occupant protection systems and other safety
technologies was limited, and our evaluation and analysis
technology was weak. The cornerstone of our project was
the spirit of delivering the airbags needed by customers as
quickly as possible and a sense of mission to “save lives.”
Airbags are effective when installed in vehicles.
Accordingly, we worked to comprehensively overcome
issues in conjunction with vehicle and seat belt systems
after closely studying how they are used in the market
through occupant protection performance in crash tests.
Finally, we achieved mass production.
Since then, we have worked continuously to spread
our airbags through efforts to lower costs and build asupply chain that achieves the same quality globally.
▲

President

10Foundation of Value Creation

Data

Creating a path to the future by offering solutions to environmental
and social issues through cooperation with our stakeholders
Our mission is leveraging our expertise in rubber
and plastics to help resolve social issues

Toru Koyama

Value Creation Strategy

In order to further reduce traffic fatalities, wehave been developing new airbags by leveraging ouraccumulated technologies and our global development
and assurance system. With a sincere concern for safety,
we have pursued the potential of airbags to reduce
casualties and protect vehicle occupants through analysisof global traffic fatality data, repeated computer-aided
engineering analyses and test trials, and much discussion
with and numerous proposals to customers.
From this new airbag business development, I learned
that helping to solve social issues and other issues leads
to corporate growth. We will embrace the actual problems
for many people and propose solutions based on market
conditions. We will then spread solutions throughout theworld while continuing to develop our technology. This
will lead to the sustainability of our business. Our spiritof taking on challenges, our know-how, and the global
network we have developed are the source of our present
competitiveness.

Solving major social issues throughcooperation with our stakeholders
Stakeholders have steadily rising expectations of companies to help solve social issues. For Toyoda Gosei, amanufacturer of polymer automotive parts, our next big
challenge is to achieve carbon neutrality.
As we address this difficult social issue, it is important
to cooperate with our stakeholders in order to improve
problem-solving ability, competitiveness, and speed.
I myself became keenly aware of the importance of cooperation with stakeholders through the development of
airbags. This is why I believe one of my important roles
as a leader is to build relationships with all stakeholders
involved in our business, including customers, suppliers,
employees, and local communities. For this purpose, I
will share the company’s future vision and direction, andalign our ideas with them through continuous dialog toachieve corporate growth and help solve social issues.
With the transformation of automobiles and thedramatically changing business environment, it is more
important than ever to demonstrate to stakeholders thecompany's direction and to undertake our initiatives
with a sense of urgency. As the leader of the company, I
will clearly present our medium- to long-term businessplan as a means to share and gain understanding of ourinitiatives and promote solutions to the challenges weface in creating a sustainable society.

11Contents

Achieving our 2025 Business Plan

To achieve sustainable growth in today’schanging environment, it is important forexisting businesses to take an aggressive
posture in continuing to change
Toyoda Gosei has maintained a leading position in
automotive parts made of rubber and plastics.
To achieve sustainable growth in the midst of therecent major environmental changes, we need a “cycleof corporate growth” to ensure profitability. This
includes reviewing our business and product portfolio
and further evolving our existing designs/materials andmanufacturing capabilities, developing new products
based on these management resources, and sending
them to the market. Without an aggressive posture, wewill not be able to maintain our position as a leader inthis field, and will have little prospect of further growth.
In the SS business ( P.34), a growth driver for Toyoda
Gosei, we will take an aggressive approach to new
product development with the aim of capturing the
top market share. In India, where the automobile
market is expected to grow, we will strengthen ourdevelopment and production systems and further
enhance collaboration with business partner Daicel
Corporation in order to respond to the coming shift to 6
mandated airbags for passenger cars by law. To ensurethat we do not miss any business opportunities, we will
implement winning business strategies such as local
procurement of components. We will also implement
sales strategies to meet a wide range of customer needs
by proposing collision safety systems that optimize
airbags and seatbelts as a whole to increase our market
share. To further improve safety performance, we will
expand high-performance far-side airbags, develop highimpact-absorbing airbags for BEVs, and propose steering

Value Creation Strategy

Foundation of Value CreationData

wheels that incorporate advanced design and high levelsof safety.
Even as vehicles change, we will continue to improve
the safety technology of our airbags to address the social
needs of protecting as many lives as possible in traffic
accidents and providing safety in a timely manner tousers around world.
In the IE business ( P.35), we aim to further growsales by strengthening our products and productionengineering to reliably meet changing design andfunction needs associated with the shift to BEVs andautonomous driving. Examples in exteriors are stylish
products that transmit millimeter waves, light, andsound, and the development of environmentally-friendly
materials and decorative technologies. In interiors,
we will make timely proposals for new products thatleverage our accumulated technologies, focusing on nextgeneration interiors such as functional LED lighting andthin instrument panels that integrate airbag technology.
▲

The FC business ( P.36) requires the most flexible response to market changes. We focus on the developmentof next-generation cooling pipes for BEVs and hydrogentanks for FCEVs to keep up with the wave of change. At
the same time, we are developing a production systemthat can handle the shift from gasoline to electric vehicles.
▲

In the WS business ( P.37), more advanced technology isneeded to reduce driving noise more than engine noisewith the move to BEVs. We will propose products withimproved quietness performance with our expertise inrubber materials cultivated over 70 years.
▲

FY2022 is a year of preparation for our final push toachieve the 2025 Business Plan. We are taking early
action on issues to achieve these goals, and allocating
management resources to carbon neutrality and new
businesses, which are growing markets and fields, with aneye to the future. We will work for corporate growth witheffective and maximum utilization of our resources.

Value Creation Story

▲

▲

12

Forecast for achieving our 2025 Business Plan
We have reached the halfway point in our 2025 Business
Plan ( P.32), published in 2018. We have been working
toward our goals of achieving revenue of more than
1 trillion yen, operating profit ratio of 8%, and ROE of
10%. Looking back over the past four years, the businessenvironment has changed more dramatically than we
had anticipated. We have asked each employee to think
and act on their own with a sense of ownership and to
be united in working on our policies and business plans.
These initiatives have begun to bear fruit, and sales
revenue of 1 trillion yen is now within sight. The safetysystems business, a growth driver for the company, isspurring sales and earnings, and our other automotive
businesses are focusing on regions where they can grow.
Meanwhile, there are a number issues to be addressed in our commercialization of new technologies.
Although the development of LED-related products for
consumer use has progressed to a satisfactory level, thecommercialization of new material-related products has
been delayed due to a lack of maturity in the technology
and weak commercialization strategies. We believe that areview is necessary. Through a re-evaluation of our newvalue creation development process since last year and
our CVC activities ( P.30), we have been supplementing
areas where we lack technology or knowledge to promote
early commercialization.
▲

Over the past year, the situation of the automotive industry has been changing dramatically. Our
main customer announced their BEV strategy, and theongoing transformation of automobiles has accelerated
significantly.

▲

A look back on FY2021
In FY2021, it was difficult to ensure profits on a
global basis. The spread of COVID-19 caused a global
semiconductor shortage and opaque production
fluctuations. There were also soaring prices and a tightmarket for raw materials, along with rising energy,transportation costs, and labor costs.
Even in this harsh environment, we have been urgently
working on business continuity plan (BCP) management
to provide stable and timely production and quality, thelifeline of manufacturing, to our customers. Specifically,
we have implemented continuous improvements throughregular discussions on BCP at management and board
meetings, and we have enhanced our ability to supply
customers even during material shortages brought on bypolitical instability or COVID-19 pandemic. We do this byutilizing our global network to procure alternative partsand establish backup production systems. In addition,
to ensure global optimization and rapid responses, wehave been reviewing our organization to strengthen
global information collaboration and internal controls
at affiliates in Japan and other countries, and developing
regulations and systems to ensure investment decisions
and fund procurement to avoid loss.
We are now beginning to see challenges in terms
of profitability. It is extremely frustrating that wewere unable to secure profits commensurate with therecovering trend in sales. Profits decreased due toworsening materials market conditions in the Americas,
one of our primary sources of revenue, and a lack offlexible response to production fluctuations. This was
despite an increase in net sales from FY2020 with therecovery in production following the significant drop
caused by COVID-19 pandemic and growing sales in our
non-automotive business. In order to efficiently secure
profits in the coming years, we will make significant
efforts to shrink losses from variable costs by responding
flexibly to material market conditions and production
fluctuations, and to reduce total costs through thoroughcost improvement.
We will continue to make concerted efforts to build
a foundation for efficient earning. While exploring new
ideas for manufacturing that go beyond precedentor convention, we are making efforts to utilize IT for
rapid improvements through timely visualization of
productivity, yield, and defects. We are also expanding
smart factories globally with more efficient work styles,
environments, and information management.

Taking these unprecedented changes in the automotive business as an opportunity for growth, we will seek
to enhance our ability to make farsighted proposals
centered on carbon neutrality and responding to the shift
to BEVs ( P.26). We will also enhance our corporate capabilities by planting seeds for the future and solidifying
our management foundation.

About Toyoda Gosei

Toyoda Gosei’s identity lies in a high level of knowledgeof rubber, plastics, and other polymer materials, andaccumulated experience in new business development,

Strategy by Segment/Business Field
Business field

Segment

SS
SafetySystems

IE

FC

WS

New
Interiors
Functional
Weatherstrips Technology
andComponents
Exteriors

Total

Japan
Americas
Asia
Europe13

Contents

including LED and airbag products. We hope to further
refine the technologies developed and passed on to us
from our predecessors and contribute to solving social
issues through the creation of new value that goesbeyond the framework of automotive parts.

coexistence between the environment
and polymer materials

the future

14

Since last year, we have also strengthened our initiatives
to enable activities by a diverse workforce. We have always
respected each and every one of our employees, and have
tried to make it possible for them to display their maximum
abilities. With the establishment of a new Human Rights
Policy, we hope to promote a culture of mutual respect
throughout the Toyoda Gosei Group and extending to
all other stakeholders involved in our business activities.
The world is entering a period of major shifts in the social
environment, with declining birthrates, aging populations,diversifying work styles, and changing values. We see thisas a turning point in our efforts to improve our corporate
capabilities, and we are examining and implementing
personnel policies from various perspectives to ensure that
employees with diverse ways of thinking and talents will
respect each other and display their maximum individual
strengths. This will lead to business growth opportunities
and effective responses to corporate risks based on new
perspectives. Since each employee needs to acquire skills
that meet the needs of the times, we are also putting
greater emphasis on the reskilling necessary for the DX thatis currently underway at Toyoda Gosei and the generationof new business ideas. Employee job satisfaction andmotivation are also crucial to these activities, and so we
conduct employee engagement surveys to obtain theirtrue opinions, which we link to company policies andworkplace improvements with the aim of creating vibrantand energetic workplaces (Social Initiatives P.54).
▲

We are rapidly accelerating our sustainability activities.
Last year, we launched a new Sustainability Meeting
to discuss global issues presented in the Sustainable
Development Goals (SDGs) and management issues
related to the environment, society, and governance froma medium-term perspective. The presence of outside
directors and outside Audit and Supervisory Board
members helps to ensure that our supervisory functions
work well and that balanced policies are agreed uponand implemented. We will continue to take the lead in

Environmental activities are one part of the ESG concept,
the foundation of management. For about 30 years,
we have been sincerely committed to reducing CO 2
emissions and protecting the environment, by setting
specific activity goals every five years. Since last year, wehave been working toward our 2025 mid-range targets.
This increases the feasibility of a 50% reduction in CO2emissions and 50% use of renewable energy (Targets 50 &50) by 2030 and achieving carbon neutrality by 2050. We
will evolve as a leading company for carbon neutrality in thefield of automotive rubber and plastic parts. We can accelerateindustry-wide initiatives for carbon neutrality and a circular
economy by more quickly building a track record of activities
targeting Scope 3 emissions and spreading that positive impact
throughout the auto parts industry. We also want to contributeto clean hydrogen energy societies ( P.28) through ourhydrogen tank technology, and continue our efforts to leavea safe global living environment for future generations(Environment Initiatives P.42).
▲

Leading the Toyoda Gosei of today into

sustainability activities in order to lead Toyoda Gosei into
the future.

▲

The world has become keenly aware of the importanceof tackling environmental problems on a global scale.
Environmental problems caused by plastic and rubber
waste are being closely watched around the world. It isalso true that we cannot go back to manufacturing without
polymer materials. Recycling and effective utilization ofrubber and plastic materials have become crucial for the
positive coexistence of the environment and polymer
materials.
Toyoda Gosei’s extensive knowledge in rubber andplastics, compounding technologies, and using thesematerials to full advantage can lead to major business
opportunities without adversely impacting the environment.
Currently, we aim to expand material recycling, including
recycling of waste materials and utilizing recycledmaterials in our products. If a company can establish green
technology in the areas of rubber and plastics, it will open
up a whole new world of business opportunities. We arecollaborating with other companies on material recycling to
make it into a viable business as soon as possible.
In addition to material recycling, we are making a wide
range of other initiatives, including reducing the amountof materials used, improving yields during production,and substituting with bio-materials. We aim to become theleader in carbon neutrality among polymer automotive
parts manufacturers by making major changes in design
and production engineering and cooperating with our
suppliers.

Value Creation Story

To continue as a company of integrity, a cornerstone of ourcompany, our governance system must constantly change
and evolve in response to the circumstances of the times
and the opportunities and risks we face. Last year, in linewith revisions to Japan’s Corporate Governance Code, we

Value Creation Strategy

Foundation of Value Creation

Data

reviewed the operation of the Board of Directors and otherfunctional bodies. We will make global initiatives to build
a foundation for sustainable increases in corporate value
by developing an Internal Control Committee in addition
to a new internal audit status report to manage and correct
corporate risks in an integrated manner. Compliance andrisk management, which have been handled individually,
will also be discussed from multiple perspectives(Governance Initiatives P.68).
▲

Using our strengths to maintain

About Toyoda Gosei

To our stakeholders
The world is going through chaotic times, with politicalinstability, escalating environmental problems, and the
spread of COVID-19. The automotive industry is also undergoing a huge transformation. Even in this uncertain
business environment, we are leveraging our management
resources and core competencies with a sense of integrity
to continue achieving sustainable growth.
We strive to be a company that contributes solutions toenvironmental and social issues and moves into the future
by working together with our stakeholders and partners
who share and understand our initiatives. For this purpose,the entire company is united in taking on new challenges
with energy and enthusiasm.
We would like to ask all of our stakeholders for theircontinued understanding and support.

Toru Koyama
President

November 2022

Photo taken at Toyoda Gosei Memorial Gymnasium (ENTRIO)
Entrio was opened in September 2020 with the conceptof being a place that would bring people together
through sports, make them smile, and energize them.
In addition to hosting the official games of Toyoda
Gosei’s sports clubs and internal company events, itcreates excitement and contributes to a sustainable
society as a meeting place for people and people,
people and companies, and companies and companies.
Origin of the name ENTRIO
The gymnasium was named for the three “en”
(connections) of work, community, and sports that wetreasure as we support each other and grow, and “trio”
meaning three.

15

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Value Creation Process
With the company creed of “Boundless creativity and social contribution,”
the Toyoda Gosei Group leverages its expertise in rubber and plastic, its global reach,and its experience in pioneering new businesses, and will continue tomeet social needs through the provision of automotive products and other innovations.

Demands from society
Social issues from the perspective of
Toyoda Gosei

Company Creed/Management Philosophy

Provide both innovations in automotive
technology (BEVs, CASE) and a safe and secure
mobility society

Mid-Term Business Plan (2025 Business Plan) P32

Increasingly serious problems in the global
environment
Changing values/diversiﬁcation of work styles●

Intellectual●Social and relationship●

Natural●Financial

y

(B

us

in e

r
cu
o
r
P

e titiv e a d v a n

ss ac

●

tivi tie s・M

tagOperating proﬁt ratio ・・・・・・・ 8%●

ROE (Return on equity) ・・・10%

Shareholders, Investors

Automotive
Safety Systems

●
●

P34

Interiors and Exteriors

es

ge
ana

0

me

b
nt

as

Weatherstrips

P36

●

P38

General Industry Products

Active participation of a diverse workforce
Stimulating and pleasant workplace environment

Customers●

P37

Other areas

TG Spirit / Sincerity, Activity, Unity P21

Corporate governance /Risk management / Compliance

Functional Components

Stable, sustainable shareholder returns
Provision of transparent IR information

Employees
P35

●

2

P2

Fast response to climate change(Contributing to carbon neutrality, circular societies)

em

en
t

mp

Revenue ・・・ More than ￥1 trillion●

Natural environment

e)

lit

ig n

Manufactured

er

●

at

Human

M

●

Co

io
n

P2

Sa

Global netw
ork

des

u
od
Pr

Management capital P18
iam

Value chain

ct

Management capital built up over morethan 70 years of company history

lop

t/

Unstable material supply due to
COVID-19 pandemics（2025）●

Providing value to stakeholders and society

enexchange ﬂuctuations, instability in energy supply

le

Deve

evelopment experiences
ness dbusi
NewChanges in company competitiveness withaccelerating digital/IT transformation

Mid-term
targets

Business,
Products

the ﬁelds of rubber and p
lasticdge inelw
sKnoFewer children/aging population

Increasing political instability‒ Import/export regulations, cost of living/foreign

Toyoda Gosei aims to grow as a global company that acts ﬂexibly and swiftly in today’s
dramatically changing business environment,delivering the highest levels of satisfaction tocustomers worldwide through safety, comfort,
well-being and the environment.

P3

Contributing to business growth, purpose
realization- Provision of safe and reliable products- Flexible response to business transformation

Suppliers●

Sustainable, equitable and fair business dealings
Mutual development based on mutual trust

LEDs /e-Rubber●

Re-S eco-brand

Local communities, government
Achieving a safer and more comfortable mobility
society● Contributing to stable community development●

P68

Higher sustainable corporate value from value creation cycle
16

17Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Management CapitalManagement capital built up over a history of more than 70 years
Management capital is crucial to the sustainable increase of corporate value.
Toyoda Gosei cultivates management capital through repeated cycles ofvalue creation based on its management philosophy, investing capital at opportune times for
anticipated business opportunities and risks.

Human Capital

Number of employees

39,511A manufacturing workforce with diverse individual characteristics andstrengths to support corporate evolution and growth
Toyoda Gosei operates 61 Group companies in 16 countries and regions around theworld. We will continue to evolve and grow through the collective efforts of ouremployees, who have diverse talents and values that differ in terms of nationality,
gender, age, and lifestyle, as they display their full abilities. We promote thecreation of healthy and comfortable work environments where everyone can fully
demonstrate their abilities while experiencing personal growth.
●●●●

Percentage of employees outside of Japan: 76.3%
No. of female managers [Toyoda Gosei Co., Ltd.]: 30
Local executive percentage: 31.0%
Percentage of management who are mid-career hires [Toyoda Gosei Co., Ltd.]: 30.9%

Social and
Relational Capital

Number of suppliers[Toyoda Gosei Co., Ltd.]772 companies

Number of locations

61companies

Leveraging our global network and knowledge in the fields of rubber andplastics for the timely provision of safety, comfort, well-being, and theenvironment to customers around the world
To meet the needs of our customers around the world in a timely manner, we haveestablished sales and engineering structures with close ties to each region and an
optimal global production and delivery system. In addition, we are enhancing ourmanufacturing capabilities through innovative advancements in manufacturingmethods and production equipment by leveraging our own knowledge in the fields
of rubber and plastics, a strength we have cultivated for more than 70 years. Goingforward, we will introduce internal carbon pricing (ICP) to promote investment
decisions based on the balance between environmental and economic activities.
●

Intellectual
CapitalR&D expenses¥33.5 billion

In this once-in-a-century period of tremendous change, and instability in theinternational community, smooth cooperation with various stakeholders is
crucial to realizing our management vision. Toyoda Gosei will engage in carefuldialogue with our stakeholders, and, together with these stakeholders, build andmaintain strong relationships of mutual trust by providing value to society. We
will continue to steadily evolve even in the current harsh business environment.
●●

Active Participation of a Diverse Workforce P58

Manufacturing
Capital

Building strong relationships with stakeholders through close dialogue

Dialogue with institutional investors (financial results briefings, small
meetings, ESG briefings, facility tours, business briefings, and more)
Joint research with universities (Nagoya University, Osaka University,
University of Tokyo, others)

Social Initiatives P54

Natural Capital

Initiatives for climate change and resource recycling that leverage ourenvironmental technologies and knowledge

Total energy input

2,361,000 GJ＊

Toyoda Gosei began full-scale environmental activities in 1993 with its“First Environmental Action Plan” and we have been strongly committed toenvironmental activities over these 30 years. Natural capital is the root ofmateriality and outcomes, and by further advancing our cultivated knowledge
and technology in environmental conservation, and our knowledge in the fields
of rubber and plastics, we will achieve efficient resource investment and reductionof environmental impacts, promoting both environmental and economic value.
●●

Capital investment: ￥49.7 billion●

Total material input: 40,305t
Water resource input: 1,120,000㎥
Renewable energy input: 34,000GJ
Percentage of production sites that have acquired ISO 14001 certification (environmental management): 100%●Competitive Advantages P20* Gigajoule (1,000,000,000 joules)

Materiality P22

Refining our research and development (R&D) capabilities to further enhance
our competitive advantage in new business development experiences

Financial CapitalSound financial management that supports sustainable growth and increased
corporate value

We are going through a period of tremendous change with the transformation of
the automobile. Grasping the needs of customers and society as early as possible
and possessing the technological capabilities that will be needed in five to ten years
will be important, as R&D capabilities are the source of growth for the company.
Toyoda Gosei has invested approximately 100 billion yen in R&D over the last three
years for new and existing businesses. We will continue to enhance our competitive
advantage by utilizing IP landscaping and other means to improve the accuracy andspeed of decision-making in new business development.
●●

No. of developers and engineers [Toyoda Gosei Co., Ltd.]: 2,327
No. of patents held: 4,829

Competitive Advantages P20

Financial and Non-Financial Highlights P86

Credit rating

A+（R&I）

Environment Initiatives P42

Sustainable growth requires continuous investment in facilities, R&D, and human resources.
Toyoda Gosei will maintain the stability of its financial base through sound financial management
and achieve continuous growth by effectively using financial capital with the necessary timing.
In the future, by introducing new management indicators such as ROIC, promoting decisionmaking that emphasizes investment efficiency, and improving capital efficiency through theestablishment of a system for global and nimble financing, we aim to increase corporate value
through multifaceted financial management that emphasizes capital efficiency.
●●●

Shareholders’ equity: ￥428.8 billion
Interest-bearing debt: ￥173.6 billion
Ratio of equity attributable to owners of parent to total assets: 49.9%

Message from the Officer in Charge of Finance P40

Financial and Non-Financial Highlights P86
As of March 2022

18

19

Contents

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Competitive Advantages

TG Spirit

We aim to achieve sustainable corporate evolution and growth by addressing materiality issues based on the threecompetitive advantages we have built up over 70 years of business: knowledge in the fields of rubber and plastics, a
global network, and new business development experiences.

The Toyoda Gosei Group established the “TG Spirit” as a common set of values toward work. As work styles diversify
and values change, the TG Spirit is an important source of cohesion and strength for our approximately 39,000
employees working in 16 countries and regions around the world, who differ in terms of nationality, gender, age, andlifestyle, and will help them to demonstrate their collective strength through teamwork. We will aim for sustainablecorporate evolution and growth by carrying into the future the “attitudes and ways of thinking that should be valued inperforming our work.” These are things that have been passed down to us and that we will continue to treasure even in
today’s rapidly changing environment.

Knowledge in the Fields of Rubber and Plastics
Materials and manufacturing methods that give our products an edge
Our research and development goes back to the rubber research division established by Kiichiro Toyoda, the founder of
Toyota Motor Corporation. We are leveraging the foundation of our continuous basic research to create materials andmanufacturing methods that anticipate the needs of our customers and the times to enhance our competitive advantage.
▲

In-house development of materials

Our departments specializing in development
and analysis for the rubber, plastic, and surface-treated materials that are most suitable forour products are working to solve development
issues from the perspective of materials. We
then use these strengths in material and compounding technology, in analysis, observationand evaluation technology, and in simulation
technology to create various products beyond
the framework of automotive parts.
Our knowledge in the fields of rubber and plastics
may be considered our identity, and is an important
foundation for sustainable corporate growth.

Weatherstrips●●

Functional Components

Opening trims / weatherstrips
Door glass runs

Mixingtechnology

Formulation
design●●●

Plastic fuel filler pipes
Plastic turbo ducts
Brake hoses

Non-automotive
e-RubberRubber and plastic Denaturation /materials
reformulation /surface treatment polymerization
LEDs (package)●●

Radiator grilles
Instrument panel modules
and components

Plating / painting /coating design

Interiors and Exteriors●●

Steering wheels
Airbags

Safety Systems

GaN power devices

Making the Ideas Passed Down Our Own, and Passing Them on to the Younger Generation
We believe that sharing this TG Spirit throughout the entire Toyoda Gosei Group will help us to become one team,transcending differences in nationality, gender, age, and lifestyle.

1

Customer Oriented

2

3

Challenge

Ownership

Think from the customer’s perspective

Aim high, be resolute in the face of difficulties

Be responsible and proactive

How can we help customers get what
they want?

We will aim high, set ambitious goals andwork relentlessly toward achieving themno matter what the difficulties may be.

Each and every TG employee is encouraged
to feel a sense of ownership for the
products that leave our doors.

4

Continuous Kaizen

5

6

Respect

Teamwork

Global Network

Never be satisfied; improvement never ends

Respect for individuals and their perspectives

Help each other, grow as a team

A value chain leveraging our network of 61 Group companies in 16 countries/regions
Following our entry into the “global car” market, we have established more than 40 Group companies in about 20
years. Utilizing this global network, we deliver reliable technology and quality in a timely manner based on an optimal
production system with a view to customer needs and political conditions.

Using the approaches of genchi-genbutsu (goand see) and genjitsu (activities based on theactual situation) and asking why five times, wewill constantly strive to bring our operations
and products to the next highest level.

We will maintain respect for the individuality
and perspectives of each person, be humble
in our dealings with others regardless ofnationality, gender, or rank, and always try
to learn from each other.

We will combine our strengths withinteams, between divisions, and between
Toyoda Gosei Group companies to make
One TG a reality.

Development /designProduction

Assisting vehicle development through close coordination
We support speedy vehicle development through close coordination
between overseas sites and engineering, development, and productionengineering from our World Headquarters. In this way, we can respondto vehicle development by automakers at their overseas locations.
Best production networks globally
We have established a stable production and delivery system
based on production near to our customers, and by building afoundation for our production backup and support systems infour regions (Japan, the Americas, Asia, Europe/Africa).

Procurement

Sales

Stable procurement through global supply chain
Our partnership with more than 700 global suppliers (Tier 1)
ensures stable procurement of parts and materials even in the
midst of geopolitical risks, for the timely delivery of products
tailored to our customers' needs.
Customer-oriented sales activities
We have established sales structures in each region to meet theneeds of our customers around the world, quickly identifying theneeds of local customers in other countries and working with theWorld Headquarters to address them in a speedy manner.

New Business Development Experiences
Innovative products
In line with our company creed, “Boundless Creativity and Social Contribution,” the many experiences we have gained
over our 70-year history in successfully developing products that meet the needs of the times, such as for safety andthe environment, form the foundation for our spirit of taking on challenges, as expressed in the TG Spirit. We willcontinue to evolve further as a company by taking on challenges related to social issues while embracing the mindset
passed on to us from our predecessors.
▲

World firsts

SRS curtain airbags▲

New endeavors
for social issues

Blue LEDs

Medicine / Health

e-Rubber

20

About Toyoda Gosei

Millimeter wave
compatible emblems

Lightweight
opening trims

Plastic fuelfiller pipes

Power devices

Re-S eco-brandEnvironment

UV-C LED

High pressure hydrogen tanks

The TG Spirit Supports Value Chain Activities
Development /designCreating a new future with a spirit oftaking on challenges

As one of my social problem-solving innovation
activities, I am working with startup companies
to develop new areas of technology. We areconducting social demonstrations using microwave
power transfer, image-based AI, and othertechnologies. What is important here is to have aspirit of taking on challenges and to be looking
toward the future. Startups are incredibly fast in
business, including development and decision
making. When we ourselves focused on speedwith full commitment to the work, we found more
and more colleagues who support us. I would
like to continue to open paths to a new future bycontinuing to take on challenges without fear.

Production

YoshikiNakamura

General Manager
New Value
Development
Division

Kaizen is linked to all aspects of
the TG Spirit

I believe that the TG Spirit is a guideline fordoing things better for our employees and our
stakeholders, including our customers andcommunities. I believe that “continuous kaizen ” isthe keyword that encompasses all aspects of theTG Spirit. We must make daily improvements partof our own work responsibility, work together andrespect other team members to accomplish what
we cannot accomplish alone, and boldly take on Michelle
challenges to bring joy to our stakeholders through Patrick
our improvements. With this mindset, I will do Vice President
my best every day to contribute to Toyota Gosei's Interior/Exterior Div.
TGMO
growth.

Procurement

Respect for our suppliers and maintaining
open and fair relationships with them

We hear that “the downstream process is thecustomer,” but when I was a young man in thePurchasing Division I was often taught that “thesupplier is the customer.” I have been involved inpurchasing since I joined the company, and I havealways approached this with an attitude of respect
for our suppliers. We think together with themand provide thorough support as their contact
point for Toyoda Gosei, no matter what kind ofproblems or questions they may have. As thebusiness environment becomes increasingly harsh,
I hope to overcome challenges together with our
suppliers and further deepen our relationship asequal partners to enable mutual growth.

Sales

HiroakiWatanabe

General Manager
SS Parts Purchasing
Dept., Purchasing
Division“Customer Oriented,” the starting pointof salesAbout 15 years ago, at my own request, I wastransferred from a secretarial position to a sales
position. The first time I was in charge of adjustingsales prices, I discovered that the job was moredifficult and demanding than I had imagined. In
this situation, I tried to be “Customer Oriented,”
specifically, I adopted an attitude of give and take,understanding the other person's point of view,and keeping my promises. By doing so, I gradually Sukanya
gained the trust of customers and my work began Soongsanit
to go smoothly. I would like to pass on these real- General Manager
life experiences and realizations to new members. Sales Department
TGAS

21

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Materiality (Key Issues)With the company creed of “Boundless Creativity and Social Contribution” we aim to achieve both economic
and social value by contributing to the realization of sustainable societies through the growth of our company.
In order to achieve our 2025 Business Plan, we are working on materiality items that are of high importanceto us and to which we can make a particular contribution, from among various social issues, including social
forecasts and SDGs, which are envisioned based on the changing business environment.

Materiality Identification Process

Respond to thetransformation of
automobiles

Development of new products for BEVs（Feature 2 P.26）
Development of advanced safety technology, higher added value of steering wheel grips
Next-generation decoration (decorative lighting, hot stamps, etc.), forward-looking interiors
Cooling system for battery cooling and heat management

Achieve a safer and more
comfortable mobility
society by reducing thenumber of traffic fatalities

Development and sales of airbags that deliver safety, comfort, well-being and the environment to all（Feature 1 P.24）
Enhanced protection performance
Development of crash safety systems in combination with seatbelts
Development of various simulation technologies
Creation of a production network for the spread of airbags in developing countries (India, Southeast Asia, etc.)

●
●

▼

●

●
●
●
●

Building environmentally-friendly businesses leveraging our knowledge in the fields of rubber and plastics
Expansion of material recycling, including reuse of plastic waste material and desulfurization andregeneration（ P.47）
Development of products that use CNF-reinforced plastic（ P.26）●●

STEP 3 Validity evaluation by management●▼ ▼Create new businesses thatutilize core technologies

Expand new businesses using our new business development experiences
Development of hydrogen tanks for commercial vehicles（Feature 3 P.28）
Development of water purification units and air and surface sterilization using UV-C (deep ultraviolet) LEDs（ P.38）
Development of GaN power devices (Ministry of the Environment CO2 reduction project)（ P.38）
Development of smart insoles using e-Rubber
Leveraging our core technologies for innovation: Corporate venture capital（Feature 4 P.30）
Creation of products through company collaboration using recycling (expand Re-S brand)（ P.49）▼

Changes in company
competitiveness withaccelerating digital/ITtransformation

▼

●
●
●

The validity of materiality is evaluated by interviewing outside directors, executives, and investors regarding the material issues identified,including specific processes.

▼

●

▼

Analysis and evaluation based on importance toToyoda Gosei (management philosophy, management
capital, interactions with competitive advantages andstrengths) and importance to stakeholders (contribution to social issues, promotion of ESG activities)

Provide both innovationsin automotive
technology (BEVs, CASE)
and a safe and secure
mobility society

Most crucial fields inrelated SDGs

Major initiatives●

Group-wide global activities for carbon neutrality（ P.44）
Reduction of energy consumption with greater efficiency through daily kaizen and by innovatingproduction engineering using IoT, AI
Aggressive use of renewable energy
Making lighter weight products for better fuel efficiency (minimize CO2 during use)
Design for easy disassembly (promote recycling, minimize waste)
Facility investment decisions that balance economics and the environment through the introduction of ICP
Horizontal deployment of measures to reduce CO2 emissions of suppliers▼

Increasingly serious
problems in the global
environment

STEP 4 Materiality identification
Selection of priority themes through deliberation
by management bodies

Contribute to decarbonizedsocieties by reducing
emissions of CO2 and othergreenhouse gases
Contribute to circularsocieties by reducing waste
and water risks

●

●
●
●
●
●

Contributing to circular societies（ P.47）
Expansion of recycled decorative products, use of environmentally friendly materials
Reduction of water intake/promotion of recycling, upgrading of wastewater treatment facilities for cleaner wastewater▼

STEP 2 Evaluation/analysis of materiality candidates

Business activities

Issues to be considered are identified (59 items)
by sustainability advocates appointed from related
divisions, with reference to social issues, market
and social trends, GRI standards, SDGs, materialityof other companies, and other considerations.

