Sustainability Initiatives

Strengthening existing businesses and nurturing new growth businesses.
Through the practice of “ambidextrous management” we are accelerating initiatives aimed at achieving TOKYO KEIKI Vision 2030.

Publishing the Integrated Report
Starting this fiscal year, we are publishing the Integrated Report, evolving from our previous Sustainability Report to present the Group’s business activities more clearly.
　The Group continues its efforts to realize the TOKYO KEIKI Vision 2030, formulated in June 2021. To support this initiative, we considered it necessary to publish the Integrated Report, organized around five perspectives as a signpost.
　The first point is to provide an overview of value creation process. This lays out the path to both financial and non-financial value creation that we will take over the medium to long term. At the 2025 General Meeting of Shareholders, we also received many questions regarding medium- to long-term matters.
　Second, it responds to the expectations of investors and society. This report will address not only short-term profit but also expectations regarding sustainability and social responsibility.
　Third, it links our management to sustainability. In order to encourage changes in awareness within the organization and rearrange strategies, we aim to organize and communicate information in ways that are easier for those outside the Company to understand.
　Fourth, it builds relationships of trust with stakeholders. The integrated report plays an important role as a means of providing highly transparent information, helping us strengthen trust with our stakeholders.
　Fifth, the last point: it follows internationally recognized reporting standards. With the globalization of investment, reporting that aligns with international standards is essential for gaining trust from investors around the world.
　I hope that this will enhance your understanding of our path to sustainable value creation, as based on the above five perspectives.

Achieving Record High Profits in FY2024
As part of the process of achieving the TOKYO KEIKI Vision 2030, we designated the three years of the new Medium-term Business Plan (from FY2024 to FY2026) as a period of preparation for the “leap toward growth,” during which we will promote our basic policies of “improve profitability,” “expand business areas,” and “strengthen the business foundation.”
　In terms of “improve profitability,” we are using return on invested capital (ROIC) to analyze the business portfolio, optimizing cost structures, and using management indicators in other ways to enhance profitability.
　In terms of “expand business areas,” we are promoting the development of edge AI, clean energy (technology using hydrogen), and the space business as fields of endeavor to drive growth over the medium to long term. We have taken the first steps towards commercialization, which include multiple pilot and prototype projects in these fields.
　As for “strengthen business foundation,” we have transformed the personnel system to be capable of nurturing and establishing human resources with a pioneering spirit. We also implemented capital investment for the Group as a whole at a level approximately 1.6 times that of the previous fiscal year.
　My perception is that the measures and initiatives executed in fiscal 2024, which corresponded to the first year of the new Medium-term Business Plan, enabled us to build a solid foundation for future leaps forward. Moreover, in terms of performance, we achieved record high levels of operating and ordinary profit. On the other hand, difficult conditions continued for some of our operations, including the Hydraulics and Pneumatics Business. Rather than restricting ourselves to individual businesses, we will promote strengthening and improvement measures throughout the Group and open the way to sustainable growth.

New Stages for Our Technologies
In addition to our existing businesses, we are taking on challenges in preparation for the development of new growth businesses.
　In the Defense & Communications Equipment Business, we have conducted a new research project into MEMS Hemispherical Resonator (MEMS-HR) Gyroscope / Inertial Navigation Technology commissioned by the Japan Ministry of Defense. By utilizing MEMS technology,
which is one of the strengths of the Company, we aim to reduce the size, enhance the precision, and lower the cost of existing Hemispherical Resonator Gyroscope (HRG) high-precision sensors. We also seek to develop inertial navigation devices capable of autonomous and high-precision measurement of position, attitude, and speed, without relying on global navigation satellite systems (GNSS) or other external signals. We expect this technology to be applied to autonomous robots, drones and other aircraft equipment fields in the future.
　In the space business, we began assembly of small SAR satellites. In 2023, we constructed the “Space Building” for assembly and are making progress in the new area of building a production system for the private-sector space market.
　In terms of strengthening and enhancing the production system, we completed a new “Defense Management Building” at the Nasu Plant, which began operations in December 2024. As well as enabling an increase in production capacity to deal with rising demand for defense-related products, this location will provide research and personnel training functions with an eye on new product development going forward.
　In the AI field, we completed a prototype of an edge AI camera, which was demonstrated at external exhibitions. When camera images are processed by AI, it has traditionally been necessary to transmit the image data via a network, which involves communications capacity and security issues. In contrast, we have equipped the edge AI camera with discriminatory functions. As a new type of AI camera that can process data at the terminal itself in real time, this technology has attracted an extraordinary amount of attention, and we expect to expand applications into a variety of different fields in the future.

