Sustainability

Establishment of Sustainability Policy

Sustainability Roadmap

Considering efforts for the Sustainable Development Goals (SDGs) as anLong-Term Vision

important management issue, the Group has formulated theRealize social and industrial infrastructure that is
considerate of the global environment, with a focus on
exceptional motor drive technologies

Sustainability Policy as a guideline for specific actions.

Environment

Basic policy
The Toyo Denki Group states its commitment to contributing to society in the business principles and initiatives to protect the global
environment as its priority task in the environmental philosophy. The Group has formulated the Sustainability Policy as a guideline forits efforts to realize these principles and contribute to the sustainable development of society.

FYE May 2050 Targets
Scope1&2
CO2 emissions

Corporate principles
Business Principles
The Toyo Denki Group will practice thefollowing business principles to ensure thegrowth of its business, earn the confidence
and understanding of shareholders andstakeholders, and foster the development of
its employees:
Prioritize ethics and contribute to theprosperity of customers and society as a whole
Encourage creativity and an enterprisingspirit to meet the challenges of the future
Build trust by focusing on quality first<Action Guidelines>
We will continue to provide products and services that are considerate of the burden on the global
environment by drawing on our “future-oriented technologies friendly to the Earth and mankind.”
1. We will comply with all environmental requirements including those under the relevant laws and regulations.
2. We will strive to minimize environmental burden through a reduction of energy
consumption and other measures at all stages of product lifecycle, namely planning,development, design, production, sales, use and disposal.
3. We will establish and execute a system to continuously promote activities to protect the global environment.
4. We will raise environmental awareness among individuals through enlightenment activities within the Group.

Formulation of Sustainability
PolicyCompany Slogan of the Toyo Denki Group2021

Sustainability Policy
Threeperspectives

Initiative in Products and Services

Initiative in Production Activities

Initiative in Valuing People and Communities

PolicyWe will use the Group’s exceptional
technologies to provide products andservices that contribute to the realization ofa sustainable society.

We will strive to minimize environmental
burden in production activities and continue
to protect regional environments.

We will value our employees and the local
communities and carry our aspirations into
the future.

Supply of decarbonized energy, such as
small hydroelectric power generation
Popularization of energy-efficienttransportation, such as railroads andelectric vehicles
Efficiency improvement of electricalequipment and the spread of power
storage systems
Improvement of safety through a shift tobarrier-free transportation systems
etc.

Reduction of energy consumption in
production
Study of solar power generation anddecarbonization of energy currently used
Reduction of energy consumption duringtransportation of materials and products
Recycling activities at production sites
and officesetc.

Support for education through university
endowment courses and offering factory
tours for school students
Promotion of diversity and inclusion
Promotion of health and productivity
management and well-being
Protection of regional environments andcontributions to nature conservation, etc.

CO2 emissions

Scope1&2
CO2 emissions

Established the Sustainability
Committee and theSustainability Promotion Office2022

30%reduction

10%reduction(Compared with FYE May 2018)

Track emission volumes and promote reduction
Scope3CO2 emissions

2026

2050
2030
FYE May 2030 Targets

FYE May 2026 Targets

2.9% or more

Ratio of female employees(Administration divisions /Assistant manager level)

25% or more

Ratio of female employees(Administration divisions /Manager level)

8% or more

Ratio of male employees
taking childcare leave

50% or more
19

(Compared with FYE May 2018)(Compared with FYE May 2018)

Percentage of employeeswith disabilities
Certified as 2022 CertifiedHealth & Productivity
Management Organization(Large Enterprise Category)%
reduction

Scope1&2

FYE May 2026 Target

Environmental Philosophy
The Toyo Denki Group sets initiatives to protect the global environment as its priority
task and contributes to the development of a sustainable society.

