MEIDENSHA REPORT 2020

MEIDENSHA REPORT

ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo 141-6029 Japan

www.meidensha.com

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CONTENTS
Editorial Policy

Meiden Group Corporate Philosophy
Corporate Mission

Corporate Slogan

It defines the raison d’être and corporate mission

Expressing the corporate philosophy in a single phrase

Illuminating a more affluent
tomorrow

The Meiden Group Corporate Philosophy is as follows: “We seek

We continue to create value
and technologies for the realization of a more
affluent and environmentally conscious society.

to delight customers by offering high quality products and services
to help solve their problems. Through these business activities, we
aim to fulfill our corporate social responsibility (CSR) by proactively
solving global environmental problems and other social issues andhelping achieve a more affluent future. We must continually tackle
these challenges.”

Value Provision
It defines the unique value provision and core competenceThis is our legacy from Hosui Shigemune, who founded ourcompany as a local factory to manufacture and repair electrical

For customer peace of mind
and satisfaction

machinery. His will remains our common sense of values, even as

We offer complete environmental consideration
and appropriate support for our customers. Fromproduct design to commissioning, our highly
skilled staff help customers solve various issues
and realize their dreams by providing high-quality,
socially responsible products and services.

the Meiden Group aims to grow with society and be indispensable

these have evolved with the times, and remains at the core of all
our business activities. Staying true to this Corporate Philosophy,

The Meiden Group informs its stakeholders of its attitude and initiatives
relating to social responsibility through the two media of the Meidensha
Report (print edition and web edition) and the Meiden Group CSR (webedition).
With regard to the content of the reports, we work to collect andanalyze information that meets our stakeholders’ expectations and is ofinterest to our stakeholders, and distribute it through regular notices, IR
activities, and interviews with each department.
Furthermore, the Meiden Group is conducting internal communication
activities as part of the process of drafting reports in order to understandchanges in the external environment and share future issues and trends. In
addition, we work to strategically promote future CSR initiatives byexchanging opinions based on the reports that have been created, andhaving each department reflect on its own activities, taking into accountoutside perspectives.

Report Media
Meidensha Report print edition andweb edition
A comprehensive collection of financial
information concerning the Meiden
Group and nonfinancial
information such as
initiatives that contributeto improving corporate
value and management
strategies.

Meiden Group CSR web
editionA summarized introduction focusing
on specific initiatives to tackle
CSR issues that the Meiden
Group considers important.

to it. With that as our goal, we continually take the challenge ofcreating new technologies and value.

Reporting Period
This report mainly covers initiatives taken in FY2019(April 1, 2019 - March 31, 2020)
It also includes some information from prior to FY2018 and until July 2020.

Subject Organizations

MEIDEN CYCLE

CSR Definition
Under the Meiden Group’s
definition of CSR, “Eachand every employee shallwork to realize the Group’s
corporate philosophy sothat the Meiden Group isneeded by society.”

Publication

Corporate Code of
Conduct
This code definescompliance in conducting
our CSR programs andactivities.

The report mainly covers initiatives of Meidensha Corporation and its
affiliated companies. Human resources data applies to affiliated companies
in Japan, while environmental reporting data applies to Meidensha and its
40 major affiliated companies (21 in Japan and 19 overseas).
Publication of this report: September 2020

Build Loyalty

Next scheduled publication: August 2021

Guidelines Used as References

President’s CSR Policy
This policy sets forth thepolicy of our CSR programs
and activities in the medium
term. The Policy asks eachGroup employee to implement
CSR programs and activities
in their daily work. We willdraw up specifications thatreflect the given businessclimate and CSR challenges
under the current stage of theMedium-term Management
Plan.

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MEIDENSHA REPORT 2020

MEIDEN CYCLEMEIDEN CYCLE shows
the guiding spirits sharedby all members of theGroup in realizing theGroup’s corporate
philosophy.

identify the direction for each individual employee to aim towards
and provide signposts to help them proceed without losing theirway. To enable us to do so, we have made these five actions ourwatchwords. The actions are mutually linked, with one action
calling forth the next, creating a cycle of action and growth. Basedon this image, we call this the MEIDEN CYCLE.
By sharing and practicing the MEIDEN CYCLE as the ethos
underlying our actions, we seek to maximize the growth cycle foreach of our employees.

Cover Story ............................................ 3
Continuing to support full, rich lifestyles
through the ages ........................................ 5
Supporting an evolving mobility society
as a pioneer of EV drive systems ............. 7
Contributing to the availability ofelectricity that protects people’s lives
and livelihoods ........................................... 9

Message from Management ........ 1１
ProfileMeiden Group History ............................ 13
The Meiden Group Value
Creation Process .................................... 15
Meiden Group Businesses ..................... 17

Strategy for Value Creation
Progress of the Medium-termManagement Plan ................................... 19
Research and Development Strategy..... 23
Social Infrastructure Business ................ 25
Industrial Systems Business .................. 29
Maintenance and Servicing Business .... 31

International Integrated Reporting Council (IIRC) “The International
Integrated Reporting Framework”

Foundation for Creating Value

Ministry of Economy, Trade and Industry “Guidance for Collaborative
Value Creation”

ESG at the Meiden Group ...................... 33

GRI “Sustainability Reporting Standards”

Environment ............................................ 35* Although this report is based on the reporting principles, the content
does not necessarily conform to them.

In order to realize our Group Corporate Philosophy, we must

Meiden Group Corporate Philosophy ....... 1

Ministry of the Environment “Environmental Reporting Guidelines(FY2018 Version)”

Inquiries about This Report
Meidensha Corporation
Public & Investor Relations Section, Public & Investor Relations
Division
ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo
141-6029 Japan
TEL: 81-3-6420-8100 FAX: 81-3-5745-3027

Disclaimer
In addition to past and current facts about the Meiden Group, this reportcontains forecasts for the future based on plans, outlooks and business
policies and strategies in effect at the time of publication. These forecasts
are our assumptions and judgments as based on information available atthe time they were stated, and may differ from actual business activity
results and events in future owing to changes in conditions.

Human Resources Management ........... 39
Quality Management ............................... 41
Supply Chain Management .................... 42
Corporate Governance ........................... 43
Risk Management ................................... 54

Corporate Information
Overview by Business Segment ............ 55
Financial / Non-Financial Highlights ....... 56
Outline of the Meiden Group .................. 5７

MEIDENSHA REPORT 2020

2

COVER STORY

What will the world be like in 50 or 100 years?
What can the Meiden Group do to create a more vibrant and comfortable society in the future?

What the Meiden Group Can Do
for the Future

Since Meidensha’s founding, the Meiden Group has created and supplied a variety oftechnologies and services, focusing on electrical equipment that supports social infrastructure, as
well as contributing to the sustainable development of society. This is reflected in our corporate
slogan of “quality connecting the next.”
Meanwhile, there have been dramatic events and changes in the external environment inwhich we operate —economic climate, political and international situations, and the evolution oftechnology, all of which can easily overtake our predictions— making it extremely difficult to foresee
the future.
Even in this age of uncertainty, the Meiden Group must respond flexibly to changes in theexternal environment and aim for sustainable growth going forward.
We believe that what the Meiden Group can do for the future is continue to pursue
manufacturing that contributes to a future-oriented society, and for all employees to ceaselessly
work to implement reform.
From the start, social contribution and a heartfelt attitude —the very DNA of the Meiden
Group— has been the impetus behind the creation of a new business model. We will focus onsocial change and issues, continuing to embrace the challenge of realizing a safe and vibrantsociety in harmony with nature.

- Aiming for a safe and vibrant society where people can live in harmony with nature -COVER STORY 1

COVER STORY 2

Continuing to support full,rich lifestyles through theages

Supporting a mobility society
Contributing to theas it evolves, as a pioneer of availability of electricity that
EV drive systems
protects people’s lives andlivelihoods(P7-8)(P5-6)

COVER STORY 3(P9-10)For us, our “quality” is not only about the quality of our
products and services. There are two things that make ourquality: “people” and “technology”. People at Meiden Group
strengthen ties with customers around the world by being
truthful and flexible. Meiden Group technology contributes
to society with truly original products and reliable services
created with expertise. These two attributes make Meiden
Group’s unique quality, and create new connections withthe future. Making connections with our customers, society,and people living in it. These connections will expand, andthe power we have built will become the energy for the next
generation.
For the peace of mind and joy of our customers, andthe precious lives of people beyond them, Meiden Groupquality will connect with a more prosperous tomorrow. Thisis our never-changing mission.

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MEIDENSHA REPORT 2020

MEIDENSHA REPORT 2020

4COVER STORY 1

Social Infrastructure BusinessContinuing to support full,rich lifestyles through the ages

Continuing to Embrace Challenges with an
Unchanging Attitude in an Ever-Changing WorldIn the Meiji era, one young man’s strong conviction to “enrichsociety through the power of electricity” became the foundationof Meidensha. He believed that the age of electricity would
come during an age of gas streetlights, and over the next
123-years, his motor repair business expanded to encompass
not only motors, but the broader infrastructure business field.
Although the interpretation of a “more affluent tomorrow” hasevolved in the years since Meidensha’s founding, the goal
behind our corporate philosophy has not changed.
Since the industrial revolution, the economy has
improved, resulting in a more convenient and prosperous
society. However, greenhouse gas emissions have rapidly
increased, resulting in damage throughout the world from theeffects of climate change. On the other hand, the populationof Japan has been declining in recent years, and as businessincome has tapered off, local governments are being forced torenew aging facilities in order to provide and maintain social
infrastructure. Furthermore, new value is required to solve
complex social issues such as deregulation of electricity, theexpansion of renewable energy, and the response to changes
in electricity supply systems and society due to depopulation.
In order to solve these issues, public and private
institutions must share knowledge and technology,
establishing the necessary cooperation between infrastructureareas. These areas share energy between different typesof infrastructure such as water pipes and waste treatment
facilities, as well as inter-regional cooperation, which shares
infrastructure between local government areas. By leveraging
our experience and network in several fields developed overmany years, we provide optimal solutions by combining
products, technologies, and services that transcend thebounds of individual businesses.

Creating New Energy Services that Work with
Other Industries

Decentralization
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MEIDENSHA REPORT 2020

Due to needs such as the expansion of the introduction ofrenewable energy and the widening of infrastructure due tofinancial difficulties of local governments, expectations arerising for the ability to adjust*1 by utilizing the energy resourcesof each local government and company. Power regulation willbe traded via the Supply and Demand Adjustment Market*2
to be established in 2021, and major issues to be addressed
before full-scale operation is possible include securing control
technology and establishing the business model.
We are promoting verification aimed at utilization ofvirtual power plants (VPP)*3 by employing consumers’ energy

resources. To achieve this, we will leverage the knowledge
relating to the operation of heavy electrical equipment
amassed by local governments and companies over time.
This will ensure that the multiple VPPs currently in operation
participate in the structural verification program.
The verification program aims form a consortium withcompanies such as local governments and manufacturers,
as well as a wide variety of businesses including academic
institutions to expand energy resource capacity, improve
control accuracy, and enter the supply and demand adjustment
market.
Diagram of virtual power plants
Solar power
Electric
vehiclesWind farms

VPP

Virtual Power Plant
Consumers(buildings andpublic facilities)

Consumers(factories)
Consumers(residential, etc.)

To be a Company that Truly Contributes toLocal Communities
It is essential that we enhance platform creation both insideand outside of the Company, and develop businesses fromthe perspective of solving social issues. Particularly in an age
where global infrastructure is experiencing great change.
Going forward, we will challenge ourselves to create newtechnologies and new value to contribute to the realization of avibrant and comfortable future society.
*1 The ability of electricity generation equipment, power storage equipment, demand
response (DR), other systems that control electricity supply, and other items that are
essential for general electricity transmission and distribution businesses to control
the frequency of electricity in the service area and adjust the balance of supply anddemand.
*2 A market for general electricity transmission and distribution businesses to secure
power in advance to eliminate the gap between supply and demand (power
regulation).
*3 A system for connecting power generation equipment —for renewable energy suchas solar power, batteries, and power equipment used by customers— to the network
to function as if it were a single power station.

Related pages▶ P.25 – 28 [Social Infrastructure Business]
MEIDENSHA REPORT 2020

6COVER STORY 2

Industrial Systems BusinessSupporting an evolving
mobility society as apioneer of EV drive
systems

Electrification
The proliferation of electric vehicles is the key to limiting the
global average temperature increase to 2°C or less
The International Energy Agency’s (IEA) clean technology scenario(if the target of an average temperature increase of 2°C* isaccomplished)

Motor vehicles sold (100 million units)
1.5
Electric motor
vehicles
15%

32%

51 %

2020

2030

2040

1.0

0.5

0

Gasoline vehicles

Green diesel vehicles

Natural gas vehicles

Hybrid vehicles

Plug-in hybrid vehicles

Electric vehicles

2050 (year)

Source: Ministry of Economy, Trade and Industry “Materials for the Meetingon New-age Vehicle Strategy (1st)”* The global target of limiting temperature increase since the industrial revolution to
2°C or less, from the perspective of mitigating the negative effects of climate change,
agreed to as part of the 2015 Paris Agreement.

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MEIDENSHA REPORT 2020

The Impact on Society of Reforms in the
Automobile Industry and Realizing a Mobility
Society

Creation of New Technology and Value
Relating to Electrification and Digitalization ofAutomobiles

In the automotive industry, the automobile concept ischanging dramatically as technological innovation progresses
in the new field of CASE (connected, autonomous, shared,
electric). This change is notable because it not only impacts
industrial structure, but it also the state of society. Against thisbackdrop are environmental problems, social problems suchas traffic accidents and congestion, and financial problems
such as inequality. Various additional external changes arealso occurring, including demographic changes such as thedeclining birthrate, aging and decreasing population, as well
as changes in customer needs, such as changes in values forownership.
Electrification and digitalization of automobiles solves
these social issues, and it is an important aspect of realizinga mobility society in which freedom of movement is ensured
for all.

Since its founding in 1897, Meidensha has overcome countlesschallenges, and we have become known as “Motor Meiden” forour manufacturing industrial motors and threshing machines.
We subsequently accumulated a range of technologies,
including motors for uses such as elevators and forklifts, and theinverters to control them. In 1990, we used this knowledge as abase for the development of motors and inverters for EVs. Since
the adoption of the world’s first mass-produced EV in 2009, we
can boast a total record of 350,000 mass-produced EVs.
We have also greatly contributed to the developmentof automotive technology through dynamic measurement
systems —e.g. by delivering Japan’s first electric dynamometerin 1920 as well as the nation’s first chassis dynamometer in
1927. The current automobile market is heading for a vast
technological transition to electric and self-driving vehicles. We
are providing the model-based testing equipment systems formore efficient development.
Meidensha is the only company with both a productand testing equipment system business for EV motors andinverters, making us a pioneer in the field. We will continue
improving quality and mass-production technology inthe product business, increasing the scale of operations* References to EV include EV, PHEV, and HV.

by improving the performance of testing equipment andenhancing simulations and analysis for the electrification of
automobiles, while continuing to create new technology andvalue alongside our customers and partners.

One of the Creators of the Age of Electric
VehiclesEngineers 120 years ago, in addition to attending to the tasks
immediately before them, must have believed they could create
the future through motors. Our EV drive systems represent
the culmination of motor technology and that ambition for the
future handed down through the generations.
Great expectations have been placed on electrificationof automobiles to enable more people to enjoy the value
provided by realization of a mobile society. We will continue
to embrace the challenge of creating new technologies andvalue, contributing to the development of EV systems and thesolution of social issues as one of the pioneers of the age ofelectric vehicles.

Related pages▶P.29-30 [Industrial Systems Business]
MEIDENSHA REPORT 2020

8

COVER STORY 3

Maintenance and Servicing BusinessContributing to the availability ofelectricity that protects people’s
lives and livelihoods
Social Responsibility as a Heavy Electrical
Equipment Manufacturer
Modern life is made possible by social infrastructure such as
electricity and plumbing. In recent years, natural disasters
such as typhoons and torrential rains have become more
frequent and intense as a result of global climate changes,
having a serious impact on a range of areas from daily life
to threatening the business continuity of companies andlocal governments. Interruptions to electricity and watersupply could cause even more damage. If high-rise buildings,
hospitals, and factories, for example, were to suffer blackouts,
they would be blanketed in darkness. Elevators powered byelectricity would stop and disaster prevention tools such as
fire-fighting equipment would be rendered inoperable.
As a result —and due to the growing awareness of BCP(Business Continuity Plan) and disaster prevention, and theaccompanying revision of the Fire Service Act— the demand
for maintenance of emergency generators, extension of lifeof equipment, repair and inspection is increasing. In addition,
comprehensive outsourcing of upkeep and maintenance toprivate institutions has been increasing due to labor shortages
caused by the declining labor force and financial difficulties
of local governments. Thus, the need for inspection andmaintenance continues to increase.
For example, if essential services such as electricity, water,
rail, and broadcasting are affected by a disaster such as theGreat East Japan Earthquake, it is the Meiden Group’s social

The frequency of torrential rains increasing in Japan
National (AMeDAS) annual frequency of rainfall of 50 mm or more in
one hour

Average annual frequency over the last 10 years

Approx.

226 Approx.

(1976 – 1985)

1.4-foldincrease

Approx.

327(2010 – 2019)

Source: Japan Meteorological Agency website “Long-term Changes in
Heavy Rain and Extreme Heat, etc. (Extreme Phenomena)”

9

MEIDENSHA REPORT 2020

responsibility as a heavy electrical equipment manufacturer tocontribute to the normalization of daily life through the prompt
restoration of those services. Which we consider to be ourultimate mission.

Contributing to the Solution of Customer
Issues Through Support for the Whole ofEquipment Lifecycle
The Meiden Group provides support throughout the lifecycle ofour equipment —from customer planning for new equipment
to renewal or disposal— for that equipment to continue tofulfill its role. After equipment has been delivered, we proposea maintenance plan suited to the customer, conducting
regular inspections, managing operations such as conducting
diagnostics or permanently stationing staff, providing
technological training support, and taking steps to prolong
the service life while presenting replacement proposals forequipment that is in long-term operation to prevent accidents
and ensure the stable operation of customer equipment.
Furthermore, in addition to responding to other companies'
products and proposing energy savings to customers, we also
contribute to the solution of customer issues by improving ourcapacity to make proposals that meet market needs throughour one-stop services that singlehandedly support customers
through all complications involving their equipment.

Our Customers’ Closest Ally
We are our customers’ closest ally when it comes to our
products. The Maintenance and Servicing Business is essential
for the secure, safe, and stable continuation of infrastructure
support, even after products have been delivered to thecustomer. We aim to realize a society in which electricity canbe used with confidence, even in times of emergency, and ourcustomers feel secure in relying on our undeniable knowledge
and technology. Going forward, the Meiden Group will work
even more closely with customers to perfect technology andaccomplish our mission of ensuring efficient use and the stablesupply of electricity.
Related pages

365 days▶P.31-32 [Maintenance and Servicing Business]
MEIDENSHA REPORT 202010

Message from Management

Based on our company’s
founding beliefs, we will
carry out the Medium-termManagement Plan 2020
and aim for continuous
improvement of ourcorporate value.

were all the highest ever recorded by us. In spite of themodel can even detect objects around the catenary (suchrelatively minor impact of the novel coronavirus (COVID-19)

as fallen trees) with technology that uses camera images

on our FY2019 results, concerns remain about possible

to inspect catenary abrasion. Proposing solutions to solve

declines in private demand for capital investment, delays inissues such as these are a benefit of the technology weoverseas projects, and impact on procurement, leading us

have developed over many years, and proposals backed

to anticipate an unavoidable decline in earnings and profit.

by this technology are compelling to our customers.

In addition to thoroughly implementing measures to limit

From the perspective of the 2015 UN-adopted

the risk of infection to the Group’s employees, we will roll

Sustainable Development Goals (SDGs), the Meidenout measures to minimize any decline in performance.

