MEIDENSHA REPORT 2023

Meidensha’s CO 2 reduction
targets received SBT
certification.

Meidensha received theMinister of the Environment’sAward for Climate Change
Action in 2022.

Meidensha was granted
Platinum Kurumin
certification by the Ministerof Health, Labour andWelfare.

Meidensha was recognized as2023 Health and Productivity
Management Organization(White 500) in the large
enterprise category.

Meidensha received a Goldaward in PRIDE Index 2022,
which recognizes efforts topromote understanding of
LGBTQ+ and other groups.

Meidensha received thehighest Eruboshi certification(Level 3) from the Minister of
Health, Labour and Welfare.

MEIDENSHAREPORT

2023

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

www.meidensha.com

AA55-3674 As of Dec., 2023

Introduction / Message

Our Value

Our Approach

Corporate GovernanceNotice of Transition to New Structure

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

On June 28, 2023, previous Meidensha
President Takeshi Miida became theAccelerating reforms and aiming forsustainable enhancement of corporate value
under a new management structure

Representative Director, Chairperson andSenior Officer of the Company, and Akio
Inoue succeeded him as Representative
Director, President and Executive Officer.
Amid major and rapid changes in theenvironment surrounding our business during
Miida’s tenure as President, we promoted thestrategies set out in Medium-term Management
Plan 2020 and Medium-term Management Plan
2024 and also proactively invested to ensurebusiness growth and enhanced corporate value

01

Akio Inoue

Takeshi Miida

Representative Director
President and Executive Officer

Representative Director
Chairperson and Senior Officer

I am pleased to announce my appointment as
President and would like to thank you for yourcontinued support of the Meiden Group. To
realize our corporate mission of “Illuminating
a more affluent tomorrow,” we will steadfastly
maintain management capable of deliveringhigh-quality products and services in addition
to safety and peace of mind.
In the 126 years since our founding, we haveaccumulated a great deal of technology andexpertise that can be used to solve issues
faced by modern society. I believe it is my
mission to draw up and implement strategies tomaximize the use of these resources to create acompany that continues to be indispensable tosociety and sustainably enhances its corporate
value in the future. I will lead the Group with afirm hand while also taking the time to interact
with our stakeholders.

Thanks to the support and cooperation of somany people during my five years as president,
I have been able to fulfill my important
responsibilities, and for that I would like toexpress my sincere gratitude.
Although the Meiden Group has experienced
some difficulties due to the pandemic andother factors, we are now in a position to seize
excellent opportunities for growth amid therapid rise in environmental awareness and otherdevelopments. We decided that this was thebest time to rejuvenate management by passing
the baton to people who have the energy topromote and expedite sweeping reforms.
I intend to support President Inoue’s
leadership and continue to do my best for thefurther advancement of the Meiden Groupthrough interactions with people inside andoutside the company.

into the future.
With the aim of carefully passing the baton
of management to the next generation andaccelerating the pace of reforms, candidates tobecome the next generation of top executives
were selected after consultations with theNomination & Compensation Committee.
As Chairman of the Board of Directors,
Miida will continue to promote improvements
to its effectiveness and the further
strengthening of the governance of the entire
Group. Also, President Inoue will deploy
measures to strengthen the competitivenessof each business and improve profitability
in addition to increasing the visibility of oursustainable growth strategy by formulating
medium-to long-term visions.
We look forward to your continued
guidance and encouragement under our new
management structure.

02

Introduction / Message

Our Value

Meiden Group Corporate Philosophy
Corporate Mission
It defines the raison d’êtreand corporate mission

Corporate
Philosophy
MISSION

Value Provision
It defines the uniquevalue provision and corecompetence

Ideal State of Being/
VisionVISION

Corporate raison d’être

Illuminating a more affluent tomorrow
We continue to create value and technologies for the realization of a more affluent andenvironmentally aware society

For customer peace of mind and satisfaction
We offer complete environmental consideration and appropriate support for ourcustomers. From product 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

Ideal State of Being/Vision

A sustainability partnerships that creates personal happiness and asustainable global environment

VALUE

Important Values

Values Shared by Employees

Sustainability Diversity
Integrity and responsibility Future-orientation

Corporate Slogan(Expressing the corporate philosophy in a single phrase)

Our Impact

Our Strategy

Editorial Policy
The content of this report is determined after reporting to and consultation
with the Board of Directors. With regard to the content of the reports,
we work to collect, analyze, and distribute information that meets our
stakeholders’ expectations and is of interest to our stakeholders throughdaily public relations, IR activities, and interviews with each department.
In Meidensha Report 2023, we set out to present the progress of the
Meiden Group’s value creation, Medium-term Management Plan 2024, andthe sustainability management on which the plan is based, as well as tovividly convey how we embody our important values for realizing our statedvision and our employees’ personal visions and challenges, which we referto as “My Vision, My Challenge,” through the platform of the Meiden Group.
We hope this report brings you on board with our vision of the society that
the Meiden Group hopes to realize, and we look forward to watching waves
of co-creation gain momentum toward the realization of a more affluent
tomorrow.
We hope this report helps enhance and enrich our dialogue withstakeholders.

Corporate Ideal State of Being

Work to build a new society through integrity to the earth, society, and people, and through thepower of co-creation

Important Values

Corporate GovernanceIn drafting this report, we refer to the International Integrated Reporting
Framework proposed by the IFRS Foundation and the Guidance forIntegrated Corporate Disclosure and Company-Investor Dialogues for
Collaborative Value Creation proposed by the Ministry of Economy, Trade andIndustry, etc. The content of the report is based on opinions and questions
received from stakeholders on a daily basis, and we drafted it by working witheach organization to convey information in a manner that is easily understoodfrom a long-term general perspective, in order to realize the Meiden Group’s
ideal state of being. I have confirmed that the drafting process and content
are correct and proper.
Since 2013, Meidensha has issued the Meidensha Report as an integrated
report. It is a communication tool for all stakeholders, including shareholders
and investors, to understand the Company. Going forward, we will use thereport as a tool for dialog and sincerely face our stakeholders to work tosustainably increase corporate value.

MEIDEN CYCLE

Report MediaThe 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 Meiden Group Sustainability (webedition).

03

Meidensha Report print edition
and web edition

Meiden Group Sustainability
Web Edition

A comprehensive collection offinancial information concerning
the Meiden Group andnonfinancial information suchas initiatives that contribute toimproving corporate value andmanagement strategies.

A summarized introduction
focusing on specific initiatives totackle sustainability issues that
we consider important.

MEIDENSHA REPORT 2023

Introduction
01

Notice of Transition to New Structure

Message05

Message from Management

09

Message from the Officer in Charge of Finance

Our Value
11

A History of Value Creation

13

The Meiden Group’s Value Creation Is Supported by Its
Human Resources

15

Meiden Group Value Creation Process

17

Meiden Group’s Materiality

19

Materiality and Medium-term Management Plan 2024

21

Social Value Created through Business

Our Approach23

Climate Change Responses

27

The carbon neutral transition plan29

DX strategy

31

Human Resource Strategy

33

Respect for Human Rights

35

Manufacturing Strategy

38

Value Creation Story: Case 1
Business Development in Collaboration with Suppliers

39

Research and Development / Intellectual Property Strategy

40

Innovation Strategy

41

Value Creation Story: Case 2
New Challenges for Technological Innovation from NPI

Representative Director
President and Executive Officer: Akio Inoue

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 at the time they were stated and may differ from actual
business activity results and events in future owing to changes in conditions.

In order to realize our Group Corporate Philosophy, we must
identify the direction for each individual employee to aim
towards and provide signposts to help them proceed without
losing their way. To enable us to do so, we have made these
five actions our watchwords. The actions are mutually linked,
with one action calling forth the next, creating a cycle of action
and growth. Based on this image, we call this the Meiden
Cycle. By sharing and practicing the Meiden Cycle as theethos underlying our actions, we seek to maximize the growth
cycle for each of our employees.

Corporate Information

The Meidensha Report’s Drafting and Approval Process andResponsibility for the Meidensha Report

Disclaimer

For us, our “quality” is not only about the quality of our products
and services. There are two things that make our quality:“people” and “technology.” People at Meiden 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’s unique quality, and create
new connections with the future. Making connections with ourcustomers, society, and people living in it. These connections will
expand, and the power we have built will become the energy forthe next generation.
For the peace of mind and joy of our customers, and the precious
lives of people beyond them, Meiden Group quality will connect witha more prosperous tomorrow. This is our never-changing mission.

Contents

Meiden Group Corporate Philosophy

Our Approach

Corporate Governance
43

Board of Directors & Executive Officers / Message from
Outside Directors

45

Corporate Governance53

Risk Management / Compliance

Our Impact
57

Value Creation Story: Case 3
Greater Livability with the Opening of Haga Utsunomiya LRT

59

Value Creation Story: Case 4
Safeguarding Water: O&M for Local Revitalization by Sado
Meiden

61

Value Creation Story: Case 5
Born in the Motor Business, Meidensha Tackles the Spreadof New Mobility

62

Value Creation Story: Case 6
Meiden Singapore’s Mission to Protect Stable Electricity
Supply in the Asian Hub

Our Strategy
63

Progress of Medium-term Management Plan 2024

65

Power Infrastructures Business Group67

Public, Industrial & Commercial Sector Business Group69

Mobility & Electrical Components Business Group71

EV Components Business Group73

Field Service Engineering Business Group

Corporate Information

https://meidensha.disclosure.site/en

75

Financial / Non-Financial Highlights

77

Outline of the Meiden Group04

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Thoughts and Resolve toward Assuming
the Position of President
Greeting and Self-introduction

Representative Director
President and Executive Officer

MESSAGE FROM MANAGEMENT

Harnessing the Powerof the Overlap between
the Values and Visionof the Company and its
Employees
Seizing Multiple Business Opportunities to Create a
New Society

05

I am Akio Inoue, and I assumed the position of
President and Executive Officer on June 28, 2023.
While bracing myself for the great responsibility of theposition, I am determined to manage the Meiden Group
toward further growth.
I grew up playing softball and baseball in the
countryside of Yamaguchi Prefecture, and I was
engrossed in rugby in high school and college.
Thinking back, those days were full of gruelingpractices, but I believe those experiences and the
support of my teachers and fellow students shaped
me into who I am today. Rugby was full of formative
experiences for me, particularly learning the joy ofwinning and the importance of developing strong will.
I started my career at Meidensha 37 years ago fromthe Accounting Department of Numazu Works. After
working in the Business Coordination Division for the
Water Infrastructure Business and the Corporate Policy
Planning Division, I became the General Manager of the
Accounting & Financing Group in 2018. In the Business
Coordination and Corporate Policy Planning Division
I was involved in the formulation of profit plans andmedium-term management plans while experiencing
events that marked major turning points in society,including the collapse of the Japan’s economic bubble
in the early 1990s, the global financial crisis in the late
2000s, and the Great East Japan Earthquake in 2011.
At the Accounting and Finance Headquarters, I was
involved in the issuance of the Company’s first greenbond, and through dialogue with various stakeholders,
I was consistently reminded of the world’s interest in
the environment and other aspects of sustainability
and people’s high expectations for the Meiden Group’s
contributions to the environment through its business.

My Mission and Role as President
Although Meidensha’s corporate philosophy of“Illuminating a more affluent tomorrow” was createdmore than a decade ago, it is aligned with the aims of
ESG, sustainability, and other highly touted pursuits oftoday’s world. This philosophy resonates deeply withme and will continue to occupy an elevated position in
my sights. The Meiden Group has many sincere andresponsible employees, and I have often observed
them trying their very best to help not only customers,
but also their fellow employees. As I feel that we should
use these advantages more widely, I intend to makethe Meiden Group a place that contributes more to theworld and paves the way to the future. This desire isembodied in the current vision of the Meiden Group(“Work to build a new society through integrity to theearth, society, and people, and through the power ofco-creation”), which I believe the Meiden Group has
sufficient power to achieve.
In terms of business performance, I believe my
mission is to complete Medium-term Management
Plan 2024, a task I inherited from Chairperson Miida.

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

The plan covers a four-year period starting in FY2021.
In the first two years, the lingering global effects of
the COVID-19 pandemic and widespread downward
pressure on earnings due to soaring material prices had
a substantial impact on the Meiden Group’s ability togenerate profits. However, as the transition to a postpandemic world progress, business activity is gradually
returning to normal and capital investment is regaining
momentum, especially in Japan. Given these signsof increasing demand in infrastructure and various
industries, energy conversion policies and stricter
environmental regulations in various countries, andother factors, I feel that the winds are beginning to blowin the right direction for the Meiden Group.
The most urgent and important issue, therefore, isdetermining how to improve on manufacturing costs,
which were trending in the wrong direction. I aim to
return the situation to normal as soon as possible
by correctly ascertaining and analyzing the present
situation—which has been disrupted by the rapid
rise in material prices and other factors—and quickly
deploying appropriate measures. Furthermore, by
creating a new framework, I aim to gain the ability
to absorb information on progress and costs in the
production and delivery flow in a timely manner andpromote speedy management decisions, thereby
laying the foundation for our ability to generate profits
over the medium-to long-term.
Digital Transformation Strategy, P.29-30

Concurrently, I will devote energy to drawing up
growth strategies that enhance our corporate value
over the medium-to long-term and augment ourability to create value. It is an important mission
for both the Company and me to ensure that all
stakeholders of the Meiden Group are expectant
and excited about not only the future society weenvision and seek to realize, but also the Group
itself. The technologies, products, and businesses
we have cultivated through our business to dateare all highly compatible with the realization of asustainable society in the future. We will achieve thegoals of Medium-term Management Plan 2024, whichsets outgrowth strategies based on these businessassets and proceed with the formulation of the next
medium-term management plan and a long-term
vision for the coming era.
The Meiden Group has many immediate and mediumto long-term issues to tackle, and I recognize that,having been involved in cost control, finance, andmanagement strategy, my appointment as President
means that I am expected to create a roadmap
to address these issues. I have worked on theadministrative side for many years. When I was assigned
to the Accounting Department right after I joined thecompany, my first supervisor there always reminded
me not to just sit at my desk. “We’re manufacturers,” hewould say. “You have to go down to the floor and see
what we make.” After all these years, I continue to holdthat lesson as a fundamental belief. I will continue totake this stance—to go see what we make and talk withpeople on the front lines as I identify issues and search

06

Introduction / Message

for solutions. With this approach, I intend to further
elevate the value of the Meiden Group to the world andilluminate a more affluent tomorrow.

Reflecting on FY2022 and Outlook
on the Completion of Medium-termManagement Plan 2024
I already mentioned the downward pressure on the
Meiden Group’s earnings we experienced for a time
due to rapid changes in the external environment.
However, even under such circumstances, we haveseen definite progress in the two years since thestart of the medium-term management plan.
Symbolic of this is the improvement of the profit
structure of our overseas operations. In FY2021, profit
structure problems had become apparent in four
locations: India, Germany, the U.S., and Vietnam. In
response, we proposed solutions to our customers,
reduced costs, and made other efforts. In FY2022,
our location in Germany returned to profitability, andour location in the U.S. posted its first profits in its
third year of operation, driven by growing demand forenvironmentally friendly products.
Although problems still remain in India and Vietnam,
those locations are on track to turn to profitability.
In India in particular, we have spent a great deal oftime establishing and strengthening our businessfoundation since venturing into the country in earnest.
Thanks to aggressive sales activities in response toincreasing demand for renewable energy and in otherareas of power infrastructure, we have received orders
worth nearly 5 billion yen in FY2022. We will continue
to further expand our business in the Indian market
with our sights set on entering major projects withelectric power companies and electric railways.
We have also made progress in the EV business,
which we were able to return to profitability in thesecond half of FY2022. Although the semiconductor
shortage and other problems procuring parts,
inconsistent automobile manufacturing, and otherproblems persisted, they were resolved gradually, andin the process, our drive units were chosen for many
car models. Consequently, the operating rates of ourdomestic production lines increased. FY2023 will see
the start of mass production on second production
line in China. We will make full use of our production
capacity in Japan and China and also focus on
acquiring more new customers and new models.
Additionally, we will aim to develop our business ina well-balanced manner, looking at both returns on
investments and future business expansion.
While we are doing our utmost to achieve thegoals set out in Medium-Term Management Plan
2024, our path is in no small part affected by theexternal environment. However, the foundationand profitability of the Meiden Group are gaining
strength by the day. We are determined to achieve
the goals of the medium-term management plan byhoning that strength while confronting challenging
circumstances.

07

Our Value

Toward Medium- to Long-Term
Value Creation
These days, the world is changing faster than
anticipated. It seems difficult to accurately predict
the future 10 or 20 years from now. However, I am
confident that there will be many opportunities for the
Meiden Group to shine in the areas of environment andsociety-building.
Our role as a management team is to seize theseopportunities and maximize corporate value, andwe aim to become a company capable of pursuing
profits while consistently contributing to society. I
believe the Meiden Group has the ability to provide
even greater value to the world and achieve evengreater results.
We will further solidify the foundation of ourbusiness by striving to create value for the earth,society, and people, while taking each of the many
opportunities that appear before us. I feel strongly
that this is the focus of management. Specificinitiatives are described in detail in this report, andthey reflect our attitude of seeking to contribute tosociety while concurrently pursuing profits, two of thematerial issues we identified by working backwardfrom our vision of where we want to be in 2030.
Meiden Group’s Materiality P.17-18

One matter that many companies are dealing withthese days is analyzing their current situation andtaking steps to rectify P/B ratios below 1.0. I intend to
focus on two efforts to increase our P/B ratio: improving
our ROE and improving our P/E ratio. As for improving
our ROE, I view increasing our operating margin as
the first and most important step. We will achieve thisthrough the measures to cut costs in manufacturing
I mentioned previously as well as promoting digitaltransformation, realigning our business portfolio, andother initiatives. Especially regarding our businessportfolio, we have a wide range of businesses, and weneed to increase the value of each of them. In fact, weestablished a Business Reform Committee in FY2023 to
examine and discuss whether individual businesses are
consistent with our corporate philosophy and strategic
direction and whether they can reach the required profit
levels. The committee will also consider creating rules
to make business portfolio discussions a permanent
part of management.
As for improving our P/E ratio, I believe the key
is whether the market and our broad range ofstakeholders can rely on the Meiden Group to be
a company that can continue to grow in the future.
Looking ahead to the age of carbon neutrality, society
will face many challenges in power and energy, mobility,
and other domains. Additionally, the infrastructure that
supports our communities is aging. We must work to
rebuild it and build communities that are equipped to
thrive in the future. The Meiden Group possesses thetechnology, expertise, and human resources necessary
to resolve these issues, and we intend to use thesesolutions to enhance future growth opportunities. We
will straightforwardly communicate these scenarios for

Our Approach

Corporate Governance

Our Impact

enhancing the medium- to long-term corporate value ofthe Meiden Group, measures to realize them, and theprogress of the measures to shareholders, investors,
and other stakeholders.

Broadening the Overlap between the
Values and Vision of
the Company and Individuals
To realize the vision set out by the Meiden Group,
what we truly need are human resources. I believethat the cornerstone of success is the harmony
between the Company’s aspirations and those of its
employees. The management team is the voice of theCompany’s goal, which is to enhance corporate value.
Enhancing corporate value is not a matter of simply
increasing our stock priceor capital, but of providing
something of real value tosociety and being recognized
as a valuable entity. At thesame time, the aspirations
and passions of each andevery employee are also
very important. I understandthat this manifests itself
in different ways, fromstriving to provide goodcompensation and more
comfort and motivation atwork to supporting selfrealization and contributions
to society. I believe that
harmony between theaspirations of the Company
and those of its employees is
the key to creating true value.
I mentioned theCompany’s goal earlier. As
for specific efforts to bring
employees’ aspirations
into sharper focus, we arepromoting an initiative called“MY Vision, MY Challenge.”
This aim of this initiative is to ensure that each
employee is aware of both the vision of the Meiden
Group and their own vision based on their own
values, and then discovers and takes steps to tackle
their own challenges in the context of the Meiden
Group. I believe that bringing all these visions andchallenges together will create more momentum forour corporate activities and eventually lead us torealizing the Meiden Group’s vision. During my time
as a member of the Meiden Group, I have overcome
major obstacles that I cannot overcome on my own,with the help of like-minded members and people
outside the company who share our philosophy.
Beyond the technologies and bonds with customers
the Meiden Group has accumulated over its long
history, I believe there is a more affluent society that
we can create precisely because we are who we are.
I am firmly committed to creating a company where

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

everyone is capable of taking initiative and involving
others in the realization of these goals. The “sha” inMeidensha means “place where like-minded people
gather.” In that spirit, I want to make Meidensha acompany wherein we reexamine our own aspirations
to take on the challenge of creating a new society.
Whenever I talk with Group employees, I tell themthat I want them to envision a new society in their own
minds—completely separate from what the Meiden
Group has accomplished to date—while at the sametime finding overlap between the direction of theCompany and their own aspirations. I will continue tofoster a corporate culture that nurtures the aspirationsof diverse individuals while allowing everyone to be acatalyst for achieving our vision.
Human Resource Strategy P.31-32

To Our Stakeholders
Our former president has a natural dynamism andextensive connections formed through thoughtful
dialogue with customers over many years, and I
feel that he used these attributes as he promoted
the Meiden Group far and wide during his term,laying the groundwork for us to expand our range ofactivity. Although I do not consider myself to be as
articulate as he is, I am determined to illuminate thepath toward the Meiden Group’s vision by quantifying
and carefully explaining our targets, KPIs, andspecific measures toward that end as well as ourprogress along the way.
I would like to thank all of our stakeholders forsharing their opinions regarding the Meiden Group
without reserve, and I ask for your continued
guidance and encouragement.

08

Our Value

Introduction / Message

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

MESSAGE FROM THE OFFICER IN CHARGE OF FINANCE

Maximizing business value andenhancing corporate value by practicing
cost of capital-conscious management

Masayuki Iwao
Director & Senior Managing Executive Officer

Reflecting on FY2022
Our consolidated operating income for FY2022 wasonly 8.5 billion yen, lower than both the previous fiscal
year and the forecast at the beginning of the current
fiscal year, due to a significant decrease in profits in ourdomestic infrastructure-related business—our revenue
base—against a backdrop of soaring prices and longer
lead times for various materials, as well as a decline in thesemiconductor manufacturing equipment business in thesecond half. While I recognize that our weighted average
cost of capital (WACC) is in the low 5% range, our returnon invested capital (ROIC) fell 0.6 percentage points year
on year to 3.9%, lower than the cost of capital. On theother hand, this was also a year in which both orders
and sales reached record highs and significant progress
was made in improving the profitability of the Overseas
T&D Business.
I believe one reason for the sluggishness of our pricebook value ratio (PBR) is the market’s harsh evaluation of
our current profitability and future growth expectations,as mentioned earlier. In FY2023, we will continue ourefforts to recover and improve profitability by negotiating

09

higher prices and diversifying suppliers, while striving
to enhance our corporate value by promoting digitaltransformation and rising to the challenge of achievingcarbon neutrality to achieve sustainable growth.
ROE/ROIC/WACC
(%)

ROE

ROIC

WACC

10.0

7.5
6.8

5.0

5.3
3.9

2.5

0
2018

2019

2020

2021

2022

(FY)

Basic Policy on Financial Strategy

Strengthening Cash Flow Management

Our financial strategy comprises a basic policy ofmaintaining and strengthening financial soundness
while paying stable dividends, taking into
consideration the balance between cash generated
from business activities and how it is used. As a formof financial discipline, we will aim for a net D/E ratio of
0.25-0.30.
Additionally, Medium-Term Management Plan 2024
includes numerical targets for return on equity (ROE:
10% in FY2024) and ROIC (8%), and I believe that
achieving these targets is a major mission for me
as the officer in charge of finance. As one measure
toward that end, in April 2023, I raised the hurdle rate(the minimum rate of return) for internal investment
decisions.
Accordingly, by strengthening and promoting capitalefficiency-conscious management, we aim to achievesustainable enhancement of our corporate value
by consistently realizing an ROIC that exceeds our
WACC, and also to improve our ROE, thereby pushing
our PBR above 1.0x.

As previously mentioned, the basic policy of our
financial strategy is to use the cash we generate to
pay stable dividends while balancing investments
for growth and maintaining and strengthening ourfinancial soundness. Therefore, we consider it very
important to maintain and increase positive operating
cash flow. Given cash flows from operating activitiesof 13.7 billion yen in FY2022, up 2.3 billion yen year on
year, we feel that our ability to generate cash has beensteadily and gradually strengthening.
In order to achieve our forecasted 60–65 billion yen
in operating cash flows over the three-year period
from FY2022 to FY2024 within our Medium-Term
Management Plan 2024, it is a must that we growour net sales. To do this, we have made intensive
investments in our Overseas T&D Business and our
EV Business, positioning them as growth businesses.
This will create dramatic growth in these twobusinesses and result in a higher top line. In addition,
we will enhance capital efficiency through activities toimprove the cash conversion cycle (CCC).

ROIC

ROE

8.0%

10.0%

Payout ratio
Stable level of30%

Cash Allocation

Shareholder Returns

Medium-term Management Plan 2024 calls for us
to invest roughly 50 billion yen over the three-year
period from FY2022 to FY2024 using cash generated
from cumulative operating cash flow and asset
reduction, and to return profits to shareholders witha target payout ratio of 30%. This policy has notchanged. In FY2022, we used our operating cash
flow of 13.7 billion yen in addition to cash generated
from asset reduction to fund capital expenditures of
12.3 billion yen and dividends.
As a company, we are in the process of growing
and can aim to expand our top line aggressively by
investing in both tangible and intangible assets while
maintaining a certain level of leverage; therefore, I
believe the market’s low evaluation for the visibilityof our company’s growth potential is behind thesluggish P/B ratio. To solve this problem, we needto create a cycle of growth that gives investors hopeand confidence. I intend to create a virtuous cycle
in which we make high-quality, cost of capitalconscious investments and use the resulting cash toinvest in the next stage of growth, and to carefully
explain the story behind it.

In terms of shareholder returns, we aim to increase
shareholder value by enhancing corporate value throughsustainable growth in addition to directly returning profits
to shareholders through stable dividends, with a target
payout ratio of 30% of net income attributable to ownersof the parent company. In the future, we will consider
measures to further increase shareholder value while
also taking into account the balance between investment
in growth and shareholder returns.
Dividends(yen/share)

Interim80

Year-end(%)

Payout ratio

40
33.7

31.6

60
26.1

29.8

28.9
26.7

27.6

31.8

30

23.1

40

20.7

20

20

10

0

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)10

Introduction / Message

Our Value

Our Approach

A History of Value Creation

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Since its founding in 1897, Meidensha has single-mindedly pursued manufacturing excellence while contributing
to the sustainable advancement of society by creating a variety of technologies, products, and services,with a focus on the Japanese social infrastructure sector. Our commitment to manufacturing excellence,inquisitiveness, and spirit of challenge originate in the determination of our founder, Hosui Shigemune, to “build
a more affluent tomorrow through the power of electricity.”

Tracing Our History of Value Creation Born from Our Spirit of “For Society and For People”
Founding–1960

1970s–1990s

2000s–2010s2020–Present and future

Contributing to the Advancement ofElectricity and Social Infrastructure

Supporting Industry Progress andAdvancement

From Japan’s Meidensha to theWorld’s Meiden

Creating a Safe, Secure Society withEnvironmental and BCP Solutions

Desiring to “build a more affluent tomorrow through thepower of electricity,” our founder, Hosui Shigemune,
started a factory to manufacture and repair electricalmachinery in 1897 at a time when Japan depended on
imported products for much of its industrial machinery.
His efforts led him to devise his own induction motor
design method in 1905. The following year, he started
full-scale production of motors based on this method,giving rise to “the motor expert Meiden.”
Thereafter, Meidensha released a stream of electricmotors, generators, and transformers, supporting theadvancement and development of industrial machineryand Japan’s electrical infrastructure. The foundations of
the businesses that would become today’s Meidensha
were also laid during this time, with Meiden supplying
electrical equipment to Japan’s first sewage treatment
plant in 1922 and providing numerous transformers
for the Tokaido Shinkansen, the construction ofwhich began in 1959. In addition, for the 1964 Tokyo
Olympics, we provided electrical equipment for theJapan National Stadium and the NHK Broadcasting
Center, contributing to the Olympic fever that swept
across Japan at that time.

In line with changing societal trends, in the 1970s we shiftedfrom a management strategy focused on quantity to one
focused on quality, with the aim of cementing our status as amanufacturer of heavy electrical equipment.
In 1975, Meidensha was the first in the world to develop
gapless metal oxide surge arresters for electric powersystems incorporating zinc oxide. Through the supply of sucharresters to electric power companies both in Japan andaround the world, we contributed greatly to increased power
supply reliability. Nearly 40 years later, in 2014, this invention
was added to the prestigious List of IEEE Milestones.
We continued to develop and supply a steady stream ofproducts supporting the development of industry as wellas convenient, prosperous lifestyles for people, including
dynamometers that assisted the rapid advancement ofJapan’s auto industry; and remote monitoring systems forrailroads, water treatment facilities, and other infrastructure.
In 1994, we began mass production and sale of vacuum
capacitors (VCs), a Meidensha specialty product leveraging
the expertise we accumulated through our developmentof vacuum circuit breakers. Backed by our proprietary
manufacturing technologies and advanced quality control, ourVCs have continued to support the rapid development of thesemiconductor industry
on a global scale up to
the present time.
After the collapseof Japan’s bubble
economy, we faceda difficult businessenvironment, but thetechnological legacy of
our forebears as well as
our outstanding humanresources served as
foundations for new
development, and wecelebrated our 100th
anniversary in 1997.

Amid a business environment that remained harshdomestically, we began focusing our efforts on thedevelopment of business overseas in order to establish
a firm foundation for growth as a company as well as for
future business expansion.
We established MEIDEN ASIA PTE. LTD. as our regional
headquarters in Southeast Asia, a location in which we had
begun establishing sites starting in the 1960s, to accelerate
the enhancement of our operations in the area in terms ofaspects such as risk management and the localization ofbusiness management. We also launched corporations forthe production of electric power and industrial products in
China, a country that was experiencing dramatic economic
growth, and established new companies in the UnitedStates as well with the aim of expanding business in the
North American region. In 2014, we entered the Indian
market through capital participation in a local company,
showing our determination to expand our areas of activity.
Our business activities in countries around the world
cover a wide variety of domains, including not just theindustrial and private sectors but also business tied toelectric power, railroads, water treatment facilities, and otherforms of infrastructure. One of the fruits of our unflagging
business efforts, rooted in each country, was our receptionof the order for our largest-ever railroad electrical equipment
project in Singapore in
FY2017. Born in Japan,
Meidensha was now
expanding the sphere of its
activities on a global scalewith our founder’s spiritof challenge in our hearts,
delivering to people aroundthe world a more affluent
tomorrow, peace of mind,
and satisfaction. During
this time, we made the leap
to become “the world’s
Meiden.”Around the world, the environmental protection movement
is gathering momentum and decarbonization initiatives
are being reinforced. Possessing strengths in such areas
as environmentally friendly products utilizing vacuum
technology and EV drive units leveraging the fundamental
technologies we have accumulated, Meidensha is in an
extremely advantageous position whereby our contributions
to the resolution of issues faced by society and ourcustomers tie directly into drivers of our own growth.
Further, against the backdrop of climate change, natural
disasters are increasing. At the same time, working-age
populations are declining. Given these and other challenges,
in addition to supplying products that contribute to customers’
business continuity planning (BCP) and society’s disasterprevention and mitigation measures, business domains in which
our resources can contribute to the resolution of issues facedby society as a whole are key for Meidensha. These include
maintenance services that ensure safe and reliable facility
usage; and facility management, operation, and maintenance.
Even with the rapid changes taking place in the external
environment such as global pandemics and the emergenceof geopolitical risks, the ideal society and vision the Meiden
Group is aiming for remain unchanged. The reason is thatthey are rooted in the values of our employees and in our
founding spirit of “for society and for people.”
Going forward, we will continue to be steadfast in taking
on the challenge of creating personal happiness and asustainable global environment as a sustainability partner.

