CSR Report

2018−2019

Fine Materials
for the Future©2018 S. FC

TODA KOGYO CORP.
supports SANFRECCE HIROSHIMA!

Contact address : CSR, Environment & Safety Department (Phone +81-827-57-6129)

Published: Oct. 1st, 2018

CONTENTS

TODA KOGYO Group renewed its Management Principle, Management Policy and Guidelines for Action in fiscal 2014.
Each and every executive and employee fulfills his or her respective role and works in accordance with these principles.

TODA KOGYO Group’s Product Group familiar to the Consumers ………………………………………………… 6
Message from the President ………………………………………………………………………………………… 8

M anagement Principle

Special Report ① 10th anniversary of the establishment of TODA ISU CORPORATION………………………… 9………… 10……………………………………………………………………………………………………… 12-Management-1) Corporate Governance2) Compliance-Economy-………………………………………………………………………………………………………… 16

1) Business Overview of fiscal 20172) Management Plan for fiscal 20183) General Meeting of Shareholders and IR Explanation Meeting………………………………………………………………………………………………… 18

1) For Improving Product Quality
2) Situation regarding Responses to Customer Inquiries
3) Small Group Activities

1. We will establish a management foundation as a “Manufacturing Company” that can contribute to society andwill continue to grow and develop even 100 years after its foundation.
2. We will refine our only-one technologies and continue to offer products and solutions that have high added value.
3. We will become a company that is essential on a global level and increase the corporate value of the group.
4. We will seek the happiness of our employees and their families and will be a company that is constantly trusted
by our stakeholders.

G uidelines for Action
1. We will act quickly to offer products and solutions that respond to the requirements of the customers.
2. The whole company will come together as one, with manufacturing, engineering, sales and management
working enthusiastically together.
3. We will be corporate citizens who are faithful and fair and will act with a strong sense of ethics.
4. We will improve our dignity as individuals and will continue to have pride, hope and dreams for the future.
5. We will work for harmony and symbiosis with the local community and with the global environment.

Management

4) Development of Human Resources Capable of Strengthening the Workplace

M anagement Policy

Special Report②-Product Quality-

Our group will further improve the fine particle synthesis technology we have developed with iron oxides andwill always continue lively growth and development.
We will work on a foundation built on sincerity and trust and we will bring together our creativity andmanufacturing strength to make a contribution to society in general with attractive new materials and solutions
that are full of originality.

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Special Report ② Restructure of the business of cathode materials for Lithium ion rechargeable battery

Business Contents
and History………………………………………………… 3
TODA KOGYO Group’s Management Principle and CSR Policy
TODA KOGYO Group’s Business Contents and History …………………………………………………………… 4

Management Principle
and CSR Policy

Management Principle, Management Policy and Guidelines for Action………………………………………………………………………………………… 20-Environment and Safety-

1) Reduction of the Environmental Load2) Sustainable Procurement
3) Risk Management

CSR Policy

Economy4) Occupational Safety and Health5) Security Trade Control
6) Initiatives for Biodiversity…………………………………………………………………………………………………………… 32

1) Respect for Human Rights
2) Involvement with Community and Society3) Better Working Environment ( Interview with Employees )4) Support for the Development of the Next Generation /5) Club Activities■For our Investors

6) Training Systems
Organization Chart

Four Guidelines for CSR

Environment
and Safety

Activities on Promotion of Women’s Participation and Advancement

Product Quality-Society-

TODA KOGYO Group is committed to carry out management on an ongoing basis which is based on management principle
and management policy, for the purpose of continued sound development into the future. Recognizing that the fulfillment of
our social responsibility is an important role as better citizens and corporate citizens, we will adhere to the relevant laws andordinances and company regulations, on the base of the spirit of compliance. Top managers of our Group themselves will leadby examples of these philosophy and policy, then will enforce within the company, disseminating to group corporations andbusiness partners. Furthermore, we will seek sound and normal relations with politics and government, while refusing tohave relations with antisocial forces and groups that may threaten the order and safety of civil society.

………………………………………………………………………………………………… 42…………………………………………………………………………………………… 43■For our Customers and Business Partners

We will share values from our customers’ viewpoints and, using our original technologies as advantages, we will also build
good partnerships with our business partners who share same ambitions. And then, we will continue to make mutually
beneficial efforts for achieving our common goals.

Society

Offices and Subsidiaries

Not only by means of accumulation and supply of results brought by high quality growth which is underpinned by creativetechnologies, but also by means of establishment and administration of a transparent and sound corporate governance setup
and effective internal controls, we will endeavor to earn understandings and empathy of all our investors.

■For Society

Organization Chart/
Offices and Subsidiaries

In accordance with the spirit of compliance, we will break off relations with antisocial forces, give the highest priority toconsiderations for safety and the global environment, and aim to build a wonderful living culture on the global level based on
our cultural capital, while seeking cooperation with local communities and harmony with international societies.

■For our Employees

The creativity and diversity of each and every employee is our wealth. We will support and fairly assess the limitlessadvancement and expression of these abilities. We will also strive to live together while enhancing the comfort and affluenceof our employees.

23Management Principle
and CSR Policy

Business Contents of TODA KOGYO Group

Automobile

・Materials for lithium ion rechargeable batteries (Electric Vehicle)
・Magnet materials (motor / sensor)
・Transparent iron oxides (coating)・Functional materials for electronic parts (inductors and capacitors)
・Functional iron oxides (for brake pads, vibration isolation and damping)

Copying Machines
and Printers

・Toner materials and carriers
・Magnet materials (Magnet roll)

Environment andHousing Life

・Lead free materials(Polyvinyl chloride resin stabilizer and road marking materials)
・Combustion catalyst
・Contaminated soil conditioner

Special Report②

・Pigment for automobiles and office equipment
・Pigment for building and building materials
・Pigment for antirust paint for ship bottom

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Please do have a look at “TODA KOGYO CORP.” introduction videoof 4 minutes and 30 seconds.
You can access from the QR code on the left. (*It is an introduction
only in Japanese.)

Paint

Business Contents
and History

・Magnet materials (home appliances motor)
Consumer Electronics and・Product parts for mobile phones and smartphones
Communication Equipment ・Parts for wearable products

TODA KOGYO Group expands business based on nanotechnologies beginning with the wet synthesis of iron oxides.
Depending on types of bonding of elements primarily comprising iron and oxygen, iron oxides show differences incolor, hardness, magnetism and physical or chemical properties.
TODA KOGYO’s wet synthetic technology is unique in that we can control the properties of iron oxides and other kindof particles, and can use our full command of the materials to produce a rich variety of materials with the desired
functions and properties. Our accumulation of nanotechnology based on wet synthetic technology represents the corecompetence of TODA KOGYO.
Our accumulation of specialized knowledge, technologies and know-how based on iron oxides enables us to approachcustomers’ issues from a new viewpoint and to provide solutions from the perspective of materials.
In recent years, we have developed and manufactured electronic parts unique to TODA KOGYO with superior
knowledge of materials, such as Ferrite sheets for noncontact charger for smartphones. Therefore, we can meet theadvanced demands of customers in the electronic parts market. Moreover, returning to the origin of iron oxides, we willcontinue to focus on the development and manufacture of various kinds of catalysts, magnet materials and functional
pigments.
With the entire TODA KOGYO Group working together, we will continue to provide solutions which support
information, environment and energy via materials.

Management

History of TODA KOGYO Group1933
TODA KOGYO CORP.
established in
Yokogawa-Shinmachi in
Nishi-ku, Hiroshima City

1953
Tokyo Sales Office andOsaka Sales Officeestablished

1959
Onoda Plant built in Sanyo-Onoda City,
Yamaguchi Prefecture

1823

1910

1920

1823 Bengala manufacturing
started in Ibara City,
Okayama Prefecture

1930

1940

Beginning from the industrial
manufacture of Bengala, the oldest
pigment known to mankind

1950

1965
Overcoming the pollution problems using the developmentof the wet synthetic method in which iron oxides are synthesizedfrom aqueous solution by a chemical reaction

1960

1953
Joint research started with Kyoto University.
Bengala manufacturing is transformed
from a traditional “skill” to a “technology”.

1970

1994
Toda Kogyo Europe GmbH established2011
Toda United Industrial (Zhejiang) Co., Ltd. in
Zhejiang Province, China became aconsolidated subsidiary of TODA KOGYO.

2004
Zhejiang Toda DMEGC Magnetic Co., Ltd.
established in Zhejiang Province, China

2012
TODA MAGNET (SHENZHEN) CO., Ltd.
established in Guangdong Province, China

2006
TODA Ferrite KOREA Co., LTD. established in South Korea

2014
Head Office relocated to Hiroshima City.

1997
Toda Pigment Corp. established2007
Toda Magnequench Magnetic Material (Tianjin) Co., Ltd.
established in Tianjin, China
Toda Advanced Materials Inc. established in Canada

2015
BASF TODA Battery Materials LLC
established

2000
Head Office relocated to Funairi-Minami
in Naka-ku, Hiroshima City2008
All shares of Tokyo Shikizai Industry Co., Ltd. Acquired
TODA ISU CORPORATION established in South Korea

2016
Toda Kogyo Asia (Thailand) Co., Ltd. establishedAll shares of Toda Fine Tech Inc. acquired

1996
Toda America Incorporated established

1990

2000

1999
1989
1988
Facilities for manufacturing
Dedicated facility to manufacture Facility for manufacturing magnetic
Hydrotalcite newly added topowder for metal tape added tocoloring materials for
Onoda Plant
Onoda Plant
electronic printing added
to Onoda Plant
Computer digital
Applicationoftherecording tape
wet synthetic method
to materials otherthan iron

2010
2003
2004
Facilities for producing cathode Facilities for manufacturing Barium Titanium
trioxide added to Onoda Plant
materials for Lithium ion
rechargeable battery newly
added to Onoda Plant

Hydrotalcite

Contributing to the reduction of industrial
wastes and effective utilization of resources

1994
Development of a combustion
catalyst which suppress
generation of dioxins

1996
Facilities for manufacturing color
toner carrier materials newly
added to Otake Plant

Example of use of Barium Titanium trioxide
2006
Equipment for production ofantenna sheets for IC tags
added to Otake Plant

2011
Equipment for production of NFC
ferrite sheets for use in smartphones
added to Otake Plant

Organization Chart/
Offices and Subsidiaries

1984
Production of ferrite materials started at Otake Plant

Society

1973
Equipment for production ofcoloring pigment using wet
synthetic method added to
Onoda Plant.

Toner materials

2003
Head Office moved to Otake City.
Wholly owned subsidiary Toda Plastic Magnet Material(Zhejiang) Corp. established in Zhejiang Province, China

The industry’s first! Development of
the wet synthetic method for iron oxides

Pellets

4

Start of overseas activities!

1980

World’s Number 1 share for magnetic powder
used in audiotapes and videotapes!

Use of iron sulfate and iron chloride,
which are derived as byproducts fromiron and steel product manufacturing
processes, as raw materials
Ferrite powder

1984
Otake Plant newly
established in
Otake City, Hiroshima Prefecture

1969
Equipment for production of magnetic powder materials
for audiotapes and videotapes added to Onoda Plant

1953
Production plant of ferrite materials
newly added to Hiroshima Plant

Coating material for building timber
Primer for dark blue dyeing
Coloring for lacquerwareand bangasa (coarse oilpaper umbrellas)
Ceramics (akae glaze), etc.