Group’s business activities are extremely compatible with

In addition, the current medium-term management

each of the SDGs, including issues and fields that utilize

plan positions the current phase as a “powerful step”

the Meiden Group’s existing technologies and knowledge

towards additional gains, and we hope to steadfastly

to contribute to solutions.

promote initiatives aimed at this future jump. In FY2020,
we established new production lines at Kofu and Nagoya

The Meiden Group’s Approach to ESG

to expand our EV component business, and we plan toTakeshi Miida
Representative Director, President

The Meiden Group’s Purpose

reach full operation of our new US company establishedThe Meiden Group President’s CSR Policy lists the three

to handle transformer products. This is in addition to

key issues of environment, society, and human resources.

commencing operations at our new technology center,By tackling these key issues on the management

aimed of achieving transmission of technology and further

foundation of compliance, corporate governance, and risk

improvements in safety awareness. Although conditions

management, we will continue to provide value to society.

are extremely difficult, we are working to achieve balanced

In terms of communication with stakeholders, wemanagement that attends to both current performance as

have recently held technological exhibitions with thewell as sowing seeds for the future.

theme of products, technologies, and services that solve

motors, has led to the development and production of arange of heavy electrical equipment, allowing us to growsocial issues, in addition to our normal marketing, PR,

Awareness of Societal Change

and other promotional activities. By conveying the details

Since its founding in 1897, Meidensha has single-mindedly

into the Meiden Group, and supporting modern social

pursued manufacturing excellence by contributing to

infrastructure. Meidensha’s commitment to manufacturing

In recent years, increasingly severe global environmental

through communication with our stakeholders, we

the sustainable growth of society through the creation

excellence, inquisitiveness, and spirit of challenge originate

problems, larger-scale natural disasters, and social issues

acknowledge customer expectations and hopes thatand provision of a variety of technologies, products, andin the determination to enrich society through the power ofsuch as increasing inequality have come to the fore around

Meidensha will be able to solve the issues they are facing,

services, with a focus on electrical equipment relating toelectricity present from the company’s inception. Our many

the world. Market downsizing due to a declining population,

leading to improved employee engagement in which theysocial infrastructure.

of Meidensha’s purpose, aim, and social contributions

business fields grew from the belief in looking beyond

a major issue, is also being faced by Japanese companies

feel they are playing a valuable role. We believe that thisShigemune Hosui founded Meidensha with the

products to envision prosperous lives for the many people

and local governments in many industries. And while

will result in development of better business operations. I

conviction that the “age of electricity will come” and thewho use them, refining technologies to enrich society

the post-coronavirus needs of customers may change

am proud that each and every Meiden Group employee

ambition to “build a more affluent world through the power

through business. This is Meidensha’s true mission andsuddenly, these changes in social structure always bringworks with the belief that they are supporting infrastructureof electricity.” In the Meiji Era, the name of Meidensha

drive as a manufacturer of heavy electrical equipment.

new issues along with the solutions to address them. As

and benefiting society. I sincerely hope that Meidensha

represented the concept of creating “a place where

From time to time, we are asked to repair equipment

a company that supports social infrastructure, in addition

continues to be a company that supports infrastructure

ambitious friends can come together to build a morethat has been in service for 50 or even 80 years. I believe this toto ensuring that we make products and services our

150 or even 200 years from now, continuing as a place

affluent world through the power of electricity.”be evidence of the trust and confidence placed in Meidensha

customers need, we have also proposed many solutions

where people take pride in their work. Going forward, we

Our Founder surely believed that when the age ofby our customers, as well as proof that we are a company

to social issues in recent years. For example, the MEIDEN

will embrace the challenge of realizing a safe and vibrantelectricity arrived, it would not only mean the proliferationthat has continued to deliver a range of systems and conduct

e-Axle EV drive system has contributed to the drivability

society where people work in harmony with nature, whileof motors, but that the transmission and distribution ofmaintenance services long-term throughout Japan.

of automobiles by increasing the speed of automotive

valuing our thoughts on social contribution and a sincere

development – effectively utilizing in-car space andattitude, the very DNA of Meidensha.

electricity would be necessary, requiring static equipment
such as transformers to achieve this. Since our inception,

Our Current Operations

slimming components, through the integration of motors,
inverters, and gears into a single unit. The Catenary Eye

we have manufactured transformers for electric lights
as well as motors, contributing to the advancement of

In FY2019, the Group recorded net sales of 255.7 billion

catenary inspection mechanism can be mounted on small,electricity in Japan. Our business, which began withyen. Net sales, operating income, and ordinary incomecommercially available vehicles, and the most recent

11 MEIDENSHA REPORT 2020

MEIDENSHA REPORT 202012

Meiden Group History

Supporting social infrastructure
for more than 120 years.
The Meiden Group’s quality will lead toa more affluent future.

A more detailed timeline may be found on our website.

https://www.meidensha.com/corporate/corp_05/index.html

1897

The 1970s -The 1980s -The 1990s -The 2010s -Founding and Birth of “Meiden a Motor Company”

Evolving into “Meiden a PowerElectronics Company”

Evolving into “Meiden a
System Engineering Company”

Approaching Our Centenary

Aiming to Be “Meiden a Global
Company”

During Japan’s postwar economic
boom, Meidensha actively expanded
into the industrial systems business andcontributed to the development ofindustry in Japan. In about 1970, society
was beginning to prize quality overquantity. Likewise, Meidensha switched
its management strategy from quantity
base to quality base. On the technicalside, our aim was to develop new
products that made full use of ouremployees’ creativity. At this time, webegan to cement our status as amanufacturerofheavyelectricalequipment, having developed new
products that combined heavy electrical
technology (power) with the latest
electronics technology.

In the latter half of the 1980s, economic
expansion led Meidensha to boost its
production capacity at factories andupgrade its production system. We
added to our family of Group companies
and developed a variety of businesses tomake us a stronger enterprise.
We grew to have three corebusiness areas, adding mechatronics
and electronics to our existing powerelectronics field. The integration oftechnologies from each of these fields tocreate management, monitoring, andcontrol systems, evolves our Group into
a company known as “Meiden a System
Engineering Company.”

Meidensha
celebrated
its
100th
anniversary in 1997. Japan’s businessenvironment changed drastically after
the collapse of the bubble economy, andmanagement had to deal with a time ofcrisis. However, the legacy we had
inherited from our predecessors,
technologies and well-developed humanresources, became the base for a newera of expansion as we hit the 100-year
milestone.
Upon our 110th anniversary in 2007,
we christened ThinkPark Tower, a facility
combining our head office building withpleasant greenery in Osaki, Shinagawa
City, Tokyo, where our company was
founded.

Today, the Meiden Group is expanding its
presence in markets outside Japan,
especially in the ASEAN region. As partof this, we transferred to our overseas
subsidiariesastrongerregional
supervisory role; e.g. building partnerships
with enterprises outside Japan, andopening training centers for local staff.
We are using IoT and AI to increase
our product competitiveness and systemtechnology. We also enhanced one-stop
service business ranging from equipment
manufacture to maintenance, inspection,and operations and management.
The world is undergoing vastchange, but Meidensha will never stop
endeavoring to contribute to theformation of an “affluent future society.”

In 1897, our founder Hosui
Shigemune started a factory in the
belief that one day Japan would buildits
own
electric
machinery.
Meanwhile, Japan depended on
imported products for much of its
industrial machinery. His business atthat time was mainly repair ofelectrical equipment and manufactureof switches. However, his efforts tobuild made-in-Japan motors gavehim
several
new
ideas
for
development of own products.
In 1901, Shigemune successfully
developed a three-phase induction

motor and sold 18 motors between
1903 and 1904. He continued withresearch and made prototypes in thedesire to develop more products of his
own. His efforts led him to devise an
induction motor design method in 1905.
In the following year, he started
production of motors to his own design
method.
Meidensha’s motor production
helped to modernize Japanese industry
and became the cornerstone ofvalue-building at Meidensha that still
persists today.

Meiden Group History
1897

Company founded as a privately operated factory for electrical machinery

1965

MEIDEN ENGEERING CORPORATION established

1997

Celebrated 100th anniversary

2014

Stake acquired in the Indian company, Prime Electric (now PRIME MEIDEN LIMITED)1913

Osaki Factory established1970

The Shinagawa Works and move to the Numazu Works closed

2001

A joint venture company, Japan AE Power Systems

2015

Maintenance and after-sales service businesses reorganized into MEIDEN O&M CORPORATION

Change of corporate structure from a private company to a listed company

1975

MEIDEN SINGAPORE PTE. LTD. established

1917

Corporation establishedand MEIDEN ENGINEERING CORPORATION

Merger with MEIDEN ENGINEERING CORPORATIONTRIDELTA (now TRIDELTA MEIDENSHA GmbH) acquired from TRIDELTA GmbH

1935

Nagoya Works established

1976

Gotanda Office opened

2003

1937

Shinagawa Works established

1977

Ota Works established

2005

Work started on a development project near the West

2017

1950

KOFU MEIDENSHA ELECTRIC MFG. CO., LTD. established1987

Technological exhibition held to celebrate the company’s 90th anniversary

Exit of Osaki Station

2018

2007

Headquarters moved to Osaki, Shinagawa-ku, Tokyo due
to completion of ThinkPark Tower

2019

MEIDEN HANGZHOU DRIVE TECHNOLOGY CO., LTD. established2012

Japan AE Power Systems Corporation joint venture

2020

MEIDEN AMERICA SWITCHGEAR INC. established1958

Headquarters moved to Otemachi, Chiyoda-ku, Tokyo

1993

The R&D Center opened in Osaki, Shinagawa-ku

1961

Numazu Works established

1995

Headquarters moved to Hakozaki, Chuo-ku, Tokyo

Celebrated our 120th anniversary by holding events such as the Meiden Expo
Formulation of Medium-term Management Plan 2020
Decided to invest 7.0 billion yen in the Electric Vehicle (EV) Parts businessdissolved

13 MEIDENSHA REPORT 2020

MEIDENSHA REPORT 2020

14

The Meiden Group Value Creation Process

Areas in which we will contribute to the solutionof social issues through our business strategy

Aiming for sustainable
development of the Meiden Groupand society
The Meiden Group’s corporate mission is “illuminating a more affluent tomorrow”
and we are conducting corporate activities according to the corporate
philosophy of “for customer peace of mind and satisfaction.” By continuing to
improve the quality of people and technology, which is the driving force behindall of our business activities, we will provide unique products and reliable
services, and contribute to society as appropriate for the age and the market.
Through this, we aim to provide increased value to the customer byimplementing a business strategy that integrates development, production,
sale, and maintenance while strengthening our foundations, and achievesustainable development for both the Meiden Group and society.

OUTCOME
Investments for growth and steady
expansion in business performance

Solving social issues
by providing value to customers

The Meiden Group will establish competitive superiority andsecure business opportunities by proactively engaging withsocial issues. Under Medium-term Management Plan
2020, we are actively investing and strategizing with regard
to equipment, HR, research and development, andstrengthening partnerships, etc., for a further leap forward.

The Meiden Group will contribute to the solution of social
issues, including Sustainable Development Goals (SDGs) byproviding value to customers. Furthermore, we provide
value to society, such as stable power supply, energy
efficiency, access to safe water resources, creation of
employment, and shareholder returns.

Strategy

INPUT

OUTPUT

Medium-term Management Plan 2020 (FY2018 to FY2020)■ Growth Businesses: Overseas Business and Automobile-related Business● Expanding the scale of businesses in line with market growth

Optimal capital allocation andstrengthening management foundations

Improving the corporate value
and gaining the trust of customers

Over 120 years, the Meiden Group has ceaselessly
continued to adapt, and optimally allocated the various
capital that supports business activities, which has been
accumulated throughout its history. Medium-termManagement Plan 2020 aims to efficiently inject capital tosupport businesses and achieve financial targets.

Consideration for the environment, a comprehensive
customer support system, and high-quality services areforms of value that increase a company’s value for its
customers, and they are also the Meiden Group’s strengths.
These forms of value also win trust from customers andgenerate robust financial underpinnings, creating a virtuous
cycle that further strengthens management foundations.

■ Earnings-base Businesses: Public Infrastructure Business andMaintenance and Servicing Business● Strengthening earnings power through generation of new values■ Strengthening Business Foundations● Manufacturing, development and business promotion capabilities, humanassets fostering and financial strategies

Meiden Group quality will connect
with a more prosperous tomorrow.

The Business Environment in which the Group Operates (anticipated)
Overseas Market● Increasing populationin developing
countries● Increased
infrastructure
demandDomestic Market
Declining population● Slumping economic
growth rate
● Difficulty inimplementing national
and local government
fiscal policies●

Business Key Words
Environmental
regulations● Automobile
electrification anddigitalization● Development of the
IoT and AI●

Railwaysystems

EnergyAutomobile
testingsystems

15 MEIDENSHA REPORT 2020

Logistics

Customers

CapitalBusiness
Activities

Customers

Electricalpower

Society
Illuminating amore affluent tomorrow

Strategy

Water andenvironmental
systems

Plant
constructionengineering

ICT
production

Maintenance

Challenge to create new technologies
and value / Further honing of quality

t
Qu
x
e
ality
n
c o n n ec t i n g t h e
For the peace of mind and satisfaction of our customers,
and the precious lives of the people beyond them, theMeiden Group will continue to refine products and services
to increase the quality of people and technologies, andembrace the challenge of constantly creating newtechnologies and value.

MEIDENSHA REPORT 202016

Meiden Group Businesses
10

Our products are found inthese places, operating for
benefits of the society.

1
ICT
Providing optimal facility
operation with use of IoT
and AI for better work
efficiency and optimization
3

ICT

2

8

9

4
5

7

6

1 Power Stations

Hydro turbine generator

2 Substations

Mobile power generating system

Substation plant4 Railways

Tank type vacuum circuit
breakerSupervisory control and dataacquisition system (SCADA)

3 Water Treatment Plants

7 Various Factories

Comprehensive monitoring
system for a water supply system

Ceramic flatsheet membrane
unit

Energy storage system

Photovoltaic power
generating system

6 Sewage Treatment Plant

8 Electric Vehicles

9 Hospitals

Drive system for EV and HEV

Emergency gas turbine
generator

5 Automobile Plants

SCADA system for railways

17 MEIDENSHA REPORT 2020

OCS inspection system

Dynamometer

Operation Transmission testing
and measurement systems

Supervisory control system
for a sewage treatment

Ceramic flatsheet
membrane unit

Automated guided vehicles(AGV)

Industrial controller

PM motor

Inverter

Motor drive unit for battery
folklifts

10 High-rise Buildings

Cogeneration system

Uninterruptible power supply

Motor for elevator

Inverter for elevator

MEIDENSHA REPORT 202018

Strategy for Value Creation

Progress of the Medium-term Management
Plan
The Meiden Group’s vision for the future is to be a heavy electric machinery maker that
supports the future of social infrastructure and industrial advancement, while realizing
sustainable growth and development. With environmental issues and sustainablegrowth as major management issues, strategic development is extremely importantfrom a medium- to-long-term perspective.
The Medium-term Management Plan 2020, which we have been operating since
FY2018, has been positioned as a phase for actively making a range of investments inorder to take a “powerful step” toward future “jump”. As a result of these efforts, we
aim to realize “high-quality” growth in the “jump” phase under the next medium-term
management plan from FY2021.
Director, Executive Vice President

Shosuke Mori

Basic Policies of the Medium-term Management Plan 2020
In the Medium-term Management Plan 2020 from FY2018,as part of the “powerful step forward” phase, we will actively
invest and implement equipment, personnel resources,
research and development, and strengthen business
partnerships. Positioning the next medium-term management
plan and beyond as a “jump” period, we aim to achieve “highquality” growth by improving business profitability and creating
a balanced business structure. As a fundamental policy under
the current Medium-term Management Plan, business areas

are divided into the following three areas: Growth Businesses,
Earnings-base Businesses, and New Growth Businesses to
distribute of company resources, with each area implementing
its own strategies. Based on these policies, we will actively
invest and work to strengthen earning potential with the goalof further increasing corporate value. The following is an
explanation of the progress of the Medium-term Management
Plan 2020 in FY2019.

Medium-term Management Plan 2020 (FY2018-2020)
Powerful Step for a Jump

VisionIdeal state of
being
JUMP

HOP

V120
(FY2015-2017)

Powerful
STEP
Medium-termManagement
Plan 2020(FY2018-2020)

Investment in facilities andhuman assets for major growth■ Enhancing its product competitiveness■ Enhancing earnings power■ Clarification of growth areas

19 MEIDENSHA REPORT 2020

■ Powerful Step:● Investments for growth andsteady expansion in businessperformance

Next
and ensuring
management
plans(FY2021-2024)

Realization of“high-quality” growth■ Expansion of business scale■ “High-quality” growthWell-balanced compositionof business operations● Enhanced profit margin●

A heavy electricmachinery maker that
supports the future ofsocial infrastructure
and industrial
advancement, while
realizing sustainablegrowth anddevelopment

Key Measures for the Accomplishmentof the Medium-term Management Plan 2020
① Growth Businesses
The Overseas T&D Business, which is expected to expand mainly in emerging Asian countries, and the Automobilerelated Business, have made significant progress in the electrification and digitization of cars, positioning it as a
Growth Businesses. We are actively investing resources into these businesses to expand our business scale.
In the Overseas T&D Business in January 2020, we reached
an investment agreement to acquire a 41% stake in Vietstar
Industry Corporation, a Switchgear Manufacturer in Vietnam(hereinafter “Vietstar”). Through this acquisition of shares,
we will combine Vietstar’s commercial distribution andproduction capabilities with the Meiden Group’s producttechnology to enter the Vietnamese electricity market,
particularly in the field of medium-voltage switchgear, andin future, we aim to enhance the value chain in the ASEAN
region by positioning Vietstar as our key production base in
the Mekong region.
As environmental regulations increase, MEIDEN AMERICASWITCHGEAR, INC. was established in April 2020 in the U.S.
to manufacture vacuum circuit breakers in the U.S., where
there is a strong demand to replace aging power equipment.
Through this subsidiary, we will strengthen manufacturing andsales of vacuum circuit breakers and vacuum interrupters inNorth America, and at the same time, we aim to expand theOverseas T&D Business.
In the EV Business, we aim to start mass production
in FY2020 by commencing operation of new productionlines in Nagoya and Kofu. In China, the world’s largest
automobile market, we establish MEIDEN HANGZHOU DRIVETECHNOLOGY CO., LTD. as the first overseas production site
for the EV Business, and we will focus on business expansion
in that market.
In the Dynamometer Systems Business, we are accelerating
our customers’ model-based development of automobilerelated products and supporting reduction of development
times, through the commencement of operation of an EV motor
evaluation bench embedded software from FEV Japan Co., Ltd.
(FEV), with which we formed a business partnership in March
2019. In this way, we will continue to strengthen our businessand achieve synergies with our EV Business.

② Earnings-base Businesses
We have placed the Water Treatment and Public Infrastructure Business, the Electricity and Renewable Energy
Business, and the Maintenance and Servicing Business in Japan, etc., in the Earnings-base Business group. We are
striving to strengthen profitability by reforming business models and improving productivity.
In the Water Infrastructure Business and the Electrical Energy
Business, we established a new Public Infrastructure Business
Planning Group in April 2020 to respond in order to respondto diversifying social needs. The Headquarters will promote
activities to propose cross-business solutions in order to solve
social issues including crossing and expanding the scope of
infrastructure services, decarbonization, and Business Continuity
Plan (BCP). We will devote ourselves to the creation of new
business models by leveraging our extensive record of delivering
numerous products and services, as well as through partnerships
with local governments and companies in other industries.
In the Railway Systems Business, it is now possible todetect abnormalities in structures, etc. around the catenary(damage from fallen trees due to typhoons, etc.), and to improvethe maintenance efficiency of railway operator inspections byfurther improving our catenary inspection equipment that

detects deterioration and abrasion through image analysis
technology, and by combining image analysis and AI.
In addition, in the Maintenance and Servicing Business,
demand for maintenance of emergency generators and lifeprolonging and overhauling of facilities is increasing due
to heightened awareness of BCP and disaster prevention.
Comprehensive outsourcing of maintenance and management
to private sector is becoming increasingly common against
the backdrop of a declining labor force and financial difficulties
for local governments, etc., and the need for maintenance isincreasing. We are focusing on maintenance support for othercompanies’ products, energy-efficient proposals, developmentof new services such as operation and management work, andproposals for walkthrough activities in which we walk aroundthe site with customers to examine and diagnose equipment.

③ New Growth Businesses
We are promoting new markets and new products development in New Growth Businesses such as the
Semiconductor-related Businesses.
In April 2020, MEIDEN NANOPROCESS INNOVATIONS, INC.,
was established commenced sales of a new product, the ALD/
OER film deposition equipment, in order to commercialize
room-temperature film deposition technology using 100%pure ozone generated by Meidensha’s proprietary technology.
By making this business a subsidiary, we will conduct rapid
decision-making and collaboration with parties outside of theGroup, and accelerate its commercialization.

We have also restructured the Business Development
Department in order to further strengthen and promote new
businesses development and open innovation even more than
before. We are thus working to identify synergies and create
new businesses through collaboration with companies in
Silicon Valley in North America as well as other industries inJapan and abroad.
MEIDENSHA REPORT 202020

Strategy for Value Creation

Progress of the Medium-term Management Plan
Major Initiatives and Results in FY2019
Strategy of the Medium-term Management Plan 2020

SocialInfrastructure
Business
GrowthBusinesses

Industrial
Systems
Business

SocialInfrastructure
Business

Industrial
Systems
Business

Maintenanceand Servicing
Business

Industrial
Systems
Business

Power Generation and T&D Equipment
Strengthen our overseas business structure, including theestablishment of a new switchgear company in the U.S.

Overseas Railway Business
Capturing further demand
Strengthen the project implementation system

Promote activities to secure orders for new overseas projects

EV Business
Increase production equipment and development capabilities
Promote miniaturization, efficiency, and integration

Operate new production lines (in Kofu and Nagoya)
Watch market and customer trends due to the spread of the novel
coronavirus (COVID-19)

Dynamometer Systems Business
Enhanced engineering capabilities for model-based development
Achieve synergies through collaboration with the EV Business

Swift response to R&D budget restrictions of automobile
manufacturers
Construct a business foundation through partnerships

Water Treatment and Public Infrastructure BusinessElectrical Energy Business
Non-sequential cost reduction of products and systems
Provide new value utilizing IoT and AI technologies
Build a sales structure to meet diversified needs

Private Sector Business
Reduce product costs and collaborate with maintenance services

Earningsbase
Businesses

New GrowthBusinesses

Overseas Power Business
Partnerships with local businesses
Realize entry into the market where power companies purchasepower equipment
Realization of autonomous operation of PRIME MEIDEN LIMITED andenhancement of business expansion in India and markets locatedwest of India, including Africa

FY2019 initiatives (progress)

Applied Electromotive Products Business
Launch high-speed motors and transformerless high-voltage inverters
Logistics Business
Create unique products through collaboration with system integrators

Water Infrastructure
Thoroughly manage an agile schedule in response to changing
circumstances
Public private partnerships (PPP) projects, use of ICT and AI
technologies, etc.
Improve profitability by strengthening product strategies in responseto the restructuring of electric power industry
Promote targets for the decarbonized market and create synergies
through comprehensive proposals for renewable energy and battery
technology
Strengthen the hydroelectric power business through collaboration
with EAML Engineering CO., LTD.
Enhance project management of large-scale/overseas projects
Capture the demand to replace aging equipment by proposing
integration with maintenance services
Expand business by enhancing product capabilities and launching
new products timely
Establish a production system in line with changes in load due to theimpact of the novel coronavirus (COVID-19)

Enhanced Rollout of One-stop Services
Partnerships and walkthrough activities
Expand into developing countries

Promote total maintenance of machinery and electrical equipment,
including products from other companies
Strengthen proposal capabilities through walkthrough activities andintegration with product sales

Rollout of Facility Management
Provide new value by utilizing IoT and AI technologies
Enhance human resource development and skill transfer byreinforcing facilities

Improve HR capabilities by establishing a new technology center∙ Strengthen HR development and recruitment, and to improve
workplace efficiency through the use of IoT and AI technology∙ Improve work style reform and cost competitiveness by developing
and strengthening partner companies

Electronics Products Business
Reinforce production equipment and develop new products

Deploy of the innovation business through the Dejima strategy by
establishing a new pure ozone company
Launch the new product, “Cold-cathode X-ray Tubes”

Measures

E

Allocate the electricity generated by wind farms owned by Group companies to the use of our own R&D center and the Osaki Kaikan Hall
to reduce the CO2 emissions associated with electricity consumption to zero

Conduct appropriate design review using risk maps
Establish quality management standards for purchased products
Enhance change-point management based on quality data
Introduce automated equipment to product inspection processes, etc.

