Contents
03

Profile13	Promote Material Initiatives

for Management

03	Corporate Philosophy andManagement Policies

15	FY2023 Medium-Term

05	Fuji Electric’s Energy andManagement Plan

Environment Businesses
07

Value Creation at Fuji Electric

Overview of Segments
45	Power Electronics Systems Energy

55

Basic Information
55	Consolidated Financial and
Non-Financial Highlights

17	
Overview of Fiscal 2020 and

57

Corporate Data

58

History

Fiscal 2021
19

09

45

Research and Development

Regarding the Fuji Electric Report47	Power Electronics Systems Industry

President’s Message

21

Key ESG Issues
21

49

Semiconductors

Fuji Electric Report is an integrated report that is prepared andpublished for the purpose of facilitating understanding of theCompany’s whole corporate activities among its stakeholders,mainly shareholders and investors.
Fuji Electric places great importance on clear communication ofits material issues of ESG (environment, society, governance) andinitiatives aimed at improving sustainability to enhance long-term
corporate value.
Covered organizations are Fuji Electric Co., Ltd. and its
consolidated subsidiaries in Japan and overseas, which arecollectively referred to as Fuji Electric.
For details of financial and non-financial information, please refer tothe Company’s website and other disclosure materials.

EnvironmentInvestor Relations Website:
https://www.fujielectric.com/ir/

Contributing to the Developmentof the SDGs and the Realization of nvironmental, Social, and Governance Website:Ehttps://www.fujielectric.com/company/csr/a Decarbonized Society throughOur Energy and Environment

About the Front Cover

51

Businesses

Power Generation

The front cover of this report reflects
Fuji Electric’s attitude toward enhancing
corporate value over the long term in

25

addition to contributing to developing SDGs

Human Resources

and realizing a sustainable society throughits energy and environment businesses.

53

1

Fuji Electric Report 2021

27

Sustainable Procurement

29

Corporate Governance

41

Compliance

43

Risk Management

Food and Beverage Distribution

Disclaimer Regarding Forward-Looking Statements
Statements made in this report regarding estimates or projections
are forward-looking statements based on the Company’s
judgments and assumptions in light of currently available
information. Actual results may differ materially from thoseprojected as a result of uncertainties inherent in such judgments
and assumptions as well as changes in business operations orother internal or external conditions. Accordingly, the Company
gives no guarantee regarding the reliability of any information
contained in these forward-looking statements. Investors areencouraged to also reference documents submitted by theCompany in accordance with the Financial Instruments andExchange Act of Japan and other disclosure materials.

Fuji Electric Report 2021

2

Profile

Corporate Philosophy and Management Policies
Fuji Electric’s corporate philosophy hinges on a mission to contribute to prosperity, encourage creativity,

Corporate Philosophy

and seek harmony with the environment, while the Company’s management policies are centered on
the notion of contributing to society through its energy and environment businesses.
By putting this corporate philosophy and management policies into practice based on its Corporate Code of Conduct,
which sets forth guidelines for the conduct of employees, Fuji Electric and its employees, together with customers andbusiness partners, will aim to resolve social and environmental issues, create customer value, develop the SDGs,
and contribute to the creation of a responsible and sustainable society.

We, Fuji Electric, pledge as responsible corporate citizens in a global society tostrengthen our trust with communities, customers and partners.
Contribute toprosperity

SloganEncourage
creativity

Seek harmony withthe environment

To be enthusiastic, ambitious and sensitive.

Management Policies
1. Through our innovation in energy and environment technology, we contribute to
the creation of a responsible and sustainable society.
2. Achieve further growth through our global business expansion.

The Creation of a Responsible and Sustainable Society

3. Maximize our strengths as a team, respecting employees’ diverse ambition.

Fuji Electric Code of Conduct

Resolution ofSocial andCreation of

In order to practice our corporate philosophy to fulfill social responsibility and act with high ethical standards

Environmental

Customer Value

while understanding and complying with relevant laws, regulations, international rules, and the spirit of such

Issuesregulations and rules, both domestically and abroad, Fuji Electric and its employees have defined this code asa foundation for decision-making and behavior.

Corporate Philosophy

1. Respect and value all people

6. Respect and value interaction with society

2. Respect and value our customers

7. Make global compliance a top priority

3. Respect and value our business partners

7-1. Thorough compliance

4. Respect and value our shareholders

7-2. Thorough risk management

and investors

8. Top management will thoroughly practice

5. Respect and value the global environment

Contribute to prosperity

Encourage creativity

Seek harmony withthe environment

Management Policies

this standard urther information about Fuji Electric Code of Conduct is available at our website.
Fhttps://www.fujielectric.com/company/conduct.html

Brand Statement

Fuji Electric’s Energy and Environment Businesses
Brand Promise

Fuji Electric Code of Conduct

Through our pursuit of innovation in electric and thermal energy technology,
we develop products that maximize energy efficiency and lead to a responsible
and sustainable society.

