Origin of Value Creation

Six Capitals

• Financial Capital

  Strong Financial Base

  Total Assets:

  ¥64.2bn

  Equity Ratio:

  63.7%

• Manufacturing Capital

  Global Production Footprint

  Capital Expenditure:

  ¥1.0bn

  Production Sites:

  2

• Intellectual Capital

  Development Capabilities That Meet Customer Needs

  R&D Expenses:

  ¥0.5bn

  Patents Held:

  186

  (Note) Figures are for the Head Factory.

• Human Capital

  Free and Open Corporate Culture

  Number of Employees:

  807

  Ratio of Female Employees:

  17.8%

  Ratio of mid-career recruits:

  57.3%

• Social and Relationship Capital

  Partnership for Value Creation

  Cooperation with Business Partners, Local Communities, and Government

• Natural Capital

  Effective Use Resources

  Energy Consumption per Production Value:

  7.75kL/¥100 mn

  Overall Waste Recycling Rate:

  88.5%

Material Issues

Identified Materialities

Material Issues	SDG Goals	Key Initiatives
Environmental Initiatives		Improving Energy Efficiency at Our Plants Focused management by “visualizing” electricity consumption and reducing standby power on holidays. Improving productivity through DX and reducing energy intensity. Adoption of Renewable Energy Use of CO2-free electricity from hydropower and solar energy Reduction of Emissions and Waste Reviewing sludge disposal methods and reducing waste generation through equipment and process improvements Greening Initiatives Enhancing biodiversity and environmental awareness by creating a Hometown Forest at our plants
Development of Next-Generation Products		Development of Hydrogen- and Biofuel-Related Products Promoting R&D and demonstration testing of 100% hydrogen-dedicated engine compressors, hydrogen fuel cell power generators, and biofuel-compatible generators High-Efficiency and Energy-Saving Technologies Achieving ultra-high-efficiency air ends through new tooth profile designs, and optimizing operations through inverter control and next-generation control technologies Products for New Markets Advancing performance improvements and market rollout of generators for reefer containers, and considering overseas expansion based on our track record in Japan Implementation of the Intellectual Property Strategy Strengthening patent and design filings focused on next-generation products and technologies for overseas markets, with holdings planned to increase from 393 in FY2024 to 415 in FY2027 Strengthening the R&D Structure Establishing a new technology development department and building an R&D framework in collaboration with our group companies. Establishing a hydrogen technology testing facility to accelerate the development of next-generation products
Strengthening Overseas Expansion		Deterioration in Relationships with Distributors and Partners Enhancing sales capabilities and strengthening trust through regular information sharing, technical training, and joint marketing Development of Products for Overseas Market Developing product lineups tailored to local usage environments, legal regulations, and customer needs M&A and Strategic Partnerships Rapidly expanding sales networks, service capabilities, and talent through partnerships with local companies Development of Global Talent Developing personnel to lead our overseas business through overseas assignments, local hiring, and language training
Promotion of Human Capital Management		Development of Young Employees and Skills Transfer Systematically transferring the skills and expertise of experienced employees to younger employees through phased training programs and OJT Promotion of Multi-Skilling Providing training that enables employees to handle multiple processes at manufacturing sites, thereby achieving flexible workforce allocation and improved productivity Promotion of Diversity Expanding the recruitment of women, foreign nationals, and mid-career professionals; promoting women to management positions; and conducting training programs to support women’s career advancement Development of an Attractive Working Environment Promoting automation at manufacturing sites to create a work environment that is accessible regardless of age or gender, and improving retention through workstyle reforms and enhanced attention to safety and health Strategic Human Resource Management Introducing an employment system for individuals aged 65 and over, reallocating personnel in line with overseas strategies, and implementing planned placement of new employees to strengthen the organization for the future
Stable Supply of High-Quality Products		Strengthening Quality Control Establishing and operating a quality management system, and continuously improving product quality Complaint Reduction Initiative Reducing defect rates and the number of complaints by analyzing root causes and implementing measures to prevent recurrence Improvement of Productivity and Capacity Improving utilization rates and ensuring on-time delivery through production line improvements and capital investment Supply Chain Management Regular information sharing with suppliers and alignment on quality standards
Open and Transparent Governance Structure		Centralized Information and KPI Management The Corporate Planning Office centrally manages performance and KPIs across departments and group companies and reports regularly to management meetings. Cross-Functional, Company-Wide information Sharing Holding regular interdepartmental and cross-project meetings to share on-site issues and improvement proposals with management Operation of an Employee Suggestion Program Accepting bottom-up suggestions from employees and making implementation status and results visible internally Strengthening Governance and Internal Controls Establishing a governance framework in line with the Corporate Governance Code, implementing the basic policy for the internal control system, and developing information security policies and rules Oversight of Overseas Sites Regularly monitoring the progress of business plans at overseas bases and strengthening coordination between local management and headquarters

Identification of Materiality

AIRMAN identifies material issues (“Materiality”) by assessing the relationship between social issues and its business, with the aim of achieving both a sustainable society and enhanced medium- to long-term corporate value. In doing so, we take into account changes in the external environment and evolving societal expectations, and comprehensively consider our strengths, management strategies, and stakeholder expectations to clarify the issues we should prioritize in management.

Identification of Social Issues

Drawing on international frameworks such as the GRI Standards and the SDGs, and taking into account the external environment surrounding our business—including climate change, tighter environmental regulations, and shifts in demographic and industrial structures—we broadly identify issues facing society and markets.

Company Perspective

For each issue identified, we assess its relevance to our business activities, technological capabilities, and management strategies, and evaluate associated business opportunities and risks. We then clarify the significance for AIRMAN and the potential level of impact.

Stakeholder Perspective

Taking into account the expectations and interests of diverse stakeholders—including customers, business partners, employees, local communities, and shareholders—we assess the level of social impact and the strength of stakeholder expectations, and identify the highest-priority issues.

Identification of Materiality

We comprehensively assess both the importance of social issues and their significance to our management, and identify material issues ("Materiality") in alignment with our management strategy.

Risks and Opportunities by Materiality