東洋電機製造（6505） – Toyo Denki Seizo Report 2021

Toyo Denki Seizo ReportOur Heart and Technology for the Future2021005_0524558582109.indd 2005_0524558582109.indd 22021/11/26 11:14:312021/11/26 11:14:31Our Long-Term VisionToyo Denki Seizo K.K. Contributes to the Development of Social Infrastructure SystemsBased 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.Industrial Systems SegmentBusiness PrinciplesThe Toyo Denki Group will practice the following business principles to ensure the growth of its business, earn the confidence and understanding of shareholders and stakeholders, and foster the development of its employees:Prioritize ethics and contribute to the prosperity of customers and society as a wholeEncourage creativity and enterprising spirit to meet the challenges of the futureBuild trust by focusing on quality firstInformation Equipment Systems SegmentCode of Conduct1. Respond to customers in a timely and speedy manner2. Tackle all challenges with forethought and creativity3. Continuous efforts toward self-development and skill improvement4. Keep a broad perspective and influence each other toward growth5. Act with awareness and pride of a good member of society and businessmanTransportation Systems SegmentCompany SloganOur Heart and Technology for the FutureManufacturingTransportation Systems SegmentElectrical equipment for rail vehicles manufactured by the Company using its technological capability developed over 100 years covers a wide range of fields, including propulsion sys-tems (drive systems), auxiliary power supply and door-closing units of trains, and we contribute to the maintenance and de-velopment of railway infrastructure overseas, not to mention in Japan, by pursuing safety and comfort of trains.Door operating equipmentCurrent collectors (pantographs)Passenger information display systemMaster controllersTotal train communication system1Driving gear unitsMain motorsPropulsion inverters (VVVF inverter)Twin disk couplingsAuxiliary power supply (SIV)010_0524558582109.indd 1010_0524558582109.indd 12021/12/18 13:18:472021/12/18 13:18:47Toyo Denki Seizo K.K. Contributes to the Development of Social Infrastructure SystemsIndustrial Systems SegmentThe 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 systemsPower generation and social infrastructure systemProduction and processing equipment systemsInformation Equipment Systems SegmentIn the Information Equipment Systems segment, we operate in the two fields of railway station operat-ing 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 cus-tomers through realization of various equipment monitoring and position monitoring, by leveraging cloud computing.Facilities management solutionsRailway station operating equipment systemsCONTENTSContents/Editorial Policy/Long-Term Vision … 1Over 100-Year History of Toyo Denki Seizo K.K. … 3Consolidated Financial Highlights ………… 4Message from Chairman and President …… 5Special Report 1 Medium-Term Management Plan Initiatives to Protect the Environment … 14 With Our Customers ………………… 16 With Our Shareholders and Investors … 17 With Our Local Communities ………… 18 With Our Suppliers …………………… 19 With Our Employees ………………… 19“Revitalize 2022” ……………… 7Special Report 2 Establishment of Sustainability Policy … 8Business Report Transportation Systems Segment ……… 9Industrial Systems Segment …………… 10 Information Equipment Systems Segment … 11 Topics ………………………………… 12 Research and Development/Intellectual Property … 13ESG/CSR Report Environment Social Governance Financial Report Financial Review ……………………… 27 Reference Data for Management Indices … 28 Consolidated Balance Sheets …………… 29 Corporate Governance ……………… 21 Executive Profiles …………………… 23 Messages from Outside Directors …… 23 Internal Control and Compliance ……… 25 Risk Management …………………… 25 Risk Factors ………………………… 25Information Security ………………… 26 Consolidated Statements of Income and Consolidated Statements of Comprehensive Income … 31 Consolidated Statements of Changes in Net Assets … 32 Consolidated Statements of Cash Flows … 33Stock Related Information ………………… 34Company Profile ………………………… 35Organization Chart ………………………… 36Editorial PolicyWe have been publishing this report since 2013 with the goal of allowing a wide range of stake-holders 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 ReportThis 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 ReportThis report covers the Toyo Denki Group, including Toyo Denki Seizo K.K. and its consolidated subsid-iaries.Reference GuidelinesThe GRI Sustainability Reporting Standards (GRI Standards)2010_0524558582109.indd 2010_0524558582109.indd 22021/12/18 13:18:482021/12/18 13:18:48Toyo Denki Seizo Report 2021Over 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.1918~1949From foundation to postwar1918Technical cooperation with Brit-ish Dick Kerr and establishment of the company with the capital of 3 million yen1919 Operation started at Yokohama FactoryGroup photo of our employees with technical advisors from the partner British Dick Kerr company.Yokohama factory at the start of operations (Hodogaya-ku, Yokohama)1920 Control equipments and traction mo-tors delivered directly to Keihan Elec-tric Railway Co.1921 Development of pantograph, first in Japan1926 Start of manufacturing of three-phase commutator motor (AS motor)1932 Development of electric equipment for trolleybus, first in Japan Completion of controller with regener-ation brake using compound motor, first in Japan1935 Development of diesel electric railcar, first in our country, and delivered to Sagami Railway1949 Our stocks was listed on Tokyo Stock ExchangeAS motorEarly domestic pantograph1950~1989From postwar reconstruction to high economic growth1950 Development of ST type three-phase AC Commutator motor (patented)1952 Development of Cardan shaft driving device, first in Japan1958 Completion of traction motor and con-troller for the Japan National Railways “Kodama” limited express1959 Completion of automatic train stop1960 Completion of traction motor and drive for Shinkansen testing car Order received for electric towing loco-motive for the Panama Canal Development of constant-speed opera-tion controller for vehicle, first in Japan Development of hydraulic winch for ship, first in Japan1963 Delivery of pantograph for Shinkansen to Japanese National Railways1965 Development of thyristor static Leonard equipment series, first in JapanCardan shaft driving deviceJapan National Railway 151 series limited express train “Kodama”Japan National Railway Series 0 Shinkansen1969 Completion of automotive brake test equipment1972 Development of brushless motor generator (BLMG), first in the world Development of 150kVA 440Hz static CVCF, first in Japan1973 Completion of commutation ticket issuing system1977 Completion