SafetyExpand ISO 45001 certification
Implement internal education through the Safety Promotion Center to prevent risk awareness lessons from fading
Various measures to improve health based on the President’s Health and Wellness Management Policy Statement

Work Style Reforms

Promote operational reforms and telework through RPA, etc.
Systematically reduce overtime and promote the use of paid leave
Promote flexible working styles through measures to support childcare and nursing care, etc.
Introduce a mandatory retirement at 65 years of age

Corporate Governance

G

Building a Robust Financial Base
Meidensha is working to strengthen the Group’s position
based on the following capital procurement policies, in order
to complete its Medium-term Management Plan 2020.
Our basic policy for funding is to select the most optimal
financing method while balancing the long-to-short-term ratio
and direct to indirect financing. In principle, we use capitalfor investment within the scope of depreciation expenses;
however, in the expansion phase of investment, we plan toraise funds with a D/E ratio (debt to equity ratio) of 0.5 forcapital procurement. In the past few years, as we have
expanded our long-term financing of investments, our longterm ratio has grown to 72%, thereby reducing the risk ofshort-term refinancing.
In FY2019, we issued green bonds for the purposeof funding mass-production equipment for EV motors andinverters, and promoted the diversification of our funding
sources. Furthermore, we are also working to increase thesize of our commitment line with a view to ensure a complete
procurement system.
ESG/SDGs finance such as green bonds and green
loans are highly compatible with Meidensha’s businesses,
and we believe they are a financing method that enables bothbusiness expansion and environmental/social contribution. We
will consider forming sustainability bonds and sustainability
loans, according to future funding demands.
From the perspective of asset efficiency, we consider
ROIC (return on invested capital) as an important indicator, andwe are working to improve our CCC (cash conversion cycle)
through improved accounts receivable turnover and inventory
reduction. In terms of financial targets, we are aiming to secure
medium-to-long-term ROE (return on equity) of 10% and ROIC
of 7%.
Furthermore, we aim to achieve equity capital of at least
100 billion yen through profitability improvement.

Transfer to a company with an audit and supervisory committee
Enhance discussions and supervisory functions of the Board of Directors by expanding the proportion of outside directors, etc., andenhance internal controls
Establish the voluntary Nomination and Remuneration Committee
Improve the effectiveness of the Board of Directors through conducting meetings to exchange opinions with the themes of management
issues and strategy

21 MEIDENSHA REPORT 2020

Financial Targets (consolidated)(In billion yen)

FY2019(results)

FY2020(forecast)

FY2020(targets)

Net sales

255.7

236.0

280.0

Operating income

12.7

7.0

14.0

Ordinary income

11.4

6.6

13.5

Net income attributable toowners of parent

8.2

4.7

9.4

Net sales

146.0

138.0

157.0

Operatingincome

3.6

2.7

4.8

Net sales

65.8

55.0

77.0

Operatingincome

3.2

(0.9)

5.5

Net sales

38.8

38.0

39.0

Operatingincome

5.6

5.5

4.4

Net sales

3.4

3.5

3.5

Operatingincome

1.3

1.3

1.3

Net sales

1.5

1.5

3.5

Operatingincome

(1.3)

(1.6)

(2.0)

Net sales

255.7

236.0

280.0

Operatingincome

12.7

7.0

14.0

Socialinfrastructure

Industrial
systems

Maintenanceand servicing

Real estate

Others

Total

Profitability

(%)

ROE

9.6

ー

10

ROIC

6.9

ー

7

5

3

5

Operating profit margin

Investment Plan

Environment
QualityS

Financial Strategy

Shareholder Return Policy
Meidensha considers the appropriate distribution of profits
to shareholders to be a major management priority, and ourbasic policy is to improve shareholders’ equity and returnon shareholders’ equity while paying appropriate dividends
according to our performance. In addition, we pay surpluses
twice yearly, as an interim and a year-end dividend, aiming tomaintain a stable payout ratio of approximately 30%.
With regard to internal reserves, we use them effectively
for capital investment and investment in research anddevelopment, in order to maintain and improve our market
competitiveness.

(In billion yen)

FY2019(results)

FY2018—2020
Cumulative amountover three years

Capital investment

9.5

30.0

Growth investment budget

6.9

20.0

Research and development
expenditure

10.4

More than 30

FY2019(results)

FY2020 (targets)¥87.1 billion¥100.0 billion

27.6%

Stably at 30.0%

Net Worth / Dividend Payout Ratio

Net worth
Consolidated dividend payout
ratio

MEIDENSHA REPORT 202022

Strategy for Value Creation

Research and Development Strategy
Since Meidensha was founded, we have been focusing on the development of products
and technologies to support social infrastructure based on our corporate philosophy of“illuminating a more affluent tomorrow.” In our Medium-term Management Plan 2020,
we have been enhancing our research and development in response to environmental
regulations, the electrification of vehicles, and IoT and AI technologies, with an eye tosolving the environmental problems we have been facing in recent years, as well as
issues such as population decline.
In addition to strengthening our existing products to contribute to society, we
will continue to develop new products and technologies that will contribute to solve
the problems of a rapidly changing society, such as the increasing severity of natural
disasters and the new normal caused by the novel coronavirus (COVID-19).
Representative Director, Executive Vice President

Masamichi Kuramoto

Priority Areas
Compliance with Environmental Regulations
With regard to vacuum circuit breakers, which are an importantcomponent of electrical power system equipment, we havecompleted the development of a 145kV Ecotank Type Vacuum
Circuit Breaker, which is the world’s first vacuum circuit breakerin the class of over 100kV.
This product does not use SF6 gas, which has a highglobal warming potential, and was launched in April 2020,
mainly in North America, where demand for replacement ofaging power equipment is high and environmental regulations
are strict. We also commercialized high-output (1 MW class)
PM motors and drive inverters to meet the need for highspeed blowers and compressors, etc. We contributed tolower environmental impact by reducing energy consumption
by 20% and achieving a 1/5th reduction in motor volume
compared to systems using conventional step-up gears by
operating the motors at 10,000 rpm or more.

Enhancing Digital Technology including IoT
and AI
In order to expand our services in water infrastructure systems,
we are attempting to provide information to citizens by using
IoT technology to measure and visualize the level of water insewer pipes and overflowing water on the ground with sensors
attached to manhole covers, which will be used to makedecisions such as issuing evacuation orders.
In addition, as a response to social issues such as
automation/labor saving of manual/skilled work, we havecommercialized the RocoMo-V, an automatic guided vehicle
equipped with a small cooperative robot that can carry aweight of 14 kg. Through digital technology, it is now possible
for the robots to estimate their positions and respond flexibly
to changes in the layout of the location where they run.

Response to Electrification of Automobiles
We developed the MEIDEN e-Axle, which integrates gears aswell as a motor and inverter, with the aim of further reducing
the size and weight of EV drive systems. This product achieves
a compact size, weight reduction, and high power output, andincreases output density by approximately 60% (compared
to previous Meiden models). In addition, it also contributes
to improved handling stability due to a lower center of gravity
and increased cabin space through optimal placement ofcomponents and a thinner components with less height.
We also worked to improve the functionality of EV
motor evaluation systems. The system makes it possible toevaluate fuel consumption and power costs in the vehicle’s
running condition, contributing to the speed of our customers’
development.
RocoMo-V

23 MEIDENSHA REPORT 2020

Initiatives for New Businesses

Company-wide Core Technologies

Meidensha has established room-temperature deposition
technology by ALD (atomic layer deposition)/OER (ozoneethylene radical generation technology), which utilizes
Meidensha’s proprietary 100% pure ozone technology, andhas completed the development of the film deposition system.
This makes it possible to deposit films on substrates that areeasily damaged by heat. As this technology enables depositionof oxide film on a range of base materials at room temperature,
it is expected to have a range of applications in the future,such as in semiconductors and displays.
In addition, using Meidensha’s vacuum technology wehave developed over many years, we have also developed
a cold-cathode X-ray Tube for X-ray inspection equipment.
By using a cold-cathode electron source with Carbon
nanostructures based on field emission technology eliminates
the need to heat the filament, which is essential for conventional
thermionic emission systems, and achieves a smaller, lightweight and more energy-efficient X-ray Tube with shorter
heating times. This development has enabled miniaturization
andportability,
allowing
use in security screeningat events, etc. and nondestructive industrial tests are
anticipated. We will promote a
new go-to-market strategy byutilizing Meidensha’s vacuum
technology.

Regarding the advancement of power electronics technology,
we focused on miniaturization, increased efficiency, and weight
reduction of high-power density SiC inverter motors. In addition,
we also worked to improve the performance of zinc oxide
components and to acquire material technologies, such asreliability design of environmentally friendly epoxy resins used in
the insulation of electrical power equipment. To further improvethe competitiveness of our products, we are strengthening
our analysis technology, such as improving the efficiency ofhydroelectric water turbines using fluid dynamics simulation.
As a result of promoting research and development
activities centering on these activities, total R&D expenses
amounted to 10,467 million yen.

R&D Expenses (Millions of yen)

9,970

2015

9,462

9,402

9,458

2016

2017

2018

10,4672019(FY)

Cold-cathode X-ray Tubes

Capital Investment
We are making capital investments in accordance with thepolicies of our Medium-term Management Plan 2020.
In the EV Business, we augmented EV component mass
production equipment at three Japanese sites in Numazu,
Nagoya, and Kofu. At the Nagoya Works, we decided
additional capital investment in order to further improve
production capabilities. In the Chinese market, we establisheda manufacturing subsidiary, which is our first local EV Businessoutside of Japan. A factory is currently being constructed.
With respect to data processing, we continued to introduce
a production management system to optimize processes
through visualization, etc. of the progress of manufacturing
processes and an RPA (work automation system) system.
Concerning the foundations of our business activities,
including safety, the environment, and BCP, we introduced
a new hands-on safety experience trucks, expanded safety
experience VR content, converted to LED lighting, andinvested in equipment like emergency generators.
As a result, total capital investment for the fiscal year
under review increased 8.146 billion yen year on year to 16.042
billion yen. While depreciation and demand for funds will also
increase as we make our largest-ever capital investment, we
will aim to expand the scale of our business and improve our
return on invested capital (ROIC) and other financial metrics bysteadily generating the benefits of our investments.

Capital Investment (Millions of yen)
16,042

8,314

2015

7,335

7,584

7,895

2016

2017

2018

2019

(FY)

KOFU MEIDENSHA ELECTRIC MFG. CO., LTD. EV factory

MEIDENSHA REPORT 202024

Strategy for Value Creation

Initiatives for FY2020 and Beyond

Social Infrastructure BusinessElectrical Energy / Social Systems BusinessWith regard to the Power Generation and T&D Business, wehave established a new T&D product company in the U.S.,
which has strong need to reduce its environmental impact, andcommenced sales of our own vacuum circuit breakers, which
are one of our products that contribute to the environment, toU.S. electricity companies.
In the electrical energy business, we achieved a stronger
structure for the small and medium-sized hydro power station

business, with the consolidation of EAML Engineering, Ltd. in
July 2019.
In the social systems business, we strengthened project
management following reflection on the worsening of costs inoverseas projects in FY2019. In addition, we have achieved
results in timely proposals for the replacement of customers’
aging equipment through active activities to integrate proposals
with maintenance services.

Establishment of a New Company to
Manufacture and Sale Switchgear in North
America, where Environmental Requirements
are High

Business Environment
In the domestic market, the business environment is
becoming more severe due to the declining population andfinancial difficulties of local governments. Meidensha, however,has been performing relatively strong due to solid orders for
replacement of aging equipment and securing of large-scale
projects. Furthermore, there is an increasing need for widearea expansion and public-private partnerships at municipal
facilities throughout the country, and demand for BCP (mobile
power generating system, emergency generators, etc.) toprepare for frequent disasters is also on the rise.
In overseas markets, while the growing movement forenvironmental conservation in North America is providing afavorable sales trend for environmentally friendly T&D products

and other products, the spread of the novel coronavirus
disease (COVID-19) has been gradually affecting our businessin ASEAN, India, and other markets, and the future outlook forour business remains unclear.
Net Sales and Operating Income(Billions of yen)
200.0
150.0
100.0

Net sales

147.0
126.5
3.2
(2.6%)

Operating income (operating margin of net sales)

137.5

4.0
(2.8%)

146.0

3.6(2.5%)

50.0

157.0

6.0

4.8
(3.1%)

4.0

138.0

2.7
(2.0%)

2016

2017

2018

2.0
0

(0.1)
0

(Billions of yen)
8.0

2019

2020
2020
(Forecast) (Medium-termManagement
Plan target)

(2.0)
(FY)

Overview of FY2019 and Outlook for FY2020
In the Electrical Energy Business and Water Infrastructure
Business, both sales revenues and profits increased over theprevious fiscal year as a result of recording net sales fromprojects for which completion of the construction work had
been postponed from the previous fiscal year, etc., and also
improving the profit margin due to reduced cost.
In the Social Systems Business, sales revenue and profit
increased over the previous fiscal year due to strong domestic
demand and, furthermore, by strengthening management
based on the reflection of the deteriorating cost of goods that
occurred in FY2018 in overseas private sector projects, as wellas the elimination of unprofitable projects in some projects.
In the Railway Business, revenue decreased comparedto the previous fiscal year due to a decrease in large-scale
projects both in Japan and overseas.
Despite recording an operating loss of 100 million yen
in FY2018 due to the effects of worsening costs of overseas
EPC projects and the deferment of sales of some domestic
infrastructure projects, etc., we turned this around in FY2019

25 MEIDENSHA REPORT 2020

to achieve greatly increased profit.
In FY2020, there is some uncertainty and risk relating
to securing orders for FY2020 net sales in overseas private
demands and industrial systems as a whole due to the impactof the novel coronavirus (COVID-19). As a result, we areplanning for operating income in the entire social infrastructurebusiness segment of 2.7 billion yen, which is 2.1 billion yen
less than our final target in the medium-term management
plan for FY2020.
The Power Generation and T&D Business is expected tofall short of the Medium-term Management Plan due to thefollowing three factors: sluggish demand growth in the Power
Generation Business against the backdrop of increased
environmental awareness, increased competition in theOverseas T&D Business, and the delayed strategic progressof PRIME MEIDEN LIMITED in India. Meanwhile, in the Water
Infrastructure Business, which is our domestic revenue-basebusiness, we expect to exceed the figures in the medium-term
management plan by focusing on acquiring existing projects.

In North America, there has been an increase in demand forthe replacement of aging power equipment; environmental
regulations on SF6 gas, which contributes greatly to thehigh greenhouse effect, have grown stricter; demand forenvironmentally friendly vacuum circuit breakers has been
increasing. In addition, there is also a greater demandfor electric distribution equipment that uses vacuum
interrupters, due to the rearrangement of the electrical
power system to accommodate decentralized powersources based on renewable energy source.
Given the increasing value placed on sustainability,
we consider the North American T&D Business to be a
promising market, and in April 2020, we established a
new company, MEIDEN AMERICA SWITCHGEAR, INC.
in South Carolina, U.S.A., in order to manufacture andsell switchgear, and have commenced operations there.
Meiden America Switchgear sells VIs (vacuum interrupters)
and manufactures and sells 72.5kV and 145kV Ecotank
Type Vacuum Circuit Breaker, which were the worlds’ firstcommercialized SF6 gas-free dead-tank vacuum circuit
breakers in the over 100kV class.

145kV Ecotank Type Vacuum Circuit BreakerEntering the Vietnamese Power Market
in the Medium-voltage Switchgear Field,
in Collaboration with a Local Switchgear
Manufacturer
While foreign companies are expected to enter the power
sector and invest more in power infrastructure, the Meiden
ASIA PTE. LTD. entered into an agreement In January 2020,
to invest in Vietstar Industry Corporation (Vietstar), a local
switchgear manufacturer in Vietnam, to enable the Meiden
Group to enter the Vietnamese power market. Vietstar mainly
manufactures and sells low and medium-voltage switchgear
and is one of the top-ranked companies in the country, withcustomers in Vietnam. Through this partnership, we aim tosupport power supply for stable economic activities andcomfortable lifestyles in Vietnam, and to expand into the
Mekong region in the future.

Signing ceremony

MEIDENSHA REPORT 202026

Strategy for Value Creation

Social Infrastructure Business
Enhancement of the Social Infrastructure
Business as a Revenue Base and Creationof New Business Models

Railway BusinessIn the Railway Business, multiple large-scale overseas projects
are proceeding in parallel, including the renewal of the NorthSouth and East-West MRT lines in Singapore, which wereordered in FY2017. While focusing on project personnel
assignments and cost management, we aim to continue to

win orders for new projects in overseas markets where thedevelopment of rail infrastructure is booming. We are also
working to win orders for the Shinkansen bullet trains andto expand our customer base in the private railway sector inJapan.

Completed Construction of Singapore MRT Thomson-East CoastLine (stage 1)
MEIDEN SINGAPORE PTE. LTD. completed constructionof stage 1 of the railway power equipment for the ThomsonEast Coast line, for which the company won a sole-source
contract from the Singapore Land Transport Authority, andthe line was opened in January 2020.
The Thomson-East Coast line is a 43km longcommuter line with 32 stations. We have received orders
as a system contractor for a complete set of railroad power
supply equipment for the train depot and 22 stations(stages 1-3). We have been entrusted with comprehensive
work from basic design, manufacturing, installation, testing,adjustment, and handover of 66kV transformer equipment,
22kV transformers equipment, 750V DC power feeding
equipment, and remote power monitoring equipment.
Regarding stages 4 and 5, we are also scheduled to deliver
some key equipment and are involved in the entire line. Theline is scheduled to open in stages from now on, with theentire line scheduled to be in operation in 2024.
The Meiden Group will continue to use the technology
and experience it has developed over many years in theOverseas Railway Business to contribute to the resolutionof environmental issues face by cities and economic
development, and contribute to the realization of asustainable society led by railways.
North Woodlands
Woodlands
South Woodlands

stage1

SingaporeThomson-East Coast line

Urban
area

Sungei Bedok

ChangiInternational
AirportWater Infrastructure BusinessIn the Water Infrastructure Business, we are promoting initiatives aimed at new PPP (public-private partnership) projects andenhancement of our proposal capabilities through ICT and AI technologies. In addition, we are also continuing to focus on winningorders for replacement of equipment of water and sewage treatment plants.

Establishment of the Public Infrastructure Business
Planning GroupIn April 2020, we established a new Public Infrastructure
Business Planning Group and are promoting and creating
an area-wide business model with the aim of proposing
value through the combination of water and energy.
In the Social Infrastructure Business, each division has
taken initiative so far in developing business strategies foreach customer, such as Electric Power Companies, privatecompanies, and water and sewage service providers, including
local governments, etc. Meanwhile, the domestic infrastructure
market is expected to undergo major changes in its market
structure, including social changes due to the population
decline and financial difficulties of local governments, advancesin IoT and AI technology, and changes in needs due to publicprivate partnerships (PPP) and widespread infrastructureservices. In the midst of these market changes, the Meiden
Group must apply its knowledge over the years in providing
a range of infrastructure services, and provide technology
solutions through organizational collaboration by proposing
infrastructure platforms together with companies and local
communities, and through cross-organizational cooperation,in order to provide maximum value.
To respond to these changes, the newly establisheddivision is responsible for managing the business operationsof social infrastructure projects such as electric powerand energy, water infrastructure, and railway system,
improving revenue and profits through operational reforms
including optimization of business structure and operations,promoting the planning, development and commercializationof new business models that respond to business changes
and diversified social needs. Specific initiatives that havealready been undertaken so far include a virtual power
plant demonstration that utilizes reused EV batteries, anddemonstration of flooding and inundation countermeasureservices, etc., in partnerships with electricity companies,
local governments, and companies in other industries.

Demonstration Experiment of a Flood and Inundation
Countermeasure Service in Tsukubamirai City

Water treatment plant maintenance patrol

27 MEIDENSHA REPORT 2020

Water treatment plant monitoring

In April 2020, Meidensha commenced a demonstration
experiment of flooding and inundation countermeasureservice in cooperation with Tsukubamirai City, Ibaraki
Prefecture, and TEPCO Town Planning Co., Ltd.
In recent years, urban flooding events and torrential/
heavy rain in a short period of time have increased due toclimate changes. In this demonstration experiment, sensors
attached to manholes detect the water level in sewage
pipes, and sensors attached to power poles detect the waterlevel on the ground, and the information is shared via thecloud. The information is centralized as disaster prevention

information (real-time monitoring information and water level
forecast information) for use in making decisions on roadclosures and routes, installation of sandbags and water stop
plates, evacuation orders, and rescue and recovery efforts.
The information is also shared with the public as needed.
This is the first approach in Japan to consistently
monitor water levels
underground and above
groundfordisasterprevention and mitigation.

