T OPY R E P O Rt 2 0 16

Technology and quality flowing together in one perfect motion T OPY R e p o r t

2 0 1 6

TEL：+81-3-393-0777 FAX：+81-3-3493-0200 http://www.topy.co.jp/ 2016 「暮らしの満足」を創ることが、 Technology and quality flowing together in one トピー工業グループの仕事です。 perfect motion

暮らしと社会のさまざまなシーンで活躍するトピー工業グループ。

私たちの使命は、社会の根幹となる鉄素材から、 At the Topy Industries Group, we use the phrase “One-piece Cycle” to describe our approach to building a richer, prosperous society. Our Group’s most distinctive 自動車・産業建設機械部品、発電、流通、スポーツ・レジャーまで、 quality is our integrated production system, which covers everything from raw materials to finished products. The know-how cultivated by each of our many business divi- 幅広い事業を通じて「暮らしの満足」につながる新しい価値を創造することです。 sions is shared throughout the Group, enabling us to develop technologies with great- 私たちには、産業界の多様なニーズに応え、付加価値の高い製品を生み出す er ingenuity and to make products with greater added-value. From design to production, from raw materials to finished products, we at Topy Industries conglomer- 素材から製品までの一貫生産体制があります。 ate are committed to working alongside other Topy Industries Group companies and the society that uses our products to create new ways of doing business. 世界に広がる、機動的なモノづくりのネットワークがあります。こうした強みを活かして、より豊かで暮らしやすい社会と、 Contents 地球環境に貢献する技術や製品をお届けしています。 Editorial Policy/Contents 1 このレポートでは、トピー工業グループの、最新の事業とCSR活動についてご報告しています。 Top Message 3 未来に向かってたゆまない挑戦を続ける、トピー工業グループの“いま”に触れてください。 Corporate Profile and Governance Corporate Profile 5 Global Development of the Topy Industries Group 9 Special Feature New Medium-Term Management Plan 11 Corporate Governance 15 Business Development The Topy Industries Group at a Glance 19 Steel Business 21 Automotive and Industrial Machinery Components Business 23 Other Business 27 New Products and Technologies 28 From Topy’s Global Locations 29 CSR Activities CSR of the Topy Industries Group 31 CSR Highlights: 33 Small Group Activity supporting workplace capability in Topy Energy Saving Initiatives 2020: “Enekatsu 2020” 37 Environmental Activities Environmental Management 39 Recycling 40 Initiatives on Waste Reduction 41 Initiatives on the Prevention of Global Warming 43 Biodiversity Conservation 43 Chemical Substance Management 44 Development of Environmentally Friendly Products Reporting Period 45 Editorial Policy Basic Environment Policy of Topy Industries 46 Reporting Scope Covers mainly FY2015 (April 1, 2015 to March 31, 2016), but includes Social Responsibility This report covers all companies listed as an affili- some activities that occurred after April 1, 2016. Basic Policy ate of the Topy Industries Group (consolidated basis), Relationship with Customers 47 Topy Report 2016 has been prepared to provide all financial information. Information which was previously however, some activities and data represents only Date of Issue Involvement with Shareholders and Stakeholders 48 Topy Industries, Limited. Activities where the scope stakeholders with information on the involvement and introduced in the annual report has been integrated November 2016 activities of the Topy Industries Group with respect to into this Topy Report 2016. has not been specified refer, in principle, to the Topy Relationship with Local Communities 49 CSR in a comprehensive manner. This report is largely Industries Group. Where it is necessary to specify the Inquiries Regarding this Report Relationship with Employees 51 divided into two parts: the first part introduces the phi- This report contains the information of applicable scope, activities by Topy Industries alone losophy of the Topy Industries Group, topics of activi- “ISO26000:2010”, GRI“Sustainability Reporting Guide- are identified within the headline or sentences as Topy Topy Industries, Limited (General Affairs Department) Additional Data ties in the fiscal year (FY) 2015 and addresses the en- line 2006” and Environment Reporting Guidelines Industries and activities by an individual Group compa- TEL: +81-3-3493-0777 vironmental and social responsibilities of the Topy 2012 of Ministry of the Environment. ny are identified by the name of the Group Company Art Village Osaki Central Tower, 1-2-2 Osaki, Corporate Data 55 Industries Group; the second part consists mainly of involved. Shinagawa-ku, Tokyo, Japan 141-8634

1 2 Corporate Profile and Governance Business Development CSR Activities Additional Data 4 ” Goanzenni ! Goanzenni “ ” or the Energy Improvement Activity producing steady ” is a Japanese flag slogan for “Safety First”, which is adopted not only for Addressing CSR in fiscal year 2015 In the meantime, we are working on building a supply chain realizeWe it an important issue that we respect the cultures Inthis report, wehave taken as up, features,the new Medium- Goanzenni ! Goanzenni EneKatsu resultsin reducing energy consumption index payingby specific with working and impact environmental to consideration make to continue We issues. social for initiatives problem-solving recognizable contribution the to environment by utilizing the state- energy in efficient most (world’s furnace electric of-the-art domestic the in largest furnace-the 200-ton the and consumption electric furnace industry), which we featured Report in Topy 2015. responds procurement, stable and fair assures that management marketto and customers’ needs by having a firm stance on procurement and based on individual standards at each operation. In this report, we also introduce some of the news that our performanceand contribution quality, to costs and delivery have been highly appreciated by our customers. compliance the by abide and communities local the of customs and of the host county, and look into social issues of each area, diversity issue. of promotion including raising awareness in safety and management at all workplaces, that Group Industries but also Topy of promoting developments business of phases all at activities like. the and dealings, business production, planning, encompass *“ technologies and cultivating new markets. we however, know, We are living in the world where just extension of the past experience does not warrant our survival. It is necessary for us examine to maintained or altered be know we culture corporate the whether and build a new corporate culture in order remain to competitive as a sustainable corporation in the next years. 100 will We look into such theme under the New Medium-Term Management Plan. ManagementTerm Plan which started covering fiscal year from The Small 2018, to Group2016 Activity focusing on effectiveness moreseriously generate to motivation of employees, and “ Aiming to stay a sustainable corporation in the next years100 On the New Medium-Term Management Plan “Growth & Change (G&C 2018” 2018) Affected by theeconomic slowdown in China and emerging When we look at our business environment, there is a positive Under the New Medium-Term Management Plan which covers Meanwhile, we will exert our best effort acquire to trust and globally presence manufacturing and sales Expanding our Industries,Topy was Ltd. founded and we are in going 1921 to supply chain, in themeantime, wehave embarked onbuilding steadily a solid business foundation in the steelbusiness by launching a state-of-the-art steelmaking plant assure to overwhelming cost competitiveness. the At same time, in our advisory designated a up sat have we organization, corporate outside introducing committee, remuneration and committee governance. corporate strengthen to order in director countries together with the drops in resource prices we saw a for components undercarriage the for demand in decrease drastic for wheels diameter extra-large the and equipment construction restructuring into us forced has situation the and trucks mining some of our business in the related areas. Due this to negative impact, we regret we were unable achieve to a projected earning. side in the expansion of demand for automotives and steel in the world centering emerging countries, while, as a negative side, domestic demand will be unlikely expand to due decreasing to birth rate and aging of the population. As for the demand for the continues recovery vehicles, mining and equipment construction dragto and casting uncertainties in the future. the However, market will recover in the long-term perspective at a backdrop of urbanization. rapid and population world growing through we continueFY2016 2018, promote to “Growth” in the global markets and “Change” assure to high corporate earnings machinery industrial and automotive the positioning by structure components business as a driving force for growth and by acceleratingbusiness presence in the global markets in order to achieve a sustainable growth. In the meantime, we will work on to technologies original our utilizing in approaches new exploring potential. business new develop involved be will and conducts business our for society of sympathy awareness, culture, corporate a nurture to activities reforming in as well as actions that can flexibly respondto the changes and create a decent corporation where human resources that are expected carry to the future of the corporation can exert their talents the to fullest extent. meansthat ourmanagements of groupcompanies willbe involved invarious changes on global basis in greatera extent. This is the circumstance that we are unable avoid to in our path grow to and we have face to with such hitches. have be We to prepared ourselves that corporate management will always be thrown into drastic changes within a short period of time, and we have keep to in sustainability maintain to order in attempts new on challenging circumstances. such under even growth celebrate 95th anniversary this In looking year. back its long history, we are impressed know to that we have grown big under the culture that has encouraged our challengein deepening Topy Industries, Ltd. Topy and CEO President Review of previous Medium-Term Management Plan “Growth & Change (G&C 2015) 2015” Under the previous Medium-Term Management Plan started in We haveWe a firm belief that our efforts in addressing further FY2012 we have pursued various management plans focusing on on focusing plans management various pursued have we FY2012 “Growth” in global perspective and “Change” facilitate to building a corporate structure with high earnings. In the automotive and have we sector, business machinery components industrial expanded our overseas manufacturing bases establish to a global customers in terms of material properties, design and other requirements. improvement of corporate value through manufacturing will not only help realize a richer, livable and sustainable society but also lead the to growth Industries of the Topy Group in the future. Toward the 100thanniversary Toward in 2021 of the founding Topy of will we Industries, Limited, promote to work sustainable growth and change a decent to andcompany become world a leading company in its respective business field. Fulfill Corporate Social Responsibility (CSR) though though (CSR) Responsibility Social Corporate Fulfill activitiesbusiness Topy Industries, Ltd. operates with an organic structure; special structure; organic an with operates Ltd. Industries, Topy Our CSR strategy serves win to the trust of stakeholders by shapes steel produced by the Steel Division is processed into high value-added products such as wheels and tracks by the Wheel employing by Division Components Undercarriage the and Division steel from chain production integrated The technologies. original strength ultimate the constitutes products finished to materials raw the synergyof Topy, effect of which makes us possible produce to from needs diverse to respond will that products reliable highly contributing to realizing sustainable society through manufacturing manufacturing through society sustainable realizing to contributing as stated expressly philosophy basic group’s the under activities “Win the trust of society through the continuance and development Industriesof the Topy Group and the execution duty of one’s as a institution.” public Top Message Top 3 Corporate Profile and Governance and Profile Corporate Corporate Profile and Governance Business Development CSR Activities Additional Data 6 - - Osaka Branch Office Branch Osaka 4-4-9 Koraibashi, Chuo-ku, Osaka-shi, Osaka 541-0043 FAX: +81-6-6220-1273 TEL: +81-6-6220-1250 center R&D 441-8510 Aichi Toyohashi-shi, Akemi-cho, 1 +81-532-25-2384 FAX: +81-532-25-5354 TEL: Nagoya Branch Office Branch Nagoya Aichi Nagoya-shi, Naka-ku, Nishiki, 2-15-22 460-0003 TEL: +81-52-201-6051 FAX: +81-52-231-2692 hashi Factory hashi operation commenced Indonesia Undercarriage Topy PT. at operation commercial commenced plant making steel new The Factory Toyohashi FastenersTopy Mexico was S.A. founded DE C.V. Topy Corporation (current Topy America, Inc.) was founded was Inc.) America, Topy (current Corporation Topy Dunlop-Topy Wheel Ltd. joint (a venture company) was founded (U.K.) Succeeded in the practical application of high quality synthetic use cosmetic for mica Concluded a technical assistance agreement with PakoakuinaPT. (Indonesia) equipment construction for components undercarriage for plant A Factory Toyohashi at operation commenced operation commenced Factory Toyokawa of Plant Akemi Factory Toyohashi at completed was Hall Boku to Kimi operation commenced Factory Toyokawa of Plant Kurate Fujian Yuan Shing Ltd. (current Topy Fujian Autoparts Topy Co., wasLtd.) founded (China) A mill for deformed concrete bars commenced operation at Toyo sites production all at accreditation 9001 ISO Obtained International,Topy U.C.A. Inc. (current America, Topy Inc.) was founded sites production all for obtained was accreditation 14001 ISO operation commenced Ltd. Power Electric Akemi produc wheel steel for agreement comprehensive a Concluded tion with Fergat group (Italy) Qingdao Shantui Topy Machinery Ltd. Co., (current Qingdao Topy Machinery was Ltd.) Co., founded operation commenced Factory Ayase of Plant Hamura America,Topy Inc. was founded (merger International, of Topy Corporation,Inc., Topy and International Topy U.C.A. Inc.) Head Office movedto Osaki, Shinagawa-ku,Tokyo established was Division Science to Corporation Steel Nippon with agreement an Concluded cooperation business general strengthen UndercarriageTopy (China) Ltd. Co., was founded Tianjin Machinery Topy Ltd. Co., was founded founded was Indonesia Manufacturing Palingda Topy PT. founded was Indonesia Undercarriage Topy PT. MW ManufacturingTopy Mexico was S.A. founded DE C.V. 2014 2015 1985 1987 1988 1989 1990 1991 1992 1995 1998 1999 2000 2001 2002 2004 2007 2008 2011 2012 2013 - - Hamura Plant Hamura Nishitama-gun, Mizuho-cho, Nagaoka, 3-5-10 Tokyo 190-1232 +81-42-579-5874 FAX: +81-42-579-5871 TEL: Kanagawa Factory Kanagawa 253-8650 Kanagawa Chigasaki-shi, Yabata, 830 FAX: +81-467-58-3566 TEL: +81-467-82-1171 Ayase Factory Ayase Ogami,2-3-1 Ayase-shi, Kanagawa 252-1104 +81-467-76-7302 FAX: +81-467-78-1111 TEL: ) vehicle wheels were devel ® oped Miya Steelworks (predecessor Steel of Toto Mfg., was Ltd.) Co., founded Miya Steelworks succeeded in hot-rolling of steel sashes Tokyo Shearing Ltd. Co., (predecessor Steel of Toto Mfg., Co., wasLtd.) founded Teikoku Hatsujo Seisakusho (predecessor of Japan Motor Wheel commenced Ltd.) Co., production of prototype steel wheels for automobiles Tokyo Sharin Seisakusho Ltd. Co., (predecessor of Japan Motor Wheel was Ltd.) Co., founded Tokyo Sharin Seisakusho and Abe Tekkosho Ltd. Co., merged to form Japan Motor Wheel Ltd. Co., Miya Steelworks and Tokyo Shearing Ltd. Co., merged form to SteelToto Mfg., Ltd. Co., ZokiToto Ltd. Co., was founded Tekko Ltd. Co., wasToto founded Toyohashi Steel Mill Plant Steel of Toto Mfg., Ltd. Co., (current established was Ltd.) Industries, Topy of Factory Toyohashi Chigasaki Seisakusho Zoki of Toto Ltd. Co., (current Kanagawa Factory Industries, of Topy was Ltd.) established Toyokawa Plant of Japan Motor Wheel Ltd. Co., (current Toyokawa established was Ltd.) Industries, Topy of Factory Each headquarters of Japan Motor Wheel Steel Toto Ltd., Co., ZokiMfg., Toto Ltd., Co., Tekko and Ltd. Co., moved Toto a new to Tokyo Chiyoda-ku, Yonban-cho, in location Ayase Plant of Japan Motor Wheel Ltd. Co., (current Ayase Facto ry Industries, of Topy was Ltd.) established Japan Motor Wheel Steel Ltd, Co., Toto Zoki Mfg. Toto Ltd., Co., Ltd.Co., Tekko and Co. Ltd. merged Toto form to Industries, Topy Limited International,Topy Inc. (current America, Topy Inc.) was founded Technology Research Center (current R&D center) was opened at Factory Toyohashi Sales of synthetic mica started Concluded a technical assistance agreement with Inkoasku PT. (Indonesia) Concluded a technical assistance agreement with Palingda PT. (Indonesia) Nasional tubeless for wheels truck medium-duty and heavy- Developed tires at Ayase Factory Super-Giant Off-the-road Rim (SGOR Brief History Akemi Plant Akemi 441-8074 Aichi Toyohashi-shi, Akemi-cho, 5-29 FAX: +81-532-23-3194 TEL: +81-532-23-3191 Plant Kurate Oaza-Muroki, Aza-Iwagouchi, 765-1 807-1307 Fukuoka Kurate-gun, Kurate-machi, TEL: +81-949-42-8051 FAX: +81-949-42-8048 Toyokawa FactoryToyokawa 442-8506 Aichi Toyokawa-shi, Honohara, 3-30 +81-533-89-1309 FAX: +81-533-86-5121 TEL: 1921 1922 1926 1930 1934 1941 1943 1955 1956 1958 1961 1964 1969 1972 1977 1980 1982 Exterior view of the Head Office R&D center, Industries, Topy Limited Head Office Osaki, Shinagawa-ku,1-2-2 Tokyo 141-8634 +81-3-3493-0200 FAX: +81-3-3493-0777 TEL: Toyohashi Factory 441-8510 Aichi Toyohashi-shi, Akemi-cho, 1 +81-532-25-0354 FAX: +81-532-25-1111 TEL: (March 2016) 31, Topy Industries, Limited Topy October 1921 Art Village Osaki CentralTower, Osaki, Shinagawa-ku, Tokyo 1-2-2 Fujii Yasuo million¥20,983 (non-consolidated) 1,819 4,408 (consolidated) shares 240,775,103 companies 23 companies2 (consolidated) million ¥215,900 ¥8,800 million (consolidated)

Office and Corporate Profile Factory Locations Company name: Company Founded: Head office: CEO: and President Capital: employees: of No. issued of No. shares: subsidiary consolidated companies: of No. equity-based of affiliated companies: No. sales: Net Ordinary profit: Corporate Profile 5 Corporate Profile and Governance and Profile Corporate Corporate Profile and Governance Business Development CSR Activities Additional Data 8 (Topy Industries, Ltd.) (Topy Joined Development Bank of Japan Supervisor of Development Bank of Japan Japan Auditor of Development Bank of Resident Limited Managing Director of Japan Nuclear Fuel Nuclear Fuel Limited Director and Executive Officer of Japan Management Value Representative Director and President of Inc. Institute, Ltd. Auditor of Fuji Oil Co., (to present) Ltd. Industries, Topy Director of Joined Fuji Bank Limited Branch Manager of Shinjuku Branch of Fuji Bank Executive Officer, Ltd. Executive Managing Officer of Fuji Bank Ltd. Life Insurance Company Yasuda Joined Meiji General Manager of Multi-life Product Development Promotion Life Insurance Company Yasuda of Meiji Dept. Life Yasuda General Manager of Medical Department of Meiji Insurance Company Company Technology System Yasuda Auditor of Meiji Statutory (to present) Ltd. Industries, Topy Auditor of Statutory Joined Topy Industries, Ltd. Industries, Topy Joined General Manager of Science Business Operating Officer, Affairs Dept. Councilor to General Auditor (to present) Statutory Ltd. Industries, Topy Joined Manager of Educational Issues at Personnel Dept. IR) (PR, Affairs Dept. Senior Manager of General Affairs Dept. Deputy General Manager of General Auditor (to present) Statutory Institute Research Mizuho of President Vice Director, Representative Ltd. Ltd. Representative Director and President of Mizuho Capital Co., (to present) Ltd. Industries, Topy Auditor of Statutory Statutory Auditor Director Tsuyoshi Inoue 1976 2006 2008 2010 2013 2014 2015 2016 Statutory Auditor Statutory Auditor Statutory Auditor Masakazu Kawabata 1977 2005 2006 2009 Kazuo Shouyu 1978 2005 2008 2012 2016 Masaru Yamamoto 1977 2011 2013 Ogawa Yukihiro 1982 2007 2010 2014 2015 2012 2016 Note: Tsuyoshi Inoue is an outside director. Director Auditor Masakazu Kawabata and Kazuo Shouyu are outside statutory auditors. - -

Joined Nippon Steel Corporation Works, Sakai General Superintendent, Executive Counsellor, General Member of the Board, Structurals Division Director, Structurals Division Works, Sakai Superintendent, Structurals Division Works, Sakai General Superintendent, Director, Works General Yawata Superintendent, Director, Works Kimitsu General Superintendent, Managing Director, Ltd. Topy Industries, Adviser of Assumed role as Executive Officer; President and CEO (to present) Joined Topy Industries, Ltd. Industries, Topy Joined Audit General Manager of Internal Operating Officer, Audit General Manager of Internal Executive Operating Officer, Managing Director MW Manufacturing Topy Inc.; Director at America, Topy Director at DE C.V. Mexico S.A. Affairs Executive Operating Officer overseeing General Senior Managing Director (to present) Joined Topy Industries, Ltd. Industries, Topy Joined General Manager of Corporate Planning Dept. Operating Officer. Affiliated Companies; General Manag Corporate Planning, Director, Ltd. Industries, Topy Joined Special Matters) Corporate Planning (Manager, Operating Officer, General Manager of Efficiency Improvement Dept. Operating Officer, General Manager of Business Reform Promotion Dept. Operating Officer, Environment, Quality, Executive Operating Officer overseeing Safety, Administration Business New Business Development, Center, Technical Coordination and Business Technology Reform; General Manager of (present Ltd. Autoparts Co., Topy Auditor at Fujian Administration Reform: (present post) Ltd. Machinery Co., Topy Tianjin Auditor at post); Technical Environment, Quality, Managing Director overseeing Safety, Administration Reform; Business New Business Development, Center, Administration Coordination and Business Technical General Manager of Reform Dept. Palingda Manufacturing Indonesia (to present) Topy Auditor at PT. Senior Managing Director present) Vice Executive President (to er of Corporate Planning Dept. Affiliated Companies; Corporate Planning, Managing Director, General Manager of Corporate Planning Dept. Affiliated Companies, Corporate Planning, Managing Director, Overseas Planning; General Manager of Corporate Planning Dept. Affiliated Compa Corporate Planning, Senior Managing Director, Overseas Planning Financial Matters, nies, Affiliated Vice President in charge of Corporate Planning, Executive Human Resources and Labor Financial Matters, Companies, Relations (present post) Ltd. Machinery Co., Topy Qingdao Auditor, (present post) Ltd. Undercarriage (China) Co., Topy Auditor, Vice President (to present) Executive

Yasuo Fujii Yasuo 1977 2005 2006 2007 2009 2011 Senior Managing Director Kojima Tadashi 1976 2011 2014 2015 2016 President and CEO Executive Vice President Akira Higashi 1975 2000 2003 Executive Vice President Ishii Yasuto 1976 2008 2010 2012 2013 2015 2016 2006 2007 2010 2011 2013 2015 Directors & Supervisory and Audit BoardMembers Akemi Plant Kurate Plant Hamura Plant Audit & Supervisory Office Audit & Toyohashi Factory Crawler Robot Dept. Kanagawa Factory Mica Dept. Toyokawa Factory Ayase Factory Toyohashi Factory Nagoya Branch Office Osaka Branch Office Supervisory Board

Science Div. Personnel Dept. Finance Dept. Steel Div. Wheel Div. Internal Audit Dept. Corporate Planning Dept. Engineering Administration Dept. Internet of Things Promotion Dept. General Affairs Dept. Undercarriage Components Div.

Business Function Business Administrative Headquarters Administrative Organization Meeting Board of and CEO Directors President Executive Corporate Management Corporate Profile 7 Corporate Profile and Governance and Profile Corporate Corporate Profile and Governance Global Development of the Topy Industries Group The company is accelerating the establishment of an optimum global production system centering on automotive and con-

struction machinery undercarriage components businesses. Corporate Profile and Governance

−Deliver high quality products around the world using production systems in conformity with customer needs− In order to build such a global optimum production system the Topy Industries Group has progressed with business developments including new production/sales bases as well as alliances with new partners. Our global optimum production system will be further reinforced with the entry into Indonesia and Mexico.

China Topy Undercarriage (China) Co., Ltd.

Fujian Topy Autoparts Co., Ltd.

North America Business Development Europe Topy America, Inc. Topy Precision Mfg., Inc. Italy, France, Poland, Romania, Russia, Turkey Japan (MW) Topy Industries, Ltd. Topy Fasteners, Ltd.

India Mexico (Wheels India Ltd.) Viet Nam Topy MW Manufacturing Mexico S.A. DE C.V. Thailand Topy Fasteners Vietnam Co., Ltd. Topy Fasteners (Thailand), Ltd. Topy Fasteners Mexico S.A. DE C.V.

Indonesia PT. Topy Palingda Manufacturing Indonesia PT. Topy Undercarriage Indonesia CSR Activities

(PT. Inkoasku, PT. Pakoakuina)

South Africa (MW)

地図中のMW社＝MW Italia S.p.A.