of large high-speed auto-matic drafting machine1978 Developed our proprietary AFE chopper device1983 Completion of in-train ticket issuing system1985 The current Yokohama Planmt was completed1985 Delivery of world-first superimposed field excitation control for 205 Panama Canal Agency Electric Locomotive for Dredgersseries electric train of Japanese National Railways1988 Completion of world-first heat-pipe type 8-unit motor batch con-trol VVVF inverter and delivery of it to Tokyu Electric Railway Co1989 Development of small VVVF inverter using reverse conductive GTO thyristor, first in Japan1990~2019Global expansion and to the next 100 years1990 Development of stroke switching type door closing machine, first in Japan Development of intelligent door system, first in Japan1991 Development of light-weight VVVF inverter using 1,500V mass-pro-duction type reverse conductive GTO thyristor, first in our Japan1997 Completion of in-train ticket issuing machine corresponding to automatic ticket checker1998 Delivery of electric equipment for Bei-jing subway east-west line train2000 Completion of permanent-magnet mo-tor (ED motor)Beijing subway east-west line train2004 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-hicle (LRV) produced in Japan Succeeded in development and running of in-wheel motor for car2007 The new public transport smart card Pasmogoes 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 inverter2009 Delivered electric machinery for Tohoku Shinkansen E5 series2012 Order receipt of handsets for conductor for JR West2018 May, Shiga Ryuo Plant completed June, Toyo Denki Seizo K.K. 100th anniversary Order received for consigned research and development of superconducting flywheel power storage system for railways Establishment of Chalco-Toyo Perma-nent Magnet Motor Co., Ltd. in China2020 Establishment of TOYO DENKI RAIL-WAY SERVICE, LLC. in the U.S.2021 Order received for automobile vehicle test-ing equipment using in-wheel-well dynamo2019 Establishment of SIAM TOYO DENKI Co., Ltd. in ThailandLos Angeles County Metropolitan Transportation Bureau P3010 LRVIn-wheel-well dynamo3010_0524558582109.indd 3010_0524558582109.indd 32021/12/18 13:18:532021/12/18 13:18:53Consolidated Financial HighlightsHighlights of Toyo Denki Seizo K.K. and Consolidated Subsidiaries for the Consolidated Fiscal Year ended May 31 or as of May 31156th fiscal term 157th fiscal term 158th fiscal term 159th fiscal term 160th fiscal termFiscal 2016Fiscal 2017Fiscal 2018Fiscal 2019Fiscal 202040,6689,2211,5711,1741,5134,60692742,5278,0723666922,0094,77284041,1727,839557690(251)1,09073139,0718,2421,0681,081(351)54579233,1437,33842397794632819 (million yen) (million yen)24,60354,92726,32763,291*124,80458,00124,18355,16524,00851,9672,605.092,788.012,773.872,704.612,685.28123.873073.33 50*275.2730120.98109.38303044.84.93.931.124.24303,895647.241.62.70.925.368.23914,097680.342.82.71.422.939.93954,905839.243.84.42.720.724.83864,185743.946.24.11.315.927.43714,184751.6Number of officers (non-consolidated)13121110101,2621,2671,2261,2271,217*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 yearFigures for the Shiga Ryuo Plant since fiscal 2018 include those for TD Drive Co., Ltd.4Financial DataFiscal YearNet sales Gross profit (million yen)(million yen)Operating income (million yen)Net income attributable to owners of the parent (million yen)Comprehensive income (million yen)Capital investment (million yen)Research and development costs (million yen)Fiscal Year-EndNet assets Total assets Per Share InformationNet assets Net income Dividend Major Management IndicesShareholders’ equity ratio Return on equity (ROE) Operating income ratio Overseas net sales ratio Dividend payout ratio Non-financial Data (yen) (yen) (yen) (%) (%) (%) (%) (%)Number of employees on a consol-idated basisNumber of employees at Group companies in Japan and overseasCO2 emissions on a non-consolidated basis (t)*3Electricity consumption on a non-consolidated basis (10,000 kWh)*3010_0524558582109.indd 4010_0524558582109.indd 42021/12/18 13:18:532021/12/18 13:18:53Toyo Denki Seizo Report 2021Message from the PresidentWe are pressing forward with our initiatives for the second two years of the medium-term management plan (“Revitalize 2022” for the period from fiscal 2020 to fiscal 2021) as “a period for accumulating earning power and returning to a growth path.”Akira WatanabePresidentKenzo TerashimaChairmanResults for the fiscal year ended May 2021Although both net sales and profits decreased year on year due to the impact of COVID-19, profits exceeded the published forecasts.The business environment for the fiscal year ended May 2021 re-mained harsh throughout the year due to the impact of COVID-19 and three declarations of a state of emergency triggered by it. Amid restrictions imposed on economic activities both in Japan and overseas, the significant decline in tourism demand as well as the spread of teleworking caused a sharp decrease in the number of passengers transported by railway operators. In addi-tion, capital investments were called off in the manufacturing in-dustry due to uncertain outlook. In the latter half of the year, some recovery was observed thanks to measures to prevent the spread of infection and large-scale economic packages both in and out of Japan. China, in particular, experienced an economic recovery as the impact of COVID-19 quickly subsided.In such an environment, the Group’s orders and sales were im-pacted as there were some revisions and postponements in rail-way operators’ plans for rolling stock production and replacement as well as equipment renewal plans in the manufacturing industry. As a result, orders received, net sales, and operating income all decreased year on year to 30.0 billion yen, 33.1 billion yen, and 420 million yen, respectively. However, profits exceeded the pub-lished forecasts, helped by improved profitability. Ordinary income was 750 million yen mainly due to foreign exchange gains, and net income attributable to owners of the parent was 970 million yen as a result of efforts to reduce certain cross holdings.By segment, the Transportation Systems segment saw a year-on-year decrease in both orders received and net sales due to 5010_0524558582109.indd 5010_0524558582109.indd 52021/12/18 13:18:572021/12/18 13:18:57lower sales to clients other than JR Group. Segment profit de-clined due to decreases in net sales and profits at subsidiaries despite efforts to step up cost and process control.In the Industrial Systems segment, orders received fell below the previous fiscal year due to a decrease in orders for processing equipment. Net sales declined primarily due to lower sales for testing equipment and power supply. Segment profit decreased mainly owing to the impact of lower net