1983
Creative R&D Center
newly established in
Funairi-Minami in
Naka-ku, Hiroshima City

1991
Otake Creative R&D Center establishedin Otake Plant

Environment
and Safety

Foundedin

1975
Funairi Plant transformed into a
dedicated research anddevelopment facility.

1983
Shares listed on the first sectionof the Tokyo Stock Exchange

Product Quality

1953
In the process ofmanufacturing iron oxides
1936
by calcination of iron sulfate,
Head Office and plant
sulfurous acid gas was
relocated togenerated and became a
Funairi-Minami in
Naka-ku, Hiroshima City. serious problem.

1971
Head Office relocated to
Yokogawa-Shinmachi in Nishi-ku,
Hiroshima City.

Economy1907
Plant relocated to Asakita-ku,
Hiroshima City (Hiroshima Plant)

Magnets

Magnetic tickets andmagnetic cards

Examples of use of a dioxin-suppressing
catalyst (garbage bags, cushioning material)

Color toner carrier

Metal-compatible IC tags

Ferrite sheet

5Business Contents
and History

TODA KOGYO Group’ s materials are widely used in products familiar to everyone.
With “Fine Materials for the Future” as the word, we will continue to create newvalues utilizing the most advanced material technologies.

Management Principle
and CSR Policy

TODA KOGYO Group’s Product Group familiar to the Consumers

Door packing for refrigerator

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Inductors
Capacitors

Ferrite sheets for noncontact charger

Motors for washing machine

Films for touch-screen
Magnetic toner and magnetic carrier

Lipstick

Special Report②

Magnetic ticket

Motors for air conditioner
Fan motors
Combustion catalyst

Management

Industrial catalyst

EconomyRust preventives for a steel frame

Product Quality

Colored pavement

Automotive paint
Environment
and Safety

Bengala lattice
Films for a plastic greenhouse

Motors6

Electronic circuit components

Organization Chart/
Offices and Subsidiaries

The line in the center of the roadSociety

Brake

Ship bottom paint (rust preventives)

7

The 10th anniversary ceremony of TODA ISU CORPORATION in South Korea (hereafter “TODA ISU” ),established in February 2008, was held on May 8, 2018 at Hiroshima head office of TODA KOGYO. TODA ISU
is a joint corporation with ISU Corporation in South Korea. TODA ISU manufactures and sales Ferrite powder,
Ferrite sheets, inductors, etc.
On the ceremony day the chairman of ISU Group and the president of ISU Corporation came to Japan fromSouth Korea and participated. In a warm atmosphere, a discussion session, a factory tour of Otake Plant, etc.
were held. As a result of business expansion during ten years, TODA ISU became an indispensable part of TODA
KOGYO Group. We will continue to raise TODA ISU by working with local staff and joint venture partners.

Business Contents
and History
Product Group
Message from the President/
Familiar to Consumers
Special Report①
Special Report②

TODA KOGYO Group is a chemical material manufacturer founded at the end of the Edo
Period as a producer of the red iron oxide pigment ‘Bengala’ which is known by painting ofporcelain and ‘Bengala lattice’ . At present, in the field of automobile and communicationequipment, we also prov ide pa r t s a nd mater ials i nd ispensable for h ig h ly adva nced
electronics, such as magnet materials for high performance motors and Ferrite sheets fornoncontact charger.
Five years to the 200th anniversary of foundation, with each and every executive andemployee of our group working together, we will steadily respond to the demands of thetimes by means of the synthetic technologies for fine particles of inorganic materials, basedon the achievements for the synthesis of iron oxides.
The CSR Report is the fourth in this issue. We not only introduce our products, but also
show how our company fulfills social responsibilities in terms of economy, environment &safety and society. We hope to see the following contents. In this issue we also show the
relations between our activities and SDGs※). We are in an era where not only the continuity
as a company, but also efforts on a global scale for mankind to survive abundantly are
required. TODA KOGYO Group will promote activities based on the comprehension of SDGs
through governance and business activities, and will contribute to the rich development of
humanity.

Management Principle
and CSR Policy

Special Report① 10th anniversary of establishment of TODA ISU CORPORATION

Top Message

We will continue to strive to develop lively together with our stakeholders. We appreciate
your kind understanding and support.

President and Representative Director

Management

Shigeru Takaragi※) SDGs：“Sustainable Development Goals” adopted at the United Nations General Assembly in September 2015; 17 development goals related toeconomy, society and the environment, that should be achieved by the international community from 2016 to 2030

EconomyProduct Quality

Scene from the anniversary ceremony, held at Hiroshima head officeEnvironment
and Safety
Society
Organization Chart/
Offices and Subsidiaries

Ferrite sheet

89TODA KOGYO received the special prize of the “4th Award for M&A that creates social value and capital”
organized by Development Bank of Japan Inc. (hereafter, DBJ). (The award ceremony was held on June 12,2018.)
This award selects and awards efforts of M&A which excel in creating both social value and capital, using theevaluation system independently developed by DBJ.
An effort of M&A by TODA KOGYO Group together with BASF Group to make a joint venture of cathodematerials business for LIB for electric vehicles in Japan and the United Sates, was highly appreciated not only for
its economic value but also as an activity on a socially superior M&A ( “Social M&A” ). Moreover, our effort
was appreciated not only by realizing expansion of production capacity utilizing the procurement capabilities,
sales network, etc. of BASF Group, but also by creating new employment and ripple effects on the local economy
at Onoda Plant (the main production base of the joint venture) etc.
By means of gather i ng resou rces with BASF G roup, TODA KOGYO G roup will st reng then productdevelopment, performance, cost competitiveness, supply scale and supply capacity which are key factors for
growing in the LIB market. And we will continue to respond appropriately to the market that will expand further
globally in the future.

Trade name of the
new company

BASF TODA America LLC

Business contents

Production and sales of cathode materials for LIB

Equity ratio

BASF makes a majority contribution.

Employees

consist of employees of BASF and TAI

Raw materials

Precursors
Gifu, Japan

TaiwanCentral Battery
Materials Co., Ltd

Merged inNovember 2011

Yamaguchi, Japan

Fukuoka, Japan

BTBM, Onoda Plant

BTBM Kitakyushu
Plant

Merged in February 2015

CanadaThe United States

Toda Advanced
Materials Inc.

BTA
(Battle Creek, MI)(Elyria, OH)

Economy

MECHEMATODA CORPORATION

Cathode materials

Management

TODA KOGYO G roup is developing mater ials that cont r ibute to societ y by means of deepening thetechnologies cultivated with the synthesis of iron oxides. In addition to expanding sales of various coloringmaterials, magnet materials, etc. which are core business, in the LIB market expected to have highly promisingpotential, we established a joint venture company with BASF Group in Japan in February 2015, and thereby wehave been respond i ng to t he globally expa nd i ng ma rket by mea ns of supply i ng cat hode mater ials to
manufacturers of LIB in Japan, Asia, Europe and North America. In order to establish a system that can respond
appropriately to the demands of the rapidly expanding LIB market in the future, we decided to collaborate with
BASF Group also in the United States.
BASF Group mainly manufactures and sells chemicals, plastics, agriculture related products, oil and gas, etc.,
including cathode materials and electrolytes.

Special Report②

Toda America Incorporated (hereafter, “TAI” ), a subsidiary of TODA KOGYO, has concluded a management
on a joint business with BASF Corporation (hereafter, “BASF” ), a U.S. corporation of a group (hereafter,“BASF Group” ) focusing on BASF SE, a global chemical company in Germany.
TAI star ted a joint venture on the business of cathode materials for Lithium ion rechargeable batteries(hereafter, LIB) in the United States, with BASF Group.
After investing in BASF TODA America LLC (Limited Liability Company in the United States, hereafter,“BTA” ) that was established by BASF for this business alliance on March 8, 2028, TAI transferred the assets ofBattle Creek Plant owned by TAI (Michigan, U.S.A.) to BTA on the same day. Following BASF TODA Battery
Materials LLC(headquar tered in Minato-ku,Tokyo) established in 2015, BTA is an entity of the second
collaboration between TODA KOGYO Group and BASF Group.

Product Group
Message from the President/
Familiar to Consumers
Special Report①2) Special Prize Winner of “Award for M&A that creates social value and capital”

Business Contents
and History

1) Establishment of BTA (BASF TODA America LLC)

Management Principle
and CSR Policy

Special Report② Restructure of the business of cathode materials for Lithium ion rechargeable batteries

Merged in
February 2013

Product Quality

Merged in
March 2018

Supply chain of cathode materials for LIB involved in TODA KOGYO Group* BTBM = BASF TODA Battery Materials LLC.

Environment
and Safety
Society

External appearance of BTA

Mr. Yanagi (left); President of DBJ
and President Takaragi

10

Message from President Takaragi at the award ceremony

Organization Chart/
Offices and Subsidiaries

Mr. Kenneth Lane (left); President,
BASF Global Catalyst Division, and President Takaragi

11

●Board of Auditors

1) Corporate governance< System >General Meeting of Shareholders (The supreme decision making body)Compliance
Committee

Appointments and dismissals
Monitoring
and audit

Board of Directors
Management Appointments, dismissals
supervisionand supervision

Work audit

ReportingBoard of Auditors

Monitoring
and audit

Representative
Directors

Monitoring
and audit

Monitoring
and audit

Accounting
Auditors
Accounting audit

Participation

Control and monitoring

Participation

Work Departments
Corporate Governance System Outline drawing●Board of Directors

12

TODA KOGYO Group stipulates that acting with a strong senseof ethics as a faithf ul and fair cor porate citizen is one of theguidelines for action. Under the guideline we endeavor to maintainand improve compliance within TODA KOGYO Group.

< Compliance Code of Conduct and Compliance Promotion Regulations >TODA KOGYO Group has established the “Compliance Code of Conduct” and the“Compl ia nce P romot ion Reg u lat ion s” , a nd endeavor s to en su re a nd promot ecompliance.
The “Compliance Code of Conduct” specifies that all executives and employees of the TODA KOGYO Groupshall comply with laws, regulations, internal regulations, etc. and take actions which are compatible with social
ethics and social norms, based on the guidelines for action of TODA KOGYO.
The “Compliance Promotion Regulations” stipulate a system so as to promote compliance with the "Compliance
Code of Conduct". TODA KOGYO has est ablished a system based on the reg ulations and ensu res theeffectiveness of compliance with the "Compliance Code of Conduct".

Organization Chart/
Offices and Subsidiaries

The Board of Directors consists of 7 members, including 5 directors and 2 outside directors. We select a person
as a director candidate,who is familiar with the business contents of the TODA KOGYO Group and understandthe importance of basic development technology, which is the strength of TODA KOGYO, so as to ensure thesystem that enables prompt and appropriate decision-making on important business execution. We choose aperson who has attainments as a manager, wide knowledge and work experience as a candidate for an outside
director, so as to build a system that can monitor and oversee the execution of duties by directors from a moreneutral and independent perspective.

