TOYODA GOSEI REPORT2020

We are a global company that delivers
satisfaction to customers worldwide
through safety, comfort, well-being
and the environment
T he T o yo da Gosei Grou p c on tin ue s t o me e tt he needs o f soc iety th rou g h th e p rov isionof aut o mo ti ve an d oth er p rod u c ts using
rubber and plastic tec h n olog y .

Management Philosophy

Boundless Creativity and Social Contribution
Good corporate citizenship

Proper business operation

Sustainable growthWe, as a good corporate citizen, contribute to

We promote business operations with integrity

We aim to build up the TG Group's collective

the economy and society through community-

through the establishment of a system foundedstrength through an open and fair relationshipbased business activities and social action

on thorough compliance and corporate ethics.

with suppliers, through a mutually strengthened
corporate structure and innovative management

programs.

response to change.

Customer satisfaction

Conservation of global
environment and resources

Respect for the individual

We aim to provide products and services with

We aim to conserve the global environment andWe aim to establish a vibrant corporate culturesatisfying quality and price in a timely manner,

resources in order to hand down a greener

through respect for individuality and the value

through forward-looking R&D and production

world to our children through every businessof enhanced teamwork, based on shared

engineering.

activity, which includes cooperation with society

responsibility and mutual trust between

and the development of an environment

employees and management.

friendly product and manufacturing process.

2

Contents
2
4
6Management Philosophy
Businesses and Locations
History of Toyoda Gosei

Value Creation Strategy
8
12
14
16
18

Letter from the President
Message from the Officer in Charge of Finance
Financial and Non-Financial Highlights
Value Creation Process
Medium- and Long-Term “2025Business Plan”
Overview / Sustainability efforts / The
situation before us and key future strategies /Pillar Ⅰ: Venture into innovation, newmobility / Pillar Ⅱ: Strategy for growing
markets / fields / Pillar Ⅲ: Innovative
manufacturing at production sites

Foundation of Value Creation
26
28

42

Sustainability SDGs and ESG
Governance〈G〉
Corporate governance / Interview withoutside directors / Risk management /Compliance / Management members

Environment〈E〉
Building a decarbonized society / Building
recycling societies / Environmental
management / Other key issues

50

Social〈S〉
Key performance indicators / Workstyle andworkplace cultural reforms / Respect for humanrights / Health management / Hiring of diverse
personnel / Work-Life balance / Personnel
development / Aiming for “zero accidents” /Uniform global quality assurance / Supply chain
management / Contributing to local communities

Financial Report
60
62
64

Consolidated 10-Year Financial Summary
Financial Review
Consolidated Financial Statement
Consolidated statement of financial position /Consolidated statement of profit or loss /Consolidated statement of comprehensive
income / Consolidated statement of changes inequity / Consolidated statement of cash flows

68
69

Company and Investor Information
Editorial Policy, Recognition from Society3Businesses and Locations
We supply rubber and plastic automotive parts globally.

Product area
Automotive parts
Functional
Components

Weatherstrips¥112.4 billion（13.8%）¥147.4 billion（18.1%）

Opening trim
weatherstrips

Plastic fuel filler pipes
Plastic turbo ducts

Revenue by product area
Door glass runs

¥812.9billion

Brake hoses（FY2019）

Interiors andExteriors

Safety Systems¥250.7 billion（30.9%）¥302.3 billion（37.2%）

Instrument panel modules
and components

Radiator grilles

Airbags

Console boxes

Steering wheels(with built-in airbags)

Pop-up hoodactuators

Other products

e-Rubber(Heart surgery training simulator)

4

GaN power devices

LEDs

General industry products(Air purifiers, interior and exterior
parts for agricultural, construction,and industrial machines)

Global network
With 64 group companies in 17 countries and regions, Toyoda Gosei swiftly meets the needs of customers aroundthe world. We have established sales and engineering systems that are customer-oriented and community-basedwith globally optimal systems of production and delivery.

Group
Companies

64companies
Asia

23
companies

Japan

18
companies

Americas19

Europe & Africa

companies

4companies

Sales by region (Rounded down to the nearest ten million yen)

Employees by region

Europe & Africa

Europe & Africa

Japan¥35.37billion¥377.85billion

1,725（FY2019）¥160.20billion

9,033

39,403¥ 812.93 billion
Asia

Japan

（FY2019）

Americas¥239.49billion

Asia

14,317

Americas14,3285

History of Toyoda Gosei
Toyoda Gosei has exploited its expertise in rubber and plastics and provided newvalue to the world that meets the needs of the times.

1949
1949

1960

1970

Nagoya Rubber Co., Ltd. is established as

1980

Headquarters is relocated to present location(Kiyosu, Aichi Prefecture)a spin-off of the rubber research division of
Toyota Motor Industry Co., Ltd.

1957
1967
1973
1976
1977
1978

1980

1982
1985

Haruhi Plant begins operation

Bisai Plant is completed and begins operation
Capital participation in Tai-yue Rubber Industrial Co., Ltd.
Company wins Deming Prize for Total Quality Management

Inazawa Plant begins operation
Company name is changed to Toyoda Gosei Co., Ltd.

1986
1997

Morimachi Plant begins operation

TG Missouri Corporation is establishedCompany obtains ISO 9001
Present Kitajima Technical Center is completed

US Office is established in Illinois
Company is listed on the Nagoya Stock Exchange

1999

Company is listed on the Tokyo Stock Exchange
Toyoda Gosei North America Corporation is established

Development history of technologies and products
Automotive parts
Rubber1953

Brake hoses

1961

Piston cups

1977

Constant velocity
joint boots

1983

Nylon fuel hoses

1963

Flocked glass runs

1950

1982

Weatherstrips

Sound insulating glass runs

Plastics
1954

Plastic injection
steering wheels

1960

PP steering wheels

1974

Instrument panels

1982

Plastic fuel filler caps

1989

Driver-side airbags

New fields
1986

Start of R&D for blue LEDs

6

600

400

Net sales (Billions of yen)

800

200

1990
2000
2001
2005
2006
2008
2009

2000

2010

Toyoda Gosei Europe N.V. is established

2013

2019

Toyoda Gosei East Japan Co., Ltd. is establishedGDBR Industria e Comercio de Componentes

Toyoda Gosei Asia Co., Ltd. is established

Quimicos e de Borracha Ltda. is established

ISO / TS16949 certification
Toyoda Gosei (Shanghai) Co., Ltd. is established

2014
2016

Toyoda Gosei Minda India Pvt. Ltd. is established

Toyoda Gosei Irapuato Mexico, S.A. de C.V. is established
Bawal Plant of Toyoda Gosei Minda India Pvt. Ltd.
begins operation

Miwa Technical Center is established2018

Gujarat Plant of Toyoda Gosei Minda India Pvt. Ltd.
begins operation
PT.Toyoda Gosei Indonesia is established2019

Hubei Toyoda Gosei Zheng Ao Rubber & Plastics Sealing
Science and Technology Co., Ltd. is established
Thai Binh Plant of Toyoda Gosei Haiphong Co., Ltd.
begins operation

2011

Lightweight radiator hoses

2003

Two-color molded
opening trims

2000

Noise absorbing
air intake ducts

2010

2014

2017

2008

2015

2017

Lightweight opening
trim weatherstrips

Plastic water pipes

Plastic fuel filler pipes

Capless fuel fillers

2008

1998

Rear-end impact airbags

Curtain airbags

Glass run for flush surface door

Large radiator grilleSuccess in developmentof blue LEDs is certified

2010
2007

Start of R&D for e-Rubber

Start of R&D for
GaN power devices

Air conditioner
register with
LED lighting

2019

2020

Plastic turbo ducts / Extra-large spindle grilles
Battery cases

2017

Steering wheel with grip sensor /New type of side airbag

2017
1991

2018

Conclusion of exclusive license
agreement for the main material
in e-Rubber

2020

2019

Exhibition of e-Rubber technology
at CES, the world’s largest consumer
technology trade show

World-class current operation achieved ona vertical GaN power device /Development with EBM Corp. of
the SupeR BEAT heart surgery simulator
that uses e-Rubber

7

Letter from the President

We will overcome thecurrent crisis and achievea sustainable rise incorporate value
Toru Koyama
President8Value Creation Strategy

Foundation of Value Creation

Financial Report

My deepest sympathies go out to all people who havecontracted COVID-19 and to those who have been affectedby the spread of this infection. We at Toyoda Gosei pray thatcalm and peaceful days will return at the earliest possible
time, and we will do our utmost so that we can contribute tosociety through our business activities.

and the automotive market. We expect China will continue
to grow and are working to develop our business in thatmarket as our second pillar after the Americas. Meanwhile,
the pandemic has heightened social needs for safety andsecurity, and we need to meet those needs by pushing ahead
with technical development and commercialization.

Self-introduction and aspirations

A look back on FY2019

I would first like to extend my gratitude to our shareholders,investors and all other stakeholders.
After joining Toyoda Gosei in 1982, I worked for 25
years as an engineer in the development of safety systems,
and then for eight years as vice president and president at
our regional headquarters for the Americas. Afterward, as adirector at the World Headquarters, I was responsible for the
Corporate Planning Division, where I sought resolutions tomanagement issues.
I recently became the first president to come up entirely
through the company in 38 years. I believe Toyoda Gosei’s
strengths lie in its continuous efforts to pioneer new
businesses such as LEDs and e-Rubber while growing its coreautomotive business using its rubber and plastic expertise.
Its worldwide locations also give the company a global reach.
We will continue to take full advantage of these strengths,
while accelerating each of the strategies in our 2025 Business
Plan, following the key words of “Sincerity,” “Activity andUnity” and “Strategy.” We will strive for further increases incorporate value with a long-term perspective and sustainablegrowth.

Under the banner of “overwhelming speed,” we haveworked to develop our positions in growing markets. In
China, we reorganized our production locations. In India,
we established a sales and development office and started
up a new plant. In Asia, the automotive market is currently
stalled, but the region is sure to grow in the future. With theaim of keeping pace with the speed of business in China,
we have established a new “BR China Product Engineering
Department” that is dedicated to developing products for
the Chinese market. In India, we will continue to build aproduction foundation to accommodate future increases
in production volume, ensure profitability, and raise ourpositions.
Improving our business in Europe has been a major
issue for years, and we have reformed our business structureby selling Toyoda Gosei Meteor in Germany. In the fourth

Huge changes in the business environment
The spread of the novel coronavirus has greatly affected ourbusiness, and we have made efforts to prevent infections,contribute to social recovery, maintain our production
network and more. At the same time, we have all worked
together to cut costs and taken other measures to getthrough this difficult time.
We need to carefully anticipate the post-coronavirus world

Toyoda Gosei booth at Tokyo Motor Show 20199

Letter from the President

quarter of FY2019 we achieved a return to profitability. Our
efforts have begun to show effects.
In the technical field, we are collaborating with othercompanies to swiftly develop new products for CASE
technologies. At the Tokyo Motor Show, we exhibited
steering wheel modules and next-generation safety systems
in cooperation with other Toyota Group companies. We havealso been investing in startups that promise synergy with
our key strengths. The outstanding technologies of thesecompanies will help to improve the value of TG products andshorten the development time.
We have also been working to pioneer new businesses.
In January 2020, we showed the world our e-Rubber
technology at CES, the world's largest electronics exhibition
held in Las Vegas, USA. e-Rubber is a novel material that canvirtually reproduce the sense of touch. In the coming years
we intend to bring products to the market in the three areasof IoT sensors, haptics, and tactile hands. We also plan tomove ahead with activities for commercialization in many
fields, with a view to possibilities that will meet social needs
in areas such as telemedicine.

FY2020: A year to display our true abilities
With the resolution of our major structural issues in Europe,
we are ready to display our true abilities and turn to fulloffense as we work to achieve the goals in our 2025 BusinessPlan.
In the field of new technologies, we will introduce
products that contribute to solving social issues at theearliest possible time. This includes the use of e-Rubberin the medical and other fields and commercialization ofsterilization with deep UV LEDs, based on the needs forsafety of post-coronavirus society.
By focusing resources on product fields and geographic
regions with high potential for profitability and growth, wewill strive for the further growth of our automotive business.
Specifically, we are focusing efforts on safety systems andfunctional products, and the growing markets of China andIndia.
On our production floors, we adopt the thinking of“reducing costs by thoroughly eliminating waste” that is theaim of the Toyota Production System. We will accelerate theglobal spread of innovative production technology for laborsavings and autonomation as we move to strengthen our
manufacturing abilities. We are also moving ahead to reduce
loss with IoT and raise productivity, and utilizing Special Skill
Dojos to pass on TG skills to the next generation.
To achieve business growth in the future, we are actively
advancing communication measures and personnel
development for all employees, who support our global
operations.

SDGs / ESG efforts
e-Rubber haptics and augmented reality

10

Based on our management philosophy, Toyoda Gosei
supports the Sustainable Development Goals (SDGs), which
are shared goals of international society to be achieved by
2030. All Toyoda Gosei employees are making efforts tocontribute to the achievement of these 17 goals.

Value Creation Strategy

We have decided on eight goals that are closely related
to our business and established a dedicated organization tofurther accelerate our activities.

Foundation of Value Creation

Financial Report

Moving toward achievement of
the 2025 Business Plan
The Toyoda Gosei 2025 Business Plan was adopted in
May 2018 with the aim of sharing more specific goals andinitiatives throughout the TG Group as we look to the future
for sustainable growth. Two years have passed since theformulation of the plan, and the first step, the eliminationof losses through structural reforms, has come into sight.
The next step is to increase sales revenue and improve profit
margins by pursuing growth in the automobile business. To
do this we have been developing our production network toachieve steady growth in sales. We will also continue efforts
to accelerate commercialization of technologies in new
business fields beyond automobiles.

As a company, we believe that we can increase ourcorporate value by conducting our businesses in ways that
contribute to the solution of social issues. As a company ofintegrity, we will enhance and promote activities related to
SDGs/ESG.
We have been implementing corporate culture reforms
in recent years in recognition of the extreme importance ofenhancing the vitality and sense of unity that forms the basisof corporate growth.
In the field of governance, in order to increase thetransparency and objectivity of executive appointments
and compensation, we have made outside directors thechairpersons of the Executive Appointment Committee andthe Executive Compensation Committee, the majority ofwhose members are also outside directors. To assist outside
directors in properly performing their monitoring functions,
we endeavor to share information on the company's situation
through means such as individual explanations by eachdepartment and outside director liaison meetings attended by
all outside directors. We also provide advisory opportunities
outside the Board of Directors, and we will continue to utilize
the wealth of experience and deep insight of outside directors
to improve corporate value over the medium to long term.
In April 2020, we held our first ESG briefing session
for institutional investors. We would like to deepen our
relationships with all of our stakeholders by providing themwith opportunities for active dialogue.

11Message from the Officer in Charge of FinanceEngaging with capital markets as
an open company, we will use their
feedback as a management input inexecuting our 2025 Business Plan.

Masaki Oka

Director, Corporate Officer,
Chief of Finance & Accounting Headquarters, Chief of Corporate Planning Division

Strengthening dialogue with capital markets

In recent years, Toyoda Gosei has been placing morepriority on IR activities, strengthening dialogue withinstitutional investors in particular. In FY2019, welaunched a shareholder relations (SR) program to better
engage with shareholders and institutional investors inline with their needs as gleaned through our dialogue
with them and in accord with the intent of Japan’s recently
issued/revised Corporate Governance and Stewardship
Codes.
We earnestly listen to shareholders and investors’
opinions and advice through our SR program and adjust
our management approach accordingly. In March
2020, we transferred chairmanship of the Executive
Appointment Committee and Executive Compensation
Committee from the president to an outsider director.
We also split oversight of the Audit Division and Finance& Accounting Division, previously supervised by a single
executive, between two executives. Additionally, we havetaken steps to become a more open company, including
holding an ESG briefing led by top management in April.
We plan to hold ESG briefings on an ongoing basis.
Another topic that has come up in SR settings is our
strategic shareholdings. We hold stock in 25 companies
as of March 31, 2020. We fully divested equity stakes inthree companies in FY2016 and five more in FY2019. We
plan to continue to periodically pare down holdings ofstocks deemed no longer worth owning from a strategic or
investment standpoint.
Additionally, we have a debt IR program to engage
with bond investors and rating agencies. It provides
objective feedback on financial soundness and has
reaffirmed the importance of cash flow generation. To
utilize debt markets as a ready source of capital, we
intend to deepen our engagement with investors withperspectives different than equity investors’ and betterbalance our financial strategy.
Insights gained from such dialogue with capital
market participants are proactively shared within ourorganization as feedback. Reports from IR staff are also
shared among management down to the divisional

12

general manager level, not merely presented at meetingsof senior-most executives. We apply input from outsiders
to business activities throughout our organization.
Senior management enthusiastically participates in
IR activities. For example, the head of development has
attended meetings with investors as the main presenterand the general manager of the e-Rubber business has
held briefings. Since FY2019, sales division generalmanagers have started attending meetings of analysts
to discuss the state of our businesses on the front lines.
By involving not only IR staff but also a company-widecross-section of personnel in IR, we engage more fully
with capital markets and incorporate their input into ourbusiness activities. Such an approach is conducive to an
appropriate valuation for Toyoda Gosei.
The auto industry is currently in the throes of majorchange. Inwardly focused companies are at risk of fallingbehind the times and failing to survive let alone grow.
Toyota Group founder Sakichi Toyoda famously once said,“Open the window. It’s a big world out there!” We believethat continuing to earnestly listen to outsiders’ point ofview is especially crucial in times of change. While analysts
and investors sometimes offer harsh criticism, much of
their input is valuable advice for us and a reflection of big
expectations for Toyoda Gosei. We engage in IR not only
to gain recognition from capital markets in the form of
an appropriate valuation but also because we believe that
another key role of IR is generating internal feedback thatkeeps our workforce highly motivated.

Operating performance

FY2020 has gotten off to a tumultuous start, forcing us
to urgently focus on short-term profitability for the time
being. In the face of concerns about a second and eventhird wave of the COVID-19 pandemic, we have shiftedto a more nimble footing to enable us to swiftly adapt toexternal changes.
Despite drastic deterioration in the operating
environment, we ended FY2019 with an ample equity
cushion. Specifically, equity attributable to ownersof parent at fiscal year-end was equivalent to 48.7%

Foundation of Value Creation

Financial Reportof total assets. We also supplemented our on-handliquidity by raising additional debt capital. Additionally,
we bolstered our cash-generative capacity by divesting
chronically negative-cash-flowing subsidiaries in FY2019
in conjunction with restructuring the European business.
We have sufficient wherewithal to successfully navigate
the COVID-19 crisis. We have shored up our financial
position to not only protect Toyoda Gosei and its affiliates
but also to act responsibly from an SDGs/ESG standpoint,
including by supporting suppliers and maintaining
employment.
Meanwhile, we have our sights set on further profit
growth after the pandemic has subsided. We will use thecrisis as an opportunity to further solidify our profitability
by globally overhauling our cost structure with respect
to fixed expenses that have swelled over the course of
our growth to date. For subsidiaries too new to haveexperienced the 2008–09 Global Financial Crisis (GFC)in particular, we see the pandemic as a sort of stress tests
that affords an opportunity to improve efficiency.
One challenge we must address to achieve the2025 Business Plan’s targets is to improve profitability.
In FY2019, our operating profit margin, adjusted to
exclude one-time factors, was around 5%, three points
below our 8% target. We plan to rectify this three-point
shortfall through three steps. The first is restructuringof unprofitable businesses. The second is growing theexisting automotive parts business in lucrative markets
with promising growth prospects. The third is achieving
high profitability in new businesses such as e-Rubber.
The restructuring of unprofitable businesses waslargely completed with our European restructuring in
FY2019. We expect it to boost annual operating profit
by roughly ¥5 billion. In terms of the other two steps,
we will accelerate initiatives to increase the profitabilityof the existing automotive parts business in particular.
To do so, we will strategically allocate limited resources
and improve the business’s portfolio in terms of both
geographic and product mix in the aim of boosting theautomotive parts business’s operating profit margin to 7%.
At our FY2019 financial results briefing, we presented
a 4 × 4 matrix of product domains and regions that
was appended with an extra column representing new
businesses across all regions. We explained to investors
which of the matrix’s 17 cells we are targeting for growth.
We plan to use this 17-cell matrix concept in future IR
communications while allocating strategic resources andcontrolling operations more effectively than in the past.

In talking with investors since publishing the ROE
target in the 2025 Business Plan, we have found thatthey have even more questions than before about costof capital. For example, we have been asked not only
whether the European business restructured in FY2019
have turned profitable but whether they will achieve
capital efficiency commensurate with cost of capital. We
have been asked the same question about other lowmargin businesses also.
To turn such input from capital markets into grist for
growth, we must internally step up our efforts to increase
profitability further. We believe strategic management isalso essential to asset efficiency, particularly in terms of
how to most efficiently allocate resources, starting withcapital investment.

Capital cost

Financial Policy

Value Creation Strategy

To achieve capital efficiency that sustainably exceeds ourcost of equity, we have set a 10% ROE target in our 2025
Business Plan. Achieving a 10% ROE requires a certain
degree of control from a financial leverage standpoint inaddition to improved profitability. We have formulated
financial policies on matters such as shareholder returns
and investment and disclosed them in November 2018.

