Yokowo 2021
Integrated Report

CONTENTS
Yokowo 2021 Integrated Report
Contents / Editorial Policy

01

Corporate Philosophy / Corporate Mission

02

Yokowo Global Network / Company Profile

03

Value Creation ̶ Our Track Record

05

Segment Overview

Yokowoʼs Value Creation

Yokowoʼs Business Domain

07

Vehicle Communication
Equipment Segment

08

Circuit Testing
Connectors Segment

09

Wireless Communication
Equipment Segment

10

Top Message

11

Yokowoʼs Value Creation Process 15

ESG Report

Appendix

01

Yokowoʼs Manufacturing

17

Yokowoʼs Materiality

19

Research and Development

23

Product Technology

25

Corporate Governance27

Directors, Auditors andExecutive Officers

30

Compliance andRisk Management

31

Employees

33

Diversity

35

Information Security

37

Procurement38

Occupational Health & Safety:
OH & S

39

Local Communities

40

Environment

41

Financial Highlight43

Non-financial Highlight

44

Financial Information

45

Independent Practitionerʼs
Assurance Report

54

Yokowo 2021 Integrated Report

Editorial Policy
Covered Organization: YOKOWO CO., LTD.
4 Domestic Group Companies
18 Overseas Group Companies
Period: Fiscal Year 2020 (April 1, 2020 - March 31, 2021)
Published: December 3, 2021
Publishing Cycle: Annually
Information Disclosure:
The Yokowo Group discloses information accurately,
promptly and proactively in order to build long-term
relationships of trust with its shareholders, investors andother stakeholders.
Forward-looking Statements:
Certain statements in this report such as “plan,” “forecast”
and “strategy” constitute forward-looking statements
and are based upon reasonable assumptions given theinformation available at the time of publication. Please
note that due to various factors, actual results may differ
significantly from those anticipated in such statements.
Department Responsible for the Report:
Public Relations & Equity Department,
Administration Management H.Q.
Tel: +81-3-3916-3111 (main number)
Inquiry Form:
https://www.yokowo.co.jp/english/inquiry/Corporate Philosophy
Yokowo’s corporate vision is to be “a sustainably evolving company that
accumulates technology to contribute to society and meet the trust ofcustomers, and challenges the creation of markets as a whole. Yokowo is acompany united in commitment to discovering and creating new markets.”

Corporate Mission
To realize a sustainable society, Yokowo will contribute to the evolution ofsociety by responding to the needs of leading companies that are promoting
business structural innovation and providing high-quality products based on
our core technologies.
The corporate vision and mission were redefined in August 2009, one year
after the collapse of Lehman Brothers, as a part of the “Make the Future of
Yokowo” project.
Amid the chaos of a global paradigm shift, employees and the
management team brainstormed and distilled views of what Yokowo and allof us at Yokowo should do and wish to be in the future based on opinions
collected from all employees.
We believe that the reason for Yokowoʼs existence is our steadycontribution to the evolution of society, based on unwavering commitment
even amid a drastically changing environment, through the improvement of
our technologies and quality and our response to the needs of our worldclass customers.

Yokowo 2021 Integrated Report

02

YOKOWO GLOBAL NETWORK
Since establishing its Taiwan Plant in 1967, the Yokowo Group has been actively shifting production bases to overseas
locations so that it can build an optimal global production system. It currently operates mass production plants primarily
in Malaysia, China, and Vietnam. Overseas production now accounts for more than 80% of Yokowo’s total production.
In terms of sales, Yokowo has opened overseas offices in countries and regions worldwide with offices in six cities in
the Americas, the U.K. and Germany in Europe, and eight Asian countries to provide local-based sales services closely
matched to market needs around the world.

YOKOWO KOREA CO., LTD.
[Korea]YOKOWO EUROPE GmbH
[Germany]
YOKOWO EUROPE GmbH
[Germany]

DONGGUAN YOKOWO COMMUNICATIONCOMPONENTS CO., LTD. [China]

Düsseldorf office

Dalian office

DONGGUAN YOKOWO COMMUNICATION COMPONENTS
CO., LTD [China]
DONGGUAN YOKOWO CAR COMPONENTS CO., LTD. [China]
YOKOWO EUROPE LTD.
[U.K.]

Vehicle antenna, Fine connector

YOKOWO VIETNAM CO., LTD. [Vietnam]
Vehicle antenna

YOKOWO MICRO TECH
CO., LTD. [Taiwan]
YOKOWO (THAILAND) CO., LTD. [Thailand]
YOKOWOMANUFACTURING OF
THE PHILIPPINES, INC.
[Philippines]

YOKOWO ELECTRONICS (M) SDN. BHD. [Malaysia]
Vehicle antenna, Circuit testing connector, Fine connector

Vehicle antenna

YOKOWO (SINGAPORE) PTE. LTD. [Singapore]
Production
R&D
Sales

YOKOWO (SINGAPORE)
PTE. LTD. [Philippines]

YOKOWO (HONG KONG) LTD.
[Hong Kong]

Philippine office

YOKOWO CORP. (H.K.) LTD.
[Hong Kong]

Company Profile (As of March 31, 2021)
Company Name

Head Office
LocationFoundedYOKOWO CO., LTD.
5-11, Takinogawa 7-Chome,
Kita-ku, Tokyo 114-8515
Japan
September 1, 1922

Incorporated

June 14, 1951

Capital¥6,387 million*

Number ofshares issuable
Number ofshares issued
Number ofshareholders

40,000,000 shares
22,579,878 shares, including
538,426 treasury stock shares
6,653* The Company’s capital was 7,819 million yen as of July
31, 2021 as a result of completion of the exercise of the
3rd series of share acquisition rights.

03

Yokowo 2021 Integrated Report▼Major Shareholders (As of March 31, 2021)
Shareholder

Number ofPercentage ofshares held
shares held
(in thousands)

Custody Bank of Japan, Ltd.

4,397

19.9

The Master Trust Bank of Japan, Ltd.

2,100

9.5

The Gunma Bank, Ltd.

990

4.4

BNP Paribas Securities Services Luxembourg/JASDEC/
FIM/Luxembourg Funds/Ucits Assets

990

4.4

Yokowo Business Partners Shareholders’ Association

756

3.4

Mitsubishi UFJ Trust and Banking Corporation

595

2.7

The Dai-ichi Life Insurance Company, Limited

450

2.0

MUFG Bank, Ltd.

446

2.0

The Resona Bank, Limited

445

2.0

Employee Stock Ownership Association

437

1.9

* The Company holds 538 thousands of its treasury stocks, but not counted as a major shareholder.
* The number of shares is rounded to the nearest thousand.
* Percentage of shares held is calculated without 538 thousands of treasury stocks and is rounded to
the nearest third decimal with numbers of less than one-hundredth of one percent omitted.

YOKOWO AMERICA CORPORATION [IL, USA]YOKOWO MANUFACTURING OF AMERICA LLC [MI, USA]
Detroit office

YOKOWO AMERICA CORPORATION[CA, USA]YOKOWO AMERICA CORPORATION [OH, USA]
Cleveland office

Silicon Valley office

YOKOWO MANUFACTURING OF AMERICA LLC [OH, USA]

Tomioka plant

Vehicle antenna

Vehicle antenna,
Circuit testing connector,
Fine connector,
Medical device

Utsunomiya
branchYOKOWO AMERICA CORPORATION [AZ, USA]MEMS development
center

LTCC Materials Co., Ltd.
LTCC products

Tempe office

Circuit testing connector

Core technology centerTokyo head office

Chubu branch
Osaka branch▼Net Sales by Region (FY2020)▼Net Sales / Share of Total Overseas Sales
19,587

17,272

23,116
Net sales (million yen)0

10,000Japan

20,00030,000Europe and America

40,00050,00060,000(million yen)Asia

60,00050,00063.4

64.3

Share of total overseas sales (%)
67.3
66.4
70

63.2

60

44,07751,91954,75260,59559,97640,000▼Number of Employees by Region (FY2020)

40

30,000

2,881
0

1,000
China*

1

2,000

3,463
3,000

Vietnam*

1

4,000

685

5,000

Malaysia*

1

6,000

Japan**1 Major Production Bases *2 YOKOWO CO., LTD.

2

906

7,000

493

8,000

50

30

20,00020

10,00010(Unit: person)

Other

0

2016
■ Net sales

2017
2018
2019
2020
Share of total overseas sales (FY)

Yokowo 2021 Integrated Report

004Value Creation– Our Track Record
Yokowo started with precision metal pipe processing developed by its founder,
Chutaro Yokoo, at the time when he was a craftsman in the industry. From these
beginnings, Yokowo introduced various new technologies centered on micro
precision processing, expanding the business to a wide range of fields.
With Tomioka Town within Kanra District, Gunma Prefecture (now TomiokaCity), where the founder was born and raised, as the center of development andproduction, Yokowo is developing and providing cutting-edge products for the
global market while expanding its bases overseas.

1980
'83

●

S tarted Personal Communication
Antenna business.
(withdrew in 2014)

Cellular Phone
Antenna

1920
'22

●

1960

F ounded YOKOWO MFG. CO., LTD.
in Sumida, Tokyo.

'61●

Established Tomioka plant in
Kanohara, Tomioka.

●Personal
Communication
AntennaS tarted Microwave Component
business. (transferred to the Vehicle
Communication Equipment businessin 2002)

Around 1930
Developed a Spring Bar for watches
that, at that time, captured thelargest share of the global market.

●Tomioka Plant

Listed on the second section of theTokyo Stock Exchange.

'62

● 	

'67

● 	

Microwave Components'84

Established YOKOWO MFG. CO.,(TAIWAN) Ltd.
(now YOKOWO MICRO TECH CO., LTD.) '86

Spring Bar

Established YOKOWO AMERICACORPORATION in Chicago, U.S.A.

● 	

●

Started Fine Connector business.

1950
'51

●

Incorporated.

'56●

	Started Rod Antenna business.
(withdrew in 2003)

Spring Connector

1970

'87

Established YOKOWO(HONG KONG) LTD.

'73

● 	

'78

●

'79

● 	

Established YOKOWO ELECTRONICS(M) SDN. BHD. in Malaysia.

●

Rod Antenna

Began OEM supply of various
satellite broadcast reception devices
in tandem with NHK’s launch ofsatellite broadcast services.

●

'57

Started Vehicle Communication
Equipment business.

● 		Established YOKOWO(SINGAPORE) PTE. LTD.

Started Circuit Testing Connectorbusiness.

Pillar Antenna
Outdoor Unit for BS
AM/FM Motor Antenna'59

Started Sporting Goods business.
(withdrew in 1995)● 	Golf Goods

05

Yokowo 2021 Integrated Report

Contact Probe'89

Completed new head officein Tokyo.

● 	

1990

2000

Changed company name to
YOKOWO CO., LTD.

'90

●

'92

●

Developed a small-sized ceramic
patch GPS Antenna.

2010

Listed on the first section of theTokyo Stock Exchange.

'01

●

'02

●

'11

Established YOKOWO VIETNAM
CO., LTD. in Vietnam.

●Established YOKOWO
MANUFACTURING OF AMERICA
LLC in Hilliard, Ohio, U.S.A.
Began OEM supply of Guide Wirefor medical treatment.

●

GPS Antenna'94

Established DONGGUAN YOKOWOELECTRONICS CO., LTD. in China.
(merged with DONGGUANYOKOWO CAR COMPONENTS CO.,LTD. in 2017)●Established YOKOWO KOREA CO.,LTD. in Korea.

●Guide Wire for Medical Treatment

Developed the industry’s firstsocket for high-frequency testing.

●Established DONGGUAN YOKOWOCAR COMPONENTS CO., LTD.
in China.

'95

●

'96

●

Developed the world’s first Micro
Antenna for automotive AM/FM
radio.

Acquired ISO 13485 certificate.

'12

●

'13

●

'14

●

'16

●

'18

●

Commercialized the YPX probecard series for the testing of highfrequency devices using MEMS
technology.

Hi-Giga Sockets'05

Established YOKOWO CORP. (H.K.)
LTD. in Hong Kong.

●

●

D
 eveloped a 2 Piece connector to
make a full entry into the rugged
handheld device market.

YPX Series

Acquired ISO 27001 certificate.
Acquired OHSAS 18001 certificate.
(Transferred to ISO 45001 in 2020)

Established Advanced Measurement
Technology Center in Tomioka plant.

Micro Antenna
2 Piece Connector

Started Microwave Ceramics
business.

●

'06

●

AMT Center

Started Medical Device business.

'19
Components for
Medical Devices(Tip Terminal of
Catheter)

Ceramic Antenna

'97

●

D
 eveloped a BGA Test Socket
to make a full entry into thesemiconductor inspection market.

'07®

Registered the SmartWeld
trademark for its original technology
for bonding different metallic
materials.

●

Established a joint corporation as
LTCC Materials Co., Ltd.

●

Established YOKOWO Advanced
Device Center. (reorganized into a
joint corporation in 2019)

●

2020
'20

Established YOKOWO EUROPE
GmbH in Germany.

●

YOKOWO Advanced Device Center

BGA Test Socket

Established Lumax Yokowo
Technologies Private Limitedin India.

●

'99

Established DONGGUAN YOKOWOCOMMUNICATION COMPONENTS
CO., LTD. in China.

●

●

E
 stablished YOKOWO Europe Ltd.
in London, U.K.

'08

Took over probe card businessfrom Genesis Technology Inc.

●

Established YOKOWO MEMS
development center.

●E stablished YOKOWO
MANUFACTURING OF THE
PHILIPPINES, INC. in Philippines.

●Yokowo 2021 Integrated Report

06Segment Overview

Yokowoʼs Business Domain
The Yokowo Group has implemented and refined a number of technologies such as antenna and microwave
technologies, while further deepening the technologies in micro precision processing. The Companyʼs businessdomain has continually expanded from antennas, connectors and advanced devices, branching out today into threesegments: Vehicle Communication Equipment, Circuit Testing Connector, and Wireless Communication Equipment.

▼Business Domain Map

Vehicle Communication
Equipment

Sales: ¥37,292 million(-5.0% YOY)
Vehicle Antennas

Shark Fin Antennas

GNSS Antennas

Circuit Testing Connectors

Wireless Communication
Equipment

Sales: 13,242 million(+3.2% YOY)

Sales: ¥9,441 million(+11.1% YOY)
Connectors forElectronic Devices(Fine Connectors)

Semiconductor
Testing Tools

Probe Cards

07

Spring connectors

Hi-Giga-Socket

Vehicle Communication
Equipment

Circuit Testing Connector

Yokowo manufactures antennas for cars
(vehicle antennas), such as the SharkFin antenna, mainly for the automotive
market.
By continuing to develop and propose
antenna systems to the customers
that support next-generation vehiclecommunication which meet the basic
needs required for smaller, multi-use,lower profile and smart vehicle antennas,
Yokowo is helping to create safe andcomfortable mobility services.

Yokowo manufactures probe cards forfront-end testing and sockets for backend testing mainly for the semiconductor
and electronic component testing market.
By making full use of its micro
precision processing and microwave
technologies, the Company provides
solutions for all processes in the areaof testing for electronic devices, suchas semiconductors and electronic
components, so as to meet the demands
for smaller size and greater speeds.

Yokowo 2021 Integrated Report

Medical
Devices

Coils for Guide Wires
and Catheter Shafts

Wireless Communication
Equipment
Fine Connector Business
Yokowo is globally developing andproviding minute spring connectors thatmeet the needs for miniaturization andspace saving in various electronic devices,
mainly for the mobile communications
terminal market.

Medical Device Business
Yokowo provides a complete service
from the design to the development
and manufacturing of OEM guide wires,
catheters and other micro precision parts andassembly products, mainly for the minimallyinvasive medical equipment market.

Vehicle Communication Equipment Segment▼Vehicle Communication Equipment - Consolidated Sales(million yen)

FY2016FY2017FY2018FY2019FY202032,02936,25638,18339,26437,292

Segment Overview
In this segment, Yokowo manufactures vehicle antennas,
including Shark Fin and GPS antennas for all areas from low
to high frequency, mainly in China and Vietnam with over
90% of production taking place overseas. Regarding sales, we
mainly provide our vehicle antennas to Japanese automobile
manufacturers, not only in Japan but also globally in the UnitedStates and ASEAN markets. Overseas sales account for over 60%
of all sales in this segment.
As a leading company of antenna systems that support nextgeneration vehicle communications, Yokowo will continue
to strengthen its core technologies including antennas, andpromote drastic reforms to its profit structure to continue togenerate long-term profits.

Segment Review (Fiscal 2020)
In the automotive market, this segmentʼs main market,
automobile manufacturers were forced to reduce production in
the first quarter due to the spread of the COVID-19 pandemic. In
the second quarter onward, although the scale of this reduction
shrank as demand began to recover, the overall automotive
industry was impacted by global semiconductor and resinmaterial shortages, so both production and sales declined year
on year. By region, new vehicle sales in the Chinese market
improved greatly from the previous fiscal year. However, in the
United States, ASEAN, and Japanese markets, there was a year
on year decrease due to a fall in demand and the shrinking
and suspension of production in the first half of the fiscal
year. Under these circumstances, from the second quarter
onward, sales of antennas for automobile manufacturers inJapan and overseas, such as Yokowoʼs mainstay Shark Fin and
GPS antennas, and sales of products mainly for the domestic
market, such as the ETC antenna, surpassed levels for thesame period of the previous fiscal year due to the recovery of
production by automobile manufacturers. However, this was
not enough to offset the decline in sales during the first quarterand overall sales decreased year on year. As a result, net sales inthis segment decreased from the previous fiscal year to 37,292
million yen (down 5.0% on previous year). In regard to segment

VehicleCommunication
Equipment

CircuitTesting
Connectors

Wireless
Communication
Equipment

profit and loss, we not only recorded a loss in the first quarterbut also had a surge in ocean freight charges and an increase inlogistics costs attributable to the increased use of air shipments
due to parts procurement difficulties and production delays,
as well as a temporary decrease in inventory valuation in thesecond half of the fiscal year. Despite this, from the second
quarter onward, factors such as an increase in the proportionof product sales with relatively high profit margins, a decreasein manufacturing costs resulting from cost management
initiatives, and higher yields from manufacturing processes led
to a significant improvement in profit. As a result, we recorded a
profit of 433 million yen (compared to a profit of 30 million yen
in the previous fiscal year).