Our Heart and Technology for the Future

Specificactions

100

FYE May 2030 Targets

Percentage of employeeswith disabilities

3.0% or more

Ratio of female employees(Administration divisions /Assistant manager level)

30% or more

Ratio of female employees(Administration divisions /Manager level)

15% or more

Ratio of male employees
taking childcare leave

70% or more

Human
CapitalToyo Denki Seizo Report 2022

20

Sustainability

Initiative in Products and Services
We will provide products and services that help build a sustainable society using the exceptional technologies of the Group.
Business Category

Transportation
Business
Segment

Business Description

ICT Solution
Business
Segment

21

Focus SDGs

ExamplesElectrical equipment
for railway vehicles

Contribute to the world’s railway infrastructure throughthe supply of high-quality electrical equipment for
railway vehicles[Ongoing actions]
Adoption of highly efficient semi-conductors and smaller, lighter propulsion systems (drive systems such as VVVF inverters and low-noise motors)
Establishment of condition-based maintenance (CBM) with real-time monitoring of product operation status and analysis of accumulated data to prevent product failureand save manpower and labor
Shift to barrier-free transportation with various electrical equipment optimally designed for light rail vehicles (LRV), and ramp and door-step devices for railway vehicles[Future actions]
Promote the development of autonomous driving technology for the realization of driverless driving
Establish a new maintenance model using digital twin technology
Improve recyclability and eliminate specified hazardous substances with promotion of environmentally conscious design

Railway power storage
systems

Contribute to energy-saving and stable railway
transportation with the effective use of regenerative
power[Ongoing actions]
Battery storage of regenerative power generated by train braking and supply of power to trains in emergencies[Future actions]
Further reduce energy usage by introducing systems that are combined with solar power in railway track facilities
Build new storage systems, such as a superconducting flywheel railway power storage system

Automobile testing
systems

Support the development of next-generation vehicles
with testing systems that use industry-leading
high-performance motors and inverters[Ongoing actions]
Popularization of next-generation automobile testing systems using in-wheel-well dynamo, which saves space and is quiet, suitable for various driving test evaluations
Development and supply of testing equipment in response to the shift to automobile electrification, such as ultra-high-speed dynamos and high-capacity battery simulators[Future actions]
Adapt in-wheel-well dynamo to advanced driver-assistance systems (ADAS) and popularize autonomous driving systems

Contribute to manufacturing around the world by
providing customers with optimal control systems using
a wealth of technologies and products[Ongoing actions]
Construction of advanced systems that capitalize on high-efficiency motors and invertors
Improvement of energy-saving performance and maintainability of production facilities with economical and eco-friendly Eco-Drive Motor (ED motor)[Future actions]
Design products with better recyclability and develop rare-earths-free motors and control systems for them
Expand RoHS compliant products and promote responses to REACH regulations

Power generation andsocial infrastructure
systems

Supply power generation systems for continuous/
emergency use and generators using natural energy tosupport public infrastructure[Ongoing actions]
Establishment of power generation infrastructure by providing continuous-use generators to developing countries
Popularization of small hydroelectric power generation systems and biomass generators
Contribution to BCP preparation by supplying emergency generators for government offices, financial institutions, etc.
[Future actions]
Realize small and highly efficient pumps using Eco-Drive Motor (ED motor)
Develop emergency generators using hydrogen and biofuels
Popularize distributed power supply systems (mechanism in which power is supplied by small-scale generators distributed near consumption areas) for local production
and local consumption of energy
Participate in the demonstration of wave power generation and consider its commercialization

Car-mounted electricalequipment

Contribute to the development of electric vehicles (EVs)and hybrid electric vehicles (HEVs) with power electronics technologies[Ongoing actions]
Supply of on-board electrical equipment in response to the shift to electrification, such as for construction machinery[Future actions]
Promote recycling of used invertors, motors, and batteries of EVs