3

Fuji Electric Report 2021

Fuji Electric Report 2021

4

Fuji Electric’s Energy and Environment Businesses

ProfilePriority SDGs to Be Addressed through Our Businesses

We will ceaselessly pursue synergies between our core power semiconductor and power electronics
technologies and combine high-quality equipment employing key devices with our engineering services,
optimal control technologies, and IoT know-how honed thus far. In this way, we provide system solutions forvarious customers in industrial and social infrastructure fields.
S pread of renewable energy useImprovement ofenergy efficiency

Clean energy
Power Generation

Stable supply
Power Electronics Systems
EnergyReduction of CO2 emissions fromindustrial processes
Reinforcement of social andindustrial infrastructureof energy uilding safe and secure urban
Binfrastructure services
Development of sustainabletransport systems

E fficient use of natural resources
Rigorous management andreduction of emissions ofchemical substances and waste

Reducing society’s CO2 emissions
through products
Reducing GHG emissions during
production

Energy saving Automation

Power Electronics Systems
Industry

Food and Beverage
Distribution

Semiconductors

Four Businesses
Five Segments

Power and new energy

Energymanagement

Power supply
andfacility systems

Power distribution
andcontrol equipment

System
Optimal Control
Technologies

Engineering

Factory
automation

Process
automation

Social solutions

Semiconductors

Vending machinesStore
distribution

Solutions
Services

IoT

Components
Smart meters

Uninterruptible
power systems

Transformers

Magnetic
switches

Molded-casecircuit breakers

Inverters

MotorsServo systems

Controllers

Measuring instruments

Key Devices
Power semiconductors

5

Fuji Electric Report 2021

Sensors

Fuji Electric Report 2021

6

Value Creation at Fuji ElectricProfileEnergy Saving

Saving energy when using air conditioning equipment

By capitalizing on the electric technology under our control—namely, creating, measuring (sensing and measuring
technologies), controlling (control technologies), converting (power electronics technologies), and optimizing electricity—Fuji Electric provides products and systems designed to support the use of clean energy, stable energy supply, energy
saving, and automation. Through this, we are contributing to developing the SDGs and creating a sustainable society.

Clean Energy

Geothermal power generation facilities contributing
to the economy, society, and the environment

Contributing to the devel
the creation of aopment of the SDGs andsustainable society

Clean Energy

Stable Energy Supply

Energy Saving

Power generation

Power electronics systems

Power electronics

Semiconductors• Geothermal power• Substation equipment

systems• Power• Uninterruptible power• Inverters

Fuji Electric delivered inverters for air
Inverters
conditioners produced by a leading air conditioner
FRENIC-VG
manufacturer, aiming to realize further energy
saving when using air conditioning equipment
installed at plants, buildings, and other facilities. The customer’s
products are now being used across the United States and China,
contributing to energy saving in these regions.

Automation
Energy Saving

We were commissioned to carry out a project to build the Muara
Laboh Geothermal Power Plant in West Sumatra, Indonesia.
The project encompassed the entire process from design andprocurement to construction. We also delivered steam turbines,
power generators, and other equipment. The electricity generated
by the plant, which is enough to power 420,000 households, is
supplied across the entire region of West Sumatra.

generation• Hydro powersystems (UPSs)

generation• Switchgears and• Solar power

controlgears

generation• Power stabilizers• Wind power• Power conditioning

generation

systems

Energy saving in equipment using power semiconductors

semiconductors• Motors• Servo systems

Food and beverage• Controllers

distribution• Programmable• Vending machines

operator interfaces

4th-generation direct liquid coolingmodule for electrified vehicles (xEVs)• Showcases• FA systems• Fuel cells

4th-generation direct
liquid cooling module

Stable Energy Supply
Muara Laboh Geothermal Power Plant (Courtesy of PT. SEML)

Clean Energy

Stable Energy Supply

Stable Energy Supply

Renewable energy demand forecasting contributes tooptimal use of power

SiC power semiconductor modules formain converter inverters in trains

Energy Saving

Contributing to stable energy supply and energy
saving at data centers
Main converter
inverterPower stabilizers for stable supply of clean energy

SiC power
semiconductor module

The Suzuran Kushiro-cho Solar Power Plant has one of thelargest output capacities in Japan. Fuji Electric was responsiblefor designing and building the entire power plant, along withprocurement. We delivered power stabilizers containing storage
batteries and similar, together with power conditioning systems
capable of highly efficient power conversion, thereby providing astable power supply to the area.

The Soma IHI Green Energy Center was established to facilitate
local production for local consumption of renewable energy,
aiming at regional development. Fuji Electric delivered a regionalenergy management system that forecasts the amount of solar
power to be generated and each facility’s electricity demand. We
also delivered substation equipment. The electricity generated
is used at the energy center, as well as the Soma City sewage
treatment facilities, thereby contributing to the stable supply andoptimal use of energy.

Data centers operate 365 days a year to provide internet andcommunication services around the clock. The issues thesecenters face include reducing incidents of equipment failurecaused by lightening or instantaneous voltage drops, andconsuming less electricity. Fuji Electric delivers comprehensive
electrical equipment systems, such as uninterruptible powersystems (UPSs) designed to supply electricity when instantaneousvoltage drops occur, to domestic and overseas data center
business owners. These systems contribute to the stable operationof these facilities, as well as energy saving.

Equipping the drive part of electrified
vehicles with the module boosts power
density by 36% compared to conventional
products, thereby enhancing efficiency andreducing size and weight.

Energy Saving

Equipping the main converter inverters
in trains with SiC power semiconductor
modules reduces the weight of railcar drive
systems by 20% compared to conventional
products, while also cutting CO2 emissions
by 7%.
Automation

Helping create environmentally friendly retail stores

Hybrid heat pump vending machines
The heat exchanger technology makes optimal use of heat from theopen air, using the heat generated by refrigerating beverages to control
electricity consumption and contribute to energy saving.
*Annual electricity consumption cut by about 55% compared to Fuji Electric-manufactured models from2008.

