112The

To Our Shareholders

th Fiscal Year Business Report

April 1, 2020 ▶▶▶ March 31, 2021

Stock Exchange Code: 6623

To Our Shareholders
We are pleased to extend
o u r g re e t i n g s t o o u rshareholders in presenting
our 112th annual report for
the fiscal year ended
March 31, 2021.

Overview of business
During the period under review, theJapanese economy faced harsh conditions,with a slump in production and consumption
due to the global spread of COVID-19. Despitea gradual upturn after the state of emergency
was lifted in May, the outlook remains clouded in
the absence of a genuine recovery, withwidening disparities among industries as theimpact of the pandemic becomes more longterm. Regarding the business conditions of ourgroup, the Electric Power Products Groupsuffered the impact of the COVID-19 crisis, withdelays to scheduled overseas plant works, but
enjoyed robust demand from power transmission
and distribution companies.

Net sales 75.6 billion yen
Electric Power Products GroupOperating income 4.1 billion yen
Motor Products Group(Billions of yen)

80
60

The Motor Products Group faced sluggish
demand for motors during the first half of the
fiscal year, but demand began to increase insecond half, with a recovery in the airconditioning, automotive and other industries.
Demand for printed wiring boards remained at ahigh level throughout the fiscal year, against thebackground of a booming electronics industry.
Under such circumstances, our Group has
worked on structural enhancements for future
growth in this fiscal year, the second year of the2023 medium-term management plan “Create
the future with reliable technology - Innovation
and Challenge -.” Specifically, we haveundertaken organizational reforms including themerger of the Company and its subsidiary AICHIELEC CO. and adopted a structure comprisinginternal companies, while enhancing thecompetitiveness of existing businesses,
developing new products and businesses, andimplementing focused investment in growthbusinesses. The Electric Power Products Groupfocused its efforts on expanding sales of
products such as new step voltage regulatorsand transformers targeting the generalmanufacturing industry. At the same time, it(Billions of yen)

78.2

80.0

75.0

75.6

6
5

43.5

47.3

46.2

47.7

28.7

27.8

40

5.1
4.2

4

4.1
2.8

3
2

20
0

34.7

109th

(FY2018)

1

32.7

110th

(FY2019)

111th(FY2020)

112th(FY2021)

1
0

109th

(FY2018)

110th(FY2019)

111th(FY2020)

112th(FY2021)

Note: Effective the 112th fiscal year, powder processing machines and boilers, etc. have been reclassified under the Electric Power Products Group insteadof the Motor Products Group, under which they had been classified. Figures for the 109th, 110th and 111th fiscal years have been prepared basedon the new classification for the purposes of comparability.

proceeded with initiatives to enhance quality,
cost and delivery (QCD) such as the renewal of
the small transfor mer factor y and TPS
improvement activities for large transformers. It
also worked to pioneer businesses including
biogas power plants and hydroelectric power
generation equipment. The Motor ProductsGroup worked on initiatives including ramping
up production capacity of on-vehicle hermetic
motors and package board cores, as well as
countermeasures to respond to a temporary
downturn in orders due to COVID-19.
With regard to the consolidated performancefor the fiscal year ended March 31, 2021, bothsales and income increased compared with theprevious fiscal year, due to an increase in salesof the Motor Products Group and an improvementin the gross profit ratio resulting from changes in
the composition of sales of the Electric Power
Products Group. Net sales increased by 0.8% to75,619 million yen, operating income increasedby 49.2% to 4,179 million yen, ordinary income
increased by 43.7% to 4,751 million yen, and net
income attributable to owners of parent
increased by 22.0% to 3,338 million yen.

Dividend
Our final dividend was 48 yen per share.
Combined with the interim dividend, the total
dividend was 93 yen per share.
Future prospects
Business conditions surrounding our groupwill be subject to some adverse factors,
including the prolonged impact of COVID-19,
wheeling cost reductions by power transmission
and distribution companies, and soaring
materials prices. However, growth is expected
in demand for products such as sophisticatedpower distribution products, on-vehicle motors
and package board cores, in the context of the
spread of renewable energy and the progressive
digitalization of society. The Group will continue
to strive for even more competitive products
through the enhanced QCD, and aim forbusiness expansion by steadily making
investment focused on growth fields.
We appreciate your continued understanding
and support.
June 2021

Kazuo Kobayashi
President

Ordinary income 4.7 billion yen

Net income attributable to owners of parent 3.3 billion yen(Billions of yen)(Billions of yen)

6
5

5.0

4
4.8

4.7

3.1

3.3

3

3.3
2.7

2

2

1

1
0

3.3
3

4

109th

(FY2018)

110th(FY2019)

111th(FY2020)

112th(FY2021)

0109th(FY2018)

110th(FY2019)

111th(FY2020)

112th(FY2021)2

Performance at each Group■Electric Power Products GroupNet sales 27.8 billion yen
Sales ratio

Business description
This Group is engaged in the design, manufacture and sale of electricalequipment, such as different types of transformers, protection and control
devices, equipment related to renewable energy, powder processing
machines and hot water boilers, as well as receiving and transforming
substation construction in Japan and Overseas.
Overview of FY2021
Sales ratio
Compared with the previous year, net sales
decreased by 3.3% to 27,845 million yen andsegment income increased by 48.7% to 3,565
million yen. Net sales 37
declineddue to a slump in%overseas substation construction and sales oflarge transformers, etc. but segment income
increased thanks to an increase in sales of step
voltage regulators and controllers.