sales, despite efforts to enhance cost control.In the Information Equipment Systems segment, orders re-ceived, net sales, and segment profit all declined year on year mainly due to a negative rebound from the previous fiscal year’s recording of large-scale orders, in addition to the impact of COVID-19.Future outlook and message to our stakeholdersWe will work on measures to establish a “muscular” business management system that can generate stable profits and to expand the scale of our business.While the domestic and overseas economic conditions remain se-vere due to concerns over the resurgence of COVID-19 caused by mutant strains, there are signs of recovery in the form of visible effects of various policies and developments in the recovery of overseas economies such as China. Measures to prevent the spread of infection and vaccination are being rolled out both in Japan and overseas, and it is hoped that personal consumption and capital investment will recover as the easing of movement re-strictions will progress with the subsiding of COVID-19.In the Transportation Systems segment, the number of railway users in Japan is predicted not to return to the level seen in the past due to the decline in demand for transport as well as the in-tensifying population drop and increasingly aging population. However, in China, the number of passengers on trunk railways has generally recovered to the past level, raising expectations for a recovery in maintenance demand for high-speed railways and urban transport systems. Projects in overseas markets other than China, such as Southeast Asia, have also started to pick up.In the Industrial Systems segment, production facilities and printing machines are returning to the levels seen in the past, and there has been an increasing number of inquiries from the United States, China, and South Korea. Furthermore, efforts toward the realization of a sustainable society, such as decarbonization, are gathering pace, and test equipment for the electrification of auto-mobiles and autonomous driving as well as dispersed power source systems are projected to grow. There are also expectations for the expansion and reinforcement of infrastructure equipment, such as emergency power generators, as part of efforts to build national resilience.In the Information Equipment Systems segment, with increas-ing demand for digitalization and contactless systems, there is a growing need for compatibility with IC train tickets, including those for local lines, and as such, demand for products such as IC car-mounted terminals is expected to rise.As new customer needs are emerging in the wake of changes in behavior and values in a post-COVID society, we believe that the areas in which our business can make contribution will further expand.In response to these changes in the business environment, the Group reviewed the medium-term management plan “Revitalize 2020,” which will be completed in fiscal 2021, and relaunched it as “Revitalize 2022” in January 2021. Based on the achieve-ments of efforts to improve profitability during the first two years (from fiscal 2018 to fiscal 2019), we conducted a review to ad-dress changes in the business environment and designated the second two years (from fiscal 2020 to fiscal 2021) as “a period for accumulating earning power and returning to a growth path.” We are working on measures to establish a “muscular” business management system that can generate stable profits and to ex-pand the scale of our business.We hope that our stakeholders will look forward to the devel-opment and expansion of our business and would like to ask for their continued support.010_0524558582109.indd 6010_0524558582109.indd 62021/12/18 13:18:582021/12/18 13:18:586Toyo Denki Seizo Report 2021Special ReportMedium-Term Management Plan “Revitalize 2022”The Group reviewed the medium-term management plan “Revitalize 2020” in light of changes in the business environment and issues to be addressed, and relaunched it as “Revitalize 2022” with new numerical management targets. Measures for the new plan are underway.Achievements of the first two years and future issuesFundamental policies and major actions For the first two years (fiscal 2018 through fiscal 2019), the Company focused on improving profitability and produced desired results, including hitting profit targets and improving ROE. Sales activities have begun to be affected by COVID-19, which poses a challenge for future sales expansion.Changes in the business environment Domestic and overseas economic conditions are clouded by concerns over the resurgence of COVID-19. On the other hand, there are signs of recovery in the manufac-turing industry’s capital investment and demand related to high-speed railways and urban transport systems in China. Efforts to realize a decarbonized society are gathering pace, and digital transformation (DX) is advancing. Possible areas for contribution by our business, which is deeply involved in social infrastructure development and global environmental conservation, will further expand.Positioning of the second two years The second two years (fiscal 2020 through fiscal 2021) were revised from “a period for creating growth” to “a period for accumulating earning power and returning to a growth path.” We will establish a foundation to achieve the initial target of “securing net sales of over 47 billion yen, operating income of 2 billion yen, and ROE of 5%” within the first two years of the next medium-term management plan. The existing seven fundamental policies remain in place. Major actions for each policy were revised by considering responses to changes in the business environment.Major actions added or revised in the planResponse to the impact of COVID-19 Establish a business continuity plan (BCP) that can address the COVID-19 pandemic Improve business profitability with operating income in mind Reduce fixed costs through the united efforts of administration, sales and plants Response to the realization of a decarbonized society and DX advancement Develop products that contribute to the realization of a decarbonized society and bring them to market at an early stage Promote the development of test equipment that contributes to the electrification of automobiles and autonomous driving Roll out industrial motors into the Chinese market Promote the application of IoT technology to the maintenance field Commercialize wireless power supply technology at an early stage Explore production methods that incorporate energy efficiency Response to SDGs Establish a sustainability policy and roadmap* For details of the fundamental policies and major actions, please see the IR Release section on the Company’s website.Numerical management targets (consolidated) (Unit: 100 million yen)Toyo Denki GroupFY