Non-leak showcase
Storage battery facilities

Power conditioning system

In the control building at the Soma
IHI Green Energy Center (energy
management system)

Substation equipment

Green refrigerants are used to reduce
environmental impact.
Uninterruptible power system (UPS)

7

Fuji Electric Report 2021

Fuji Electric Report 2021

8

President’s Message
Toward achieving FY2023 Medium-Term Management Plan

Michihiro Kitazawa
President and Chairman of the Board of Directors

Through our energy and environment businesses, we aim to benefit society andbecome a company of sustainable growth.
First of all, I would like to express my deepest respect andgratitude to all those who are making sincere efforts tocombat the COVID-19 pandemic, which is having a major
impact on society, the economy, and people’s daily lives.
Since its establishment in 1923, Fuji Electric has
contributed to the advancement of society and industry
through its cutting-edge energy and environment
technologies. As responsible corporate citizens in a
global society, we value our relationships of trust withlocal communities, customers, suppliers, and manyother business partners, under our corporate mission:“contribute to prosperity,” “encourage creativity,” and“seek harmony with the environment.” In recent years,
the international community has been pursuing theSDGs, which target integrated economic, social, andenvironmental development—an objective that accuratelyreflects our corporate philosophy.
Moreover, we can help realize a decarbonized society, acenter of rapidly growing world attention, through our coreenergy and environment businesses. Our greatest strengthis our ability to provide comprehensive responses, fromstable energy supply to energy saving and automation
solutions. We do this by offering power electronics
equipment with world-leading power semiconductors,
systems that combine such equipment, and engineering
services, in addition to a variety of clean energy-related
products. By leveraging this strength, we will help realize
the world’s goal of a decarbonized society by 2050.
Today, advancing the SDGs and realizing a decarbonized9

Fuji Electric Report 2021

society have become increasingly significant common
global issues. To continue growing sustainably, therefore,
Fuji Electric believes it is important to clarify and promote
its ESG priorities. We will continue strengthening ouroperating foundation through clarification and achievementof targets, appropriate information disclosure, and dialogue
with stakeholders.

Our Vision

Realize adecarbonizedsociety

Develop
the SDGs

Energy and Environment Businesses
Clean energy

Power
Generation

Stable energy
supplyPower Electronics
Systems

Semiconductors

Energy saving
andautomation
Food andBeverage Distribution

Fiscal 2020: Increased income despite lower
revenue, reflecting our strengths as a team
Immediately after the start of the plan, the businessenvironment surrounding the Company changed
dramatically. Following U.S.-China trade issues in fiscal
2019 and the impact of COVID-19 in fiscal 2020, theseenvironmental changes provided an opportunity to
examine our management structure. Although net sales
have been sluggish for the past two years, we achieved ayear-on-year increase in operating income in fiscal 2020.
This was the result of our efforts to improve profitability
through our companywide Pro-7 activities, as well as theability of each plant to continue operations even during
the pandemic by implementing rigorous infection control
measures. It was truly a testament to the Company’scomprehensive strengths.
Net income attributable to owners of parent reached arecord-high level in fiscal 2020, but we faced two issues
related to extraordinary items. The first was the postingof a ¥25.7 billion loss due to defects in certain power
semiconductors for use in specific fields. To prevent a
recurrence, we have been confirming usage conditions,reviewing standards and procedures adopted in the
procurement and product design processes, and actively
implementing improvement measures. We sincerely
apologize to our customers, shareholders, and otherinvestors for any concern this may have caused, and wewill continue striving to improve customer satisfaction,
keeping in mind that providing safe, reliable, andsuperior products and services is the starting pointof any manufacturer. The second was a reductionof our cross-shareholdings. Due to the sale of someinvestment securities, we reported an extraordinary gainof ¥40.9 billion. We will continue to further reducecross-shareholdings and use the proceeds from the saleof such holdings to make investments to achieve businessgrowth and improve capital efficiency.
In fiscal 2020, we declared annual dividends of ¥85 pershare (¥40 interim dividend and ¥45 year-end dividend), up¥5 year on year, for a payout ratio of 29%. From a mediumto long-term perspective, we will continue retaining internal
reserves for research and development, capital investment,
and human resource development, while at the same timeemphasizing payment of stable and continuous dividends
to our shareholders.

FY2021
FY2023 Medium-Term
Management Management Plan
Plan (Target)(Target)(Billions of yen)

FY2018Results

FY2019Results

FY2020Results

Net Sales

914.9

900.6

875.9

900.0

Operating Income

60.0

42.5

48.6

60.0

80.0

Operating Margin

6.6%

4.7%

5.5%

6.7%

8.0%

Net Income
Attributable to
Owners of Parent

40.3

28.8

41.9

42.0

55.0

President’s Message

Contributing to the Developmentof the SDGs and the Realization ofa Decarbonized Society through Our
Energy and Environment Businesses

In June 2019, we announced our Medium-Term
Management Plan—Reiwa Prosperity 2023—which
ends at the close of fiscal 2023. Under the plan, we will
strengthen our operating foundation for the Fuji Electric’s
further development in fiscal 2024 and thereafter and aim
for prosperity together with society.