Value through Challenges and Learning
It could be said that the foundation for these new initiatives is the unique business model that the Group has formed over the last 129 years and the Value Creation Story derived from it.
　TOKYO KEIKI has been introducing cutting-edge technology through business alliances with overseas companies since the early 1900s and has refined its proprietary technologies while applying Japanese-style customization in some areas. It is on the foundation of intellectual capital we have accumulated in this way that we link and circulate capital to create value.
　Put another way, it is how we have worked hand-in-hand with customers to achieve advances in manufacturing that has been the source of the Group’s value creation process. Co-creation with customers results in increases in social and intellectual capital, leads to high product quality and the gaining of trust in the market, and forms the foundation of corporate value.
　On the point of co-creation with customers, the Group has reliably dealt with applications that require extraordinarily rigorous quality control, including the defense equipment business. Moreover, using this “manufacturing capital” to provide high-value-added products has enabled us to secure steady profits. The reallocation of these profits to investments in human and intellectual capital leads to further strengthening of technological and organizational capabilities and accelerates the cycle of value creation.
　The result of the sustainable value creation process that arises from this linking and circulation of capital is our value creation story. Human capital, intellectual capital, social capital, and other forms of non-financial capital provide a foundation on which to generate innovation that creates financial value, and by reinvesting this value we are building a cycle that increases capital even further.
　For example, if you look at this cycle from the perspective of human capital, process innovation within the various departments of the Company (such as corporate staff, sales, technology, production, and service) is driven by each employee’s challenges and learning. In other words, this is nothing other than the enhancement of human capital. This approach is what leads to the accumulation of proprietary technology and know-how that constitutes intellectual capital. Furthermore, the technologies and trust that are born from these enhancements in human and intellectual capital become social capital, which strengthens relationships of trust with customers and society. In turn, it becomes the driving force for maintaining a balance between sustainable growth of the Company on the one hand and contributions to the resolution of social issues on the other hand.

Challenge Drives Growth
Above all else, it is human capital that is the force driving value creation. No matter how advanced technology becomes, a company’s success ultimately depends on its　people. Even with outstanding strategies and technologies,　success can only be achieved when employees work　together as a team. I believe that it is precisely human capital that provides the basis for corporate value creation　and constitutes the source of competitiveness over the long term. Especially in today’s rapidly changing environment, it is employees who can learn, think, and act independently that drive corporate growth.
　The basic policy of the Group’s human resource strategy is to nurture independent, growth-orientated human resources,　and we are working to establish an environment wherein diverse employees can maximize the expression of their individual abilities. That being said, we are still on the journey toward this goal.
There are some situations in which we have not been able to fully leverage individual abilities, and I am aware that there is room for improvement in terms of developing managers. In order to convert diversity in human resources to genuine corporate value we must put in place organizational mechanisms and other elements, including evaluation systems. While maintaining an awareness of such issues, we will continue to build a company where every employee takes pride and finds fulfillment in their work, with a corporate culture that nurtures people at its core.

Relentlessly Taking on Challenges and Protecting Our Values
　Next year, in 2026, the Company will celebrate its 130th anniversary. Nevertheless, rather than contenting ourselves with tradition, we have evolved repeatedly in response to our unceasing reassessment of our role in society. The key to sustainable expansion is an attitude of contributing to the resolution of social issues, while continuing to refine our creative technologies and striking a balance between enhancing existing technologies and creating new businesses.
　Based on the culture of taking on challenges that has been cultivated and passed down within the Group, we will provide value tailored to the changes of the era, while remaining aware at all times of the optimal use of human, material, and financial capitals, and other management resources. Our most important mission is that of supporting the safety and security of society by providing solutions focused on those areas where the Group can leverage its strengths, such as disaster prevention and mitigation, the environment, and space.
　On the other hand, there are enduring values we are committed to preserving, including sincerity, harmonious coexistence with society, and contributions through technology. We have emphasized the cultivation of this spirit ever since the founding of the Company, and even today these universal values define the behavior of every employee, and are the source of our relationships of trust with customers, suppliers, and society.
　We will remain a company that is considered essential by society for the next 100 years by firmly distinguishing between what should change and the values that should be upheld, while balancing sustainable growth with contributions to society. We greatly appreciate your continued support for the Group going forward.