Financial policy

Even amid the current extremely adverse environment,
we will stay committed to capital efficiency without
erring too much on the side of safety. Our financial
policy unveiled in November 2018 remains unchanged.
With respect to shareholder returns, we will basicallyadhere to our financial policy despite the recent severe
deterioration in our operating environment due to thepandemic.
Regarding capital investment, we will stringently
screen prospective cash outlays for necessity until
further notice, but our policy of setting aside ¥50 billion
per year to fund growth investments to achieve the 2025
Business Plan’s targets remains unchanged.
Regarding cash reserves, we borrowed emergency
loans to secure ready liquidity in response to thepandemic. We borrowed ¥20 billion of long-term funding
from banks and arranged a ¥30 billion committed line ofcredit. We did so to raise cash in response to greater risks
than during the GFC and topped up cash reserves to
its baseline level of ¥30 billion more than consolidated
monthly sales.
In recent years, Toyoda Gosei has been strengthening
its IR program under the leadership of top management.
As disclosure has improved, we have been receiving
even higher-quality feedback from investors than before,
leading to further improvement in our management and
IR. We will continue to unremittingly upgrade our IR asan open company.

Shareholder
returns

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

Capitalinvestment

We will secure 50 billion yen by FY 2025 as
funding for capital investment for growth.

Cashreserves

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

13

Financial and Non-Financial Highlights

Financial data

The Group adopted International Financial Reporting Standards (IFRS) effective from the first quarter offiscal 2018, ended March 31, 2019.
Additionally, fiscal 2017 data were converted to IFRS-basis.

Revenue

Operating profit /Profit attributable to owners of parent（Billions of yen）

781.8

800

755.6

807.9

840.7

812.9

50

42.8

35.1

36.5

30
400

20

200

2016/32017/3J-GAAP

2018/3 2019/3 2020/3
IFRS

（％）

10

0

2016/32017/3

2018/3J-GAAP

IFRS

5.4

4.4

4.3

4

2.2

0

2016/32017/3J-GAAP

2018/3

2019/3

IFRS

2020/3

（Yen）

56.0

53.0

56.0

60.0

Capital investment
R&D expenses

55.2

53.4

46.8

0

28.4

27.1

27.6

30.0

31.3

2016/32017/3

2018/3

2019/32020/3J-GAAP

IFRS（Billions of yen）

2018/3

2019/3

IFRS

200
165.042020/3(FY)

180.09

100

86.74

50

0

78.3
65.7

97.5
89.0

0

(FY)

2016/32017/3J-GAAP

2018/3

2019/3

IFRS

2020/3(FY)

Ratio of equity attributable to ownersof parent to total assets

Cash and cash equivalents
Interest-bearing debt

150

20

(FY)

2017/3J-GAAP

125.42

41.8

（％）

148.0

125.4 127.9

2016/3 2017/3 2018/3 2019/3 2020/3

2016/3156.49Cash and cash equivalents /Interest-bearing debt
60.0

0

(FY)

20

100

IFRS

2020/3（Yen）

40

J-GAAP

2019/3（Billions of yen）

(FY)

Annual dividends per share

3.2

4

Basic earnings per share

40

2

6.7

5.2

Capital investment / R&D expenses

60 54.4

5.5

6

6.4

2

80

8

14

11.2

(FY)

Operating profit ratio

0

17.8

16.2

6.6

6

10

0

60

8

23.3

21.3

20.2

（％）

10

40.6

40

600

Operating profit
Profit attributable to owners of parent（Billions of yen）

Return on equity

108.2 107.3
97.9

60

51.7

50.7

51.2

50.0

48.7

40

20

2016/3 2017/3 2018/3 2019/3 2020/3
J-GAAP

IFRS

(FY)

0

2016/3 2017/3 2018/3 2019/3 2020/3
J-GAAPIFRS(FY)Value Creation Strategy

Foundation of Value Creation

Financial ReportNon-financial data
Environment〈E〉
Waste volume per sales unit

CO2 emissions per sales unit
Japan consolidated (Toyoda Gosei Co., Ltd.
and domestic affiliates)
Outside Japan
Global consolidated（ t-CO2 /¥100 million）

150
111

107

103

100

50

95
63

75

73

69

48

43

42

37

（2012）

1590

10 （2013）
7.0

60

33

32

（2013）

5

4.0（2012）

0Base year

2015

2016

Japan consolidated (Toyoda Gosei Co., Ltd.
and domestic affiliates)
Outside Japan
Global consolidated（t/¥100 million）

11.3

100

76

Water use per sales unit

2017

2018

2019

0

(FY)

Base year（1,000 m3/¥100 million）

0.8
0.72

0.7
8.6
6.0

0.71

（2012）

0.6

6.8

5.5

5.3

5.3
4.0

4.4

3.6

3.7

2015

2016

5.0
3.7

3.2

2.8

2.5

2017

2018

2019

Japan consolidated (Toyoda Gosei Co., Ltd.
and domestic affiliates)
Outside Japan
Global consolidated

0.65
0.62
0.63
0.58 0.53
0.62
0.54

0.5

0.52

0.4
0.0

(FY)

Base year

2015

2016

2017

0.46
0.45

0.43
0.42
0.41

2018

2019

(FY)

Social〈S〉
Average years of service for male and female[Toyoda Gosei Co., Ltd.]

Female17.9

15 13.8

19.5

17.9
13.8

18.6
15.5

14.8

Male

18.5
15.5

20

2017

2018

2019

（People）

20
63
6

60

5

2016

Male

80

40

2015

Female（People）

100[Toyoda Gosei Co., Ltd.][Toyoda Gosei Co., Ltd.]（Years）

20

No. of female managers

No. of parental leaves taken

57

0

2015

(FY)

61

58
7

53
6

51

2016

15

12

49

47

2017

2018

19
16

40
9

10

31

5

10
8
6

2019

0

2015

(FY)

2016

2017

2018

2019

(FY)

Governance〈G〉
Employment rate of people with disabilities[Japan]Labor accident rate (rate of lost-worktime injuries)[Japan]

（％）

（％）

3

1.5
2.37

2.38

2.14

2.31

Rate of lost-worktime
injuries＝

0.5
Statutory employment rate：2.0%

0.41

2016

2017

0.39

0.43

2018

2019

(FY)

0

2015

0.25

0.064

2016

2017

[Japan]New employee training（People）

400

1.20

1.02

0.54

0.062
2018

0.50

317

0.118
2019

(Year)

0

336

317

244

200
100

New manager training

Training for mid-level employees

359

300

Toyoda Gosei Co., Ltd.

0.06
2015

1.20

× 1 million

Transport equipment manufacturing industry

2

1

1.15

1.0

2.2%

Total labor hours

All manufacturing industries

1.06

2.38

No. of casualties in labor
accidents (people)

No. of people who have taken compliance training

134

156

153

109

107

2017

2018

175

95
56
2015

72
2016

82
2019

(FY)

15

Value Creation Process
With its company creed of “Boundless creativity and social contribution,” the Toyoda
Gosei Group exploits its expertise in rubber and plastic, its global reach, and its
experience in pioneering new businesses, continuing to meet social needs throughthe provision of automotive products and other innovations.

Environmental and social issues

Stakeholders■ Deepening social issues■ Acceleration of technical innovation■ Changing values

Value chain

・Diversification of values
・Changing consumer behaviors
・From ownership to shares

Development
andTechnical Design

Sales

Management resources (input)

Management
philosophy

Human
●

TG Spirit

Number of employees 39,403

Manufactured
Number of locations 94● Capital investment ￥41.8 billion

icerv

・IoT/AI ・Electrification

Suppliers, Employees, Lo
mers,
cal c
o
t
s
u
om
mu
rs, C
o
t
s
nit
e
v
ies
n
,I
,C
s
r
ivi
e
d
l
ls
o
e
eh

Sh
ar

・Global warming ・Depletion of resources
・Water risks from droughts and floods
・Increasing number of endangered species
・Aging populations

Sincerity, Activity, Unity●

Procurement

Production

Intellectual●

R&D expenses ￥31.3 billion

Social and relationship●

Number of suppliers 701

Natural
Total energy input 2,571,000GJ
Total material input 45,974t● Water resource input 1,260,000㎥

New businessdevelopment
experiences

Globalnetwork

Knowledge inthe fields of rubber
and plastics●●

Competitive advantages

Financial●●

Total assets ￥709.1 billion
Interest-bearing debt ￥148 billion

Management foundation that
supports sustainable growth

Corporate governance16

Value Creation Strategy

Foundation of Value Creation

Financial Report

Solving social issues
Business, Products
Automotive

Weatherstrips

Social value
Achieving a decarbonized society

Functional Components

Interiors and Exteriors

Providing safety and comfort

Safety Systems

Supporting aging societies

Achievingthe 2025
Business Plan
P18▲

Other areas
・e-Rubber ・LEDs
・GaN power devices
・General Industry Products

Contributing to the
local community

17Medium- and Long-Term “2025 Business Plan”
To deal with a dramatically changing business environment and achieve sustainablegrowth into the future, Toyoda Gosei’s 2025 Business Plan lays out three key areas that takeadvantage of the Toyoda Gosei Group’s cultivated strengths. This shows not only numericaltargets or business expansion, but also new efforts to contribute to society and to growsustainably.
What we aspire to be

Financial objectives

Toyoda Gosei aims to grow as a global company
that acts flexibly and swiftly in today’s dramaticallychanging business environment, delivering the highest
levels of satisfaction to customers worldwide throughFY2017

FY2025

Revenue￥806.9 billion￥1 trillion

Operating profit ratio

5.1％

ROE (Return on equity)

6.6％( J-GAAP)▲

safety, comfort, well-being and the environment(IFRS)

8％
10％

Pillar Ⅰ

Pillar Ⅱ

Pillar Ⅲ

Venture into innovation,
new mobility

Strategy for growing
markets/fields

Innovative manufacturing at
production sites

New Technology, New Products● Commercialization in the new fields utilizing coretechnologies

● Development of new technologies and products

coping with CASE● Strategies of modularization and system products

Current Products

Current Products●M ake current products more highly value-added●B usiness plan execution through cooperation●G lobally standardized production know-how and● Selection and concentration of business resources

with customers and business partners

processes● Further implementation of the Toyota Production

System (TPS)● "Jidoka " and manpower saving utilizing IT● Reduction of environmental burden by productionengineering reform

Enhancement of our business foundation● Strengthening global operation

Financial
Policy● HR development● Business activities with integrity

Shareholder
returns

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.

Capitalinvestment

We will secure 50 billion yen by FY 2025 as funding for capital investment for growth.

Cash reserves

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

Sustainability efforts
To create social value and economic value, we are promoting efforts associated with the 2025 Business Plan and materiality.

Management Philosophy
Policy for SDGs
2025 Business Plan

What we aspire to be

Toyoda Gosei aims to grow as a global company
that acts flexibly and swiftly in today’s dramaticallychanging business environment, delivering
the highest levels of satisfaction to customers
worldwide through safety, comfort, well-being
and the environment
Revenue¥1trillion
18

Operating profit ratio

8％

ROE

10％

Materiality (key issues)

Pillar Ⅰ: Venture into innovation, new mobility

Business activities

Pillar Ⅱ: Strategy for growing markets/fields
Pillar Ⅲ: Innovative manufacturing at production sites

・Human capital management
・Manufacturing

・Environment

・Community revitalization

Management baseValue Creation Strategy

Foundation of Value Creation

Financial Report

The situation before us and key future strategies
The situation before us

Performance in the Europe/Africa region (FY2019)

Sales and profits declined in FY2019 due to the loss on
liquidation of our business in Europe and the impact of
the novel coronavirus. Our European business has been achallenge for some time, and while we posted a temporary
loss, we were able to set definite targets for structuralreforms. In the three months of the fourth quarter werecorded a surplus for the first time in five years.
In the immediate future we will remain in “emergency
mode” globally from the impact of the novel coronavirus,
and execute cost controls to deal with the decrease in sales.
Meanwhile, we will implement a range of measuresthat give greater priority to resources for a prompt recovery
corresponding to the changes in the post-corona markets,research and development with a view to the future, andkey geographical regions and business fields. In this way wewill continue to work toward sustainable growth. We will
also seek to promote productivity improvements globally,such as manufacturing innovations utilizing AI and IoT, andremote work and other work-style reforms to accelerate theachievement of the 2025 Business Plan company-wide.

Operating profit ratio (％)

Revenue (Billions of yen)

Operating profit (Billions of yen)

3.6%
-14.5%-15.4%-16.2%

10.9
9.3

9.0

7.1

-1.5

〔1Q〕

-1.4

〔2Q〕

-1.5

0.2

〔3Q〕

〔4Q〕

Sales ratio by product area
Interiors andExteriors

Weatherstrips

13.8％

37.2％

Functional
Components

18.1％

Safety Systems

30.9％

Key future strategies
The figure on the right shows our key strategies
for achieving the goals of the 2025 Business
Plan. The red arrows pointing upward to theright show the geographic regions and productareas where we aim to grow sales.
In the product areas of safety systems
and functional parts, we plan to expand salesof airbags and products for electric vehicles
and fuel cell vehicles in many regions witha focus on safety and security. In the area ofinterior and exterior products, we will try to
expand sales mainly in the Americas, where
profitability is high.
Among geographic regions, the Americas
have been key to much of our growth, but now
we will undertake various efforts to cultivate
China and the rest of Asia as a second pillar.
By focusing our resources on productareas and geographic regions with potential
for excellent growth and profitability, we will
optimize our portfolio and improve overallprofitability.

Strategy by segment/product area
Product
Area

SafetySystems

Functional
Components￥350
billion￥150
billionSegment

Interiors
New
Weatherstrips
andTechnology
Exteriors

Total

Japan

Americas

Asia

EuropeFY2025sales image(FY2019)(￥230)(￥130)

Growing sales
in most regions￥300
billion(￥280)￥100
billion(￥100)￥100
billion(0)

Energy focused on
Fasterregions where profits commercialization
can be earned

Note: Assumed exchange rate $1 = ￥100

19

Medium- and Long-Term “2025 Business Plan”

Pillar Ⅰ: Venture into innovation, new mobility
e-Rubber exhibited at domestic and international trade shows
Toyoda Gosei’s knowledge of rubber has been cultivated over many years. Today weare using that knowledge in a focused effort to develop e-Rubber, an innovative rubberthat moves when electricity is applied. In January 2020, we exhibited for the first time at
CES, the world’s largest consumer technology trade show held in the USA, with a booththat featured e-Rubber haptics. The following month we exhibited an e-Rubber tactile
hand that can detect the shape and softness of an object at RoboDEX in Japan. These
exhibits were favorably received by visitors, many of whom requested samples.

Barista robots (equipped with a tactile hand)e-Rubber haptics in augmented reality

Toyoda Gosei booth at CES

Our booth at CES included a demonstration using haptics technology, in which vibration or other forces
are used to simulate the actual feel of touching an object. In this demonstration, a virtual bird appeared in
front of the user through AR goggles. When this virtual bird lit on the user’s finger, the user experienced alife-like feeling of being touched through a thin, soft vibrating device made with e-Rubber.

Toyoda Gosei’s “tactile hands” that use
lightweight, soft and highly sensitive
e-Rubber sensors are employed in robot
systems by QBIT Robotics Corp.*1*1 A startup that develops systems centered oncollaborative robots for use in the service industry,including food service and entertainment.

Launch of “SupeR BEAT” medical training simulator using e-Rubber
Toyoda Gosei and EBM Corporation*2 launched the “SupeR BEAT” surgical training
simulator in October 2019. This simulator can reproduce the beating of the heart withextreme accuracy using e-Rubber. The two companies have been collaborating sinceNovember 2017 to develop a practical simulator that can help surgeons to efficiently
improve their skills. Demand for such surgical training simulators is rapidly growing as
medical surgeries are becoming increasingly sophisticated and ensuring safety becomes
important more than ever. Training using simulators has become compulsory in specialties
such as cardiovascular surgery, where doctors must complete a fixed amount of training.
A special program installed in the simulator enables more than a dozen heartbeat
patterns, which can be combined to mimic varying states such as the complex heartbeat
patterns seen with arrhythmia or the rapid heartbeat of infants. A stressful surgicalenvironment very close to that of actual coronary artery bypass surgery*3 can also be
reproduced.
The current coronavirus pandemic has brought new social needs to the fore.
Telemedicine, for example, may help to ensure the safety of medical personnel and prevent
medical systems from being overwhelmed. With e-Rubber, the human sense of touch
when touching on object is converted into digital signals, which are then transmitted andreproduced at a distant location. With haptics technology, e-Rubber has the potential tocontribute to the realization of telemedicine. It is looked to with expectation from many
quarters.
*2 EBM is a university-launched venture company involved in training simulator development and system creation for both domestic Japanese and overseas markets, principally inthe field of cardiac surgery. Their main products are used in about 70% of cardiovascular surgery hospitals in Japan, and also sold in the United States, Europe, and Asian countries.
With the aim of international standardization of surgical technique training, EBM is cooperating closely with doctors from the aspects of both equipment and practices, centered on
their Fukushima Institute of Surgical Training (FIST).
*3 In surgeries to repair angina, myocardial infarction or other conditions in which circulation of the blood (oxygen supply) in the heart is impaired due to arteriosclerosis, blood flow
is ensured by connecting the constricted artery to another healthy artery. To reduce patient burden, off pump surgery done without a heart-lung machine, which means the heart
is still beating, is increasingly used. A high level of skill is essential to suture together vessels with a diameter of 2 millimeters on the surface of a beating heart.

20Value Creation Strategy

Haptics (tactile transmission) will contribute to therealization of telemedicine
e-Rubber can function as both an actuator and a sensor.
Utilizing these strengths, e-Rubber is promising for areas suchas telemedicine, where it can be used for online “palpation”
and other tactile aspects of examinations, through haptics
technology that simulates the feeling of touch.
Transmission

Home

Pulse felt withtactile sensor

HospitalFoundation of Value Creation

Financial Report

Various kinds of elemental technologies
for the realization of future concepts
introduced at Tokyo Motor Show
Commu-Touchpad
This is a haptic technologythat simulates various tactile
sensations using the vibrationof e-Rubber, a next-generation
rubber that expands andcontracts with electricity.

Pulse reproduced realisticallywith HAPTIC PLASTeR vibrations

e-RubberInsulating film
Soft printed
circuit

HAPTIC PLASTeR

Toyoda Gosei’s future technologies for the age of CASE shown at the Tokyo Motor Show
Toyoda Gosei exhibited at the 2019 Tokyo Motor Show, heldat Tokyo Big Sight in October 2019. The exhibit included ourCASE-compliant technology that will contribute to mobility
in the coming years, and our future interior-exterior
concepts as a specialist in rubber and plastic products.
We also showed modular products that combine safety
support functions and attractive design by integrating
sensors and other electronic components into our main
products, such as front grilles and steering wheels, and new
airbags for the era of autonomous driving.

Front grille module

Next-generation safety system

This module is equippedwith sensing functions thatrecognize the surrounding
environment with cameras
and millimeter wave radars,
and signage functions that
communicate the vehicle’s
operating status to people
nearby with LED lights.

Airbags are integrated intoseats to accommodate themore diverse occupant
postures that are expectedwith autonomous driving.

Steering wheel module
Human machine interface functions are added for coordinated vehicle operations between
humans and systems. Driver monitoring functions sense the condition of the driver withcameras and sensors, and information functions convey information with light and vibration.

21

Medium- and Long-Term “2025 Business Plan”

Future concepts
Flesby Ⅲ

In Flesby Ⅲ, AI is applied to a soft body made with the use of rubber andplastic technology, making this car like a partner that can communicate
through touch.
This exterior concept includes a safety function that absorbs shocks in theevent of contact with a pedestrian, and an energy-saving function that
optimizes the vehicle shape according to the driving situation.
The interior concept has a “first class” function that creates a feeling of
calmness with a softly enveloping sheet and LED lighting that changes
color depending on the scene.

PillarⅡ: Strategy for growing markets/fields
Strategy for Asian business
Asia is a region where we will continue to grow our business.
It is our second pillar following the Americas.
China is a key market that is expected to growsignificantly, where we are moving ahead with even greater
profit structure reform. In India and other emerging
countries, we can expect an increase in airbag utilization
rates due to stricter safety regulations, and we aim tosteadily increase profits by expanding sales and reducing
costs.
In China in particular, we are consolidating our business
management system and reorganizing our company
locations in anticipation of the growth of our customers’
businesses. We are ensuring management efficiency as wegrow in scale, speeding up decision making, and delegating
authority to national staff.
Until recently, we expanded our business in coastal
areas, but a December 2018 investment in Hubei Rock(currently Hubei Toyoda Gosei Zheng Ao Rubber & Plastics
Sealing Science and Technology) gave us a foothold in
the inland area with the Dongfeng Motor Group. The
environment in the Chinese market is currently harsh
due to the recent economic slowdown and intensifying
competition with the growth of the market, but we will seek
to recover from this setback with CASE-compliant products.
To take us in that direction, we are moving TG China’s
Shanghai Office R&D Center (scheduled to start operationin March 2022) and taking other steps to strengthen our
local technical development system.