< Basic concept >Society

In order that shareholders can exercise their rights, TODA KOGYO takes necessary and appropriate measures.
We also strive to deepen understanding of TODA KOGYO group by providing report on business situation andinformation on future business strategies etc. to shareholders By means of establishing a place to actively
exchange opinions with shareholders and promoting constructive dialogue on business, we aim for sustainablegrowth and improvement of medium- to long-term corporate value of TODA KOGYO.

2) Compliance

Environment
and Safety● General Meeting of Shareholders

The Management Conference is an agency to examine projects such as capital investments, transactions, etc. ofa certain size or larger before making resolutions at the Board of Directors, that consists of executives andemployees of each division related to the project. By means of preventing the execution of risky projects
beforehand or expressing opinions to take appropriate measures through the examination by executives andemployees with profound knowledge of the business contents, the Management Conference supports rapid
decision-making by the Board of Directors.

Product Quality

Management Conference● Management Conference

EconomyCorporate
Lawyers

Internal Audit
OfficeInstructions

Appointments anddismissals

Management

Appointments and dismissals

TODA KOGYO aims to improve the efficiency of the audits and the quality of TODA KOGYO Group as awhole, by means of establishing the Internal Audit Office and cooperating with the Accounting Auditors and theBoard of Auditors.
The Internal Audit Office conducts business audits including Internal Control Audits. They audit whether
business activities are being carried out correctly in accordance with policies, plans, systems and various
regulations of our company, and assesse maintenance and operation of the internal control based on the Financial
Instruments and Exchange Act.
The Internal Audit Office audits TODA KOGYO and companies within TODA KOGYO Group. If matters to be
improved are found during the audit process, they perform improvement instructions and advice, and assesse theresults of improvement.
This year is the tenth year since the internal control audits began in 2008. In addition to being useful forachieving management goals, the Internal Audit Office will make efforts to discover and mitigate risks, throughgiving opinions and advices on business improvement points and responding to changes in the exter nal
environment,

Special Report②

TODA KOGYO adopts a form of corporate governance system based on the framework of governance by the“General Meeting of Shareholders” , the supreme decision-making body, the “Board of Directors” , a decisionmaking body concerning important business execution and the “Board of Auditors” , a supervising body forbusiness execution.
In addition to regular meetings once a month of the Board of Directors, an extraordinary Board of Directors isheld as necessary to business needs, enabling us to make quick and accurate management decisions. In addition,
by utilizing two outside directors we believe that the roles to mutually monitor and supervise the execution ofduties by directors are functioning effectively. Moreover, by means of implementation of audits of the Board of
Directors and other important meetings by the Board of Auditors, including three highly independent outside
auditors, we ensure the system of monitoring and supervision for business execution with high objectivity andneutrality.

● Internal Audit Office

Product Group
Message from the President/
Familiar to Consumers
Special Report①

By means of gathering imagination and creativity, TODA KOGYO Group will widely contribute to society
through new materials and solutions that are attractive and original. In order to be trusted by a wide range ofstakeholders, including shareholders, customers, business partners, local communities, employees, their families,
etc., we recognize both ensuring transparency, soundness and legality of management, and increasing efficiencyof management, as one of the most important issues for management. Through these activities, we will continue
to strengthen and enhance corporate governance.

Business Contents
and History< Basic concept >The Board of Auditors consists of 4 members, including 1 fulltime auditor and 3 outside auditors. The Auditors
attend meetings of the Board of Directors and other important meetings, state opinions as necessary and audit thelegality of the execution of duties by directors. They also conduct audits of the legality and appropriateness ofbusiness execution of TODA KOGYO Group as a whole by collecting appropriate information from directors andother executives and employees. The Board of Auditors conducts efficient and effective audits in cooperation
with the Accounting Auditors and the Internal Audit Office.

Management Principle
and CSR Policy

Management

13Management Principle
and CSR Policy

Management

Within TODA KOGYO Group, the Compliance Committee determines the basic direction of compliance inordinary times, and the Compliance Promotion Headquarters perform and ensures compliance in collaboration
with the Internal Audit Office and the Legal Group. When a specific issue arises, the Compliance Committee
and the Compliance Promotion Headquarters make compliance more effective by taking steps to solve problems
and prevent recurrence.

In order to prevent violations of laws and social ethics or to discover those at an early stage, TODA KOGYO has
set up a consultation system with officials in each department and external lawyers as contacts, based on the“Compliance Promotion Regulations” .
The Compliance Promotion Headquarters investigates consultation cases and takes appropriate measures andnecessary measures for the future in case of violation.
In order to protect the consulter, this system accepts anonymous consultation, deals with the fact and content of
the consultation as a secret, so that the consulter will not receive disadvantageous measures. Provisions
concerning the system are designed to make it easy for any employees to browse and use it.

System chart of Compliance Promotion

Board of Directors (TODA KOGYO)
Devolution

ReportingCompliance Committee
Instruction and supervision

Reporting and recommendation

Compliance Promotion Headquarters
Investigation reporting

Compliance Advice Desk
Consultation and notification

Education
andtraining

For the purpose of improving compliance awareness among employees in TODA KOGYO Group, TODA
KOGYO conducts in-company education for all employees using e-learning and documents such as DVD.
Through regularly conducting a lecture to raise awareness of compliance with laws, social ethics norms, etc. for
new employees and newly appointed managers and a lecture on information security for all employees, we haveopportunities for employees to repeatedly recognize the importance of compliance.
We also publish a "Compliance News" posting hot topics and information on compliance every other month inorder to endeavor to promote compliance awareness among executives and employees within TODA KOGYO
Group. “Compliance News" has contents considering ease of understanding, such as using simple expressions,and promotes fostering of compliance among executives and employees.

Special Report②

Reporting< In-company Education and Enlightenment Activities >Product Group
Message from the President/
Familiar to Consumers
Special Report①< Consultation System >Business Contents
and History< Promotion System >Feedback

Management

Executives and Employees(Group Companies)

Interview with the Internal Audit Office●Legal Group

Society
Organization Chart/
Offices and Subsidiaries

14

Environment
and Safety

The Compliance Committee consists of executives such as Directors, Audits, etc., the corporate lawyer and theperson responsible for the Legal Group. The Compliance Promotion Headquarters consist of ex and the persons
responsible for each department.
In ordinar y times following the deter mination of the basic direction of compliance by the Compliance
Committee, the Compliance Promotion Headquarters aim to maintain and improve compliance within TODA
KOGYO Group by means of implementing concrete measures such as educational activities on compliance andimplementation of training, and by monitoring compliance status.
In emergencies the Compliance Committee discusses specif ic cases of compliance violations or fear ofcompliance violations and determine how to respond etc. Following the decision, the Compliance Promotion
Headquarters responds to the specific cases and takes appropriate preventive measures.

Product Quality●Compliance Committee and Compliance Promotion Headquarters

Q: What kind of audits do you conduct as internal audits?
Internal Audit Office We mainly audit the internal controls related to the Financial Instruments and ExchangeAct. This audit is a measure to increase the reliability of the consolidated financial reporting.
Q: In more concrete terms, what exactly is a measure to increase the reliability of the financial reporting?
Internal Audit Office This measure involves continuously carrying out improvement activities and strengthening
internal controls, by means of periodically evaluating the development and operation status of internal controls
related to the financial reporting and giving feedback to each office / group company. The Internal Audit Officeoversees this measure and reports it to the Board of Directors etc.
Q: What kind of departments are subject to internal audits within the company?
Internal Audit Office We examine the business process of TODA KOGYO and companies of TODA KOGYO
Group. The business processes that include accounting and financial reporting, purchasing, production, sales,
asset management, etc. are important processes closely related to business purpose.
Q: How do you think SDGs and internal controls are related?
Internal Audit Office As stated in the president's policy for fiscal 2018, SDGs are activities to be undertaken by
the entire company in the future. By the development and operation of internal controls, we believe that we canhelp even a little especially for the realization of “Goal 8; Decent work and economic growth” and “Goal 17:
Partnerships for the goals” .
Q: Why do we need internal controls?
Internal Audit Office Internal controls are the management-led measures. Taking compliance as an example,
we believe that the attitude (not only to obey the law but also to understand and adapt to the social demands
behind the law) of the people at the top of our company fosters a corporate culture to prevent the occurrence ofimproprieties.

EconomyThe Legal Group does business from the viewpoint of preventing violation of laws, corporate ethics andcontract or other troubles by TODA KOGYO Group.
By means of examinations concerning both documents imprinted by TODA KOGYO and contracts signed by
TODA KOGYO Group, and by means of responding to inquiries from other departments when conducting
transactions, contracts, etc., the Legal Group prevents the occurrence of troubles in normal transactions.
Moreover, through consulting with a lawyer outside the company, as necessary, for high risk projects etc., theLegal Group strives to prevent problems that will cause major disadvantages to our company.
Through fostering and improving employees' awareness of compliance by training for new employees and newly
appointed managers, the Legal Group aims to ensure complete compliance within TODA KOGYO Group.

15

Management Principle
and CSR Policy

EconomyBecause of the sales growth of Ferrite sheet for noncontact charger for smartphones and magnet materials for
consumer electronics and automobiles, sales of TODA KOGYO Group reached 32,781 million JPY (17.5% up on
the previous fiscal year comparison). In terms of profits, despite the impact of the sharp rises in raw material
prices, the cost rate was improved due to the effect of promoting cost reduction activities etc. through in-houseproduction of raw materials. Moreover, as we continued our efforts to reduce selling and general administrative
expenses, the operating income significantly increased to 1,370 million JPY (operating loss was 151 million JPY
in the previous fiscal year). As a result of dividend income of 88 million JPY as non-operating income etc., theordinary income was 1,195 million JPY (compared to the ordinary loss of 1,116 million JPY in the previous fiscal
year) and the net income attributable to parent company shareholders was 981 million JPY (compared to the net
loss attributable to parent company shareholders was 2,926 million JPY in the previous fiscal year).

Under the Medium-term Plans; “Toda Step One” from fiscal 2013 to fiscal 2015 and “Toda Step Two” for one year fromfiscal 2016, TODA KOGYO Group has worked to consolidate our foundation for profitable operating income and further
growth. As a result, as mentioned in the previous page, we achieved profitability even in the net income in fiscal 2017.
So as to continue growing steadily in the future, we will promote resource concentration in our focused business,
reinforcement of organizational strengths and so on.
For fiscal 2018 and later, we are earnestly considering what kind of situation we aim to achieve under what kind ofvision in the medium term. The medium-term management plan will be released as soon as it is completed. This reportintroduces trends in consolidated net sales by product use and future prospects.