37%

Net sales trend (Billions of Yen)
32.7

110th

(FY2019)

28.7

27.8

111th

112th

(FY2020)(FY2021)Main products

Pole-mounted
transformers

3“TOP RUNNER”
low loss transformers

Digital-type devices for monitoring,protection and control

Step voltage
regulators (SVR)

Power conditioners

On-load tap-changing
transformers (LRT)

Receiving and transforming
substation construction

Hot water
boilers

Powder processing
machines

■Motor Products GroupNet sales 47.7 billion yen
Sales ratio

Business description

This Group supplies products that facilitate daily living, such as various
small motors including hermetic motors for air conditioner compressors,
printed wiring boards, linear actuators for electric beds, shutter operators,
etc.
Overview of FY2021
Sales ratio
Compared with the previous year, net sales
increased by 3.3% to 47,774 million yen andsegment income increased by 20.1% to 2,293
million yen. Both net sales and segment income
increased due63
to%a recovery in sales of hermetic
motors during the second half of the fiscal year,
in addition to a strong sales of package board
cores and actuators.

63%

Net sales trend (Billions of Yen)
47.3

46.2

110th

111th

(FY2019)(FY2020)

47.7

112th

(FY2021)

Note: Effective the 112th fiscal year, powder processing machines and boilers, etc. have been reclassified under the Electric Power
Products Group instead of the Motor Products Group, under which they had been classified. Figures for the 110th and 111th
fiscal years have been prepared based on the new classification for the purposes of comparability.

Main products

Hermetic motors for
air-conditioner compressors

Motors for submersible pumps

Printed wiring boards

Shutter operators

Linear actuators
Controllers and handsets forlinear actuators

Fans for cattle farms

Inverters
4

Financial report
Consolidated Balance Sheets
Assets

FY2021

FY202065,07831,117
19,968368
10,78061,71926,966
16,906337
9,722(As of March 31, 2021) (As of March 31, 2020)

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

Total assets

96,196

88,685(Millions of Yen)

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

Consolidated Statements of Income

FY202029,516
9,190
38,70725,783
8,506
34,28954,805
1,528
1,154
57,48896,19652,322977
1,095
54,39588,685(Millions of Yen)FY2021

FY2020(From April 1, 2020
to March 31, 2021)(From April 1, 2019
to March 31, 2020)

Net sales

75,61975,030

Cost of sales

64,51065,293Gross profit

11,109

9,736

Selling, general and administrative expenses

6,929

6,935

Operating income

4,179

2,801

Non-operating income

837

706

Non-operating expenses

265

201

4,751

3,306

67

94

Ordinary income
Extraordinary income
Extraordinary losses

5

FY2021(As of March 31, 2021) (As of March 31, 2020)

43

25

Income before income taxes

4,775

3,375

Income taxes-current

1,723

882

Income taxes-deferred

(324)

(300)

Net income

3,376

2,792

Net income attributable to non-controlling interests

38

56

Net income attributable to owners of parent

3,338

2,735

Non-Consolidated Balance Sheets
Assets

FY2021

FY202040,24025,8138,599
68
17,14530,743
21,8236,929
40
14,854(As of March 31, 2021) (As of March 31, 2020)

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

Total assets

66,05452,567(Millions of Yen)

Liabilities andNet assets

FY2021

FY202015,6695,414
21,084

9,727
3,377
13,10543,707
1,262
44,96966,05438,792670
39,462
52,567(As of March 31, 2021) (As of March 31, 2020)

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

Non-Consolidated Statements of Income(Millions of Yen)FY2021

FY2020(From April 1, 2020
to March 31, 2021)(From April 1, 2019
to March 31, 2020)

Net sales

46,29531,946

Cost of sales

39,27027,021Gross profit

7,025

4,924

Selling, general and administrative expenses

4,355

3,777

Operating income

2,670

1,147

Non-operating income

782

621

Non-operating expenses

68

122

Ordinary income

3,384

1,646

Extraordinary income

3,327

93

Extraordinary losses

3

6

Income before income taxes

6,708

1,733

Income taxes-current

1,128

497

Income taxes-deferred

(189)