World Business Presence of the Topy Industries Group

South East Asia China Japan North America

Additional Data Infrastructure development is increas- Steel wheels for passenger cars are pro- Factories in Japan function as mother factories to support Operation in the U.S. started more than 20 years ago and ingly brisk in the ASEAN countries and duced in Fujian, functioning to meet local the global development of our businesses. Wheels for solid operation has been maintained since. We currently Production and Sales Base / Product Category the Topy Industries Group meets the de- demand and also to disperse international passenger cars, trucks and buses as well as off-road ve- have five bases for three different product categories in- mand for automobile and construction procurement risks. hicles and undercarriage components for construction cluding steel wheels for automotives, off-road wheels/rims Undercarriage components Wheels and rims for off-road machinery components there. In Indone- In Qingdao, we produce and sell undercar- machinery are produced at our four domestic bases. The for construction and mining vehicles and undercarriage for construction machinery vehicles including SGOR® sia, a plant for truck and bus wheels and riage components for construction ma- latest developments include a new steelmaking plant de- components for construction machinery. In 2013, we signed a sales outlet for undercarriage compo- chinery and further solidification of busi- signed to achieve drastic improvements in costs and the a joint venture company agreement with MW Italia S.p.A. to Wheels for trucks and buses Industrial fasteners nents have been added, and industrial ness foundation continues to be introduction of new processes composition to promote establish a plant in Mexico to manufacture and sell steel fasteners are produced and supplied for undertaken. development of high value-added products. The benefits wheels for passenger cars and light trucks. The plant com- both two-wheeled and four-wheeled ve- Note: As part of business restructuring, a plant in Tianjin of these efforts are well capitalized on strengthening the menced operation from April, 2015. In the same year, Topy Wheels for passenger cars Alliance partner hicles in Thailand and Viet Nam. was closed and two plants in Qingdao were integrat- competitive strengths of our overseas bases. Fasteners Mexico S.A. DE C.V. was founded. This will en- ed into one plant. able us to meet the increasing demand in North and South American markets. 9 10 Corporate Profile and Governance Business Development CSR Activities Additional Data 12 ) ®

Cutting edge To increase production capacityTo of industrial fasteners at the plant To increase production capacity of steel wheel production increase To for passenger cars at the plant. plant (scheduled in January 2017) Inauguration of industrial fasteners plant at the To increase production capacityTo of steel wheel for passenger cars at the plant VietNam : Strengthening of strategic alliances with overseas U.S.A. : U.S.A. Mexico : : Mexico partners for wheel business Extra-large diameter wheel for mining dump trucks (SGOR ● ● ● ● As for the industrial fasteners, we will further reinforce Major undertaking to enhance to the presence ourof group expandingby and supply can that network supply global our strengthening the wheels made on standard designs. plant a of launch the capability through production global in Mexico, the increase in production lines in Viet Nam as well as the complementary cooperation among overseas demand. global increasing securing thereby plants, ------Tracks Details of Focus Theme Heavy-duty steel wheels for commercial buses and trucks commercial Wheels with large windows wheel Hybrid aluminum Sustainable business growth Enhance global presence and expand business We will We promote exploreto new customers rebuild by Amid increasing fierceness in competition to grab in grab to competition in fierceness increasing Amid Automotive components business Industrial machinery components business for passenger cars 1 Multi-type steel wheel Tracks (assembled to an equipment) Tracks creasing demand for automotives in the world centering vigor are makers automobile countries, emerging the on produc standardizing by reduction cost advancing ously tion platform. In order meet to such requirements, we aim compo undercarriage the of structure supply global a ing strength includes that equipment construction for nents ening the mother plant functions inJapan, in addition to locations distribution and production the of expansion the overseas. 1 ------Basic Policy Focus Theme Focus Take on the challenges for new business bytechnological innovation introducing Take risk management system Promote corporate governance Reinforce to shareholders redemption Fulfill premium systems Renew main business improvement expected who are and young staff middle Build a decent corporation where their talents maximum corporation can exert to support the future to flexibly and behavior that in order awareness, Reform corporate culture, to a change respond Enhance global presence and expand business Enhance global presence Enlarge product group byEnlarge group product leveraging advantages in original technologies

1 1 1 2 2 2 3 3 3 a change build to a decent corporation

Achieve sustainable growth accelerate and Achieve from society foundation Trust and Trust Sustainable sympathy sympathy growth of corporate business Fortification Fortification

New Medium-Term Management Plan Management Medium-Term New (FY2016 – 2018) & Change 2018 Growth

Accelerate businessAccelerate development globally our original utilize technologies challenge on the and business take new to for ways new Create Place the automotive and industrial machinery industrial and business as components adriving growthfor force automotive the Place ● ● ● The lingering recovery demand in the construction and for mining equipment is casting uncer attain sustainable con Management to growth strive by we plan, Under Medium-Term new the Current business environment surrounding the Topy Industries Group shows a mixed picture picture Industries a mixed Group shows Current business environment surrounding Topy the 3 2 1 Realizing sustainable growth and pursuing change to a de sustainable a growth pursuing to and change Realizing cent corporation.cent lation decrease and aging society, while globally expansion is expected demand decrease in the auto lation for and aging society, and steel. motive growing view in but long expansion of in the it term tainty will for regain future, strength in the urbanization. and progressing populations world high corporate toward and global “Change” the in market “Growth” both tinuouslypromoting and industrial machineryearning automotive the with structure business positioned as a driving chal on the will take we same the time, At and accelerating businessforce, development globally. our original utilize technologies, and address the to lenge ways new business new creating for by establishingchanges a decent will facilitate trust society. from wins the that corporation that as domestic economy increasedoes warrant positive in demand accelerating not popu due to Corporate Profile and Governance and Profile Corporate –Special Feature– 1111 Corporate Profile and Governance Business Development CSR Activities Additional Data 14 - - - - +4.0 +6.8 +7% (0.11) +34.1 +1.0% +6.0% +1.6% Change Change 8.5 0.60 14.0 31% 5.6% 7.7% 6.1% 250.0 Targets for FY2018 Targets for FY2018 tion Committee, along with the reform to nurture a corpo a nurture to reform the with along Committee, tion rate culture, awareness and behavior that can flexibly re spond a change. to maximum, we are going establish to a Decency Promo 1.7 0.71 10.0 24% 4.6% 1.7% 4.5% 215.9 Actual performance in FY2015 Actual performance in FY2015 Trust and sympathyTrust from society Fortification of corporate foundation Promote riskmanagement system corporateReinforce governance redemption to premium shareholders Fulfill In light of increasing importance of risk management, including thorough observance of compliance, safety, environ safety, compliance, observance of thorough including management, risk importance of increasing of light In willWe review and improve corporate governance system from the point soundness, of transparency, efficiency, and With respect the to dividend our to shareholders, we have resolved raise to the consolidated dividend payout ratio from We willWe fortify the corporate foundation reforming by corporation decent a building promote steadily To Net income attributable to owners of parent Operating income to net sales ROE ROA D/E ratio Net sales (Overseas sales ratio) Operating income 1 2 3 Quantative goals Numerical target plans (in billions of yen) ment and hazard prevention, we will strengthen the risk management system that oversees Industries whole Topy Group companies. the like, and improve its effectiveness. In order share to the awareness for earnings with the shareholdersand inspire to motivation for achieving the target, we have introduced a stock option depending on performance for the management. thecurrent numberthe targeted to higher at 25% number targetedin order at 35% 30to fulfillto premium redemptionto shareholders. Also, we will review acquisition ownof shares considering the balance between future investments and equity capital. of efficiency and appropriateness main business systems. business main where the middle and young staff who are expected to support the corporation in the future can exert their talent planWe invest to total about billion ¥30 for three years with about billion ¥6 which of for strategic investment. 2 3 - Deformed bars A Survey robot [Survey Runner™] A Survey robot In addition, Topy’s synthetic mica, produced by apply by produced mica, synthetic Topy’s addition, In in the future, developing by practical moving systems that running. autonomous and automatic allow ing the melting technology with the electric furnace, has has furnace, electric the with technology melting the ing superior characteristics in glossiness and chiefly used in cosmeticproducts. willWe increase sales inthe cosmetic application, and also expand sales into the industrial use, such as foods packaging films. - - Various shapes and sections Various Take on the challengesTake for new business by introducing technological innovation Enlarge product bygroup leveraging advantages in original technologies While maximizing the substantial effect a new of steelmaking plant, we will explore new demand with the product group The Topy IndustriesThe Topy Group develops crawler robots by planWe expand to sales into the service industries and Steel business 2 3 that incorporates the manufacturing technologies in special profile sections together with processing technologies, the the technologies, processing with together sections profile special in technologies manufacturing the incorporates that Group. Industries Topy the of points competitive Cosmetic products using synthetic mica (prescription sample) using synthetic mica (prescription Cosmetic products adopting manufacturing technologies that have been ac been have that technologies manufacturing adopting quired through years experience of for the undercarriage robots Those equipment. construction for components are used for versatile purposes, such as in hazardous ar eas, and under other restricted water, areas, receiving high credit from users. agricultural fields where demand expectedis to increase Corporate Profile and Governance and Profile Corporate 13 Corporate Profile and Governance Corporate Governance

We will work on strengthening and improving corporate gov-

ernance in order to establish a corporation that can earn the Outside director and outside statutory Strengthening of Corporate Governance trust of all stakeholders. auditor Corporate Profile and Governance Currently, the company has one outside director and Improvement of Risk Management and Compliance two outside statutory auditors. There are no special inter- The Risk Management Committee has been set up to Basic Approach ests between those personnel and the company. extract, classify and make visible the underlying risks in Outside director, Tsuyoshi Inoue assumes representa- the Topy Industries Group, to centralize information on Topy Industries, Ltd. pledges to enhance corporate value in the medium - to long - term by tive director and president of Japan Economic Research high-risk matters, and for PDCA execution. The members Institute Inc., representative director and president of Val- of the Risk Management Committee are mainly general establishing a corporate governance system appropriate to the corporation from a standpoint of ue Management Institute Inc., outside statutory auditor of managers at the head office. management soundness, transparency, efficiency and the like, in order to maintain and improve Mitsubishi Paper Mills Ltd., and outside statutory auditor In addition, we have established an Internal Audit De- the trust of stakeholders. This comes from the group basic philosophy advocating, “Win the trust of Fuji Oil Co., Ltd. There are no personal, capital or busi- partment, which is under the direct control of the corpo- ness transactions between these corporations and the rate president and currently operated by 11 staff, in order and respect of society through the continuance and development of the Topy Industries Group company. He once worked for Development Bank of Ja- to strengthen risk management including internal control. and the execution of one’s duty as a public institution.” pan. The company carries a loan from Development Bank In order to strengthen compliance, Topy Industries, of Japan for the amount less than ten percent of the total Ltd. has worked on implementing various undertakings Outline of Corporate Governance System loan of the company. such as setting up a contact office for whistle-blowers, Outside statutory auditor, Masakazu Kawabata as- publishing the Compliance Guide Book and Anti-Trust As illustrated below, we have an Audit & Statutory Board ensure efficient deliberation by the Board of Directors, the sumes outside statutory auditor of Komori Corporation Law Manual, and formulating the Topy Industries Group Business Development in our governance system, designed to supervise and audit Executive Management Meeting, comprising executive and outside director of Fuyo Auto Lease Co., Ltd. There Basic Philosophy and Group Code of Conduct. the Board of Directors Meeting as well as corporate man- directors and number of designated members, is held are no personal, capital, or business transactions be- In addition, in April 2012, we launched the “Topy Indus- agement. We have divided management functions into (one a week in principle), where such matters that require tween these corporations and the company. He once try Group Basic Corporate Ethics Consultation Office,” the management decision-making functions and operating the resolution at the Board of Directors will be deliberated worked for Mizuho Bank, Ltd. Topy Industries carries a “Topy Industries Group Compliance Hot Line,” a whis- functions, and adopted an Operating Officer System to vi- in advance. The deliberation also includes the execution loan from Mizuho Bank, Ltd. for the amount less than ten tle-blower system applicable to all companies of the Topy talize and improve the efficiency of management. and, planning and implementation of specific business percent of the total loan of the company, also Mizuho Industries Group, and distributed the revised version of The Board of Directors (in principle, to be convened policies, thus supporting appropriate management deci- Bank, Ltd. holds 3.27% in the company’s shares. the Compliance Guidebook to all employees of the Group once a month or extraordinarily as needed) put an agenda sions. Outside statutory auditor, Kazuo Shouyu assumes companies in Japan. Effective from March 2013, we also before No. 122 General Meeting of Shareholders in June Furthermore, in order to respond quickly to changes in managing director of Meiji Yasuda Cultural Foundation. launched the “Employee Ethics Seminar: Fostering per- 2016, proposing an appointment of two outside directors, the business environment, the term of the directors and There are no personal, capital, or business transactions sonnel to support compliance” targeting all staff members but one candidate was withdrawn due to his sudden de- operating officers is set to one year. The Audit & Supervi- between this organization and the company. He once of the Topy Industries Group. cease and one outside director was officially approved. As sory Board is constituted of two external statutory audi- worked for Meiji Yasuda Insurance Company. The compa- a result, the current Board of Directors is made up of total tors and two internal auditors, conducting fair and neutral ny carries a loan from Meiji Yasuda Life Insurance Compa- five directors: four executive directors and one outside di- audit. Besides the statutory organizations, the company ny for the amount less than ten percent of the total loan of rector. The Board of Directors not only resolves important has the Compensation Committee, the Nominating Com- the company. Meiji Yasuda Life Insurance Company holds issues of the company, including basic management poli- mittee, the Risk Management Committee and other ad- 4.05% in the company’s share. cy, in addition to the matters required by the article of in- hoc committees to strengthen managing functions. The As for the major shareholders of the company’s share, CSR Activities corporation of the company, but also supervises manage- company will set up an optional committee when needed customers, institution in mutual assumption with the out- ment from independent and objective stance. In order to to enhance further governance capability. side director, the party to whom the company makes a donation, the company considers their particular interest with the company and judges their independency accord- Corporate Governance System ing to the guidelines for independency defined by the To- kyo Stock Exchange. The company deems one outside General Meeting of Shareholders director and two outside statutory auditor mentioned Appointment and dismissal Appointment and dismissal Appointment and dismissal above having independency, and the documents submit- Compliance Guidebook Audit Audit and report Audit & Supervisory Board (four members) Board of Directors Meeting (ﬁve members) Accounting Auditor ted to the Tokyo and Nagoya Stock Exchange stating all (including one outside director) Report Report outside director and outside statutory as independent di- Close cooperation Close cooperation Nomination Advisory Committee Prior Compensation Committee rectors have been officially accepted. Group Risk Management Briefing Session consultation Outside director, Tsuyoshi Inoue contributes to rein- The first Group risk management briefing session was Close Executive Management Meeting Report cooperation Report Risk Management Committee forcing the decision-making functions and supervisory held at the headquarters of Topy Industries, Ltd. in De- Internal Audit Dept. President

functions of the Board of Directors through his opinions in cember 2012. Employees of various Group companies Additional Data Internal Appointment Audit the decision-making process of the Board of Directors participated and listened intently to the briefing pertaining Dismissal Each Permanent Committee Supervision based on the rich knowledge and experience he has ac- to the Group Basic Philosophy, Code of Conduct and Topy Industries Group Basic Report Corporate Ethics Consultation Ofﬁce quired as corporate management. Outside statutory audi- Guidebook. After this event, a similar briefing session has Topy Industries Group tors, Masakazu Kawabata and Kazuo Shouyu contribute been held at each factories as part of our efforts to Whistle Compliance Hotline blower Policy, planning, etc of business execution to reinforcing audit functions through their advice and strengthen risk management and the aggregated.

Head Office Organization suggestion to secure validity and verification in deci- Executive Director/Executive Officer Division Organization Employee sion-making in the board of directors and other occasions /Operating officer Affiliated Companies as well as opinions expressed in the auditors meeting based on their rich knowledge and experience they have acquired mainly at financial institutions.

15 16 Corporate Profile and Governance Corporate Governance

Responsibility to Stakeholders Information Tools Addressed to Stakeholders in demand for our products in major markets such as countries, the Group’s manufacture and sales activities Japan, North America and Asia would adversely affect have expanded into these regions by way of direct invest- Corporate Profile and Governance T The business activities of the Topy Industries Group OPY the results of business and financial status of the Topy ment. However, doing business in these countries brings Repo rt 20 stretch over a broad range of fields including materials, 16 Industries Group. various intrinsic risks and new challenges such as inade- motorization, land development, urban construction, elec- quate social/technical infrastructures, unexpected chang- tric power, distribution, sports and leisure, recycling, 2. Procurement of Raw Materials es of local laws and regulations, disadvantageous political transportation and services, and are widely involved with 2016 The prices of major raw materials used to manufac- or economic factors, and difficulties in securing human re- society in playing an indispensable role in various aspects ture products of the Topy Industries Group such as steel sources etc. of people’s lives. Topy’s corporate message “One-piece material, metal scrap, and fuel oil, may fluctuate rapidly Cycle” has been chosen to express the corporate attitude in response to changes in international business environ- (4) Risks Related to New Products and New Technolo- towards creating a new wave in each business area to ments. gy Development build a better future through the concerted efforts of the Topy Report 2016 Corporate Profile Corporate Profile DVD When raw material costs surge and such cost in- It is necessary for the Topy Industries Group, which en- Topy Industries Group and the rest of society. crease cannot be appropriately reflected onto the selling gages in manufacturing activities, to establish a firm tech- The company’s basic philosophy clearly state, “Win the prices of products, there would be adverse effects on nological position within the competitive environment in trust and respect of society through the continuance and business and financial performance of the Group. order to ensure each business segment achieves long and development of the Topy Industries Group and the execu- stable profit. Especially in the automotive/industrial ma- tion of one’s duty as a public institution.” All our business 3. Currency Exchange Risks chinery components business, driven by technological in- behaviors come from this pledge. The Topy Industries The business of the Topy Industries Group includes novation of automotives, we must be prepared to respond Business Development Group will contribute to the development of society by exports of products from Japan to North America/Asia, to the increasingly sophisticated requirements from auto- providing customers with high quality and cost competi- and the manufacture and sales of products in such re- mobile manufacturers. tive products that can win their satisfaction, and fulfill our gions. Fluctuations in currency exchange rates would We are continually at risk for that we must gain favor of social responsibility through specific activities, including affect the Group’s business and financial performance. the market and customers by precisely forecasting new Financial Statement Financial Results Brief Ordinary General Meeting timely and appropriate disclosure of information, contribu- of Shareholders products and technologies, as well as successfully com- tion to local communities, positive involvement in the 4. Change in Interest Rate and Reliance on Interest-bear- mercializing such products. global environmental issues, and the like. It is, therefore, ing Debt our mission that, through those activities, we enhance The Topy Industries Group has been working to re- (5) Disaster Risks corporate value of the Topy Industries Group as well as ducing interest-bearing debt. However, the percentage The Topy Industries Group has steadily implemented common interests of stakeholders. of interest-bearing debt to the total assets remains at a various effective measures against anticipated natural di- high level. Therefore, the fluctuation in interest rates on sasters including strengthening our emergency communi- Information Disclosure for Highly interest-bearing debt would affect the Group’s business cation systems, executing regular evacuation drills, an- To Our Shareholders and financial performance. ti-seismic reinforcement of facilities. However, our business Transparent Management operations and financial status would be adversely affected The Topy Industries Group discloses its business activ- 5. Corporate Financing by the occurrence of any large scale earthquakes, ty- ities and financial conditions through various information The Topy Industries Group conducts corporate fi- phoons, or other natural disasters in the vicinity of our fac- tools in the hopes that our stakeholders will understand nancing mainly by loans from financial institutions. The tories. CSR Activities the high transparency of our management. Annual publi- Business Related Risks financing costs are affected by the interest rates and cation of the Topy Report which integrates CSR informa- evaluation of the Group by financial rating organizations. (6) Risk from Product Defects tion such as corporate social contribution and environ- The risks that may impact corporate performance, Rise in interest rates or decline in business performance The Topy Industries Group places the safety of the mental activities as well as financial information for stock prices and financial position of the Topy Industries of the Group may result in the procurement of financing products as a top priority and we products are manufac- shareholders and stakeholders started from FY2012 in Group include the following. Issues related to the future at higher interest rates, or difficulty in securing the financ- tured in strict conformance with quality requirements and order to expand investor relations. In addition, a variety of are based on estimations made by the Group as of the ing amount needed. This would adversely affect the standards emplace by law and regulation applicable in the corporate information is delivered in real-time on our web- date the securities report was submitted (June 23, 2016). Group’s business and financial performance. country where we operate. The Group is insured in terms of site (http://www.topy.co.jp/). product liability; however, there is always the possibility of (1) Changes in Economic Environment (2) Risks due to Selling Price Decline incidents not covered by insurance or large-scale recalls 1. Sales The Topy Industries Group conducts its manufacture needed for the safety of our users and customers which The primary income of the Group comes from the and sales business of steel, automotive/industrial machin- may result in substantial cost that will adversely affect our sales of steel products and components for automotive, ery components within extremely competitive markets. The financial status. mining and construction equipment. The sales of the au- Group will continue to exert efforts to secure earnings by

tomotive, mining and construction components are af- reducing purchasing costs and improving productivity. (7) Risks from Laws and Regulations Additional Data fected largely by the sales of completed vehicles and However, if the selling price overrides our efforts, it may The business operations of the Topy Industries Group machinery which are vulnerable to the economic condi- lead to decrease in profit ratio. are subject to various laws and regulations of the country tions of the respective market where such vehicles and where we operate. Any changes in these laws and regula- machinery are sold. Likewise, the sales of steel-products (3) Risks Associated with Overseas Expansion tions may have adverse effects on our business perfor- Website: Top Page Website: Shareholders and Investors Information are also affected by the business environment in the par- Japan and North America had long been existing man- mance and financial status. ticular country or area where those products are sold. ufacture and sales activities of the Topy Industries Group. Therefore, slowdown of economy and subsequent drop Now, with economic development in China and Asian

17 18 Business Development

The Topy Industries Group at a Glance ■Sales, Operating Profits and Projections

Sales We aim to build a richer and more comfortable society where we can feel Sales Operating proﬁts (in millions of yen) Operating proﬁts

greater satisfaction in our lives. The business activities of the Topy Industries 250,000 234,682 237,677 25,000 Group extend over a vast area covering steel, automotives, construction ma- 215,872 215,000 chinery, robots, distribution, transportation, sports and leisure. The various 200,000 20,000 products, technologies and services provided by the Topy Industries Group 150,000 15,000 10,000 contribute to society through their respective roles. Our business activities 100,000 10,000 6,422 7,500 are divided into four segments, namely “Steel”, “Automotive and Industrial 5,308 50,000 5,000

Machinery Components”, “Power Generation”, and “Others”. Corporate Profile and Governance 0 0 FY2014 FY2015 FY2016 FY2017 (projection) c20m80y50

Steel Business Automotive and Industrial Machinery Components Business Power Generation Business Other Business

The Topy Industries’ raw Wheel Division Focusing on stable supply of New earning power material business since electricity while paying utmost This segment includes the Science its foundation A world top-class general wheel manufacturer consideration to maintaining Division and other new businesses. Topy responds to the various needs of the automotive harmonious relations with sur- The Science Division was established Topy’s steel business possess- with the intent to create sources of es unique manufacturing tech- and construction machinery industries by producing a com- rounding environment prehensive lineup of wheels for passenger cars, commercial trucks and buses, profit for the company in science-relat- nologies for special sections, is able to respond to ed fields other than metal processing, diverse specification requirements, and has a flexible and ultra-large mining and construction equipment. While developing high quality As for the power generation business, we changed products, we are committed to contributing to the future motorization of society supply destination since April 2015, and started supplying and is currently developing businesses at Mica Depart- production system for high-mix, low-volume produc- ment which sells ingredient materials for cosmetics; and tion. These technologies enable the in-house supply by building a global supply system taking into consideration environmental and electricity to power producers and suppliers. safety concerns as well as top priority issues of the automotive industry such as In view of increasing quantity-wise importance of this the Crawler Robot Department which develops and sells of raw materials to the automotive and industrial Business Development weight reduction and driving stability. business since FY2015, power generation business has remotely controlled survey robots such as those that have machinery components business divisions. This inte- been utilized for the inspection of Fukushima Daiichi Nuclear grated production system of raw materials to finished become an independent business segment. Steel and aluminum wheels for passenger cars/Steel wheels for commercial trucks and buses/Steel Power Station. Other business includes social contribution products under one corporate umbrella gives Topy wheels and rims for construction and industrial machinery/Ultra-large diameter wheels (SGOR®) for through sports and leisure related facilities as well as indoor an extra competitive edge over other electric furnace mining dump trucks/Industrial spring steel fasteners and outdoor advertisement. mills. The Topy Industries Group also possesses The power generation business that had been included in business units engaging in steel product fabrication, the Other Business Segment became an independent seg- collection and recycling of scrap metal, as well as ment in view of increased quantitative importance. As such, transportation, trade, and distribution. These satellite sales and operating income expressed in the graph below Group resources are well positioned around the steel for the years after 2015 reflect this change. manufacturing business and act to increase the business’s competitiveness.