(100 million JPY)

Sales

Operating profit(100 million JPY)
327

(100 million JPY)

13.7

10.5

11.9

Net income attributable toparent company shareholders(100 million JPY)

9.8

278
▲1.5

2016

2015

2016

FY

2017

2015

one million JPY

Copying Machines
and Printers

▲68.6
2016

2017

2015

FY

2016

2017

Automobile

FY2) General Meeting of Shareholders and IR Explanation Meeting

Consumer Electronics andCommunication Equipment
FY 2016

FY 2017

FY 2018

Product Quality②Future prospects

Society
Organization Chart/
Offices and Subsidiaries

As a big topic, TODA KOGYO resolved to make a capital and business tie-up with TDK Corporation (hereafter,"TDK") on January 10, 2019 (planned). (At the Board of Directors meeting held on July 30, 2018)
TODA KOGYO Group and TDK will utilize the resources and know-how possessed by both companies so as topromote efficiency and sharing; related to planning and development of products concerning materials and raw materials
for electronic parts, cooperation on sales of the products and logistics operations of the products. We believe that thecooperation of both companies in development of new products centering on electronic materials business, procurementof raw materials both in Japan and overseas, marketing and logistics using global network, etc. contribute to further
expansion of business opportunities of TODA KOGYO Group.
Through the business alliance with TDK, by means of bringing together the technology and development capabilities,
sales force, information capabilities, etc. both of TODA KOGYO Group and TDK, and by means of mutuallycomplementing them, we aim to realize enhancement of product competitiveness, expansion of sales, development of
new markets, etc. which are planned by both companies.

Environment
and Safety

Scene from the IR Explanation Meeting

Paint
EconomyOn June 27, 2018, TODA KOGYO's 85th term general meeting of shareholders was held. Many shareholders
attended, like always, this fiscal year. We have positioned the general meeting of shareholders as an opportunity
for valuable communication with shareholders. After the meeting of the general meeting of shareholders has been
completed, we hold a Management Record Reporting Meeting by the President every time, and strive to makeour shareholders deepen their understanding of TODA KOGYO Group. We also inform our shareholders how
TODA KOGYO’ s products are used in products familiar in our life, through exhibits of our products andexplanations by technical experts.
In addition, TODA KOGYO regularly holds an IR (Investor Relations) Explanation Meeting for investors,
analysts, economic reporters, etc. We held an IR Explanation Meeting for fiscal 2017 on June 5, 2018 in Tokyo.

16

Environment andHousing LifeManagement

FY

2017

35,000one million JPY

one million JPY

▲11.1
▲14.4

32,781

27,889

▲29.2

2015

①Consolidated net sales by product use in FY 2018

Special Report②285

Ordinary income

Product Group
Message from the President/
Familiar to Consumers
Special Report①

3) Management Plan for fiscal 2018

Business Contents
and History

1) Business Overview of fiscal 2017 (April 1, 2017 - March 31, 2018)172) Situation regarding Responses to Customers’ Inquiries

TODA KOGYO Group promotes the quality assurance activities shown below based on the quality policy; “Provide
quality which obtain the customers’ trust and satisfaction by developing continuous improvement activities.” The
Quality Assurance Department as a promoter, is an organization that is independent from sales, development andmanufacturing departments placed under the direct control of the President so as to promote quality assurance activities
from a neutral standpoint, more effectively.
The Quality Assurance Department organizes a Quality Assurance Committee, shares information with the quality
assurance department of each TODA KOGYO Group’s plant, and has established a system to resolve quality issues
throughout the entire company. In addition to performing quality audits for the manufacturing departments of TODA
KOGYO Group, the Quality Assurance Department identifies causes of complaints, claims, etc. delivered to sales
department from customers. Moreover, the Quality Assurance Department plans and implements measures to prevent
recurrence of complaints, and performs verification and horizontal development of them from the perspective ofworkplace.
In fiscal 2017, in order to expand quality management education activities, we established the "Monozukuri*)Promotion Center" under the organization of the quality assurance department and worked on human resource
development based on the idea that "Monozukuri corresponds to human resource development". In fiscal 2018, we willplace “Monozukuri*) Promotion Center” directly under the newly established Human Resources Development
Department and will cooperate to support these activities.
*) Monozukuri means manufacturing.

TODA KOGYO Group is trying to respond to customers’ inquiries
regarding the products, CSR, etc. promptly and politely.
Concerning the issues that arise in such activities, we cooperatewith the departments in charge and strive to solve problems.
In fiscal 2017, we responded to a large number of inquiries, mainly
on inquiries related to chemical substances as shown in the figure on
the right.

Reporting

Reporting ofcorrections

Research & Development Division

Onoda Plant

Human resources development

Technical support

Otake Plant

Toda Pigment Corp.

Communication of complaints etc.

Marketing

18

Other
manufacturing
affiliates

20%
10%
0%
Chemical
substance
relatedConflict
minerals

Environment /quality syst

BCP
related

OthersBreakdown of contents of customer inquiries by business location

Scene from the small group presentation meeting at Otake Plant

Monozukuri Promotion Center is promoting a corporate culturethat can be improved by thinking autonomously by noticing the
problems of its own workplace based on the idea that "Monozukuri
corresponds to human resource development".
We support “the activity of special zone of 5S”, so as to foster aculture that improves small problems noticed in our workplace by"5S"; Seiri (arrangement), Seiton (ordering), Seiso (cleaning),
Seiketsu (neatness), Shitsuke (discipline). Through the activity, we
promote to revitalize the workplaces by fostering the capability tosolve the found problems and eliminate waste. In fiscal 2017, basedon the activity, we provided opportunities to learn "How to view andthink about things based on QC (Quality Control)" which means
Study sessions on QC stories
recognizing the appearance that the workplace should be,visualizing the problems and improving them. In more concrete terms, we held study sessions on QC stories, change
point management, why-why analysis, etc.
In fiscal 2018, we will work on the human resource development reflecting the idea of TQM (Total Quality
Management), in order to enhance human resource development through the quality control education. We aim atdeveloping human resources capable of adapting both to workplace problems and to the rapidly changing businessenvironment, by enhancing Genbaryoku (capabilities to find and solve problems in the workplaces) and organizational
capabilities.

Organization Chart/
Offices and Subsidiaries

Tokyo Shikizai
Industry Co., Ltd.

30%

SocietyConsultation

Monozukuri
Promotion Center

Quality audit

40%

Environment
and Safety

Quality Assurance Committee (Quality Assurance Department)

50%

Product Quality

Supervision

60%

EconomyManagement Conference(TODA KOGYO)

70%

Management

Quality Assurance Structure

Identification of causes of complaints
etc., planning and implementation of
measures to prevent recurrence ofcomplaints, confirmation of progressand horizontal deployment

4) Development of Human Resources
Capable of Strengthening the Workplace■Onoda Plant

Special Report②

1. We perform quality audits for the purpose of confirming compliance with requirements in the ISO9001 series and improvementof the quality assurance systems.
2. We confirm the status of compliance with laws, regulations and other requirements.
3. In order to improve the quality of products by TODA KOGYO Group, we promote comprehensive quality improvement by meansof analyzing quality, providing improvement guidance for related departments and holding regular quality review meetings(Quality Assurance Committees).
4. We support strengthening the quality assurance system of overseas companies.
5. We support the human resource education so as to enhance Genbaryoku (capabilities to find and solve problems in the workplaces).

Within TODA KOGYO Group, we recognize the ideal form of the
production site at each workplace of each plant and eachmanufacturing subsidiary, under the slogan “No efficiency without
safety; No trust without quality; No growth without innovation(improvement)”.
We also actively participate in small group activities in cooperation
with subcontracting companies toward improving the issues.
By means of expanding the scope of activity theme to environmentand safety, we are strengthening the unity of employees at the sitethrough this activity. In addition to improving awareness andknowledge of employees, we lead to the sharing of know-hows
between workplaces by implementing presentation meetings.

■Otake Plant

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Guidelines of Quality Assurance Activities

3) Small Group Activities■Toda Pigment Corp.
80%

Business Contents
and History

1) For Improving Product Quality

Management Principle
and CSR Policy

Product Quality

191) Reduction of the Environmental Load

③Measures against Global Warming

TODA ISU CORPORATION

Toda Plastic Magnet Material (Zhejiang) Corp.

Zhejiang United Pigment Co., Ltd.
Toda America Incorporated
Toda Kogyo Asia (Thailand) Co., Ltd.

20

Otake Creative R&D Center

2011

2012

④Recycling of waste

2013

2014

2015

2016

2017 FY

0

2010

2011

2012

2013

2014

2015

2016

2017 FY

From the regular report by TODA KOGYO CORP., based on the Energy Conserv

By effective utilization of recycling, reuse, etc. of industrial
Industrial waste volume Industrial waste volume
Industrial
waste volume(%)
Recycling rate
waste, TODA KOGYO Group promotes activities targeting the(t)
100
18,000f i nal waste d isposal (la ndf ill d isposal) a mou nt zero (zero16,000emission). At domestic business sites we restrict the generation of
14,000wa st e a nd c ol le ct i ng a nd reu si ng wa st e by rev iew i ng t he
90
12,000manufacturing processes. In addition to recycling the generated
10,000iron-based inorganic sludge as cement raw material, mixed fuel,8,000
catalyst application, etc., we promote recycling of waste plastics,
80
6,000
waste scraps, paper and other materials.
4,000
Due to such results of activities, the recycling rate in total of
2,000
O n o d a Pl a n t , O t a k e Pl a n t a n d To d a P ig m e n t C o r p. w a s
700maintained at 99% or more during fiscal 2012 and fiscal 2016. In
2017 FY
2012
2013 2014
2015
2016
f iscal 2017, the composition and physical proper ties of thegenerated sludge changed with the increase in production at
Onoda Plant. As a result of these changes, the recycling rate decreased to 80.8% because the acceptance volumeof recycling processors decreased. By promoting countermeasures such as reducing the amount of generated
sludge and improving the physical properties of sludge, we aim to recover the recycling rate to the level until
fiscal 2016.

⑤Registration for the participation in the Environmental Reporting Platform Development Pilot Project(Ministry of the Environment)
Efforts towards the environment by companies are becoming
impor tant in cor porate social responsibilit y. Cor porate
valu at ion s a re p e r for me d comprehe n sively f rom ESG(environment, society and governance) information. Ministry of
the Environment is developing the “Environmental Reporting
Platform Development Pilot Project” ; the demonstration
project for full-scale operation of "ESG Dialogue Platform"*).
TODA KOGYO Group has participated in the project andstarted to engage in dialogue with investors etc.
*) O n ESG Dialog ue Plat for m , compa n ies e ngaged i nenvironmental initiatives interact with investors etc. in order tobe appropriately evaluated by them.

Company

Investor etc.

Environmental
Reporting Platform

IR Library

CSR Report
Environmental Report

Report on corporate
governance

EconomyEnvironment / Society

Governance

Organization Chart/
Offices and Subsidiaries

Zhejiang Toda DMEGC Magnetic Co., Ltd.

ISO14001

2010

Society

Toda Magnequench Magnetic Material (Tianjin) Co., Ltd.

0

Environment
and Safety

TODA Ferrite KOREA Co., Ltd.

TODA MAGNET (SHENZHEN) CO., Ltd.
Otake Creative R&D Center:
Product Development Group

100,000

Product Quality

Toda Pigment Corp.

ISO9001

200,000
50,000

EconomyOnoda Plant
Otake Plant

ISO9001
ISO14001

300,000

100,000

Management

TODA KOGYO Group has acquired certification under the following management systems and implements the
PDCA*) cycle in its business activities.
*) PDCA means plan, do, check and act.