Railway station
operating equipment
systems

Achieve greater convenience for railway patrons andlabor-saving for railway operators by combining
advanced ICT and mechatronics[Ongoing actions]Improvement in convenience of railways by popularizing railway station operating equipment (commuter pass issuing machines and portable terminal devices for conductors)[Future actions]
Provide low-price ticketless systems to areas where IC has not yet been introduced, using QR codes, touch payment credit cards, and facial recognition technology
Provide QR code payment systems shared by private railway companies and online booking services for commuter passes

Realize monitoring and control of mobile entities andremote facilities with a variety of simple, inexpensive
IoT/M2M solutions[Ongoing and future actions]
Provide train operation information systems and bus location systems to improve the convenience of transportation systems
Status monitoring, alarm notification, and remote control of generators using IoT remote monitoring systems
Prediction and early detection of natural disasters (heavy rains, flooding and inundation, landslides) using IoT remote monitoring systems
Conduct remote monitoring and control of agricultural greenhouses, poultry farms, pig farms, and onshore aquaculture facilities to support stable agricultural production
Conduct remote monitoring and control of frozen food trucks and refrigerated containers to support safe and stable distribution of foods

Production andprocessing equipment
systems

Industry
Business
Segment

Value We Offer

IoT solutions

Toyo Denki Seizo Report 2022

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Sustainability

Initiative in Production Activities

Installation of a solar power generation system at the Yokohama Plant

We will strive to minimize environmental burden in production activities and continue to protect regional environments.

Environmental
Philosophy

The Toyo Denki Group sets initiatives to protect the global environment as its priority task
and contributes to the development of a sustainable society.
We will continue to provide products and services that are considerate of the burden on the global
environment by drawing on our “future-oriented technologies friendly to the Earth and mankind.”

ActionGuidelines

1. We will comply with all environmental requirements including those under the relevant laws and regulations.
2. We will strive to minimize environmental burden through a reduction of energy consumption and other measures at allstages of product lifecycle, namely planning, development, design, production, sales, use and disposal.

We installed a solar power generation system (500 kW) on the roofof the Yokohama Plant in 2012. In recent years, the system has generated 600,000 to 650,000 kWh of electricity annually, all of whichis consumed internally. This contributes to reducing greenhousegas emissions (equivalent to approximately 300 tons of CO2 peryear) and curbing global warming.
The Company was awarded by
Yokohama City in recognition of Solar power generation system atthis accomplishment.
the Yokohama Plant

4. We will raise environmental awareness among individuals through enlightenment activities within the Group

800
600

839.2
680.3
176.5
647.2
36.0
31.6

400

A sustainable society as envisaged by the Company is the combination of a “low-carbon society,” a “recycling-based society” anda “nature-symbiotic society.”
The environment technologies of the Company have produced
numerous products that contribute to energy conservation, including
high efficiency motors and inverters that capitalize on the amalgamation of our outstanding motor drive technology and other state-of-theart technologies. In the meantime, the Company has been striving toconserve resources through not only the efficient use of energy but
also the reduction of the size and weight of its products.
Decarbonized society
Implementation of measuresagainst global warming

Recycling-based society
Promotion of 3Rs(reduce, reuse, recycle)

Nature-symbiotic society
Conservation of biodiversity

Energy conservation throughthe Company’s technologies
and products
Energy conservation in
production activities
Use of sustainable energy
Improvement of logistics
efﬁciency
Proper treatment of wastes
Reduction of amount of ﬁnal
disposal of wastes
Proper management ofchemical substances
Cleanup around ofﬁces

Environmental Management System
In order to tackle environmental issues on an independent and continuous basis, the Company has developed and operates an environmental management system and thereby obtained ISO 14001
certification. This certification has been acquired for all offices andthe production bases Yokohama Plant and Shiga Ryuo Plant.