Our first production 1-HP
three-phase induction
motor. The start of “themotor expert Meiden.”

4

We developed vacuum
capacitors leveraging theexpertise we accumulated
through more than 40
years of vacuum circuit
breaker production.
We began supplying
VCs to semiconductor
manufacturing equipment
and other power supply
manufacturers.

04

We developed an
overhead catenary
system inspection system
for railway businesses
using Meidensha’s
proprietary image analysis
technologies. This system
was able to inspect andverify the wear stateof overhead catenary
systems in real time.

20

We supplied one of
the largest anechoic
chambers in Japan to
the Japan Automobile
Research Institute for
automobile noise testing.
This contributed greatly
to the development ofJapan’s automotive
industry.

20

A mobile 30-MVA Scottconnection transformer,
one of the largest inJapan. Supported thelaunch of the Tokaido
Shinkansen.

6

199

4

197

1

196

190

Examples of Value Creation Born from Our Spirit of “For Society and For People”

23

We began marketing
the MEIDEN e-Axle
integrated motor,
inverter, and gear EV
drive unit. Lightweight,
compact, and low
profile, it is contributing
to the creation of
attractive vehicles andthe decarbonization ofsociety.

Additional information about our corporate history may be found on our website.
https://www.meidensha.com/corporate/corp_05/

1112Introduction / Message

Our Value

The Meiden Group’s Value Creation Is
Supported by Its Human Resources

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

The most important element in the realization of the Meiden Group’s vision is the diverse human resources
who implement it. In this section, we introduce how the people who work for the Meiden Group engage intheir jobs in accordance with four shared key values.

Our Human Resources Are Our Most Important Capital and Foundation

Sustainability

Through maintenanceand management,
I aim to create windenergy that is
loved by society
and thecommunity

Diversity

I provide support sothat everyone canfollow the career
path that suits themSaya Suzuki
Shota Sasaki
Noto Sales Office
M WINDS

DEI Policy Promotion Office,Human Resources Development
Division, Human Resources
Management Group, Meidensha

M WINDS is a company involved in the managementof wind farms and the sale of electricity.
I am in charge of maintaining and managing
Wajima Community Wind Farm in Wajima City,
Ishikawa Prefecture. I have been involved in thefarm since its construction. Its windmills are like mycoworkers, and it makes me happy when they are
working well. The work involved in maintenanceand management is very diverse and includes
patrol of the facility and inspections to check every
nook and cranny of the windmills, dealing withlightning strikes and other unexpected events,
adjusting work schedules, and aggregating andanalyzing various data.
Wind power is attracting a lot of attention as asustainable energy source, but because wind farm
maintenance requires special expertise, there areareas that we have been forced to contract out toother companies. I am striving to bring this work inhouse, by leveraging the knowledge I have gained
about wind power over the past 17 years.
Going forward, I will further enhance our industryleading expertise and technical capabilities in thefield of wind power, and contribute to improving theoperating rate of our own facilities.

I have been involved in human resources andrecruiting since I joined the company, and inthat work, there are two things I have held
important: My desire to contribute to the creationof a work environment in which people canexperience job satisfaction, and my desire tocreate solid teams that leverage the diversityof all individual members. I also engage in the
promotion of diversity, equity, and inclusion(DEI), and strive to foster a corporate culture andcreate an organization in which all workers candemonstrate their individual strengths and play
active role in an environment where no one isheld back.
In FY2022, we launched an internal Career
Consultation Service. Using my qualifications
as a career consultant, I work as one of theservice’s consultants, and every day I enjoy
this job, as it matches my own personal values.
I believe that leveraging each individual’s
strengths and helping them to become theperson they want to be in turn will help the
Meiden Group to achieve significant growth.
I want to help as many people as possible tofollow the career path that suits them.

In the middle of a periodic facility inspection. Test operations anddata verification are also performed.

Employees can apply to receive career consultation at any time.

Integrity andsense of responsibility

Future orientation

I want to create awave of empathy
by showing how weface society withsincerity

Researching coretechnologies so that
the Meiden Groupcan continue tocontribute to society

Daisuke Kawaguchi

Takashi Abe

Branding, Marketing &Advertisement Section,
Corporate Communications
Promotion Division,
Meidensha

R&D Strategy Planning Section,
Advanced Technology ResearchLaboratories, Research &Development Group,
Meidensha

Does a B2B enterprise really need to advertise?
This is a question I hear a lot. I personally see
advertising not just as a tool to promote sales,
but also as a space for expressing and conveying
the Meiden Group’s corporate attitude, andas something that serves to strengthen bonds
between colleagues and create unity of thought.
Since 2017, when we celebrated our 120th
anniversary, we have used the catchphrase“Electricity: Taking action.” At the same time,
we have also created advertising content thatshows the results of the electrical power createdthanks to each individual employee’s work, andhow the technologies that support this protect
and maintain the irreplaceable everyday life thatpeople enjoy. When people see this advertisingcontent, it makes them think for a moment about
the social infrastructure that supports theirlives. It also serves as a chance for them to takenotice, if even a little, of the Meiden Group’s
efforts, creating a wave of empathy that slowly
spreads outward. I will continue to focus on andcreate advertisements that convey these ideas.

The pace of change in all kinds of environments
is accelerating. We are living in an age of
VUCA (volatility, uncertainty, complexity, andambiguity), and the future is becoming evenmore difficult to predict. In order for the Meiden
Group to continue to contribute to society like ithas, I believe it is necessary that we continue toacquire new technologies for resolving the futurechallenges of society, and that we continue todevelop such technologies into core businesses.
From the perspectives of Meidensha’s focus
areas and the resolution of social challenges, theR&D Strategy Planning Section seeks to create
concrete scenarios for the world the Meiden
Group is seeking to realize. At the same time,
while taking into account what it is that makes
Meidensha unique, we seek technologies that
could become new core businesses in the future,and engage in the research and development of
the seeds that will lead to them.
Through these activities, we are striving to
make the Meiden Group’s vision a reality andcontribute to a sustainable society.

Our pixel art “Electricity: Taking action.” advertisement won theYouTube Works Awards Japan 2023 (sponsored by Google)
Grand Prix.

The Research & Development Group holds Future Theme
Community meetings as a space for dialogue to vitalize
innovation activities.

Our pixel art “Electricity: Taking action.” advertisement canbe seen on our website. (only in Japanese)
https://www.meidensha.co.jp/knowledge/takingaction/#web

13

14

Introduction / Message

Our Value

Meiden Group Value Creation Process
Societal Changes

Input

2030

Climate Change

Ideal State ofBeing/Vision

Diversification of sense of values

FY2022 results/
as of March 31, 2023

Progress of digitalization
Shrinking domestic market

Our Approach

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

The Meiden Group will reform its value creation processes to realize its
ideal society and 2030 ideal state of being/vision, with the aim of achieving asustainable society and sustainable growth of the Meiden Group.

Work to build a new society through integrity to
the earth, society, and people, and through thepower of co-creation

OutcomeSustainability partnerships

Financial difficulties in local

Intellectual capital

Corporate Governance

Ideal Society

government

Research and development
expenditure10.2 billion yen
Patents, etc., held(in Japan and overseas)

2,413

Base Business Activities

Materiality

The Meiden Group’s Strengths

Materiality Relating to Value
Creation(patents, utility models, and designs)

Basic Policy

Manufacturing CapitalDeepknowledge ofelectricity

Manufacturing sites

8 sites
Overseas 11 sites
Japan

Manufacturing
capabilities

12.3 billion yen

Strongrelationshipof trust withcustomers

Dealing withcustomers
sincerely

Natural Capital
Energy usage

20,663 kL
Overseas 5,064 kL

Realization of a safe, secure, andconvenient society

1

Expansion of growthbusinesses

2

Enhancement ofcompetitiveness of earningsbased businesses

3

Improvement of profitabilityof overseas businesses

Japan

Basic Policy

Use of water resourcesJapan

1,643 thousand m

3

Value Creation Mechanisms

Human Capital
Employees

9,816

Number of participants in major/
key training programs
Total ofSocial Capital
Customers

1,960 companies
Countries of sale

44 countries
Suppliers

Approx.

Understanding
Provision ofneeds andequipment
issuesandsystems
Co-creation
DesignsolutionsDX

31,5451,700 companies

Total assets

Materiality Relating to Our
Business BaseCreating corporate culture thatgives lively workplace and growthfor diverse human resources

Carbon Neutrality
Realizing environmentally friendly
lifestyles and industries

Basic Policy

Foundation to support business activities
Corporate governanceRisk management

High-quality manufacturing andvalue provision

Illuminating a more affluent tomorrow
For customer peace of mind and satisfaction

Sincere and responsible business
operation

Sustainability | Diversity | Integrity and sense of
responsibility | Future orientation

Net sales

300 billion yen

3Creation ofvalue to support
a new society

A resilient society where
humans live in harmony withnature ecarbonization and energyD
conservation for society andcustomers
S afe and secure water usage

Particularly relevant
stakeholders
The earth

OperatingincomeOperatingcash flow*

18 billion yen
60-65
billion yen* FY2022-2024

Consolidated
dividend
payout ratio

Stable level of30%

Products and Services

Power
Infrastructure

Public,Industrial &Commercial
SectorSociety

Customers

A society that feels safe,
prosperous, and exciting afe and secure infrastructureSD evelopment of local economies
C onvenient and comfortable
lifestyles
C reation of a new society

Particularly relevant
stakeholders
Society

Customers

A society where different
communities and people cancoexist ealization of diverse lifestyles
RR ealization of a sense ofachievement and individuality

Particularly relevant
stakeholders
Society

Employees

Enhancement of Capital

Promotion of ambidexterity
management
Shifting earnings obtained in existing
businesses to investment in new fields

Corporate
Philosophy

FY2024 Targets

Well-being
Building a society based on personalhappiness

Smart
Industry

Green
Mobility

2

Promotion of sustainability
management

After-sales service

Important Values
Financial Capital

Innovation through co-creation

Sustainable
Infrastructure

Renewable
Energy1

Realization of highquality growth

Contribution to carbon neutrality

Capital Investment

OutputMedium-termManagement Plan 2024

Mobility &Electrical
Components

Field Service
Engineering

 trong financial structureSRelationships of trust withstakeholders
Increased level of personnel

Particularly relevant
stakeholders

Three-pronged structure supporting
innovation

Group strategy
P.65-74

Shareholders

Suppliers

Employees

307.4 billion yen
RatingA-

Rating issued by Japan Credit
Rating Agency, Ltd.

15

Sustainable growth through circular value creation (reinvestment in capital)

16

Introduction / Message

Our Value

Meiden Group’s Materiality
The six identified materiality are divided into the two groups of “materiality relating to value
creation,” to embrace the challenge of creating a new society, and “materiality relating toour business base,” to support business operation.

Our Approach

Related SDGs

Related SDGs

17

Our Impact

Our Strategy

Management of Major
Opportunities andRisks for the MeidenGroup

Evaluation ofImportance

Identification andDetermination ofMateriality

Reasons for Identification as a Materiality

Reasons for Identification as a Materiality

The Meiden Group operates many decarbonization
businesses, but there is also an environmental impact frommanufacturing. It is essential to launch a response to thesignificant impact on operations.

Human resources are the source of the Meiden
Group’s strength.
Drawing out and combining the abilities of eachindividual is essential for value creation.

Climate change is accelerating, and the movement to reach theParis agreement target (1.5°C) is gaining momentum.
Outlook

Values will diversify and work-styles will change. There is ademand for a corporate atmosphere that allows individuals todisplay their abilities and work with enthusiasm.

High-quality Manufacturing and Value Provision

Reasons for Identification as a Materiality

Reasons for Identification as a Materiality

The Meiden Group operates many relevant businesses.
On another front, it is essential to respond as business
continuity risks may arise.

The Meiden Group’s strength of insistence on quality isessential not only to deliver products and systems, butalso provide subsequent services.

Outlook

Digitalization is expected to proceed, leading to increased
semiconductor-related demand and increased demand for
reduced manpower and automation in the industrial sector.

Outlook

The Meiden Group’s business fields relate to infrastructure
and industrial underpinnings, and it is essential that we deliver
high-quality products and systems without defects.

Sincere and Responsible Business Operation

Reasons for Identification as a Materiality

Reasons for Identification as a Materiality

It is extremely important to embrace the challenge ofdeveloping next-generation technology, and create andfurnish social value along with partners that share thesame conviction.

It is important to respond to the changing requirements ofsociety and promote management that we can be proud of,with the core of the Meiden Group’s strengths of sincerity
and responsibility.

Outlook

These issues cannot be solved by any individual organization, so
it is necessary to enter partnerships to embrace the challenge ofsolving them.

Related SDGs

As society changes, the value of infrastructure and equipmentthat “will not shut down” under any circumstances will remain
constant.

Innovation Through Co-creation

Existing social systems have reached the end of their usefulness,and global-scale social issues have arisen, including climatechange issues.

Related SDGs

As a precursor to this, it is essential for the workplaceenvironment to allow employees to be physically andpsychologically healthy.

Realization of a Secure, Safe andConvenient Society

Review of the state of local infrastructure will proceed due to thedeclining birthrate and aging population, difficulties with local
government finances, and aging facilities in Japan.

Establishment ofTargets and KPIs

Materiality Relating to Our Business BaseCreating corporate culture that gives lively workplaceand growth for diverse human resources

Markets relating to decarbonization are expanding, and it isessential to respond to legal restrictions relating to carbon taxes,
etc., and prepare for increasing large-scale disasters.

MEIDENSHA REPORT 2023

Materiality Identification Process

Contribution to Carbon Neutrality

Outlook

Corporate Information

For more information on how we identify material issues, please visit our website.
https://meidensha.disclosure.site/en/themes/145

Materiality Relating to Value Creation

Related SDGs

Corporate GovernanceOutlook

We have an obligation to society to always conduct
corporate management with sincerity, as we receive capitalfrom society, provide value to society in conjunction with
our stakeholders.

Related SDGs

18

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Materiality and Medium-termManagement Plan 2024
Materiality

Major opportunities and risks

 xpansion of markets for businesses thatE
contribute to the environment

Contribution tocarbon neutrality

Increased costs due to carbon taxes, etc.

Realization ofhigh-quality
growthCorporate Information

MEIDENSHA REPORT 2023

Result surpassed FY2024 target

Major opportunities
Major risks

Good progress toward FY2024 target*
Progress toward FY2024 target needs more effort*Means that score on progress since March 31, 2021, was at least 50%

Major KPIs*1

Medium-term Management Plan 2024

Basic Policy 1

Our Strategy

1 E xpansion of growth businesses xpansion of EV-related, renewable energy business,Eand environmentally-considerate products, and highprofitability

Risks from frequent storms and floods
 ecline in competitiveness due to lateD
response

Assessment

Items (including internal indicators)

FY2024 target

Progress in FY2022

EV business net sales

47.0 billion yen

38.2 billion yen

GHG reduction contribution by Environment Contributing
Businesses *2

10.00 million tons

13.54 million tons

Scope 3 reduction rate (compared to FY2019)6% reduction

10% reduction

Renewable energy business net sales/Proportion of green
products/Number of super green products——

Scope 1 & 2 reduction rate (compared to FY2019)6% reduction

7% reduction

Maintenance business net sales

41.6 billion yen

39.7 billion yen

Overseas net sales

73.0 billion yen

74.2 billion yen

Motor Drive business net sales
Semiconductor-related businesses net sales——

New businesses net sales

5.0 billion yen

400 million yen

Number of innovation themes
Number of innovation personnel——

Improvement rate of employee engagement metrics(compared to FY2021)

10% improvement

1.4% worse

Female officer class: number of insideat least 1

0

Number of non-Japanese presidents of local subsidiaries

at least 3

1

Total education and training expenses/Number of industrial
accidents——

Number of defects and cost of dealing with defects(compared to FY2020)

reduced by 50%

reduced by 51%

Manufacturing process metrics (product production time,
production time per unit, units produced per person, production/
manufacturing lead time)

—

—

—

Stakeholder engagement improvement rate
Human rights training attendance rate
Information security training attendance rate
Compliance training attendance rate

—

—

—

—

Basic Policy 2

Promotion ofsustainability
management
 rowing need for replacement andGmaintenance of infrastructure

1 E xpansion of growth businesses xpansion of motor drive and semiconductor-relatedEbusinesses

Rebuilding local infrastructure

Realization of asecure, safe, andconvenientsociety rowing need for semiconductors due toGdigitalization
Expansion of overseas markets
 reation of added value through digitalC
transformation(DX) rowing need for labor reduction andGautomation

Basic Policy 1

Realization ofhigh-quality
growthCreating corporate
culture that gives
lively workplaceand growth fordiverse humanresources

High-quality
manufacturing andvalue creation

Sincere andresponsible
business
operation

 rowing new needs due to sustainability
Gand ESG trends
Advancement of new technologies
 ecline in competitiveness due to lateD
response utflow of personnel or insufficientO
personnel due to low engagement
 orse employee health due to factors
W
including occurrence of industrial accidents
and pandemics

 reating safe and secure infrastructure andCindustrial underpinnings
 oss of customer trust or orders by reason
Lof lower qualityInfringement of human rights by the Meiden
Group or suppliers
Information security risks
Insufficient compliance measures

earnings-based businesses

Expansion of the maintenance businessPromotion of public private partnerships andprovision of design solutions

3 Improvement of profitability of overseas
 ebuilding and improving profitability of overseas
Rbusinesses

Basic Policy 3

Promotion of
Ambidexterity
ManagementImprovement of productivity through highengagement of employees eneration of innovation by leveraging
G
diversity

2 Enhancement of competitiveness ofbusinesses ecline in competitiveness due to lateD
response

Innovation
through cocreation

Promotion of decarbonization within the Company

Basic Policy 2

Promotion of
Ambidexterity
Management

Basic Policy 2

Promotion ofsustainability
management

Basic Policy 2

Promotion ofsustainability
management

 reation of new business themes and promotion ofC
commercialization through co-creation
 evelopment of and furnishing society with nextD
generation technology

Implementation of measures to improve engagement
E xpansion of diversity and inclusion measures xpansion and fulfillment of professional development
E
programs
Enhancement of occupational health and safety——

Promotion of health management

 stablishment of the Meiden Monozukuri (Manufacturing)EStandards to improve QCDSE nhancement of quality assurance (QR map,E
reconstruction of the Meiden Customer Center, etc.)—

Enhancement of stakeholder engagementIntroduction of respect for human rights and humanrights due diligenceEnhancement of information security and internal trainingEnhancement of complianceEnhancement of corporate governance*1 K
 PIs include some items that are still not set or are not disclosed. We will continue to consider and scrutinize the selection of measures and specific KPI figures
going forward.
*2 We replaced the “environmental contribution” with “GHG reduction contribution” starting with FY2022.

19

20

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Social Value Created through Business
Value Provision

Realizing green, safe, and stableelectricity provision
Power Infrastructures
Business Group

Percentage of net sales*

Products and Services

Main Customers

FY2022 results

Power T&D

 ale of power T&D equipment (transformers,
Sswitchgears, surge arresters, and vacuum
interrupters, etc.)

etc.

Power & Energy

The Power Infrastructures Business Group manufactures andsells power generation systems to generate the electricity that
supports industry and lifestyles, substation equipment for
power transmission and distribution, and products and systems
for generation of renewable energy, which is expected toincrease going forward, and efficient use of electricity.

 eneration, transmission, and distribution systems
GPower monitoring and control systems
Hydroelectric power generation equipment
Photovoltaic PCSs
Wind power O&M

21.7%

Net salesOverseas electric power companies

60.4 billion yen
Operating income

 lectric power companies
EPower generation companies
Local public enterprise(0.5) billion yen
etc.

Social Infrastructure Systems

Contributing to building sustainableinfrastructure
Public, Industrial & Commercial
Sector Business Group eneration, transmission, and distribution systems
GSupervisory control system
UPSGovernment offices Broadcasters Buildings
Facilities Hospitals Private factories
etc.
Heavy industry manufacturer

Railways ower supply systems
PSupervisory control system
Overhead contact line inspection system

The Public, Industrial & Commercial Sector Business Group
manufactures and sells various electrical equipment and related
systems which support safe and efficient use of electricity inorder to realize infrastructure that support people’s affluent
lifestyles, facilities and competitive factories, etc.

 R companies Public railways
JOverseas urban high-speed railPrivate railways

Net sales

90.3 billion yen

etc.

Operating income

Water Infrastructure onitoring and control systems for facilities forM
drinking water and sewage treatment plants

 ocal governments, including the Bureau ofL
Sewerage Tokyo Metropolitan Government

 ower generation, transmission, and distributionPsystemsOverseas private business operators

32.1%

2.3 billion yen

Operation and Maintenanceetc.

Ceramic Flatsheet Membranes

Motor Drive Solutions

Contributing to the realizationof cutting-edge technology andtechnological innovation for mobility
Mobility & Electrical Components
Business Group

The Mobility & Electrical Components Business Group
manufactures and sells precision component products andtesting equipment to support cutting-edge manufacturing
and R&D, electric vehicle drive units to support the rapidly
progressing electrification of automobiles, and motors andinverters to contribute to various industries through highefficiency and control technology

21

The Field Service Engineering Business Group provides
solutions such as maintenance services for customers to safely
use equipment delivered by Meidensha, and other equipment,
for a long time, equipment life extension, and energy
conservation.

Elevator manufacturers
Machine tool manufacturers
Forklift manufacturers
Warehouse companies
Factories of various manufacturers

Net sales
etc.

EVs

E V/PHEV motors and inverters

Realizing a secure and safe society
through maintenance services
Field Service Engineering
Business Group levator traction machines
EMotors for injection molding machineryElectric forklift motors and inverters
Various general industry motors and invertersetc.
Automatic guided vehicles

 utomobile manufacturers
AAutomotive parts manufacturers

Operating income

Electronics products

Vacuum capacitors Industrial PCs
Pulse power supplies

 emiconductor manufacturing equipment
S
manufacturers

1.6 billion yen

Mobility T&S (Testing and solution)

 utomobile production testing systems (engine
Abenches, drivetrains, EV benches, dynamometers) utomobile manufacturers
AAutomotive parts manufacturers
Automotive research institutions.

G overnment offices

P reventative maintenanceC orrective maintenance ater infrastructure-related organizations (local
W
governments, etc.)

O peration and management

R ailway operators

B reakdown maintenanceO verall diagnosis

 arious industry-related organizations (iron andVsteel, automotive, electrical equipment,machinery, etc.)

L ife-extending treatment

Facilities, buildings, hospitals

 arbon neutrality (“Support for High efficiency
C
Installations for Facilities with Targets” (SHIFT))

27.6%

etc.

M aintenance consultingR enewal plans

78.1 billion yen

etc.

Net sales

39.7 billion yen
14.0%

Operating income

5.2 billion yen

G eneral building management
C ustomer centeretc.

* Percentages of net sales are calculated based on net sales to external customers anddo not include intersegment transactions.
The total does not add up to 100% due to rounding.

Other
Real Estate

3.5%
1.2%

22

Introduction / Message

Our Value

Climate Change Responses

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

| Analysis of Climate Change Scenarios
Of the two selected scenarios, the following is the outlook under the Decarbonization Scenario.

Decarbonization scenario
Broad growth in renewable energy and the EV marketplace, as well as the continued spread of hydrogen power.

Disclosure based on TCFD recommendations| Attitude
For many years, the Meiden Group has been aware of the
major problem of climate change, and has worked to solve
this problem through business. With regard to TCFD*, weendorsed the TCFD recommendations in June 2019, we
began considering risks and opportunities according to
the TCFD framework in 2020, and we are promoting theincorporation of this in our strategies.
As society places more emphasis on the issue ofclimate change, in Medium-term Management Plan 2024,
which was released in FY2021, we pledged to “promotesustainability management,” and we aim to accelerate
promotion of management and development of businesses
to realize a carbon-free society.

Introduce carbon tax (USD$140/
CO 2 ton)
Governments /Municipalities

 trengthen ZEV regulations,S
accelerate renewable energy
subsidies, substantially strengthenchemical management

 enewable energy to occupy 61%Rof power production in the world(28% in 2020)

Power

2030
Decarbonization
scenario

generationindustry

Promote the use of hydrogen(RCP1.9)*T CFD: Task Force on Climate-related Financial Disclosure established by the
Financial Stability Board (FSB) .

Banks /
Investment
firms

 alue contributions toVsustainability, increased
investment in such businesses

industry

 oward 61% ZEV worldwide (4% inT
2020)

Naturaldisasters

 ainfall ≤1.1current levelsR≤2 flood occurrence rate≤1.3 times number of extreme
heat days

Transportation

MEIDEN ivest from businesses with large
Dcarbon footprint

Governance/risk management| Governance
The Sustainability Management Strategy Committee andthe Sustainability Management Promotion Committee
handle all general matters involving sustainability andthese two committees explore potential strategies toenact for decarbonization. The manager in chargeof Sustainability and the Sustainability Management
Promotion Division both report on the content of thesemeetings twice annually to the Board of Directors
and the Executive Officers’ Meeting. Alongside these
efforts and as a way of managing the promotion ofenvironmental activities within the Group, the Meiden
Group Environmental Committee, which is chaired by a
production manager, meets quarterly to uncover issues

within the Company, set environmental goals, devise
action plans, and discuss emergency responses in orderto promote and monitor the deployment of concrete
policies for environmental management.
| Risk Management
To manage sustainability-related risks, the Sustainability
Management Promotion Division, which is charged withpromoting sustainability management, operates centrallywith relevant departments to extract risks. The details of
those risks are incorporated into all the risks managed
by the Governance Headquarters, which simultaneously
manages a variety of risks, including those related toclimate change.

Strategy| Analysis of Climate Change Scenarios
The Sustainability Management Promotion Division
analyzes climate change scenarios in conjunction with
relevant departments. The scenario analysis examination
process is divided into four parts, with analysis and
STEP 1

STEP 2

STEP 3

STEP 4

Identification and Materializationof Types of Scenario

Evaluation of importance ofclimate change-related risks

Business impact evaluation

Consideration of response
measures

STEP 1

Identification and Materialization of Types of Scenario

As recommended by TCFD, we identified scenarios atmultiple levels of warming, including a scenario of lessthan 2°C, and conducted analysis accordingly. Basedon the two scenarios of decarbonization (RCP1.9) andglobal warming (RCP4.5 and RCP8.5), we have arranged
outlooks and specific scenarios for 2030 to accommodate
each scenario using management frameworks such as fiveforces analysis, based on international published data fromthe IEA, IPCC, etc., as well as numerical data published by
Japanese government institutions, etc.

23

evaluations conducted annually. At the same time,
major factors that could impact business are identified,and identified risks, opportunities, and evaluations arereflected in our business strategy.

Temperature
range
Decarbonization
scenario

warming

ProviderNZE2050

IEA

RCP1.9

IPCC

STEPS

IEA

 ease working with companies
C
that cannot meet their standards

2.5 to 4.0°C

RCP4.5IPCC

RCP8.5IPCC* Uses data from the 2.0°C scenario
because data is not available for the
1.5°C scenario

For more information on the Global Warming Scenario, see “Disclosure based on
TCFD recommendations” on our website.
https://meidensha.disclosure.site/en/themes/139

STEP 2

Evaluation of Importance of Climate Change-related Risks

We have set out factors for climate change risks andopportunities according to the outlook of each scenario,

giving reference to the risks and opportunities in the TCFD
recommendations.
Opportunities and Risks for
MeidenFactors for Risks and Opportunities

Societal Scenario

 pportunities to reduce GHG emissions
OIncreased government subsidies

Decarbonization of the transportindustry

Expanded
EV business

EV business/Battery storagerelatedIncreased government subsidies
Accelerated technological developments
Transition to a decentralized society

Increased ratio of renewableenergyExpanded renewable energy
business

Wind/Hydroelectric/Photovoltaic
storage/Solar generation/Battery
storage-related /Hydrogen-relatedIncreased regulations to reduce GHG
emissionsElectric companies shift toward
decarbonization

Restrictions on chemical
substances such as SF6

Expanded Power T&D Business

Zero SF6 products/Environmentallyfriendly products

Changing stakeholder mindset

Increased customer demand forbeing carbon-free

Increased demand forenvironmentally friendly products
and services

Environmentally friendly products
and services (including green
products)

 pportunities to reduce GHG emissions
OTightening of legal restrictions

Introduction of a carbon tax

Increased manufacturing costs
Increased procurement costs

All companies

Opportunities to reduce GHG emissions

Rising prices from growing
demand for EV and renewableenergy components

Increased procurement andmanufacturing costs

EV-related business/Renewableenergy-related businessIncreased frequency of extreme weather
eventsMore water-related disasters

Suspension of operation/Collapse of
supply chain
Production sites
Increased costs to respond to waterrelated disasters

 pportunities to reduce GHG emissions
OChanging stakeholder mindset

Increased pressure on
environmentally burdensome
businesses

Reduced sales in relevantbusinesses

Diesel/Gas engine generators
Ceramic membrane businessRising average temperatures

Worsening working environments

Increased personnel expenses at
sites

Manufacturing/Maintenance/
Construction service businessunitsIncreased proportion of renewableenergyIncreased cost of industrial
electricity

Increased power procurement costs

All companies

Less than 1.5°C

Globalscenario

Relevant
scenario

Clients

 alue contributions toVsustainability, demand increase tosupport RE100

Relevant Businesses

24Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Climate Change Responses
Business Impact Evaluation

STEP 3

two axes of “impact on operating income” and “likelihoodof occurrence in an event” in FY2030, and conducted
detailed analysis of these matters. We assessed precountermeasure outcomes based on the rate of market
growth in each scenario for each large-impact item. These
were quantitatively calculated using partial assumptions,and items with unachievable results were organized
qualitatively.