ended May 2019(Result)FY ended May 2020(Result)FY ended May 2021(Result)Revitalize 2020Revitalize 2022FY ending May 2022(Plan)FY ending May 2022(Revised plan)Net salesOperating income(Operating margin ratio)Ordinary incomeNet incomeInvestment gain on equity methodROEPayout ratioNet sales by segmentTransportation SystemsIndustrial SystemsInformation Equipment Systems411.75.5(1.4%)4.96.90.12.7%39.9%272.3123.315.8390.710.6(2.7%)12.010.8(0.3)4.4%24.8%242.6130.217.7331.44.2(1.3%)7.59.7(0.0)4.1%27.4%215.2105.410.6340.04.5(1.3%)7.08.01.73.3%33.5%205.0127.08.0360.06.0(1.7%)8.07.01.03.0%30.0%220.0130.010.07010_0524558582109.indd 7010_0524558582109.indd 72021/12/18 13:18:582021/12/18 13:18:5812Special Report Establishment of Sustainability PolicyConsidering efforts for the Sustainable Development Goals (SDGs) as an important management issue, the Group has formulated the Sustainability Policy as a guideline for specific actions.Basic policyThe 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 for its efforts to realize these principles and contribute to the sustainable development of society.Based on the Group’s business principles, environmental philosophy, and slogan, relations between the Company’s initiatives and the realization of SDGs were summarized from the following three perspectives: “Initiative in Products and Services,” “Initiative in Production Activities,” and “Initiative in Valuing People and Communities.” While assessing the various impacts of the Group’s businesses and activities, we will set out specific action targets as a roadmap and implement them.Corporate principlesBusiness PrinciplesThe Toyo Denki Group will practice the following business principles to ensure the growth of its business, earn the confidence and understanding of shareholders and stakeholders, and foster the development of its employees: Prioritize ethics and contribute to the prosperity of customers and society as a whole Encourage creativity and an enterprising spirit to meet the challenges of the future Build trust by focusing on quality firstEnvironmental PhilosophyThe 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.”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.Company Slogan of the Toyo Denki GroupOur Heart and Technology for the FutureSpecific initiativesInitiative in Products and Services Supply of decarbonized energy, such as small hydroelectric power generation P o p u l a r i z a t i o n o f e n e r g y – e f f i c i e n t transportation, such as railroads and electric vehicles Efficiency improvement of electrical equipment and the spread of power storage systems Improvement of safety through a shift to barrier-free transportation systemsetc.Initiative in Production Activities Reduction of energy consumption in production Study of solar power generation and decarbonization of energy currently used Reduction of energy consumption during transportation of materials and products Recycling activities at production sites and officesetc. Initiative in Valuing People and Communities Support for school education by offering university endowed lectures and accepting school field trips in plants Promotion of gender equality initiatives and appointment of female managers Protection of the global environment to contribute to nature conservationetc.010_0524558582109.indd 8010_0524558582109.indd 82021/12/18 13:18:592021/12/18 13:18:5982Toyo Denki Seizo Report 2021Business ReportTransportation Systems SegmentBUSINESSPercentage of total net sales65.0%Support railway transportation that connects people and cities with safety and trust, through manufacturing that merges electronics technologies and mechanical technologies in a highly advanced manner Results for fiscal 2020 Orders Received18,818 million yen (Down 26.8% year on year) Net Sales21,528 million yen (Down 11.3% year on year) Segment Income2,211 million yen (Down 10.6% year on year)Orders Received (Unit: Million yen)Net Sales (Unit: Million yen)Segment Income (Unit: Million yen)080,62217,52818,81532,72962,42825,12724,2474,2112,2201920202021201920202021201920202021Orders received decreased 26.8% compared with the previous fiscal year to 18,818 million yen, due to a decrease in orders from private railways, Chinese customers, and overseas customers (excluding those in China), despite an increase in orders from the JR Group. Net sales totaled 21,528 million yen, an 11.3% decrease from the previous fiscal year, due to a decrease in sales for private railways, Chinese customers, and overseas customers (excluding those in China), offsetting an increase in sales for the JR Group. Segment income de-creased 10.6% from the previous fiscal year to 2,211 million yen as a result of lower net sales and profits at subsidiaries, despite the ef-forts to step up cost and process control.V O I C EWe will introduce new environmentally friendly products to the market and expand the overseas maintenance business.The Transportation Systems segment will naturally continue pursuing safety and reliability of electrical equipment for railway vehicles, which have to meet strict usage conditions, and at the same time pour our efforts on reducing environ-mental impact in the form of energy saving, maintenance saving, and noise reduction to provide new environmentally friendly products and services.In the domestic business, there has been a growing number of customers who have chosen our new products, in-cluding driving inverters and auxiliary power supply units that realized smaller size and lighter weight as well as noise-reduced motor and driving gear units. Going forward, we anticipate more customers will choose our new prod-ucts, together with pantographs and other highly reliable electrical equipment.As for the overseas business, the maintenance business of electrical equipment for subway trains has been launched in China, and we will strive to expand the business and provide stable services to meet surging demand. In North America, we reorganized our local subsidiaries in response to changes in the business environment and set up a new maintenance business, which has started operations.We will also continue to work towards improving profitability of the production line at the Yokohama Plant, one of our production bases, by enhancing production capacity and efficiency.Naoki OkuyamaGeneral Manager of Transportation Business Unit9010_0524558582109.indd 9010_0524558582109.indd 92021/12/18 13:18:592021/12/18 13:18:59Business ReportIndustrial Systems SegmentBUSINESSPercentage of total net sales31.8%Deliver technologies and gratitude to customers with highly precise, highly responding and highly efficient power electronics, for realization of an environment-friendly society Results for fiscal 2020 Orders Received10,597 million yen (Down 5.4% year on year) Net