Segment Policy
Looking ahead, Yokowo will continue to promote further
business expansion and a more layered business model bygaining a full market presence in mobility service fields, such
as MaaS. The Company will do so while working on thedevelopment of more advanced strategic products with higher
levels of added value in new fields such as ADAS, automateddriving, and connected cars.
In addition to investment to increase capacity at its production
bases, Yokowo will forge ahead rebuilding its profit structure
by moving more production from its Chinese plant to its plantin Vietnam. The Company will also overhaul its profit profile
by establishing a plant in the Philippines as a third production
base (due to begin operations in April 2022), and by making themost of strategic alliances while seeking steady expansion of its
automatic assembly lines and automatic testing systems broughtin this fiscal year.

Shark Fin Antennas

GNSS Antennas

Yokowo 2021 Integrated Report

08Segment Overview

Circuit Testing Connectors Segment▼Circuit Testing Connectors - Consolidated Sales

FY2016FY2017FY2018FY2019FY2020

6,883

9,503

9,138

12,832

13,242

Segment Overview
In this segment, Yokowo manufactures contact probes making
full use of its micro precision processing technology, and also
manufactures probe cards for front-end testing and sockets forback-end testing in semiconductor manufacturing processes,
which both use contact probes. Yokowo has production basesin Japan and Malaysia with overseas production accounting forover 60％ in this segment. Products are supplied worldwide,
mainly to semiconductor manufacturers and foundries, with over
80% of sales going overseas.
In recent years, Yokowo has expanded its product lineup in
cutting-edge fields, such as testing sockets for testing 5G devices
that use microwave technology, and probe cards for the testingof high-frequency electronic components (YPX) that make useof MEMS technology. As of March 2021, monthly production
capacity for contact probes was approximately 5.8 million units.

Segment Review (Fiscal 2020)
In the semiconductor testing market, this segmentʼs mainmarket, the COVID-19 pandemic drove an increase in demandfor personal computers due to an increase in people working
remotely and an increase in demand for servers accompanying asudden rise in internet use as people refrained or were restrictedfrom going out. Also, although there was a temporary decline
in demand related to 5G as investment stalled, this recoveredfrom the second half of the fiscal year onward. Under thesecircumstances, sales of the Groupʼs mainstay semiconductor
back-end testing tools remained level with the previous fiscal
year. This was mainly due to sales from major customers
declining across the board from the second quarter onward asa result of the COVID-19 pandemic and trade friction between
the United States and China, despite an increase in orders in
the first quarter. Sales of semiconductor front-end testing toolsrose significantly compared to the previous year as overall sales
grew against the backdrop of a global increase in sales of 5G
smartphones in the turnkey business, which provides a one-stop
service solution to include peripheral equipment. As a result, net

09(million yen)

Yokowo 2021 Integrated Report

VehicleCommunication
Equipment

CircuitTesting
Connectors

Wireless
Communication
Equipment

sales in this segment grew year on year to 13,242 million yen(up 3.2% on previous year). In terms of profit and loss for thesegment, profit decreased to 2,682 million yen (down 14.4%
on previous year), due to factors such as an increase in fixed
expenses accompanying the enhancement of production systems
in anticipation of recovery and increase in orders, as well as anincrease in fixed expenses for back-office departments following
increased sales.

Segment Policy
Going forward, Yokowoʼs policy is to steadily capture theincrease in demand for semiconductor testing in fields such as
5G, IoT, in-vehicle, and AI. To this end, Yokowo will strongly
promote the strengthening of full-scale systems to; develop
and launch strategic products that target the market for
high-frequency and high speed signal testing related to 5G
communications, invest in capacity increases at domestic andMalaysian plants, invest in improved efficiency and streamlining
such as by building automatic assembly lines and introducing
automatic testing systems, and expand its turnkey business inthe area of semiconductor front-end testing. Yokowo will also
strive to build a more profitable business structure and maintainstable business operations.

Contact
ProbesYPXProbe Head

Sockets

Wireless Communication Equipment Segment▼Wireless Communication Equipment - Consolidated Sales(million yen)

FY2016FY2017FY2018FY2019FY2020

5,164

6,158

7,429

8,498

9,441

Segment Overview
This segment consists of two businesses; Fine Connectors andMedical Devices.
In the Fine Connector business, Yokowo manufactures spring
connectors which allow for easy attachment and detachment
to electronic devices. These connectors are manufactured inJapan, Malaysia, and China, with over 80% being produced
overseas. Yokowo supplies a wide range of electronic device
manufacturers in Japan and overseas, with over 80% of sales
going outside Japan.
In the Medical Device business, in addition to micro precisionparts such as OEM guide wires and catheters, Yokowo designs,
develops, and manufactures assembly products at its Tomioka
plant in Japan. Yokowo mainly supplies domestic medical device
manufacturers, with approximately 10% of sales going overseas.

Segment Review (Fiscal 2020)
Although sales of smartphones have been declining in themobile communications terminal market, this segmentʼsmain market, future growth is expected on the back ofmore diversification and functionality with wearable devices.
Moreover, the point of sales (POS) market continues to growsteadily from the perspective of improved operational efficiency
through information management in a wide range of industries,
including logistics and manufacturing. Growth is also expected
in other markets such as industrial equipment. Under thesecircumstances, with fine spring connectors as the businessʼ coreproduct in the Fine Connector business, net sales increased year
on year as sales of POS terminals remained strong and orders
increased for other products, such as mobile terminals for use
in educational facilities. In the Medical Device business, whichis also included in this segment, sales remained roughly levelwith the previous year. The impact of the COVID-19 pandemic
led to a decrease in orders for parts, but sales of new products
sold as complete units were strong. As a result, net sales in thissegment increased from the previous fiscal year to 9,441 million
yen (up 11.1% on previous year). In terms of profit and loss,

VehicleCommunication
Equipment

CircuitTesting
Connectors

Wireless
Communication
Equipment

profit increased to 2,062 million yen (up 17.5% on previousyear) due to factors such as increased revenue from the Fine
Connector business.

Segment Policy
In the Fine Connector business, Yokowo plans to continue
working to expand its business and carry on with the multilayer structuring of its products, markets, and customers.
The Company will do this by accelerating the introduction ofcustom-type connectors such as high-performance, high-speed,large-capacity connectors that meet the product needs of adifferentiated market, and by expanding its standard productlineup to capture new demand.
In the Medical Device business, Yokowo aims to further growthe business by increasing the production capacity of micro
precision parts with the installation of cutting-edge production
equipment and by expanding sales of guide wire and catheter
assembly products in Japan and overseas. The Company will
also promote a multi-layered structure to the supply chain in
anticipation of business expansion in the cutting-edge medical
field which is seeing worldwide expansion particularly in the
United States.

Spring Connectors

Coils for guide wires

Yokowo 2021 Integrated Report10

Yokowoʼs Value Creation

Top Message

Challenge the next stage
by promoting the new
medium-term
management plan
GO BEYOND~Challenge the Next Stage~

Takayuki Tokuma
Representative Director,
President and Executive Officer
YOKOWO CO., LTD.

Yokowo will drive forward with its new medium-term management
plan, to ensure that it is a constantly evolving company.
The new medium-term management plan began in fiscal year 2020.
An outline of the new medium-term management plan and the success stories for the next stage Yokowo will takefrom here are described below.

Basic Management Policy
Yokowo has instituted two management policies to realize its
corporate vision. One is the sustainable evolution of business
management and the other is a multi-layered business structure.
The sustainable evolution of business management isconstant evolution and moving forward as Yokowo has
advocated in the slogan it has out forward since its inception,“Constantly on the cutting edge.” The measures for realizing
the sustainable evolution of business management are productinnovation (including business model, product and businessstructure innovation), process innovation (the innovation ofbusiness processes) and personnel innovation (human resources
innovation).
In other words, these measures aim to substantially change

11

Yokowo 2021 Integrated Report

the business structure, including products, technology andmarkets, and business operating process through the optimal
placement of business sites and the proactive introduction of
new production processes, processing technologies and IT. The
diversity of the human resources who operate the above will
expand to ensure the development of highly professional teams.
In line with management innovation (the innovation of
corporate management and business operations), substantialchanges will be made to how the elements and systems involvedin the above three innovation measures and these measures
themselves are managed, in order to accelerate the evolution ofbusiness management.
The other management policy of the multi-layered businessstructure aims to enhance the stability of our corporate
management and our companywide earnings structure. In otherwords, we aim to improve sustainability.
As the management environment surrounding Yokowo ischanging drastically, this management policy aims to establish
a business system capable of responding to these changes bycreating a multi-layered business structure (industry, customers,
technologies, supply chains and other layers).
By promoting the sustainable evolution of business
management and a multi-layered business structure, we hopeto achieve Minimum 8 (secure at least 8% in sales growth rate,
operating profit margin, and return on equity) in a consistentand stable way.

The New Medium-term Management
Plan and the Current State ofOperational Performance Under the
Impact of the COVID-19 Pandemic
In November 2020, Yokowo announced its new medium-term
management plan, around six months later than originally
anticipated. The new plan covers the three-year period from the83rd fiscal term (the fiscal year ended March 31, 2021) to the85th fiscal term (the fiscal year ending March 31, 2023). As far
as possible, the spread of the COVID-19 pandemic was taken
into account when formulating the plan.

New Medium-term Management Plan
With the 100th anniversary of our founding coming up
in September 2022, the title of the new medium-term
management plan is “Go Beyond: Challenge the Next Stage,”to evoke our belief that our goal is to transcend the present
situation and advance to the next stage.
The outline of the plan is as follows.

1. Promote management innovation company-wide■ Realize business operations that are directly linked to theneeds of our customers■ Strengthen our capabilities to manage manufacturing

proficiencies and integrate responsibilities for business income
and expenditures and the authorities for achieving the income
and expenditure plans■ Realize the visualization of profit performance by product andimprove capital efficiency

2. Product innovatoin that transforms the risksof changes in industries and markets into
opportunities for business■ Revitalize our business structure through sustained effort todevelop new markets and introduce new technologies andthrough strategic withdrawals from unprofitable businesses

3. Strengthen systems that support productinnovation■ Intellectual property strategy■ Establish elemental technologies■ Strengthen cooperation between the business divisionʼs

technologies and research and development (including
external networks)

4. Evolve process innovation to meet customer
expectations■ Develop product innovation based on the new 5S* principle

using AI and other advanced technologies in all businessprocesses* Simple, Slim, Small, Short and Smooth

Corporate Vision

Evolution of Business Management

Multi-layered Business Structure● Multi-layered business structure (industry, customers,● Product innovation

technologies, supply chains and other layers)● Process innovation● Personnel innovation

Global paradigm shift/Establishing a business systemcapable of responding to drastic changes in businessenvironment and competitive environment● Management innovation

Realization of Minimum 8● Sales growth rate
● Operating profit margin● Return on equity

8%
Yokowo 2021 Integrated Report

12

Yokowoʼs Value Creation

By steadily promoting the corporate priorities, we aim toensure the achievement of the medium-term basic managerial
objectives and consolidated performance objectives.

Medium-term Basic Managerial Objectives
Stable realization of Minimum 8

Consolidated Performance Objectives
in the New Medium-term Management Plan
(Fiscal year ending March 31, 2023)

Consolidated net sales: ¥ 72 billion
Operating income:Ordinary income:¥ 7.2 billion (operating margin: 10%)
¥ 7 billion

Profit attributable to owners of parent: ¥ 5 billion

Moreover, we are determined to drive forward initiatives in thefollowing three areas as measures to be enacted over a period
longer than the period of the medium-term management plan.

1. Basic researchCentering on micro precision processing technology andmicrowave technology, the core strengths of the Yokowo
Group, we will work to invest in and enhance the system forbasic research, a key driver of long-term growth.

2. Digital transformation (DX)By improving productivity and efficiency at each site fordevelopment, procurement, production and marketing, we
will promptly provide value to customers. Moreover, we aim tocontinue to improve the speed of management decision-making
and our responsiveness to change by reinforcing real-timecooperation between these sites and the headquarters.

3. The SDGs
We will work on the three top-priority issues of the environment,
local communities and diversity and inclusion, which have been
extracted through a materiality identification process and aim toachieve KPIs set for each measure (see p.19 to p.22, “YokowoʼsMateriality”).
By steadily and vigorously pushing ahead toward these goals,
we will establish resilient strength that does not waver during
upheaval and that enables appropriate and prompt responses tosuccessive and drastic changes. We will strive to collaborate with
our stakeholders in our efforts to create new value.

13

Yokowo 2021 Integrated Report

Performance in the Fiscal Year Ended March 31,
2021 and Current Situation
The main markets for the Yokowo Group include theautomotive, semiconductor testing, mobile communications
device and advanced medical equipment markets. These
markets are experiencing a dramatic transformation due tothe widespread adoption of CASE*, MaaS, 5G, AI and IoTtechnologies, and this presents major business opportunities for
Yokowo. However, the spread of the global COVID-19 pandemic
has had a major impact on our Company.
Specific examples of the negative impact of COVID-19
include a reduction in the capacity utilization rate of ourCompanyʼs production bases due to lockdowns and restrictions
on movement, etc., a substantial fall in the volume of orders
received from customers due to semiconductor shortages, andincreased freight charges and longer shipping times for marinetransport. On the other hand, the dramatic transformationin lifestyles caused by the pandemic has also had some morepositive impacts, such as the global increase in demand forsemiconductors resulting from people staying at home more
and working from home, and the shift away from using public
transportation towards using private cars, etc. As a result,examination of the Companyʼs performance in the fiscal year
ended March 31, 2021 shows that sales fell only very slightly
year-on-year (by 1.0%) to 59,976 million yen, while operating
profit rose 5.3% year-on-year to 5,179 million yen, ordinary
income rose by 16.1% year-on-year to 5,320 million yen, andprofit attributable to owners of the parent company rose by
11.0% year-on-year to 3,818 million yen. All of these profit
indicators represented record highs for the Company.
* CASE: An acronym for the new trend in automobiles:
Connectivity, Autonomous, Shared, Electric

Performance Forecast for the Fiscal Year Ending
March 31, 2022
In the fiscal year ending March 31, 2022, the scale of the impactsof the COVID-19 pandemic outlined above has expanded. In
particular, the spread of COVID-19 variants in the Asia region
has become a severe problem, with an impact on the production
operations not only of Yokowo but also of our customers andsuppliers that has been more pronounced than in the previous
fiscal year, and the outlook for the future is becoming even more
uncertain. Although the Yokowo Group is expected to see anincrease in whole-year sales year-on-year, a fall in profits will be
unavoidable due to the significant decline in order volume, therising cost of raw materials and the increase in logistics costs.
As of November 2021, it appeared unlikely that this fiscal year
would see record earnings. At the same time, however, enduser demand remains strong in Yokowoʼs main markets, which
include the automotive and semiconductor markets. We believe
that, if the pandemic is brought under control and economic
activity gets back to normal, then performance could improveagain in the fiscal year ending March 31, 2023, partly as aresult of a rebound effect. We will continue working towards
achieving the performance targets set in the new medium-term
management plan for the fiscal year ending March 31 2023.

My Desire to “Make Yokowo a Good
Company”
Since being appointed as President in 2007, I have constantly
conveyed my desire to make Yokowo a good company to ouremployees in and outside Japan. As I wrote in the section aboutmateriality, I think that a better company is:■ A company about which customers say, “It was good that wehave conducted business with Yokowo. We will expand ourbusiness relationship with Yokowo.”■ A company about which contractors say, “It was good that

we performed business operations for Yokowo. We will work
harder to contribute more,” and about which people in thelocal community say, “It is good that we have Yokowo in our
town. We are happy to have our children work there.”■ And most importantly, a company where the employees of the

Yokowo Group think, “I am very satisfied with to be working
for this company. I will work harder to make it an even better
company.”
I think that a company such as that is truly a good company.
To make Yokowo a good company, we should ensure that theofficers and employees of the Yokowo Group in and outside
Japan, regardless of nationality, gender and other differences,are content and fulfilled in their work, and have a foundation ofreliability and trust.
Through the evolution of our technology, we will continue
to offer quality products and services to improve customer
satisfactions. We will contribute to local communities which werely on to ensure that we are welcomed by them and to bringsatisfactions to our neighbors. As a resident of this world, we willcontribute to solving climate change and other issues to preserve
the natural environment that sustains lives of people around theworld, including our stakeholders. Based on the above, we havethe three top-priority issues: the environment, local communities
and diversity and inclusion.
Recently, we have introduced new measures to address theseissues, and have begun implementation of new initiatives. For
example, with regard to the environment, at a meeting of theBoard of Directors held in October 2021 it was decided thatYokowo would express its support for the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD)(see p.41, “Environment”). In regard to diversity and inclusion,
besides the Tomioka International Specialist Park (TISP) projectthat was launched several years ago, and which has alreadybegun to produce results, we have also organized round-tablediscussion meetings that provide a venue for a wide rangeof employees – including female, foreign, veteran and new
employees – to engage in free discussion and exchange ofviews; the ideas raised during these meetings are reflected in
the Companyʼs human resources system and employee welfare
measures (see p.34 “Employees”).
One mission of the Yokowo Group is to operate our businessand make a profit as a group engaging in commercial businesses.
We recognize that now, it is not simply the volume of profits
generated from our growth potential and the profitability ofour business that is strongly demanded, but also the quality ofthe profits that should reflect equal, fair and proper business
operations, and together, the results of a business operated inthis way should lead to social contribution.
While working to achieve the new medium-term
management plan and the long-term measures, we hope tobecome a good company for our shareholders and investors byincreasing both the volume and quality of profits, expanding
profit distribution and by improving our quality and dignity as acompany.
We offer our appreciation to all of our stakeholders and lookforward to your continued understanding and support in the
future.