Years of ISO 14001 certification

Shiga Ryuo Plant*
2001

Yokohama Plant(Unit: 10,000 kWh)

1,000

Yokohama Plant
2004

200

Extended to all offices
2010

615.6

644.3

662.7

2016

2017

2018

751.6
171.4

712.5
179.3

565.6

580.2

533.2

2019

2020

2021

Yokohama Plant

500

400

Initiatives to reduce greenhouse gas (CO2) emissions

300

The Company is promoting energy conservation at each of its
production bases and offices to reduce its CO2 emissions. At the
production bases in particular, we are promoting power-savingand streamlining at production facilities. In addition, the Yokohama
Plant uses solar power generation for peak shaving of power demands.

200

294.1

350.0

443.4
74.3

369.1

100

Total amount of shift

5,750
6,990
6,490 7,200
7,000
6,800
6,700
4,520
6,600
6,150
6,000
5,800
5,300
8,000

4,000
2,000
0
2016

2017

2018

2019

2020

2021

(year*)

Initiatives for Reducing Disposed Waste as Well as Recycling
Main actions(year*)

Shiga Ryuo Plant (formerly Shiga Factory)

408.2
80.2

424.7
86.1

413.4
89.9

328.0

338.6

323.5

The Company has been thoroughly implementing waste processing rules, sorting metal waste, and recycling paper resources. As
a result, its landfill waste rate was 1.7% in fiscal 2021. The volume of landfill waste at the Yokohama Plant has been reduced tothe previous level due to the completion of large-scale maintenance.
Output of general and valuable waste
General waste output
Valuable waste output

(t)

600

351.6

0
2016

2017

2018

2019

2020

2021

(year*)

Total CO2 emissions
5,000

4,000
3,000

4,905
4,097
3,895
183
161

2,000
1,000

0
Yokohama Plant

3,734

3,914

933

4,185
806

4,184
774

3,410

2017

2018

(t)

15

4.1
2017

2018

2019

2020

2020

2021

Yokohama Plant

Shiga Ryuo Plant(year*)

2021

5

5.0

5.0

(year*)

Volatile organic compounds (VOCs) emitted as a result of ourbusiness activities are adequately controlled and the amount ofemission is monitored under the Pollutant Release and Transfer
Register (PRTR).
We will further engage in the reduction of waste through suchmeasures including using non-VOC materials and implementing
recovery and reuse of solvents. PCB waste is also subject to adequate control, storage and disposal in accordance with Japan’s

2016

2017

7.2
3.2

6.3
0

Initiatives for Control over Chemical Substances

12.4
1.1

10.4

10

2,899

0
2016

2019

Volume of landfill waste
3,749
850

3,972
3,379

2016

Shiga Ryuo Plant (formerly Shiga Factory)

Shiga Ryuo Plant
Shiga Ryuo Plant

368.3

186.2

150

Yokohama Plant
Yokohama Plant

450.6
408.2
48.8
55.1 324.8
301.4
36.9
36.4
401.8
353.1
287.9
265.0
142.3
135.4
118.8
112.4
99.2
19.8
16.6
17.6
10.9
122.5
95.8
107.9
117.8

450
300

(t)

As described in the sustainability roadmap (page 20), the Company has set a target of reducing CO2 emissions at the Company’s
production bases, the Yokohama Plant and the Shiga Ryuo Plant,by 10% in fiscal 2026. CO2 emissions per unit of production output in fiscal 2021 increased by 3.6% at the Yokohama Plant and9.5% at the Shiga Ryuo Plant due to lower production output
caused by COVID-19, against the target of 1% reduction year on
year. The Company will continue to make efforts to reduce CO2
emissions per unit of production output by 1% year on year in thenext fiscal year.

743.9
178.3

Total energy input (gas)(Unit: 1,000 m3)

Targeted reduction of CO2 emissions and progress status

Total amount of air emissions

10,000

Shiga Ryuo Plant (formerly Shiga Factory)

0*The Shiga Ryuo Plant was the Shiga Factory (Moriyama) when it obtained the certification.

Initiatives to Prevent Global Warming

Notification volume for Pollutant Release and Transfer Register (PRTR) substances(kg)

Total energy input (electricity)

3. We will establish and execute a system to continuously promote activities to protect the global environment.

Aiming for Realization of a Sustainable Society

Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes.