Manhole antenna

Demonstration experiment signing ceremony (right: Satoru Kameyama, thenManaging Executive Officer of Meidensha)

Commencement of VPP Demonstration Experiment
Utilizing Reuse Technology for EV Drive Batteries
Meidensha, in collaboration with The Chugoku ElectricPower Co. and Mazda Motor Corporation, has built astationary-type storage battery system that reuses EV
drive batteries, and commenced a virtual power plant(VPP) demonstration experiment utilizing the system.
VPPs combine and control a large number ofdecentralized power sources such as renewable energy,EVs, and storage batteries owned by residences andfactories, etc., as if they were a single power station. They
are expected to be used to provide a range of powersystem services such as adjustment of supply and demandby electricity transmission and distribution businesses.
In this demonstration experiment to verify the possibilityof reusing EV drive batteries as a resource for VPP, anintegrated control system for multiple drive batteries isconstructed and combined with distributed power sources,
including renewable energy, to be used to evaluate theresponse and degradation characteristics of the batteries.
In this way, we aim to secure control technology that will
maximize utilization of renewable energy and lead to abalance between supply and demand, etc.
MEIDENSHA REPORT 202028

Strategy for Value Creation

Initiatives for FY2020 and Beyond

Industrial Systems
Business

EV BusinessWe are continuing to systematically make strategic
investments while keeping an eye on market and customer
trends. The new production line at the Numazu inverter
factory commenced operation in April 2019, and the new
production lines at the Kofu and Nagoya motor/inverter
factories are scheduled to begin mass production in FY2020.
MEIDEN HANGZHOU DRIVE TECHNOLOGY CO., LTD.,
which was established in Hangzhou, China, in FY2019 as a
new company to manufacture EV motors, has invested 3.4
billion yen in facilities with an eye toward commencement ofoperations in 2021.
We must expect a decrease in revenue in FY2020 due
to the impact of the novel coronavirus (COVID-19). We will,
however, continue to keep a close eye on the progress ofprojects and market trends to ensure that we make steadycapital investments at the right time.

Dynamometer Systems BusinessBusiness Environment
The severity of business environment surrounding theautomotive industry is intensifying due to the impact of thenovel coronavirus (COVID-19), which has significantly damaged
the economies and business activities of countries around theworld. As a result, many Japanese and foreign automotive
companies have suspended or delayed their investment plans,
etc. Meanwhile, we expect investment in new technologies,
such as automated driving and electrification of automobiles,
to continue to grow.
In addition, increasingly strict environmental regulations invarious countries around the world have boosted the demandfor electric forklifts, and the need to save labor and energy, andmitigate the risk of shutdowns are expected to increase thedemand for the transportation business.
In the semiconductor industry, the launch of 5G and active

investment in data centers, etc. have generated momentum,and Meidensha’s Electronics Products Business is also
showing a marked recovery trend.

29 MEIDENSHA REPORT 2020

Motor Drive Products and Logistics
Business/Electronics Products BusinessWith regard to AGVs and other transport products,
we began sales of RocoMo-V, an automatic guided vehicle
equipped with a small cooperative robot. In the area of motor
drive products, we are enhancing product appeal of motors
and inverters for elevators and forklifts, etc.
Concerning the Electronics Products Business, weestablished a subsidiary for the purpose of introducing thecold-cathode X-ray Tube market with a miniature X-ray
generator that does not use heat, using Meidensha’s vacuum
technology, which has been perfected over many years,
and commercialization of room-temperature film deposition
technology using 100% pure ozone generated by Meidensha’s
proprietary technology. This subsidiary then commenced salesof a new product, ALD/OER film deposition equipment.

Net Sales and Operating Income(Billions of yen)

Net sales

Operating income (operating margin of net sales)
77.0

80.0

65.1
60.0

55.5

4.3
(7.8%)

40.0

20.0

0

65.8

56.0

5.5
(7.1%)
3.2(5.0%)

2.4(4.4%)

8.0
6.0

55.0
5.6
(8.6%)(Billions of yen)

4.0
2.0
0

(0.9)

2016

2017

2018

2019

2020
2020
(Forecast) (Medium-termManagement
Plan target)

(2.0)
(FY)

Overview of FY2019 and Outlook for FY2020
In the EV Business, sales revenues increased over the previous
fiscal year due to strong sales of EV motors and inverters andoperation of the new production line at the Numazu inverter
factory. But profit decreased over the previous fiscal year due
to advance costs for the commencement of mass production
at new equipment, etc. In the Motor Drive Products Business,there were reductions in both sales revenues and profits due
to a slowdown in demand for injection molding equipment,
etc. In the Electronics Products Business, although there werereductions in both sales revenues and profits compared to theprevious fiscal year, the semiconductor market is recovering fromthe adjustment phase. In the Dynamometer Systems Business,while the overall decline in the automotive industry affected, there
was a decrease in revenue and an increase in profit compared tothe previous year due to improved productivity.

In March 2019, Meidensha has entered into a business
partnership with FEV Japan Ltd. (below, FEV) in orderto support the digitalization of design and development
through model-based development of automobile, with the
combination of FEV’s advanced software with our automotive
dynamometer system, and since April 2019, we have been

selling the system to Japanese manufacturers of complete
vehicles and automotive parts.
In FY2019, we installed our own dynamometer and an
EV motor stand-alone evaluation bench with FEV’s software
embedded in the operation and measurement panel at the
Ota Works Development and Laboratory. In this way, we areworking to enhance our engineering proposal capabilities toaddress the electrification of automobiles.

For FY2020, sales in the EV Business are expected todecrease temporarily due to the market expanding faster than
expected at the time of the formulation of the Medium-termManagement Plan, as well as an increase in advance costs
due to active investments made in conjunction with the market
expansion, as well as the impact of the novel coronavirus(COVID-19). In the Electronics Products Business, it has notreached the level anticipated at the time of the formulationof the Medium-term Management Plan, although thesemiconductor manufacturing equipment market is recoveringand is relatively strong. In light of these market trends, we
anticipate that the entire industrial systems business segment
will face harsh conditions, with profit decrease of 4.1 billion yen
compared to FY2019.

Development of the MEIDEN e-Axle – A New Integrated Motor,
Inverter, Gear Product for EVs
We have developed the MEIDEN e-Axle, an integrated motor, inverter, gear
(step-down) unit for EVs. By integrating these three components, vehicle space
efficiency has been improved, and the adoption of an oil-cooled motor andoptimized gear ratios for the high-speed motor has increased power density byapproximately 60% (compared to our previous product), allowing vehicles to drive
at high speeds for long distance and to climb slopes continually.
Since this product is a standard product, it is less expensive than customized
products and contributes to shorter development time for customers. This willcontribute to the rapid popularization of electric vehicles.

MEIDEN e-Axle

Establishment of a Subsidiary for Pure Ozone Application
Processes Business
In April 2020, we established a new subsidiary, MEIDEN NANOPROCESSINNOVATIONS, INC. a wholly owned subsidiary, and commenced sales of its
new ALD/OER film-deposition system.
Until now, we have been conducting research and development of roomtemperature film deposition technology using 100% pure ozone (hereinafter “pureozone”). By making this pure ozone application process business a subsidiary,
we are able to further enhance our agility and speed up our decision-making
process. We also intend to create an environment in which innovation can easily
be triggered, and to use this role model for successful commercialization of thetechnology.
Going forward, Meidensha and MEIDEN NANOPROCESS INNOVATIONS,
INC. will continue to create new technologies that utilize existing ones tocontribute to a range of markets in the future.

ALD/OER film deposition equipment* Here, “EV” refers to electric vehicles, which includes fully electric vehicles (FEV), plugin hybrid electric vehicles (PHEV), and hybrid electric vehicles (HEV).

MEIDENSHA REPORT 202030

Strategy for Value Creation

Initiatives for FY2020 and Beyond

Maintenance and Servicing
Business

Initiatives such as the one-stop service, to provide support
to customers through all issues involving their equipment
and walkthroughs where we walk on-site with customers to
examine and diagnose faults with their equipment, are graduallyshowing results, and if the restrictions relating to the novel
coronavirus (COVID-19) are lifted, we anticipate that demand
will remain stable for the Maintenance and Servicing Business.
In FY2020, we will establish a new technology center inNumazu, to focus on further professional development of ourmaintenance and servicing technicians. We aim to promote theutilization of IoT and AI, as well as improve the efficiency of ourmaintenance services and enhance our cost competitivenessby taking measures to implement work style reforms, including
at our affiliates.
Thermal image diagnosis

Establishment of the New Technology Center,“Manabi-ya, the schoolhouse”

Business Environment
As natural disasters continue to occur in regions throughout
Japan, demand is increasing for maintenance services forelectrical equipment due to heightened awareness of theimportance of BCP and disaster prevention in the wider
community, and review of inspection standards for emergency
generators in line with revisions to the Fire Service Act, etc.
In addition, as demand is rising from local governments
and companies to extend the lifespan of their equipment,
there is also an increasing number of needs related to
repairs. Furthermore, there is a growing need for integrated
maintenance of machinery and electrical equipment, including
products from other companies, and we are continuing tostrengthen our proposals through walk-throughs at customer
facilities.

Net Sales and Operating Income(Billions of yen)

Net sales

4０.０
33.0

Operating income (operating margin of net sales)
39.0
38.8
38.0
36.9

6.０
5.6
(14.6%)

2０.０

０

8.０

33.9

3０.０

1０.０

(Billions of yen)

3.7
(11.4%)

3.5(10.6%)

2016

2017

4.3
(11.7%)

5.5(14.5%)

4.4(11.3%)

4.０

2.０

2018

2019

2020
2020
(Forecast) (Medium-termManagement
Plan target)

０(FY)

Overview of FY2019 and Outlook for FY2020
Sales revenues and profits increased compared to the previous
fiscal year as a result of strong sales of our one-stop service
for electrical equipment repair, inspection, maintenance, andoperation management as a whole, against the backdrop ofrising demand for BCP, energy conservation measures, andfacility life extension, as well as efforts to strengthen proposals
by integrating maintenance services and product sales for
efficient maintenance and management of customers’ entire
facilities.

Meidensha plans to establish the new technology center,“Manabi-ya, the schoolhouse”, which is scheduled to open
in October 2020, in order to enhance the potential of its
professional development.
The goal of Manabi-ya, the schoolhouse, is to develop
technicians who can work immediately; through thistraining, we aim for smooth skill transfer, early mobilizationof young people into the workforce, and improvement oftechnical capabilities in business fields such as maintenanceand service, which require actual experience in the field, byusing actual equipment and simulating real-work situations.
Our newly built AR (augmented reality) education system
supports maintenance education using the latest ICT
technology, such as through maintenance experienceon virtual, full-scale equipment, visualization of invisible
electrified areas, and reference to operational knowhow ofveteran staff, by using AR. The facility is also fully equippedwith a VR (virtual reality) system to create a virtual space that

illustrates dangerous cases that could arise on-site in daily
activities, as well as safety experience training that improvessafety awareness and enables people to safely experiencerisk prediction training. The facility is planned to be deployedoutside the company as well, including to suppliers.

Example of education using AR

In FY2020, we anticipate a partial decline in orders andsales due to the planned delay of some maintenance andinspection projects, mainly for private sector customers, due
to the impact of the novel coronavirus (COVID-19). However,on the other hand, the impact is expected to be limited forexisting orders and for maintenance and inspections ofelectric power and water infrastructure and other public sector
projects at this point in time.

Illustration of the new technology center building

31 MEIDENSHA REPORT 2020

MEIDENSHA REPORT 202032

Foundation
for Creating
Value

ESG at the Meiden Group

Areas in Which We Will Contribute to the Solution of Social
Issues Through Our Business Strategy
Contributing to provision of safe water and effective
utilization of water resources

The Meiden Group’s Approach to ESG
Since it was founded in 1897, the Meiden Group has provided a variety of technologies, products, and services, with afocus on electrical equipment relating to social infrastructure, and we have contributed to the sustainable developmentof society by dealing sincerely and building relationships of trust with our customers.
In recent years, social issues such as deterioration of the global environment, increasing economic inequality, andlessened well-being have come to the fore around the world, as a result of prioritizing economic growth. In addition,
the business environment in which the company operates and the needs of the world are rapidly changing due to theprogress of globalization and digitalization, increasing population, urbanization, and aging infrastructure, etc.
Against this backdrop, we will work with our stakeholders to embrace the challenge of realizing a safe and vibrantsociety where people are in harmony with nature, in order to pave the way for a more affluent tomorrow, while continuing
to value a sincere attitude to social contribution, which is Meidensha’s DNA.

The Meiden Group’s Approach to SDGs
At the UN Sustainable Development Summit in 2015, the world adopted common goals known as the Sustainable
Development Goals (SDGs). The SDGs are challenges the international community is addressing over the 15 years from2016 to 2030.
The targets of the SDGs are very compatible with business activities of the Meiden Group. They include many areas
where we can contribute to a solution with technologies and expertise we have cultivated over the years. As a heavy electric
equipment manufacturer supporting the future of social infrastructure, the evolution of industry, and achieving sustainablegrowth and development, the Meiden Group contributes to the seventeen goals of the SDGs through all business activities.
Furthermore, in order to continue contributing to the SDGs in the future, it is necessary to seriously address the expectationsof society and accurately grasp key social issues as important issues for the Meiden group. To do this, we have establishedareas that contribute to solving social issues through business strategies.

Corporate Mission
Illuminating a more affluent tomorrow
We continue to create value and technologies for the realization of a more affluent and environmentally conscious society.

Contributing to the realization of a carbon-free society
In the Social Infrastructure Business, Meidensha provides emergency andcontinuous power generation equipment, hydroelectric generation equipment,
and T&D equipment, etc., for domestic and overseas power plants and factories,
etc., and we are working to manufacture and sell systems relating to renewableenergy such as photovoltaic and small to medium hydroelectric systems. As
demand for environmentally friendly energy is rapidly increasing, Meidensha
will continue to contribute to the realization of a carbon-free society by working
to reduce our environmental impact and provide products and services that
contribute to a sustainable society.

Hydroelectric power plant

Contributing to the realization of cutting-edge technology
and technological innovation in the automotive industry
Meidensha contributes to the realization of leading-edge technology and theadvancement of a prosperous society through technological innovation for
semiconductor and FPD manufacturing equipment components (vacuum
capacitors, industrial controllers, and pulse power supplies, etc.), and contributes
to technological innovation in the automotive industry through the development
and sale of EV drive components and test systems for automotive-related
research institutions, universities, manufacturers of automobiles, and automotive
parts manufacturers.

Since 1910, Meidensha has engaged in the manufacture and sale of railway
power equipment, and we contribute to the creation of transport infrastructure
through feeder equipment and railway catenary inspection equipment. Since
the 1980s, we have also developed our overseas railway business, centeredon the ASEAN region. Our electrical equipment has been used for large-scalerail projects such as the KVMRT in Malaysia and the MRT in Singapore, and wecontribute to urban development and easing traffic congestion by providing safeand reliable equipment that leverages our record and knowhow accumulated up
to this point.

Collaboration with Partners

Areas that we will engage in through all business activities
Environment

33 MEIDENSHA REPORT 2020

Water treatment plant maintenance

EV motor stand-alone evaluation bench system

Contributing to urban development and the creation oftransport infrastructure

Areas in which we willcontribute to the solutionof social issues throughour business strategy

ESG Issues

Based on our record of involvement with construction and development ofJapan’s national water and sewerage infrastructure, Meidensha contributes tothe provision of safe water by providing a one-stop service for all equipment fromthe manufacture of receiving substation equipment that is essential for water andsewerage facilities, through to upkeep, inspections, maintenance, and operation
management, etc., as a water treatment electrical equipment professional.
Ceramic flatsheet membranes with features such as durability, strength, andreliability are also used in filtration tanks for sewerage and industrial wastewater
treatment facilities, as well as purifying household water and industrial wastewater.

Society

Human Resources

Management Foundationof Our Business Activities

Singapore MRTContributing to the creation of a disaster prevention
platform and disaster prevention assistanceIn recent years, as awareness of BCP (business continuity plan) and disasterprevention has been increasing among businesses and local governments due
to frequently occurring natural disasters caused by climate change, Meidensha
provides emergency generators and mobile power generating system, andurban flood monitoring services using Manhole Antenna that enable real-time
understanding and management of conditions in sewer pipes. We are contributing
to the creation of disaster prevention platforms and providing disaster prevention
support to businesses and local governments through the spread of products
and services that contribute to dealing with climate change.

Mobile power generating system

MEIDENSHA REPORT 202034

Foundation
for Creating
Value

E NVIRONMENT
Environment

Strategic Environmental Management
FY2020 Environmental Targets (Japan)
Strategic Targets

Environmental Vision
The Meiden Group has established an “Environmental Vision” as a medium-long term vision for promoting environmental management
in order to indicate an ideal situation and initiative direction. In addition to reducing the environmental impact of our businessactivities, we contribute to the creation of a sustainable society through our energy and water treatment businesses, products,
technologies, and services that support the social infrastructure we have cultivated so far.
According to the Environmental Vision, the propositions imposed on companies living in the 21st century are defined as“Mitigation of Climate Change,” “Realization of a recycling society,” and “Conservation of biodiversity,” and what the companies
should do in their business activities and what the products should aim for are set as goals.
We work on environmental management by establishing a “corporate culture that highly values the environment” that supports
these goals.
Deployment of Action Plans

What WeCan Do forPlanetEarth

Mitigating
ClimateChangeConserving
Biodiversity

Meiden Group Environmental Vision

Realizing a
Recycling
Society

A. Mitigating Climate Change

B. Realizing a Recycling Society

C. Conserving Biodiversity

D. Fostering a Corporate Culture thatHighly Values the Environment

Meiden Group Environmental Vision
A Corporate Culture that Highly
Values the Environment
Actions

Reduce the environmental
impact of business
operations

Promote environmental
management

A. Mitigating Climate Change

2) Manage chemicals properly

3. Promote environmental communication
4. Improve employees’ environmental
awareness
5. Reform environmental awareness2) Contribute to sustainable society

D. Fostering a Corporate Culture thatHighly Values the Environment

A. Mitigating Climate Change

C. Conserving Biodiversity❶ Contribute to the reduction of CO2 emissions through the sale of energy-related
products and systems (i.e., products for renewable energy resources, etc.)❶ Contribute to securing water resources through our water processing systems
business.

❷ Promote environmentally conscious product design and reduce CO2 emissions in
the product life cycle.

❷ Conduct risk management on chemical materials and promote the reduction ofvery risky hazardous chemical materials, as well as initiatives to find alternative
materials on a basis to reduce or replace harmful chemicals.

❷ Promote zero emissions of waste products from our production activities.

35 MEIDENSHA REPORT 2020

Conserve biodiversity

Conservation of ecosystems: 4 main manufacturing sites*3

Strengthen value chain management

Green procurement rate (own standards): 90% or greaterSociety

Technology

Enhanced efficiency of electric power
conversion
Advancement of ICT, IoT technology
Development of new energy / alternative
energy technology

Reputation /Needs

Demand for information disclosure(accountability)
Lifestyle changes (ecology-oriented)

NaturalEnvironment

Changes of temperature andprecipitation volume
Increase of local disasters (sudden
downpours, tornadoes, etc.)
Ecosystem irregularities (increase oforganisms that carry infectious disease)

Targets that Express Our Environmental Vision❶ Promote the 3Rs (Reduce, Reuse and Recycle) of waste materials in the various
stages of the product life cycle.

Implementation of water conservation activities and risk countermeasures: 4 main manufacturing sites*3

Spread of responsibility to entire value
chain (upstream and downstream)
Improvement of employment / labor
conditions
New normal (after corona)2) Strengthen value chain management

B. Realizing a Recycling Society

Zero emissions*1 at 9 sites*2

Conserve water resources

Expanded ESG investment
Price competition (low cost, premium
pricing)
Extended pandemic response

1) Strengthen management of Meiden Group companies❸ Reduce CO2 emissions in our production activities.

Total wastes: –3% (compared to FY2017) *3

Promote the 3Rs

EconomyC. Conserving Biodiversity

1) Disclose information, conduct PR

2) Conduct environmental training and awareness raising

VOC emissions: 80 tons or lessGovernment(political)
Laws and
Regulations

B. Realizing a Recycling Society1) Develop environmental management personnel

Manage chemicals properly

Revision of Feed-in Tariff Scheme for
Renewable Energy
Deregulation of electric power industry,
revision of power supply structure
Flow of processes to implement carbon
pricing
Energy conservation regulations& standards (business operations,products)
Stronger regulations on hazardous
chemical substances

4) Maintain water resources5) Conserving biodiversity

Total emissions (Scope 1+2): –4% (compared to FY2017)

Phenomena (issues) Related to Environment3) Manage chemicals in products

3) Promote the 3Rs (reduce, reuse, recycle)

Reduction in emissions over the life cycle of new products

Reduce greenhouse gas emissions

Risk Management

2) Promote environmentally conscious design
4) Reduce plastic packaging

2. Reduce the environmental impact ofbusiness operations

Promote environmentally conscious design

Responding to Environmental Risks and Opportunities
Corresponding “Environmental Vision”

1) Reduce greenhouse gas emissions

FY2020 Environmental Targets (Japan)
Contribute an 900,000 t/year reduction in CO2 emissions by Environment-Contributing Businesses*1 Meiden Group definition of zero emissions: To achieve a non-recycling rate of less than 1.0% of the total volume of waste (including industrial waste, general waste, and saleable
waste, but excluding construction sludge, etc.).
*2 Scope of zero emissions initiatives: manufacturing sites in Japan (Numazu Works, Ota Works, Nagoya Works, KOFU MEIDENSHA ELECTRIC MFG. CO., LTD., MEIDENCHEMICAL CO., LTD. (Sagami Works), HOKUTO DENKO CORPORATION (Atsugi Works)), Engineering Service Business Units and two Construction Service Business Units*3 Main four manufacturing sites: Numazu Works, Ota Works, Nagoya Works, and KOFU MEIDENSHA ELECTRIC MFG. CO., LTD.