Yokowo 2021 Integrated Report

14

Yokowoʼs Value Creation

Yokowoʼs Value Creation Process
While utilizing our “6 types of capital,” the Yokowo Group provides value to society through a multi-layered
combination of our core competencies (micro-precision processing, microwaves (high frequency), and advanced
devices). Looking forward, our aim is to achieve a sustainable society through our business activities that are based
upon the four pillars of our basic management policies, and to strive to continue to create value unique to Yokowo.

Key Inputs

Yokowoʼs Business Activities(FY2020)◦Production capital

VehicleCommunication
Equipment

・Non-current assets:¥18.45 billion
・Capital investment:¥4.43 billion

Details→p.8

1. Development◦Intellectual capital

Proposing products needed by
future generations, utilizing ourcore technologies
Details→ p.23

844

・Patents held:
・R&D expenses:¥3.2 billion

2. Procurement

Carrying out green procurement◦Human capital

3. Production

8,428

・Employees:◦Financial capital・Total assets:¥56.86 billion
・Cash & cash equiv.:¥15.46 billion◦Social capital・Domestic group companies: 4・Overseas group companies: 18

Building the worldʼs preeminent
local production system

4. SalesCircuit Testing
Connector
Details→ p.9

Expanding sales to 6 cities in theAmericas, and 10 countries andregions in Europe, Asia, andaround the world
Details→p.3

Basic Management Policy
Quality first・Electricity
・Water

35,110 MWh
283,178 m3

Promotion of evolutionary
management(4 innovations)Technology-based enterpriseMulti-layered businessstructure

Global business base

15

Yokowo 2021 Integrated Report

Details→ p.10

Details: https://www.yokowo.co.jp/english/ir/message/(establish the “Yokowo quality brand”)◦Natural capital

Wireless
Communication
EquipmentKey Outputs

Value Provided to Society(FY2020)

Reduction in environmental
impact◦Sales
¥59.97 billion

Addressing social issues
Related SDGs*

Innovations in information &communication technology

Providing minimally invasive
medical equipment◦Representative
products

Improvements in daily safety
and comfort

Vehicle Communication
Equipment

Improved traffic and transport

・Shark Fin Antennas
・GNSS Antennas

Improved, more resilient social
infrastructure

Circuit Testing
Connectors
・Probe Cards
・Hi-Giga Sockets

Wireless Communication
Equipment
・Spring Connectors

Human resource training
making the most of diversity

Building of a fair working
environment

・Guide Wires / Catheters
Assembly Products* SDGs: Abbreviation of Sustainable Development
Goals. These were adopted by the United Nationsin 2015 as common goals for 2030, to confront
issues such as poverty and climate change

Achieving Our Mission◦Reduction in
CO2 emissions▶Corporate Mission

Year-on-year-215 t-CO

2

At Yokowo, we consider our corporate mission to be “to create asustainable society, Yokowo responds to the needs of advanced
companies that are undertaking structural reforms, and helps tocreate the future by offering high-quality products backed by its coretechnologies.”

Yokowo 2021 Integrated Report

16

Yokowoʼs Value Creation

Yokowoʼs Manufacturing
The Yokowo Group actively incorporates cutting-edge technologies while reaching greater heights with its coretechnologies, such as micro precision processing technology, antenna technology, and microwave technology,
providing a wide variety of original products for the worldʼs leading companies.
Furthermore, Yokowo is promoting innovation each and every day in the production process to achieve high levels
in terms of quality, cost, delivery and safety (QCDS).

Cutting-Edge Research and Development

Basic Research

Microwave
Technology

Amid the development of automated driving and 5th generation mobile communications systems (5G),
microwave technology is becoming increasingly more important in the fields of vehicle communicationand semiconductors. Yokowo is progressing with the establishment of the worldʼs highest-level
microwave technology in terms of both wireless communication and semiconductor testing.

In addition to the worldʼs highest-level micro precision processing
technology, Yokowo is strengthening its competitiveness in precision
plating and MEMS processing.

Micro Precision
Process

Process
Development

All major elemental technologies are developed within Yokowoʼsproduction engineering department, which also promotes AI
applications in production and quality control.

Production
Process

Yokowo is establishing an integrated system from design tomaintenance that utilizes multiple uses of 3D computer-assisted design
information.

Design Process

Commercialization
Research

Yokowo has established a system in which the R&D department, the process technology department
and the department responsible for new product development and commercialization can work
together closely. By incorporating cutting-edge technologies in collaboration with other companies anduniversities, Yokowo is also promoting product evolution and a multi-layered business structure.

Applied Research● System proposals related to building social platforms that utilize wireless technology and software development capabilities● Development of high-speed optical communication devices and connectors, and automatic testing technology for wireless antennas

incorporated in semiconductor devices essential for the evolution in automated driving and 5G● Turnkey system proposals for semiconductor testing tools

17

Yokowo 2021 Integrated ReportMulti-Layer Building
Products

Fields for Product Roll-Out

Vehicle Antennas

Semiconductor testing

Expanding and Strengthening

Software applications● Automated driving systems

Semiconductor Testing Tools● 5G● Turnkey

Connectors forElectronic Devices●S mall, low profile,waterproof, high current

Medical Devices● Precision parts● Assembly productsHigh frequency
device testing

Social Platforms● Car sharing

Medical devices

Strategic Development

Connectors forelectronic devices● Drones

High Frequency Device
Testing● Amps● Filters

Optical Communications● Connectors● Photoelectric conversion

Precision Plating● Wet

The worldʼs number one manufacturer for high-frequency,
wireless applications, and precision parts

Vehicle antennas● Dry

Yokowo 2021 Integrated Report

18

Yokowoʼs Value Creation

Yokowoʼs Materiality
In 2020, Yokowo identified our materiality as a Group. This clearly states the contribution to society made throughour business activities, and incorporates the desire of our management to “make Yokowo a good company.” Throughthe promotion of innovation and reforms to business models, we are both sustainably growing our business, andcontributing to the environment, society, and diversity.

① Be a company that customers and theircustomers feel comfortable working with“Make Yokowo a good company”
̶ Three Wills❶ Be a company that customers and theircustomers feel comfortable working with

❷ Be a company that society (including local
communities) and its business partners
feel comfortable interacting with

● Establishing the “Yokowo Quality Brand” focusing on thehighest quality, and on zero hazardous chemical substances■High quality, high productivity, and reduced environmental impact resulting
from reforms in production processes through the New 5S (Simple, Slim, Small,
Short, Smooth) Concept, and through AI■

Enhancing a research and development system that promotes more in-depth
and advanced world-class micro precision processing and microwave (highfrequency) technologies, as well as reducing our environmental impact throughthe development of ultra-compact, energy-saving products■

Utilizing our antenna and software technologies to break into the field of MaaS■

Promoting the F0 Conference and other quality improvement activities■

Integrated management of technologies using PLM, and improvements toquality pre-verification functions using digital twins■

Reducing environmental impact through our business activities
Promotion of recycled materials in plastic molding, and reductions in waste
Moving to plastic-free packaging and transport pallets, and conversion to biodegradable
plastics
Recycling of cutting oils, etc. (joint research with universities and technical colleges)
Establishment and operation of Green Procurement Guidelines❸ Be a company where employees feel

comfortable being employed, and which
ensures that employeesʼ families are
happy for them to work there.

Process to Identify Materiality
Specific processes are as follows:① List themes considered by the Company
or its stakeholders to be important basedon management policies, medium-term
management plans, specific materiality by
SASB industry, etc.
② Refine themes and set targets throughworkshops with General Managers ofbusiness divisions and Chief Officers ofbusiness strategy divisions.
③ After reviews by the Board of Directors
including outside directors and outside
Audit & Supervisory Board Members,
approval of items and KPIs.
④ Organize the relationship with CSR issues,and clearly detail the specified results in
the integrated report and on the website.

● Contributions to treatment of illnesses and rare diseases■

Development of innovative medical devices through the use of our world-classmicro precision processing and microwave (high frequency) technologies■

Industry-academia open innovation (Gunma University, University of Tsukuba,
Tokai University, Kobe City Medical Center General Hospital, UCLA, etc.)■

Construction of an ecosystem with universities, hospitals, and startup businesses(startup ecosystem)● Promoting measures in response to climate change
Formulating and promoting concrete measures in response to climate change inorder to realize carbon neutrality by 2050.
■

Responding to climate change
Formulating concrete measures that conform to the recommendations of the
FSB Task Force on Climate-related Financial Disclosures (TCFD)
Disclosure using the Carbon Disclosure Project (CDP) framework■

Water resource management (reductions in water usage, improved wastewater
treatment)■

Resource recycling (reductions in waste quantities, promotion of zero emissions)● Strengthened compliance and governanceThree Priority Issues (Materiality)

Related SDGs

From the candidate issues that wereextracted and analyzed using the process
outlined above, we identified the following
three priority issues:● The environment● Local communities● Diversity and inclusion

19

Yokowo 2021 Integrated ReportMore advanced

② Be a company that society (including local
communities) and its business partners feel
comfortable interacting with

③ Be a company where employees feel comfortablebeing employed, and which ensures that employeesʼ
families are happy for them to work there.

● Dialog with local communities and contributions to theirdevelopment● Promotion and development of workforce diversity andinclusion■

Employment of local residents■

Donations to local governments, and sponsorship of local events■

Donations to Tomioka City in Gunma Prefecture and Kita City in Tokyo tosupport medical facilities to treat COVID-19■

Entering into a naming rights partnership agreement with Tomioka City■

Trash cleanup activities around the Tomioka plant■

Tomioka City Educational Fund, Tomioka World Heritage Exhibition
Maintenance and Management■

Agreement on Gunma University Industry-academia Collaboration■

Donations to the Rotary Yoneyama Memorial Foundation and Disaster Relief
Funds through the Tomioka Rotary Club■

Through the Tomioka Chamber of Commerce & Industry, work in collaboration
with the municipal government to promote solutions to local issues■

Education assistance for elementary, junior high, and high schools■

Contribution to local revitalization through expanded hiring of foreign staff
in the Tomioka area (utilizing TISP)■

Promoting activities to provide support for SMEs and for the cultivation ofyoung people who will play important roles in the future, as a sponsoring
member of the Certified Management Support NPO Club, a Specified Nonprofit Corporation registered with Tokyo Metropolitan Government● Fulfilling social responsibility throughout the supply chain■

Fair and equitable selection, and compliance with the Subcontracting Law■

Building relationships as an equal partner■

Building a checking system to eliminate unethically mined resources, etc.
(conflict minerals monitoring system)■

Multi-layered production bases (Vehicle Communication Equipment segment:
establishment of a third production base)■Construction of a fault-tolerant supply network(duplicated lines and networking)■

Strengthened support system with Tier 2 and Tier 3 suppliers● Establishment of a global BCP system, and constant testing to
improve its effectiveness● Building of a human rights check system in cooperation withlocal governments and NPOs to eliminate child labor andunethically mined resources, etc.

■

Promotion of the TISP (Tomioka International Specialist Park) concept
Employing around 100 specialists from overseas and establishing business
management processes in which collaboration with overseas staff is considered
normal will stimulate business activities that make the most of this diversity, andthrough improved living environments we will contribute to regional interaction andrevitalization.

■

Expansion and development of womenʼs careers
Revising and promoting the action plan in accordance with the Revision of the Act
on Promotion of Womenʼs Participation and Advancement in the Workplace, andexpanding and reinforcing this throughout the PDCA cycle
Revising and promoting the action plan in accordance with the Act on Advancementof Measures to Support Raising Next-Generation Children, and expanding andreinforcing this throughout the PDCA cycle
Improving work-life balance by establishing on-site company nurseries■

Creating a workplace environment allowing all employees to play an activerole regardless of age■

Establishing a special subsidiary to provide employment for persons withdisabilities and expand their opportunities for participation● Achieving an appealing, rewarding work environment■

Improving work-life balance by establishing a teleworking system■

Improving work-life balance by encouraging employees to take annual paid
leave

■

Improve employee satisfaction by expanded support for illness prevention
and treatment■

Establishment of awards system, including for social contributions■

Get-together Interactive meetings (product technologies, production
technologies, QC)■

Establishment of global employee promotion and HR treatment system■

Establishment of an Advanced Technical Research and Development Center toprovide an appealing working environment for technical personnel■

Offering advanced technical training opportunities (AI and other graduate
education, business school, external research organizations)● Expanding long-term training and apprenticeship programsin Japan for employees in locations overseas thus improving
their abilities, and establishing a human resources systemwith global applicability■

Strengthened risk management (establishment of Business Risk Management Committee, disclosure of major risks)■

Achieving fair market competition (setting of Group rules, and monitoring of compliance)

Related SDGs■

Avoidance of corruption, bribery, and anti-competitive behavior

Related SDGs

business activities and social contribution
GO BEYOND〜Challenge the Next Stage〜
Yokowo 2021 Integrated Report20

Yokowoʼs Value Creation▼Materiality targets and progress status
Targets for 2030
Materiality

Establish Yokowo as a quality brand by using the highest
quality, and by a move to zero hazardous chemical
substances

Performance Indicator

Target Value

Number of innovative medical devices created backed up
by IP (annual)5①

Be a company that customers and their customers
feel comfortable working with

Establishment of micro precision and microwave
laboratories

EstablishedContributions to treatment of illnesses and rare diseases

Number of treatments provided to the field of rarediseases with low patient numbers and withoutestablished treatment methods (annual)3

Response to climate change

GHG emissions
Compared to FY2014
Target for 2030

Scope 1 and 2
35% reduction

Water use (basic units)
Target for 2030

10% reduction comparedto FY2020

Amount of waste generated
Target for 2030

10% reduction comparedto FY2020

Formulating concrete strategies that conform to TCFD
recommendations
Disclosure using the CDP framework
Planning and progress management by the Board of
Directors

Number of major compliance violations (annual)Strengthened compliance and governanceTraining participation rate (annual)0100%

Be a company that society(including local communities)
and its business partners feel
comfortable interacting with②

Be a company where employees feel comfortable being
employed, and which ensures that employeesʼ families are
happy for them to work there

Dialog with local communities and contributions to theirdevelopment

Number of community service projects undertaken(annual)10

Fulfilling social responsibility throughout the supply
chain

Violations of the Subcontracting Law

0

Establishment of a global BCP system, and constanttesting to improve its effectiveness

BCP strategy-based best mix of overseas and domestic
production

BCP certification

In-house checks, and actively contributing to thepromotion of fair labor practices through collaboration
with NPOs in each country

NPO cooperation activities
5 (annual)

Ratio of female leaders (overall ratio of female employees
who are section heads or higher)

Comparable with levels for
males

Create a workplace environment allowing all employees toplay an active role regardless of age

Employment age limit
70 and above

Concern for human rights
Building of a check system in cooperation with local
governments and NPOs to eliminate child labor andunethically mined resources, etc.

③

21Promotion and development of workforce diversity andinclusion

Number of TISP hires

Ratio of employees with disabilities

Percentage of annual paid leave taken

Achieving an appealing, rewarding work environment

Expanding long-term training and apprenticeshipprograms in Japan for employees in locations overseas
thus improving their abilities, and strengthening thebusiness mindset of Japanese employees throughinteraction with these employees

Yokowo 2021 Integrated Report

120

150% of legally stipulated
ratio

90%

Number of on-site company nurseries established(including contracted service provision)

3

Number of workplace accidents (annual)0

Number of overseas long-term trainees accepted (annual)

20

VOICE
Achievement Level by FY2020
2 Under development (specifications finalized)
Planning for the establishment of the new
Micro Process R&D Center (construction ofwhich is scheduled to begin in February 2022,
and be completed in late 2022)

Contributions to treatmentof illnesses and rare diseases
̶Status of progress madein building a startup
ecosystem

1 Under development (prototype stage)
Commencement of preparations for the
adoption of photovoltaic power generating
facilities at the Tomioka Plant and Vietnam
Plant, which are the Companyʼs core plants
Commencement of discussion of concretemeasures for reducing Scope 3 emissions
17.0% reduction compared tothe previous fiscal year
15.5% reduction compared tothe previous fiscal year
0
Information security e-learning: 98%
Harassment prevention e-learning: 98%
Yokowo is implementing activities as a namingrights partner at the Tomioka Plant. For moredetails, please see the Local Communities
section (p.40).
0
In the Fine Connector business in the WirelessCommunication Equipment segment, we areproceeding with the establishment of a new
business continuity planning (BCP) system
We comply with all of our customersʼ humanrights status check requirements, and we are
exploring possibilities for collaboration withNPOs to strengthen our own internal checking
function
Male 43.7% Female 11.5%
We are currently implementing roundtablediscussions to address this issue.
For more details, please see the Employees
section (p.34).
We have adopted a framework that enables
persons aged 65 or over to continue working
as contract employees under outsourcing
agreements
Number of TISP hires at the Company 61
For more details, see the Diversity section (p.36).
1.52%
We are currently preparing to establish a special
subsidiary for the employment of people withdisabilities. For more details, please see theDiversity section (p.35).
63.6％
Preparations are underway as part of the
Tomioka Plant renewal plan. We are alsoplanning to introduce a childcare and nursing
care plan as part of the new personnel system.
60
In FY2020, although recruitment at overseas
facilities went ahead as normal, the acceptanceof overseas long-term trainees in Japan was put
on hold because of the spread of the COVID-19
pandemic.