Sales and operating profit trends in Asia
6.8

Operating profit
ratio (％)
Revenue(Billions of yen)

Operating profit(Billions of yen)

6.6

6.4
5.6

201.7

179.0

197.6

199.7

188.2

13.7

11.7

14.1

12.7

10.6

2016/32017/3

2018/3

2019/32020/3J-GAAPIFRS(FY)

Production locations

China

8 locations
TaiwanIndia

5 locations

2 locations
Thailand2 locations

Indonesia

2 locations

22

7.1

Vietnam

2 locations

Value Creation Strategy

Foundation of Value Creation

Financial Report

TOPICSStrengthening our weatherstrip production network in central China
To expand our automotive parts business in China,
the world's largest market, we are strengthening our
production system for weatherstrips at an affiliatedcompany in Hubei Province called Hubei Toyoda
Gosei Zheng Ao Rubber & Plastics Sealing Science andTechnology Co., Ltd. (TG Zheng Ao). By May 2021, we will
enlarge the plant building and add production equipment
to double the weatherstrip production capacity from thelevel in FY2018.
TG Zheng Ao became a Toyoda Gosei affiliate when
the Toyoda Gosei Group invested in independent supplier
Hubei Rock in December 2018. The company has
supplied weatherstrips to Dongfeng Motor Corporation,
one of China’s “Big Three” automakers, as well as to its
joint ventures Dongfeng Honda Automobile Co., Ltd.
and Dongfeng Peugeot-Citroën Automobile Co., Ltd.,
automakers in partnership with Honda Motor Company
and Groupe PSA, respectively. With this expansion, Toyoda
Gosei aims to make TG Zheng Ao a core location forgrowing the TG Group’s business in central China.

Weatherstrip production network system in China
Toyoda Gosei Star Light(Tianjin) Auto Parts Co., Ltd.

Hubei Toyoda Gosei
Zheng Ao Rubber &Plastics Sealing Scienceand Technology Co., Ltd.
（Expansion）
Toyoda Gosei (China)
Investment Co., Ltd.
Fuzhou Fu-Yue Rubber &Plastic Industrial Co., Ltd.
Toyoda Gosei (Foshan)
Rubber Parts Co., Ltd.
Regional headquarters
Production company

TOPICS

Reorganization of production subsidiaries in India
Toyoda Gosei Co., Ltd. is restructuring its production
subsidiaries in India to optimize its production networkin that country. The company will transfer all its sharesin Toyoda Gosei South India Pvt. Ltd. (TGSIN) to
Toyoda Gosei Minda India Pvt. Ltd. (TGMIN) in 2020.
TGSIN supplies interior/exterior and other parts
mainly to Toyota Motor in South India, while TGMIN
supplies airbags, steering wheels, and other parts
mainly to Suzuki Motor in North India. With thisrestructuring, Toyoda Gosei intends to develop a more
flexible supply system in India that is not bound by
product categories.
India is a market of focus in Toyoda Gosei’s
medium- and long-term 2025 Business Plan. Recently
the Gurgaon Sales and Engineering Office wasestablished and a new plant went into operation in
Gujarat. We will continue to enhance the development
and production capacity in this emerging market.

Business network in India

Toyoda Gosei Minda India Pvt. Ltd. Gurgaon Office [Sales, Engineering]

Minda TG Rubber Pvt. Ltd. [Functional Components]

Toyoda Gosei Minda India Pvt. Ltd. Bawal Plant [Weatherstrips, Safety Systems]

Toyoda Gosei Minda India Pvt. Ltd. Neemrana Plant (Headquarters plant)[Safety Systems, Weatherstrips, Functional Components]
Toyoda Gosei Minda India Pvt. Ltd. Gujarat Plant [Weatherstrips, Safety Systems]

Toyoda Gosei South India Pvt. Ltd.
[Interiors and Exteriors, Safety Systems, Functional Components]

23

Medium- and Long-Term “2025 Business Plan”

Safety Systems business strategy
Among safety system products, we will grow sales ofhighly profitable airbags in both developed and emerging
countries.
The assessment trends in developed countries areshown below on the left. We will continue to introduce new
products with a view these stricter assessments, startingwith far-side passenger protection in Europe in 2020.

The number of airbags equipped in vehicles will also
increase in emerging countries, such as the requirement fordriver’s side airbags as standard equipment in India in 2019.
We will increase sales by solidly meeting this need. We also
aim to improve profitability by investing to increase airbag
capacity in Vietnam and localizing inflators in cooperation
with Daicel in India.

Developed countries

Emerging countries

Introduction of new products with a view to strengthening
assessments

Handling increased number of airbags used and promoting
cost reductions

Assessment trends 2020 Far-side passenger protection (Europe)

Assessment trends 2019 Driver’s side airbag becomes standard
equipment (India)

2021 Stricter side impact regulations (USA)Front center
airbags

2023 Rear passenger protection (USA)2021 Stricter offset impact regulations (China)2025 Oblique impact passenger protection (USA)2021 Far side passenger protection (China)

Body
movement

Rear-seat
airbags
ImpactProtection of passengers
from far side impact

2021 Pedestrian protection (ASEAN)

Body
movement

Cost reductions

Increased airbag production:
Investment to increase capacity (Vietnam)
Inflator localization:

ImpactCooperation with Daicel (India)

Protection of rear passengers
from front impacts

TOPICS

Enhancing production capacity for airbag parts in Vietnam
To meet the growing demand for airbags globally, we are
increasing production capacity at the Thai Binh Plant of Toyoda
Gosei Haiphong Co., Ltd. (TGHP). This is our second production
subsidiary in Vietnam, which went into operation in July 2019.
A new building will be constructed and annual production
capacity in Vietnam of the bags that inflate on impact will be
increased to 25 million bags by FY2023, about 1.5 times the
FY2018 level. Investment for this plant expansion is estimatedat about JPY1.8 billion.* The construction of the new building
started in May 2020 and production will start from October 2021.
Airbags and other safety system products are a key businessin Toyoda Gosei’s 2025 Business Plan, and by FY2023 we plan toincrease global airbag production to 100 million units annually,
approximately 1.6 times the level in FY2018.

Hanoi

TGHP HQ Plant

TGHP Thai Binh Plant(Rendering after expansion)

Expandedbuilding*Calculated at $1 = ￥109

Functional product business strategy
Functional components are another of the product areas
where sales are growing in many geographic regions. These
parts are also associated with safety, and so they require highquality. This makes the barriers to entry by other companies
high. We believe that the rubber and plastics knowledge andthe trust we have built up over many years can be used as24

a weapon to expand sales globally. Market trends indicatethat gasoline and hybrid vehicles will remain the main typesof vehicle for the time being, and we believe that we cancontinue to increase sales by having our plastic fuel filler
pipes and fuel valves, which contribute to weight reduction,used in a wider range of vehicle models. In addition, sinceValue Creation Strategy

these products are already in the payback period, we can
expect profitability to increase with increased sales.
Automobile powertrains will change in the future, but
we believe we will be able to respond adequately to changes
in the market by enhancing our lineup of products such as
cooling pipes for electric batteries and hydrogen tanks forfuel cell vehicles. Cooling pipes in particular are a productwith which we can utilize the materials and design (routing)technology that we have cultivated for the hoses used ingasoline engines and around fuel tanks. Moving ahead
with sales while keeping initial investments down is also anadvantage.

Sales growth
itemsMarkettrendsFoundation of Value Creation

Financial Report

Plastic fuel filler pipes/
Fuel valves

Cooling pipes

Hydrogentank

Gasoline, Diesel

HV, PHVFCVHV, PHVEV

Continuing major trend

True growthfrom 2022

True spreadfrom 2025Key
regions

Americas, China

Japan, China

Japan, China

Product
lifecycle

Collection period

Growth period

Introduction
periodInterior and exterior product strategy (North America)
Among interior and exterior products, we will focus onlarge exterior products, one of the product groups withparticularly high added value. Toyoda Gosei has advanced
mold technology and decorative technology, such as plating
and painting, and we will expand sales in North America ofhigh value-added products that utilize these technologies.
In 2019, we established a new R&D and sales office near
one of our customers to strengthen our sales network forthis non-Toyota customer. In addition, we will continue toinvest in major capacity increases at our main production
locations to further enhance the advantages we have built
up in North America.

We are enhancing the production capacity at threemanufacturing subsidiaries in the United States to handle
growth in sales of radiator grilles and other interior andexterior parts in North America. We will invest a total of
USD60.3 million by the end of FY2021 to enlarge factorybuildings and add molding machines, painting equipment
and other equipment at Toyota Gosei Texas, TG Missouri,
and TG Kentucky. With this investment, we plan to increase
Group sales of interior and exterior products in North
America to approximately 87 billion yen by FY2025, about
1.3 times the level in FY2018.

PillarⅢ: Innovative manufacturing at production sites
Manufacturing innovations that support strategy
In the past, we suffered large production losses with thelaunch of new models. Reflecting on this, over the last
few years the entire Group has been working to develop
manufacturing systems that do not generate loss. Recently,
we have been focusing particularly on the use of IoT and
big data. Loss reduction is achieved by identifying the causeof equipment stoppages with “visualization” of processes
using IoT and elucidation of the mechanisms of failure byanalyzing collected big data. Information can be visualizedby simply installing a relatively inexpensive device inexisting processes. Thus, it can be applied to various
products. Currently, we are implementing this approach ona priority basis to key strategic parts, such as inflators andplastic fuel filler pipes. In the future we will increase theimpact by spreading it globally.

IoT standard tools
1

Andon*

Process control board

Automation of daily reports

Reduced loss from equipment stoppages
Product

FY2019From FY2020

Inflator

Japan

Americas, China

Plastic FP*2

Japan

Americas, China
Japan, Americas, China

Painted products

The use of big data

Elucidation of defectmechanism

Data analysis

Reduced loss from defects
Product

FY2019Inflator

Japan

Millimeter wave
compatible emblems

Japan

Weatherstrips*1 Light displays for equipment operation status

From FY2020

Japan, Americas*2 Plastic fuel filler pipes

25

Sustainability

SDGs and ESG
Review of materiality (key issues)With the company creed of “Boundless creativity and social
contribution,” we contribute to a sustainable society throughcompany growth. For this purpose, we will take initiativein helping to solve the global issues indicated in the UN
Sustainable Development Goals (SDGs; shared goals thatthe international community aims to achieve by 2030), andin the area of ESG (environmental, social and governance),

based on an appropriate governance system. We will meetthe expectations of our stakeholders around the world,
including customers, shareholders, investors, employees,
and suppliers. In April 2020, we reviewed materiality basedon growing interest in sustainability and narrowed our focus
to the eight most important fields.

Materiality identification process
STEP 1

STEP 2

STEP 3

STEP 4

Selection ofmateriality candidates

Evaluation/analysis ofmateriality candidates

Validity evaluation
by management

Materiality
identification

Management baseBusiness activities

Most crucial fields in SDGs

26

Materiality (key issues)

Good health and well-being

Bring about a safer and more comfortablemobility society by responding to thetransformation of automobiles and reducing
the number of traffic fatalities

Industry, innovation and infrastructure

Create new industries that utilize coretechnologies

Climate action
Build a decarbonized society by reducing
emissions of CO2 and other greenhouse gases
Affordable and clean energy

Responsible consumption andproduction

Build a recycling-based society by reducing
waste and water risks

Decent work and economic growth

Coexist with local communities by creating
employment and contributing to society

Reduced inequalities

Promote diversification in employment,
protect human rights

Peace, justice and strong institutions

Carry out thorough corporate governance andcompliance as a company of integrityValue Creation Strategy

Foundation of Value Creation

Financial Report

Expectations fromstakeholders●

Contributions to SDGs●

Advancement of ESG activities●

Proper information disclosure(TCFD proposals, GRI standards)

Importance to stakeholders

Very highHigh

Materiality (key issues)
determination

Importance to Toyoda Gosei

Very highBoundless Creativity and Social Contribution
What we aspire to be(Good corporate citizenship, Proper business operation,
Sustainable growth, Customer satisfaction, Conservation of
global environment and resources, Respect for the individual)

Major efforts
●
●

●

●
●
●

●
●
●

●

●

●

●

●

●
●

●
●

●

●
●

●
●
●
●

●
●
●

●

Corresponding
ESG areas evelopment of safety devices, such as airbag products for many different kinds of accidentsDDevelopment of simulation technology to create safety devices that correspond to various riding postures,from adults to children
Development of advanced safety technology for autonomous drivingES evelopment of mobility products that are compatible with CASE/MaaSD
Development and commercialization of e-Rubber applications (tactile hands, heart surgery simulator, etc.)
Development and commercialization of GaN power devices; development of deep UV LED water purification
units

E

S

 evelopment and mass production of high-pressure hydrogen tanks that are at the heart of fuel cell vehicles
DPush for lighter weight products for higher fuel efficiency (lightweight panels, plastic fuel filler pipes, etc.)
Push for establishment and spread of innovative and energy-saving production techniques to achieve
medium- and long-term CO2 reduction targets
Revolutionary energy savings from higher productivity with the introduction of innovative technologies, dailykaizen , and IoT
Introduction of solar power generation and other renewable energyE ush for waste reduction projects to minimize waste in production processes (effective use of weatherstrip
P
scraps; search for ways to minimize scrap generated in plating processes)
Investigation of applications for rubber material recycling technology that uses rubber desulfurization andregeneration technologies
Push for product design that allows easy disassembly and product design and development with the use ofenvironmentally-friendly materials
Push for kaizen and recycling for water usage loss by expert teams
Creation of products (eco bags, etc.) that use waste (airbag base fabric, leather, etc.)

E

Business expansion and job creation in developing countries
 olunteer activities in cooperation with local governments and social welfare councils (companywide
Vcleanups, community crime prevention, blood drives, on-site classes)
Push for activities for living with nature (woodland maintenance, plant afforestation, river and wetland
preservation), under the slogan “Linking activities with water, the source of life”S eformation of the company atmosphere through efforts to raise the communication ability at work
R
Development of human resources for global management (education program for future management
candidates)
Creation of mechanisms to promote career advancement in female employees, so that they feel value in work
Review of personnel systems to promote the activity of senior workers
Hiring of people with disabilities in all Group companies and creation of pleasant workplaces
Explanatory meetings and practical training for supervisors and leaders on harassment preventionS ctivities for thorough compliance and risk reduction centered on the Compliance and Risk Management CommitteeA
Strengthening of ability to handle risk by preparing risk management guidelinesFormulation of and education with the Toyoda Gosei Guidelines for Business Ethics, our code of conduct for
employees
Early detection and correction of misconduct by establishing legal violation/compliance consultation offices(inside and outside the company)G
27

Governance〈G〉
Building and operating transparent management
systems for thorough Group-wide compliance.
The entire Toyoda Gosei Group is striving to enhance corporate governance sothat we can continue as a company of integrity that is trusted by society. To build
and maintain fair and transparent corporate governance systems, we are
increasing the effectiveness of the monitoring and auditing of corporate
management by outside directors and Audit & Supervisory Board members,
while also installing internal control systems company-wide to ensure the
propriety and efficiency of work. Through Group-wide compliance activities, weare pursuing thorough legal compliance and business ethics.
We are also identifying risks with the potential to have a huge impact on ouroperations, and implementing risk management activities to prevent future
problems.

Masaki Oka

Director, Corporate Officer,
Chief of Finance & Accounting Headquarters, Chief of Corporate Planning DivisionCorporate governance
Basic philosophy
We view the enhancement and strengthening of corporate
governance with the aim of ensuring sound and efficient
corporate management to be crucial in achieving sustainablegrowth. Based on this, we are building and maintaining fair
and transparent management systems and organizational
systems that can respond precisely to environmental changes.

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

Corporate governance system
Toyoda 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 asneeded), where matters prescribed by law or in the Articles
of Incorporation and important matters related to corporate
management are reported, discussed, and resolved.
A system of corporate officers is used to speed up decisionmaking and business execution. For important businessmatters, monthly management meetings are held. Functional
meetings and committee meetings relevant to key areas suchas technology, costs, and personnel are also held as needed
for good management decisions.
The Audit & Supervisory Board consists of five members
and holds regular meetings. Members also attend important
meetings such as Board of Directors’ meetings and audit eachdepartment and subsidiary, through which they fulfill theirfunction 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 executionfunctions are well coordinated with each other under this28

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 haveestablished an Executive Appointment Committee andExecutive Compensation Committee under the Board of
Directors as non-mandatory advisory committees, both ofwhich are majority-independent and chaired by an outside
director. The roles and membership of the two committees
are as follows.
Name

Role

Members

Executive
Appointment
Committee

Deliberates and reports
on proposals regarding
the appointment anddismissal of directors
and Audit & Supervisory
Board members(Appointment ofpresident, etc.)

ChairmanNaoki Miyazaki,
President
Toru Koyama,
Outside Director
Sojiro Tsuchiya,
Outside Director
Kimio Yamaka (Chairperson),
Outside Director
Mayumi Matsumoto

Deliberates and reportson the compensation
Executive
system for directors
Compensation and their individual
Committee
compensation(Restricted stock-based
compensation, etc.)

ChairmanNaoki Miyazaki,
President
Toru Koyama,
Outside Director
Sojiro Tsuchiya,
Outside Director
Kimio Yamaka (Chairperson),
Outside Director
Mayumi Matsumoto

Value Creation Strategy

Foundation of Value Creation

Financial Report

Internal control systems
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 toensure 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, theBoard of Directors checks the status of establishment andoperation of internal controls in an ongoing effort to improveand reinforce them.

Internal controls for the Toyoda Gosei GroupTo cultivate a healthy internal control environment at Toyoda
Gosei and its subsidiaries, all Group companies share its
management philosophy. The Toyoda Gosei Group Charterfor Business Ethics, a shared guideline for compliance, hasalso 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 of subsidiaries’
businesses through advance approval reports. We also send
non-executive directors and Audit & Supervisory Board
members to key subsidiaries in a system to monitor and act
as a check on their business execution.

Corporate governance system
Shareholders' Meeting
Appointment/
Dismissal

Appointment/
Dismissal
Audit

Board of Directors
Consultation
Appointment/
Supervision
Dismissal

Audit & Supervisory Board

Appointment/
Dismissal
Cooperation

Accounting Auditors

ReportSubmission/
Executive
Executive
ReportAppointment Compensation
Committee
Committee

Audit &
Supervisory
Board Dept.

Audit

Audit

Business Execution System

President

Direction/Supervision

ReportAudit Div.

Business Execution
Audit

Cooperation with Audit &Supervisory Board andAccounting Auditor

Company Meetings
Submission/
ReportCorporate Officers

Functional/Business Divisions

Subsidiaries

Decision/
ApprovalManagement Meetings

Functional Meetings

Committees

Internal audits, Audit & Supervisory Board members’ audits, and accounting audits
We have set up an 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 effectivenessof internal audits is increased by checking 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 the Boardof Directors and management meetings, listen to reports
on business from directors and others, inspect financial29

Governance〈G〉

statements and other important documents, and conduct onsite audits of offices and subsidiaries to audit the performanceof duties by directors from the perspectives of ensuring
legality and appropriateness, protecting assets and rights, andpreventing loss. Moreover, a special department has been
established to assist the auditors’ audits.
The certified public accountants who performed the FY2019
accounting audit of Toyoda Gosei are Eiichi Yamanaka andTomohiro Nishimura 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 efficient and effective
audits, contacting each other as needed to exchange ideas
and share information.

Director (skills matrix)
Executive
Executive
Manufacturing
Corporate
Overseas
GovernanceAppointment Compensation(production/quality Technology
management
operations
Committee Committee
management)

Name

Position at
Toyoda Gosei

Naoki
Miyazaki

Chairman

○

○

○

○

○

Toru
KoyamaPresident

○

○

○

○

○

Tomonobu
YamadaExecutive Vice
President○○○

Hiroshi
YasudaDirector○○○

MasakiOka

Director○○

TakashiIshikawa

Director

SojiroTsuchiya

Director
OutsideIndependent

○

○

Kimio
YamakaDirector
OutsideIndependent

◎

◎

○

MayumiMatsumotoDirector
OutsideIndependent

○

○

○

○

○

Finance

Personnel

Environment
and energy

○

○

○

○

○

○

○

○

○

○

○

○

○

Sales

○

○

○

○

○

○

○

○

○

○

○

○

○

Note: “ ◎ ” denotes the committee chairperson.

Expected roles of and support for outside directors
All three outside directors possess a wealth of experience andkeen insight.
Mr. Tsuchiya’s experience and expertise lie in global
strategy and production engineering; Mr. Yamaka’s, in financeand the environment; Ms. Matsumoto’s, in the environment
and SDGs. Ms. Matsumoto is Toyoda Gosei’s first woman
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 theform of departmental briefings on business operations andchallenges and direct access to front-line operations through30

on-site-visits to domestic and overseas subsidiaries to better
understand the actual state of operations. Additionally, they
are briefed in advance on the content and background ofresolutions to be voted on at Board meetings to facilitatesound decision-making.
At the same time, the outside directors advise managementon company direction and business challenges. Advisory
opportunities include regularly scheduled liaison meetings
attended by all outside directors and outside Audit &Supervisory Board members, each of whom attends various
other meetings also, including Sales Meetings and ad hoc
meetings.
Continued on page 35

Value Creation Strategy

Foundation of Value Creation

Financial Report

Interview with outside directors

Sojiro Tsuchiya

Mayumi Matsumoto

Kimio Yamaka

Career summary

Career summary

Career summary

Toyoda Gosei director since June 2015
Formerly executive vice president of
Denso Corporation

Toyoda Gosei director since June 2019
Visiting Associate Professor, Special
Division of Environmental and Energy
Science, Komaba Organization for
Educational Excellence (KOMEX), The
University of Tokyo (current)

Toyoda Gosei director since June 2016
Director, Energy Strategy Institute Co.,
Ltd. (current)31

Governance〈G〉

Outside directors’ roles
Tsuchiya: To ensure transparent Board decision-making,I place priority on providing objective advice based on myknowledge and experience. Having worked for anothermanufacturer like Toyoda Gosei, I am communicatingwith front-line personnel as much as possible andoffering context-specific advice from an outsiders’perspective to help them to properly fulfill their roles.

candid discussions. I believe discussions amongpeople with diverse experience and backgrounds are
extremely important. It would be better to have broader
discussions with input from more perspectives, including
not only management and governance but also producttechnologies, production, quality, sales and service.