We are evaluating business impact through discussions with
relevant parties within the Company, such as the Corporate
Policy Planning Group, the Accounting & Financing Group,
the Corporate Governance Management Group, andbusiness units, based on the scenarios and outlooks set out
in Step 1 and the opportunities and risks set out in Step 2.
In the course of this, we screened matters that have aparticularly large impact on businesses by focusing on the* The following values were calculated with a focus on the market growth rate and do not represent a designated target value for the Company.

Evaluation axes for selection of risks and opportunities (2030)
Impact on operating income (estimate)

Likelihood of occurrence in an event in 2030

Very large: ±10 billion yen or more Large: ±1 billion yen or more
Medium: ±0.1 – 1 billion yen
Small: ±less than 0.1 billion yen

Large: High probability of occurrence
Medium: Occurrence is possible, but cannot be predicted with confidence
Small: Only occur in the scenarios

Opportunities and risks for
our Company

Decarbonization of thetransport industry

Expanded EV business

Increased ratio of renewableenergyExpanded renewable energy
business

Restrictions on chemical
substances such as SF6
Increased customer demandfor being carbon-free

Relevant Businesses

Very large

Wind/Hydroelectric/
Photovoltaic storage/Solar
generation/Battery storagerelated /Hydrogen-related

Recent sales × growth rate ofdomestic renewable energy

MediumExpanded Power T&D business

Zero SF6 products/
Environmentally friendly
products

Recent sales of relevant products
× VCB market growth rate

MediumSmall

Increased demand forenvironmentally friendly products
and services

Environmentally friendly
products and services(including green products)* Cannot calculate at thistime because green productstandards are being revised——

Increased procurement andmanufacturing costs

All companies

2030 Scope 1, 2 emissions ×carbon tax
2030 Scope 3 Category 1
emissions × carbon tax

7.5 billion

N/A

Rising prices from growing
demand for EV and renewableenergy components

Increased procurement andmanufacturing costs

EV business/Renewable energy
business

Cost of transitioning relevantbusiness × rate of cost increases

MediumSmall

More water-related disasters

Suspension of operation/
Collapse of supply chain
Increased costs to respond towater-related disasters

Production sites

Assumed cost of each incident
in 2030 using Ministry tools ×
occurrence rate in each scenario,
etc.

Very large

Very large

Increased pressure on
environmentally burdensome
businesses

Reduced sales in relevantbusinesses

Diesel/Gas engine generators/
Ceramic membrane business

2030 business sales × state ofeach scenario

MediumN/A

Worsening working
environments

Increased personnel expenses at
sites

Manufacturing/Maintenance/
Construction service business
units

Number of site personnel in 2030
× medical and health-care costs

Small

MediumIncreased cost of industrial
electricity

Increased power procurementcosts

All companies

Power usage in 2030 × rising costof industrial power

MediumSmall

Opportunities

Expanded EV business following decarbonization of the transportation sector
Expanded renewable energy business with large growth of renewable energy
Expanded T&D Business with regulations on chemical substances like SF6
Increased demand for environmentally friendly products and services as morecustomers seek decarbonization
Suspension of operations or supply chain collapse due to increased waterrelated damage
Increased procurement and production costs from carbon tax

Risks

Rising prices from increased demand for EV and renewable energy materials,
increased procurement and production costs
Reduced operating income from increased pressure on businesses with large
carbon footprint
Increased personnel expenses at sites from rising average temperatures
Higher industrial electrical costs from an increase in the ratio of renewable energy

to the situation of the Company, based on the outcomes
calculated in Step 3.
Climate change can be a chance to “Grow businesses that contributeto GHG reductions”
 Generating power through renewable energy (hydroelectric, wind, solar generation)
 Transporting power through T&D (change to not using SF6)
 Using power with logistics (products driven by EV & HEV) Common goals with environmentally friendly products and services (green products)

Enhancement of internal measures to reduce risks due to climatechangeDecarbonizing internally reduces Scope 1 and 2
 Responding to water-related damage through BCP-related policies
 Increasing the cost of industrial power supplies by investigating in-house consumption, etc.
 Worsening factory working conditions to improve workplaces

Revise the direction of businesses with a large carbon footprint Business portfolio* SBT Initiative: An international initiative by the United Nations Global Compact(UNGC), the Worldwide Fund for Nature (WWF), the CDP, and the World
Resources Institute (WRI).

Japan
Emissions frombusiness activities(Scope 1 + 2)

FY2023

FY2024FY2030Plan

FY2022
Actual

Plan

Plan

Plan

5% reduction

8% reduction

8% reduction——

Overseas

2% reduction

1% increase

3% reduction

Total

4% reduction

7% reduction

5% reduction

6% reduction 30% reduction—

10% reduction—

6% reduction 15% reduction

Small

Consideration of Response Measures

We considered development of strategies to grasp
opportunities and measures to mitigate risks according

Each year vs FY2019

Emissions from product use(Scope 3, Category 11)* Second Meiden Environmental Vision including FY2030 targets has received SBT (science based targets) certification.

| Future Path
Although we have identified the growth opportunities
and risks facing the Meiden Group through analysis of
scenarios based on the TCFD recommendations, in most
instances, calculation of impact is merely a rough estimate,and further precision is needed. Furthermore, we arepromoting response to climate-related metric categories

TOPICS

STEP 4

EV businessLargecarbon neutrality by 2050, in November 2021, as our
medium- to long-term targets.

Second Meiden Environmental Vision targets (all targets and results are compared to FY2019)changeDecarbonization Climate
scenario
scenario (RCP1.9) (RCP4.5,
8.5)

Recent average sales × ZEVstock growth ratio

Introduction of a carbon tax

25

Calculation formula

Impact on FY2030 operating
income| Metrics and Targets
We see changes due to climate change as business
opportunities, and are implementing strategies tomitigate risks.
From a business perspective, we will particularly
contribute to the creation of a carbon-free society
through further expansion of the EV and Renewable
Energy businesses. We also released the Second
Meiden Environmental Vision as our environmental goals
in FY2021, and we have disclosed 2030 GHG reduction
targets for scopes 1, 2, and 3 in order to reduce internalrisks. These goals have received SBT recognition. We
will work with our suppliers to achieve our targets. In
addition, we pledged to reach RE100 by 2040 andacross multiple industries in the TCFD recommendations,which require new disclosure. Along with this, we areconsidering establishing ESG (environment, social,and governance) metrics, incorporating them in ourstandards for calculating officers’ remuneration, andfurther strengthening governance, in order to increase theeffectiveness of sustainability management promotion.

Meidensha started sales expansion of highvoltage power T&D products contributing
to green transformation packaged withenvironmentally friendly products
In FY2022, Meidensha started sales expansion activities for highvoltage products for GX, a package comprising environmentallyfriendly high-voltage power transformation products (completely
SF6 -free Eco C-GIS, eco-transformers with vegetable-based
insulating oil, paint-free panels that reduce environmental impact
A high-voltage substation for GX at Meidensha’s Numazu Worksduring manufacturing) and a smart maintenance technology
model established through demonstration experiments and other efforts. Normally, gas-insulated switchgear (GIS)
contains SF6, a greenhouse gas 23,500 times more potent than CO 2. However, our Eco C-GIS is SF6 -free, reducing
Scope 1 emissions when our customers use and dispose of the equipment.
Additionally, because our Remote Continuous Monitoring System for High-Voltage Substations has been certified by
the National Institute of Technology and Evaluation (NITE), customers who have installed it undergo on-site inspections
monthly rather than weekly and major inspections involving power disconnection every six years rather than annually.
In April 2023, we established an internal Project for Eco-friendly Green Product Sales Expansion to promote highvoltage products for GX mainly to accommodate the need to replace equipment in the private sector, while spreading theword about the aforementioned benefits.
We will continue to devote energy to expanding our lineup and sales of environmentally friendly products to contributeto the development of a more livable society and the advancement of industry.

reviews that include the environment

26

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

The carbon neutral transition plan
Meiden Group is taking the following actions to become carbon neutral by 2050.

Reducing emissions from business activities (Scope 1+2)

Reducing emissions in the product use stage (Scope 3 Category 11)| Energy Saving Campaign

Among our strategic facility investments such as switchingfrom gas to electric power and making lighting, A/C
equipment, and manufacturing equipment with more
efficient fixtures, we are introducing internal carbon pricing(ICP) as a metric for determining investment within the
Company. To accelerate our efforts to decarbonize in
FY2023, we revised our price of carbon from 3,000 yen/tCO2 to 15,000 yen/t-CO2.
We also experienced power shortages last year andso redoubled our commitment to reducing energy
consumption. We now have power-saving initiatives inplace at all our offices and factories.
In addition to these efforts toward reducing the amountof energy we use, we also promote procuring renewableenergy at multiple bases inside the Group, from Company
factories through to the offices of Group affiliates.

The product use stage (Category 11) accounts for 80% of
Meiden Group’s Scope 3. We have drafted medium- andlong-term targets for greenhouse gas emission levels in the
product use stage (Category 11) and are tracking our levelsof achievement. We have proposed plans to incorporate
environmental considerations into our products (SF6 gasfree, reducing product size, increasing efficiency, etc.) andupdating our business portfolio (expanding low-carbon
businesses) as ways to reduce emissions.

The Group held an Energy Saving Campaign with the aimof using energy more efficiently, spreading awarenessof energy saving, and lowering energy costs. As partof this, employees were invited to propose ideas for
improvements that would lead to energy savings. In
addition, divisions that made outstanding energy-saving
efforts at their respective offices and units received
commendations.

| Simulation of Business Portfolio Revision

1 Turning off unnecessary lighting
2 Strictly controlling air-conditioner

Examples of
Initiatives

During the formulation of the Meiden Group’s FY2030
greenhouse gas emissions reduction targets, we
conducted a simulation of net sales and emissions froma business portfolio revision regarding emissions in the
product use stage (scope 3, category 11).
We found that by increasing the ratio of low carbon
businesses with low emissions per unit of sales suchas EV, maintenance services, and small and mediumsized hydropower generation, and we had a potential to
comfortably achieve both increased sales and reduced
emissions.

operations
3 Saving power with office equipment
4 Introducing energy-saving equipment

The carbon neutral transition plan
Emissions
category

Greenhouse gas reduction measures

Replacing SF6 gas

FY2021

FY2022

FY2023

FY2024

Electrical testing Evaluate replacement gases for SF6(replacement with dry air, etc.)

Update older equipment

Capital investment

FY2025~FY2030

Replace SF 6 gas

Use LED lighting, update air conditioning & production equipment

Implement high-efficiency equipment

Replace gas with electricity

Emissionsfrom businessactivities

Procure renewable energy at R&D Center/Osaki Kaikan Hall, Ota Works

Renewable energy
procurement(Scope 1 + 2)

Percentage ofnet sales in eachbusiness sector

Procure renewable energy at Kofu
Procure renewable energy at Numazu, Head Office
Procure renewable energy in Germany, use solar in India, partially use solar in USA, Vietnam, Thailand
Overseas

Switching company-ownedcars to electric vehicles
Emissionsfrom productuse(Scope 3,
Category 11)

Gradually acquire EVs/hybrids (as fleet is updated)

Entire fleet EVs/hybrids

Environmentally friendly
product design

Compact, high-efficiency

Revising business portfolio

Increase percentage of EV-related, maintenance services, small to medium hydroelectric systems, etc.

20196,000,000

Mobility andelectricalcomponents
sector4,000,000

2,000,000

Powerinfrastructure
sector2024

41,215 t-CO
Overseas 12,258 t-CO

Emissions frombusiness activities

2

2

Scope
1&2

6%

2030

reduction

5 Banned substance

6 C onsider product lifecycle

7 Environmental awards,
Top runner products etc.

Simple LCA evaluation sheet
1 Procurement

2 Outsourcing

3 Production

4 Logistics

5 Use

6 Disposal

Calculate the environmental footprint for theentire LC footprint

Procurement

Production

Use

Gas-powered
vehiclesEV

Super green products

Best-in-class environmental standards
even among green products

Green products

Products that satisfy Meidensha’s
green product standards

FY2030 target

Compared to FY2019

Emissions frombusiness activities
Scope
1&2

30%

reduction

FY20502040

Compared to FY2019
FY2040 target

RE100
27

4 Long-term use

FY2019 FY2030(base year) (targetyear)

FY2024 target

Emissions frombusiness activities

2 R educe energy andresources

GHG emission levels0Note: The above graph is an estimate from a simulation and does not amountto a commitment to a business plan

FY2019 results

Scope
1&2

Field service
engineering
sectorPublic, industrial,and commercial
sector

FY2019 FY2030(base year) (targetyear)

1 Reduce product weight
3 3R

SF 6 gas-free

Image of Scope 1 & 2 reductions toward carbon neutrality by 2050

Japan

Product environmental assessment sheet

8,000,000

Other

Nagoya(non-fossil fuel certificate,
power menu, etc.)

Scope 3 (category 11)
Emissions volume (t- CO2)

Scope 3, Category 11 is emissions from productuse and connects directly to our customer’s Scope
1 and 2 emissions. Developing and producing
environmentally friendly products and services witha low carbon footprint through “a complete life cyclefrom material procurement through product use
and disposal” will lead to the decarbonization of ourCompany, our customers, and society as a whole.
In FY2022, we worked systematically on LCAs (lifecycle assessments) of existing products, and havecompleted assessments for most products categories
involved in Social infrastructure. We concurrently
revised our environmental assessment of productsthat includes LCA and continue reviewing standards
for green products and preparing to develop supergreen products that will represent the gold standard
for the industry.

Product environmental assessment

Meiden Group Scope 3, Category 11
Reduction Simulation

Use leading transformers| Developing Environmentally Friendly Products
and Services

Achievecarbonneutrality
2050
28

Introduction / Message

Our Value

DX strategy

Our Ideal
Aggressive

Representative Director
Executive Vice President & Executive Officer
Officer Responsible for Promoting Digital Transformation

Norio Takekawa

Digital Transformation at the Meiden Group (Companywide Policy)
Each of these efforts, however, was limited to individualor partial optimization. Going forward, we will promote
DX with a company-wide approach. This will make ourbusiness more competitive and bring a greater impact
to society. Within the DX Promotion Committee, headedby the Executive Vice President and Executive Officer,
there are four subcommittees, each conducting specificinitiatives with a different theme. Committee meeting
discussions are regularly reported to the Executive
Officers’ Meeting and the Board of Directors for followup and supervision of progress.

DX Advancement Road Map
FY2024
STEP1
Stage ofpromotion

DX strategy

DX1.0

Operations transformation
 reation of database of externalC
contacts (product operation
information, build CRM*)
N ext-generation core system concept
R econsider operations & internal rules

Foundationforpromotion

FY2027

FY2030

STEP2

DX2.0

Ecosystem transformation
D evelop service sales business xpanding co-creation with insideEand outside the Meiden Group eform Headquarters & factory coreRsystems
B egin using foundation for data linking

STEP3

DX3.0

Smart technology
company-wideS ervice sales
business

physical goods sales

Enhance data-based decision-making
Raise productivity through overall
optimization of operations & systems

 eform the corporate culture by increasing company-wide digital and IT literacy and fostering a mindset ofR
transformation through training for all employeesD evelop expert human resources through education and practiceC ontinuous enhancement of information security governance*CRM: Customer Relationship Management

TOPICS

Digital Lab for Co-Creation
with an Agile Approach
The Digital Lab, an agile, co-creation center for creating new value, started
up at Numazu Works in October 2022.
Unlike the historical approach with its emphasis on certainty and stability
with little change, we have been working since FY2020 on an agile approach

Our Strategy

The desire to “enrich society through thepower of electricity” has been at the heartof the Meiden Group since its founding. This
led us to an attitude of thinking about therich lives and exciting societies to be enjoyed by people
on the other end of our products and services. It has been
the driving force behind the creation of new value for ourcustomers in every era. This desire is unchanged today,even as society rapidly changes and people’s ways ofthinking are growing more diverse. The important thing is
to explore and pursue added value from the customer’s
point of view, such as “Why do they buy our company
products and how do they need us?”, to move from thephase of “What can we get the customer to buy?” . Getting
there will require aggressive DX. For example, we will takepreviously scattered customer contact information, make itinto a database, and share it. This will not only enhance oursales of physical goods, but also expand sales of services.
By combining the two, we will develop a system to create avirtuous cycle of business.

Our Ideal

Corporate Information

MEIDENSHA REPORT 2023

Transformation of Business Models
Filteringcustomers

Improvements &new products
sales strategy
Internal
sharing ofcontact
information

Maintenanceservices

Diagnosis
reportMonitoring
serviceExpansion ofmaintenance stock

Operational
supportCustomer
contact data

Solutionsales

Remotemonitoring

Sales ofservices

Local work

Product
development

Sales ofphysicalgoods
Production

Sales

Sharing
between units

Transformation of Core Business and Business Management

DefensiveDX

In today’s world, an enterprise’s competitive
advantage depends directly on how fast it
can make business decisions. To survive,
enterprises need a system to quickly andcentrally view all sorts of information that can support
decision-making, such as business resources (people,
goods, and money), project progress, and operating statusof products already delivered. We recognize that there is
still room for improvement in the mechanisms for absorbing
information right away and speeding up decision-making.
To practice defensive DX, we will elevate our business by
centrally managing, quickly linking, and visualizing companywide business information. At the same time, by bringing
digital innovation to our work sites and linking data in our corebusinesses, we will work for the overall optimization of supply
chain management for higher productivity.

Theme-Specific Subcommittees
Equipment
and Systems
1
Operations
Transformation•U se of project management systems tocentralize progress and cost information
management in production processes and makeefficiency improvements•C reation of database of customer contacts
company-wide

Mass Production
2 Operations
Transformation•E stablishment of inventory and costmanagement standards for mass-produced
products•E stablishment of maintenance and management
standards for mass production lines

3

Business Model
TransformationIdentification of product operation information
especially in the Meiden Customer Center anddeployment to the service sales business4

Corporate
Transformation•R eview of business management methods toreform Headquarters and factory core systems•O rganization of corporate operations, and digitallabor savings

Establishment of Foundation for DX Promotion Infrastructure
Development of Digital Human Resources
A prerequisite to advancing DX is to build a foundation so thatevery employee takes DX personally and works accordingly.
To do so, we are developing an environment that supports
the training and awareness of employees, who will takethe lead in advancing DX. Our aim is to foster a corporate
culture for the digital age. Specific training measures include
continuing our existing ICT Primer and Basic Education for
The human
resources we
seekTransformation personnel(DX human resources)

new employees and in addition continuous IT skills e-learning
designed for self-development. In addition, we created new
DX training for all employees starting in FY2023, providing
opportunities for people to understand what DX is and why
it is needed now. All Meidensha employees will receive DX
training by FY2024, and training will gradually expand tocover the entire Meiden Group.

The level atwhich the employee
can lead projects

Use practice opportunities to experience the practice of DX
Plan and promote DX projects internally and externally

Practice/Experience
The Open Space at the Digital Lab

that puts greater emphasis on responding to change and on speed and value. The agile approach seeks to create newvalue by practicing close communication with customers and stakeholders. We will accelerate the search for new valuebased businesses by promoting agile development with pilot projects, exchanging personnel and information with nearby
enterprises and partners, and using a wide range of seminars and events for internal human resources development.

29

Our Impact

DX

We are promoting digital transformation to realize the vision of the Meiden Group.
This goes beyond merely digitizing operations—we consider digital transformation
to be a means to change the way business is conducted, and thus to reform ourcorporate culture and ultimately our management itself, with the aim of establishingcompetitive advantages that will continue to be indispensable in the future.
We will continue to tackle the challenge of innovation by looking beyond thethings we now see as normal.

The Meiden Group defines DX as an effort to use
digital technology and data to change the world’s
expectations in terms of existing business models(businesses and products); systems associated with
operations in general; and the knowledge, skills,
mindsets, organizations, and corporate cultures of theemployees responsible for these, and thereby realize
the enterprise’s desired state and vision. The Grouphas previously used digital technology to transform its
business, such as IoT to visualize manufacturing lines
and implementing Robotic Process Automation (RPA).

Corporate Governance

Our Approach

Specialized personnel(digital human resources)

Internal specialist level

Basis human resources(digital human resources)

The level that
all employees strive for

Possess specialized digital knowledge
Participate in DX projects as a member

Train people motivated to learn DX/Provide opportunities to practiceEnough IT literacy to know basic concepts and how to use them30

Introduction / Message

Our Value

Human Resource Strategy
The Meiden Group’s Approach to Human
CapitalAs the social environment is rapidly changing, companies
are required to provide new kinds of value, and industrial
structures are transforming. In this environment, we at the
Meiden Group must adapt to these changes and reevaluate
how we provide value. In order to realize our vision for2030, our aim is to take on the challenge of creating a newsociety. To achieve this, it is essential that we continuously
reform our business, generate innovation, and acquire andtrain the human resources necessary for our purposes.
Meanwhile, the maturation of societies is resulting indiversifying public values, and so too are the answers
to what happiness is and how people should work. It
is amid these circumstances that we must maximize
corporate performance with an approach that views humanresources as human capital, enhancing the abilities andmotivation of each employee, and creating opportunities
and environments that empower all employees. The
Meiden Group regards human capital as the source of ourvalue creation and has set strengthening human capitalas one of our materialities. Based on this, we are moving
forward with efforts to shift from an organization-centric
approach to one that respects the individual and seeks
harmony between individual and organization.

our employees, establish linkages with our personnel
system, promote specific measures such as reskilling,
and gradually carry out concrete activities toward thelaunch of the new system in FY2024.

My Vision, My Challenge: Expanding
the Overlap Between Individual andOrganizational Visions
The key to realizing the vision set forth by the Meiden
Group is the diverse human resources that will put
it into practice. Our belief is that if each and every
employee can engage in spirited, fulfilling work, it willlead to greater corporate value. We have launched
the My Vision, My Challenge policy with the aim ofdemonstrating respect for diverse individuals andeliciting ownership and motivation for individual
employees. This is an effort to have members of the
Meiden Group reflect on their visions for their own lives,compare these to their respective company’s vision,and codify what challenges they will take on within theGroup. In FY2022, our upper management codified
their own challenges within the My Vision, My Challenge
program. In FY2023, we will continue to roll this program
out to Executive Officers and managers.

How the Meiden Group creates value

Consolidated
human resource
requirements

31

The human resources we seek
Thought and action
Thought
and action

Co-acting(Co-creating)able to think and act for oneself

Co-actingable to accept all types ofindividuals and create new value

Co-cultivation
able to support and provide
opportunities for individual
growth and challenge (Individuals
and teams able to cultivate andgrow with each other)| Technical Human Resource Development
With the aim of strengthening the technological capabilities ofyoung employees, we provide training for both technical andadministrative staff to learn about electricity, which is essential
for understanding Meidensha’s technologies and products.
In FY2022, our activities in this area included introducing
hands-on introductory and fundamental ICT education
for new employees, preparing textbooks for fundamental
electricity education in cooperation with factory units,
and providing education on negotiation skills for young
employees in the sales and engineering units.

Critical human resources

solutions that address the2 Providing
world’s issues and needs

Human resources with autonomy and proficiency in digital technologies(i.e., DX) and a deep knowledge of the Earth, society, and people
Managers who can support individual growth and challenges, provide
opportunities, and then transform these into organizational strength

Corporate Information

MEIDENSHA REPORT 2023of opportunities to young and mid-career employees
through both selective and open recruitment processes.
These include manager cultivation training, dispatch tobusiness school programs, human resource exchanges
with other units, human resource exchanges with overseas
subsidiaries and domestic affiliates, and cross-cultural
exchange through secondment to organizations outside
the Group and government agencies.
| Career Design Support
As values continue to diversify, people are coming to takea more active role in their career development. In FY2022,
we established the new Career Consultation Service, aspecialized contact point for discussing career issues. This
service is staffed by qualified career consultants, and isavailable to all Group employees at any time.
For more information on human resource development, please visit
our website.
https://meidensha.disclosure.site/en/themes/98

HR Development Policy

Individual & teammanagement skills

A My Vision, My Challenge workshop

Our Strategy

Transform the training system from company-led toproactivity of trainees, aiming to develop human resources
with the autonomy to think and act on their own.

(management)

Human resources with experience and knowledge in R&D,
manufacturing, ICT, etc.

Management that utilizes and builds

The Meiden Group’s value creation has been supported
by human resources with experience and insights in areas
such as R&D, manufacturing, and ICT. In order to remain
essential to society going forward, is essential that we
acquire and train human resources like these and continue
to strengthen product competitiveness and maintenanceservice skills. To offer solutions to the issues faced by theworld and to address its needs, it is necessary that we
cultivate autonomous human resources who are proficientin digital technologies (i.e., DX), have a deep knowledge of
the Earth, society and people, and can proactively work
to create a new society. Simultaneously, we will focus
on developing our management team in the interest ofutilizing and building bonds between diverse individuals tomaximize the performance of the organization.

Co-cultivation

products, systems,
1 Providing
and services

between diverse individuals to
3 bonds
maximize organizational performance

Our Impact

Human Resource Development for
Evolving Management

Basic skills + specialized skills

Creating a System Maximizing Individual
Capability:
Launch of the Human Resource Task ForceThe Human Resource Task Force was established in
FY2022 to discuss and build the skills and new training
systems that the Meiden Group will need going forward.
This task force’s aims are to establish a clear profile ofhuman resources sought for building the future and to
begin operating a new human resource development
system in FY2024. Many young employees in their 20s,
who will become core supporters of the Meiden Groupin the coming years, participate in these activities led
by the officer in charge of human resources. In FY2022,
we formulated a new human resource development
policy, analyzed the gap between the current situationand the profile of human resources we need to achieve
our vision for 2030, and identified the skills required foreach administrative, technical, and skills-based position
as well as for the entire Company. Going forward, we
will examine measures to instill the necessary skills in

Corporate Governance

Our Approach| Cultivating Solution Architects and Innovators
In order to grasp the social issues and needs of the world
and local communities, and to co-create solutions withexternal partners, it is essential to acquire knowledge andexpertise in solution building and experience through trial
and error in practical application. The Meiden Group isdeveloping solution architects and innovators by holding
solution and innovation workshops in collaboration withventure capital firms and studying local solution content incollaboration with schools in the city of Numazu.
| Cultivating the Next Generation of Management
For the purpose of systematic and strategic development of
human resources for the next generation, we offer a variety

DEI for Universal Empowerment
With the growing recognition that diversity exists in all
employees and that the organization needs to transform
into one where employees are universally empowered, weare focusing on eliminating potential roadblocks toward
said empowerment that are based on specific employee
attributes, such as gender, nationality, and childcare status.
We carry out Diversity, Equity, & Inclusion (DEI) activities
with the aim of becoming an organization where humanresources with a diverse range of skills can maximallydemonstrate their individual capabilities in a culture andenvironment of fairness, and where individual growthand organizational development coexist. The Diversity
Promotion Office , which was newly established in FY2022,
will be renamed the DEI Policy Promotion Office in FY2023,
and the DEI Committee , a decision-making body forpolicies and measures related to DEI in general, will beestablished to further advance DEI.

| eNPS* Employee Engagement Survey
Our employee engagement index (eNPS) is incorporated
into the annual employee awareness survey and has
been set as a KPI (10% score improvement in FY2024
vs. FY2021). Furthermore, we analyze factors importantto our employees in exploring measures. Currently,
we are focusing on efforts to improve two main items:
motivation and fostering a universally empowering climate
and opportunities. For the former, we are working on
job fulfillment, career development and systems forevaluation, compensation, and promotion. For the latter,
we are working on openness, flexibility, and an orientation
toward challenge.
For more information on our DEI efforts, please visit our website.
https://meidensha.disclosure.site/en/themes/147* eNPS: Employee Net Promoter Score. NPS® is a registered trademark of Bain
& Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

32

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Respect for Human Rights
The Meiden Group Human Rights Policy

Promotion Framework

Initiatives for Identifying Prominent Human Rights Issues

Since it was founded, the Meiden Group has created andsupplied a variety of technologies, products, and services,with a focus on electrical equipment that supportssocial infrastructure, and contributed to the sustainable
development of society.
Respect for human rights is the foundation of ourbusiness activities to realize our corporate philosophies
of “illuminating a more affluent tomorrow” and “forcustomer peace of mind and satisfaction.” Through its
business activities, the Meiden Group will create a joyful
and sustainable society for everyone, and comply withinternational human rights norms as indicated by the
Meiden Group Corporate Code of Conduct.
We will also identify, prevent, and mitigate risks andimpacts relating to human rights throughout our activities,
including in the supply chain, and endeavor to disclose our
responses on an ongoing basis.
Meidensha has signed a statement of support for theUnited Nations Global Compact and is registered as aparticipating company.
Also, for the sake of both internal and external
stakeholders, we have revised the Group’s Sustainable
Procurement Guidelines, which include human rights
considerations, to reduce risks to human rights in our supply
chain, and distributed these to our business partners.

Twice a year, human rights progress reports arepresented to the Board of Directors and the Executive
Officers’ Meeting as part of Meidensha’s frameworkfor promoting sustainability management. In particular,
incidents of harassment are reported at regular meetingsof the Compliance Committee, which oversees our
response to them, and the nature of such incidents is also
reported to management.

Meidensha practices human rights due diligence toidentify, manage, prevent, and mitigate human rights risks
in our business activities for all stakeholders. We also

Please see our website for the full text of the Meiden Group
Human Rights Policy and the Meiden Group Sustainable
Procurement Guidelines
https://meidensha.disclosure.site/en/themes/96

Please see our website for more information on the
promotion framework.
https://meidensha.disclosure.site/en/themes/96

Major Initiatives to Respect Human Rights

Schedule of initiatives to promote respect for human rights (scope: Meidensha)
Step

FY2021 and earlier

Initiative
Initiatives to promote andtrain

Workplace discussions(Human Rights Week)

D ialogue with employee representatives
Conflict
mineralsInitiatives to address labor issues
 uman rights discussions at each workplace during
H
Human Rights Week
D iversity (DEI) management
R ollout of Smart Work 2024
 ollout of occupational health and safety activities/
R
health management
 stablishment and operation of the ComplianceE
Hotline, Harassment Consultation Hotline, and theexternal Public Whistleblower Hotline
 upplier evaluations including human rights andSlabor issues

FY2023
1st half

2nd half

3TG*
surveyCobaltsurveySelf-assessment

Humanrightsdue
diligence

Training for officers
Workplace discussions(Human Rights Week)

Workplace discussions(Human Rights Week)

Revise Human Rights Policy
Revise Corporate Code of
Conduct
Establish Sustainable
Procurement Guidelines

Establish policyS upport for a living wage

FY2022
Join UN Global Compact

Previous Major Initiatives
C ompliance with international human rights norms

investigate the state of human rights using a questionnaire
for our stakeholder suppliers on their sustainability andenvironmental protection initiatives.