Hiroshi Igahara
Executive Officer cum General Manager,
MD Business Division

Established in 2006, Yokowoʼs Medical Device (MD) business is a relatively young
business. Since being appointed General Manager of the MD Business Division in2017, I have tried to develop the business in line with the vision of “getting every
individual employee to experience for themselves the satisfaction of playing a partin contributing to society through business.” However, it has also been broughthome to me just how difficult it is for a single company to achieve this on its own.
Around this time, it just so happened that I made the acquaintance of Mr.
Kazuya Shobayashi, the Chairman of Biomedical Solutions, Inc. We shared ourviews regarding the issues affecting the healthcare sector in Japan, such as thefact that cultivation of medical device startups has been slow to develop, and we
discussed ways of addressing these issues, during which discussion I was able todraw on my own experience in areas such as venture capital investment and M&A
implementation.
In 2018, at a meeting of the Council on Promoting Development of NextGeneration Medical Devices organized by Japanʼs Cabinet Secretariat, Mr.
Shobayashi proposed the development of a startup ecosystem as a framework
for the development of medical devices in Japan. Yokowo gave its wholehearted
support for this proposal, and decided that we would serve as a manufacturing
partner for the realization of revolutionary new product ideas developed
by startups. With Mr. Shobayashi and various universities and startup firms
proceeding with the development of relevant concepts, a large number of productideas have been generated, with a focus on revolutionary development projects,
many of which relate to the treatment of intractable diseases. In 2021, we begancollaboration with four medical device startups (all of which Yokowo has investedin), and we have also launched the Japan Medical Start-up Incubation Program(JMPR) foundation to provide further support in the area of basic research.
This initiative has been positioned as an important future strategy for Yokowoʼs
MD business. One of our outside directors commented that “the concept of
the startup ecosystem itself embodies the core meaning of the SDGs,” and MDBusiness Division staff have been unanimous in saying that they have been able
to experience for themselves the making of a contribution to society even greaterthan that normally made through our business activities, and have felt a real senseof achievement. I believe that this is an initiative that will make it possible to realizeboth a better company and a better society.
Going forward, as the head of the MD Business Division, I hope that I will beable to make a contribution towards the success of the startup ecosystem, while
collaborating with many people who are involved in the healthcare sector.

Yokowo 2021 Integrated Report

22

Yokowoʼs Value Creation

Research and Development
The Yokowo Group has set the five fields of micro precision processing technology, microwave technology,
antenna technology, surface modification materials technology (surface processing/modification of material), andsemiconductor application technology as the Companyʼs core technologies supporting its competitiveness in themarketplace. Through greater sophistication and wider use of all its technologies, Yokowo is building a multi-layered
business structure to create innovative, high-tech products.

Research and Development Policy
Basic & Applied ResearchBusiness Development in Growth Fields

Product design R&D

Production R&D

Microwave
technology

Micro precision
processing
technology

Advanced ProductCreation

Stable Supply of
Advanced Products

Semiconductor
application
technology

Antennatechnology
Wireless
communication
technology

Surfacemodificationmaterials
technology

Automotive

Social infrastructure(MaaS/ETC)

SoftwarePackagingTechnology

Material
evaluation
technology*1
Ceramic
technology*1

CASE*2

Semiconductor
testing

Mobile communication
terminals

5G

Medical devices*1 Material evaluation technology and ceramic technology promote evolution through alliance*2 An acronym for the new trend in automobiles: Connectivity, Autonomous, Shared, Electric

Ceramic devices(joint venture with
Nippon Electric Glass)

Decliningbirthrate
and aging
population

Product design R&D and production R&D are essential and inseparable elements of Yokowoʼs research and development. With the two
running in sync Yokowo is able to create advanced products at the cutting edge, providing a stable supply to the Companyʼs customers.

Research and Development System

Technical H.Q.

Each Business Division’sTechnology Development Group

Production Engineering
Research Department

Core Technology
Development H.Q.

Manufacturing
Engineering
Research Department

New Technology &New Business Incubation

Innovation Promotion
Division(Product Development Supervision,
Intellectual Property)

Production Process
Innovation H.Q.
(Basic technologies and research
related to
production process technology)

Management Planning H.Q.
(Business Strategy, M&A)

The Core Technology Development H.Q. is in charge of the research and development of technologies, such as microwave technology,
micro precision processing, and MEMS technologies, needed to give our products a competitive advantage. Whereas the engineering
departments in each business division are in charge of developing applications for new products with the Technical H.Q. overseeing thewhole product development process. Likewise, the Production Process Innovation H.Q. is in charge of research related to the production of
products, and the Management Planning H.Q. is in charge of new technology and new business incubation.

23

Yokowo 2021 Integrated Report

R&D Investment

Main R&D Themes

Based on the Yokowo Groupʼs company-wide growth strategy,
the R&D department, the business divisionʼs technology
department, and local development centers work together topromote research and development centered on the Companyʼscore technologies. In particular, Yokowo is focusing on the
research and development of new technologies and new
products with an emphasis on developing products with a higher
degree of technological integration and increased added value.

Over the medium to long term, Yokowoʼs main markets, namely
the automotive, semiconductor testing, mobile communication
terminals, and medical device markets, are expected to grow insize due to: advances in new eco-friendly vehicles such as plug-in
hybrids and electric vehicles as well as advanced driver-assistancesystems (ADAS) and automated driving; the actualization of
new semiconductor demand for next-generation high-speed,large-capacity communications typified by 5G; the rise of nextgeneration products such as wearable devices; and the spreadof minimally invasive treatment and advances in genetic testing
technology.
The main R&D themes for each segment related to the above
markets are as follows:▼R&D Expenses(million yen)
4,000
3,500

3,260

3,000
2,500

3,592
3,201

2,636
2,105

Vehicle Communication Equipment

2,000■ Antenna system for V2X essential for ADAS and automateddriving■ Technology development for communication systems,
equipment and devices for the CASE era

1,500
1,000
500
0

2016

2017

2018

2019

2020
(FY)

Circuit Testing Connector

Intellectual Property Rights
With its sights set squarely on target business fields and businessdevelopment for intellectual property, Yokowo is strengthening
the foundations of its intellectual property, the cornerstone of its
business strategy, by steadily increasing the number of patents
it holds in Japan and overseas and by making use of licensing
agreements, etc.
▼Patents held(case)

844

900
800

658

700
600
500
400

495

526

453

411

394
320

300

253

200
100
0

737

2016

2017

2018

2019

semiconductor device technology roadmaps (narrower pitch,
more pins, and higher frequencies)

Vehicle Communication Equipment
Fine Connector Business■ Development of high rated connectors■ Development of optical connectors for high-speed opticalcommunication
Medical Device Business■ Joint development of new minimally invasive medical
equipment and testing systems with universities and medical
institutions in Japan and the United States that utilize micro
precision processing technology and microwave technology

349

284

247

206

141

■ Development of test sockets for high-current, high-speed andhigh-frequency devices■ Research and development aimed at improving performance,
durability, and functionality, e.g. probe surface modification
technology■ Development of probe cards that keep pace with the

2020
(FY)

Overseas patents (including actual plans, designs and trademarks)
Domestic patents (including actual plans, designs and trademarks)

Yokowo 2021 Integrated Report24

Yokowoʼs Value Creation

Product Technology
The Yokowo Group develops a whole range of innovative products based on its unique technological capabilities
built up over many years, supplying electronic, electrical and automotive manufacturers around the world.

Innovative Product Development through the Fusion of Yokowoʼs Technologies

Antenna
Technology

Surface Modification
Materials
Technology

Microwave
Technology

Micro Precision
Processing
Technology

Product
Development

Production
Engineering

・MEMS Technology

New Core
Technology

・Ultra Fine Pitch Microwave
Contactor
・Advanced Millimeter-Wave
Module Technology/Measurement
Technology

Technology
Research &Development

By combining Yokowoʼs production engineering
for increased production efficiency with its
core technologies of micro precision processing
technology, microwave technology, antenna
technology, and surface modification materials
technology, the Company is able to develop
products with innovation and creativity. Amassing
technical expertise with greater sophistication,
Yokowo remains committed to the fundamental
research and development of new coretechnologies.
Through these unique technologies, Yokowo
manufactures a whole range of innovative
products such as: vehicle antennas; testing tools
for semiconductors and electronic components;
connectors for electronic devices; and medical
devices. Yokowo continues to supply these products
and more to the automotive, semiconductor
testing, mobile communication terminals andmedical device markets.

▼Vehicle Communication Equipment Business Domain

Automotive Market
Multimedia

SystemProducts Developed

To meet the needs required for smaller, multi-use,lower profile, smart vehicle antennas, Yokowo isdeveloping antenna systems that support nextgeneration vehicle communication by making fulluse of modular technologies as well as the antenna
and microwave technologies Yokowo has built up
over many years.
Along with Yokowoʼs state-of-the-art facilities,
including an electromagnetic field simulator and an
anechoic chamber for measuring millimeter-wave
frequencies (up to 40GHz) in 5G communications,
Yokowo makes full use of its world-leading
technological prowess to manufacture innovative,
industry-leading products.

Connected

AM/FM

Navigation

DigitalBroadcasting

Telematics

Electronic Toll
Collection/
Dedicated
Short Range
Communications

Solutions

Shark Fin
Antennawithbuilt-incameraHigh
precision
GNSS
Antenna

Laminated
Antenna

5G/V2X
compatible
Shark Fin
Antenna

GNSS/DSRC
HybridAntenna

MaaS
compatible
In-Vehicle
Control
Solution

Shark Fin Antenna with built-in camera

25

Yokowo 2021 Integrated Report

5G compatible anechoic chamber▼Circuit Testing Connector Business Domain

Semiconductor Testing Market
MEMS Technology

More than ever before semiconductors andelectronic components are required to have faster
speeds, higher frequencies, and better integration,with similar expectations also for the testingprocess. By making full use of MEMS technology,
in addition to Yokowoʼs micro precision processing
and microwave technologies developed over many
years, Yokowo develops and supplies products
globally in all areas of high-speed, high-frequency
as well as front- and back-end testing processes.

Contact Bumps

Core Connector
Technologies for
Semiconductor
Testing

Micro Precision
Processing
Technology

Microwave
Technology

Ceramic
Technology

Microfabricated Parts

Evaluation Systems▼Features and Main Uses of the Spring Connector

Mobile Communication
Terminal Market
In the rapidly expanding mobile communications
terminal market, there is an increasing need for
detachable, low profile space-saving connectors
with detachable durability and environmental
worthiness becoming even more importantin commercial information devices. Yokowoʼsproprietary spring connectors accurately capture
these market needs, becoming used more widely ina variety of applications.

4 features

High Reliability

Space Saving

Design FreedomHigh Durability

Main Uses
Video equipment

Informationequipment

Automotive
equipment

Mobile phone

Point of Sales

Health equipment

Wireless device

Medical Device Market
Yokowo is making full use of technologies such as
micro precision processing, coating, assembly, as
well as product design and evaluation to develop
such products as OEM guide wires, catheters andother items in the field of minimally invasive medical
equipment. Yokowo possesses its own equipment
and manufacturing lines to provide a complete
service from product processing and finishedproduct assembly to hydrophilic coating, packaging
and sterilization. In the assembly process, various
connections methods can be selected depending on
the productʼs use.

Enlarged Figure of Hydrophilic
Coating

Assembly of Esophageal Temperature Probe

Tip Terminal of Catheter

Radiopaque Marker

Coil for Guide Wire

Yokowo 2021 Integrated Report26

ESG Report

Corporate Governance
The Yokowo Group aims to achieve its management goals by ensuring management efficiency, transparency andcompliance through the continuous strengthening of its corporate governance, positioned as one of the Groupʼsimportant management challenges.

Board of Directors

Basic Principles Concerning Corporate
GovernanceTo speed up the decision-making process, the Board of Directors
consists of only a limited number of directors (3 internal and 2
outside directors). The Company has appointed two independent
outside directors (with a high level of independence) to further
strengthen the management supervisory function, and theseinclude a female outside director.

Recognizing that Yokowo exists today through the supportof its various stakeholders, the Group positions strengthening
corporate governance as one of its important management
challenges. As well as building smooth relations with its
stakeholders, the Group aims to maximize corporate value
through further enhancing its corporate governance.

Audit & Supervisory Board
In addition to one full-time internal Audit & Supervisory Board
Member with sufficient knowledge in finance and accounting,
the Company has appointed two highly independent outside
Audit & Supervisory Board Members to further strengthen the
management audit function.

Corporate Governance System

Executive Officers
By adopting the Executive Officer system, the strategic decisionmaking and operational supervisory functions are clearly separate
from the executive function, creating a system for prompt andappropriate execution of operations. In addition to three internal
directors, the Company has appointed 10 executive officers in
the positions of Chief Officer, General Manager, and General
Manager at Tomioka plant, etc.

Yokowo is a company with auditors and has a system ofcorporate governance consisting of: a Board of Directors
responsible for management strategy and supervisory functions,an Executive Officer system that fulfills business execution, andan Audit & Supervisory Board that performs management audit
functions.
▼Corporate Governance System (As of October 1, 2021)

General Meeting of Shareholders
Elect

Board of Directors outside
Consultation
Supervise

Elect

Audit

Elect

Cooperate

Audit & Supervisory Board

Independent Auditors

Management/Supervision

Reporting

Nomination andCompensation
Advisory
Committee

Cooperate

Audit

Audit

Business Execution

President and Executive Officer
Business Risk Management Committee
Internal Audit Dept.
CSR Promotion Dept.

Management Planning H.Q.
Administration Management H.Q.

Sales H.Q.
Technical H.Q.

VCCS
Business Div.

CTC
Business Div.

FC
Business Div.

Core Technology Development H.Q.

MD
Business Div. Production Process Innovation H.Q.
Purchasing H.Q.
Quality Assurance H.Q.

Business Organization

27

Yokowo 2021 Integrated Report

Functional
Organization

Initiatives to Improve Governance
Establishment of the Nomination andCompensation Advisory Committee
In February 2021, the Nomination and Compensation Advisory
Committee was established as an advisory body for the Boardof Directors, with the aim of enhancing the transparency ofthe decision-making process for matters relating to corporate
governance, such as directorsʼ nomination and compensation.
The Committee is composed of the Companyʼs two independent
outside directors and its representative director, with Ms.
Kuniko Muramatsu, an independent outside director, serving aschairperson. The Committee receives requests for consultationfrom the Board of Directors, and deliberates and decides on
proposals and submits reports to the Board of Directors. The
rules governing the operation of the Board of Directors specify
that, in its decision-making, the Board must respect the content
of the reports received from the Committee to the utmost
possible extent.

Measures to Enhance the Auditing Function
As well as sharing information and exchanging ideas in advanceof the Board of Directorsʼ agenda, the Companyʼs outside
directors share, to a necessary extent, matters of deliberation
and reports from the Audit & Supervisory Board.
Full-time internal auditors ensure compliance andappropriateness by attending important monthly meetings toregularly monitor how business is conducted.

Business Risk Management Committee
Furthermore, the Company has established the Business Risk
Management Committee as an organization under the directcontrol of the President. Its aim is to strengthen the Companyʼscompetitiveness and ability to manage risk, such as by forming
alliances through joint ventures, mergers and acquisitions tofurther advance business, and by verifying the profitability oflarge-scale investments. In addition to regular reports to theBoard of Directors, the Committee conducts activities in close
cooperation with the outside directors.

Analysis and Evaluation of theEffectiveness of the Board of Directors
Since 2016 Yokowo has been conducting self-evaluation
surveys and, when necessary, interviews with all its directors andauditors, collecting the results and analyzing them.
Based on the surveys and interviews conducted in June

2021, the effectiveness of the Companyʼs Board of Directors wasdeemed to be, on the whole, sufficient. Nonetheless, Yokowo
will systematically work on improvements and measures on all
issues and demands to further improve the effectiveness of theBoard of Directors.

Director and Executive Officer
Compensation
Policy on Determining Director and Executive
Officer Compensation
With regards to compensation for the directors of the Company,
an upper limit for the total compensation in each fiscal year
is set by resolution at the General Meeting of Shareholders.
Compensation for individual directors is then determined by aprocess whereby the Nomination and Compensation Advisory
Committee receives a request for consultation from the Boardof Directors, and then deliberates and decides on proposals
regarding the amount to be paid to individual directors before
reporting to the Board of Directors, which then makes the
final decision, while respecting the reports received from theCommittee to the utmost possible extent.
In the same way, with regards to compensation for theauditors, an upper limit for the total compensation in each fiscal
year is set by resolution at the General Meeting of Shareholders.
Individual compensation is then determined within the boundsof the upper limit through consultation with auditors.