Undercarriage Components Division A general undercarriage components manufacturer CSR Activities Taking full advantage of our unique heat treatment and processing technologies that have been accumulated over the years, Topy produces and sells various undercarriage components including shoes, track shoes and blade components (cutting edges) for construction machinery such as hydraulic excavators and bulldozers. Our competitiveness in QCD realized by an integrated production system from raw materials to finished products, as well as our design General steel sections/Deformed bars/Extra-thick, extra-wide development and proposal capabilities are highly evaluated by our customers. flat bars/Mast rail sections for forklifts/Universal mill plates with Robots for surveying, and under floor and roof inspection/Synthetic mica/ grooves Power Generation Business Real estate business/Sports and leisure business/Indoor and outdoor Shoes/Track shoes/Cutting edges/Links/Rollers billboards

■Sales, Operating Profits and Projections ■Sales, Operating Profits and Projections ■Sales, Operating Profits and Projections ■Sales, Operating Profits and Projections

Sales Sales Sales Sales Sales Operating profits (in millions of yen) Operating profits Sales Operating profits (in millions of yen) Operating profits Sales Operating profits (in millions of yen) Operating profits

Sales Operating proﬁts (in millions of yen) Operating proﬁts 160,000 16,000 12,000 12,000 16,000 4,000 Additional Data 151,025 10,626 14,303 147,423 134,099 128,000 80,000 8,000 9,000 72,955 72,247 71,000 120,000 12,000 9,000 9,000 12,000 3,000 63,767 60,000 6,000 6,647 7,360 7,757 80,000 6,919 8,000 6,000 6,000 8,000 7,378 7,000 2,000 40,000 4,000 1,323 4,815 4,200 3,381 40,000 4,000 3,000 2,475 3,000 4,000 1,474 1,400 1,000 20,000 2,000 5,320 5,100 632 1,000 1,630 (904) 0 0 0 0 0 0 0 0 FY2014 FY2015 FY2016 FY2017 (projection) FY2014 FY2015 FY2016 FY2017 (projection) FY2015 FY2016 FY2017 (projection) FY2014 FY2015 FY2016 FY2017 (projection)

19 20 Corporate Profile and Governance Business Development CSR Activities Additional Data 22 ------Operating OfficerOperating Katsuyoshi Daido General Manager, the Steel Division ------We willWe continue supply to our products incor by The products are made to a complex shape with with shape complex a to made are products The strict quality requirements satisfied in dimensional tol dimensional in satisfied quality requirements strict erances, while meeting customer request for larger profile special making in technology original Our sizes. materialized has years the over accumulated sections product. this porating our competitive advantage produce to spe needs, application various to sections profile cial thereby contributing the to development society of in the future. - - Began to ship steel products Outer for Ring Tokyo Road TOPY Highlights FY2015 The Steel Division began ship to steel products for Tokyo OuterTokyo Ring Road, now under construction. We expect stable shipment continues for the next several years. The Outer Tokyo Ring Road will be constructed easeto traffic congestion in the metropolitan area and realize a smooth traffic network. Our products are con tunnel the important part support of the to used (tem Junction Tohmei – Junction Ohizumi at structed named). porarily We do expect not We our business on stays easy road in the future, as domestic demand drop may after As for the business environment surrounding us, we expect do expect we us, surrounding environment business the for As Management Plan Thewith specific Medium-Term a company announced target set in in May2016 The new steelmaking plant, commenced operation in March March in commenced operation plant, steelmaking The new Message from Division General the Manager niversary in 2021, the next Olympics.niversary year after Tokyo While 2020 continuing maintain in 2021, to high perfor mance the new of steelmaking facilities the fullest to plan up step we further extent, to our technology in needs the meet that products develop and technology, processing and sections special profile producing the times,of and expand sales globally. are we determined build Olympics. to a businessTokyo However, model for the new electric furnace mill that will be continuing under grow to any adverse environment achieving by the target setout above. troduced at Toyohashi Factory was featured with superior energy superior energy with featured was Factory Toyohashi at troduced remarkable our performance by achieved have we but efficiency, 24% projection original from electricityefforts costs, reducing in improve drastic by accompanied reduction, 27% to reduction ments in electrode consumption and amount rate the dust of gen eration. The new continuous casting machine is equipped with a revolutionary function that can cast billets both for deformed bars andblooms for shapes the at same in order support time, to flexi ble production for versatile products with small a selling lot, point of our operation. also have Here, we achieved almost targeted figures furnace operation, the with combined productivity total of terms in the of discontinuation including reduction cost huge succeeding in sources. outside from supply billet mestic investment for construction will be supported the invest by Olympics Tokyo ment for the 2020 time being, related to but in the medium- long-range, to the investment slackenis likely financial to due to restraints theby government and agingof its population amidex the tremely birth low In addition, there rate. are such issue as the excess production capacity steel of in China and lingering economic slump in emerging countries, which constitute huge concern with us in terms of demand-supply strengthen worked position hard have to We steel. our of muscle are so that we able to continue and expand our operation stably under harsh business environment. Our answers such to chal lenges are the refining and castingtechnology that canrespond to production varietyof a of products, the and technology, rolling design and roll optimal utilizing sections special profile producing in technology original products, our in reflected been well have Those technologies lots. small producing on know-how chiefly such theas materialsfor shipbuilding,we em rim and shoe sectionsfor in-house2015, In use. com a members deep segment underground, used tunnel for materials the of production the on barked technology processing precision high and sections special profile in technology traditional our of bination that makes high value added products. In accordance with only not the plan, have we reviewed FY2018. planning forthree years but also tried to forthe find way business a should-be, suitableforthe corporation, which100th is to goingcelebrate an 2015, has a stage entered now into where it can exert performance2015, furnace in electric The state-of-the-art planned initially. as almost The new steelmaking plant at Toyohashi at plant steelmaking new The We promote to build a business model for the new new the for model a business build to promote We electric furnace operation. Steel Business Steel Business Development Business 21 21 Corporate Profile and Governance Business Development CSR Activities Additional Data 24 Tape-cutting ceremony Tape-cutting Managing Operating Officer Operating Managing Shinichi Kijima General Manager, the Wheel Division Wheel the Manager, General - - - TOPY Highlights FY2015 MW ManufacturingTopy Mexico celebrated its opening ceremony grandA ceremony was attended about guests by 150 including The ceremony was opened withspeech a Watanabe, Tsuneo by Lastly a tape-cutting ceremony and commemorative tree planting Opening ceremony MW Manufacturing held at Topy Mexico on October 29, 2015. The companyon October 2015. commenced 29, operation in April and made the first2015 shipment 2,000with wheels in July. Silao, of mayor Guanajuato, of governor as such personnel, prominent from representatives Administration, Development Economic of mayor corporations. European and Japanese presidentthe of company followedcongratulatory by speeches the by guests, and finished withexchange of commemorative present(Japa nese sake andMexican tequila) between Fujii, president Yasuo Topy of Guanajuato. of governor and Industries company. the of opening the congratulate to outside conducted were As for the road wheels, two projects invested in 2014 and 2015, and 2015, Asforthe wheels,road two projects investedin 2014 mining and construction wheelsfor business off road the For work We growth. for force driving a or company the of business core the up The Wheel Division makes The Wheel presence Division global enhancement addresses of Message from Division General the Manager poration” as described in the new Medium-Term Management poration”as described in the new Medium-Term Plan. a steel wheel plant for buses and trucks in Indonesia and a steel wheel plant for passenger cars in Mexico started have operation as planned, and expect we see tangible to effect as the base of plan strengthen growth.We to strategic alliance with overseas imple timely and ratio, contribution capital our raising partners by ment increase in production capacity respective at facilities in U.S., Mexico and China, in orderachieve further to business growth by market. automotive global the in system supply product reinforcing equipment, demand for which have continues we remain to slow, concentratetaken to management a step resources rebuilding by global production structure. Meanwhile, sales plan promote we to expansion and obtain 1 global No. share in OEM both and replacement market introducingby new products and new business through into a move arena. buildto a strong business foundation that can cope flexibly with changes in surrounding environmentby united efforts among Japanese Factory) and mother overseas plants Factory plants, (Ayase and Toyokawa general wheel manufacturer. top-class further world enhancing as presence our thereby and expansion of business as priority theme along the corporate corporate the priority along as business theme of expansion and policy seeking “Sustainable Growth and Change a Decent to Cor - - Topy MW Manufacturing Mexico Manufacturing MW Topy We aim to enhance global presence and expand and expand presence global enhance to aim We “Sus of policy corporate basic the under business Corpora a Decent Growthtainable to and Change tion” Wheel Division Automotive and Industrial MachineryAutomotive Business Components Business Development Business 23 Corporate Profile and Governance Business Development CSR Activities Additional Data 26 - - - - General Manager, Manager, General Managing Operating Officer Operating Managing Hiroyuki Kinoshita the Undercarriage Components Division Components Undercarriage the - - - - Renovated 2,300-ton Forging Press Sanwa Buhin Co., Ltd. Ltd. Co., Buhin Sanwa Link Forging Press Update TOPY Highlights Component of “tracks” manufactured processing by hot rolled steel materials. shoes Track and other components are assembled form to “tracks”. FY2015 A 2,300-ton line was updated and started operating The in April updated 2016. The company continues work to maximize to improvement effect and establish Sanwa Buhin is located in Bando-shi, Ibaraki-ken and produces and sells under carriage components for construction equipment. construction for components carriage line is built with the advanced technology capable shortening of forging time and expected contribute to the to improvement productivity. of production system that can respond a change to in demand. The Undercarriage Components Division manufactures and and manufactures Division Components Undercarriage The TheDivision currently operates threeat locations in Japan and In recent years, demand from emerging countries As remained one cope strategic options of to slow. Under such circumstances, be aim a leading we to company in the industry belong we under to the Message from Division General the Manager *Track shoe: *Track belt. track steel a machinery is and construction of components undercarriage assembled for name general A **Tracks: sells various undercarriage components for construction machin construction for components undercarriage various sells Above track such all, shoes*ery, as for hy hydraulic excavators. system production “integrated embody the excavators draulic frommaterials raw finished to featuringproducts” our strongest selling The point. manufacturing integrated has system realized andhigh our QCD, level of products receive excellent evaluation from our customers refined thanks to services,VA pro including posals supported advanced by design development nurtured over many years. three locations overseas in North America, China and Indonesia, making six locations. total This makes it possible supply to products with high levels QCD of from these the plants construction to responding while different locations, at machinery manufacturers globalization customer meeting fluctuations, exchange currency to reducingby inventory risk JIT deliveries. by As a result, the Division top-level market share inenjoys terms OEM supply the of world’s track of shoes and tracks** for hydrau lic shovels. with changing market environment, realigned we production location concentration by in China in FY2015. The Division faces a harsh in the long-termperspective, environment demand present, at however, for construction machinery is expected expand to globally as the world population will and grow urbaniza tion progress in the future. Management Plan, develop highnew Medium-Term value-added products based on customer and mar needs,ket cost improve competitiveness, sales promote expansion leveraging by our advantage in hav business our foundation. and strengthen locations, global ing Topy UndercarriageTopy (China) Ltd. Co., The Undercarriage supporting Division: Components construction machinery manufacturers and society establishingby optimal production structure globally and distribution production of expansion through and overseas Japan in sites Undercarriage Components Division Undercarriage Components Automotive and Industrial MachineryAutomotive Business Components Business Development Business 25 Corporate Profile and Governance Business Development CSR Activities Additional Data 28 - face Cut Adjusted toughness toughness Adjusted of painted filmto expansion suppress - Machined gloss surface New Technology Suppress rust development Machined gloss finished sur ■ Joint plate Joint Changed resin to adhe improve with siveness surface Machined gloss finished specification finished gloss Machined Segment and Joint plate Segment Corrosion deposit deposit Corrosion gas hydrogen and generated (rust develops) Expand Machined gloss surface Large blister generated Demand for the tunnel segment at great depth The line is designed to operate automatically from from automatically operate to designed is line The Conventional Technology Cast surface with coating specification coating with surface Cast receiving hot-rolled of materials shipping to the of products finished with secondary processing, and is capable securing of quality requirementfrom cus performing productivity. high of also and tomers and large section road construction is expected to increase in the future. plan We improve to further productivity the of automatic line and expand sales integratingby manufacturing and sales. Shield tunnel Shield Adhesiveness between cast surface and painted film ■ Solvent primer coated surface expanded without brake up by corrosion deposit by Push-up pressurePush-up ------An automatic processing line of for plate joint segment tunnel Expanding sales of high value-added product incorporated secondary processing Development of high anti-corrosive, machined gloss finished finished gloss machined anti-corrosive, high of Development wheel aluminum Fitting of cast aluminum wheels with machined machined with wheels aluminum cast of Fitting new paintingtechnology Topy’s with improved New painting system has improved coating film The Steel Division is strengthening involvement in 2 1 secondary processing its of hot rolled steel prod ucts. On the Processing “Automatic line Joint of Plate Segment”, for Tunnel a line capable both of au tomatic cutting flame by and bevel finishing has been installed as a means differentiation of uniting by second to section profile special of manufacturing ary processing, resulting in receiving orders for the jointplate for tunnel segment, which is going be to depth great with site construction road the at used and large section. gloss finishto luxurious cars is on increase, however, its condition setting has not been recommended by car manufacturers for the sales in the area where snow-melting agent is used as well as the shipments com resistance corrosion inferior its to export due for pared the to traditional painted finishof cast wheels. clear to possible it made now resistance corrosion salt including globally requirements setting condition start mass-production and Europe, in area damaged ed. caused coating of blister eliminating characteristics, hydrogenby gas released from the coated film, im re customers’ satisfying and adhesiveness proving quirements. The Topy Industries Group has beenpromoting various research actively anddevelopment Topy The New Products and Technologies products and next-generation Topy’s of some Introducing technologies themes that suit needs of customers and society, embodying the ideas into visible products. The items introduced below show some of new technologies and products that are expected to Industries future. Group the in growth Topy boost the the help of - - - General Manager, General the Science Division Science the Topy’s booth Toshiyuki Tani Toshiyuki Managing Operating Officer Operating Managing ------Mica cluster Mica - TOPY Highlights The Mica Department the of Science Division par booth was exhibitedTopy’s with the synthetic mica continueWe expanding the market participate by FY2015 Topy’s mica on the 7thTopy’s Cosmetic Exhibition Technology & Ingredients ticipatedin an exhibition held (CITE Japan from 2015) successfully exhibition The 2015. 5, through 3 June visitors. thousand 31 estimated gathered powder for cosmetics and the high gloss pearl mica Helios as main product and appealed its high quality. the show like this. The Mica Department has long been supplying synthetic mica high functionThe words are safety, key and product concept. The Crawler Robot Department draws up customer needs and The key words are safety, autonomous operation,The words are safety, seeds key and matching. The Science Division continues working on new challenges Manage during the New Medium-Term Last year, the Science Division reorganized its business struc business its reorganized Division Science the Last year, Message from Division General the Manager ture by which by ture withdrew we from the sign business, system while the outdoor advertisement En business was transferred Topy to continue to terprises, the business. Ltd. As a result, concentrate we business. robot crawler the and business mica synthetic the on as cosmetic materials the major to cosmetic companies,but we see it essential develop for us the to business overseas and ex plore new applications in order achieve future to growth. The syn thetic mica, cosmetic both use and industrial is easily use, not re placed priced low by and cost low materials, and plan we to enhance added value the mica of developing by high safe, func tional material specialized in our original technology in order to products. competitors’ difference with make iscapable responding of quickly from design input the prodto of - In light the market. theucts shortage of into working of declining force due to populations with fast de veloping aging society, there is increasing technological demand for the robots for more practical use in in use practical more for robots the demand for technological increasing is there society, aging veloping all domestic industries, including life support the success to A key robots. lies on fast how can we devel op and the robots the put market that conform into the needs to leveraging by our strength in speedy response. new expand to innovation technological by products unique of development the through Plan ment business. We intend to develop products with unique features features unique with products develop to intend We challenge the on and take innovation technological by business. new expand to Other Business Business Development Business 27 27 Corporate Profile and Governance Business Development CSR Activities Additional Data 30 - - Brushing capabilities our through up salesmonthly meeting (Topy Enterprises Ltd.) Co., (Dalian F.T.Z.) They prepare sales reports in Japanese for monthly sales They are using the sales meeting improve to our Japanese activities sales reporting for used not is meeting sales The In the sales meeting, they are able know to the contents of 7 meeting. Since the reports are submitted the to management at head officeTopy Enterprises, of Tokyo, andkey points are sum marizedinto easy-to-read style. It is really not easy summarize to the events during past month activities in a couple of lines and express succinctly and clearly before the meeting in Japanese which is not their mother tongue. directions future discuss summarize, to ability proficiencies, and confirm each other. By doing theyso, believe their abilityto communicate with Japanese staff Enterprises at Topy as well as Japanese customers will gradually improve, and also it will con sales capabilities. our up step to substantially tributes only, but it is also used, when developing new issue, consult to distribution physical and distribution commercial for schemes Administration the of participation with decision making before Department. In China, matters related with taxes are often changed without prior notice due the to nature of the laws and through exchange information extended Therefore, regulations. frequent interaction between the Administrative Department and theSales Department is essential realize to smooth proceeding Department. Sales the by business of the report our to seniors and colleagues but also understand to whatare happening in the whole company. Inaddition, itgives themselves of activities sales the check opportunity to an their and thinkwhat they are lacking and howthings are going to be progressed in the future. They are work to determined achieve to together improvement. further ------(Topy MW Manufacturing Mexico S.A. DE C.V.) (Topy America, Inc.,) Working on the shipment to car to manu shipment the on Working facturers highland in areaMexico in Technical service activity jumpinginto customers grounds The company, established in October and commenced 2013 workers employed newly for ceremony initiation Following A lot of effort has been spent until they made the first Generally speaking, though maybe a kind of stereotype Frequent visits OEM to manufacturers and technical services Inaddition, they make periodic visits the to mines, end users TheOTR Departmenthas The OTR Department America of the Topy is engaging in They started work to on strengthening quality of their techni 6 5 operation in Aprilis located 2015, in the central highland area where automotive industries are operating in concentration and its plant is situated in the Santa Fe Industrial Complex where many Japanese companies have operating sites, the location lies in the state famous for World Heritage Guanajuato. This area is now called a mini-Detroit as many Japanese, American as well as European car manufacturers concentrated in this Mexi can hub area. in January the company 2015, has progressively increased trial OJT, production, proto-type conducting while employment repetition. in production mass shipment, they somehow wereable reach to a stage that themselves. by changeover set-up and production allows although condition, stable in stays operation Currently they have encountered unexpected event that workers at numbers. large in quitted suddenly workplace particular adher meticulous, cheerful, not look people Mexican view, ent religion, to world most talkative, drinkers, fond of singing anddancing generous and are We character. national wishing growth of the com pany with such wonderful people! cal services by stationing their service engineer at OTR Depart ment America of Topy since July 2015. Topy’s enhancing certainly helping are meetings telephone via presence. of the equipment, for technical services besides first hand on- site survey for their own. Sometimes, they are able obtain to hid denbut valuable ideas from the operator down at working sites on product usability and securing of safety that OEM makers are not aware and of, the ideas that they do not have either, making it a great hint for their product development. started addressing this just service and they continue aimto at establishing better relationship with customers in future.the sales of wheels for construction and mining vehicles. Their cus tomers are OEM manufacturers of mining equipment and front lines lie at the strip mines where the vehicles are in operation. It is very important for them satisfy to their customers by providing as customers servicesservices by technical expected including further improvement. for products quality supplying by as well - - - 6 1 3 5 - 7 2 4 (Topy Precision Inc.,) Mfg., Indonesia) Manufacturing Palingda Topy (PT. Thickness defects reduction transmission for initiatives shims Topy Palingda Manufacturing Indonesia Topy One-year anniversaryOne-year of ceremony A pray was submitted in accordance with Islamic manners manners Islamic with accordance in submitted was pray A A twin-head grinding machine is used finish to thickness of This improvement activity is intended raise to awareness One-year anniversary ceremony of founding Paling Topy PT. Topy Precision is involved chiefly in manufacturing of com of manufacturing in chiefly involved is Precision Topy 3 4 da Manufacturing Indonesia was conducted A 2015. on July 31, greeting wasprovided by Yasuo Fujii, president Indus of Topy tries, Ltd. and Alberto Sudarto, president PAKOAKUINA, of PT. following the opening message by Norio Akiyama, president of Palingda.Topy after lookingback the histo ry of the company over the followed videos, and pictures by a ceremony of cutting cone a Tumpeng” “Nasi of shaped mountain of rice surrounded with full platter of to cuisine typical Indonesian particular event, congratulate wishing future growth of the company. ponents fasten to inner and exterior fittings of automotives. The shims are the components that are used inside the transmission of the cars adjust to gear clearances. the shims, and theyembarked onan improvement activity in the end of last year with a target achieve to thickness defect zero percentage. and knowledge of staff involved in the grinding operation and let specialty high acquire them that encouraging is It skill. they can feel staff’s awareness placing toward rising steadily value even each to small piece fasteners. of ------” (Reporting, (Reporting, ” (Topy Fasteners Vietnam Ltd.) Co., City-pad attachment installed line (The Undercarriage Department, Topy America, Inc.,) America, (TheTopy Department, Undercarriage Education Fasteners, at Topy Viet Nam Inorder reduce to inventory space required for carrying There are other education programs, such as Japanese Japanese as such programs, education other There are Thereare three types oftrack belt formini-hydraulic excava The company is relativelynew a entity that commenced There are two education programs available: one is to ex to is one available: programs education two are There TheUndercarriage Department America, of Topy Inc. manu 2 1 Ho, Ren, So toryand assemble them on steelto track belt. tors: rubber track belt, city pad track belt, all steel track belt. So carryingfar, sufficient quantities of inventory was thoughtto be only a viable way meet to frequent requests for different track belt from end-users. three different types of track belt and strengthen the capability to respond flexibly the to change requests, they have installed an up pick to designed line assembly independent city pads from inven plain overall company issues and the other is a special educa tion provided at each workplace. Efforts are made prepare to an environment that will facilitates easy operation, including use of and tools arranging explanation, specific for pictures and photos other necessary items as closely as possible the to workplace. tain environment to enhance enhance to environment tain communication. tance of factures and sells tracks since 2000. The operation started with only five staff, but now the staff almost tripledto fourteen. production in November 2012. Majorities of the employees are are employees the of Majorities 2012. November in production newly employed with limited knowledge and it poses an issue how maintain to their operating skill under increasing new em ployees. sill levelssill and realize impor Contacting and Consultation), Consultation), and Contacting language education, 5W1H, 5W1H, language education, “ P.D.C.A., etc. that help main help that etc. P.D.C.A., In NorthIn America, China, and Southeast Asia, theTopy GroupIndustries operations the into assimilated are well environments. local here areIntroduced of some the latest and topics news. The Topy Industries Group has expanded its globalThe Topy presence. activities. their of some introduce will we Here, From Topy’s Global Locations Topy’s From Business Development Business 29 29 Corporate Profile and Governance Business Development CSR Activities Additional Data 32 - - - - - − To win− To the trust and respect of society – General Affairs General Top managementTop shall make example by leadership and inform the strict adherence the to Code of Conduct and ensure the compli ance of the corporate ethics effectively administrating its manage its administrating effectively ethics corporate the of ance ment systems. If and when any of the Code of Conduct is violated, management solve personally to determination indomitable an demonstrate shall the issue by launching an investigation and shall take actions to prevent the recurrence of such incidents. At the same time, top management shall make full disclosure within and outside the company promptly and precisely, and, upon determining the disciplinary strict impose responsibility, and competence of source responsible. held those against action Seek widely for knowledge and information both domestically and internationally, and continue the innovation of technology and know- compe professional and technologies distinctive refining by how tence. Operate business in a fair and transparent manner under free compe titionand appropriately keep an arm’s length distance from politics agencies. administrative and 1. 2. Recently, many scandals involving large corporationslarge scandals many involving Recently, the Group strive Basic realize to will We by Philosophy Senior Managing Director Managing Senior Article 6 (Technology and know-how innovation) activities) corporate in (Fairness Article 7 management) top of (Responsibilities Article 8