Representative Director
President & CEO

Tsuyoshi ANDO

Creativity and Challenges to Shape the Future
　Since our founding, we have valued innovative technology and a corporate culture with a spirit of challenge, growing together with society. The trust we have earned from our customers—built upon the technological expertise developed throughout our long history—is a source of pride and a vital asset that we aim to carry forward into the future.
　This year, to clearly show how these assets drive our growth, we have evolved our “Sustainability Report” into an “Integrated Report.” In this report, we place sustainability management at the heart of our value creation, aiming for sustainable growth in an ever-changing environment. We also aim to present a clear view of our aspirations.

Power for the Sustainable Future
　The transition to an Integrated Report is an opportunity to revisit the origins of our value creation from a broader perspective. Our sustainability initiatives are not limited to environmental care and social contribution; they are deeply connected to the very foundation of our business activities. All these efforts—including the transition to a decarbonized society, resource recycling, and biodiversity preservation, as well as supporting the growth of our employees, passing on technology, and fostering coexistence with local communities—directly contribute to the sustainable enhancement of corporate value.
　In particular, our strengths—creative technologies and on-site manufacturing capabilities—are key resources for implementing sustainability management. Highly efficient and durable products that address climate change, along with design and processing technologies that minimize environmental impact, serve as tangible solutions to social challenges. Supporting all of this are workplace ingenuity and the motivation of our employees to continue to learn.
　I believe that when each employee—and the organization as a collective—breaks out of the shell, it will create a new future for TOKYO KEIKI. The shell may consist of past successes, habits, fixed notions about roles, or mental barriers—the assumption that “it’s impossible for me.” It is up to each individual to break through these barriers. By changing our actions through our own will, we can achieve remarkable personal growth and make life more fulfilling. The accumulation of such personal changes drives corporate transformation.

Breaking New Ground: A Courageous Step
　The corporate environment is changing faster than ever, with uncertainty on the rise. Challenges are becoming more diverse—from climate change and population decline, digitalization and the restructuring of supply chains—while geopolitical factors make it increasingly hard to know what’s right or which direction to take. In this situation, it’s essential for us to break out of old habits and routines and step onto new ground, which we call “breaking out of the shell.”
　The phrase “breaking out of the shell” embodies the courage and will to take action to create change. It’s not about reacting to instructions or external circumstances, but about believing in your own potential and convictions and taking a proactive step forward. That very step becomes the driving force that transforms organizations, moves society, and shapes the future.
　Looking back on TOKYO KEIKI’s history, many innovations, new products, and business processes have arisen from the accumulation of small, progressive challenges taken on by individuals on the front lines. Examples include the development of Japan’s first ultrasonic flowmeter and customer-focused business processes in our hydraulic product lines. Our technology and corporate culture have grown from everyday insights that “we can do better,” the willingness to say “I’ll give it a try,” and the courage to act boldly and independently, even in the face of difficulties. Such a chain of challenges has been the core driving force sustaining TOKYO KEIKI’s 129-year history and continues to empower us to shape the future.

Passing on Sustainable Power to the Next Generation
　Our vision of sustainability does not just refer to continuing things as they are. It means understanding social trends, responding flexibly to changes in the business environment, and continuously evolving by discovering new value. While some challenges we face are global and large-scale—such as climate change, human rights, and inequality—others exist in our everyday lives as individuals.
　I believe that turning small everyday insights into action, without being bound by formality, contributes not only to the growth of the company and workplace but also to personal development. To achieve this, it is more important than ever to respect the creativity and initiative of our frontline employees and to create an environment where everyone can believe in their own potential and act proactively. In promoting sustainability, I hope to collaboratively nurture a free and open corporate culture. I firmly believe that maximizing the value of our human capital is the key to sustaining our competitive edge.
　The transition to an Integrated Report is, in essence, a declaration of our own challenge to embody this evolution. I hope that this Report serves as an opportunity for dialogue aimed at considering and creating our future together and contributes to building new value with all our stakeholders.

Director & Executive Officer,
Chief of Sustainability Promotion
Yukihiko SUZUKI