Compensation for Directors
Compensation for the Companyʼs directors consists of fixedmonthly compensation, a monetary executive bonus, and a sharebonus in the form of stock options, etc.
Based on guidelines that take into account individualsʼ roles
and responsibilities, the Representative Director, President andExecutive Officer draws up a proposal regarding the amount of
fixed compensation after taking into consideration the businessresults of the previous fiscal year, the management plan of thecurrent fiscal year, and the roles of each director, etc., submits arequest for consultation to the Nomination and Compensation
Advisory Committee, and then reports to the Board of Directors,
which deliberates on the matter and makes the final decision.
Executive bonuses are paid to internal directors who are
executive directors, to enhance their motivation for improving
the Companyʼs performance in each (consolidated) fiscal year,
and are based on the extent to which performance targets havebeen met. Consolidated operating profit, which best represents
the Yokowo Groupʼs earning ability, is used as the performancetarget.
Regarding the question of whether executive bonuses arepaid, and the total amount paid, the Representative Director,

Yokowo 2021 Integrated Report28

ESG Report

President and Executive Officer draws up a proposal based on theextent to which consolidated operating profit targets have been
met in each (consolidated) fiscal year. If it is determined that
executive bonuses will be paid that year, then the Representative
Director, President and Executive Officer draws up a proposal
regarding the amount to be paid to each individual based on theroles and results of each individual executive director, submits arequest for consultation to the Nomination and Compensation
Advisory Committee, and then reports to the Board of Directors,
which deliberates on the matter and makes the final decision.
With the aim of sharing value with shareholders whileproviding increased incentive to build corporate value overthe medium to long term and enhance shareholder value,stock options are granted to executive directors. However, thedecision as to whether to grant stock options, and the period,is determined after comparing the impact of the necessary
expenses on performance with the anticipated incentive effect.
With regard to the amount of stock options granted to eachindividual executive director, the Representative Director,
President and Executive Officer draws up a proposal regarding
the amount of stock options to be granted to each individual
executive director based on the roles and results of eachindividual executive director, within the upper limit (in terms ofthe value of shares or number of shares) set by the Shareholders
Meeting, submits a request for consultation to the Nomination
and Compensation Advisory Committee, and then reports to theBoard of Directors, which deliberates on the matter and makes
the final decision.
As a general rule, internal directors are obliged to contributea certain amount or more of their basic compensation to the
Executive Shareholdersʼ Association every month as stipulated

each executive director and on trends in compensation at othercompanies with a similar scale of operation to Yokowo. In thecase where stock options are granted up to the specified upper
limit, the target ratios for each category of compensation are:basic compensation: 60%; performance-linked compensation:
20%; compensation in the form of shares: 20%.

by internal rules. Yokowo shares accumulated by the Executive
Shareholdersʼ Association shall be transferred under the nameof the individual executive directors every six months (in late
September and late March). Directors shall, in principle, while intheir position of director, hold their shares and not sell them.
Regarding the ratio of executive directorsʼ overall
compensation to be held by each category of compensation, thisshall be determined based on the roles and responsibilities ofOf the various areas of specialist experience and areas ofexperience possessed by each current Director and Memberof the Audit & Supervisory Board, up to three items are listed
for which there are particularly strong expectations regardingthat individualʼs ability to utilize these items effectively in theperformance of their duties. The table below thus does not show
the entirety of the specialist experience and experience of eachindividual.

Compensation for Auditors
Compensation for auditors is limited to basic compensation,
which comprises monthly compensation in monetary terms.
The amount of basic compensation is determined bydiscussion among the auditors at the Audit & Supervisory
Board meeting held immediately after the General Meetingof Shareholders, taking into consideration the roles andresponsibilities of each auditor and based on guidelines
stipulated in advance.
In the event of bonuses to auditors, these are paid after
approval at the General Meeting of Shareholders.
▼Compensation Figures(million yen)

Fiscal 2020
Upper Limit(annual)

280
(20)
40
320

Directors(outside)
Auditors
Total

Basic
compensation

Executive
bonus

Compensationin the form ofshares

132
(12)
30
162

41
(―)
―
41

―
(―)
―
―

Total

173
(12)
30
203

Company Officers Skill Matrix▼Company Officers Skill Matrix
Specialist Expertise and Experience
Name

Position

Corporate
management

ESG andsustainability〇〇

Takayuki Tokuma

Representative Director, President andExecutive Officer

Kouichi Fukagawa

Director, Senior Managing Executive Officer〇

Kenji Yokoo

Director, Managing Executive Officer〇〇

Kuniko Muramatsu

Outside Director〇〇

Hajime Shioiri

Outside Director〇

Yasushi Mashimo

Audit & Supervisory Board Member

Tooru Furuta

Outside Audit & Supervisory Board
MemberToshiaki Tochigi

Outside Audit & Supervisory Board
Member29

Yokowo 2021 Integrated Report

Finance and M&A

Human resources
and labor affairs

〇
〇

〇

〇
〇
〇

〇
〇

Legal affairs andrisk management

〇
〇
〇

〇

〇
〇
〇

〇

Directors, Auditors and Executive Officers(As of June 25, 2021)

Board of Directors

Takayuki
TokumaKouichi
Fukagawa

Kenji
Yokoo

KunikoMuramatsu

HajimeShioiri

Representative Director,
President and Executive
Officer

Director,
Senior Managing Executive
Officer

Director,
Managing Executive
Officer

Outside Director

Outside Director

Attendance rate at Boardof Directors Meetings:
18/18 times (100％)
Number of Company
shares held:
286,942 shares

Attendance rate at Boardof Directors Meetings:
18/18 times (100%)
Number of Company
shares held:
50,828 shares

Attendance rate at Boardof Directors Meetings:
18/18 times (100%)
Number of Company
shares held:
89,005 shares

Attendance rate at Boardof Directors Meetings:
18/18 times (100%)
Number of Company
shares held:
0 shareAttendance rate at Boardof Directors Meetings:
18/18 times (100%)
Number of Company
shares held:
0 shareAudit & Supervisory Board Members

Yasushi
MashimoTooru
FurutaToshiakiTochigi

Audit & Supervisory Board
MemberOutside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Attendance rate at Boardof Directors Meetings:
18/18 times (100%)
Attendance rate of the
Audit & Supervisory Board
Meetings:
17/17 times (100%)
Number of Company
shares held:
31,603 shares

Attendance rate at Boardof Directors Meetings:
17/18 times (94%)
Attendance rate at Audit& Supervisory Board
Meetings:
16/17 times (94%)
Number of Company
shares held:
0 shareAttendance rate at Boardof Directors Meetings:
18/18 times (100%)
Attendance rate at Audit& Supervisory Board
Meetings:
17/17 times (100%)
Number of Company
shares held:
0 shareExecutive Officers
President and Executive Officer

Executive Officer cum Chief Officer,
Production Process Innovation H.Q.

Executive Officer cum Chief Officer,
Technical H.Q.

Shinji Kusano

Naohito Odani

Kouichi Fukagawa

Executive Officer cum Deputy Chief Officer,
Technical H.Q. cum General Manager,
VCCS Engineering Management Division

Executive Officer cum Chief Officer,
Purchasing H.Q. cum General Manager,
VCCS Manufacturing Department

Managing Executive Officer cum General Manager,
VCCS Business Division

Tsuyoshi Sakata

Yoshiro Furumi

Executive Officer cum General Manager,
MD Business Division

Executive Officer cum General Manager,
FC Business Division

Hiroshi Igahara

Motoaki Matsuura

Executive Officer cum Chief Officer,
Quality Assurance H.Q.

Executive Officer cum General Manager,
CTC Business Division

Masaki Shimizu

Naoki Kawata

Takayuki Tokuma
Senior Managing Executive Officer

Kenji Yokoo
Managing Executive Officer cum General Manager,
VCCS Overseas Plant

Katsuhei Yanagisawa
Managing Executive Officer cum General Manager,
Tomioka Plant

Mitsuaki Okazaki* For details regarding the reasons for appointment of individual Directors andAudit & Supervisory Board Members, please visit our official corporate website.
https://www.yokowo.co.jp/english/company/csr/governance.html

Yokowo 2021 Integrated Report30

ESG ReportCompliance and Risk Management
In accordance with the CSR Code of Conduct, the Yokowo Group will comply with laws and regulations in good faithand engage in fair corporate activities on a daily basis, and will also fulfill the social responsibilities of a corporation
by responding appropriately to risks through our Risk Management System and efforts to continuously improve ourrisk management performance.

Approaches to Compliance
The Yokowo Group will contribute to the development of asustainable society by engaging in activities that impact on theeconomy, the environment, and society in a transparent andhighly ethical manner in order to earn the trust of stakeholders
with the constant aim of enhancing corporate value.

Initiatives to Improve ComplianceTo ensure compliance, the Yokowo Group works to firmly
establish the CSR Code of Conduct, which sets out the actions to
be taken by the Groupʼs officers and employees, and distributes
it as a leaflet in Japanese, English, or Chinese that can be carriedaround easily, to make all officers and employees familiar with its
content. We also endeavor to detect and correct any violationsof laws and regulations, the Articles of Incorporation, or related
rules through the establishment of a whistleblowing system
under the Compliance Rules and the use of an external hotline.
Furthermore, the Internal Audit Department audits businessprocesses in each department at Yokowo and at subsidiaries
in Japan and overseas, providing guidance on detecting andpreventing misconduct and improving processes.
In FY2021, there are no compliance violations.

Initiatives to Improve Risk
Management
The Yokowo Group has established and maintains the Risk
Management System (RMS), which conducts identification,
analysis, planning, implementation, evaluation, improvement,
and review for diversifying loss risks in order to ensure morestable and smoother business activities. Under the Risk
Management Rules, we have established risk management
policies and risk management guidelines, and we are striving tocontinually enhance the RMS.
We are also working to identify risks at an early stage,
share and analyze them and to formulate and implement
countermeasures, with the establishment of the Business Risk
Management Committee (see the Corporate Governance pageon p. 28).
▼Schematic diagram showing the internal whistleblowing
systemContact points for reports andrequests for consultation

External consultation window

Responsible department within
the Company

Demonstrating concern for
the feelings of the reporting party

Clarifying the reporting
party’s intent

Collating the issues
Support for exploring solutions

Investigations and interviews

Approaches to Risk Management

Consultation
with external
experts

Clarifying the reporting
party’s intent(1) Handling the matter outside the Company(2) Submitting a non-anonymous report to
the Company(3) Submitting an anonymous report to theCompany
Where the reporting
party does not wish
to have the matterhandled by theCompany

Selection of a strategy for resolving
the issue based on the reporting
party’s own insights

Where thereportingparty wishes
to have thematterhandled by theCompany

Examination to resolve the issue
and/or decision on disposition by
the Rewards and Penalties Committee

Resolving the issue

Aware of the potential impact of risk on our business activities,
besides complying with relevant laws and regulations, theYokowo Group also strives to fulfill our social responsibility andput organizational operation on a stable footing by responding
appropriately to risk, through measures to continually
improve our risk management systems and risk management
performance.

Reoccurrence prevention
and follow-up

31

Yokowo 2021 Integrated Report

The Yokowo Groupʼs measures in response to
the COVID-19 pandemic
Giving first priority to employeesʼ
health and the safety of local
communities
In responding to the COVID-19 pandemic, the Yokowo
Group has followed the instructions given by theJapanese government, and has implemented infection
prevention measures that prioritize the health andsafety of Group employees and their family members,customers, suppliers, local residents, and others.
Since as early as late March 2020, Yokowo has
been implementing teleworking at its two facilities(Tokyo head office, and Utsunomiya branch) in theTokyo metropolitan region, where the infection was
spreading rapidly. Currently, around 80% of employees
at the Tokyo head office are working from home,which exceeds the 70% target set by the Japanese
government.
Aware of our responsibility to deliver products tocustomers, we ensure that our employees engaged
in product manufacturing at our Tomioka plant takethorough infection prevention measures that do
not disrupt production, so that we can continue tosupply both products and services. At the plantʼsdevelopment, design, procurement, quality assurance
and management departments, a shift system has
been adopted whereby employees are divided into twogroups, spending alternate weeks working at home andcoming in to the plant to work. In this way, even if an
employee gets infected with COVID-19, the plant cancontinue its operation.
Yokowo has arranged the working environment
for teleworking by investing in IT equipment to ensure
security and a seamless network environment for
telecommuting equivalent to that in the office. We
have also built a permanent teleworking system, forexample by providing lump-sum payments to help
employees prepare for working from home, along withteleworking allowances, and by signing contracts forshared office operation.
Additionally, in FY2020, we donated 10 million yen
each to the local government authorities in Kita-ku,
Tokyo, where Yokowoʼs head office is located, and in
Tomioka City, Gunma Prefecture, where the Companyʼsmain manufacturing facility is located.

Internal measures in response to
the COVID-19 pandemic■ In July 2021, workplace vaccination was conducted
for Yokowo Group employees working at the
Tomioka plant, and their family members■ From 2021 onwards, workplace vaccination has been
conducted at the China plants, the Malaysia plant,
and the Vietnam plant■ Teleworking has been implemented at overseas sales
locations, including those in Taiwan and the U.S.A.
■ Health management has been performed using daily
temperature checks, and monitoring employeesʼ
movements■ Automated temperature checking stations have been
installed, along with the provision of alcohol-based
sanitizer■ Entry to production facilities by personnel from otherdepartments has been restricted■ Yokowo has ensured thorough implementation of
the policy of avoiding the Three Cʼs (closed spaces,
crowded places, and close-contact settings) in the
Tomioka plantʼs cafeteria, with measures that include
a four-shift system for meals, eating in silence, andsanitization after eating.
■ Overseas business travel has been prohibited (except
where absolutely necessary), and the use of public
transport for domestic business travel has also beenprohibited■ PCR tests have been implemented in the workplace,in collaboration with GME, a company based in
Takasaki City, Gunma Prefecture■ New IT infrastructure has been adopted to ensuresmooth implementation of teleworking■ The teleworking system has been put in a permanentfooting■ Shared offices have been used

An automated temperature checking
station located at the entrance to the
Tomioka plant

Yokowo 2021 Integrated Report32

ESG Report

Employees
The Yokowo Group aims to promote and advance diversity and inclusion among our employees and strives to create arewarding and attractive workplace environment with the aim to “Be a company where employees feel comfortablebeing employed, and which ensures that employeesʼ families are happy for them to work there.”

Basic Data on Employees▼Number of Employees
Yokowo total

Asia

8,428

1,209

81

7,138

6,373

246

55

6,072

Circuit Testing Connectors

835

265

15

555

Wireless Communication Equipment—Fine Connectors

503

71

9

423

Wireless Communication Equipment—Medical Devices

248

247

1

0

Other employees

469

380

1

88

Total employees (persons)
Vehicle Communication Equipment
Breakdownbybusiness segment

Europe andthe U.S.

Japan

Composition of Employees
The main production bases in each segment are China andVietnam for the Vehicle Communication Equipment segment,
Malaysia and Japan for the Circuit Testing Connectors segment,
Malaysia and China for the Fine Connector business in the
Personal Communication Equipment segment, and Japan for
the Medical Device business in the Personal Communication
Equipment segment. Our production bases are concentrated
in Asia. In particular, there are a large number of employees in
China and Vietnam, which are production bases for the Vehicle
Communication Equipment segment.

▼Recruitment and Turnover
YOKOWO CO., LTD.

82

New recruitment
Male

Total

53

Female

Total

29
34

Number of job leavers
Male

Total

24

FemaleTotal

10Work-Life Balance
Percentage of annual paid leave taken

Use of nursing care leave

We promote the use of annual paid leave aiming for an annual
paid leave utilization rate* of 70%, which is the target for
FY2020. In FY2020, the annual paid leave utilization rate was
63.6%.

Yokowo has established a nursing care leave system to support
employees in balancing work with nursing care. In FY2020, no
employees took nursing care leave.

* Number of annual paid leave days taken ÷ number of annual paid leavedays newly granted each fiscal year

Use of childcare leave
Yokowo has established a childcare leave system to support
employees in balancing work with childcare. In FY2020, one
female employee took childcare leave.

33

Yokowo 2021 Integrated Report

Other work-life balance measures■ Hourly paid leave■ Special COVID-19 vaccination leaveHolding Roundtable Meetings toFurther Improve the Workplace
Environment

Performance Evaluation

Yokowo is holding roundtable meetings to clarify issues in ourorganizational culture and systems, to build and strengthen
specific improvement measures and systems, and to share themamong employees in order to realize a rewarding and attractive
workplace environment.
The roundtable meetings are held with employees divided
according to eight attributes to stimulate discussion within each
attribute and ensure the identification of areas for improvementin the current situation at Yokowo. We intend to use theidentified areas when we revise the personnel system and othersystems in the future.
▼Roundtable Meeting Attributes
1

Female6Specialists (employees withspecific qualifications)2

Non-Japanese

7

Production line employees andsupervisors

3

Young employees in their first
three years at the Company

8

Veteran employees aged 55
and older4Mid-career employees intheir 30s

9Roundtable suggestion box*

5

Employees raising children

At the beginning of each fiscal year, every employee preparesa job description in consultation with their superiors which
includes their duties and goals, and carries out their duties.
Superiors evaluate employee performance every six months andhold interviews to provide feedback on the results to employees.

Development of Human Resources
We have established an “integrated human resource
development system starting with new employees” in order tocultivate “globally-minded human resources” who will support
the full-scale globalization of our business and to actively
promote the strengthening of management at all levels. In
addition to training that is common to all employees, we provide
diverse position-specific and specialty training to encourage
employee growth.

* We have established the “Roundtable suggestion box” on the Company
intranet as an opportunity to enable employees with opinions to speakout freely. The opinions we collect will be used to initiate new roundtable
meetings depending on the content.

▼Conceptual Diagram of Training System
Position-specific training

New deputy general manager training

Manager

New manager training

Non-management
position

Assistant Manager

Mid-career employee (leader) training

MemberYoung employee training

Induction

Self-education

Next-generation leader
selective training

Sales
department
training

Technology
department
training

Production
department
training

Administration
department
training

Tentative assignment/basic training

Self-education
Online education (position-specific) andlanguage training

Deputy General
ManagerTraining on current affairs

New general manager training

Common training
Global adaptation training(cross-cultural adaptation, etc.)

Management
position

General manager

Specialty training

Online education (support for occupational training and acquisition of qualifications)

Yokowo 2021 Integrated Report34

ESG Report

Diversity
Through the promotion of diversity and inclusion, the Yokowo Group is promoting the recruitment and developmentof human resources without regard to nationality, gender, or age, with the aim of becoming Team Yokowo, a“sustainably evolving company.”