sessions. To furtherstrengthen sessions. To Group our we compliance, Compliance a prepared Guide Bookhave opened and an officefor consultation about corporate ethicsfor all Group companies. opportunity this been reported.have Taking as a reminder Industries the reinforce Group will ourselves, to the Topy importance the of GroupBasic and the Philosophy Code of Conduct to fulfillresponsibility our to stakeholders. issues with along addressing the Group Code Conduct, of be to and continue a corporate needed that is so group by ciety. Tadashi Kojima Tadashi ------Communicate widely with society as well as shareholders and ac Co appropriately. and fairly information corporate disclose tively contri social on work actively and communities local with operate bution activities as being a good corporate citizen. Oppose resolutely any anti-social forces and parties posing a men ace social to orders and security. The Topy IndustriesThe Topy Group Corporate Code of Conduct The Topy Industries Group Corporate Basic Philosophy Basic Industries Corporate Group Topy The thusiasm, and attain fulfilling lives. fulfilling attain and thusiasm, Pay due respect different to cultures and customs of all countries and regions, and perform business activities contribute to the to develop ment and well being of local communities. Realize that a sensible approach environmental to conservation is essential the to existence and activities of the company, and behave actively. and voluntarily Produce and supply, high-quality and safety-oriented merchandise merchandise safety-oriented and high-quality supply, and Produce and service gain to customers and consumer confidence. 1. 2. Respect the individual character and personality of employees, and provide safe-working environments allowing them work to with en Since the enactment the of International Standard ISO In April2009, the Group formulated Basic we Philosophy Article 4 (With the world) environment) (With the Article 5 Win the trust and respect of society through the continuance and development of the Topy Industries Group and the execution of one’s one’s of execution the and Industries Group Topy the of development and continuance society the through respect trust and of the Win institution. public a duty as applicable all by strictly abide shall Industries Group Topy the of employees and management the Philosophy, Corporate the Under responsibility and social corporate full accepting while Conduct, of Code Corporate the and reflected, spirit the ordinances, and laws culture. corporate creative open-minded and an fostering Article 1 (For the benefit of customer) Article 2 (For the benefit of society) Article 3 (For the benefit of employee) Responsible behaviors by each corporate employee based on the Group Group the on based employee corporate each by behaviors Responsible is this Conduct; Corporate Code of Group and Philosophy Corporate Basic CSR. towards Group Industries Topy the of position basic the 26000 on November 1st, 2010, the recognition26000 that every 2010, on November 1st, its fulfill organization social should responsibility the for societysustainable of development world spreading is CSR wide. activities the oneof most are important issues Industries Group believes The organization. our for Topy respond order to the to expectations in that needs and of customers employees and from stakeholders including the corporation, CSR as be corporate one handled should Corporationsstrategy. the for indispensable existence are its but the activities at same time, economy, of development impacts huge on societyhave We and the environment. that continued CSR recognize fully must therefore activities Industries Group the that Topy desire We essential. are continues be to a trusted organization working worldwide with global perspectives the to and responding expectation variousof stakeholders customers, consumers, including shareholders, local investors, and employ communities to CSR needed words, In other “activities the ees. means Going forward,look become will we a trusted company”. profits short-term beyond and contributeof a to creation the sustainable society activ business of development through environment aspects overall economy, ities combining of by and society from various angles. and Group Code Conduct of as the basis CSR of activities CSR promoted have and hosting by be to shared awareness - - - - Local Employees communities health Human Trust resources Safety and Sense of development fellowship A loop of “Symbiosis” with communities local Fulfill responsibility as a member of the local com cre and communication, promote actively munity, co-develop ensure to recognition fellowship ate ment. A loop of “Growth” with employees growth the for maximum consideration Provide and safety of employees working in the Indus Topy tries Group and make the most of their skills and passion. Build a relationship ensure to that both grow. can corporation the and employees Loop of growth Loop of symbiosis Skill As a citizen Enthusiasm improvement corporate - For the benefit of employees of Trust burden benefit For the Working of society in harmony Reduction with the world Evaluation environmental with For the benefit of customers Friendliness philosophy environment Loop of Basic policy recycling Environmental for environment Loop of trust Philosophy Group Basic Group Code of Conduct Customers Environment Top technology Innovation of Safety management Quality Quality and know-how responsibilities materials Fair A loop of “Trust” with customers Deliver customers safe and high quality products, evalu customers’ where environment an establish ations of our products are repeatedly fed back to the production site, and build a solid trust. A loop of “Recycling” for the environment positiveTake initiatives in promoting recycling of preciousnatural resources pertaining the to recycling a is Industries Topy that self-declaration environmental reduce to work and corporation, lifestyles. social in burden activities corporate ------strength Relation Analysis and disclosure measurement Technological Information together Loop of working Value Trust of profits Loop of expectation Sustainable development Redistribution The Topy IndustriesThe Topy Group understands the relationship with its stakeholders as shown below and understanding deepening two-way propel activities CSR desires loops. by six through to the CSR of the Topy Industries Group Industries Topy the of CSR partners Business Makeuse of technologies and values possessed by both parties through dealings in a fair and equi Respond the to expectations that shareholders and investors have with regards Industries Topy to disclo and business of growth sustainable through transparen high with information corporate of sure cy and establish a win-win relationship that en sures mutual benefit. A loop of “Working together” business partnerswith work of relationship a establish and manner, table ing together across entire value chains by actively providinginformation such asanalysis and mea technologies. suring A loop of “Expectation” with shareholders investors and and investors Shareholders CSR Activities CSR 31 Corporate Profile and Governance Business Development CSR Activities Additional Data 34 The accessory guides for rolls have been outsourced, but after tries and and after tries but have been outsourced, rolls for guides The accessory costs. succeeded in building them by themselves and reduced errors, by making and yield percentages operating efficiency Succeeded in improving one bloom instead of from pieces of products it possible to make three one bloom. from traditional two pieces of products Tooling was inclined to break due to the clogging caused by scrap. Breakage due to the clogging caused by scrap. Breakage was inclined to break Tooling anti-scattering device for scrap. by improving of tooling has been prevented by improvements has been secured improvement Encouraging productivity rim end bending and die stamp punching in rim setting with in 1) Errors to identify of No. 5 rim line and 3) The method 2) Standardization processes, processes. and succeeding condition of foregoing present of automatic measures in finding effective After many tries and errors found a has been decreased, assembly line with which operating efficiency in cost reduction. resulting the problem, way to improve work of the bush as well as reduction 50% in replacing Succeeded in reducing in annealing time. Heat Treatment Group, Undercarriage Components Plant, Undercarriage Group, Heat Treatment Kanagawa Factory Factory Roll Cutting Shop, Toyohashi by stabilizing improvement Productivity manufacturing operation of Z section steel Factory Heavy Structural Rolling Mill Shop, Toyohashi Countermeasures for tooling breakage due to scrap for tooling breakage Countermeasures system with 3,500-ton press clogging prevention Factory Ayase Center, Set Tooling Tire 5 rim line and Reduction in defect ratio with No. improvement initiatives on productivity Factory Ayase Wheel Plant, Commercial Heavy-duty Group, Extra-large Diameter Wheel, Construction Wheel Plant, Ayase Factory SWproducts and reviewing of the materials Cost reduction by internal welding of the disc for improvingproduction method of hot accessories rolling improving thebox exclusively used for thebush Noise abatement and shorteningin annealing timeby Establishment of in-house production by 100% FY2015 ConventionFY2015 Award for ImprovementProposals “Gold” were given the to following six presentations because of consideration their to substantial contribution the to development the of company after careful deliberations in accordance Standard. System Proposal the of criteria) (Judgment 23 clause the with FY2015 Convention Award Improvement Proposals “Gold” 1 2 3 4 5 6

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all Topy presentation convention was convened. presentation Topy all convention was convened. Group presentation Topy Topy Group presentation convention was convened. Group presentation Topy convention was convened. group presentation Topy all Topy presentation convention was convened. presentation Topy all nd nd th th th Topy Group presentation convention was convened. Group presentation Topy all Topy presentation convention was convened. Topy all st st Topy Fasteners, Ltd. participated. Ltd. Fasteners, Topy participated for the first time. Ltd. Undercarriage (China) Co., Topy Kyushu Wheel Kogyo, Ltd. participated for the first time as a group company. Ltd. Wheel Kogyo, Kyushu Topy Metali, Ltd., Kyushu Wheel Kogyo, Ltd., Hokuetsu Metal Co., Ltd. participated. Ltd. Co., Metal Hokuetsu Ltd., Kogyo, Wheel Kyushu Ltd., Metali, Topy first as time overseas corporation. Fujian Topy Autoparts Co., Ltd., Topy Fasteners (Thailand), Ltd. participated for the participated Ltd. (Thailand), Fasteners Topy Ltd., Co., Autoparts Topy Fujian Qingdao Topy Machinery Co., Ltd. participated for the first time as corporation in China. Ltd. Machinery Co., Topy Qingdao The 16 The 22 The 1 The 22 The 25 The 27 Small Group Activity started. Small Group The 1 * * * * * *

History of Small Group Activity in the Topy Group Activity in the Topy History of Small Group 1982 1987 1989 2010 2013 2015 1970 1971 Growth of Growth individual and self-realization Vitalization of the workplace the corporation Development of Small Group Activity supporting workplace capability in Topy At the Topy Group, we are reviewing the said the activity reviewing activity are the vitalize we itself and in order to Group, Topy the At No matter how many new technologies are developed, it does not warrant continuation of of it technologies does new warrant continuation many developed, No are not how matter Objectives of Small Group ActivityObjectivesGroup of Small Improve quality, costs, delivery delivery costs, quality, Improve and other requirements. Use the activity as an Use the activity as an opportunity where visible effect resulting from originality and ingenuity can be expected as a whole workplace. Issues to be employees all with discussed participated on equal footing and find a solution for a theme. See the job as his or her issue See the job as his or her issue and participate in the activity by making most of what they have. step up workplacestep capability. erycertain requirements at and manufacturing continue other stably prod order in the to levels “Workplace this, Capability” realize each working employee of at To want. customers that ucts workplace line of be front developed becomes needthe initiatives to and essential, improvement originality with and ingenuity conceived whole the across workplace. business activities. It is obvious for us to maintain qualitybusiness and us services, products to for is obvious It of activities. deliv costs, − CSR Highlights − Highlights − CSR 33 Corporate Profile and Governance Business Development CSR Activities Additional Data 36 Kogyo, Ltd. Kyushu Wheel Operating OfficerOperating June 8, 2016 Large Hall at Kyushu Wheel Kogyo Administration Dept. Administration General Manager, Engineering Manager, General In-house education education In-house days) two night one Hall, Employee (at Tsuyoshi Nakamura Tsuyoshi Topy Topy the development of entire Topy Group. the development of Topy entire small group activities and efficient activitiessmall group and efficient efforts of employees, contributing to managementthereof withconcerted Fasteners, Ltd. July 7, 2016 July 7, Conference Room Fastenersat Topy Co., Ltd. Provide assistance to education at the group companies. assistance to education at the group Provide Sanwa Buhin Specifically speaking, the preliminaries are held for Shonan held for Shonan are preliminaries Specifically speaking, the Industries will continue to exerciseimprovement activities Topy In-house education for assistants for education In-house site) business each (at June 2016 24, Conference Room at Sanwa Buhin management efficiency, which ended up a presentation convention which ended up a presentation management efficiency, circles. with representative Division Indirect District Preliminary, Mikawa District Preliminary, Convention, Presentation Convention and The Group Presentation representative and the finals will be competed for the first prize by Along with this change, that have won the preliminaries. circles shifted to Head the convention place under the new name will be Industries, Ltd. to make convention management of Topy Office efficient. more directlyrelated to generatingearnings vitalization through of the Basic Policy Key Activity Items FY2016 for Items Key Activity

FY2016 JK·Improvement Activity Company Policy FY2016 JK·Improvement . and check sheet Pareto chart, histogram, control chart, scatter diagram, cause effect diagram effectdiagram cause scatterdiagram, chart, control histogram, chart, Pareto The All Topy Group Small Group Activity started with the 1st Activity started with the 1st Small Group Group The All Topy The convention has seen sophistication both in its presentation Enekatsu 2020 The All Topy Small Group ActivityGroup Small PresentationThe AllTopy Convention Changes in the small group activity group in theconvention Changes presentation small Acquire abilityAcquire / attitude solving problem to solve through problems Activate knowledge or intelligence to enhance logical thinking. Vitalize passion and will-power involving surrounding. Implement improvement education (QC story, improvement skill) to improvement education Implement (QC story, N7* Introduce tools at division. indirect Provide assistance to activities as well as education at the group Activity Small Group Group Expandparticipation to the Topy Enhance the activities through The All Topy Small Group ActivityGroup Small Enhancethe activities The AllTopy through Presentation Convention. presentation convention held in 1971, had been convened twice twice convention held in 1971, had been convened presentation one night and two days at the Gotenba a year on the schedule of 24th convention, with So at the skirt of Mt. Fuji until the YMCA Tozan activities of many participants. During this period, the small group Wheel has become active with the participation of Kyushu the group its name to Kogyo, Ltd. in 1982, and in1989, the activity changed Convention, the Activity Presentation Small Group Group The Topy and Me Hall) at convening place changed to Kimi to Boku Hall (You 27th convention in 2015. celebrating factory, the Toyohashi that have techniques, the circles presentation contents and toward performed enthusiastic presentation passed preliminaries we began recently, However, award. the first prize and impressive and stereotyped management somewhat convention see to this situation, break To audience seemed to loose their interests. Small Group to “The All Topy to change its name we resolved the preliminaries introducing Convention” Activity Presentation vitalize to order in site business of framework a beyond system convention activities and to improve JK and improvement those assistingimprovement activities. companies, both companies, domestic and overseas. EnhanceIndirect mutual District enlightenment through Preliminaries, Division Convention Convention. and Group experience. Presentation Convention. Implement improvement activities directly related to earnings. improving *QC 7 tools: 7 *QC tools: 2 1 1 Assistance to startup activities of indirect division circles Assistance todivision startup activitiesof indirect Activity Small Group Industries Group Vitalization of the Topy with energycosts to double theenergy saving activities coordination in Promotion ofPromotion the activities directlyrelated toin electricity reduction / employees Implementation of improvement activitiesof improvement Implementation withconcerted efforts of ● ● ● ● ● ● ● ● Advance further vitalization and reform of JK Improvement Activity, step up workplace capabilities by improving by improving step up capabilities workplace Activity, of reform Improvement Advance JK and further vitalization 4) competence of each employee and contributeIndustries as Group wellto as the development the of the Topy 3) 2) 1) 1) improvement in its earnings. - - - - - Indirect Division Presentation Division Presentation Indirect st sentation titled as “Convenience Im provement Conference No.4 of Room”. Convention was held on March 2016 25, and Gladiolus Circle the of Kanagawa Factory won the Fist Prize for the pre The 1 The circles that have been selected through these pre these through selected been have that circles The Indirect Division Division Indirect Presentation Convention Industries and Group Topy Company Operating Sites Selected top 1 circle 25, 2016 March Topy Industries Technology Committee and members of JK staff meeting staff JK of members and Committee Technology Industries Topy liminaries are now qualifiedto present Topy at SmallThe All intro the With Convention. Presentation Activity Group duction thisof new mechanism,we plan vitalize to whole IndustriesTopy Group in the future, whilepromoting the ac group the of solidification the to activities improvement earnings. to related directly activities the and tivities ------Mikawa District Preliminary Factory Toyohashi Factory Toyokawa Selected top 2 circles September 28, 2016 The All Topy Small Group Presentation Convention Presentation Small Group The All Topy Date: December 2, 2016 Place: Topy Industries, Head Office, Conference Room 1, 2 and 3 Conference Industries, Head Office, Date: December 2, 2016 Place: Topy The Group Presentation Convention Presentation The Group Ltd., Hokuetsu Metal Co., Ltd., Ltd., Kyushu Wheel Kogyo, Ltd., Akemi Electric Power, Marine Transport, Fasteners, Ltd., Topy Topy (China) Co., Ltd., Undercarriage Autoparts Co., Ltd., Topy America, Inc., Fujian Topy Sanwa Buhin Co., Ltd., Topy MW Manufacturing Mexico S.A. DE C.V. Topy Selected top 2 circles October 21, 2016 Ayase Factory Ayase Kanagawa Factory Selected top 2 circles September 5, 2016 Shonan District Preliminary The structure that we have followed the up to last Topy In September 2015, JKIn staff September meeting 2015, receivedan in Measures started activityMeasures efficient make tomanagement group and vitalize the small struction from the technology committee to review mea review to committee technology the from struction sures vitalize to the presentation convention, which seems have beento becoming stereotyped. Responding this to request, JK staff meeting decided start to reviewing a im and activity group small the of “vitalization for theme provement managing of efficiency”. In the first meeting vitalization reviewed committee the 7, October on held measures with 100th anniversary the of company’s found ing in sight after having preliminary knowledge on “where the small group activity is placed” as well as “trend in the companies”. other of activity group small se groups the that was convention presentation Group lected in the preliminary round at the factory and group business operating sites were qualifiedto participate to the final convention. After several reviews, we have come up with theidea that the groups thathave been selected inthe company or at eachbusiness site are required to win the next stage at the regional preliminary, indirect sec tion presentation convention as well as the group presen convention. tation − CSR Highlights − Highlights − CSR 35 − CSR Highlights −

Environmental Topics Energy Saving Initiatives 2020: “Enekatsu 2020”

Energy saving activity with employee involvement to contribute in reducing energy consumption and Toyokawa Factory conservation of the Earth’s environment Reduction in the amount of air owing to the Huge amount of the scale 2 found clinging inside of

installation of a compressor line and improvement Corporate Profile and Governance activity the cooling water pipe for compressor deteriorating Reduction of CO2 emission gas by promoting energy saving is an important theme for all cor- The air pipe connecting the compressor room that the performance of the porations to tackle. In addition, incessant efforts to curb electricity consumption are called for in supplies air and the steel wheel plant is about 300 m compressor. light of structural changes occurred in the supply of electricity after the Great East Japan Earth- long, resulting in pressure loss of about ten percent. Installation of a new pipe line along the existing pipe line quake and Tsunami on March 11, 2011. In order to reduce energy consumption and respond to succeeded in reducing air pressure loss and electricity environmental conservation, The Topy Industries Group has embarked on an energy saving consumption with the compressor was reduced by activity “Enekatsu 2020” since FY2013 with employees involved. We are providing hereunder a about five percent. Used larger diameter They also worked on the improvement in compressor pipes for cooling water brief report on the outline of the activity and its results. efficiency, maintaining healthy conditions of cooling and changed the pipes water pipes, reduction in air leakage from the air piping from steel to stainless Promotion of company-wide energy index Initiatives on energy saving at four factories and achieved more than further ten percent reduction in steel pipes to prevent reduction campaign of Topy Industries electricity consumption with the compressor. adhesion of the scale “Topy Energy Saving Award” : Aiming to achieve Since the start of “Enekatsu 2020”, awareness for inside the pipes. solid reduction of energy basic unit in terms of energy saving at each factory of Topy Industries, Ltd. operating site unit has steadily increased. A specific improvement idea is

1 Business Development A competition among production site units aiming at provided below. Ayase Factory achieving the targeted reduction defined in the Energy Introduction of visualization into compressed Kanagawa Factory Saving Law (reduction of 1% from the previous year). 3 air resulted in significant reduction in factory- Toyohashi Factory Reduction in electricity waste and variation by In FY2015, total four companies, eight production site wide air leakage 4 introducing a system that visualizes electricity units participated in the competition, including four Reduction in the amount of fuel used at reheating 1 Ayase Factory has long been addressing the reduction Kanagawa Factory became the first factory in Topy factories of Topy Industries, Ltd. and four domestic furnace by introduction of a heat insulation box of air leakage from factory air piping system, but they Industries that introduced a system to visualize group companies, Kyushu Wheel Kogyo, Ltd. won the for blooms were unable to identify how much air was supplied electricity. This system enabled the factory to measure award for the first time as a group company. By applying to the government subsidies for business and how much leakage occurred quantitatively due to minimum amount of electricity needed for each operators engaged in reduction of energy saving in unavailability of air flow monitors. FY2015, we installed a heat insulation box for blooms. equipment as well as electricity loss. In FY2015, they “Topy Power Saving Award” : Working on power They installed the air flow monitors on the main piping Four sides of the box are enclosed with steel plate succeeded in suppressing peak electricity and reduce saving each unit and each line, and worked on the visualization of and the inside of the detachable ceiling is padded with the contract amount of electricity by 25% by leveling 2 compressed air. electricity use of the entire factory. A competition that invites nonproduction (indirect) ceramic fibers to provide thermal insulation. Through a joint work by staff and workplace operators business units, such as head office, branch office, The blooms are temporally stored in the box immediately to check the leakage of compressed air and the repair administrative department of each production site. after casting and fed into the rolling process with heat works implemented based on the data from the air Electricity curve before leveling Electricity curve after leveling maintained at high temperatures, resulting in five to Contract electricity In FY2015, total 51 units participated.The Administration flow monitors, they came up with an amazing number before leveling CSR Activities seven percent reduction in the amount of fuel used at the Office of the Toyokawa Factory was awarded for three as much as about 60% reduction in the amount of air 25％reduction consecutive years. reheating furnace. leakage. Contract electricity after leveling “Topy Energy Saving Improvement Award”: Special award for superior improvement ideas on Location where air ﬂow monitors were installed Outdoor stock 3 energy saving Small-Medium Assembly Correction Assembly rim line line assembly line line

Select and award for the idea producing greatest Contract electricity (kW) Direct feed Image ﬁgure energy saving effect, selected from improvement ideas. Continuous casting Hot rolling reheating furnace In FY2015, the Circle A, Facility Section, Maintenance 0123456789 10 1112 1314151617181920 2122 23 Group of the Toyokawa Factory proposing “Reduction Time (h) in the volume of air consumption due to improved Heat insulation box Painting line Assembly efficiency of compressor operation” was awarded. Continuous casting to hot rolling reheating furnace ﬂow 1,000-ton press Rim line Rim line Rim line line Operator Other assigned PC PC Additional Data

In-house LAN Compressor

RS-485 RS-485

100-ton press Rim line Rim line Rim line

Disc line system Electricity meter Electricity meter Logging One unit attached Logging One unit attached device to each equipment device to each equipment Outside of bloom heat insulation box Storing condition of cast blooms after casting Block 1 Block 2

37 38 Corporate Profile and Governance Business Development CSR Activities Additional Data 40 - Recycling Electric furnace Shapes Steel Div. Melting/Rolling Steel Scrap iron in the market ducts Pro Science Div. Steel Division, Wheel Division, processed and turned into various Undercarriage Components Division Steel materials born from recycling are wheels and undercarriage components paper Waste Recycled Waste paper equipment Undercarriage construction Components Div. Components of Use as material Slag Civil In-house recycling system recycling In-house construction Wheel Div. Steel wheels pany assigned carry to out a vital role in the production Further society. of system recycling the within activities more, we have implementedan original recycling system within our production flow for the reuse of resources. - - Steel Division Market iron to produce steel Recycles and reuses scrap Production activities within Society Consumption activities

Recycling System

)

s p t e a r

( c s [Topy Industries,[Topy Ltd.] Collected by the • Tojitu Co., Ltd. • NE-Tojitsu, Ltd. Topy Industries Group • Akemi Recycling Center, Ltd. Topy Industries, Ltd. manufactures steel products us products steel manufactures Ltd. Industries, Topy In this business model, we see ourselves as a com material of Reuse Factory, we produce Toyohashi various Topy’s At steel Topy is a corporation a is recycles that Topy ing scrap iron generated over the course consumption of society. within activities production and furnace. electric an in made steel molten from sections have twoWe sources scrap of iron, the major material for our steelmaking process; scrap gathered in-house and scrap procured from outside. A substantial quantity of steel sections producedthe by Steel Division is shipped to Components Undercarriage the and Wheel Division the Division be to used as raw materials in the production of components. undercarriage and wheels various Recycling Recycling - Oct. 2005 Jun. 2005 Feb. 2006 Nov. 2005 Directors Transition to 2004 version Completed in Completed in Completed in Completed in Ofﬁce Committee Engineering Environment [Topy Industries, Ltd.] Administration Dept.Administration Factory Environment [Topy Industries, Ltd.] [Topy Director in Charge of Environment of Charge in Director Factories General Managers of Manager Dept. Personnel Labor Union of Representative Meeting Apr. 1999 Jun. 1999 Nov. 1998 Nov. 1998 President ISO 14001 Committee certification obtained Central Environment Executive Management Executive Environment Ayase Factory Sub-Committee Toyokawa Toyohashi Kanagawa ISO 14001 CertificationISO 14001 Status Environment conservationEnvironment initiatives promotion structure

Environment staff of each factory - - - - - [Topy Industries,[Topy Ltd.] ------Basic Environmental Policies As part its of duty as a corporate ranks citizen, Topy Complying with the Law the with Complying Products Conscious Environmentally Developing Raising Environmental Awareness and Finding Communities Local with Harmony Conserving the Environment in Overseas Business Overseas Business in Environment Conserving the Activities Reducing Environmental Footprint Environmental Reducing dertake cost-conscious efforts to reduce its environmental environmental its reduce efforts to cost-conscious dertake footprint by saving energy, lowering greenhouse gas emis recycling. and resources, fewer using sions, Topy will develop products that are environmentally conscious conscious environmentally are that products develop will Topy at every stage in their life cycle, from design and production to disposal. and use Topy will comply with all environmental regulations, protocols, protocols, regulations, environmental all with comply will Topy activities. manufacturing its in agreements and In order bolster to environmental management, will Topy un thermore, will Topy strive create to harmony between the com communities. local and pany Topy willTopy remain mindful of its impact on local environments and implement measures in accordance with the needs of local communities. Topy will promoteTopy understanding of its environmental policy through conservation environmental of awareness raise and Fur employees. its for enrichment and training environmental