Survey 380 business partners with CMRT
(Conflict Minerals Reporting Template)
Cobalt Reporting Template(CRT)

EMRT (Extended Minerals
Reporting Template)

FY2023 survey
FY2023 survey(cobalt & mica survey)

Survey scope
Risk inventory
Study of impacts andcountermeasures

Risk assessment

Create list of issues
Interview relevant
departments
Identify conspicuous humanrights issues
Consider countermeasures
Sort out discussion points
Assessment sheet

Impact assessment* 3TG: Tin, Tantalum, Tungsten, Gold

Relief and Remedy
Establishment of a Compliance Hotline
If a human rights violation occurs due to Meidensha’s
businesses, employees are able to report to theCompliance Hotline, the Harassment Consultation Hotline,
and the external Public Whistleblower System.
All stakeholders (including individuals, local residents, etc.)
can make inquiries from outside the company using our
external helpline. The Compliance Committee investigates
information that is brought to the above points of contact,
and, having confirmed the content, consults lawyers before
resolving issues if necessary.
Furthermore, our system effectively manages information
concerning whistleblowers’ names, etc., protects
whistleblowers, and enables anonymous consultation, in
accordance with national guidelines. We work to ensurethat whistleblowers experience no disadvantage andimprove the dependability of our whistleblower system.

33

New Initiatives in FY2022
 evision of the Meiden Group Corporate Code ofR
Conduct
Development of the Meiden Group Human Rights PolicyH uman rights education for officers
 evision of the Meiden Group Guidelines forR
Sustainable Procurement
J oining the United Nations Global Compact
H uman rights due diligence self-assessment

Future Issues and Initiatives
H uman rights due diligence
Conducting risk and impact assessments
D ialogue and consultation with stakeholders
 ngoing activities to foster and spread awarenessOof respect for human rights

Promoting Respect for Human Rights through Our Business Activities
Human 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 “respect for human rights,” which is listed in
the Corporate Code of Conduct. We also comply with all
relevant laws concerning the prohibition of forced laborand abolition of child labor. The Meiden Group Human
Rights Policy is available in three languages (Japanese,
English, and Chinese) to ensure that it becomes ingrainedin all employees, and we conduct various types oftraining as educational activities to raise awarenessof fundamental human rights. We offer periodic grouptraining and videos (in Japanese, English, and Chinese)on compliance and harassment to raise all Group

employees’ awareness of these issues. We also increase
understanding and awareness by providing opportunities
for individuals to reconsider their workplace and waysof thinking. We have also expanded anger management
training for managers to include all employees. Throughthe training, we raise awareness to respect thepersonalities and ideas of others.
To strengthen our efforts in mental health, we conduct
self-care training in each region for each year of joining
the company and each age bracket, as well as line-caretraining for managers and supervisors.
In fiscal 2022, we invited external instructors to conduct
training concerning “business and human rights” requiredby companies for all officers of executive officer level orabove and presidents of Japanese subsidiaries.

34

Introduction / Message

Our Value

Manufacturing Strategy
In this way, we will not only improve the quality of
products, but by reforming the awareness of employees
involved with manufacturing, we will foster worksites with asense of achievement and growth, and remain a company
that is attractive to the earth, society, and people.

Progress of FY2022 Initiatives

Policy for Initiatives from FY2023

In the second year since the introduction of our factory complex
system, in which our 12 manufacturing units are divided into five large
factory units for integrated management, we saw acceleration andadvancement in the integration of people, technology, and products
across manufacturing organizations.
In particular, in FY2022, we have been focusing on the crossfunctional fusion and efficient utilization of human resources on acompany-wide basis in response to fluctuating production load at eachfactory, with the aim of improving profitability. In addition, we haveadvanced manufacturing reforms using DX, and we have promoted thestreamlining of factory lines in distribution board and rotating machinery
assembly lines to improve productivity and shorten lead times.
Furthermore, at our Nagoya EV production line, we have been increasing
the automation ratio to support increased production and ensure stable
operation, resulting in significant improvements in quality and productivity.

The manufacturing strategy is divided into three groups: “mass production,”“equipment,” and “systems.” Group by group, we will work to automate andintroduce robots for simple tasks and apply image-based inspection in mass
production, accelerate the development and introduction of work support
tools in equipment, and work toward the streamlining of production lines andthe visualization of production processes to eliminate waste and link design
data to manufacturing and testing processes in “systems.” In addition,
subcommittees such as the Equipment and System Operations Reform
Subcommittee and Mass Production Operations Reform Subcommittee
will be established under the DX Promotion Committee , working
toward centralized management and streamlining of progress andcost information in the production process using project management
systems and the advancement of inventory and cost management for
mass-produced products. In this way, we will establish a manufacturingsystem that directly builds our corporate competitiveness.

| Meiden Customer Center
The Meiden Customer Center is the point of contact forinquiries and trouble calls for all Meiden Group products.
35

At the Meiden Group, employee health and safety isa core management value. We work to “ensure a safe
environment that is conducive to work, as well as achieve
comfort and affluence for employees,” as it says in our
Corporate Code of Conduct, and aim to be a leading
health and safety company.

| Safety and Health Initiatives
For some time, we have been engaged in a range
of initiatives to prevent industrial accidents, suchas conducting KYK (risk anticipation activities), risk
assessments, and introduction of safety patrols andsafety and health management systems (ISO 45001).
Safety patrols are performed not only by internal
stakeholders, but also by outside parties such as
health and safety consultants to ensure that patrols are
conducted from a variety of perspectives. Furthermore,by utilizing digital equipment, remote patrols are
conducted from all over Japan, connecting a single
patrol site to many locations and affiliated companies
via remote communication tools. The new insights wegain from the many eyes that inspect our locations andadvice from remote participants are used as hints tofurther improve workplace health and safety.

to

m

e

e
rC

n te

r Monitoring
service

Hands-on safety training is offered to each of our
locations to enhance sensitivity to danger. In thistraining, we dispatch a safety simulator trailer equippedwith safety simulation training equipment in the container
it carries.
The safety education is not limited to classroom
lectures, but also features simulated work-related
accidents using virtual reality (VR), etc., offering strong
learning potential. As of FY2022, we have newly
developed a Metaverse hands-on safety educational
program, which enables participants to receive
non-contact safety experience education within the
Metaverse using their own avatars. We have also started
external sales of VR safety training content through a
subscription service for external customers, providing anenvironment where the latest safety training content canbe accessed at any time.

Improvements &new products

us
nC

de

The Quality Control Process Chart (QC Process Chart),
mostly used at manufacturing organizations, has been
expanded in application to cover sales and technicalorganizations as well, where it is commonly called the QR
Map. By applying this QR map, we are able to ensure that
all tasks are completed and that everyone completes tasks
at the same level, which enables us to reduce the risk ofdefects arising due to the variations among personnel.
This QR map is linked to standards and procedures topromote tasks in each process. We limit recurrence of past
defects and occurrence of similar defects by conducting
an overall examination and revision of these standards
and procedures to ensure that their content relates toprevention of recurrence of defects or occurrence of similar
defects. Furthermore, we encourage filling in the Quality
Control Process Chart (QC Process Chart) so that theimplementation status can be confirmed by third parties.

Our remote monitoring service connects the Meiden
Customer Center with Meiden Group products installed
in infrastructure facilities and renewable energy power
stations. The service monitors the operating status ofcustomers’ facilities and, if an abnormality occurs, asks
maintenance service personnel to address the situation oreven makes the first response to the failure itself.
In addition, by analyzing and utilizing equipment
operating data, past issue data, plant design data,and on-site maintenance data centrally managed at
the Meiden Customer Center, we will be able to makeproposals to customers that will contribute to appropriate
maintenance, reduction of life-cycle costs, and reductionof greenhouse gas emissions.

M ei| Establishing and Complying with Standards andProcedures

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

| Safety Promotion Center Preserves Lessons
from Industrial Accidents
In order to ensure that the facts about past industrial
accidents continue to be told, we have established the
Safety Promotion Center as a place to provide thesefacts and a forum to consider them.
We believe that our mission is to never turn awayfrom a sad truth, and to consistently tell stories of pastexperiences to ensure that similar fates do not befall
future employees and their families.
The Meiden Group will continue its efforts to raisesafety awareness and achieve zero accidents, achievedby recording safety memories in our bodies through oursafety simulator, and by having our hearts moved at the
Safety Promotion Center.
While the Safety Promotion Center has a physicalexhibition space at Numazu Works, for employees wholive too far away to visit the museum, a new Metaverse
Safety Promotion Center has opened as of October
2022, utilizing virtual space. This enables multiple
employees to participate without location restrictions,
whether in Japan or overseas, as long as they havea VR head-mounted display, and also allows them toexchange opinions while gathering as their respective
avatars over the Metaverse.

| Enhancing sensitivity to danger through handson safety training

Quality Control
At the Meiden Group, which is involved with social
infrastructure, each employee is not only aware of social
responsibility in relation to the Meiden Group’s products
and services, as well as the scale of the impact that
defects could have on society, but engage in quality
control activities from the perspective of “no defective unit
accepted,” “no defective unit made in our factory,” and “nodefective unit shall leave our factory,” satisfying customers
and improving profitability by reducing unnecessary costs.

Corporate GovernanceOccupational Safety and HealthEnhancing Manufacturing Capabilities
We gave divided products manufactured by the Meiden
Group into “mass production,” “equipment,” and“systems,” and established manufacturing strategies
suited to the features of each group, and we will enhance
product competitiveness by improving quality, cost,delivery, safety, and environment.

Our Approach

Diagnosis
reportCustomer comments
Trouble history

Inquiry history

Customer interface
information
Maintenance information

Operational
supportA VR hands-on safety
educational program inprogress

The Safety Promotion
Center, located within
Numazu Works| Operation of the Safety Information Portal
The Meiden Group started operating the Safety
Information Portal in 2020. This tool effectively gathers
and analyzes health and safety management information
as it accumulates in the Group and uses it to improvehealth and safety management (with the PDCA cycle).
Currently, the system can manage industrial accident
reports, traffic accident reports, near-misses, safety
patrols, risk assessments, the number of days withzero accidents, safety training, e-learning, accident
frequency and severity rates, the number of accidents
per thousand persons each year, and more.
Using the system allows Group employees to easily
access safety information and encourages their safety
awareness and activities.

Design & component
information

Maintenanceservices

Equipment operations
information
Remotemonitoring

Sales &
upgrades
Mockup of the Safety
Information Portal

36

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

In FY2022, the deteriorating availability of various partsand materials, including semiconductors and electronic
components, as well as soaring material prices had an
impact in a wide range of domains, putting extremely heavy
downward pressure on the Meiden Group’s earnings.
In order to minimize these effects, we are taking various
countermeasures through devising new approaches
to procurement and reviewing procurement practices.
Although the worsening availability of parts and materials,
with the exception of some special parts, has gradually
begun to normalize, we are continuing to minimize theimpact on production activities and product delivery
dates by diversifying procurement sources and securing
inventories as needed (e.g., by placing orders in advance).
In addition, as a countermeasure against fluctuations inmaterial prices, we will continue our efforts to minimize
fluctuations in procurement prices through combinedcountermeasures in some areas, e.g., through procurement
price hedging, and supplier discussion engagement.

| Sustainable Procurement|B uilding a Sustainable Supply Chain
At the start of business with a new supplier, we conduct
a survey on sustainability and environmental conservation
activities, and issue a scorecard every year with updated
evaluation results.
Through this evaluation, we strive to understand theactual state of supplier business operations and identify
high-risk suppliers with regard to social issues such as
climate change, biodiversity, environmental management,
human rights, and the labor environment, as well as provide
support for local audits and activities as necessary.
1 Promoting and Supporting EcoAction 21

Certification and Registration
We support our suppliers in registering and applying
for certification in the EcoAction 21 environmental
management system promoted by the Ministry of theEnvironment, with the aim of spreading environmental
management systems and environmental improvements
throughout the entire value chain. As of FY2022, theeighth year of the program, a cumulative total of 134
suppliers have acquired EcoAction 21 certification.
Going forward, we will continue our efforts in this area,
which will lead to reductions in CO 2 emissions.
2 Environmental Audits

We conduct environmental audits of our suppliers. In
FY2022, we conducted on-site environmental audits
in combination with remote audits to adapt to the
COVID-19 pandemic situation. Seven suppliers that were
found to be nonconforming as a result of the audits wererequested to take corrective actions, with follow-ups
conducted on these.
3 Holding Various Seminars

We hold seminars on process improvement andinformation security measures at our suppliers’
manufacturing sites as needed to improve their capabilities.
At product exchange meetings, we communicate andexchange opinions with workers on-site. We also conduct
workplace checks of our suppliers using our Health and
Safety Support Project.

A Health and
Safety Support
Project activity

A production plan briefing session in the Numazu area

37

MEIDENSHA REPORT 2023

To combat long delivery times, the Meiden Grouphas focused its efforts on studying the introduction ofalternative parts. This was a Company-wide strategy
that included not only the factory design and productdevelopment divisions, but also the entire Research &Development Group. In addition, we have been building
pipelines in the U.S. and India as part of our efforts togrow the sources for our parts and materials. In thiscrisis, what has been effective in mitigating impact isthe confirmation of absolute final delivery deadlines,
arduous process to ascertain the very latest delivery
that does not affect shipments on an item-by-item
basis, and to clarify prioritization accordingly. Precisely
because of the challenging nature of the situation, we
have been tackling delivery date concerns head-on
while also emphasizing mutual trust with our partners
from a medium- to long-term perspective.

1

CASE

The Meiden Group promotes sustainable procurement
in conjunction with business partners in order tocontribute to the realization of a sustainable society. In
FY2022, we newly issued the Meiden Group Sustainable
Procurement Guidelines in conjunction with the revisionof the Meiden Group Corporate Code of Conduct. Uponthe start of business with all (100% of) new suppliers, we
present these guidelines, which they are requested tofamiliarize themselves with and abide by. Other efforts
to strengthen our supply chain capabilities include
explaining our basic procurement policies at annual
production plan briefing sessions held at each of our
production sites, as well as providing information onvarious support activities (compliance, human rights,
labor, health and safety, environment, quality, safety,
information security, business continuity planning, etc.)
in order to ensure supplier compliance with the Meiden
Group Sustainable Procurement Guidelines, and a focus
on communication activities such as presentations on
examples of best practices in supplier improvements andinformation sharing and opinion exchange to enhancetheir technical capabilities.

Corporate Information

The Meiden Group’s Response to
Unprecedented Long Delivery Times

Supply Chain Management| Addressing Rising Material Prices and Long
Lead Times

Our Strategy

Value Creation Story

Related SDGs

Business Developmentin Collaboration with
Suppliers
The combination of a pandemic, the emergence of geopoliticalrisks, and a shortage of semiconductors and other physicalgoods has led to difficulties in procuring parts and materials,
in turn significantly affecting the global manufacturing industry.
This is the story of the procurement group that confronted thisdifficult situation and the partners who struggled and toiled
alongside Meidensha to overcome it.

Collaborative Action with Partners
Miyoshi “Hirai Industry, with whom we have had a longstanding relationship, has been a strong supporter ofMeidensha through flexible management unbound by
conventional thinking about inventory, having scrambled
to obtain difficult-to-procure items ahead of time based on
the list of parts that have long delivery times shared by ourcompany.”
In addition, the close collaboration between the twocompanies has enabled rapid exploration of replacing partsand materials with those from other companies, leading toshorter delivery times.

Yuki Miyoshi
Numazu Procurement Section,
Direct Procurement Division,
Procurement Group,
Meidensha Corporation

Yoshimasa Hirai

My Challenge

My Challenge

Knowing that we are supported bymany partners (suppliers), I wantto build relationships that respect
the wishes of both parties.

I will always be mindful of what
our company exists for, and strive
to create a company needed bysociety.

President and Representative
Director, Hirai Industry Co., Ltd.

Mr. Hirai “We aim to be a company that is needed by society,while at the same time being aware of the values of others,
which can change depending on their position, and always
considering what kind of work is expected of us.”Even in a difficult business environment, we will continue tomaintain our commitment to fulfilling our social responsibilities
through collaboration based on trust and dialogue.

38

Introduction / Message

Our Value

Research and Development /Intellectual Property Strategy
Results of Research and Development
in FY2022
In the Medium-term Management Plan 2024, we haveestablished a basic policy of promoting R&D to support
sustainability management. At the core of this policy is our
R&D focusing on the realization of carbon neutrality andwell-being. In FY2022, the second year of our Medium-termManagement Plan, we continued to develop products applying
vacuum technologies with the goal of eliminating the use of
SF6 gas, which has global warming potential, and to expand
our lineup of EV drive units to address the accelerating
electrification of vehicles, both initiatives toward carbon
neutrality. Another initiative area is contributing to wellbeing.
Here, in the semiconductor field that serves as the foundation
for convenient and comfortable lifestyles, we responded todiverse customer needs through the custom development of
power supplies for semiconductor manufacturing equipment
and vacuum capacitors. In the creation of new technologies
and products, we developed an ultra-concentration/high purity
ozone water generator that uses highly concentrated ozone
gas produced by a pure ozone generator, and proceededwith market research and cultivation toward productcommercialization. In this way, we accelerated our work tocreate a new society through innovation, acquired proprietary
technologies to solve environmental and social issues, andbuilt and strengthened R&D and business development
systems that are capable of generating new businesses.
Research and Development Expenditures(Billion yen)

Research and development expenditure (consolidated)Research and development expenditure contributing tocarbon neutrality and well-being

12
10

9.4

9.4

9.4

2016

2017

2018

10.4

9.4

9.8

10.2

2020

2021

2022

8
6
4
2
0
2019

(FY)

The current situation suggests continued impact from longdelivery times of parts and materials and rising material costs
due to changes in global affairs. Therefore, it is necessary
to work toward the establishment and advancement of partsubstitution design technology that incorporates supply chain
considerations. In addition, in order to realize the vision set
forth in our sustainability management, it is essential to acquire
the abilities of transformation and foresight, and to conduct
research and development that supports ambidexterity
management that constantly creates new value. We will
focus on exploration and basic research to acquire coretechnologies that will become our future strengths, envisioning
possible future scenarios with an orientation toward carbon

39

neutrality and well-being. In the area of carbon neutrality,
in addition to deepening technologies for environmentallyfriendly products that offer unique features, such as vacuum
interrupters and vacuum circuit breakers with higher voltages
than other products, we will work on strengthening productcompetitiveness in the area of next-generation mobility andadvance development for the next generation. In the area ofwell-being, we will accelerate the application of SiC devices
in the semiconductor field and improve vacuum capacitor
products (including their quality). In addition, to enhance theadded value of the products and services we provide to
our customers, we will work to transform business models
through the promotion of DX, including the enhancement ofcloud systems and maintenance labor-saving technologies
connected to our business model and the realization of
combined solutions offering both products and services.

Contributing to Sustainability throughIntellectual Property Activities
In the area of intellectual property activities, we are engaged
in strategic initiatives to identify and acquire rights totechnologies that will contribute to the enhancement ofcorporate value. Here, we are honing the identification of thedirection our development should proceed in by analyzing
and sharing intellectual property information internally.
Our intellectual property activities that contribute tosustainable management include registering our environmental
technologies with WIPO GREEN, an environmental technology
platform created by the World Intellectual Property Organization(WIPO), a United Nations specialized agency with jurisdiction
over intellectual property systems. This registration is aimed
at encouraging co-creation with companies and institutions
around the world and the dissemination of our environmental
technologies. We are engaged in a range of messaging efforts
to inform outside parties about our environmental technologies.
This includes the exchange of opinions between our top
management and the Commissioner of the Japan Patent Office(JPO) and the posting of our environmental technologies on the
JPO website. Furthermore, we introduced our WIPO GREEN
initiatives and our environmental technology products andrelated patent rights at a meeting of the Intellectual Property
Rights Experts Group (IPEG), part of the August 2023 gatheringof the Asia-Pacific Economic Cooperation (APEC)’s Committee
On Trade and Investment (CTI) in the U.S. city of Seattle.
Applications for Patents or Design Registration/
Patents or Registered Designs Held
Held in Japan
Applications in Japan(Number)

2,000

1,871

1,853

1,653

1,500

Held overseas
Applications overseas

1,615

1,695

1,741

1,626

766

828

830

787

223

195

191

169
47

2021

2022

1,000
500
0

93

664

674

658

197

232

216

2016

80

2017

66

2018

67

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Innovation Strategy

2019

67

2020

109

(FY)

The MAST Project for Generating Innovation
In promoting ambidexterity management, an element of our
Medium-term Management Plan 2024, we aim to accelerate
the creation of a new society through innovation in ourbusiness activities. The MAST Project, launched in FY2022, is
led by the officer in charge of innovation with the key words of“behavioral change,” “co-creation,” and “on-site awareness,”
and aims to further establish and expand innovation activities
by enabling individuals to demonstrate their knowledge andexpertise in external fields while accurately identifying social
issues. The MAST Project was named by combining theJapanese first letters of “Meidensha,” “ashita” (tomorrow),“sozo” (creation), and “thinking,” while also carrying themeaning of the word “mast” (in that it helps to harness wind
and propel us forward).
We are working to build a foundation for the explorationand startup of our next business pillars, including humanresource development and the fostering of our corporate
culture. Meanwhile, we are also internally soliciting
new business ideas that do not fall under our existing
businesses, supporting these ideas, and engaging in cocreation activities with other companies.

Establishing a Culture of Innovation
Our innovation activities have been underway since theprevious Medium-term Management Plan. One exampleof the fruits of our efforts here is that the number of future
themes (new business themes) suggested by employees
has reached approximately 600. At the same time, we havedeveloped a commercialization process and introduced
a stage-gate system to create a path from conception
to business creation, including a system to accompany
concepts along this path. We have also focused on
developing innovative human resources who have thepower to drive behavioral changes, instilling a cultureof tackling business launches in an exciting way andaddressing areas on the periphery of existing businesses
that will contribute to solving future social issues.
Currently, we are focusing on themes helping to
generate businesses and technologies that will bringabout carbon neutrality and well-being as advocated inour sustainability management, and we are continuing

TOPICS

Future Initiatives and Priority Sectors

Our Approachto encourage our employees to voluntarily participate
in these efforts. From FY2023 onward, we will work tocreate a personnel system that facilitates the discovery
and development of potential innovators and innovation
activities by dividing them into three categories: “theme
managers” who will work toward the commercializationof proposed themes, “challengers” who propose future
themes based on their own concepts, and “collaborators”
who will be the core drivers of innovation activities.
Target
For theme
managers

Understanding businessprocesses for making atheme into a business by
yourself

MethodExternal: Outside events
Internal: Innovation Salon(Advanced)(Study group) Businessplanning workshops

Learning brainstorming
methods
For
Proposing themes andchallengers applying for MEIAN
Challenge

External: Outside workshops
Internal: Innovation Salon(Beginner)(Relationship-building,
discussion, brainstorm)

For
Just jump in!
collaborators Building interest level

External: Outside seminars
Internal: Innovation Salon(Beginner)(Relationship-building,
discussion) Expert lectures

Holding the MEIAN Challenge Idea Contest
and Establishing the Future Theme
Community Forum for Dialogue
In FY2022, we held the first MEIAN Challenge, an idea
contest where employees can freely come up with ideas
together with their colleagues about their ideal future andco-create businesses. These activities are designed toturn their interest in innovation into behavioral change. Of
the 54 themes, seven were selected as candidates for the
final presentation, where over 300 employees listened toideas that will change tomorrow and the thoughts of the
proposers as they presented. Four themes were selected
for awards, and after deliberations, three were advanced
to commercialization study.
Another innovation activity is the Future Theme Community,
newly established as a forum for dialogue to energize
innovation activities by connecting theme managers withcolleagues interested in supporting them. Our first Future
Theme Community session was held at Numazu Works.
Going forward, we will continue to play a role in corporate
reform by creating and nurturing businesses that provide newvalue, and by establishing a culture that supports such efforts.

Launched Sales of Ultra-concentration/High purity
Ozone Water Generator
The ultra-concentration/high purity ozone water generator was borne of a future theme idea, resulting
in product launch in FY2023. Ozone is used for a variety of applications, including deodorization,
sewage treatment, and removal and cleaning of organic materials and sterilization in semiconductor
manufacturing processes. This new device is capable of generating industry-leading ultra-concentrated and high-purity ozone
water, and offers applications in semiconductor cleaning processes and metal degreasing and cleaning processes. Sinceozone water is ultimately decomposed into non-toxic water and oxygen, it is expected to reduce the environmental impact andcost burden of wastewater treatment compared to conventional chemical treatment. The combination of this ozone water andMeidensha’s proprietary process technology OUR* (patent pending) provides an advanced cleaning effect. In the future, we
aim to expand our business by developing mass-production machines and expanding applications.
*OUR stands for Ozone water Used Radical generation, a new, accelerated oxidation reaction that induces the reaction of ultra-concentrated ozone waterwith proprietary technology.

40Introduction / Message

Our Value

Our Approach

Corporate GovernanceTetsuya Nishiguchi
Director, Meiden Nanoprocess Innovations

My Challenge
To use unique, made-in-Japan technology
to transform the world, to make what was
impossible possible, and to make newcommon sense.

Tatsunori Shino
Technology Development Division,
Meiden Nanoprocess Innovations

My Challenge

CASE

2

To be innovative not only in technology, but in
how I think and act in development, consistently
providing new value not only to my customers,
but also to my company and colleagues.

Related SDGs

Value Creation Story

New Challenges forTechnological Innovationfrom NPI

Pure ozone is one of the Meiden Group’s most distinctive technologies. This is the story of an engineer,fascinated by pure ozone’s potential for over two decades, who banded together with colleagues toachieve a shared dream that would astonish the world.

History of the Foundation of Meiden Nanoprocess Innovations, Inc. (NPI)
Tetsuya Nishiguchi, a pioneer inpure ozone technology*, and the
Meiden Group made their first
forays in this technology in thelate 1990s.
Nishiguchi “The National Instituteof Advanced Industrial Scienceand Technology (AIST) approached
us to do some technologicallyinteresting work at their Tsukuba
location. The company was very
forgiving of my time spent there,saying it was good as long as it
would help me grow in the longrun. I remember a lot of excitingtimes when the researchers would
show each other what they had
come up with.” Though the pureozone generator that would becommercialized several years
did generate sales, it did not see
explosive growth, as the uniquenature of its technology did notnecessarily translate directly
into commercial viability. After
that, Nishiguchi was engaged in41

research in a different field, but theturning point for him came when
he was based in Silicon Valley.
As a result of researching market
opportunities in the U.S. for pureozone, his former area of focus,
he saw potential in the applicationof OH radicals generated bymixing ozone and ethylene for film
deposition, and proposed this to
management of Meidensha.
Nishiguchi “The company
could have made the decision
to terminate our project at any
time, but they let us thrive andpersevere.” In March 2020, withthe aim of further boosting agility
in this area, the pure ozone
application process project was
isolated from the Company as NPI,a new subsidiary.

*Pure ozone technology: A uniquely held technology at NPI, capable of generating 100% pure ozone
gas without impurities. NPI’s proprietary technology, which generates highly active OH radicals at room
temperature by reacting pure ozone with ethylene gas, offers promise in application to various industrial
fields, including room temperature film deposition and adhesive-free bonding.

The Meiden Group’sonSociety20

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Key Values for NPI as an Independent Meiden Entity
At NPI, mid-career hires withdiverse skill sets are being
empowered, catalyzing thecapabilities of the Meiden Group’s
traditional hires.
Shino“I had been doing
R&D for a large organization,
but I was so tied up with myown technologies and plansthat I wasn’t paying attention
to my customers. NPI offered
me a chance to do a betterjob of developing technology
for customers and society.”
Nishiguchi, a director constantly
watching NPI’s advancements,
nods his head.
Nishiguchi “Each person is
responsible for deciding whether
or not to do something basedon the customer’s needs. It is
important for each person to
maximize his or her expertise.”
Shino looks back on thedevelopment of equipment thatis now being shipped to Taiwan.
This product that had originallynever even appeared in any ofthe development themes cameto be based on the wishes ofour customers and sales team.
At NPI, the agile method hastaken firm root, a process inwhich a product is released evenin an imperfect state, and thenpolished in a cycle based on
mutual understanding of theseimperfections. As Shino often
says, “It is my presumptive belief
that the customer is also part ofour development team.”Greenhouse gas emissions%

reduction

NPI’s pure ozone generator has thepotential for a variety of applications.
When used in the semiconductor
ALD process, it offers greenhousegas emissions reduction of around
20% versus ordinary ozone gas
generators thanks to its lower
process temperatures.

Pure Ozone Technology: Pioneering
the Future
As a subsidiary establishedthrough Dejima strategy, NPI
strives for business activities
that emphasize free thinking
and agility, and aims to makea remarkable impact on social
development and technologicaladvancement.
Nishiguchi “The world twenty
years ago believed plasma was
the solution to all problems,but I feel a lot of problems have
cropped up with that technology.
We are on the verge of breaking
through the next big barrier here,
and in 10 years we intend to makepure ozone the world’s gamechanger. NPI’s team is constantly

mindful of checking whether weare right in our assumptions here.”More than 20 years have passed
since Nishiguchi stepped into
this world, and the potential ofpure ozone, as conceived at thattime, has become even more
far-reaching with the evolutionof technology. Shino offers his
own unique perspective to thistechnology.
Shino“As an engineer, I havealways wanted to contribute to
medical care, not as a doctor,
but as an artisan. There may be
opportunities to apply pure ozone
not only to semiconductors,
but also to medical devices

and communication devices,where compactness brings
value. For example, if we could
create connected devices thatallow people to easily perform
checkups at home without goingto a hospital, we would be able
to make a great contribution tosociety and its people. These are
the dreams inspired by ozone,
as an alternative to plasma.”
The technology that Nishiguchi
has developed and the ideas
within the Meiden Group thathas watched over it are now
expanding, offering a sense ofimpending breakthrough that will
astonish society in the near future.