Materiality (key issues)▼

Related social issues▼

STEP 1 Selection of materiality candidates

●
●

▼

●
●

▼

●

▼

Diversity & inclusion, safety, health management（ P.54）
Promotion of human rights policy and pleasant workplaces (creation of mechanisms, education, implementation)
Company policies, workplace improvement activities based on engagement surveys
Empowerment of women, hiring of people with disabilities, delayed retirement to promote theactivity of senior employees
Ensuring safe and pleasant workplace environments
Health management to maintain and improve the health of employees●●

Fewer children/
aging population

Promote diversificationin employment /Respect human rights●●●

Quality that supports sustainability and strengthening of supply chain
Strengthened supply chain management（ P.64）
Uniform global quality assurance（ P.66）●●

Unstable material
supply due to
COVID-19 pandemic

Strengthening of corporate governance systems for sustainable growth（ P.68）
Enhancement of ESG initiatives with establishment of new Sustainability Meeting
Risk reduction activities and thorough compliance centered on Internal Control Committee
Strengthened response to global risks (stable procurement of parts and materials, operation
shutdowns related to COVID-19, cyberterrorism, etc.)
Strengthened corporate governance with development of business plan and management
systems in Group companies▼

Increasing politicalinstability

Importance to Toyoda Gosei

22

●

▼

determination

Changing values/
diversification of work
stylesLocal activities through companies that grow together with the communities where they are rooted
Business expansion and employment creation in developing countries
Activities to support nature (woodland maintenance, plant afforestation, river and wetland protection, etc.)（ P.50）
Contributing to the development of sustainable communities (environmental protection, social
welfare, youth development, community crime prevention)（ P.67）
Fostering a sense of unity between employees and the community through sports（ P.67）▼

Materiality(key issues)

Coexist with local
communities

Management base

Importance to stakeholders

Review of initiatives tied to company policies,
confirmation by the Sustainability Meeting, andregular review of materiality▼

STEP 5 Review

Corporate governance as acompany of integrity
Thorough compliance

●
●
●

●

23

Feature

Contents

1

Building Transportation Societies That Protect
Irreplaceable Human Life

Wider Use of Airbags Will Bring Us Closer to Zero Traffic Fatalities

We will increase production capacity in regions with risingdemand for airbags

2. Further Evolve Safety Systems
We will improve the performance of airbags to cover injuries
that conventional airbags do not protect against
We will also develop technologies and products to respondto changes in the environment
Breakdown by status of trafﬁc fatality (%)
Automobile occupant

India

Two- or three-wheeled vehicle

China

Cyclists

ASEAN
North
America
EuropePedestrians

North
America

Breakdown

Japan

EuropeJapan(Reference) World Health Organization (WHO) Global Status Report on Road Safety 2018

Toyoda Gosei’s Forecast for Number of Automobiles Producedin the Market and Number Equipped with Airbags

No. of airbags
equipped

No. ofautomobiles produced

No. of airbags equipped (million)

No. of automobiles produced

No. of automobiles produced (million)

No. of airbags equipped

Overall, the number of traffic fatalities in developed
countries has been on the decline. One factor is theevolution of safer vehicle bodies in collisions and safety
equipment such as airbags. Automatic braking and driving
are also expected to evolve in the future, ushering in an
era in which many accidents themselves can be prevented.
However, more time is said to be needed. Therefore,
the continuous evolution of airbags and other safety
equipment that protect passengers and pedestrians in theevent of a traffic accident is still needed.
In 2020, we began mass production of far-side airbags
that prevent injury to occupants thrown to the opposite
side of the vehicle during side impact collisions. We havecontinued developing these airbags since then, earninghigh praise from many automakers. Our most recent
far-side airbag is also compliant with the new, stricter
assessments.
With the BEVs that will become mainstream in the
future, impacts on occupants during traffic accidents
may be more severe in some cases due to changes in thevehicle body structure. This will require safety equipmentwith high levels of impact absorption.

Data

North China area
Tianjin Toyoda Gosei Co., Ltd.

Toyoda Gosei (Zhangjiagang) Co., Ltd.
East China area

New plant (rendering)South China area

Toyoda Gosei (Foshan) Auto Parts Co., Ltd.

New plant in South China

Airbags and other safety equipment must also evolve
to match the advanced design and changes in riding
posture that are expected in the future.
Computer analysis is one of our strengths as a technology that supports such development. Various vehicles
and the human body reproduced on computers are used
to simulate accidents. This allows us to predict how vehicles will be damaged and the types of injuries that will besustained by humans. This is then fed back into the development of new products. We also have connections withmedical institutions and universities to improve reproductions of the tolerance of the human body and increase theaccuracy of our analysis.
This technology makes it possible to analyze theentire vehicle as a system, rather than just the airbag
itself, and to propose improved protection performancethat also combines the vehicle body and seat belts.
We are also addressing social issues, such as thedevelopment of a steering wheel with an accelerator
lever for drivers with lower limb disabilities. This makes it
possible to accelerate the vehicle with the steering wheelalone.

Toyoda Gosei’s forecast for airbag usage rate based on Light Vehicle Production(IHS, April 2021) and average annual growth rate

Product Development Roadmap〜2025
Far side impact
Far side airbag〜2030

Cyclist protection
Cyclist protection airbag

Analytical Technology That Supports
Product Development

Rear seat passenger protection
Wrap airbag

Regulations /assessments
Also effective when people are sitting
freely during autonomous driving

1. Increase Production Capacity
We are increasing our production capacity in China, India,
and Southeast Asia to keep pace with the rising number of
airbags that will be installed in vehicles after 2025.
In China, we established a new plant in the southern partof the country (to start operations in summer 2023). It willbe the first SS plant to incorporate the “TG Advanced Plant

Foundation of Value Creation

Developing countries
No. of airbags equipped (million)

No. of automobiles produced (million)

Developed countries

Value Creation Strategy

2. Further Evolve Safety Systems

1. Increase Production Capacity

No. of trafﬁc fatalities by region (1,000 people)

Value Creation Story

In India, where the government is expected to mandate six
types of airbags on vehicles (driver, front passenger, left andright side & curtain airbags), we are forecasting 5-fold growthcompared with the current level and are working with inflator
suppliers for local procurement to ensure capacity and costcompetitiveness.
In Southeast Asia, side-impact evaluations have been introduced in assessments and the demand for airbags is increasing.
We have established a new plant in Indonesia, where market
growth is particularly strong and Japanese OEMs have a large
share of the market, to increase our production capacity.

Although rapid advances are being made in automobile safety performance, traffic fatalities are on the rise inregions where the development of traffic infrastructure lags behind the widespread use of automobiles and safety
equipment such as airbags are not widely used. Even in developed countries with well-developed transportation
infrastructure and widespread safety equipment, the number of traffic fatalities is far from negligible. In recent
years, global traffic fatalities have hovered around 1.35 million. To contribute to traffic safety and security, we
will continue to pursue higher-performance safety equipment and provide this equipment in many regions.

The World Health Organization (WHO) reports that inrecent years the number of traffic fatalities worldwide hastrended at around 1.35 million annually. It is estimated thatbetween 2020 and 2030, the total number of traffic fatalities will be approximately 13 million. One of the reasons forthese high numbers, along with the lagging state of transportation infrastructure and the high ratio of two-wheeledvehicles, especially in developing countries, is thought to bethat automobile airbags and other safety equipment havenot been widely adopted. In India, Southeast Asia, and otherregions where there is large growth in the automobile market, demand for airbags will increase as regulations makeairbags mandatory and initiatives advance to raise airbag
adoption rates by strengthening assessments.
While the number of traffic fatalities is gradually decreasing in western countries, Japan, and elsewhere, many issues
still need to be resolved before the number of fatalities canbe brought closer to zero. Through the continuous evolutionof airbags and other safety equipment, we want to increase
the types of accident in which people can be saved.
In addition, safety systems of vehicles in the coming
years need to evolve to accommodate changes. New
vehicles such as BEVs and micro-vehicles are appearing
on the market, and these vehicles differ from conventional
vehicles in the degree of impact on occupants and vehicle
body deformation in the event of an accident. At the sametime, advances in autonomous driving technology are
expected to allow drivers more freedom in their actions andriding posture.
In response to these market trends and changes inthe environment, we have established two major growthstrategies for the Safety System business.

About Toyoda Gosei

Concept,” pursuing efficient manufacturing and utilizing
IoT and AI to monitor production status in real time fromanywhere.
In addition, we will promote jidoka (autonomation) toensure sufficient production capacity to meet increasing
demand.

Worsened impact G force with BEVs
Proposal of measures with seatbelt + airbag
systems with CAE analysis technology*

CASE
SDGs
AirbagSteering wheel for people with disability(attached accelerator lever)Focus on injured parts of the body that are
not evaluated in regulations/assessments
by analytical medicine and engineeringcollaboration using THUMSTHUMS：Total HUman Model for Safety

Seatbelt*Analysis technology using computers in the machine design process24

25

Feature

Contents2

Developing Products for BEVs

① Environmental Friendliness
Since BEVs have a higher environmental impact than gasoline-powered vehicles during the manufacturing stage, it isimportant to make life cycle assessments. As a manufacturer
specializing in the polymer field, we aim to provide environmentally friendly products by improving their recyclability,
expanding the application in our products of rubber regeneration technology, and developing the use of naturally
derived materials. Products containing cellulose nanofibers
are expected to reduce CO2 emissions through both weight
reduction and recyclability. We are also working on thepractical application of natural rubber and vegan leather.
Furthermore, we are striving to impart new value by using
recycled materials, for example by using waste materials
from plated products to achieve new surface designs.

BEV Trends
Forecast Spread of Electric Vehicles(%)(Year)

DieselMild hybrid

Hybrid

PHEV

BEV

FCEV

(Reference) Prepared from a June 2022 report by the Boston Consulting Group

Toyoda Gosei's BEV Initiatives
The biggest challenge for the widespread adoption of
BEVs is to extend their cruising range. Environmental
friendliness and user safety and comfort in response tochanges in vehicle structure are also important. Toyoda
Gosei's technological potential lies in its plastic andrubber material technologies and its product technologies in each business area. We believe that we canincrease our potential for providing value with tech-

nologies that span multiple fields in response to thechanges in vehicles and needs associated with the shift
to BEVs.
We have established the following four development
targets based on Toyoda Gosei's business areas, and,viewing change as an opportunity, are promoting product development while optimizing resources to quickly
respond to changes in the business environment.

Development targets

2022① Environmental friendliness

Raise recycling rate, provide new value with recycled materials, use nature-derived materials

Disassembly/ Material
recoveryUse(driving)

Material

Design2025
Water injection(deodorization)

Input of wastematerial

Water

Water

FutureExhaust gas
treatment

Water
Cooling tank

DesignManufacture/
distribution② Extension of cruising range

Pulverization Desulfurization

Deodorization

Heat

Desulfurization process

Reclaimed rubber

Rubber desulfurization andregeneration technologies

Cellulose nanoﬁber
Use of natural rubber
mixed products

Vegan leather

Higher electric mileage with lighter weight using plastic, better cooling around battery
Cylindrical battery

Cooling pipes

Cooling plate

Image of seamlessexterior

Case

Battery cases

Transparent garnish(electromagnetic waves, light)

Achieves occupant comfort and innovative feelNovel steering wheel shape
Interiorfunctional
illumination④ Safety assurance

Heat managing
air conditioning(near occupants)Thin instrument panel
compatible passenger-side airbag

Improved occupant protection performance in response to changes in impact G force
High performance
airbag（far side）

Next-generation
active vent
Driver-side
airbags

WrapairbagHigherperformancesteering wheel

Compatible with changes in interior layout, autonomous driving

26

Foundation of Value Creation

Data

Example of Lifecycle Assessment Efforts

Disassembly/ Material
recovery
Product waste material
Recovered crushed
parts, etc.

Use
(driving)

Nature-derived materials
Rubber desulfurization
and regeneration, etc.

DesignManufacture/
distribution
Plated product waste mixing design
Cellulose nanofiber mix
Glove box, etc.

Recycled material mix
Opening trim, etc.

Use of cellulose
Lightweight reusable box, etc.

Toyoda Gosei is contributing to extended BEV cruising ranges mainly through heat
management, weight reduction and aerodynamic design. We have brought together engineersfrom our functional component business to develop cooling systems (for example, piping andbattery cases) that extract greater battery efficiency.
We utilize our materials technologies to replace metal with plastic, tomake plastic and rubber products thinner by improving the material strength,
and to make products lighter using our foam production engineering. In theexterior product field, seamless design with no openings is needed to improveaerodynamic performance. To achieve this design, we are differentiating
our exterior products by enhancing their functionality, including decorativetechnologies that allow radio waves and light to pass through.

Seamless exterior image with functional
consolidation garnish
Battery cases③ BEV-like Interior SpaceThe design trend for BEV interior spaces will be for forward-looking spaces thatdiffer distinctly from gasoline-powered vehicles. We aim to achieve such forwardlooking vehicle interior spaces through a combination of our strengths in interiors
and safety systems. For example, we are developing airbags and registers that
contribute to smart, thin instrument panels, and functional illumination such as
driver notifications that use the entire cockpit including the steering wheel.
Our advanced steering wheels with a novel shape provide not only an ergonomic
grip shape for comfortable steering, but also reflect airbag technology that ensures
the same occupant restraint performance even with a steering wheel shape withvertical cutouts.

Functional illumination

Thin instrument panel
Thin register
Novel steering
wheel shapeThin instrument panel
compatible passenger-side airbag

Conductor (bus bar)Compatible with simple front design, contributes to BEV-like design and aerodynamic performance③ BEV-like interior space

Value Creation Strategy② Extension of Cruising Range

Gasoline

Disassembly/
recoveryUse (driving)
Manufacture/
distribution

Value Creation Story

Four Development Targets

A major shift toward electrification is taking place in the automobile industry, and we are developing new
products by bringing together the polymer material technologies we have cultivated in multiple businessfields and our technical capabilities in product design and production based on these technologies. In
developing products for battery electric vehicles (BEVs), we seek to create new value ahead of needs,
while expanding the scope of our efforts to all of CASE and contributing to the creation of safe, secure,and comfortable vehicles.

A joint statement was issued at COP26 in 2021 withthe aim of making all new cars sold in major markets
zero-emission vehicles by 2035, and all new cars
sold worldwide zero-emission by 2040. A proposalby the European Commission in 2021 to ban the saleof internal combustion engine vehicles in the EU by
2035 was passed in June 2022, a move that further
accelerates the shift to BEVs by automakers worldwide.

About Toyoda Gosei④ Safety Assurance
The increased strength of the parts around the battery with the shift to BEVs willaffect how vehicle occupants are impacted during collisions. This will require better
protection performance from the restraint system. Toyoda Gosei ensures safetywith high-performance airbags and internal pressure control technology. We arealso developing systems together with Tokai Rika Co., Ltd. and Ashimori Industry
Co., Ltd. to achieve optimal protection performance for each vehicle model throughthe combination of airbags and seatbelts. In addition, we are developing wrap
around airbags that are integrated with seatbelts to ensure safety in response to
future changes in cabin layout and occupant posture. Toyoda Gosei will continue toprovide safety and security to all while adapting to various vehicle changes in the
future, with the ultimate aim of zero fatalities in traffic accidents.

Image of large, comfortable vehicle interior

Wrap airbag

27

Contents

3

About Toyoda Gosei

Value Creation Story

Moving From “SStorage” and “UUse” to “T
Transport”
and “P
Production” for Hydrogen Societies

Toyoda Gosei’s History of CNG / Hydrogen Tank Development

Toyoda Gosei has completed the development of its first hydrogen tank for automobiles, and we beganmass production at one of our own plants in 2020. In moving toward hydrogen societies, we started out inthe areas of hydrogen “storage” and “use”, which are familiar to end-users. In the future, we will spread thistechnology to the “transport” and “production” of hydrogen, further contributing to hydrogen societies.

Performance

FeatureValue Creation Strategy

Foundation of Value Creation

Hydrogen tanks

Data

2020

CFRP

CFRP
Aluminum liner

Aluminum liner tank

70 MPa hydrogen tank UN certification acquired
Plastic liner

Highest level 6.2Wt% achieved

Aluminum cap

Plastic liner tank(Toyoda Gosei specifications)

2016

70 MPa hydrogen tank KHK certification acquired・Liner thickness: Plastic liner is 30% thinner than aluminum liner
・CFPR thickness: Plastic liner is 20% thinner than aluminum liner

2014 Mass production of plastic liners for 1st generation Mirai
2007 Mass production of plastic liners
2004 35 MPa hydrogen tank KHK certification acquired

2001 20 MPa CNG tank KHK certification acquired

1995

Development of type IV CNG tank started

The Future of Hydrogen Societies
Hydrogen can be produced from a variety of resources,and has the characteristics of not emitting carbon dioxide when used and enabling renewable energy to be
stored, transported, and used.

The areas of “production”, “transport”,“storage”, and “use” of hydrogenin societies near to end users(personal mobility, public transport,
transportation vehicles, construction
machinery, household use)

FCEV

Production

Transport

Storage

Use

Contributing to Hydrogen Societies
STEP

FC forklift

We will offer variations in size, pressure resistance, and other characteristics to meet2

In hydrogen societies, the need for hydrogen supply will emerge not only in relation
to mobility, but also for use at construction sites, homes, and many other places. Our
hydrogen tank technology will make it possible to load hydrogen onto “transport” vehicles,
as well as increase the hydrogen loading volume and contribute to weight reduction.

Hydrogen“transport”

We will also develop portable, removable containers in which hydrogen can be easily
carried for use in a wide range of applications.

Energy farm

Hydrogen engine vehicle

FC motorcycle

Hydrogen production

STEP
Hydrogen power generation

Hydrogentank

3

Further hydrogen“storage”

4

Hydrogen“production”

As hydrogen usage grows, the need for more efficient, large-capacity hydrogenstorage will increase. We will further develop our existing hydrogen tank technology
to develop hydrogen tanks that are compact and capable of storing large amounts ofhydrogen.

Fuel cell unit

Solar panel

STEP

Hydrogen production plant
FC railroad
Wind power

Portable tank

Hydrogen tank technology for passenger cars will be applied to commercial vehicles,
motorcycles, ships, railroads, and other forms of mobility.

Hydrogen“storage” and “use”

Hydrogen station

FC busHydrogen
supply truck1

the needs of our customers, and work to ensure performance in a variety of operating
environments.

STEP

Hydrogen trailer

FC truck

In Japan, initiatives are underway for the utilizationof hydrogen as a key energy source so that carbon neutrality can be achieved by 2050, and we are committed
to contributing to these hydrogen societies.

Year

Construction
machinery, etc.

Large hydrogen ship

Gray hydrogen is currently the main method for producing hydrogen, and it emits
CO2 in the manufacturing process. There is a need to expand the production of greenhydrogen, which uses sunlight or other natural energy sources and water and does
not emit CO2 in the production process. Toyoda Gosei will build relationships whileleveraging its strengths to contribute to the realization of carbon-neutral societies.

The areas of “production”,“transport”, “storage”, and“use” as represented by various
types of energy production
plant at the national level

Hydrogen production*4

Production

Toyoda Gosei development items

Hydrogen supply truck28

In 2007, we began production of 70 MPa*2 plastic
liners for leased FCEVs, and in 2014 we began mass
production of plastic liners for the first generationof the Toyota Mirai. This was a stepping stone to thedevelopment of hydrogen tanks, and carbon fiber
winding and epoxy curing technologies were brought
in-house. In 2016, we obtained certification for 70 MPa
hydrogen tanks, and in 2020 we began mass productionof hydrogen tanks in one of our own plants for thesecond generation Mirai. This contributes to hydrogen“storage” and “use”.
*1 New Energy and Industrial Technology Development Organization(National Research and Development Agency)*2 Megapascal (unit of pressure)

Wind
power

Hydrogen tankloading pallet *3(increased hydrogenload)

Toyoda Gosei’s Involvement with Hydrogen
Using our strengths in polymer materials, we began
developing compressed natural gas (CNG) tanks withplastic liners for natural gas vehicles in 1995, andobtained Japan's first certification in 2001. Tanks withplastic liners are lighter and less expensive than tankswith conventional aluminum liners.
In 2002, we began developing hydrogen tanks forfuel cell electric vehicles (FCEVs) utilizing our CNG
tank technology. This was recognized in a NEDO *1
subsidized project. Hydrogen molecules are smaller
than those of natural gas, and the development ofmaterials to prevent fuel permeation was a challenge.
This was solved by modifying the plastic material.

Renewable energy
Solar power
generation

Transport

Water
Electrolysis tank

Portable tank(removable)

Hydrogen tank

Storage

FC truck

FC busGreen hydrogen

Decreased
no. of tanks

More variations

FCEV

Hydrogen storage material(higher hydrogen load)

Non-automotive

Home use

Use

Today

STEP 1

STEP 2*3 Collection container in which several tanks are attached to frame

STEP 3

STEP 4*4 Concept includes collaboration with partners

29

Feature

Contents

4

New Value Creation for the Future

Achieving Sustainable Growth

Another objective of the CVC is to broaden the outlookof the young employees who will be responsible for the
future of the company. For this purpose, we assign young
engineers not only to the dedicated CVC organization,
but also to various engineering departments that serve as
support organizations. They can experience new insights
by coming into contact with technologies and culturesfrom different industries that they have previously been
unexposed to, through which we hope to foster new
ideas and flexible ways of thinking within the company.
We are also implementing a project in which young
employees are sent to work at the startups in which

VOICE
businesses, such as blue LEDs. We have inherited thisfoundation and culture of taking on new challenges
and will to pass it on to younger people in the company as we create new value for the future.
What is “New Value Creation for the Future”?

ro
w

th

We are conducting new value creation for the future inwhich external forces (startups, others) and internal
forces (young employees) serve as growth engineslegTargets

ab
n
ai
st
Su

New value creation
for the future

uing onContin pathemsa

・Mobility
・Energy・Smart homes
・Healthcare
・Carbon neutrality

Use of Corporate Venture Capital (CVC)
For the effective use of external forces, we launched aninternal organization dedicated to investing in startups(corporate venture capital; CVC) in January 2019. The
idea is to accelerate our response to areas that cannot
be handled with limited internal resources or where
our knowledge and experience are limited, by leveraging the capabilities of startups and other outside organizations.
In these CVC activities, our investments are focusedin five key areas: mobility, energy, smart homes,
healthcare, and carbon neutrality. This is based on theidea of prioritizing fields that have high synergy withour core technologies (automotive-related technologies such as rubber and plastics, airbags, and hydrogentanks; GaN-based semiconductor technologies such as
blue LEDs).
Three years have passed since we began these CVC
activities as one of our new growth engines. The current
organization consists of a full-time staff of 10 and 30
young engineers also working in other departments.
The annual budget is 1 billion yen, and investments
have been made in 16 startups to date. We do not simply

invest in these companies, but also work with them on
joint development. We will continue to promote activities to develop new products and cultivate new markets
by utilizing technologies from different industries.
Major Companies in Which We Have Invested
Category

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Projects in Which We Send Toyoda Gosei Employees to Work at Startups

As the environment undergoes drastic changes, we cannot expect to make significant progress if we continue
along the same path as in the past. In order to achieve sustainable growth, it will be necessary to create newvalue by adding outside knowledge and resources to the management resources we have cultivated to date.
We will build new growth engines by incorporating outside capabilities while maintaining the foundations of
our existing businesses, continuing to take steps forward by changing the way we think and developing ourhuman resources in order to promptly respond to changes that may arise as we address these challenges.

To achieve sustainable growth for the future, we willneed to venture out from the path we have been on.
For this we will need to develop new products andcultivate new markets. At the same time, we need torespond quickly, and within our limited available resources, to various social challenges such as the SDGs
and carbon neutrality.
Currently, there is a gap between following the same
path and sustainable growth. We believe that activities
to bridge this gap are what will lead to new value creation for the future. Two things are needed for this. One
is how well we are able to utilize external forces, such as
start-ups. The other is how to awaken the latent potential within the company, especially among young people, and how well that potential is displayed.
Toyoda Gosei has a history of venturing into new

About Toyoda Gosei

Name of company

Content ofdevelopment

Carbonneutrality

WOTA Corp.

Portable water
purification unit

Carbonneutrality

Slab Inc.

Pellet 3D printer(for recycledmaterials）

Mobility
Smart homes

Space Power
Microwave power
Technologies Co., Ltd.
supply device

Mobility

Global Walkers, Inc.

Visual recognition
AI modeldevelopment

EnergyE-ThermoGentek Co.,Ltd.

Development of power
generation elementthat uses waste heat

Healthcare

Provigate, Inc.

Development of
medical device (blood
glucose measurement)

we have invested in order to make new discoveries andgain insights by looking at our company from the startup's point of view.
So far, four young employees have been sent tothese start-ups,
where they are
performing newwork in environments they havenever experienced
before.
Together with S lab Inc. employees (Haruka Ibusuki,
New Value Creation Division; front row 3rd from right)

Haruka Ibusuki New Value Creation Division

I was sent to work at S lab Co., Ltd., a 3D printer manufacturer, in April 2022. Here I work with management in looking
at how to strengthen the company's organizational structure, as well as its management and sales strategies, with a viewto a future stock listing. I am also involved in the implementation and follow up of plans that have been made. This
industry is different, and I have had to work at a speed that I could not have imagined before. I felt a little lost at first, but
it has been a very valuable experience that I would not have known without actually working in a start-up.

New Business Creation Process
For the more effective use of internal capabilities, weestablished a new organization called the New Value
Creation Division in January 2022. It was formed topromote activities that create new value from within
the company, rather than simply depending on externalorganizations through CVC.
First, new business plans and ideas that different departments had been working on independently werebrought together in the New Value Creation Division,
which then centralized all the information. Next, theprocesses for creating new business were clearly defined, and the items to be checked for each process
were clarified. At the same time, stage gates were set
up to check each milepost. In this way, a system wasstarted that enables timely decisions on whether thenecessary recovery and business development is possible and on efficient management.
In the design generation stage, a large numberof ideas are proposed without trying to winnow

them down (high production). Hypotheses are thenformulated on customer value and market size, andverified step by step. Technical development target
levels and how close we are to those levels are assessedfrom multiple perspectives. Development themes
are then prioritized, resources are allocated to key
activities, and missing pieces are examined (externaluse). By following this process carefully and managing
the gates, we will eliminate rework, arrive at carefullyselected and high-quality themes, and accelerate new
business creation.
Stage Gate Review Steps in New Value Creation Process

New value creation process
Information
organization/
insights

Idea creation(many ideas)▲Core technology
development

Gate 1▲Trial(hypothesis
testing)

Gate 2Mass production,
Product
development commercialization▲

Gate 3Business Idea Contest
In trying to create new businesses, we started theBusiness Idea Contest in the hope of soliciting
ideas from a wider range of employees. This system
encourages boldness in stepping forward with attempts
to actively propose interesting ideas that come tomind. These contests were launched in FY2021, andthe first one received 125 applications, far exceeding
expectations. Two excellent ideas were selected andresearch activities were begun.
We see that an attitude and culture of “new value

creation for the future” has been cultivated and is taking root within the company.
We will continue
to advance thesevarious measuresand actively promote activities that
support sustainablegrowth.
During Business Idea Contest

30

31

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives and Progress in Our 2025 Business Plan

Mid-Term Business Plan (2025 Business Plan)

Assessment of Our Current Status

Financial Objectives
FY2017

FY2025

Revenue¥806.9billion

More than¥1 trillion

Operatingprofit
ratio

5.1％

ROE(Returnonequity)

6.6％

Toyoda Gosei aims to grow as a global company that acts flexibly and swiftly in today’s
dramatically changing business environment,delivering the highest levels of satisfaction tocustomers worldwide through safety, comfort,( J-GAAP)

Pillar Ⅰ

Pillar Ⅱ

Venture into innovation,
new mobility

Strategy for growing
markets/fields

New Technology, New Products● Commercializationinnewfields

utilizingcoretechnologies● MakecurrentproductsmorehighlyandproductscopingwithCASE

Current Products● Globallystandardizedproduction

know-howandprocesses● Furtherimplementationofthevalue-added● Strategiesofmodularizationand

10％Innovative
manufacturing at
production sites

businessresources● Developmentofnewtechnologies

8％

Pillar Ⅲ

Current Products● Selectionandconcentrationof

▲well-being and the environment(IFRS)

ToyotaProductionSystem(TPS)

● Businessplanexecutionthrough● “Jidoka ”andmanpowersaving

cooperationwithcustomersand
businesspartners● Reductionofenvironmentalburden

systemproducts

utilizingIT

FY2021 Results

Consolidated

By regional segment
Japan

Operating proﬁt ratio

Americas13.8(Billions of yen)

(FY)

Asia

Europe & Africa

Operating proﬁt

What We Aspire to Be

AlthoughsalesrevenueincreasedinFY2021,
mainlyduetotherecoveryofproductionfromthecutbackscausedbyCOVID-19theprevious
fiscal year, operating profit fell and theoperatingprofitratiodropped1percentage
point to 4.1%. This was due to significantchangesintheexternalenvironment,includingdeterioratingrawmaterialmarketconditions,
mainlyintheAmericas,poortrackingofthe
rapidproductionvolumechangesduetothe
semiconductor supply shortage, and risinglogisticscosts.
Lookingatourprogresstowardthemanagementtargetsofthe2025BusinessPlanundersuchcircumstances,wefindthatalthoughtheglobal automobile production forecast(see
figureonright)islower thanwhen theplanwasformulated,non-Toyotasales,mainlyofSS
products,andsalesofIEproductsaregrowing
steadilyandweareontracktoachievetherevenuetargetof1trillionyen.
Atthesametime,asmentionedabove,our
operatingprofitratiofellby1percentagepoint
inFY2021fromthepreviousyear,duemainlytothesluggishperformanceintheAmericas.
Despitetheseharshconditions,weareaimingfor a rate of 5% in FY2022 through profit
improvement measures. After that we will
continuetoincreaseaddedvalueandreduce
costs,theentirecompanymakingconcertedeffortstoachieveourtargetoperatingprofit
ratioof8%.

Revenue

To deal with the significant changes in the business environment and achieve sustainable growth into
the future, Toyoda Gosei’s 2025 Business Plan for the medium term lays out three key areas that takeadvantage of the Toyoda Gosei Group’s cultivated strengths. We are making efforts tied to materialitythat will provide both social and economic value.

(FY)

(FY)

(FY)

Outlook for Global Vehicle Production(million units)
When formulated

Most recent

COVID-19

Semiconductor
shortage(FY)

Future Initiatives to Achieve Management Goals

byproductionengineeringreform
Base of the Pillars

Enhancement of our business foundation● Strengtheningglobaloperations● HRdevelopment
● Businessactivitieswithintegrity

Capitalinvestment

Wewillsecure50billionyenbyFY2025asfundingforcapitalinvestmentforgrowth.

Cashreserves

32

Inviewoftheprevailingcircumstances,wewillsecurecashreserves*ofconsolidatedmonthly
turnoverplus30billionyenincludingfundstocoverrisk.
*Short-termborrowings（lessthanoneyear)areexcluded.

▲

Regardingshareholderreturnsforthetimebeing,wewillworkwhollytorewardshareholders
basedonaconsolidatedpayoutratioof30%orgreater,fromavarietyofperspectives.

▲

Shareholder
returns

Thethirdistopushfurthercostimprovements.Wehave
always tried tomakecostimprovements,butnow weare
puttinggreateremphasisonrationalizationthaninprevious
yearsbyimprovingprocesses,strengtheninglossreduction,
andreducinglaborneedsthrough“jidoka ”.Thisisalsobeing
donewithaviewtowardfuturerecruitmentdifficulties.
Medium-tolong-terminitiativeswillbemadetoincrease
addedvaluebyintroducinghigh-value-addedproductsand
high-performance airbags in the growing SS business(P.24),andnewhigh-value-addedproductsfortheBEVsthat
willcomeintowideruse( P.26).Wealsoaimtodevelopnewbusinesses,takingnewtechnologiesandthedemandfor
carbonneutralityasopportunities.
   In addition, we willstrive toreduce costs throughour
manufacturinginnovationstrategy( P.39)andaswitchto
low-costmaterialswithlowCO2emissions,aswellasareview
ofourbusinessportfoliomixtoachievethetargetsinour2025BusinessPlan.
▲

Financial PolicyWeareworkingfrombothshort-termandmedium-tolongtermperspectivestoachieveanoperatingprofitratioof8%.
Our short-term initiatives are to reinforce our business,
mainlyintheAmericas,focusingonthreekeyinitiatives.
    The first is to reduce the impact of material market
conditions.Weareworkingtominimizetheimpactofmaterial
marketconditionsbyreducingmateriallossesthroughyield
improvementandothermeasures,andreducingtheamounts
ofmaterialsused,whilealsonegotiatingwithautomakersto
passonsomeoftheprices.Thesecondisaflexibleresponsetosuddenproductionfluctuations.Inthepreviousfiscalyear,
wewereunabletorespondflexiblytosuddenfluctuationsin
productionvolume,resultinginincreaseddirectlaborcosts.
Tocounterthis,wearereceivingmoredetailedinformation
onproductionplansfromautomakersthaneverbefore,while
alsooptimizingtheallocationofpersonnelintheproduction
process.We aremakingimprovements to ourproduction
systemsothatwecanreceivethebenefitsofincreasedsales
whenproductionstabilizesinthefuture.