Energy consumption converted to crude oil（kL）
400,000

Special Report②②Situation regarding Introduction of Management Systems

CO 2 emission（t-CO₂）150,000

Product Group
Message from the President/
Familiar to Consumers
Special Report①

TODA KOGYO Group conducts environmental management based on the ISO14000 series, and not only
recog nizes environ mental conser vation as the mission imposed on global citizens, but also considers
environmental conservation activities and management activities coaxial. We are responsible for ourselves andwork on these activities across the entire group.
Concrete codes of conduct(1)Setting and achievement of high environmental conservation goals
Executives and employees set high goals that anticipates social expectations at their own responsibility, andst rive to create economic value th rough the achievement of them, as well as compliance with laws andregulations.
(2)Promotion of the development of innovative environmental technologies
Executives and employees create customer value and proceed with the development of innovative environmental
technologies widely used across society.
(3)Continuous improvement with the participation of all executives and employees
Executives and employees grasp the impact on the environment in all business activities, and continuously
improve on the prevention of pollution and effective use of energy and resources by all participants.
(4)Provision of environmentally conscious products and services
When providing products and services, executives and employees strive to reduce the environmental load in all
stages leading to sales, logistics, use, recycling and disposal from procurement policies and production.
(5)Improvement of consciousness and promotion of responsible environmental conservation activities
Each and every executive and employees broadly looks at society, raises awareness through positive learning,and proceeds with environmental conservation activities by his/her own responsibility.
(6)Contribution to the realization of a sustainable society
Executives and employees contribute to the realization of a sustainable society by means of joining andsupporting environmental conservation activities.
(7)Acquisition of social trust through communication
Executives and employees develop environmental conservation activities in cooperation with stakeholders andgain the trust of society through active communication.

TODA KOGYO Group is promoting measures against global war ming by the Environment Committee(composed of domestic group companies) which is under the control of the CSR, Environment & Safety
Department. In addition to responding to CDP (International NGO) 's climate change questionnaire since 2016,
we are working on the climate change issues on the Board of Directors level, by setting CSR, Environment &Safety Department directly under the president.
In each plant, the production department improves productivity, the equipment division updates to equipmentwith excellent energy saving performance and the development department is engaged in development of
manufacturing method with excellent productivity etc. respectively. Moreover, we hold an energy conservation
proposal contest for all employees, and award prizes and certificates of commendation for excellent proposals.
Although CO2 emissions and energy consumption converted to crude oil increased with the effect of launchingof new business in fiscal 2017, we will promote measures against global warming throughout the company.

Business Contents
and History①Basic Environmental Policy

ISO9001
ISO14001OHSAS18001

Management Principle
and CSR Policy

Environment and Safety212) Sustainable Procurement〈Form〉

Procurement Policy
Since our founding, we have always maintained the spirit of creativity and originality, studied hard,refined our sense and sensibility and aimed to create values. In order to contribute to society even morein the future as a world’ s top-class material manufacturer, we list the following procurement policies.

Product Group
Message from the President/
Familiar to Consumers
Special Report①

TODA KOGYO Group shares global values with respect to "Human Rights", “Labour", "Environment" and"Anti-Corruption" stipulated by the United Nations Global Compact and follows "Procurement Policy", "Guidelines","Basic Policy concerning Conflict Minerals", as described below. We also improve our business competitiveness andcorporate value by enhancing sustainability with business partners, and aim to contribute to society.

In accordance with the purchasing regulations, we are obligated to implement business partner surveys. In the
sur veys, from various aspects such as quality assurance, supply capability, BCP / BCM, environmental
conservation, human rights, compliance with laws and regulations, social contribution, etc., we receive responses
from our business partners and share values. Through these efforts, we aim to acquire trust, expectations andsecurity of customers, shareholders and society.

Business Contents
and History①Policy②Business Partner Survey

Management Principle
and CSR Policy

Environment and Safety

Specific procurement items under the Green Purchasing Law started from 101 items in 14 fields in fiscal 2001 andincreased to 275 items in 21 fields in fiscal 2018. (Cabinet decision in February 2018) Based on the "Public
Procurement Guidelines for Green Purchasing (February 2018)" published by Japan, considering chemical substancemanagement, energy saving, resource saving, recycling, packaging materials, ease of regeneration / disassembly /treatment, impact on ecosystems, we procure products and ser vices which are considered to reduce theenvironmental load.
Covered items: paper, stationery, home appliances, office equipment, water heaters, lighting, working clothes, etc.,
air conditioners etc., fire extinguishers
Reference environmental labels etc.

Environment
and Safety
Society

We promote sustainable procurement in cooperation with everyone in the supply chain.

Organization Chart/
Offices and Subsidiaries

22③Green Procurement

Product Quality

In the Democratic Republic of the Congo and neighboring countries, significant violations of humanrights and environmental destruction by anti-government forces are occurring. These problems areserious concerns for the international community. It is said that some of the minerals (tin, tantalum,
tungsten, gold) that are produced in this region are exploited as a source of funding (so-called “conflictminerals” ) for these forces.
Under such circumstances, in the Dodd-Frank Wall Street Reform and Consumer Protection Act(2010) established in the United States, it has been made compulsory for listed companies in the UnitedStates to disclose use of “conflict minerals” in their products and so on.
TODA KOGYO Group has no intention to assist such violations of human rights and environmental
destruction. We will continue to advance initiatives in cooperation with our customers, business
partners, industrial associations, and so on.
TODA KOGYO Group asks its business partners to procure from smelters which comply with theConf lict-Free Smelter Program*) established by the Electronic Industry Citizenship Coalition (EICC)
CSR alliance / Global e-Sustainability Initiative (GeSI), or smelters which are recognized as having no
involvement with conf licts in traceability projects which track traces of reliable minerals from theirmining to processing and distribution.
*) Conflict-Free Smelter Program: A program in which an independent third party certifies that all theminerals which smelters process are originated from conflict-free sources.

EconomyBasic policy concerning conflict minerals

Management

1. Compliance with laws and regulations: In all activities related to procurement we comply with laws andregulations and conduct fair transactions.
2. CSR: In addition to recognizing the responsibility as better citizens and doing our CSR activities, we
collaborate with business partners who share similar ambitions and fulfill our social contribution.
3. Green procurement: We conduct purchase transactions, based on the procurement considering resource
conservation and environmental conservation.
4. Fair and impartial transactions: We widely open the trading market and conduct purchase transactions,based on impartial and fair standards both domestically and abroad.
5. Selection of business partners: We comprehensively evaluate quality, price, delivery time, etc. presented bybusiness partners. Considering the promotion of cost reduction activities, the possibility of providing newmaterials and new technologies, etc., we make selection based on economic rationality.
6.Regarding purchase transactions, we always pursue consistency and do not conduct speculativetransactions.
7.We strictly manage documents and information provided in purchase transactions.

Special Report②

Guidelines

23

Management Principle
and CSR Policy

Environment and Safety
3) Risk Management

Business Contents
and History①Risk Management

Manager
Advice and guidanceTokyo Shikizai Industry Co., Ltd.
A disaster prevention drill on 16th November 2017

Toda Pigment Corp.
First aid for injured person in adisaster prevention drill on 26th September 2017

Toda Pigment Corp.
Initial firefighting activity in adisaster prevention drill on 26th September 2017

Onoda Plant
Report by a headquarters captain in adisaster prevention drill on 13th November 2017

Product Group
Message from the President/
Familiar to Consumers
Special Report①

TODA KOGYO Group has established "Risk Management Regulations". We conduct identification, assessment,
training, etc. of risks surrounding the entire TODA KOGYO Group.
Having set up a risk management team in fiscal 2017, we promote to make risk management more effective.
Specifically, by assigning an internal specialist as a "Risk Evaluator" for each risk category, we evaluate the risk
situations which are self-evaluated by our business sites and operating companies.

Special Report②

Secretariat
Report at Management Conference

Self-evaluation
Self-evaluate the situationof risk of each businesssite etc.

Risk Evaluator
Evaluation by the
Risk Evaluator

Evaluate the validityof self-evaluation

Management

Self-evaluator

Self-evaluator
Feedback &response to the risks

EconomyEnvironment
and Safety

Risk management is essential for the company's sustainability. Together with the following BCP (BusinessContinuity Plan), we will continue to focus on them.

②BCP / Disaster prevention activities

Onoda Plant
Scene from recording a time line in adisaster prevention drill on 13th November 2017

Otake Plant
Evacuation of injured person in adisaster prevention drill on 13th November 2017

Otake Plant
Initial firefighting activity in adisaster prevention drill on 13th November 2017

Organization Chart/
Offices and Subsidiaries

24

Society(1)BCP
Based on the basic business continuity policy, TODA KOGYO Group is engaged in BCP at company level
including business offices both in Japan and overseas.
(2)Emergency response drill
Since we handle inf lammables such as heavy oil, kerosene, LPG and hydrogen gas in large quantities, at each
worksite, there are risks of fire, explosion and pollution due to outflow of chemical substances. In order to preventthe development of these potential risks, we carry out daily and periodic inspections and improve our safety system.
Emergency response drills are held every year at the worksites. We conduct drills for evacuation, rescue,
firefighting, etc., assuming ①” personnel damage” , ②” fire occurrence” and ③” damage to buildings” due to an
earthquake.

Product Quality

Currently, the major items that we recognize as risks are the following four. When classifying them finely, weevaluate the risks of 40 more.
(1)Political, economic and social risks (Occurrence of terrorism and war, material economic fluctuations, etc.)(2)Disaster risks (Stop of infrastructure, occurrence of earthquake, etc.)(3)Operational risks (Occurrence of bad debt, institution of a lawsuit, occurrence of a labour issue, etc.)(4)Management risks (Hostile takeovers etc.)254) Occupational Safety and HealthThe preamble) Based on the “Safety First” principle, TODA KOGYO works on prevention of industrial accidents
to protect the happiness of all employees and their families.

Business Contents
and History①The Constitution for Safety of TODA KOGYO(2) Safety Activities
At Onoda plant and Otake plant, we hold a "Safety Convention" every year before the National Safety Week andthe National Health Week. We invite lecturers from Ube Labour Standards Inspection Office at Onoda Plant and
Hatsukaichi Labour Standards Inspection Office at Otake Plant respectively, in order to listen to lectures on disaster
trends and disaster prevention plans together with the employees, and to raise employee's awareness of safety. We
recognize the lectures as opportunities to reconfirm the results of disaster occurrences in the previous fiscal year.
We also reconsider the goals for the current fiscal year and set them.

Management Principle
and CSR Policy

Environment and Safety

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Article 1. Human life and human safety are given top priority.
Article 2. Safety is achieved by all participants.
Article 3. We develop human resources for safely.
Article 4. We remove or improve unsafe situations without leaving them.
Article 5. Safety is based on "5S".
Article 6. All workers work in accordance with established rules.

Special Report②

Article 7. We thoroughly investigate the causes of disasters and prevent recurrence.
Article 8. We aim for intrinsic safety with the risk assessment in advance.
Article 9. We seek the creation of comfortable workplaces.

