Toyo Denki Seizo K K : Report 2021

Toyo Denki Seizo Report 2021

Our Heart and Technology for the Future

Our Long-Term Vision

Toyo Denki Seizo K.K. Contributes to the Development

Based on a firm management foundation, we help build social infrastructure systems that are considerate of the global environment through the global provision of high-quality products that integrate our exceptional motor drive technologies since establishment with our breakthrough advanced technologies.

	Business Principles	Information
	The Toyo Denki Group will practice the following business principles to ensure the growth of
Industrial	Equipment
its business, earn the confidence and understanding of shareholders and stakeholders, and
Systems	foster the development of its employees:	Systems
Segment	Prioritize ethics and contribute to the prosperity of customers and society as a whole	Segment
	Encourage creativity and enterprising spirit to meet the challenges of the future
	Build trust by focusing on quality first

Code of Conduct

1. Respond to customers in a timely and speedy manner
2. Tackle all challenges with forethought and creativity
3. Continuous efforts toward self-development and skill improvement
4. Keep a broad perspective and influence each other toward growth
5. Act with awareness and pride of a good member of society and businessman

Company Slogan

Transportation	Our Heart and Technology for the Future	Manufacturing
Systems
Segment

Transportation Systems Segment

Electrical equipment for rail vehicles manufactured by the Company using its technological capability developed over 100 years covers a wide range of fields, including propulsion systems (drive systems), auxiliary power supply and door-closing

units of trains, and we contribute to the maintenance and de-	Current collectors
(pantographs)
velopment of railway infrastructure overseas, not to mention in
Japan, by pursuing safety and comfort of trains.
Door operating equipment

Passenger information display system

Master controllers
Total train communication	Propulsion inverters (VVVF inverter)
system

1

Driving gear units

Main motors

Twin disk couplings	Auxiliary power supply (SIV)

of Social Infrastructure Systems

Industrial Systems Segment

The Company is extensively contributing to customers at home and abroad through general industrial machinery and equipment, testing equipment for automobile development and social infrastructure equipment that is indispensable to the daily lives of people. In addition, we address manufacturing that contributes to the prevention of global warming, while providing products manufactured through high system-building technologies that make full use of energy-saving motors, inverters, FA controllers and networks.

Automobile testing systems

Power generation and social infrastructure system

Production and processing equipment systems

Information Equipment Systems Segment

In the Information Equipment Systems segment, we operate in the two fields of railway station operating equipment and remote monitoring systems, by merging advanced telecommunication technologies and mechatronics.

With regard to railway station operating equipment systems, we develop and manufacture commuter pass issuing machines that quickly became IC card compliant and portable terminal devices for conduc- tors, and provide systems for smooth toll collection and income management system to railway operators.

Our remote monitoring systems greatly contribute to labor saving and maintenance saving of customers through realization of various equipment monitoring and position monitoring, by leveraging cloud computing.

Facilities management solutions

Railway station operating equipment systems

CONTENTS

Contents/Editorial Policy/Long-Term Vision… … 1 Over 100-Year History of Toyo Denki Seizo K.K.…… 3

Consolidated Financial Highlights… ………… 4

Message from Chairman and President… …… 5

Special Report 1 Medium-Term Management Plan "Revitalize 2022"… ……………… 7

Special Report 2 Establishment of Sustainability Policy… 8 Business Report

Transportation Systems Segment… ……… 9

Industrial Systems Segment… …………… 10

Information Equipment Systems Segment…… 11

Topics… ………………………………… 12

Research and Development/Intellectual Property… 13 ESG/CSR Report

Environment

Initiatives to Protect the Environment…… 14

Social

With Our Customers… ………………… 16

With Our Shareholders and Investors… … 17 With Our Local Communities… ………… 18

With Our Suppliers…………………… 19

With Our Employees… ………………… 19

Governance

Corporate Governance… ……………… 21

Executive Profiles… …………………… 23

Messages from Outside Directors… …… 23

Internal Control and Compliance……… 25

Risk Management……………………… 25

Risk Factors… ………………………… 25

Information Security… ………………… 26

Financial Report

Financial Review… ……………………… 27

Reference Data for Management Indices… 28 Consolidated Balance Sheets……………… 29

Consolidated Statements of Income and

Consolidated Statements of Comprehensive Income…… 31

Consolidated Statements of Changes in Net Assets…… 32

Consolidated Statements of Cash Flows…… 33

Stock Related Information… ………………… 34

Company Profile… ………………………… 35

Organization Chart…………………………… 36

Editorial Policy

We have been publishing this report since 2013 with the goal of allowing a wide range of stakeholders to have a better understanding of the Company. This report combines our management policy with reports on our businesses, ESG/CSR and finances. We are committed to describing our initiatives during the year and our future direction in a manner that is easy to understand.