1) Expand businesses that contribute to the environment
1. Contribute to environment throughproducts and services

Actions

The Meiden Group identifies and evaluates uncertain events that may occur in the future (risks and opportunities) and promotes thecreation of company-wide risk management systems to handle these risks and opportunities in an appropriate manner. The Meiden
Group Environmental Committee identifies risks and opportunities relating to the environment and conducts initiatives in the courseof business activities to handle these risks and opportunities.

Develop to
Action Plans

Medium-term Management Plan 2020, an Action Plan for FY2018–FY2020
Strategic Targets

Contribute to environment
through products andservices

D. Fostering a Corporate Culture that Highly Values the Environment❶ Promote environmental communication: Actively disclose our environmental
activities and results and promote two-way communication with our stakeholders.
❷ Foster environmental awareness: For mitigating Climate Change, increase
environmental literacy to promote environmentally conscious R&D and productdevelopment and cultivate the Group’s individuals who actively perform local
community and social contribution programs by acting on their own initiative.

Risks

Opportunities

Carrying Out Initiatives

Short-term cost increases
Rising cost of energy increases
our costs (procurement, shipping,
manufacturing, scrapping, etc.)
directly and indirectly.

Growth of new markets
Markets for products andservices related to renewableenergy and energy conservation
are growing.

Decline of productcompetitivenessIt will get harder to sell productsthat do not meet environmental
regulations and standards.
We will lose share if we cannot
meet the needs of a market
looking for environmentallyconscious products.

Differentiation withenvironmentally conscious
products
Being among the first to bringproducts that meet regulations,etc., to market and offering lowenvironmental impact products
and services make us morecompetitive.

Expand products’ contribution to theenvironment
Expand sales of products related
to renewable energy and energy
conservation (wind, hydroelectric,
and solar power equipment, EV/PHEV
electric equipment, transformers,
motors, inverters, etc.)
Develop environmentally conscious
products, implement new technologies(which are more compact, lightweight,
efficient, energy-conserving, etc.)

Decline of corporate value
Our image, evaluations (credit
ratings, etc.), and share prices
will decline if our business is
not seen as environmentallyconscious.

Better business performancethrough environmental
management
By running businesses that help
solve environmental issues, we
can enhance our corporate value
and business performance.

Increase of local disasters
Flooding and other disasters
can stop operations and cut the
supply chain.

Responding to natural disasters
Demand for flood control anddisaster prevention and response(e.g., securing the power supply)is rising.

Diversify financial assets
Issue green bonds, etc.
Reduce the environmental impact ofbusiness operations
Promote energy conservation (capital
investment, visualization, etc.)
Promote the 3Rs, eliminate harmful
chemicals
Maintain water resources, consider
biodiversity
Improve business efficiency
Promote Smart Work, work from home,
web meetings, etc.
Promote environmental management
Promote business risk management
Strengthen value chain management
Practice environmental communication(information disclosure, etc.)
Deploy infrastructure-support products
during disaster
Emergency power supply equipment,
mobile power supply cars, UPSs, remotemonitoring systems, etc.

MEIDENSHA REPORT 202036

Environment

Foundation
for Creating
Value

Climate Change Countermeasures

FY2019 Environmental Targets and Results
Following is a summary of how well we achieved our targets for FY2019. We are examining further measures based on our target
achievement status and will incorporate this information into future plans.
FY2019 Environmental Target Achievement Status (Japan)
Strategic Targets

Actions

Contribute to environment
through products andservices

Promote environmentally conscious
designReduce the environmental
impact of business
operations

Promote environmental
management

Legend: ○ Achieved △ Not achieved (better than previous year) × Not achieved

FY2019 Targets (Japan)

FY2019 Results

Contribute a 800,000 t/year reduction in CO2 emissions
by Environment-Contributing Businesses

Achievement〇

848,000 t/year

Reduction in emissions over the lifecycle of new products 25 Green Products (own(specific areas)
standards)〇

Reduce greenhouse gas emissions

Total emissions (Scope 1+2): –2 % (compared to FY2017) -22％ (compared to FY2017)〇Manage chemicals properly

VOC emissions: 80 tons or less83.3 tons△

Promote the 3Rs

Total wastes: –1% (compared to FY2017) 4 main
manufacturing sites*3-6％ (compared to FY2017)〇

Zero emissions* at 9 sites*

Achieved at all 9 sites〇

Conserve water resources

Measurement and analysis of water data and evaluate
risks: 4 main manufacturing sites*3

Analysis of water data andinvestigation of leaks, etc.

〇

Conserve biodiversity

Conservation of ecosystems: 4 main manufacturing
sites*3

Education, tree planting activities,
conservation activities of native
species, etc.

〇

Strengthen value chain management

Green procurement rate (own standards): 85% or greater 87％

1

2

Expand Businesses that Contribute to
the Environment

Promote Environmentally Conscious
DesignThe Meiden Group aims to benefit the environment by using
renewable energy like solar, wind and hydroelectric power andby supplying products and services that are more efficient andthus energy saving.
In FY2019, we set environmental contribution (projected
reduction in CO2 emissions from product sold) targets of
800,000 t/year. We increased shipment of electric vehicles,
high-voltage inverters, hydroelectric generators, and hydraulicturbines, enabling us to achieve our target for the fiscal year,
totaling emissions reductions of 848,000 t/year.

Any time we develop a new product, we evaluate it for energy
and resource conservation, recyclability, environmental safety,
and more, based on our Product Environmental Assessment
Standard. If a product meets those standards, we certify it asa Meiden Green Product.
For the evaluation item “consideration of lifecycle,” wecalculate CO2 emissions according to a life cycle assessment(LCA), and we encourage environmentally conscious design inorder to reduce CO2 emissions.

Choshi Shiosai
Wind Farm(10,000t-CO2)
100

Photovoltaic
PCS

Integrated motor/
gear box drive unit

Low-voltage inverter

CO2 emission reduction target –800,000 t/year

848,000 t/year
reduction in
CO2 emissions

The Meiden Group aims to reduce greenhouse gas emissions
from business activities by 30% by FY2030 (compared to
FY2017 levels).
This target was determined using Science Based Targets(SBT) in conformity with the Paris Agreement*1. We work
for with stakeholders in the Meiden Group’s supply chain,including customers and business partners, to set common
objectives for the challenges we share.
Under the Medium-term Management Plan 2020, ourtargets for FY2018, FY2019, and FY2020 are reductionsof 1%, 2%, and 4%, respectively (compared to emissions
in Japan in FY2017). These steps were decided to help us
achieve our aims for 2030. We will periodically revise thosetargets.

A Meiden Green Product registered in FY2019[Product] Large-Capacity High-Speed PM Motor Drive System
Combines a high-speed PM motor (permanent magnet
synchronous motor) with a speed of at least 10,000 rpm
with an inverter capable of high-frequency output.
The volume realized 1/5 of downsizing and saving spacecompared to the conventional product by speeding up
the motor.
20% saving in power consumption by utilizing PM
motors and high-speed drive.

0

High-voltage high frequency inverter, THYFREC
VT731PM80

100

Lifecycle CO2 emissions

2015 Result

2016 Result

37 MEIDENSHA REPORT 20202017 Result

2018 Result 2019 Result (FY)80%

* Comparison against
equivalent previous
Meiden productThis productPrevious product(develop in FY2008)■ SCOPE1■ SCOPE2

53,06543,71040,00025,86820,00027,197
041,21525,573
12,900
7,177
5,723

18,137

24,724
12,366
7,480
4,886

12,258
7,043
5,215

16,491

Japan Overseas

Japan Overseas

Japan Overseas

FY2017FY2018FY2019Reducing Water Consumption
We are concerned about the possibility of water leaks fromburied water supply pipes on factory grounds as our facilities
age. We are systematically updating pipes and placing morepipes above ground for easy maintenance and inspections.

■ Scope 1 (city gas and fuel combustion, etc.) ■ Scope 2 (electric power, etc.)
1%reduction
2%reduction 4%reduction
30%reduction

Trends in Water Usage Volume (Japan)(thousand m3)
2,000
FY2017(Benchmark year)

FY2018FY2019FY20201,500

FY2030

1,768
1,183

1,238

1,203

1,085

2015

2016

2017

2018

1,000

To address emissions stemming from energy consumption, we
are working thoroughly to conserve energy through production
streamlining, capital investments, etc., and converting to
renewable energy. In addition, we are practicing strict control
and making technological innovations to address directemissions of GHGs like SF6 gas.

500
0

2019

(FY)

* Water usage volume includes tap water, water for industrial use, and ground water.
* Measurement points were changed in FY2019 in order to increase accuracy, there
is no continuity with those before FY2018.

TopicsProcurement of Electricity with Zero CO2 Emissions Using Non-Fossil Fuel Certificates
Since November 2019, Meidensha has procured electricity from substantially renewable energy sources for the R&D Center
and Osaki Kaikan Hall in combination with FIT*1 and non-fossil fuel certificates*2, which carry tracking information for thesubsidiary, M WINDS Co., Ltd.’s Choshi Shiosai Wind Farm. Through non-fossil fuel certificates containing tracking data, we areable to link electricity that is consumed by the R&D Center and Osaki Kaikan hall to the environmental value of energy producedby the Choshi Shiosai Wind Farm, demonstrating that we produce net zero CO2 emissions. In this way, electricity consumption
by Meidensha’s R&D Center and Osaki Kaikan hall produces net zero emissions.
Furthermore, using non-fossil fuel certificates with tracking information makes it possible to conform with the international
initiatives RE100, which has the goal of obtaining 100% of the electricity required for business activities from renewable energy
sources. This expand our options to effectively utilize existing wind farms.
As demand for electricity from renewable energy sources is rapidly increasing, with the aim of decarbonization, Meidensha
will continue to work to reduce our environmental impact and provide products and services that contribute to a sustainable
society.
Flow of environmental value
Zero CO2 emissions due toelectric power consumption

Other electricity

FIT electricity

60

20

60,000

Amount of Greenhouse Gas Emissions from Business
Activities

Flow of electricity

40(t-CO₂)*1 Paris Agreement: A new framework for tackling global warming from 2020,
adopted by the 21st Conference of the parties (COP21) to the UN Framework
Convention on Climate Change.

M WINDS CO., LTD.
Choshi Shiosai Wind Farm80

Large-capacity high-speed
PM motor

Amount of Greenhouse Gas Emissions (Scope 1 and 2)– Emissions from Business Activities〇*1 Meiden Group definition of zero emissions: To achieve a non-recycling rate of less than 1.0% of the total volume of waste (including industrial waste, general waste, and saleable
waste, but excluding construction sludge, etc.).
*2 Scope of zero emissions initiatives: manufacturing sites in Japan (Numazu Works, Ota Works, Nagoya Works, KOFU MEIDENSHA ELECTRIC MFG. CO., LTD., MEIDENCHEMICAL CO., LTD. (Sagami Works), HOKUTO DENKO CORPORATION (Atsugi Works)), Engineering Service Business Units and two Construction Service Business Units*3 Main four manufacturing sites: Numazu Works, Ota Works, Nagoya Works, and KOFU MEIDENSHA ELECTRIC MFG. CO., LTD.

Reducing CO2 Emissions Caused by Products

As a result of these initiatives, in FY2019, we achieved
reductions of 22% (domestic) and 19% (combined domestic
and overseas) compared to FY2017 levels.

Electric Power Company

Green Investment Promotion Organization(cost-burden adjustment agency)

Non-fossil fuel certificate
Non-fossil fuel value trading market(Japan Electric Power Exchange)
R&D Center

Osaki Kaikan Hall

*1 Feed-in tariff (FIT) system: A system to require electricity companies to purchase electricity generated from renewable energy sources (solar, wind, hydro, geothermal,
biomass) for a certain period of time. The system was launched in July 2012 in order to promote the use of renewable energy.
*2 Non-fossil fuel certificate: A certificate issued by the Ministry of Economy, Trade and Industry that certifies the environmental value of electricity that does not create
CO2 emissions, such as electricity from renewable energy sources. Trading commenced through Japan Electric Power Exchange in May 2018, and a demonstration
experiment that included tracking information (information that clearly states the type and location of energy source) in certificates commenced in March 2019.

MEIDENSHA REPORT 202038

Foundation
for Creating
Value

S OCIAL
Human Resources Management

Basic Approach
As issues facing our customers and society as a whole
become increasingly complicated and unclear, it is importantto have personnel with the abilities to think flexibly and act
courageously, creating the value necessary to solve theseissues in order to enhance corporate competitiveness. For thisreason, we are determined to achieve sustainable growth byfocusing on employing and developing competent personnel
and creating an environment where each person can derive
pride and fulfillment from their work.
In order for the employees to maximize their abilities, it
is important to promote diversity management and createa workplace in which a diverse range of employees canparticipate with a healthy mind and body. Specifically, by
engaging as a group in initiatives such as achieving a work-lifebalance, and improving occupational health and safety, we will
enhance the corporate value for the entire group.

Plan and Targets

We continue to formulate action plans in line withthe purpose of the Act on the
Promotion of Women’s Participation
and Advancement in the Workplace,promote measures to encourage theacquisition of childcare leave for men,and promote measures to actively
recruit/train female technical employees.

FY2019 Initiatives
Observation of worksite with female engineers
In FY2019, Meidensha held a worksite observation topromote interaction between female staff who work in
administrative and accounting roles in the Tokyo areaand female engineers who work in Plant Construction& Engineering Business Group. During the observation,
female engineers introduced their duties and spoke
about the conditions on construction sites and how they
can be improved. Participants observed construction
and facilities utilizing Meidensha’s equipment. There wasalso a meeting for participants to share their opinions witheach other, which proved to be a valuable opportunity tointeract with other departments.

We implement many training programs to encourage employee
growth in different aspects as an employee, member of society,and professional.
As the business environment under Medium-termManagement Plan 2020 becomes increasingly unclear, we arefocusing on creating the value necessary to solve these issues,in order to, enhance corporate competitiveness and training
personnel to think flexibly and act courageously.
Furthermore, continuing development of global operations
offers increasing opportunities for strategic alliances such astechnical collaboration with foreign companies, as well asworking with people with differing viewpoints or abilities. We arepromoting growth through opportunities to work with diverse
personnel, such as our system of offering staff exchanges withlocal employees from overseas subsidiaries, the foreign trainee
system, and the overseas assignment system.

Work Style Reform

Promoting Diversity Management

Rolling Out “Smart Work 2020”- Toward reduction of total annual working hours -Meidensha is actively working to achieve diversity management
to enable participation by a diverse range of people, irrespectiveof gender, age, or nationality, etc. We emphasize steadily
achieving work-style reform as expressed in the SDGs Action
Plan 2020, which was released by the Japanese government’s
SDGs Promotion Headquarters. Creating a work environment
with flexible work styles where individual employees are able tomaximize their abilities and various educational opportunities,
etc., improves employee productivity and creativity, and leads
to the creation of a fulfilling workplace environment.
Promotion of Opportunities for and Participation by
Female Personnel
Meidensha was evaluated for promoting women’s participation
and advancement, and in November 2017, for the first time in
the heavy electric machinery industry, we earned the top Stage
3 “Eruboshi” certification by the Minister of Health, Labour andWelfare.

39 MEIDENSHA REPORT 2020

Vision and Target Values of “Smart Work 2020”
We will realize work styles based on legal compliance byreviewing and improving the work style itself, working on
holidays, and eliminating excessive overtime work on week
days.
Target value

FY2019 results*

People worked overtime>80 h/month

Zero

Zero

People worked overtime>720 h/year

Zero

Zero

Average days of paid leaveused up

20 days/person-year

19.1 days/person-year

Average hours of overtime

24 hours/person-month

26 hours/person-month

Total annual working hours

1,950 h/person

1,991 h/person

Promotion of Respect for Human
RightsHuman Rights Education for Officers and Employees
The entire Meiden Group understands international norms(Universal Declaration of Human Rights and International Bill of
Human Rights) and is working to conduct education activities
focused on human rights. With the aim of ensuring “respectfor human rights,” which is listed in the Meidensha Corporate
Code of Conduct.
We conduct periodic group training and visual education,
relating to compliance and harassment for all Group employees andimprove understanding and awareness by providing opportunities
for individuals to reexamine their workplace and views.

Promoting Health Management* Paid leave, overtime, and total working hours are average figures per person at
Meidensha and Meiden Engineering

President’s Health and Management Policy
Statement
In order to realize the Meiden Group’s corporate
philosophy of “illuminating a more affluent tomorrow,” itis important for employees to maintain their physical andmental health and work with vigor and purpose.
We are promoting activities as an organization to support
the health of each individual such as sharing the belief
that “nothing is more valuable than good health” withall employees and actively supporting employees’ own
health activities.
Through these activities, we are working to become
a company that enables employees and their families tolive a vigorous and healthy lifestyle.

Promoting Flexible Work Styles
In FY2019, we completely renovated the headquarters
refreshment space - Meiden Plaza - and the R&D Centerlounge. We created an environment where it is possible tochange the layout to enable a variety of scenarios such as
small-group consultations or lively exchange of opinions inaddition to use as a satellite office. It is a bright and refreshingspace where employees can improve their mood while
engaging in work.

Specific Action Items
Follow-ups to employees who received findings in theirresults of periodic health examination results● Mental health measures● Health management of workers that work long hours● Various forms of health education on an ongoing basis●

An employee survey showed that there are many opinions anddemands in employees of the Meiden Group concerning issues
relate to long working hours, such as “shortage of personnel,”“consciousness reform,” and “operations review.” Therefore,
we identified the issue of long working hours as a management
challenge. Since the previous medium-term management plan,
we have started efforts to reduce total annual working hours
as Smart Work V120. Under the “Medium-Term Management
Plan 2020”, we promote innovative production as “Smart
Work 2020” based on the results and reflection of “V120”, andimprove work efficiency by RPA (Robotic Process Automation)and telework, so as to strengthen our efforts to realize flexible
working styles.

The refurbished Meiden Plaza and R&D Center Relaffice

Developing the Next Generation ofGroup Personnel
Systematic Development of Management Personnel
We have established a new Career Development Management
Program, a training program to systematically and strategicallydevelop the next generation of personnel. We aim to develop
personnel who can think and act with a broad perspective
and outlook that exceed the bounds of their areas of specialty
and roles such as by conducting personnel exchanges
between business units as well as domestic and international
Group companies, cultural exchanges through dispatches
to non-Group companies and government institutions,and dispatching personnel to attend business schools(postgraduate institutions for adults). Furthermore, we haveintroduced the Innovation Professional Development Program
we are working to develop personnel who can create newvalue in order to foster innovative thinking.

Topics2020 Certified Health and Productivity
Management Outstanding Organization in the
Large Enterprise Category Recognition
Meidensha joined the Certified Health and Productivity
Management Outstanding Organization Recognition
Program that is jointly recognized by the Ministry of
Economy, Trade and Industry(METI) and Nippon Kenko
Kaigi, and 2020 certified Health and Productivity
Management Outstanding Organization in the Large
Enterprise Category. Our efforts to focus on risk holders
were evaluated as the Health andProductivity Certification based on
information such as the developmentof organizational structure topromote internal health management
and medical examination results.

MEIDENSHA REPORT 202040

SocialFoundation
for Creating
Value

Quality Management

Basic Approach
The Meiden Group must continue contributing to the solutionsof customers’ problems by providing high-quality products andservices at all times, in order to continue to be relied on andchosen by customers and society. To do this, it is importantthat we implement the following three things: “initiatives toimprove quality,” “promoting initiatives to collect customers’
needs,” and “developing human resources to support the
supply of high-quality products.” As our customers’ partner,
the Meiden Group aims for all employees to listen to customers,
act quickly, and improve quality, in order to increase customer
satisfaction.

Plan and Targets
Under Medium-term Management Plan 2020, we will promote
initiatives to improve quality with the quantitative target of
reducing the number of defects and the cost of rectifying
defects by half in comparison with 2017 results and contributeto increased profits by increasing customer satisfaction andreducing unnecessary costs.