42

Introduction / Message

Our Value

Board of Directors & Executive Officers
as of July, 2023

Meidensha’s Board of Directors (Skill Matrix)

Our Approach

Corporate GovernanceTakeshi
Miida

Representative Director
Chairperson & Senior Officer
Director, Chairman

Akio
Inoue

Representative Director
President & Executive Officer

Norio
Takekawa

Representative Director
Executive Vice President &Executive Officer

Masayuki
Iwao

Director & Senior Managing
Executive Officer

Hiroyuki
Takenaka

Director (Outside Director)
Head of the Nomination &Compensation Committee

HirojiAdachi

Director (Outside Director)

ManabuKinoshita

Director (Outside Director)

Michihiko
Kato

Director & Audit & Supervisory
Committee Member(Standing Audit & Supervisory
Committee Member)Head of Audit andSupervisory Committee

KeikoHayashi

Director & Audit &Supervisory Committee
Member(Outside Director)

Takashi
KurodaDirector & Audit &Supervisory Committee
Member(Outside Director)

Hideki
Hiraki

Director & Audit &Supervisory Committee
Member(Outside Director)

GlobalFinance/
Accounting

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Message from Outside Directors

To facilitate a highly effective supervisory function and decision-making on important management issues
by the Board of Directors, Meidensha has established a skills matrix of the expertise that directors should
possess. Based on this matrix, we appoint directors and structure the Board of Directors based on theabilities, insight, and experience of individual directors to ensure the diversity of the Board as a whole andthe appropriate allocation of human resources.
DX/
Research andFields in which Directors can particularly Business
Sales/
Business
Development/
exert their expertise management transformation Marketing “Monozukuri”

Our Impact

Legal affairs/
HRInternal
Environment
development
control

Director (Outside Director)
Head of the Nomination &Compensation Committee

Hiroyuki
Takenaka

Director & Audit & Supervisory
Committee Member(Outside Director)

KeikoHayashiMeidensha has strengthened thesupervisory function of its Board of
Directors by adopting a system with anaudit & supervisory committee and byincreasing the number of outside directors
to a majority of the Board of Directors. I
believe that, in order to further improve
this supervisory function as an outside
director, it is important to collect andanalyze information more proactively,
especially by exchanging opinions withnot only top management but also atvarious levels of executive divisions. This
enables outside directors to gain anunderstanding of management issues
and the multifaceted opinions within

the executive divisions, as well as toprovide opinions for them based on
our outside expertise and management
experience when executive divisions
are exploring management issues. This
process enables the executive divisions
and outside directors to form a common
understanding of management issues,and it also enables more substantive
discussions at the Board of Directors,
and therefore a stronger supervisory
function for the Board of Directors, via the
proposals created and submitted via thisprocess. By contributing to these efforts,
I will strive to strengthen the supervisory
function of the Board of Directors.

Governance reform is progressing, as
evidenced by outside directors now
comprising a majority of the Board of
Directors, and I have felt more active
dialogue, including agenda setting thatenables discussion of management
strategies from a medium- to long-term
perspective. One example is ongoingserious discussions to create a sense ofownership for important management
issues, such as review of our businessportfolio and promotion of digitaltransformation, with the goal of spreading
the Meiden Group-wide attitude for taking
on new challenges, such as with field
operations in our EV business.

In addition, the DEI Committee, establishedunder the leadership of Meidensha’s top
management, has begun to focus not only
on empowering women and globalization,
but also on capability development forpeople with disabilities. It is from activities likethese that Meidensha’s directors are coming
to realize the value of diversity. The Board of
Directors will maintain an effective monitoringprocess vis-à-vis these efforts, ensuringthat they generate results with leadershipfrom executive divisions. We will also
constantly examine whether explanations
and disclosures are made in a manner that iseasy to understand from the perspective of
ordinary shareholders.

My experience so far has convinced me of
two things: that people make or a break acompany, and that human resources are
the greatest asset. With the evolution ofgenerative AI as represented by ChatGPT,
routine tasks are becoming more efficientand automated, and the way employees
work and the skill sets required are
expected to change. However, I believethat there will be an unchanging essenceof work, that it should be fun, that weshould not fear failure, and that it should
excite us, in order to generate innovationand take on challenges.
To achieve sustainable growth, it isnecessary to create a corporate culture inwhich employees can work with energy
and think and act on their own initiative.

Furthermore, we must foster an open
corporate culture with diversity. I feel thatthe shortcut to this is for management
to listen to the voices of each and every
employee on the front lines, engage indialogue, and increase engagement one
step at a time.
Change presents opportunity. If we
can get out of the conference rooms
and engage a variety of people inconversation, we can build resonanceand co-creation, which will lead to theimprovement of interpersonal skills. I am
grateful for the opportunity I have received
and will contribute to the sustainablegrowth of Meidensha through the creationof social value.

Skills Required to the Board of Directors and the Reasons
Meidensha believes that members of the Board of Directors should have such skills and experiences by the reasons below.

43

SkillsReasons why such skill is required

Businessmanagement

With the diversification of values as social conditions change dramatically, to promotesustainability management and to strengthen the corporate governance structure byclarifying management direction by rapidly and flexibly making management decisions inorder to continuously grow with the challenge to build a new society.

DX/
Businesstransformation

It is essential to work on innovation through co-creation, operational reforms through Digital
Transformation (DX), and business transformation in response to changes in society for
illuminating a more affluent tomorrow.

Sales/Marketing

To formulate and execute sales strategies aimed at rapid progress in growth businesses
and strengthening the competitiveness of the earnings base by realizing high quality growthin order to provide customer peace of mind and satisfaction.

Research andDevelopment/“Monozukuri”

To enhance product competitiveness which is necessary for high quality “Monozukuri” (design,
manufacture, construction, and maintenance) to maintain a safe and secure social infrastructureand for provision of value, along with creating new technologies and new products.

GlobalTo promote initiatives aimed at building a strong business base for overseas business and further
enhancing the earning power necessary to meet the world’s new infrastructure demands.

Finance/
Accounting

To manage capital efficiently, invest in growth businesses, and deliver shareholder returns,
together with making accurate financial reports.

Legal affairs/
Internal control

To strengthen internal control and compliance / risk management structure, the base forhonest and responsible business operations.

HR development

To enhance wellbeing and employee engagement and to promote initiatives such as DEI(Diversity, Equity & Inclusion), in order for diverse human resources, who are the sourceof corporate value, to be able to grow and play an active role in a lively way, where each
person can derive fulfillment from their work.

Environment

To expand businesses that contribute to the environment and to promote green strategies
focused on internal decarbonization which are necessary to realize carbon neutrality.

Executive Officers
Chairman & Senior Officer
Takeshi Miida
President & Executive Officer
Akio Inoue
Executive Vice President & Executive Officer
Norio Takekawa
Senior Managing Executive Officers
Masayuki Iwao
Nobuaki Tamaki
Tatsuki Mochizuki
Masahiko Suzuki
Satoshi Momenya
Koji NiikuraNewappointment

Managing Executive Officers
Hiroshi Toke
Hideki Miyazawa
Akio Ikemori
Katsuyuki Watanabe
Hiroshi Takahata
Hitoshi Miyake
Executive Officers
Noritaka Matsushita
Takeo Suzuki
Munekazu Shiratori
Seiji Kato
Nobuya Ono
Takehisa Koganezawa
Yasuhiro Yoshino
Hirokazu Fukudome

Hisahiro Murashima
Katsunori Suzuki
Kuniteru Yamaoka
Kazuhiro Yamada
Katsumi Shimamura
Ko Yamamoto
Masami Ogawa
Shinichiro Kon

Director (Outside Director)

ManabuKinoshita

44

Introduction / Message

Our Value

Basic Approachof Directors meeting held in May 2006. In addition,
we revised this basic policy at the regular Board of
Directors meeting held in July 2022, as a result ofa revision of the officer system to further clarify thedivision of roles between executive functions (executive
officers) and so-called supervisory functions (directors
and the Board of Directors).
We will work to further improve the fairness,
efficiency, and transparency of management bypromoting initiatives to enhance corporate governancein accordance with the Corporate Governance Code.

The Meiden Group has implemented a number

relationship between the Board in its supervisoryof measures to strengthen its corporate

function and business execution, as well as

governance. These began with the introduction

about growth strategies for each business. Iof the executive officer system in 2003, followed

believe that, in order to go beyond discussion andby the establishment of the voluntary Nomination

further vitalize activities, it is one of the missions& Compensation Committee in 2018 andof the Board of Directors to quickly absorb

the transition to a company with an audit &various issues occurring in the field and to leadsupervisory committee in 2020.

Meidensha in the right direction while advancing
I think that the Meiden Group is approaching

since then. I believe that the latest revision in 2021

a key juncture in its history. In order for further

clearly presents three new important areas thatgrowth in the Meiden Group, I believe that it is ofare effective in improving the quality of a board

utmost importance to create a corporate cultureof directors. The first area is the effective use

in which our human resources, the source of ourof outside directors and the identification andvalue creation, can grow and flourish vigorously.

disclosure of the skills of directors, etc., with the

It is with this belief that we at Meidensha will work

aim of making the Board of Directors function

to secure and cultivate diverse human resources

effectively. The second is to ensure diversity inand make improvements to the labor environment

the company’s core human resources. The third isfor our employees.

disclosure of initiatives.
Amid these new developments, the Meiden

As Chairperson of the Board of Directors, I will
steadily implement these

Directors

Number of directors (outside directors): 7 (3)Directors(Audit & Supervisory
Committee Members)

Number of directors (outside directors): 4 (3)
6 (3 outside directors and 3 outside

Number of Independent
directors (Audit & Supervisory Committee
Officers

members))

From FY2003

From FY2015

Purpose/results
Enhancement ofDecision-making
and Supervisory
Functions of theBoard of Directors 20032012
Separation ofSupervision andExecution ofManagement

2015
Introduction of executive officer system
R evision of the rules of internal approval

2019

Enhancementof transparency
and soundness ofmanagement

2012

Revitalizing andenhancing debate
by the Board of
Directors

2013
2014

2018
2019
2015
2018

Deeper corporate governance system
based on suddenly changing businessenvironment

From FY2020
2020	Revision of the Board of Director’s Meeting
agenda, standards and rules of internal
approval
Transition to a company with an Audit &Supervisory Committee
Proportion of outside directors at least 1/3
Election of female outside director (1 person)
2022	Review of the officer system (Clarification of
execution and supervision)
Increase of outside directors’ ratio to majority

 evision of Board of Directors agendaRstandards
S eparation of the roles of Chairpersonof the Board of Directors andChairperson of the Executive Officers’
MeetingElimination of quotas for number of
directors

Revision of the Basic Policy on Internal
2020  Revision of basic internal control policy
Control Systems
E stablishment of the Group for Promotion C ommencement of verification ofeffectiveness of the Board of Directorsof Internal Control
C ommencement of evaluation ofIncrease of outside directors ratio on the2022cross-shareholdings
voluntary Nomination & Compensation
Committee to majority
E stablishment of the voluntary	E stablishment of the Corporate
Compensation Committee
Establishment of the voluntary
Governance Management Group
Nomination & Compensation CommitteeR evision of the Basic Policy on Internal Change of directors’ term of office to 1 year
Control Systems
Abolition of Senior Advisor system ommencement of training for newlyC
appointed outside directors
2021Commencement of advance explanationof Board of Directors agenda items to
outside directors

 stablishment of Board of Directors’Ediscussion

Corporate Governance Structure
General Meeting of Shareholders
Appointment andDismissal

Chairperson: Director & Chairperson

Nomination &Compensation
Committee
AdviceRecommendation

by enhancing the internal control system, having

as well as corporate value

Executive
Officers’Meeting

outside directors comprise a majority of the Board

enhancement.

Audit & Supervisory
Committee

Audit
Oversee

ReportMonitorSupport and Advisory
Division for Audit& Supervisory
Committee
Cooperation

ReportRequest / Instruct

ReportPresident & Executive
Officer (Chairman)

Internal Auditing
Division

Instruct

Executive Officers with Titles
Direction / Orders
Monitor / Oversee

Audit
ReportAppointment andDismissal

ReportDirectors Who are Audit &Supervisory Committee Members

Directors
Appointment
MonitorTransfer ofOversee
Authority

Appointment
and Dismissal

ReportBoard of Directors(Voluntary Committee)

profitability improvement,

Takeshi Miida2017 nhancement of information sharing withE
outside directors
Commencement of meetings to
exchange opinions with outside directorsof Directors and strengthening its governance

Representative Director
Chairperson & Senior Officer

2016 evision of the Basic PolicyRregarding Establishment of a System
to Ensure the Appropriateness ofBusiness Activities (the Basic Policy
on Internal Control Systems)
C ommencement of reporting to
the Board of Director’s Meeting on
internal control adjustment status

Executive Structure

policies regarding climate change action and

2018

2015
2006

initiatives to bring theof Directors, and formulating and disclosing

45

Company with an Audit & Supervisory
Committee

Form of Organization

Promotion of corporate governancereforms based on the Corporate
Governance Code

Meiden Group sustainable

has been engaged in discussions about the

MEIDENSHA REPORT 2023

Outline of Corporate Governance Structure

Commencement of stronger
corporate governance to increase theeffectiveness of the Board of Directors

Group is improving the effectiveness of the Board

human capital. In addition, the Board of Directors

Corporate Information

supervisory and executive functions by making
changes to increase legitimacy in June 2022,
and combining it with the transfer of authority
mentioned in (b) through the introduction of an
executive officer system in June 2003, and asystem for election of executive officers who
are responsible for a flexible and agile businessexecution system by the Board of Directors, basedon the Articles of Incorporation.

We are a company with an Audit & Supervisory Committee,
and we aim to further strengthen corporate governance inthe following areas.
(a)We further enhance the supervisory functionsof the Board of Directors through use of legal
authority, such as directors that are Audit &Supervisory Committee Members holding voting
rights at meetings of the Board of Directors andhaving the right to present a position statement
relating to nomination and compensation of
directors at General Shareholder’s Meetings.
(b)We further enhance discussions on management
strategies, etc. by transferring the Board of
Directors’ meeting to a monitoring type, sincea portion of the Board of Directors’ authority
to make decision on business execution has
been transferred to the Director & President andExecutive Officer (Executive Officers’ Meeting).
(c)We aim to further promote separation ofsolutions to these issues.

into effect in 2015, has been revised periodicallythe formulation of basic sustainability policies and

Our Strategy

Transition to a Stronger Corporate Governance System

Message from the Chairman of the Board of Directors

The Corporate Governance Code, which came

Our Impact

Corporate GovernanceCorporate Governance Structure and Initiatives

Corporate Governance
Under our Corporate Mission of “illuminating a more
affluent tomorrow” and our Corporate Philosophyof providing value “for customer peace of mind andsatisfaction,” our group has set forth our Ideal State ofBeing/Vision for 2030 as “Work to build a new society
through integrity to the earth, society, and people,
and through the power of co-creation – Sustainability
Partner –.” Our group takes the basic stance that
we maintain fair and steady business activities withrespect for people and the global environment, operatebusinesses focusing on profit while constantly pursuing
new technology and high quality, and endeavor to giveback to society.
In order to implement this basic stance, we
formulated the “Basic Policy to Improve the Governanceto Secure Fair Business Practices” at the regular Board

Our Approach

ReportCooperation

ReportCompliance Committee
Risk Management Committee
MonitorInternal Audit

Executive officers & department heads
Group Subsidiaries

Accounting
AuditorSupportMonitorAccounting
Audit

Internal Control Promotion
Division46

Introduction / Message

1. The Company’s Board of Directors
In principle, the Board of Directors convenes on aregular monthly basis and holds ad-hoc meetings asnecessary, to discuss major executive matters, businessissues, and management issues related to the ourbusiness execution. In FY2022, the Board of Directors
held 13 meetings, and the attendance rate was 100%for all directors.
1 Composition of Board of Directors
Our Board of Directors consists of 11 directors,
including 4 who are Audit & Supervisory Committee
members. The 11 directors also include 6 outside
directors (of which 3 are members of the Audit& Supervisory Committee). The 6 all satisfy therequirements for independent directors as definedby the Tokyo Stock Exchange and our Criteria for
Determining the Independence of Outside Directors.
This means that independent outside directors makeup a majority of the Board of Directors, ensures theeffectiveness of the supervisory function of the Board of
Directors, and ensures that objective and independent
opinions are fully incorporated into the company’s
management.
It is the basic policy to ensure the diversity of theBoard of Directors as a whole based on the abilities,
insight, and experience of individual directors and toassign appropriate human resources that contributeto the enhancement of our corporate value. It is also
our policy to ensure the diversity and balance of the
Audit & Supervisory Committee as a whole based on
the knowledge and experience of accounting, financial,and legal matters etc., of directors who are membersof the Audit & Supervisory Committee. The balance ofexpertise, knowledge, experience, etc., is as describedin the Board of Directors’ Skill Matrix above.
2 Activities of the Board of Directors
The Board of Directors considers “matters fordiscussion” in addition to matters to be resolved andreported. “Matters for discussion” includes following
the progress of and tracing matters related to basic
management policies such as the Medium-termManagement Plan and important management themes.
At their meetings, directors actively exchange opinions
on our management issues and strategies and on
corporate governance, while drawing on the knowledgeof the outside directors. The Board of Directors use themeeting as a forum to reach consensus on the directionof us in the conceptual and planning stages prior to
making a board resolution.
Major topics discussed by the Board of Directors in
FY2022 included the following.

 trengthening the supervisory function of theS
Board of Directors
The Board of Directors discussed this issue with theaim of further strengthening its supervisory function, as
found in the FY2021 board effectiveness evaluation. In
addition, an outside attorney gave a training on the roleof the Board of Directors and outside directors and theexercise of their functions. Directors also met several

47

Our Value

times outside of formal Board of Directors’ Meetings to
trade opinions.
The following measures have been taken as a result of
the Board’s discussions and deliberations.
Improved advance explanation of agenda items of
the Board of Directors
The Executive Vice President & Executive Officer
attends the explanatory meeting for outside directors
to share information on overall business execution as it
relates to agenda items of the Board of Directors andexecutive officers in charge provide explanations toresolve questions on individual operations related toagenda items in advance, we make an improvement thathelps stimulate and enhance discussions and debates
at Board of Directors’ Meetings.
Participation in discussions at the conceptual andplanning stages
The FY2023 profit plan was discussed at a Boardof Directors’ Meeting at the stage where policy wasforming. Directors discussed setting optimal profit
targets and investment plans to enhance corporate
value. The profit plan is decided at a meeting of theBoard of Directors after it is reviewed by the businessexecution organization based on discussions.

Our Approach

Our Impact

Corporate Governance

3 Participation of Outside Directors in Board of

Directors’ Meetings
Participation in the agenda
Our outside directors have diverse management
experience and areas of specialization, understandthe content of the proposals put before the Board of
Director’s Meeting from a variety of perspectives when
said matters are explained in advance, and attend
Board of Directors’ Meetings having checked any
unclear points in advance.
At Board of Directors’ Meetings, multifaceted
discussion occurs, based on the broad perspectiveof managers, the knowledge of technicians, and thehigh-level specialization of experts, etc. The outside
directors participate in deliberations by actively making
statements, etc., in particular concerning policies
and measures to deal with risks, and cautions whenmonitoring, etc.
Training for New Outside Directors
We create opportunities to explain our business andstructures, primarily to aid the understanding of newly
appointed outside directors. The responsible officers

Our Strategy

MEIDENSHA REPORT 2023

or managers in charge of the business group explain
their business, group-wide themes, and our governancesystem to the outside directors, answer their questions,and exchange opinions with them.

2. E
 ffectiveness Evaluation of the Board of
Directors
Meidensha has a mechanism in place to conduct ananalysis and evaluation of the effectiveness of the Boardof Directors in order to strengthen the supervisory
function of the Board of Directors.
With regard to the activities of the Board of Directors
in FY2022, all members of the Board of Directors,
including outside directors, conducted self-evaluationsof the effectiveness of the Board of Directors, and thefollowing discussions took place at the meeting of theBoard of Directors, in order to revitalize deliberations by
the Board of Directors.
An overview of the analysis, evaluation, anddiscussions is as follows.

Major issues and status of efforts to increase effectiveness as discussed in previous fiscal year
Major issues in FY2021

Improved agenda setting
It was suggested that to strengthen the supervisory
function of the Board of Directors, it is important tostrengthen Board of Directors agenda setting based oneach director’s understanding of management issues.
Previously, the annual schedule of Board of Directors
meetings was prepared based on the opinions of thedirectors and confirmed at each Board of Directors’Meeting. Starting in FY2023, the agenda of board
meetings will be discussed and deliberated on aregular basis as a new agenda item itself. The aim is
to strengthen agenda setting and further reinforce thesupervisory function of the Board of Directors.

Corporate Information

Status of efforts in FY2022

1 E nsure greater diversity and skills balance among

directors

2 E xplore monitoring-type Board operations,

including the use of Board of Directors meeting
agenda items

3 Further strengthen information sharing with outside

directors

Starting with the Notice of Convocation of the 159th Ordinary General Meeting of
Shareholders, disclosing “Skills Required to the Board of Directors and the Reasons”
Participating in discussions at the conceptual and planning stages
Improving advance explanation of agenda items of the Board of Directors and improving
agenda setting

Effectiveness Evaluation Process for the Board of Directors (FY2022)

1

Formulation ofquestionnaire

The Chairperson and Secretariat of the Board of Directors formulate aquestionnaire (11 questions, all descriptive) on the status of the Board of Directors’
initiatives and their effectiveness, based on the issues identified in the discussionsof the effectiveness evaluation of the previous year, the status of the response tothem and evaluation, and new issues found by the Board of Directors in FY2022.

Effectiveness evaluation items(questionnaire items)
1 Composition, deliberations, and operations of theBoard of Directors (size, independence, diversity,content of deliberations, deliberation time, andoperating methods)

2 Ensuring the effectiveness of the Board of

Directors (is the monitoring-type Board of Directors
functioning?)

2

Conducting ofquestionnaire
surveyAll 11 directors are asked to fill out the above questionnaire in April 2023.

3

Discussions at
Board of Directors
meeting

At the May 2023 Board of Directors meeting, all directors discuss the results of theevaluation of the effectiveness of the Board of Directors (Matters for Discussion by
the Board of Directors), based on the results of the responses to the questionnaire
received from each director. The FY2023 analysis and evaluation results arecompiled to determine whether the Board of Directors is effective.

Analysis andevaluation results

Results of questionnaire evaluation from each director are summarized and discussed by the members of the Board of Directors, and theopinions are summarized as follows.
The composition of the Board of Directors and its deliberation time and operating methods are appropriate.
The quality of the content of deliberations (agenda setting and discussion by directors) has been enhanced.
O pinions and advice from outside directors have been adequately received, and follow-up on these has improved since last year.
Based on the above, we have judged that our Board of Directors is effective.

 rogress of Medium-term Management Plan 2024 inPeach business and strategies to achieve its objectives
The Board of Directors discussed several topics
intended to monitor the progress of Medium-termManagement Plan 2024 and supervise strategies
to achieve its objectives. The Board of Directors
discussed the situation and strategies in each business,
especially measures to cope with rising component
prices, collaboration between businesses (especiallybetween the product sales and maintenance service
businesses), and growth strategies beyond Mediumterm Management Plan 2024.
Promoting sustainability management
The Board of Directors’ Meeting discusses the progressof the meeting of the Sustainability Management
Strategy Committee (chaired by the President &Executive Officer) as part of supervision of sustainability
management, which is a basic policy of Medium-termManagement Plan 2024. It also discusses the status ofhuman capital initiatives.

Issues and Future Initiatives

4

3 Self-evaluation (securing time required for duties,

demonstration of expertise, inside: awareness ofmanagement and supervisory perspectives, outside:supervision from an independent standpoint)

Major issues in FY2022
1 Improve board meeting agenda setting

4 Reorganization of Board of Director’s Meeting agenda

items and supervisory function (how execution andsupervision should be further separated)

5 Other (free description)

Initiatives in FY2023

to further the Board of Directors’supervisory function

Enhance information sharing with outside directors, link agenda setting with the Executive Officers’ Meeting, andhold discussions within the Board of Directors with an awareness of the active involvement of outside directors.

2 O rganize delegation of decisions of

To organize what is being delegated, we will first organize the monitoring function of the Board of Directors andseek a common understanding of the supervisory function of directors that should exist in a company with an Audit& Supervisory Committee.

important business execution

3 Establish a system on the execution side

The content of deliberations and operating methods of the Executive Officers’ Meeting will be organized and linked
to efforts to improve Board of Directors operations to enhance effectiveness.

Based on the above, we will continue working to increase the effectiveness of the Board of Directors.

48

Introduction / Message

3. Nomination & Compensation Committee
Meidensha has established a voluntary Nomination& Compensation Committee as an advisory
body to the Board of Directors. Its purpose is toensure management transparency and strengthen
accountability regarding nominations (appointments anddismissals) and compensation of directors.

4. Board of Directors Selection Policy andAppointment and Dismissal Process
The number of directors is set at no more than 15 toallow sufficient discussion of management issues.
(10 Directors who are not Audit & Supervisory
Committee members and five who are)Based on the basic policy for ensuring a balance
between the diversity of the Board of Directors as awhole and its expertise and experience, as describedin (1) 1 Composition of Board of Directors above, we
select individuals who will help strengthen the decisionmaking and supervisory functions of the Board of
Directors. The Board of Directors consults with theNomination & Compensation Committee (a voluntarycommittee), with independent outside directors as themain members and chair, then the Board of Directors
nominates candidates by resolution. Finally, nominations
are submitted to the General Meeting of Shareholders.
In the event that a director is found to be in violationof laws and regulations or the Articles of Incorporation,or to have significantly deviated from the policy forthe appointment of directors, the Board of Directors
will take the necessary procedures for dismissal after
consulting with the Nomination & Compensation
Committee.

5. S
 uccessor Planning
Meidensha selects several candidates to succeed the top
executive from among those appointed as directors or
executive officers with titles who have undergone educationand training and who meet certain requirements andcontribute to enhancing our corporate value.
In replacing the top executive, it is identified which of thecandidates should be the successor after consulting with
the Nomination & Compensation Committee. The Executive
Officers’ Meeting and the Board of Directors scrutinize therequirements and eligibility, identify a candidate, and finallydecide who will be the top executive.

6. Executive Officer System and Executive
Structure
Meidensha introduced an executive officer system inJune 2003 in order to streamline the Board of Directors,
as well as to accelerate management decision-making
and to enhance supervisory functions. At the sametime, we sought to reinforce the functions of theBoard of Directors by promoting the separation of thedecision-making authority and supervisory function
from the business performance function held by the49

Our Value

Board of Directors.
Based on the Articles of Incorporation, executive
officers selected by the Board of Director’s Meeting
assume responsibility for the execution of specified
tasks within the scope of authority transferred by
the Executive Officers’ Meeting and the President
and Executive Officer, and nimbly perform executivefunctions under the supervision of the Board of
Directors, in accordance with the Meidensha Group’s
management policies determined by the Board of
Directors.
The Executive Officers’ Meeting, which comprises
Executive Officers with Titles, is created for executive
decision-making, and decides matters based on
the rules of internal approval, as well as matters forwhich consultation from a full-company perspective isrequired.
Furthermore, apart from the meeting body to makedecisions, we established advisory and internal bodies
such as review and strategy meetings, and with regard
to important management matters, we created asystem wherein thorough discussion and deliberation
are conducted prior to decision-making, and follow-up
strategy and planning and improvement initiatives are
conducted following decision-making.
Summaries and key points of proceedings at the
Executive Officers’ Meeting and other internal bodies
are reported at the regular meeting of the Boardof Directors for the month as a report on businessexecution. This helps to ensure and improve theeffectiveness and supervisory functions of the Board of
Directors.
In executing business, resolutions and decisions are
made by executive officers who have authority overbusiness execution and strive to execute operations
proactively and flexibly.
In addition, when the Board of Directors delegatespart of its business execution authority to executive
officers via the directors, the executive officers are
required to submit a report on the status of businessexecution to the Board of Directors at least once every
three months. This helps ensure that the Board of
Directors can supervise effectively.

7. Auditing System
Our Audit & Supervisory Committee consists of four
directors who are Audit & Supervisory Committee
members (three outside directors and one standing
inside director).
In principle, the Audit & Supervisory Committee
is held once a month before the Board of Director’s
Meeting. The purpose is to enable the Audit &Supervisory Committee to form its own intentions on
matters to be discussed at Board of Director’s Meetingsprior to the Audit & Supervisory Committee. In casethere is a quarterly audit report from the accounting
auditor, Audit & Supervisory Committee is held on thesame day as the Board of Director’s Meeting. In thatcase, the Audit & Supervisory Committee is held twice
in a month. Each Audit & Supervisory Committee lasts
about two hours.
In addition, we established the Support and Advisory

Our Approach

Corporate Governance

Our Impact

Division for Audit & Supervisory Committee exclusively
to aid the Audit & Supervisory Committee. It has four
members with legal, financial, accounting, sales,
factory, quality control, R&D, overseas business, andinternal auditing experience.

8. Internal Auditing System
1 Organizations
Meidensha has established the Internal Auditing Division(16members as of March 31, 2023).
As an organization under the direct control of the
President and Executive Officer, the Internal Auditing
Division is independent from other executive lines. It
conducts internal audits to check the effectivenessand efficiency of business operations, the reliabilityof financial reporting, the status of compliance withlaws and regulations, and the maintenance of assets,
covering Meidensha and all of Meidensha Group
companies including in abroad.
With regard to internal control, the Internal Control
Promotion Division is the specialized division that
establishes risk management systems that integrate
the entire Meidensha Group, promotes enhancement ofinternal control systems, and ensures complete internal
control functions through joint monitoring of internal
control systems by the Audit & Supervisory Committee
and the Internal Auditing Division.
2 Method of audits
We conducted risk-based audits in 10 divisions basedon the major Company-wide risks identified by the
Risk Management Committee. We covered those risks
comprehensively while prioritizing high-risk areas. In
FY2023, we will reevaluate the major Company-widerisks from the perspective of the Internal Auditing
Division and will audit units selected in consideration ofrisk factors of particular importance to management andother risks.
To improve the coverage of risks in audits ofsubsidiaries, we conduct standardized audits with audit
standardization tools. We plan to conduct standardized
audits of all subsidiaries between FY2021 and FY2024.
In FY2022, we audited 4 domestic subsidiaries and 12
overseas subsidiaries.
The Internal Audit Regulations stipulate that internal
audit results are to be reported to the President &Executive Officer, the Board of Directors, the Executive
Officers’ Meeting, and the Audit & Supervisory
Committee.
In FY2022, reports were presented monthly to the
President & Executive Officer, semiannually to the Boardof Directors and the Executive Officers’ Meeting, and 10
times to the Audit & Supervisory Committee. Internal audit
reports are also sent to the members of the Executive
Officers’ Meeting and standing Audit & Supervisory
Committee members each time one is issued.

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

policies based on the “Basic Policy regarding
Establishment of a System to Ensure theAppropriateness of Business Activities” at each
Meidensha Group company, establishing a regulatory
framework, and implementing the PDCA cycle.
Major Initiatives in FY2022(1) T he Group Company Internal Control Committee met
twice in the year to share information on important
top risks for the Group as discussed by the Risk
Management Committee and the progress of risk
management at each company. It also introduced
CSA (control self-assessment) to overseas
subsidiaries and provided internal control training
and CSA training for local staff at 13 companies,
mainly at presiding companies.
(2) In order to strengthen the internal controls of theentire Group, the Internal Auditing Division conducted
standardized audits of four domestic subsidiaries
and two overseas subsidiaries to check the status of
their preparation and operation of internal controls.