33

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives and Progress in Our 2025 Business Plan

SS Business Area

Issues roductdevelopmenttocorrespondtomorePtypesofaccidents● evelopmentofnetworktohandlegrowingD
globalmarket

IssuesIE Business Area

 evelopmentofproductsandproductionengineeringDthatcapturestrendsindesignandfunctionalneeds●●With our abilities in product development

 roductdevelopmenttokeepupwiththePchangesinautomobiles●using world-class CAE analysis technology,＊1
we will provide high-quality, low-cost airbags

Strengths

to all regions to help solve social issues andachieve business growth.
*1Computer-aidedanalysistechnologyinthemachinedesign
process.

 roductdevelopmentusingworld-classCAE
P
analysistechnology● evelopmentandproductionlocationsthat
D
coverexpandingregions● bilitytoproposesystemswithperipheral
A
componentsaddedtoairbags

We will expand our business by developing
products and production engineering that

 upplyingoptionalpartsthatcorrespondtoSdiversifyinguserneeds●

meet performance requirements that arechanging with CASE, and by developing
environmentally friendly materials andmanufacturing methods and adopting themat our production facilities.

StrengthsD evelopment,productdesign,andproduction
engineeringabilitiestoachievevariousdecorations,
suchaspainting,plating,LEDillumination,and
surfaces,andmechanicalproductswithhighquality● lantsthathavethelatestproductionengineeringP
forourmainmanufacturingmethodsofpainting,
plating,moldingandmore.

●

●

34

Lowercosts,higherproductivitywith“jidoka ”and
productionengineeringimprovements●

Key Initiatives in FY2021

Key Initiatives in FY2021

Innewproductdevelopment,webeganmassproductionofairbagsthatprotectpedestrians,who
accountforthemajorityoftrafficfatalities.Theairbagscoverrigidsectionsofthevehicle,suchasthefrontpillarsandthelowerpartofthewindshield,thatcaneasilyleadtofatalinjuries.By
optimallyadjustingtheinternalpressureforeacharea,theairbagsreduceimpactstothehead.
Theworld-classCAEanalysistechnologyusedinthedevelopmentofthisairbaghasalsoshownits
advantagesinthedevelopmentofBEVairbagsystemstoachievetargetperformance.Thiswillbe
reflectedinfuturemass-producedBEVs.Inanotherarea,weestablishedanewplantinMexicoto
increaseourairbagproductioncapacity.Thiswillbuildupourproductionnetworksothatwecanmeetgrowingdemand.

Takingadvantageofourproductdesignandproductionengineeringcapabilitiesthatgiverisetoawiderangeofhighqualitydecorativetechniquesandproducts,wedevelopedanewlacquerblack
plating thatcombinesalustrous feelanddeepblackcoloring,andanLEDilluminatedemblemthatcontributestotheforward-lookingdesignsuitedtoBEVs,thefirsttobeadoptedinJapan.In
addition,tostrengthenourproductionnetwork,weenlargedplantsandintroducednewequipmenttorespondtoincreasedsalesofradiatorgrillesandotherproductsatUSlocations,whichisakey
overseasmarketforus.InJapan,westartedproductionatanewplantinMiyagiPrefecture.Itisa
state-of-the-artplantthatcombinesefficientmanufacturingusingthelatestpaintingequipmentand
collaborativerobotswithenvironmentallyfriendlypracticessuchastheuseofrenewableenergy.

Pedestrianprotectionairbags

Illuminatedemblems

NewMiyagiOhiraPlant

Newlacquerblackplating

Future Initiatives

Future Initiatives

We aim to develop high-performance products and speed up development throughcollaborationwithseatbeltandinflatormanufacturerstomeetthechangesinthebusiness
environment,suchasthespreadofBEVsandautonomousdriving.
Inaddition,wewillincreaseourairbagproductioncapacityinthekeymarketsofChina,
India, and Southeast Asia, where further growth in demand is expected. PreparationsareunderwayfortheestablishmentofanewplantinSouthChinawithatargetedstart
ofproductioninthesummerof2023.The“TGAdvancedPlantConcept”willbekeyto
operationsatthenewplant.Thisconceptwillthenbesequentiallyintroducedatothergloballocations.

Wewillproposeproductscompatiblewith thesensing technologynecessary forCASE,
interiorproductsincorporatinghumanmachineinterfaces(HMI)andothertechnologies,
andnewinstrumentpanelscombinedwithairbags.
Thenewtrendforautomobilesubscriptionswillstimulatetheoptionalpartsmarket.
ToyodaGoseiaimstoincreasevaluebyacceptingordersformass-producedproductsand
optionalpartsinsetsthroughintegratedplanning,andmeetingtheneedsforembellishedinteriorsandexteriorswiththeuseofadvanceddecorativetechnologies.
Wewillalsogrowourbusinessinlinewithenvironmentalconsiderationsbyutilizingenvironmentallyfriendlyandrecycledmaterialsanddevelopingcleanplants,facilities,and
manufacturingmethods.

35

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives and Progress in Our 2025 Business Plan

FC Business Area

Issues evelopmentofBEVlowCO2emissionsD
products(nature-derivedmaterials,material
recyclingapplications,lighterweight,more)●

We aim to achieve further growth by ex- emainingfuelsystemproductdevelopment
RandproductdevelopmentforBEVswhile
ensuringproductionresources●

panding global sales of fuel system productsthat reduce vehicle weight and meet emisproduction network for products to be used

 nvironmentallyfriendlyproduct
E
developmentthatleveragesourknowledge
inthefieldsofrubberandplastics●on the electric vehicles of the future, andIssues

We aim to contribute solutions to social

activities centered on quietness technology
and a carbon-neutral, circular economy.

Strengths
 ubberdesulfurizationandregeneration
R
technology●P roductdevelopmentabilitiesandevaluation
technologyabilitiesthatcontributetoimprovedquietness,leveragingour
knowledgeinthefieldsofrubberandplastics●●Globalsupplynetwork●Key Initiatives in FY2021

Key Initiatives in FY2021

Wearepromotinganall-roundstrategytogrowglobalsalesofplasticfuelfillerpipesandfueltank
peripheralcomponentsforgasolineandHEV/PHEVvehicles,andinvestingresourcesinadvanced
developmentandfacilitiesinvestmentforBEVsandFCEVs.
Carbonneutralityinitiativesincludedesignandmanufacturingmethoddevelopmentutilizingknowledge from our strengthsin the field ofrubber andplastics to achieve weightreduction
throughthinnerwallsandtoreplacemetalwithplasticmaterials.

To improve profitability, we are seeking to reduce costs through production lines that are
automatedanddonotrequirehighskilllevels.
WearealsoreducingwasteandCO2emissionsbyreusingrubberwasteintheplantwithour
rubberdesulfurizationandregenerationtechnology.Toraisetheaddedvalueofourproducts,we
havebeenworkingcontinuouslywiththetestingdivisiontodeveloptechnologyforquietness.
Weidentify vehicleweaknesses thatcontribute tolackofquietness,anddevelopandpropose
quietness-enhancingproductsbyimprovingtheseweaknesses.InFY2022,wearestartingmass
productionofdoorglassrunsthatwillbeusedontheLexus.

Future Initiatives
Wewillpursuebusinessexpansioninalldirections,includingthe development oflow-cost
fuelsystemproductsforsealed
tanksystemsforHEVs/PHEVs,
coolingpipeandbatterypack
products for BEVs, and fullscalemassproductionoftanks
forFCEVpassengerandcommercialvehicles.
   With a view to achievingcarbonneutrality,wewillseek
theeffectiveuseofrubberresources through our original
desulfurization andregenerationtechnologyandtheuseofnaturallyderivedandrecycledmaterialsutilizingourknowledgeofpolymermaterials.

36 eetingtheneedsforgreaterquietnesswith
M
electrificationwhilealsoloweringproduct
cost

●

issues and ensure reliable profits throughTechnologyandmanufacturingtoproduce
importantsafetyproductswithhighquality

new environmentally friendly businesses.

 stablishmentofsustainablesealproduct
EbusinesswhileusingrubbermaterialswithhighCO2emissionsandthataredifficultto
recycle●

product development and manufacturing

Strengths

sion regulations, building a development and

WS Business Area

Power
trainsFunctions

Gasoline
vehicles

HEVs
PHEVs

BEVs

Previous product

FCEVs

1

3

High pressurehydrogen tanks

Storage /control /supply2

Fuel tankperipheral parts

Changes

Plastic fuel filler pipes

Cooling

Doorglassruns(dottedline)

Batterycases

FC stack manifolds

Growing
volumeCooling pipes

Electric vehicles
havehighcooling
needs, and pipe
lengthis aboutfour timesthat
ingasolinevehicles

Noise

Developed productInterior

Interior

Highersound
Exterior insulation

Exterior

Noise

Future Initiatives
Tocontribute to a carbon-neutral, circular economy, we aim toimprove the quality of
recycledrubberandincreaserecycledrubberproduction.Atthesametime,wewilllook
intoswitchingtoplasticforsomeproductsforevenlowerCO2emissions,dependingonthe
productcharacteristics,andworktoincreasetherecyclingrate.
    We also aim to improve the profitability of this business overall by developing
technologiestoexpand therangeofuses forrecycledrubberandplasticmaterialsand
developingsealstructuresthatwillenableustomaintainhighquietnessperformanceand
costcompetitiveness.

37

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives and Progress in Our 2025 Business Plan

Life Solution BusinessIn the non-automotive area, we are expanding xpansionandincreasedsalesofindustrial
EmachinerypartsandtheLEDbusiness● cceleratedestablishmentoftechnologyforA
earliercommercializationinnewfields●

our UV-C and other LED business and working
toward commercialization in power semiconductor
devices and other new fields.

Manufacturing
Innovation Strategy

IssuesStrengths
Industry-academia-governmentcollaboration

UV-C LED Business
Key Activities in FY2021 and Future Initiatives
WelaunchedseveralnewUV-CLEDproductsinFY2020inresponsetoCOVID-19pandemic,andarenowdevelopingand
marketingvariousproductsinthethreeareasofairsterilization,waterpurification,andsurfacesterilization.Intheair
sterilizationfield,westartedwithaUV-Cspacedisinfector,whichtrapsbacteriaandvirusesinafilterandeliminatesthem
byirradiationwithUV-CLEDs,andthenintroducedacompactUV-C
Air disinfection
Surface disinfection
personalairdisinfectoranddeodorizer,whichalsohasadeodorizing
function.Wearecurrentlydevelopingnewproductstofurtherexpand
ourproductlineup.Inthefieldofwaterpurification,wesellaUV-Cwaterpurificationunit,andinthefieldofsurfacedisinfection,wesella
UV-CdisinfectionboxandaUV-Chigh-speedsurfacedisinfectionunit.
UV-Cpersonal
UV-Chigh-speedsurface
UV-Cspace
spacedisinfector
disinfectors
disinfectors
Wearedevelopingnewproductsintheseareasaswell.
anddeodorizers
Tomakeiteasierforthegeneralpublictopurchaseourproducts,
Water purification WOSHportable
washstands
wehavestartedanonlinestorewheresomeofourproductscanbepurchased directly over the internet.We will continue to develop
UV-CLEDswithhigheroutputandlongerlifeandexpandtheuseof
UV-CLEDwater
UV-CLEDstofacilitieswheremercurylampsareused,suchaswater
*SoldbyWOTACorp.
purificationunits
purificationplants,inordertoprovidesafeandsecurespaces.

Key Activities in FY2021 and Future Initiatives*Energylossestoheat,etc.generatedduringDC⇔ACconversion

38

Made substrate of more than
6 inches in diameter(Manufacturing method: Sodium flux)
Thesize andqualityof thegrownsubstratedependsontheseedcrystal,andsolargerdiameterandhigherquality
seedcrystalsareimportantinperformanceandcostasa
powersemiconductor.

Best Performance Range of Each Device

Output [W]

1M
100k

SiC,Ga2O3

ThenewMiyagiOhiraPlant,whichbeganproductionoperationsinJuly2022,isthefirstplantlaunchedunder
theTGAdvancedPlantConcept.ItembodiestheTGAdvancedFactoryConceptinthethreekeyareasof(1)
“jidoka ”andlaborsavings,(2)carbonneutrality,and(3)factoryDX,andwillhelptoachievesequential
productionandreducedper-productCO2emissionsbytakingadvantageofitslocationclosetothecustomer.
NewMiyagiOhiraPlant

Power
conditioners

10k
1k Si
10k

Electric
vehiclesAuxiliary
power supply
Serverpower source

Toyoda Gosei’s
development area
(GaN)

GaN on Si Higher power

100k
1M
Operating frequency [Hz]Vigor（2）Carbon Neutrality
Smart

Clean

（3）Factory DX
Smart

Virtuous

Collaborative robots perform everything from parts
assemblytotransfertocarts.Sequentialproductionisachievedincombinationwithversatilefixtures.Automated
guidedvehicles(AGVs)handleallin-planttransport,and
arelinkedwithIoTtoenableoptimaltransport.Productivity
improvementof30%isachieved[Smart],whilehumansare
freedfromassemblyandtransportationwork[Vigor].

Inadditiontotheuseofsolarpowerintheplant,all
moldingandsetupmachinesonmoldinglineshave
beenconverted toelectricpower.In thepaintingprocess, thepaintingboothhasbeenmademore
compactbyimprovingthepaintingrobot'srangeofmotion,resultingina20%increaseinproductivity
[Smart]anda30%reductioninCO2emissions[Clean].

Eachproduct,frommaterialintroductiontoshipment,canbe
tracedwiththeuseofQRprinting.Thedataarethendisplayed
onARglassestodeterhumanerrorssuchaspickingupthewrongparts.Differentconditionsarealsoconvertedintodataandusedforimprovement.Productivityisincreasedby30%
[Smart]andthepassingonofdefectsiseliminated[Virtuous]
bynotcreatingpointsofvariationbetweenhumans.

TransportusingAGVs

All-electricmoldingline

UsingwirelessARglassesPartassemblyprocess
withcollaborativerobots

Paintingrobot

AutomaticQRprintingwithalasermarker

Future Initiatives

Development area in Ministryof the Environment project

Higher frequency

to double productivity and halve CO2 emissions.

Key Initiatives in FY2021

Smart

10M

at the expanded Seto Plant and a new plant in South China

TheTGAdvancedFactoryConcepthasbeenestablishedtorespondtovariouschangesintheenvironment,suchasdiversifyingcustomerneeds,
thegrowinglaborshortage,andstricterlawsandregulationstocopewithglobalwarming,andtoensurethecompetitivenessoftheentire
companyforcontinuedgrowth.Itincorporatesthreeconceptscenteredonthehighproductivitysmartfactoriesthathavebeendeveloped
basedontheToyotaProductionSystem.WehavebeensteadilyputtingthisconceptintopracticeaswemovetowarddoublingourproductivityandhalvingourCO2emissions.
Thefirstconceptisthatofa“virtuousfactory.”In-processlocationinformationandmanufacturingconditionsarelinkedbydatadowntotheindividualproduct;evenhumanintuitionandknow-howareconvertedto
Factory where
everyone can work
digitaldata.WiththeuseofAI,wecandeliversafetyandsecuritytoourcustomersbynotcreatingorpassing
with vigor
ondefects.Thesecondconceptisthe“cleanfactory.”Wewillminimizeenergyconsumptionthroughprocess
Clean factory
innovationfocusedonintegrationanddownsizing,withanemphasisontheheatingprocessforourmainstay
plasticsandrubber.Thethirdconceptisthatof“afactorywhereeveryonecanworkwithvigor.”Tediousor
Virtuous factory
heavytasksareautomatedthroughtheuseofautomatedconveyance,automatedvisualinspections,and
Smart factorycollaborativerobotssothatworkerscanconcentrateontasksthatcanonlybeperformedbyhumans,suchas
maintenanceimprovements.Thiswillincreasethesatisfactionandmotivationofskilledworkers.
TG Advanced Factory Concept（1）“Jidoka ” and Manpower Saving

Power Device Business
World’slargestclass

Advanced Plant Concept banner. Evolution is also continuing

Aims of the Manufacturing Innovation Strategy

KnowledgeinLEDfield,materials●●Powersemiconductordevicesareusedforpowercontrolinindustrial
equipment,automobiles,homeappliances,andotherapplications.We
aredevelopingsubstratesandelementsforthesedevicesusingGaN
materials.Currently,powerdevicesusemainlySiandSiCmaterials,but
withthesematerialsthereisaproblemoflargeswitchingloss.*Higherfrequency andhigherpower canbe expected with theuse of GaN
materials.Weareconductingdevelopmentincollaborationwithindustry,
academia,andgovernment,usingtheknowledgewehavecultivated
overmanyyearsinthefieldofblueLEDs.Inaprojectsponsoredbythe
MinistryoftheEnvironment,wesucceededinproducinghigh-quality
GaNseedcrystalsofmorethan6inchesinsize,amongthelargestintheworld,utilizingamethodofgrowingGaNcrystalsinliquidmetalmixed
withsodiumandgallium(sodiumfluxmethod).
Withaviewtofuturecommercialization,weareacceleratingthedevelopmentofelements withimprovedcharacteristics,supplying
samples,furtherimprovingthequalityofseedcrystals,andincreasingthediameterofsubstrates.Wealsoaimtoenterthemarketfordata
centersby2025.Beyondthat,wearelookingtoapplythetechnologytoautomotiveapplications.

The new Miyagi Ohira Plant was established under the TG

10M

ThenewMiyagiOhiraplantwasthestartingpointforTGadvancedfactories,
andtheseactivitieshavecontinuedtoevolvewiththeexpandedSetoPlantanda
newSouthChinaplant.Theywillalsobespreadtoexistingplantsaspartofour
restructuringinitiativesinJapanandoverseas.
Inthefuture,wewillimplementmanufacturinginnovationswiththeidealof
realizingthe“TGOneFactoryConcept,”inwhicheachplantoftheglobalToyoda
GoseiGroupisoperatedaspartofonelargeplant.

SetoPlant *Expanded
NewPlantinCentralChina(Productionscheduledtostart (Productionscheduledtostart
aroundthesummerof2023)
inDecemberof2023)

39

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Message from the
Officer in Chargeof Finance
Aiming to improve corporate
value by implementing financial
strategies and completing the job
to achieve the 2025 Business Plan

Hiroshi Yasuda
Director, Corporate Officer

Chief of Corporate Strategy
Headquarters

2025 Business Plan Initiatives
Review of FY2021 Financial Results
The financial results for FY2021 were significantly
a f f e c t e d by change s in the e x t er nal busine s senvironment. In addition to soaring material andlogistics costs and rising wages, there were also
sharp fluctuations in production volume due to thesemiconductor supply shortage, resulting in some losses
to the production system. The Americas in particular was
greatly affected by changes in the business environment
with the profit margin of the entire consolidated region
dropping unavoidably by about 1 percentage point.
Initiatives for FY2022
Although external factors will be the same or greater in
FY2022, we not only regard improving the profitabilityof our Americas business as our top management
priority, but will also work to improve profitability byfocusing on three key themes.
The first is to reduce the influence of the materials
market. As well as working to reduce material losses
by improving yield, we will negotiate on prices, mainly
for those materials that have no rules when it comesto passing on costs. The second is dealing flexibly tofluctuations in production volume. In the previous fiscal
year, we were unable to adapt to the sudden decline inproduction, leaving us with the burden of direct laborcosts. However, we are working to minimize the effectsof labor costs by reviewing the number of personnel
allocated and better assigning employees based on
advanced forecasts. When production stabilizes in the
future, we will establish a production system so that we40

can firmly enjoy the effects of increased sales. The thirdis promoting cost improvements. We will aim to cut costs
to a higher level than before by making improvements
to our processes, reducing losses, and benefiting frominvestments made to automate the manufacturing
process, which we have been undertaking. Although
the external business environment is likely to continue
to deteriorate due to soaring material and energy
costs, we will focus on these three themes centered on
the Americas, aiming for previous profit levels at an
operating profit ratio of 5%.
Progress of the 2025 Business Plan
Next, I would like to discuss how the 2025 Business
Plan has been coming along. The plan itself is in its
final stages with only three years remaining. Despite
revenue in FY2021 of ¥830 billion, which is about¥170 billion lower than our target, we are largely on
track toward our sales target of ¥1 trillion with sales
growth centered on the Safety Systems (SS) and theInteriors and Exteriors (IE) businesses. Conversely,
operating profit ratio remains in the 4–5% range owing
to a significant drop in net sales in FY2020 becauseof COVID-19 pandemic and, as mentioned above, adeterioration in the external business environment
in FY2021. There is a gap to our target operating
profit ratio of 8%, so it is imperative that we improve
profitability. In the short term, we are looking to
improve the profitability of our Americas business,and in the medium to long term, we aim to improve
our portfolio mix by introducing high-value-added
products geared toward the growth areas of our SS
business and battery electric vehicles (BEVs). In the

SS business, we will not only generate more added
value through new technology that meets changes
in the business environment, but will also work to
reduce costs by automating as well as standardizing
components. With more BEVs on the road, the partof the vehicle where the battery is mounted willinvariably need to be strengthened owing to thenature of the vehicle chassis. Because of this, it ispredicted the impact on the occupants in the eventof a collision will be more severe, and as such, theairbags’ shock absorption will need to be improved. It
is also expected that compact BEVs will become more
popular, but since compact cars require even greatershock absorption, it will be necessary to improveadded value. In other businesses as well, while there isdemand for futuristic designs and advanced interiors
that characterize BEVs, it is also necessary to improve
power consumption by reducing weight and improving
aerodynamic performance. Major changes are expectedin the business environment, but we see these changes
as business opportunities. As such, we will work to
improve profitability by leveraging Toyoda Gosei's
strengths in balancing design and functionality, as wellas our ability to make proposals.

Status of Financial Policies—Responding to issues based on environmental changes
Toward an ROE of 10%
To stably achieve capital efficiency in excess of ourcost of equity, we are targeting a 10% return on
equity (ROE) under our 2025 Business Plan. To
achieve this goal, we have quickly been reducing
unprofitable businesses. For instance, we downsized
the optoelectronics business, divested a German
subsidiary, and closed our base in the U.K. As anext step, improving profitability is imperative forus. We aim to achieve an ROE of 10% by improving
the operating profit ratio through the proposal of
products that add value using changes in the businessenvironment as an opportunity.
Approach to Capital Investment
Over the past few years, we have contributed toachieving our sales targets by aggressively making
capital investments mainly in the SS and IE businesses.
The new plants we build will be smart factories that
double productivity and halve CO2 emissions. These
smart factories will improve our competitiveness aswell as help us adapt to the predicted shortage ofworkers and enable us to realize carbon neutrality. We
will also work to expand globally, strengthening thefoundation we are built on.
However, due to the recent impact from COVID-19
pandemic and the sudden drop in production, sales

did not meet expectations. This brought about
discussions on fixed costs, especially in termsof footing the bill for depreciation costs. While
investment is expected to increase in growth areas
such as BEVs and the move to carbon neutrality,
we will make decisions that place more emphasis
on investment efficiency through more stringent
assessments on the recovery of fuel system parts,
etc., a market which is expected to contract. In
addition to the conventional approaches of sales
growth and profitability, we will aim to achieve ROE
targets while improving profitability. We will do thisby substantiating our investment efficiency in termsof the region, business, and product, using the new
metric of return on invested capital (ROIC) as abenchmark.
Approach to Cash Reserves
Next, I would like to talk about funding. From a global
perspective, while we see regions with robust capitalrequirements, there are regions with a financing
surplus, resulting in an imbalance between regions.
On a consolidated basis, both cash and borrowings
are used, which makes for a rather inefficient financial
position. We will strive to improve capital efficiency bybuilding a framework for flexibly diverting funds on a
global basis led by headquarters.
Globally, there is no change to our policy on securing
more than ¥30 billion in monthly turnover, including
funds for risk management after learning the lessons
from the Great East Japan Earthquake.
Lastly, regarding dividends, there is no change in ourgoal, stated in our financial policy, of a consolidated
dividend payout ratio of 30% or more. We will continue
to work to meet the expectations of our shareholders
from many different perspectives.

In Closing
At this time, we are in the final stages of our 2025
Business Plan. We aim to achieve our goals by
proposing high-value-added products centered on
the SS business, where sales growth is expected, toimprove profitability.
Currently, the automobile industry is in a period oftransformation and the external business environment ischanging, but we see this as a great business opportunity
for the Company. Looking ahead to 2025 and beyond,
I would like to break away from the same initiatives wehave seen before and make every effort to enhance ourcorporate value while improving our portfolio mix.
We will continue to step up our investor relations
as a transparent company, striving to gain widespreadfavor to become the company of choice.

41

Contents

Taking on the challenge of carbon neutrality
and a circular economy with the concerted
strength of the Toyoda Gosei Group

Environment

Through All Our Business Activities
Basic Philosophy
tect the environment.
Globally, we have set integrated environmental
functions in Japan and the regions of the Americas,
China, Southeast Asia, and India. The Group is also
making efforts as a whole with area control in fiveglobal regions, the above four plus Europe/South
Africa. These initiatives are made in conjunction withgovernment agencies, customers and suppliers.

Environmental Policy
2. Good Corporate Citizenship

We are keenly aware that all stages of our business
relate deeply to the environment, from development,
production, and sales activities to end-of-life disposal.
The Toyoda Gosei Group, including all internal divisions, domestic and international affiliates, and suppliers, conducts all business activities with concern for
the environment in cooperation and coordination withcustomers, government agencies, and others.

As a good corporate citizen, we participate in,support, and cooperate with environmental
activities by many groups while also working
on environmental activities in the communityand broader society. We also provide education
for all employees to support them in becoming
involved in environmental activities as membersof the community and society, and supportsocial contributions and volunteerism.

Value Creation Strategy

3. While Spreading
Information on These
Activities, We Listen to
the Opinions of Peopleat All Levels of Society
and Work to Improve
Our Activities Wherever
We Can.

TG 2050 Environmental Challenge

TG 2050 Environmental
Challenge(Six Challenges)
Circularsocieties

Contribute toenvironmentally-friendly
societies through highpolymer and LED
technology

Environmental
management
Foster an environmentally
responsible corporate
culture andemployees

42

Targets 50&50

target management
・Water use reductions

Decarbonizedsocieties

Environmental
preservation andliving with nature

Circularsocieties
Minimize water risks
and improve
waste water
quality

Global enhancement ・Global consolidated

Cut plant CO２ tozero and utilize
renewableenergyMinimize waste andcreate resource
recyclingsystemsthe starting point for polymers. Borrowing from the six
sides of the benzene ring, we have set six challenges forour environmental preservation activities with a long-

Medium- and Long-Term Scenario for Achieving Carbon Neutrality

Products andtechnology

Strengthen and expand
environmental protection
and preservation
activities(50% decrease in CO2emissions and 50%
renewable energy use)

Enhanced reduction of 6 gases
Nature-friendly activities・Start of plant afforestation
True start ofenvironmental
activities

Activities for decarbonized societies•Management system
consolidation•Legal management•Waste reduction

1st

Action Plan

5th

Action Plan

CarbonNeutrality
Declaration

TG 2050
Environmental
Challenge

・Introduction of renewable energy
・Completion of LED lighting replacement
・Strengthened production engineering kaizen
・Inauguration of energy-saving kaizen expert team・CO2 reduction
targets•Main plant ISO
acquisition

Announced
February 2016

2030 Milestones
7th

6th

Action Plan

Announced April 2020
(targets set April 2021)

Action Plan
Announced
April 2021

Our medium- and long-term policy and key action
items are discussed and decided in a Carbon Neutrality
and Environmental Committee chaired by thecompany president. The Committee consists of threesubcommittees in the areas of products, production,and quality. In the area of production, a productionand environment subgroup has been established tostrengthen environmental activities over the entire
manufacturing process. The above subcommittees
are further broken down into working groups that
promote and manage areas such as reductions inEnvironmental action plan
https://www.toyoda-gosei.com/csr/environmental/report2/

energy use, waste products and preservation of theenvironment. In this way, environmental preservationand management activities are conducted from anexpert perspective. Liaison meetings have also been
established to share information with domestic andinternational Group companies.
A carbon neutrality project was started in FY2021
to accelerate initiatives over the product lifecycle. The
project is headed by the president and with outside
directors as advisors and the managers of related
divisions as members.

Environmental Organizational Structure

Carbon Neutrality
and Environmental
Committee*(meets 2 times/year)(Chairperson: Company
president)

Discussion ofmatters necessary
for medium- andlong-termbusinessdecisions

Carbon Neutrality
Project
Formulation of
medium- andlong-term targets
and discussion of
measures andissues to achievethem

Production andEnvironment Subgroup(meets 2 times/year)

Production

2015

2020

2025

2030

2050

Liaison Committee forEnvironmental
Communication
with Domestic Afﬁliates

Products and Technology Environment
Subcommittee (meets as needed)

Products

Discussion of speciﬁc
measures and issues toachieve short andmedium-term goals

Quality Assurance(meets 2 times/year)

Promotes and manages development ofenvironmentally-friendly products andtechnologies

Manages, guides, andsupports coordinatedenvironmental efforts
by Group companies
in Japan

Production Environment Subcommittee(meets 2 times/year)

Liaison Committee forEnvironmental
Communication
with Overseas Afﬁliates

Promotes and manages policies and technicaldevelopment measures for reduced
emissions from production processes(meets once/month)

Subcommittee on Systems for SOC Regulations
and Quality Assurance (meets as needed)

Manages, guides, andsupports coordinatedenvironmental efforts
by Group companies
in other countries

Develops systems for compliance with SOC
regulations and for quality control* The position of the Carbon Neutrality and Environmental Committee within the organization can be seen in our Corporate Governance Organization Chart (see p. 69)
Deployment from the Carbon Neutrality and Environmental Committee, the Production and Environment Subgroup, and the respective subcommittees to plants andother operations is done with the establishment of expert committees in accordance with the ISO 14001 system at each plant.

To help us achieve the TG 2050 Environmental Challenge, we have developed a carbon neutrality and circular economy strategy for the entire life cycle of our
products. Our goal is to contribute to a carbon-neutral,circular economy by taking concrete actions in thefour specific areas of sustainable materials (Materials),sustainable design (Design), a zero emission challenge(Manufacturing), and resource circulation (Recovery/
recycling).
Materials

We will procure recycled materials and expand
the use of biomass materials with a stablesupply in mind.

DesignWe will seek designs for lightweight products,
easy disassembly, and compactness.

Manufacturing

In addition to daily improvements, we willcontinue to introduce innovative processes,
including line downsizing and heat energy
reduction, and explore the use of hydrogen.

Recovery/recycling

Environmental Action Plan (5-year plans)

1993

Data

Action Plan to guide our initiatives.

Carbon Neutrality and Circular Economy Strategy
The Toyoda Gosei Group specializes in the field ofhigh polymers—rubber and plastics. Our symbol is thebenzene ring, a hexagonal hydrocarbon structure that isFoundation of Value Creation

Environmental Organization

Contributing to Environmental Preservation

1. Environmentally-Friendly Corporate Activities

Value Creation Story

term view to the year 2050. As a roadmap to achieve
that, we have set targets for 2030 (Targets 50 & 50) as
milestones and formulated a five-year Environmental

Global warming and the problems of resource depletion and waste that result
from mass production and disposal have become issues common to the entire
world. Under the slogan of “A Greener, Richer World for Our children,” Toyoda
Gosei is accelerating Group-wide initiatives to achieve a carbon-neutral andcircular economy as soon as possible, fully leveraging our strengths in rubber
and plastic polymer technology in both production and products.

The Toyoda Gosei Group formulated its 1st Environmental Action Plan in 1993 based on its environmental
policy, and since that time has been actively confronting
environmental issues. In February 2016, we announced
our TG 2050 Environmental Challenge, and have set targets to be reached by 2030 as milestones. We have also
formulated a 5-year action plan in which activity items
and targets are set, and are carrying out activities to pro-

About Toyoda Gosei

Materials

DesignManufacturing Recovery/recycling

Carbon Neutrality and Circular Economy Strategy

Sustainable
Materials

Materials
Resource Recovery/
Circulation recycling

DesignSustainable
DesignManufacturing

Zero Emission
Challenge

We will systematically minimize the waste in
our plants, while at the same time building
systems to recover parts from the market.

43

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment

Building Decarbonized Societies

Reducing CO2 Emissions

Basic Philosophy
the midpoint for the TG 2050 Environmental Challenge,
and implementing stepwise, specific CO2 reductions.
■ Support for TCFD Recommendations
The Toyoda Gosei Group endorsed the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) in May 2019, and has analyzed risk/
opportunity scenarios and response scenarios based on
guidelines. Together with an acceleration of initiatives,
including the TG 2050 Environmental Challenge andreview of our 2030 milestones, we are actively disclosing
relevant information.
Please visit our website to see the results of our scenario analysis.
https://www.toyoda-gosei.com/csr/ environmental/report11/

Carbon Neutrality Project

●

Task

We have been reducing CO 2 emissions throughout
the entire lifecycle of our products, from material andcomponent procurement and product development
to the production, use and disposal stages. In June
2021, we launched a company-wide Carbon Neutrality
Project to accelerate these activities.