2018

11.3

6.8

4.0
2019

7.1
0.3

2020

2021

(year*)

Quality Control – Providing Safe and High-Quality Products
Basic policy on quality control
The Company’s electrical equipment for rail vehicles is installed inmany rail vehicles. These extremely important products play a
direct role in ensuring the safety of human life and property*The fiscal year is from April to March of the following year *Figures for the Shiga Ryuo Plant include those of TD Drive Co., Ltd. from fiscal 2018.
*Prior to fiscal 2017, total energy input (gas) data is available only for the Yokohama Plant due to zero input of the Shiga Plant.
*Prior to fiscal 2017, data on output of general and valuable waste and volume of landfill waste is presented only for the Yokohama Plant.

23

Toyo Denki Seizo Report 202224

Sustainability

during rail transportation. In the Industrial Systems and Information Equipment Systems segments as well, the Company’s products and services are used in customers’ production facilities,
development sites and in the field of social infrastructure, andthey form the foundation supporting the sustainable developmentof a society that is safe and comfortable to live in.
In order to ensure the high quality of our products and services, the Company has established a quality policy, which is deployed at all production bases as we strive to maintain andimprove our human resources education, compliance with rules,
and our facilities.

Towards Just and Fair Procurement

Quality Policy
Quality assurance to satisfy our customers.
Challenge to achieve “zero” complaints.

Communication with suppliers

Promotion framework
With regard to quality control, each fiscal year the Company develops policies and the promotion framework aimed at further
maintaining and improving quality in each business unit, alongwith specific policies pertaining to the reduction of flaws and other issues.
The Company’s Corporate Quality Control Division works together with the quality control department or the quality assurance department in each business unit to put together a report on
the status of quality control and results in each unit. The report isdelivered to top management at the monthly Operating Officer Liaison Meeting where measures are debated and decided.
Furthermore, in the event that a flaw is discovered after a
product has been shipped, the necessary steps are swiftly taken,
mainly by the quality assurance department in each business unit,
while at the same time the causes that led to the flaw and its
mechanism are investigated, and this information is put into a database so that the information can be shared in-house in an effort
to prevent recurrence.

Quality Management System
The Company has created and operates a quality management
system at its production bases, the Yokohama Plant and the Shiga
Ryuo Plant, and has obtained ISO 9001 certification.
Year ISO 9001 certification obtained

Yokohama Plant
1997

Shiga Ryuo Plant*
2000

Extended to all offices
2005*The Shiga Ryuo Plant was the Shiga Factory (Moriyama) when it obtained the certification.

Acquisition of International Standards
High level of safety is essential for rail vehicles. UNIFE, the Association of European Rail Industry, established the International Railway Industry Standard (IRIS) in 2007 to ensure the quality of rail
vehicles.
In 2013, we became the first company in Japan to obtain an
IRIS certification for auxiliary power supply (SIV).

25

In 2014, we were also accredited to the China Railway Certification Center’s (CRCC) certification for driving gear units. CRCC, astate-owned enterprise set up in April 2003 after obtaining approval of the Certification and Accreditation Administration of thePeople’s Republic of China, is an organization that mainly manages the quality of railway products. It is necessary to obtain thiscertification to sell high-speed rail products in China.
We will continue to acquire international standards and further
expand our business globally.

The Company’s products possess various distinctive characteristics such as being individually built-to-order, manufactured in
multi-product small lots, and demanding high reliability. Therefore,
the Company can be affected by the performance of our suppliers
as a result of issues such as delays in supply due to fluctuationsin production quantity or delays in processing due to the quality of
products received.
In order to reduce these risks as much as possible, the Company carries out instruction and support related to quality, technology, and skills for our suppliers, as well as guidance for
improvement of manufacturing sites, in order to ensure stableprocurement of even better quality products. In addition, we actively promote information sharing through the “Toyo Denki Seizo
Cooperation Association” to which our leading suppliers belong.