1,000.0

Fiscal 2021: Year of challenge
Fiscal 2021 will be an important year of challenge as we
strive to achieve the final-year targets of our Medium-Term
Management Plan: Consolidated net sales of ¥1 trillion andan operating margin of 8% or higher. For the year, we aretargeting nets sales of ¥900 billion and operating income of¥60 billion, and we must reach these targets to achieve theplan’s objectives.
Realizing a decarbonized society, a major goal sharedby the world, will provide great opportunities for us.
With the accelerating shift to electrified vehicles and the
expanding uptake of renewable energy, these opportunities
are already growing. With this in mind, we will focus
management resources on the power electronics systems
business and power semiconductors business, earmarked
as growth drivers, in order to expand our operations.
In power electronics systems, we will promote a strategy
of partnerships and expand our overseas business byleveraging the sales channels and human resources wehave acquired through M&As and alliances. In Asia, wewill reinforce our engineering and plant system proposal
capabilities, centering on our Thai factory, while in India wewill strengthen our competitiveness by establishing local
development and production systems. In addition, we
will target increased orders for comprehensive electricalequipment, which combines substation equipment,
uninterruptible power systems, and other equipment
for data centers—where capital investment is strong inJapan and overseas—as well as semiconductor-related
applications. Amid an ongoing review of our power supply
mix, we will work to increase orders for renewable energy bystrengthening collaboration between our power generationand power electronics systems businesses. In power
semiconductors, we will address customer demand byaccelerating capital investments to increase production
capacity in response to strong demand growth associatedwith electrified vehicles and other factors. In the food andbeverage distribution business, which posted a major loss
in fiscal 2019, we returned to profitability in fiscal 2020
thanks to dramatic reforms of our sales and facilities.
Meanwhile, Fuji Electric has a 70% share of the Japanesevending machine market. Going forward, we will propose
environmentally friendly, highly convenient products thatreflect people’s changing lifestyles and work to discover
how vending machines, which have taken root in Japanesesociety, can keep benefiting societies.
Fuji Electric Report 202110

Improving the effectiveness of governanceHelping realize a decarbonized society
Environmental Vision 2050
We aim to contribute to the achievement of a decarbonizedsociety, a recycling-oriented society, and a society that is inharmony with nature by expanding the use of
Fuji Electric’s innovative clean energy technologies
and energy-saving products.

Realize a Decarbonized Society
Target carbon neutrality across the supply chain

Realize a
Recycling-Oriented
Society

Realize a
Society in Harmony
with Nature

Promote green supply chainsand 3R*1 activities to reduce
the environmental impact to zeroAim for zero impact on theecosystem through corporate activities
that contribute to biodiversity

Fiscal 2030 Goals
To limit the temperature rise to 1.5°C above pre-industrial levels,
reduce greenhouse gas emissions in production bymore than 46% (compared to FY2013) andstrive to reduce society’s CO2 emissions through our products.*2*1 3R: Reduce, Reuse, Recycle*2 V alues for reducing society’s CO2 emissions through our products will be disclosed
in 2022.

Employee-first management
My motto in management is “Employees first.” The growthof our employees will lead to the sustainable growth andprosperity of our company. This will create a virtuous
cycle in which profits earned through our businessactivities are returned to employees, shareholders,and society.
With “respect and value all people” clearly statedin our Corporate Code of Conduct, we are striving
to create working environments that respect humanrights and encourage the active participation of diverse
human resources. As social issues and customer needs
become increasingly diverse, we are working to provide
environments where diverse employees can work inteams. We encourage our experienced senior employees
to pass on their skills and techniques to younger
employees, and we have established a system thatallows them to continue working vigorously after the ageof 65 by making the most of their energy, stamina, andintellect. Committed to promoting the advancement of
women, meanwhile, we are working to hire more female
employees and increase the number of female managers.
Over the medium and long term, we will develop humanresources by creating environments where individual
employees can fully demonstrate their abilities.

11

Fuji Electric Report 2021

Leveraging measures to prevent the spread of COVID19, we have stepped up work-style reforms already being
undertaken—including work in satellite offices and flexible
working-hour arrangements—while helping employees
achieve a good work–life balance. On the other hand, theimportance of face-to-face communication has become
apparent in the way we work to combat infectious
diseases. As part of our companywide Pro-7 activities
aimed at enhancing work quality and improving work
efficiency, we have established a project to promote workstyle reforms. This entails promoting work-style reforms
from medium- to long-term perspectives by specifying
issues that are common to the entire company and thosethat are specific to each business.
Every year, we conduct an employee awarenesssurvey to find out how employees perceive and evaluate
the Company’s policies. We believe it is important for
executives and managers to keep abreast of changes overtime. Based on the issues raised in the previous survey,
in fiscal 2020 we continued to implement training for
mid-level line managers to further strengthen workplace
management, and we also reinforced our compliancesystem. We will continue striving to create environments
where employees can work with motivation.

From the management standpoint, we believe that
improving the effectiveness of governance is key toincreasing corporate value over the long term. For thisreason, we are working to improve the transparency ofmanagement and its supervisory functions.
In terms of structure, for fiscal 2021 the Company hasnine directors (up one from the previous year) and five Audit& Supervisory Board Members. The newly added Standing
Director is also head of the Corporate R&D Headquarters.
By appointing him, we aim to further stimulate discussion
on medium- to long-term challenges in management
strategy, business strategy, and technology development.
In line with our policy of emphasizing diversity, we havebeen appointing female Audit & Supervisory Board
Members since 2012. At present, we have one female
Audit & Supervisory Board Member. As for appointing
female directors, we recognize this as an issue and willcontinue progressing toward it.

Compliance is the cornerstone of stakeholder trust andexpectations. The Fuji Electric Compliance Promotion
Committee receives reports on compliance action plans,
progress, and achievements from its members who
are responsible for regulating laws and shares themwith the Board of Directors. As we focus on expanding
our overseas business, we recognize that meticulous
compliance at overseas subsidiaries is an important priority.
For this reason, we will promote effective, down-to-earth
initiatives, including the dissemination of various rules, daily
monitoring and auditing, and ongoing education.
To minimize the impact of management and businessrisks, we will strengthen our ability to address large-scaledisasters, infectious disease outbreaks, information security
issues, and other crisis management challenges in an agile
and integrated manner, with the aim ensuring proper risk
management and business continuity.