Period Covered by This Report

This report focuses on our activities in fiscal 2020 (from June 2020 to May 2021), but also contains some information from outside this period.

Organizations Covered by This Report

This report covers the Toyo Denki Group, including Toyo Denki Seizo K.K. and its consolidated subsid- iaries.

Reference Guidelines

The GRI Sustainability Reporting Standards (GRI Standards)

Toyo Denki Seizo Report 2021 2

Over 100-Year History of Toyo Denki Seizo K.K.

Our company was founded in 1918 with the intention of "domestic production of electrical machinery for railway vehicles". A spectacular feeling that we want to export products to domestic as well as to many Orient countries and contribute to the development of the country has come from the name of "TOYO DENKI SEIZO K.K.". And this feeling has been handed down to successive employees, and now our products are contributing to the development of social infrastructure systems around the world.

1918~1949

From foundation to postwar

1918 Technical cooperation with Brit- ish Dick Kerr and establishment of the company with the capital of 3 million yen

1919 Operation started at Yokohama Factory

Group photo of our employees with technical advisors from the partner British Dick Kerr company.

Yokohama factory at the start of operations (Hodogaya-ku, Yokohama)

1972	Development of brushless motor generator (BLMG), first in the world
	Development of 150kVA 440Hz static CVCF, first in Japan
1973	Completion of commutation ticket issuing system
1977	Completion of large high-speed auto-
	matic drafting machine
1978	Developed our proprietary AFE chopper device
1983	Completion of in-train ticket issuing system	Panama Canal Agency Electric
1985	The current Yokohama Planmt was completed	Locomotive for Dredgers
1985	Delivery of world-first superimposed field excitation control for 205
	series electric train of Japanese National Railways
1988	Completion of world-firstheat-pipe type 8-unit motor batch con-
	trol VVVF inverter and delivery of it to Tokyu Electric Railway Co
1989	Development of small VVVF inverter using reverse conductive GTO
	thyristor, first in Japan

1990~2019

1920 Control equipments and traction motors delivered directly to Keihan Electric Railway Co.

1921 Development of pantograph, first in Japan

1926 Start of manufacturing of three-phase commutator motor (AS motor)

1932 Development of electric equipment for trolleybus, first in Japan

Completion of controller with regeneration brake using compound motor, first in Japan

1935 Development of diesel electric railcar, first in our country, and delivered to Sagami Railway

1949 Our stocks was listed onTokyo Stock Exchange

Early domestic pantograph

AS motor

Global expansion and to the next 100 years

1990	Development of stroke switching type door closing machine, first in Japan
	Development of intelligent door system, first in Japan
1991	Development of light-weight VVVF inverter using 1,500V mass-pro-
	duction type reverse conductive GTO thyristor, first in our Japan
1997	Completion of	in-train ticket issuing
	machine corresponding to automatic
	ticket checker
1998	Delivery of electric equipment for Bei-
	jing subway east-west line train
2000	Completion of permanent-magnet mo-
	tor (ED motor)	Beijing subway east-west line train
2004	Development of	electrical equipment for the world's first micro gas
	turbine hybrid vehicle
	Joint development of the first full-flat,super-low floor light rail ve-

1950~1989

From postwar reconstruction to high economic growth

hicle (LRV) produced in Japan

Succeeded in development and running of in-wheel motor for car

2007 The new public transport smart card Pasmo

1950 Development of ST type three-phase AC

Commutator motor (patented)

1952 Development of Cardan shaft driving device, first in Japan

1958 Completion of traction motor and controller for the Japan National Railways "Kodama" limited express

1959 Completion of automatic train stop

1960 Completion of traction motor and drive for Shinkansen testing car

Order received for electric towing locomotive for the Panama Canal

Development of constant-speed operation controller for vehicle, first in Japan Development of hydraulic winch for

ship, first in Japan

1963 Delivery of pantograph for Shinkansen

to Japanese National Railways

1965 Development of thyristor static Leonard equipment series, first in Japan

Cardan shaft driving device

Japan National Railway 151 series limited express train "Kodama"

Japan National Railway Series 0 Shinkansen

goes into service (delivery of automatic commuter ticket vending

machine with support for smart card passes and smart card charge

machines to station facilities)

Start of commercial service of the new N700 series trains on the Tokai- do and Sanyo Shinkansen lines (delivery of traction motors, gear units, pantographs,TD couplings, static conversion equipment, etc.)