Initiative in Valuing People and Communities
We will value our employees and the local communities and carry our aspirations into the future.

With Our Employees
Promotion of “health andproductivity management”
Striving to be a company where
employees can play active roles
in good physical and mental health, the Company promotes “healthand productivity management” together with the health insurance
association and labor union. With the “Health and Productivity
Management Declaration” in place, our efforts focus on the following six priority items.

Health and Productivity Management Declaration
The Toyo Denki Group expresses in its business principles its
commitment to “ensure the growth of its business, earn the confidence and understanding of shareholders and stakeholders,and foster the development of its employees.” Recognizing thatthe realization of the commitment involves each employee to bephysically and mentally healthy and able to play an active rolewith enthusiasm, the Company will support its employees toachieve good health.

Disease prevention, prevention of illness aggravation

Formulation of “Procurement Action Guidelines”(formulated in February 2016)

Procurement Action Guidelines
These guidelines indicate the codes of conduct that the Toyo
Denki Group’s executives and employees should observe in the
procurement of purchased parts and outsourced parts as required for the manufacturing of products ordered by customers(“procurement transactions”).
1. Procurement transactions shall be carried out in observanceof the laws of the relevant countries.
2. Information concerning suppliers in procurement transactions
shall only be obtained within the scope necessary for conducting procurement activities in accordance with contracts.
Furthermore, efforts shall be made to carefully manage andobserve the confidentiality of information gained through procurement transactions.
3. Personal interests with suppliers shall be prohibited in procurement transactions, including the lending and borrowingof money.
4. Receiving of support beyond the socially accepted practices
or receiving of money or inappropriate gifts or any other formsof personal rewards from suppliers shall be prohibited in personal transactions. In addition, forceful requests for any of theabove from suppliers shall be prohibited in procurementtransactions.

We will maintain a 100% participation rate for regular healthcheckups, improve the take up rate for specific health guidance
aimed to prevent adult diseases, and support the attendance offollow-up examinations.

Work-life balance
We are expanding systems that support flexible working styles toachieve a balance between work and home. In addition to aflextime system and annual leave on an hourly basis, we have arehiring system for employees who have to leave their jobs due tochildbirth, childcare, family care, spouse’s transfer, and other life
events. In addition, efforts are underway to establish staggered
commuting and remote work that are currently in place to prevent
COVID-19 infection as part of a permanent system.
In 2014, we were certified as a “company that supports child-rearing” and received the “Kurumin” certification logo
from the Tokyo Labor Bureau, in recognition of our efforts including an extensive
childcare-related scheme, educational activities related to work-life balance support, the creation of an environment inwhich it is easy to obtain childcare leave,
and the track record of male employees taking childcare leave.
We will continue to improve the child-rearing support program.

Promotion of health and safety activities andrealization of a comfortable working environment
To secure a safe working environment and achieve zero occupational accidents, we have in place the “Company-Wide Safety andHygiene Management Policy,” and the Safety and Hygiene Committee at each office addresses any issues at workplace. Information on the committees’ actions is shared at the Company-Wide
Safety and Hygiene Committee, which convenes quarterly, in order to raise the level of health and safety activities at each office.

Improvement of employee health, communication
promotion and support
We support employees’ voluntary health maintenance and improvement efforts, internal club activities, and social events ateach workplace. We also hold health events together with thehealth insurance association and labor union to improve thehealth of employees and promote communication.