Yamaka: I am committed to unreservedly expressing
opinions from stakeholders' standpoint to fulfill my roleof monitoring and advising management so they canbenefit from my expertise and experience.
Matsumoto: Since first becoming a director, I havefocused primarily on the monitoring function in lightof the company’s circumstances and investors’ needs.
With outside directors assuming increasingly important
responsibilities, I actively question whatever I findquestionable and speak out as an advocate for regularshareholders.

Progress in corporate governance
Tsuchiya: Since I joined the Board, Toyoda Gosei has
made great strides in terms of corporate governanceby virtue of growing societal interest in governance inaddition to the company’s efforts. I feel Toyoda Gosei
stacks up well against other Japanese companies withrespect to governance.
Yamaka: We are steadily upgrading our monitoring
regime. I believe we are sensitively responding to thedemands of the times. To function effectively, however,outside directors need a deeper understanding of thecompany’s business activities. I would like to be briefedin even more detail than we are now.
Matsumoto: While Mr. Yamaka has been a director for
four years, I joined the Board just last year. In contrast
to four years ago, when outside directors reportedly had
few opportunities to learn about the company, I have
had numerous opportunities to do so, including throughplant tours and studying about business activities before
officially being appointed. Given the gravity of outside
directors’ responsibilities, I appreciate that Toyoda
Gosei not only provides opportunities to learn but also
promptly answers questions and responds to requests.

Board’s effectiveness and shortcomings
Tsuchiya: I think very highly of the Board. Board
meetings have a good atmosphere conducive to

32

Yamaka: I feel we outside directors contribute to lively
discussions because we mostly speak candidly. The
Board often makes decisions on information-intensive
matters under tight time constraints. I sometimes
would like to be able to devote more time to discussion.
Allocating discussion time among agenda items is a
tough balancing act, but I wish the Board would put a
bit more thought into doing so.
Matsumoto: As a newcomer, I initially had a hard time
understanding what was being discussed at times.
Management helped me to become an effective director
by, for example, inviting me to Production Meetings andSales Meetings so that I could learn about the company’s
medium- to long-term direction. I strive to arrive at
optimal solutions by personally taking the initiative
to learn what I need to know and clearing up anyquestions.

Toyoda Gosei’s key management issues
Tsuchiya: We are said to be in a once-a-century periodof monumental change. With autos also undergoingd ra s t i c c h a n ge , w h a t we p ro d u ce i s b e co m i n g
increasingly important together with how we produce
it. Technological capabilities are now more crucial thanever before. To reliably meet customers’ needs andwishes, we must develop various new manufacturing

Value Creation Strategy

Foundation of Value Creation

Financial Reporttechnologies even for decorative interior and exterior
components, for example.
Information and electronic technologies are
likewise becoming essential in the safety/security andautonomous driving domains. It is important for Toyoda
Gosei to create innovative new value by combining
the LED technologies it has long been refining withmaterials technologies, another of its fortes. Identifying
products and businesses that will drive Toyoda Gosei’s
growth going forward and allocating management
resources to them on a priority basis are currently two
key management issues in my opinion.

to put products out into the world on a pilot basis froman early stage. Short-term risks should definitely betaken in pursuit of growth, but needless risks must be
controlled. I believe greater risk-sensitivity is needed.
Over the medium to long term, I think Toyoda Gosei
should engage in dialogue with not only existing
partners but also young digital natives that will form thenucleus of the next generation to learn more about whatkind of cars they are seeking and what kind of society
they want to live in, as well as needs and vehicle featuresin the autonomous driving era. Such information should
be utilized in product development.

Yamaka: Though many people in the company think
good technology directly leads to sales increase, it
is important to be cognizant of how to best embody
technologies in products and how to generate profits
from technologies. With the auto industry changing
drastically, customer stability can no longer be taken for
granted. In such an environment, I believe shifting toa mentality of self-reliance vis-à-vis generation of both
ideas and profits is a key issue.
For example, Toyoda Gosei has been lauded for its
environmental initiatives. Environmentally friendly
products not only generate stable profits, they also
constitute a promising domain in which to create new
businesses by leveraging existing technologies. A
hydrogen society extending beyond FCVs will definitely
be realized at some point and the inverter model ofenergy transmission/control will become mainstream.

Tsuchiya: I am glad we decided to divest German
subsidiary TG Meteor. The move largely resolved a big
problem. It was a big decision for the company and a lotof hard work but, thankfully, the deal closed successfully.
On the whole, the interior and exterior components
business and safety systems business, particularly
airbag-related products and millimeter wave compatible
emblems, are growing steadily and expected to continue
to grow. The rubber components business is not doing
so well, but it is Toyoda Gosei’s original business and its
products are essential automotive components. It must
somehow be turned around into an attractive businessagain. Morimachi Plant personnel are currently working
together to steadily improve operations and develop
technologies. I am confident their efforts will produce
impressive results in the near future.
Amid the current pandemic, I am a bit concerned
about the company’s global production network. Laborintensive production processes like sewing airbags andwrapping steering wheels in leather are concentrated incountries like Vietnam from the standpoint of both labor
availability and labor costs. We have to think about not
only the current pandemic but also abnormal weather
events such as floods, which have been increasing inseverity in recent years, and natural disasters such as
earthquakes, tsunamis and wildfires in addition toother risks such as labor disputes. While geographic
concentration of certain operations undeniably has
major efficiency benefits, I see the pandemic as areminder that we need to think about how to balancesuch benefits against the risks of overconcentration.

Matsumoto: Technological development is the linchpinof Toyoda Gosei’s businesses. Given the necessity ofdeveloping products that are attuned to the needs of thetimes and address societal challenges, it is important

Yamaka: With Toyoda Gosei supplying a wide rangeof products globally, the words “One Team, One TG”
resonates with me more deeply with each passing
year. Despite the expectations placed on the company,
setbacks sporadically occur due to what I consider to becompany-wide communication deficiencies. I believe
it is crucial to have a mindset of working together andgenerating profits in unity, irrespective of their businessdomains, positions or roles.

33

Governance〈G〉

Branching into new domains, including not only
the CASE space but also non-automotive businesses,
will also be important. In automotive businesses, webasically aim to recoup investments over five-year
intervals. In other sectors, however, our approach differs
by sector. I feel that Toyoda Gosei has plenty of humanresources capable of adapting to new environments. For
example, the environment and energy staff have growntremendously over the past four years to the point where
I now sometimes learn from them.

Advancement of production engineering
Tsuchiya: Production engineering is on a good trajectory
but it does not exist in a vacuum. It is one componentof manufacturing. Its full power is unleashed only when
it is integrated into the process from development anddesign through production and sales. If a production
plant is thrown out of kilter by the introduction of an
incompatible product or process, the incompatibility willlead to quality and profitability problems. Manufacturingentails not only production engineering and a
production site but also coordination and cooperation
among the manufacturer’s entire workforce. Productionengineering’s role includes coordinating all activities
central to manufacturing.
I believe Toyoda Gosei’s production engineering
program has been getting stronger and making steadyprogress in various improvement activities and new
development projects. It is important to have a strategy
for extending the program globally and on a Groupwide basis to allow it to directly contribute even more to
improving competitiveness and profitability.

Comments as chairperson of executive
appointment and executive
compensation committees
Yamaka: I feel the magnitude of my responsibility as
committee chairperson, a critical role related to thecompany’s management. I aim to make sure committee
members can engage in candid discussions froman outsider’s vantage point at meetings. To ensure
impartial, independent and appropriate decisions, I
plan to provide opportunities to communicate with awide range of individuals and promote understanding ofpolicies.

SDGs and ESG activities
Matsumoto: Because Toyoda Gosei’s SDGs are grouped
together, I was initially unsure how they translate into

34

action. This year, I did a materiality reassessment, which
was a big step forward in the space of one year. I value
the opportunity to personally educate employees atworkshops and other places on SDGs that enable themto individually contribute to society while doing theirjobs.
Tsuchiya: As members of society, companies are naturally
obliged to take ESG seriously. Both commitment andtechnology are essential to realizing ESG objectives.
I believe Toyoda Gosei can greatly contribute technologically given its wide-ranging technological capabilities.
Yamaka: In terms of the environment, one of the pillarsof ESG, Toyoda Gosei has been discussing methodologies
and progressing toward long-term targets with deadlinesof 2030 and 2050. Rapid advancements in energy
efficiency and renewable energy are heavily influencing
its new product and new technology strategies also.
I expect such a comprehensive strategy to help drive
growth for “environmentally friendly TG.”

Diversity
Matsumoto: Given the nature of Toyoda Gosei’s businessas an auto parts manufacturer, most of its workplaces arestaffed with more men than women, but it is consciously
hiring more women. In terms of diversification of work
styles, telecommuting, which was previously limited,
has expanded throughout the company in response to
the COVID-19 pandemic. Even after the pandemic ends,
I hope the company continues to allow telecommuting
as a means of increasing employee retention.

Value Creation Strategy

Foundation of Value Creation

Financial Report

Continued from page 30

Changes in numbers of directors and Audit & Supervisory Board members
In 2012, Toyoda Gosei adopted a systemof corporate officers and downsized its
Board of Directors to eight directors
from 23 as of 2011. It appointed its firstoutside director in 2015.
The Board currently comprises nine
directors, three or one-third of whom
are outside directors. One of the outside
directors is a woman. The outside
director appointments have increased
the Board’s objectivity and diversity.

2011

2012

2013

2014

2015

2016

2017

2018

2019

23

8

7

7

8

9

10

9

9

Outside directors(% of total)

0
（ー）

0
（ー）

0
（ー）

0
1
2
2
2
3
（ー） （12%） （22%） （20%） （22%） （33%）

Female(% of total)

0
（ー）

0
（ー）

0
（ー）

0
（ー）

0
（ー）

0
（ー）

0
（ー）

5

5

5

5

5

5

5

5

5

2

3

3

3

3

3

3

3

3

Total
directors

Audit &
Supervisory
Board members
Outside Audit &Supervisory
Board members

01（ー） （11%）

Outside directors and outside Audit & Supervisory Board members
Toyoda Gosei appointed three outside directors, Sojiro
Tsuchiya, Kimio Yamaka, and Mayumi Matsumoto, at its
annual shareholders’ meeting on June 12, 2020. Chika Kako
was also appointed as an outside Audit & Supervisory Board

member. Together with current outside Audit & Supervisory
Board members Hideomi Miyake and Masami Hadama, a totalof three outside Audit & Supervisory Board members havenow been appointed.

Election of outside directors and outside Audit & Supervisory Board members
Independent
director

Reason for appointment

Sojiro Tsuchiya○

To reflect in Toyoda Gosei’s management his wealth of experience and keen insight gained fromhis career at Denso Corporation, where he served mainly in production engineering roles and was
involved in management as a director.
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.

Outside directors Kimio Yamaka○

To reflect in Toyoda Gosei’s management his wealth of experience and keen insight gained from acareer spent in public-sector finance and project review and the environmental/energy field.
Mr. Yamaka 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.

○

To reflect her extensive experience and 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.

Appointment

Name

Mayumi Matsumoto

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

Chika Kako

Outside Audit &Supervisory Board Masami Hadama
members

Hideomi Miyake○

To reflect his extensive experience and deep insight in law in the auditing of Toyoda Gosei.
Mr. Hadama 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.

○

To reflect his extensive experience and deep insight as a corporate manager in the auditing of Toyoda
Gosei.
Mr. Miyake 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.

35Governance〈G〉

Ensuring the effectiveness of the Board of Directors
At Toyoda Gosei, the Board of Directors Officeconducts annual interviews of all directors and Audit &Supervisory Board members, including outside ones,on the effectiveness of the Board of Directors. The roles
and responsibilities of the Board of Directors, the level of
discussions, opportunities to improve effectiveness andother matters are assessed from multiple perspectives
and the results are reported to the Board of Directors. In
FY2019, the Board was rated highly on a numberof points, including appropriateness of matterssubmitted/reported on at Board meetings and sharing
of information with outside directors in addition to its
composition and welcoming attitude toward candid
discussion, both of which were ranked highly in FY2018
also. The assessment accordingly concluded that theBoard’s effectiveness increased in FY2019. At the sametime, the Board still has room for improvement incertain areas. It will explore ways to further increase its
effectiveness and improve on an ongoing basis.

Highly rated board attributes

Needed improvements
・Clearer identification of medium- to long-term issues
that should be addressed and more discussion ofstrategies for addressing them・Faster response to urgent issues
・Easier-to-understand materials for Board meetings(reason for inclusion on agenda, big-picture view,
relationship with business strategy, etc.)
・More opportunities outside of Board meetings fordiscussion, information sharing, etc. between outsideand executive directors

・Board’s size, composition and balance between
executive and outside directors
・Atmosphere conducive to lively discussions
・Limited meeting agendas that allow for ample
discussion of important matters to be submitted
・Support for outside directors, including access to
information needed for Board deliberations

Executive compensation

36

Director compensation scheme
From July 2020

Monthly compensation
Capped at¥60 million/month

Monthly70%
compensation

80%(¥720 million annualized)

Cash bonuses(Amount approved20%
at annual shareholders’meetings)

Cash bonuses 20%

Restricted
stock-based 10%compensation

Long-term

Short-term

Fixed
compensation

Through June 2020

Performance-based compensation

Executive compensation consists of fixed monthly
compensation and performance-based compensation inaccord with the idea that executives should be appropriately
incentivized to pursue sustained growth in shareholder
value. The performance-based compensation consistsof cash bonuses (short-term incentive) and stock-based
compensation (long-term incentive). The fixed monthly
compensation is set at a level that reflects the individual’s
job responsibilities and experience as well as compensation
norms at other companies. Its base amount accounts forsome 70% of total compensation, with cash bonuses (shortterm incentive) and stock-based compensation (long-term
incentive) respectively accounting for roughly 20% and 10%.
Outside directors and Audit & Supervisory Board
members receive only fixed monthly compensation because
their role is to oversee and monitor management from an
independent vantage point.
Executives’ cash bonuses are based on consolidated
earnings for the period in question in addition to a numberof other factors, including dividends, employees’ bonus
level, other companies’ executive bonuses, medium- to longterm operating performance and previous bonus payment
amounts.
Stock-based compensation is intended to as an incentive
to pursue sustained growth in Toyoda Gosei’s value. It is paidin the form of restricted stock to promote greater sharing ofvalue with shareholders.
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).

Officer compensation
The total compensation for each officer class, the total by eachtype of compensation, and the number of officers receiving thecompensation

Officer class

Total executive
compensation(Millions of yen)

Total amount by typeof compensation(Millions of yen)Monthly
Bonusescompensation

Numberof subject
officers(People)Directors(excluding outside directors)

355

282

73

7

Audit & Supervisory Board members(excluding outside members)

76

76

ー

2

Outside officers

67

67

ー

6

Note: Bonuses are the provision of allowance in the given fiscal year.

Value Creation Strategy

All three compensation caps were approved at the annual
shareholders’ meeting on June 12, 2020.
Based on the methods mentioned above, the Board of
Directors votes to set compensation within the limits set

Foundation of Value Creation

Financial Reportby shareholder resolution, following a fair and transparent
review/reporting process by the majority-independent
Executive Compensation Committee chaired by an outside
director.

Communication with shareholders and investors
For constructive dialogue with shareholders and investors,
we have established a system for conducting such dialogue
in a coordinated manner, planning opportunities and sharing
necessary information.
This dialogue is carried out through financial results
briefings or small meetings for institutional investors with
explanations by the company’s president or relevant officer;
plant tours for institutional investors with explanations by
the officer in charge; direct visits by the officer and persons
in charge of IR and SR to institutional investors; and othermeans. Based on the opinions and desires of shareholders
and investors obtained, further opportunities for dialogue arebeing enhanced.
In compliance with fair disclosure rules, Toyoda Gosei
restricts dialogue with shareholders and investors andthoroughly controls information in the company during asilent period before earnings reports are released. If insider
information emerges in the company, it is tightly controlled
as part of thorough information management.
Main IR activities
Targeted persons

IR activities

Domestic institutional Individual discussions, financial
investors (including
results briefings, facility tours,
securities analysts)
telephone conferences●

Overseas institutional Individual discussions, participation
investorsin IR eventsI ssuance of the “Toyoda
Gosei Report”

Dissemination of financial
 riefings for individual investors
B
information and IR materials
Plant tours after annual shareholders’ on the website
meetingIssuance of “Report on BusinessResults”●●

Individual
shareholders andinvestors●●

Risk management
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 ineach function and make decisions on how to respond in the
Compliance and Risk Management Committee and general
meetings. A Compliance and Risk Management Committee
headed by the company president identifies key risks,determines measures to counter them, and checks on the
progress in executing these measures. In this way, we makethese measures more effective.
For each type of risk in safety, quality, and the environment,
the departments in charge have established regulations andkey points and conduct proper business management, such as
implementing measures as needed based on assessments ofoperational status.

Moreover, Risk Management and Response Guidelines
have been established. These guidelines show the behaviors
to adopt to prevent potential risks and to respond to problems
appropriately and quickly. At the beginning of 2020, an
emergency response task force led by the company president
was set up to deal with the novel coronavirus. Actions taken
to minimize the impact of the novel coronavirus included(1) preventing infections by having people work from homeand cancelling company internal events, (2) implementing
measures for the event that an infection occurred in an
employee, (3) maintaining our production network bymonitoring issues, including at our suppliers, and (4)introducing profit improvement measures.

Crisis Management Project in anticipation of largescale earthquake disasters

Disaster response

We have put into place a crisis management system 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 on the
project, we have conducted resilience training more than 120
times for directors and members of anti-disaster departments
since FY2013. These efforts are based on our belief that
improving the skills of response personnel is essential. We
have also established specific procedures for the recovery ofaffected buildings, facilities, and processes and for alternative
production in a production recovery system.

Disaster outbreak̶First response

Recovery

Permanent
Warning & Monitoring Team
Disaster occurs

Emergency
Task Force

Emergency
earthquake alertFirst Response Task Force
Advance Team
(investigative team)District Task Force

Life Support
Task Force

Production
Restoration Task ForceInstructions
Reports37

Governance〈G〉

Recovery training for design drawings andother data is also carried out so that productdevelopment can be continued even after
disasters. In addition, workshops to strengthen
crisis management not only in our own
companies but also at affiliates and suppliers
are conducted regularly. Assessments using
anti-earthquake measures 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.

Efforts to date
Classification

Measures arthquake resistance measures for buildings and facilities
EEstablishment of a disaster prevention center to serve as an operations basefor the entire company for anti-disaster department operations●
Equipping all locations with a multi-channel access radio system (which isused in Japan for various purposes, from daily work to emergency and disastersituations) 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 and operating computers,
data communications, and other devices)●●

Facility andequipment
measuresI ntroduction of site and building safety decisions
Maintenance of supply chain information●
Teleconference system for multiple locations using tablet computers●
Earthquake bulletin and employee safety information system training●Employee safety follow-up system incorporating arrival and departure times atcompany and business trip data●Preparation of a BCP●●

Systemmeasures

Strengthening information security measures and raising awarenessTo strengthen the control of confidential information, annual
checks of the compliance status of each division basedon company confidentiality management regulations are
conducted together with onsite audits. Self-inspections arealso done at Group companies in Japan and overseas businessbases. Confidentiality officers are assigned in all departments,
and confidentiality education activities are conducted basedon information system security operating standards and aconfidential information management manual. Security
control education is also conducted for new employees.

Enhanced measures
Classification

Preventionof leaks fromnegligence

Preventionof malicious
unauthorized
leaks

Tangiblemeasures
Intangible
measures
Tangiblemeasures
Intangible
measures

Educational activities(ethics)

Measures

●

●
●

●
●

Printing restrictions with ID card authentication on multifunction machines and dedicated drawing printers ata encryption of all PCs
D
Security measures when sending emails out of the Company (mandatory cc to superiors, encryption of attachedfiles)
I ncreased surveillance cameras
Installation of wire locks to prevent PC theft onfidentiality pledge
CStricter applications for taking items from premises●
Restricted file server access
●
●

●
●

 ew employee education
NCompany-wide security control voluntary inspections
using check sheets●Restrictions on writing onto external storage media

 ystem use records and access log records monitoringSStrengthened hacking prevention measures (Internet)●
Prevention of unauthorized connection of terminals
brought in from outside
●
●

●
●

 n-site checks of each department
OTraining in responding to targeted attack emails

Compliance
Basic philosophy
Toyoda Gosei’s management philosophy states, “We promotebusiness operations with integrity through the establishmentof a system founded on thorough compliance and corporate
ethics.” We strive for thorough compliance in all areas basedon this philosophy.
The Toyoda Gosei Group Charter for Business Ethics sets
forth shared values and behavioral standards for the entire

38

Toyoda Gosei Group worldwide, and Group companies inJapan and other countries formulate 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.

Value Creation Strategy

Foundation of Value Creation

Financial ReportCompliance system
Toyoda Gosei has established the Compliance and Risk
Management Committee with the Company’s president
serving as chairman and all company officers as members.
Together with compliance advocates in each division, thecommittee works for thorough compliance with a unified
approach between management and the workplace.
In Japan, regular compliance liaison conferences are heldwith Group companies. Group companies in other countries
have established compliance committees, appointed
compliance advocates, or set up other compliance systems
suited to the circumstances in their region and company.
Compliance activities are carried out in coordination withToyoda Gosei.