Sales10,541 million yen (Down 19.1% year on year) Segment Income718 million yen (Down 28.8% year on year)Orders Received (Unit: Million yen)Net Sales (Unit: Million yen)Segment Income (Unit: Million yen)338,21891,11795,01320,31933,21145,01800,1056817201920202021201920202021201920202021Orders received decreased 5.4% compared with the previous fiscal year to 10,597 million yen, due to a decrease in orders for processing equipment, despite orders for testing equipment maintaining the previous year’s level. Net sales decreased 19.1% compared with the previous fiscal year to 10,541 million yen mainly as a result of lower sales for testing equipment and power supply. Segment income totaled 718 mil-lion yen, a 28.8% decrease compared with the previous fiscal year, mainly due to lower net sales, offsetting efforts to step up cost control.V O I C EWe will accelerate our business expansion both in Japan and overseas to achieve dramatic development in the new era.While sales activities, local adjustment, and other aspects of the Industrial Systems segment have been affected by the COVID-19 pandemic that has been devastating the world from the beginning of 2020, efforts for a new era are produc-ing steady results.At the Shiga Ryuo Plant, we have been embedding thorough cost and process control and improving the quality control level, raising its maturity as our main plant in three years after it was newly built. In addition, the R&D center attached to the plant has been accumulating data for the practical application of in-wheel-well dynamo, and local adjustment of overseas test equipment now gets remotely completed, which confirm the increasing sophistication of the plant.Overseas, the two local subsidiaries set up in 2019 are steadily developing their businesses for the future, despite harsh environments. SIAM TOYO DENKI, a Thai subsidiary, is producing results in expanding its customer base, while Chalco-Toyo Permanent Magnet Motor Co., Ltd., a Chinese motor production subsidiary, started operations in the fall of 2020 and is in full swing to capture the growing demand for high-efficiency motors in China.In Japan, inquiries for our electrical equipment are growing as corporate capital investment recovers, and demand of products for small hydroelectric power generation, in which the Company has a strength, is also expanding sharply, as the world shifts towards carbon-neutrality.We will continue to strive for dramatic development of the Industrial Systems segment, keeping pace with new trends in a new era.Yoshifumi OtsuboGeneral Manager of Industry Business Unit10010_0524558582109.indd 10010_0524558582109.indd 102021/12/18 13:18:592021/12/18 13:18:59Toyo Denki Seizo Report 2021Business ReportInformation Equipment Systems SegmentBUSINESSPercentage of total net sales3.2%Provision of products that make the execution of operations on station premises and trains smooth and convenient and M2M solutions based on mobile phone networks and cloud servers using remote monitoring system Results for fiscal 2020 Orders Received633 million yen (Down 60.7% year on year) Net Sales1,067 million yen (Down 39.8% year on year) Segment Income267 million yen (Down 41.9% year on year)Orders Received (Unit: Million yen)Net Sales (Unit: Million yen)Segment Income (Unit: Million yen)657,1116,1277,1385,1064760,1092762336201920202021201920202021201920202021Orders received decreased 60.7% compared with the previous fiscal year to 633 million yen, due to the impact of COVID-19 as well as a negative rebound from demand for software improvement projects associated with the consumption tax amendment seen in the previous fiscal year. Net sales decreased 39.8% from the previous fiscal year to 1,067 million yen for the same reason as orders received. Seg-ment income totaled 267 million yen, a 41.9% decrease from the previous fiscal year, as a result of lower net sales.V O I C EWe will work towards expanding the Information Equipment Systems segment through product development and solutions that meet customer needs, with a focus on railway station operating equipment.Capitalizing on the strengths in fare calculation and IC card processing technologies, the Information Equipment Systems segment provides products ranging from railway station operating equipment such as commuter pass issuing machines to portable terminal devices for conductors. In response to the spring timetable revision in March 2021, we modified the equipment we had already delivered and were able to complete the work without any major problems. In addition, more railway lines and zones started using on-board IC ticket checking machines that enable the processing of IC card entry and exit on trains. These machines are smoothly operating without disruption.The prolonged COVID-19 pandemic has caused a slew of postponements and scalebacks in railway operators’ plans for new and renewal projects as well as functional refurbishments, dragging out an extremely difficult situation. Howev-er, we will engage in product development with an eye on changes in the times and the post-COVID world and continue to provide products that satisfy our customers, with the keywords of non-contact, cashless, thin client, and competitive price.Toshiaki AsakuraGeneral Manager of IT Business Unit11010_0524558582109.indd 11010_0524558582109.indd 112021/12/18 13:19:012021/12/18 13:19:01Business ReportTopics Development of electrical equipment for rail vehicles with green creden-tials such as energy savingThe Company delivered VVVF inverter, totally enclosed motor, and other products for Keikyu Corporation’s new 1000 series 20th-batch rolling stock. VVVF inverter uses SiC elements to achieve smaller size and lighter weight in comparison to the previous product (for Keikyu Corporation’s 2100 series), with a mass reduction of approximately 37% and a volume reduction of approximately 44%. In addition, totally enclosed motor realizes maintenance saving, high efficiency, and noise reduction thanks to the totally enclosed structure. The Company will continue to develop products with green cre-dentials such as energy saving with an aim to realize a sustainable society.VVVF inverterTotally enclosed motor Promotion of the development of test equipment that contributes to the electrification of automobiles and autonomous drivingThe Company is developing in-wheel-well dynamo, a new type of test equipment for automobile development, for the purposes of evaluat-ing self-driving vehicles, which are predicted to become widespread in the future, and replacing chassis dynamos. This equipment can be attached to the tires of an actual vehicle to simulate an actual driving test. The Company has received the first order for test equipment us-ing in-wheel-well dynamo. Going forward, development efforts