President’s Message

The challenge of decarbonization has begun in many
countries around the world. In 2019, we formulated andannounced our Environmental Vision 2050, which focuses
on reducing greenhouse gas emissions by 80% or more,with the aim of realizing a decarbonized society. In June
2021, in light of recent global trends, we revised our policy
to target carbon neutrality in our entire supply chain by 2050.
Anticipating a large increase in environment-related
investments around the world, we will optimize our diverse
range of renewable energy-related products, as well as
our power stabilization technologies and energy usage.
We will also strengthen and accelerate development ofenergy-saving and environmentally friendly products. In
these ways, we will contribute to the reduction of CO2
emissions in society. At our own factories, meanwhile,
we will consider and implement various measures, suchas introducing renewable energy equipment, expanding
procurement of green electricity, and developing production
technologies to reduce greenhouse gas emissions.
We are also forging ahead with analyzing and examining
risks and opportunities related to the Task Force on
Climate-related Financial Disclosures (TCFD). From a
medium- to long-term perspective, in addition to examining
the financial impact of business opportunities and risk
countermeasures on our factories and supply chains,
we will deploy them in a wide range of management andbusiness activities.

To be enthusiastic, ambitious and sensitive
In the 10 years since the Global Financial Crisis, we havegone back to our manufacturing roots and made in-depth
efforts to strengthen our manufacturing capabilities andimprove our factories mainly through in-house production
and automation. In today’s world of rapid advances ingreen and digital technologies, we need to create new
businesses and develop new products for the next 10
to 20 years, in addition to reinforcing our manufacturing
capabilities. We have already started discussing this with
our team. In all cases, however, the main contributors are
our employees, so it is important to know how they feel
and what kind of future they envision.
Our corporate slogan—To be enthusiastic, ambitious
and sensitive—expresses the thoughts shared by our
employees. “Enthusiasm” means the eagerness tocontribute to society by creating new technologies andproducts. “Ambition” means the determination to set
high goals and continuously pursue them. “Sensitivity”
means practicing three types of kindness: (1) Kindness
to appreciate for customers, (2) Kindness to appreciate
for colleagues with mutual respect and thought on
making the Company better together, and (3) Kindness
to appreciate for families. This sensitivity, part of Fuji
Electric’s DNA that has been handed down fromgeneration to generation, represents an unwavering value.

Fuji Electric will celebrate its 100th anniversary in 2023.
Thanks to the trust and support of our customers, business
partners, employees, and various other stakeholders thatour predecessors have cultivated, we have become theFuji Electric of today. We will continue placing importanceon individual diversity and teamwork to further expand ourenergy and environment businesses, contributing to thecreation of a responsible and sustainable society.
We look forward to the continued understanding andsupport of all stakeholders, including shareholders andother investors.

Fuji Electric Report 2021

12

Promote Material Initiatives for Management
Fuji Electric aims to develop its activities in regard to the Sustainable Development Goals (SDGs) set out by theinternational community and create a decarbonized society by putting its corporate philosophy and management
policies into practice. The ongoing reinforcement of our operating foundations is vital in working to resolve social andMaterial Issues for Management and Major Initiatives
Field

Material Issues

environmental issues and create customer value through our energy and environment businesses. As part of theseworking toward resolving them.

SDGs to Be Addressed through Companywide Activities
businesses advanced by our five segments (clean energy,	Expand power electronics systems andsemiconductor businesses	Power electronics systems:	Created competitive components (global
transformers, etc.), received consecutive orders
for comprehensive electrical equipment systems
for data centers, continually improved partnershipstrategies to expand overseas businesses	Semiconductors:
	Enhanced production capacity, increased sales ofpower semiconductors for electrified vehicles (xEVs)

Promote energy
and environment
businesses

SDGs to be Addressed through Fuji Electric’s Companywide Activities
	Reduce society’s CO2 emissions byproviding energy-saving products	Reduce greenhouse gas emissions
during production

Priority SDGs to be Addressed through Energy and Environment Businesses

E (Environment)

stable energy supply, energy saving, and automation)

Major Initiatives in FY2020

and contributions to the accomplishment of the SDGs,
Fuji Electric selected five priority goals. Furthermore, four
additional goals were designated as priorities in relation to
the reinforcement of operating foundations to be pursued

Realize a decarbonizedsocietythrough overall corporate activities, making for a total ofnine goals.

Material Initiatives for Management
have organized the ESG material initiatives based on the
Fuji Electric Code of Conduct, which serves as a guidefor the Company’s foundation and how we, along with all
our employees, should act in order to put our corporate
philosophy and management policies into practice andfulfill our social responsibility.