ComplianceCorporate activities
Support for the
Support for theManagement
Domestic compliance system Philosophy compliance system Overseas
affiliates
affiliates
Toyoda Gosei Group
Charter for Business Ethics

All company executives

Compliance and Risk
Management Committee
Legal affairs/
complianceworkshops

Toyoda Gosei Guidelines for
Business Ethics

Ensuring
compliance

Compliance advocatesfrom each division

Company-wide Compliance
Advocates’ Meeting
Internal and external

Compliance and harassment
consultation services offices

Specific efforts
Compliance consultation office
To identify and resolve compliance problems at an earlystage, Toyoda Gosei has established internal and external
compliance consultation services offices and an internalharassment consultation office.
Group companies in Japan have their own consultation

offices, in addition to which they have established a joint
external compliance consultation office together with Toyoda
Gosei. Group companies in other countries have establishedexternal or internal consultation offices.

Compliance activity checks and kaizen
Toyoda Gosei conducts compliance entrenchment
questionnaires of all employees each year to confirm
penetration of compliance transparency and whether there
are signs of violations. Kaizen activities are then conductedbased on the results.
For Group companies in Japan and other countries, avoluntary check sheet is used to check their basic policy
and systems for compliance, the status of compliancewith important laws including anti-trust laws and bribery
and corruption laws, and risks in key areas such as humanresources, finance, sales, procurement, safety, and quality.
Based on the results, kaizen activities are conducted.

Efforts to prevent violations of anti-trust laws
Toyoda Gosei has prepared guidelines for Japan and key
regions where Group companies are located (UnitedStates, EU, China, Thailand, India, Brazil, and others), and isundertaking efforts globally to prevent anti-competitive acts
at Toyoda Gosei Group companies.
Specific behavioral guidelines that Toyoda Gosei
expects employees to follow in various business activities,

especially sales activities, are embodied in the Codes ofConduct for Antitrust Law Compliance in the Company’s
internal regulations, and thorough compliance is expected of
employees.
Continuing education activities are also conducted
through special training in competition laws and regularcompliance training for each level within the Company.

Anti-bribery efforts
Toyoda Gosei has formulated Global Anti-Bribery Guidelines
as a common guide to conducting transparent and soundbusiness activities globally, and is doing its utmost to
prevent bribery and corruption at all Toyoda Gosei Group
companies. Education activities are continuously conducted
for employees through training for each level and risk.

Compliance training (international Group company)

39

Governance〈G〉

Management members(As of June 12, 2020)

Naoki Miyazaki

Toru Koyama

Tomonobu Yamada

Hiroshi Yasuda

1980 Joined Toyota Motor Company

1982 Joined Toyoda Gosei

1981 Joined Toyoda Gosei

1982 Joined Toyoda Gosei

2008 Managing Officer, Toyota
Motor Corp.

2005 General Manager of Development
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

Chairman2013 Senior Managing Officer,
Toyota Motor Corp.
2014 Adviser, Toyoda Gosei;
Executive Vice President,
Toyoda Gosei
2015 President, Toyoda Gosei
2020 Chairman, Toyoda Gosei(current)

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)2010 Director, Toyoda Gosei
2012 Corporate Officer, Toyoda Gosei
2014 Managing Officer, Toyoda Gosei;
Chief of Sales Headquarters,
Toyoda Gosei (current)
2016 Director, Managing Officer, Toyoda
Gosei; President, Toyoda Gosei(Shanghai) Co., Ltd. (current)
2017 Director, Senior Managing
Officer, Toyoda Gosei; Adviser
to General Industry Products
Division, Toyoda Gosei
2019 Director, Corporate Officer;
Chief of General Industry
Products Division, Toyoda Gosei
2020 Executive Vice President, Toyoda Gosei(current); Chief of Audit Division, Toyoda
Gosei; Adviser to General Industry
Products Business Headquarters (current)

Director, Corporate Officer

2010 President, Toyoda Gosei Czech, s.r.o.
2012 Corporate Officer, Toyoda Gosei
2016 Director, Managing Officer,
Toyoda Gosei; Chief of Production
Headquarters, Toyoda Gosei(current); Chief of Plastic Parts
Production Center, Toyoda Gosei;
President, Tianjin Toyoda Gosei
Co., Ltd.
2017 Adviser to Quality Assurance
Headquarters, Toyoda Gosei
2018 Director, Senior Managing
Officer, Toyoda Gosei
2019 Director, Corporate Officer,
Toyoda Gosei (current); Chiefof Safety & Health Promotion
Division, Environment Division,
Toyoda Gosei (current)

Masaki Oka

Takashi Ishikawa

Sojiro Tsuchiya
Outside Director

Outside Director

1985 Joined Toyota Motor Corp.

1985 Joined Toyota Motor Corp.

1975 Joined Nippondenso Co., Ltd.

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

2008 General Manager of Upper
Body Engineering Division 2,
Toyota Motor Corp.

2002 Director, Denso Corp.

1980 Joined Japan Development
Bank

Director, Corporate Officer

2014 General Manager of Related Business
Department, Toyota Motor Corp.
2015 Adviser, Toyoda Gosei; Corporate Officer,
Toyoda Gosei; General Manager of Finance& Accounting Division, Toyoda Gosei; incharge of IT Planning Division, Toyoda Gosei
2016 Deputy Chief of Finance & Accounting
Headquarters, Toyoda Gosei; in chargeof Audit Division, Toyoda Gosei
2017 Chief of Finance & Accounting
Headquarters, Toyoda Gosei (current)
2018 Director, Managing Officer,
Toyoda Gosei; Chief of IT
Headquarters, Toyoda Gosei
2019 Director, Corporate Officer,
Toyoda Gosei (current); Chiefof Audit Division, Toyoda Gosei

40

Executive Vice President

2020 Chief of Corporate Planning
Division, Toyoda Gosei (current)

Director, Corporate Officer

2013 Adviser, Toyoda Gosei;
Corporate Officer, Toyoda Gosei
2016 Managing Officer, Toyoda
Gosei
2019 Corporate Officer, Toyoda Gosei
2020 Director, Corporate Officer,
Toyoda Gosei (current); Chiefof Research and Development
Headquarters (current)

2004 Managing Officer, 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
(retired June 2016)

Kimio Yamaka

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)Value Creation Strategy

Foundation of Value Creation

Financial Report

Corporate Officers

Ryo Onishi
Yoshiyuki Fujita
Junichiro Kako
Hiroki Fukui

Mayumi Matsumoto

Katsumi Tanabe

Kenji Oiso

Audit & Supervisory Board Member

Todd Huber

1987 Contract newscaster, TV Asahi
Corporation

1981 Joined Toyota Motor Sales Co.,
Ltd.

1980 Joined Sumitomo Metal
Industries, Ltd.

Hiroyasu Hirayama

1993 Contract newscaster, Japan
Broadcasting Corporation

2006 General Manager, European
Business Dept., Toyota Motor
Corp.

2002 Deputy Manager, Finance & Accounting
Div., Sumitomo Metal Ind., Ltd.

Hiromasa Zaitsu

2004 Joined Mitsubishi Sumitomo
Silicon, Co., Ltd.

Yutaka Ogasawara

Outside Director

2003 Freelance announcer, Horipro Inc.
2008 Collaborative Researcher, ResearchCenter for Advanced Science andTechnology, The University of Tokyo
2009 Project Researcher, same as above
2011 Director, principal researcher,International Environment andEconomy Institute (current)

Audit & Supervisory Board Member

2012 Project Senior Manager, TME
Japan, Toyota Motor Corp.
2013 Adviser, Toyoda Gosei;
Corporate Officer, Toyoda Gosei
2017 Full-Time Audit & Supervisory
Board Member, Toyoda Gosei(current)

2014 Visiting Associate Professor, Special
Division of Environmental and Energy
Science, Komaba Organization for
Educational Excellence (KOMEX),The University of Tokyo (current)

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.
2017 Project General Manager, Finance &Accounting Division, Toyoda Gosei
2019 Managing Director, Toyoda
Gosei Corporate Pension Fund2017 Director, Japan Council for
Renewable Energy (current)

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

2019 Director, Toyoda Gosei (current)

Chika Kako

Masami Hadama

Hideomi Miyake

1989 Joined Toyota Motor Corp.

1993 Public Prosecutor

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

2006 Public Prosecutor, Special
Investigation Dept., Tokyo
District Public Prosecutors
Office1968 Joined Toyoda Iron Works Co.,Ltd.

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)

Outside Audit & Supervisory Board Member

2007 Registered lawyer, partner at
TMI Associates (current)
2008 Professor, Sophia University
Graduate School of Law
2012 Representative, TMI Partners
2014 Audit & Supervisory Board
Member, Toyoda Gosei(current)

Outside Audit & Supervisory Board Member

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

41

Environment〈E〉
We contribute to preservation of the earth’s
environment through all of our businessactivities to leave a greener, richer world
for the future and our children.
We obtain many resources from the earth—water, food and clothing as well as raw
materials such as rubber, resin, and metal. At the same time, we inflict damage on
the earth through the emission of greenhouse gases and depletion of resources asa result of overuse in our daily lives and business activities.
Based on the TG 2050 Environmental Challenge, our long-term environmental
vision, we formulate action plans every five years to promote environmental
protection. These plans have been highly regarded by external organizations,
including in corporate rankings by newspapers. To conduct environmental
management that meets the expectations of society, we disclose related
information in agreement with the recent recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD). Going forward, we will continue
our efforts to improve corporate culture and human resource development while
striving to further strengthen sustainable environmental protection activities.

Hiroshi Yasuda

Director, Corporate Officer,
Chief of Environment Division, Chief of Production Headquarters, Chief of Safety & Health Promotion Division

Basic philosophy
The Toyoda Gosei Group formulated its 1st Environmental
Action Plan in 1993 based on its environmental policy, andsince that time has been actively confronting environmental
issues. In February 2016, we announced our TG 2050
Environmental Challenge, which lays out our long-termgoals, and formulated our 6th Environmental Action Plan,
which establishes our action items and goals for the five years
until 2020. These documents will guide our environmental

protection activities moving forward.
To carry out environmental management that meets the
expectations of society, we have established environmental
operations in the Americas, China, and Asia, and have put
in place a global system for area management in these fourglobal regions including Japan. The entire Toyoda Gosei
Group will move ahead steadily with a view to 2030, themidpoint of our Environmental Challenge.

Environmental policy
1. Environmentally-friendly corporate activities

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
departments, domestic and international affiliates, andsuppliers, conducts all business activities with concern
for the environment in cooperation and coordination
with customers, government authorities, and others.

2. Good corporate citizenshipAs a good corporate citizen, we participate in, support,
and cooperate with environmental activities bymany groups while also working on environmental
activities in the community and broader society. We
also provide education for all employees to support
them in becoming involved in environmental
activities as members of the community and society,and support social contributions and volunteerism.

TG 2050 Environmental Challenge

Products andtechnology—A Greener, Richer World for Our Children
The Toyoda Gosei Group specializes in the field of highpolymers—rubber and plastics. Our symbol is the benzene
ring, a hexagonal hydrocarbon structure that is the starting
point for polymers. Borrowing from the six sides of thebenzene ring, the TG 2050 Environmental Challenge sets six
challenges to strengthen our environmental efforts with along-term view to the year 2050.

Support for TCFD recommendations
In May 2019, the Toyoda Gosei Group endorsed therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) and is actively disclosing
relevant information together with measures to achievea decarbonized society, as set forth in the TG 2050
Environmental Challenge (details are posted on our website).
In April 2020, we announced our CO2 emission targets for2030 and are accelerating our efforts.

42

3. While spreading
information on these
activities, we listen
to the opinions ofpeople at all levels ofsociety and work to
improve our activities
wherever we can.

Recyclingsociety

Contribute to an
environmentally-friendly
society through highpolymer and LED
technology

Decarbonizedsociety

Minimize waste andcreate resource
recyclingsystems

Minimize plant
ＣＯ２ and utilize
renewableenergyRecyclingsociety

Environmental
preservation andliving with nature

Minimization of water
risks and improvementof waste water
quality

Environmental
management
Foster an environmentally
responsible corporate
culture andemployees

Strengthen and expand
environmental protection
and preservation
activities

Value Creation Strategy

Foundation of Value Creation

Financial Report

Environmental organization
environment. In this way, environmental preservation andmanagement activities are conducted from an expert perspective.
Liaison committees have also been established to share
information with related companies in Japan and abroad.
Since 2019 we have been strengthening coordination between
production technology and plant floor manufacturing (newly
established Joint Production and Environment Subcommittee)
to promote energy-saving activities.

Our medium- and long-term policy and key action items are
discussed and decided in an Environmental Committee chairedby the company president. The Environmental Committee
consists of four subcommittees in the areas of products,
production, and quality. The subcommittees are further broken
down into working groups that promote and manage areas
such as reductions in energy use, waste products, and volatileorganic compound (VOC) emissions, and preservation of theEnvironmental organizational structure
Environmental Committee*1(2 times/year)(Chairperson: Company president)

Promotes and manages development of environmentallyfriendly products and technologies

Discussion of matters necessary
for medium- and long-termbusiness decisions

Production*1 The position of the Environmental
Committee within the organization
can be seen in our Corporate
Governance Organization Chart(see p. 29)

Products and Technology Environment
Subcommittee (as needed)

Products and Technology

Joint Production and Environment
Subcommittee (2 times/year)
Discussion of specific measuresand issues to achieve short- andmedium-term goals

Production Technology Environment
Subcommittee (3 times/year)

Liaison Committee for Environmental Communication
with Domestic Affiliates (3 times/year)

Promotes and manages development of environmentallyfriendly processes (low waste emissions)

Production Environment Subcommittee

Manages, guides, and supports coordinatedenvironmental efforts by affiliates and suppliers in Japan

Promotes and manages technical development measures
for reduced emissions from production processes

Liaison Committee for Environmental Communication
with Overseas Affiliates (as needed)(3 times/year)

Manages, guides, and supports coordinatedenvironmental efforts by affiliates in other countries

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

Quality Assurance

Develops systems for compliance with SOC regulations
and for quality control

Deployment from the Environmental Committee and subcommittees to plants and other operations is done with the establishment of expert committees in accordance with the ISO 14001 system at each plant.

Risk and opportunity associated with climate change and resource depletion
The risks and opportunities associated withclimate change and resource depletion arerecognized as an important management
issue. We are working to strengthen our
responses to the overall financial and social
risks from the effects on economic andproduction activities of more drastic abnormal
weather, changing precipitation patterns,
droughts and floods, from a global perspective
based on laws, regulations and trends.

ClimatechangeResource
depletion
Management(regulatorycompliance)

Risk

Opportunity

Cost increases from carbon tax andsoaring energy prices

Development of lighter weight, next-generation automotive
parts, cost reductions from efficient energy use

Effects of water shortages and floods
on production activities

Cost reductions from re-use anddecreased use of water

Cost increases from difficulty in procuring
materials, soaring material prices

Cost reductions from recycling
technology, use of fewer materials

Loss of trust in the company due to environmental
problems, including legal violations, andinsufficient efforts to protect the environment

Raise brand strength by enhancing
environmental activities

Resource utilization and environmental emissions in business activities
To lessen the amount of energy, material and other resource
inputs, and maximum product output, we are utilizing our skills
in product development, process development and workplacekaizen in efforts to improve through business activities.
The input resources we use include environmentallyfriendly materials and clean energy.

INPUT

OUTPUT

Total material input 45,974t
Plastic
28,154t

Rubber (rubber sheet) 17,820t
Excluding purchased parts, metal and liquid

Total energy input 2,571,000GJ*2
Purchased electricity 1,240,000GJ
Renewable energy
2.5GJCity gas
1,190,000GJ
LPG
2,000GJ

Heavy oil
Kerosene
LNG
Gasoline

Water resource input 1,260,000㎥
Industrial water 696,000㎥

Clean water
214,000㎥
Underground water 350,000㎥

12,000GJ
0GJ
126,000GJ
1,000GJPRTR*3 substances usage 593t
*2 G
 igajoule (1,000,000,000 joules)*3 P
 ollutant Release and Transfer Register*4 S ulfur Oxide*5 N itrogen Oxide*6 Volatile Organic Compounds*7 Range of target: 4 plants of Haruhi,
Inazawa, Heiwacho and Seto,
Kitajima Technical Center, Miwa
Technical Center and Sun-Court
Inoguchi

Products

Business
activities

Emitted into the atmosphere
106,000t-CO2
CO2
6 gases
200t-CO2
SOx*4
0t

108t
NOx*5
Dust
0t
Volume of substances subject to PRTR 91t
270t
VOC*6 emissions

Waste discharge
Landfill wasteIncinerated wasteIndustrial wasteGeneral waste
7t
For-profit disposal by sale 5,893t
Volume of substances subject to PRTR 59t

0t
1t
7,203tWastewater
Total wastewater 930,000㎥
Volume of substances subject to PRTR 0.1t

Nitrogen emissions*7
Phosphorus emissions*7
COD emissions*7

8.3t
0.5t
4.1t

43

Environment〈E〉

Environmental impact in the value chain
From the perspective of preserving the earth, we have
surveyed and disclosed not only GHG emissions (Scope
1*1, Scope 2*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*3). To
increase precision for a more accurate picture, we reviewed
the calculation method and data collection for Scope 3.
*1 Greenhouse gas emissions emitted directly by the company itself (natural gas
and other fossil fuels, etc.)*2 Indirectly emitted greenhouse gases (electricity, etc.)*3 Greenhouse gases emitted in the supply chain that are indirectly emitted by
the company (manufacturing, transport, business travel, commuting, etc.)

CO2 emissions by scope level
FY2019 (Global) 1,860,000t -CO2
●Scope 1

123,000t-CO2●Scope 2 390,000t-CO2●Scope 3

1,347,000t-CO2(Other indirect emissions)・Raw materials/capital goods 1,254,000t-CO2
・Employee commutes & business trips 26,000t-CO2
・Distribution 37,000t-CO2
・Other 30,000t-CO2

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

Basic philosophy
In addition to achieving the goal set under the Paris Agreementof keeping the rise in the global average temperature to below
2°C compared with pre-Industrial Revolution levels, we believethat we must reduce greenhouse gas emissions to virtuallyzero by the end of this century. With the aim of minimizing
CO2 emissions as presented in the TG 2050 Environmental
Challenge, we are utilizing new production techniques andproduct development skills with an eye toward next-generation

vehicles in addition to the manufacturing skills we havecultivated over time. Plans for execution are included in our 6th
Environmental Action Plan with activity targets for FY2020. We
have also set the goal of cutting CO2 emissions 43% by FY2030,
the midpoint for the TG 2050 Environmental Challenge, andimplementing stepwise, specific CO2 reductions. To reduce
CO2 emissions over the entire product lifecycle, we are making
efforts to increase efficiency in distribution and other areas.

Reducing CO2 emissions
The Toyoda Gosei Group is reducing CO2 emissions (per unit sales) in the product stage, production stage, and over the entire
lifecycle to achieve the targets set for FY2020.

Product development stage: Environmentally-friendly product development
In the product stage, we are making headway in providing
parts for environmentally-friendly, next-generation vehicles
and developing products with lighter weight for greater fuelefficiency and lower energy consumption across the areasof materials technology, product design, and production

technology. Examples include aggressive efforts to switch
materials (e.g., from metal or rubber to plastic) in instrument
panel peripherals and other interior products and in functionalparts such as hoses, reduce the number of components, integrate
functions, and use thinner material while ensuring strength.

Production stage: Reductions with development of new processes, daily kaizen
In the production stage, we are developing new production
techniques that minimize energy usage and introducing
energy-saving equipment through the Production Engineering
Technology Environment Subcommittee started in FY2016.
We also conduct regular kaizen to thoroughly eliminate

waste. Today, the TG ESCO (expert team that conducts
reduction activities with genchi-genbutsu ) formed in2016 is conducting kaizen activities that include the latest
technologies and collecting and applying information on bestpractices from other companies.

Recycling: Reductions in materials and parts procurement, more efficient distribution
Toyoda Gosei has prepared and distributed green
procurement guidelines for materials and parts procurementwith low environmental impact. Together with regularsupplier surveys to ensure compliance, we also provide
support when improvements are needed.

44

We are also making active efforts to reduce CO2 emissions
over the lifecycle with more efficient distribution, including
reviews of truck allocation and transport modes with theaim of improving truck payloads and shortening distributionlines.

Value Creation Strategy

Foundation of Value Creation

Financial Report

Renewable energy
We are moving toward a target of using renewable energy
equivalent to 2% of our total global electricity consumption
by FY2020. This includes installation of solar and wind clean

energy generation equipment and the purchase of green
power. Our next challenge is to raise clean energy levels to atleast 20% globally by FY2030.

CO2 emissions, CO2 emissions per sales unit (index)*430

50

decrease vs.

FY2012

2012

2016

2017

2018

2019

2020

0

(FY)

Achieved

FY2012

100

80

15.4

Achieved

10.6

10（12.8）
Target17％

50

decrease vs.

0

FY20122012(Base year)

2016

2017

2018

2019

2020

Target
15％

0

2012

2016

2017

2018

14.1

decrease vs.

2019

2020

50

FY2012(FY)

0Toyoda Gosei Co., Ltd.

(Range: delivery distribution, intra-process distribution, procurement distribution)
Achieved

decrease vs.