will be carried out with a view to the applicability to self-driving vehicle tests inside a testing room. The Company will continue to contribute to the realization of a sustainable society, includ-ing decarbonization, by supporting automobile development.Actual vehicle test with in-wheel-well dynamo IORemoter II, IoT terminal for remote monitoring and control systems, enables connection with major cloudsIORemoter II is a high-speed IoT terminal with a built-in 4G/LTE module. IoT remote monitoring and control of various facilities, controllers, devices, and mobile entities can be conducted faster and at a larger capacity.IORemoter II is compatible with multi-carrier and dual SIM operation, enabling proposals for communication lines that are suitable for Our new initiative is to develop IORemoter II’s connectivity with major cloud computing services. It now connects with Microsoft Azure, AWS, and Alibaba Cloud IoT Platform. We are also developing connectivity with Google Cloud Platform.Enabling connection with each cloud computing service reduces the time required for connection verification and makes system provi-System configuration (e.g. Alibaba Cloud IoT Platform)CollectionStorageProcessing (ETL)AnalysisUseVisualization of simple dataeach customer’s applications.sion quicker. In addition, more secure and high-quality systems can be built. The Company will respond to diverse needs of our customers and contribute to ac-celerating digital transformation.IORemoter IIIoT PlatformRDSDataV12010_0524558582109.indd 12010_0524558582109.indd 122021/12/18 13:19:022021/12/18 13:19:02TOPICSToyo Denki Seizo Report 2021Business ReportResearch and Development/Intellectual PropertyBUSINESSR&D to support the development of social infrastructure and supporting frameworksResearch and DevelopmentThe Group’s R&D activities are based on seeking to create products that fully satisfy our customers and challenging the creation and expansion of these products, and we actively promote development of technologies of our existing businesses and basic technology developments that support this development as well as development of new products that expand our businesses. Results and topics from fiscal 2020SegmentProjectDevelopment of anti-slip re-adhesion control considering three-dimensional bogie motionsDevelopment of current collector with ADD for overseas markets smetsySnoitatropsnarTsmetsyS lairtsudnI noitamrofnI tnempuqEismetsyS weN fo noisnapxEsessenisuB hcraeseRyrotarobaLTo explain the effect of bogie dynamics on the adhesion and wheel slip phenomena of railway vehicles, by building a three-dimensional model, we recreated the phenomena of false detection of slip due to torque reduction during slip and re-adhesion as well as re-adhesion failure due to repeated slips caused by insufficient torque reduction.DescriptionDevelopment of VVVF inverter for vehicles with high-function-ing control unitWe increased the performance of control unit to almost triple the processing speed compared to before and installed a large-capacity memory. The im-provements enabled high-speed re-adhesion control during slipping and sliding, high-precision monitoring data recording, and long-term dynamic re-cording.Building on pantographs for the Japanese market, we developed air-operated type pantograph fitted with ADD (Automatic Dropping Device).Development of in-wheel-well dynamoWe are studying the application of in-wheel-well dynamo, which can fit inside the automobile’s wheel well, to chassis dynamo. We conducted in-house production of parts and a review to improve the potential of assembly operation, with mass production in mind.Development of slender-type high-speed motor for EV/HEV system testsWe are developing a motor for testing the multi-axle drive systems of EV/HEV. Using the developed motor for dynamos with a 20,000 rpm speed, the development process involves reducing the diameter of the frame and changing a part of the frame to cutout construction. Once developed, the motor will enable tests to create the same layout as if it is installed in an actual vehicle.Development of 690V large capacity motor / inverterWe are developing motor and inverter for 690V power supply that can accommodate larger capacities of processing machine systems. A motor for 690V was developed based on the existing induction motor for 400V power supply. Inverter and converter are undergoing evaluation tests on prototypes.Development of standardized data and programs for railway station operating equipmentStandardized data and programs, which unified fare data (stations, fare, etc.) and fare calculation programs necessary for fare calculation to be pro-cessed by various railway station operating equipment, were completed. Standardization is expected to reduce renewal costs associated with fare revi-sion and to improve the processing quality.Development of IoT terminal and expansion of functionsIn addition to the Company’s own existing cloud, it is now possible to connect to major cloud services such as Amazon Web Service, Microsoft Azure, and Alibaba Cloud. We started developing a next-generation IoT terminal that supports 5G, evolving IORemoter II to a next-generation terminal.Distributed power sourceIn collaboration with the Industrial Systems segment, we developed software for grid interconnection inverter VF66G that has already been commercial-ized, to comply with the grid interconnection regulations for distributed power sources.Support for overseas EDM productionDevelopment of automatic deburring system for cast gear boxesDevelopment of synchronous operation system with high-speed Ethernet communicationWith the research laboratory and the Industrial Systems segment, we are assisting production to develop a range of permanent-magnet synchronous motors CTEDM that are mass-produced by Chalco-Toyo Permanent Magnet Motor Co., Ltd., a joint venture set up in China. Three models with IP55 protection and 1,500 rpm specifications, which meet Chinese standards, were released ahead of others.Cast gear boxes that house gear devices for railway vehicles come in a variety of types, each of which is produced in small quantity, so deburring is per-formed manually. This development project involved deploying a 3D sensor that acts as a human eye and automating deburring with a robotic arm.In a system that operates multiple motors in synchronization without mechanically connecting them, communication between each inverter that drives motors was realized by a high-speed open network using Ethernet. Conventional optical fiber and other types of wiring can be replaced with one LAN cable, which is expected to save wiring, reduce man-hours, and lower costs.Intellectual PropertyOur intellectual property is placed as a key corporate re-source. Our intellectual