Initiatives to Improve Quality
The Meiden Group has determined items that need tobe managed from the perspectives of “no defective unit
accepted,” “no defective unit made here,” and “no defective
unit shall leave here,” in order to improve quality in each internal
process, such as development, design, manufacture, testing,and inspection, including purchasing parts and materials, etc.,from affiliates, and we conduct activities accordingly.
In particular, we are strengthening activities relating to thequality of such development and design that has the risk of adefect with potential widespread influence.
DR (Design Reviews)
Meidensha

Activities◯ : Particularly Relevant

Partner Companies

Do defective unit
accepted

Development, Design,
and Manufacture

Testingand Inspection

Do defective unit made Do defective unit shallhere
leave here

3H measures○○

Quality Improvement of DR○○

Management of Remaining
Work for DR
Applying Lessons from Past
Defects
Implementing and Complying
with Standards and Procedures

○

○

○

○

4M-Change Management

○

○

○

○

…

Auditing and Instructing○

Quality Analysis of Parts and Materials to Prevent Defects
At the Materials & Semiconductor Device Analysis Center,
we promote activities to improve product quality andprevent defects through analysis and reliability evaluation ofsemiconductor devices and materials that are used in our

Supply Chain Management

products, adopting “improving product quality,” “creating new
products,” and “consideration for the environment” as ourbasic policies.
If new parts and components such as semiconductor
devices are used, they do not only undergo evaluation ofvariation in electrical characteristics and failure analysis, but(1) they undergo non-destructive inspection, (2) they are
removed from packaging and further examined, and (3) theinternal structure is examined by taking cross-sections etc., toevaluate whether they comply with internal standards. We also
actively work to achieve long-term reliability and have a systemof checking the potential effects of a range of stresses suchas heat, humidity, and corrosive
gasses.
Also, we are improving
screeningtechnology
forplastics that contain phthalates,in accordance with trends inenvironmental regulations andamendments to the RoHS
directive, in order to provide
products that customer can use
Evaluation of electricalcharacteristics of semiconductor
with confidence.
devices (power device analyzer)

Developing Human Resources to
Support the Supply of High-quality
Products
Technical Skills Maintenance Training for Safety andSecurityAt the technology center adjacent to Numazu Works, we
conduct training programs for workmanship and technical skills
maintenance engineers. We raise engineers who contributeto the stable, safe, and efficient operation of customers’
equipment through practical training using real equipment.
Instructors are veteran engineers with extensive realworld experience and the curriculum is formulated to allow
participants to touch and experience actual equipment, suchas extra high-voltage and high-voltage receiving substationequipment, computers, power converter equipment,
generators, and rotating machinery. Maintenance training is
conducted each year for customers to whom Meidensha’s
products have been supplied. Participants deepen theirunderstanding of the internal composition of machinery
through cross-sectional models of products, and gain
experience of actually operating disconnecting switches andcircuit breakers, testing protective relays, and using generating
equipment and inverters, etc.
As one of our 120th
anniversary projects, we have
granted internships to two Thai
university students each year
since FY2017, and we haveconducted technical education
for these two university students
in FY2019 as before.
Thai university student internships(product observation)

41 MEIDENSHA REPORT 2020

Basic Approach
It is important to build equal and fair relationships that allow
for mutual growth with suppliers, in order to provide better
products and services to customers consistently. On the other
hand, while procurement risks in the supply chain become
greater as globalization of businesses and business activities
continues, it is necessary to identify potential risks in advanceand to minimize them.
The Meiden Group is working to build good partnerships
with suppliers and a sound and strong supply chain, by
promoting “CSR activities involving the entire supply chain andrisk evaluation,” “communication with business partners,” and“enhancing group procurement systems.”

Partners and strengthen relationships. The President gives
messages to business partners concerning future Meidensha
policies, and awards to praise the assistance and contribution
towards business activities and production activities. We
appreciate them face-to-face, and reward exceptional
activities and results.
In FY2020, with implementation of thorough measures toprevent the spread of novel coronavirus (COVID-19) infection,
the President visited our business partners in person.

Plan and Targets
The Meiden Group promotes enhanced supply chain
management based on the basic policy of “Medium-termManagement Plan 2020.”
We are working to conduct fair and impartial transactions,and to improve CSR further while strengthening partnerships tohelp business partners understand the importance of promoting
CSR in the supply chain. Furthermore, we hope to promotelegal compliance, environmental conservation, and community
contribution activities, etc., with our business partners, with theaim of achieving mutual sustainable development.
We are continuing activities to support the acquisition of
EMS certification by our business partners and supporting
CSR promotions such as through follow-up education after
EMS certification has been acquired and education concerning
information security measures.

Companies awarded in FY2019

A visit and commendation at abusiness partner in FY2020

Holding Various Seminars
We hold various seminars at business partners’ manufacturing
plants concerning subjects such as reforming processes andinformation security in order to increase the capabilities of our
suppliers. In FY2019, we visited high-risk business partners
and conducted on-site checks and instruction to ensure thatappropriate steps are being taken to prevent information leaks,
based on the results of a survey of information security measures.
Also, with the assistance of the Shizuoka Industrial Foundation,
we held an event to showcase instances of improvement
through IoT, wherein business partners showcased the resultsof their successful improvements and shared information.

Promotion of CSR that Involves the
Entire Supply Chain and Risk Evaluation
Evaluation of Suppliers
We convey the importance of CSR and our philosophy to ourbusiness partners, including legal compliance, environmental
protection, and community contribution, which are the basic
policies of the Procurement Group. In addition to quality,
delivery date, price, technological development proficiency,
and environmental certification, etc. we evaluate our business
partners’ social responsibility for the risks of environmentand social issues such as human rights and labor, fair tradeprinciples, social contribution, environmental conservation,and management of chemical substances.
Through this evaluation, we work to gain an understandingof business conditions relating to social issues such as
climate change, biodiversity, environmental management,
human rights, and working environments, and then to identify
suppliers which have a high-risk.

IoT seminar

Information security instruction

Promoting and Supporting Eco-Action 21 Certification
and Registration
In FY2019, for the fifth consecutive year, we held a study
group for the Eco-Action 21 and we promoted and supported
certification and registration. As a result, 34 participating
business partners received certification, and a ceremony toconfer certification and registration certificates was held at
each production location.
We will continue providing support for our business
partners in relation to Eco-Action 21 certification andregistration activities, and aim for environmental improvements
throughout the entire value chain.

Communication with Business
Partners
Holding Meidensha Partners Meetings
We have held Meidensha Partners Meetings since FY2019
in order to enhance two-way communication with Business

Certification ceremony in the
Numazu district

Follow-up education in the Numazu
district

MEIDENSHA REPORT 202042

Foundation
for Creating
Value

G OVERNANCE
Corporate Governance

Basic Approach
Practices” at the regular Board of Directors meeting held in
May 2006. (This basic policy was revised at the regular Boardof Directors meeting held in June 2020 to reflect the transition
to a company with an Audit & Supervisory Committee andfurther enhancement of the internal control promotion system.)
The Company will work to further improve the efficiency
and fairness of management by promoting initiatives toenhance corporate governance in accordance with the
Corporate Governance Code.

Under our corporate mission of “illuminating a more affluent
tomorrow” and our corporate philosophy of providing thevalue “for customer peace of mind and satisfaction,” ourgroup of companies takes the basic stance that we maintain
fair and steady business activities with respect for people andthe global environment, operate businesses focusing on profit
while constantly pursuing new technology and high quality,and endeavor to contribute to prosperity of society. In orderto implement this basic stance, we formulated the “Basic
Policy to Improve the Governance to Secure Fair Businessstrategies, etc. by transferring the Board of Directors
meeting to a monitoring type, since a substantial portionof the Board of Directors’ authority to make decision on
business execution can be transferred to the Executive
Director.
(c) In order to further promote the separation of supervisionand execution with regard to the executive officer
system introduced in June 2003, in combination withtransition of authority mentioned in the previous section.

Outline of Corporate Governance Structure
Form of Organization

Company with an Audit & Supervisory
Committee

Directors

Number of directors (outside directors): 9 (2)Directors(Audit & Supervisory
Committee Members)

Number of directors (outside directors): 5 (3)Number of
Independent Officers

5 (2 outside directors and 3 outside
directors (Audit & Supervisory Committee
members))

Message from the Chairman of the Board of Directors
In the 2010s, the business environment around Meidensha was not always smooth.
Nonetheless, our portfolio of social infrastructure, industrial systems, maintenance,servicing, and domestic and overseas businesses performed relatively well, leading

Corporate Governance Structure andInitiatives

the Group on a path of growth. However, the global recession, fueled by the

The Company transitioned from the former institutional
structure of a company with an Audit & Supervisory Board
to a company with an Audit & Supervisory Committee at theOrdinary General Meeting of Shareholders held on June 26,
2020.
The main purpose of transitioning to a company with an
Audit & Supervisory Committee is as follows.

coronavirus pandemic, has suddenly made conditions in 2020 much more difficult.

(a) In order for the Directors who are members of Audit& Supervisory Committee having right to vote in the
Board of Directors as well as having the right to express
position statement on nomination and remuneration
at shareholder’s meetings to further enhance thesupervisory function by utilizing the legal authority.
(b) In order to further enhance discussions on management

In June 2020, Meidensha adopted a company structure with an Audit andSupervisory Committee in order to strengthen corporate governance for future
growth. We established an environment wherein outside directors could fullycomprehend executive and business conditions. We further ensured that outside
directors were able to share their opinions from their own unique perspectives,
based on their expertise and knowledge. This provided for effective supervisory
Representative Director, Chairman

Yuji Hamasaki

Corporate Governance Structure: Supervision and Management and Internal Control System

Appointment and Dismissal

Committee and the voluntary Nomination and Remuneration Committee.
Although we anticipate the 2020s to be unclear and uncertain at times, throughimproved governance, a Board of Directors with enhanced audit and supervisory

General Meeting of Shareholders
Appointment and Dismissal

functions through the activities of the Board of Directors, the Audit and Supervisory

functions for debating and adopting future management policies, and an executive
committee that promotes flexible and agile execution of business, this transition will

Appointment and Dismissal

be the driving force to continue elevating our corporate value.

Nomination &Remuneration
Committee

Advice /Recommendation(Voluntary
Committee)

Audit and Supervisory
Committee

Board ofDirectors
Directors(not Audit & Supervisory
Committee Members)

Directors(Audit & Supervisory
Committee Members)

The Company’s Board of Directors
Audit / Oversee

Executive Committee
Executive Officers

Internal
Auditing

Support /Promotion

Direction and Orders

Internal Control
Promotion Headquarters
Management Auditing
Division

Accounting
Audit
Monitor

43 MEIDENSHA REPORT 2020

In principle, the Board of Directors convenes on a regularmonthly basis and holds ad-hoc meetings as necessary,to discuss major executive matters, business issues, andmanagement issues related to the Company’s businessexecution. In FY2019, the Board of Directors held 13 meetings,
and attendance rate of all Directors was 100%.
① Composition of Board of Directors

Risk Management
Division

Executive Divisions
Affiliates

Cooperation

Accounting
AuditorExecutive
Structure

Cooperation

Cooperation

Transfer of Authority
and Oversight

Executive Directors

Audit &
Supervisory
Committee
SupportDivision

The Company’s Board of Directors consists of 14 Directors,
including five directors who are Audit & Supervisory Committee

members, and five Outside Directors, including three Audit &Supervisory Committee members.
In order to ensure the effectiveness of the supervisory
functions of outside directors, the Company attempt toensure that at least one-third of the Board of Directors meets
the Company’s Criteria for Determining the Independence ofoutside directors.
Meidensha’s outside directors satisfy the requirements of
independent directors as stipulated in the rules of the Tokyo
Stock Exchange.

Compliance Committee

MEIDENSHA REPORT 2020

44

Foundation
for Creating
Value

Corporate
Governance② Policy for Appointment of Candidates for Director andAppointment/Dismissal Process
The basic policy of the appointment of Directors of theCompany is to ensure the diversity of the Board of Directors asa whole and to balance the knowledge, experience, or abilities.
The basic policy of the appointment of Directors who
are Audit & Supervisory Committee members is to balance
the accounting, finance, and legal knowledge. The numberof directors is stipulated as a number that is sufficient to fully
deliberate on management issues, with an upper limit of 15
members.
Based on the above, we conduct a nomination ofcandidates for director that will contribute to the enhancementof the Board of Directors decision-making function andoversight function, by resolution of the Board of Directors, withadvice from the Nomination and Remuneration Committee*(voluntary committee), which is chaired by an independent
outside director. The candidates are then presented at theGeneral Meeting of Shareholders.
Furthermore, with regard to the dismissal of directors, if
it is discovered that a director has breached the law or the
Articles of Incorporation, or committed acts that flagrantly
breach the director’s nomination policy, the Board of Directors
will take the necessary steps to dismiss said director with theadvice of the Nomination and Remuneration Committee.
* Meidensha established a voluntary Remuneration Committee in December 2017.
In December 2018, the Committee took on the functions of a voluntary nominationcommittee to become the Nomination and Remuneration Committee. The Nomination
and Remuneration Committee is chaired by an independent outside director and iscomprised of two outside directors, the chairman of the Board of Directors, and thepresident of the Board of Directors.

③ Executive Officer System and Executive Structure
Meidensha introduced an executive officer system in June
2003 in order to streamline the Board of Directors, as well as
to accelerate management decision-making and to enhancesupervisory functions. At the same time, we sought to reinforce
the functions of the Board of Directors by promoting theseparation of the decision-making authority and supervisory
function from the business performance function held by the
Board of Directors.
Executive officers selected by the Board of Directors
assume responsibility for the execution of specified tasks
within the scope of authority transferred by the representative
directors, and nimbly perform executive functions under thesupervision of the representative directors, in accordance with
the Meiden Group’s management policies determined by the
Board of Directors.
The executive committee, which comprises executive
directors and executive officers with specific roles, is createdfor executive decision-making, and decides matters basedon the rules of internal approval, as well as matters for which
consultation from a full-company perspective is required.
Furthermore, apart from the meeting body to makedecisions, we established advisory and internal bodies suchas review and strategy meetings, and with regard to importantmanagement matters, we created a system wherein thoroughdiscussion and deliberation are conducted prior to decisionmaking, and follow-up strategy and planning and improvement

45 MEIDENSHA REPORT 2020

initiatives are conducted following decision-making.
The outline and main points of the proceedings at the
Executive Committee and other internal meetings are reported
as the status of business execution at the Regular Board of
Directors meetings to ensure and improve the effectivenessand supervisory functions of the Board of Directors. As to
execute business, executive directors and executive officers
with the authority are taking attempt initiatives agilely by making
resolutions and settlements. In this way, we are working toconduct executive functions autonomously and nimbly.
With the significant transfer of the authority for businessexecution from the Board of Directors to the executive
officers, officers and executive officers must submit a businessexecution status report to the Board of Directors at least once
every three months in order to ensure the effectiveness offunctional supervision by the Board of Directors.

Effectiveness Evaluation of theBoard of Directors
Meidensha has a mechanism in place to conduct an analysis
and evaluation of the effectiveness of the Board of Directors
in order to strengthen the supervisory function of the Boardof Directors.
With regard to the activities of the Board of Directors
in FY2019, all members of the Board of Directors, including
outside officers, conducted self-evaluations of the effectivenessof the Board of Directors, and the following discussions took
place at the meeting of the Board of Directors in May 2020.

Training for Officers
Legal training is conducted for officers on an annual basis,for the purpose of improving the effectiveness of the Boardof Directors and internal control. In FY2019, we conductedtraining for our officers by outside instructors, relating tocompliance and risk management, as part of internal control
activities conducted at all companies. The Meiden Group
conducted trainings on the Companies Act for new officers of
Meidensha and affiliated companies.

Composition of the Board of Directors, Nomination & Remuneration Committee, and Audit & Supervisory Board and FY2019
Attendance (Period: April 1, 2019 to March 31, 2020)
Name

Position (as of March 31, 2020)

Board of Directors

Nomination &Remuneration Committee

Audit & Supervisory
Board(13 / 13) ●(4 / 4)—(13 / 13)

(4 / 4)—(13 / 13)——

Masamichi Kuramoto

Representative Director, Chairman
Member of Nomination and Remuneration
Committee
Representative Director, President
Member of Nomination and Remuneration
Committee
Representative Director, Executive Vice President

Shosuke Mori

Director, Executive Vice President(13 / 13)——

Nobutoshi Ohashi

Director, Senior Managing Executive Officer(13 / 13)——

Norio Takekawa

Director, Senior Managing Executive Officer（13 / 13）——

Nobuaki Tamaki

Director, Senior Managing Executive Officer(13 / 13)——

(13 / 13)

(4 / 4) ●—(13 / 13)

(4 / 4)—(13 / 13)—

(6 / 6) ●Yuji Hamasaki

Takeshi Miida

Hiroyuki Takenaka

Junji Yasui
Taketora Ito

Outside Director
Member of Nomination and Remuneration
Committee
Outside Director
Member of Nomination and Remuneration
Committee
Audit & Supervisory Board Member

ⅰ Items EvaluatedSeiji Kato

Audit & Supervisory Board Member(13 / 13)—

(6 / 6)Composition and operation (resolution and deliberation
methods, etc.) of the Board of Directors, self-evaluations
concerning effectiveness of the Board of Directors, other
opinions

Yoshiaki Shin

Outside Audit & Supervisory Board Member(12 / 13)—

(6 / 6)

Mitsuru Nawata

Outside Audit & Supervisory Board Member(13 / 13)—

(6 / 6)ⅱ Outline of Analysis and Evaluation Results
The results of the evaluation of each director and Audit& Supervisory Board Member were collected, and after
deliberation by the Board of Directors, it was determined thatthe quality of operation and deliberation is sufficient, sufficient
opinions and advice have been received from outside directors
and outside Audit & Supervisory Board Members, and theeffectiveness of the Board of Directors is currently secure.
In addition, through the establishment of a system in linewith the transition to a company with an Audit & Supervisory
Committee, we confirmed our evaluation that there is atrend to promote further deliberation and enhancing of thesupervisory function of the Board of Directors.We will also
improve understanding of Meidensha’s business environmentand strategy and provide ongoing opportunities for discussion
such as through explanations in advance, meetings to
exchange opinions, and explanatory programs outside of theinitiatives of the Board of Directors referred to below.

Note 1: ● refers to the chair of the Board of Directors, Audit & Supervisory Board, and each committee
Note 2: Attendance of each type of meeting is market as (xxx / xx)

Initiatives to Utilize Outside
Directors
Meidensha seeks active participation in management byoutside officers, in order to enhance the supervisory functionof the Board of Directors. As such, we are conducting thefollowing initiatives to ensure free and active debates.
① Initiatives at the Board of Directors

ⅱ Timely and Appropriate Sharing of Information
Besides the agenda for the meeting, Meidensha provides
briefings on current topics relating to the company at meetingsof the Board of Directors, with the aim of timely and appropriate
sharing of information with outside directors, so that they canshare the status of the Company in a timely fashion.
② Initiatives Outside of the Board of Directors

ⅰ Advance Explanation of Agendas of the Board of
Directors

ⅰ Introductory Sessions

We give explanations in advance so that directors are able
to confirm the content of agenda items prior to participating
in meetings of the board of directors. Our system allows us
to accept questions, etc., relating to the content of agendas
in advance and prepare an explanation to be given at themeeting of the Board of Directors, and this revitalizes andenriches deliberations.

We create opportunities to explain the Company’s businessand structures, primarily to aid the understanding of newly
appointed outside officers.
The officers or general managers in charge of eachbusiness explain their business and Meidensha’s governancesystem to the outside officers, answer their questions andexchange opinions with them.
MEIDENSHA REPORT 202046

Foundation
for Creating
Value

Corporate
Governanceⅱ Meeting for Exchange of Opinions
Apart from legally-required board meetings, we hold monthly
discussion meetings in order to best utilize the knowledge ofthe outside directors and outside audit & supervisory board
members.
In these meetings, participants vigorously exchange
opinions, mainly concerning matters relating to corporate
governance and the Company’s management issues andstrategy. The meetings also serve as preliminaries to discussmatters prior to passing resolutions at the Board of Directors.

Auditing System
The Company transitioned from the prior institutional structureof a company with an Audit & Supervisory Board to a company
with an Audit & Supervisory Committee at the Ordinary General
Meeting of Shareholders held on June 26, 2020.
The Audit and Supervisory Committee consists of five
directors, including three outside directors, who are Audit &Supervisory Committee members, and there is also a Support
Department for the Audit and Supervisory Committee has
been established as a staff organization to support the Audit
and Supervisory Committee.The committee communicateswith directors, the Internal Auditing Division, and other related
divisions, while adhering to the auditing policies, allotted
duties, and auditing rules, etc., for Audit & Supervisory
Committee members stipulated by the Audit & Supervisory
Committee. Committee members attend meetings of theBoard of Directors and other important meetings, and audit
the execution of directors’ duties through investigations ofbusiness and financial conditions.
Directors who are Audit & Supervisory Committee
members are granted new authority, such as voting rights atmeetings of the Board of Directors and the right to present a
position statement at meetings of the Board of Directors relating
to nomination and remuneration of officers. We are therefore
promoting the establishment of an auditing framework and theenhancement of various initiatives to further strengthen the
supervisory function of the Board of Directors, which is the aimof altering our institutional design, through new activities suchas monitoring and auditing, etc. of the transfer of authority
to executive directors and the status of the governance thatguarantees it, in addition to the auditing activities previously
undertaken, and by further strengthening cooperation withoutside directors, etc.

internal control and increase the efficiency of risk audits ateach business unit.
In FY2019, we engaged in activities under the threebasic policies of “promoting the three lines of defense andCSA (Control Self Assessment),” “strengthening preventionof faults and misconduct,” and “improving audit quality andthoroughly following up audits.” We conducted new initiatives
such as external evaluation of risk management and individual
audit reports for officers in charge of specific functions, and weenhanced internal control functions.
In April 2020, we improved the framework to promoteinternal control by establishing the Internal Control Promotion
Headquarters comprising the Management Auditing Divisionand the newly established Risk Management Division. We
will further promote internal control functions by monitoring
internal control systems through internal audits in conjunction
with the Audit & Supervisory Committee and having a full-time
department develop a risk management structure that covers
the entire Group.

