114

The

To Our Shareholders

th Fiscal Year Business Report

April 1, 2022 ▶ March 31, 2023

Stock Exchange Code: 6623

To Our Shareholders
We are pleased to extend
our greetings to ourshareholders in presenting
our 114th annual report for
the fiscal year ended
March 31, 2023 (“FY2022”).

Overview of business
During the period under review, despite acontinuing moderate upturn in conditions, theoutlook remained clouded due to factors suchas the prolonged conflict in Ukraine and dramatic fluctuations in exchange rates. Our Group
continued to face an adverse environment in orders for electric power products due to cost reductions by power distribution companies
against the backdrop of electricity market deregulation. However, demand was generally
strong for motor products such as motors for car
air-conditioner compressors and package

Net sales 114.2 billion yen
Electric Power Products Group80
60

Operating income 7.5 billion yen

Motor Products Group
114.2(Billions of yen)

75.0

75.6

82.8

0

5
3

4.1
2.8

2
28.7

27.8

28.4

31.3

111th

112th

113th

114th

(FY2019)

1

6
4

47.7

40
20

7.5
6.6

7

65.9
46.2

(Billions of yen)

8

94.3

100

board cores, thanks to market growth in electrified vehicles and the expansion of investment indigital infrastructure.
Under such circumstances, our Grouppushed ahead with initiatives to achieve sustainable growth under the 2023 medium-term management plan “Create the future with reliable
technology - Innovation and Challenge -.” The
Electric Power Products Group worked to enhance productivity through factory renewal and
TPS improvement activities. At the same time, it
took the challenge to develop new products andbusinesses, including developing new customers for hydropower generation system products
and developing next generation digital control
equipment. The Motor Products Group worked
on enhancing production capacity for motors for
car air-conditioner compressors and package
board cores. It also worked to build more robust
and resilient supply chains by securing substitute suppliers and developing new suppliers.

(FY2020)(FY2021)(FY2022)

1
0

111th

(FY2019)

112th(FY2020)

113th(FY2021)114th(FY2022)

With regard to the consolidated performance for the fiscal year ended March 31, 2023,
both sales and income increased comparedwith the previous fiscal year, due to strong firsthalf results from the Motor Products Group. Net
sales increased by 21.1% to 114,286 million
yen, operating income increased by 12.6% to
7,504 million yen, ordinary income increased by
10.4% to 8,793 million yen. We recorded appraisal losses of investments in overseas affiliate, etc. of 338 million yen as extraordinary
losses, and net income attributable to owners ofparent increased by 7.0% to 5,954 million yen.
Dividend
Our year-end dividend was 80 yen per
share. Combined with the interim dividend, thetotal dividend was 160 yen per share.
Future prospects
The business conditions surrounding ourGroup are becoming increasingly severe, with aOrdinary income 8.7 billion yen

7.9

8

We appreciate your continued understanding and support.

June 2023
President

Net income attributable to owners of parent 5.9 billion yen
8.7(Billions of yen)slowdown in the semiconductor market and acyclical downturn in demand in the air conditioning market. However, in the medium andlong term, growth is expected in demand for
products such as motors for car air-conditioner
compressors, sophisticated power distribution
products and package board cores, in the context of the accelerating spread of electrified vehicles, promotion of the introduction of renewableenergy and rising levels of investment in digitaltechnology. Our Group will continue to strive tobe even more competitive through enhanced
QCD, and aim for sustainable business growththrough continuing investment in these fields.

(Billions of yen)

8

7

7

6

6
4.7

5
4

5.9

5
4

3.3

3

3

2

2

1
0

5.5

2.7

3.3

1

111th

(FY2019)

112th(FY2020)

113th(FY2021)114th(FY2022)

0111th(FY2019)

112th(FY2020)

113th(FY2021)114th(FY2022)2Performance at Each Group■Electric Power Products GroupNet sales 31.3 billion yen
Sales ratio

Business description
This Group is engaged in the design, manufacture and sale of electric
power equipment such as different types of transformers, protection andcontrol devices, equipment related to renewable energy, and industrial
equipment such as powder processing machines, as well as designingand executing the construction of receiving and transforming substationsin Japan and overseas.
Overview of FY2022 Sales ratio
Compared with the previous year, net sales increased by 10.5%
to 31,397 million yen while segment income decreased by
10.5% to 2,650 million yen. Net sales increased due to robust
27％
sales of small and large transformers,
despite a year-on-year
decline in substation construction and sales of voltage
regulators for distribution lines (medium transformers). Segment
income decreased mainly due to the impact of a decline inproduction resulting from soaring basic materials prices and ashortage of semiconductor components.