20

10

CO2 emissions in distribution, CO2 emissions per sales unit (index)*4

Target17％

Toyoda Gosei Co., Ltd.

67
17.3

(Base year)

(FY)

0

Emissions (10,000t-CO2)

0100

Achieved

Emissions per sales unit (index)

Target
12％

20

90

2.0

1.33

Target
8％

1.07

1.0

50

decrease vs.

FY20120

2012(Base year)*4 E
 missions per sales unit (index) is a figure obtained taking FY2012 as 100[CO2 conversion factor]
The CO2 conversion factors used for Japan*5 are the 1990 Keidanren factors.
The CO2 conversion factors used for other countries are from the GHG
Protocol (2001).

100

2016

2017

2018

2019

2020

(FY)

0

Emissions per sales unit (index)

51.6

Emissions (10,000t-CO2)

49.4

Emissions per sales unit (index)

100

79

(Base year)

Emissions (10,000t-CO2)

Japan, consolidated

Achieved

60

Emissions per sales unit (index)

Emissions (10,000t-CO2)

Global, consolidated*5 E
 lectricity: 0.3707t-CO2/MWh, class A fuel oil: 2.69577t-CO2/kL,
LPG: 3.00397t-CO2/t, Town gas: 2.15701t-CO2/1,000 Nm³,
Kerosene: 2.53155 t-CO2/ kL, LNG: 2.68682t-CO2/t,
Gasoline: 2.36063t-CO2/kL (excluding external factors of gas companies’ town gas
heat conversion)

Solar power generation graph (does not include stand-alone systems such as outside lights with solar panels)

Miyoshi Distribution
Center

Heiwacho Plant
Nishimizoguchi Plant
Morimachi Plant(FY)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2,000
1,000
0

6,000

15,000
Tianjin TG

4,000

10,000

7,942

Zhangjiagang TG

2,000
0

Total generation capacity (kW)Bisai Plant

TG East Japan Co., Ltd. (Miyagi)

Heiwacho Plant, Morimachi Plant

2,102

3,000

Generation capacity (kW)

2007

2,395

Total generation capacity (kW)0Overseas affiliates
Kitajima Technical Center

1,000

Haruhi Plant Safety Office

2,000

Miyoshi Distribution Center

3,000
Sun Court Inoguchi

Generation capacity (kW)Japan, consolidated

Foshan TGRT
TGMIN
TGP

5,000

695kW

2007

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (FY)0

Reductions in 6 greenhouse gases*6*6 H
 ydrofluorocarbon (HFC), perfluorocarbon (PFC), sulfur hexafluoride (SF6),
methane (CH4), nitrous oxide (N2O), nitrogen trifluoride (NF3)

Trend in greenhouse gas (6 gases) emissions (CO2 equivalents)
Toyoda Gosei Co., Ltd.
Emissions (10,000t-CO2)

Of the six greenhouse gases, Toyoda Gosei Co., Ltd. uses three(HFC, PFC, SF6) and is conducting activities to reduce all ofthem. By FY2015 we had completed a switch to alternative
gases with a low environmental impact for the shield gas usedin the production of steering wheel cores and other gases.
This has resulted in a 74% decrease in greenhouse gases since
FY2012. We will continue these reduction activities in the
future.

2.0

Target62％

1.3

decrease vs.

1.0

FY2012

Achieved

0

0.02
2012

(Base year)

2016

2017

2018

2019

（0.5）
2020

(FY)

45

Environment〈E〉

Building recycling societies
Toyoda Gosei uses resources effectively and contributes to a recycling society by reducing waste volumes*1 and water usage anddesigning products that are easily recyclable.
*1 We are currently attempting to reduce waste volumes to meet our FY2020 target as we move toward minimization of industrial waste as set forth in the TG 2050 Environmental Challenge.

Basic philosophy
To move closer to the recycling society envisioned in the
TG 2050 Environmental Challenge, Toyoda Gosei aims
to minimize industrial waste and water usage and we aremaking every effort to use resources effectively, reducing
materials usage and waste volumes through thorough sorting
and the design of easily recyclable products.

Frequent water shortages and floods have become amajor problem in all parts of the world. We are attempting
to identify these risks in every country and region where
we have operations while also striving to give back to thecommunity by reducing water usage, recycling water, andreleasing cleaner wastewater.

Waste reduction
Production To reduce waste in production processes andachieve our 2020 targets, we are combating waste at its source
and recycling. We have also started a waste reduction projectwith coordination among plants and production technology,
materials technology, and product design departments tostrengthen efforts to combat waste at its source. At eachplant, we are reducing waste through genchi-genbutsu (goand see), identifying items for reduction with the help of
external experts, and implementing rubber, plastic, and liquid
reductions.
Study sessions are also held to promote waste reduction
at both domestic and international Group companies.
Distribution The packing material used in product transport
is being reduced to prevent products from being dirtied byincreasing the number of times reusable containers are usedin the field and maintaining cleanliness. We are also reducing
packing material by putting lids on reusable containers andother changes, considering the balance between maintaining
product quality and reducing the use of packing materials.
Amounts of waste generated and disposed of(results for FY2019: Toyoda Gosei)
Amount of internal reuse 1,691t

Amount of compensatedrecycling(payment received)
5,893tAmountof waste
11,002t〈100%〉
Amount oflandfill waste
0t〈0%〉

Amount ofincinerated waste
1t〈0.1%〉

Amount ofpaid recycling(payment made)7,203t〈99.9%〉
Figures in parentheses are the proportionof the discarded materials volume

Waste volume, waste volume per sales unit (index)*2
Japan, consolidated

2012(Base year)

2016

2017

2018

2019

2020 (FY)

Target6％

Overseas affiliates
60,000decrease vs.

0

Achieved

36,691
20,000150

50

20,4000

2013(Base year)

2016

2017

2018

2019

2020 (FY)

7,210

decrease vs.

50

FY2012

0

2012

2016

2017

2018

2019

0

1,000

2020 (FY)

0

100

1,112

740

Target8％500

50decrease vs.

FY20120

2012(Base year)

2016

2017

2018

2019

*2 The amount of waste per sales unit (index) is a figure obtained taking the base year as 100*3 The amount of distribution packing material used per sales unit (index) is a figure obtained taking the base year as 100*4 The amount of packing material used increased with increased shipments of service parts due to natural disasters and larger part sizes.

46

Target12％

Amount of distribution packing material used, Amount used
per sales unit (Index)*3
4
122 *Toyoda Gosei Co., Ltd.

100

42

10,000(Base year)

FY201340,00065

12,844

Waste volume per sales unit (index)

11,117 FY2012

100

Achieved

Amount used per sales unit (index)

decrease vs.

50

Amount of waste (t)10,000Target10％

20,000

Amount used (t)64Waste volume per sales unit (index)

Amount of waste (t)14,2230

Amount of waste (t)100Achieved

Waste volume per sales unit (index)

Toyoda Gosei Co., Ltd.

20,0002020 (FY)0Value Creation Strategy

Foundation of Value Creation

Financial Report

Reducing water risks
To achieve the 2020 targets, we are working on kaizen
through TG ESCO (expert team that conducts reduction
activities with genchi-genbutsu ) activities. Today, water use
has been reduced 24% compared with FY2012 levels bydecreasing loss and leakage in water use amounts.
Wastewater treatment facilities are also being

systematically upgraded to improve our processing ability
so that wastewater is cleaner and the water recycling rate
is higher. We will continue our efforts for improvement byidentifying risks in each country and region where we dobusiness based on the increasing importance of water.

Water use, water use per sales unit (index)*5
Japan, consolidated

200

188

2012

(Base year)

2016

2017

2018

2019

Target8％50

decrease vs.

FY2012

2020

0

(FY)

69

100

0

100

Achieved

184

2012

(Base year)

2016

2017

2018

Target8％

126

decrease vs.

2019

2020

50

FY2012(FY)

0Water use per sales unit (index)

59

200
Water use (10,000 t)

Water use (10,000 t)

260

0

100

Achieved

Water use per sales unit (index)

Toyoda Gosei Co., Ltd.

400

*5 Water use per sales unit (index) is a figure obtained taking the base year as 100

Water use (10,000 t)

400

200

58

202

167
0

100

Achieved

2012(Base year)

2016

2017

2018

2019

Target8％50

decrease vs.

FY2012

2020

(FY)

0

Water use per sales unit (index)

Overseas affiliates

Environmental management
While working for environmental preservation, we are continuing employee training and education programs so that every
employee can act with awareness of the environment.

Basic philosophy
In addition to strengthening the selection and managementof chemical substances to create products and processes
that are kind to people and the earth, we are improving
environmental management in things such as compliancewith laws, regulations and customer standards in every

country where we do business, based on ISO 14001.
We are also making aggressive efforts for education toraise the environmental awareness of employees and train
personnel for sustainable environmental activities.

Control of chemical substances contained in products
To strengthen the management of chemical substances inour products, we control legally regulated substances in eachcountry, substances that are self-regulated by automakers,
and substances covered by our own company regulations. We
watch the trends in European REACH*6 regulations and the
EU RoHS Directive*7 and have a system in place to respondrapidly when these regulations are revised. To respond torequests from automakers in each country for information
on chemical substances in products, we have devisedmechanisms and conducted systems for global collective
management of chemical substances that we are currently
using in Japan, China, Thailand and Vietnam. We will besteadily expanding this system to places where it is not yet inuse.

*6 Registration, Evaluation, Authorization and Restriction of Chemicals*7 Restrictions on the use of specific hazardous substances contained in electrical and electronic equipment

47

Environment〈E〉

ISO 14001 environmental audit

ISO14001-certified production sites

Toyoda Gosei and its domestic and international affiliates
acquire ISO 14001 environmental management system
certification. Internal environmental audits are carriedout by audit teams composed of members from businessareas outside those being audited in order to raise theindependence and objectivity of the audits. Toyoda Gosei
Co., Ltd. commissions external reviews by the Japan Quality
Assurance Organization ( JQA) to assess whether ourenvironmental management systems are run properly inaccordance with ISO14001.

Toyoda Gosei Co., Ltd.

7 plants (FY2019)

Affiliates in Japan

10 companies

Overseas Affiliates

Americas: 12 companies,
Asia: 7 companies,
China: 6 companies,
Europe/Africa: 3 companies

Activities to eliminate compliance and environmental violations and complaints
Regular checks are conducted by expert departments andmaintenance and management are carried out to ensure legal
compliance and no environmental problems or complaints.
Preventive activities such as environmental 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 andinternational affiliates, and take preventive measures.
We are ensuring proper disposal of equipment containing
polychlorinated biphenyl (PCB). So far, we have completed
disposal of waste from 848 units. We are continuing these
efforts to dispose of untreated low-level PCB waste at an earlydate.

Environmental education
Toyoda Gosei educates employees on environmental
problems including the destruction of nature andenvironmental pollution, the impacts on the environmentof production activities, and compliance with environmental

regulations. 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
Level-specific training

ISO education
Affiliate Companies

Toyoda Gosei Co., Ltd.

Japan

Affiliate Companies

Toyoda Gosei Co., Ltd.

Overseas

Japan

Overseas

Education for environmental staff

Education for new managers

Education to improve internal auditors’ skills

Education for those posted overseas

Education to register internal auditors

Education for environmental key persons

Education for supervising managers

Acquisition of environmental education qualifications

Education for key environmental facility workers

Education for new employees

Education for general workers

Activities to raise environmental awarenessWe are attempting to raise the environmental awarenessof employees through Environment Month events, regularenvironmental lectures, and other activities so that all
employees have an awareness of the environment in theiractivities for ongoing environmental protection.

Environmental exhibits at five plants
in Japan48

Environment Month: Seeking Mottainai ideas
Don’t you have more mottainai ?

We also conduct a questionnaire survey of employees
each year to assess their environmental awareness and plan
educational activities based on the results.

Eco tours(woodland maintenance/Kimori no sato )Environmental booth at company events(TG Festival)

Value Creation Strategy

Foundation of Value Creation

Financial Report

Other key issues
With awareness of environmental issues, every employee makes efforts to preserve the environment while recognizing theimportance of protecting nature and biodiversity and contributing to the creation of environmentally-friendly societies.

Reduced use of substances of concern

Volumes and flow of emitted PRTR substances

In production processes, we are switching to water-based
paint and release agents, making painting lines morecompact, improving coating efficiency, and making otherefforts to reduce Pollutant Release and Transfer Register(PRTR) substances and volatile organic compounds (VOCs).
Through on-site visits, we also share information on
cases in which VOCs were successfully decreased to promote
reduction activities.

(Unit: t)

Atmospheric emissions
91

Recycled
19

Chemical
substances
handled593

Products
333

Released Released
into
into
waterways sewers
0.1
0Released
into soil
0

Amounttransferred
as waste
59

Disposal(amount
treated)91

VOC emissions, emissions per sales unit (index)*

68
Target
6％

250

0

376

2012

(Base year)

2016

2017

2018

50

decrease vs.

FY2012

2019

2020

(FY)

0

500
Emissions (t)Emissions (t)

454

100

Achieved

427

Target
6％

250

270
0

100

73

2012

(Base year)

2016

2017

2018

2019

50

decrease vs.

FY2012

2020

(FY)

0

Emissions per sales unit (index)

Toyoda Gosei Co., Ltd.
Achieved

500

Emissions per sales unit (index)

Japan, consolidated*Emissions per sales unit (index) is a figure obtained taking FY2012 as 100

Biodiversity
The Toyoda Gosei Group is working actively to protect
nature and create environmentally-friendly societies
through our plant afforestation project, biotope creation andenvironmental education.

We will further enhance these activities in coordination
with the Toyota Group, government agencies, NPOs andothers.

Kimori no sato woodland maintenanceMid-range plan for 2020
We have drafted a mid-range plan for biodiversity activities
and are carrying out these activities with the slogan “Working
to save our water, the source of life on earth.”
Working to save our water, the source of life on earth
Efforts to protect the water used at our plants from its source (mountains) to its destination (sea)Breeding endangered creaturesProtecting rare species in biotopes From FY2017
Plant afforestation
Biotope creation●Creation of biotopes inregulating ponds Heiwacho Plant(Completed in November 2018)

In FY2019 we cleared undergrowth and thinned trees in a forest
in Minokamo, Gifu
Prefecture, locatedon the upper reachesof the Kiso River topromote healthy
woodlands.

●●

Abundant water with abundant forests“Toyoda Gosei Kimori no sato ”
for woodland maintenance
From FY2019●

Biotope creation

Clearing undergrowth (scheduled for June, October)Protecting local aquatic life

Eradicating non-native species From FY2018
Eradication of lance-leaved coreopsis (June)
Environmental education through nature observation●Eco tour (June)●

Fostering organisms inclean and beautiful seas

Environmental
preservation in tidal flats
From FY2018

Preservation of Fujimae
Tidal Flats (May, October)●

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 wereconfirmed, and livingorganisms have begun
to gradually become
established.

49

Social〈S〉
Developing personnel who can thrive in achanging environment, and contributing to society
through manufacturing.
As a good corporate citizen, the Toyoda Gosei Group aims to contribute todevelopment of the economy and society through business activities rooted
in each country and community and social contribution activities. To build
a foundation for those endeavors, we are developing professionals who canact globally and promoting diversity and workstyle reforms. We respect theindividuality of each person while increasing our collective strength throughteamwork to achieve a vibrant corporate culture with meaningful work. We willcontinue to conduct research and development in anticipation of future changes,
raise the level of our manufacturing technology, strengthen our supply chain andmake constant kaizen efforts to satisfy our customers.

Hiromasa Zaitsu

Corporate Officer,
Chief of General Administration and Human Resources Headquarters, IT Headquarters

We are striving to create workplaces that are pleasant and conducive to producing good results,
with the following key performance indicators.
Classification

1

2

Creating
pleasant
workplaceenvironments

Promotingdiversity

Item

Target

FY2019 results

Employee turnover rate

Less than 3.0%

1.2%

Average overtime hours

Less than 20 h/month

16.8 h/month

95% or higher

97%

Number of people promoted from non-regular
to regular employees

30/year

112

Harassment prevention training for new managers
implementation rate

100%

100%

Rate of interviews on how to work with young
employees

100% within 2 years

100% (for FY2019)

Prohibition of smoking on company premises

Institution of on-sitesmoking prohibition

Instituted in January 2020

Percentage of women among new employees(staff positions)

20%

16%

No. of female managers

40 (2025)

19

Childcare leave taking rate

Men: 30%
Women: 100%

Men: 5%
Women: 100%

30

30

2.20%

2.38%

Number of young employees on loan outsidecompany

40

49(of whom 25 were sent overseas)

Successful execution of young employee 3-year
independence plans

100%

100%

Number of people who have taken practical or
professional training

2,500

2,592

Number of people who have taken global officer+ management training

250

269

Annual paid leave taking rate

No. of foreign national employees
Employment rate of people with disabilities

350

Personnel
development

Value Creation Strategy

Foundation of Value Creation

Financial Report

Workstyle and workplace culture reforms
From FY2017 we began efforts to make work more efficient withthe use of IT and reviews of meeting structures with the aim of
every employee thoroughly executing his or her essential tasks.
Overall activities entailing a range of efforts to change the way
we work are conducted for workstyle reforms.
We are also making various efforts to deal withenvironmental changes with a sense of speed
and raise the quality of work. In conjunction
with this, we are providing opportunities forcommunication in the workplace, such as
Activity promotion
character Kaikakuma
informal gatherings with officers and superiors,(selected fromwhile also eliminating waste and adopting a employee submissions)working style with a varied pace.
The keys ofworkstyle reforms

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 finished3. I will say “I appreciate your efforts”
for positive information from teammembers, and “Thank you” for negative
information
4. I will back team members who take onchallenges, and assume responsibility
5. I will try to make myself better
understood
We aim to create an environment in which employees can discuss anything freely
with each other, with officers themselves leading these changes (this year is 5th year)

Changing ourway of thinking

Correction of long
working hours andlabor compliance

Increased work
efficiency

Workplace culture reforms
Creation of a workplaceculture where people are free
to exchange all opinions

Two-way
communication

Active bottom-up
proposals

Creation of systems for flexible work styles

Examples of workstyle and workplace culture reforms
Perspective

Item

Concentration Establishment ofon essential a concentration
time
work

Increased
work
efficiency

Review ofmeeting
structure

Efforts

11:00 to 12:00 each day is set as “concentration time”(as a rule, NO meetings, NO telephoning, NO
instruction. Workers are notified with music played at
11:00 a.m.)●

Abolishment of preliminary meetings, minimizationof the number of participants, time, and frequency
Thorough reinforcement in observing company rules
and etiquette●●

Reduction of travel time, increased work speed(introduction of teleconference, electronic approvalsystems, etc.)
Task automation with RPA* electronic decision-making●Work kaizen
using IT tools●Workplaceculturereforms

Workstylewith varied
paceManagement
declarations
Workplacespecific problem
resolution
Encouraging
people to takeannual vacation

Workplace colleagues cheering for handball teamWork from home has been introduced as one aspect ofworkstyle reforms. By making it possible to work from home,
we provide an environment where people can balance workand life, display their abilities, and do their jobs efficiently.
●

Interviews with young employees on working styles

Consultants identify things that are troubling young employees
using an interview format, leading to improvements in theworkplace environment.
Classification

Staff positions

Targeted persons

2nd, 4th, 6th year employees

Skilled workers 2nd year employees, 1st–3rd year female employees

General managers and deputy general managers use
their own words to talk to subordinates about thekind of workplace they want to create●Labor and management exchange opinions andmake proposals to create better workplaces●

Encourage general workplace employees to take fullannual leave and 3-day weekends
Set annual vacation targets for management
positions and monitor whether this vacation is taken●●* Robotic process automation

Company uniform committee (review of uniform to mark 70th anniversary)Days of thinking about engineer workstyles (event for engineering staff)

Toyoda Gosei Group Ekiden race (suppliers/affiliates also participate)51

Social〈S〉

Respect for human rights
Respect for individual human rights and privacy both in and out of work are set in employee behavioral guidelines in the
Toyoda Gosei Guidelines for Business Ethics. We are striving to create healthy and pleasant workplaces where the character andindividuality of each person is respected and that are free of discriminatory behavior, sexual harassment and power harassment.

Human rights education
In both new employee education and new manager training,
we provide education on human rights. Employees learn
about the current problems in human rights, so that they can
act with increased awareness and respect for human rights

and privacy both during and outside of their work. Personnel
are sent to external training to learn in greater depth aboutrights problems. In these and other ways we are trying to train
people with a superior sense of human rights.

Health management
Health declaration — To achieve “Boundless Creativity and Social Contribution”
We believe that healthy and energetic employees and their families are the source for Toyoda Gosei’s management
philosophy of “Boundless Creativity and Social Contribution,” and we will promote the following activities.
1. We believe the health of our employees is an important management issue and will strive to foster an organizational
culture that puts safety and health first.
2. We will strive to create cheerful and lively workplaces where employees can work energetically.
3. We will support the health of our employees and their families by cooperating with the health insurance associationand making efforts for primary prevention.
Toyoda Gosei has been recognized as an “Outstanding Health Management Corporation” (large corporation
category) for four consecutive years (March 2020).
In 2018, Toyoda Gosei formulated its 2025 Business Plan. The
ability of each employee to work with energy and health into
the future is essential as a foundation to fulfill our corporatesocial responsibility as stated in Toyoda Gosei’s management
philosophy. In recognition of this, we are promoting healthmanagement to maintain and promote the health of ouremployees.
With our Safety & Health Promotion Division serving
as the executive office, we have established mental andOrganization

physical health committees consisting of company general
occupational physicians and members of our Human
Resources Division, health insurance union, and labor
union. Health management measures are discussed in thesecommittees and progress is confirmed. In addition, reports
are given and approvals are obtained in our Central Safety
and Health Committee, which then spreads these measures
to the Safety and Health Committees in each region.