2008	Start of sales of the VF66 inverter
2009	Delivered electric machinery for Tohoku
	Shinkansen E5 series
2012	Order receipt of handsets for conductor for JR West
2018	May, Shiga Ryuo Plant completed
	June, Toyo Denki Seizo K.K. 100th anniversary
	Order received for consigned research and	Los Angeles County Metropolitan
	development of superconducting flywheel	Transportation Bureau P3010 LRV
	power storage system for railways
2019	Establishment of SIAM TOYO DENKI Co., Ltd. in Thailand
	Establishment of Chalco-Toyo Perma-
	nent Magnet Motor Co., Ltd. in China
2020	Establishment of TOYO DENKI RAIL-
	WAY SERVICE, LLC. in the U.S.

1969 Completion of automotive brake test equipment

2021	Order received for automobile vehicle test-
	ing equipment using in-wheel-well dynamo	In-wheel-well dynamo

3

Consolidated Financial Highlights

Highlights of Toyo Denki Seizo K.K. and Consolidated Subsidiaries for the Consolidated Fiscal Year ended May 31 or as of May 31

			156th fiscal term	157th fiscal term	158th fiscal term
			Fiscal 2016	Fiscal 2017	Fiscal 2018
Financial Data
Fiscal Year
Net sales	(million yen)
40,668	42,527	41,172
Gross profit	(million yen)	9,221	8,072	7,839
Operating income	(million yen)	1,571	366	557
Net income attributable			1,174	692	690
to owners of the parent	(million yen)
Comprehensive income	(million yen)	1,513	2,009	(251)
Capital investment	(million yen)	4,606	4,772	1,090
Research and development costs (million yen)	927	840	731
Fiscal Year-End
Net assets	(million yen)
24,603	26,327	24,804
Total assets	(million yen)	54,927	63,291*1	58,001
Per Share Information
Net assets		(yen)
	2,605.09	2,788.01	2,773.87
Net income		(yen)	123.87	73.33	75.27
Dividend		(yen)	30	50*2	30
Major Management Indices
Shareholders' equity ratio	(%)
44.8	41.6	42.8
Return on equity (ROE)		(%)	4.9	2.7	2.7
Operating income ratio		(%)	3.9	0.9	1.4
Overseas net sales ratio		(%)	31.1	25.3	22.9
Dividend payout ratio		(%)	24.2	68.2	39.9
Non-financial Data
Number of officers (non-consolidated)
13	12	11
Number of employees on a consol-	1,262	1,267	1,226
idated basis
Number of employees at Group	430	391	395
companies in Japan and overseas
CO2 emissions on			3,895	4,097	4,905
a non-consolidated basis		(t)*3
Electricity consumption on a		647.2	680.3	839.2
non-consolidated basis (10,000 kWh)*3

159th fiscal term	160th fiscal term
Fiscal 2019	Fiscal 2020

39,071 33,143

8,242 7,338

1,068423

1,081977

1. 94

1. 632

1. 819

24,183 24,008

55,165 51,967

2,704.61 2,685.28

120.98 109.38

3030

43.846.2

4.44.1

2.71.3

20.715.9

24.827.4

1010

1,227 1,217

386371

4,185 4,184

743.9 751.6

*1 The Company has adopted "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 2 8, February 1 6, 2 0 1 8) from the beginning of the 158th fiscal term. Accordingly, total assets as of the end of the 157th fiscal term have been calculated by retroactively applying the accounting standard.

*2 The dividend for the 157th fiscal term includes a commemorative dividend of 20 yen for the 100th anniversary.

*3 Aggregate amount of production bases per fiscal year beginning in April and ending in March of the following year Figures for the Shiga Ryuo Plant since fiscal 2018 include those for TD Drive Co., Ltd.

Toyo Denki Seizo Report 2021 4