27％

Net sales trend (Billions of yen)

27.8

112th

(FY2020)

28.4

113th

(FY2021)

31.3

114th

(FY2022)Main products

Pole-mounted “TOP RUNNER” lowtransformers
loss transformers

3

Digital-type observation,
protection and control
devices

Bi-directional power
A2-TVR
A2-STATCOM
flow type SVR
Automatic voltage regulators

Hydropower turbine andgenerator

Receiving and transforming
substation construction

On-load tap-changing
transformers (LRT)

Powder processing
machines

■Motor Products GroupNet sales 82.8 billion yen
Sales ratio

Business description
This Group supplies products that facilitate daily living, such as various
small motors including hermetic motors for air-conditioner compressors,
printed wiring boards, linear actuators for electric beds, shutter operators,
etc.

Overview of FY2022
Sales ratio
Compared with the previous year, net sales increased by
25.6% to 82,889 million yen and segment income
increased by 22.4% to 6,718 million yen. Results wereaffected by inventory adjustments by some semiconductor％
manufacturers and 73
building
air-conditioner manufacturers
in the fourth quarter, but both net sales and segment
income increased due to substantial growth in motors for
car and building air-conditioner compressors andpackage board cores in the first half.

73％

Net sales trend (Billions of yen)
82.8

65.9
47.7

112th

(FY2020)

113th(FY2021)114th(FY2022)Main products

Hermetic motors for airconditioner compressors

Motors for submersible
pumps

Printed wiring boards

Shutter operators

Linear actuators
Controllers and handsets for linear actuators

Fans for cattle farms

Inverters
4

Financial Report
Consolidated Balance Sheets
Assets

FY2022

FY2021

84,66038,71827,707517
10,49374,17936,12424,988509
10,626(As of March 31, 2023) (As of March 31, 2022)

Current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total assets

123,378

110,304(Millions of yen)

Liabilities andNet assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

Consolidated Statements of Income

FY2021

39,58015,28454,86537,027
9,768
46,796

63,6833,425
1,404
68,513
123,378

59,4392,790
1,278
63,508110,304(Millions of yen)

FY2022

FY2021(From April 1, 2022
to March 31, 2023)(From April 1, 2021
to March 31, 2022)

Net sales

114,286

94,381

Cost of sales

98,11879,612Gross profit

16,167

14,768Selling, general and administrative expenses

8,663

8,100

Operating income

7,504

6,667

Non-operating income

1,559

1,466

Non-operating expenses
Ordinary income

270

166

8,793

7,966

Extraordinary income

66

34

Extraordinary losses

364

148

Income before income taxes

8,494

7,853

Income taxes-current

2,452

2,231

Income taxes-deferred
Net income

5

FY2022(As of March 31, 2023) (As of March 31, 2022)

18

65

6,023

5,557

Net income (loss) attributable to non-controlling interests

69

(7)

Net income attributable to owners of parent

5,954

5,564

Non-Consolidated Balance Sheets
Assets

FY2022

FY202147,45527,911
9,059
84
18,766

41,50927,0458,916
70
18,058(As of March 31, 2023) (As of March 31, 2022)

Current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total assets

75,36768,555(Millions of yen)

Liabilities andNet assets

FY2022

FY2021

20,393
6,672
27,066

17,573
3,923
21,49647,241
1,059
48,30075,36746,031
1,026
47,05868,555(As of March 31, 2023) (As of March 31, 2022)

Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Valuation and translation adjustments
Total net assets
Total liabilities and net assets

Non-Consolidated Statements of Income(Millions of yen)

FY2022

FY2021(From April 1, 2022
to March 31, 2023)(From April 1, 2021
to March 31, 2022)