Composition

Central Safety and Health Committee

Chairperson: President
Vice Chairperson: Officer in charge of Safety &Health Promotion Division
Labor Union Executive Committee Chairperson● Office: Safety & Health Promotion Division● Members: Company Chairman, Vice President,
related officers, a general occupational physician,general health and safety managers●(meets 4 times/year)●

Mental Health Committee(meets 4 times/year)●●

Physical Health Committee(meets 4 times/year)

District Safety and
Health Committees

52

Chairperson: Safety & Health Promotion Division
Members: Health insurance association,
labor union, Human Resources Division

Value Creation Strategy

Foundation of Value Creation

Financial Report

Measures to prevent passive smoking
In anticipation of the Revised Health Promotion Act, which
went into full effect in April 2020, we instituted a smoking
ban on all company property in Japan staring in January
2020. This was made possible by the strong will of company
management to “be a company with no unwanted secondhand smoke.” We are also trying to reduce smoking rates byholding smoking cessation lectures, offering guidance on
how to quit smoking, and continuing to support smoking
cessation in ways such as paying outpatient expenses fortreatments to help individuals quit.

Smoking rate
（%）

40

35.6

33.8

32.6

30

20

2016

2017

2018

30.4

2019

(Year)

Activities to prevent the onset or recurrence of mental health problems in employeesWith the goal of reducing by 10% (on a year-on-year basis)the number of employees who are on leave due to mental
illness, last year we provided individual consultations for
employees found to have high levels of stress in stress checks
and those who were promoted or transferred under highpressure environments. We also enhanced education for

managers and supervisors to prevent communication errors
in the workplace, and made efforts to improve the workplacein collaboration with the Human Resources Division.
As a result, we achieved our target of a 24% reductionin the number of employees on leave for mental illness
compared to the previous year.

Ongoing educational activities to raise health awarenessWe held health lectures and exercise workshops at threelocations in Japan with the aim of encouraging employees
to adopt healthier behaviors (improved lifestyle habits). Of
the more than 300 employees who participated, 98% said
that they could implement the practices introduced “fromthe next day,” indicating that these events were a trigger foraction.
Health seminar

Hiring of diverse personnel
Toyoda Gosei hires a diverse workforce and is making efforts to energize the company. We are creating a positive environment in
the company by providing fair and equal employment and training with respect for diversity.

Encouraging the active roles of women
A special organization established in 2010 has been activein the three key areas of (1) training and support for theactive roles of female leaders, (2) reforming the attitudes
and behaviors of superiors, and (3) creating a fair workplaceculture. Our aim is to create a situation in which all people,
regardless of sex, can be active and grow. A working group of
management volunteers was started in 2018 and has begun
working to raise the management level. The group is reviewing
the work styles of managers with the themes of promoting theactive roles of diverse employees and the work-life balance ofmanagers themselves and their subordinates. “Tea meetings,”“Training programs to encourage early development” andother opportunities are also offered to listen to the troubles
and thoughts of female employees and strengthen personalconnections. Together with creating an environment where
people can work for long times with a sense of security, there isalso support for career advancement.
What we want for each person

To be active and grow as an employee who can work
energetically and produce results in an open and fairenvironment.
Three key priority measures for activity

Workplace reform management class

Training andsupport for theactive roles offemale employees

Reforming theattitudes andbehaviors ofsuperiors

Creatinga workplaceculture53

Social〈S〉

Workplaces that welcome people with disabilities

Creation of an environment for stable work after retirement

We view the hiring of persons with disabilities as a social
responsibility, and make active efforts in this area. The
Committee for Employment of People with Disabilities
implements hiring, job assignments, and manager andsupervisor education, and helps to establish stable positions.
We place particular emphasis on helping persons withdisabilities establish stable positions, monitoring conditions
through regular care interviews and improving the work
environment by identifying where they face problems. The
entire Toyoda Gosei Group holds seminars on people withdisabilities to share information and create educational
opportunities. Work that people with disabilities can perform
is identified, and they are systematically hired and placed. In
FY2019, 120 people with disabilities were hired (as of March
1, 2020). This wasa hiring rate of
2.38%, exceeding
our target (legallym a n d a t e demployment rate
≥2.2%).

We have established an environment so that employees canwork with assurance after retirement in a post-retirement
rehiring system. Many people can make use of their highlevels of expertise and experience after they are rehired. A
system of reduced working days and working hours supports
working styles for a good work-life balance.
Trend in cumulative number of re-employed retirees(People)

500

400

347

348

373

2015

2016

2017

429

470

300
200
100
0

2018

2019

(FY)

Communication with sign language in the workplace

Changes in employment rate for people with disabilities
(Toyoda Gosei Co., Ltd.)
(%)

3

2.14%

2.41%

2.38%

2.31%

2

2.2%

Legally mandated rate
1

2015

2016

2.38%

2017

2018

2019

(FY)

Work-Life balance
Toyoda Gosei Co., Ltd. is adopting a system wherein each
employee can select a working style with consideration ofwork-life balance, supporting employees so that they canwork with a sense of security and motivation. Childcare
support includes systems for shorter working hours andholiday day-care, plus working parent networking events. For
these efforts we have been certified by the Ministry of Health,
Labor and Welfare as a “Childcare Support Corporation.”
For nursing care support we are also undertaking activities
to increase knowledge and familiarize employees with
our systems. We have introduced systems for reduced daysor reduced working hours so that patients can undergo
treatment for disease while continuing to work, and for abalance between medical care and work.
We will provide education for the creation of workplaceenvironments where people can use these systems without
hesitation, while continuing to enhance our support andpolicies.

FY2019Childcare leave

Care leave

Reduced working hours

67

0

68*

* Childcare 57 / nursing care 5 / medical treatment 6

54

Holiday day-care

Working parent networking meeting (support for childcare-work balance)Value Creation Strategy

Foundation of Value Creation

Financial Report

Personnel development
A global workforce of employees who think andact independently
To raise the collective strength of Toyoda Gosei globally, weare striving to develop people who can contribute to that end
and to create workplace environments where each employee
can display his or her full abilities.
Personnel who can play active roles globally

Ability to makemanufacturing innovations

Ability to create
innovations

Ability to produce
high added value

Personnel who are in demand
from the business environment

Professionalism andhigh levels of skill

Ability to play an active role
anywhere in the world

Ability to transmit skills
and techniques globally

Personnel who arein universal demand

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)

Framework for personnel development that supports growth
In the Toyoda Gosei Group, our personnel management
system features aspiration interviews and visualization of
mid- and long-term career design for each employee, as wellas rotation of young employees so that they experience awide range of work. We are also enhancing our level-specificand specialty training to give employees opportunities toacquire needed abilities and skills.
Personnel development cycle

Superiors and subordinates
discuss challenges for growth
to help individuals find a
mission and vision of what
they would like to be■ Career design
Employees consider their own
career plan based on career
visions for each department■ Appointment /Rotation

Experience of otherareas, appointment topositions from a young age■ Aspiration interview

Personal
growth■ Young employee

overseas training
transfer

A program for young
employees to work withlocal staff while learning
the language and culture■ Evaluation■ OJT OFF-JT

Fair, equitable and open
evaluations andperformance reviews

Personnel development through on-the-job
training (OJT). Skills improvement throughin-house training by rank and role (OFF-JT)

Enhanced training programs, invigorated personnel
development
A broad range of efforts based on individual career visions
are underway, including measures and study programs inJapan to develop people who can perform globally and next
generation leaders, and personnel development programs
for all global employees.

People who received basic training in TG work in China (Regional Basic Training)

Level-specific education system“Basic competency” training
Officers
Executive Management

Senior Management

Problem-solving
ability

Problem-solving[vision creation]

Management
T1

SX

T2

S1

T3

S2

T5・T4 B1・B2

Problem-solving[setting challenges]
Problem-solving[problem occurrence]
PDCA

Ability to workin teams

Business/organization
management

Basic skills

Advanced skills /Skill transfer

Humanmanagement
Coaching
Mental care
Guiding/looking
after younger
workers

Fundamental skills[advanced]

Communication
teamwork

Fundamental skills[intermediate]

Reporting, contacting,consultation

Fundamental skills[beginner]

Role education

Global education

New division generalmanagers

Executive
candidateeducation

New division deputy
general managers,
department generalmanagers

Global leader
education

New group leaders,section managers

Management

Division assistantmanagers, supervisors
S1, mid-level, team leaders

Regional
education

S2, 5th year

problem-solving,knowing TG

2nd, 3rd year,
new employees

New employees

55Social〈S〉

Training manufacturing personnel
Improving the skills of each worker is an indispensable part ofenhancing the manufacturing capabilities of production sites.
We have therefore introduced various measures with the basic
policy of “cultivating a culture that values skills.”
To lead other companies in strong manufacturing,
managers and supervisors need to have their own specializedskills in addition to the ability to supervise manufacturing sites.
Special Skills Dojos are being started up sequentially in eachproduct area as a place to train supervisors.
In 2019, we launched the Equipment Maintenance Dojoat the Miwa Technical Center and established an educational
curriculum that combines both classroom and practical skill
learning with the aim of having learners become fully active
members of the maintenance staff as soon as possible. We havealso set up a Mold Maintenance Dojo at the Nishimizoguchi
Factory to train all mold maintenance workers. Training
began in FY2014. We have established a solid foundation formaintenance skills and put in place a system for employees towork on raising their skill levels.
In FY2017 we began participating in the Skills Olympics.
While still feeling our way toward raising employees’ skills,
we participated in our first national tournament in 2018 anda Toyoda Gosei employee won the Fighting Spirit award in
2019. It was an extraordinary achievement to win that prizein only our second year in the competition. The result gave us
confidence in our approach to developing human resources forthe manufacturing floor.

Maintenance skill dojo

Aiming for “zero accidents”
Toyoda Gosei Co., Ltd. aims for zero accidents through Safe
Personnel and Safe Workplace programs, with the president
overseeing all efforts as the company’s general health andsafety manager.
In the Safe Personnel program, we focused in FY2019
on increasing maintenance and regular observation of rules
through monitor activities to ensure that employees holdhandrails on stairs and stop and check in both directions at stop
points on walkways within plants.

In Safe Workplace activities we aim to improve the safetyof high-risk equipment where serious accidents (STOP 7) can
occur. Risk assessments based on a reverse KY (kiken yochi , orhazard prediction) approach are conducted to identify target
equipment, set clear priorities, and take preventive measures.
Trends in labor accident rate (rate of lost-worktime injuries)
No. of casualties in labor accidents (people)
Rate of lost×1 million＝
worktime injuries
Total labor hours

(%)

1.5

All manufacturingindustries

1.20

Transport equipment
manufacturing industry

0.50

1.0

0.5

0.188
0
Monitors

Toyoda Gosei Co., Ltd.

2015

2016

2017

2018

2019 （Year）

Uniform global quality assurance
Toyoda Gosei ensures quality in all business activities, from development
to production, based on our basic quality policy. Every one of our plants has
obtained certification in the ISO 9001 (JQA QM7318/QMA11826/QMA12841)
and IATF16949 (JQA-AU124) international standards for quality management
systems. Each plant also sets its own quality control goals for production. These
goals are based on the principles of Total Quality Management, or TQM—
activities designed to enhance the quality of products, work, and management,
and increase the dynamism of individuals and organizations, through constantimprovement and the participation of all based on the “Customer First” principle.
In addition, all Group companies use our Quality System Global Standards, which
incorporate quality improvement with rules and know-how to ensure quality.

56

Fundamental
principles of TQM
Customer
first

TQM
Constant

Participation

improvementby allValue Creation Strategy

Foundation of Value Creation

Financial Report

Monitoring and responding to manufacturing processes and market quality
Defect-free process completion is carried out in production
and other processes for parts involved in the basic automotivefunctions of running, turning, and stopping, as these parts are
directly linked to safety. We want the Toyoda Gosei name toequal quality in the minds of customers worldwide. For thispurpose, we advance quality assurance declaration activities
at all production locations. This means that all employees
make efforts to improve safety and the people in charge of
all manufacturing processes improve quality through thedevelopment of people and processes. When a mechanismthat can ensure the target quality has been completed andis in place, the manager makes an “assurance declaration” tothe president or site manager. The president or site manager
then conducts a site inspection. Through “jidoka ,” we improve

quality by creating processes that do not produce or pass onany defects and developing workers with a high sensitivity tosafety and to avoiding mistakes. We also have fulltime auditors
who audit and improve processes at all production sites
globally.
A system is in place so that whenever a quality problem
occurs in the market, we can quickly investigate the causes
based on information from automakers and implement
prevention measures. When it is difficult to pinpoint thecause of a problem and develop solutions internally, we workwith the quality departments of automakers to take precise
measures to prevent recurrence based on inspections with test
vehicles and other means. In this way we prevent such quality
defects from occurring in the next products.

Supply chain management
We aim to deepen our partnerships with suppliers based on our basic procurement policy, while achieving sustainable growth
for us both.

Basic procurement policy
1. Optimum global procurement

2. Mutual growth based on mutual trust

3. Efforts for ESG

We procure the best raw materials,
products, and equipment fairly from a
global perspective while considering
cost, quality, technology, andproduction.
We also welcome proposals fromsuppliers for new technologies andmethods and new products.

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

We share ESG efforts with supplierswith the aim of protecting theenvironment, fulfilling our social
responsibilities, and thoroughgovernance in the Toyoda Gosei Group.
We also aim to ensure complete legal
compliance and confidentiality incorporate activities, including our
supply chain.

Strengthening our relationships with suppliers
Every April, we hold a procurement policy briefing with about
200 suppliers, where we explain our management philosophy,business environment and company policy, and share ourefforts and targets in the areas of safety, compliance, quality,
production, and costs. We also present awards to suppliers who
have raised their achievements in each field. Every quarter, wehold a procurement liaison meeting with about 100 suppliers
to share production information and information on quality,
compliance, safety and other matters. In addition, we holdseminars on personnel development, business continuation andother topics to strengthen our partnerships with suppliers.

Procurement policy briefing

Seminars/meetings on business challenges

57

Social〈S〉

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 checksof compliance with Japan’s Industrial Safety and Health Act
and risk assessments. Efforts related to production include
manufacturing site improvement through manufacturing
reform activities. Both of these areas are related to personnel
development. We have also established Supplier Month asa time to express our sincere appreciation to each of our
suppliers for their daily efforts, while also listening to theirconcerns and working continuously to resolve them.

Supplier appreciation event

Supplier month poster

Green procurement
We do our utmost for environmentally-friendly procurement
based on our Green Procurement Guidelines (4thEdition), which consist of three components: establishingenvironmental management systems; improving regulatorycompliance and environmental performance; and managing
harmful substances. To reduce environmental impacts,
we strive to enhance suppliers’ internal organizations andsystems and raise the level of their production activities.
Positive results have been achieved, such as acquisition of

ISO 14001 certification and reduction of energy consumption
and waste. We comply with increasingly strict chemical
substance regulations around the world and monitor thechemicals contained in items procured from suppliers. We also
coordinate with suppliers in complying with European ELV(end of-life vehicle) and REACH (Registration, Evaluation,
Authorization and Restriction of Chemicals) regulations, andin the management of volatile organic compounds (VOCs).

Contributing to local communities
The Toyoda Gosei Group wants to earn the trust ofsociety through all its business activities, including thedevelopment and manufacture of products that satisfy
customers worldwide, environmental preservation,and social contribution. TG Group companies and theiremployees around the world are making efforts tocontribute to their communities in the four areas of social
welfare, environmental preservation, youth development,
and community safety, and grow together with strong local
roots.

Social welfare

Environmental protection

Introduction of fund-raising meals incafeterias

Wheelchair repair in welfare institutions

Youth development

Support for Boys and Girls Invention
Club

58

Environmental education for elementary
school students

A total of more than 300,000 trees
planted domestically and internationally

Community safety

Sports clinics

Anti-crime patrols

Road safety campaign

Value Creation Strategy

Foundation of Value Creation

Financial Report

Sports promotion

Wolfdogs Nagoya
volleyball teamBlue Falcon
handball teamSince winning their first league
championship in 2015, the Wolfdogs
Nagoya volleyball team has beenin contention for the top spot every
year. Our handball and basketballteams are also active in Japanese
domestic leagues. We aim to fostera sense of unity in employees andthe community for a vibrant, richand active society.

Scorpionsbasketball team

Kokoro Hakobu Project
The “Kokoro Hakobu Project” is an ongoing, long-term support effort led by Toyota
Motor Corporation, in which assistance is brought from all parts of the country to areas
affected by the Great East Japan Earthquake with the feeling of “carrying our hearts”
to those who have suffered. Following the spread of the novel coronavirus from the
beginning of 2020, we wondered what we could do to contribute to people fighting thedisease and healthcare workers and national and local government personnel who arestruggling day and night to combat it. The Toyota Group has joined forces to conduct a
range of efforts and support activities under the general name “Kokoro Hakobu Project.”
Providing PCR test vehicles

Supplying protective gear to healthcare sites

In May 2020, we provided one novel coronavirus PCR test vehicle to the Tokyo
Medical Association. We then provided one to Nagoya University Hospitalin June. These vehicles allow medical personnel to collect samples througha barrier, which should be effective in preventing infections. They also havethe advantage of being able to be moved to wherever they are needed. The
vehicles, based on Toyota’s HiAce, are remodeled with the cooperation of Toyota
Customizing & Development Co., Ltd., an expert in the specialty vehicle business.

In May 2020, we provided 200 protective gowns
to Nagoya University Hospital and other medical
institutions to help overcome the shortage of medical
supplies. Airbags, one of our main products, aremade of silicone-coated nylon, which does not allow
air to pass through and can be washed and used
repeatedly. We planned
these gowns jointly with
Toyobo Co., Ltd., which
manufactures cloth,and Chinese garment
manufacturer Hualida
Garments Group Co., Ltd.
based on hospital needs.

Supporting regional dairy and forestry workers

Donating food brought in by employees to food banks

In May 2020, we provided assistance to dairy and forestry
operators in Gifu Prefecture to help reduce excess inventoryof food and lumber that was going to have to be thrown awayor left unused due to the effects of the novel coronavirus. We
purchased milk for which demand from schools fell as a resultof the nationwide school closures, and woodworking sets madewith surplus wood due to the decline in large-scale demand forhomebuilding and other commercial needs. We then provided
these products to our employees. This support was provided
through relationships with Gifu Prefecture and Minokamo
City as part of ourenvironmental
preservation
activities in a forest
maintenanceproject called the“ To y o d a G o s e i
Kimori no sato .”In June 2020, we donated various food items to Second Harvest
Nagoya, an NPO food bank. In addition to the increase in thenumber of people living in need due to the spread of novel
coronavirus infections, food donations to the food bank havedecreased significantly. Employees from 16 Toyoda Gosei Group
locations brought in packaged food and bottled drinks from home
to donate to the food bank.

59

Financial Report

Consolidated 10-Year Financial Summary
FY2010FY2011FY2012FY2013

FY2014

Net sales

516,982

504,518

599,615

689,477

727,846

Operating profit

29,952

20,41536,706

43,79841,603

Ordinary profit

27,54920,287

36,77745,847

43,792

27,192

19,07636,571

46,101

39,851

17,116

8,971

21,42926,214

21,15556,58670,71579,07392,36485,283

183,293229,238

244,798

279,281291,246

191,261

183,864

196,163

210,214250,557

Non-current assets

233,268

225,555

244,846

262,596

316,926

Total assets

416,562454,794

489,644541,877

608,172

20,20023,30035,97839,06941,848Current liabilities

123,379

149,968

157,748

168,136

180,795

Bonds payable

10,000----Long-term loans payable

19,34834,39723,32931,13842,929Non-current liabilities

59,10767,45759,751

73,462

88,902

Total liabilities

182,487

217,426

217,500

241,598

269,697

Shareholders’ equity

233,365

238,400

255,201

275,840

289,321(Reference) Interest-bearing debt

49,54857,69859,30770,207

84,777

Cash flows from operating activities

62,586

51,11252,45155,44851,283J-GAAP
Operating results（Fiscal year ended （Fiscal year ended （Fiscal year ended （Fiscal year ended （Fiscal year ended
March 31, 2011）
March 31, 2012）
March 31, 2013）
March 31, 2014）
March 31, 2015）

Profit before income taxes
Profit attributable to owners of parent
Financial position＊1

Cash and deposits
Current assets
Property, plant and equipment

Short-term loans payable ＊2

Cash flows

Key performanceindicators

Per share
information (yen)

60

*1
*2

Cash flows from investing activities（52,579） （37,027） （40,989） （45,680） （62,432）

Cash flows from financing activities（18,785）2,224（6,128）

（732）

（238）

Return on sales (%)

3.3

1.8

3.6

3.8

2.9

Total asset turnover (times)

1.22

1.16

1.27

1.34

1.27

Equity ratio (%)

52.2

48.6

51.7

51.6

51.6

Return on equity (ROE) (%)

7.9

4.1

9.0

9.8

7.1

Capital investment

46,98337,62339,09743,08564,733

Depreciation and amortization

44,481

41,964

38,63338,74339,353R&D expenses

25,61725,93627,27929,17029,579Number of employees at year-end (consolidated)

26,964

29,10830,19031,672

34,754

Annual dividends

36.00

36.00

44.00

56.00

56.00

Earnings per share (EPS)

132.2769.33

165.63202.54163.44

Dividend payout ratio (%)

27.22

51.93

26.57

27.65

34.26

“Net income” for FY2010
Including current portion of long-term loans payable and redemption of bonds within one year.