●

Understand current
situation and set
reduction targets

Structure The project is headed by the President and has

Chiefs of the Corporate Strategy Headquarters,
Research and Development Headquarters, andAutomotive Business Management Headquarters serving as project leaders. The core members are division general managers and above.
This structure allows for quick decisions andactions in management issues.
Activities Each task is carried out with the relevant division general manager as leader.

A

Task

B

Achievingcarbonneutrality

Task

Formulate andexecute reduction
scenarios
Identify where to start and points
of focus for strategic reductions
Formulate scenarios(pillars of major activity)● Identify items for execution tobring about scenarios

Visualization of CO2 emissions
and reduction volumes
Items in setting targets⑴ Set medium- and long-termtargets (2050, 2030, 2025)⑵ Category (Scope 3)
Unit target details⑶ Set targets for each theme

C

Financial inﬂuences/budgeting and IR/
public relations
Clarify ﬁnancial inﬂuencesand environmental investments
Identify regulatory and industrial
trends, release information,
conduct public relations● Coordinate with customers,
JAPIA, others● Create environmental business

●

●

●

●

Reducing CO2 Emissions in the Value Chain

Aiming for Carbon Neutrality in the Value Chain by 2050●

Product lifecycle

Procurement of materials and parts

Scope 3*1
Procurement ofmaterials and parts●

Content of initiatives

Material and partCO2 minimization

Transport

Reduction of CO2
in distribution

In collaboration with
In collaboration withmaterials manufacturers: logistics companies:
・Development and use of
・Loading efﬁciency,
recycled and biomass materials
more efﬁcienttransport routes
In collaboration with・Introduction ofparts manufacturers:
electric trucks
・Reduction of CO2 emissions

Commuting &business trips
Minimization of CO2
in commuting andbusiness travel
・Encourage use ofBEVs, FCEVs
・Recommend Web
conferencing andworking from home

Toyoda Gosei (manufacturing)

Use/Disposal (recycling)

Scope 1*2 , 2*3

Scope 3

Parts manufacture
Achieving zero CO2 at plants

・Daily improvements:
Thorough energy-saving activities
・Utilities upgrades:
High-efﬁciency equipment
・Innovative production engineerings:
Development of innovative
manufacturing methods
・Renewable energy introduction:
Solar panel installation, green energy

Transport Usage

・Lighter weight products
・Product development for BEVs, FCEVs
・Development of power devices andother technology

Minimization of waste• Design for easy disassembly• Promotion of waste collection
and recycling*1 Greenhouse gas emissions in the company’s supply chain that are not directly related to the company’s activities (raw materials manufacture, transport, businesstravel, commuting, etc.)*2 Direct greenhouse gas emissions by the company itself (fossil fuels, natural gas, etc.) *3 Indirect greenhouse gas emissions (purchase of electricity, etc.)

44

of high pressure hydrogen tanks for FCEVs and,after confirming strength and other quality aspects,
aggressively switching materials (e.g., from metal or
rubber to plastic) in instrument panel peripherals
and other IE products and in FC parts such as hoses,
reducing the number of components, integrating
functions, and making lighter weight products.

■ Production Stage: Development of New Production
Methods, Reductions Through Daily Kaizen andOther Efforts Manufacturing■ Distribution Stage: Improve Loading Efficiency
DesignDaily improvement「Targets 50&50」

Renewableenergy use

50

CO2 Emissions（Scope 1, 2）

Without any measures

（%）

100

Expand to 50%

0

2013

2020

2025

Innovative productionengineerings
Utilities upgrades(energy saving equipment)

2030 Target

2025 Target
Target for the 7th
Environmental Action Plan
25% decrease（compared to FY2015）

50% decrease（compared to FY2013）

Special priorities

Renewable energy
2030

TG 2050 Environmental Challenge formulated

2035

2040

2045

Manufacturing

In collaboration with logistics companies, we are
reducing CO 2 by improving truck loads and more
efficient logistics.

On our way to achieving zero plant CO2 emissions
under the TG 2050 Environmental Challenge, we haveset 2030 milestones that we seek to achieve throughdaily kaizen at our plants, production engineering innovations, higher efficiency of utilities and expansionof renewable energy.

（10,000 tons-CO 2）

60

Reductionin energy
consumption

GlobalToyoda Gosei Co., Ltd.

57.4

53.2

Target25% decrease

47.1

vs. FY2015

Effect from powercompanies
switching topower with low
CO2 emissions

2050（FY）

Target
50% decreasevs. FY2013

30

Increasein renewableenergy use

15.9
0

2013

14.9
2015

（Base year）（Base year）

TG2050 Environmental Challenge Zero（carbon neutrality）

10.8
2019

2020

2021

2025

2030 （FY）

Examples

CO2 Garden — Reducing CO2 Through Visualization
CO2 emissions are calculated for each product in terms of its component parts and processes, and CO2
emissions graphs (CO2 garden) are created. We have narrowed our focus in materials, processes, and facilities,
leading to effective CO2 reduction initiatives.
STEP

1

Disassemble Products to Part Units

STEP

3

STEP

2

Calculate CO2 Emissions
by Component Parts
10
and for Each Process,Create CO2 Garden
50Disassemble to Process Unit
Part ①
Molding

Part ②
Molding

Part ③
Molding

Part ②

Plating

Plating

Plating

Part ③

Painting

Part ①

Waste

Minimization of CO2 in usage stage

DesignIn the product stage, we are making headway inproviding parts for environmentally-friendly, nextge n e ra t i o n ve h i c l e s a n d d e ve l o p i n g p ro d u c t swith lighter weight for greater fuel efficiency andlower energy consumption with linkage in areas ofmaterials technology, product design, and productionengineering. Examples include the development

kg-CO2 / partIn addition to achieving the goal set under the Paris
Agreement of keeping the rise in the global averagetemperature to below 2°C compared with pre-Industrial
Revolution levels, we must reduce greenhouse gas
emissions to virtually zero by the end of this century. With
the aim of zero CO2 emissions as presented in the TG
2050 Environmental Challenge, we are utilizing materials
and product development skills with an eye toward nextgeneration vehicles in addition to the manufacturing
skills we have cultivated over time. Plans for execution
are included in our 7th Environmental Action Plan withactivity targets for FY2025. We have also set the goal of
cutting CO2 emissions 50% (vs FY2013 levels) by 2030,■ Product Development Stage: Environmentally-Friendly Product Development Materials

Ratio of CO2 emissions volume

In addition to lighter weight products that lead to improved vehicle fuel efficiency, we are reducing CO2 emissions
through improved productivity and more efficient distribution.

The Toyoda Gosei Group is reducing CO2 emissions in the product stage, production stage, and over the entire
lifecycle to achieve the targets set for FY2025.

Focus of reduction

Identiﬁcationof issues by
element

STEP

4

Manufacturing
Molding
process Plating Painting
lines
lines Assembly
lines

Assembly

CO2 Reduction Initiatives
Materials: Thinner product walls, use of recycledmaterials
Manufacturing: Low-pressure molding, shorter
cycle times

Parts
Materials

45

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment

Building Circular Societies■ Renewable Energy
Percentage of Renewable Energy［Global］（%）

Target60＊

20％Target2025

40

Toyoda Gosei uses resources effectively and contributes to circular societies by reducing waste volumes 2 and water
usage and designing products that are easily recyclable.

2030*2 We are currently attempting to reduce waste volumes for the minimization of industrial waste as set forth in the TG 2050 Environmental Challenge.

12％

20

Basic Philosophy

6

0

2019

2020

2021

2025

2030 （FY）

Reductions in 6 Greenhouse Gases 1*

Of the six greenhouse gases, Toyoda Gosei Co., Ltd.
uses three (HFC, PFC, SF6) and is conducting activities
to reduce all of them. By FY2015 we had completed aswitch to alternative gases with a low environmental
impact for the shield gas used in the production ofsteering wheel cores and other gases. We will continue
these reduction activities in the future.
*1 Hydrofluorocarbon (HFC), perfluorocarbon (PFC), sulfur hexafluoride (SF6),
methane (CH4), nitrous oxide (N2O), nitrogen trifluoride (NF3)

Greenhouse Gas (6 gases) Emissions (CO2 equivalents)［Toyoda Gosei Co., Ltd.］（10,000 tons-CO 2）

2.0

1.3

0.03
2012

2019

2020

2021

（FY）

Environmental Impact in the Value Chain
From the perspective of preserving the earth, we have
surveyed and disclosed not only GHG emissions (Scope
1, Scope 2) in our business activities but also emissions
in our entire value chain including excavation of raw
materials and product use and disposal (Scope 3). Our
Carbon Neutrality Project was inaugurated in FY2021
to improve the accuracy of Scope 3. Together with this,we have established milestones and are making efforts
to reduce CO2 through lighter weight and recycling of
raw materials for which there are high emissions.

CO2 Emissions by Scope Level (FY2021 results)［Global］
Scope / Category

The risks and opportunities associated with resource recycling are an important management issue, and we are
addressing them company-wide as one of our key action items.
Impact items

Opportunities

Response

Depletion of • Decreased revenue, production
disruptions from difficulty purchasing
resources
raw materials and soaring prices(shortage)• Higher revenue from recycling
technology, reduced material usage• Higher corporate value fromdevelopment of the above
technologies• Product development for lighter weight• Development of raw material recycling
technology• Greater use of plant-derived biomaterials
and recycled materials• Production disruptions from difficulty
ensuring water needed in production• Poorer product quality from water
quality deterioration• Production disruptions from water
damage• Higher revenue from reuse of water,
decreased usage• Higher corporate value fromdevelopment of the above
technologies• Development of water reuse technologies• Greater use of rainwater• Review of production networks, review ofelectric facility installation sites

Emissions(10,000 tons)

Scope 1

10.1

Scope 237.0

Scope 3

Another major problem relates to water, with water
shortages and flooding in many parts of the world
caused by climate change. We are therefore identifying
risks in all countries and regions of the world where wehave operations, and working to mitigate these risks
by decreasing water consumption and recycling water,
as well as returning cleaner wastewater to surrounding
communities.

Risks and Opportunities Associated with Resource Circulation

1.0

0

As a polymer manufacturer specializing in rubber
and plastics, we undertake to do our part for circularsocieties through the effective use of limited resources.
First, we take measures to prevent defects andimprove yields centered on manufacturing floors. In
addition, we are seeking ways to limit emissions andrecycle materials with the involvement of our material
and production engineering divisions, where all of ourwork starts, and expand resource circulation.

1. Purchased goods and services

138.1

2. Capital goods

14.5

3. Fuel- and energy-related activities(not included in scope 1 or scope 2)

5.0

4. Upstream transportation anddistribution

8.2

5. Waste generated in operations

3.8

Waste Reduction■ Establishment of 2030 Milestones

172.4

6. Business travel

0.4

7. Employee commuting

2.3

8. Upstream leased assets

0.1

Water risks(volume/quality)Risks

As we move toward the circular societies envisioned
in our TG 2050 Environmental Challenge, we aim tominimize emissions volumes and have set targets as2030 milestones for the effective use of resources,
including measures to limit emissions and control
their source, recycling of rubber and plastic scrap,
and reducing waste through careful and thoroughseparation.

Scenario for Minimizing Amount of Waste (reduction image)［Toyoda Gosei Co., Ltd.］
（%）

100

Percentage of waste

We are expanding renewable energy, including the
installation of clean solar and wind energy generationequipment and the purchase of green power. This
exceeded 5% of our total global electricity consumption
by the end of FY2021. Our next challenge is to raiseclean energy levels to at least 20% globally by FY2030.

Daily improvement
Post-occurrence measures

60
50

0

2012

2017

Industrial method development

2020

2025

2030

2040

2050（FY）

TG 2050 Environmental Challenge Minimization

Minute amounts for other than the above, or not applicable■ Satisfying the Plastic Resource Circulation Act
The Plastic Resource Circulation Act went into effectin April 2022, and with a view to our contribution tocarbon neutrality, we are committed to designingand manufacturing environmentally friendly 3R +Renewable products.
We have also set new 2030 targets for industrial
plastic waste volume and are working for plastic
resource circulation.

Plastic Industrial Waste Volume［Toyoda Gosei Co., Ltd.］（ Tons）

1,500

1,373

1,215

1,000

Target22% decreasevs. FY2019

1,073

500
0

2019

（Base year）

46

2030 Target

2025 Target line
50% decrease
Recycling
Targets for the 7th Environmental Action Plan （compared to FY2012） （including development
40% decreaseof recycled products）（compared to FY2012）

2020

2021

2030

（FY）

47

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment■ Development of Product Recycling Technology Materials

DesignWe develop and design easily recyclable products
and materials with thought to the entire lifecycleof automobiles. We are also developing recycling
technology for waste material.

Development of Technology for End-of-Life Vehicle Parts Recycling

Manufacturing Recovery/recycling

Key items

Measures implemented

New recycling• Composite material separation technology• New recycling technology (high quality
material recycling)

Use of recycledmaterials in
vehicles• End-of-life vehicle recycling technology• Development of applications for recycledmaterials• Product design for easy disassembly
Product design• Materials and composition changes for easy
for easy recycling
recyclingAmount of Waste［Toyoda Gosei Co., Ltd.］

Waste Volume per Sales Unit (index) 1［Overseas Group companies］（1,000 tons ）（Index）

12

11.3

100

2025 targets

40%

2030 targets

decrease vs.
FY2012850%

decrease vs.
FY20125.5

1002025 targets

80

50％

decrease vs.
FY2015602030 targets

55％

decrease vs.
FY2015

34

40

4

20

0

2012

（Base year）

Examples

*

2019

2020

2021

2025

2030（FY）

0

2015（Base year）

2019

2020

2021

2025

2030（FY）*1 A figure obtained taking the base year as 100

Full-Scale Operation of Rubber Recycling Processes to Achieve FY2030 Targets Recovery/recycling
We aim to reduce waste materials by 50% (compared with FY2012 levels) by 2030 on our way toachieving carbon neutrality in 2050. In April 2021,
recycling processes for four types of weatherstrips
were brought together in a dedicated building. By
restoring waste rubber to a raw material state with
our original technology and using it in new products,
we expect to reduce waste by about 600 tons. Thisshould also have an effect in reducing CO2 emitted
during raw material transport and the incineration ofwaste. In addition, we hope to contribute to reducing
the environmental impacts of the industry overall,by using this recycled rubber not only inhouse but
also selling it to other companies.

Reducing Water Risks

Weatherstrip Recycling Process
Input of wastematerial

Water injection(deodorization)
Water

Water

Exhaust gas
treatment

Water
Cooling tank

Pulverization Desulfurization

Deodorization

Heat

Desulfurization process

Manufacturing

We have set and are working toward 2030 milestones
to achieve the targets in the TG 2050 Environmental
Challenge. For this we are assessing risks in both water
usage and water quality in Japan and international
locations, and making improvements at high-risk
locations. Even in places where risks are low, we aretrying to reduce water intake amounts for the effective
use of resources.
In FY2021, we cut water use through improvements
to reduce leakage and by promoting recycling. We
are also planning upgrades to wastewater treatment
facilities for cleaner waste water.

2030 Reducing Water Risks Milestone［Global］

Water Intake per Sales Unit (index) 2［Toyoda Gosei Co., Ltd.］

ReclaimedrubberItem2030 target

Water quality

Measures completed
at four locations

Water intake

Measures completed
at seven locations

High risk area

Low risk area

Water intake persales unit

11% decrease vs.
FY2019■ Reduction of Waste Materials in the Production Stage Manufacturing Recovery/recycling
To reduce waste in the production stage, we arecombating waste at its source and recycling. To
minimize waste in the TG 2050 Environmental
Challenge, we launched a waste reduction project in2018 by our plants and production engineering, materials technology, and product design divisions, inwhich we combat waste at its source and recycle. We
also conduct mottainai inspections to identify items
for reduction with genchi-genbutsu (go and see) andother reduction activities at each business location.
Good examples of reduction are shared among
domestic and international Group companies as theentire Group tries to reduce waste.

Amount of internal reuse
1,522 tons

Amountof waste
5,517 tons
〈100%〉
Amount ofincinerated waste
0.5 tons〈0.1%〉

Amount of compensatedrecycling(payment received)
5,841 tons
Amount of paid
recycling(payment made)
5,516 tons
〈99.9%〉

Figures in parentheses are the proportion of the discarded materials volume■ Reduction of Packaging in the Distribution Stage Recovery/recycling
The packing material used in product transport isbeing reduced to prevent products from being soiled
by increasing the number of times reusable containers
are used in the field and maintaining cleanliness. We

48（Index）

120

are also reducing packing material by putting lids on
reusable containers and other changes, considering
the balance between maintaining product quality andreducing the use of packing materials.

107

100

60

0

2025 targets

2030 targets

decrease vs.
FY2019decrease vs.
FY20196％2019（Base year）

2020

2021

2025

11％

2030（FY）*2 A figure obtained taking the base year as 100

Amounts of Waste Generated and Disposed of (results for
FY2021)［Toyoda Gosei Co., Ltd.］

Amount of
landﬁll waste
0 ton〈0%〉*Re-S Eco-Brand

Recovery/recycling

As one part of our efforts to reduce waste, we have
expanded to products that use remnants generated
in the production of automotive parts such as airbags
and steering wheels, under the Re-S brand.
Our Re-S brand is widely marketed to the generalpublic, including consumers, and is being promoted
through regular pop-up stores at nearby commercial
facilities and through our own online store.
In addition, we are actively collaborating withcompanies in different industries, which we hope willlead to the accumulation of B to C business know-how.
In FY2021, we promoted and launched a projectfor collaborative products with Doala, the mascot of
the Chunichi Dragons professional baseball team,Yamanami Kobo, a facility for people with disabilities,
and students of Kinjo Gakuin University.

“Re-S” was coined from the prefix“re-,” as in “reborn” and “recycle,”that is the start of environmentallyfriendly activities, and also includes
the meaning of sustainability (S).
https://res00.base.shop/

Re-S
onlineshop

Airbags &seatbelts

Representative productCollaborative
product with
Kinjo Gakuin
University

49

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment

Environmental Preservation and Building Environmentally-Friendly Societies

Working to Save Our Water, the Source of Life on Earth
Initiatives to protect the water used at our plants from its source(mountains) to its destination (sea)

We comply with laws and regulations related to chemical substance control and the environment, and are
conducting activities to protect biodiversity.

Breeding endangered creaturesProtecting rare species in biotopes

Basic Philosophy●●

Plant afforestation
Biotope creation●

In addition to strengthening the selection and management of chemical substances to create products
and processes that are kind to people and the earth,
we are improving environmental management inthings such as compliance with laws, regulations andcustomer standards in every country where we dobusiness, based on ISO 14001.
We are also maintaining a company woodland,
creating biotopes, and working to preserve tidal flats
and other areas for biodiversity.

Control of Substances of Concern
To strengthen the management of chemical substances in our products, we control substances that arelegally regulated in each country, substances that are
self-regulated by automakers, and substances coveredby our own company regulations. We monitor thetrends in European REACH*1 regulations and the EU
RoHS Directive*2 and have a system in place to respondrapidly when these regulations are revised.
To respond to requests from automakers in each

Reduced Use of Substances of Concern
In production processes, we are switching to waterbased paint and release agents, making painting lines
more compact, improving coating efficiency, andmaking other efforts to reduce Pollutant Release andTransfer Register (PRTR) substances.

Atmospheric emissions 81（Unit: tons ）Recycled
17

Chemical
substances
handled521

Products
276■ Establishment of Medium- and Long-Term Targets

We are working to identify risks and opportunities
associated with biodiversity.

To contribute to environmentally-friendly societies asenvisioned in the TG 2050 Environmental Challenge,
we have set the goal of no net loss of greenery (restoring
59 hectares, equivalent to the area of our plants, togreenery by 2050) and are working to achieve this goal.

Response• Decreased revenue,• Business continuation • Product development
production disruptions by ensuring personnel for lighter weightfrom difficulty
and raw materials• Development of raw
purchasing raw
through nature
Decliningmaterials and soaring
conservation activities material recycling
technology
naturalprices• Sustainable production
capital• Poorer product quality and higher corporate • Greater use of plantvalue by ensuring high derived biomaterials
from water quality
quality water resources and recycled
deteriorationmaterials
through woodland
maintenance and riverconservation

Scenario for Achieving This
0
-10

2010

2020

2050 targets
2030

2040

0

2050 （FY）

Fostering organisms in clean
Eradicating non-native species and beautiful seas
Protecting local aquatic life

Eradication of lance-leaved
coreopsis (June)

Environmental education
through nature observation●

Eco tour (June)

Environmental
preservation in tidal
ﬂats●

Preservation of
Fujimae Tidal Flats(May, October)

Kimori no sato preservation workin Gifu Prefecture

Woodland maintenance participants

Biotope Creation on Company Grounds

We conducted a biological survey of the biotope completed in FY2018 at the Heiwacho Plant. Five themes
and five species that are Aichi Prefecture Ecosystem
Monitoring Indicator Species were confirmed, andliving organisms have begun to gradually become
established.

-302025 targets
2021 targets -45.0-50 2010 targets -51.0
-59.0
-40

-60

ha (area of lost greenery)-36.02030 targets

・Tree planting
・Woodland maintenance・Use of abandoned farmland
・Solar power generation, more

Biological survey participants

Activities to Eliminate Compliance and Environmental Violations and Complaints
Regular checks are conducted by expert departments
and maintenance and management are carried out
to ensure legal compliance and no environmental
problems or complaints. Preventive activities such asenvironmental preservation project team activities
are also conducted to combat risks. In addition, we

analyze problems that occur at other companies,
inspect similar facilities including those at domestic
a n d i n t e r n a t i o n a l G ro u p co m pan ies, an d takepreventive measures. There were no occurrences ofenvironmental abnormalities in FY2021.

Proper Disposal and Storage of PCB-Containing Equipment
The law stipulates that hazardous and persistent
PCB (polychlorinated biphenyl) waste must be
disposed of by the end of March 2027. We started
outsourcing this disposal in FY2006 for the proper
treatment of equipment that contains PCBs. By
FY2021, 896 units had been treated. We will continue
to process untreated low-concentration PCB waste at
an early stage. Until that is completed, appropriate
management based on the PCB Special Measures Law
is done to prevent runoff and soil contamination.

Protecting Soil and Groundwater

-20

-70

50

Clearing undergrowth (scheduled for June, October）

Biological survey at Heiwacho Plant■ Risks and Opportunities Associated with Biodiversity

Opportunity●

Volumes and Flow of Emitted PRTR Substances

In an initiative to conduct our business in balance with nature for the preservation of biodiversity, we have set
coexistence with local communities as a material issue and are seeking to promote it.

Risk“Toyoda Gosei Kimori no sato ” forwoodland maintenance［Toyoda Gosei Co., Ltd.］

Building Societies in Balance with Nature to Preserve Biodiversity

Impactitems

Creation of biotopes in regulating ponds
Heiwacho Plant*1 Registration, Evaluation, Authorization and Restriction of Chemicals*2 Restrictions on the use of specific hazardous substances contained inelectrical and electronic equipment

Released into Released into Released into Amount transferred
Disposalwaterways
sewerssoil
as waste(amount treated)
0.12
0
0
43
103

Risks and Opportunities

Woodland Maintenance

In FY2019 we cleared undergrowth and thinned trees
in a forest in Minokamo, Gifu Prefecture, located on
the upper reaches of the Kiso River to promote healthy
woodlands.

Abundant water with abundant forests●

country for information on chemical substances in
products, we have devised mechanisms and conductedsystems for global collective management of chemical
substances that we are currently using in Japan, China,
Thailand and Vietnam. We will be steadily expanding
this system to places where it is not yet in use.

■ Main Activities Related to Biodiversity

We carefully monitor and treat soil and groundwater
co n t a m i n a t i o n f ro m t ox i c s u b s t a n ce s s u c h a strichloroethylene, which was formerly used in cleaning
agents. We have established observation wells at eachplant, and regularly confirm that there is no soil orgroundwater pollution from toxic substances and oils.

Category

Type

High concentration PCB
waste material

No. of units TreatedtreatedweightBallast, power
capacitors, etc.

802
units

6.9
tons

Low concentration PCB
waste material(PCB levels: 0.5–5,000 mg/kg)

Transformers,
power capacitors,
etc.

94
units

80.3
tons

Location

Status of corrective measures(PCB levels: >5,000 mg/kg)

TargetHaruhi
Purification in progress (proactive treatment, as
Groundwater
Plant
contamination from off-site sources is possible)
Because substances we have no history of using havebeen detected, regular reports to the government
Inazawa
Groundwater contain results of measurements only
Plant
*Results below reference values since 2010 (government
reports concluded in FY2012)51

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Environment

Environmental Management■ International Environmental Audits

In coordination with Group companies in Japan and other countries, we are continuing employee training andeducation programs so that every employee can act with awareness of the environment.

Voluntary annual inspections are performed based on
TG Global EMS, which are our original environmental
management system standards, problems are corrected, and kaizen activities are carried out.
Toyoda Gosei (Thailand) Co., Ltd.

Basic Philosophy
We are also making aggressive efforts for education to raise the environmental awareness of employees and train
personnel for sustainable environmental activities.

Enhancing Group-Wide Environmental Management
The entire Toyoda Gosei Group promotes environmental management. Environmental data has been collected bydomestic Group companies since FY2001 and by international Group companies since FY2003.
Plants Subject to Environmental Management
Toyoda Gosei Co., Ltd.
Haruhi Plant

Inazawa Plant

Nishimizoguchi Plant

Bisai Plant

Seto Plant

Morimachi Plant

Ichiei Kogyo Co., Ltd.

Kaiyo Gomu Co., Ltd.

Inabe Plant*

Toyoda Gosei Hinode Co., Ltd.

TG Opseed Co., Ltd.

Hoshin Gosei Co., Ltd.

TGAP Co., Ltd.

Toyoda Gosei Interior
Manufacturing Co., Ltd.

Toyoda Gosei East
Japan Co., Ltd.
Toyoda Gosei Kyushu
Co., Ltd.

Overseas Affiliates■ Americas(Regional headquarters: Toyoda Gosei North America Corporation)TG Missouri Corporation

Toyoda Gosei Texas, LLC

TG Kentucky, LLC

Waterville TG Inc.

TG Automotive Sealing
Kentucky, LLC

TG Minto Corporation

TG Fluid Systems USA
Corporation

TAPEX Mexicana S.A. de
C.V.

Toyoda Gosei Automotive
Sealing Mexico S.A. de C.V.

Toyoda Gosei(Thailand)Co., Ltd.

GDBR Industria e Comercio deComponentes Quimicos e de
Borracha Ltda.

Toyoda Gosei Rubber(Thailand) Co., Ltd.

Pecval Industria Ltda.

Toyoda Gosei HaiphongCo., Ltd.
Toyoda Gosei South India
Pvt. Ltd.

PT. Toyoda Gosei
Safety Systems
Indonesia
Toyoda Gosei Minda
India Pvt. Ltd.
Fong Yue Co., Ltd.
PT Toyoda Gosei
Indonesia

Toyoda Gosei Irapuato Mexico,
S.A. de C.V.
■ China (Regional headquarters: Toyoda Gosei (China) Investment Co., Ltd.)
Tianjin Toyoda Gosei Co., Ltd.
Toyoda Gosei Star Light(Tianjin) Auto Parts Co., Ltd.

Toyoda Gosei(Zhangjiagang) Co., Ltd.

Toyoda Gosei (Foshan) Auto
Parts Co., Ltd.

Toyoda Gosei (Foshan)
Rubber Parts Co., Ltd.

Hubei Toyoda Gosei Zheng
Ao Rubber & Plastics Sealing
Technology Co., Ltd.

Toyoda Gosei educates employees on environmental problems including the destruction of nature andenvironmental pollution, the impacts on the environment of production activities, and compliance withenvironmental regulations.

Toyoda Gosei UK Ltd.
Toyoda Gosei Czech, s.r.o.

Toyoda Gosei
Co., Ltd.

Level-speciﬁc training
Education for new managers○

Education for those posted overseas○

Education for environmental key persons

○

○

○

Acquisition of environmental education
qualiﬁcations

○

○

○

Education for new employees

○

○

○

Toyoda Gosei South
Africa (Pty). Ltd.

Know well

FY2021■ ISO 14001 Environmental Audit

FY202013％

FY20167％

sess whether our environmental management systems
are run properly in accordance with ISO 14001. We arepromoting 100% acquisition with the intention to havenew companies acquire ISO 14001 certification within
three years of being established.

ISO 14001-Certified Production Sites Acquisition rate 100%

Affiliates in Japan52

9 companies

Education for environmental staff
Education to improve internal auditors’ skills
Education to register internal auditors
Education for supervising managers
Education for key environmental facility
workers
Education for general employees

Toyoda Gosei
Co., Ltd.
○○○○Group companies
Japan
Overseas
○
○
○

○

○

○

○

○

○

in their activities for ongoing environmental protection.
We also conduct a questionnaire survey of employees
each year to assess their environmental awareness andplan educational activities based on the results.

Level of Recognition of Toyoda Gosei’s Long-Term Environmental Initiatives

Environmental Audits

Americas: 13 companies,
Asia: 7 companies,
Overseas Affiliates
China: 6 companies,
Europe/Africa: 3 companies

ISO education

We are attempting to raise the environmental awarenessof employees through Environment Month events,
regular environmental lectures, and other activities sothat all employees have an awareness of the environment

Have seen and heard

Toyoda Gosei Co., Ltd. 7 plants

Group companies
Japan
Overseas

Activities to Raise Environmental Awareness■ Europe and Africa* The Inabe Plant was added from April 2021.
Acquired ISO 14001 certification. When new plants and new companies are established, we aim to acquire ISO 14001 within three years of starting operation.

Toyoda Gosei and its domestic and international Group
companies acquire ISO 14001 environmental management system certification. Internal environmental audits
are carried out by audit teams composed of members
from business areas outside those being audited in order
to raise the independence and objectivity of the audits.
Toyoda Gosei Co., Ltd. commissions external reviews by
the Japan Quality Assurance Organization (JQA) to as-

The content each year emphasizes understanding
and practices based on legal trends, with examples
incorporated to create specific and understandable
teaching materials.

Environmental Education System■ Asia(Regional headquarters: Toyoda Gosei Asia Co., Ltd.)

Toyoda Gosei Rubber Mexico,
S.A. de C.V.

neutrality study groups, we provide
examples of CO2 reductions and otherinformation.

We conduct surveys of the status of compliance withgreen procurement guidelines of the suppliers withwhom we do business, and conduct genchi-gembutsu(go and see) inspections of high-risk companies. Whenneeded, we carry out joint kaizen activities. In carbon

Environmental Education

Affiliates in Japan
Heiwacho
Plant

Activities Based on Green Procurement Guidelines

18％

０％

Have a general idea ofDon’t know

56％
54％
32％
20％

6％

27％
43％

40％

3％

23％

60％

19％
80％

100％

Raise namerecognition
year by year
Environment Month (virtual environmental exhibition)

Collaboration with External Organizations
As the leading company in the Japan Auto Parts
Industries Association’s Global Warming Prevention
Subcommittee, we work with member companies
to prepare positive case studies and various study
sessions.

Measures to counter global warming is an issue on
a global scale, and requires effort in collaboration withthe entire automobile industry. We will continue toactively participate and put out information.

Internal environmental audits / Toyoda Gosei
Hinode Co., Ltd.

53

Contents

SocialAbout Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Growing together through activities withall stakeholders
With our management philosophy of conducting business withintegrity, we are committed to contributing to society throughmanufacturing, and are working to develop our personnel and create
comfortable work environments as the foundation for such activities.
Respect for human rights is also important, and is the basis forvarious activities with our domestic and overseas Group companies
and business partners.