The Internal Auditing Division conducts internal audits to checkthe effectiveness and efficiency of business operations, thereliability of financial reporting, the status of compliance withlaws and regulations, and the maintenance of assets, covering
the Company and all Group companies at home and abroad.
Since FY2016, we have conducted risk management
using control self assessment (CSA) at each Meidensha
factory and each Japanese subsidiary in order to enhance

47 MEIDENSHA REPORT 2020

Basic Remuneration
for Each Position

The Nomination and Remuneration Committee confirms andconsiders the content of the remuneration system and theamount of remuneration from an objective perspective prior todetermination by the Board of Directors.
FY2019 Resultsⅰ Level of Remuneration
The level of remuneration of Meidensha’s directors isdetermined based on external objective remuneration market
data, economic conditions, industry trends, and Meidensha’s
business circumstances, etc., and it is confirmed by the
Nomination and Remuneration Committee referred to above.
ⅱ Composition of Remuneration
Remuneration of directors is performance-based annual
remuneration, and comprises basic remuneration andincentive remuneration according to each role. Of thesetypes of remuneration, incentive remuneration comprises
remuneration that is linked to business performance as ashort-term incentive and stock remuneration as a medium tolong-term incentive.
Target Proportion of Each Type of Remuneration(if 100% of targets were achieved)
Basic
Remuneration：

PerformanceLinked
Remuneration

20%

：

Stock
Remuneration

10%ⅲ Incentive Remuneration System
Performance-based remuneration, which is a short-term
incentive, varies from 0 to 140 depending on the degree ofachievement of targets, with perfect achievement of targets
counting as 100. We use operating income, which is also used
for our financial targets in Medium-term Management Plan
2020, as a performance evaluation indicator, and also giveconsideration to revisions according to operating conditions
and changes to the roles of each officer, etc.

Total Amount of
Remuneration, etc.
(millions of yen)

Going forward, we will work to build friendly and healthful
relationships with tax agencies through timely and appropriate
provision of information and responding sincerely in the eventof advance rulings and tax audits.

Dialogues with Shareholders andInvestors
Basic Approach and IR System

ⅳ Remuneration Determination Procedures

Officers’ Remuneration
Directors remuneration policy

Coefficient According to Achievementof Target Operating Income (0.0 to 1.4)

Stock remuneration, which is a medium to long-term incentive,
grants shares to the Officers’ Shareholders Association for the
purpose of further promoting sharing of profit and loss withshareholders.

Classification

70%

Internal Auditing System

Calculation Formula

Total Amount of Each Typeof Remuneration, etc.
(millions of yen)Basicremuneration

Incentive
remuneration

Numberof People

When any shareholders wish a dialogue with the Company
that will contribute to medium to long-term improvement of theCompany’s corporate value, it is Meidensha’s policy that theCompany’s management conducts the dialogue to the extent
reasonably possible.
A system is in place where an executive officer is placedin charge of IR matters and an IR-specialist department
conducts activities to enhance constructive dialogue withshareholders, including institutional investors and strengthens
external communication.
Results Briefings

Directors (excluding
outside directors)

320

268

52

9

Outside directors

14

14

-

2

Corporate auditors(excluding outside
audit & supervisoryboard members)

43

43

-

2

Outside audit &supervisory board
members

11

11

-

2

Total

391

338

52

15

1. The amount paid to directors includes performance-based remuneration for
FY2019.
2. The amount of remuneration paid to directors that concurrently serve as employees
does not include the amount of remuneration paid to them as employees.

We hold results briefings twice a year in May and November.
In addition, we have also commenced briefings for individual
investors since FY2018.
We will continue to work to ensure an even fuller disclosureof information through results briefings, individual IR sessions,conferences, the website, and this report, etc., and continue
to engage in dialogue with shareholders and investors.
Main IR Activities in FY2019
Individual Sessions

NumberJapanese Investors

105

Foreign Investors

54

Total

159

The materials for the results briefings are available for viewing Please visit “Fact
Sheet for Account Settlement Briefing Session” under “Investors” on the Corporate website.

Tax

Fact Sheet for Account Settlement Briefing Session
https://www.meidensha.com/ir/ir_04/ir_04_03/index.html

Tax Policy
The Meiden Group is aware that ensuring transparency of tax
matters and payment of tax is its corporate social responsibility,
and understands and complies with the principles of thetaxation law of each country and region in which it conducts
its global business activities. We contribute to the prosperity ofeach country and region by paying tax appropriately according
to the application of a preferential tax system that avoids
double taxation through normal procedures and complies withthe aims of each system.
Furthermore, our policy is to refuse to engage ininternational tax avoidance, such as by complying with theOECD Transfer Pricing Guidelines for Multinational Enterprises
and Tax Administrations and refusing to use tax havens
according to business circumstances.

MEIDENSHA REPORT 2020

48

Foundation
for Creating
Value

Corporate
Governance

Board of Directors & Executive Officers as of July, 2020
Director

Representative Director, Chairman
Nomination & Remuneration Committee Member

Reason for Selection
Yuji Hamasaki served as president since 2013, and since 2018, he has overseen all aspects of the Group’s
management as chairman. He has extensive experience and results, and as chairman of the Board of
Directors, he has worked to enhance the supervisory function of the Board of Directors in order for the Groupto take appropriate risks.
He has been selected as he is expected to further enhance the corporate governance of the entire Groupby reflecting the aforementioned experience and achievements at meetings of the Board of Directors.
Career Summary
June 2004 – Executive officer of Sumitomo Electric Industries, Ltd.
June 2005 – Managing executive officer of Sumitomo Electric Industries, Ltd.
June 2006 – Managing director of Sumitomo Electric Industries, Ltd.
April 2010 – Senior managing executive officer of Meidensha
June 2010 – Director of Meidensha
April 2011 – Executive vice president of Meidensha
June 2013 – President of Meidensha
June 2018 to present – Chairman of Meidensha

Director, Executive Vice President

Shosuke Mori

Director, Senior Managing Executive Officer

Reason for Selection
Based on his experience of HR and general affairs-related operations, in recent years, Nobutoshi Ohashi
has contributed to the improvement of corporate governance as the manager of the HR and General Affairs
Business Unit, and since 2018, he has worked to promote the Smart Work 2020 work-style reform actionplan.
Based on the aforementioned experience and achievements, he has been selected as he is expected
to enhance the decision-making and oversight functions of the Board of Directors through his involvement
in management as a promoter of initiatives to leverage the personnel of the entire Meiden Group and further
improve corporate governance.
Career Summary
April 1979 – Joined Meidensha
April 2013 – Executive officer in charge of the HR & General Affairs Group and the HR Planning Division
April 2015 – Managing executive officer in charge of the HR & General Affairs Group
April 2018 – Senior managing executive officer in charge of the HR & General Affairs Group
June 2018 to present – Director
April 2020 to present – Senior managing executive officer in charge of the HR & General Affairs Group

Nobutoshi Ohashi

Yuji Hamasaki
Reason for Selection
Takeshi Miida has been involved with drafting and implementing group-wide management plans, and since
2018, he has been responsible group-wide management and Medium-term Management Plan 2020 aspresident.
Based on the aforementioned experience and achievements, he has been selected as he is expected
to enhance the decision-making and oversight functions of the Board of Directors through his involvement inmanagement as a promoter of Medium-term Management Plan 2020.
Career Summary
April 1978 – Joined Meidensha
April 2008 – Executive officer in charge of the Corporate Policy Planning Group and the Corporate Policy Planning Division
April 2011 – Managing executive officer in charge of the Corporate Policy Planning Group and head of the Corporate Policy
Planning Division
June 2012 – Director
April 2015 – Executive vice president
June 2018 to present – President

Reason for Selection
Norio Takekawa has extensive on-site experience as an engineer in the Construction Business Unit. He iscurrently leveraging this experience to improve Meidensha’s production and quality management systems,
and working to implement production process reforms and invest in streamlining equipment as work-stylereforms, from the perspective of production.
With an outlook, perspective, and sense of balance based on the aforementioned diverse experienceand achievements, he has been selected as he is expected to enhance the decision-making and oversightfunctions of the Board of Directors through his involvement in management.
Career Summary
April 1981 – Joined Meidensha
April 2015 – Executive officer in charge of the Plant Construction & Engineering Business Group
April 2017 – Managing executive officer in charge of the Production Engineering and Management Group
April 2018 – Senior managing executive officer
June 2018 to present – Director
April 2020 to present – Senior managing executive officer in charge of the Plant Construction & Engineering Business Group
Director, Senior Managing Executive Officer

Representative Director, President
Nomination & Remuneration Committee Member

Norio Takekawa

Takeshi Miida
Reason for Selection
Based on his extensive experience and achievements as an engineer in the Research and Development
Business Unit, Masamichi Kuramoto is working to expand the scale of all of the Company’s business,environmental initiatives, and the automobile-related business, which is one of the growth business underMedium-term Management Plan 2020.
Based on the aforementioned experience and achievements, he has been selected as he is expected
to enhance the decision-making and oversight functions of the Board of Directors through his involvement
in management.
Career Summary
April 1980 – Joined Meidensha
April 2013 – Executive officer in charge of the Research & Development Group
April 2014 – Managing executive officer in charge of the Research & Development Group
April 2015 – Senior managing executive officer in charge of the Research & Development Group
June 2015 – Director
April 2018 to present – Executive vice president

Reason for Selection
Based on his experience as an engineer who worked on T&D products, which are Meidensha’s core products,
and as top management of an overseas subsidiary, Nobuaki Tamaki is working to expand the scale of theoverseas business, which is positioned as a growth business under Medium-term Management Plan 2020.
With aforementioned perspective as an engineer and a global perspective, he has been selected as heis expected to enhance the decision-making and oversight functions of the Board of Directors through his
involvement in management.
Career Summary
April 1982 – Joined Meidensha
April 2015 – Head of the T&D Business Unit
April 2016 – Executive officer
April 2017 – Managing executive officer
April 2018 – Senior managing executive officer
June 2018 to present – Director
April 2020 to present – Senior managing executive officer in charge of the Overseas Business Strategic Management Group

Representative Director, Executive Vice President

Director, Senior Managing Executive Officer

Masamichi Kuramoto

Nobuaki Tamaki

49 MEIDENSHA REPORT 2020

Reason for Selection
Since assuming his position in June 2019, Shosuke Mori has been responsible for new businesses,
business alliances, and overseas businesses, etc. He is working to strategically enhance the social
infrastructure systems business and the maintenance and servicing business, which are positioned as
earnings-base businesses under Medium-term Management Plan 2020.
Based on the aforementioned experience and achievements, he has been selected as he is expected
to enhance the decision-making and oversight functions of the Board of Directors through his involvement
in management.
Career Summary
April 2011 – Executive officer in charge of the 1st Headquarters Sales Division of Sumitomo Mitsui Banking Corporation
April 2013 – Executive officer in charge of the General International Division of Sumitomo Mitsui Banking Corporation
April 2014 – Managing executive officer in charge of the General International Division of Sumitomo Mitsui Banking Corporation
April 2015 – Managing executive officer in charge of the Asia Pacific Division of Sumitomo Mitsui Banking Corporation
April 2017 – Senior managing executive officer, second in command of the International Division of Sumitomo Mitsui Banking Corporation
April 2018 – Senior managing executive officer in charge of the Corporate Advisory Division of Sumitomo Mitsui Banking Corporation
April 2019 – Executive officer and vice president of Meidensha
June 2019 to present – Executive vice president of Meidensha

MEIDENSHA REPORT 2020

50

Foundation
for Creating
Value

Corporate
GovernanceOutside Director
Head of the Nomination & Remuneration Committee

Hiroyuki Takenaka

Outside Director
Nomination & Remuneration Committee Member

Reason for Selection
Hiroyuki Takenaka uses his extensive management experience spanning many years and broad knowledge totirelessly work to improve the Group’s corporate governance. At present, he is serving as chair of the voluntary
Nomination and Remuneration Committee and contributing to improved transparency of management.
He has been selected as he is expected to further enhance the supervisory function of the Board of
Directors by continuing to reflect the aforementioned experience and knowledge at meetings of Meidensha’s
Board of Directors.
Career Summary
June 2001 – Director of Sumitomo Electric Industries, Ltd.
June 2003 – Executive officer of Sumitomo Electric Industries, Ltd.
June 2004 – Managing director of Sumitomo Electric Industries, Ltd.
June 2007 – Senior managing director in charge of the Electrical Cable, Materials, and Energy Business Headquarters and theProduction Technology Headquarters of Sumitomo Electric Industries, Ltd.
June 2008 – Senior managing director in charge of the electrical cable, materials, and energy business headquarters of
Sumitomo Electric Industries, Ltd.
May 2010 – Senior managing director of Sumitomo Electric Industries, Ltd.
June 2010 – Executive vice president of Sumitomo Electric Industries, Ltd.
June 2013 to present – Director of Meidensha

Reason for Selection
Junji Yasui uses his extensive management experience spanning many years and broad knowledge to tirelessly
work to improve the Group’s corporate governance. At present, he is serving as a member of the voluntary
Nomination and Remuneration Committee and contributing to improved transparency of management.
He has been selected as he is expected to further enhance the supervisory function of the Board of
Directors by continuing to reflect the aforementioned experience and knowledge at meetings of Meidensha’s
Board of Directors.
Career Summary
April 2004 – Executive officer in charge of the Third Solutions and Sales Business Headquarters of NEC Corporation
April 2005 – Executive officer in charge of the Fourth Solutions Business Headquarters of NEC Corporation
April 2008 – Executive vice president of NEC Corporation
June 2008 – Director and executive vice president of NEC Corporation
April 2010 – Director and managing executive vice president of NEC Corporation
July 2011 – Director, managing executive vice president, and chief supply chain officer of NEC Corporation
April 2012 – Representative director, senior executive vice president, and chief supply chain officer of NEC Corporation
April 2016 – Representative director and senior executive vice president of NEC Corporation
June 2016 to present – Director of Meidensha

Tadayoshi Machimura

Director and Audit & Supervisory Committee
Member (Outside Director)

Yoshiaki Shin

Director and Audit & Supervisory Committee
Member (Outside Director)

Mitsuru Nawata

Junji Yasui

Director and Audit & Supervisory Committee Member(Full-time Audit & Supervisory Committee Member)

Reason for Selection
Yoshiaki Shin has extensive management experience and high-level knowledge spanning many years, andhas experience as an auditor of Meidensha. He has been selected as he is expected to further enhance audit
and supervisory functions by reflecting the aforementioned experience and knowledge in Meidensha’s audits
and meetings of the Board of Directors.
Career Summary
April 2008 – Director and chair of Mitsui Sumitomo Insurance Group Holdings, Incorporated
April 2010 – Director of Mitsui Sumitomo Insurance Co., Ltd.
April 2010 – Consultant at MS & AD Insurance Group Holdings, Inc.
April 2011 – Standing consultant at Mitsui Sumitomo Insurance Co., Ltd.
June 2012 – Outside auditor of Meidensha
June 2012 – Director of DSB Co., Ltd.
April 2014 to present – Senior advisor to Mitsui Sumitomo Insurance Co., Ltd.
June 2020 to present – Director (Audit & Supervisory Committee Member) of Meidensha

Reason for Selection
Until March 2019, Tadayoshi Machimura served as a representative director of Meidensha. Until March
2020, he was involved with management as the president of Meiden O&M, which is the core of the Group’s
maintenance and servicing business, and he has extensive experience and achievements.
He has been selected as he is expected to further enhance audit and supervisory functions by reflecting
his perspective on management of the entire Meiden Group, including affiliates, in Meidensha’s audits andmeetings of the Board of Directors based on the aforementioned experience and achievements.
Career Summary
April 1977 – Joined Meidensha
April 2012 – Executive officer and supervisor of electric power conversion products of Meidensha
April 2014 – Managing executive officer, supervisor of electric power conversion products, and supervisor of power generation
products of Meidensha
April 2015 – Senior managing executive officer of Meidensha
June 2015 – Director of Meidensha
April 2018 – Executive vice president of Meidensha
April 2019 – President of Meiden O&M Corporation
April 2020 – Adviser at Meidensha
June 2020 to present – Director (Audit & Supervisory Committee Member)

Reason for Selection
Taketora Ito has been involved with the Manufacturing Business Unit for many years. He has extensive
experience and knowledge relating to manufacturing, production, and factory operation, etc. He has served
as an Audit & Supervisory Board Member of Meidensha since June 2017.
He has been selected as he is expected to further enhance audit and supervisory functions by reflecting
the aforementioned experience and knowledge in Meidensha’s audits and at meetings of the Board of
Directors.
Career Summary
April 1981 – Joined Meidensha
September 2011 – General Manager of Rotating Machinery Factory, Energy Systems Business Unit
April 2014 – Head of the Power Generation Products Planning Division
October 2015 – General Manager for Special Task of the Power Generation Products Business Unit
April 2017 – Manager of the Internal Auditors Office
June 2017 – Audit & Supervisory Board Member
June 2020 to present – Director (Audit & Supervisory Committee Member)

Director and Audit & Supervisory Committee
Member (Outside Director)

Keiko Hayashi

Reason for Selection
Mitsuru Nawata has extensive management experience and high-level knowledge spanning many years, andhas experience as an auditor of Meidensha. He has been selected as he is expected to further enhance audit
and supervisory functions by reflecting the aforementioned experience and knowledge in Meidensha’s audits
and meetings of the Board of Directors.
Career Summary
June 2007 – Managing executive officer of The Sumitomo Trust and Banking Co., Ltd. (currently Sumitomo Mitsui Trust Bank,
Limited)May 2008 – Managing executive officer in charge of the credit division of The Sumitomo Trust and Banking Co., Ltd.
January 2009 – Managing executive officer in charge of the first credit division of The Sumitomo Trust and Banking Co., Ltd.
May 2009 – Managing executive officer of The Sumitomo Trust and Banking Co., Ltd.
June 2010 – Director and chair of Life Housing Loan Co., Ltd.
June 2010 – Director and chair of First Credit Corporation
October 2010 – President of Sumishin Real Estate Loan & Finance, Limited (currently Sumitomo Mitsui Trust Loan & Finance Co., Ltd.)
April 2015 – Director and chair of Sumitomo Mitsui Trust Loan & Finance Co., Ltd.
April 2016 – Standing auditor of Sumitomo Mitsui Trust Panasonic Finance Co., Ltd.
June 2016 – Outside auditor of Meidensha
June 2020 to present – Director (Audit & Supervisory Committee Member) of Meidensha

Reason for Selection
Keiko Hayashi has a high-level of expertise and extensive experience as an accountant spanning many years.
She has gained wide-ranging views and knowledge through organizational diversity promotion initiatives.
She has been selected as she is expected to further enhance audit and supervisory functions by reflecting
the aforementioned expertise, experience, views, and knowledge in Meidensha’s audits and meetings of theBoard of Directors.
Career Summary
April 1986 – Joined the Tokyo Regional Taxation Bureau
October 1990 – Joined Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)
March 1994 – Registered as a certified public accountant
July 2006 – Partner of Tohmatsu Audit Corporation (currently Deloitte Touche Tohmatsu LLC)
July 2013 – Director of The Japanese Institute of Certified Public Accountants
October 2013 – Deloitte Tohmatsu Group diversity promotion officer
July 2016 to present – Managing director of The Japanese Institute of Certified Public Accountants
November 2018 – Representative director of Tohmatsu Challenged Co., Ltd.
January 2019 to present – Member of Acquisition, Technology and Logistics Agency Defense Procurement Council
June 2019 – Deloitte Tohmatsu Group D & I committee advisor
August 2019 – Chair of The Japanese Institute of Certified Public Accountants Audit Practice and Review Committee
October 2019 to present – Chair of The Japanese Institute of Certified Public Accountants Audit and Discipline Investigation Committee
June 2020 to present – Director (Audit & Supervisory Committee Member) of Meidensha

Senior Managing
Executive Officer

Managing Executive Officers

Executive Officers

Kazumi Ikarashi

Michihiko Kato

Kuniake Yasukawa

Noritaka Matsushita

Norio Mizutani

Katsunori Suzuki

Masayuki Iwao

Masahiko Suzuki

Hiroshi Toke

Hideki Miyazawa

Munekazu Shiratori

Tatsuki Mochizuki

Akio Inoue

Minoru Kaneda

Akio Ikemori

Kuniteru Yamaoka

Hisahiro Murashima

Takashi Furuta

Katsuyuki Watanabe

Satoshi Momenya

Takeo Suzuki

Director and Audit & Supervisory Committee Member(Full-time Audit & Supervisory Committee Member)

Taketora Ito

51 MEIDENSHA REPORT 2020

MEIDENSHA REPORT 202052

Foundation
for Creating
Value

Corporate
GovernanceRisk Management
Message from the Outside Directors

Outside Director

Hiroyuki Takenaka

In June 2020, Meidensha
adoptedacompany
structure with an Audit andSupervisory Committee. In
order to further increase
the effectiveness of theBoard of Directors, it isnecessary to strengthen
their supervisory function,
rebuild an internal control
system, and create anenvironment wherein the
Audit and Supervisory

Committee can fully function.
To achieve this, we believe it is essential to constructa framework for close collaboration between the Audit andSupervisory Committee, the Internal Control Promotion
Headquarters, and the Internal Auditing Division, while
clearly defining the scope of authority granted to executive
directors and executive officers.
In the “jump” stage of the Medium-term Management
Plan 2020 (FY2021–FY2024), business conditions are
expected to change on a global scale due to the impactof the novel coronavirus (COVID-19). In order for theOutside Director

Junji Yasui

It has been four years since
I was appointed Outside
Director of Meidensha.
In contrast to when I first
assumed the position,
it is my evaluation that
information disclosure has
become more thorough,questions at Board of
Directors meetings more
appropriate, and that theeffectiveness of the Boardof Directors has steadily

improved.
Specifically, it has become easier to comprehend theexecution status of business due to prior explanations ofagenda items to outside directors, verification of Executive
Committee decision-making processes, and monthly
reports by the President to the Board of Directors.
This fiscal year, we became a company with an Audit
and Supervisory Committee, and the number of outside
directors on this committee has increased. Outside
directors possess a diverse range of experience andexpertise, and I expect that this will continue to enhance

53 MEIDENSHA REPORT 2020

Policy, system, and initiatives related to compliance are available for viewing
on the Corporate websites.

https://meidensha.disclosure.site/en/themes/104

Basic Approach
Meiden Group to continue to moving forward, we muststabilize revenue from our existing base businesses
while integrating their technology, working with externalorganizations through M&A, launching and developing
new businesses based on ESG/SDGs, building a balanced
business portfolio, and improving our profit margin.
As it is also important to secure personnel throughessential, strategic hiring, and ensure that we have acomplete education and self-improvement training system,
including the implementation of training for management
candidates.
In manufacturing, becoming a trailblazer is key tokeeping up with innovation in design and production
technology through IoT and AI. To meet this task, we must
conduct wide-ranging outsourcing activities.
We are aware, therefore, that it is necessary for outside
directors to scrutinize business conditions even more than
before. This supervision will take the form of in-depth debate
at Board of Directors meetings, information exchange with
the Audit and Supervisory Committee, vigorous exchangeof ideas, and gaining a broader understanding of the
Executive Division. Going forward, we will contribute to
the sustainable growth and increased corporate value of
Meidensha from a medium to long-term perspective.

audit and supervisory functions. This has been a significant
change of course for the Company. Improvements cancause inconvenience and new challenges, so directors
must have the resolve to break old habits.
I aim for further advancements by promoting reforms
through the Board of Directors, reflecting on precedents
and systems that have continued until now, and being
mindful of the Company culture and mission.
As a member of the Nomination and Remuneration
Committee, I hope to evaluate candidates based on our
corporate philosophy, values, and corporate vision, whileremaining cognizant of the qualities required in a successor
and continuing to interact with all candidates.
Going forward, the management required ofMeidensha will involve taking things one step at a timewith a shared awareness among directors as to how we
can fulfill our broader social responsibility through an ESG
perspective and SDGs, in addition to our responsibility
to shareholders to seek profit. Fulfilling my duties as
an outside director through objective confirmation of
appropriate of business decision-making processes, I
expect us to carefully foster the positive culture we havenurtured for more than 120 years, increasing corporate
value, and contributing to society even more than before.

debate response policies. Managers further debate businessrisks debated by the Risk Management Committee, stipulate
key business risks facing the Meiden Group, and determine
response policies.