Approaches to Diversity
The Yokowo Group hires and trains diverse human resources,
irrespective of nationality, gender, or age, and strives to create
an employee-friendly workplace where there is respect forindividuality and fair and equitable treatment to enable each andevery employee to achieve their full potential.

female employee) to discuss what aspects of our organizational
culture are hindering active participation by women and how to
improve the culture as well as formulating an improvement plan.
▼Percentage of female employees★
(persons)

800
600

Concrete Measures Relating toDiversity
The Yokowo Group treats “diversity and inclusion” as one of ourmanagement strategies. We are striving to become a company
where employees with the diverse values of global Yokowo areable to come together and work together on a global basis toachieve their full potential. In terms of diversity, we are steadily
promoting measures based on the TISP Project to expand thefield of activities of non-Japanese employees. However, there arestill many issues to be addressed in increasing the ratio of female
leaders and the ratio of employees with disabilities.
In 2021, the revised Child Care and Family Care Leave Act
was enacted, requiring companies to encourage male employees
to take childcare leave. However, it is necessary clarify the issues
involved for this measure to become established at Yokowo.
In order to clarify these issues in our organizational culture
and systems, and to share the direction for improvement
and reform, one of our concrete measures is the “roundtable
meetings” (see the Employees page on p. 34), where theemployees concerned can frankly exchange opinions andreflect them in changes to the human resources system and inmanagement.

Promoting Active Participation by Women
Due to the fact that Yokowo is a manufacturing company, thenumber of permanent female employees hired is small, andthe ratio of female leaders is currently lower than that of male
employees due to the small pool of female employees. However,our goal is to increase the ratio of female leaders to at least thesame as that of male leaders. To achieve this goals, we havestarted to appoint women as outside directors and promoting
them to management positions. At the same time, we have helda roundtable meeting on womenʼs active participation (led by a

35

Yokowo 2021 Integrated Report

（％）

906

1,000

769

659
11.4

839

817

16
15.1
12

11.3

11.1

10.7

8

400
200
0

0.9
2016

2017

3.1

2.6

1.3
2018

Number of YOKOWO CO., LTD. employees

2019

3.1

2020

4
0

(FY)
Percentage of female managers*1

Percentage of permanent female employees*2*1 Female managers at end of fiscal year ÷ executive and management positions
at end of fiscal year (includes assistant managers, excludes specialists)*2 Number of female employees at end of fiscal year ÷ number of full-timepermanent employees at end of fiscal year★: YOKOWO CO., LTD.

Employment of People with Disabilities
Yokowo is a manufacturing company focusing on microprecision processing. As such, we have not made progresson hiring people with disabilities, and we have not met thelegally mandated employment rate. Nevertheless, from theperspective of the SDGs, we have set a goal to at least double
the employment rate of people with disabilities compared to
the legally mandated rate. In order to achieve this goal, we
determined the need to develop both tangible and intangible
company-wide infrastructure and development of jobs thatwould enable people with disabilities to play active roles, andset up the “Project Team for Establishing a Special Subsidiary.”
The immediate goal is to establish a special subsidiary in FY2022
and build a system that will stably meet the legally mandated
employment rate for people with disabilities.

Promoting Active Participation by Senior Human
Resources▼Changes in new graduate hires and mid-career hires★

In addition to the existing system of re-employment (reemployment after transfer to an affiliated company), we
established a new system to extend employment after retirement
at the age of 60 as permanent employees at our Head Officein 2020 in order to promote the active participation by seniorhuman resources. This is subject to approval by the Personnel
Committee if the Company deems it necessary and the employee
agrees to do so for the purpose of transferring technology toyounger employees or utilizing proprietary technology andknow-how.
This system also allows those who are 65 years old or older tocontinue to playing an active role under an outsourcing contract
or consultant contract if the Company deems it necessary andagrees with the individual.
Furthermore, we hold roundtable meetings for senior humanresources to further improve the system while incorporating theopinions of the people concerned.

(Person)▼Number of older employees re-employed★
(persons)

30

30
25

22
19

20
15
10

11
8

5
0

2016

2017

2018

2019

2020

（FY）

★: YOKOWO CO., LTD.

Strengthened Mid-career Hiring
The Yokowo Group corporate vision incorporates the message
that “as Team Yokowo, by creating new products thatincorporate cutting-edge advancements based upon the Groupʼs
proprietary technology, we want to be a company that while
evolving, achieves persistent growth.”
The Yokowo Group in principle enhances our workforce
by hiring new graduates, however recent years have seen an
increase in the ratio of mid-career hires supported by strong
business performance. We are bringing together all employees
who sympathize with this message, regardless of new graduate
or mid-career hires, irrespective of gender, age, or nationality.

50

49

45

40
30
20

18

16

30

29

25

20

18

22

10
0

2016

2017

New graduate hires

2018

2019

Mid-career hires

2020

（FY）

★: YOKOWO CO., LTD.

TISP ProjectAt the Yokowo Group, we are promoting the “TISP (Tomioka
International Specialist Park) Project” as a central part of ourdiversity and inclusion initiatives.
This project brings together specialists from around theworld (in product design, production engineering, elemental
technologies, quality assurance, production control, etc.)
to our main plant—the Tomioka plant (Gunma Prefecture).
Hiring criteria place no particular requirements as regards
Japanese conversational ability, and have a focus on expertisefor midcareer hires, and potential for new graduates. Looking
forward, we aim to bring together 120 foreign specialists
centered around the Tomioka plant.
With this project, we are actively recruiting foreign employees
living in Japan, and those living overseas. In particular at our
main manufacturing bases in China, Vietnam, and Malaysia, wehave in place a multi-year training program in Japan for new
graduate hires who have graduated from local universities inthose countries. For these trainees, we create an individualized
CDP (Career Development Plan) with which we provide
systematic human resource training, and many of the trainees
who have completed their training in Japan return to work intheir own countries.
▼Changes in TISP human resources★
(Person)

66

70
60

61

54

50
40
30

31
23

20
10
0

2016

2017

2018

2019

2020

（FY）

★: YOKOWO CO., LTD.

Yokowo 2021 Integrated Report36

ESG Report

Information Security
In our current networked era, we are seeing increasing worldwide demand for strengthened information security.
The Yokowo Group constantly recognizes the importance of all the information assets and we promote information
security activities globally to meet these requirements.

Approaches to Information Security
The Yokowo Group aims to ensure that it always recognizes
the importance of all information assets handled thereby,
including information provided by its customers and business
partners, in order that the Group may continue to be a trusted
member of society. To this end, the Group has stipulated andimplemented its Information Security Policy in order to prevent
all improper disclosure, divulgence, and unauthorized use ofsuch information assets.

constructed an information security management system (ISMS),
and is working together with the entire Group to advance its
information security activities.
In December 2014, Yokowo head office and its threedomestic group companies acquired ISO 27001, the International
Organization for Standardization (ISO)ʼs information security
management system standard. Yokowo is also promoting theacquisition of this standard at its major sites.

Information Security Education
Information Security Policy (Overview)
1. Compliance
2. Framework
3. Management of Information Assets
4. Training
5. Preventing and Responding to Incidents
Enacted: April 1, 2013

* The full text of the Information Security Policy can be viewed on the
Yokowo website.
https://www.yokowo.co.jp/english/company/csr/security.html▼Information Security Management Framework
Chief Information Management Officer
President & Executive Officer

The Group considers the basis for information security to be foreach employee to have a high level of awareness with regard
to information management, and works to keep all officers andemployees (including temporary staff) well informed regarding
laws and regulations as well as corporate policy and rules, etc.
governing information security.
Furthermore, Yokowo implements various activities in order
to increase awareness of information management, such as
carrying out yearly e-learning sessions on information security,and issuing all employees with an Information Security Handbookthat details practices which should be followed during the courseof everyday duties.
▼ISO 27001 Certification Status
2014

YOKOWO CO., LTD., 3 Japanese subsidiaries

2016

Chinese subsidiaries (3 locations)

2017

Malaysia subsidiary

Information Security Committee
Committee Chairman:
Senior Information Management Officer

Committee Members:
General Managers,
Information Management

Committee Members:
General Manager,
Information Systems Dept.

Enhancement of Information Security
Under the Groupʼs Information Security Policy, Yokowo
recognizes the management of information security as oneof the most important issues in business management. In
order to manage the information assets appropriately, it has

37

Yokowo 2021 Integrated Report

Protection of Confidential Information
Under its Information Security Policy, the Group has establishedconfidentiality rules for the protection of confidential
information, and disseminated these to the Group and all
suppliers, etc. engaged in Yokowoʼs business. Throughcompliance with these rules, Yokowo handles and protects, bothstrictly and appropriately, all information assets possessed by
Yokowo, and information disclosed to it by its customers.

Procurement
The Yokowo Group strives to engage in fair and equitable transactions with suppliers, and we are focused onbuilding equal partner relationships. We are working to transform our system away from a passive procurement
function towards more dynamic procurement.

Approach to Procurement

Measures Relating to Procurement

Besides striving to ensure fair and equitable transactions
with our suppliers, the Yokowo Group also aims to realize a
procurement function to purchase high-quality, reasonablypriced items from all over the world at the right time and in
the right quantities, while promoting proactive procurement
activities that contribute towards the Companyʼs profitability.
We not only comply with all relevant laws and regulations, suchas the Act against Delay in Payment of Subcontract Proceeds,
Etc. to Subcontractors, but also strive to fulfill our social
responsibility within the supply chain in order to build multilayered production bases and a reliable supply network when
undertaking day-to-day purchasing activities.

Compliance with the Act against Delay inPayment of Subcontract Proceeds, Etc. to
Subcontractors (Subcontract Act)

Policies
Yokowoʼs Purchasing H.Q. conducts its operationsin accordance with the following basic policies:
Cost Reduction, BCP Strategies, and Strengthening
Procurement Capability.
Date of formulation: April 1, 2020

Details of the basic policies

Cost Reduction■ Striving to reduce costs■ Ensuring that costs are set early■ Thorough implementation of theprinciple of Sangenshugi̶theThree Actuals (the actual place,the actual part, and the actual
situation)

BCP Strategies■ Stable procurement■ Supplier quality enhancement■ Fair and equitable selection of
suppliers

Strengthening
Procurement
Capability■ Training and developing humanresources■ Compliance with relevant laws,
ordinances, and specifications■ Consideration for the environment
and for society■ Having employees attend external seminars■ Implementation of internal education■ Responding to Japan Fair Trade Commission (JFTC)
questionnaire surveys■ Checks performed in day-to-day operations (with rigorous
verification of negotiations, unit price setting, acceptanceinspection, and payment)

Elimination of child labor, use of prohibitedchemical substances, and use of conflict minerals■ The requirement to eliminate child labor, use of prohibitedchemical substances, and use of conflict minerals is clearlystipulated in the Code of Conduct for Business Transactions(and Agreement), which was compiled as an annex when
Yokowo revised its master agreements pursuant to therevision of Japanʼs Civil Code.
■ Surveys of the substances contained in mass-produced
products are being implemented at all Yokowo Group plants■ When launching production of a new model, suppliers are
required to provide data on the substances contained at thetime of the first sample inspection■ The prohibition on conflict minerals applies to materials thathave cobalt, cassiterite, tungsten or gold as a raw material

Implementing Green Procurement
The Yokowo Group holds presentations for our suppliers on
chemical substances contained in products, and we implement
environmental assessment that includes constituent analysisof the items that suppliers deliver. In addition, the masteragreement that we sign with suppliers includes provisions
relating to not using harmful chemical substances, ourprocurement activities prioritize purchasing items that havea smaller environmental footprint, and product verification is
performed in collaboration with our Quality Assurance H.Q.

Yokowo 2021 Integrated Report38

ESG Report

Occupational Health & Safety: OH & S
The Yokowo Group positions the management of health and safety of its employees as well as stakeholders in theGroupʼs activities as the top priority issue for its management, and will pursue a workplace where they are able to workwithout undue concern by always securing their safety, and that will strive to promote their mental and physical health.

Approaches to Occupational Healthand Safety
The Yokowo Group positions proper management of the safety,
peace of mind, and health of employees and other stakeholders
as a number one priority. In order to safeguard every individual
employee—each of whom is vital to the Groupʼs business
continuity and growth—we have formulated the Occupational
Health and Safety Policy, and we promote occupational healthand safety activities on the basis of this policy.
* Please see our website for more details on the Occupational Health and
Safety Policy of the Yokowo Group.
https://www.yokowo.co.jp/english/company/csr/safety.html

Occupational Health and Safety Framework
Yokowoʼs Health and Safety Promotion Committee meets on amonthly basis. The Committee is headed by senior management
and consisting of the OH&S managers and promoters of eachdepartment, who play a central role in practical health and safety
activities. The Committee strives to realize continued improvementof OH&S activities by sharing the progress made in individual
departmentsʼ OH&S action plans, the results of monthly OH&S
inspections, and details of occupational accidents and the remedial
measures taken. In addition, the Committee holds monthly
meetings to provide a venue for talks between its members, bothfrom labor and management, with the participation of occupational
physicians, etc., as required by law. The Risk Assessment
Committee evaluates remedial measures when responding to
unexpected occupational accidents. It discusses and confirms
whether the measures proposed by the department where theaccident occurred are effective from an objective viewpoint, andwhether there are any oversights in preventing reoccurrence.
In April 2021, the Occupational Health & Safety Section wasestablished within the General Affairs Department. This new
department aims to further expand measures that contributetowards OH&S, with a particular focus on promoting theactivities of the various committees.
▼Occupational Health and Safety Management Framework

General Managers, Health and Safety Management /Senior Health and Safety Management Officer
Health and Safety Committee

Health and Safety
Promotion Committee

FY2018FY2019FY2020

Accidents withlost work days

1

0

2

Accidents without
lost work days

4

1

4

Total accidents

5

1

6

To Realize a Continued Improvementof Occupational Health and Safety
Yokowo has constructed an occupational health and safety
management system (OHSMS), and is working to advanceits OH&S efforts as the entire Group under the OH&S Policy.
YOKOWO CO., LTD., including the following subsidiaries, has
acquired “ISO 45001” certification, the international standard
for occupational health and safety management systems.
▼ISO 45001 Certification Status

2020

YOKOWO CO., LTD., domestic subsidiaries(3 companies)
Chinese subsidiaries (2 locations)* OHSAS 18001 certification was obtained in 2016 in Japan and in 2017 in
China, however this was transferred to ISO 45001 certification in August
2020.

The Key Pillars of the Promotion of
Occupational Health and Safety Activities
The Yokowo Group has designated safety, health and workstyle as the three key pillars of the annual plan for promotionof occupational health and safety. Based on these three key
pillars, each department carries out occupational health andsafety activities systematically after setting its own targets andperforming risk assessment.
Ideal Form

An energetic
workplace
Work
style

Chief Occupational Health and Safety
Management Officer
President & Executive Officer

Occupational Health & Safety Section▼Occurrence of Occupational Accidents Over the Past Three Years

Healthy mind
and body
A healthy
Health workplace

SafetyA safe and secure workplace
Eliminate unsafe conditions
Eliminate unsafe behaviors

Risk Assessment
Committee

Follow rules / Self-management / Compliance
Head Office, Tomioka Plant,
Domestic Offices

39

Domestic Subsidiaries

Yokowo 2021 Integrated Report

Cooperative Company
in Tomioka Plant

Local Communities
Operating in a range of locales both within Japan and overseas, the Yokowo Group values our relationships withlocal communities, and is promoting multifaceted social action programs. As a company rooted in local communities,
we will contribute to their development, and towards achieving a sustainable society.

On Contributing to Local Communities
As a member of local communities, the Yokowo Group is
promoting a range of social action programs. Our aim is todevelop alongside local communities, through activities that
support their development, and initiatives that contribute tosolving societal issues.
▼Three Areas of Activities
Activities groundedin the community

Activities towards
achievinga sustainable society

In April 2021, in collaboration with other like-minded Japanesecompanies located in
the same industrial park,
YOKOWO VIETNAM provided
a local orphanage withmaterial support such as foodand beverage items, including
milk, and clothing.

Activities towards Achieving a
Sustainable Society

Activities that
contribute tocommunity development

Community-based Activities
YUKA Volunteer Team(DONGGUAN YOKOWO CAR COMPONENTS CO.,LTD. [China])
In 2016, DONGGUAN YOKOWO CAR COMPONENTS CO., LTD.
formed the YUKA Volunteer Team, which promotes activities tosupport the elderly and people with disabilities in the community.
These activities include holding volunteer events as wellas environmental conservation activities, and these see many
employees volunteering to participate.

Employees who have participated involunteer activities (2016 to present)

Support for an Orphanage(YOKOWO VIETNAM CO., LTD.)

155

Donations of Masks and Sanitizer(YOKOWO ELECTRONICS (MALAYSIA) Sdn Bhd)
In 2020, YOKOWO ELECTRONICS (MALAYSIA) donated
COVID-19 infection control supplies such as masks and sanitizer
to the local police.

Activities that Contribute toCommunity Development
Naming Rights Partnership Activities(Tomioka Plant)
Wishing to contribute to the development of Tomioka City,
where it is located, the Tomioka Plant participated in the open
bidding for the naming rights for three local sports facilities andwas chosen as a partner enterprise by Tomioka City. Tomioka
Plant will encourage its employees and their family members to
use these facilities, which will improve their health and foster thebuilding of closer connections through sports, while at the sametime this will also support the joint development of both thelocal community and Yokowo.

4.5

The naming rights agreement covers the three-year
period between February 2021 and March 2024.
Total cost of naming rights:
million yen

Yokowo 2021 Integrated Report40

ESG Report

Environment
The Yokowo Group recognizes that conducting business activities in harmony with the global environment isan essential responsibility for a corporation. The Yokowo Group continues to implement a range of Group-wide
environmental preservation activities and address climate change based upon defined environmental policies in orderthat we can pass on our irreplaceable global environment to future generations.