Data concerning personnel and labor (at Toyo Denki Seizo K.K.)
Item

Unit
Total
Number of employees
Men Persons
Women
Ratio of female employees%
Total
Number of administrative professionals
Men Persons
Women
Ratio of female administrative professionals%
Overall
Average age
Men
Age
Women
Overall
Average years of employment
Men
Years
Women
Average annual salary
Yen
Turnover rate (within 3 years of joining the Company)%
Number of employees taking childcare leave
Persons
Number of employees taking family care leave
Persons
Number of temporary staff (including part-timers)
Persons

FYE May 2018
843
771
72
8.5
140
136
4
2.9
40.2
40.3
39.5
14.9
15.1
12.7
6,049,512
2.7
4
0
130

FYE May 2019
831
762
69
8.3
143
139
4
2.8
40.8
40.8
40.9
15.4
15.5
14.1
5,756,046
6.5
6
0
119

FYE May 2020
841
773
68
8.1
136
133
3
2.2
41.0
40.9
41.7
15.4
15.5
14.1
5,634,571
4.7
2
0
106

FYE May 2021
847
766
81
9.6
139
136
3
2.2
41.7
41.6
42.8
16.0
16.2
13.9
5,518,761
2.4
8
0
86

FYE May 2022
830
746
84
10.1
134
132
2
1.5
42.3
42.2
43.0
16.5
16.7
14.0
5,422,507
7.6
4
1
81

Notes

*Number of regular employees including Operating Officers, and number of special employees, temporary employees, contract
employees and staff on loan from other companies, etc.

Toyo Denki Seizo Report 2022

26

Sustainability

Prevention of mental health problems and support
for returning to work
We annually carry out stress checks on our employees to preventand detect mental health problems at an early stage. In addition,
we provide line care training for managers so that they recognize
the importance of communication and promptly coordinate withoccupational health staff at each office.

Health management of employees at overseas posts
In addition to properly conducting health checkups before overseas postings, we aim to regularly check the health conditions of
employees and follow up on the results of health checkups after
their postings.

Initiatives for employment of the disabled
Aiming to be a company where both the disabled and nondisabledwork together lively, the Company makes improvements to theworkplace environment and carries out workplace training. We
also offer work experience in collaboration with local support organizations and special-needs schools. The percentage of employees with disabilities at the Company is 2.84% (as of June 2022).

GovernanceContributions to Locai Communities

Governance

To Convey the Mission and Appeal of Toyo Denki

In an effort to continuously enhance its corporate value, the Company is striving to ensure transparency of management and compliance, along with the maintenance and operation of an adequate governance framework while reinforcing its risk management framework.

Receiving interns
We are committed to activities that raise awareness and appreciation of our manufacturing expertise by accepting interns from local technical high schools and providing them with hands-on
experience at manufacturing sites. This internship system serves
as an effective means of recruiting outstanding technical staff on
a consistent basis as some students from these schools apply for
positions at the Company.

Participation in university endowment courses andhands-on courses
We participated in endowment courses sponsored by the Yokohama Green Purchasing Network so that participants can deepen
their knowledge on history of railway and the environment throughour business activities.
We conduct lectures leveraging the know-how fostered throughoperations and our business activities in on-site training courses
held by educational institutions including universities.

Training and skill development of employees

Cooperation with Yokohama Kyodo no Mori FundWe aim to grow the capabilities of our employees and be a company where each and every one works as a professional.

The Company cooperates in small woodlands conservation activities led mainly by the city of Yokohama by donating part of theproceeds from vending machines installed at the Engineering
Center of the Yokohama Plant to the fund.

Education and training system
The Company’s education and training system is divided into level-specific training, individual training according to job types androles, a support program aimed at helping employees to obtainacademic degrees and official qualifications, and division education conducted by each division. Furthermore, new employees intechnical positions receive lectures and practical training at theTechnical Training Center for one year. They are assigned to each
workplace after receiving basic and specialized training for technical staff.

Factory tours
We normally conduct “factory tours” to provide opportunities formembers of local communities to actually see our manufacturing
facilities and products in order to develop deeper understanding
about the business operations of the Company. During these
tours, we inform the participants of our products as well as ouractions for environmental protection and factory facilities, in an effort to build up relationships built on trust with local communities.

of) Statutory Auditors work effectively and believes that the current system is sufficiently running.
Specifically, each of the following bodies and meeting bodies isin place to function effectively.