	Implement human rights due diligence	Implemented human rights due diligence(at all 133 operating sites and domestic andoverseas affiliate companies; 65 in Japan and 68
overseas)	Provided human rights training(raising awareness of human rights, harassment
prevention)

	Promote active participation of female
employees
	Promote active participation of
employees over 60
	Broaden scope of duties performed bydifferently abled employees	Advance workstyle reforms
	Promote work–life balance	Stepped up hiring of women (percentage of women
hired as of April 2021: 20%)
	Increased the number of female employees insupervisory positions (300 as of June 2021)
	Introduced the Senior Task System	Established the Employment Guidelines for
Employees over 65	Increased employment of differently abled people(2.92% as of June 2021)
	Established a more diverse work system	Continued fostering a workplace environment that
supports employees who are raising children or
caring for family in need of assistance

Create a supply chainthat supports asustainable society	Practice fair and equitable procurement
	Practice sustainable procurement
together with business partners

	Implemented self-assessment of CSR procurement

Improve effectivenessof corporate
governance	Improve transparency and supervisory
function of management	Continued third-party evaluation of the effectivenessof the Board of Directors and incorporated thisevaluation into operations	Partially reduced cross-shareholding

Respect for humanrightsS (Society)We have defined our key issues (materialities) for
management with an aim to improve long-term corporate
value. These are the promotion of our energy andenvironment businesses that contribute to the creationof a sustainable society, as well as the promotion of ESG
material initiatives to reinforce our operating foundations,and relevant activities are being advanced globally. We

Promote energy and environment businesses that contribute to the creation of a sustainable society

Active participationof diverse humanresources

Promote ESG material initiatives to reinforce our operating foundations• Environment (E): Create a decarbonized society(reduce society’s CO2 emissions and greenhouse gas emissions during production by providing energy-saving products)• Society (S): Respect human rights, encourage employees’ success, promote workstyle reforms, and create a supply chain that
underpins a sustainable society• Governance (G): Improve the effectiveness of corporate governance, promote compliance, and enhance risk management
Details of the Fuji Electric Code of Conduct can be found on our website.
https://www.fujielectric.com/company/conduct.html

System for Promoting Material Initiatives for Management
System for Promoting Material Initiatives for Management

officers responsible for the business, sales, and corporate

Board of Directors

divisions. It deliberates and evaluates policies andExecutive Committee

measures regarding issues related to the environment,
human rights, the encouragement of employees’ success,and the creation of a sustainable supply chain, as well as

President

Deliberation/Report

Standing Audit & Supervisory Board Members

manages the progress toward their implementation. The
Compliance Promotion Committee deliberates on the statusof compliance execution and planning. The details of what isdeliberated at these committees are regularly reported to the
Executive Committee and the Board of Directors.

13

Fuji Electric Report 2021

Executive Officers

Compliance Promotion *Committee

SDGs Promotion Committee
Environmental Vision
Promotion Subcommittee

Human Rights Promotion and Human
Resources Empowerment Subcommittee

G (Governance)

The SDGs Promotion Committee consists of executive

	Revised the Fuji Electric Environmental Vision 2050
in our aim toward decarbonization	Declared support for the TCFD; analyzed risks andopportunities
	Increased the reduction of CO2 emissions throughour products (contributed to a reduction of 41.78
million tons in FY2020)	Reduced greenhouse gas emissions during
production (emissions totaled 440,000 tons in
FY2020)	Ensure effective implementation of
the Fuji Electric Compliance Program

Promote compliance

Enhanced risk
management

	Reinforce business continuity
capabilities	Improve product quality
	Strengthen information security

Relevant SDGs

Reference Page(s)Power electronics
systems
P45–48
Semiconductors
P49–50
Promote Material
Initiatives for Management

Assessing the link between the value created by the fourBusinesses

efforts, we have set out material issues and goals related to the environment, society, and governance (ESG), and are

Major Initiatives

Environment
P21–24

Human resources
P25–26

Sustainableprocurement
P27–28	Established, revised, and abolished internal rules,
and conducted oversight, audit, and education
	Implemented compliance education	Thoroughly implemented the Business Ethics
Whistle-Blowing Systems
	Established a BCP for procurement
	Strengthened countermeasures against cyber attacks
	Established countermeasures against the spread of
COVID-19

Corporate
governanceP29–40ComplianceP41–42

Risk management
P43–44

Details on ESG (environment, society, and governance) can be found on our website.
https://www.fujielectric.com/company/csr/index.html*Refer to the compliance promotion system (page 41).

Fuji Electric Report 2021

14

FY2023 Medium-Term Management Plan

FY2023 Medium-Term Management Plan “Reiwa Prosperity 2023”

Following global financial crisis in 2008, Fuji Electric began reinforcing its profit structure through business restructuring and

Key Issues

has since been implementing management reforms to further expand its business and enhance its profitability.

Establish Foundations for Sustainable Growth

Under our FY2023 Medium-Term Management Plan, we aim to establish a foundation for sustainable growth with net
sales of ¥1 trillion and an operating margin of 8% or more, and pursing three key initiatives: “promote growth strategies,”

Promote growth strategies

Further improve profitability“further improve profitability,” and “ongoing reinforcement of operating foundation.”

Concentrate resources on power electronics

Augment global manufacturing capabilities

Progress of Management Reforms

systems and power semiconductor businesses• Promote local production for local consumption

Expand overseas business• Step up development of local leaders overseas• Increase sales centered on Southeast Asia, India,• Deploy IoT technologies to advance digital reforms of

2019–2023
Establish foundations forsustainable growth
Reiwa Prosperity 2023

2016–2018
2013–2015
2010–2012

Promote growth strategies
Proactive management¥1 trillion

Operating margin 8% or more

Strengthened our power electronics
systems business• Strengthened development of power• Strengthened mother factories in Japan
electronics systems equipped withand Thai Factory (core base in Asia)
power semiconductors• Abolishing the holding company• Promoted M&As and alliances
systemtargeting overseas business• Clarified business domains as energy
expansionand environment businesses• Promoted companywide Pro-7• Reorganized production bases(magnetic disks and vending machines) activities to improve profitability•

our manufacturing

Ongoing Reinforcement of Operating Foundations• Ongoing reinforcement of our operating foundations with a focus on the environment, human resources,

Focus resources on power electronics
systems and semiconductor businesses• Strengthen global manufacturing capabilities• Continuously strengthen environment,
human resource, and governance••and governance
FY2023 Medium-Term
Management Plan

Strengthen a profitablestructure throughbusiness restructuring

Net sales

Further renovation of
Fuji Electricand China• Target ratio of sales outside Japan: 35%• Evolution of companywide Pro-7 activities

Financial Policy

Reinforced manufacturing capabilities• Emphasize balance between growth potential, profitability, efficiency, and financial soundness• Further improve capital efficiency

Further information about progress of management reforms is available at our website.