10. B asic Policy and Current Status of
Cross-Shareholdings
Our purpose to hold cross-shareholdings is to maintainand expand transactions for the medium-to longterm and secure and strengthen medium-to long-termcooperative relationships with partners and allies,
taking account of market conditions and other factors.
Based on the purpose, our basic policy is to hold crossshareholdings that help enhance corporate value andto consider selling cross-shareholdings that no longer
seem significant or rational.
Under this policy, we decide to keep or reduce
its current holdings of listed stocks based on acomprehensive assessment of whether the ratio of eachstock’s return (dividends, related trading profits, etc.)
to market value meets the target cost of capital, policy
factors, and so on.
We sold 10 listed and unlisted stocks for ¥1.03 billion
out of its 102 listed and unlisted stocks (balance sheet
amount: ¥16.406 billion) as of March 31, 2022, reducing
the number of stocks to 96 (balance sheet amount:¥16.418 billion) as of March 31, 2023. This represents
14.8% of consolidated net assets as of March 31, 2023.

9. Strengthening Group Governance
The Meidensha Group is working to continuously
strengthen group governance by developing basic

50

Introduction / Message

Operating income for FY2021 was ¥9.468 billion,
compared to a target of ¥10 billion, which represents anachievement rate of 94.6%.

Directors’ Compensation
Directors compensation policy
i Level and System of Compensation
The level of compensation of Meidensha’s directors isdetermined based on external objective compensation
market data, economic conditions, industry trends,
and Meidensha’s business circumstances, etc. Giving
consideration to this level, the content of the director’scompensation system is determined in the form ofinternal regulations on director’s compensation after
consultation and confirmation by the aforementioned
voluntary Nomination & Compensation Committee,
chaired by an outside director.
ii Composition of Compensation(a) Directors (excluding Audit & Supervisory
Committee members and outside directors)
Compensation of directors (excluding Audit &Supervisory Committee members and outside
directors) is based on an annual salary system withperformance-linked compensation and comprises basic
compensation (a) and incentive compensation according
to position. Of these, incentive compensation comprises
performance-linked compensation (b) as a short-term
incentive and compensation for stock acquisition (c) andTSR (total shareholder return)-linked compensation (d)as medium- to long-term incentives.
Target Proportion of Each Type of Compensation(if 100% of targets were achieved)

Incentive Compensation
Basic
Compensation (a)60%PerformanceLinked
Compensation (b)20%

Our ValueCompensationfor Stock
Acquisition (c)15%TSR-Linked Compensation (d) 5%

Calculation formula

BasicRemuneration for
Each Position

Coefficient According
to Achievement Level ofTarget Operating
Income(0.0 to 1.4)(b) Meidensha provides compensation for stockacquisition and TSR-linked compensation as mediumto long-term incentives to sustainably increase
corporate value and ensure that directors (excluding
Audit & Supervisory Committee members and outside
directors) have some shared value with shareholders.

iii Incentive Compensation System(a) The performance indicator for calculating
performance-linked compensation as a short-term
incentive is decided after the annual general meetingof shareholders for the relevant fiscal year. It is decided
based on the operating income of the previous fiscal
year to raise awareness of the need to improve
performance, especially profitability, each fiscal year.
The performance-linked compensation indicator varies
from 0 to 140 depending on the degree to which targets
were achieved, with perfect achievement counting as
100.

51

Corporate Governance

Our Impact

decision must consider the details of such confirmation
or report. In FY2022, the Board of Directors resolved
at its June 23, 2022, meeting to delegate President
Takeshi Miida to determine the specific details of theamount of compensation for directors. The reason fordelegating this authority is that the President, as thechief officer of the Company, is best suited to evaluateeach director while looking at Meidensha’s overall
performance.
Compensation for directors who are members of the
Audit & Supervisory Committee is determined by thesame committee within the compensation limit decided
at the General Meeting of Shareholders. An appropriate
amount is set to reward the services of committee
members, taking into consideration whether they
are standing or non-standing and the nature of theirrespective auditing duties.

is determined for each position based on internal rules
on officers’ compensation. The amount is contributed
to the Officers’ Shareholding Association to acquire
shares.
2 The TSR-linked compensation indicator varies
generally between 80 and 120 depending on the ratio of
the Company’s TSR at the end of the latest fiscal year
to the TSR of the TOPIX benchmark including dividends
corresponding to the Company’s TSR calculation period(relative TSR*).

Calculation formula

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

FY2022 Results
Classification

Total
Amount ofCompensation,etc.

Total Amount of Each Type ofCompensation, etc.
(millions of yen)

Numberof
PeopleBasic

Incentivecompensation

246

175

70

6

26

26

—

4

34

34

—

2

Outside directors
who are Audit& Supervisory
Committee
members

26

26

—

5

Total

333

262

70

17

(millions of yen) compensation

Directors(excluding Audit& Supervisory
Committee members
and Outside Directors)

Outside directors(excluding Audit& Supervisory
Committee members)

Directors who
are Audit andSupervisory
Committee members(excluding Outside
Directors)

Notes 1. Amounts are rounded down to the nearest ¥1 million.
2. The above includes three directors (excluding Audit & Supervisory
Committee members) and two directors who are Audit & Supervisory
Committee members who retired at the conclusion of the 158th
Ordinary General Meeting of Shareholders held on June 23, 2022.
3. The amount of compensation for directors (excluding Audit &Supervisory Committee members) does not include employee
salaries for directors who also serve as employees.

1 The amount of compensation for stock acquisition

Dialogues with Shareholders and Investors
When any shareholder wishes to discuss with theCompany ideas that will contribute to the medium- tolong-term improvement of the Company’s corporate value,
Meidensha’s policy is that Company management will
engage in such dialogue to the greatest extent possible.

Results of Conversations with Stakeholders
This section will introduce some of the opinions andrealizations we received through conversations withanalysts, institutional investors, and shareholders.
1 Introduce relative TSR (Total Shareholder Return)

Position-specific basic
TSR-linked
compensation

A factor based onrelative TSR(0.8 to 1.2)

* Relative TSR: Meidensha’s TSR at the end of the latest fiscal year divided by
the TSR of the TOPIX benchmark including dividends corresponding to theCompany’s TSR calculation period(b) D irectors and Outside Directors Who Are Audit &Supervisory Committee Members
Directors and outside directors who are Audit &Supervisory Committee members only receive basic
compensation on annual salary system basis.

Our Approachiv Compensation Determination Procedures
Details of the compensation system and the amount ofcompensation (including the rules that it is calculated
in accordance with the standards of the compensation
system and is within the compensation limits decided
at the General Meeting of Shareholders) are confirmed
and deliberated from an objective point of view by thevoluntary Nomination & Compensation Committee.
Specific details of the amount of compensation foreach individual director (excluding members of the
Audit & Supervisory Committee) are delegated to the
President & Executive Officer (“President”), who is adirector, based on a resolution of the Board of Directors.
To ensure that the President exercises this authority
properly, the Board of Directors establishes proceduresfor the President to consult and obtain confirmation of
the draft in advance from the voluntary Nomination &Compensation Committee. Moreover, the President’s

Main IR & SR Activities in FY2022
Individual
Sessions

NumberBreakdown of Investor Type

Domestic
Investors

77

Analyst: 43
Fund Manager: 34

Overseas
Investors

32

Analyst: 11
Fund Manager: 21

Total

109

(Note: There were 41 meetings with securities analysts not listed above for a
total of 150 meetings with investors.)

Main Discussion Themes with Analysts andInstitutional Investors
The main themes that came up in discussions with analysts
and institutional investors in FY2022 are as follows.
 he impact on performance andT
countermeasures following the sharp rise in
the cost of materials, energy, and logistics,
and the emergence of geopolitical risks
V iew of the future outlook and capital
investment of the EV BusinessMeasures for improved profitability of overseas
businesses and a timeline for achievement

into director compensation benchmarks
We were told that it would be good to introduce
performance-based compensation with relative TSR as
an index in addition to the conventional stock acquisitioncompensation in the medium- to long-term incentive
compensation from FY2023. This would make the director
compensation system and benchmarks align more closelywith stockholder interests.
2 Disclose the reasons (including definitions)behind the skills matrix selection
We received feedback that we should establish itemswith more specific definitions of the skills required for the
Board of Directors to function. Therefore, starting with
the Notice of Convocation of the 159th Annual General
Meeting of Shareholders to be held in June 2023, we will
disclose the “Required Skills and Reasons for Appointing
the Board of Directors.”
Going forward, we will continue to proactively
communicate with all our shareholders and investors
by enhancing opportunities for dialogue throughfinancial results briefings and individual IR/SR, as well by
expanding information disclosure on our website and inreports and other publications.

52

Introduction / Message

Our Value

Risk Management/ Compliance
Compliance Initiatives

Businesses face conditions that change day to day:climate change, natural disasters growing in frequency
and intensity, geopolitical risks coming to the surface,
increasing digitalization, and diversifying values. Under
these circumstances, we must identify the wide rangeof potential future risks in a timely manner and respond
appropriately if we are to sustainably increase ourcorporate value.
The Meiden Group has created an ERM (Enterprise
Risk Management) system designed to identify all typesof major business risks to the Group as a whole so thatmanagement can discuss them and control them in an
integrated manner.
In addition to everyday risk management, we also
have an organization-wide BCM (Business Continuity
Management) system for managing and responding
to business continuity risks caused by accidents ordisasters. Through this, we aim to be able to respond toconstantly changing risks during both regular operationand emergencies.

Meidensha has enhanced and constructed a compliancepromotion framework that is an important pillar of risk
management, by integrating the Legal Affairs Divisionand the Enterprise Risk Management Division into theGovernance Headquarters in April 2022. The Legal Affairs
Division is the office responsible for the Compliance
Committee, which is chaired by the member responsible
for compliance, and convenes twice each year todetermine compliance action plans.
Based on these action plans, the staff business units,
led by the Legal Affairs Division, conduct compliancetraining for all Group companies on observing antitrust
laws, preventing corruption and harassment, and otherissues. In addition, the Compliance Committee secretariat
handles matters related to compliance reporting andworks to resolve any legal issues that arise. These
compliance-related activities are reported during regularmeetings of the Compliance Committee and at meetingsof the Board of Directors.
Each Japanese company in the Meiden Group has asimilar compliance committee and compliance manager
system to Meidensha. Moreover, we take a survey ofoverseas Group companies that helps us continuallydevelop our internal control system such as promoting
understanding of on-the-ground conditions of compliancesystems at each company.

The Meiden Group is building a risk management systemusing the following three-line model.

Our Impact

Corporate Governance

Our Strategy

Risk Management StructureManagement

The Risk Management Committee is chaired by the
Director & Senior Managing Executive Officer andconsists of the heads of Headquarters staff business
units. Twice a year, it deliberates on the importantbusiness risks of the Meiden Group as identified by theInternal Control Promotion Division, then selects major
company-wide risks. The committee determines which
units have jurisdiction over each risk and discusses
policies for dealing with the risks. Management
holds discussions on the business risks previously
discussed by the Risk Management Committee andExecutive Officers’
Meeting

Group Company Internal
Control Committee[Share information on major
company-wide risks]
Composition ofcommittees

Audit andSupervisory
Committee

President

Process through Deciding Major
Company-Wide Risks(Example from FY2022)

Process

Actions performed

Submit progress check form tohead of business group

Submit CSA progress check form

[First Line]Business units

Hold risk discussion

Submit major group risks

Sales/
technology

Factories

Construction
business units

Research
Institute

Risk
information

Sales bases

Group
companies

Support risk
control

Discuss major companywide risksGroup discussion by Executive Officers’ Meeting
Provide draft of major
company-wide risks

Hold risk discussion

Share information andconsult with Line 2
Identify and evaluate major
company-wide risks

Internal Control Promotion Division
Present draft of major company-wide risks
Report discussion results

Line 2

Consult on how tostrengthen risk control

Share discussion results
Deliberate major companywide risks

Risk Management Committee

Report results of deliberation on major company-wide risks

Discuss and decide on
major company-wide risks

Board of Directors / Executive Officers’ Meeting

Major Risks Facing the Group
The Meiden Group stipulates major business risks tothe entire Meiden Group, including in relation to ESG,
through regular discussion among managers according
to systems such as those listed above. As a result of

the above discussion among managers, risks that could
have a serious impact on the decisions of investors are
as follows (as of March 31, 2023).

Committees concerned with risks

1
2

Speed ofmaterialization

Effectiveness of
response

High

NormalEffective

High

High

Somewhat fast

NormalSomewhat highLarge

MediumExtremely fast

EffectiveHigh

Geopolitical risks

Large

MediumExtremely fast

NormalSomewhat highInadequate labor management

Large

MediumNormalNormalHigh

6

Occurrence of industrial accident

Large

MediumExtremely fast

Somewhat effective

Somewhat high7

Reduced quality

Large

High

Fast

Somewhat effective

Normal8

Inadequate cyber measures

Large

MediumExtremely fast

Effective

Somewhat highLarge

Inadequate procurement management

Large

3

Insufficient internal information
management

4[Third Line]

5Internal Auditing
Division[Audit risks in each unit]

Cooperation

Internal
auditsInternal Control Promotion
Division[Aggregate company-wide risks]
Risk information

Risk

Environmental regulations/climate change

Shareinformation on[Second Line]major risks

Each staff business unit
[Support business units]

Ranking

Likelihood

Give risk control
instructions

Staff business units

Conduct risk management at
the unit level

Share group-level risk
awareness

Risk discussion among five business groups

ImpactCooperation

Risk Management Committee[Select major company-wide risks]

Composition ofcommittees

Identify, evaluate, andcontrol risks

Conduct CSA (70 units)Line 1

Risk assessment

Submit information on major risks
Shareinformation
on majorrisks

MEIDENSHA REPORT 2023

further debates them in meetings of the Executive
Officers’ Meeting and Board of Directors to determine
the important business risks of the Meiden Group andpolicies for dealing with them.
The Risk Management Committee is clearly
independent from the Audit and Supervisory
Committee.
The Risk Management Committee and the Group
Company Internal Control Committee are chaired by
the Meidensha Director & Senior Managing Executive
Officer, who is in charge of all administrative divisions.

[Deliberate major company-wide risks]

Board of Directors

Corporate Information

Operations of the Risk Management Committee

Basic Approach

Risk Management Structure

Our Approach

Cooperation

Outsideexperts

Likelihood of harm to
brand

9

Human rights violations

Large

MediumNormalNormalSomewhat high10

Insufficient personnel

Large

High

Somewhat slow

Somewhat effective

Normal11

Occurrence of a natural disaster

Large

MediumExtremely fast

Effective

Normal12

Disguising quality or iniquitous inspection

Large

Low

Fast

Somewhat effective

High

13

Breach of Construction Business Act

Large

Low

Fast

Somewhat effective

High

14

Insufficient awareness or responsivenessto changes in market conditions

Large

High

NormalEffective

Normal15

Breach of Antimonopoly Act or bribery

Large

Low

Extremely fast

Effective

High

16

Losses due to fluctuations in exchange rates,interest rates, stock prices, and land prices
Incomplete control of overseas
subsidiaries
Insufficient or poor internal communication

MediumHigh

Somewhat fast

Somewhat effective

NormalLarge

Low

Extremely fast

Somewhat effective

Somewhat highMediumHigh

Somewhat slow

Somewhat effective

NormalIncomplete control of Japanesesubsidiaries
Reduced ability to cater to customers

Large

Low

NormalSomewhat effective

Somewhat high

Large

Low

Extremely fast

NormalNormal

17
18
19
20

Comparison withprevious year’s
assessment

Note: Risk assessment is an independent analysis of the various risks faced by the Group rather than a general risk assessment.

53

54

Introduction / Message

Basic BCP (Business Continuity Plan) Policy
The Meiden Group Basic BCP Policy stipulates the Meiden
Group’s basic policy on business continuity, business
continuity targets, and response in the event of a disaster,etc., and is applied at each business unit and subsidiary.
1 In the event of a disaster, it is our utmost
priority to ensure the safety of all employees,
their family members, and customers.
2 W
 e contribute to swif t reconstruction andrecover y from disasters, considering ourcorporate social responsibility as a company
that suppor ts social infrastructure.

Our Value

Improving corporate and organizational resilience ncouraging independent promotion of BCPs
E
by business units, and work to improve Disaster
responsiveness by company organization
Considering alternative production sites for important
operations
Contributing to society and communities ontributing to disaster-resilient communityCdevelopment by supplying Meidensha’s BCP products
and corporate BCP initiatives to communities andsociety3 L imit impact on customers and Meidensha’s
businesses as much as possible.

BCM Activities
BCM (Business Continuity Management)
Promotion System
Under the BCM Committee, which determines the Meiden
Group’s BCP policy and measures, the Meiden Groupestablished the Corporate BCP Promotion Committee,
BCP promotion committees for each business, BCP liaison
committees at domestic subsidiaries, and the working
group to discuss company-wide issues and promotes BCP
throughout the Group.

BCM Committee Chair:President
Decide BCP policies and measures (meet twice a year)
Secretariat (Internal Control
Promotion Division)

Working groups
Company-wide crosssectional policy review

BCP atCorporate BCP BCP promotion
manufacturing
Promotioncommittee forsites
LiaisonCommittee
each businessCommittee

BCP liaison
committees
at domestic
subsidiaries

Promotionof disasterprevention and
BCP at business
sites

Share
information on
establishmentof subsidiaries’
BCPs

Promotingspecific measuresrelating to BCP
for corporate
functions

Promotingspecific measuresrelating to BCP
to business
functions

Medium-term Management Plan 2024
Initiatives
We will promote the Medium-term Management Plan 2024,
paying particular attention to the following items relating todisaster-prevention and BCP.
Ongoing BCP initiatives
 oving from an earthquake-based BCP to an “all-hazard”
M
BCP that applies to a range of risks
Establishing a BCP and creating systems to maintain,
evaluate, and confirm its effectivenessContinuing education and training, and ensuring thateach employee is involved with BCP initiatives
E xtending the BCP to overseas subsidiaries, and creating
a BCP with a global perspective

Start of Works BCP Liaison Committee
To improve disaster prevention and BCP at eachproduction site (works), we launched the Works BCP
Liaison Committee in November 2022. In the event of adisaster, works must set up an area disaster response
headquarters to deal with a wide range of issues suchas responding to personnel in the area, gathering
information from their factories and other units andsubsidiaries, and managing stockpiles. However, each
works had established its own methods of responding
and there was no interaction with others. The new liaison
committee organizes disaster prevention and BCPrelated issues at each works and discusses solutions
to each one. This has enhanced disaster prevention
and BCP systems at each works. This effort continues in
FY2023 to strengthen the disaster response capabilities ofeach works.
Disaster Response Drill at Numazu Works
In March 2023, we brought a mobile power supply
vehicle to Numazu Works to prepare for power outages
at the site. In conjunction with the introduction of thevehicle, we conducted a drill to verify the process ofrequesting the vehicle and dispatching it to the site in
the event of a power outage, as well as the work to be
performed at the site. For the drill, we did in fact cut
power to a portion of the plant. Participants restored
electricity by connecting to the mobile power supply
vehicle. This allowed us to confirm how the work would
actually be performed. On the day of the event, anoutside company provided drone footage of the drill. We
have also discussed the usefulness of drones in times ofdisaster.
The Meiden Group will improve on issues identified
during the drill to help create better BCP measures.

A scene at the drill55

Our Approach

Corporate Governance

Our Impact

Establishing BCPs at Overseas Subsidiaries
Meiden Group subsidiaries outside Japan have also
begun establishing BCPs. Japanese and local staff
work together to design the optimal BCP for eachcompany. This effort is starting with the ASEAN region,
India, and China. Subsidiaries in these regions aim tocomplete their BCP manuals by the end of FY2023.
We are committed to advancing this initiative to ensurebusiness continuity for the entire Meiden Group,
including overseas subsidiaries.
Employee Education on Disaster Prevention and BCP
Disaster prevention and BCP training is included in
the curriculum of personnel education for each levelof employment and is provided continually. In FY2022,
we gave training for new employees and mid-careerhires. We have also visited regional offices in Japan
to conduct extensive awareness-raising initiatives,
including disaster prevention and BCP training for
local employees and training for BCP staff of Group
companies.
In addition, we created a training video to further
spread the word about our disaster prevention and BCP
efforts. The video will be released in FY2023 and we will
work to ensure that all Group employees view it.

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

we installed next-generation antivirus software on allcomputers, in order to enhance detection.
We established the Meiden Computer Security
Incident Response Team (CSIRT) and joined the Nippon
CSIRT Association in order to enhance response. In
addition, we have begun strengthening information
security measures for customers of our products andservices so they can better respond to cyberattacks,
which have become increasingly sophisticated in recent
years. We are also establishing internal systems to
speed up incident response.
Enhancement of Supply Chain Information Security
Since FY2017, we have continuously conductedactivities to enhance our suppliers’ information security.
We ensure that suppliers are aware of information
security measures as management issues, and we holdtraining and information sessions as required.
We continue to support our business partners’ efforts
to strengthen information security. We do so throughfour measures designed to prevent information security
incidents: awareness raising, education, visitations, andinformation sharing.

Awareness raising

A BCP education video for employees

Strengthening Information Security
Management
The Meiden Group understands that ensuring the securityof the information we handle is a most critical issue.
We therefore protect information assets from disasters,
accidents, criminal acts, errors, and other threats. We also
maintain and enhance information management to prevent
leaks, tampering, theft, or loss.
Analysis of Incidents and Countermeasures for Each
Cause
The Meiden Group is working to implement sustainablesecurity measures in the areas of “prediction,”“defense,” “detection,” and “response.”
We analyze and implement both hardware andsoftware measures to protect data from unauthorized
logins, etc., and virus infections from suspicious emails,
such as targeted email attacks, as well as measures
mainly aim at combatting human factors such astheft, loss, or mishandling of information devices. We
introduced the Security Operation Center (SOC) in FY
2017, established a detection system that operates
24 hours per day, 365 days per year, and in FY 2019,

We have strengthened and encouraged ourbusiness partners’ voluntary enhancements of
information security by utilizing the SECURITY
ACTION program of the Information-technology
Promotion Agency, Japan (from FY2021). We also
recommend that our business partners acquire stars(logos) representing their level of efforts to address
information security to make evaluation more visible.
Education
We provide group training at each works and share
information on information security measuresand risk case studies at production plan briefing
sessions.
Visitations
We perform on-site diagnosis of information security
risks during visits to business partners.
Information sharing
We publish an information security newsletter andprovide educational content on the online Supplier
Portal.

56

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Yuuki Ishii

Akihiko Mori

Senior Manager,
Facilities Group,
LRT Management Division,
Construction Department,
Utsunomiya City

Sales Section 1,
Railway System Business
Sales Division, Social &Railway System Sales and Engineering Group,
Meidensha Corporation

My Challenge

My Challenge

To treasure an attitude of
constantly learning new things,
to support the operation of the
new LRT, and to contribute to thecreation of a vibrant community

To value customer-oriented
thinking, and to contribute toenriched lives for people throughsupport of infrastructure

New Transportation Infrastructure Brings
Utsunomiya Joy and a Polished Luster

CASE

3

Utsunomiya City, the largest economic zone in thenorthern Kanto region, has an agglomeration of various
urban functions within its borders. While it enjoys easy
access to Tokyo, it simultaneously is abundant in richand beautiful nature. The newly opened LRT service
will bring even more luster to the city by creating
new value for children and the elderly, providing easy
access to where and when they want to go with lesstransportation hassle.

Related SDGs

Value Creation Story

Greater Livability with
the Opening of Haga
Utsunomiya LRT

OpenedAugust2023

Utsunomiya City, Tochigi Prefecture, aims to build stronger transportation infrastructure in orderto create a city where all generations can live with peace of mind. This is the story of those who
toiled in the background to bring the Haga Utsunomiya Light Rail Transit (LRT) system to fruition,
creating Japan’s first new streetcar line in 75 years.

For Convenient, Vibrant Communities Through a Next-Generation Streetcar System
In the city of Utsunomiya, people are highly dependent
on automobiles as a means of transportation. Here, it had
become evident that morning and evening traffic congestion
and mobility restrictions for elderly people who are unable todrive had emerged as problems for community development.

The Meiden Group’sonSociety

The Haga Utsunomiya LRT is expected to serve
about 16,000 passengers per weekday. In addition
to greater convenience and comfort for individuals,
the transit service brings a wide range of benefits tolocal communities, such as easing traffic congestionand encouraging seniors to go out more actively.

57

Under these circumstances, it was decided that the city
would introduce a next-generation streetcar system,
light rail transit (LRT) that would provide a new means oftransportation for Utsunomiya’s residents. This new system
was intended to help cultivate a more convenient, vibrantcommunity with a public transportation focus, under theslogan “Utsunomiya: City of the Future.” This LRT system
offers not only punctual, accessible transportation, butalso partners with bus routes and other public transit tohelp the city’s denizens get around easier without having torely on automobiles. It is also expected to generate a wide
range of benefits for society as a whole, such as promoting
the independent lives and health of the elderly, andencouraging community services and business activities.

Helping Customers Inexperienced with
New Route Construction to Overcome
Various Challenges
In this project, Meidensha delivered traction substationequipment to three substations, as well as a power
management system that monitors all four substations.
Mori“From the planning stages, we have been
engaged with a strong desire to help community
development in Utsunomiya City, achieved by bringing our
Meidensha products to bear in building a new line.”

He recalls the utmost care that was provided incoordinating processes with various contracts due tothe Haga Utsunomiya LRT being a new line construction
project. In his words, challenges were overcome thanks
to close collaboration with all internal stakeholder units.
As the customer had never experienced a new streetcar
construction project, Meidensha made efforts to ensurethat it brought to bear its ample experience and technicalcapabilities from decades of electric rail work. Thanks to theconcerted efforts of all involved in the construction work, the
new line successfully entered service on August 26, 2023.

Mr. Ishii “The Haga Utsunomiya LRT was an entirely
new line construction project. Not only that, but this was
the first time in my engineering career that I handled
direct current electricity, so there were a lot of things
I did not understand. Still, I and the Meidensha teamworked diligently to get the job done, and I believethat both sides grew as a result. For me, the line’s
new opening is not the goal, but a fresh start. Looking
ahead, I will put my best efforts into maintenance andmanagement, hoping to make this a transportation
system that makes everyone happy.”
Mori“I am proud to have been involved in thisproject. I will never forget the words of gratitude fromthe client when we cleared the final inspection, arewarding moment for the efforts of all those working on
the project. The new cars on this line boast advanced
and barrier-free design, and I hope that as many people
as possible can enjoy what we have built.”

By utilizing its knowledge not only in the field of railways,
but also in energy as well as disaster preparedness
and mitigation, Meidensha will continue to contributeto community development that solves regional social
issues.

16,000Haga Utsunomiya LRT passengers per weekday*Photographs published with permission
from the respective rights holders

58

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Aiding Sado City in Becoming an SDGs Future City

CASE

4

Related SDGs

Value Creation Story

Safeguarding Water: O&M*
for Local Revitalization
by Sado Meiden
One hour from Niigata City by high-speed ferry is the richly historic and abundantly natural
tourist destination of Sado Island, the site of a famous gold mine and home of the graceful tokiibis. This is the story of the people who protect the island’s water infrastructure and support
safety and peace of mind for those who live there.
*O&M: Operation and Maintenance

Takuro Kitami

Hiroyuki Morikawa

Kasumi Okura

Sales Department, Sado Meiden
Service Corporation

Manager, Water Supply and Sewerage
Division, Sado City

Operations Department, Sado Meiden
Service Corporation

My Challenge

My Challenge

My Challenge

To protect water safety, quality, and peace ofmind, whether in water supply or sewage. To do
the job no one else can, so that Sado Meiden issynonymous with water

To make every effort possible to achieve andmaintain the stable provision of water andsewage services, which are an important part ofsocial infrastructure that we must provide to ourresidents

To sincerely and attentively respond to customer
needs and to always remain professional incounter services, the face of Sado City

Mr. Morikawa “Even before Sado
City formulated its SDGs Future
City Plan, there was the long
history of efforts to revive Sado
Island’s characteristic toki ibis andagricultural efforts toward that end,
showing that Sado City had alreadyplanted the seeds for community
building even before the world cameto know the term ‘SDGs.’”

particular difficulties for islands due
to having no connection to otherland, the people of Sado are strongly
aware of horizontal cooperation andtake action in situations like these bycombining their efforts. During thisparticular emergency, we tackled
the issue by working to restore water
treatment facilities in partnership withconstruction and social welfare units.

In the field of water supply andsewage, part of Sado Meiden’sbusiness areas, linkages havebeen made to Goals 6, 9,
and 11 of the 17 SDGs, which
Sado City is actively promoting
throughout the island. The city
places particular emphasis on
Goal 11: Sustainable Cities andCommunities.

Kitami“We couldn’t let the
sewage overflow, so we loaded an
emergency generator on a truck
and managed to use it to pump the
sewage out of the pumping station.
As we were working in the middle ofthe night, the power company was
nearby doing everything they could
to restore electricity.”

In December 2022, the area washit by heavy snowfall that resulted
in several days of power outages.
Although such emergencies involve

Though natural disaster damage
cannot be completely mitigated,
the accumulation of expertise to
overcome such disasters when
they do occur is also an asset

to the community. Because
Sado is a remote island, theimportance of combining efforts is
deeply ingrained in the common
understanding of the people there.

The Meiden Group’sMore thanonSociety

To deliver safe drinking water to more than 22,000
households throughout Sado City and to support
the water cycle through proper treatment of sewage,
Sado Meiden Service employees are entrusted by
Sado City with water treatment facility management.

22,000households
in Sado City use the watersupply system

Future Vision for Sado Meiden Service

Safeguarding Clean Water Through Proper Maintenance and Management
Sado Meiden Service Corporation
was established in November
2017 and is engaged in a variety ofbusinesses, with a core focus on
O&M covering 44 water and sewage
facilities of various sizes on Sado
Island. The first contact between
Sado Island’s water infrastructure
facilities and contracted services
by the Meiden Group (including
our prior incarnations) dates backto 1995. The business, whichbegan with the maintenance andmanagement of sewage treatment
facilities, has expanded to include
the operation and maintenance ofwater supply facilities. In recent
years, we have also been entrusted

59with meter-reading services, waterleakage investigations, and counter
services at city hall buildings.
Almost all of Sado Meiden’s
employees originally hail from theisland, whose population is on
the decline. Amid this decline,
our strong desire is to provide
employment to contribute to the
local community and consistently
be a company supporting local
development. In our recruitment,
we not only target mid-career
professionals but also new
graduates from local high schools.
Many of our customers are also
locals, and the vertical, horizontal,

and diagonal connections amongpeople can be a driving force tocreate great power in times of
emergency, such as natural disasters.
Kitami“Where we are mostattentive is the water supply, since
water is something people consume
on a daily basis. Furthermore,since treated sewage is discharged
into waterways, we also pay close
attention to water quality.”In the background of water supply andcirculation, an area we are rarely awareof in our daily lives, we can see a teamthat takes pride in diligent water workand protecting people’s lives.