Net sales

60,797

52,115

Cost of sales

53,12843,745Gross profit

7,669

8,369

Selling, general and administrative expenses

4,847

4,741

Operating income

2,821

3,627

Non-operating income

1,507

989

Non-operating expenses

88

67

4,239

4,550

Extraordinary income

2355

Extraordinary losses

341

81

3,921

4,523

Income taxes-current

868

1,164

Income taxes-deferred

132

103

2,920

3,255

Ordinary income

Income before income taxes

Net income

6Topics
Electric Power Products Group
Development of a transformer monitoring device
We have developed a transformer
monitoring device that constantly monitors
the operational status of transformers.
The device collects the informationnecessary for maintenance services (suchas temperature, electrical current and theconcentration of hydrogen in the oil) throughvarious sensors attached to the transformer.
The collected information can be used todetect any indications of equipment
malfunction. This is expected to lead toTransformer monitoring device
greater efficiency and the reduction ofmaintenance work by making it possible toreduce the frequency of regular inspections or eliminate them altogether.
The long-term use of transformers has progressed in recent years, bringing a greater proportion foraging products. As a result, there is an increasing trend in maintenance work to ascertain the operational
status of transformers.

Motor Products Group
Expansion of production lines for hermetic motors for car airconditioner compressors
We are expanding our production lines to handle expanding
demand for hermetic motors for car air-conditioner compressors.
In FY2022, we established and began mass-production at anothertwo stator lines and three rotor lines for these motors. This represents
a capital investment of approximately 800 million yen, and is expected
to boost production capacity by around 50%.
We will continue to strengthen our production systems and expand
our automotive motor business to respond swiftly to market needs.

Rotor (left) and stator (right) from a hermetic
motor for a car air-conditioner compressor

Motor Products Group

7

Expansion of the package board core business
AIKOKIKI MFG. CO., LTD. (a consolidated
subsidiary) is progressively expanding its package
board core business. As part of this expansion, it
has constructed a new metal plating factory on theland next to its head office factory. The new factorybegan production in January 2023.
In March 2 0 2 3, it went on to acquire factory
Exterior of the new metal
Metal plating production line
buildings formerly used by KYOCERA Corporation
plating factoryin Shibata, Niigata, as a new production base. It iscurrently installing equipment for building production lines in this factory.
The package board cores manufactured in these factories are expected to experience demand
growth in the medium and long term, with the accelerating spread of 5G communications, AI and the
IoT. Our Group will strive to continue to grow the package board core business to respond to thisexpanding demand.

IR Activities
First ever participation in the Nagoya Stock Exchange IR EXPO 2022 for individual investors
We participated in the IR EXPO 2022 organized by the Nagoya Stock Exchange.
This event was held at Fukiage Hall (Nagoya Trade & Industry Center) over two days from Friday,
September 9 to Saturday, September 10, 2022.
Our booth was visited by many individual investors during the event, who were briefed on
information such as our corporate overview and performance trends.
We will continue to participate in exhibitions for investors.

Our booth at the event

The event venue

First ever financial results briefing for institutional investors
On Friday, May 26, 2023, we held an online financial results briefing for institutional investors.
We have posted a video of the event, as well as the briefing materials, etc., under “IR Information”
on our website.
You can access the video and materials (Japanese only) from the URL below or by scanning the
QR code.
URL: https://www.aichidenki.jp/ir/briefing.html

The financial results briefing

An image from our website

8Outline of the Company, Board of Directors and Auditors, and Status of Shares
Corporate Data (As of March 31, 2023)

Status of Shares (As of March 31, 2023)
Total number of shares authorized to be issued 23,912,200 shares
Total number of shares issued	Established:

May 27, 1942

Capital:4,053 million yen

Number of Employees: 1,082 (Consolidated: 2,783)
Head Office:Number of shares Shareholding ratio (%)(thousand shares)

486-8666, JAPAN

Board of Directors and Auditors(As of June 29, 2023)

8,295 persons

Major shareholders (top ten shareholders)

1, Aichi-cho, Kasugai city, Aichi pref.,Phone +81-568-31-1111

9,500,000 shares

Number of shareholders

Chubu Electric Power Co., Inc.