• For shareholder returns, target dividend payout ratio of 30% based on principle of stable andhttps://www.fujielectric.com/ir/box/doc/pdf/rep2021/management_reforms.pdf

continuous dividends

Progress of Medium-Term Management Plan
The business environment surrounding our company hasremained challenging. In fiscal 2019, for example, we faced
market contraction overseas, especially in China, due tothe trade friction between the United States and China,
and in fiscal 2020 we encountered ongoing investment
restraint due to restrictions on economic activities in Japanand overseas caused by the spread of COVID-19.
We expect the global economy to gradually recover,with signs of a turnaround in capital investment in China’s
manufacturing sector since last year. In addition, the trend
toward digitalization and greenification, evidenced by theelectrification of automobiles and spread of renewable
Net Sales*1
energy, is accelerating, providing increased business(Billions of yen)opportunities for the Company, which is centered on the914.9
energy and environment businesses.
In fiscal 2021, we are targeting net sales of ¥900 billion
and operating income of ¥60 billion, and we must reach 137.3
Ratios for PowerElectronics
Systemsthese targets to achieve the plan’s objectives forfiscaland Semiconductors
546.6
2023 (net sales of ¥1 trillion and an operating margin71%
of
8% or higher). In light of the current changes in the market
environment, we will review the strategies and targets of
FY2018each business segment.
Results

Consolidated Business Performance Trends(Billions of yen)

Net Sales
Operating Income
Net Income Attributableto Owners of Parent
Operating Margin

914.9

900.6

Net Debt-Equity Ratio
Equity Ratio

60.0
40.3

48.6

42.5

+53.4

600.0

Elimination andCorporation

FY2023Medium-Term
Management Plan (Target)

Semiconductors

Plant and Equipment Investment
60.0

28.8
6.7%

Others220.0 Total +66.4

120.0

FY2018Results

FY2019Results

FY2020Results

FY2021
Management Plan
(Target)Medium-Term
78%
Management Plan
(Target)0.4 times

0.4 times

0.3 times

0.4 times

0.1 times

37%

37%

40%

42%

50%

Ratios for PowerElectronics Systems
FY2023andSemiconductors

ROA (Return on Assets)

4%

3%

4%

4%

5%

12%

8%

11%

10%

11%

Dividend Payout Ratio

28%

40%

29%

—

30%

65.8

232.4
137.3
914.9
78.4

71%

546.6
137.3
121.7

71%

546.6
FY2018FY2018Results
Results

Ratios for PowerElectronics Systems
and Semiconductors+85.1
1,000.0
200.0 Total +62.7
+56.6
135.0
75%

+62.7
+53.4
+36.3

200.0
600.0
158.0

75%

+53.4
600.0
FY2023
Corporation
FY2023Medium-Term
Medium-Term
Management Plan (Target)
Management Plan (Target)

Elimination andElimination andPower
Asia andElectronics
others FY2018
Systems
China Europe
Semiconductors
AmericasCorporation
Others
FY2023Medium-Term

2
Plant
R&D Expenditures*and Equipment
Investment
Management Plan (Target)(Change)(Billions(Billions ofof yen)yen)Power Electronics Systems(Billions of yen)

8.0%

5.5%

Electronics Systems
and Semiconductors

+11.2
+13.5
(Change)

27.0
30.0

(Change)
Semiconductors+66.4
220.0 TotalOthers
200.0 Total +24.8

Plant and Equipment
Investment
175.2

153.6

4.7%

15.8
16.5
Ratios for
Power

914.9
25%

Results(Change)

55.0

42.0

41.9

ROE (Return on Equity)

Fuji Electric Report 2021

+62.7

75%

80.0

* Net debt-equity ratio = Net interest-bearing debt ÷ Equity* Assumed exchange rates for fiscal 2023: ¥105 to the U.S. dollar; ¥123 to the Euro; ¥16 to the RMB

15(Billions of yen)(Billions of yen)

6.6%

Financial Indicators

Ratio of Sales1
Net
Sales*
Outside Japan

200.0(Change)(Change)
35%
Total
+85.1
Total
+117.6350.0
1,000.0(Billions of yen)

1,000.0 Total +85.1

1,000.0 Power Electronics Systems

900.0

875.9

1
Net
Overseas
Sales*Sales(Change)

FY2014-2018
Cumulative Results

Ratios for PowerElectronics Systems
80%
and Semiconductors

78.0
FY2019-2023
Cumulative (Target)

+24.3

78%

Ratios for PowerElectronics Systems
and Semiconductors

62.4
90%
153.6
65.8 80%
77.2
53.7
65.8

(Change)