(4 ) A c t i v i t i e s a t t h e S a f e t y a n d M o n o z u k u r i(manufacturing) workshop
Centering on the Safety Promotion Center, we holdthe Safety and Monozukuri workshop for all employees
including subcontracting companies.
At this workshop, we hold courses in the classroom on“5S” a nd “Da nger prevent ion t r ai n i ng” t hat a reregarded as basic of safety, for half a day though it isshort time.

Society

Scene from a classroom lecture in the Safety and Monozukuri workshop

Organization Chart/
Offices and Subsidiaries

26

Scene from a course on mental healthcare in Toda Pigment Corp.
Environment
and Safety* Rate of lost-worktime injuries: This means the number of casualties caused by industrial accidents per 1 million actual
working hours, and expresses the frequency of industrial accidents.

Product Quality(1)Data on industrial accidents
Unfortunately, four lost-worktime injuries occurred in the entire group in fiscal 2017. There were 3 disasters of thegroup employees and 1 case of an employee of a subcontracting company in a work site. Reflecting the result, we
conducted an inspection of the organization, as a first step in strengthening the safety and health management
system at each workplace.
We strive to raise awareness of all
Trend of rate of lost-worktime injuries in TODA KOGYO Group
employees by transmitting information
TODA KOGYO Groupon safet y a nd healt h eve r y mont h.
Average value of data of various industries investigated by
Ministry of Health, Labour and Welfare
Rate of lost-worktime injuries
Unfortunately, in the event of industrial
3.0
accidents, we distribute information on
the accident to the site workers reliably
2.5
and in a timely manner. All the workers
2.0
lea r n f rom past accident cases andc o n f i r m t h e m e a s u r e s t o p r e ve n t
1.5
recurrence. Through these efforts, we
w ill cont i nue to develop act iv it ies
1.0
aiming for our wishful “eradication of
0.5
industrial accidents” in collaboration
with the safety and health committees
0.0
in each plant.
2012
2013
2014
2015
2016
2017 FY(3)Holding of various types of courses and seminars
By implementing courses focusing on priority themes
set for each work site f rom time to time; such as“ Sp e cial e ducat ion for low pre ssu re ele ct r icit yhandling” , “Course on danger prevention training” ,“Cou r se on wea r i ng of per sonal protect ive
equipment” , “Course on mental healthcare” , “Course
on VDT (Video Display Terminal) operation” , etc.,
not limited to legal special courses, TODA KOGYO
Group strives to disseminate the recognition on safety
and health for the group employees.

EconomyFor the purpose of unifying the activities on occupational safety and health in the entire group, TODA KOGYO
Group operates safety and health activities with the following organizational system.
・Operation of the safety and health committees in each plant under the Central Summarizing Safety and HealthCommittee
・Cooperation with the Safety Promotion Center which provides support activities focusing on education andawareness-raising activities
Under the above system, we promote to foster a corporate culture of safety and health for the entire group.

Scene from a Safety Convention in Otake plant

Management②Safety and Health Activities

Scene from a Safety Convention in Onoda plant275) Security Export Control

Security Export Control
Number of issued Parameter Sheets
140
120

Product Group
Message from the President/
Familiar to Consumers
Special Report①

TODA KOGYO Group has established the Security Export Control Regulations, and declares not only to comply
with laws and regulations but also to contribute to maintain international peace and security.
In order to prevent weapons and military-transferable cargo / technology from going to countries or terrorists etc.
that threaten the security of the international community, TODA KOGYO Group conducts export controls in goodfaith based on Foreign Exchange and Foreign Trade Act and other applicable international laws and foreign laws
when exporting and providing our products, our technical information, etc.

Business Contents
and History

In order for all participants to experience “the importance of safety” ( “What is danger?” , “Notice of dangerous
situation” , etc.) with their whole bodies, we adopt experiencing devices and instruction methods, such as “Risk ofload lifting” , “Risk related to exposure to a liquid chemical” , “Hanging experience using one hanging safety belt”
and so on. Through the simulated experiences and experiences of danger by the unique devices and creative
methods, we provide the participants with opportunities for awareness of danger.

Management Principle
and CSR Policy

Environment and Safety

Special Report②

100
80Entrance of the Safety and Monozukuri workshop
and Scenes from various experiences(1)Employee's health maintenance and promotion
Based on the Industrial Safety and Health Act, TODA KOGYO Group conducts general health checkups and at thetime of employment of employees and at least once a year. We also carry out special health checkups for employees
engaged in specific tasks. We analyze the results of health checkups and reflect it in health maintenance / promotion
activities at a safety and health committee etc. at each worksite.

Apr.
2017

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2018

Feb.

Mar.

System of Security Export Control

Executive Export Control Officer

Environment
and Safety

Export Control Officer

Person in charge of
Onoda Plant

Person in charge of
Otake Plant

Department in charge : Procurer
Department in charge : Procurer
Shipping person
Shipping person

Person in charge of Research& Development Division

Sales representative
Society

Department in charge : Procurer
Department in charge : Procurer
Shipping person
Shipping person<Inquiries concerning security export control>
For inquiries concerning security export control of our products or related technology, please contact the nearest
technical / sales representative.

Organization Chart/
Offices and Subsidiaries

28

0

Product Quality

Scene from a Course on mental healthcare
via DVD viewing in Head Office20

Economy(2)Result of stress check test
Along with the revision of the Industrial Safety and Health
2018
90.0
Act, TODA KOGYO established the Stress Check System
TODA KOGYO 10.0
Implementation Regulations on April 1, 2016 and conducts
2018
annual stress check test for all employees. According to the
Average of
14.3
85.7
other companies
result of June 2018, the ratio of high stress persons was 10%of all examinees. Although increased slightly compared to the
2017
92.2
fiscal year 2017, the ratio of high stress persons maintains a
TODA KOGYO 7.8
lower value than the average ratio of 14.3% of the stress check2017
test implementation consignment company (400,000 people
Average of
13.0
87.0
other companies
under examination).
We are actively working on various measures for mental
0
20
40
60
80
100
health measures, based on the "Guidelines for Maintaining
high stress persons
persons other than high stress persons
a nd i mprovi ng
Workers' Mental
Health" established by the Ministry of Health, Labour and Welfare. We
conduct the stress check test described above, as “Self-care” based on“Four types of mental health care” ( “Self-care” , “Care by management
supervisors” , “Care by industrial health staff, etc. placed at offices” and“Care by external resources” ). We also strive to create an environmentthat makes it easy to consult inside and outside the company, by the
implementation of various training including mental health course andhealth consultation by in-company medical staff.

40

Management③Efforts for Health Promotion

60296) Initiatives for Biodiversity

Special Report②

1. Recognizing the preservation of biodiversity to be an important issue in the corporation, we willpractice environmental management.
2. We will understand the inf luences on biodiversity affected by our business activities including our raw
materials procurement policy, and endeavor to continuously reduce these influences.
3. We will continuously promote resource saving, energy saving and 3R (reduce, reuse, recycle) not only in
our own business activities but also in cooperation within our supply chain.
4. We will promote manufacture of products which contribute to the preser vation of biodiversity,
technological development and innovation of the production process.
5. We will endeavor to enhance communication and contribute to cooperation with customers, suppliers,
other corporations, NGOs, education and research agencies, local governments and so on.
6. Because the activities of each and every employee are essential for preserving biodiversity, we will
increase awareness for protection of abundant ecosystems through education of employees.

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Action Guidelines for Biodiversity

Business Contents
and History①Introduction of Action Guidelines
TODA KOGYO Group has def ined the following concrete action guidelines that take into consideration
biodiversity, and promotes business activities in order to contribute to global environmental conservation.

③Participation in the observation class of the tidal flat in Ozegawa River in Otake (The following is a comment
from a participant.)
I participated in “the observation class of the tidal f lat in Ozegawa River in Otake” , conducted by Otake city
as part of environmental conservation activities by local governments. (on July 23, 2017) Entering the sea,collecting living things by pulling a grinding net with a total length of about 8 meters in cooperation with otherparticipants, I also conducted volunteer activities such as participants' support for measures against heat stroke.
As the weather was cloudy on that day, the maximum temperature was 33 ° C and it was hot and humid, thesweat did not stop as it seemed to be in the sauna, in the unfamiliar muddy work wearing the rubber torso length.
I have participated almost every year since 2012. This time I entered quite a lot off the coast aiming for big
things, so there was also the inf luence of the waves, I got wet to the skin more than usual year. It is a valuable
opportunity for me to experience biodiversity of the familiar sea with children. (The pictures are provided by
Civic Life Department, Environment Improvement Division, Otake City.)

Management Principle
and CSR Policy

Environment and Safety

Management

We do environmental beautification activities along rivers and roads near each workplace in order to preserve
biodiversity.

EconomyProduct Quality

Cleanup activities of Egawa River
adjacent to Otake Plant

The breakwater. constructed along the contour of Otake Plant,
near the estuary of Egawa River and the green belt

Organization Chart/
Offices and Subsidiaries

30

Scenes from the collecting living things and the observation of them at the tidal f lat in Ozegawa River in Otake
Society②Breakwater and green belt (Otake Plant)
Along the breakwater, constructed along the contourof Otake Plant, near the estuary of Egawa River, there
is a natural forested green belt where dragonf lies f ly
and birds also sing. During lunch breaks this green
belt is a place for relaxation of employees or a healthwalking course.

Environment
and Safety

Cleaning up mud from side grooves of a prefecturalroad near Toda Pigment Corp.

31

Management Principle
and CSR Policy

Society②Efforts concerning Respect for Human Rights

1) Respect for human rights

TODA KOGYO Group seeks always to respect fundamental human rights on the basis of mutual understanding.
TODA KOGYO Group also does not discriminate on the basis of race, religious faith, gender, social position,
citizenship, sickness, handicaps, etc.

< Concrete code of conduct >Special Report②(1)Elimination of all discrimination
Executives and employees must respect the fundamental human rights of individuals and must not engage inany actions that ignore human rights such as discriminatory language, violence, sexual harassment, power
harassment, etc.
(2)Protection of personal privacy
When contacting personal information inside and outside the company for business activities, executives andemployees must pay close attention in their handling of this information in order that the personal privacy will
not be infringed, and must exercise the proper management control over it.
(3)Elimination of improper labour practices
Executives and employees must eliminate improper labour practices. Moreover, they must not employ children
under the legal working age of the country or region concerned. Executives and employees must also impose thesame conditions as conditions within TODA KOGYO Group, on its sales outlets and subcontracting companies.

Management

Scene from the training for local managers of overseas subsidiary (Held in Japan)①Enhancement of Company Regulations(3)Education for expatriates
For Japanese assigned to overseas subsidiaries, we conduct various training (basics of cross-cultural businessetc.) for smooth subsidiary management.
(4)Education for foreign employees of our company and those of subcontracting companies
In order to prevent from occurring various human rights problems due to differences in language, religion,
culture, customs, etc., we educate in the local language.

$

!

  

By setting up a consultation counter for harassment consultation / complaints in the Personal & General
Affairs Depar t ment, we take appropr iate measu res in accordance with the harassment prevention
regulations.