2,326

24.5

BBH FOR FIDELITY LOW — PRICED STOCKFUND(PRINCIPAL ALL SECTOR SUBPORTFOLIO)

598

6.3

Furukawa Electric Co., Ltd.

565

5.9

TSUCHIYA CORPORATION

500

5.2

President

Kazuo Kobayashi

MUFG Bank, Ltd.

312

3.2

Managing Director

Shinobu Kato

Custody Bank of Japan, Ltd.
(trust account 4)

303

3.1

Director

Hisashi Tajima

Yasumitsu Shigeta

266

2.8

Director

Masaki Kakihara

Kawaguchi Kosan Co., Ltd.

200

2.1

Director

Yoshikazu Suda

Director

Yukinari Yokote

Meiji Yasuda Life Insurance
Company

175

1.8

Director

Hirotsugu Shibayama

Tokio Marine & Nichido Fire
Insurance Co., Ltd.

164

1.7

Director

Fujio Nakaseko

Director (Outside)

Keiichiro Urakami

Director (Outside)

Hideshige Seo

Auditor

Hideki Hosoe

Auditor (Outside)

Akinori Kataoka

Auditor (Outside)

Wataru Hashimoto

Note 1	Numbers of shares are rounded down to the nearest
thousand shares.
Note 2	The shareholding ratio is calculated excluding treasury
shares (4,918 shares).

Distribution of shares by shareholder
Foreigninvestors
12.4%

Individual
investors
27.4%

Domestic
investors
87.6% Financial institutions
and securities firms
Other companies,
15.1%
etc.
45.1%

9

Information regarding the share buyback and additional purchase program for fractional shares less than one unit
Share buyback
This program enables shareholders to sell amounts of fractional shares less than
100 shares back to the Company at the market price.
Example: If you hold 80 shares, you can sell them back to the Company at themarket price. Blocks of 80 shares cannot be sold on the share market.
Sell back to the Company atmarket priceCash

80 shares

Additional purchase
This program enables shareholders to purchase amounts of fractional sharesless than 100 shares (one unit) from the Company at the market price.
Example: If you hold 80 shares, you can purchase an additional 20 shares fromthe Company at the market price, making a total of 100 shares.
One unit
Purchase 20 shares from theCompany at market price
80 shares

20 shares

20 shares
80 shares

100 sharesContacts for procedures for the share buyback and additional purchase program· For shareholders who have an account with a securities company
Please contact your securities company.
· For shareholders who do not have an account with a securities company
Please contact Sumitomo Mitsui Trust Bank, Limited.

10

Information on SharesBusiness Year

April 1 to March 31 of the following year

Ordinary General Meeting Juneof Shareholders
Record date for shareholder March 31
rights for the Ordinary General
Meeting of Shareholders
Record date for year-end March 31
dividend
Record date forinterim dividend

Contacts for various procedures(Changes in name or address, buyback and additionalpurchase of fractional shares less than one unit)
For shareholders who have an account with asecurities company
Please contact your securities company.
For shareholders who do not have an account with asecurities company
P lease contact Sumitomo Mitsui Trust Bank,
Limited.

September 30

Stock Transfer Agent andSumitomo Mitsui Trust Bank, Limited
Account Management
1-4-1, Marunouchi, Chiyoda-ku, Tokyo, JAPANInstitution for Special Accounts
Handling Office

Stock Transfer Agency Business
Planning Department, Sumitomo Mitsui
Trust Bank, Limited
3-15-33, Sakae, Naka-ku, Nagoya,
JAPAN

Inquiries

Stock Transfer Agency Business
Planning Department, Sumitomo Mitsui
Trust Bank, Limited
2-8-4, Izumi, Suginami-ku, Tokyo
168-0063, JAPAN
Telephone +81-120-782-031 (toll-freein Japan)Public Notices

Public notices shall be madeelectronically.
Public notice URL:
https://www.aichidenki.jp
If electronic notice is impossible due toaccidents or other unavoidable
circumstances, the notice shall be
posted in the Chunichi Shimbun which is
published in Nagoya city.

Concerning outstanding dividend payments
Please contact Sumitomo Mitsui Trust Bank, Limited.

https://www.aichidenki.jp/english