(34)

Net income

5,770

1,270
6

Topics
Management
Strengthening the management structure
We are progressively strengthening our management structure, with the aim of creating products
and services for the future with reliable technology to be an electrical manufacturer that continues togrow, as set forth under our 2023 medium-term management plan.
1) Introduction of an internal company structure
We have reorganized our operational structure to the one comprising two internal companies andone division―the Electric Power Company, the Motor Company and the Administration Division.
Through this transition, we aim to clarify responsibilities and authorities, and expedite operations.
In addition, each company will take control of subsidiary management, and effectively utilize
management resources such as personnel and flexible funding.
2) Restructuring the motor businesses
We are proceeding with the concentration of management resources and business expansion in the
motor businesses, where future growth is anticipated. We have completed the absorption-type mergerof our subsidiary AICHI ELEC CO., and have integrated the motor businesses into the Motor Company.
We also merged the subsidiaries SHIROTORI AICHI ELEC CO., LTD. and ENA AICHI ELECTRIC
CO., LTD. to form a new company, SHIROTORI ENA AICHI ELECTRIC CO., LTD.
The Group will aim for sustainable growth, with the Electric Power Company and the Motor Company
as the pillars of our business expansion.

Electric Power Products Group
Development of a centralized-server-type automated power distribution master station device
This is a system that monitors andcontrols the status of power distributionlines.
Previously, Chubu Electric Power Grid
Co., Inc. operated a decentralized system
of automated power distribution masterstations, with a master station at eachbusiness location.
We have improved this arrangement,
Master station servers
Master station controllers(at one location)(at each business location)
developing a new system where the server,
the core of the master station control function, is centralized in one location.
This achieves improvements in cyber security, reductions in maintenance costs, and improvements
in system availability at a time of disaster, among other benefits.
Master stations at all 60 locations operated by Chubu Electric Power Grid Co., Inc. will progressively
switch from a decentralized to a centralized-server-type system.
7

Electric Power Products Group
Development of a low voltage thyristor type step voltage regulator (LTVR*)
This product compensates for decreases in voltage along low voltage power distribution lines.
Electric power companies are currently considering changing the mode of power distribution throughmountainous regions from high voltage to low voltage, in order to form more efficient and effective power
distribution systems.
In making this transition to low voltage distribution lines, electric powercompanies are faced with the problem of significant declines in voltage over long
distribution lines, compared to high voltage distribution. We have developed
LTVR with the aim of solving this problem.
Our newly-developed product has the following features.
• Compensate for large declines in voltage, with a focus on raising voltage• Improve voltage instability through a balancer function• Utilize a tap-changing thyristor type function, making maintenance almost
unnecessary*LTVR=Low voltage Thyristor type step Voltage Regulator

Electric Power Products Group
Development of a dual power source transformer for automatic switching devices
We have developed a dual power source transformer for automatic switching
devices, for use with the power sources for their operation and control. We havebegun delivering these new products to Shikoku Electric Power Transmission &Distribution Company, Incorporated.
Automatic switching devices are installed on high voltage power distributionlines. If a breakdown in power transmission occurs, then they automatically detect
the section in which the breakdown occurred, and automatically operate switches
to minimize the sections affected by the blackout. This product is a transformer tosupply power to these automatic switching devices.
In addition to using the same assembly as existing products, allowing easy
installation, these new products enable cost reductions through the use of common
components with the pole-mounted transformers that we also provide to Shikoku Electric Power
Transmission & Distribution Company, Incorporated.

Electric Power Products Group
Launch of the lightning resistant primary cutout switches repair businessWe have begun a repair business for lightning resistant primary
cutout switches (lightning resistant PCs*) as part of our efforts toprotect and reuse resources in power distribution devices.
We repair aging lightning resistant PCs that suffer fromdeclining function, and enable them to be used again.
We established a new repair line for this business, to achieve
the high-quality, low-cost lightning resistant PC repair services
that our customers need.
*Lightning resistant PCs are switches installed on electricity poles, connecting pole-mounted
transformers with high voltage power distribution lines. They are also given the special function ofabsorbing power surges resulting from lightning strikes, and acting as a fuse to prevent pole-mounted
transformers short-circuiting and failing.

A lightning resistant PC repair line

8

Electric Power Products Group
Development of a ground-mounted transformer tower
We have developed and begun delivering a ground-mounted transformer tower
for Shikoku Electric Power Transmission & Distribution Company, Incorporated.
This product is constructed to allow easy detachment of the high and low
voltage doors, and enables easier installation. In addition, we have ensured
compatibility with existing products, by maintaining the same external dimensions.
This product is a transformer for use in place of pole-mounted transformers inareas with underground power distribution lines. The need for removing electricity
poles is increasing in Japan, from aesthetic, safety and disaster-prevention
perspectives, and we are actively promoting this new product.