&%

    (0EBA

Environment
and Safety     " #%            K9
 4`4A+  *TA0Z ]  ?$\O%1:AR  7@^8TX;8TA_ [\DP HW Q TVDL ]=%"5)(,>%&'&()
*)+&, -.-/.01(+2,() 3-/
3.0/2,20 4.)5202 :$83(1(6( -.)72)+(2 528+.-/(+ ,.0'(

Product Quality

Consultation System

EconomyWe have established "Harassment prevention regulations", “Regulations concerning protection of personal
information” , “Regulations for childcare and nursing care leave” , “Regulations concerning leave due topersonal illness and return to work” , ” Stress check system implementation regulations” , “Compliancepromotion regulations” , “Compliance consultation system” , etc. and strive to respect human rights throughout
our group.

Product Group
Message from the President/
Familiar to Consumers
Special Report①< Basic policy >Business Contents
and History

Regarding the originality and the diversity of each employee as property, TODA KOGYO Group supports
unlimited leap and activity of its capabilities, and evaluate fairly. We also endeavor to enhance employee's
comfort and affluence and aim to live together.
In the CSR Code of Conduct "10. Respect for Human Rights, Employment and Labour", we have established thefollowing basic policies and concrete code of conduct.

As efforts to promote globalization and diversity within TODA KOGYO Group, we conduct promotion of
employment of foreign nationals in TODA KOGYO, support for training for overseas subsidiary staff, educationfor expatriates, etc. Activities in fiscal 2017 are introduced as follows.
(1)Activities on regular recruitment of foreign students
Of nine regular recruits in fiscal 2018, three are foreign nationals. (The total number of foreign national
employees is seven.) In order to make life and work smoothly in Japan, we conduct correspondence education forimproving Japanese language skills etc. before joining the company.
(2)Training support for overseas subsidiary staff
In order to raise the career of the local manager (foreign nationality) of the overseas subsidiary, TODA KOGYO
started educational support since fiscal 2017.

BA CU6(\!#F NP3, GASMZ]
 <2WJ"&!AT =/YI>!T.-')5(]9'4&<%9:9)7 /2,20,() :(72;= *8!><(0(/ -.-2:2,2 ,.=2(4(() =.0/2,20;=87.0!>2+?!"#$#!

6#;1



!

!

Society

Internal awareness survey

Scene from the education for Indonesian trainees

32

Scene form the education for employees of affiliated companies in China

Organization Chart/
Offices and Subsidiaries

We conducted a survey of attitudes for all employees in fiscal 2015. Based on the result, we have establisheda new personnel system that enriches "environment and system which allows us to work together in friendly
rivalry".

33

②Exhibition by companies at Hiroshima University Open Campus (Chemistry Dream)

2) Involvement with Society and Community

Exhibit contents by TODA KOGYO
1.A top that keeps spinning
2.Electronic tickets for football games, antennas for mobile wallet (Ferrite IC tags)
3.Not hot (?), no noisy (?) coating (Heat insulating and soundproof paint)
4.Cosmetic (lipstick) samples (Application of nanoparticles)
5.Lithium ion rechargeable battery materials for smartphone and personal computer

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Since fiscal 2008, TODA KOGYO has implemented outreach science lessons and events for elementary andmiddle school pupils in Hiroshima. Children experience the work of permanent magnets and electromagnets, andlearn that products using magnets are useful in familiar lives, through touching various types of permanent
magnets, or through making easy-handmade motors using permanent magnets, enameled wire coils and drybatteries. As a result of these activities, we hope that more children will be interested in science and will become
the bearers of science and technology in Japan in the future.

Business Contents
and History①Outreach science lessons and eventsAt Hiroshima University Open Campus (August 21 to 22, 2018), Cluster 3, Faculty of Engineering, Hiroshima
University (Programs of Applied Chemistry, Biochemistry and Chemical Engineering) carried out a company
exhibition targeting high school students who consider taking the entrance examination of the chemical course of
faculty of engineering, Hiroshima University. In order that these high school students experience the wonder ofchemical technology and how it works in concrete terms in the world, member companies in the Chugoku
region's chemical conversation party (Secretariat: Department of Chemical Engineering, Faculty of Engineering,
Hiroshima University) exhibited advanced materials, technologies, interesting substances, etc. which create"Chemistry Dream". TODA KOGYO participates every year and conveys the interests, wonders and dreams ofchemistry to high school students.

Management Principle
and CSR Policy

Society

Special Report②
Management

10
8
6

2
0

34

2009

2010

2011

2012

2013

2014

2015

2016

2017

FY

Scene from the seminar at the exchange meeting of new technology

Organization Chart/
Offices and Subsidiaries

4

Society

12

Environment
and Safety

Number of schools
Number of lessons

2008

Product Quality

The Chugoku region's chemical conversation party(Secretariat: Department of Chemical Engineering,
Faculty of Engineering, Hiroshima University, Thenu mbe r of pa r t y membe r s is 62. ) is engaged i nvarious activities such as a research group, a seminar,
an exchange meeting of new technology, etc. with thea i m of p r o m o t i n g a c a d e m ic a n d t e c h n olog ic a ldevelopment on chemical engineering and mutual
f r ie nd sh ip. T he 22nd exch a nge me et i ng of newtechnology was held on July 14, 2017 at Otake Plant.
53 participants from local companies and universities
deepened f r iendship th rough the new tech nolog yintroduction seminar, tours of Otake Plant and Otake
Creative R&D Center, and the social gathering.

Number of outreach lessons

14

Exhibition booth of TODA KOGYO③Exchange meeting of new technology

Scenes from science events and outreach lessons

16

EconomyScenery of corporate exhibition35

④Volunteer of “Disbudding of Kozo Project” by Handmade Japanese paper Preservation Society, Otake

Organization Chart/
Offices and Subsidiaries

I belong to Analytical Technique Development Group of Research & Development Division, and mainly
perfor m quantitative deter mination of trace elements contained in products, analysis of foreigncontaminations and products of other companies, construction of new analysis techniques, etc. When I was
assigned to our group, I was puzzled with various needs for analysis of different kinds of materials fromdifferent groups. However, the atmosphere in the workplace is good, the superior,seniors and colleagues teach me kindly, so I think that I felt little anxiety. In
addition, as there are opportunities to participate in lecture sessions andanalytical seminars outside the company, I am in an environment where I canacquire useful information and techniques for my daily work in a timely manner.
Nowadays, in addition to stationary analysis, non-stationary analysis such as
analysis of products of other companies and f ur ther investigations are
increasingly requested. Since there are many problems which cannot be solved by
the conventional methods, deeper considerations are required. In those cases I
work towards achieving the objectives by cooperating with all members of ourgroup.
With a quick and accurate work in mind, I will continue to push forward withmy daily work while receiving the cooperation of my colleagues.

Society36

Kaori Kohara

Environment
and Safety

TODA KOGYO Group promotes reg ular blood donation activities at each of our domestic off ices andsubsidiaries. In fiscal 2017, the number of blood donors was 104 (in total of Onoda Plant, Otake Plant andResearch & Development Division). For continuous blood donation activities, Otake Plant received a certificate
of appreciation from Hiroshima Prefecture in fiscal 2017.

Product Quality⑥Blood donation activity

Analytical Technique Development Group,
Research & Development Division

EconomyIn the area around Kuba Station, the closest station toO t a ke Pla nt of TODA KO GYO, a b e aut i f icat ion
activity, called “f lower-planting campaign” is being
implemented primarily by local residents' association.
Members of TODA KOGYO have participated in thiscampaign since 2011, replanting roadside f lowers
twice a year.

I moved to South Korea in May 2010 and moved to Shenzhen,
China since May 2014. My overseas assignment has entered the ninth
year. TODA MAGNET (SHENZHEN) CO., Ltd. which I serve aspresident, manufactures and sells rubber magnets for motors andprocessed Ferrite sheets for NFC.
Because of working in a foreign country, it is natural that there arelanguage barriers and differences in business customs. There areproblems how to adapt myself to these differences or how to ask
local employees to understand that “in this case, we take such actionin Japan” . Every day, I make every effort to solve these problems. It
is crucial to accept the reality that things do not advance like inJapan, and to decide how to proceed from there.
As part of communication with local employees, we carry out information sharing by monthly performance
review meeting and implement “Report, Communication and Consultation” . We hold a dinner party on eachjuncture and make grassroots exchanges through China-specific toast competition.
Once a year, we go on a comfort trip although it is a nearby place. In the past, we went to swimming in thesea, hot springs, etc. Every year, there is a conversation between local employees such as "Where shall we go
next year?” . I hope that such a conversation will contribute to thevitality of the workplace.
By the way, although it is a personal story, I participate in the monthly
softball league game held by the local Japanese society, for the purposeof health maintenance (rather than promotion). Although I can no longer
play softball like my young days, that is a good change of pace, including
the closing party at the after. That is also a precious place to exchange
information among Japanese people.
I will continue to work hard together with local employees, in order tocontinue to develop in the future.

Management⑤Flower planting campaign

Takafumi Mita

Special Report②

Kozo

TODA MAGNET (SHENZHEN) CO., Ltd. President

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Kozo field, Bouka, Otake in July 2017

3) Better Working Environment (Interview with employees)

Business Contents
and History

In order to grow the trunk of Kozo (Hybrid mulberry tree used to make Japanese paper) in good quality, we
participated in volunteering work "Disbudding of side buds". From June to September, it is necessary to pick theside buds at a frequency of once in two weeks. Thanks to the heavy work of crushing lively Kozo under thescorching sun, it grows to a height 3 m or more in the late summer. After reaping straight grown Kozo in
November, winter work of paper raw material making begins.

Management Principle
and CSR Policy

Society37

①Action plans for supporting the development of the next generation (5 years from 1 April 2016 to 31 March 2021)

1

We regularly make awareness ofv a r io u s s y s t e m s c o n c e r n i n gchildcare through the intranet andot her mea n s, a nd cont i nue to
conduct necessary education for
managerial training etc.

As a result of actively implementing
reg ular recr uit ment and career
recruitment activities to raise thefemale ratio in the workplace, thefemale ratio increased to 13.3% asof the end of fiscal 2017. (12.1% at
the end of fiscal 2016)

Female
13.3%

Male
86.7%

5

8
6
4
2

3
（43％）

4
（57％）

2
（29％）

5
（71％）

4
（44％）

5
（56％）

4
3
2
1

2

1

2

2

2

1

0

0
2016

2017
Male

2018

FY

2015

Female

2016
Male

2017

FY

Female(2)Continued employment and work style reforms
Male

FemaleAverage

Average number of years of continuous service

23.3

12.6

22.0

Average age

49.5

39.4

48.3

Monthly average of extra working hours (hr)Average acquisition rate (%)of annual paid leave and number of acquired days of annual paid leave

11.2
60.2%／11.6

MaleFemaleNumber of people eligible for childcare leave

44

Number of acquirers

04

Acquisition rate (%)

0%

100%

※Acquisition rate of female maintains 100% over the past ten years.
(3)Evaluation and promotion (As of March 31, 2017)
10.7%

Percentage of female workers in management

1.3%

Percentage of female in executives

0%

Organization Chart/
Offices and Subsidiaries

Percentage of female workers in assistant manager

Society

We ma ke ch ild ren reali ze the ・We encourage understanding of ・Number of exhibitions at events
interests of science and chemistry.
science and chemistry throughfor elementary, junior high andex hibiting at events forhigh school students: 2
elementar y, ju nior high and ・Number of implementations ofhigh school students.
out reach science lesson s: 8
lessons were held at 6 schools.
・We will cooperate with school
education for elementary schools t u d e nt s (out r e a ch s c ie n c elessons etc. ).