Maintenance our of environmental management sys Since the Wheel Division (Toyokawa Factory) launched launched Factory) (Toyokawa Wheel Division the Since We believe it believe is our dutyWe preserve to a rich and beautiful world for future In generations enjoy. to continuous improvement under the ISO 14001 environ 14001 ISO the under improvement continuous 5. 3. 4. ed the following policies: following the ed 1. 2. mentalmanagement system among its management top implement and established has Topy Therefore, priorities. ISO 14001 certification status 14001 ISO Environmental Philosophy ment conservation activities in February all 1998, Topy manufacturing sites have undertaken certi an ISO 14001 in completed was which program, acquisition fication 1999. June tem has been confirmedby regular audits after this initial certification. We are carrying out environment-friendly sys scheduled and promoting by activities production En Basic our with line in initiatives environmental tematic Policies. vironmental a certification acquisition program to promote environ promote to program acquisition certification a opment in our society. Environmental Management partnershipand solidarity withlocal communities promote willwork continuous to we improvement in everything from make, materials we finished to products,the foundation to lay for sustainable devel Environmental Activities CSR Activities CSR 39 Corporate Profile and Governance Business Development CSR Activities Additional Data 42 ⑥ Concrete aggregate (JIS-certiﬁed product) aggregate Road sub-grade Shipment Certificate ⑥ AIKURU ⑤ Slanting and delivery New crushing plant ③ Existing crushing plant ④ ≤ 15 ≤ 150 ≤ 150 ≤ 150 ≤ 250 ≤ 150 Cooling ≤ 4,000 ≤ 4,000 Risk of contamination as reduced slag is treated on the same premises ② Outdoor slag treatment ground Spec. value Spec. First storage Crushing (automated operation) First storage ⑤ 6.0 < 0.5 < 0.5 < 2.0 < 5.0 New indoor treatment shop 160.0 150.0 < 0.05 Inclusion Test (mg/kg) Test Inclusion ③ ② No risk of contamination by reduced slag Analysis value Reduced slag treatment ground Oxidized slag treatment ground ≤ 0.8 ≤ 1.0 ≤ 0.01 ≤ 0.01 ≤ 0.05 ≤ 0.01 ≤ 0.01 Slag pan ① Input of raw stone Discharge into the slag pan ≤ 0.0005 ④ ① Spec. value Spec. Hauling by slag car 0.05 0.19 < 0.01 Elusion Test (mg/L) Elusion Test < 0.005 < 0.002 < 0.001 < 0.005 < 0.0005 Analysis value Slag discharge from electric furnace Item Lead Boron Conventional treatment Arsenic Fluorine Selenium Cadmium Total mercury Total Hazardous Materials Elusion and Inclusion Test (Analysis example) Hazardous Test Inclusion and Elusion Materials Flow Treatment Slag New Hexavalent Chromium New slag treatment for JIS certiﬁcation ------” certificate” ) is a recycled roadbed TM AIKURU ), which), started in The 2002. license certifies that the Oxidized slag aggregate is heavier in specific gravity materi roadbed recycled for slag furnace electric The Toyohashi FactoryToyohashi has established a system in which Obtained revised JIS Certification for JIS Certification Obtained revised Oxidized Slag ECO Stone™ meetsECO Stone™ the environmental criteria a by Electric Furnace Slag for Material Road-bed Recycled “ ECO Stone™ obtains cessed and recycled installation by a slag of cooling facil obtained factory the 2013, April In facility. crushing ity and A slag aggregatefor concrete categoryJIS A 5011-4: the addition, In aggregate. slag furnace electric No.4: factory acquired in December another certificate 2013, and startedfor Revised produce to JIS A 5011-4 and sell concrete. for aggregate slag oxidized furnace electric thannatural materials such as sand and gravel that have been used as concrete aggregate materials and so we expect slag be to used for heavy concrete aggregate such as dissipation wave blocks. The sales expansion oxidizedof slag aggregate for concrete has a favorable aggregate natural of extraction the reduces it effect as materials and thus its impact natural to environments and also curbs energy consumption. will We exert our contin ued efforts reduce to environmental load through review activities. business our of als (Product Name: ECO Stone oxidized slag generated within the electric furnace during during furnace electric the within generated slag oxidized the refining process and reduced slag discharged from the to subsequent casting continuous after ladle the refinery process are completely separated, treated, pro RU performance environmental and quality, meet materials safety requirements, and that it can be used for public works. Certificate Number2)-201. hazard of inclusion and elusion of terms in margin great materials. ous material made crushing, by sheaving and mixing oxidized slag and reduced slag. The obtained ECO Stone™ a underlicense the Aichi 2014 on Prefecture August 31, Recycle Materials Evaluation System (Pet name: AIKU [Topy Industries,[Topy Ltd.] - - - 470 2015 FY 12,568 Discharged amount amount Disposed 422 2014 FY 14,429 368 2013 FY 15,276 416 2012 FY 15,463 385 2011 FY 15,648 0 Various cutting oilsare being used in the production Recycling of cutting oil by clarification treatment Waste reduction and recycling reduction Waste partA the of metal scrap (steel) generated during The amount discharged of industrial waste remained will We continue promote to recycling and reuse the Transition of Discharged and Ultimate Amount of Disposal Waste Industrial 2,000 4,000 8,000 6,000 12,000 14,000 10,000 16,000 (ton/month) processes our of operations, and these also constitute one our of major environmental issues. Ayase At Factory, we apply clarification treatment the to usedcutting oil and bring it back for reuse. will We eventually implement this at all other factories. production activities is reused directly in-house as a raw material in electric furnaces. As for other waste, we are waste of amount disposal ultimate reducing engaged in through re-resourcing collection (e.g. scrap of iron, col lection zinc of out melting of Oxidized dust). slag generat edfrom steelmaking is recycled at ratea as high as 90% and material construction civil for reused is and more or material. concrete almost flat since but decreased FY2010 year-on- 13% Meanwhile,year in FY2015. ultimate amount disposed of industrialtons, anwaste marked increase 470 11% of from the previous term due disposition to long of retained stock the of waste generated from mica production. im and expansion the through amount disposal ultimate provement 3R of activities. Initiatives on Waste Reduction on Waste Initiatives Environmental Activities CSR Activities CSR 41 Corporate Profile and Governance Business Development CSR Activities Additional Data 44 2014 2014 546 FY 163.9 FY Toyokawa FactoryToyokawa Toyokawa FactoryToyokawa Ayase Factory Ayase Factory 2013 589 156.4 FY FY2013 [Topy Industries, Ltd.] 2012 2012 644 192.4 FY FY Toyohashi Factory Kanagawa Factory Kanagawa Toyohashi Factory Kanagawa Factory Kanagawa 2011 2011 1,056 387.4 FY FY Total Total 2010 2010 1,041 451.3 FY FY [Topy Industries, Ltd.] [Topy 0 0 [Topy Industries, Ltd.] Transition of PRTR Applicable Total Emission Emission Total Applicable PRTR of Transition Amount and Transfer Amount VOC Total Emission Total VOC Amount and Transfer Amount

(ton) 200 400 800 600 100 200 500 400 300 (ton) 1,200 1,000 (The results will for FY2015 be posted Report in Topy 2017.) (The results will for FY2015 be posted Report in Topy 2017.) - - - - - emission and discharge of industrial wastes do emission and discharge of industrial wastes 2 Emission management of Emission management Law the PRTR materials under Initiatives on air pollution prevention As a proactive approach for the prevention of air pollu of air the prevention for approach a proactive As to half compared In FY2012, VOC emission dropped With the revision of the Air Pollution Control Law in May With of the Air Pollution Control the revision In accordance with the PRTR Law (the Pollutant Re- In accordance with the depends The amount of chemical substance emission likewise. Both total emission and transfer amounts of sub- likewise. Both total emission and transfer amounts and Transfer stances subject to PRTR (Pollutant Release the global economic slump trig- Register) declined due to turned to an in- gered by the economic crisis in 2009 but up. However, crease as business activities started to pick Compound), Organic (Volatile VOC of reduction the with levels. The such amounts in FY2012 dropped to FY2009 a year-on- decreased about 7% on amounts for FY2014 improvement year comparison with FY2013 due to further efforts. lease and Transfer Register Act (the Act on Confirmation lease and Transfer Register of Specific Chemical Substances etc. of Release Amounts Promotion of Improvements to the in the Environment and handle chem- Management thereof), business entities that report to ad- ical substances are obliged to manage and emission ministrative offices the amount of environmental hazardous to and transfer of chemical substances that are business sites. humans and ecosystems at each of their on this system, we submit annual reports to the Based the same time, respective administration bodies, and at management of use this process to implement continuous chemical substances. as the amount significantly on the production volume just of CO mestic reduction target by the end of FY2010. mestic reduction Industries is conducting voluntary measurement tion, Topy the facilities generating VOC at of VOC concentration from action items re our four major factories as well as reviewing of emis technologies for the reduction lated to production sion. Factory at Toyohashi year due to reduction to the previous use of paint in the bridge business after decreased (due to Factory announcement of business withdrawal) and Ayase facilities commissioned). FY2013 (emission gas treatment of 20% due to paint gas emission posted further reduction FY2014 use of paint and thinner. facilities and decreased of materials regard due to increase posted a slight increase ed as painted goods. Chemical Substance Management Chemical 2004, it became necessary to respond to regulations on to regulations 2004, it became necessary to respond to of 30% compared emission of VOC, and a reduction as the do basis was presented FY2000 on a year-on-year

------[Topy Industries, Ltd.] [Topy Pilot solar power generation facility at Toyohashi Factory Toyohashi at facility generation power solar Pilot with an estimated generation power some of 2 The company is propelling “Energy Saving Action The business and manufacturing operations of Topy Topy of operations manufacturing and business The Initiatives on Biodiversity on Initiatives Pilot solar power generation solar facility power Pilot Factory Toyohashi at 2020” as one the of objectives “Preservation of Global of Environment Energy by As part Saving.” “Promotion of of Energy Saving Investment,” the mainstay such of action plan, we installed a pilot solar power system facility at Factory Toyohashi and assessment has started from The facilityMarch 2014. has a total solar panel space of 270 m Industries, do not Ltd. involve activities such as deforesta tion and other activities that may disrupt the ecosystem. biodiversity of conservation that recognition the share We and prevention global of warming are essential for sus a conservation biodiversity part one of As society. tainable and preservation forest of resources in developing coun tries, we encourage the use paper of made from domestic materials and preserve recycled To paper. water resourc es we are working on the reduction water of consumption circulatingby and reusing cooling water at our factories. Biodiversity Conservation [Topy Industries, Ltd.] 46,000 kWh For per testing year. purpose three different panels (single-crystal panel, multi-crystal panel and CIS panel) were installed at the same time compare to gener ation power and characteristics. For another experimental purpose beside the solar facility, we laid oxidized slag ag gregatesproduced in-house on the ground the of pilot aggre slag oxidized of effectiveness the check to facility gates as a suppressor against weeds including its effects theto pilot equipment and power generation itself. are We undertaking these attempts as part our of contributions to activities. conservation environmental global the - - - - - emis 2 488 FY2015 469 FY2014 Emission Amount Emission 473 2 FY2013 emissions emissions has continued be to 2 2 at our facilities isreported theto 2 479 FY2012 457 ) 2 FY2011 0

500 400 300 200 100 As we anticipate an increase in the amountenergy of The amountCO of amount Emission At each At factory Industries, Topy of improvement Ltd. Reduction CO of Energy Source Based CO

(thousand ton-CO flat since FY2010 due to the increase in production along along production in increase the to due since flat FY2010 with the recent upturn trend the of global economy. usein the future as production volume recovers, willwe pursuestringent control and improvements in order to continue restrict to the amount energy of usage. activities are in place according to the production facilities facilities production the to according place in are activities involved toward achieving targets based on Keidanren's the on Plan Action "Voluntary Federation) Business (Japan the total amountEnvironment." In FY2015, CO of cludes Topy’s offices,cludes which Topy’s would usually excludedbe Toyo for As factories. control energy designated from hashi Factory Factory and Toyokawa in AichiPrefecture, we have submitted a Global Warming Prevention Mea sures Plan according the to Aichi Prefecture Ordinance for Global Warming Prevention Measures Plan System. government authorities according the to revised Energy Saving Regulation enacted in FY2009. The report in Initiatives on the Prevention of Global of Warming on the Prevention Initiatives sions from energy use at Topy's facilities was 488 thou 488 was facilities Topy's at use energy from sions sand tons, maintaining the target level below that of the CO However, FY1990. Environmental Activities CSR Activities CSR 43 Corporate Profile and Governance Business Development CSR Activities Additional Data 46 ------) to prevent global warming. global prevent to ) 2 [Topy Industries,[Topy Ltd.] Ayase Factory Ayase Kanagawa Factory Exercise thorough routine management and remove signifi remove management and routine thorough Exercise Provide education to understand approaches and roles re understand roles and approaches to education Provide sub-contrac and employees all to environment the garding tors working at the factory so that each and every employee can recognize their duties to the environment and thus, ac failure. without targets the complish pro and quality improve to inconsistencies and waste cant directly environmental improvement realize and ductivity, activities. production to connected Promote communication by participating in local environ local in participating by communication Promote relation symbiotic a build to activities conservation mental ship with the local community. As for overseas business activities and exports, make ef from requests to responding measures implement forts to the local community of the host country and take into ac impact. environmental local count Inthe case that any environmental issues arise from busi ness activities, take appropriate measures to minimize such emer regular exercise addition, In impact. environmental issues. environmental of anticipation in drill gency ingthe environment to all employeesFactory of Toyokawa increaseand environmental awareness. Increase environmental awareness Provide education on basic approaches and roles regard From a viewpoint of life cycle, realize environmental friendly use including activities, business all through manufacturing production, design, procurement, materials, optimal of sales, transportation, use, disposal and etc, save energy consumption and natural resources, reduce industrial impacting (environmental substances chemical and wastes substances), promote proactive measures to prevent con tamination, and maintain and improve healthy environment. healthy improve maintain and and tamination, Work toward accomplishing environmental improvement activities by setting up environmental objectives and tar gets, and at the same time, implement regular reviews for environmental management. of continuous improvement Comply with applicable legal and related requirements in in requirements related and legal applicable with Comply order to build a symbiotic relationship with the local commu nity. Reduce greenhouse gases (CO Comply with applicable laws and regulations as well as in dustry specific requirements and at the same time, make management environmental improve efforts to continuous ac procedures job and standards voluntary maintaining by cording to the basic environmental policy Industries. of Topy Prevent environmental pollution by chemical substances fo management effective Apply solvent. organic as such solvent. and thinners, paint soluble on cusing Work toward reducing electric power and oil consumption by focusing on the reduction of energy for drive lines, air lighting. and conditioning Promotereduction of discharges for effective utilization of resources and resource recovery, by focusing on reduction re resource and materials papers, discarded packaging of covery. 6. 6. 7. 3. 4. 5. 2. policy basic Environment 1. 2. 3. 4. 5. 4. policy basic Environment 1. ------Toyokawa Factory Toyokawa Toyohashi Factory Toyohashi Toyohashi Factory engages in recycling activity of metal Comply with applicable laws and regulations related to ac to related regulations and laws applicable with Comply targets. and jectives Enhance employee understanding and awareness at Toyo hashi Factory on the environment through environmental education, in-house publicity activities and exchange with public policy environment this Make communities. local within and outside the company. ments associated with the environment and promote build community. local the with relationship symbiotic a ing Reduction of environmental impact Promote energy saving, resource saving, reduction of ac corporate throughout substances chemical and waste transporta and purchasing sales, design, including tivities maintain implement and to tion continuous improvement pro addition, In manufacturing. eco-friendly enhance and mote activities to reduce the emission of greenhouse gases and measures against global warming. products eco-friendly Supplying Be considerate of the environment from the product design stageand reduce use of hazardous substances to supply eco-friendly products. munityby participating in varietya of environmental activi ties such as local environmental conservation activities and contrib communities, local with promotion communication uting to the maintenance and continuation of the natural environment surrounding Mikawa Bay where Toyohashi located. is Factory Contribute to realizing a low carbon society through effi technology, optimum of utilization energy, of use cient streamliningof productionprocesses, efficient transporta tion and the like. Work toward reducing waste through activities such as reining in waste generation, utilization of resources, and ex recycling. panding Work toward decreasing environmental impact through im provement in processes and facilities,designing and devel opment of eco-friendly products. tivities, products and services at Toyohashi Factory and the voluntary regulations of the Japan Iron and Steel Federation etc. or other requirements such as agreements with local communities. Set up environmental objectives and targets at all depart ments in the management system of Toyohashi Factory and Regularly activities. environmental improvement promote review and make necessary revisions to environmental ob requirements related and legal applicable with Compliance require related and legal applicable with comply Strictly Continuous improvement of environmental management of Continuousimprovement performance. environmental overall raise to system Work to establish a harmonious relation with the local com 8. 2. 3. 3. 4. 5. 6. 7. policy basic Environment 1. Environment Basic Policy Basic Environment nat related and scrap metal using production non-metal and ural resources. On the other hand, we are aware that our busi nessuses large amounts of energy and is accompanied with environmentalburden. will We continue to work on the con servation of both the local and global environment. guidelines Action 1. 2. Basic Environment Policy of Topy Industries Industries Topy of Policy Basic Environment - - - - - for ® [Topy Industries, Ltd.] [Topy - - - - - (Super GiantOff-the-road Rim)wheels areul ® wheels can can wheels ® mining dump trucks Ultra-large wheel diameter SGOR efficient mining to largest contributing wheel world’s The hauling and operations SGOR Automotive manufacturers are increasing their use of of use their increasing are manufacturers Automotive Hot-rolled high-strength rim material rim high-strength Hot-rolled safety collision reduction and weight assuringWheels vehicle high-strength steel that enables chassis weight reduction reduction weight enables chassis that steel high-strength while maintaining equal strength conventional to steel as this allows the achievement both of reductions in fuel con sumption due lighter to body weight and improvement in collision has been safety. Topy working on the use high- of bus and truck for sections special hot-rolled strength wheel applications. A challenging issue for raw material was how uniform strength could be attained. have suc We inherent our to thanks production commercial ceeded in thickness material controlling for technologies hot-rolling and temperature. tra-large diameter wheels that Topy has developed for for developed has Topy that wheels diameter tra-large the across sites mining large-scale at used trucks dump dimen have available wheels largest the Currently, world. sions 63 of inches in inner m) (about 44 diameter, inch 1.6 in widthm) and weighesas much (abouttons as 1.1 2.83 about being each, five times the diame ter ordinary of pas senger car wheels. SGOR meetthe demanding min of requirements in applications ing functionality of terms and hauling capaci contributingty, to en of reduction the vironmental burden. ------reduction Corrugated rims Redesigned overall thickness distribution Product drawing Product drawing Non-chrome pre-treatment of aluminum wheel painting processing chromium-free industryAn for first Surfacetreatment aluminum of alloy wheels has long New lightweightNew wheels weight wheel 15% roughly by efficiency fuel to Contribution are that wheels ISO-compliant developed has Topy been developed with a focus on long-term corrosion re sistance and anti-discoloring, and treatment with chromi umwas thought be vital to for anti-corrosion properties. in viewHowever, European of environmental regulations, at their turned have manufacturers automobile Japanese tention surface to treatments that avoid the use heavy of substantial spent has Topy chromium. as such metals timeon the study and technological development alter of succeeded has and chromium, replace to materials native in a chromium-free process for the first time in the indus try. about 15% lighterabout compared 15% the to corresponding con ventional wheels by combining a corrugated rim that uses uses that rim corrugated a combining by wheels ventional an with technology reduction weight inherent Topy’s ECOD-processeddisc. The corrugated rims are pro ducedfrom rim sections withuneven thickness in a corru gated shape on their tire-mounting side, allowing the sec tionsachieve to an optimal thickness distribution when roll-formed. The rim material is produced the by Steel Di vision and shipped the to Wheel Division undergo to pro cess forming into rims, capitalizing on the advantages of com to enables us that system production integrated our with technologies steelmaking hot-rolling unique our bine wheelmaking technologies. design and analysis superior The ECOD discs are formed through cold spinning (rock ing die forming) a tube of made steel of plate, enabling re the compromising without discs lighter and thinner quired strength. Development of Environmentally Friendly Products Products Friendly Environmentally of Development Environmental Activities CSR Activities CSR 45 Corporate Profile and Governance Business Development CSR Activities Additional Data 48 ------29 34 Participants Explanation session for financial results Explanation session for financial Contents Full year financial results 2nd quarter financial results Date Held For our shareholders registered as the of end March of In order earn to the trust our of shareholders and Our basic policy regarding profit distributionto re is Nov 19. 2015 May 26. 2016 Stable dividends Industries, Ltd.] [Topy Shareholder special benefit plan Shareholder Industries, Ltd.] [Topy Participants of FY2015 Explanation Session FY2015 Participants of and September each of year a traffic accident insurance policy and/orflower a gift are provided depending on thenumber shares of owned. Shareholders eligible for a flower gift have an optionto choose a donationto a social welfare organization instead a flowerof gift, whichwill share of behalf on company the by donated be directly holders. investors, we believe it is important continue to making stable dividends besides redistribution profits of by taking into account overall factors including business develop structure. financial corporate strengthening and ment, turn profitsto shareholders in proportionto the consol earn retained up building while business results idated strengthening and development business future for ings our corporate structure. Retained earnings will be allo cated investment to into new business undertakings and long- for technologies/products new of development the term business development, and thus we are committed com global and structure corporate our strengthening to petitiveness. we have maintained So far, a stance that business consolidated on based index return profit the results be targeted at a payout ratio How about of 25%. we now would raise likeever, to the as ratio 35% 30 to to a guide in an effort enrich to profit returnto sharehold theers. decisions However, are be to made with careful considerationfor stable continueddividends. Dividends are, in principle, paid out twice interim per and year—an for responsible body the Regarding dividends. year-end deciding dividends, article it is stipulated the in of Topy’s be can surplus of effect “dividends the to corporation decided theby resolution the of Board Directors of in Companies of Article 459 of 1 Section with accordance Act.” - - (summary) Notice of convocation in English Ordinary General Meeting of Ordinary th [Topy Industries, Ltd.] [Topy 122 Shareholders [Topy Industries, Ltd.] [Topy Explanation session for financial results Adequate information disclosure Adequate information - Initiatives to vitalize general meet ings of shareholders We believe that the opportunity for our top executives We Article2 (For the benefit of society)Topy Indus of the areWe taking the following initiatives vitalize to gener Enrichment and early dispatch notice of convene to shareholders of meeting general Use the of Internet for notices convene to general shareholders of meetings Exercise voting of rights via the Internet Preparation notice of convene to general meetings of (summary) English in shareholders to directly explain our management plan and financial explain our management plan and financial to directly helps us earnresults the trust of our investors. Such ses- disclosed at the are held after financial results sions are end of the second quarter and at the end of the fiscal year him- president The investors. institutional and analysts for results as well as our medium to our financial self presents long-term consolidated management plans. This manage- our from ment plan session can be watched via streaming “IR library.” website for shareholders/investors, Involvement with Shareholders and Stakeholders with Shareholders Involvement tries Group Code Conduct of stipulates that the Topy society with widely “Communicate will Group Industries as wellas shareholders and actively disclose corporate informationfairly and appropriately. Cooperate with local contribution social on work actively and communities the From citizen.” corporate good a being as activities standpoint securing of management transparency we are endeavoring disclose to corporate information in a related the with accordance in manner equitable and fair laws and regulations such as the Financial Instruments and Exchange Act. al meetings shareholders of as a place communication of between the company, shareholders, and investors to ensure that voting rights can be exercised with ease. 1) 2) 3) 4) 5 4 - - 3 2 In 2010s 1 ISO 9001 0 accordance accordance with current 9 8 7 6 5 4 2000s 3 2 1 Topy Industries Topy 0 9 Formulate president's Formulate quality policy QMS in Management 8 Engineering Administration Dept.Engineering Administration 7 6 5 Annual Report • Central quality committee office • Office for president's quality review • Office for quality divisional managers meeting • Support reporting on critical quality issues to the committee management risk the and president • Participate as auditing member to division quality audit and Group company quality audit 4 1990s risks and improvements” 3 Group Implement PDCA based on ISO 9001 Quality System Management company president 2 70 1 through providing world supreme quality— 0 In-house news letter 9 complaints by thorough analysis of quality complaints by thorough 8 FY2016-2017 Quality Policy “Work on the challenges to achieve a zero quality on the challenges to achieve a zero “Work 7 —Establish an unwavering presence in the global markets —Establish an unwavering presence in the global 6 Bridge Div. 5 4 1980s 3 2 1 [Topy Industries, Ltd.] [Topy Minimum once/year 0 9 8 7 Formulate quality policy for factory QMS in Management 6 Formulate division quality policy quality audit Conduct division quality audit company Conduct Group Work as a member of central quality committee Judge the necessity to report quality issues to the president at headquarters 5 4 1970s President quality review 3 Implement PDCA based on ISO 9001 Quality System Management 2 50 Verify the development status status development the Verify of president's quality policy production site with general Factory 1 manager Division for quality 0 with supreme with responsibility head personnel head 9 Managing rankManaging 8 7 (Responsibility and authority) and (Responsibility 6 News 5 Merger 1960s Four Company Topy Industries Topy 4 3 2 1 0 Approximately four times/year four Two times/year Two Mechanism Videos Web Site Web Quality Assurance Philosophy Quality Assurance Topy Report Topy Topy Report Topy Formulate president's quality policy quality president's Formulate factory qualityReview to responding instructions Issue problems quality critical Annual Report Annual Report Always anticipate the expectations and needs of customers ahead of time, react their to requirements promptly andand precisely, continue introduce to and deliver quality products and services that satisfy reliability customers improve quality and product stabilize stages, development and design quality in building on Focus Realize the importance of education and training and enhance the quality awareness of all employees of our organizationNotice that quality defects are caused by multiple factors, promptly investigate the true cause of the problem make to substan tial improvement tial (Committee, motivation enhancement etc.) motivation (Committee, Corporate History Environment Report In-house news letter Corporate Introduction

Topy Industries,Topy is Ltd. devoted placing to customers as our first priority and strivesto contributeto society by delivering safe highand quality products and services that always satisfy customers, while continuously improving theity effectiveness Management System). of our QMS (Qual

Electronic Medium Electronic Topy Industries,Topy Communication Ltd. Chronology Tool Material Printed Quality assurance of each division each Quality assurance of Engineering Dept. Administration Quality Management Structure Conduct audit to verify the effect of Report and follow up quality policy Committee members: chairman, vice chairman and other members • • Central quality committee quality Central Enhance system and activate information exchange information activate and system Enhance Quality managers meeting President • • cost quality and status development transition (Regular meeting) quality critical against taken measures issues by thechairman and vice chairman of the committee (Extraordinary meeting) ■ Relationship with Customers Satisfaction Quality and Customer − Management − Social Responsibility CSR Activities CSR 47 Corporate Profile and Governance Business Development CSR Activities Additional Data 50