FY2021 Priority Item Results and FY2025 Targets［Toyoda Gosei Co., Ltd.］
Priority item

FY2021 results

FY2025 target

No. of people who have taken training for executive personnel

54

65

Percentage of people who have had overseas assignments(management, technical and office personnel)

22.7％

25%

No. of DX personnel trained

94

270

No. of female managers

30

40

31.0%
［Global］

40%［Global］

Local executive percentage (VP and above at overseas
Group companies)
Percentage of managers who are mid-career hires
Employment of people with disabilities

Human Resources Strategy

Engagement survey results (positive evaluation)
Average overtime hours
Annual paid leave taking rate

30.9%

30% or higher

2.78%［Entire Group in Japan］

Achievement of legally mandated rate
［All Group companies in Japan］

56%

65%

12.3 h/month per person

Less than 10.0 h/month per person

97.3%

90% or higher

We Aim to Be a Group of People Who Can Think Independently and Act Boldly
The automotive industry today faces social challenges,
including the shift to BEVs and move toward carbon
neutrality. In this rapidly changing environment, humancapital is an ever greater focus of attention as a basis forsustainable company growth, for which enhancing ourhuman resource strategies is essential.
The TG Spirit refers to a common set of work values that
we have adhered to throughout our history of more than 70
years. Our problem-solving method and the PDCA cycle isfundamental to how we approach our work. Together, they
form a foundation for the people that support the company’ssustainable growth, which we consider to be one of ourstrengths.
We aim to achieve sustainable corporate growth byresponding to market changes in our core automotive
business, and by commercializing new technologies to solve
increasingly diverse and complex social issues.
We seek to strengthen our market competitiveness byenhancing the competitive advantages we have cultivated:knowledge in the fields of rubber and plastics, a global network,and new business development experiences. At the same time,
we strive to display leadership in solving social issues. For this,the thinking and independent actions that will enable us toadapt to market changes, as well as business opportunities
and risks, are important. To bring us closer to this ideal, we

are striving to strengthen our ability to identify problems, ourability to conceptualize scenarios and action plans, and ourability to execute these plans and bring them to reality.
We believe that human resource development measuresand culture reforms must go hand in hand in order todevelop people who can think for themselves and take onchallenges. To create a vibrant and comfortable working
climate, we will respect the various values of our diverse
workforce (diversity and inclusion) and create workplaces
where people can freely express their ideas, make proposals
and fully demonstrate their abilities while we continue
to reform work styles and change ways of thinking. At thesame time, we seek to develop the abilities and promote thegrowth of each individual.
Boundless Creativity and Social Contribution
Business growth × Solving social issues
Display of abilities, individual and organizational growth

A group of people who can think independently and act boldly
Promote the developmentof human resources

Active participation of
a diverse workforce

TG Spirit

Create a pleasantcorporate culture

Sincerity, Activity, Unity

Respect for human rights

Three Pillars of Human Resources Strategy
Up to now we have focused on providing educational opportunities for employees to learn
our specialized knowledge in areas such astechnology and materials, as well as our problemsolving method and the PDCA cycle, which are
fundamental to the way we work. We have alsosought to create workplaces where we can all
work together, including women and people
with disabilities who were not traditionally inthe workforce. In addition to these existing
initiatives, by implementing measures based on
our changing environment, such as diversificationof values and our workforce and digitalization ofoperations, we aim to become a group of people
who can think independently and act boldly.

54

Promote the developmentof human resources

Active participationof a diverse workforce

Create a pleasantcorporate culture

We are training the leaders
who will drive sustainablegrowth and systematicallydeveloping the specialized
technical personnel who will
create stronger manufacturing sites. We want to develop people who can take initiative in facing challenges
and display their abilities forthe growth of the businesseven in an age of volatility,
uncertainty, complexity, andambiguity (VUCA).

Promoting the creationof an environment inwhich people from various backgrounds canfully demonstrate theirabilities will lead to thecreation of new value
and sustainable corporate growth.

Through continuous
improvements based on
engagement surveys, weare creating workplaces
that are pleasant for a diverse workforce, aiming
to combine our efforts
to be the company weaspire to be with employee job satisfaction and asense of growth.

Human Rights Initiatives
Basic Philosophy
The Toyoda Gosei Group respects the United Nations’ Universal Declaration of Human Rights, the UN Guiding
Principles on Business and Human Rights, and other international norms. The Toyoda Gosei Group Charterfor Business Ethics lays out our basic principles of “respecting human rights and the diversity, character, andindividuality of each person and striving to create workplaces that are free of discrimination and harassment
and always healthy, pleasant and safe, based on labor-management cooperation.” The Toyoda Gosei Guidelines
for Business Ethics, our behavioral standards to realize the ideals in the Charter, declares respect for individual
character, human rights, and fairness in hiring, and forbids forced labor and child labor.
■ Formulation of Human Rights Policy
In May 2022, we formulated the Toyoda Gosei Group
Human Rights Policy based on the UN Guiding Principles.
We will promote management that respects human rights
and diverse values in the countries and regions in which we
operate, and contribute to sustainable societies throughmutual growth and development with our stakeholders.
This policy is positioned as the highest level humanrights policy in the Toyoda Gosei Group. To continue as acompany of integrity, we will comply with all relevant laws
and regulations in the countries and regions where we dobusiness, and as a good corporate citizen we will earnestly
address issues related to human rights by promoting
activities that respect the fundamental human rights of all
our stakeholders.
Toyoda Gosei Group Human Rights Policy
https://www.toyoda-gosei.com/csr/social/report2/pdf/ToyodaGoseiGroupHumanRightsPolicy.pdf■ Human Rights Due Diligence
We began conducting human rights due diligence in May
2022 in accordance with the Guiding Principles. Following
a desk review, we completed interviews and a written
survey with relevant personnel at the World Headquarters
and domestic and overseas Group companies, and plan
to complete the identification of significant risks by theend of this fiscal year. In FY2023, we will study measures
to prevent and mitigate the identified risks, implement
corrective measures, and verify their effectiveness. We
will focus on understanding the real situation and taking
effective measures in cooperation with Toyoda Gosei

Group companies and our business partners. The progressof this activity will be disclosed on our website from time
to time.
■ Education
In the past, education on respect for human rights wasprovided on occasions such as when people join thecompany, and when they are promoted. In FY2022, based on
the formulation of the Toyoda Gosei Group Human Rights
Policy, we have introduced lectures by outside speakers on
the theme of well-being, a human rights policy practical guidein the company newsletter, training for department generalmanagers by outside instructors, online training for technicaland office personnel, and the development of educational
tools for skilled workers. We issue a monthly communication
for the creation of workplaces free of harassment anddiscrimination, which is read out at workplaces.
■ Consultation Office
We have established a consultation office for harassment, child and nursing care, mental health, andemployment support for people with disabilities. In
the future, we plan set up and build channels to accept
inquiries from people who are not employees of thecompany.
■ System
Initiatives related to respect for human rights are discussed
at the Human Resources Meeting, and results are reported
and confirmed at the Sustainability Meeting, for which thecompany president serves as chairperson.

55

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialPromotion of Human Resources Development

Training of Global Executive Candidates

Ability to work in teams

Problem-solving[vision creation]

Business/organization
management

Management
Problem-solving[setting challenges]

T1

SX

T2

S1

T3

S2

Problem-solving[problem occurrence]

T5・T4

B1・B2

PDCA

Human management
Coaching
Mental care

Basic skills

Advanced skills/
Skill transfer

Guiding/looking after
newer employees

Fundamental skills[advanced]

Communication
Teamwork
Reporting,contacting, consultation

Fundamental skills[intermediate]
Fundamental skills[beginner]

Role education

Global education

New division
general managers

Executive
candidate education

New division deputy generalmanagers, department
general managers

Global leader
education

New group leaders,section managers

Management

Division assistantmanagers, supervisors
S2, 5th year

Regional education
problem-solving,knowing TG

2nd, 3rd year
New employees

New employees

Mid-level, team leaders

Specialized education

New Employee OJT System
For early employee education, we have introduced a“New employee OJT system” for independence of young
employees within three years of joining the company. We
provide both on-the-job training and classroom training
in the workplace so that they can perform their work
according to the PDCA cycle.
Interviews in the pivotal second, fourth and sixth
years in the company help them display their abilities,
understand their individual growth, discover educational
problems early, and take measures to counter them.

Item

Year

OJT
<workplace>

1st year in company

2nd year in company

Position

Work guidance based on PDCA

New employee training

Basic problemsolving training

Business manners
PDCA, others

OFF-JT<training>

Plant training

Understanding
manufacturing

Special education

Technician training
Production engineering
training

3rd year in company

Problem-solving
practical training

Report/contact/
consult training(communication)

New employee
interviews (2nd year)

Special Skills Dojos, Maintenance Skills Dojos, and Mold Skills Dojos Raise the Level of
Skill on the Manufacturing Floor
Improving the skills of each worker is an indispensable partof enhancing manufacturing capabilities at production sites.
We therefore started up three dojos in FY2019 with the basic
policy of “cultivating a culture that values skills.”
The Special Skills Dojo is designed to help managers andsupervisors acquire specialized skills in addition to theirsupervisory duties. We have started a training program where
they learn the mechanisms that lead to defects so that they
are better able to take corrective actions.
In the Maintenance Skills Dojo launched to train
maintenance personnel, we have added application-leveltraining to respond to the shift to robotics and IT. To promoteautonomation through the use of collaborative robots on
manufacturing floors, general shop floor workers are also
being trained in robot teaching skills. In FY2022, we have

56

Ability to makemanufacturing
innovations

Ability to produce
high added value

Ability to create
innovations

Professionalism
and high levelsof skill

Basic competencies needed in business

1

Problem-solving
ability

to work
2 Ability
in teams

3 Basic skills

TG Spirit（Toyoda Gosei Group’s shared values toward work）

Project Leader Training in the Age of VUCA
Innovation project
Leader training

Problem-solving ability

Development ofdigital talent

SeniorManagement“Basic competency” training

Looking after others

Level-SpecificEducation Officers
Executive
System Management

We have also launched a new training program to develop
project leaders who can bring about reforms in order to
respond to changes in the business environment, and digitaltalent to promote DX. We are also actively introducing online
training, e-learning and other new training methods.

also begun to create a curriculum to train people who willbring autonomation to existing processes through the use ofcollaborative robots.
The Mold Skills Dojo provides basic skills training andtrainer training for mold maintenance personnel at domestic
and overseas locations. So far a total of 100 people havebeen through this dojo.
We have been entering the Skills Olympics since 2017. By
helping young employees to acquire the high-level skills andknowledge related to their essential work, we are striving
to develop employees who can play active roles on the
production floor in the future. With these ongoing initiatives,
we hope to achieve strong manufacturing floors that support
the company.

In addition to training based on problem solving,
we believe people need to develop the expertise,capabilities, and skills required to respond tochanges in the business environment and implement
management strategies. We have started a training
program where people learn new ideas, approaches,and other skills to create new value and take the leadin innovating business operations. Three types ofproject leaders are trained: 1) Business leaders whocreate new businesses and products, 2) Business
innovation leaders who innovate business processes,and 3) DX leaders who lead digital human resources
and promote DX. This training has been fully
implemented since September 2022.

1）Business leader2）Business innovation leader

Necessary abilities

Necessary abilities

・Scenario planning・Marketing
・Business models
・Project planning, more

Effective
use of IT

Digital personnel
development3）DX leader

・Gathering and analysis
of customer needs
・Work analysis
・Return on investment
・Process design, more

Necessary abilities

・Agile processes
・Design thinking
・Data science
・Digital architecture, more

Data scientist

Digital architect

Digital Personnel Development for People Who Can Carry Out DX
I n re s p o n s e t o t h e ra p i d l y c h a n g i n g b u s i n e s senvironment, we are overhauling production processes
and products using data and digital technology.
While transforming our business model, we are alsotransforming the work itself and the organization,
processes, corporate culture and atmosphere. We willcontinue this DX to gain a competitive advantage.
Training people who can do this is an urgent task,
Digital Personnel Education System
Expert level
DX leader
Data scientist

Standard level

Digitalarchitect

Generalemployees

FY2021
results

Training planfor 2025

Data scientist

Can extract and analyze informationfrom large amounts of data andreflect it back to work improvements

57

150

Digital architect

Is well-versed in the latest cloudand other technologies, and can
implement them

24

100

DX leaderCan direct digital talent andpromote DX－＊

20

Entry level
IT literacy

and in January 2022 we introduced a new educational
program to train core digital personnel.
With this we will ensure business innovations andour competitiveness in the market, so that we cangrow as an organization that can respond flexibly
and rapidly to market changes (81 people received
standard level certification in FY2021).

Necessary DX personnel
Digital core personnel

To improve the skills and abilities needed in working
at Toyoda Gosei, we are encouraging human resources
development in three key areas: problem-solving, which isfundamental to work; the ability to work in teams based oncommunication; and basic skills for strong on-site abilities.

Personnel who are in demand fromthe business environment

Personnel who are in universal
demandAbility to play anactive role anywherein the world

Enhanced Training Programs, Invigorated Personnel Development

Personnel who can play active roles globally

Ability to transmit
skills and techniques
globally

To raise the collective strength of Toyoda Gosei globally, we are striving to develop human resources and create
workplace environments where everyone can display their full abilities.

For the systematic training of people who will manage
the company in the future, we have introduced aprogram to help people learn how to look at and think
about things at the management level and cultivate
the qualities that will help them bear higher levelsof work responsibility, with aims such as broadening
their outlook and improving their judgment. Outside
Japan, we are training executive candidates globallywith the introduction of a certification system forsolving problems by clarifying issues and setting goals.
With the continuous education of management
personnel, we will ensure that we have the personnel
who can support the management foundation of thecompany.

*Due to implementation from FY2022

57

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialActive Participation of a Diverse Workforce

Continuing Roles of Senior Employees

Toyoda Gosei hires and trains a diverse workforce, including women, foreign nationals, mid-career hires, andpeople with disabilities. We provide fair and impartial training, evaluation, and promotion opportunities toall employees, so that everyone can display their abilities. We seek to energize the company by providing anenvironment where people can play active roles.

Encouraging the Active Roles of Women
To bring about a situation in which all employees,
regardless of gender, can play active roles and grow,and to create new value by taking advantage ofdiversity, we are implementing the initiatives shown in
the table below. Our focus is on training and support
for the active roles of female employees, reforming theattitudes and behavior of superiors, and support for awork-life balance.
We aim to have more than 40 female managers by
2025 in order to create an environment where female
employees can work long-term with assurance andcontinue to grow, as well as to incorporate morediverse values and new perspectives and ideas into ourmanagement.
For example, in training and support for the activeroles of female employees, we are strengthening ourtraining initiatives to encourage female employees
who aspire to become leaders by providing training
to improve their management skills and actively

Training and support
for the active roles offemale employees

implementing training rotations to expand their rangeof experience and perspective.
In technical workplaces, we are also creating manufacturing floors where employees can play an activerole regardless of gender or age by introducing innovations to minimize heavy labor, such as rethinking
high-load work with the use of karakuri kaizen and thegreater use of robots. This will encourage more active
participation of female employees.
Number of Female Managers［Toyoda Gosei Co., Ltd.］（Target）
40（People）

40
30

19

20
10
0

25

30

2019

2020

2021

2025

（FY）

・Challenge Programs: Educational program in which female manager candidates provide “Acquisition ofmanagement skills through training,” “Expanding range of experience with training rotation,” and “Sharing
and mutual advice of troubles or matters that are noticed through practice in the workplace.”
・Tea Meetings: A place where female employees can take up troubles and opinions and strengthen personal
networks

Reforming the・Workplace reform management class: A place to exchange opinions on voluntarily improving theattitudes and behaviors
management ability of those in managerial positions, and change atmospheres and attitudes
of superiors
Support for work-lifebalance

as how they will work in the future and how todemonstrate the techniques, skills, and experience
they have cultivated in the workplace.
In addition, to improve health and physical fitness,
we are stepping up activities to promote healththrough regular discussions with employees, suchas holding health seminars at milestone ages andreviewing cafeteria menus to improve dietary habits.
Increasing
motivation• Management education for superiors(Better communication, dialog ability, etc.)• Career formation education(Young, mid-level to senior workers)

Health andphysical fitness
improvements• Health education(Seminars in pivotal years)• Improved cafeteria menu
(Corresponding to risks for hyperlipidemia,
hypertension)

Workplaceenvironment
development• Spread of good examples of workplaces on
manufacturing floors• Initiatives to reduce physical burden (useof karakuri , other means)

Workplaces That Welcome People with Disabilities

2
2011

We will create an environment in which senior
employees, who are steadily increasing in number,can continue to work with a sense of security andhigh motivation after the age of 60. This will create
new value by combining their wealth of experience,techniques, and skills with the ideas and perspectives ofyounger employees. To build a foundation for this, wehave raised the retirement age from 60 to 65, effective
April 2022. We will continue the initiatives shown in thetable on the right to encourage employees to continue
working enthusiastically and vigorously until age 65.
We are continuing activities to create an environment in which employees, regardless of age, canmaximize their potential and to further improve engagement (target: positive response rate of 65% orhigher for employee engagement (50s and 60s)).
For example, as a means of improving motivation,
we conduct career training for employees in their50s, providing them with opportunities to exchange
opinions with their peers and rethink such matters

We view the hiring of people with disabilities as asocial responsibility, and make active efforts in thisarea. The Committee for Employment of People with
Disabilities implements hiring, job assignments,
manager and supervisor education, and workplacesettlement. We place particular emphasis on getting
people settled in the workplace, monitoring conditions
through regular care interviews, taking up problems,and formulating 3-year plans for improvement of theworkplace environment. We are also systematicallyinstalling restrooms for all with consideration of
the workplace environment. Work that people withdisabilities can perform is identified, and they aresystematically hired and placed. As of the end of
FY2021 (March 1, 2022), 127 people with disabilities
had been hired for a hiring rate of 2.39%, exceeding
the legally mandated employment rate of 2.3%.
Our special subsidiary TG Welfare Co., Ltd. holds
seminars for people with disabilities for the entire
Group and serves in other ways to create places foreducation and share information with 14 Group
companies that have received special Group company
certification, achieving a hiring rate of 2.78% for theGroup overall.
Employment Rate of People with Disabilities• Enhancement of childcare leave, reduced working hours (systems exceed legal standards)（％）• Introduction of telework (for office and engineering work since January 2021)

Statutory employment rate

3.00

2.62
2.50

Local Executive Training
With 61 companies in 16 countries and regions aroundthe world, we want our operations to be rooted in
the local communities that support sustainablegrowth. For such business operations, we believe theinvolvement of personnel who are familiar with local
business practices and culture is essential, and weare actively promoting the appointment and trainingof local executives at our overseas locations. To
accelerate active promotion to such positions in eachregion, we established a basic policy and targets forthe promotion of local executives (vice presidents andabove) in FY2020. Each business unit is working toachieve these targets.
With the aim of having 40% local executives by

58

2025, we are evaluating people with high potential
in each region and formulating plans for theirdevelopment. We are also promoting the developmentof local personnel by introducing an introductory
education and mentoring system and conducting“problem-setting problem-solving” training toretain mid-career employees who are candidates for
executive positions. In addition, Regional Succession
Committee (RSC) meetings are held in the Americas,
Southeast Asia, and China to share the status ofactivities and issues related to the development andrecruitment of executive successor candidates. Annual
reports are given at Global Succession Committee(GSC) meetings.

2.00
We have formulated a three-year Training camp at TG Welfare Co., Ltd.
plan to improve the workplace envi- to support independence
ronment, and are making systematic
improvements such as installing restrooms with consideration of people
with disabilities

0

2.38

2.00
2017

2.31

Toyoda Gosei Co., Ltd.

2.70
2.38

2.78

2.78

2.47

2.39
2.30

2.20

2018

All domestic Group companies

2019

2020

2021 （FY）

59

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialCreating a Pleasant Corporate Culture

Creating Systems and Environments for Flexible Working Styles and That Support
Increased Activity

We believe that it is very important to have both systems and environments in place for our employees to work withenergy and enthusiasm. In addition to measures to improve job satisfaction, we are actively working to improve
office environments, cafeterias, restrooms, and other facilities to provide safe and comfortable work environments
and create a foundation on which each employee can demonstrate their abilities.

■ Working Styles and Systems

Penetration

Expansion

Two-way communication, Five Articles for Officers, facilitation of new work styles (telework, remote conferences)

Workplaceculturereform2022

M/F

Childcare leave

M/F

7th grade

4th grade

1st grade

3 yo

2 yo

1 yo

Delivery date

100

12.3

2018

2019

2020

2021

（FY）

94.4

95.3

2017

2018

79.6*279.5*2

2019

2020

97.3

50

In addition to the above, we have other generous programs such as Special
Children Support Leave so that parents can attend children's events or deal
with school closures and a Holiday Childcare Subsidy to subsidize the costof using a private daycare center on holidays that are working days for thecompany. Other programs include a Special Childcare Work Exemption andinterviews before taking childcare leave and before returning to work.
*1 4-hour workday up to first grade of elementary school, 6/7-hour workday
up to fourth grade of elementary school

Major Systems for Care Support

0

System exceeding laws

10 days/year

2021

（FY）

*2 There were company shutdowns due to COVID-19

Number of Men Who Took Childcare Leave［Toyoda Gosei Co., Ltd.］*3（People）

50

No. of people（％）

Percentage

20.9

40

Amount required by law

M/F

17.0

Annual Paid Leave Taking Rate［Toyoda Gosei Co., Ltd.］Special sick/injured M / F
10 days/year
childcare leave

Care day off

19.3

2017

（％）

Restrictions on overtime,
M/Flate-night work

M/F

20.1

10.0

0

M/F

Care leave

20

30

10.5

20
10

3.0

0

6

2017

4.5

4.9

9

8

2018

2019

37

20.0
15.0
10.0

18
2020

25.0

5.0
2021 （FY）

0.0*3 No. corresponding to the year when childcare leave was started

System to Support a Balance Between Work and Medical Care
• Reduced working hours• Half-day work

• Relaxation of upper restrictions on telework■ Workplace Environment
Company ekiden relay race

We aim to create an environment inwhich anything can be discussed freely,with officers themselves leading changes(this year is the 7th year)

Employees cheering for volleyball team

60

Childcare leaveat birth

Subject

2021

Raisingof jobsatisfaction

Example of Workplace Culture Reform Activities
Five Articles for Officers
1. I will greet people with a smile
2. I will listen to team members
talk until they are finished
3. I will say “I appreciate yourefforts” for positive informationfrom team members, and “Thankyou” for negative information
4. I will back team members whotake on challenges, and assume
responsibility
5. I will try to make myself better
understood

Mainlymen

3 years

Initiatives of superiors to communicate vision and thoughts

2020

Specialpaternity leave（h/month）

10

1 yearLabor and management initiatives are made with an emphasis on the senior generation, mid-level and young
employees, and supervisors (career support for young workers, postponement of retirement to age 65, etc.)

2019

M/F

System exceeding laws

6 months

Initiatives to improve engagement

2015～

Specialparental leave

93 days

Behavioral
changeEmpathy

SystemReducedworking hours*1

Trends in Initiatives to Improve Employee Engagement

Communication

Amount required by law

Timing/eventchildren are born and by raising awareness through our
in-house newsletters.
To help employees achieve a work-life balance, we
also strive to create an environment where they cancontinue to work with a sense of fulfillment, using
flexible work styles such as telework, shorter working
hours, and flexible work schedules.
Company-Wide Average Overtime Hours［Toyoda Gosei Co., Ltd.］

Major Systems for Childcare Support

1 month

the vision and mission for their division and declare
how they will develop human resources and create apositive culture.
Although progress was made in reforming thecorporate culture through these ongoing measures,in 2021 we started an engagement survey and havebeen monitoring internal conditions to make further
improvements by quantitatively measuring employee
job satisfaction and other parameters. We will continue
our efforts to improve employee engagement byaddressing issues that are identified in the surveys.

Subject

Toyoda Gosei is undertaking various activities to create
a comfortable working atmosphere.
In 2015, we launched the “Five Articles for Officers”
with the aim of fostering workplaces where people canspeak their minds freely and a culture that encourages
bottom-up proposals and initiative, as well as a company ekiden relay race to improve vitality and solidarity.
These activities produced changes in the atmosphere
within the company, but to further raise employees’
sense of accomplishment and satisfaction in theirwork, in April 2019 we started the Management
Declaration Activity. The heads of all divisions clarify

Pregnancy

Workplace Culture Reforms, Higher Employee Engagement

In addition to systems that exceed the legal requirements for support in balancing work with childcare,nursing care, and medical treatment, we are fostering aworkplace culture of mutual consideration. In particular,
as both men and women participate in childcare, we
actively encourage male employees to take childcare
leave by reminding them of the system when their

We strive to create workplace environments where
each and every employee can work energetically andplay an active role. We are improving the company
environment to create safe and comfortable workplaces
for our employees by renovating break rooms usedby employees on manufacturing floors, installing
restrooms for everyone, including disabled and LGBTQ
employees, and establishing a “hot desking” systemand satellite space in offices to promote flexible andefficient work styles that are not limited by location.

Miwa Technical Center (satellite space) Headquarters office (hot desking)61

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialSafety and Health

Health Management

Basic Policy for Safety and Health

We conduct health management activities so that all people working in the Toyoda Gosei Group can continue
working in both mental and physical health.

The Toyoda Gosei Group considers employee safety and mental and physical health to be one of the most importantmanagement issues, and we do our best to ensure secure and pleasant workplace environments for all business activities.

1. We believe the health of our employees is an important management resource and will strive to foster an

Safety and Health Initiatives
In the Toyoda Gosei Group, safety and health declarations are made and company activities are spread based on
the above basic philosophy.

Safety and
HealthDeclaration

1. Compliance with laws and internal regulations and standards related to health.
2. With “safety before all” foremost in mind, thorough safety-first behavior by all employees.
3. Cultivation of a culture of safety in which activities are conducted with a sense ofownership and there is mutual development with participation by all employees.

Promotion System
A Central Safety and Health Committee (meets 4 times/year)
is organized with the executive in charge of safety as thechairperson. Meetings are attended by the company president,
labor union chairperson, plant managers of all locationsin Japan, and the presidents of domestic and international
subsidiaries. Various measures related to safety and healthare reported and discussed, and the results are reported to theBoard of Directors.

In addition to the deliberation results of the Central
Safety and Health Committee, safety information is sent out
repeatedly in the President’s New Year message and company
newsletters. The entire Toyoda Gosei Group carries out these
activities. For suppliers, efforts are made to regularly share all
relevant information through procurement liaison meetingsand other means.

Targets/Achievements
We believe it is the company's responsibility to ensure thateveryone who works on our premises returns home in thesame good health as when they arrived at work. We have
implemented various measures to achieve our goal of zerograve,*1 serious*2 and STOP 7*3 accidents on a global basis.
We are working to eliminate accidents so that our employees
can focus on manufacturing with safety and security evenwhen faced with sudden production volume fluctuations
due to COVID-19 or other factors. This includes preventing
recurrence, conducting risk assessments and various
safety audits for advance prevention, providing safety andhealth education by job level to raise safety awareness, andconducting ongoing KYT (hazard prediction training) activities.

*1 Grave: death*2 Serious: Victim loses part of body (or function)*3 STOP 7: Seven things with which there is a possibility of serious injury:(1) being pinched or caught in a machine, (2) heavy objects, (3) falling
objects or people, (4) electric shock, (5) vehicles, (6) hot material,
explosives, gas, (7) severance

Occurrence of Grave and Serious STOP 7 Accidents［Global］(Including various contractors)（Incidents）

Grave accidents

4

2

0

Serious STOP 7 accidents

2017

1

1

2018

2019

0

2020

2021

62

Healthorganizational culture that puts safety and health first.
Declaration 2. We will strive to create positive and lively workplaces where employees can work energetically, and develop our
personnel.
3. To help improve the health of employees and their families, we try to raise health awareness for disease prevention.

Promotion System
With the aim of upgrading health management, the mental andphysical health committees were merged to form the Health andHappiness Promotion Council in FY2022. Aiming not only for good
health but also for happiness in work, industrial physicians and thecompany’s Human Resources Division, health insurance union, andlabor union come together to discuss management for health andwell-being, with the Safety & Health Promotion Division acting as
executive office.

In addition, activity reports are given and approvals are obtainedin our Central Safety and Health Committee, which then spreads
these measures to the Safety and Health Committees in each placeof business.
Central Safety and Health Committee (meets 4 times/year)
Health and Happiness Promotion Council (meets 4 times/year)
Safety and health committee at each location (meets once/month)

Health Management Activities and Certifications/Awards
The ability of each employee to work with energy and health into
the future is essential as a foundation to fulfill our corporate social
responsibility as stated in Toyoda Gosei’s management philosophy.
In recognition of this, we are promoting health management tomaintain and promote the health of our employees.
A strategy map based on the Ministry of Economy, Trade andIndustry’s Guidelines for Administrative Accounting of Investment in
Health and Productivity Management was created for the purpose ofquantitatively showing health management initiatives and results,
and implementing the PDCA cycle for activities. We will promotehealth management in a continuous and effective manner by

quantitatively evaluating investments, effectiveness, and resources.
We have also formulated Challenge 8 as a health KPI to promotehealth management. The eight items of weight, breakfast, alcohol
consumption, snacking, smoking cessation, exercise, sleep, and stress
are numerically assessed, and targets have been set for each fiscal
year through FY2025.
In recognition of our past health management activities, we were recognized for the
first time by the Ministry of Economy, Tradeand Industry as a Health and Productivity
Brand in 2022.

Raising Health Awareness and Changing Behaviors

2

2

（FY）

Domestic and International Subsidiary Audits
We have been using safety and fire prevention maps (SFPM)
since FY2020 for the purpose of understanding the safety
and fire prevention levels at our domestic and international subsidiaries and rectifying weaknesses. In FY2021, weestablished uniform assessment items based on the resultsof voluntary assessments at each company. We have been
conducting audits and providing support at 13 domestic
subsidiaries three times a year (39 times in total) through onsite inspections to further raise the level of safety.
Particularly in the area of disaster prevention, we havebeen conducting KYT activities with the aim of further
improving KY (hazard prediction) capabilities and creating

To Achieve “Boundless Creativity and Social Contribution”

workplaces where acting safely (hazard avoidance) is second
nature and people point out hazards to each other. KYT
competitions have also been held in India and China.

First-place team in the first Indian KYT conference (TGSIN TPS section team)

We are in the seventh year of our workplace-based health promotion
activities, one of the programs to achieve the goals in Challenge 8.
The number of participants has increased year by year, and in FY2021
reached 96.8% of all employees. More than 80% of the 316 participatingteams have an exercise theme, and each workplace has a fun and creative
way to promote health and wellness. In FY2021, we also introduced the
new theme of Sleep and Mental Health to promote activities for both

physical and mental health.
We are also working on activities toraise health awareness and promote
behavioral change by holding walking
events during long weekends andholidays using the Aichi Health Plus app
distributed by Aichi Prefecture.

A workplace that takes stretchingas a theme in workplace healthpromotion activities

Initiatives to Maintain and Improve Women’s Health
We place great importance on activities that support the health ofworking women. Our first Women's Health Week event was held in March2022 with the aim of improving women's health literacy. A special
meal (Pink Ribbon Lunch) was served in the cafeteria, information
was provided via panels, flyers, and digital signage, and self-checkgoods were distributed to raise awareness of breast and uterine cancer
screenings. In collaboration with the health insurance union, leaflets toimprove the cancer screening rate were distributed to people in their
20s, in whom the screening rate is particularly low. This resulted in a 5%

increase in the cancer screening application rate in FY2022.
We are also trying to support women who are returning to work afterparental leave by providing information on consultation services andself-care information
to help them balancechildcare and workfrom a health perspective.

“Pink ribbon lunch” provided during Women’s HealthWeek and information being provided at event

63

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialSupply Chain Management

Strengthening Our Relationships with Suppliers

Basic Procurement Policy
The Toyoda Gosei Group has set a basic procurement policy based on the idea of coexistence and co-prosperity with
our suppliers. We aim to deepen our partnerships with suppliers while achieving sustainable growth for us both.
1. Optimum Global
Procurement

We procure the best raw materials,

Basicproducts, and equipment fairly
Procurement from a global perspective whileconsidering cost, quality, technolPolicy
ogy, and production.
We also welcome proposals fromsuppliers for new technologies andmethods and new products.

2. Mutual Growth Based on
Mutual Trust

We aim to raise the collective
strength of the Toyoda Gosei
Group based on open and fairrelationships with suppliers,
strengthening our mutual
corporate cultures, introducing
innovative management, andbuilding mutual trust.

3. Moving Toward Sustainable
Societies

Toyoda Gosei has set activity norms as
guidelines for initiatives that should
be made for the SDGs and other social
issues, and shared them with suppliersin carrying out activities. We also aim toensure complete legal compliance andconfidentiality in corporate activities,
including our supply chain.

Toyoda Gosei’s Supply Chain
The number of suppliers we have direct dealings withis 419 for products and parts and 327 for materials
and equipment. When suppliers not in those areas areincluded, the total number is 772 companies.

Products/ Materials/
parts
equipment
Number of suppliers[Toyoda Gosei Co., Ltd.]

419

327

Other

Total

26

772

Global Collaboration
As our business expands globally, we are collaboratingwith purchasing managers in each region to further
promote local procurement, with consideration ofquality, cost, risk avoidance, and all other parameters.
Global Procurement Liaison Meetings are held twice
yearly as a forum to share information. At thesemeetings, regional managers share information andhold discussions to resolve issues related to quality,
cost, and delivery (QCD), and well as environmental
issues and other sustainability activities. We arealso strengthening our global procurement network
through mutual support, such as sharing buyer
education materials and localization information.

Business with New Suppliers
We have an entry form on our website for open dialogue
regarding new proposals and business dealings.
In addition to QCD assessments at the start of new
business dealings, we also check the status of theother party’s management activities based on theirlevel of support for our sustainability guidelines andother factors, to manage risks starting from our firsttransactions.
At the same time, together with the signing ofcontracts and memorandums of understanding, we
explain the various guidelines that Toyoda Gosei hasdeveloped and seek their understanding.

Initiatives for Sustainability Over Entire Supply Chain
Based on rising expectations for sustainability initiatives
in companies, we have created Supplier Sustainability
Guidelines and requested that our suppliers thoroughly
understand and practice them. We also provide selfcheck sheets for early measures when potential risks are
noticed, and ask companies to conduct self-assessments.
These guidelines set policies related to human rights
and labor, the environment, compliance, and othermatters. In addition to social aspects (child labor,
forced labor, no discrimination and equal opportunity,
freedom of association, reduction of long working
hours, compliance with minimum wages, and healthand safety), we ask suppliers to observe environmental
aspects such as water use and biodiversity.