property department is responsible for the management of intellectual property and our research laboratory and the development divisions in each business unit actively apply for patents and utility models.In the overseas markets which we expect to further ex-pand our businesses, we have started to actively engage in activities concerning our intellectual property in order to pro-tect our technologies and brand.Patent applications granted(Applications)804006020045456616527261414051414759423733243627923623129 3400161515 16202120162017201820192020Patent applications:Granted cases:JapanJapanOverseasOverseas13010_0524558582109.indd 13010_0524558582109.indd 132021/12/18 13:19:022021/12/18 13:19:02ESG/CSR ReportEnvironmentInitiatives to Protect the EnvironmentWith a view to realizing an environment-friendly society, the Company will further strive to promote the reduction of environmental burden, while providing more efficient products that contribute to energy conservation.Environmental PhilosophyAction GuidelinesThe 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.”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 GroupAiming for Realization of a Sustainable SocietyA sustainable society as envisaged by the Company is the combi-nation of a “low-carbon society,” a “recycling-based society” and a “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 amalgama-tion of our outstanding motor drive technology and other state-of-the-art technologies. In the meantime, the Company has been striving to conserve resources through not only the efficient use of energy but also the reduction of the size and weight of its products.In addition, the Company is working on the development of products with lower levels of noise involved in their use to make them friendlier to the surrounding environment. The Company will make further contribution to make society more sustainable, fully utilizing on its environmental technologies on a global scale, while carrying out various environmental actions at each of its bases.Environmental Management SystemIn 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 and the production bases Yokohama Plant and Shiga Ryuo Plant.Years of ISO 14001 certificationYokohama Plant2004Shiga Ryuo Plant*2001Extended to all offices2010*The Shiga Ryuo Plant was the Shiga Factory (Moriyama) when it obtained the certification.Low-carbon societyImplementation of measures against global warmingRecycling-based societyPromotion of 3Rs (reduce, reuse, recycle)Nature-symbiotic societyConservation of biodiversityEnergy conservation through the Company’s technologies and productsEnergy conservation in production activitiesUse of sustainable energyImprovement of logistics efficiencyProper treatment of wastesReduction of amount of final disposal of wastesProper management of chemical substancesCleanup around officesOur WebsiteInformation on the Company’s environ-mental initiatives can be found at our web-site.https://www.toyodenki.co.jp/esg_csr/14010_0524558582109.indd 14010_0524558582109.indd 142021/12/18 13:19:032021/12/18 13:19:03Toyo Denki Seizo Report 2021ESG/CSR ReportEnvironmentInitiatives to Prevent Global WarmingInitiatives for Control over Chemical SubstancesInitiatives to reduce greenhouse gas (CO2) emissionsThe 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-saving and streamlining at production facilities. In addition, the Yokohama Plant uses solar power generation for peak shaving of power de-mands.Targeted reduction of CO2 emissions and progress statusAlthough the CO2 reduction goal for the Company’s production bases, the Yokohama Plant and Shiga Ryuo Plant, is to reduce CO2 emissions per unit of production output by 1% year on year, CO2 emissions on a per unit basis regrettably increased 8.4% at the Yokohama Plant and 27.9% at the Shiga Ryuo Plant in fiscal 2020, due to lower production output caused by COVID-19. The Company will make efforts to further reduce CO2 emissions going forward.(kg)10,0006,0004,0002,0000Volatile organic compounds (VOCs) emitted as a result of our business activities are adequately controlled and the amount of emission is monitored under the Pollutant Release and Transfer Register (PRTR).We will further engage in the reduction of waste through such measures including using non-VOC materials and implementing recovery and reuse of solvents. PCB waste is also subject to ade-quate control, storage and disposal in accordance with Japan’s Act on Special Measures concerning Promotion of Proper Treat-ment of PCB Wastes. Notification volume for Pollutant Release and Transfer Register (PRTR) substancesTotal amount of air emissionsTotal amount of shift8,0007,7007,0006,8005,8006,150 6,6005,2605,7506,9906,4907,2006,700201520162017201820192020(year*)Total energy input (electricity)(Unit: 10,000 kWh)1,000Yokohama PlantShiga Ryuo Plant (formerly Shiga Factory)Initiatives for Reducing Disposed Waste as Well as Recycling648.8647.231.031.031.631.6680.336.036.0839.2176.5176.5743.9178.3178.3751.6171.4171.4617.8617.8615.6615.6644.3644.3662.7662.7565.6565.6580.2580.2201520162017201820192020(year*)Main actionsThe Company has been thoroughly implementing waste process-ing rules, sorting metal waste and recycling paper resources. As a result, its landfill waste rate was 2.3% in fiscal 2020. The increase in the volume of landfill waste at the Yokohama Plant is mainly due to sewage sludge generated from large-scale maintenance of water supply facilities.Total energy input (gas)(Unit: 1,000 m3)500286.0294.1350.0Yokohama PlantShiga Ryuo Plant (formerly Shiga Factory)Output of general and valuable waste408.280.280.2424.786.186.1443.474.374.3369.1369.1328.0328.0338.6338.6246.2General waste outputValuable waste outputYokohama PlantYokohama PlantShiga Ryuo PlantShiga Ryuo Plant450434.3424.5441.9450.7490.648.848.855.155.1402.036.936.9109.6107.6401.9401.9435.5435.5365.1365.1134.8115.0115.019.819.8123.6107.0107.016.616.6134.7117.1117.117.617.6201520162017201820192020(year*)Shiga Ryuo Plant (formerly Shiga Factory)Volume of landfill waste201520162017201820192020(year*)Total CO2 emissionsYokohama Plant4,9054,0979339331831833,9723,9723,9143,9143,9243,8951651651611614,1858068064,1847747743,7593,7593,7343,7343,3793,3793,4103,410Yokohama PlantShiga Ryuo Plant12.41.111.311.310.44.16.36.37.23.24.04.05.05.02.380060040020004003002001000(t)5,0004,0003,0002,0001,0000(t)6003001500(t)151050201520162017201820192020(year*)201520162017201820192020(year*)*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.15011_0524558582109.indd 15011_0524558582109.indd 152021/12/22 18:46:382021/12/22 18:46:38ESG/CSR ReportSocialWith Our CustomersThe Company makes it one of our business principles to “build trust by focusing on quality first.” As such, we strive to enhance customer satisfaction through