Corporate GovernanceOur basic policy on corporate governance
The Group’s business activities are based on the business principles that “prioritize ethics and contribute to the prosperity of customers and society as a whole.” We therefore strive to attainsound corporate management through strengthening and reinforcing corporate governance, fully appreciating the significanceof compliance based on corporate ethics. At the same time, we
review as appropriate our management monitoring system to ensure its conformity to the changes in the business environment
including social environment and relevant legislation.

We have corporate bodies established in accordance with laws
and regulations as well as the Articles of Incorporation, including
the General Meeting of Shareholders, Directors and the Board of
Directors, Statutory Auditors and the Board of Statutory Auditors,
and Accounting Auditors. To strengthen corporate governance, thesupervision and execution functions of the Board of Directors are
separated, through the adoption of a structure where the Board of
Directors is mainly in charge of governance, and Operating Officers are primarily in charge of business execution.
The Company strives to ensure that both the supervision function of the Board of Directors and the audit function of (the Board

As part of our “initiative in valuing people and communities,” employees at the Yokohama Plant and the Shiga Ryuo Plant regularly
conduct cleanup activities around theplants.
The Shiga Ryuo Plant also expressed its endorsement of the Shiga
Prefecture’s Mother Lake Goals(MLGs) and participates in river cleanup operations near Lake Biwa in cooperation with local communities.

Corporate governance framework
General meeting of shareholders

Accounting Auditors

Reporting
ReportingAppointments/dismissals
Legal audit

Board of Directors
Directors

Business audit

Instruction/reporting

Internal Control Committee(Secretariat)
Human Resources andGeneral Affairs Division(Contact for whistle-blowers)(Contact for legal consulting)

Reporting on
business execution

Appointments/dismissals

Reporting/decisions

Internal audit

Appointments/dismissals

Statutory Auditors
Reporting

Audit Division

ReportingBoard of Statutory Auditors

Accounting audit

Legal counsel(Contact for whistle-blowers)

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The Company has meeting bodies including the Management
Strategy Meeting and Operating Officer Report Meeting. Throughthese bodies, specific matters related to their execution of duties
and critical management matters including those subject to thedeliberation of the Board of Directors are reported to the President
by Operating Officers and the general managers of business execution departments, deliberated and discussed preliminarily. In
addition, Outside Directors and Statutory Auditors attend thesemeeting bodies, as necessary. As for the matters discussed atmeetings, matters subject to the deliberation of the Board of Directors are decided by the Board of Directors and other matters
are decided by employees with business execution authority
through means such as circulars based on the Management Authority Rules.

Appointments/
reporting/recommendations
Whistle-blowings
Oversight
Whistle-blowings

President
Management Strategy Meeting
Operating Officer Report Meeting
National and Global Group Company Meetings
Instruction/reporting

Appointments/dismissals

Employees with exceptional manufacturing skills or expertise arerecognized as “Technical My Star” and assigned to instruct andtrain younger employees. Three employees of the Company haveaccepted Contemporary Master Craftsman awards from the Minister of Health, Labour and Welfare, and two have been awarded
to the Medal with Yellow Ribbon by the Japanese government.
Moreover, a large number of employees have become certified as
special-grade skilled workers.

Cleaning activities around the plants

At its regular monthly meetings as well as extraordinary meetings
held when appropriate, the Board of Directors, which is composedof seven Directors including three Outside Directors, discusses
and decides on important management matters such as reports
on Operating Officers’ business execution and matters to be decided solely at the discretion of the Board of Directors, while supervising the execution of duties by Operating Officers.
Management Strategy Meeting and Operating Officer
Report Meeting, etc.

Overview of corporate governance structure andreasons for its adoption

Appointments/dismissals

Skill transfer

Directors and the Board of Directors

Operating Officers
Instruction/reporting

Each business department
Instruction/reporting

Instruction/
reporting

Each Group company

Toyo Denki Seizo Report 2022

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