------Students from Tendai Primary School Tendai from Students - - - A suspected explosive object is collected using using collected is object explosive suspected A Watching a presentation introducing Topy Group Topy introducing presentation a Watching an extended arm of the special purpose vehicle. A factory tourby primary school students Total of 94 of fifthTotal grader studentsTendai fromPrimary They were taken back the by large factory site and Thefactory will positively An anti-terrorist joint drill Metropolitan the by Tokyo their reinforced has Agency Police Metropolitan The positively will Topy-Rec [Topy Industries, Ltd.] [Topy drill An Anti-terrorist Ltd.] [Topy-Rec, Junior High School students visit visit Junior High School students head Office Topy’s Industries, Ltd.] [Topy On April 15, 2016, eight studentsKohriyama of Junior 2016, On April15, that they are unable to experience at school or in the ar the in experience or school at to unable are they that ac business the on tion tivitiesGroup of the Topy whileresponding the to School,Ayase-shi visited the Ayase Factory on Novem for plant tour. ber 2015 10th, immense observed size SGOR*, of carefully movements cu much with wheels the directly touched machines, of riosities and showed various reactions what to they saw. A lot questions of were raised during their tour showing as learn to enthusiasm their possible. as much various promoting continue local the with exchanges community. Police Agency and Johto Police Stationwas conducted Plaza at Topy-Rec inon Koto-ku. With February 2015, 21, local and activities police with associated people many demon was procedure a attended, community residents special a using object suspicious a collect to how strated dogs. police of involvement with vehicle purpose such place a in acts terrorists’ possible the to caution where facilities commercial large and stations railway as many general people gather and is deploying terror a pre jointly. people the officials and the by campaign vention needs social such to respond management carries its and in safe and secure condi tions. eas where they live. The company gave generalinforma gave The company live. eas where they cursion wasdesigned provide to them withopportunities questions from thestu Thedents. students spent 90 minutes with a break Corporate visit by school students during their school ex school their during students school by visit Corporate in enthusiastic manner to manner to enthusiastic in learn. High School, Fukushima Pre. visited Topy’s head head office. Topy’s visited Pre. Fukushima School, High ------A drill at Topy-Rec Plaza Kaori Takeuchi, one-day policewoman one-day Takeuchi, Kaori A ten-day safe and secure town building, and regional A joint drill participated Johto by Police Station, Fu Upon a request from Johto Police Station that they facilities their providing been long has company The The company continues contributing various to anti A campaign for building safe and se- town cure Industries, Ltd.] [Topy Contribution to local community in local community in Contribution to with the police hands in hands Ltd.] [Topy-Rec, safety and campaign an female 2015 started October 11, staff newly employed at the Ayase Factory participated police in staff clad female The policewoman. one-day as demonstrated campaign anti-crime an in joined uniform in frontRailway the of Station, Yamato passing out leaf letscalling for safetya net be attachedto the to bicycle rack and other anti-theft ideas in order raise to anti-crime awareness. The factory will continue cooperating with community local buildto safe a town. kagawa Police Station and Public Peace Riot Police Plazastaff at Topy-Rec was East held 2015 on June 24, Building.The drill was organized on the assumption that Chemical). Biological and (Nuclear, NBC used terrorists wanted carry to this drill in a place where a lot people of accepted andgather, Topy-Rec it as part their of coop eration contribute to building to a safe and secure com the Police, the by explanation explicit to Thanks munity. attendants understood how the police reacted such to situation and seemed relieved. The parties related the to police agency showed keen interest in the event and enthusiastically. event the watched visitors many prevention, snatching including campaigns, various for prevention swindle of practices. Their cooperation and appreci highly community local was the to contribution ated,and resulted inreceiving anaward from the Metro politan Police Agency on June 2015. 25, crime and traffic safety campaigns in the future. ------(Photo by courtesy of Hino Motors. Ltd.) Firefighting at an outside fuel storage tank - Hino No. trucks 2 in the Dakar No.1& Rally with logo Topy mark The Dakar Rally is called the toughest rally in the Topy Industries co-sponsored “HINO TEAM SUGA “HINO co-sponsored Industries Topy A joint disaster drill was conducted on June 2015 5, With about employees 200 Topy watching, firefight Co-sponsor to “HINO TEAM SUGA- Co-sponsor to “HINO TEAM Rally 2016 in Dakar Off-Road WARA” Industries, Ltd.] [Topy - Fire Toyohashi-shi A Joint Drill with fighting Headquarters Industries, Ltd.] [Topy WARA” in the 14-day long in the Dakar14-day WARA” Off-Road Rally from January 2016. 3 through 16, world. The started rally 2016 from BuenosAires, Argen tina, passing Bolivia and reaching Rosario, to Argentina after covering over 8,500 km. The course includes des erts, unbeaten paths in the mountain area. Lastyear, HINO TEAM SUGAWARA finished1st and2nd place in theclass under engine displacement litters. 10 The team started with an ambition for the repeat last of year for the Hino on based modified vehicles, two and class same Ranger with logo a TOPY mark came and 2nd as in 1st expected. They finishedoverallin 13th31st andcate in gory rankings and expectation for next year is growing. ing started water by spray the by in-house firefighters followed firefighting by using foam by the staff of city fire fighting department from a special firefighting vehicle for aerial an with work rescue including chemical products ladder truck. All participants were impressed with the quick and dependable behaviors in-house of firefighters, those to comparable City Firefighters, of contributing raising to awarenessall of par ticipants the to drill. at the Factory Toyohashi as part the of program for Dangerous Materials Safety Week with participation of Toyohashi-shi Firefighting Headquarters and Topy’s 52 in-house firefightersinvolving seven fire engines. The drill was performed on the assumption thatwe were hit by an earthquake with an intensity levels lower of a fire 5, broke out the of fuel storage tank causing our workers in inspection work the of tank injured and left behind.

- - - “Goanzenni !” “Goanzenni Students operate measuring equipment measuring operate Students Caroline Kennedy, U.S. Ambassador to Tokyo. to Ambassador U.S. Kennedy, Caroline Yasuo Fujii, president Industries of Topy in handshake with Yasuo Fujii, presidentYasuo Industries, Topy of Shinichi Ki Yasuo Fujii, president of Topy Industries of Topy Fujii, president Yasuo invited to a party hosted by U.S. Am- bassador Industries, Ltd.] [Topy Junior high school students participate Junior high school learningin experimental Industries, Ltd.] [Topy theAt request from a junior high school in Chigasaki Clad in the same uniform and safety gearsas Topy’s In their free composition, they were saying, “Maybe I’m jima, general manager the of Wheel Division and Ichiro deputyTakeuchi, general manager the of Wheel Division attended dinner a hosted party by 2015, on April 21, CarolineAmbassador Kennedy, the U.S. the Tokyo, to party was organized commemorate to the visit Steve of Beshear, Governor Kentucky. of A deep relation between IndustriesTopy and StateKentucky of continues since Corporation whenAmerica, 1985 Topy Topy (now Inc.) was established as our first production site in the state. city, two city, male junior high school students visited Kanaga - wa Factory in November for two days experimental learn ing with intent learn to practical things needed for social experience. hands-on from life employee,their day started with salutation a Theirleaning included removing and installing chains for the first time, measuring products dimensions and hard ness, letting them learn the importance observing of the rules, doing the jobs that are appreciated others. by most suited for engineering jobs in the future.” Relationship with Local Communities Society Contributions− to − Social Responsibility CSR Activities CSR 49 Corporate Profile and Governance Business Development CSR Activities Additional Data 52 - Honorable Honorable Mention Award Honorable Honorable Mention Award Honorable Honorable Mention Award [Honorable Mention Slogan] build up stress Don’t in your mind Get yourself refreshed by controlling on-off switch Honorable Honorable Mention Award As part the of event for the National Labor and Health Posters and Slogans awarded for for awarded Posters and Slogans Week FY 2015 National Labor and Health Slogans (expedient translation example for reference for example translation Slogans (expedient only) purpose Posters Week the company solicited posters and slogan from employees. The following posters and slogans have been awarded contest. for the FY2015 Excellent Poster Award Poster Excellent Honorable Mention Award ■ [Excellent Slogan Award] Health check starts with High-spirited workplace begins with this word dark at night due planned to blackout. should We not fade such away precious experiences and must remem ber it every time we have a disaster drill. will We continue the drill in the future. ■ “Hello!” “How are you?” “Hello!” - - - 10 Indonesian trainees Indonesian 10 Aboard (showing a shelter) is hard to recognize at night recognize at to hard is - - A night-shift disaster drill was conducted at the The drill started switching by off the outer lights on the It is very important that the drill The Third Indonesian trainees join the Indonesian trainees join The Third company IndonesianTen trainees, thethird theof program, They are learning jobs from senior workers at the Night-shift disaster drill Kanagawa on March Factory 2015. 20, from 21:30 premise and all lights in thefactory buildings. Evacuation was lead the to general evacuation area (shelter) while reflect of conditions buildings, the in checking facilities ing tapes on the wall, handling roadside of lamps and the door at emergency exit. Then, followed roll by call, contacting and reporting per the rules before activating confirmation of employees safety system. At the general evacuation area, storage place emergency of supplies, storageplace emergency of ration, location emergency of generators, and which lamp be to lighted were checked allby participants. The drill was really practical for us to think the of use emergency of sup plies. isrepeated in order be notto pan icked when a disaster happened. There are many other things to improve and steadilyhave we to work on them. When the Great East JapanEarthquake hitus on March we experienced repeated 2011, 11, fears aftershock, of working in the joined the Topy Industries, Ltd. on June 17, 2015. They 2015. joined Industries, the Topy on June Ltd. 17, they dictionary when the checking studiously learning are find difficult words to understand with regard to the edu cation on safety and work details. difficulties ma in finding handling sometime workplace, chines, heavier weight wheels of and faster line speed than they expected. They are very positive in acquiring skills and learning technologies from the training and play to going are they that determination firm a have more important roles in their home country. This time, they are going stay to three years, three times longer thanthe previous team. They might encounter various unexpected challenges or hitches in every day work at the factory as well as in off-work lives during three years period. But, we hope they will overcome such adverse circumstances with helps Japanese of senior workers and other staff around them and be able to spend fulfilling days possible. as much as - - - - - Human skill Intermediate level communication ability • Fostering junior partners • Senior level communication ability • Organization management • Fostering juniors • Guidance to juniors • • Entry level communication ability We provideWe various health and welfare programs for With the motto “having interests in broad a range of Initiatives on work-life balance Conceptual skill Items to be nurtured ing a career and are family. We working broaden to pro grams for parental and care leave. promote We the en hancement awareness of among employees about these programs posting by special reports in our in-house involved are who employees male introducing newsletters in childcare. employees help to them maintain a balance between hav field beyond the job assigned and maintaining a positive positive a maintaining and assigned job the beyond field attitudefor learning enriches human resources,” arewe focused on developing human resources draw to out the potential and motivationeach of individual. Also, we offer various education systems available from the start em of ployment through retirement to in order nurture to human resourceswith rich expertise and the management facul company. manufacturing a needed for ties • Target-driven management • Business strategy • Applied logical thinking • Problem-solving ability • Basic logical thinking [Topy Industries, Ltd.] [Topy - ] 0.01 0.02 0.00 0.00 0.00 Severity 2.13 1.35 0.00 2.24 2.27 Frequency Frequency Topy Industries, Ltd.

1 2 2 0 5 Knowledge (technical skill) No. of accidents • Master expert knowledge • Basic management • Advanced management • Advanced expert knowledge • Financial knowledge • Expert knowledge • Advanced individual knowledge • Business manners • Individual knowledge • Health and safety 939,813 891,084 440,273 hours 3,711,193 1,440,023 Total working Total Leader Follower Manager (candidate to Newly employed Senior employee become a leader) Development step Total We considerWe securing the health and safety our of have implemented We varietya actions of achieveto The Topy IndustriesThe Topy Group declares in article the 3 of (Term: January throughDecember 2015 2015) Labor Accident Statistical SurveyList Ayase Education System Structure [ Improvement in workplace Improvement health and safety Philosophy and basic policy Philosophy and resources to develop human

Factory Toyokawa Toyohashi Kanagawa workers be to one the of priorities top the of company. zero accidents, and at the same time conduct a monthly statistical survey for labor accidents in order enhance to the awareness health of and safety each of and every employee. The survey results are listed in the company’s magazine. monthly Group Code Conduct of (For the benefitof employees) that it will “Respect the individual character and personal ityemployees, of and provide safe-working environments allowing them work to with enthusiasm, and attain fulfilling lives.”

Relationship with Employees − Comfortable and Environment Safe a Creating − Workplace Social Responsibility CSR Activities CSR 51 Corporate Profile and Governance Business Development CSR Activities Additional Data 54 - - - - Spraying water Spraying On a way walking to home ] ] ] - - - - The Rokkaen (A former resident of Seiroku Muroto) Seiroku of resident former (A Rokkaen The Ayase Factory, Topy Industries, Ltd. Topy Factory, Ayase Head Office, Topy Industries, Ltd. Head Office, Toyohashi Factory, Topy Industries, Ltd. Industries, Topy Factory, Toyohashi A firefightingmanipulation techniques by convention They were able to improve anti-disaster consciousness consciousness anti-disaster improve to able were They A drill for going home by walking was conducted for for conducted was walking by home going for drill A Anticipated rain stopped stopped rain Anticipated The Health Promotion Committee of the Toyohashi Toyohashi the of Committee Promotion Health The national as designated Rokkaen, visited Participants A Firefighting Manipulation Techniques Techniques Manipulation A Firefighting Convention [ A Drill for Going Home by Walking [ [ 47th Walking Event Kuwana in Castle47th Walking Town Ayase team performed impressive operations, showing the joyed relaxed healthy Ayase-shi was conducted on July 19, 2015. Ayase team team Ayase 2015. 19, July on conducted was Ayase-shi tionsbyother teams which by confirmingby their return danger knowing routes, ous areas on the course, checking a rest point, pre paring for concrete actions, at timesetc. emergency. of was one of the fewprivate corporateparticipants while the staff working athead a office on November2015, 20, wana Ishidori Festival (literally translated as “stone bringing bringing “stone as translated (literally Festival Ishidori wana claimedfestival”, be the to loudest festival in Japan, was exhibit. on walking underand mild a under burnvoices big movements agile structions in with endedup with encourag- against dynamic opera Factory organized 47th Walking Event on April 11, 2015 on Factory 2015 organized Walking Event47th on April 11, the about 5 km long course from the Kuwana Station to Park. Kyuka Ku the where Hall property Ishidori important and cultural erage. Theyerage. came fullyin some prepared like conditions, portable the on map application. used a fire enginetruck. and the participantsand the en mostrestof the were the firebrigades The city. the in benefitsoftheir routine trainings by delivering precise in ing hot temperatures and resultswell competing ing programasking them walk to from thehead office to their homes asdisaster a preparedness measure. On three the hours training, the participants km walked in av over10 experience good their from sneaker a brought participants information pre-registered some with drill, previous the in pleasant weather. ------A disaster drill disaster A A beach seining beach A ” or reducing ] Gensai ,” many company,” em Southern Street - Kanagawa Factory, Topy Industries, Ltd. Topy Kanagawa Factory, A disasterA evacuation drill was conductedat Toyoka the after held was committee management risk A is earthquake an from completely damages Avoiding an annual event 2015, for beachOn seining June 7, The festival site was located down straight south to A Summer Health Festival (beach seining) on the beach [ Disaster drill at Toyokawa Factory Toyokawa Disaster drill at Industries, [ Topy Ltd. ] wa Factory on June 10, 2015 on the assumptionwa Factory 2015 on June that 10, a massive earthquake struck region. Tokai The drill this time included a going home drill, a first trial, in addition the to evacuation instructs that program regular the to highly making a area, evacuation second a as ground tense atmosphere the to drill. evacuation and resolved after actions measures from initial actions information and made it well known the to evacuees. After that, the participants were divided into re required, time commuting their to according groups in-house an through made instruction go-home a ceived announcement system, over confirmed the PA their safe ty at the locker room, guard house and parking ground, then went home. practically hard. The factory took a survey this time after the drill. ill We continue work to on “ Chigasaki Beach. Nishihama Chigasaki performed on was Beach has a long history as fishermen town with many popular spots like fishing boat operators and fish restau rants. “ famous the along ployees gathered there with their families in the beautiful Theweather. catch was somewhat poor but this year, sardines, mackerels, barracudas and rays were found amongblast the the catch. atmosphere To the of festival, treasurea hunting game, bread-eatinga race were orga day. summer healthy one enjoyed participants and nized Hoping a big catch in the next year festival! damages a natural of disaster even just a little improv by ing theitems observed during the drill this time, while continu ing the drill with practical much contents. - - - - - Motors Limited Motors An award from Isuzu Division with the gold award gold the with Division ] The Undercarriage Component Component Undercarriage The Motor Corporation Motor An award from Mazda ] The Wheel Division Division Wheel The with the platinum award platinum the with Motor Corporation Motor The Wheel Division and Undercarriage Component Division, Component Division, Undercarriage The Wheel Division and Wheel Division, Topy Industries, Ltd. Wheel Division, Topy Topy will continueTopy further to enhance its total strength In the previous we introduced Report Topy some 2015, TheDivision will continue pursuing high quality and The Wheel Division won the platinum award SQEP for Quality Pro Excellence Supplier for stands SQEP The Various quality awards to the Wheel Di- quality awards Various Industries vision, Topy [ [ Industries, Ltd. Topy Prestigious SQEP Award from Caterpillar from Award SQEP Prestigious An award from Toyota the company continues to promote further improvement further improvement promote to continues company the becometo a corporation trusted customers. by cessand is the most prestigious award given suppliers to who have met overall assessment in quality, costs, deliv ery and other requirements set Caterpillar. by The rank of the award is graded from the highest Platinum Gold, to Divi Component Undercarriage The Bronze. and Silver sion improved their grade from previous Silver Gold, to up. rank one achieving us. on trust solidify customer and theof Wheel Division’s initiatives on quality that have been highly evaluated our by customers. Their continuous ac our form appreciations encouraging brought have tivities customers during as the division FY2015 received awards, Activities for Letter Appreciation 2015 include which Corporation Motors Toyota from Expectations Meet That for two consecutive years, Quality Performance Excel lentAward from Mazda Motor Corporation, and Quality Achievement Award from Isuzu Motors Limited. satisfaction. customer enhance 2015 from Caterpillar Corporation for four consecutive consecutive four for Corporation Caterpillar from 2015 years as a supplier off-road of wheels for mining vehicles the received Division Component Undercarriage the and components undercarriage of supplier a as award gold equipment. construction for - - A lecture scene lecture A Holding the award the Holding ] Manufacturing Indonesia Co., Ltd. Co., Indonesia Manufacturing - - - - The Best Supplier Award plaque presented by Kazushi Ebara, president of Hino Motors PT. Topy Palingda Manufacturing Indonesia Topy PT. PT. Topy Palingda Manufacturing Indonesia received received Indonesia Manufacturing Palingda Topy PT. by Encouraged [ Topy Industries, [ Topy Ltd. ] Kanagawa Factory received an annual zero accident Road safety campaign for parents and and for parents Road safety campaign children Fasteners, [ Topy Ltd. ] A roadsafety class was organized and opened in the The company received a letter of appreciation from from appreciation of letter a received company The from the Japan Iron and Federation Steel Iron the Japan from Topy Palingda wins the Best Suppli Topy ers Motors Hino from Award Indonesia Kanagawa Factory receives an award Kanagawa award an Factory receives theBest Supplier Award from Hino Motors Manufacturing Ltd. Co., Indonesia Suppliersin the 2016 Award and Meeting Hino by Ceremony Indonesia Motors convened on March at a hotel in 30, 2016 Jakarta,Indonesia. the award receiving, and zero occupational injury award from the Japan Iron and Steel Federation Iron at and the 57th for FY2015 SteelSafety Award Ceremony announced in February The award is given2016. the to operation site that has achieved excellent performance in overall safety and is worthy being of recognized as the model for others in order raise to safety awareness and reduce labor accident and in jury. Kanagawa Factory firm uphold to continues determination for “Safety First.” Matsumoto Fasteners, Plant on Topy of September Ltd. for the parents and 2015 children the of local27, com munity. With cooperation from Matsumoto Police Station Station Police Matsumoto from cooperation With munity. such lecture feel-danger Corporation, Motors Honda and as running into the street and involvement accident by using a textbook and an actual vehicle as well as safety demonstrated. were simulator bicycle a using guidance the Matsumoto Police Station and theMatsumo Trafficto Safety Associa contribu long its for tion tion the to program. Relationship with Employees − Comfortable and Environment Safe a Creating − Workplace Social Responsibility CSR Activities CSR 53 Additional Data Corporate Data

Financial Highlights

Millions of yen Thousands of Corporate Profile and Governance Consolidated U.S. dollars 2016 2015 (Note)

Net sales ¥ 215,872 ¥ 237,677 $ 1,915,627 Net income attributable to owners of parent 1,700 2,360 15,086 Total assets 231,583 252,456 2,055,045 Net income per share (in yen and U.S. dollars) 7.18 9.96 0.064 Millions of yen Thousands of Non-Consolidated U.S. dollars 2016 2015 (Note)

Net sales 127, 583 140,884 1,132,159 Net income 1,690 2,886 14,997 Annual Report Total assets 171,278 187, 337 1,519,904 Net income per share 7.14 12.18 0.063 Fact Book Cash dividend applicable to the period (in yen and U.S. dollars) 6.00 4.00 0.053 Business Development Note: Dollar amounts are converted at the rate of ¥112.69 to U.S. 1 dollar (Year ended March 31, 2016) *Consolidated net sales and non-consolidated net sales do not include the consumption tax and related taxes (consumption tax and local con- Contents sumption tax). Additional Data

Financial Highlights 56 Analysis of Operation Results and Financial Situation 57 Five-year Trends in Sales and Profits

Businesses by Segment Consolidated

Non-consolidated • Steel Business 58 • Automotive and Industrial Machinery Net sales (Millions of yen) Net income (loss) (Millions of yen) Net income per share (loss) (Yen) Components Business 59

• Power Generation Business and Other 300,000 5,000 20.00 Business 60 CSR Activities Major Subsidiaries & Affiliates 61

16.52 Directors, Auditors & Operating Officers 62 250,000 237,677 240,534 234,682 4,000 3,918 226,912 215,872 15.00 Consolidated Financial Statements 14.38 3,409 14.20 • Consolidated Balance Sheets (Assets) 63 200,000 3,367 12.18 • Consolidated Balance Sheets (Liabilities/ 3,000 2,886 Net Assets) 64 11.23 • Consolidated Statements of Income and 2,663 161,788 9.96 Consolidated Statements of Comprehensive 65 150,000 10.00 Income 140,047 143,672 140,884 2,360 • Consolidated Statement of Changes 8.08 67 2,000 in Net Assets 127,583 7.18 1,914 1,700 7.50 100,000 1,780 • Consolidated Cash Flow Statement 7.14 Additional Data 69 1,690 • Notes to Consolidated Financial Statements 71 5.00 1,000 Segment Information (2016) 73 50,000 Consolidated Financial Statement for the Past 10 Years 73

0 0 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2012 FY2013 FY2014 FY2015 FY2016 FY2012 FY2013 FY2014 FY2015 FY2016

55 56 Corporate Profile and Governance Business Development CSR Activities Additional Data 58 - 0 500 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 Topy Industries,Topy Ltd. Akemi Recycling Center, Ltd. Industries,Topy Ltd. Ltd. Enterprises, Topy MarineTopy Transport, Ltd. Tojitu Ltd. Co., Ltd. NE-Tojitsu

(Millions of yen) Operating income

4,815 Companies included in this business segment business this in included Companies 63,767 Research and development Research and FY2016 We spentWe million ¥5 on these R&D activities. On going achievements include orders received for We areWe involved in the enhancement quality of level Manufacturing: services: and Sales explore new demand for the product group that will best best will that group product the for demand new explore and shapes special the in technologies production utilize technologies. processing with coupled sections tional products, development of technology on industrial industrial on technology of development products, tional wastes and recycling resources. of of hot of rolled products, reduction industrial of wastes and improvementin environmental issues suchas recycling while implementing development new of shapes and new grade steels. of new shapes, reduction in power intensity rate on conven 3,3813,381 - - - - 72,247 FY2015 1,6301,630 72,955 FY2014 720 67,621 FY2013 3,833 71,271 Net sales income Operating FY2012 0 Business Results Issues be addressed to At theAt same time, we work maximize to the designed We aimWe at becoming a leading company in the seg In this environment, net sales Industries the of Topy In the steel industry, production crude of steel de Steel Business Steel Net sales, Operating income Operating sales, Net

90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 110,000 100,000 Sales (Millions of yen) output effect out the of new steelmaking facilities and ment steel of industry we belong building by to up the highest levels cost of competitiveness in the market and focusing on special shapes and sections featured with originalities. our Group came to ¥63,767 millionGroup came (year-to-year comparison, ¥63,767 to decrease) due decrease to in the sales11.7% price. On slowdown the by affected although and hand, other the in demand for steel material towards the automotive and of result a as business, machinery components industrial appropriate an maintaining etc., exportsecuring volume, sales price, realizing the positive impact the of new steel ef reduction cost intensive other and facilities making forts, operating million income ended (year-to- at ¥4,815 year increase). comparison, 42.4% creased from the previous years, reflecting waning com manufacturing and construction among demand panies. Harsh business environments also continued in the electric furnace industry because demand for steel materials remained weak and the steel market declined. Businesses by segment Businesses by ------Topy Industries,Topy Ltd. President and CEO