We asked Sado Meiden Service
Corporation’s customers about
their opinion of the locally rooted
company as it seeks further
evolution.
Mr. Morikawa “Sado Meiden
has demonstrated solid technicalcapabilities to provide safe andsecure water, toilets, and otherinfrastructure, whether in timesof disaster or normal times. In
their counter operations, they act
as the face of Sado City as theyanswer each phone call from local
residents, and they have beenvery courteous in their customer
support here.”

The gradual expansion of ourwork on Sado Island is owed
to this trust we have built up

with our customers. The historyof our desire to contribute to
our customers and the local
community in any way we canin the field related to water has
shaped Sado Meiden Service as
it exists today. In order to realize
the basic philosophy of Sado
City’s waterworks, which is toprovide safe and strong watersupply connecting the city to the
future, we will strive for efficientand appropriate maintenance,
operation, and management offacilities while working closelywith the local community, andaim to propose new value-added
solutions that address the issuesof society and our customers.
In 2022, Sado City certified
Sado Meiden Service as a Sado
SDGs Partner. In addition tocontributing to a livable and richnatural environment throughour business, our intent going
forward is to contribute to Sado’s
resilience as a remote island.
Okura“It makes me
happy to work for a company
born on Sado, for the benefit ofSado. I will do my best to makethe island even more vibrant andfull of shining smiles.”Sado Meiden Service will remaincommitted in its support of Sado
for years and years to come.

60

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

CASE

6

Project Overview

Value Creation Story

Motors are the founding business of Meidensha,
which has accumulated variable speed technology for
optimized control in combination with inverters to suitvarious applications. In the 1990s, Meidensha began
developing motors and inverters for EVs, pioneering

CASE

5

the field ahead of other manufacturers. Since thestart of full-scale product supply in 2009, the total
number of vehicles equipped with Meidensha drive

Value Creation Story

units has exceeded 1 million units. In April 2023, wecompleted development of the MEIDEN e-Axle, thethree elements of motor, inverter, and gear, and began
moving toward full-scale market launch.

Born in the Motor
Business, Meidensha
Tackles the Spread of
New Mobility

Takahiko Oishi

Nobuhito Kamikuri

Drive Development Section 3,
Development Division 1, EV
Components Sales & Engineering
Business Unit, Meidensha Corporation

Drive Development Section
2, Development Division
1, EV Components Sales &Engineering Business Unit,
Meidensha Corporation

My Challenge

My Challenge

To work closely with motor, inverter,and gear reducer developers
and contribute to providing more
comfortable rides for people with
the Meiden e-Axle

To contribute to achieving diversity
while valuing teamwork andincreasing productivity

This is the story of Meidensha’s original founding businessof motors, and how its modern-day developers, who
inherited technology refined over 120 years of history,
devoted all their energies to bringing new products tothe market and looking ahead to future technologicaldevelopments.

Product Development Focused on a Slim
Form Factor
The newly developed e-Axle is in the 150-kW class,a high-volume market zone. In its development, one
rigorous focus was ensuring a slim form factor. The
axial layout of the inverter, motor, and gear, which israre among competitors, reduces the height dimension
and elicits benefits for automobiles, such as allowing a
spacious cargo area and three rows of seats, especiallywhen mounted for rear-wheel drive. It is the culminationof Meidensha’s history and the wisdom of those whocame before, passionate devotees to creating smaller
products with the same output.
The Meiden Group’sonSociety

Vehicles equipped with Meidenmade EV drive units

1

million

Since the start of mass production and supply in 2009, the total
number of vehicles equipped with EV drive units manufactured by the
Meiden Group has exceeded 1 million units. In addition to reducing
CO2 emissions over the life cycle of an automobile, we deliver value
to users in the form of a comfortable ride and high level of comfort.

61

Related SDGs

flagship traction motor system that integrates theRelated SDGs

To Provide a More Comfortable Ride
Oishi
“Development involves a series of research,
design, prototyping, and evaluation steps, and wewill take full advantage of our unique ability to quickly
evaluate e-Axle in-house.”

Meidensha is engaged in the automotive testing systems
business and will leverage inter-business synergies tocomplete the evaluation of e-Axle in the development
stage by utilizing its in-house facilities and expertise.
Kamikuri “In our current development of the basic

technology for the high-output e-Axle, we are rapidly
studying the use of SiC power devices and innovations
in cooling technology to achieve higher output. Our
desire is to create products that only Meidensha canbring to the market.”With their shared goal of providing more comfortablerides, these two will devote all their efforts todevelopment in order to evolve the automotive industry
and bring joy to customers.

MEIDENSHA REPORT 2023

Meiden Singapore’s Mission toProtect Stable Electricity Supply in
the Asian Hub

Tan Oh Boon
Director, Meiden Singapore Pte. Ltd.

My Challenge

Although Singapore’s entire land area is only slightly larger than Tokyo’s 23
special wards, it is a world-class hub attracting a wide range of industries. Thisis the story of the people behind its stable power infrastructure, one source of
its appeal and competitiveness.

Relentless Efforts to Safeguard WorldClass High-Quality Power Infrastructure
Singapore is known as the business hub of Southeast
Asia, leading the region in various fields such as
finance, logistics, trade, and technology. Due toSingapore’s limited land and natural resources, foreign
investment is essential. Therefore, national policy isdriving the establishment of strong infrastructure topitch the country as an optimal investment environment.
One element of this infrastructure is world-class power
quality and stability. To achieve this, Meiden Singapore
works hand in hand with power companies, tirelessly
striving to provide quality products and maintenanceservices 24 hours a day, 365 days a year, withresponsibility and pride.

Project Overview
Though Singapore gained independence
from Malaysia in 1965, the Meiden Group
had already been involved in building
local infrastructure in the area. In 1975,
Meiden Singapore was establishedamid an increasing number of Japanesecompanies entering Southeast Asia, andtherefore an increasing need for local
installation and maintenance services
related to Meidensha products. In 1979,
Meiden Singapore opened its factory,
beginning local production. Since
then, the company has supplied manytransformers and distribution boards
to the power network on the island of
Singapore.

To do our very best to ensure thestability of Singapore’s domestic
power network, in gratitude for ourcustomers’ unwavering support of
Meiden Singapore

Mission as the Only Singaporean
Electronics Manufacturer with Local
Production
Tan“Every single day of the year, my colleagues
at Meiden Singapore are engaged in upgrade andmaintenance work on equipment delivered to power
utilities. As the only company in Singapore with not
only a local service team but also local production for
power equipment, we work proudly day and night withour customers to maintain a stable power supply. It
is a tough job, and I would like to express my sincere
gratitude to my family for understanding and supporting
me. In response to growing environmental awareness,
we have begun to focus on proposing new eco-friendly
products. Singapore’s electricity network, which
expanded alongside the country’s growth from the
1980s to the mid-1990s, will soon find that its facilities
will gradually need upgrading. Meiden Singapore willcontinue to do its utmost to support the provision of astable power supply, ensuring that Singapore remains
an attractive country.”

The Meiden Group’sonSocietyOver

Singapore substations utilizing
Meidensha products

15,000Of the substations that help to send electricity to every cornerof Singapore, more than 15,000 use products from Meiden
Singapore. Through the provision of high-quality products andmaintenance services via skilled engineers, we support theelectric power grid that underpins affluent lifestyles and industry.

62

Introduction / Message

Our Value

Progress of Medium-termManagement Plan 2024

2018-2020
Medium-termManagement Plan 2020previous plan, further solidify our earnings base, and achieve
high-quality growth.
In addition, in response to recent growing interest in
the SDGs, we will evolve our management and businessstrategies with a focus on ESG (sustainability) and promoteambidexterity management to build a foundation forsustainable growth in FY2024 and beyond.

2021-2024
Medium-term Management Plan 2024

Powerful
STEP

HOP

JUMP

Reinforcing
earnings base

Establishing earnings
base

Achieving high-quality
growthPromotingsustainability
management

Growth investment
Establishing growth
areas

Exploring new domains

Promoting ambidexterity
management

Climate change action (carbon neutrality)
Highly probablechanges to comeDigital transformation (DX)

Ideal State ofBeing/Vision

Work to build a newsociety through integrityto the earth, society, andpeople, and through thepower of co-creation

 ealization ofR
High-quality Growth

Financial Targets
FY2023 performance
forecast (initial forecast)(announced May 2022)

Ordersreceived

285 billion yen

300 billion yen

Net sales

290 billion yen

300 billion yen

Operatingincome10 billion yen

18 billion yen

FY2024 targets

1.Rapid progress of growth businesses
Improving sales and profitability of future core businesses such as EV
and renewable energy-related businesses

Four Focus Areas

2.Enhancement of competitiveness of earnings-based businesses

In order to realize our aspiration to be an attractive company
that proactively tackles the creation of an ideal society
through our business activities, Medium-term Management
Plan 2024 defines four areas of focus and the value we
provide in each.

Rapidly generating results from our growth investments and achieving
stable growth at subsidiaries in India, Vietnam, and the U.S.

Renewable Energy

Green Mobility

Valueprovided

Initiative
statusEstablishment of an environmentally friendly energy supply
system trengthening efforts to become a hydropower service
S
provider and revising developmental business strategies inwind power generation
Profitability work to minimize losses/turn profits in overseas
M&A subsidiaries on track; Overseas T&D Business is
expanding more rapidlyEnhanced remote monitoring and data analysis capabilities incustomer centers

Sustainable Infrastructure
Value
provided

Initiative
status63

In Medium-term Management Plan 2024, we have set forth
the following three themes to realize our goals.
In FY2022, we achieved a significant year-on-year
improvement in earnings thanks to our overseas businesses
and implemented initiatives such as the launch of a new
EV production line. In FY2023, we will continue to focus on
improving the profitability of our social infrastructure-related
businesses, which struggled in the previous fiscal year,
while working to increase the profitability of our overseas
and growth businesses. Furthermore, we will accelerate ourefforts to achieve our FY2024 targets.

Build and maintain sustainable infrastructure and improve
community resilience trengthened sales activities for Japanese water supply,S
sewage, and railroad infrastructure, and expanded Overseas
T&D Business and Railway BusinessAccelerated smart maintenance by integrating maintenanceexpertise with ICT and IoT technologies
Enhanced lineup and expanded sales of environmentallyfriendly products, including high voltage products for GX(sales expansion project launched in FY2023)

Building greater competitiveness in infrastructure businesses throughmeasures such as providing value through solution design

3.Increasing profitability of overseas businesses

Value
provided

Initiative
statusBuilding a next-generation mobility society he Mobility T&S Business is lagging behind its strategy
T
despite entering new areas such as the battery testing
marketImproved and evolved mass production technology at our
Nagoya EV plantF ocused on activities to obtain nominations for newmodels during the next Medium-term Management Plan
periodInitiative
statusPromoting industrial automation and digitalization
 trengthened maintenance service initiatives forS
semiconductor manufacturing equipment (e.g., opening of
Kyushu location)
Progress in retaining existing customers and developing newcustomers for vacuum capacitors (VCs) and pulse power
supplies for the semiconductor fieldL aunched study of synergies among semiconductorrelated businesses (pure ozone, electronic equipment, andmaintenance) within the Meiden Group

MEIDENSHA REPORT 2023

management resources in areas that contribute to providing
value, such as carbon neutrality and well-being.

Sustainability Management Promotion System (2022)
Board of Directors

Progress reports(twice a year)

Sustainability Management Strategy
Committee

Decisions made as needed

Chair: President
Secretariat: Officer in charge of sustainability
Frequency: Twice a year

Sustainability Management
Implementation System

Sustainability Management Promotion
Committee

Executive Officers’ Meeting

Group
Business
AdministrationGroup

Sustainability
Management
Promotion
Division

Research &Development
Group

Chair: Officer in charge of sustainability
Secretariat: Sustainability Promotion Bureau
Frequency: About four times a year
Human
Resources
Management
Group

Production
EngineeringandManagement
Group

Achieving Carbon Neutrality(Green Strategy)
The Meiden Group’s medium- to long-term goals for theenvironment are presented in our Second Meiden Environmental
Vision. We are engaged in a range of initiatives based on
this vision, which espouses the belief that it is essential todecarbonize within the Group and expand decarbonization
businesses in order to realize a carbon-neutral society by 2050.

Internal Decarbonization in Business Activities
As part of our internal decarbonization efforts, we are actively
working to introduce renewable energy. In FY2022, oursubsidiaries worked to go CO 2 -free in their business activities.
These initiatives included Kofu Meidensha switching a portionof electricity procurement in its business activities to use
renewable energy, and Meiden Kohsan procuring electricity
from a wind power plant operated by M WINDS, another ofour subsidiaries, for a new company building.
In addition, in order to encourage investments that
contribute to the environment, we have decided to raise thestandard internal carbon price from 3,000 yen to 15,000 yen
per ton of CO 2 emissions, effective from FY2023. The resultsof these and other various initiatives led to our surpassing theoriginal plan with regard to FY2022 reduction rates for Scope
1 and 2 emissions, which we have set as KPIs.
Basic Policy 3

Procurement
Group (PG)

Corporate
GovernanceManagement
Group

Discussions on overall sustainability
management direction
Checking overall sustainability
management progress

Sharing of sustainability
management issues, study ofmeasures, and checking progress

Business
Development
Division

Corporate
Communication
Promotion Division

Expansion of Decarbonization Businesses
With regard to the expansion of our decarbonization
businesses, we are working with our suppliers to makeproducts greener, and simultaneously focusing on expanding
sales of environmentally friendly products such as Ecotanktype circuit breakers and high voltage products for GX thateliminate greenhouse gas emissions. These initiatives are
steadily yielding positive results.
In FY2022, our visualization and reduction of greenhousegas emissions in the life cycle for Ecotank-type vacuum
circuit breakers won the 2022 Climate Change Action Award
from the Minister of the Environment and the 19th LCA Japan
Forum Incentive Award.

Sustainability Strategy Committee Discussion Topics (FY2022)
1st
SessionMaterialities for the Meiden Group
Environment (water conservation)
Dialogue for greater penetration (My Vision, My
Challenge), Meiden Mirai Meeting

2nd
Session

Human resource development (Human Resource Task
Force)
ESG assessment analysis

Promotion of Ambidexterity Management

In promoting ambidexterity management, we aim toaccelerate the creation of a new society through innovationin our business activities. As part of this effort, we haveadvancing initiatives under the MAST Project*, launched in
FY2022 and led by the officer in charge of innovation.
In this project, we are working to build a foundation for
the exploration and startup of our next business pillars,
including human resource development and the fosteringof our corporate culture. Meanwhile, we are also internallysoliciting new business ideas that do not fall under our
existing businesses, supporting these ideas, and engaging in
co-creation activities with other companies.

Smart Industry
Value
provided

Corporate Information

Our Strategy

Promoting Sustainability Management2025 and beyond

Various communities, diversity of people

Basic Policy 1

Our Impact

In order to ensure business expansion in the aforementioned
focus areas, we are working to become the company
we have envisioned for ourselves by concentrating our

Generating results from initiatives to increase growth and earning power, and realizing “high-quality” growth.
Corresponding to the changes of the times and promoting sustainability (ESG) -focused management to build a new society.
2015 -2017
V120

Corporate Governance

Basic Policy 2

Basic Policies of Medium-term Management Plan 2024
In the V120 Medium-term Management Plan, two plans prior,
the Meiden Group clarified the direction of businesses tobe grown. In the following Medium-term Management Plan
2020, we were able to both steadily expand our performanceand invest for growth. In the current Medium-termManagement Plan 2024, what we consider our jump phase,
we will generate results from the investments made under the

Our Approach

A MAST
Project meeting.
*T he MAST Project was named by combining the Japanese first letters of“Meidensha,” “ashita” (tomorrow), “sozo” (creation), and “thinking,” while also
carrying the meaning of the word “mast” (in that it helps to harness wind andpropel us forward).

Looking Beyond the Medium-term Management Plan 2024
As the world continues to normalize after the COVID-19
pandemic, we, as a corporation supporting society, mustbuild up a new normal without being bound by old value
systems. In parallel with the completion of Medium-termManagement Plan 2024, Meidensha will work to restructure its
business portfolio from the perspective of fulfilling obligations
such as social responsibility and supply responsibility forcustomers, contributing to social issues such as reducing
environmental impact while incorporating factors such as
profitability and growth potential. In order to ensure that ourmanagement is conducted mindful of long-, medium-, andshort-term timelines, we are compiling these concepts into along-term vision for the future, which we will present to ourshareholders.
64Our Value

Power Infrastructures
Business Group

Senior Managing Executive Officer
Strategic Group Leader,Power Infrastructures Business Group

Business Environment (Risks and Opportunities)/Strengths

Opportunities

Increased demand due to improved post-pandemic economic conditions
Greater need for environmentally friendly products due to stricter environmental regulationsin North America
Increased demand for upgrading to high-efficiency equipment due to the new revenue cap
system in Japan
Stronger demand for updating hydroelectric power plants, a stable source of renewable energyRisks ajor changes in geopolitical risks, exchange rates, national trade policies of countries, etc.
M
Lower capital expenditures due to changes in demand from domestic electric power companies
Lingering impact of surging material prices and longer lead times for components
 lineup of environmentally friendly productsACost competitiveness and supply capabilities on the strength of collaboration withoverseas locations
Power conversion technology that helps ensure renewable energy and power quality

FY2024 Management Targets
Net sales (left axis)
Operating income (right axis)
Operating margin

Orders59.5 billion yen(Billion yen)(Billion yen)

2.9%

100

57.5 billion yen
60.4 billion yen

80(0.7)%(3.6)%

6040(0.9)%

5
4

72.8
60.4

45.9

57.5

1.3 billion yen

2.1

(0.3)

2020
Outlined figures are FY2022 results

2
1.3

20
0

3

52.3

Operating income(0.5) billion yen

65

2.3%

77.9 billion yen
Sales

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Vacuum interrupters (VIs) are the heart of switchgear, safely interrupting high-voltage currents by
opening and closing electrodes in a vacuum. Meidensha began research on vacuum technology in 1965
and successfully commercialized VIs in 1970. In recent years, demand for VIs has been increasing inNorth America against a backdrop of new infrastructure investment legislation and stricter environmental
regulations. Specifically, switchgear known as reclosers—which are equipped to cope with the larger
number of power outages caused by more frequent, increasingly intense wildfires, hurricanes, and otherdisasters—have become indispensable for the stable supply of electricity. Accordingly, demand forsmall VIs to be incorporated into reclosers
grew significantly. Demand for VIs is expected
to continue to grow in North America in light of
the large amount of aging power transmission
and distribution equipment that is due forreplacement, as well as the strong need to
improve the reliability of power systems bypromoting the use of reclosers in place offuses. To respond to this market growth, wewill begin investing to expand VI production at
Numazu Works in FY2023 with the aim ofswiftly expanding capacity to roughly double
the current level. We will strive to further
expand the Power T&D Business by leveraging
expertise in the distinctive vacuum technology
we have cultivated over six decades.

Nobuaki Tamaki

Strengths

Our Approach

Increased Production of Vacuum Interrupters Supports Stable
Supply of Electricity

Reflecting on FY2022
In FY2022, the PowerInfrastructures Business Group
was able to significantly reduce
its operating loss thanks to
improved profitability resulting
from increased revenues. In thePower T&D Business, whichmainly operates overseas,
we have seen recovery indemand for power equipment
for electric power company
in Singapore and the German
Surge Arrester Business,
which had dropped due to the
COVID-19 pandemic. Additionally,
our U.S. manufacturingsubsidiary, MEIDEN AMERICASWITCHGEAR, INC., turned to
profitability in its third year ofoperation, buoyed by growing
demand for vacuum circuit
breakers and vacuum interruptersagainst a backdrop of rising
environmental awareness. On theother hand, the Power & Energy
Business, which is mainly basedin Japan, had a difficult year interms of both sales and profits
due to delayed shipments andsurging prices of components
resulting from longer lead times.
In terms of orders, overseas
orders were driven largely by
local subsidiaries in the U.S.
and India, while domesticorders for large transformers
were strong, far outpacing theprevious high after the shift to thecurrent segment classifications.
Originally, we planned to shut
down the Hachiryu Wind Farm
operated by our subsidiary M
WINDS Co., Ltd. in the town ofMitane in Akita Prefecture at
the end of FY2022 to replace
its windmills. However, due
to changes in the businessenvironment, we have decided topostpone the reconstruction until
January 2027, when the current
feed-in tariff (FIT) agreement
expires.

TOPICS

Introduction / Message

(1.8)

2021

0

(0.5)

2022

1

2023

2024

Initial plan Medium-Term
Management Plan(FY)

Development in FY2023
and Beyond
With the global rise in environmental
awareness and progress in efforts
to realize a decarbonized world,
our Power Infrastructure Businessis experiencing a tailwind toward
expansion.
In the Power T&D Business,
which mainly operates overseas,
demand for environmentallyfriendly products such as
vacuum circuit breakers freeof the greenhouse gas SF6 is
growing rapidly in the North
American market against a
backdrop of stricter environmental
regulations. Accordingly, we willconsider boosting a portion of
our production capacity to meetfurther increases in demand.
Additionally, MEIDEN T&D(INDIA) LIMITED—a transformer
manufacturing subsidiary in India
that became a wholly owned
subsidiary in 2021—is receiving
more orders for projects involving
renewable energy investment andwill continue striving to expand
its market share in this field.

In conjunction, the subsidiaryis also targeting railroads—
transportation infrastructure withlow environmental impact—and
ramping up efforts to win orders
for large-scale projects. In thisway, we will contribute to carbon
neutrality through our businessas we expand our presence in
the Indian market. Furthermore,in the key regions of Singapore,
Germany, and Vietnam, we aim tocapture new markets by matching
our distinctive technologies withwhat those societies need.
In the domestic market, we arefocusing on expanding sales ofenvironmentally friendly products
as the core of our strategy,
and will further strengthen
our proposal activities forenvironmentally friendly products
such as greenhouse gas-freeswitchgear and transformers thatuse naturally derived insulating oil.
We will also expand our businessto provide solutions to customers
through digital transformations inmaintenance and other efforts to
add value in addition to expanding
areas such as power storage

PCSs with inertial force functions
that contribute to a stable supplyof electricity and power quality,
voltage dip compensators, andhydroelectric power generation
systems (an area of strength for
the Meiden Group). Concurrently,
we will take steps to expand
our business domains, forexample by preparing for thecommercialization of electricity
sales through hydroelectric power
generated at Eikane Power Plant
in Shobara, Hiroshima Prefecture,transferred to us in FY2022.
As the percentage of renewableenergy in Japan’s power supply
mix increases, plans call for the
improvement and reinforcementof power transmission anddistribution networks, anddemand for transmission anddistribution products should growas we approach 2030. Under
these circumstances, we willcontinually strive to strengthen
the appeal of our products andour ability to provide solutions
to ensure that market growthtranslates into growth for ourcompany.

66

Our Value

Public, Industrial &Commercial Sector Business Group

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Meidensha supplied power transmission and distribution equipment to supply electricity to rolling stock on
the Sotetsu–Tokyu Shin-yokohama Line, a commuter railway that opened on March 18, 2023. The newsection connects Hazawa yokohama-kokudai Station (Sotetsu) to Hiyoshi Station (Tokyu) via Shin-yokohama
Station, and has substantially improved transportation convenience, reducing the travel time between
Sotetsu Line stations and central Tokyo by more than 10 minutes in some sections and providing transferfree access to the Shinkansen at Shin-yokohama Station from stations on the Sotetsu and Tokyu lines. For
this new section, we supplied inverters for regenerative power that contribute to energy savings by preventing
lapses in regenerative braking on trains in addition to an array of environmentally friendly electrical equipmentthat is critical for safe, reliable railway services, including our signature 72-kV gas-insulated switchgear andtransformers, environmentally friendly heat-pipe-cooled silicon rectifiers with pure-water refrigerant, andML-type DC high-speed circuit breakers with excellent safety features. We will continue to contribute to therealization of a carbon-neutral world by applying our hard-earned, time-tested technologies and experience
to build and develop highly reliable railway infrastructure and provide products and services.

Satoshi Momenya
Senior Managing Executive Officer
Strategic Group Leader,
Public, Industrial & Commercial
Sector Business Group

ShibuyaShin-tsunashima Hiyoshi

Ebina

Futamatagawa

MeguroTokyu Shinyokohama Line
Sotetsu ShinYokohama Line

NishiyaShin-yokohama

Hazawa yokohama-kokudai
Yokohama

Shonandai

Business Environment (Risks and Opportunities)/Strengths

Opportunities

 rowing interest in energy-saving and environmentally friendly products and services
GConstant level of public investment in Japan
Ongoing demand for urban railroads in Southeast Asia
Adoption of Japanese railroad system for the high-speed railway in India
Strengthening trend of widespread collaboration among local governments, public–private
partnership (PPP) projects, etc.

Risks

 ingering impact of surging material prices and longer lead times for components
LLoss of opportunities to win orders because valuable engineers are occupied with projects that
overrun their schedules
Intensified market competition due to the growing trend of performance-based ordering

Strengths

 ourteous, agile responsiveness based on a customer-first attitudeCE xtensive experience in system and plant organization
Life-cycle engineering capabilities (everything from product delivery to maintenance,
repairs, and servicing)

FY2024 Management Targets
Net sales (left axis)
Operating income (right axis)
Operating margin

Orders

95.0 billion yen(Billion yen)Sales

94.6 billion yen
90.3 billion yen

88.6

80
60

3.8%

90.3

6.1

2.7%

91.8

2.9%

10

94.6
6.4%

8

6.1

6
4

3.3
2.3

20

2.7

2

0

0
2020

Outlined figures are FY2022 results

94.7
6.4%

40

Operating income

6.1billion yen(Billion yen)100

96.7 billion yen

2.3 billion yen

67

Our Approach

Delivering Electrical Equipment to Support the Opening of the
Sotetsu–Tokyu Shin-yokohama Line, Improving the Convenienceof Both Railways

Reflecting on FY2022
In FY2022, the Public, Industrial& Commercial Sector BusinessGroup experienced a decline inboth sales and profits due to thesubstantial impact of component
shortages and surging material
prices. In the Railway Systems
Business, we noted a recovery
in capital investment bydomestic customers—railroad
operators—as social andeconomic activities returned tonormal amid increasing control
over the COVID-19 pandemic.
On the other hand, earnings
in the Social Infrastructure
Systems Business and Water
Infrastructure Business werequite disappointing due to areactionary decline from thestrong performance of theprevious fiscal year, as well as
delayed product shipments andlocal construction schedules
resulting from longer leadtimes for components, andcost increases stemming fromsurging material and component
prices. In terms of orders,
the segment realized further
growth on top of last year’s
substantial increase, setting a
new record since the shift to thecurrent segment classifications.
Although the same reactionary
decline occurred in the Water
Infrastructure Business, orders
were higher than in a typicalyear. In the Social Infrastructure
Systems Business, the fieldof electrical equipment forbroadcasting stations wasstrong, and the acquisition ofmajor projects meeting privatesector demand overseas also
contributed. In the Railway
Systems Business, demand
from domestic businesses wastrending toward recovery, and
we also won orders for new
projects in Singapore.

TOPICS

Introduction / Message

2021

2022

2023

2024

Initial plan Medium-Term
Management Plan(FY)

Development in FY2023
and Beyond
Although investment in thedomestic public infrastructure
market is expected to continue ata certain level for the time being,
population decline and financial
difficulties of local governments
appear to foretell a decline in total
investment and changes in ordering
patterns. Meanwhile, in Asia andother overseas markets, as the
population grows and economies
develop, investment is expected tocontinue expanding in the railway
and other public sectors as well as
in the private sector.
Given these circumstances,in the Social Infrastructure
Systems Business, we will focus
on public projects, projects forbroadcasting stations, and otherareas where we can apply ourstockpile of technologies, anduse our environmentally friendly
products for substations tostrengthen our proposal activities
for the high voltage products
for GX to accommodate thegrowing needs of a wide rangeof customers (including those in
the private sector) to reduce theenvironmental impact of theirbusiness activities. Additionally,in the field of electrical equipment
for Japanese manufacturers in
the ASEAN region, we will further
strengthen our proposal activities
for biomass power generationand other products and projects
that help customers reduce theirenvironmental impact.
In the Railway Systems
Business, in Japan, we will
focus on acquiring replacement
projects, as customers’ capital
investment plans are showing
signs of recovery and returning
to normal after the constraints ofthe pandemic. Outside Japan,
although we are heading into thefinal stages of construction to
update the East–West and North–South MRT lines in Singapore—amajor project awarded in FY2017—
we view the technical knowledge
and project management knowhow gained from the project asassets that will help us maintainand improve our project execution
capabilities for more major

projects in the future.
In the Water Infrastructure
Business, the deterioration inearnings due to longer lead times
for components and other factors
was particularly pronounced
in FY2022; given the likelihoodthat these circumstances persist
for the foreseeable future, wewill take measures such asprioritizing components andstrategically securing inventory.
Concurrently, we must advanceour organizational capacity toadapt to anticipated changes
in the business environment—
namely, stronger and morewidespread cooperation
between local governments, andconcessions and other public–
private partnerships. In addition
to acquiring digital technology tomaintain our advantages, we will
improve operational efficiency
and profitability by promoting
digital transformations within thecompany with the aim of further
solidifying the position of the Water
Infrastructure Business as anintegral part of our revenue base.

68

Our Value

Mobility & Electrical Components
Business Group

Senior Managing Executive Officer
Strategic Group Leader,
Mobility & Electrical Components
Business Group

Business Environment (Risks and Opportunities)/Strengths

Risks

Strengths

Development in FY2023
and Beyond

 rogress in economic activity returning to normal after the pandemic (Overall)PIncreased need for electrification and manpower-saving (Motor Drive)E xpanded demand for semiconductors in the future due to AI development, etc.
(Electronic Products)
Accelerated battery and electric powertrain development for electrification (Mobility T&S)
 ariation in demand in response to the economy (Overall)V
Material price fluctuations and intensified price competition (Motor Drive)Temporary downturn in the semiconductor market (Electronic Products)
Shrinking market for testing systems for engines, etc. (Mobility T&S)
 ccumulation of variable-speed and vacuum application technology (Overall)AKnowledge of motor control for diverse applications (Motor Drive)Distinctive products based on proprietary production engineering (Electronic Products)
Satisfaction of customers’ needs backed by extensive delivery experience (Mobility T&S)

FY2024 Management Targets
Orders

97.0 billion yen

Net sales (left axis)
Operating income (right axis)
Operating margin
7.4% (Billion yen)(Billion yen)100

80.2 billion yen
Sales

96.0 billion yen
78.1 billion yen(0.3)%

2.2%

0.4%

78.1

79.1

(0.4)%

80

96.0

10
8

7.1

63.8

60

6

52.4

40

4

Operating income

7.1billion yen
1.6 billion yen

20
0

2020
Outlined figures are FY2022 results

2

1.6
(0.1)

0.3

(0.2)

2021

2022

2023

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

The Meiden Group has long supplied elevator traction
machines to elevator manufacturers in Japan andoverseas. People trust elevators with their lives—
therefore, elevators must have the utmost quality andreliability. Our traction machines incorporate special
design elements optimized for elevators, and are inservice around the world as products that not only
ensure safe and reliable operation, but also provide
comfortable rides on the strength of our speed control
technology.
In recent years, demand has been growing for
products that are not only more efficient and compact,
but also easier to work with in order to expedite
construction schedules. In response, we havedeveloped a new elevator traction machine for mid- andhigh-rise buildings. Our new traction machine features
improved energy-saving performance and compactness through higher efficiency based on the latest
analytical methods, and also incorporates many creative solutions to simplify shipping in parts andreassembly to facilitate renovation work in existing buildings where delivery routes and work spaces arelimited. We also eliminated the jig for transport, which was previously required for moving the motors,
resulting in cost reductions and environmental contributions via reducing waste materials. We willcontinue to accurately ascertain changing needs and aim to develop the Motor Drive Business tocontribute to resolving societal issues through technology.