our commitment to thorough-going quality control as we believe deliver-ing safe and secure products and services to customers is the Company’s most important mission.Quality Control – Providing Safe and High-Quality ProductsBasic policy on quality controlThe Company’s electrical equipment for rail vehicles is installed in many rail vehicles. These extremely important products play a direct role in ensuring the safety of human life and property during rail transportation. In the Industrial Systems and Informa-tion Equipment Systems segments as well, the Company’s prod-ucts and services are used in customers’ production facilities, development sites and in the field of social infrastructure, and they form the foundation supporting the sustainable development of 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 and improve our human resources education, compliance with rules, and our facilities.Quality Policy Quality assurance to satisfy our customers. Challenge to achieve “zero” complaints.Promotion frameworkWith regard to quality control, each fiscal year the Company devel-ops policies and the promotion framework aimed at further main-taining and improving quality in each business unit, along with specific policies pertaining to the reduction of flaws and other is-sues. The Company’s Corporate Quality Control Division works to-gether 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 is deliv-ered 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 investi-gated, and this information is put into a database so that the infor-mation can be shared in-house in an effort to prevent recurrence.Quality Management SystemThe 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 obtainedYokohama Plant1997Shiga Ryuo Plant*2000Extended to all offices2005*The Shiga Ryuo Plant was the Shiga Factory (Moriyama) when it obtained the certification.Responding to the Global MarketProper export controlsThe Export Control Department at Human Resources and General Affairs Division is responsible for export management as the ex-port management control department. We have created a system for the proper management of exports in order to ensure compli-ance with the laws and regulations concerning export manage-ment in the countries and regions where we engage in business activities as well as to avoid involvement in transactions that could hinder the maintenance of international peace and safety.The Export Control Department handles cargo and technology parameters used in determining whether or not export permits are required, as well as investigation of transactions. In addition, the Department carries out employee education and guidance and support for Group companies.Acquisition of International StandardsHigh level of safety is essential for rail vehicles. UNIFE, the As-sociation 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 compa-ny in Japan to obtain an IRIS certification for auxiliary power supply (SIV).In 2 0 1 4, we were also accredited to the China Railway Certification Center’s (CRCC) certification for driving gear units. CRCC, a state-owned enterprise set up in April 2003 after obtaining approval of the Certification and Ac-creditation Administration of the People’s Republic of China, is an organization that mainly manages the quality of railway prod-ucts. It is necessary to obtain this certification to sell high-speed rail products in China.We will continue to acquire international standards and fur-ther expand our business glob-ally.16011_0524558582109.indd 16011_0524558582109.indd 162021/12/22 18:46:382021/12/22 18:46:38Toyo Denki Seizo Report 2021ESG/CSR ReportSocialWith Our Shareholders and InvestorsWe strive to ensure transparency of management through the timely and proper disclosure of information and vari-ous modes of communication in order to receive an appropriate evaluation of the Company from our shareholders and investors. Towards Enhancement of Corporate ValueDividendsBasic philosophyThrough timely and appropriate disclosure of information to our shareholders and investors, the Company accurately conveys our management policy and business conditions while making use of IR tools such as our website to promote a full range of IR activities that contribute to the improvement of our corporate value.Development of IR activitiesIR activities for institutional investors and securities analystsThe Toyo Denki management team holds a financial results brief-ing each quarterly period to provide opportunities for institutional investors and securities analysts to understand the summary of our financial results. The management team gives a report includ-ing the state of progress of the medium-term management plan and an overview and forecast for each segment as well as new orders received and other topics.Briefing sessions, which are aimed to help institutional inves-tors to deepen their understanding of the Company, were held online during fiscal 2020 to prevent COVID-19 infection.IR activities for individual shareholders and individual investorsThe Company website includes a “For Individual Investors” page which offers a clear introduction to our business activities and our results, as well as making available a variety of IR materials. URL “For Individual Investors”https://www.toyodenki.co.jp/ir/individual.phpBased on a comprehensive consideration of factors such as main-taining a stable and continuous return of profits, and strengthen-ing the corporate structure, the Company paid a year-end dividend of 30 yen per share for fiscal 2020. We will continue to aim to pay dividends with reference to the dividend payout ratio of 30%, a management target outlined in the medium-term man-agement plan.Dividend per shareCommon dividendCommemorative dividend3030303030502030(Yen)50403020100FY 201620172018201920202021(Forecast)Record of 160th Annual General Meeting of ShareholdersDate held: Friday, August 27, 2021The Company issues Business Reports for shareholders once ev-ery six months. They are also available on the website.Interim Business Report for Fiscal 2020Business Report for Fiscal 2020Plant tour for shareholders17011_0524558582109.indd 17011_0524558582109.indd 172021/12/22 18:46:402021/12/22 18:46:40Contributions to Local CommunitiesWe are committed to various social contribution activities, to contribute to society through our business while facili-tating our own co-existence with communities and to foster young people who will represent the next generation.To Convey the Mission and Appeal of Electrical Industry as Well as of Toyo DenkiReceiving internsWe are committed to activities that raise awareness and appreci-ation of our manufacturing expertise by accepting interns from lo-cal 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 and hands-on coursesWe participated