Outlook the for future and issues be resolved to In the past fourTopy years the fiscal up to year 2015, Meanwhile, we observed a drastic decline in demand The world demand for automotive and steel is ex Group Industries Topy the circumstances, such Under comprehensive consideration to stable continuation of of continuation stable to consideration comprehensive annual total the Accordingly, shareholders. dividends to dividends payable shareholders to will become per ¥6 share including per share ¥1 paid as interim dividends. *Currently targeted at 30 35%. to Industries Group has steadily executed its business along along business its executed steadily has Group Industries the basic policy aiming attain to “Growth” on the global markets and promote “Change” high to earning corpo rate structures as outlined in the previous Medium-Term Management Plan. Specifically, we expanded have pro chain supply global a establish to oversea base duction machinery components industrial and automotive the of steelmaking new a operating commenced and business competi cost overwhelming realize to designed facilities tiveness, steadily progressing forward build to solid foun dation toward further growth in the future. off-road and machinery components construction the for wheels for mining vehicles reflecting the slow down of economy in China and emerging countries and lingering dropin the prices mineral of resources. cope with To undertaken promptly has company the situation, such a measure restructure to the business but we regret we were unable achieve to the earning targets. pected expand to in the future while domestic demand does not warrant expansion due decreasing to numbers are There society. aging advancing with population in construction the for demand world the uncertainties in machinery and mining equipmentas the marketis still on a slow recovery track, but the demand is expected to growin the long-term perspectiveagainst a backdrop of urbanization. advancing and populations world growing has formulated a new management plan “Growth & covering the 2018) period ” (G&C Change starting 2018 andfrom ending Under FY2016 in FY2018. this new me dium-term management plan, we will continue promoting “Growth” in global dimensions and “Change” in the cor porate structure that will allow generate us to high earn ings putting by the automotive and industrial machinery business into a driving position and accelerate business of growth sustainable achieve to globally development business. the At same time, we continue working find to makeways to best use our of original technologies in our business. new explore efforts to ------Dividend Business Overview Business The basic policy the of company regarding profit al Under the conditions, the Topy Industries Group has has Group Industries Topy the conditions, the Under As for the dividends payable at the end this of con Overall, the global economy during this consolidated Analysis of Operation Results and Financial Situation and Financial Operation Results Analysis of ued rebound to and the European economy began to Therecover. economy in Japan showed signs gradual of recovery supported a lift by in capital investment as com pany revenue improved. individual However, consumption remained factors, other among production, industrial and weak, and a temporary lull in the economy continued. manage consolidated medium-term the implemented ment plan “Growth with basic a & Change princi 2015” pleglobal of “Growth” and “Change” achieve to highlya the plan, this part of one As structure. business profitable Groupbegan manufacturing passenger car wheels at MW ManufacturingTopy (Guanajua Mexico S.A. DE C.V. Mexico). In theto, power generation business, it imple mented business reforms and began supplying power to Power Producers and Suppliers also We continued (PPS). workto on maintaining an appropriatesales price steel, of de to responds that system production a establishing through costs lowering and productivity, improving mand, Group the Meanwhile, activities. energy-conservation machinery com construction its restructure to worked China. in business wheels mining and business ponents Asresult,a net sales for this consolidated fiscal year for Industries, millionthe Topy (year- Group were ¥215,872 income operating decrease), 9.2% comparison, to-year millionwas ¥10,000 (year-to-year comparison, 55.7% increase), ordinary income ended at ¥8,806 million (year- to-year comparison, due increase). 45.8% to However, the allocation a loss of from restructuring associated with net the China, in sites manufacturing of integration the income attributable owner to parent of ended at ¥1,700 million decrease). (year-to-year comparison, 27.9% location return is to profitto shareholders depending on in of fulfillment the and results business consolidated the ternal reserve toward future business developments and strengthening corporate of structures. As for the internal reserve,it will be assigned the to investments into new prod new and technologies new as well as businesses development business stable a achieve to order in ucts in the long term, thus aiming strengthen to corporate profit of index The competitiveness. global and structure results business consolidated the to according returning is targeted at somewhere arounddividend payout ratio it will However, be decided *25%. of after paying careful in dividends stable of continuation the to consideration the future. solidatedfiscal planwe per pay ¥5 to year, share after fiscal year under review showed a moderate recovery, and China in conditions economic stagnant reflecting contin economy U.S. the although countries, emerging Consolidated Business Results for (Summary) FY2016 Business Consolidated Additional Data Additional 57 Additional Data Corporate Data

Business by Segment

Automotive and Industrial Machinery Components Business Power Generation Business Corporate Profile and Governance

Business Results Research and development activities Business by Segment Net sales, Operating income

Domestic automotive production declined from a We are involved in weight saving, quality improve- We have changed the supply destination of electricity (Millions of yen) Net sales (Millions of yen) Operating income year ago, chiefly because of sluggish sales associated ments, cost reduction, speed up of development time to Power Producer and Suppliers, and have continued Net sales Operating income with the light vehicle tax hike and decrease in exports of and development of new products. stable electric supply following our business plan. Net 20,000 3,000 trucks etc. On the other hand, demand for automotives Ongoing achievements related to steel and aluminum sales were ¥10,626 million (year-to-year comparison, 2,475 remained strong. As for the construction machinery wheels for passenger cars include improvement in the 59.9% increase) and operating income was ¥2,475 million industry, the Chinese and Southeast Asian markets con- accuracy of analysis and evaluation technology, develop- (compared with ¥904 million operating deficit a year ago). 15,000 2,000 tinued to contract and demand for mining machinery ment and commercial production of new products, cost remained slow. reduction, and quality improvement of conventional prod- Issue to be addressed In this environment, the Group continued to take every ucts. 10,626 10,000 1,000 step to improve the situation. However, net sales declined Achievements associated with construction and min- We continue to maintain solid production system and

to ¥134,099 million (year-to-year comparison, 11.2% ing equipment components include cost reduction in stable supply of electricity by operating power generation 6,647 decrease), and operating income fell to ¥5,320 million forging process of ultra-large diameter wheels, quality plant while paying the maximum consideration to keep (year-to-year comparison, 23.1% decrease), reflecting the improvements and cost reduction in heat treatment pro- harmonious relationship with surrounding environment. 5,000 0 Business Development impact of a decrease in the sales quantity of wheels for cesses of rollers and shoes for hydraulic excavators. mini vehicles, in addition to a significant drop in the sales We spent ¥457 million on these R&D activities. (904) of undercarriage components for construction machinery 0 -1,000 against backdrop of a sluggish demand for construction FY2015 FY2016 machinery in China and other emerging countries. Companies included in this segment Manufacturing: Topy Industries, Ltd. 500 Issues to be addressed Topy Fasteners, Ltd. Other Business Kyushu Wheel Kogyo, Ltd. We aim to enhance our presence as a “World Top- Sanwa Buhin Co., Ltd. Class General Wheel Maker” by establishing a global Topy America, Inc. 0 Topy Precision Mfg., Inc. Business by Segment Companies included in this segment supply chain that enables us to deliver the wheels with Topy Fasteners (Thailand), Ltd. Manufacturing: Topy Industries, Ltd. common designs to any part of the world. Fujian Topy Autoparts Co., Ltd. The Topy Industries Group also engages in manufac- Topy Enterprises, Ltd. Topy Undercarriage (China) Co., Ltd. At the same time, we plan to explore new markets ture and sales of synthetic mica used in cosmetics and Sales and services: Topy Industries, Ltd. Topy Fasteners Vietnam Co., Ltd. through rebuilding of global supply chain by reinforcing other products, the manufacture and sales of crawler ro- Topy-Rec, Ltd. PT. Topy Palingda Manufacturing Indonesia the functions of mother factory in Japan in addition to the PT. Topy Undercarriage Indonesia bots, indoor and outdoor sign systems, civil engineering

expansion of production and distribution sites overseas Topy MW Manufacturing Mexico S.A. DE C.V. and construction, leasing of real estate such as Topy-Rec CSR Activities in order to solidify the position as a “General Undercar- Sales and Services: Topy Enterprises, Ltd. Plaza (Minami-Suna, Koto-ku, Tokyo), and the operation Autopia Ltd. riage Components Maker of Construction Machinery”. of the sports club OSSO. Net sales were ¥7,378 million, Net sales, Operating income and operating income was ¥1,474 million. (Millions of yen) Net sales (Millions of yen) Net sales Operating income Operating income Issue to be addressed Net sales, Operating income 30,000 3,000 We work to expand sales through product develop- (Millions of yen) Net sales (Millions of yen) ments that catch customer needs in our efforts to devel- 25,000 2,500 Net sales Operating income Operating income op versatile businesses including synthetic mica, crawler 180,000 18,000 robots, various services and other businesses. 20,000 2,000 154,031 160,000 151,025 16,000 145,398 147,423 15,232 1,474 14,303 140,000 134,099 14,000 Research and development activities 15,000 13,891 1,323 1,500 120,000 12,000 We work on positive promotion of university-industry 10,392 9,966 10,000 1,000 Additional Data 801 100,000 10,000 cooperation in new areas. The Science Division is in- 7,378 volved in the development of new products using high 542 7,757 80,000 7,360 8,000 6,919 gloss synthetic mica as well as crawler robots. R&D cen- 5,000 632 500 60,000 5,320 6,000 ter is involved in the development of basic element tech- 0 0 40,000 4,000 nology related to each business. We spent ¥597 million on these activities. FY2012 FY2013 FY2014 FY2015 FY2016 20,000 2,000 *Sales and operating income attributable to Power Generation shown 0 0 above are included the above figures until FY2015. FY2012 FY2013 FY2014 FY2015 FY2016

59 60 Corporate Profile and Governance Business Development CSR Activities Additional Data 62 As of July 1, 2016 [Topy Industries, Ltd.] [Topy Titles or responsibilities or Titles General Manager of Internal Audit Dept. General Manager of Engineering Administration Dept. Administration Engineering of Manager General General Manager of Internet of Things Promotion Dept. General Manager of Finance Dept. (Topy Undercarriage (China) Ltd.) Co., General Manager of the Steel in Div., charge of Steel Business General Manager of General Affairs Dept. General Manager of the Wheel in Div., charge of Automotive and Industrial Machinery Business Components Deputy General Manager of the Wheel Div. Deputy General Manager of the Wheel Div. General Manager of the Science Div. Dept. Personnel of Manager General General Manager of the Undercarrige Components in Div., charge of Automotive and Business Machinery Components Industrial Outside Director Outside Auditor Outside Auditor Outside General Manager of the Corporate Planning Dept. In charge of General Affairs Dept. Representative Director Representative In charge of Corporate Planning, Personnel Dept. & Finance Dept. In charge of Engineering Administration Dept. and Internet of Things Promotion Dept. Name Yasuo Fujii Yasuo Norio Saito Norio Yasuto Ishii Akira Higashi Akira Toshiyuki Tani Toshiyuki Shinichi Kijima Shinichi Kazuo Shouyu Tsuyoshi Inoue Tsuyoshi Ichiro Takeuchi Ichiro Tadashi Kojima Tadashi Yukihiro Ogawa Hiroji Kobayashi Hiroji Koichi Sakamoto Koichi Katsuyoshi Daido Katsuyoshi Hiroyuki Kinoshita Hiroyuki Masaru Yamamoto Masaru Satoshi Kumazawa Satoshi Tsuyoshi Nakamura Tsuyoshi Kazuhisa Nakayama Kazuhisa Masakazu Kawabata Masakazu Masayoshi Takezawa Masayuki Yamaguchi Masayuki Director Position President President Statutory Auditor Statutory Auditor Statutory Auditor Statutory Auditor Statutory Operating OfficerOperating Operating OfficerOperating Operating OfficerOperating Operating OfficerOperating OfficerOperating Operating OfficerOperating OfficerOperating President and CEO Director, Executive Vice Director, Executive Vice Senior Managing Director Managing Senior Managing Operating Officer Operating Managing Managing Operating Officer Operating Managing Officer Operating Managing Officer Operating Managing Managing Operating Officer Operating Managing Officer Operating Managing Directors, Auditors & Operating Officers & Operating Directors, Auditors - - - - 75 70 35 by) (30) 100 100 0.1 (80) 100 100 100 (1.4) (100) (0.1) 36.0 20.5 (Owned Holding voting right or owned by (%) As of March 31, 2016 As of March Business segment Automotive and Industrial Machinery Components Automotive and Industrial Machinery Components Automotive and Industrial Machinery Components Others Automotive and Industrial Machinery Components Manufacture and Manufacture sales of steel and products engineering Automotive and Industrial Machinery Components Steel Automotive and Industrial Machinery Components Automotive and Industrial Machinery Components ¥764 million ¥1,214 million ¥7,513 million 81 ¥89,040 million ¥31,965 million 173 300 U.S. 330 103 100 491 U.S. 6.24 yuan yuan pesos pesos billion million million 1,969 dollars million rupiah million million dollars of yen) Capital thousand thousand (millions 419,524 location (1) Net sales (2) Operating income (3) Net profit (4) Net assets assets (5) Gross Head office West Java, West Indonesia Jawa Barat, Indonesia Tianjin, China Jung Yen, Jung Yen, Viet Nam Kitakyushu-shi, Fukuoka Pref. Qingdao, China Nagaoka-shi, Niigata Pref. State of Guanajuato, Mexico State of San Luis Potosi, Mexico Chiyoda-ku, Tokyo rect holding percentages. rect filiated companies). and $62,999,400 U.S. of paid premiums Mfg., Inc. have Precision Topy and Inc, America, Topy the capital mentioned above, totaling capital of U.S. aside from U.S. $4,950,000, respectively, $63,000,000 and U.S. $5,000,000 respectively. Undercarriage Topy Ltd., Co., Autoparts Topy Fujian Inc., America, Topy Ltd., Enterprises, Topy categorized as special Palingda Manufacturing Indonesia are Topy (China) Co., Ltd. and PT. subsidiary companies. Hokuetsu Metal Co., Ltd. and Nippon Steel & Sumitomo Metal Corporation issue an official fi nancial statement separately. Indus of the consolidated sales of Topy Enterprises, Ltd. as a proportion The sales ratio of Topy Industries Group internal exceeds 10% (excluding tries Group sales among consolidated Topy companies). Major financial information Respective business segments are listed in the “business segment” column (excluding other af listed Respective business segments are The values in parentheses under the “holding voting right or owned by” column represent indi “holding voting right or owned by” column represent under the The values in parentheses Company name PT. Topy Topy PT. Undercarriage Indonesia PT. Topy Palingda Topy PT. Manufacturing Indonesia Tianjin Topy Tianjin Topy Machinery Co., Ltd. Topy Fasteners Topy Vietnam Co., Ltd. Nippon Steel Topy Nippon Steel Topy Bridge Co., Ltd. (Other Affiliates) Nippon Steel & Sumitomo Metal Corporation Topy Undercarriage Undercarriage Topy (China) Co., Ltd. (Unconsolidated subsidiary accounted for under the equity method) Hokuetsu Metal Co., Ltd. Topy MW Topy Manufacturing Mexico S.A. DE C.V. Fasteners Topy Mexico, S.A. DE C.V. 2. 3. 4. 5. Notes: 1. 6. [Topy Industries, Ltd.] [Topy 95 75 (30) (10) (40) 100 100 100 100 100 100 100 100 100 100 100 100 100 100 (100) (100) (100) (100) Holding voting right or owned by (%) Business segment Automotive and Industrial Machinery Components Power Generation Automotive and Industrial Machinery Components Steel Automotive and Industrial Machinery Components Steel Steel Automotive and Industrial Machinery Components Others Automotive and Industrial Machinery Components Automotive and Industrial Machinery Components Steel Automotive and Industrial Machinery Components Steel, Automotive and Industrial Machinery Components, Other Automotive and Industrial Machinery Components Automotive and Industrial Machinery Components 50 30 34 80 60 50 U.S. 600 205 200 200 100 300 310 225 480 194 U.S. baht yuan yuan dollars million million million dollars of yen) Capital thousand thousand (millions location Head office Illinois, U.S.A. Kentucky, U.S.A. Kentucky, Toyohashi-shi, Toyohashi-shi, Aichi Pref. Bando-shi, Ibaraki Pref. Toyohashi-shi, Toyohashi-shi, Aichi Pref. Koto-ku, Tokyo Urayasu-shi, Chiba Pref. Toyohashi-shi, Toyohashi-shi, Aichi Pref. Miyako-gun, Fukuoka Pref. Koto-ku, Tokyo Matsumoto-shi, Nagano Pref. Qingdao, China Toyohashi-shi, Toyohashi-shi, Aichi Pref. Chonburi, Thailand Shinagawa-ku, Tokyo Fujian, China Company name Topy Precision Mfg., Precision Topy Inc. Topy America, Inc. Topy Akemi Electric Power, Akemi Electric Power, Ltd. Sanwa Buhin Co., Ltd. Akemi Recycling Ltd. Center, Autopia, Ltd. NE-Tojitsu, Ltd. NE-Tojitsu, Tojitu Co., Ltd. Tojitu Kyushu Wheel Kogyo, Ltd. Topy-Rec, Ltd. Topy-Rec, Topy Fasteners, Ltd. Topy Qingdao Topy Qingdao Topy Machinery Co., Ltd. Topy Marine Topy Ltd. Transport, Topy Fasteners Topy (Thailand), Ltd. Fujian Topy Fujian Topy Autoparts Co., Ltd. (Consolidated Subsidiaries) Enterprises, Ltd. Topy Major Subsidiaries & Affiliates & Subsidiaries Major Corporate Data Additional Data Additional 61 Corporate Profile and Governance Business Development CSR Activities Additional Data 64 692 (115) 2,662 3,887 1,411 1,517 2,085 7,179 8,262 9,584 94,117 14,704 20,729 97,711 26,684 44,325 17,100 52,045 (9,264) 200,577 102,751 591,286 211,199 207,357 576,600 186,201 167,042 480,540 825,521 887,151 1,167,885 2,055,045 (Note) $ 172,553 U.S. dollars Thousands of (8) 518 140 257 403 838 (281) (925) 9,574 1,753 1,753 1,750 1,544 8,263 2,729 3,796 3,409 3,409 5,300 10,861 69,274 21,954 18,824 75,241 13,906 92,281 10,399 20,983 26,662 53,399 23,600 107,9 41 144,515 252,456 ¥ 26,707 ¥ 26,707 2015 78 171 159 (13) 438 235 809 300 Millions of yen (931) 1,927 1,657 1,080 5,865 3,007 4,995 2,336 11,011 11, 579 54,152 18,824 93,028 10,606 99,973 66,632 (1,044) 20,983 23,367 64,977 22,603 23,800 131,609 231,583 ¥ 19,445 2016 Notes and accounts payable - trade operating - obligations recorded Electronically payable loans Short-term bonds of portion Current Lease obligations Lease Income taxesIncome payable Other liabilities current Total payable Bonds Long-term loans payable obligations Lease taxDeferred liabilities Provision for corporate officers’ retirement benefits Reserve for repairs Net defined benefit liability obligations retirement Asset Liabilities from application of equity method of application from Liabilities Retained earnings Retained Treasury shares Other non-current liabilities Total stock Capital surplus Capital Total shareholders’ equity shareholders’ Total securities available-for-sale on difference Valuation Deferred gains or losses on hedges Foreign currency translation adjustments translation currency Foreign plans benefit defined of Remeasurements income comprehensive other accumulated Total Consolidated BalanceConsolidated Sheets/ (Liabilities Net Assets) Current liabilitiesCurrent Non-current liabilities Non-current Total liabilities Total equity Shareholders’ Accumulated other comprehensive income comprehensive other Accumulated Non-controlling interests Non-controlling Total netTotal assets Liabilities Net assetsNet Total liabilitiesTotal and net assets (488) (382) 5,502 12,175 12,175 23,862 16,452 38,051 23,614 13,826 17,313 38,202 84,355 13,719 39,755 913,338 221,777 267,113 862,419 755,134 269,314 427,207 162,037 291,925 351,282 113,639 (14,438) (485,811) (274,612) 1,192,626 2,055,045 1,685,908 (Note) $ 221,821 (1,258,692) U.S. dollars U.S. Thousands of 607 (46) (34) 3 ,114 1,417 1,417 9,910 1,937 4,418 4,314 1,302 5,737 5,737 2,079 4,450 2,095 37,161 51,651 (1,199) 32,615 13,324 18,479 33,359 43,988 43,988 85,547 33,385 101,471 191,503 112 ,4 0 6 150,985 (52,932) (31,290) 252,456 (139,852) ¥ 22,048 2015 620 (43) (55) Millions of yen of Millions 1,951 1,372 1,372 2,661 1,558 1,854 1,546 9,506 4,288 2,689 4,480 4,305 97,18 6 30,101 48,142 (1,627) 18,260 24,992 32,897 12,806 39,586 85,096 30,349 102,924 189,985 231,583 134,397 (54,746) (30,946) (141,842) ¥ 24,997 2016 Leased assets, net assets, Leased depreciation Accumulated net Other, Accumulated depreciation Accumulated net structures, and Buildings depreciation Accumulated Machinery, equipment and vehicles, net Accumulated depreciation Accumulated Other Deferred tax assets investmentsTotal and other assets Buildings and structures and Buildings assets Leased receivable loans Long-term Machinery, equipment and vehicles and equipment Machinery, Land Investment securities Investment Other accounts doubtful for Allowance Construction in progress in Construction Other equipment and plant property, Total assets intangible Total Total non-current assets non-current Total Intangible assets Intangible Property, plant and equipment and plant Property, Investments and other assets Total currentTotal assets Notes and accounts receivable-trade goods finished and Merchandise Work in process supplies and materials Raw Deferred tax assets Other accounts doubtful for Allowance Cash and deposits Consolidated BalanceConsolidated Sheets (Assets) Non-current assets Non-current Current assets Total assets Assets Consolidated Financial StatementsConsolidated Corporate Data Additional Data Additional 63 Corporate Profile and Governance Business Development CSR Activities Additional Data 66 (44) (266) 11,935 (6,744) (4,606) (47,671) (56,261) (18,067) (72,810) (60,875) (Note) U.S. dollars U.S. Thousands of 65 (6) (70) 2 ,115 1,907 3,441 4,894 12,416 10,301 12,486 2015 (5) (30) Millions of yen of Millions (519) (760) 1,345 (5,372) (2,036) (8,205) (6,860) (6,340) 2016 Valuation difference on available-for-sale securities available-for-sale on difference Valuation Deferred gains or losses on hedges adjustment translation currency Foreign Remeasurements of defined benefit plans, net of tax equity method using for accounted associates of income comprehensive other of Share income comprehensive other Total Comprehensive income attributable owners to of parent interests non-controlling to attribute income Comprehensive Consolidated Statements of Comprehensive Income Comprehensive of Statements Consolidated income Net Other comprehensive income comprehensive Other Comprehensive income Comprehensive to attributable income Comprehensive 0 －－ 612 169 790 1,136 ） 3,718 6,061 3,976 4,756 8,439 9,664 6,265 2,059 2,733 3,905 (3,141) 11,935 78,144 43,163 41,539 13,826 13,994 15,086 10,090 24,829 29,595 88,739 24,599 50,430 245,532 334,280 1,581,338 (Note) $ 1,915,627 U.S. dollars U.S. Thousands of 1 －－－ 12 16 37 69 40 80 96 415 332 570 570 575 243 2 ,115 1,124 (244) (500) 1,657 4,476 1,643 6,037 2,361 1,334 2,028 2,028 6,422 2,862 2,360 （ 34,915 28,492 202,762 202,762 ¥ 237,677 ¥ 237,677 2015 ） 0 －－ 19 69 89 419 128 951 232 536 683 706 308 440 448 Millions of yen of Millions 1,137 (354) 1,089 1,700 1,577 1,558 4,681 1,345 5,683 3,335 2,772 2,798 4,864 8,806 37,670 27,6 69 10,000 178,201 2016 ¥ 215,872 （ Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Comprehensive Statements of and Consolidated Income Statements of Consolidated Total extraordinary losses Total Loss on sales of non-current assets Loss on retirement of non-current assets Loss on reduction of non-current assets Loss on valuation of investment securities loss Restructuring loss Impairment Other Total extraordinary income extraordinary Total Total non-operating expenses non-operating Total Gain on sales of non-current assets Gain on sales of investment securities income Subsidy Insurance income Insurance Other income non-operating Total expenses Interest losses exchange Foreign Other Interest income Interest Dividends income method equity using for accounted entities of profit of Share Net income (loss) attributable owners to of parent Total incomeTotal taxes Net income (loss) attributable non-controlling to interests Income before income taxes and minority interests taxes-currentIncome Income taxes-deferred income Net Extraordinary losses Ordinary income Extraordinary income Non-operating expenses Non-operating Gross profit Selling, general and administrative expenses income Non-operating Cost of sales Operating income Operating Consolidated Statements of Income of Statements Consolidated sales Net Consolidated Financial StatementsConsolidated Corporate Data Additional Data Additional 65 Corporate Profile and Governance Business Development CSR Activities Additional Data 68 0 (71) (53) (44) (44) (115) 9,584 17,10 0 15,556 15,086 (6,771) (6,771) 52,045 33,685 44,325 (9,264) (5,963) (5,963) (8,404) (2,494) 8 87,151 957, 858 957, 858 (47,94 6) (47,94 6) 123,401 (7 7, 327) (71,355) (71,355) (16,585) (16,585) (70,698) $ 92,280 (Note) U.S. dollars Thousands of － 53 (4) (5) (8) (3) (3) 534 (101) (101) (281) (710) 1,915 1,915 4,951 4,951 1,753 1,855 3,262 3,262 3,779 3,796 2,360 10,126 10,126 11,668 10,024 96,219 (2,196) 13,906 10,399 96,272 107,9 41 ¥ 5,447 2015 0 (6) (5) (5) (8) (13) Millions of yen (281) (672) (672) (763) (763) (947) 1,927 1,753 1,700 1,080 5,865 4,995 3,796 (8,041) (8,041) (7,9 67) (8,714) 13,906 99,973 (1,869) (1,869) (1,044) (5,403) (5,403) 107,941 107,941 ¥ 10,399 2016 Net changes of items other than shareholders’ equity Net changes of items other than shareholders’ equity Net changes of items other than shareholders’ equity Net changes of items other than shareholders’ equity Net changes of items other than shareholders’ equity Net changes of items other than shareholders’ equity Net changes of items other than shareholders’ equity Dividends from surplus Net income attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes of items other than shareholders’ equity Cumulative efforts of changes in accounting policies accounting in changes efforts of Cumulative Balance at the beginning of year Balance at the beginning of year Balance at the beginning of year Balance at the beginning of year Balance at the beginning of year Balance at the beginning of year Balance at the beginning of year Total changes of items during period Total changes of items during period Total changes of items during period Changes of items during period Balance at the end of year Changes of items during period Balance at the end of year period during items of Changes Total changes of items during period Total changes of items during period Balance at the end of year Total changes of items during period Changes of items during period during items of Changes Balance at the end of year Changes of items during period Balance at the end of year Changes of items during period Balance at the end of year Total changes of items during period Restated balanceRestated Changes of items during period Balance at the end of year Valuation difference on available-for-sale securities Valuation difference on available-for-sale Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plants Accumulated other comprehensive income Accumulated other comprehensive Total accumulated other comprehensive income Minority interests Total net assets 0 0 0 0 － (53) (53) (53) 6,673 6,620 15,086 15,086 (8,262) (8,404) (8,404) (8,208) 167,0 42 167,0 42 818,893 818,893 825,521 186,201 473,858 473,858 480,540 (Note) $ 186,201 U.S. dollars U.S. Thousands of －－ 53 53 (5) (5) (5) (919) (710) (710) (925) 1,649 1,643 2,360 2,360 51,749 51,695 18,824 18,824 92,281 20,983 90,637 53,399 90,584 ¥ 20,983 2015 0 0 0 0 － (6) (6) (6) 746 752 Millions of yen of Millions (931) (925) (947) (947) 1,700 1,700 54,152 18,824 18,824 93,028 93,028 20,983 92,281 92,281 53,399 53,399 ¥ 20,983 2016 Disposal of treasury shares Dividends of surplus of Dividends Net income attributable owners to of parent shares treasury of Purchase Purchase of treasury shares treasury of Purchase Disposal of treasury shares Dividends of surplus of Dividends Net income attributable owners to of parent Disposal of treasury shares Cumulative efforts of changes in accounting policies accounting in changes efforts of Cumulative Cumulative efforts of changes in accounting policies accounting in changes efforts of Cumulative Total changesTotal of items during period Total changesTotal of items during period Balance at the end of year Total changesTotal of items during period Restated balanceRestated period during items of Changes Balance at the beginning of year Total changesTotal of items during period Changes of items during period during items of Changes Balance at the end of year Balance at the end of year Balance at the beginning of year Changes of items during period during items of Changes Restated balanceRestated Balance at the end of year Balance at the beginning of year Changes of items during period during items of Changes changesTotal of items during period Balance at the end of year Balance at the beginning of year period during items of Changes Balance at the beginning of year Consolidated Statement of Changes in Net Assets of Changes in Net Consolidated Statement Total shareholders’ equity shareholders’ Total Treasury stock Treasury Retained earnings Retained Capital surplus Capital Capital stock Capital Shareholders’ equity Shareholders’ Consolidated Financial Statements Consolidated Corporate Data Additional Data Additional 67 Corporate Profile and Governance Business Development CSR Activities Additional Data 70 0 − (53) (107) 4,304 (8,413) 25,424 32,283 (1,358) (4,952) (3,434) (47,032) (47,02 3) (74,461) 218,289 192,857 $ (3,603) (Note) U.S. dollars Thousands of － (5) 107 791 (60) (389) (713) (139) 9,928 4,247 15,486 13,157 17,485 21,733 (5,418) (5,000) ¥ (636) 2015 0 − (6) (12) 485 Millions of yen (153) (558) (948) (387) 3,638 2,865 21,733 (8,391) 24,599 (5,299) (5,300) ¥ (406) 2016 Proceeds from long-term loans payable Repayment of long-term loans payable Proceeds from issuance of bonds Redemption of bonds Increase (decrease) in deposit received through CMS Repayments of lease obligations Purchase of treasury shares Proceeds from disposal of treasury shares Proceeds from share issuance to non-controlling shareholders Cash dividends paid Dividends paid to non-controlling interests Net cash provided by (used in) financing activities Net increase (decrease) in short-term loans payable Net increase (decrease) in Cash Flows from financing activities Cash Flows from financing Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year －－ 115 151 133 169 781 879 (231) (249) 1,136 (808) 3,177 7,605 7, 3 65 3,931 3,221 3,905 14,198 (1,136) (1,180) 37, 2 53 21,377 10,090 (7,0 6 4) (3,976) (9,664) (3,079) (2,059) 171,675 (10,178) (27,15 4) 199,716 100,461 (66,812) (42,027) (83,663) $ 41,539 (Note) U.S. dollars Thousands of －－－－ 11 41 37 39 20 22 103 (12) 106 570 665 268 228 (76) (36) (80) (30) (145) (138) (570) 1,170 1,124 (338) (644) (277) 1,576 1,334 2,949 (1,145) 10,315 21,735 21,735 19,440 (2,398) (29,141) ¥ 4,476 ¥ 4,476 (28,870) 2015 －－－ 13 17 15 19 99 88 128 (91) 857 363 830 358 440 448 (26) Millions of yen (28) (133) (128) 1,137 (232) (448) (347) (796) 4,198 1,600 4,480 2,409 11, 321 (1,147) (7, 529) 19,346 (1,089) (9,428) (4,736) 22,506 (3,060) ¥ 4,681 2016 Consolidated Cash Flow Statement CashConsolidated Flow Proceeds from subsidy income Net cash provided by (used in) investing activities Collection of loans receivable Purchase of intangible assets Other, net Purchase of investment securities Proceeds from sales of investment securities Proceeda from sales of shares of subsidiaries and associates Payments of loans receivable Purchase of property, plant and equipment Proceeds from sales of property, plant and equipment Interest and dividend income received Proceeds from Insurance income Income taxes paid Income taxes refund Net cash provided by (used in) operating activities Loss on reduction of non-current assets Decrease (increase) in notes and accounts receivable-trade Decrease (increase) in inventories Increase (decrease) in notes and accounts payable-trade Increase/decrease in other assets/liabilities Subtotal Loss (gain) on sales and retirement of property, plant and equipment Loss (gain) on sales and retirement of property, plant Interest expenses paid Interest expenses Insurance income method Share of (profit) loss of entities accounted for using equity securities Loss (gain) on sales of short-term and long-term investment investment securities Loss (gain) on valuation of short-term and long-term Subsidy income Loss on business restructuring Impaisment loss Increase (decrease) in allowance for doubtful accounts retirement benefits Increase (decrease) in allowance for executive directors’ Increase (decrease) in allowance for periodic repairs Increase (decrease) in net defined benefit liability Interest and dividend income Depreciation Net decrease (increase) in time deposits Income (loss) before income taxes and non-controlling interests Income (loss) before income Cash flows from investing activities Cash Flows from operating activities Cash Flows from operating Consolidated Financial StatementsConsolidated Corporate Data Additional Data Additional 69 Corporate Profile and Governance Business Development CSR Activities Additional Data 72 - - - - The impacts by the application of The Guide Related to Collectible The impacts by the application of The Guide Related to Collectible To be applied effective from the beginning of the new consolidated the beginning of the new consolidated from be applied effective To Impacts from the application of the said accounting standard and related and related standard the application of the said accounting Impacts from requirements Deferred Tax Assets on the consolidated financial statement are being as Assets on the consolidated financial statement are Tax Deferred fiscal year starting on and after April 1, 2016. counting Standard Related to Tax Effect Accounting with regard to the to the with regard Accounting Effect Related to Tax counting Standard tax assets is applied. collectability of deferred sessed at present. amount of deferred tax assets, and defined the guide line when the Ac amount of deferred justments including temporary differences in the future in the corporation in the in the future justments including temporary differences under category (3). (3). ments of category (4) and also falls under category (2) or category under category (1) through category (5). under category (1) through the corporations under category (2). ∙ Processing of the corporation when the corporation meets the require of the corporation when the ∙ Processing 2. Scheduled date of application 3. Category requirements and reviewing of the processing of allocated amount processing of the and reviewing Category requirements assets. tax of deferred meet any of the requirements of the corporation that does not ∙ Processing to category (2) and category (3). related ∙ Category requirements to be scheduled in amount that is difficult deductible of future ∙ Processing tax ad taxable income before of rational estimating period of ∙ Processing