Approaches to the Environment

Environmental Policy

Action Guidelines

Today, when Japan and the rest of the world
are starting to make a serious effort torealize carbon neutrality by 2050, Yokowo
is also responding to the demands of our
stakeholders and society by formulating
more concrete measures to address climatechange, and working actively to implement
them. Reflecting this stance, we support therecommendations of the FSB Task Force on
Climate-related Financial Disclosures (TCFD),
and we are implementing specific initiatives
to achieve the target of reducing greenhousegas emissions from our plants (Scope 1 and 2)
by 35% by FY2030, compared to FY2014, andpromote specific climate-related information
disclosure.
Yokowo is also committed to helping
to create a rich natural environment. We
seek to do this through our environmental
management system and through activities
designed to achieve continuous improvements
in environmental performance. As part of ourcommitment, we take into consideration theenvironmental impact of our business activities
and comply with all relevant environmental
laws, regulations, and guidelines, as well aswith each customerʼs specific guidelines.

1. Yokowo supports the TCFD recommendations, and besides formulating
and implementing concrete measures to achieve the target of reducing
greenhouse gas emissions at our plants (Scope 1 and 2) by 35% by
FY2030, compared to FY2014, we will also be disclosing details of
the measures taken, through the Carbon Disclosure Project (CDP)
framework.
2. Yokowo will continuously and actively promote energy saving, resource
conservation, and recycling to contribute to the protection of the
global environment.
3. In respect of chemical substances which are harmful to both theenvironment and human body, Yokowo will prevent environmental
pollution by implementing preventive measures and action plan, which
include those for the case of abnormal and emergency operation, andwill minimize the use of hazardous chemical substances.
4. Yokowo will comply with all relevant environmental laws, regulations,and each customerʼs specific requirements, and intend to enhance ourenvironmental management by our original internal standards.
5. Yokowo will set objectives and goals for our environmental activities
and also improve our environmental management system continuously
by periodically reviewing the objectives and goals.
6. Through in-house education and publicity, Yokowo will promote all theemployeesʼ recognition of involvement in environmental preservation
and will make these activities take root as daily duties.
7. Yokowo ensures that all the employees including those of affiliatedcompanies are fully aware of the environmental policies, and will
disclose them to the public on request.
8. Yokowo will contribute to the development of a sustainable society byconsidering the impact on biodiversity in all its business activities.
Enacted: June 1, 2005 Revised: October 15, 2021

Environmental Management Systems

Issues and Results of Activities

ISO 14001 Certification

The Yokowo Group reviewed its Medium-Term Environmental
Plan in 2014 and identified four issues that need attention—
addressing climate change, management of water resources,
resource recycling, and working towards zero hazardous
chemical substances. For this, Yokowo sets goals and activities tobe achieved each year.
At a meeting of the Board of Directors held in October 2021,
it was decided that Yokowo would express its support for therecommendations of the TCFD and disclose details of the measurestaken by the Company through the CDP, with the Board of
Directors supervising this directly. Subsequently, revisions were madeto the Companyʼs Environmental Policy and Action Guidelines.

Since its individual production bases received ISO 14001
certification starting in 1998, the Yokowo Group has continued
with its work in environmental activities. There were no
infringements of environmental regulations in FY2020.
* Please see our website for more details on the status of ISO14001
Certification Acquisitions.
https://www.yokowo.co.jp/english/company/csr/environment.html

41

Yokowo 2021 Integrated ReportAddressing Climate ChangeWith the aim of reducing direct greenhouse gas emissions (Scope
1 and 2), we are drawing up plans for the adoption of renewableenergy at our plants in Japan (in Tomioka City, Gunma Prefecture),
China, Vietnam and Malaysia, which are our Companyʼs main
sources of greenhouse gas emissions. In 2021, we are working
to give more concrete shape to our plans for adopting renewableenergy at our Vietnam Plant and Tomioka Plant, which are ourmost important production facilities.
Regarding the reduction of Scope 3 greenhouse gas emissions,as most of the employees at the Tomioka Plant currently commute
to work by car, we are implementing a plan to persuade a local
railway company to establish a station near the plant, so that
employees will be able to commute to work by train, and weare also planning to establish charging points for electric vehicles
at the plant. Through the implementation of these concrete
strategies, we are aiming, initially, to secure a “B” evaluationfrom the CDP. We will be steadily disclosing details of theimplementation status of these concrete measures through the
CDP platform, and also on our Company website.
As of 2020, the Yokowo Group had implemented a variety ofactivities directed towards meeting the goal of a year-on-year 1%
reduction in the greenhouse gas (GHG) emission factor.
We are currently still in the process of collecting data regarding
greenhouse gas emissions in 2014—the base year for determining
greenhouse gas emissions reduction—and will disclose thisinformation once the calculations have been completed.
▼CO2 emissions and emission factor
CO2 emissions (t)*1
21,0000.425

Emission factor (CO2 emissions/sales)*2
0.5

20,5000.388

20,00020,156

19,50019,00020,361

20,222

0.372

0.334

20,0070.334

18,754

0.4
0.3
0.2

18,5000.1

18,00017,5002016
2017■ CO2 emissions

2018
2019
Emission factor

2020*

0.0

(FY)

*1 Electricity CO2 conversion factor is calculated using the following:
Domestic: TEPCO Energy Partner, Inc Basic Emission Factor
Overseas: IEA Official Factor*2 Up until FY2019, consolidated sales were aggregated using internal
exchange rates. However, starting from FY2020, Yokowo has switchedover to aggregating consolidated sales based on real exchange rates, anddata for FY2019 and previous years have been retroactively adjusted.

Management of Water Resources
Of the water used within the Yokowo Group, the majority is fordomestic-type uses; because of the characteristics of our products,
hardly any water is used in the production processes. We areworking to achieve our goal of a year-on-year 1% reduction inwater consumption, measured by per unit of sales.
Additionally, we are monitoring the quality of plant
wastewater using our internal standards, which are more rigorous
than legal requirements. At the Tomioka plant, we are recovering

all hazardous chemical substances in discharge from ourgalvanization processes, and have achieved zero emissions into
public waterways.
▼Water usage and usage rates
Water usage (m3)*3
7.486
350,000
340,000

Usage rate (water usage / sales)*4
6.389

329,947

330,000

344,632
335,868

331,726

320,000

8
7

5.687

6

4.722

6.134

5

310,000

4

300,000

3

290,000

2

283,178

280,000
270,000

1
2016■ Water usage

2017

2018
Usage rate

2019

0

2020
(FY)

*3 As the aggregation method has been reviewed, data for FY2019 andprevious years have been retroactively adjusted.
*4 As the per unit indicator has been reviewed from water usage per
employee to water usage per unit of sales, data for FY2019 and previous
years have been retroactively adjusted.

Resource Recycling
The Yokowo Groupʼs main products are electronic components,
and the main types of waste that we generate are metal andplastic waste, and waste cutting oil, that are generated during the
production processes. With regard to these main types of waste,
we are working to conserve resources. As well as promoting a
reduction in the quantities of waste generated by our businessactivities, we have also set a recycling rate of at least 80% as atarget. The inclusion of Yokowo Vietnam in the data aggregationfrom FY2020 onwards has led to a substantial increase in therecycling rate.
▼Quantity of waste and recycling rate
Waste (t)Recycling rate (%)*5

1,400
1,200

1,052

956

1,000

1,150

90

1,249
1,056

87.1

70
60

63.0

800

56.4

50

59.4

53.8

600

40
30

400

20

200
0

80

10
2016
■ Waste2017
2018
Recycling rate

2019

2020

0

(FY)

*5 The recycling rate is the share of waste handed over to recycling firms.
We are experimenting with the use of recycled plastic in plastic molding
processes. We are also working on the development of original recycling
technology for cutting oil, in collaboration with a local vocational college.

TopicsIn September 2021, we received third-party certification(scope 1 and 2) for greenhouse gas emissions. In the
future, we will expand the scope of monitoring of ourgreenhouse gas emissions, and ensure this information isdisclosed to the public.

Yokowo 2021 Integrated Report42Appendix

Financial Highlight▼Net sales▼Operating income
Sales growth rate (％）

Net sales (million yen)
70,00017.8

60,00054,75250,00044,07740,00060,59559,976

10.7

51,919

10.2

Operating income margin (％)

6,000

4,916
2,516

4,000
3,000

3,135
6.0

5.7

8.1

3,028

5.0
5.5

10,000

5.5

2017
2018
Sales growth rate

-1.0
2019

2020

0

2.0

1,000
0

(FY)

2016
2017
■ Operating income

2018
2019
2020
Operating income margin (FY)

(million yen）

(million yen）

6,000

5,320
4,583

5,000
4,000

4,000
3,000

3,286

2,911

3,440
2,381

2,337

2016

2017

3,818

2,209

2,000

2,000

1,000

1,000
0

2016

2017

2018

2019

2020

0

(FY)

▼Basic earnings per share

2018

2019

2020
(FY)

▼Net assets per share

(yen)

(yen)

200

169.85

184.551,800

1,640.21

1,500

150

118.94115.821,200

109.18100

1,034.63

1,150.65

1,209.36

1,306.58

900
600

50
300
0

2016

2017

2018

2019

2020

0

(FY)

2016

2017

2018

▼Interest bearing debt*▼Research and development expenses(million yen)(million yen)

12,0009,155

10,000

7,589

8,000
6,000

4,000

10,435

4,569

3,260
3,000
2,000

4,561

4,000

2019

2020
(FY)

3,592
3,201

2,636
2,105

1,000

2,000
0

2016

2017

* Borrowing + lease liabilities

43

Yokowo 2021 Integrated Report

2018

2019

2020

（FY）

0

8.0

4.0

▼Profit attributable to owners of parent

2,608

8.6

10.0

6.0

▼Ordinary income (full year)

3,000

5,179

2,000

20,0002016■ Net sales

Operating income (million yen）

5,000
15.0
10.0

30,000

0

20.0

2016

2017

2018

2019

2020

（FY）

0.0

Non-financial Highlight▼Percentage of female employees★

▼Employee turnover rate★

(persons)

(％)

906

1,000
800

659
11.4

600

839

817

769

16

11.1

10.7

8

400
200

0.9

0

2016

3.1

2.6

1.3

5.0

15.1
12

11.3

(％)

3.1

3.9

4.0

3.4
2.6

3.0
2.0

2.3

1.9

4
1.0

2017

2018

2019

2020

0

0.0

2016

(FY)

2017

2018

2019

2020

67.2

65.2

63.6

2018

2019

2020

(FY)

Number of YOKOWO CO., LTD. employees
Percentage of female managers*1
Percentage of permanent female employees*2*1 Female managers at end of fiscal year ÷ executive and management positions at
end of fiscal year (includes assistant managers, excludes specialists)*2 Number of female employees at end of fiscal year ÷ number of full-timepermanent employees at end of fiscal year

▼Employment rate of people with disabilities★

▼Uptake of paid leave★

(%)

(%)

2.0

1.62

1.65

1.51

1.35

80

1.58

1.0

59.3

53.7

60
40
20

0.0

2016

2017

2018

2019

0

2020

▼Number of older employees re-employed★

CO2 emissions (t)3030

21,000

22
19

20

11

10

(FY)

Emission factor (CO2 emissions/sales)
0.425

0.5

20,5000.388

20,00020,156

20,361
0.372

19,50015

19,0008

20,22220,007
0.334

0.334

18,754

0.3
0.2
0.1

18,0002016

0.4

18,50050

2017▼CO2 emissions and emission factor(persons)

25

2016

(FY)

2017

2018

2019

17,500

2020
(FY)

2016
2017
■ CO2 emissions

2018
2019
Emission factor

2020*

0.0

(FY)

* Electricity CO2 conversion factor is calculated using the following:
Domestic: TEPCO Energy Partner, Inc Basic Emission Factor
Overseas: IEA Official Factor▼Water usage and usage rates▼Quantity of waste and recycling rate

Water usage (m )Usage rate (water usage/sales)

3350,000
340,000
330,000

7.486
6.389

329,947
331,726

320,000

344,632
335,868

5.687
4.722

6.134

1,400

7

1,200

6

1,000

5

310,000

4

300,000

3

290,000

283,178

Waste (t)82270,000

0

0

2019

2020
(FY)

90

1,249
1,056

87.1

80
70
60

63.0

56.4

50

59.4

53.8

40
30

400
200

2018
Usage rate

1,150

600

1
2017

1,052

956

800

280,000
2016■ Water usage

Recycling rate (%)

20
10
2016
■ Waste2017
2018
Recycling rate

2019

2020

0

(FY)

★: YOKOWO CO., LTD.
Yokowo 2021 Integrated Report44Appendix

Financial Information
Analysis of Operating Results and Financial Position in Fiscal 2020

Business Environment and Operating Results
During the fiscal year under review (April 1, 2020 to March 31,2021), the global economy slowed sharply owing to the large▼Operating Results in Fiscal 2020
(million yen)

Net sales

59,976(-1.0% YOY)

Operating income

5,179 (+5.3% YOY)

reduction in economic activity as a result of the global COVID-19

Ordinary income

5,320 (+16.1% YOY)

pandemic in addition to the intensification of trade friction between

Profit attributable to owners of parent

3,818 (+11.0% YOY)

the U.S. and China among other factors.
In Japan also, the outlook is extremely uncertain due to thereissuance of the state of emergency declaration and the expectationthat it will take some time to achieve immunity in the population due
to delays in the vaccine rollout.
Market structure in the Groupʼs core markets, automotive,
semiconductor testing, and mobile communication terminals, has▼Minimum 8
（%）

20

17.8

generation mobile communications systems) products and services

10.6
10

8.1

5

5.7

as CASE, MaaS, IoT, and AI.
In these circumstances, the Group continued working to advance

12.2

10.7

9.3

10.2

and intensifying competition in the development of products andtechnologies aimed at expanding use of advanced applications such

13.5

12.0

15

continued to change rapidly with the full-scale roll out of 5G (5th

6.0

8.6

5.5
-1.0

0

2016

the four forms of innovation (innovation in products, processes,

2017

Sales growth rate

personnel, and management) specified in the Basic Management

2018

2019

Operating income margin

2020
(FY)

ROE

Policy to achieve high-quality, full-scale growth. In the Vehicle
Communication Equipment segment, the Group identified rebuilding
the profit structure as the top priority issue and worked to radicallyFinancial Position

reform the fixed cost structure by significantly strengthening(Assets)business management systems and improving cost awareness at

Current assets stood at 38,417 million yen as of March 31, 2021, up

production bases. In the Circuit Testing Connector segment, the5,154 million yen from the end of the previous fiscal year. The increase

Group strengthened technology and manufacturing systems in orderin current assets was mainly due to the increase in cash and deposits

to grasp business growth opportunities arising from 5G and boosted

of 3,110 million yen, increase in notes and accounts receivable – tradecapacity by expanding new production lines in Japan and Malaysia

of 251 million yen, and increase in inventories of 1,630 million yen.

in addition to working to strengthen the production backup system

The increase in cash and deposits was due to the issuance of stock

through a review of the ratio of production in Japan and Malaysia.

acquisition rights through a third-party allotment and the receipt of

The Group also formulated the new medium-term management

proceeds from the exercise of such rights, which offset a decrease dueplan covering the period from fiscal 2020 until the 85th businessto the adjustment of liquidity on hand (partial repayment of short-term (fiscal 2022) which looks toward breaking through the limits

term loans payable), which had been maintained at an extremelyof existing technologies and businesses and acquiring new growthhigh level through both short-term loans payable and cash. The large

potential through new technologies and new businesses. To provide

increase in inventories as of March 31, 2021 was due to the rebounda source of funds for the plan, the meeting of the Board of Directors

from the low level of inventories in both finished products and parts

held in November 2020 resolved to issue stock acquisition rights byand materials at the end of the previous fiscal year, which resulted

way of a third-party allotment, which were allocated in December

from a large decline in capacity utilization at the China plant due to2020, and raised 4,770 million yen by the end of the fiscal year under

the spread of COVID-19. There was also an increase in inventories ofreview. As a result of these efforts, although net sales fell slightly

finished goods, including those for loading and unloading, as marine

year on year, with the Vehicle Communication Equipment segment

transportation slowed due to delays in port operations caused by an

impacted by the COVID-19 pandemic, operating income, ordinary

increase in the number of people with COVID-19.

income, and profit attributable to owners of parent all continued to

Non-current assets stood at 18,451 million yen, up 3,579 million

reach record highs year on year, mainly due to the return to profit

yen from the end of the previous fiscal year. The increase in noncurrent

from the second quarter onward due to improved profitability.

assets was mainly due to the increase in property plant and equipmentof 2,612 million yen. This was due to vigorous investment in mass
production and development in each business segment.

45

Yokowo 2021 Integrated ReportAs a result, total assets stood at 56,868 million yen as of March 31,(5) Information on Liquidity and Capital Resources

2021, up 8,734 million yen from the end of the previous fiscal year.

The Companyʼs working capital is mainly spent on procurement of raw(Liabilities)

materials and parts used in the manufacture of products and is also

Current liabilities stood at 19,880 million yen as of March 31, 2021,

similarly expended on goods and services recorded in manufacturing

up 2,300 million yen from the end of the previous fiscal year. The

expenses and selling, general and administrative expenses.

increase in current liabilities was mainly due to the decrease in short-

In addition, capital investment funds are expended onterm loans payable of 1,464 million yen and the increase in current

establishing and strengthening production systems, such as the

portion of long-term loans payable of 3,400 million yen.

acquisition of production equipment, and the maintenance ofNon-current liabilities stood at 785 million yen, down 3,236

information systems. The Companyʼs basic policy is to provide for the

million yen from the end of the previous fiscal year. The decrease innecessary funding through internal funds generated by the recorded

non-current liabilities was mainly due to the decrease in long-term

profit and depreciation.

loans payable of 3,400 million yen.