Motor Products Group
Construction of a new factory for hermetic motors for car air-conditioner compressors at our subsidiary in China
SUZHOU AICHI GAUSS MOTOR CO., LTD., one of our subsidiaries
in China, has built a new factory in the Suzhou Industrial Park, and begun
manufacturing hermetic motors for car air-conditioner compressors.
The purpose of constructing the new factory is to respond to
growing demand for on-vehicle motors in China. The area of the newfactory buildings is 19,000 square meters, on a site with an area ofapproximately 28,000 square meters.
The new factory engages in the integrated manufacture of motors,
from punching motor cores, to the final assembly and completion. It boasts a production capacity of approximately 6 million
units per year, around twice as many as the current factory.
With the new factory fully operational, we aim to respond to customer needs, and expand our overseas and on-vehicle
motor businesses.

Motor Products Group
Establishment of a manufacturing company to make motors for building air-conditioner compressors
We established GUANGZHOU AICHI ELECTRIC CO., LTD. (GZA) in
Guangzhou city, Guangdong province, for the purpose of manufacturing motors forbuilding air-conditioner compressors.
We made this move in response to expanding demand for air-conditioner
motors in China, and plan to produce and sell approximately 300,000 units per
year, to Japanese manufacturing companies in Guangzhou city.
Production will be undertaken at a leased factory in the Guangdong Conghua
Economic Development Zone Mingzhu Industrial Park. The area of the factorybuildings is 2,000 square meters.
GZA is a company wholly owned by SUZHOU AICHI TECHNOLOGY CO.,LTD., our subsidiary in Suzhou city in China. The invested capital is RMB 25 million.
Looking ahead, we plan to position GZA as the Group’s motor manufacturing base in southern China, and expand
orders received from air-conditioner manufacturers in the region.
9

Outline of the Company, Board of Directors and Auditors, and Status of Shares
Corporate Data (As of March 31, 2021)

Status of Shares (As of March 31, 2021)
Total number of shares authorized to be issued 23,912,200 shares
9,500,000 shares

Total number of shares issued
Established:

May 27, 1942

Capital:4,053 million yen

Number of Employees: 1,073 (Consolidated: 2,497)
Head Office:

Major shareholders (top ten shareholders)

1, Aichi-cho, Kasugai city, Aichi pref.,Number of shares Shareholding ratio (%)(thousand shares)

486-8666, JAPAN
Phone +81-568-31-1111

Board of Directors and Auditors(As of June 29, 2021)

6,498 persons

Number of shareholders

Chubu Electric Power Co., Inc.

2,326

24.5

Furukawa Electric Co., Ltd.

565

5.9

TSUCHIYA CORPORATION

548

5.7

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

318

3.3

MUFG Bank, Ltd.

312

3.2

President

Kazuo Kobayashi

Managing Director

Toshiyuki Miyakawa

Managing Director

Shinobu Kato

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

303

3.1

Director

Naoji Yamashita

Yasumitsu Shigeta

266

2.8

Director

Hisashi Tajima

SSBTC CLIENT OMNIBUS
ACCOUNT

226

2.3

Director

Masaki Kakihara

Kawaguchi Kosan Co., Ltd.

200

2.1

Director

Yoshikazu Suda

HIKARI TSUSHIN, INC.

186

1.9

Director

Yukinari Yokote

Director

Hiroyuki Muto

Director (Outside)

Keiichiro Urakami

Director (Outside)

Hideshige Seo

Auditor

Hideki Hosoe

Auditor (Outside)

Akinori Kataoka

Auditor (Outside)

Wataru Hashimoto

Note 1	Numbers of shares are rounded down to the nearest
thousand shares.
Note 2	The treasury shares (4,421 shares) were excluded in
the calculation of the shareholding ratio.

Distribution of shares by shareholder
Foreigninvestors
12.0%

Individual
investors
25.8%

Domestic
investors
88.0% Financial institutions
and securities firms
Other companies,
16.2%
etc.
46.0%

10

Information on SharesBusiness Year

April 1 to March 31 of the following year

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

Frameworks are in place to ask the Company to buyback or request additional purchases of fractional
shares less than one unit. If you are interested, pleasecontact the following.

September 30

Contacts for various procedures

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

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

Reference

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

Public Notices

Information regarding the share buyback
and additional purchase program for
fractional shares less than one unit
(shares less than 100 shares)(Changes in name or address, buyback and additionalpurchase of fractional shares less than one unit)
For shareholders who have an account with asecurities company
Please contact your securities company.
For shareholders who do not have an account with asecurities company
P lease contact Sumitomo Mitsui Trust Bank,
Limited.

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

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

Create the future with reliable technology - Innovation and Challenge A valuable company that creates good products,
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