------currency forecast transaction forecast currency Commodity futures Commodity physical transaction rate swap Interest rate Borrowing Exchange contract and currency swap Exchange contract and currency Foreign currency denominated credits and foreign and foreign denominated credits currency Foreign

The Company principally has adopted the deferral hedge account The Company principally has The Company hedges against a fluctuation in exchange rates, com rates, exchange in fluctuation a against hedges Company The Hedging methods and hedging items to which hedging accounting Hedging methods and hedging items to which hedging accounting in cash flow as hedg the total fluctuations The Company compares The Application Guide Line for Collectability of Deferred Tax Assets Tax The Application Guide Line for Collectability of Deferred The Company has adopted tax-exclusion system as accounting pro The Company has adopted tax-exclusion system as accounting Scope of funds covers cash in hands, deposit with unrestricted with with unrestricted deposit in hands, cash covers of funds Scope Hedge accounting method Hedging policy Hedging method: Hedging item: Hedging method: Hedging item: ing. The deferral accounting is adopted for exchange forward contracts adopted for exchange forward ing. The deferral accounting is special and met are requirements accounting when swaps currency and require rates swaps when accounting accounting is adopted for interest met. ments are Hedging methods and hedging items as stated below. has been employed for this consolidated fiscal term are Hedging method: with internal standards. rates in accordance modity prices and interest Evaluation method of hedging effectiveness method for the ing item and the total fluctuations in cash flow as hedging and judgment to hedge effectiveness hedge implementation from period factors. make a judgment based on the fluctuation amount of both rates by special accounting, effec for the swapping of interest However, tiveness evaluation is omitted. Hedging item: Hedging In connection with the transferring of practical accounting guide line and to with regard to account processing) auditing guide line (the part related the Japan Certified Public Accountant Associ accounting from tax effect ation to the Corporate Accounting Standard Committee, the Corporate Corporate the Committee, Standard Accounting Corporate the to ation Committee has divided corporations into five cate Accounting Standard to the collectability of deferred to the guide lines related gories with regard tax asset chiefly defined among the said practical guide in the Japan Cer report No. 66: auditing processing tified Public Accountant Association tax assets, basi concerning on the collectability of deferred the judgment cally followed the framework that estimates the allocated amount of de to the categories and conducted necessary according tax assets ferred of allocated and part of processing on the category requirements review Standard No. 21 dated September 13, 2013), Accounting Standard for for No. 21 dated September 13, 2013), Accounting Standard Standard No.22 Consolidated Financial Statement (Corporate Accounting Standard applied effective are standards dated September 13, 2013) and related review the fiscal year under the consolidated accounting term from from methods of net income in the fiscal term and the changes in presentation minori methods from as well as the changes in presentation under review ty interests to non-controlling interests are adopted, To reflect these these reflect To adopted, are interests to non-controlling ty interests methods the consolidated financial state changes in the presentation consolidated fiscal year. in the preceding ments had been rearranged Accounting process for consumption tax Accounting process Consolidated cash flow statement and scope of funds sitions for Business Combination (Corporate Accounting ∙ Accounting Standard drawal and short-term investments with high liquidity with maturity of three of three drawal and short-term investments with high liquidity with maturity months or less and minimal risks against fluctuations in values. cess for consumption tax. (Change in accounting policy) to corporate mergers and acqui related Application of accounting standard a) Accounting Standard unapplied Accounting Standard Assets Tax ∙ Application Guide Line for Collectability of Deferred 28, 2016) No. 26 dated March (Corporate Accounting Standard 1. Outline c) b) d) (8) (7)

------4-14 years 2-10 years 10-47 years Others The principal estimated useful lives: Buildings and structures Machinery and transportation equipment Primarily moving average method (values on balance sheet to be cal Primarily moving average method moving others primarily by cost and identification by individual Rolls Depreciation of property, plant and equipment is calculated by the the plant and equipment is calculated by of property, Depreciation To prepare for possible losses due to uncollectable accounts such such accounts uncollectable to due losses possible for prepare To For software (for in-house use), the straight-line method is adopted (for in-house use), the straight-line For software the leasing term as estimated useful lives and The Company regards In calculating retirement benefits obligations, the benefit formula ba In calculating retirement Actual gain and loss are amortized in the year following the year in amortized in the year following the year in Actual gain and loss are To prepare for the payment of retirement benefits for the operating operating the for benefits of retirement payment the for prepare To cation of merchandise (values on balance sheet to be calculated by writing cation of merchandise profitability) down book value due to reduced profitability) due to reduced culated by writing down book value average method (values on balance sheet to be calculated by writing down average method (values on balance sheet to be calculated by writing profitability) book value due to reduced Monetary credits and debts in foreign currencies have been transferred have been transferred currencies and debts in foreign Monetary credits Assets, liabilities and earnings, expenses of subsidiaries overseas have Tangible fixed assets (except for leasing assets) Tangible others by the declining balance method or the straight-line method, and de the adopt and consolidated subsidiaries declining balance method, Allowance for uncollectable accounts the Company has posted estimated uncollect as accounts receivable, Intangible fixed assets (except for leasing assets) The straight-line method is adopted. based on the estimated useful life in the company. Leasing assets to reduced value residual eventual with straight-line method the adopts stipulating the transfer of owner For the finance lease agreements zero. Attribution method for projected retirement benefits retirement Attribution method for projected ship and the agreements that started before March 31, 2008, accounting March that started before ship and the agreements lease transactions is adopted. standard with in accordance process able accounts by using actual rate of uncollectable accounts for general of collection possibility individual and also by checking accounts credit for special accounts such as doubtful accounts. for the benefits. dards benefits for the period up retirement sis is adopted to attribute projected consolidated accounting tern.to the current gaps between theory and practice primarily by the straight-line method which the gain or loss is recognized years of service of the employees (principally over the average remaining 15 years). clining balance method or the straight-line method. However, for build clining balance method or the straight-line method. However, for auxiliary facilities of in Japan after April 1, 1998 (except ings acquired method. is calculated by the straight-line building), depreciation amount at the Company has posted payable officers of the Company, with the in-house stan the end of consolidated fiscal year in accordance Finished goods, semi-finished goods, raw materials, work in process Finished goods, semi-finished goods, Supplies Significant hedge accounting method Material depreciation assets and depreciation method assets and depreciation Material depreciation a) Accounting basis for significant allowance a) criteria conversion and currencies foreign in liabilities or assets Significant into Japanese Yen. to yen at the spot exchange rate on the closing date of consolidated finan b) c) cial statements. Translation differences have been disposed as profits or or have been disposed as profits differences cial statements. Translation losses. on the closing spot exchange rate the yen based on to been transferred in are date of consolidated financial statements and translation differences exchange transfer adjustment account of net assets and cluded in currency equity by minor shareholders. efits a) b) Allowance for operating officers’ retirement benefits retirement b) Allowance for operating officers’ from arising losses or gains actual of method calculating cost Processing b) (6) (2) (3) ben concerningChanges in accounting (4) retirement employees’ for payment (5)

------Total average method or last invoice method depending on the classifi average method or last invoice method Total Running prices to be calculated based on the market prices or calculated based on the market prices or to be Running prices based on moving average method Cost methods are Securities with running prices other applicable prices quoted on the account settling date (evaluation equity and component of shareholders’ as be reported to difference selling costs to be calculated by moving average method). Securities without running prices Topy Precision Mfg., Inc., Topy Fasteners (Thailand), Ltd., Topy Ameri Fasteners (Thailand), Ltd., Topy Mfg., Inc., Topy Precision Topy Total assets, sales, net profits (in proportion to equity) and retained sur and to equity) (in proportion assets, sales, net profits Total Those non-consolidated affiliated companies and subsidiaries, to which Those non-consolidated affiliated companies and subsidiaries, Topy Enterprises, Ltd., Topy Marine Transport, Ltd., Topy Fasteners, Fasteners, Ltd., Topy Marine Transport, Ltd., Topy Enterprises, Topy Consolidated financial statements are prepared based on the financial prepared Consolidated financial statements are Topy Fasteners Mexico, S.A. DE C.V. was newly established during was newly established during C.V. Fasteners Mexico, S.A. DE Topy Market price method Merchandise A major company among non-consolidated subsidiaries and affiliated com A major company among non-consolidated subsidiaries and The following companies settle their accounts on December 31 each year. Reason that the equity method is inapplicable Hokuetsu Metal Co., Ltd. Bridge Co., Ltd. Nippon Steel Topy marginal performances the equity method is inapplicable, posted relatively earnings proportion (in retained and equity) to proportion (in income net in and limited is statements financial consolidated to impact its and equity), to excluded from those companies are insignificant as a whole, and therefore, the scope that the equity method is applied. A major non-consolidated subsidiary Ltd. Agency, Topy 2 companies Non-consolidated affiliated companies by the equity method: Ltd., Topy-Rec, Ltd., Kyushu Wheel Kogyo, Ltd., Tojitu Co., Ltd., Autopia, Autopia, Ltd., Co., Tojitu Ltd., Kogyo, Wheel Kyushu Ltd., Topy-Rec, Ltd., Mfg., Inc., Sanwa Buhin Precision Topy Ltd., Akemi Recycle Center Ltd., Fasteners (Thailand), Ltd., Topy Ltd., Topy Co., Ltd., Akemi Electric Power, Machinery Co., Ltd., Fuji Co., Ltd, Qingdao Topy America, Inc., NE-Tojitsu data available as of the account settling day of respective companies. How respective day of settling account the as of available data ca, Inc., Qingdao Topy Machinery Co., Ltd., Fujian Topy Autoparts Co., Autoparts Co., Machinery Co., Ltd., Fujian Topy ca, Inc., Qingdao Topy Fasteners Vietnam Co., (China) Co., Ltd., Topy Undercarriage Ltd., Topy Palingda Manufacturing In Topy Machinery Co., Ltd., PT. Ltd., Tianjin Topy MW Manufacturing Mexi Indonesia, Topy Undercarriage Topy donesia, PT. Fasteners Mexico S.A. DE C.V. Topy co S.A. DE C.V., made on the consolidated statements for necessary adjustments are ever, between the business transactions of material importance that occurred 31. January 1 and March a) Securities Topy Agency, Ltd. Agency, Topy panies to which the equity method is inapplicable FY2015 and therefore, is included in the scope of consolidated accounting. is included FY2015 and therefore, of those non-consoli to equity) and other performances plus (in proportion marginal in scale and have insig relatively dated subsidiary companies are those and therefore, statements, consolidated overall on impact nificant the scope of consolidation. excluded from companies are an Topy Autoparts Co., Ltd., Topy Undercarriage (China) Co., Ltd., Topy (China) Co., Ltd., Topy Undercarriage Topy Autoparts Co., Ltd., an Topy Topy PT. Machinery Co., Ltd., Fasteners VietnamLtd., Tianjin Co., Topy and Indonesia Undercarriage Topy PT. Indonesia, Manufacturing Palingda Fasteners Mexico S.A. Topy MW Manufacturing Mexico S.A. DE C.V., Topy DE C.V. b) Derivative c) Inventories Basic significant matters prepareto financial consolidated statement

(2) Fiscal term of consolidated subsidiaries (3) Reason for exclusion from consolidation (3) Reason for exclusion from (1) Evaluation criteria and evaluation method of material assets (3) (2) Subsidiaries and affiliated companies by the equity method (1) Scope of consolidation 23 companies (1) Consolidated subsidiary companies: 3.

4. Accounting standards securities Other

2. Notes to Consolidated Financial Statements Consolidated to Notes 1.

Corporate Data Additional Data Additional 71 Corporate Profile and Governance Business Development CSR Activities Additional Data 74 — 6.0 1.7 7.18 42.7 30.9 total 88,739 78,223 [597] 8,806 1,700 4,408 100,461 10,000 99,973 417.60 19,346 24,599 (6,860) (7,529) (8,391) 1,915,627 2,055,045 1,915,627 Consolidated 215,872 231,583 (Millions of yen) 2016 — 603 266 (Thousands of U.S. dollars) 209,832 (36,250) (118,830) (118,830) Adjustments 4.0 2.4 9.96 42.1 28.0 [573] 6,422 6,037 2,360 4,596 12,416 448.36 19,440 13,157 21,733 237,677 107,941 252,456 77,957 99,858 (29,141) Total 2015 118,830 124,998 2,034,457 1,845,204 1,915,627 — 3,337 3,869 65,472 13,080 65,472 Other 138,034 Business 2.0 2.1 8.08 40.5 22.5 [538] 5,308 4,485 7,566 1,914 7,251 7,538 4,515 96,219 398.39 17,485 234,682 232,714 (17,478) 2014 74,612 95,980 Total 118,830 111,909 1,968,977 1,707,170 1,850,146 — 5,511 4.0 4.0 94,294 21,963 52,303 16,257 94,294 Power 42.9 15.3 [491] Business 6,990 6,234 8,222 3,409 14.38 4,374 Generation 91,258 377.47 16,770 19,798 (4,997) 226,912 208,781 (14,770) 2013 — Segment 47,209 49,703 50,910 Business 902,866 Components Automotive and 1,189,981 1,189,981 Industrial Machinery 4.0 4.8 38.7 15.6 [428] 7,304 4,459 3,918 16.52 4,135 8,643 10,554 83,096 347.37 16,010 22,124 (7,703) (4,983) 42,728 39,551 Steel 240,534 212,828 118,830 684,701 751,992 565,862 Products Business 2012 Total 4.0 2.6 8.64 39.0 25.2 (340) [432] 7,006 5,241 2,072 6,236 4,151 80,165 335.16 18,741 (3,681) (1,952) 221,413 203,956 2011 Depreciation and amortization Increase in tangible and intangible assets External sales Intra-segment sales and transfer Note: Dollar amounts are converted at the rate of ¥112.69 to U.S. 1 dollar Note: Dollar amounts are 31, 2016) ended March (Year Segment income Segment assets Sales Other items — — — 2.0 8,815 626 355 40.3 (1.3) total 11,321 10,000 [422] 4,242 (4.30) 215,872 231,583 215,872 20,547 12,010 337.53 81,884 (7,507) (2,236) (1,032) Consolidated 201,138 196,848 (Millions of yen) 2010 — 30 68 23,646 (4,085) (13,391) (13,391) Adjustments — 2.9 5.0 13.9 39.6 [471] (287) 4,125 10.39 2,384 6,010 6,686 18,293 21,547 334.16 80,942 8,785 202,995 290,333 (15,908) 11,253 13,391 14,086 Total 2009 229,263 207,936 215,872 — 376 436 7,378 1,474 7,378 15,555 Other — Business 7.7 9.8 8.0 35.3 [556] 4,133 9,405 28.90 6,366 13,130 11,78 4 83,217 371.40 12,888 (4,266) (8,447) 231,887 296,629 2008 8,408 10,816 13,391 12,611 Total 221,884 192,381 208,493 — 621 — 1,832 2,475 5,894 9.4 6.0 10,626 10,626 13.3 33.0 Power [712] 7, 826 4,107 35.60 Business 13,173 15,942 Generation 13,999 379.03 (8,217) 84,269 (3,862) 285,058 252,888 13,866 2007 — Segment 5,601 5,737 5,320 Business 134,099 101,744 134,099 Components Automotive and Industrial Machinery (%) (%) (yen) (yen) (yen) 974 (persons) 4,457 4,815 13,391 77,159 84,742 63,767 Steel Products Business Total

Fiscal year Fiscal Depreciation and amortization Increase in tangible and intangible assets External sales Intra-segment sales and transfer Net cash provided by (used in) financing activities Cash and cash equivalents at the end of current period No. of employees [temporary employees] Net cash provided by (used in) investing activities Net cash provided by (used in) operating activities Price/earnings ratio Price/earnings Equity ratio Return on equity Dividends per share per Dividends Net income per share (loss) Net assets per share Total net assets net Total Comprehensive income Comprehensive assets Net Net income (loss) income Net Ordinary profit Net sales Net income Operating Segment income Segment assets Sales Other items Consolidated Financial Statement for the Past 10 Years Consolidated Financial Segment Information (2016) Segment Information Corporate Data Additional Data Additional 73