Number of mid-career recruits in the past 3 years

10

Environment
and Safety

We will consider measu res to ・Reduct ion of t he schedu led
maintain annual paid leave usage
working hou rs per yearof ove r 70% a nd mea su re s t o(Decreased by 7 hours
promote acquisition.
compared to fiscal 2016)
・Implementation of no-overtimedays (At each worksite)
・Implementation of systematic
grant rule for payed leave (AtResea rch & Development
Division)・P romot ion of ope r at ional
efficiency using rental offices(At Tokyo Office)Number of new graduate recruits in the past 3 years

Product Quality

During the planning period, weshorten the total actual working
hours of our employees.
(Reduction of over time hou rs
worked, promotion of annual paid
holidays, expansion of applicationof hou rly u s e of a n nu a l p a id
vacation, etc.)

Under the regulation for childcare
and nursing care leave revised on
April 1, 2017, the period during
which work hou rs can be
sho r t e n e d fo r ch i ld c a r e , a ndduring which the start time andthe end time can be car r ied
fo r w a r d a n d d ow nw a r d , w a s
ex p a nd e d t o t he p e r io d u nt i lreach i ng t he beg i n n i ng ofenrollment at junior high school.
Both an acquisition rate and a
return rate of childcare leave are
maintained 100%.

Proportion of
female in employees

EconomyDuring the planning period, the ・ We c o n t i n u e e d u c a t i o n a lstat us of childcare leavea c t iv it ie s o n go o d b a l a n c eacquisition will be as follows. In
between work and family for all
addition to extending theof our employees.
applicable period for reducing ・We inform all employees about
work i ng hou rs, we encou ragechildcare leave law anda cqu isit ion s of shor t e n i ng,
childcare leave rules, especiallyadvancement and carry down ofurge men to acquire the leaves.
working hours.
※Male: Make one or moreacquirers.
※Female: Maintain an
acquisition rate of 100% and a
return rate of 100%.

【Results】All data are as of March 31, 2018.
(1)Recruitment

Management38

During the planning period, we
will raise awareness aboutchildcare in the workplace andcreate a cor porate cult u re /st r uct u re t hat w ill prov ide
understanding and cooperation for
employees who take childcare.

Special Report②

4

Result of fiscal 2017

Number of people

3

Measures to achieve the goal

We will review recruitment selection criteria and its operation and will improve measures to support balance
between work and family after employment. We also aim to increase both the number of female job applicants
and the female ratio in new graduate recruitment, by means of disclosing information such as acquisition rate ofchildcare leave.

Number of people

2

Goal

【Measures to achieve the goal】

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Based on the provisions of the Act on Advancement of Measures to Support Raising Next-Generation Children
and the Act on Promotion of Women’ s Participation and Advancement in the Workplace, TODA KOGYO hasformulated the following action plans concerning the development of the next generation training and promotionof women’ s participation and advancement, and we are promoting activities according to these plans.

②Action plans for promotion of women’ s participation and advancement (5 years from 1 April 2016 to 31 March
2021)
In response to our problems that the ratio of female employees is low and the number of female applicants issmall, we promote the following countermeasures with the goal of setting the proportion of female graduates to
new graduate recruits to 30% or more,

Business Contents
and History4) Support for the development of the next generation /activities on promotion of women’s participation and advancement

Management Principle
and CSR Policy

Society396) Training (Education) Systems

As part of welfare programs at TODA KOGYO, we support a part of the club activities expenses, which aremainly related to the friendship between our employees and the promotion of mental and physical health. There
are 16 clubs registered for application in fiscal 2017. Among them, two clubs that are active mainly by employeesof Onoda Plant are introduced as follows.

①New Recruit Training

The training is intended to switch the trainees from students to members of society in terms of rhythmof life and feelings. And it is also intended to learn the basics as workers.
- Training at Zen-temple (Switching from students to members of society in terms of feeling and rhythmof life which is to be done together with new recruits of other companies)- Business training (Starting with manners training, the recruits master the basics of "workers" withgood spirit and technique.)- In-company training (Lecture on company organization and products, learning about the company
system and rules, plant tours, etc.)

Workplace training (5 months from May to September)
The t raining is intended to understand the company cult ure and the workplace at mosphere byon-the-job experiences for a long time. And it is also intended to contact directly with senior employees
etc.
After learning the basics of Monozukuri, R&D and marketing activities in production departments,
Research & Development depar t ments and sales depar t ments, the recr uits acquire professional
knowledge on the job.

Special Report②

Our main activities are exercises conductedjointly with people of neighboring companies
every Tuesday. Moreover, we participate in the
preliminary contest of the industrial-league (B)Yamaguchi Prefecture and exchange matches by
five neighboring companies in Onoda area. We
a l s o h a ve l e s s o n s , s o e ve n b e g i n n e r s a r ewelcome. If you are interested, please feel free
to contact us.

Introductory training

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Onoda Tennis Club

Among various education systems, TODA KOGYO especially puts effort into the training for new recruits.
All recruits (technical and clerical recruits) work on the same training program together.

Business Contents
and History5) Club Activities

Management Principle
and CSR Policy

Society

Management

Decision of official assignments (October)

Dunhill (Baseball club)

Economy②OJT training

Enhancement of OJT system for new recruits (Training plans and implementations of training for OJT leaders),
implementations of safety and health / quality control educations, dispatches to domestic universities / research
institutes, etc.

③OFF-JT training

Product Quality

Stratified training, training to select candidates for the next management executives, priority issue training,
job-classified training, mental health training, etc.

④Self-development

Implementation of correspondence education assistance system (Individuals can optionally select courses. Ifthey graduate with outstanding results, they are exempted from paying tuition fees.)

Environment
and Safety

Our team consists of our employees, employees
of our affiliates, subsidiaries and subcontracting
companies, and families of our employees. We
regularly play games with the local baseballteams in Sanyo Onoda City. In order to win atleast one victory, we practice every Thursday
evening this year. The game is held once ort w ic e a m o n t h a t t h e Mu n ic i p a l St a d i u m ,Sanyo-Onoda City. Those who have time, pleasecome to support us. Thank you in advance foryour help.

Assignments are decided in consideration of each recruit’ s wishes, aptitude and needs in the company.
After that, the recruits gain a variety of experiences and grow up according to in-company job rotation.

Society
Organization Chart/
Offices and Subsidiaries

Scene from a training for assistant manager

40

Scene from a new recruit training (a training at Zen-temple)

41

JapanGlobal Fine Material Business Division

Board of Auditors

Tokyo OfficeBusiness Promotion Department◆Research & Development Division◆Otake Plant

・Toda Fine Tech Inc.

Soft Ferrite & Application Department

President

Management Conference
Compliance Committee
Internal Audit Department

・Tokyo Shikizai Industry Co., Ltd.
Iwaki Plant

BTBM, Kitakyushu Plant(Kitakyushu, Fukuoka)(Itabashi-ku, Tokyo)◆Head Office◆Onoda Plant

China Business Department

・BTBM
Onoda Plant

Korea Business Department
Production Division

・Toda Pigment Corp.

Onoda Plant
BTBM, Onoda Plant◆Tokyo Office・Tokyo Shikizai Industry Co., Ltd.
Head Office and Plant
・BTBM Head Office

Tokyo Office・BTBM.
Kitakyushu Plant(Sanyo-Onoda, Yamaguchi)

Onoda Plant

Tokyo Shikizai Industry Co., Ltd.
Head Office and Plant(Minato-ku, Tokyo)

Special Report②

Corporate Planning Department

・Central Battery Materials Co., Ltd.

Product Group
Message from the President/
Familiar to Consumers
Special Report①

Board of Directors

Business Contents
and History

General Meeting of Shareholders

Offices and Subsidiaries

Management Principle
and CSR Policy

Organization Chart

Otake Plant

Corporate Planning GroupAccounting Group

Production Planning Department
Research & Development Center

Otake Plant

Head Office(Otake, Hiroshima)(Otake, Hiroshima)(Minami-ku, Hiroshima)

Toda Pigment Corp.

1(Kita-ku, Okayama)

Management

Production Engineering Department* BTBM = BASF TODA Battery Materials LLC.

Legal Group
Business Strategy Department

Procurement & Logistics Department

Overseas

Corporate Administration DivisionaiEconomyPersonnel & General Affairs Department

Structure Improvement Department
System Department

Quality Assurance Department

Human Resources Development Department
Research & Development Division

TODA (CHINA) Co.,Ltd.
Procurement and trading

BASF TODA America LLC

Manufacture and sale of electronic materials

Toda Advanced Materials Inc.
Manufacture and sale of electronic materials

Toda Kogyo Europe GmbH

Supply and sale of Group products, etc.

de

Manufacture and sale of functional pigmentsfh

TODA Ferrite KOREA Co., Ltd.

Manufacture and sale of electronic materials

a
b
g

g

Manufacture and sale of functional pigments*Functional pigments = “a variety of coloring materials” and “magnetic powder materials”
Electronic materials = “Ferrite materials” and “battery materials”

d

e

d

Manufacture and sale of raw materials for electronic materials

Thailandf

Manufacture and sale of electronic materials

Zhejiang Toda DMEGC
Magnetic Co., Ltd.

Manufacture and sale of electronic materials

Toda Plastic Magnet Material(Zhejiang) Corp.

Manufacture and sale of electronic materials

TODA MAGNET (SHENZHEN)
Co., Ltd.

Manufacture and sale of electronic materials

Toda Kogyo Asia (Thailand)Co., Ltd.

Manufacture and sale of electronic materials

Organization Chart/
Offices and Subsidiaries

2016

Toda Magnequench Magnetic
Material (Tianjin) Co., Ltd.

Society

MECHEMATODA CORPORATION

Zhejiang Huayuan Pigment
Co., Ltdci
Environment
and Safety

c

b

42

Manufacture and sale of electronic materialshb

Toda United Industrial(Zhejiang) Co., Ltd.

<Company Data>
Name of company: TODA KOGYO CORP.
Head Office: Mitsui-seimei Hiroshima-ekimae Bldg. 9F,
1-23 Kyobashi-cho, Minami-ku, Hiroshima, 732-0828 JapanFounded: 1823
Incorporated: November 30, 1933
Capital: 7,477 million yen
Number of employees: 343 (stand-alone), 1,186 (consolidated)※As of March 31, 2018

TODA ISU CORPORATION

Product Quality

CSR, Environment & Safety Department

43

CSR Report

2018−2019

Fine Materials
for the Future©2018 S. FC

TODA KOGYO CORP.
supports SANFRECCE HIROSHIMA!

Contact address : CSR, Environment & Safety Department (Phone +81-827-57-6129)

Published: Oct. 1st, 2018