Value Creation Strategy

Foundation of Value Creation

Financial Report(Millions of yen; rounded down to the nearest million yen)

FY2015FY2016FY2017FY2017FY2018FY2019781,886

755,601

806,938

Revenue

807,958

840,714

812,937

42,82440,675

41,136

Operating profit

35,17936,525

17,88841,49039,007

43,20036,71031,28835,775

Profit before tax

35,50737,356

16,106

20,255

16,233

21,175

Profit attributable to owners of parent

21,361

23,30911,22678,38897,553

104,309

97,991

107,311

127,930

281,212305,273

328,524357,666

382,106

359,565

241,408

245,666

259,537

241,581257,728

273,479

306,160

315,425

333,819

Non-current assets

321,819

326,023

349,619587,373

620,699

662,388

Total assets

679,485

708,129

709,185

21,07331,762

43,722

Borrowings

43,72232,39644,657

162,592

170,574

189,075

Current liabilities

195,392

194,309

180,653--

10,00044,691

57,26154,45864,511

93,089103,399

96,937

110,663

119,403

Non-current liabilities

118,435

133,674

158,256

259,530

281,237

308,479

Total liabilities

313,828

327,983

338,909

301,756

311,127

324,890

Equity attributable to owners of parent

65,76589,023

108,181(Reference) Interest-bearing debt

108,233

125,486

148,057

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

44,00457,46365,247（Fiscal year ended （Fiscal year ended （Fiscal year ended
March 31, 2016）
March 31, 2017）
March 31, 2018）

IFRS

Cash and cash equivalents
Current assets
Property, plant and equipment

Bonds and borrowings（56,261） （82,131） （39,201）

Cash flows from investing activities（24,736）（Fiscal year ended （Fiscal year ended （Fiscal year ended
March 31, 2018）
March 31, 2019）
March 31, 2020）（21,832） （55,491） （54,174）

14,794

6,541

Cash flows from financing activities

5,966

7,749

12,525

2.6

2.1

2.6

Profit attributable to owners of parent ratio (%)

2.6

2.8

1.4

1.31

1.25

1.26

Total asset turnover (times)

1.23

1.21

1.15

51.7

50.7

49.6

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

50.1

50.0

48.7

6.6

5.2

6.6

Return on equity (ROE) (%)

6.4

6.7

3.2

54,49855,21864,816

Capital investment

53,411

46,891

41,83544,46240,902

44,037

Depreciation and amortization

32,54532,92737,49828,40927,164

27,864R&D expenses

27,68430,02531,37435,90336,67938,234

Number of employees at year-end (consolidated)

38,23439,42939,403

56.00

53.00

56.00

Annual dividends

56.00

60.00

60.00

156.49125.42163.60Earnings per share (EPS)

165.04180.09

86.74

35.79

42.26

34.23

Dividend payout ratio (%)

33.93

33.32

69.17
61

Financial Report

Financial Review
Overview
In FY2019, global economic growth reaccelerated mildlyin the first half before slowing throughout the second halfamid mounting uncertainty surrounding barriers to trade,most notably tariff hikes by the United States and China.
The Japanese economy likewise slowed in the second half,largely in response to a consumption tax hike and a series ofnatural disasters, including a mega-typhoon, after growing
sluggishly in the first half. Japanese auto sales surpassed fivemillion units for a third consecutive year, boosted by newmodel releases by major client automakers. Overseas, theUS auto market’s growth stalled and the Chinese market wasdampened by a downturn in consumer sentiment largely
in response to US-China trade tensions. Global auto sales
declined year on year for a second straight year. Against
such a backdrop, the SARS-CoV-2 outbreak that erupted in
China in late 2019 spread globally from January. The virus
prompted countries to close their borders, heavily depressed
consumer sentiment and caused supply chain disruptions
that shut down production lines. In response, economies
and auto markets precipitously deteriorated globally.
Amid such an environment, the Toyoda Gosei Groupidentified three key pillars of activity toward achievement of
the targets in its 2025 Business Plan, a medium- and longterm plan unveiled in May 2018, and has been putting theminto practice on a priority basis.
The first pillar is “Venture into innovation, new mobility,”
under which we are pursuing early commercializationin unconventional new domains through innovativetechnology. First, we exhibited e-Rubber, a next-generation
dielectric rubber, for the first time at CES2020, a consumerelectronics trade show held in Las Vegas in January 2020.
We also unveiled haptic (simulated touch) technologythat combines a tactile hand and augmented reality. We
aim to commercialize applications of such technology invarious markets, including healthcare and entertainment.
In the CASE (Connected, Autonomous, Shared, Electric)
automotive space, we have been proactively investingin startups through a corporate venture capital fund set
up in FY2018 and have accelerated development of newtechnologies, including modularization of interior andexterior components. Additionally, we will continue
to commercialize new technologies and products
by focusing on product development in response toautomobiles’ ongoing evolution and on vertical GaN power
semiconductor devices that incorporate technology andknow-how cultivated through development and productionof blue LEDs.
The second pillar is “Strategy for growing markets/fields.”
In the Americas, a region that supports the Toyoda Gosei
Group’s earnings as a growth market, we opened a second
engineering and sales office in the U.S. state of Ohio. By

62

locating design and sales staff in proximity to customers,
we aim to expedite development of interior and exterior
components and airbags and further expand new productsales.
To expand our geographic footprint in the large interior
and exterior component market, we plan to expand themolding and painting capacity of three manufacturingsubsidiaries in the central and southern U.S.: TG Missouri
Corporation, TG Kentucky, LLC, and Toyoda Gosei Texas,
LLC. We will pursue further earnings growth throughaggressive investment in growth markets. In China, theworld’s largest auto market and one with promising prospectsof continued growth, we plan to enlarge and expand the
production capacity of a plant of Hubei Toyoda Gosei Zheng
Ao Rubber & Plastics Sealing Science and Technology Co.,
Ltd., in the aim of expanding inland operations. In Vietnam,
an up-and-coming growth market, Toyoda Gosei HaiphongCo., Ltd., commenced production at its Thai Binh Plant, its
second plant, to meet globally growing airbag demand. It
plans to enlarge the plant in 2021.
Additionally, we are actively expanding sales of highvalue-added products to both domestic and overseas
customers. Such products include aesthetically designed
plated products, emblems that combine design withfunctionality in the form of permeability to millimeter wave
radar, and resin fuel filler pipes and resin turbo ducts, bothof which improve environmental performance by reducing
vehicle weight through substitution of metal with resin.
The third pillar is “Innovative manufacturing at
production sites.” We have realized labor savings byautomating certain (e.g., inspection) processes andreduced losses with IoT technologies. To reduce manpower
requirements through automation, we commissioneda plastic fuel filler pipe production line as an “automatedmodel plant” in a new building at our Heiwacho Plant in
May 2019. Initiatives to reduce losses with IoT technologies
include use of big-data analytics to reduce defect losses
and reduction of equipment downtime losses throughcontinuous visual monitoring of airbag inflator production
status. We plan to deploy such innovations across our entire
product line and also share them with affiliates in the aim ofincreasing Group-wide productivity.
In addition to the three key pillars of activity, we havebeen restructuring in pursuit of sustained growth. We
completed our latest round of restructuring on December
30, 2019, with the divestment of German manufacturingsubsidiary Toyoda Gosei Meteor GmbH (TGM) and U.S.
manufacturing subsidiary Meteor Sealing Systems, LLC, to
SCUR-Alpha 1123 GmbH (subsequently renamed AEQPHGmbH). We expect these divestments to be accretive toshareholder value going forward.
FY2019 revenue decreased 3.3% year on year to ¥812.9
billion as a result of depreciation in the U.S. dollar andChinese renminbi against the yen and auto production
cutbacks due to the COVID-19 pandemic since January.

Value Creation Strategy

Profits also decreased, with operating profit down
51.0% year on year to ¥17.8 billion and profit attributableto owners of the parent down 51.8% to ¥11.2 billion. Theirdecline was largely the result of a loss on liquidation of TGM
in addition to decreased sales due to the pandemic. The
dollar/yen exchange rate averaged ¥109 in FY2019 versus¥111 in FY2018.

Foundation of Value Creation

Outlook for FY2020
The COVID-19 pandemic renders accurate forecasting ofcustomers’ production practically impossible at present.
We are consequently refraining from issuing an earnings
forecast for FY2020 until we are reasonably able to forecast.

(Millions of yen)

Consolidated results

FY2019FY2018

Revenue

812,937
17,888
11,226

840,71436,52523,309Operating profit
Profit attributable to owners of parent

Revenue by segment
Japan
Revenue slipped 0.5% year on year to ¥405.1 billion, mainly
as a result of the pandemic. Although the bottom line
benefited from non-recurrence of a year-earlier loss on
antitrust law, the segment ended up incurring a ¥5.0 billion
loss (vs. ¥11.0 billion profit in previous fiscal year), largely
because of the loss booked on TGM’s liquidation in the third
quarter coupled with a pandemic-induced sales decline.

Americas
Sales to Japanese and foreign automakers were tracking
above their year-earlier level through February 2020 but
FY2019 revenue ended up dropping 2.2% year on year to¥243.5 billion, largely in response to adverse exchange rate
movements and a March sales decline due to the pandemic.
Profit was down 5.1% to ¥16.6 billion, largely as a result of
decreased sales due to the pandemic.

Asia
Despite growth in major customers’ Chinese production
through January 2020, revenue decreased 5.8% year on yearto ¥188.2 billion, largely because of the pandemic’s impact
in February and March, mainly in China. Profit fell 17.0%
to ¥10.6 billion, mainly as a result of decreased sales in
China and Thailand due to the pandemic and auto market
weakness, respectively.

Europe & Africa
Revenue was down 20.4% year on year to ¥36.5 billion.
Despite decreased sales due to the pandemic, thesegment reduced its loss to ¥4.2 billion from ¥4.7 billion
in the previous fiscal year, largely by virtue of TGM’s
deconsolidation in the third quarter.
(Millions of yen)

Revenue by segment

FY2019FY2018Japan

405,116
243,590
188,292
36,567

407,084
249,150
199,790
45,955

Americas
Asia
Europe & Africa

Financial Report

Financial condition
Analysis of financial position
1. Assets, liabilities, and equity
Assets at fiscal year-end totaled ¥709.1 billion, a ¥1.0 billion
year-on-year increase driven mainly by an increase inproperty, plant and equipment. Liabilities totaled ¥338.9
billion, a ¥10.9 billion year-on-year increase due mainly to
growth in borrowings.
Equity totaled ¥370.2 billion, a ¥9.8 billion year-on-year
decrease mainly due to a reduction in other components ofequity.

2. Cash flows
Cash and cash equivalents at the end of the fiscal year underreview increased by ¥20.6 billion, from ¥107.3 billion at theend of the previous fiscal year, to ¥127.9 billion.
Cash flows and related factors during the fiscal year
under review were as follows.

Cash flows from operating activities
Operating activities provided net cash of ¥65.2 billion, an
increase of ¥7.7 billion compared to ¥57.4 billion in theprevious fiscal year. The increase resulted largely from adecrease in trade and other receivables.

Cash flows from investing activities
Investing activities used net cash of ¥54.1 billion, a ¥1.3
billion decrease from ¥55.4 billion in the previous fiscal
year. The decrease was largely attributable to a reduction inpurchases of property, plant and equipment and intangible
assets.

Cash flows from financing activities
Financing activities provided net cash of ¥12.5 billion, an
increase of ¥4.7 billion compared to ¥7.7 billion in theprevious fiscal year. The increase was largely due to a
reduction in repayments of long-term borrowings.
(Millions of yen)

Cash flows

FY2019FY2018Cash flows from operating activities

65,24757,463

Cash flows from investing activities （54,174） （55,491）
Cash flows from financing activities

12,525

7,749

63

Financial Report

Consolidated Financial Statement(Millions of yen)

Consolidated statement of financial position

FY2018（as of March 31, 2019）

FY2019（as of March 31, 2020）

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets

107,311
179,791
10,824
63,647
20,531
382,106

127,930
142,062
8,364
63,925
17,282359,565

257,728
2,327
39,19013,897
3,722
5,434
3,722
326,023
708,129

273,479
3,741
32,244
14,252
2,603
14,473
8,824
349,619
709,185

140,660
32,396
6,216
3,221
1,499
10,313
194,309

119,083
44,657
8,335
1,585
1,881
5,110
180,653

93,089348
34,320
115
3,558
2,242
133,674
327,983

103,399
13,466
34,615
107
4,158
2,507
158,256
338,909

28,027
26,968（1,219）14,674
285,669
354,120
26,024
380,145
708,129

28,027
26,968（1,220）2,233
289,061
345,070
25,204370,275
709,185

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

64Value Creation Strategy

Foundation of Value Creation

Financial Report(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
Profit

FY20181, 2018 to（ AprilMarch 31, 2019）

FY20191, 2019 to（ AprilMarch 31, 2020）

840,714（737,352）
103,362（62,387）
4,279（8,728）36,5252,669（2,692）854
37,356（11,245）
26,111

812,937（712,436）
100,501（61,523）
2,328（23,417）
17,8882,843（5,538）913
16,106（2,265）
13,841

23,3092,801
26,111

11,226
2,614
13,841180.09-86.74-

Profit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)(Millions of yen)

Consolidated statement ofcomprehensive income

FY20181, 2018 to（ AprilMarch 31, 2019）

FY20191, 2019 to（ AprilMarch 31, 2020）

Profit26,111

13,841Other comprehensive income
Items that will not be reclassified to profit or lossE quity instruments measured at fair value throughother comprehensive income
Remeasurements of defined benefit plansS hare of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified to profit or loss

（1,218）（460）（2,313）
（467）

（33）

（17）

（1,712）（2,798）

1,983（11,061）

Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operationsS hare of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified to profit or loss
Other comprehensive income, net of tax
Comprehensive income

（120）

130

1,862
149
26,261（10,931）（13,729）
111

Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

23,2133,047
26,261（1,281）
1,393
111
65

Financial Report

Consolidated statement of changes in equity
Equity attributable to owners of parent

Balance as of April 1, 2018
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Transfer from other components ofequity to retained earnings
Total transactions with owners
Balance as of March 31, 2019
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2020

SharecapitalCapitalsurplusTreasurysharesMillions of yen

Millions of yen

Millions of yen

29,055（2,086）（1,218）
（1）
-

-

-

（2,086）
26,968---28,027

26,96828,02728,027-

Other components of equity
Exchange
Equity instruments
differences
Remeasurements
measured at fairon translationof definedvalue through othercomprehensiveof foreign
benefit plansincomeoperations
Millions of yen（2,400）
1,618
1,618
（41）

Millions of yen

（486）
（486）
-

-

-

486

（1）
（1,219）
（0）
-

（41）
（823）
（9,769）（9,769）-15,498（2,333）（2,333）
-

486
（405）
（405）
-

-

-

（338）

405

（10,593）（338）
12,826405-（0）（1,220）Equity attributable to owners of parent
Other componentsof equity
Total
Millions of yen

Balance as of April 1, 2018
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Transfer from other components ofequity to retained earnings
Total transactions with owners
Balance as of March 31, 2019
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Transfer from other components ofequity to retained earnings
Other
Total transactions with owners
Balance as of March 31, 2020

66

Millions of yen

16,726（1,228）（1,228）-Retainedearnings

Total

Non-controllinginterests

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

14,326
（96）
（96）
（41）

270,354
23,30923,309（7,508）-340,546
23,309（96）
23,213（1）（7,508）（2,128）25,111
2,801
246
3,047
（2,737）
603

486

（486）

-

-

444
14,674（12,508）（12,508）-（7,995）
285,669
11,226
11,226（7,767）-（9,638）354,120
11,226（12,508）（1,281）（0）（7,767）-（2,134）26,024
2,614（1,221）
1,393（2,328）-

365,657
26,111
149
26,261（1）（10,246）（1,525）（11,772）
380,145
13,841（13,729）111（0）（10,095）
-

67

（67）

-

-

-

67
2,233

（7,834）
289,061（7,768）345,070

114（2,213）25,204114（9,981）
370,275

Value Creation Strategy

Foundation of Value Creation

Financial Report(Millions of yen)

Consolidated statement of cash flows

FY2018FY20191, 2018 to（ AprilMarch 31, 2019）

1, 2019 to（ AprilMarch 31, 2020 ）Cash flows from operating activities
Profit before tax
Depreciation and amortization
Reversal of impairment loss
Loss on liquidation of operations
Finance income
Finance costs
Share of loss (profit) of investments accounted for using equity method
Loss (gain) on sale of fixed assets
Decrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade and other payables
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

37,35633,789（1,519）（2,669）
2,830
（854）
590
719
（7,351）
5,008
997
68,896
1,835
1,042（2,577）（11,732）
57,463

16,10637,49821,615（2,843）
2,912
（913）
398
（4,943）28,965（18,937）（3,229）76,6292,141
975（2,802）（11,696）
65,247（14,249）
9,964（49,479）
1,327（3,131）
40（13,677）
15,815（46,385）
826
（996）
1,542

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment, and intangible assets
Proceeds from sale of property, plant and equipment, and intangible assets
Purchase of investments
Proceeds from sale of investments
 ayments due to sale of shares in subsidiaries
P
resulting in change in scope of consolidation
Other
Net cash used in investing activities-（11,428）35（55,491）

128（54,174）

37,296（27,293）
31,462（25,787）（7,503）（2,742）

52,912（47,078）
24,227（5,272）（7,766）（2,328）Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Dividends paid to non-controlling interests
 roceeds from purchase of shares of subsidiaries notP
resulting in change in scope of consolidation
Other
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
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

2,314

-

2
7,749
9,721
97,991（401）
107,311（2,168）12,52523,597
107,311（2,979）127,930

67

Company and Investor Information

Location of
headquarters

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

Date ofestablishment

June 15, 1949

Capital¥28 billion

Consolidated
subsidiaries

57 (14 in Japan, 43 in other countries)

Equity method
affiliated companies

6 (3 in Japan, 3 in other countries)

Number of
employees

Consolidated: 39,403
Toyoda Gosei Co., Ltd.: 6,366

Distribution for each type of shareholder

Common stock

Authorized  200,000,000 shares
Issued 
130,010,011 shares
（Excluding 553,811 shares of treasury stock）

Number of shareholders

9,459

Stock exchange
listings

Tokyo Stock Exchange andNagoya Stock Exchange

Shareholder registryadministrator andspecial accountmanagement institution

Mitsubishi UFJ Trust andBanking Corporation

Securities code

7282

Major shareholders
Shareholder nameTreasurystock at cost
0.43％

Financial
institutions
24.47％

Individuals,
others5.85％
Foreigncorporations
19.49％

Financial
instruments
business
0.58％
Domestic
business entities
49.18％（As of March 31, 2020）

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

Toyota Motor Corporation

55,45942.84

The Master Trust Bank ofJapan, Ltd. (Trust Account)

7,990

6.17

Sumitomo Mitsui Banking
Corporation

5,049

3.90

Japan Trustee Services Bank,
Ltd. (Trust Account)

4,965

3.83

Nippon Life Insurance
Company

1,592

1.23

The Dai-ichi Life Insurance
Company, Ltd.

1,535

1.18

JP Morgan Chase Bank
385151

1,348

1.04

Toyoda Gosei Employee
Stock Ownership Association

1,344

1.03

SSBTC Client Omnibus
Account

1,326

1.02

Japan Trustee Services Bank,
Ltd. (Trust Account 5)

1,313

1.01

Note: Share-holding stakes are calculated after deducting treasury shares.

68Value Creation Strategy

Foundation of Value Creation

Financial Report

Editorial policy
This report was compiled with the aim of providing
shareholders, investors, and all other stakeholders witha deeper understanding of the Toyoda Gosei Group. It
describes the FY2019 business performance of the Groupand explains the Group’s strategy and efforts for creating
medium- and long-term value.
Since the 2018 report was issued, the Toyoda Gosei Reporthas been compiled as an integrated report. We have tried
to make 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.

Reference guidelines

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

Period covered by report

Disclaimer

April 1, 2019 to March 31, 2020
Past efforts and the latest information are given as needed
to promote understanding of disclosed content.

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

Scope

Toyoda Gosei GroupThe scope is outlined individually for some items.

Date of issue

September 2020
Last published in September 2019; issued once a year

Recognition from society
Main indices selected in composite● JPX Nikkei Index 400● MSCI Japan Empowering Women Index (WIN)● S&P/JPX Carbon Efficient Index

Ranking● CDP: Supplier Engagement Rating 2019: A; Water Security Score 2019: A−; Climate Change Score 2019: A−● WWF Japan: Third in transportation equipment sector in “Corporate Anti-Global Warming Measures Ranking”● Nikkei, Inc.: Third in manufacturing category in “Environmental Management Survey 2019 Corporate Ranking”● Securities Analysts Association of Japan: Second in automotive/automotive parts/tire division of the Award for
Excellence in Corporate Disclosure69

1 Haruhinagahata, Kiyosu, Aichi,
452-8564, Japan
Public Relations Dept., General Administration Division
Phone: +81-52-400-1452 Fax: +81-52-409-7491
https://www.toyoda-gosei.com/
2020.9.1,000 TP Japan