64

With regard to the environment, CO2 reductions, recycling of resources including waste, and control of chemical substances is demanded in our Green Procurement
Guidelines. For conflict minerals, we ask suppliers to be
responsible in their procurement of resources and raw
materials. Once a year we conduct a survey on conflictmaterials with the cooperation of all our suppliers.
As described above, we are accelerating initiatives
needed for sustainable growth over our
entire supply chain,
matched to thevarious changes insocial conditions.

Every April, we hold procurement policy briefings where we
explain our management philosophy, the business environmentand company policy to about 250 of our major suppliersin Japan. After sharing our initiatives and targets related tosafety, compliance, sustainability, quality, production, andcost, we hold regular discussions to confirm results and make
improvements through anticipated value roundtables.
We hold procurement liaison meetings six times a year to
introduce examples of fire and disaster prevention initiatives

and share information on production volumes, quality,
compliance, and cybersecurity. In addition, we hold seminars
on carbon neutrality and other social issues.
In FY2020, we established Management Troubleshooting
Consultations for suppliers and other business operators. We
receive candid inquiries from them on various management
issues, including corporate management, finance, humanresources, and legal matters. This is done in small groups,
where we try to give advice on effective solutions.

Support for Suppliers so That We Can Grow Together
To support our suppliers, we implement various initiatives
from the perspective of safety, quality, cost and production.
Safety initiatives include prevention activities based on fire
prevention inspections of painting and other production
equipment and risk assessments. Initiatives related to
production include manufacturing site improvement
through manufacturing reform activities. Both of these areas
are related to personnel development.
We also provide indirect support for the activities of
the Kyowa-kai, an organization formed by suppliers forthe purpose of mutual improvement and sharing of bestpractices, and are involved in their activities for humanresource development and to achieve carbon neutrality.
During Supplier Month (December), we once again express
our sincere appreciation for the daily efforts of our suppliers
and try to strengthen our support for their sustainability
activities.

In 2022, the Kyowa-kai held the Winning (Value)
Technology Exhibition with the aim of strengthening
each other’s competitiveness by, for example, leveraging
the knowledge that suppliers have developed to enhance
the added value of our products. The introduction of eachcompany's special technologies, value-added products,
and sustainability
activities for carbon
neutrality andother matters willlead to the creationof new value andcorporate growththroughout the
The Winning Technology Exhibition, held in
supply chain.
September 2022. Approximately 700 visitors
attended the exhibition of various “value
techniques” from participating companies

Monitoring Supplier Information
We ask suppliers with whom we have ongoing business tosubmit a supplier survey form on management information
at least once a year. The submitted information is sharedwith the entire Purchasing Division. If there are majorchanges, we visit the supplier and conduct interviews toquickly grasp the changes that have occurred, mitigate risks

as soon as possible and solve problems.
We also conduct supplier evaluations, including QCD, tobetter understand each company's strengths, weaknesses,
and challenges before considering the details of our business
transactions.

Employee Education and Training
We strive to follow the “Toyoda Gosei Guidelines for
Business Ethics” so that each and every employee engaged
in procurement operations can conduct their activities in amanner that is open, fair and equitable toward suppliers.
To achieve sustainable societies, we also make efforts
throughout our supply chain with a view to social issues

and circumstances. The Procurement Subcommittee holds
regular monthly meetings to ensure that procurement
activities correspond to various changing social conditions,and all Purchasing Division members are given compliance(subcontracting laws, bribery, etc.), safety, and carbon
neutrality information.

Participation in Relevant Associations and Initiatives
We participate in industry associations such as the Japan
Auto Parts Industries Association ( JAPIA) and the Japan
Rubber Manufacturers Association ( JRMA). Our company
president serves as an officer (director) of JAPIA.
Through our activities in these industry associations,
we seek to achieve sustainable growth together with our
suppliers, such as through the Declaration of Partnership

Building promoted by the Ministry of Economy, Trade andIndustry.
We are also participating in the revision of the JAPIA BCP
Guidelines by the general affairs committee of JAPIA for
not only earthquakes but also wind and water damage andpandemics. In this and other ways we are contributing to theformulation of BCPs by suppliers in the auto parts industry.

65

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

SocialUniform Global Quality Assurance

Contributing to Local Communities

Commitment to Quality Assurance

Contributing to the Development of Sustainable Communities
quality into new products through our Initial Management System, which checks how well each process isdone, from planning to design and production.
*1 Incorporates the know-how and rules for quality improvement in the Toyoda
Gosei Group

Gate Control by Initial Management System

Production
preparation

Gate

Product
designGate

Product
planning

Gate

3 months
Gate

Under our basic quality policy, we guarantee quality at
every step from development to production for “Customer
First” and “Quality First” principles.
For our quality assurance systems, we have obtained
certification under the international standards ISO 9001/
IATF 16949 and have established a quality management
system. We are also working to strengthen quality assurance throughout the Group using the Quality System
Global Standards*1 as common rules. We pursue qualitythat meets customer expectations by reliably building

The Toyoda Gosei Group wants to earn the trust ofsociety through all its business activities, including
not only the development and manufacture of
products that satisfy customers worldwide, but also
environmental preservation and social contribution.
To be a good corporate citizen, as stated in our man-agement philosophy, we are active globally in thefour areas of social welfare, environmental protection,
youth development, and community crime prevention.
Together with these activities, we have continued tosupport disaster recovery following the Great East
Japan Earthquake in 2011.

Mass
production

TQM for a Stronger, Better Company
Based on the basic principles of TQM,*2 we are raising productand work quality and individual and organizational vitality.
Company-wide TQM activities are undertaken to create a
flexible and resilient corporate character. In addition to ourconventional kaizen activities, including Workplace Management
Kaizen Activities and Small Group Activities, we are building a
new TQM philosophy with the concept of “changing the way
we work in anticipation of coming changes,” and sequentiallyspreading these new TQM activities in the Group.

Contributions to Food Banks

Customer
first

TQM
Constant
improvement

Creation ofcustomer
expectations

TQM

Participationby allFundamental principles of TQM

Reformsandinnovations

Individual
thoughts, actions,and coordination

New TQM philosophy*2 Total Quality Management

Development of Human Resources for Future Business and Environmental Changes
We established the Quality Learning Center as a place to foster
a mindset in which all members of the Toyoda Gosei Group,
including suppliers and overseas locations, can think and act
in a “Customer First” and “Quality First” manner. In addition to
the company's quality history and examples of quality kaizen
that embody the TG Spirit, we use this as a place to repeatedly
learn about initiatives as we move toward the future.
In addition, during “Global Quality Month” in November
each year, everyone makes a “Declaration of Thought andAction” in their position and role. Through this and theestablishment of regular opportunities for everyone toreflect on their own actions, we try to firmly establish the“Customer First” mindset.
■ Training Personnel with Digital Analysis Skills
With the recent utilization of big data and the rapid expansion of DX, the ability to analyze data has become an
essential skill. We are strengthening the practical education,
including industry-academia collaboration,*3 of people who
can use statistical quality
control (SQC) and machinelearning (ML).
*3 Experts from Shiga University and the
Toyota Group serve as instructors
Toyota Group machine learning dojo

Manufacturing Quality Assurance and Continuous Improvement Activities
In order to deliver safe and secure products to our customers around the world, we are executing defect-freeprocess completion centered on production processes
for safety parts, which are directly related to the basic
performance (running, turning, and stopping) and safetyof vehicles. Audits and improvements by certified auditors
are also conducted for safety part production processes.
■ Ongoing “Quality Assurance Declaration Activities”
We cultivate a workplace culture of continuous improvement and have conducted “Quality Assurance Declaration Activities” since 2012 with the aim of creating
manufacturing floors that can cope well with changes.
We identify issues from the three angles of developing

66

human resources, developing processes, and preventing
recurrences, and then conduct kaizen . At the stage when
we achieve our targets, the supervisor gives an “Assurance
Declaration” to the company president on-site. With theaim of quality that will earn the trust of the customers
globally, we undertake this activity with the participationand concerted effort of the entire Toyoda Gosei Group.

Afforestation Project

Boys and Girls Invention Club

Traffic Safety Patrols

Fostering a Sense of Unity Between Employees and the Community Through Sports
Through the promotion of sports, the Toyoda Gosei
Group aims to foster a sense of unity between
employees and the community, and to contribute tobright, prosperous, and vibrant societies.
In FY2021, the Wolfdogs Nagoya volleyball team,a regular contender for the No. 1 spot in Japan's top
league, won the Emperor's Cup. The Toyoda Gosei Blue
Falcon handball team won the league championshipand the Japan Championship. The Toyoda Gosei
Scorpions basketball team is active in the B3.LEAGUE.
In addition to the official team games, Entrio,
which opened in FY2020, embodies our philosophy
by hosting local events that serve to create a lively
atmosphere through interaction with the community.

Wolfdogs Nagoya
Volleyball teamBlue Falcon
Handball team

Scorpions
Basketball team

Toyoda Gosei Memorial Gymnasium (ENTRIO)

I want to contribute tosolving social issues
through corporate sports
Shigeru Tanaka
Manager
Toyoda Gosei Blue Falcon

The Japan League ChampionshipToday the idea that all business activities should contributeto solving social issues is becoming more prominent in theworld. However, I felt that when I joined Toyoda Gosei there
was already a culture within the company which held the ideathat “a company is a public institution in society and that itshould naturally therefore contribute to the local community.”
I believe that there are many aspects of corporate sports thatcan contribute to society as well as to the company.
For example, teaching handball to local children in
English, or having Toyoda Gosei play a match against aworld-class team for them to watch. We hope to come up
with many ideas that would be beneficial to the community
and the company, and create a model plan to put them into
practice. The Blue Falcon is committed to being a strong
bridge between the company and the local community
and to the team's mission of building a strong team that istrusted by the company and the local community.

“Quality Assurance Declaration Activities” in local confirmation meetings withthe company president (left: Japan, right: North America)

67

Contents

Governance

Building and operating transparent
management systems to further enhanceGroupwide corporate governance
We are working to enhance corporate governance throughout the Toyoda Gosei Group so that
we can continue to be a trusted company. To create a fair and transparent corporate governancesystem, while we ensure its effectiveness through management supervision and audits by outside
directors and outside Audit & Supervisory Board members, we improve the appropriateness andefficiency of our operations by developing and operating an internal control system. Furthermore,
we are also promoting legal compliance, corporate ethics, and risk management activities.

About Toyoda Gosei

Appointment/
Dismissal

Appointment/
Dismissal
Audit

Board of Directors
Appointment/
Dismissal
Supervision

Consultation
Submission/
ReportExecutive
Appointment
Committee

President

Additionally, Toyoda Gosei pursues consummate corporate governance by voluntarily implementing a range ofpolicies in accord with the letter and spirit of the ideals andprinciples in Japan’s Corporate Governance Code, formulated and revised in June 2021, by the Financial Services
Agency and the Tokyo Stock Exchange.

Corporate Governance Systembers and holds regular meetings. Members also attend important meetings such as Board of Directors’ meetings andaudit each department and subsidiary, through which they
fulfill their function of auditing corporate management.
Accounting auditors are external auditors who combine auditing functions with a commitment to ensuring
an independent and fair auditing system. The Company
adopts the current system because audit, supervisory,and execution functions are well coordinated with eachother under this structure, with legality and efficiency of
the Company's decision-making and business execution
sufficiently ensured.
Also, in order to strengthen the supervisory function of
the Board of Directors and to increase the objectivity andtransparency of the decision-making process, we have established the Executive Appointment Committee and Executive
Compensation Committee under the Board of Directors as
non-mandatory advisory committees.

Audit &
Supervisory Board

Cooperation

Accounting Auditors

ReportExecutive
Compensation
Committee

Audit

Audit

Audit &
Supervisory Board Dept.

Toyoda Gosei and its subsidiaries, all Group companies
share its management philosophy. The Toyoda Gosei Group
Charter for Business Ethics, a shared guideline for compliance, has also been instituted and expanded to subsidiaries.
While respecting the independence of subsidiary management, we receive regular business reports from subsidiaries
and set up systems to confirm the propriety and legality ofsubsidiaries’ businesses through advance approval reports.
We also send non-executive directors and Audit & Supervisory Board members to key subsidiaries in a system tomonitor and act as a check on their business execution.

Direction/Supervision

Report
Audit

Audit Div.
Cooperation with Audit &Supervisory Board andAccounting Auditor

Business Execution

Company Meetings

Corporate Officers

Management Meetings

Functional/
Business Divisions

Submission/
ReportDecision/
Approval

Functional Meetings

Subsidiaries

Data

Committees

Main Meetings &Committees
Board of Directors
Sustainability Meeting● Chief of Headquarters
Meeting● Management Meeting●●

Functional Meetings● Sales and Technical
Meeting● Research andDevelopment Meeting● Profit and Cost Meeting● Production andPurchasing Meeting● Human Resources Meeting● IT Planning Meeting
Committees● Internal Control Committee● Export Control Committee● Central Safety and
Health Committee● Carbon Neutrality andEnvironmental Committee● Quality Committee

Sustainability Meeting
In November 2021, we established our new Sustainability Meeting with the aim of achieving sustainablecorporate growth, improving corporate value, and contributing to the sustainable development of society. At
this meeting we work diligently to discuss and decideon key action items related to sustainability, and confirm how the initiatives are progressing. The meetingis attended by all executives, including outside directors and outside Audit & Supervisory Board members
to ensure that the Group’s sustainability measures are
implemented in a well-balanced way with transparency
and a high degree of objectivity.

Frequency

Generally meets twice yearly

Chairperson

President

Members

All Directors and Audit & Supervisory Board
members (including outside Directors and Audit& Supervisory Board members), and Chief ofHeadquarters

Main Agenda

・Make decisions on key action items related tosustainability
・Report situation on key action items and target
value
・Make decisions on important external
disclosure items

Executive Compensation Committee and Executive Appointment Committee
Toyoda Gosei’s Executive Compensation Committee
and Executive Appointment Committee are composedof members of which more than half are outside
Name

Internal Control Systems

68

Appointment/
Dismissal

Business Execution System

Basic Philosophy

In accordance with the provisions of Japan’s Companies
Act, Toyoda Gosei has formulated a Basic Policy on Establishing Internal Controls. Under this policy, we are striving
to ensure appropriate operations by establishing internal
control systems, which help us deliberate important matters, establish related rules and guidelines, and handle
internal audits, compliance and risk management. Every
year, the Board of Directors checks the status of establishment and operation of internal controls in an ongoing initiative to improve and reinforce them.
To cultivate a healthy internal control environment at

Foundation of Value Creation

Shareholders' Meeting

Corporate GovernanceToyoda Gosei has adopted an audit and supervisory board
system and set up the shareholders’ meeting, Board of
Directors, Audit & Supervisory Board, and accounting
auditors as statutory entities. We have also put in placeinternal auditors and other internal control systems includinginternal audits. The Board of Directors consists of nine
directors and holds regular monthly meetings (extraordinary
meetings held as needed), where matters prescribed by law
or in the Articles of Incorporation and important mattersrelated to corporate management are reported, discussed,
and resolved.
A system of corporate officers is used to speed up
decision-making and business execution. For importantbusiness matters, division chief meetings and management meetings are held monthly. Functional meetingsand committee meetings relevant to key areas such astechnology, costs, and personnel are also held as needed
to ensure appropriate management decisions.
The Audit & Supervisory Board consists of five mem-

Value Creation Strategy

Corporate Governance System

ReportWe view the enhancement and strengthening of corporate governance with the aim of ensuring sound and efficient corporate management to be crucial in achieving
sustainable growth. Based on this, we are building andmaintaining fair and transparent management systems
and organizational systems that can respond precisely toenvironmental changes.

Value Creation Story

Role

Deliberates and reports on
the compensation system
Executivefor directors and theirCompensationindividual compensation
Committee(restricted stock-based
compensation, etc.)

Members
Toru Koyama, president,
Naoki Miyazaki, director,
Sojiro Tsuchiya, outside
director,
Kimio Yamaka, outside
director (chairperson),Mayumi Matsumoto,outside director

directors. The chair of both committees is appointed
from outside directors to further enhance transparency
and objectivity. (Each committee met once in FY2021)
Name

Role

Members

Executive
Appointment
Committee

Deliberates and reports
on proposals regarding
the appointment anddismissal of directors andAudit & Supervisory Board
members (appointmentof the president, etc.)

Toru Koyama, president,
Naoki Miyazaki, director,
Sojiro Tsuchiya, outside
director,
Kimio Yamaka, outside
director (chairperson),Mayumi Matsumoto,outside director

69

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governance

Skills Matrix

Changes In Numbers of Directors and Audit & Supervisory Board Members
In 2012, Toyoda Gosei adopted a system of corporate
officers and downsized its Board of Directors to nine
directors from 23 as of 2011. It appointed its firstoutside director in 2015.
The Board currently comprises nine directors, three
Directors（People）

or one-third of whom are outside directors. One ofthe outside directors is a woman. The outside director
appointments have increased the Board’s objectivity
and diversity.

Outside Director Ratio

9

0％

33％

0％

11％

2022

2011

2022

2011

2022

Audit & Supervisory Board (ASB) members（People）
５

2011

Outside ASB Member Ratio

Female ASB Member Ratio

5

2022

60％

60％

0％

20％

2011

2022

2011

2022

Main Initiatives to Strengthen the Governance System
2012
Board ofDirectors,
Audit &
Supervisory
Board

Business
Execution
System2015● Reduced thenumber of directors
appointed

2019

2020

2021

2022

● Changed the ratio of outside directors to one in three● Established the Executive
Compensation Committee
and the Executive
Appointment Committee● Appointed a female director● Appointed independent outside directors as chairs ofboth committees● Appointed a female member of the Audit & Supervisory
Board

President

○

○

●
●

Hiroshi
YasudaDirector●

MasakiOka

Director●

TakashiIshikawa

Director●

Naoki
MiyazakiDirector○○●

SojiroTsuchiya

Director
Outside Independent

○

○

●

Kimio
YamakaDirector
Outside Independent◎◎

Director
MayumiMatsumoto Outside Independent

○

○

●
●

●

●

●
●

（appointed in June 2021）

ASB member

HideomiMiyakeASB member
Independent（appointed in June 2022）●

13/13 (BoD)

●

●

●

●

● Corporate Conduct
Ethics Committee● Changed name to the Complianceand Risk Management Committee

13/13 (BoD)

●
●

●

●
●

●
●

●

13/13 (BoD)●●

13/13 (BoD)

●

●

●

●

●

13/13 (BoD)●●

13/13 (BoD)●●

13/13 (BoD)
13/13 (BoD)
12/12 (ASB)●

11/11 (BoD)
10/10 (ASB)●●●

13/13 (BoD)●●

13/13 (BoD)
12/12 (ASB)●

13/13 (BoD)
12/12 (ASB)●●ー
Note: “ ◎ ” denotes the chairperson.

● Changed name to
the Internal Control
Committee● Changed name to the Carbon
Neutrality and Environmental
Committee

Policies and Procedures to Appoint and Remove Senior Officers and Nominate
Candidates for Directors and Audit & Supervisory Board Members
Nominations of candidates for directors and Audit &Supervisory Board members are made after deliberation
and reporting by the Executive Appointment Committee, followed by a resolution of the Board of Directors
then at a Shareholders’ Meeting.
The nomination policy for senior officer and director candidates is based on the candidate’s popularity interms of their ability to make accurate and prompt decisions after taking into account the balance of knowledge,
experience, and capabilities of the management teamand the Board of Directors as a whole. The candidates arecomprehensively nominated and appointed on the basisof their ability to wholeheartedly comply with laws and●●OutsideOutsideAttendance at Board of Directors’New(BoD) , Audit & Supervisorybusiness
Board (ASB) meetings(non(Apr. 2021–Mar. 2022)
automotive)

13/13 (BoD)●

ASB member

Chika
Kako

DX

●

Kenji Oiso ASB member
YamatoSuzuki●● Began adhering to the Japan’s Corporate Governance Code● Environmental Committee

70

Toru
KoyamaManufacturing
Executive Executive
Corporate
Overseas (production/
Environment
Appointment Compensation
GovernanceTechnology Sales Finance Personnel
management
operations quality
and energy
Committee Committee
management)

Hitoshi ASB member
Kuwayama Outside Independent● Introduced a corporate ● Reduced the number of corporate officers
officer system● Established the Sustainability
Meeting
Meetings &Committees

Positionat Toyoda
Gosei

Tomonobu Executive Vice
YamadaPresident

Female Director Ratio

23

2011

Name

corporate ethics.
The nomination policy for Audit & Supervisory
Board member candidates is to comprehensively
nominate candidates from the perspective of putting
the right person in the right position while ensuring
a balance between diverse perspectives on corporate management, including knowledge of finance,accounting, and legal affairs, and knowledge of theCompany’s business.
If a candidate for senior officer or director is found tohave committed any fraudulent act or seriously violated
any law or regulation, or the Articles of Incorporation,
we will take procedures for their dismissal.

Board of Directors
The Board of Directors deliberates from many different angles on the direction of management, including
management and business strategies, then reports
and discusses on progress after any necessary resolutions have been passed. In such a way, the Board
supervises from a number of different viewpoints onwhether management strategies are being executed

appropriately. In addition to strengthening the Company’s internal control system and risk management
system, in recent years the Board of Directors has beenworking to achieve sustainable corporate growth amida chaotic business environment of political instability,
worsening environmental problems, and COVID-19
pandemic.

Main Matters Discussed by the Board of Directors in FY2021
Theme

Main matters discussed
・Domestic and overseas subsidiaries’ business strategies(expansions, mergers, downsizing)

Management/ ・Conclusion of alliance agreements
Business
・Business execution reports (results, production, quality, safety,
strategies
technology/development, priority risk management, etc.)
・Progress report on matters resolved by the Board

Corporate

Investment and
Loan Projects

Number of Matters Discussed by the Board of
Directors in FY2021
1Q

2Q

3Q

4Q

Total

Matters
Resolved

21

3

7

11

42

Matters
Reported

12

6

10

7

35

Total

33

9

17

18

77

・Revisions to Board rules
・Financial results, etc.
・Appointment of directors and Audit & Supervisory Board
members / Appointment of executives
・Sustainability measures
・Internal control systems
・Executive compensation
・Investment in buildings and facilities following expansion ofdomestic and overseas production bases
・Financing for overseas subsidiaries

71

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceEvaluation of the Effectiveness of the Board of Directors

Expected Roles of and Support for Outside Directors

Effective functioning of corporate governance is essential for the Company's sustainable growth, toenhance corporate value, and to contribute to thesustainable development of society. Therefore, to ensure the effectiveness of the roles and responsibilitiesof the Board of Directors, evaluations and opinions
are heard every year from members of the Board.
The Board of Directors then analyzes, evaluates, anddeliberates on measures for improvement. In FY2021,
debriefings with all nine directors and all five Audit &Supervisory Board members were conducted to assess
their performance. As a result, Toyoda Gosei foundno material deficiencies across any of its assessments
and concluded that the Board continues to function
effectively.
Of particular note, the Board received high ratings
for its openness and candid discussions, its agendathat focused heavily on key issues, and its support

All three outside directors possess a wealth of experience and keen insight.
Mr. Tsuchiya’s experience and expertise lie in global strategy and production engineering; Mr. Yamaka’s,
in finance and the environment; and Ms. Matsumoto’s, in the environment and SDGs. Ms. Matsumoto is
Toyoda Gosei’s first female director.
The three adeptly fulfill monitoring and advisory
roles in addition to actively participating in Board discussions. In their monitoring role, they receive support
in the form of departmental briefings on business operations and challenges and direct access to frontline operations through on-site visits to domestic and overseas
subsidiaries to better understand the actual state offor outside officers. However, the Board’s discussions
on medium- to long-term policies, which have been
regarded as an issue for some time, were evaluatedas needing further improvement. Outside directors
stated their opinions on ensuring greater opportunity
for face-to-face discussions among directors, and forhaving the chance to once again make on-site visits tounderstand the actual situation on the front line, bothof which had been suspended due to the pandemic.
Accordingly, Toyoda Gosei is now taking measures toimprove communication through direct, on-site visitsby conducting tours of business sites and arranging
roundtable discussion-type meetings to exchange views.
Opinions were also expressed with an eye on the future,addressing the need to add more diversity to the Board.
As such, Toyoda Gosei will continue to strive to ensure
diversity by highlighting the experience and expertise
required for the growth of the Company in a skills matrix.

Board Effectiveness Evaluation Process
Evaluation
MethodInterview: Nine directors and five Audit &Supervisory Board members
Evaluation process: Analysis of interviews anddebriefing results to ensure
anonymity

Debriefing Items ・Roles and responsibilities of directors(Main Items)
・Oversight function of the Board
・Deliberations within the Board
・Support for outside officers

Directors and Audit & Supervisory Board Members
At its annual Shareholders’ Meeting, held on June
16, 2022, Toyoda Gosei appointed Sojiro Tsuchiya,
Kimio Yamaka, and Mayumi Matsumoto as outside
directors and Hitoshi Kuwayama as an outside Audit &Appointment

Name

SojiroTsuchiya

FY2021 Board Effectiveness Evaluation Results

Enhancing discussions on medium- to long-termplans and future visions
Discussions on measures to respond to environmental
changes (CASE, electrification, etc.)

Independent
Director/Auditor

Reason for Appointment〇

To benefit from his management oversight and advice based on his extensive experience,
including as a director of Denso Corporation, and his expertise, including full-spectrum
manufacturing expertise cultivated over decades at Denso and other companies/groups.
Mr. Tsuchiya has been designated as an independent director because he meets the requisite
criteria and is deemed free of potential conflicts of interest with regular shareholders.

〇

To benefit from his management oversight and advice based on his extensive experience andexpertise in finance, particularly policy finance, project due diligence, and the environmental
and energy sectors. Mr. Yamaka has been designated as an independent director because hemeets the requisite criteria and is deemed free of potential conflicts of interest with regularshareholders.

〇

To benefit from her management oversight and advice based on her extensive experienceand high-level insight as a news anchor and researcher in the broad fields of social issues,environment, and energy in the management of Toyoda Gosei. Ms. Matsumoto has been
designated as an independent director because she meets the requisite criteria and is deemed
free of potential conflicts of interest with regular shareholders.

Measures
Further increase opportunities for discussion and reporting at the Board of
Directors’ meetings on initiatives to improve corporate value and mediumto long-term management strategies in response to changes in the businessenvironment

Explanations on the background of individual
investments and their relationship with mediumto long-term strategies

Discuss individual projects at an executive level after indicating the directionof capital investment to make projects easier to understandEnsuring time for outside officer liaison meetings

Extend time given for officer liaison meetings for further exchange of ideas anddiscussions

Ensuring further diversity of the Board

Continue selection of diversity- conscious candidates by arranging experienceand expertise required for the growth of the Company in a skills matrix

Issues Evaluated in FY2020 for Board Effectiveness and Status of Initiatives in FY2021

72

Supervisory Board member. Including Chika Kako and
Hideomi Miyake, who are currently in office, a totalof three outside Audit & Supervisory Board members
have been appointed.

Election of Outside Directors and Outside Audit & Supervisory Board Members

More detailed sub-items are laid out under the main itemsof the debriefing to allow for a well-rounded survey.

Issues Identified

operations. Additionally, they are briefed in advance on
the content and background of resolutions to be voted
on at Board meetings to facilitate sound decision-making.
At the same time, the outside directors advise management on company direction and business challenges.
Advisory opportunities include regularly scheduledliaison meetings attended by all outside directors andoutside Audit & Supervisory Board members, each ofwhom attends various other meetings also, including
the Sustainability Meeting, Sales and Technical Meeting,
Carbon Neutrality and Environmental Committee, andad hoc meetings.

Main Feedback (Issues) in FY2020

Initiatives in FY2021

Insufficient discussion on medium- to long-term
issues such as core competencies and carbon
neutrality that will serve as future growth strategies

Reported and discussed long-term business strategies beyond 2025 at Board
meetings and at outside officer liaison meetings

Ensuring further diversity of the Board

Considered to be an ongoing issue so that appropriate candidates continue tobe selected (ongoing in FY2022)

Outsidedirectors

Kimio
YamakaMayumiMatsumoto

To reflect in Toyoda Gosei’s audits her wealth of experience and keen insight gained from her
career at Toyota Motor Corporation, where she served mainly in vehicle development andmaterials development roles and was involved in management as a managing officer.

Chika
Kako
OutsideAudit &
Supervisory
Board
members

HideomiMiyake〇To reflect his extensive experience and deep insight as a corporate manager in the auditingof Toyoda Gosei. Mr. Miyake has been designated as an independent auditor because hemeets the requisite criteria and is deemed free of potential conflicts of interest with regularshareholders.

Hitoshi
Kuwayama〇

To reflect his extensive experience and deep insight as a lawyer in the auditing of Toyoda Gosei.
Mr. Kuwayama has been designated as an independent auditor because he meets the requisite
criteria and is deemed free of potential conflicts of interest with regular shareholders.

73

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governance

Executive Compensation
Directors’ aggregate annual cash compensation (monthly
compensation plus bonuses) is capped at ¥650 million(outside directors’ share of which is capped at ¥65 million).
Directors’ aggregate annual restricted stock-based
compensation is capped at ¥100 million (outside directors
are not eligible for restricted stock-based compensation).
All three compensation caps were approved at the annual
Shareholders’ Meeting on June 12, 2020.
Outside directors and Audit & Supervisory Board
members receive only fixed monthly compensation
because their role is to oversee and monitor managementfrom an independent vantage point.
Individual directors’ compensation is set in accord withthe above policies following a fair and transparent review/
reporting process by the majority-independent Executive
Compensation Committee, established in 2019.
At Executive Compensation Committee meetings,
outside directors have made suggestions about further
enlarging the incentive element of director compensation
by, e.g., adjusting compensation to reflect the extent of
directors’ respective environmental contributions.

Director Compensation Scheme

Total Compensation for Each Officer Class, Total by Each Type ofCompensation, and Number of Officers Receiving the Compensation

Fixed
compensation

Directors’ compensation consists of monthly fixedcompensation and performance-based compensation in
the form of cash bonuses (short-term incentive) and stockbased compensation (long-term incentive) based on theidea that directors should be appropriately incentivized
to pursue sustained growth in Toyoda Gosei’s value.
Directors’ compensation is split roughly 70:20:10 among
monthly compensation, cash bonuses, and stock-based
compensation, respectively.
Monthly compensation is set at a fixed amount thatreflects the recipient’s job responsibilities and experience
as well as compensation levels at other companies. Cashbonuses are based primarily on fiscal yearly consolidated
operating profit. Secondary variables that factor into theirdetermination include the degree to which fiscal yearlyplans are attained, employees’ bonus levels, bonus levels
at other companies, medium- to long-term earnings,
previously paid bonus amounts, and contributions to ESG
management. Stock-based compensation is intended as
an incentive to pursue sustained growth in Toyoda Gosei’svalue. It is paid in the form of restricted stock to promote
greater sharing of value with shareholders.

Through June 2020
Monthly compensation

Capped at ¥60 million/month 80%（¥720 million
annualized）

From July 2020
Monthly70%
compensation

Officer Class

Total Amount by Type of Compensation
Total Executive
Number(Millions of yen)Compensation
Fixed
Performance-based
Non-cash of Subject(Millions of Compensation Compensation Compensation Officers
yen)Monthly
Stock-based (People)
Cash Bonuses

Short-termLong-term

Performance-based compensation

Compensation

Cash bonuses（）

Amount approved atannual Shareholders’Meetings

20%

Cashbonuses

20%

Restricted
stock-based 10%compensation

Interview with Outside Directors

Compensation

Directors (excluding
outside directors)

334

231

74

28

6

Audit & Supervisory Board
members (excluding
outside members)

75

75

－

－

3

Outside officers

70

70

－

－

6

*Bonuses are the provision of allowance in the given fiscal year
*Effective from April 1, 2021 to March 31, 2022

Internal Audits, Audit & Supervisory Board Membersʼ Audits, and Accounting Audits
We have set up the Audit Division to handle internal
audits. With the aims of achieving business objectives andpreventing misconduct and mistakes, internal audits are
conducted across the overall business (including audits offunctional departments) based on an internal auditing plan
approved by management at the beginning of each term.
The results of internal audits are reported to
management, and audited departments are given
recommendations for improvements based on the audit
results. The effectiveness of internal audits is increased bychecking their improvement plans and results.
Each Audit & Supervisory Board member follows theauditing policy and audit plan established by the Audit& Supervisory Board when investigating the Company
and subsidiaries. They attend the meetings of importantdeliberative bodies and committees including theBoard of Directors, Chief of Headquarters Meetings andManagement Meetings, listen to reports on business from74

directors and others, inspect financial statements andother important documents, and conduct on-site audits
of offices and subsidiaries to audit the performance of
duties by directors from the perspectives of ensuring
legality and appropriateness, protecting assets and rights,
and preventing loss. Moreover, a special department has
been established to assist the auditors’ audits.
The certified public accountants who performed the
FY2021 accounting audit of Toyoda Gosei are Yasuhiro
Nakajima and Satoko Nakatani of PricewaterhouseCoopers
Aarata LLC.
Audit & Supervisory Board members, internal auditing
department personnel, and accounting auditors regularly
meet to confirm their respective auditing systems,
auditing policy, auditing plans, implementation status,
and audit results. They cooperate in performing efficientand effective audits, contacting each other as needed to
exchange ideas and share information.