Masahiko Suzuki

Opportunities

Our Approach

Developing a compact, high-efficiency elevator traction
machine to help expedite construction schedules

Reflecting on FY2022
In FY2022, the Mobility &Electrical Components BusinessGroup returned to profitability,
mainly due to increased sales
and profit (loss reduction) in the
EV and Motor Drive businesses.
In the Motor Drive Solutions
Business, deliveries of ourelectrical components for forklifts
expanded in response to growing
demand for electric forklifts inNorth America driven by rising
environmental awareness andother factors. In the Electronic
Products Business, althoughdemand was extremely strong—
especially in the first half ofthe fiscal year—it began towaver throughout the second
half, as market conditions
deteriorated, and lagging factory
operations caused by production
adjustments and other factors
limited second-half profitability
compared to the first half. In the
Mobility T&S Business, althoughchallenging business conditions
persisted and demand did notrecover fully, earnings improved
due to the effects of reviewing
the business framework. As theautomotive industry shifted thefocus of its investments to CASE
(connected, autonomous, shared,and electric), we devoted moreenergy to proposal activities
for systems that satisfy new
customer needs, for example
testing systems for e-Axle
and chassis dynamometers
for EVs. In terms of orders,
the segment set a new record
since the shift to the current
segment classifications thanks
to increased demand as a resultof the return to normal of the
post-pandemic economy andextremely high demand in thesemiconductor market, especiallyin the first half.

TOPICS

Introduction / Message

0
2024

(FY)

Initial plan Medium-Term
Management Plan

In addition to the global increasein the need for electrification
due to the recent rise inenvironmental awareness andstricter regulations, someindustries have a greater
appetite for investing tostrengthen competitiveness,
especially capital investment
in automation and manpowersaving, all of which createsa tailwind for our business.
However, concerns abound,including ongoing supply
chain challenges, a temporary
slowdown in the semiconductor
market, and the risk of productshipment restrictions due toheightening tension between the
U.S. and China.
In the Motor Drive Business,
although demand continues tocool in the injection molding
equipment market due to theflagging Chinese economy
and other factors, a bumpis expected for electricalcomponents of electric forklifts,

particularly in the North
American market. Inquiries forautomated guided vehicles(AGVs) are also expected toincrease owing to a recovery incustomer willingness to invest
after sinking temporarily during
the pandemic. In the segment
overall, we will conduct targeted
sales activities to properly reflect
cost increases in sales prices
in addition to continuing cost
reduction (CR) activities andstructural reforms to weather
surging material prices, allin an effort to ensure better
profitability.
In the Electronic Products
Business, demand for our vacuum
capacitors (VCs) and otherproducts is expected to decline
temporarily due to the sluggish
semiconductor market, but we
expect a gradual shift toward
recovery around the second halfof FY2023. From a long-term
perspective, there is little doubt that
global demand for semiconductors
will recover and expand as
generative AI technology becomes
more advanced and ubiquitous andas automobiles evolve, to namesome expected developments.
By steadily improving our internal
structure and developing nextgeneration products to prepare
for the impending onrush, we will
ensure business expansion andstronger competitiveness into the
future.
In the Mobility T&S Business,
we have focused on advancing
electric vehicles—which havechanged in many ways over the
past several years—and oursystem solutions designed for
new performance development
have started to show results. We
have a stockpile of technology
from our decades-longexperience with testing systems
used in automobile development.
Additionally, the fact that
we ourselves develop andmanufacture EV drive units will
help us share new value with ourcustomers for their development
environments. We are committed
to exploring what our customers
need as we devote energy toproposing these value-added
testing systems.

*Mobility & Electrical Components Business Group figures include those of the EV Components Business Group.

69

70

Our ValueEV Components
Business Group
Reflecting on FY2022

Tatsuki Mochizuki
Senior Managing Executive Officer
Strategic Group Leader,
EV Components Business Group

Business Environment (Risks and Opportunities)/Strengths
Accelerating electrification due to rising environmental awareness and stricter regulations
Opportunities

Changing strategies of automotive OEMs with a strong focus on electrification
Resolution of supply-side issues such as semiconductor supply

Increased commoditization in the electric powertrain sector
Risks

Intensified competition due to an increase in the number of market players
Fewer opportunities to win orders due to OEMs’ shift to in-house production
Track record and dependable quality as a pioneer of EV components for mass production

Strengths

K nowledge of both motors and inverters
 ustomized development to meet OEM specifications and pursuit of mass productionC
effectiveness

Nagoya Works

EV integrated motorand inverter units

MEIDEN HANGZHOU DRIVETECHNOLOGY CO., LTD.

170,000 units/yearLine 1:EV motor/generators

100,000 units/year

Hangzhou,
China

Line 2:Integrated motor and inverter units

Kofu Meidensha

EV motor/generators

100,000 units/year

370,000 units/year

Total
Roughly

Numazu Works

1 million

units/year71

Our Approach

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Launching full-scale sales activities for the MEIDEN e-Axle*The EV Components Business Group’s performance figures are includedin the results of the Mobility & Electrical Components Business Group.

In FY2022, the EV Components
Business Group achieved asignificant increase in revenue
and improved profitability thanks
to the start of deliveries of units
for several new light EVs andother vehicle models.
In the first half, thesemiconductor shortage andthe lockdown in China caused
significant fluctuations incustomers’ production plans,
making it difficult to generateearnings. However, in thesecond half, the number ofmodels sold increased, allowing
us to gradually stabilize load
input (especially in Japan),which, coupled with improved
profitability through flexible
and timely production system
adjustments in response tovariation in demand, returned thebusiness group to profitability.
In business development
in China, Line 1 of MEIDEN
HANGZHOU DRIVE TECHNOLOGYCO., LTD., which started massproducing motors/generators in
FY2021, experienced a significant
downturn in operations. However,in October 2022, the company
held a completion ceremony forLine 2, which was constructed on
the same property, and has madesteady progress in launching
the production line, aiming tostart mass production in thesecond half of FY2023. Line 2
is equipped with a production
line for EV integrated motor andinverter units; given that we havereceived unofficial nominations
for deliveries to several
customers and for multiple
vehicle models, the plan for thetime being is to operate at a
production scale of 100,000 units
per year. The addition of Line 2
brings our production capacity
in Japan and China to roughly 1
million EV drive units per year.

TOPICS

Introduction / Message

EV inverters

250,000 units/year

In April 2023, Meidensha began sales activities for the full-scale market launch of the MEIDEN
e-Axle, a unit that integrates the motor, inverter, and gears (reduction gears) of the drive systems ofelectric vehicles.
In addition to achieving an industry-leading total weight reduction to 69 kg, we have improved output
density and made the new motors more compact with innovative copper wiring. By reducing vehicle
weight, these features reduce power consumption and vehicle battery capacity, thereby contributing tolower vehicle costs and other benefits. Furthermore, thanks to the ingenious design of the inverter, the
MEIDEN e-Axle has one of the lowest profiles on record—just 280 mm—making it possible to lower thefloor of the cargo space when the unit is installed on the rear wheels of a vehicle, which not only saves
space, but is also compatible with cars with three rows of seats. The unit can also be installed on thefront wheels without any designchanges, significantly
shortening the vehicle
development schedule. We will
focus on sales activities for thisproduct to expand the numberof compatible models as soon
as possible and also enhancethe output lineup and develop amass production system tomeet growing demand, all withthe aim of contributing to theadvent of more appealing
automobiles.

Development in FY2023
and Beyond
With semiconductor supply
concerns beginning to dissipate,automobile production is enteringa recovery phase. In Europe andChina, the percentage of electricvehicles among new vehicle sales
is growing faster than expected.
In Japan and the U.S., OEMsare expanding their lineups ofEVs and EV variants one after
another. In sum, the accelerationof electrification is an irreversible
global trend.
The EV Components BusinessGroup is conducting sophisticatedanalyses and surveys of demand
to reduce waste on productionlines to the extent possible bymaintaining operating efficiency
amid sudden load variations,an issue that materialized in
FY2022. Concurrently, we willcontinuously pursue productivity
improvements through process
improvements and accelerate
efforts in material procurement
to enhance our earning power
through manufacturing.

In Japan, the production
line in Nagoya, where we
manufacture integrated motorand inverter units, is expectedto achieve a high operating rate
against a backdrop of a wider
range of models sold and thereturn to normal production byautomakers, and production
loads are expected to remain
stable on the production lines
in Numazu and Kofu as well. In
China, we are working to maintainthe framework of Line 1, which iscurrently not operating well, in linewith production volumes and aremaking all possible preparations
for the smooth launch of Line 2,
which will go into service in thesecond-half of FY2023.
As for the future, we will strive
to improve the profitability ofthe entire segment, taking into
consideration load balancing
and other factors without losing
sight of the need to achieve
overall optimization in production
activities in Japan and China.
For future business expansion,
we finished developing theflagship integrated motor/inverter/gear unit, “MEIDEN e-Axle,” andhave launched full-scale sales
activities. We channeled ourstockpile of technologies intodeveloping the product under theconcept of a lightweight, compact
drive unit that delivers powerfuldriving performance, andsuccessfully created a productwith many attractive features
for automotive OEMs, including
improved electric mileage andcompatibility with lower cargospace floors for models with threerows of seats.
We will expedite our proposal
activities for this and otherproducts to local OEMs and Tier
1 suppliers in the Chinese market
and also focus on development
and proposal activities for largecapacity machines of 200 kW or
more and other products withincreasing needs in China. We
will also strengthen our proposal
activities in Japan—mainly
targeting OEMs that specialize inmini EVs—by leveraging our trackrecord with products for miniEVs, for which orders have beenstrong since last year.

72

Our Value

Field Service Engineering
Business GroupManaging Executive Officer
Strategic Group Leader,
Field Service Engineering
Business Group

Business Environment (Risks and Opportunities)/Strengths
 ales expansion of environmentally friendly products and increased demand forS
maintenance services due to acceleration of carbon neutrality
Promoting smart maintenance based on digital transformations
Overseas expansion of semiconductor-related maintenance services
Securing and maintaining power supplies by strengthening the BCP response ofcompanies, municipal governments, and others

Soaring energy-related costs
Securing technical service personnel
Life-cycle engineering by integrating products and maintenance services

Strengths

Over 120 years of maintenance stock and maintenance service dataLineup of environmentally friendly products and extensive maintenance service system
Promoting CX by enhancing customer center functions

FY2024 Management Targets
Net sales (left axis)
Operating income (right axis)
Operating margin

Orders42.0 billion yen(Billion yen)

14.9%

(Billion yen)

15.0%

50

13.2%

13.6%

14.4%

10

41.6

8

42.8 billion yen
Sales

41.6 billion yen
39.7 billion yen

40
30

38.7
5.7

39.5

39.7

5.9

41.8

5.7

6.0

6

5.2

20

4

10

2

Operating income

6.0 billion yen
5.2 billion yen

0

0
2020

Outlined figures are FY2022 results

73

Development in FY2023
and Beyond

Soaring component prices and longer lead times
Risks

Corporate Governance

Our Impact

Our Strategy

Corporate Information

MEIDENSHA REPORT 2023

Meiden Engineering has helped customers save energy and improve productivity for many years. Now thatcompanies are increasingly interested in reducing GHG emissions in order to reduce the environmental
impact of their business activities, we are devoting energy to proposing solutions focused on energy
conservation and GHG reduction—namely introducing environmentally friendly products—along with actively
recommending regular equipment maintenance and servicing. By focusing on providing optimal equipment
installation and operation proposals while helping customers formulate decarbonization plans, we havenoted a recent increase in orders for photovoltaic PCSs and mobile power supply vehicles as well as inquiries
into replacing existing equipment with high-efficiency transformers. Through such aggressive promotion of
proposed services that match rising environmental awareness and meet general needs, we are working to
expand our business beyond the conventional framework of maintaining and servicing existing products.
Additionally, as an approach to solving customers’ problems, we already provide one-stop solutions
for services—proposals to bundle overall maintenance services for customers’ equipment (including
equipment manufactured by other companies). We began offering the solutions in FY2014, and they now
account for roughly 30% of the Field Service Engineering Business Group’s sales. Meidensha andMeiden Engineering will continue to further strengthen their business collaboration to help resolve
customers’ issues and support optimal, safe, reliable equipment operation.

Hideki Miyazawa

Opportunities

Our Approach

Developing life-cycle engineering by strengthening product andengineering capabilities

Reflecting on FY2022
In FY2022, the Field Service
Engineering Business Group
recorded a slight increase inrevenue on the strength ofsolid demand for maintenanceservices, but profits decreased
due to changes in the productmix and soaring material prices.
As in the Power Infrastructures
Business Group and the Public,
Industrial & Commercial Sector
Business Group, businessactivities were limited bylonger lead times for somecomponents, causing problems
such as sales for ordered
projects being delayed until
the following fiscal year. In
response, we proactively asked
customers to expedite projectorders given the greater difficulty
procuring components. Under
these circumstances, orders
and sales have reached record
highs, and despite lingering
supply chain issues, thebusiness environment appears
to be stable, buoyed by strong
demand.
Additionally, regarding
business for the semiconductor
field—an area of focus for
us in recent years—sales ofsemiconductor manufacturing
equipment by agents andfield service of equipment at
customers’ locations have beensteadily increasing, sending
sales of related businesses pastthe ¥3 billion mark.
Furthermore, we actively
engaged in proposal activities
to provide new added
value to our customers, forexample proposing upgrades
to environmentally friendly
products and IoT-based smart
maintenance, and developing
one-stop solutions for services
to bundle overall maintenanceservices for customers’
equipment (including equipment
manufactured by othercompanies).

TOPICS

Introduction / Message

2021

2022

2023

2024

Initial plan Medium-Term
Management Plan

(FY)

Amid mounting pressure to
streamline the care and reduce
the expense of aging equipment
and facilities within public
infrastructure and at privatesector plants in Japan, and as
the working-age population
dwindles and ages, there is a
growing need for inspections,repairs, and service life
extension of various equipmentby manufacturers’ specialized
maintenance teams. In light ofthese societal changes, orders
in this field are growing steadily
every year, and if the long leadtimes of various components—afactor hindering performancein FY2022—begin to ease andreturn to normal, we expect our
profits to move into a stable
expansion phase once again.
The Meiden Group has
devoted energy to various
activities, including one-stop
solutions for services—alongstanding core strategy forbusiness expansion to provide

customers with integrated
solutions that solve multiple
problems—and walk-throughs inwhich we accompany customers
on their equipment inspections
and make proposals from anon-the-ground perspective.
Furthermore, by combining the
pursuit of improved customer
experience value (CX) and theadded value of leveraging digitaltransformations to enhance ourability to provide solutions, we
are working on a wide range ofinnovations to further increasecustomer satisfaction, startingwith providing various services
centered on maintenance andservicing. Concurrently, we
are always trying to develop
high-quality business activities
that will result in solutions tosocietal issues in general byproviding optimal proposals
that properly combine products,
systems, and services that
help customers with BCP
measures, decarbonization,and other efforts to reduce
the environmental impactof their business activities.

Through this work, we aim to
be a trustworthy, indispensablegroup of technical professionals
even as the world continues tochange rapidly.
To achieve stable andsustainable business expansion,
we will continue to expand
our maintenance stock incooperation with other businessgroups, look into creatingsynergy with Meiden Groupdivisions and affiliates involvedin the semiconductor business,and devote energy to swiftly
developing and improving theskills of technical personnel
through advanced, efficienttraining programs at the Manabiya technology education center,
all with the aim of further
expansion in order to be a sturdy
recurring revenue business thatserves as a solid revenue basefor the Meiden Group.

74

Introduction / Message

Our Value

Our Approach

Corporate Governance

Our Impact

Our Strategy

Financial / Non-Financial Highlights
Net sales(millions of yen)
302,938

300,000

Operating income(millions of yen)

30,000300,000

259,635

244,180

240,310225,000

Non-financial indicators

Net sales/Operating income(millions of yen)

255,748

245,033

150,000

150,000

75,00075,000255,046

0

9,468

8,384

2019

2020

2021

2022

2018

(FY)

2019

2020

(t-CO 2)(t-CO 2)60,0008,000,000

56,07653,47353,25450,0898,539

22,50045,0006,000,000

15,00030,0004,000,000

7,500

15,0002,000,000

0

0

0
2018

Scope 3 (Category 11) emissions

48,986

12,725
10,336

Scope 1 & 2 emissions

272,578

231,254

225,000

221,364

2021

2022

2019

2020

2021

2022

Scope 1 & 2 emissions amounted to 50,089 t-CO2, up 2.3% fromthe previous fiscal year. Although energy consumption rose because
of increased production in the EV business, Scope 1 emissions
decreased due to the expanded scope of renewable electricity.
However, an SF6 gas leak occurred in Japan (1,603 t-CO2), resulting inan overall increase from the previous fiscal year.

Overseas net sales/Overseas sales ratio

EPS/Dividend per share/Payout ratio

R&D expenses/Capital expenditure

80,00071,72540

74,27970,41060,000(%)

65,65030

Payout ratio

20

25.7

160.96150

157.13148.43(%)(millions of yen)60

20,00045

15,000

0
2019

2020

2021

2022

10

50

0

0

(FY)

31.8

30

10,000

45

50

48

50

50

15

5,000

0

0

2018

2019

2020

2021

2022

(FY)

Net income per share was 157.13 yen. During the current medium-term
management plan, we aim to return profits to shareholders by paying
stable dividends with a target consolidated payout ratio of 30%, andhave paid an annual dividend of 50 yen per share.

Overseas net sales increased by 13.1% from the previous fiscal
year, and the overseas sales ratio of total sales was 27.3% thanks
to the recovery of demand in Singapore and Germany, the full-scale
operation of manufacturing subsidiaries and increasing demand forenvironmentally friendly products in the U.S., and the positive effects
of exchange rate fluctuations.

2020

2021

2022

(FY)

* Data calculation began in FY2019.

Number of female employees
Percentage of female employees in management positions(people)800

16,042

15,575600
10,748

20.9

2018

2019

Scope 3 (Category 11) emissions were 5,745,708 t-CO2, 10% lower
than in FY2019. We were able to reduce these emissions from theprevious fiscal year mainly due to an increase in the ratio of work in therailways business and field service engineering business.

10,467

9,458

9,468

9,869

12,347

10,257

614

596

571

557

519
4.1

400

(%)

6.0

3.5

3.4

1.5

0
2019

2020

2021

2022

3.0

3.6

200

2018

4.5

4.1

7,895

20,0005,745,708

Number of female employees*1/Percentage offemale employees in management positions*1

R&D expenses
Capital expenditure

33.7

29.8

27.6

26.7

100

6,050,000 5,922,573

180.91

27.3

48,42029.3

Dividend per share200
168.6827.5

40,000

EPS

(yen)

2018

(FY)

Net sales increased by 6.9% from the previous fiscal year, reachinga record high. Although the Public, Industrial & Commercial Sector
segment saw a decline in sales strongly influenced by longer leadtimes for components, sales increased in the three other major
segments. Operating income declined by 9.8% from the previous fiscal
year, mainly due to the impact of surging material prices.

Overseas net sales
Overseas sales ratio

6,370,000

0
2018

(FY)

Orders increased by 16.6% from the previous fiscal year, reachinga record high. Orders in all four major segments increased from theprevious fiscal year, with the Power Infrastructure segment seeinga particularly significant increase of 39.4%, driven by growth in theOverseas T&D Business.

(millions of yen)

MEIDENSHA REPORT 2023

*1 Meidensha only (non-consolidated)*2 Meidensha + Meiden Engineering
Indicators other than the above are presented on a consolidated basis.

Financial indicators
OrdersCorporate Information

0
2018

(FY)

2019

2020

2021

2022

(FY)

With the recognition that continuously recruiting female employees anddeveloping female managers are important issues for the Company,
we have established a companywide organization to promote diversity,
equity, and inclusion (DEI) and are implementing various measures.
We have set a goal to increase the percentage of female employees inmanagement positions to 12% by FY2030.

R&D expenses increased by 3.9% from the previous fiscal year. We
developed vacuum technology-based products aimed at eliminating
the use of high-GWP SF6 gas and also engaged in development toexpand our lineup of EV drive units. Capital expenditures increasedby 14.8% from the previous fiscal year. We conducted a receiving
inspection for EV production line investment in China.

*The percentage of female employees in management positions is calculatedby dividing the number of female managers by the total number of managers.

Total assets/Net assets/Equity ratio

Cash flows (operating, investing, financing)

Total assets
Net assets
Equity ratio(millions of yen)

400,000(%)(millions of yen)50

20,00015,000320,000
265,586

270,410279,059

240,000
160,000
2,000

31.5

1,845

32.2

34.6

290,899

307,390
35.1

35.1

30

2,128

2,247

2,378

10

14,601

14,365

2019

2020

2021

11,38910,416

10,0005,000-5,000-10,000

2022

Total assets increased by 5.6% from the previous fiscal year, mainly
due to an increase in inventory resulting from purchases aimed atstabilizing production activities in light of greater difficulty procuring
various components. The equity ratio was 35.1%, the same as theprevious fiscal year.

(FY)

Total actual annual working hours
Rate of taking paid leave(Hours)

2,100

68

13,742

2,050

61

Education and training expenses*2 /Number ofparticipants in education and training*2
78(1,402)(8,074)-20,000
2018(thousand yen)80

200,000

60

150,000

Education and training expenses
Number of participants in education andtraining (total)

72
64(13,700)(13,117)

2019

2020

40
1,978

(2,685)(4,266)(7,503)(10,506)

1,980

2022

Operating CF increased from the previous fiscal year, mainly due to thesteady collection of receivables. As for investment CF, expenditures
increased from the previous fiscal year, mainly due to the acquisition of
fixed assets for capital investment. Funds were raised primarily throughborrowings and commercial paper.

2018

2019

2020

100,000

2021

114,500

104,590

94,59320,00014,812

1,957

1,950

(FY)

40,000151,648 31,545 30,000

1,970

20

50,000

0

0

1,900
2021

(people)133,428

2,000(3,101)

(%)

2,019

3,735

-15,000
0

2018

Operating CF
Investing CF
Financing CF

0

0

75

40

20
1,920

Total actual annual working hours*1/
Rate of taking paid leave*1

2022

(FY)

We are implementing a Smart Work program under which we
streamline operations and improve productivity with the aim of
reducing overtime work and encouraging employees to use their paid
leave, thereby reducing annual total working hours. We have set atarget of 1,800 annual total working hours per person in FY2024.

9,724

11,601

10,941

10,000

0
2018

2019

2020

2021

2022

(FY)

We provide various training programs to promote employee growth inskill development, career development, and other areas. In addition
to in-person and hybrid online programs, we have incorporated video
streaming and otherwise established an environment where employees
can choose when and where they learn in order to encourage greater
participation and develop people capable of learning on their own.
76

Introduction / Message

Our Value

Outline of the Meiden Group

Our Approach

Country/
RegionIndia

Corporate Data (as of March 31, 2023)
Corporate NameMEIDENSHA CORPORATION

Capital¥17,070 million

Established

June 1, 1917 (Since December 22, 1897)

Consolidated Sales

272,578 million yen

Representative

Director & President & Executive Officer Akio Inoue*
ThinkPark Tower, 2-1-1, Osaki,
Shinagawa-ku, Tokyo, 141-6029 Japan

Consolidated Number of
Employees

9,816

Head Office

Consolidated Subsidiaries

40 (21 in Japan, 19 overseas)*Representatives were changed after the 159th Annual General Meeting of Shareholders on June 28, 2023.

Indonesia
Korea

Malaysia

Main Subsidiary Companies (as of March 31, 2023)
Country/
Region

Japan

China

Company Name

Corporate GovernanceBusiness Entity

Singapore

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 business

EAML Engineering CO.,LTD.

Design, manufacture, sale, and repair of hydroelectric generators andperipherals, hydroelectric generation business

Vietnam

MEIDEN TECHNO SYSTEMS CO., LTD.

Maintenance, inspection, renovation and refurbishment of transformers
and switchgear, manufacture of products and parts for transformers andswitchgear, installation of transformers and switchgear

Germany

MEIDEN FACILITY SERVICE CORPORATION

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

SADO MEIDEN SERVICE CORPORATION

Upkeep, operation, maintenance, etc., of facilities etc. in Sado region

MEIDEN AQUA BUSINESS COMPANY

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

MEIDEN SYSTEM MANUFACTURING
CORPORATION

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

MEIDEN PLANT SYSTEMS CORPORATION

Design and contracting for electricity and building construction, andmanufacture, repair, refurbishment of electrical equipment, etc.

MEIDEN KIDEN KOGYO CO., LTD.

Repair and overhaul of eddy current dynamometers, mechatronic equipment,
motors, generators, and dynamometers, and high-precision machining

KOFU MEIDENSHA ELECTRIC MFG. CO.,LTD.

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

MEIDEN ENGINEERING CORPORATION

Manufacture, sale, installation, and wiring of electrical equipment, machinery,
tools, and devices, maintenance and inspection services, refurbishment, andrepairCHUO ENTERPRICE CORPORATION

All tasks relating to management and operation of facilities, maintenanceand safety inspections, sanitation, cleaning, security, construction, energyconservation measures, and other building management

MEIDEN CHEMICAL CO., LTD.

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

HOKUTO DENKO CORPORATION

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

MEIDEN NANOPROCESS INNOVATIONS, INC.

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

MEIDEN KOHSAN CO., LTD.

Sale of goods and materials, insurance agency, and real estate business

MEIDEN MASTER PARTNERS CORPORATION

Worker dispatch business

MEIDEN UNIVERSAL SERVICE LTD.*1 *2

Cleaning, security for buildings, structures, and incidental facilities, andgreening and maintenance of land

MEIDEN SYSTEM SOLUTION CORPORATION

ThailandNorth
AmericaOur Impact

Our Strategy

Company Name

Corporate Information

MEIDENSHA REPORT 2023

Business Entity

MEIDEN INDIA PRIVATE LIMITED*2

Import and sale of Meiden Group products, engineering tasks, construction,
after-sale service

MEIDEN T&D (INDIA) LIMITED

Manufacture and sale of transformers and peripheral businesses

PT. MEIDEN ENGINEERING INDONESIA

Sale and design of electrical equipment, installation, construction, andengineering tasks

MEIDEN KOREA CO., LTD.*2

Sale, installation, testing of dynamometer products, servicing andmaintenance, and import and export operations

MEIDEN MALAYSIA SDN BHD

Electrical construction, engineering tasks, EPC business, sale of Meiden
Group products and systems, and servicing & maintenance

MEIDEN METAL ENGINEERING SDN. BHD.

Manufacture and sale of transformer housing and radiators, etc.

MEIDEN ASIA PTE. LTD.

ASEAN regional presiding company

MEIDEN SINGAPORE PTE. LTD.

Manufacture and sale of transformers, switchboards, and circuit breakers,
assembly and sale of ceramic flatsheet membrane unit, and engineeringtasks

THAI MEIDENSHA CO., LTD.

Electrical construction, mechanical construction, engineering, EPC
business, and maintenance

MEIDEN THAI ENTERPRISE CO., LTD.

Personnel dispatch

VIETSTAR MEIDEN CORPORATION

Manufacture and sale of low and medium-voltage switchgear

MEIDEN EUROPE GmbH

Sale and import/export of electrical equipment

TRIDELTA MEIDENSHA GmbH

Manufacture and sale of lightning arresters for electrical and railway, andperipherals for lightning arresters

MEIDEN AMERICA, INC.

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

MEIDEN AMERICA SWITCHGEAR, INC.

Manufacture and sale of vacuum circuit breakers, and sale of vacuum
interrupters*1 Special subsidiaries *2 Non-consolidated subsidiaries

Share data (as of March 31, 2023)
Stock Listing

Tokyo Stock Exchange,
Nagoya Stock Exchange

Total number ofauthorized shares

115,200,000

Total number ofissued shares

45,527,540(Including treasury shares of 159,447)

Number of shareholders

15,801

Financial institutions

Distributionof shares byshareholder

35.33%

Securities companies

1.33%

Business companies

20.78%

Overseas investors

22.76%

Individuals

19.45%

Other

0.35%

Major Shareholders
Number of Shares Held (shares)

Shareholding Ratio (%)

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

5,650,500

12.45

Software development, design, production, sale, and rental, andmaintenance and management of computer systems and networks

Sumitomo Electric Industries, Ltd.

2,631,385

5.80

MEIDEN SHOJI CO., LTD.

Sale of electrical and electronic equipment products

Sumitomo Mitsui Banking Corporation

2,241,835

4.94

MEIDEN ZHENGZHOU ELECTRIC CO., LTD.

Manufacture and sale of lightning arresters for electric power andelectrical railways, zinc oxide blocks for lighting arresters, and accessories
for lightning arresters

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

2,100,200

4.63

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

NEC Corporation

1,746,150

3.85

THE BANK OF NEW YORK MELLON 140044

1,705,490

3.76

MEIDEN HANGZHOU DRIVE SYSTEMS CO., LTD.

Manufacture and sale of elevator motors and traction machines, inverters forsynthetic fiber machine, and automated guided vehicles (AGV)

Sumitomo Mitsui Trust Bank, Limited

1,500,000

3.31

SHANGHAI MEIDENSHA CHANGCHENGSWITCHGEAR CO., LTD

Manufacture and sale of medium-voltage cubicle-type gas insulated
switchgear and vacuum circuit breakers
Manufacture and sale of high and low voltage panels

Meidensha Employees Stock Ownership Group

1,121,571

2.47

MEIDEN (HANGZHOU) DRIVE TECHNOLOGYCO., LTD.

Manufacture and sale of motors and inverters for EVs

NORTHERN TRUST CO. (AVFC) RE MONDRIANINTERNATIONAL SMALL CAP EQUITY FUND, L.P.

1,106,400

2.44

Sale of switchboards and engineering tasks

Sumitomo Life Insurance Company

1,061,400

2.34

Hong Kong MEIDEN PACIFIC (CHINA) LIMITED

Names of Shareholders* Note: The shareholding ratio excludes treasury shares.

77

78