With regard to business activities in the near future, we must
accurately understand various business risks that may manifest
in the future and ensure that we provide for them in order toimplement our business strategy and increase corporate value
in unstable global circumstances with increasing complexityand lack of clarity. With this awareness, we consider that itis necessary for each business unit of the Meiden Group to
increase their sensitivity when considering business risk, andestablish their own PDCA risk management systems while
enhancing risk management during times of normal operation
through the establishment of a specialized risk management
department. Furthermore, we aim to create a system that is
capable of responding to constant change and all risks bycreating an Enterprise Risk Management (ERM) system thatincorporates Business Continuity Management (BCM) in orderto respond to risks and to the business continuity of the entire
Group.

Details about Business Continuity Plan (BCP) are available for viewing on the
Corporate websites.

https://meidensha.disclosure.site/en/themes/103

Response to the novel Coronavirus
Disease (COVID-19)
The global spread of the novel coronavirus disease (COVID-19)
impacted the Meiden Group in ways such as suspension of
production at overseas sites such as China, delay of partsprocurement, and postponement of sales.
The Meiden Group established the Company-Wide
Response Headquarters, created the Novel Coronavirus(COVID-19) Response Action Guidelines and the Novel
Coronavirus (COVID-19) Response Manual, and is continuing
to act with awareness of preventing infection after the stateof emergency has been lifted (avoiding the three Cs andreducing commuting outside of the region of factories by 70%,etc.) with the health and safety of employees as our utmost
priority, and reducing the impact on business activities such as
by continuing operation of all factories in Japan in accordancewith the guidelines.
Furthermore, we have ensured both the health and safetyof employees and business continuity at overseas sites, bycreating behavior standards to prevent infections, introducing
working from home and rotation shifts, and accelerating the
introduction of Internet communication tools, in accordancewith relevant national government policies. We expect global
restrictions on the movement of people to extend into the longterm, so we will promote new work styles through greater useof Internet communication tools.

Risk Management Structure
Operation of the Risk management Committee
Meidensha has established the Internal Control Promotion
Headquarters in order to enhance governance of the Group,and has newly established the Risk Management Division
within the headquarters. The Risk Management Division
promotes the business self-assessment system in eachbusiness unit, and identifies key business risks to be dealt
with by the entire Meiden Group in conjunction with the
Headquarters Staff Business Unit and the various committees.
The Risk Management Committee, which is convened by
the Risk Management Division, is chaired by the head of theInternal Control Promotion Headquarters. It scrutinizes the
Meiden Group’s business risks that have been identified by
the Risk Management Division and provides an opportunity
for key members of the Headquarters Staff Business Unit to
The Meiden Group’s Risk Management Structure

Board of Directors
ReportCompliance Committee

Direction

Meiden Group Environmental Committee
Product Liability Committee
Company-Wide QA Promotion Committee
Product and Technology Deliberation
Committee

Submission
Submission of major business risks

Safety and Trade Control Committee
Information Security Committee

Direction

Executive Committee

ReportMonitoring

Risk Management Committee

Risk control instructions

Presentation of business risk information

Internal Control Promotion Headquarters

Risk Management Division

Support

Preliminary review

Information provision
Promotion of self-assessment

Collection of risk information

Three lines of defense

Company-Wide/Regional Health and Safety
Committee
Emblem and Trademark Committee
Harassment Prevention Committee[First defense line]

Business units
Affiliates[Second defense line]
ReformAuditing

Headquarters Staff
Business Unit

[Third defense line]
ReformInternal Control Promotion
Headquarters

Auditing

Internal Auditing
Division

Risk Control Self-Assessment

MEIDENSHA REPORT 202054

Corporate Information
Overview by Business Segment

Financial / Non-Financial Highlights

Overview by Business Segment in FY2019
Net Sales(Millions of yen)

Net Operating Income(Millions of yen)

3,297

Sales and income increased year on year in the Social Infrastructure

3,654

profitability through cost improvements.
Systems field due to strong domestic demand and the resolution of thedeterioration on costs that had occurred in overseas private sector
projects in the previous fiscal year.
Sales in the Railway Systems field decreased compared with the previous–107

SocialInfrastructure
Business

4,080

146,074

3,971

from the previous fiscal year being recorded and efforts to improve

147,049

the Water Infrastructure Systems fields due to sales of projects delayed

140,585

Sales and income increased year on year in the Electricity and Energy and

126,530and operating income improved by ¥3,761 million to ¥3,654 million.

137,532

Net sales in the segment increased 6.2% year on year to ¥146,074 million,

fiscal year due to the impact of a decrease in major domestic andoverseas projects.

2015 2016 2017 2018 2019 (FY)2015 2016 2017 2018 2019 (FY)Consolidated basis
Financial indicators

FY2015FY2016FY2017FY2018FY2019255,748

Net sales (millions of yen)

237,404

220,141

241,832

245,033

Operating income (millions of yen)

10,517

8,849

11,381

10,336

12,725

Ordinary income (millions of yen)
Net income attributable to owners of parent(millions of yen)

10,595

8,209

9,992

10,128

11,481

6,962

5,743

7,056

7,653

8,208

Overseas net sales (millions of yen)

64,08258,73074,15471,72570,410Overseas sales ratio (%)

27.0

26.7

30.7

29.3

27.5
270,410

Net assets (millions of yen)

255,024

247,646

264,457

265,586

Total assets (millions of yen)

68,771

74,312

81,22984,497

90,117

Net assets per share (yen)1,488.21

1,614.00

1,768.27

1,845.21

1,920.01

Net income per share (yen)153.42126.56155.52168.68180.91

26.5

29.6

30.3

31.5

32.2

Equity ratio (%)
5,622

Net sales in the segment increased 1.2% year on year to ¥65,885 million,
and operating income deteriorated by ¥2,350 million to ¥3,272 million.

4,384

4,030
2,465

Industrial
Systems
Business

Sales and income decreased year on year in the Electronics field, but thesemiconductor market is recovering from its adjustment phase.
Systems field due to an increase in productivity despite the impact of theoverall slump across the automobile industry.
2015 2016 2017 2018 2019 (FY)2015 2016 2017 2018 2019 (FY)

4,343

3,587

3,781

36,97433,962

33,044made to strengthen personnel’s ability to work immediately by

2,921

Maintenanceand Servicing
Business

31,007extension of the life of facilities, the Group’s one-stop service that covers

38,857

5,654

Against the backdrop of heightened demand for BCP, energy-saving andand operation management has performed well, and efforts have been

17,975

14,365

10,416(7,582)(8,074)(13,700)

Cash flows from financing activities (millions of yen)

(5,847)

3,767(11,230)(3,101)

3,735

10.4

8.2

9.2

9.3

9.6

—

—

6.6

5.9

6.9

Dividend payout ratio (%)

26.1

31.6

28.9

26.7

27.6

Total shareholder return (%)(Comparative indicator: TOPIX dividend included)

134.3(89.2)

105.9(102.3)111.1(118.5)87.0(112.5)

94.9(101.8)Notes: 1. Starting in FY2015, we show “net income attributable to owners of parent,” instead of “net income.”
2. On October 1, 2018, we conducted a reverse stock split at a ratio of one share for every five shares of common stock. Thus, we calculated net assets per share and net income
per share on the premise that said reverse stock split had been conducted in FY2015.
3. ROIC has been calculated since FY2017.
4. We have used TOPIX dividend included, which includes more companies, for the comparative indicator for total shareholder return, for the purpose of facilitating easy comparison.

Sales decreased and income increased year on year in the Dynamometerfrom maintenance and inspection of electrical equipment to maintenance

11,840(12,031)

ROIC (Operating-income-based) (%)

Sales and income decreased year on year in the Motor and Drive field due
mainly to a slowdown in demand for injection molding machines.

22,597(10,530)

ROE (%)
3,272

commencement of mass production on the new equipment.

56,000year due mainly to the occurrence of up-front expenses aimed at the

61,090Numazu Inverter Plant starting operation, but income decreased year on

55,552

sales of motors and inverters for PHEVs and EVs and the new line in the

65,885

65,100

Revenue increased year on year in the EV field due to factors such as solid

Cash flows from operating activities (millions of yen)
Cash flows from investing activities (millions of yen)Non-financial indicators

FY2015FY2016FY2017FY2018FY2019R&D expenses (millions of yen)

9,970

9,462

9,402

9,458

10,467

Capital expenditure (millions of yen)

8,314

7,355

7,584

7,895

16,042

Number of employees

8,408

8,474

8,995

9,297

9,599

Total actual annual working hours (hours/year/employee)

2,083

2,016

2,002

2,019

1,991

—

—

3.92

3.96

3.84

0.44

0.96

0.29

0.99

0.60

Greenhouse gas emissions (Scope 1 and 2) (Japan) (kt-CO2)

—

—

53.0

43.7

41.2

Greenhouse gas emissions (Scope 1 and 2) (overseas) (kt-CO2)

—

—

12.9

12.4

12.3

Reduction of CO2 emissions caused by products (kt-CO2)

870

800

733

841

848

Amount of waste generated (Japan) (kt)

8.8

6.6

7.1

7.8

6.4

99.7

99.6

99.1

99.3

99.6

Water consumption (Japan) (thousand m )

1,183

1,238

1,203

1,085

1,768

Wastewater (Japan) (thousand m3)

1,749

1,664

1,914

2,113

2,206

19

32

28

38

60

incorporating such as AR and VR.
As a result, net sales increased 5.1% year on year to ¥38,857 million andoperating income improved by ¥1,311 million to ¥5,654 million.

2015 2016 2017 2018 2019 (FY)2015 2016 2017 2018 2019 (FY)

Percentage of female employees in executive positions (%)

1,353

1,419

1,337

Net sales in the segment totaled ¥3,481 million, on par with the level

1,340

1,280

3,481

3,481

3,463

and commercial building ThinkPark Tower (Osaki, Shinagawa City, Tokyo).

3,452

We are engaged in the real estate leasing business, centering on the office

3,386

Lost time accidents rateachieved in the previous fiscal year, and operating income deteriorated by

Recycling rate (Japan) (%)
2015 2016 2017 2018 2019 (FY)2015 2016 2017 2018 2019 (FY)This segment includes categories not included in any of the above
797

segments, such as manufacturing and marketing of electrochemical

891

Real EstateBusiness¥66 million to ¥1,353 million.

497

493

464

19,311

18,601

3.8% year on year to ¥19,311 million and operating income improved

18,327

Other

19,712

employees, and goods merchandising. Net sales in the segment increased

19,155

measuring equipment and electric insulation materials, welfare services for¥93 million to ¥891 million.
2015 2016 2017 2018 2019 (FY)55 MEIDENSHA REPORT 20202015 2016 2017 2018 2019 (FY)3

CSR spending (millions of yen)
Notes: 1.
2.

Figures for employee numbers exclude those employees on temporary contracts.
Total actual annual working hours are the actual working hours calculated by subtracting leave hours from the sum of official working hours and overtime hours (averaged per
employee).
3. The percentage of female employees in executive positions refers to the percentage calculated by dividing the number of female employees in executive positions by the total
number of executive positions.
4. Scope 1 (Direct Emissions): Combustion of fuel (town gas and oil, etc.) and release of greenhouse gasses (SF6 and CFCs, etc.).
5. Scope 2 (Indirect Emissions): Combustion of fossil fuel to generate electricity (electricity company) that is consumed by the company.
* Renewable energy produces zero emissions
6. Reduction of CO2 emissions caused by products is the expected reduction of such emissions caused by products sold.
7. CSR spending includes donations and sponsorship funding.

MEIDENSHA REPORT 2020

56

Corporate Information
Outline of the Meiden Group
Corporate Data as of March 31, 2020
Corporate Name MEIDENSHA CORPORATION

Capital ¥17,070 million

Established June 1, 1917 (Since December 22, 1897)

Consolidated Sales ¥255,748 million

Representative Director, President Takeshi Miida

Consolidated Number of Employees 9,599

Head Office

ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo,
141-6029 Japan

Consolidated Subsidiaries 40 (21 in Japan, 19 overseas)

Main Subsidiary Companies (as of July 31, 2020)
Country/Area

Company NameMEIDEN PLANT SYSTEMS CORPORATIONBusiness Entity
Design and contracting for electricity and building construction and manufacture, repair, andrefurbishment of electrical equipment, etc.

MEIDEN SYSTEM MANUFACTURING
CORPORATION

Manufacture and sale of switchboards, control panels, and their components

MEIDEN SYSTEM SOLUTIONCORPORATION

Software development, design, production, sale, and rental, and maintenance andmanagement of computer systems and networks

MEIDEN TECHNO SYSTEMS CO., LTD.

Maintenance, inspection, renovation and refurbishment of transformers and switchgear,
manufacture of products and parts for transformers and switchgear, installation of transformers
and switchgear, and worker dispatch business

EAML Engineering CO.,LTD.

Design, manufacture, sale, and repair of hydroelectric generators and peripherals

M WINDS CO., LTD.

Development, design, manufacture, testing, and consulting for wind power generation systems

M WINDS HACHIRYU CO., LTD.

Wind power generation business

NOTO COMMUNITY WIND POWER CO., LTD. Wind power generation businessJapan

Country/Area
Hong Kong
India

Company NameBusiness Entity

MEIDEN PACIFIC (CHINA) LIMITED

Sale of switchboards and technical consulting

MEIDEN INDIA PRIVATE LIMITED*

Import and sale of Meiden Group products, engineering tasks, construction, after-sale service,procurement of Indian products, and export operations

PRIME MEIDEN LIMITED

Manufacture and sale of transformers, and engineering

Indonesia

P.T. MEIDEN ENGINEERING INDONESIA

Sale and design of electrical equipment, installation, construction, and technical consulting
such as after-sale service

Korea

MEIDEN KOREA CO., LTD.*

Sale of dynamometer products, installation, testing, servicing, maintenance, and import andexport operations

MEIDEN MALAYSIA SDN. BHD.

Electrical engineering, technical consulting, and after-sale service

Malaysia

Singapore

ThailandGermany

U.S.A.

MEIDEN METAL ENGINEERING SDN. BHD.

Manufacture and sale of transformer housing and radiators, etc.

MEIDEN ASIA PTE. LTD.

ASEAN regional presiding company
Business strategy creation, legal affairs, HR, IT, maintenance, technical engineering, servicing,materials, R&D, etc., for the ASEAN region

MEIDEN SINGAPORE PTE. LTD.

Manufacture and sale of transformers, switchboards, and circuit breakers

THAI MEIDENSHA CO., LTD.

Electrical construction and technical consulting

MEIDEN ELECTRIC (THAILAND）LTD.

Sale of switchboards and technical consulting

MEIDEN EUROPE GmbH

Sale of electrical equipment and import and export operations

TRIDELTA MEIDENSHA GmbH

Manufacture and sale of electrical and railway lightning arresters and peripherals for lightning
arresters

MEIDEN AMERICA, INC.

System engineering and after-sale service for dynamometer products and sale of component
products

MEIDEN AMERICA SWITCHGEAR, INC.

Manufacture and sale of vacuum circuit breakers and sale of vacuum interrupters* Note concerning non-consolidated subsidiaries:
The list of affiliates includes MEIDEN NANOPROCESS INNOVATIONS, INC. and MEIDEN AMERICA SWITCHGEAR, INC., which were established in April 2020.

MEIDEN AQUA BUSINESS COMPANY

Maintenance and operation management for water, sewerage and industrial water treatment
facilities, industrial wastewater treatment facilities, and general and industrial waste treatment
facilities

ANOTSUGIKEN CO., LTD.*

Manufacture and sale of neutral inorganic caking agent (Agoclean) and multifunction powder
coagulant (Coafine), etc.

Share data as of March 31, 2020

KOFU MEIDENSHA ELECTRIC MFG.
CO.,LTD.*

Manufacture and sale of PM motors, elevator motors, industrial vehicle motors, brushless
motors, and induction motors

Stock Listing Tokyo Stock Exchange, Nagoya Stock Exchange

MEIDEN KIDEN KOGYO CO., LTD.

Repair, overhaul, and high-precision machining of eddy current dynamometers, mechatronicequipment, microturbine power generation equipment, motors, generators, and dynamometers

Total number of authorized shares 115,200,000

MEIDEN O&M CORPORATION

Drafting strategies for maintenance business activities, supervision, and education planning

MEIDEN ENGINEERING CORPORATION

Manufacture, sale, installation, and wiring of electrical equipment, machinery, tools, anddevices, as well as maintenance and inspection services, refurbishment, and repair

MEIDEN FACILITY SERVICE CORPORATION

Upkeep, operation, and maintenance, etc., of facilities etc.

SADO MEIDEN SERVICE CORPORATION

Upkeep, operation, and maintenance, etc., of facilities etc. in the Sado area

CHUO ENTERPRICE CORPORATION

All tasks relating to management and operation of facilities, maintenance and safety
inspections, sanitation, cleaning, security, construction, energy-conservation measures, andother building management

MEIDEN SHOJI CO., LTD.

Sale of electrical and electronic equipment products

MEIDEN KOHSAN CO., LTD.

Sale of goods and materials and insurance agency

MEIDEN CHEMICAL CO., LTD.

Manufacture of electrical equipment mold products and insulating varnish and resin, etc.

HOKUTO DENKO CORPORATION

Manufacture and sale of electrochemical measurement devices, and manufacture of water
quality measurement devices

MEIDEN NANOPROCESS INNOVATIONS, INC.

Development, design, manufacture, and sale of pure ozone generators and thin film deposition
equipment

MEIDEN UNIVERSAL SERVICE LTD.*

Cleaning, security for buildings, structures, and incidental facilities, and greening andmaintenance of land

Financial institutions 40.37%
Securities companies 0.98%

Distribution ofshares byshareholder

Total number of issued shares 45,527,540 (Including treasury
shares of 157,093)

Business companies 21.19%
Overseas investors

18.24%

Individuals

18.87%

Other

0.35%

Number of shareholders 13,408

Major Shareholders
Number of Shares Held
(1,000 shares)

Shareholding Ratio (%)

Japan Trustee Services Bank, Ltd. (account in trust)

4,412,700

9.73

Sumitomo Electric Industries, Ltd.

2,631,385

5.80

The Master Trust Bank of Japan, Ltd. (account in trust)

2,569,100

5.66

Sumitomo Mitsui Banking Corporation

2,241,835

4.94

NEC Corporation

1,746,150

3.85

Sumitomo Mitsui Trust Bank, Limited

1,500,000

3.31

Sumitomo Life Insurance Company

1,061,400

2.34

Meidensha Employees Stock Ownership Group

969,071

2.14

Japan Trustee Services Bank, Ltd. (account 9 in trust)

768,900

1.69

Japan Trustee Services Bank, Ltd. (account 5 in trust)

754,300

1.66

Names of Shareholders

MEIDEN MASTER PARTNERS CORPORATION Worker dispatch business

China

MEIDEN ZHENGZHOU ELECTRIC CO., LTD.

Manufacture and sale of GIS lightning arresters, and zinc oxide for lighting arresters

MEIDENSHA (SHANGHAI) CORPORATEMANAGEMENT CO., LTD.

Chinese regional presiding company
Management consulting services for affiliates, sale of electrical equipment, import and export
operations, procurement, maintenance, and after-sale service

MEIDEN HANGZHOU DRIVE SYSTEMS CO.,LTD.

Manufacture and sale of dedicated elevator motors, inverters, and automated guided vehicles(AGV)

SHANGHAI MEIDENSHA CHANGCHENGSWITCHGEAR CO., LTD

Manufacture and sale of medium-voltage cubicle-type gas circuit breakers and vacuum circuit
breakers
Manufacture and sale of high and low voltage panels, as well as import and export operations

MEIDEN (HANGZHOU) DRIVE TECHNOLOGY
Manufacture and sale of EV motors and inverters
CO., LTD.

57 MEIDENSHA REPORT 2020

(Note) The shareholding ratio excludes treasury shares.

MEIDENSHA REPORT 202058