In the fiscal year under review, the Group actively invested in

As a result, total liabilities stood at 20,666 million yen as ofresearch and development and product development, and expansion

March 31, 2021, down 936 million yen from the end of the previousof mass production facilities, including the fourth phase of expansion

fiscal year.

work and expansion of production facilities at the production(Net Assets)

subsidiary in Vietnam and the expansion of processing facilities at the

Net assets stood at 36,202 million yen as of March 31, 2021, up

production subsidiary in Malaysia.

9,670 million yen from the end of the previous fiscal year. This was

In and after the fiscal year ending March 31, 2022, the Group

mainly due to increases in capital stock and capital surplus of 2,391

plans to construct a plant and install production equipment at themillion yen and 2,391 million yen, respectively, due to the issuance of

production subsidiary in the Philippines and further boost capacity atstock acquisition rights through third-party allotment and payment

the production subsidiary in Malaysia. To fund this capital investment,

for the exercise of such rights, profit attributable to owners of parent

in addition to operating cash flow, the Group has refinanced short-of 3,818 million yen, increase in valuation difference on available-

term loans, but has reduced the amount through partial repayment.

for-sale securities of 459 million yen due to increase in stock prices

On the other hand, under the new Medium-Term Management Plan,of investment securities held, increase in foreign currency translationin order to break through the limitations of existing businesses andadjustment of 909 million yen due to the depreciation of thetechnologies and acquire new growth potential from a medium- to

Japanese yen against the U.S. dollar and other currencies as of thelong-term perspective, the Group plans to invest in basic researchend the fiscal year under review compared to the previous fiscal year,

to further deepen its core technologies and in capital investment

and dividends of surplus of 649 million yen.

to enter new fields, such as the construction of new MEMS probecard production lines. To raise funds for these purposes, it was

Cash Flows

resolved in November 2020 to issue stock acquisition rights througha third-party allotment, and the exercise of these rights has been

(1) Cash and Cash Equivalents

proceeding since December 2020. As a result, the Groupʼs cash andCash and cash equivalents stood at 15,295 million yen in the fiscal

cash equivalents stood at 15,295 million yen as of March 31, 2021,

year under review, up 2,942 million yen from the previous fiscal year.

up 2,942 million yen from the end of the previous fiscal year.

(2) Net Cash Provided by Operating Activities
Net cash provided by operating activities stood at 5,139 million
yen, down 1,350 million yen from the previous fiscal year. The main
factors for increase included profit before income taxes of 5,140
million yen and depreciation of 2,987 million yen while the main
factors for decrease included an increase in inventories of 1,263
million yen.
(3) Net Cash Used in Investing Activities
Net cash used in investing activities stood at 4,619 million yen, up
1,336 million yen from the previous fiscal year. The main factors forincrease included purchase of property, plant and equipment of 3,958
million yen and purchase of intangible assets of 410 million yen.
(4) Net Cash Provided by Financing Activities
Net cash provided by financing activities stood at 1,905 million yen,down 237 million yen from the previous fiscal year. The main factors▼Net Assets / Capital Adequacy Ratio
Capital adequacy ratio (％)

Net assets (million yen)
40,00062.5

62.9

35,00030,00025,00020,83623,28457.2

24,48655.1

36,202

60
63.6

26,53250
40

20,00030

15,00020

10,000

10

5,000
0

70

2016
■ Net assets

2017
2018
2019
Capital adequacy ratio

2020

0

(FY)

for decrease included decrease in short-term loans payable of 1,504
million yen and repayments of lease obligations of 747 million yen
while the main factors for increase included proceeds from issuanceof common shares of 4,770 million yen.

Yokowo 2021 Integrated Report46

Appendix

Capital Investment

Basic Policy for Dividends

In the fiscal year under review, the Group continued to make capital

The Company views the strengthening of returns to shareholders as aninvestment, primarily in the expansion of production facilities.

important task for management. The basic policy for dividends in each

Investment in intangible assets is included in addition to investment

fiscal year lies in stable and continuous distribution of dividends taking

in property, plant and equipment.

retained earnings into consideration for the purposes of investments

Total capital investment in the fiscal year under review was 4,430
million yen, and an overview of capital investment is as follows.

in production facilities in growing business fields, development oftechnology in new businesses, and in tapping new markets.
The Companyʼs basic policy for dividends from surplus is to pay a
dividend twice a year: an interim dividend and a year-end dividend.

(1. Property, plant and equipment)

The decision-making bodies for dividends are the Board of Directors(1) Vehicle Communication Equipment segment

for the interim dividend and the General Meeting of Shareholders for

The Group implemented total capital investment of 1,945
million yen. This included expansion of the Vietnamese plant toexpand capacity aimed at increasing work volume in parallel withstrengthening of development functions at the China plant, in
addition to construction work on the plant in the Philippines.
(2) Circuit Testing Connector segment
The Group implemented total capital investment of 1,726 million
yen. This included expansion of mass production facilities and image
measuring equipment and more at production bases in Japan and
the Malaysian plant to accommodate order growth and shorter
delivery times for semiconductor test tools.

the year-end dividend.
In business performance for the fiscal year under review, althoughconsolidated net sales declined slightly from the previous fiscal
year due to the impact of the COVID-19 pandemic, consolidated
operating income, consolidated ordinary income, and profit
attributable to owners of parent all reached record highs, due tothe improvement in profitability in the Vehicle Communication
Equipment segment among other factors.
Meanwhile, in the next fiscal year, because the risk of aresurgence of COVID-19 is expected to continue to a certain extent
despite progress on vaccination and supply and demand and(3) Personal Communication Equipment segment
The Group implemented total capital investment of 365 million yen.
The Group conducted updates and expansion at both the Chineseand Malaysian plants, including mass production facilities in the Fine
Connector business. We also expanded mass production and otherfacilities at production bases in Japan in the Medical Device business.

competitive environment trends in the Companyʼs core markets are
extremely uncertain, we consider it essential to put more emphasis
on financial stability in business operations. In addition, while themarket overall is uncertain, inquiries in growth sectors such as 5G are
increasing year by year, and there is still high demand for funds forinvestment in product development and capital investment.
Based on the circumstances outlined above, and comprehensively(2. Intangible assets)
The Group implemented total capital investment of 394 million yen.
This included improving and updating the environment for core
information systems and strengthening and renewing CAD systems
in order to realize Group-wide business streamlining.

taking into account the return of record high profit to shareholders,demand for funds in the next fiscal year onward and the securing offinancial stability, the Company submitted the proposal for a yearend dividend for the fiscal year under review of 20 yen per share to
the 83rd General Meeting of Shareholders, and it was approved.
With an interim dividend of 16 yen per share for the fiscal year

▼Capital expenditures

under review already paid, the Companyʼs annual dividend is 36 yen
per share (consolidated payout ratio of 19.5％).

(million yen)
4,000

(interim dividend of 18 yen and year-end dividend of 18 yen with a

3,073

3,000

With respect to the dividend for the next fiscal year, theCompany expects to pay an annual dividend of 36 yen per share

3,625

3,500
2,500

4,430

4,231

4,500

consolidated payout ratio of 20.6％).

2,189

The Companyʼs Articles of Incorporation stipulate that an interim

2,000

dividend can be paid.

1,500
1,000

▼Dividend per share

500
0

2016

2017

2018

2019

2020
(FY)

Consolidated payout ratio (％)

Dividend per share (yen)
40

30

30

30

26

25
20

40

36

35

22
18

15

15.1

10

20

23.8
19.0

19.5

17.7

10

5
0

2016

2017

■ Dividend per share

47

Yokowo 2021 Integrated Report

2018

2019

2020
(FY)

Consolidated payout ratio

0CONSOLIDATED BALANCE SHEETS(millions of yen)

Fiscal 2019
(As of March 31,
2020)

Fiscal 2020
(As of March 31,
2021)

Cash and deposits

12,352

15,463

Notes and accounts receivable-trade

10,774

11,026Merchandise and finished goods

4,662

6,062

ASSETS
Current assets

Inventories

402

441

Raw materials and supplies

3,616

3,808

Other

1,456

1,618

(3)

(3)

33,262

38,417

Allowance for doubtful accounts
Total current assets
Non-current assets
Net property, plant and equipment
Buildings and structures

6,568

7,546

Accumulated depreciation(3,657)(4,009)Buildings and structures, net

2,911

3,537

Machinery, equipment and vehicles

11,306

13,073

Accumulated depreciation(7,117)(8,210)Machinery, equipment and vehicles, net

4,189

4,862

Tools, furniture and fixtures

8,390

9,728

Accumulated depreciation(6,171)(7,236)

Tools, furniture and fixtures, net

2,219

2,491

Land
Leased assets
Accumulated depreciation

761

761

1,730

2,440

(1,105)(1,140)

Leased assets, net

625

1,300

Construction in progress

590

956

11,296

13,909Total property, plant and equipment
Intangible assets
Leased assets

26

14

Other

874

988

Total intangible assets

900

1,003

Investments and other assets
Investment securities

1,188

1,730

Retirement benefit asset

81

726

Deferred tax assets

737

344

Other

667

738

Total investments and other assets
Total non-current assets
Total assets

2,675

3,539

14,872

18,451

48,13456,868

Yokowo 2021 Integrated Report48

Appendix(millions of yen)

Fiscal 2019
(As of March 31,
2020)

Fiscal 2020
(As of March 31,
2021)

Notes and accounts payable-trade

6,428

6,491

Short-term loans payable

6,489

5,024

LIABILITIESCurrent liabilities

－

3,400

Lease obligations

253

310

Income taxes payable

770

725

Current portion of long-term loans payable

Provision for bonuses

600

673

Other

3,038

3,255

Total current liabilities

17,58019,880Non-current liabilities
3,400

－

Lease obligations

292

420

Deferred tax liabilities

135

154

Net defined benefit liability

183

202

Long-term loans payable

Long-term accounts payable

108

Total non-current liabilities

4,021

785

21,602

20,666

3,996

6,387

Total liabilities
NET ASSETS
Shareholdersʼ equity
Capital stock
Capital surplus

3,981

6,373

Retained earnings

19,04522,199Treasury stock

(664)

(633)

26,35934,326

Valuation difference on available-for-sale securities

84

543

Foreign currency translation adjustment

(64)

845

Remeasurements of defined benefit plans

124

437

Total valuation and translation adjustments

144

1,825

Total shareholdersʼ equity
Accumulated other comprehensive income

Subscription rights to shares

3

8

Non-controlling interest

24

41

26,532

36,202

48,13456,868

Total net assets
Total liabilities and net assets

49

Yokowo 2021 Integrated ReportCONSOLIDATED STATEMENTS OF INCOME(millions of yen)

Fiscal 2019
Fiscal 2020
(From April 1, 2019 (From April 1, 2020
to March 31, 2020) to March 31, 2021)
Net sales

60,595

Total cost of sales

47,52759,97647,080Gross profit

13,067

12,895

Selling, general and administrative expenses

8,150

7,715

Operating income

4,916

5,179

Interest income

28

16

Dividend income

39

41

Foreign exchange gains (losses)－

192

Rental income

17

14

Other

43

50

Total non-operating income

128

316

Interest expenses

104

70

Share of loss of entities accounted for using equity method

24

24Commission expenses

7

13

Share acquisition rights issuance costs－

26

Compensation expenses－

30

Foreign exchange losses

214

－

Other

111

9

Total non-operating expenses

462

175

4,583

5,320

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of non-current assets

15Gain on sales of investment securities

93

28

Total extraordinary income

95

34

47

73

Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of non-current assets

00Loss on valuation of investment securities－

139

Product warranty expenses

14－

Total extraordinary losses

62

213

Profit before income taxes

4,616

5,140

Income taxes - current

1,164

1,236

Income taxes - deferred

(8)

70

Total income taxes

1,156

1,306

Profit

3,460

3,834

19

15

3,440

3,818

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Yokowo 2021 Integrated Report50Appendix

CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME(millions of yen)

Fiscal 2019
Fiscal 2020
(From April 1, 2019 (From April 1, 2020
to March 31, 2020) to March 31, 2021)
Profit

3,460

3,834

Other comprehensive income
Valuation difference on available-for-sale securities

(271)

459

Foreign currency translation adjustment

(590)

910

Remeasurements of defined benefit plans

(10)

312

Total other comprehensive income

(872)

1,682

2,587

5,516

2,568

5,499

19

17

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

51

Yokowo 2021 Integrated ReportCONSOLIDATED STATEMENT OFCHANGES IN EQUITY
Fiscal 2019 (From April 1, 2019 to March 31, 2020)(millions of yen)

Shareholdersʼ equity

Balance at beginningof period

Capitalstock

CapitalsurplusRetainedearnings

Treasury
stock

3,996

3,981

16,197(719)

Accumulated other comprehensive income
NonShareacquisition controlling
Total
Deposit for
Valuation
Foreign RemeasureTotal
interests
rightssubscriptions shareholdersʼ difference on currency
ments of valuation anddefinedtranslationof treasury
available-for- translation
equitysharessale securities adjustment benefit plans adjustments

023,456

355

525

135

1,017

7

5

Total net
assets

24,486

Changes during
periodDividends ofsurplus

(566)

(566)

(566)

Profit (loss)
attributable toowners of parent

3,440

3,440

3,440

(1)

(1)

30

30

Purchase oftreasury shares(1)

Disposal of treasury
shares

(26)

57

(0)

Net changes of
items other thanshareholdersʼ
equityTotal changes of items
during period
Balance at end of
period

(271)

(590)

(10)

(872)

(3)

19

(857)

－

－

2,847

55

(0)

2,902

(271)

(590)

(10)

(872)

(3)

19

2,045

3,996

3,981

19,045(664)－

26,359

84

(64)

124

144

3

24

26,532

Fiscal 2020 (From April 1, 2020 to March 31, 2021)(millions of yen)

Shareholdersʼ equity

Balance at beginningof period

Accumulated other comprehensive income

Treasury
stock

Share
NonTotal
Valuation
Foreign
Remeasure- valuation acquisition controllingTotalrightsinterests
ments ofdifferenceoncurrency
andshareholdersʼ
definedavailable-for- translationtranslation
equitysale securities adjustment benefit plans adjustments

Total net
assetsCapitalstock

CapitalsurplusRetainedearnings

3,996

3,981

19,045(664) 26,359

(649)

(649)

(649)

4,782

4,782

3,818

3,818

(1)

(1)

(1)

31

17

17

84

(64)

124

144

3

24

26,532

Changes during
periodDividends ofsurplusIssuance of newshares(exercise of shareacquisition rights)

2,391

2,391

Profit (loss)
attributable toowners of parent

3,818

Purchase oftreasury shares
Disposal of treasury
shares(14)

Net changes of
items other thanshareholdersʼ
equityTotal changes of items
during period

2,391

2,391

3,154

Balance at end of
period

6,387

6,373

22,199

459

909

312

1,681

5

17

1,703

7,967

459

909

312

1,681

5

17

9,670

(633) 34,326

543

845

437

1,825

8

41

36,202

30

Yokowo 2021 Integrated Report52

Appendix

CONSOLIDATED STATEMENT OF CASH FLOWS(millions of yen)

Fiscal 2020
Fiscal 2019
(From April 1, 2019 (From April 1, 2020
to March 31, 2020) to March 31, 2021)
Cash flows from operating activities
Profit before income taxes

4,616

5,140

Depreciation

2,706

2,987

Increase (decrease) in allowance for doubtful accounts

(1)

(0)

Increase (decrease) in provision for bonuses

64

64

Increase (decrease) in provision for product warranties

(364)

－

Increase (decrease) in net defined benefit asset and liability

(71)

(176)
(58)

Interest income and dividend income(67)

Interest expenses

104

70

Foreign exchange losses (gains)

75

(328)

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

24

24

Loss (gain) on sales of non-current assets

(1)

(5)

Loss on retirement of non-current assets

47

73

Loss (gain) on sales of investment securities

(93)

(28)

Loss (gain) on valuation of investment securities－

139

Decrease (increase) in trade receivables

488

300

Decrease (increase) in inventories(868)(1,263)(471)

Increase (decrease) in trade payables

750

Other

(133)

39

Subtotal

7,277

6,509

Interest and dividends received

67

58

(111)

(71)

Income taxes paid

(742)

(1,357)

Net cash provided by (used in) operating activities

6,490

5,139

(3,066)(3,958)

2

7

(475)

(410)

－

(38)

Interest paid

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities

142

46

Payments into time deposits

－

(156)

Purchase of shares of subsidiaries and associates

(99)

－

Long-term loan advances

－

(60)

201

－

Proceeds from sales of shares of subsidiaries resulting in change in scopeof consolidation
Other
Net cash provided by (used in) investing activities

10

(48)

(3,282)(4,619)Net cash provided by (used in) financing activities
2,995(1,504)

Proceeds from issuance of shares

Net increase (decrease) in short-term borrowings

－

4,770

Repayments of lease obligations

(312)

(747)

Dividends paid

(564)

(647)

Proceeds from exercise of employee share options

27

15

Purchase of treasury shares

(1)

(1)

Proceeds from issuance of exercise of share acquisition rights

－

20

2,143

1,905

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(188)

516

Net increase (decrease) in cash and cash equivalents

5,162

2,942

Cash and cash equivalents at beginning of period

7,189

12,352

Cash and cash equivalents at end of period

12,352

15,29553

Yokowo 2021 Integrated ReportIndependent Practitionerʼs Assurance Report

Yokowo 2021 Integrated Report54

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