Sojiro Tsuchiya

Mayumi Matsumoto

Kimio Yamaka

Career summary
Toyoda Gosei director since June
2015
Formerly executive vice president,
Denso Corporation

Career summary
Toyoda Gosei director since June
2019
Visiting Associate Professor,
Komaba Organization for
Educational Excellence (KOMEX),The University of Tokyo (current)

Career summary
Toyoda Gosei director since June
2016
Director of the Energy Strategy
Institute Co., Ltd. (current)

75

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceCorporate Governance Initiatives
Tsuchiya － Overall, I think that that the company ismaking efforts honestly and in good faith. Boards andstructures have been established, and I think policies
and plans have been well discussed and fairly welldeveloped.
Yamaka － A new Sustainability Meeting has been
established to provide a holistic view of not only ESG
initiatives, but also technical and audit perspectives. It
has become possible for us to repeatedly confirm andperceive intents in conjunction with the discussionsof individual boards, and make comments andrecommendations that are more in line with theactual situation.
Matsumoto － We appreciate the positive attitude of
the company in setting up the necessary meetingsand identifying and addressing sustainability issues
on a company-wide basis.
Tsuchiya －I think the question now is how to implement
and execute the decisions that have been made.

Effectiveness of Outside Directors
Tsuchiya － I believe that progress has been made,especially in the areas of sustainability and carbon
neutrality, thanks to Mr. Yamaka and Ms. Matsumoto,who specialize in these areas.
Matsumoto － Shortly after my appointment as an
outside director in 2019, I advised the company to review the materiality it had established for ESG. At thattime, Toyoda Gosei had committed to all 17 of theSDGs, but after further discussion we decided to review these commitments and have now reestablished
our focus to concentrate on eight of the most relevant
SDGs for the company.
Tsuchiya － To work toward and achieve the company’s
goals, further advances in many technologies
for product development and production will beessential. I have also offered a variety of advice andsuggestions in this regard.
Yamaka － I always emphasize the importance ofcompany-wide objectives and their significance,76

as well as perspectives that recognize external
stakeholders.
For example, for large-scale investments such as
new factory construction, I ask whether the choice oflocation and business site are optimal and whether
the investment is a priority with considerationof all business areas. When making a large-scale
investment, I always make sure that a carbon-neutral
perspective is taken into account. With regard toinvestment decisions on renewable energy and energy
efficiency, I have given advice from viewpoints thatdiffer from the conventional rules, such as flexible
consideration of the time it will take to recover theinvestment. Recently I have proposed quantificationof energy saving and decarbonization benefits.
At the end of fiscal periods and the time of monthly
operational reports, I ask questions and try tounderstand the numbers and interpretations of thefactors in increases or decreases, mainly through an
outside eye.

Improving Governance for the Future
Tsuchiya － Toyoda Gosei is a company that contributes
to society through manufacturing. The most important
thing in manufacturing is not to betray the trust ofcustomers who use our products.
Today, we often hear about falsification or tampering with data related to quality among Japanese manufacturing companies. I believe that one of the major
themes in order to improve governance in the future
is to review and create structures, a culture, and systems to ensure that such incidents never occur, and tomaintain these things continuously.
These initiatives must be inclusive, involving not

only the company in Japan, but also domestic andoverseas subsidiaries as well as suppliers, and material manufacturers. This is something that should betaken very seriously.
Matsumoto － Another aspect of the managementfoundation is the challenge of ensuring diversity
among managers.
For example, I think that we need to continue tocoordinate our approach to the appointment andpromotion of women, mid-career hires, and foreign
nationals.
We should also enhance the quality and quantityof disclosure of climate change measures, based oninternational frameworks such as the TCFD. The company's initiatives to address issues around sustainability should also be disclosed more proactively than
before. I believe that these are things we can do.
Yamaka － Disclosure of non-financial information, including governance, is becoming increasingly important. I hope the company will continue its initiatives to
explain to the necessary stakeholders the background,
its thinking, and what it is doing to face difficult challenges, as well as to demonstrate the improvementsthat have been made, in a readily understandable
manner.

Environment Initiatives
Yamaka － The environment is clearly positioned asa key management issue. Relevant boards have beencreated and are being enhanced organizationally. In
addition, I believe that steady progress is being madein data maintenance and fact finding.
It is commendable that a tentative general framework and schedule for carbon neutrality and interim
goals have been established, and that we now havea guide for these efforts and predictability for implementation and procedures.
Meanwhile, the schedule for energy conservation
investments, which are closely related to the company’s core business, is affected by decisions on when
and to what extent renewable energy and hydrogen
will be used. Conversely, the appropriate introduction of renewable energy and green certificates canprovide flexibility in the process of developing energy-saving technologies.
Renewable energy and hydrogen are closely related
to public policy, and the associated technologies andcosts are strongly tied to domestic and international
environmental and energy policy trends, beyond
the automotive industry. We must be flexible inresponding and changing in accordance with thesituation as we anticipate it.
The rest will be executed according to the generalframework, but I look forward to bold and speedy
initiatives to earn money from this.

Matsumoto － I have a high opinion of the company’s
achievements so far and the fact that its environmental initiatives are constantly being reviewed and improved. Initiatives to save energy are also being steadily implemented in company factories and offices.
Toyoda Gosei has been selected by the Ministry of
Economy as a company that is actively innovating toachieve carbon neutrality by 2050. Lively discussions on
the development of new products and the introductionof services for decarbonization and carbon neutrality
are also taking place at meetings as we move towardcommercialization of these products and services.
It is gratifying that we outside directors also receive
detailed explanations of new products and services.
Tsuchiya － There are some things that can be done
for the environment just by making improvements towhat currently exists, but more often than not major
reforms are required. In a manufacturing company
such as Toyoda Gosei, results cannot be achieved
without the backing of technology and technicalskills.
In the field of automotive parts using polymer materials such as plastic and rubber, which are the company’s specialty, there seem to be high expectations for
us to lead the industry in the shift to environmentallyfriendly products.
General environmental initiatives are important,but I believe that expectations for and the reputation of the company will depend on whether it

77

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Governanceis able to replace polymer automotive parts withenvironmentally friendly products and provide themto the world ahead of competitors.
Matsumoto － I look forward to the introduction of abusiness in which, in parallel with initiatives to reducecarbon dioxide (CO2) emissions for the environment,a shift is made to building circular societies throughthings such as resource recycling, and then to acircular economy that creates markets and leads to
new industries and employment.

Expectations for New Products for BEVs
Tsuchiya － A BEV, or battery electric vehicle, consistsof more than just a battery, motor, and inverter.
There is also the vehicle body, interior and exterior(IE) products, safety system (SS) products, andweatherstrip (WS) products. I believe that the wave
of automobile electrification will also lead to changes
in IE products and safety devices with demands forhigher quality and lighter weight. That differentiation
will center on two factors: intelligent performance,such as safety functions and autonomous driving, andthe quality, comfort, and convenience of the vehicle's
interior and exterior.
Considering this, there should be tremendous
opportunities for the IE products and safety devices
that Toyoda Gosei specializes in, depending how
it is done. This will depend largely on whether wecan propose IE products of unprecedented quality
and airbags and other safety devices for the electricvehicle era ahead of other parts suppliers and evenahead of automakers.
Matsumoto － In the IE area, the design of illuminatedemblems and other products that take advantage of
the BEV character, as well as the design of the vehicle
interiors, are simple and help to ensure safety, andmay appeal to many drivers.
In the SS area, we should be able to expect growing
needs for the development of safety devices suited
to small BEVs (airbags that match the vehicle
characteristics) and collision safety systems combinedwith seat belts.
Yamaka － In the FC area, involvement with the batteries and peripheral products that are symbols of BEVs
is probably necessary in the sense of demonstrating
the company’s commitment to carbon neutrality. For

78

example, while optimization and lighter weight forthe cooling system around the batteries in battery
packs have been achieved, I expect to see initiatives
to further increase added value. BEVs with solar roofs
are expected to become more popular in the future,and the role of batteries and peripheral parts will
increase further.
In non-automotive areas, the market related to carbon neutrality is the largest field of growth. Technologies in areas such as GaN, which contribute to energy
saving and weight reduction, LEDs, and e-Rubber may
be considered synonymous with the Toyoda Gosei
name. The company also produces high-pressure hydrogen tanks, a key component of FCEVs, for which it
received the 2021 “Technology Development Award”
from Toyota Motor Corporation. I look forward to initiatives that encompass the entire hydrogen lifecycle(supply chain), from generation to transportation,
storage, and disposal, with high-pressure hydrogentanks at the core of the process. An accessible corporate story that drives carbon neutrality can be builtwith energy-saving and hydrogen-related technologies. Since exit strategies to cultivate demand areimportant for new products, I would like to see thecompany focus resources in this area.
Matsumoto － I am watching the trends in battery regulations as Europe moves toward a circular economy,
and hope that the company is able to respond where
its technology is involved for enactment of revisions
to those regulations.

Technology That Takes Full Advantage
of Recycled Materials
Yamaka － Toyoda Gosei is a company that develops
and utilizes plastic and rubber materials and their raw
ingredients. It is expected to be a leader in solving the
problem of decarbonization of plastics and rubber.
As a first step, it is developing technologies to recycle
and use scrap materials generated in factories as
raw materials for other products, and we are seeing
positive results.
In the future, the company will be required to expand from in-house recycling and utilization to external recycling and utilization. In addition to the “entry
point” of how to collect waste from other companies,
there is an “exit point” of overcoming various hurdles
that arise when such material is distributed and soldas a standard product. This will require initiative incoordinating with policy authorities, and so a company-wide initiative is expected.
The use of biomass and (synthetic) hydrogen materials is inevitable, and developing technologies forthe use of recycled materials is becoming increasingly
important as they will be the first in the framework ofcarbon-neutral materials. I hope that recycling strategies will be developed from this perspective.
Matsumoto － Material recycling, including material
regeneration, resource recovery, and reclamation,in which waste is recycled as raw materials for thesame product, has the advantage of matching supply
and demand since the grade remains the same andrecycling is done for the same product with the same
intended use. Toyoda Gosei's value to society will befurther enhanced by expanding from cascading *1 tohorizontal recycling *2 through the development of
single-material plastics and other measures.
*1 Recycling a used product into a different product or a product of lower
quality*2 Recycling of used products into resources that are then used again in thesame product

Tsuchiya － I think this is an area where expectations
from both society and our customers are high. The
important thing now is that this is not a time fordiscussion but to bring this to a practical level as soon
as possible.
However, changing materials is not an easy task.
The functionality and durability of the part must be
guaranteed, and production engineering and facilities
must be developed for mass production. The biggest

hurdles are how to make such products cost-effective,
acceptable to customers, and profitable.
I feel that a strong company-wide project or something, not just shouts of encouragement, is needed tomake these things happen.
Matsumoto － Toyoda Gosei produces plastic and rubber products, and I hope that all employees will havea strong awareness of the importance of a circular
economy and work toward it. For example, by developing technologies for the use of recycled materials
as a means of creating long-term value from material
waste. I look forward to initiatives for a transformation to a resource-recycling business model that isenvironmentally friendly and profitable.

Support for Initiatives to Enhance Corporate Value
Tsuchiya － The value of a manufacturing company isfound in various places, but I believe that technicalcapability is the essence that enables the creationof this value. Technical capability includes not only
product development, but also production technology, quality technology, material technology, sales andservice technology, and technology related to on-site
improvement activities, production management, andmaintenance. I hope to continue to contribute to theimprovement of Toyoda Gosei’s manufacturing andtechnical capabilities.
Yamaka － I will continue to provide information related to energy and the environment both domesticallyand internationally. As I mentioned with regard to environmental initiatives, the key to building a strategy
is to establish a general framework and timeline. It is
important to watch rapidly changing domestic and international situations and be able to respond flexibly
to these changes. I see one of the major roles of an
outside director to be to offer advice on this generalframework and flexibility.
Matsumoto － Since I have opportunities to makeexternal presentations on automobile and storage
battery policies, I keep myself open to trends in thesepolicies around the world. I would like to provide
feedback on information that I believe will be beneficial to the company.

79

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceRisk Management

Crisis Management Project in Anticipation of Large-Scale Earthquake Disasters

Basic Philosophy
We are working to prevent risks that could have graveconsequences for management and to minimize damage
in adverse events. For these purposes, we identify risks
in each function and make decisions on how to respondin Board of Directors, Internal Control Committee andgeneral meetings throughout the company.
An Internal Control Committee headed by the company president identifies key risks, determines measures to counter them, and checks on the progress inexecuting these measures. In this way, these measures
are made more effective.
In addition, initiatives to deal with key risks or unexpected business risks due to political instability or otherexternal factors are discussed regularly by the Board of
Directors, and continuous improvements are made.
System Diagram of Internal Control
Committee

Moreover, Risk Management and Response Guidelines have been established. These guidelines show
the behaviors to adopt to prevent potential risks and torespond to problems appropriately and quickly. Partsof the BCP plan are discussed by the Board of Directors
with respect to COVID-19. With consideration of thestatus of infection spread, actions taken to minimize theimpact of COVID-19 include (1) preventing infection bypromoting work from home, regulating business trips
and visitors, and cancelling company internal events, (2)implementing measures for the event that an infection
occurrs in an employee, (3) maintaining our production
network by monitoring issues, including at our suppliers, and (4) introducing profit improvement measures.

A crisis management system has been put in place for the
event of a massive disaster, such as the predicted Nankai Trough earthquake or natural disasters due to climatechange. This system is based on the principles of human life
first, community support, and early recovery. Specifically,in addition to infrastructure and system measures based ona crisis management project, resilience training has been
conducted more than 160 times for directors and membersof antidisaster departments since FY2013. These efforts are
based on the company’s belief that improving the skills of
response personnel is essential. Specific procedures for therecovery of affected buildings, facilities, and processes havealso been established, and for alternative production in a
production recovery system.
Recovery training for design drawings and other data is also
carried out so that product development can be continued
even after disasters. In addition, workshops to strengthen
crisis management not only in Toyoda Gosei companies
but also at Group companies and suppliers are conducted
regularly. Assessments using anti-earthquake measure implementation status check sheets, clarification of weak points
with graphs, introduction of responses taken at Toyoda Gosei
and other companies, and cooperative preparation of business
continuation plans (BCP) are carried out.

Disaster Response

Initiatives to Date

Disaster outbreak － First response

Recovery

Chairperson: President Koyama

Deliberation of policies and measures related to internal control

Compliance Subgroup

Risk Management Subgroup

Internal Audit Subgroup

Reports, deliberates on corporate ethics andstatus of compliance with laws, etc.

Identiﬁes major risks, decides measures toavoid or mitigate them, conﬁrms
implementation status

Status reports on internal audits

Warning & Monitoring Team●

Emergency
Task Force

Disaster occurs●

Facility andequipment
measuresFirst Response
Task Force
Advance Team
(investigative team)Life Support
Task Force

AN

N
IO

DO

PL

• Review yearly activities (including Group
companies in Japan and abroad)• Share risk analysis• Evaluate, discuss activities with members of
the Board of Directors

T
AC

K
EC
CH

• Final report on the progress status of activities
for the current ﬁscal year
• Improve, review risk management policies,
activities, standards, etc.

(Execution of annual plan)• Share information on key risks (including Group
companies in Japan and abroad)• Reﬂect in company, departmental policies• Conduct activities based on plan

External disclosure of activities (securities report, corporate governance report, annual report, company website, etc.)

Response to Key Risks
Operating foundation risks and business strategy risks
based on the business environment are assessed fromthe perspective of impact on operations (financial
impact, etc.) and possibility of occurrence (frequency),and key risks are identified.
Key risks are reflected in company policy asimportant action items, and initiatives are made to
mitigate or prevent risks.

Examples of Key Risks
Classification

Main key risks●

Size of risk
Large
Impact on
operations(financial impact, etc.)
×MediumPossibility ofoccurrence(frequency)
Small

80

●
●
●
●

●
●

●
●

Large-scale disaster (earthquakes, storm and flood damage, etc.)
COVID-19 (infection prevention, production system maintenanceRisk/opportunity and handling based on TCFD
Carbon neutrality handlingDX handling
Impact of Russia/Ukraine situation
Cyberattacks/scam email
Recall due to serious quality problem
Human injury, operation shutdown due to serious labor accident
●

●

●

●

Instructions

District Task Force

Reports●

Traffic accidents (causing serious damage/injury)

Anti-trust law violations
Business operations of partner companies
Interruption of business activities due to fire or explosion accidents●

Systemmeasures●●●

Skills●Earthquake resistance measures for buildings and facilities
Establishment of a disaster prevention center to serve as an operations
base for the entire company for anti-disaster department operations
Equipping all locations with a multi-channel access radio system (which
is used in Japan for various purposes, from daily work to emergency
and disaster situations) and satellite phones
Installment of a crisis management server (earthquake-resistant
structure) and emergency power generators
Operation of a disaster recovery system for restoration of damaged
systems and data centers (special facilities equipped with andoperating computers, data communications, and other devices)
Introduction of site and building safety decisions
Earthquake bulletin and employee safety information system training
Maintenance of supply chain information
Preparation of a business continuity plan (BCP)
Continuation of resilience training (disaster simulations)

Strengthening of Global Risk Response
The status of risks, not just domestic but also frequently
occurring global risks (tightening supply of parts and raw
materials, COVID-19-related operation shutdowns, Ukraine
situation and more), is identified, the early situation bothin Japan and internationally is grasped (issuance of aweekly BCP), and necessary actions are taken globally.
Standardization is also underway so that measurements canbe taken by domestic and international locations on theirown initiative, strengthening the response to key risks seenin the business environment of each company.

Basic Policy for Cybersecurity Measures
To strengthen the control of confidential information,
annual checks of the compliance status of each division
based on company confidentiality management regulations
are conducted together with onsite audits. Self-inspections
are also done at Group companies in Japan and overseas, aswell as at major suppliers.
Confidentiality officers are assigned in all departments,
and confidentiality education activities are conducted basedon information system security operating standards and aconfidential information management manual. At domestic
and international Group companies and major suppliers,
specific measures are stratified and executed based on thesize of the impact on Toyoda Gosei and inspection results
for cyber risk measures at each company. Regular reports
and discussions are conducted in all company boards, andcybersecurity measures are taken together globally.

Main Cybersecurity Measures
Classification
Facility andequipment measures

Prevent
leakage due
to negligence●

Leakage of confidential information
Occurrence of harassment●●

Production
Restoration
Task ForcePrincipal risk management activities• Specify key risks for the next ﬁscal year
• Conﬁrm plans to counter key risks

Measures●

Emergency
earthquake alert

Internal Control Committee

Classification

Permanent

Prevent
leakage due
to malice

System measures
Facility andequipment measures

Measures (domestic and international Group companies and suppliers respond in accordance with the size of the impact)
●

●
●
●
●
●

System measures●●

Educational activities(morale measures)●●

Printing restrictions with ID card authentication for multifunction printers and dedicated drawing printers
Data encryption on all personal computers
Security measures when sending emails out of the company (mandatory cc to superior’s email address, encryption of attached files)
Increased surveillance cameras Restrictions on writing onto external storage media
Installation of wire locks to prevent PC theft
Confidentiality pledge Monitoring of system use records, access log records Stricter applications for taking items from premises
Strengthened hacking prevention measures (Internet) Restricted access to file servers
Prevention of unauthorized connection to terminals brought in from the outside
New employee education
On-site inspections of each department
Company-wide voluntary security control inspections using check sheets
Training in responding to targeted email attacks
●

●

●

●

●

●

81

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceCompliancepeople in sales and other business departments,
training for sports clubs and more. Educational
tools using various case materials are also prepared,

Basic Philosophy■ Awareness surveys and Self-Inspections

Toyoda Gosei’s management philosophy states, “We
promote business operations with integrity throughthe establishment of a system founded on thoroughcompliance and corporate ethics.” Together withhighly ethical and fair business practices, we strive
for thorough compliance in all areas based on thisphilosophy.
The Toyoda Gosei Group Charter for Business Ethics

sets forth shared values and behavioral standards for theentire Toyoda Gosei Group. Group companies in Japanand other countries then formulate and implement
their own behavioral guidelines based on the Charter.
Toyoda Gosei Co., Ltd. has also established the Toyoda
Gosei Guidelines for Business Ethics, which it expects
every employee to follow, and has worked to familiarize
all employees with these guidelines.

Compliance System
Toyoda Gosei has established the Internal Control
Committee with the Company’s president serving aschairman and all company officers as members. The
Compliance Subgroup's activities include reporting on
and discussing the status of compliance with businessethics, laws, and regulations. The items reported
and discussed in the Committee are shared with thecompliance advocates selected by each department in
Companywide Compliance Advocates’ Meetings so thatthey will be reflected in the activities of each workplace.
The committee works for thorough compliance witha unified approach between management and theworkplace.
Regular compliance liaison conferences are also heldwith Group companies in Japan. Group companies
in other countries have also established compliancecommittees, appointed compliance advocates, or set upother compliance systems suited to the circumstancesin their region and company. Compliance activities arecarried out globally in coordination with Toyoda Gosei
Co., Ltd.
Toyoda Gosei Compliance Promotion System

Corporate activities

Domestic
afﬁliates

Support for thecompliance system

Management
Philosophy

Support for thecompliance system

Toyoda Gosei Group
Charter for Business Ethics

Overseas
affiliates

All company executives

Internal Control
Committee

Compliance advocates from each division

Ensuring
compliance

Legal affairs/
compliance workshops

Company-wide Compliance
Advocates’ Meeting

Compliance consultation office(internal/external)
Labor consultation office(internal)

new employees and others as an opportunity to spreadand deepen awareness of compliance at various career
stages.
Risk-specific training is conducted for specific risks.
These trainings include training for transferees prior
to overseas assignments, anti-trust law training for

List of Workshops/Education at Toyoda Gosei
Workshop name/education

Recipients

Workshops/study sessions for officers Company officers
New managers

Compliance, mental preparation as a manager, anti-trust laws, bribery, etc.

General employees (mid-level)

Compliance, contracts, internal company regulations, laws (anti-trust laws, bribery, etc.)

General employees (skilled workers)

Compliance in manufacturing settings

New employee training

New employees

Compliance, laws

Pre-overseas assignment training

Management/General employees

Compliance precautions in other countries (anti-trust laws, bribery, etc.)

Management/General employees (sales)

Laws, internal company regulations

Training for sports clubs
Education

82

Main content
Company law, fiduciary duty, etc.

New manager training
For each
Legal affairs/compliance training
level
Fifth-year employee training

For each Anti-trust law training
risk
Product liability law training

nition and understanding of compliance educational
tools” was 93.4%.
Domestic and overseas group companies conduct annual self-inspections of the status of their complianceadvocacy systems and major risks including antitrustand competition laws, bribery, internal control, labor,
accounting, procurement, and quality. The results of
the inspections are checked by each of the company’sfunctional departments, and a feedback report is prepared. Each Group company then makes improvements
based on the report and strives for thorough compliance through the PDCA cycle.

■ Initiatives for the Prevention of Antitrust and Competition Law Violations
The Toyoda Gosei Group Charter for Business Ethics
states that we will conduct business activities with aspirit of “fair and free competition” (compliance withantitrust and competition laws). We have formulated
the Codes of Conduct for Antitrust Law Compliance as
guidelines to be followed by our employees, and areworking to ensure thorough compliance by employees
through training and educational activities. Antitrust
law compliance manuals based on the laws of eachcountry are prepared for the regions where Group
companies are located, and initiatives are made toprevent anticompetitive acts globally.

The Toyoda Gosei Group Charter for Business Ethics
clearly states that in our relationships with government agencies, political parties, and public officials,
we shall strictly refrain from any behavior that could
be mistaken for “back-scratching” or cronyism in theeyes of society in general, and shall strive to maintainhighly transparent and sound relationships. We havealso formulated Global Anti-Bribery Guidelines as acommon guide for global activities, and are making
efforts to prevent bribery, accounting fraud, and otherforms of corruption. Education is provided to employees through various types of level-specific training
and training for Group companies doing business inregions where there is high risk to prevent corruption.

■ Early Detection and Correction of Problems Through an Internal Reporting System■ Training and Educational Activities
Toyoda Gosei conducts various training and education
activities with the aim of raising and solidifying
compliance awareness in every employee. Trainings
are conducted by level in the company and by risks
corresponding to the work. The level-specific trainings
target new officers, new managers, mid-level employees,

Workshops

To ascertain the degree to which compliance awarenesshas penetrated the company and whether there are any
signs of problems, we conduct an annual compliancesustainment questionnaire survey of all employees. The
results of the survey are reported to the Internal Control
Committee, and measures are implemented throughout the company based on the results. Each workplacealso engages in educational activities led by complianceadvocates.
In the FY2022 survey, the “level of recognition andunderstanding of the Toyoda Gosei Guidelines for
Business Ethics” was 95.6%, and the “level of recog-■ Initiatives to Prevent Corruption

Toyoda Gosei Guidelines
for Business Ethics

Specific Initiatives

Category

including a “Compliance Academy” that is regularly
published in the company newsletter, and Compliance
KY Case Studies.

We have established compliance consultation offices
both inside and outside the company for the purposeof early detection and correction of problems related
to violations of compliance, internal rules, and laws
and regulations in the course of business operations.
Outside lawyers are in charge of the external offices
to deal with problems from an objective standpoint.
This system allows all employees of the company
and family members living with them to consult
anonymously, and the company takes thoroughmeasures to protect their privacy and ensure that they
will not be treated unfairly because of their report.
In addition to the internal consultation office ofeach Group company in Japan, inquiries are also
handled at an external compliance consultation officethat is used in common through external contacts.
Overseas Group companies also have external orinternal consultation services. In FY2021, as a resultof making the consultation offices known to all, 42
reports and consultations were received from within
the company and its domestic affiliates, mainly
concerning labor management, workplace problems,and harassment. These cases were promptly investigated and appropriate corrective measures were taken
to resolve the issues.
No. of Compliance Reports/Consultations (Japan)
FY

2018

2019

2020

2021

No. of cases

40

48

69

42

Management/General employees (technical) Laws, internal company regulations
Management/General employees (athletes, staff) Compliance overall

Compliance Academy (company newsletter) All employees

Introduction of compliance cases

Compliance KY Case Studies

Theme-based cases and interpretations (100)All employees

83

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

GovernanceManagement Members（As of June 16, 2022）

Toru Koyama

Tomonobu Yamada

Hiroshi Yasuda

Masaki Oka

Mayumi Matsumoto

1982 Joined Toyoda Gosei

1981 Joined Toyoda Gosei

1982 Joined Toyoda Gosei

1985 Joined Toyota Motor Corp.

2005 General Manager ofDevelopment Division, Safety
Systems Business Unit, Toyoda
Gosei

2007 General Manager of Sales Division 1,
Toyoda Gosei

2006 General Manager of Planning Division,
Safety Systems Business Unit, Toyoda Gosei

2012 Project Senior Manager, Finance &Accounting Division, Toyota Motor Corp.

1987 Contract newscaster, TV Asahi
Corporation2010 Director, Toyoda Gosei

2010 President, Toyoda Gosei Czech, s.r.o.

2012 Corporate Officer, Toyoda Gosei

2012 Corporate Officer, Toyoda Gosei

2014 General Manager of Related Business
Department, Toyota Motor Corp.

2014 Managing Officer, Toyoda Gosei
Chief of Sales Headquarters, Toyoda Gosei(current)

2016 Director, Managing Officer, Toyoda Gosei
Chief of Production Headquarters, Toyoda
Gosei
Chief of Plastic Parts Production Center,Toyoda Gosei
President, Tianjin Toyoda Gosei Co., Ltd.

President

2012 Corporate Officer, Toyoda Gosei
President, Toyoda Gosei North
America Corp.
2015 Managing Officer, Toyoda Gosei
2016 In charge of Corporate Planning
Division, Toyoda Gosei
Director, Managing Officer,
Toyoda Gosei
Chief of Purchasing
Headquarters, Toyoda Gosei
2018 Director, Senior Managing
Officer, Toyoda Gosei
2019 Executive Vice President,
Toyoda Gosei
Chief of Corporate Planning
Division, Toyoda Gosei
2020 President, Toyoda Gosei(current)

Executive Vice President

2016 Director, Managing Officer, Toyoda Gosei
President, Toyoda Gosei (Shanghai) Co., Ltd.
2017 Director, Senior Managing Officer,
Toyoda Gosei
Adviser to General Industry Products
Division, Toyoda Gosei
2019 Director, Corporate Officer, Toyoda Gosei
Chief of General Industry Products
Division, Toyoda Gosei
2020 Executive Vice President, Toyoda Gosei(current)
Chief of Audit Division, Toyoda Gosei(current)
Adviser to General Industry Products
Business Headquarters, Toyoda Gosei
2021 Adviser to Life Solution Business
Headquarters, Toyoda Gosei
2022 Chief of Taiwan Regional Headquarters,
Toyoda Gosei (current)

Director, Corporate Officer

Director, Corporate Officer

2015 Adviser, Toyoda Gosei
Corporate Officer, Toyoda Gosei
General Manager of Finance & Accounting
Division, Toyoda Gosei
In charge of IT Planning Division, Toyoda
Gosei

2017 Adviser to Quality Assurance Headquarters,
Toyoda Gosei

2016 Deputy Chief of Finance & Accounting
Headquarters, Toyoda Gosei
In charge of Audit Division, Toyoda Gosei

2018 Director, Senior Managing Officer, Toyoda
Gosei

2017 Chief of Finance & Accounting Headquarters,
Toyoda Gosei

2019 Director, Corporate Officer, Toyoda Gosei(current)
Chief of Safety & Health Promotion Division,
Environment Division, Toyoda Gosei(current)

2018 Director, Managing Officer, Toyoda Gosei
Chief of IT Headquarters, Toyoda Gosei

2021 Chief of Corporate Strategy Headquarters,
Toyoda Gosei (current)
Chief of Carbon Neutrality and Environment
Promotion Division, Toyoda Gosei
Adviser to Automotive Business
Headquarters, Toyoda Gosei

2020 Chief of Corporate Planning Division, Toyoda
Gosei

2019 Director, Corporate Officer, Toyoda Gosei(current)
Chief of Audit Division, Toyoda Gosei

2021 Chief of Corporate Strategy Headquarters,
Toyoda Gosei
Deputy Chief of Corporate Strategy
Headquarters, Toyoda Gosei
Chief of Purchasing Headquarters, Toyoda
Gosei (current)

Outside Director

1993 Contract newscaster, Japan
Broadcasting Corporation
2003 Freelance announcer, Horipro Inc.
2008 Collaborative Researcher,
Research Center for Advanced
Science and Technology, The
University of Tokyo
2009 Project Researcher, same asabove2011 Director, principal researcher,International Environment andEconomy Institute (current)
2013 Visiting Associate Professor,
Special Division of Environmental
and Energy Science, Komaba
Organization for Educational
Excellence (KOMEX), The
University of Tokyo (current)

Kenji Oiso

Yamato Suzuki

Chika Kako

1980 Joined Sumitomo Metal
Industries, Ltd.

1987 Joined Toyota Motor Corp.

1989 Joined Toyota Motor Corp.

2012 Group Leader, Litigation Dept.,
Legal Division, Toyota Motor
Corp. (Project Senior Manager)

2015 Chief Engineer, Lexus International
ZL, Toyota Motor Corp.

Audit & Supervisory Board
Member

2002 Deputy Manager, Finance &Accounting Div., Sumitomo Metal
Ind., Ltd.
2004 Joined Mitsubishi Sumitomo
Silicon, Co., Ltd.
2006 General Manager, Finance &Accounting Division, SUMCO Corp.
2011 Corporate Officer, SUMCO Corp.
2014 Functional Officer, Yokogawa
Sumikin Bridge Corp.
2016 Joined Miraial Co., Ltd.
General Manager
Finance & Accounting Division,
Miraial Co., Ltd.

Audit & Supervisory Board
Member2015 Project General Manager,
Corporate Planning Division,
Toyoda Gosei
2016 Deputy General Manager,
Legal Division, Toyoda Gosei
General Manager, Legal
Division, Toyoda Gosei
2021 Full-Time Audit & Supervisory
Board Member, Toyoda Gosei(current)2017 Project General Manager, Finance &Accounting Division, Toyoda Gosei

2017 Director, Japan Council for
Renewable Energy (current)

2019 Managing Director, Toyoda Gosei
Corporate Pension Fund2019 Director, Toyoda Gosei (current)

2020 Full-Time Audit & Supervisory
Board Member, Toyoda Gosei(current)

Outside Audit & Supervisory
Board Member

2018 Managing Officer, Toyota
Motor Corp.
2019 Field General Manager,
Material Technology Field,
Materials Advanced R&D andEngineering Company, Toyota
Motor Corp.
2020 Senior General Manager,
Material Technology
Field, Advanced R&D andEngineering Company, Toyota
Motor Corp. (current)
Audit & Supervisory Board
Member, Toyoda Gosei(current)

Corporate Officers

Ryo Onishi
Yoshiyuki Fujita
Hiromasa Zaitsu
Takashi Ishikawa

Naoki Miyazaki

Sojiro Tsuchiya

Kimio Yamaka

Hideomi Miyake

Hitoshi Kuwayama

1985 Joined Toyota Motor Corp.

1980 Joined Toyota Motor
Company

1975 Joined Nippondenso Co., Ltd.

1980 Joined Japan Development
Bank

1968 Joined Toyoda IronWorks Co., Ltd.

2008 Managing Officer, Toyota
Motor Corp.

2004 Managing Officer, Denso Corp.

1990 Registered as attorney
Joined Midosuji LPC

Director, Corporate Officer

2008 General Manager of Upper
Body Engineering Division 2,
Toyota Motor Corp.
2013 Adviser, Toyoda Gosei
Corporate Officer, Toyoda Gosei

2013 Senior Managing Officer,
Toyota Motor Corp.

2016 Managing Officer, Toyoda Gosei

2014 Adviser, Toyoda Gosei
Executive Vice President,
Toyoda Gosei

2019 Corporate Officer, Toyoda Gosei
2020 Director, Corporate Officer,
Toyoda Gosei (current)
Chief of Research and Development
Headquarters, Toyoda Gosei
2022 Chief of Carbon Neutrality
and Environment Promotion
Division, Toyoda Gosei (current)
Technical Liaison Officer ofResearch and Development
Headquarters, Toyoda Gosei(current)

84

Director

2015 President, Toyoda Gosei
2020 Chairman, Toyoda Gosei
2021 Executive Vice President
Toyoda Gosei (current)
Director, Toyota Boshoku
Corp. (current)
Director, Toyoda Gosei(current)
Outside Audit & Supervisory
Board Member, Hino Motors,
Ltd. (current)

Outside Director

2002 Director, Denso Corp.
2007 Senior Managing Director,
Denso Corp.
2011 Executive Vice President,
Denso Corp.
2013 Advising Executive Engineer,
Denso Corp.
2015 Director, Toyoda Gosei(current)
Adviser, Denso Corp.

Outside Director

2007 Deputy Director-General,
Development Bank of Japan
2009 Director of the Energy
Strategy Institute Co., Ltd.
(current)
2012 General Advisor on Energy
Policy for Yamagata Pref.
(current)
2014 Project Professor, Graduate
School of Economics, Kyoto
University (current)
2016 Director, Toyoda Gosei(current)

Outside Audit & Supervisory
Board Member
1993 Director, Toyoda IronWorks Co., Ltd.
1999 Managing Director, Toyoda
IronWorks Co., Ltd.
2003 Senior Managing Director,
Toyoda IronWorks Co., Ltd.
2005 President, Toyoda IronWorksCo., Ltd.
2011 Chairman, Toyoda IronWorksCo., Ltd.
2015 Audit & Supervisory Board
Member, Toyoda Gosei (current)
2016 Senior Adviser, Toyoda Iron
Works Co., Ltd. (current)

Outside Audit & Supervisory
Board Member

1997 Partner at Misosuji LPC
2011 Outside Company Auditor,
Maxvalu Nishinihon Co., Ltd.
2012 Vice Chairman, Osaka Bar
Association2013 Part-time Lecturer, Kyoto
University Law School2015 Outside Director, Maxvalu
Nishinihon Co., Ltd.

Yutaka Ogasawara
Tadashi Yamamoto
Mitsuhiro Nawashiro
Makoto Hasegawa
Katsumi Saito
Kenji Hayashi

2020 Senior Partner, Midosuji LPC(current)
Outside Director, Zett Corporation(Audit and Supervisory Committee
Member) (current)
2022 Audit & Supervisory Board Member,
Toyoda Gosei (current)

85

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Data
Financial and Non-Financial Highlights
Non-F inancial Data

Financial Data
The Toyoda Gosei Group adopted the IFRS effective from the first quarter of FY2018, ended March 31, 2019.
Additionally, FY2017 data was converted to the IFRS basis.

Revenue（Billions of yen）

800

807.9

Operating Profit /Profit Attributable to Owners of Parent
840.7

830.2

812.9
721.4

（Billions of yen）

40 35.1

600

Operating proﬁt
Proﬁt attributable to owners of parent

50

36.5

30
400
200
0

2018

2019

2020

2021

23.3
17.8

0

2017

（FY）

2018

2019

[Toyoda Gosei Co., Ltd.]（10,000 tons-CO2）

（％）

8

2021

60

9.6

10
6.4

6.7

0

（FY）

57.4

53.2

40

6
5.7

20

3.2

2
2020

Water Intake per Sales Unit

CO2 Emissions per Sales Unit
（Scope 1, 2） Waste Volume [Toyoda Gosei Co., Ltd.]

Return on Equity (ROE)

4

11.2

10
2017

34.1

23.3

21.3

20

36.4 35.2

Environment

2017

2018

2019

2020

2021

0

15.9

14.9

2013

2015

（Base year）（Base year）（FY）

GlobalToyoda Gosei Co., Ltd

Compared with
FY201547.1▲25%
Compared with
FY2013▲50%（1,000 tons）（Tons/¥100 million）

15

1.0
11.3

10
5.5

5

Compared with
FY2012 Compared with▲40%
FY2012
▲50%

0.65

0.67

Compared with
Compared with
FY2019FY2019
▲6%
▲11%

2019

2021

2025 Target 2030 Target

0.5

10.8

2021

2025 Target 2030 Target

（FY）

0

2012

（Base year）

2021

2025 Target

2030 Target

（FY）

0

（Base year）（FY）

SocialOperating Profit Ratio

Capital Investment / R&D Expenses（％）（Billions of yen）

10
8
6

60 53.4
4.4

5.1

4.3

4

4.1
2.2

2017

2018

2019

40

46.8

27.6

30.0

41.8
31.3

46.5
31.0

49.7

2020

2021

0

2017

（FY）

2018

2019

2020

（Yen）

（Years）

300

20

200

33.5

271.99165.04

2021

0

（FY）

180.39180.09

100

20

2
0

Capital investment
R&D expenses

80

Average Years of Service for Male andFemale Employees [Toyoda Gosei Co., Ltd.]

Basic Earnings per Share

86.74

2017

2018

2019

2020

2021

15

Female

19.5
14.8

18.6
15.5

18.5
15.5

Male

18.3

18.3
15.4

15.5

Number of Parental Leaves Taken

Number of Female Managers[Toyoda Gosei Co., Ltd.] *1[Toyoda Gosei Co., Ltd.](People)

40

5

20

0

2017

2018

2019

2020

2021

Male

0

（FY）

（People）

30

30
25

62

60

10

（FY）

Female

80

20
41
30
6
24
2017

28
9

26
8

19

18

2018

2019

37

18

23
2020

16

19

10

10
25
2021

0

2017

（FY）

2018

2019

2020

*1 Number of employees who began parental

2021

（FY）

leave in ﬁscal year concerned

Governance
Annual Dividends per Share
（Yen）

60

56.0

60.0

60.0

60.0

60.0

Cash and Cash Equivalents /Interest-Bearing Debt

Ratio of Equity Attributable to Owners of
Parent to Total Assets

Employment Rate of People with
Disabilities [Toyoda Gosei Co., Ltd.]（Billions of yen）

（％）

（%）

60

3

200

173.6

150

40

100
20

0

Cash and cash equivalents
Interest-bearing debt

97.9

152.2
148.0
134.0
125.4 127.9
109.1
108.2 107.3

2018

2019

2020

2021

（FY）

0

50.0

48.7

50.5

49.9

Rate of lost-worktime ＝ No. of casualties in labor accidents (people) × 1 million（%）
injuries
Total labor hours

1.5

2.38

40

2.31

2.38

2.47

2.39
2.3%

2.2%

1.0

2
0.5
Statutory employment rate

2017

2018

2019

2020

2021

（FY）

0

2017

2018

2019

2020

2021

（FY）

1

2017

2018

2019

2020

All manufacturing industries*2
1.20

20

50

2017

51.2

Labor Accident Rate (Rate of Lost-Worktime Injuries)[Toyoda Gosei Co., Ltd.]

2021

（FY）

1.20

1.31

1.02

2017

（People）

New employee training

600

Training for mid-level employees

400

Transport equipment manufacturing industry*2
0.54
0.50
0.48
0.45
0.43
Toyoda Gosei Co., Ltd.
0.118
0.064
0.062

0

1.21

Number of People Who Have Taken
Compliance Training [Toyoda Gosei Co., Ltd.]

2018

2019

0.208
2020

200

0.066
2021

（FY）

*2 Results of the Ministry of Health, Labour and

0

317

336

156

153

109

107

2017

2018

317

New manager training

518

323
216

196

82

73

89

2019

2020

175

2021

（FY）

Welfare’s survey on labor accident trends(Survey period: January to December)

86

87

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Consolidated 10-Year Financial Summary（Millions of yen; rounded down to the nearest million yen）

FY2017FY2018FY2019FY2020

FY2021

Revenue

807,958

840,714

812,937

721,498

830,243

Operating profit

35,17936,525

17,88836,47934,17235,775

Profit before tax

35,50737,356

16,10637,301

37,696

16,233

21,175

Profit attributable to owners of parent

21,361

23,30911,22635,20523,35278,38897,553

104,309

97,991

107,311

127,930

134,003

109,145

291,246

281,212305,273

328,524357,666

382,106

359,565

380,578

425,165

210,214250,557

241,408

245,666

259,537

241,581257,728

273,479

290,246

316,901

244,846

262,596

316,926

306,160

315,425

333,819

Non-current assets

321,819

326,023

349,619394,577

434,137

489,644541,877

608,172

587,373

620,699

662,388

Total assets

679,485

708,129

709,185

775,155

859,30235,97839,06941,84821,07331,762

43,722

Borrowings

43,72232,39644,657

42,83543,924Current liabilities

157,748

168,136

180,795

162,592

170,574

189,075

Current liabilities

195,392

194,309

180,653

185,535

209,396

Bonds payable

-

-

-

-

-

10,00023,32931,13842,92944,691

57,26154,45864,511

93,089103,399

109,379

129,772

Non-current liabilities

59,751

73,462

88,902

96,937

110,663

119,403

Non-current liabilities

118,435

133,674

158,256

169,164

187,111

Total liabilities

217,500

241,598

269,697259,530

281,237

308,479

Total liabilities

313,828

327,983

338,909354,700

396,508

Shareholders’ equity

255,201

275,840

289,321

301,756

311,127

324,890

Equity attributable to owners of parent(Reference) Interest-bearing debt

59,30770,207

84,77765,76589,023

108,181(Reference) Interest-bearing debt

108,233

125,486

148,057

152,215

173,696

Cash flows from operating activities

52,45155,44851,283

77,76560,40160,848Cash flows from operating activities

44,00457,46365,247

67,24727,658Cash flows from investing activities（40,989）（45,680）（62,432）（56,261）（82,131）（39,201）

Cash flows from investing activities（21,832）（55,491）（54,174）（49,949）（59,427）

Cash flows from financing activities（6,128）

（732）

（238）

（24,736）

14,794

6,541

Cash flows from financing activities

5,966

7,749

12,525（13,065）

2,206

Return on sales (%)

3.6

3.8

2.9

2.6

2.1

2.6

Profit attributable to owners of parent
ratio (%)

2.6

2.8

1.4

4.9

2.8

Total asset turnover (times)

1.27

1.34

1.27

1.31

1.25

1.26

Total asset turnover (times)

1.23

1.21

1.15

0.97

1.02

51.2

50.0

48.7

50.5

49.9

6.4

6.7

3.2

9.6

5.7

FY2012FY2013

FY2014FY2015FY2016

Net sales

599,615

689,477

727,846

781,886

755,601

806,938

Operating profit

36,706

43,79841,60342,82440,675

41,136

Ordinary profit

36,77745,847

43,792

41,49039,007

43,200

Profit before income taxes

36,571

46,101

39,851

36,71031,288

Profit attributable to owners of parent

21,42926,214

21,155

20,25579,07392,36485,283244,798

279,281

196,163

Non-current assets
Total assets

J-GAAP
Operatingresults

Financial
position（Fiscal year ended （Fiscal year ended （Fiscal year ended （Fiscal year ended （Fiscal year ended
March 31, 2013） March 31, 2014） March 31, 2015） March 31, 2016） March 31, 2017）

Cash and deposits
Current assets
Property, plant and equipment

Short-term loans payable*

Long-term loans payable

Cash flows

Key performanceindicators

Per share
information(yen)

FY2017（Fiscal year ended
March 31, 2018）

IFRS

Cash and cash equivalents
Current assets
Property, plant and equipment

Bonds and borrowings（Fiscal year ended （Fiscal year ended （Fiscal year ended （Fiscal year ended （Fiscal year ended
March 31, 2018） March 31, 2019） March 31, 2020） March 31, 2021） March 31, 2022）

Equity ratio (%)

51.7

51.6

51.6

51.7

50.7

49.6

Ratio of equity attributable to owners ofparent to total assets (%)

Return on equity (ROE) (%)

9.0

9.8

7.1

6.6

5.2

6.6

Return on equity (ROE) (%)

Capital investment

39,09743,08564,73354,49855,21864,816

Capital investment

53,411

46,891

41,83546,58949,749Depreciation and amortization

38,63338,74339,353

44,46240,902

44,037

Depreciation and amortization

32,54532,92735,32335,52738,499R&D expenses

27,27929,17029,57928,40927,164

27,864R&D expenses

27,68430,02531,37431,00033,543

Number of employees at year-end(consolidated)

30,19031,672

34,75435,90336,67938,234

Number of employees at year-end(consolidated)

38,23439,42939,40338,82339,511

Annual dividends

44.00

56.00

56.00

56.00

53.00

56.00

Annual dividends

56.00

60.00

60.00

60.00

60.00

Basic earnings

165.63202.54163.44156.49125.42163.60

Basic earnings per share (yen)165.04180.0986.74

271.99180.39Dividend payout ratio (%)

26.57

27.65

34.26

35.79

42.26

34.23

Dividend payout ratio (%)

33.93

33.32

69.17

22.06

33.26

* Including current portion of long-term loans payable and redemption of bonds within one year

88

89Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Financial Review
Financial Condition

Financial Position and Operating Results
The global situation showed signs of recovery from theprevious fiscal year, when the economy plunged into
recession due to COVID-19 pandemic. However, the paceof recovery slowed in the second half of FY2021, mainly
due to the resurgence of COVID-19, notably Omicron
variant, and the surge in crude oil prices.
For most of the first half of the fiscal year the Japanese
economy was sluggish against the backdrop of the state of
emergency and measures to prevent spread of COVID-19. A
recovery was expected in the second half of the fiscal yearwith the incoming Kishida administration, which sought
for a virtuous cycle of growth and distribution, as well as ahigher rate of vaccination for the population. This recovery,
however, stalled with the spike in COVID-19 cases,
especially with the Omicron variant, and with sluggish
growth in consumer spending owing to higher prices.
The automobile industry was expected to recover atthe beginning of the year, but global production was slow
due to the shortage of semiconductors and a stagnant
supply of parts due to the comeback in COVID-19 cases.
The continued shortage of resin materials and disruption
in the distribution network also had a significant impact
on costs. Meanwhile, automakers in Japan and overseas
announced their plans, notably for the launch of moreEVs, thus marking the year when the automobile market
begun a full-scale shift toward EVs, especially when Toyota
Motor Corporation announced its plan to step up global
production of BEVs to 3.5 million units by 2030.
Under these circumstances, although the Toyoda Gosei
Group's revenue increased year on year, profits fell owing
to a slowdown in the number of vehicles rolling off theassembly line, as well as due to the state of the materials
market and soaring logistics costs. Changes in the externalbusiness environment have also had a significant impact,
amplifying our cost burden owing to our inability to respondflexibly to fluctuations in automobile production volume.
Despite this difficult situation, we will not only continue
to streamline operations and curb expenses, but will also
carry out our growth strategy revolving around three key
areas toward the realization of our medium- to long-term
2025 Business Plan.
The first pillar of our business activities is “Venture into
innovation, new mobility.” In other words, we are pursuing
expeditious commercialization of innovative technologies
in new business domains, and the development of newtechnologies and products adapted to transformations in
automobiles.
In new business domains, we have expanded our
product lineup with the launch of the UV-C Personal
Space Disinfector and Deodorizer. This product purifies
and deodorizes the air using deep ultraviolet (UV-C) LEDs
that are effective in removing viruses and bacteria. We also
released the UV-C High-Speed Surface Disinfector that is
capable of killing bacteria and viruses in a very short spaceof time.
In terms of our next-generation dielectric rubber,e-Rubber, which moves using electricity, we developed
FeelSole, a smart insole with sensors that can be fitted into
a person’s shoe to give pressure data on the sole of thefoot during exercise. We started shipping samples of this90

product to golf schools run by Mizuno Corporation. We arealso developing next-generation power semiconductors
using gallium nitride (GaN), a technology that contributes
to the realization of an energy-saving society. We havesucceeded in fabricating a larger, high-quality GaN
substrate (GaN seed crystal) of over 6 inches in diameter,
the largest of its kind in the world. As society moves toward
carbon neutrality, the practical application and widespreaduse of next-generation power semiconductors is promising
as a means of reducing power loss when controlling large
volumes of power for renewable energy and EVs. We
believe the larger diameter GaN substrates will greatly
contribute to the issue of improving productivity (costreductions).
In the automotive sector, we have brought new devices
to market with the aim of realizing a safe and secure
mobility society. In response to the more rigorous vehicle
collision safety assessments that are expected in North
America and other countries, we have developed a driverside airbag with a new structure that better protects thedriver's head and chest in the event of an angled collision.
This state-of-the-art airbag has been fitted in the new
Honda Civic. A pedestrian protection airbag we developedthat protects pedestrians when hit by a car has also been
fitted to SUBARU’s latest Legacy Outback models. Whatis more, our LED illuminated emblems meet the everchanging design needs of our customers. This product,used in Nissan’s ARIYA crossover EV, lights up the car’slogo, adding a new design dimension for BEVs.
The second pillar of our Group activities is “Strategies for
growing markets/fields”. Here, we have been taking steps tostrengthen safety system operations, as one of our mainstay
fields. To this end, we entered into a capital and businessalliance with Ashimori Industry Co., Ltd. to further improvevehicle safety performance. Our respective companies will
work together, leveraging each other's business assets andexpertise going forward to strengthen our development
capabilities and product competitiveness. In this way, we will
work on the development of airbag and seatbelt systems, aswell as next-generation safety systems for electric and selfdriving vehicles.
Our third pillar of activity will focus on “Innovative
manufacturing at production sites.” Here, we aim to create
smart factories to support sustainable growth for theGroup. The Toyoda Gosei Group concept of an advanced
factory aims to be a clean production site that emits no CO2
or waste, where anyone can work actively with no accidents
and no claims of damage or injury. As more kinds ofvehicles come off the production line, we are working not
only to increase productivity through the introduction ofcollaborative robots and IoT systems that centrally manage
production processes, but also on environmentally friendly
manufacturing to enable employees to work securely andsafely. This initiative will be rolled out in new plants andthen gradually incorporated into existing factories.
Despite a drop in production due to a shortage ofsemiconductors and other factors, revenue for FY2021
increased year on year to ¥830.2 billion (up 15.1%) thanks
to greater sales in LED-related business and a recovery

from lower production caused by COVID-19 pandemic in
the previous fiscal year.
Notwithstanding the effects of increased sales,
operating profit was ¥34.1 billion (down 6.3% year onyear) and profit attributable to owners of parent was¥23.3 billion (down 33.7%) due to factors such as soaring
raw material prices and the cost of not being able to deal
flexibly to fluctuations in automobile production volume.
(Millions of yen)

Consolidated results

FY2021

FY2020

Revenue

830,243

721,498

Operating profit

34,17236,479Profit attributable to owners of parent

23,35235,205

Revenue by Segment
Japan
Despite a drop in production due to a shortage ofsemiconductors for automobiles, revenue was ¥399.5
billion (up 11.6% year on year) thanks to greater sales in
LED-related business.
Segment profit was ¥15.8 billion (up 31.2% year onyear) due to a temporary decrease in retirement benefit
costs following changes to the retirement system.
Americas
Revenue was ¥240.7 billion (up 18.3% year on year) thanks toa favorable exchange rate and recovery from production cutscaused by COVID-19 pandemic in the previous fiscal year.
Notwithstanding the effects of increased sales, segment
profit was ¥4.1 billion (down 69.7% year on year) due tofactors such as soaring raw material prices and the costarising from our inability to deal flexibly to fluctuations in
automobile production volume, as well as a rebound fromgovernment subsidies in the previous fiscal year.
Asia
Revenue was ¥226.0 billion (up 18.7% year on year)
buoyed by a pick up in production in Thailand, India,
Indonesia, and other countries.
Despite the impact from a drop in sales in China andsoaring raw material prices throughout Asia, segment
profit was ¥15.2 billion (up 5.6% year on year), boosted byincreased sales in other regions.
Europe & Africa
Revenue was ¥26.9 billion (up 2.8% year on year).
Segment loss was ¥0.9 billion (compared with a lossof ¥3.9 billion in the previous fiscal year) due in part to areaction to a restructuring provision for the U.K. subsidiaryrecorded in FY2020.

Analysis of Financial Position
1. Assets, liabilities, and equity
Total assets at fiscal year-end increased by ¥84.1 billion
year on year to ¥859.3 billion, driven mainly by an increasein trade and other receivables. Liabilities totaled ¥396.5
billion, a ¥41.8 billion year-on-year increase due mainly to
growth in trade and other payables.
Equity totaled ¥462.7 billion, a ¥42.3 billion yearon-year increase mainly attributable to growth in othercomponents of equity.
2. Cash flows
Cash and cash equivalents at the end of the fiscal year
under review fell by ¥24.8 billion, from ¥134.0 billion at
the end of the previous fiscal year to ¥109.1 billion.
Cash flows and related factors during the fiscal year
under review were as follows.
Cash flows from operating activities
Net cash flows provided by operating activities was ¥27.6
billion, a decrease of ¥39.5 billion from the previous fiscal
year. This was mainly due to an increase in expenditures of¥22.5 billion in trade and other receivables and ¥6.1 billion
in provisions.
Cash flows from investing activities
Net cash flows used in investing activities was ¥59.4 billion,
an increase of ¥9.4 billion from outflows recorded in theprevious fiscal year. This was mainly due to a ¥2.3 billion
decrease in proceeds from withdrawal of time deposits,in addition to an increase in expenditures, ¥4.0 billion
for payments into time deposits, and ¥2.1 billion for thepurchase of property, plant and equipment, and intangible
assets.
Cash flows from financing activities
Net cash flows provided by financing activities was ¥2.2
billion, an increase of ¥15.2 billion from the previous
fiscal year. This was mainly due, in addition to an increaseof ¥16.4 billion in repayments of long-term borrowings,
to a net inflow of ¥38.7 billion in proceeds from andexpenditures for short-term borrowings, despite a decreaseof ¥8 billion in proceeds from long-term borrowings.
(Millions of yen)

Cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities

FY2021

FY202027,65867,247（59,427） （49,949）
2,206（13,065）(Millions of yen)

Revenue by segment

FY2021

FY2020Japan

399,575

358,082

Americas240,730

203,421Asia

226,037

190,479

Europe & Africa

26,992

26,261* Revenue by segment includes amounts for internal transactions within the Toyoda
Gosei Group, and so does not match the total value for consolidated sales.

91

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Consolidated Financial Statements（Millions of yen）

Consolidated statement of financial position
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Other financial assets
Investments accounted for using equity method
Retirement benefit asset
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Other financial liabilities
Retirement benefit liability
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Treasury shares
Other components of equity
Retained earnings
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

92

FY2020（as of March 31, 2021）

FY2021（as of March 31, 2022）

134,003
149,249
9,617
72,88814,819380,578

109,145
182,595
17,421
94,862
21,140425,165

290,246
4,571
41,983
14,844
6,254
21,34915,326
394,577
775,155

316,901
5,154
50,65015,642
5,741
18,706
21,340434,137
859,302126,784
42,835
4,076
3,439
2,638
5,760
185,535

147,942
43,924
4,158
3,730
2,648
6,993
209,396

109,379
13,51034,745
4,578
5,015
1,935
169,164
354,700

129,772
13,64532,420
3,233
5,304
2,734
187,111396,508

28,04625,626（1,232）
17,759320,883
391,083
29,372
420,455
775,155

28,06924,465（1,233）42,433335,069
428,804
33,989462,794
859,302（Millions of yen）

Consolidated statement of profit or loss
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit of investments accounted for using equity method
Profit before tax
Income tax expense
ProfitFY2020

FY2021

1, 2020 to（AprilMarch 31, 2021 ）1, 2021 to（ AprilMarch 31, 2022 ）

721,498（622,832）
98,665（56,423）
3,225（8,987）36,4793,035（3,116）903
37,301
773
38,075830,243（733,686）
96,557（64,050）
5,239（3,574）
34,172
5,912（2,651）
264
37,696（10,962）
26,734

Profit attributable to
Owners of parent
Non-controlling interests
Profit35,2052,870
38,07523,352
3,382
26,734

Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)271.99271.97180.39180.38（Millions of yen）

Consolidated statement of comprehensive income
ProfitFY2020

FY2021

1, 2020 to（ AprilMarch 31, 2021 ）1, 2021 to（ AprilMarch 31, 2022 ）38,075

26,734Equity instruments measured at fair value
through other comprehensive income

6,252

4,926

Remeasurements of defined benefit plans

3,757

221

Other comprehensive income
Items that will not be reclassified to profit or loss

Share of other comprehensive income of investments
accounted for using equity method

112

37

Total of items that will not be reclassified to profit or loss

10,121

5,185

Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations

9,702

20,533

Share of other comprehensive income of investments
accounted for using equity method

74

841

Total of items that may be reclassified to profit or loss
Other comprehensive income, net of tax
Comprehensive income

9,776
19,89857,974

21,37526,56053,294Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

53,857
4,116
57,974

48,251
5,043
53,29493

Contents

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data（Millions of yen）

Consolidated statement of changes in equity

Consolidated statement of cash flows
Equity attributable to owners of parent
Other components of equity

Share
capitalBalance as of April 1, 2020
ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Change in scope of consolidation
Transfer from other components ofequity to retained earnings
Other
Total transactions with owner
Balance as of March 31, 2021
ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Change due to capital increase
Change in scope of consolidation
Transfer from other components ofequity to retained earnings
Total transactions with owners
Balance as of March 31, 2022

Balance as of April 1, 2020
ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Change in scope of consolidation
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2021
ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Change due to capital increase
Change in scope of consolidation
Transfer from other components ofequity to retained earnings
Total transactions with owners
Balance as of March 31, 2022

94

CapitalsurplusMillions of yen

28,02718
18
28,04623
23
28,069Millions of yen

26,96818（1,360）（1,341）
25,62623（1,184）（1,161）
24,465

TreasurysharesMillions of yen（1,220）（11）（11）（1,232）（1）（1）（1,233）Equity attributable to owners of parent
Other components
Retainedof equityTotalearnings
Total
Millions of yen
Millions of yen
Millions of yen

2,233
18,652
18,652531-

289,061
35,20535,205（7,120）80（3,657）

3,657（3,126）
17,75924,89924,89929（3,383）
320,883
23,352
23,352（9,063）
（355）

（253）

253

（224）
42,433（9,165）335,069

345,070
35,20518,65253,85736（11）（7,120）（829）
80（7,844）
391,083
23,352
24,89948,25146（1）（9,063）（1,184）（326）-（10,529）
428,804

Equity instruments
measured at fairvalue through othercomprehensive income

Remeasurementsof defined benefit
plans

Millions of yen

Millions of yen

Millions of yen

12,826
6,289
6,289
-

-

3,657
3,657
（0）
-

-

（3,657）

19,116
4,910
4,910
-

（3,657）
253
253
-

-

-

（253）

29
18,40724,026

（253）
-

531
（1,356）
19,735
19,73529

25,204
2,870
1,246
4,116
（1,984）
1,335
373
325
50
29,372
3,382
1,661
5,043
（2,593）
1,606
176
383
（426）
33,989Millions of yen

370,275
38,07519,89857,97436（11）（9,104）
506
453
-

325
（7,794）420,455
26,73426,56053,29446（1）（11,657）
421
176
57（10,955）
462,794

1, 2021 to（ AprilMarch 31, 2022 ）

37,301

37,696

Depreciation and amortization

37,812

41,944

Impairment loss (reversal of impairment loss)
Increase (decrease) in provision
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset

813

-

4,749

（1,411）

101

（414）

933

（2,240）Finance income（2,800）（5,235）

Finance costs

3,116

2,566

Share of loss (profit) of investments accounted
for using equity method

（903）

（264）

Loss (gain) on sale of fixed assets

668

Decrease (increase) in inventories（6,410）（15,789）

Decrease (increase) in trade and other receivable（2,707）（25,283）

Increase (decrease) in trade and other payables
Other
SubtotalInterest received
Dividends received

75

6,187

13,718（3,378）（8,344）75,48537,019

2,001

1,740

893

1,178

Interest paid

（3,168）（2,582）

Income taxes paid

（7,964）（9,697）

Net cash provided by operating activities

67,24727,658（16,142）（20,189）

Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment, and intangible assets

Total

1, 2020 to（ AprilMarch 31, 2021 ）Profit before tax

Proceeds from withdrawal of time deposits
Noncontrollinginterests
Millions of yen

FY2021

Cash flows from operating activities

Exchangedifferences ontranslation of foreign
operations（10,593）
8,705
8,705
531
-

FY2020

Proceeds from sale of property, plant and equipment,
and intangible assets
Purchase of investments
Proceeds from sale of investments
Other
Net cash used in investing activities

15,673

13,297（49,595）（51,728）

632

1,206

（566）

（1,357）16
33（49,949）（656）（59,427）

Cash flows from financing activities
Proceeds from short-term borrowings

21,24954,362

Repayments of short-term borrowings（39,749）（34,138）

Proceeds from long-term borrowings

32,42924,415

Repayments of long-term borrowings（11,417）（27,868）

Repayments of lease liabilities（2,777）（3,073）

Dividends paid

（7,117）（9,071）Dividends paid to non-controlling interests（1,984）（2,593）

Payments of the abolition of the in-house deposit system（4,193）

-

494

175

Other
Net cash provided by (used in) financing activities（13,065）

2,206

Net increase (decrease) in cash and cash equivalents

4,233（29,562）

127,930

134,003

Cash and cash equivalents at beginning of period
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period

1,840

4,704

134,003

109,14595

Contents

Company and Investor Information

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

External Recognition（As of March 31, 2022）

Main Indices Selected in Composite
Location of
headquarters

1 Haruhinagahata, Kiyosu, Aichi,
452-8564, Japan

Date ofestablishment

June 15, 1949

Capital¥28 billion

Consolidated
subsidiaries

55 (14 in Japan, 41 in other countries)

Equity method
affiliated companies

6 (3 in Japan, 3 in other countries)

Number of
employees

Consolidated: 39,511
Toyoda Gosei Co., Ltd.: 6,676

Distribution for Each Type of Shareholder
Treasury stock at cost
0.43％

Individuals, others
7.52％

Financial institutions
28.24％

Foreigncorporations
13.31％

Financial instruments
business
1.51％
Domestic business
entities
48.99％

Common stock

Authorized 200,000,000 shares
Issued 129,486,496 shares（Excluding 558,510 shares of treasury stock）

Number ofshareholders

13,403

Stock exchange
listings

Tokyo Stock Exchange andNagoya Stock Exchange

JPX Nikkei Index 400

S&P/JPX Carbon Efficient Index

Shareholder registryadministrator and special
account management
institution

Mitsubishi UFJ Trust and Banking
Corporation

Securities code

7282

MSCI Japan Empowering Women Index (WIN)THE INCLUSION OF Toyoda Gosei Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF Toyoda Gosei Co., Ltd. BY MSCI OR ANY OF ITS AFFILIATES. THE
MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

External Recognition for Sustainability
Nikkei SDGs Management Survey 2021 ★★★★☆

Major Shareholders
Shareholder name

Number of shares held Investment ratio (%)(unit: 1,000 shares)

Toyota Motor Corporation

55,45942.82

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

13,192

10.18

CDP
Climate Change 2021 Score: A−
Supplier Engagement 2021 Rating: A
Water Security 2021 Score: A−
Energy Conservation Grand Prize(Best Practices category)

Custody Bank of Japan, Ltd.
(Trust Account)

7,844

6.05

Sumitomo Mitsui Banking
Corporation

5,049

3.89

Agency for Natural Resources and Energy
Commissioner's Award
2022 Health & Productivity Management

Toyoda Gosei Employee
Stock Ownership Association

1,626

1.25

Nippon Life Insurance
Company

1,592

1.22

The Dai-ichi Life Insurance
Company, Ltd.

1,381

1.06

State Street London Care ofState Street Bank and Trust,
Boston SSBTC A/C UK London
Branch Clients- United Kingdom

1,223

0.94

Daiei Sangyo Kaisha, Ltd.

1,041

0.80

Denso Corporation

1,002

0.77

Sports Yell Company 2022

External Recognition for Communication
Securities Analysts Association of Japan: Third in automotive/automotive parts/tire division of the2022 Award for Excellence in Corporate Disclosure* Share-holding stakes are calculated after deducting treasury shares.

9697

1 Haruhinagahata, Kiyosu, Aichi,
452-8564, Japan
Phone: +81-52-400-1055
https://www.toyoda-gosei.com/