220.0 Total +66.4

+54.2

90%

53.7

153.6

90%

120.0
74.0

+54.2
+11.6

120.0
85.0
78.0

+54.2
+7.8
+24.3

FY2014-2018
FY2014-2018

FY2019-2023
FY2019-2023

FY2014-2018
Cumulative Results

FY2019-2023
Cumulative (Target)

78%
Cumulative
Cumulative
Results
Results Cumulative
Cumulative(Target)(Target) +24.3
78.0
53.7

1
Overseas
Net
OperatingSales*Sales
Income*1(Billions(Billions ofof yen)yen)

914.9 27.0
Ratio of Sales
Overseas
Sales
Outside Japan
25%
60.0
232.4
15.8
137.3
Ratio of Sales
Ratios 16.5
for Power
15.6
Outside Japan 25%
Electronics Systems 78.4
and Semiconductors 232.4
79%
546.6
15.8
71% 36.2
16.5 121.7
78.4

30.0

(Billions of yen)

27.0
30.0
80%
75%

(Change)(Change)
35%(Change)+85.1
TotalTotal+117.6350.0
1,000.0
80.0 Total +20.0

+11.2
+13.5

(Change)
35%
22.0
+6.4
350.0
+62.7
200.0Total +117.6
+56.6

135.0

+11.2
+13.5

China

2
R&D Expenditures*
175.2(Billions of yen)(Billions of yen)

15.8
16.5

Elimination
Elimination
andand79%

R&D
PlantExpenditures*and Equipment Investment
Asia and others

Ratio of Sales
Operating
Income*1 27.0
Outside Japan79%

FY2023
Corporation
+36.3
158.0
FY2023
FY2023 Corporation
Medium-Term
Medium-Term
Medium-Term
Management
Plan (Target)
Management
Plan(Target)Management
Plan(Target)FY2023Asia
Power
andElectronics
othersFY2018
Systems
China Europe
Semiconductors
Americas Others
Results
Medium-Term
2 Management Plan (Target)(Billions of yen)(Billions of yen)

+53.4
+11.8
+56.6
+36.3

600.0
48.0
135.0
158.0

FY2018FY2018FY2018Results
121.7
Results
Results

OperatingOverseas Sales
Income*1(Change)(Change)
Europe 220.0
AmericasTotal+66.4
200.0 Total +24.8

25%
60.0
232.4
15.6
78.4
60.0
36.2
121.7
15.6

FY201836.2
FY2018Results
Results

Asia and othersFY2018
China

78%
80%

(Billions of yen)

(Change)

22.0+6.4
80.0 Total +20.0
+56.6
135.0
80%

22.0
48.0
158.0

+6.4
+11.8
+36.3

79%

80%
Elimination and

48.0
+11.8
FY2023
FY2023 Corporation
Medium-Term
Medium-Term
Management Plan (Target)
Management Plan (Target)

Elimination andEurope FY2023
Americas
Corporation

Results

Medium-Term

R&D Expenditures*2 Management Plan (Target)(Billions of yen)

(Change)

200.0

Total +24.8

74.0

+11.6

85.0

+7.8

175.2

153.6

(Change)

175.2
62.4
90%
65.8 80%
77.2
62.4
53.7

Operating In

+11.2
+13.5

30.0

+54.2
120.0 Total +24.8
200.0
Ratios for PowerElectronics Systems
80%
and Semiconductors(Change)
35%(Change)
Total +117.6
350.0
80.0 Total +20.0

74.0

+11.6

85.0
74.0
78.0

+11.6
+7.8
+24.3

62.4
80%

80%
77.2

80%

FY2014-2018
FY2014-2018
FY2019-2023
FY2019-2023
85.0(Target)
Cumulative
Cumulative
Results Cumulative
Cumulative(Target) +7.8
77.2Results
FY2014-2018
Cumulative Results

FY2019-2023
Cumulative (Target)*1 Ratios for netFY2014-2018
sales and operatingFY2019-2023
income are calculated
Resultselimination
Cumulative
based on Cumulative
amounts before
and(Target)
adjustment ofinter-segment transactions.
*2 Figures for R&D expenditures are classified by segment
according to theme and therefore differ from figures
stated in the consolidated financial report.

Fuji Electric Report 2021

16

Overview of Fiscal 2020 and Fiscal 2021
In fiscal 2020, Fuji Electric posted a year-on-year decline in consolidated net sales due to the impact of COVID-19 andother factors, but an increase in consolidated operating income thanks to reductions in basic and fixed costs. In fiscal
2021, we are targeting year-on-year growth in both sales and income amid expectations of a gradual global economic
recovery and the accelerating trend toward greenification and digitalization.

Fiscal 2020 Performance

FY2020 Results

FY2021 Management Plan
(Target)Net Sales

900.6

875.9

900.0

Operating Income

42.5

48.6

60.0

Operating Margin

4.7%

5.5%

6.7%

Net Income Attributable to
Owners of Parent

28.8

41.9

42.0

Financial Indicators
Net Debt-Equity Ratio

Fuji Electric Report 2021

and high-capacity UPSs for power infrastructure, material

strengthening our system business, we are working to expand

plants, and data centers, we will work to increase orders forour overseas business by promoting local production for local

system projects spearheaded by the FMT Engineering Center.

consumption, mainly in Southeast Asia, India, and China, while

In Vietnam, we will strengthen our plant business structure

stepping up local design and engineering.

through the integrated operation of Fuji Electric Vietnam

 omprehensive electrical equipment businessC
expansionCo., Ltd. and Fuji CAC Joint Stock Company which wasestablished through M&A.
In India, we are working to expand sales by utilizing theequipment in Japan and overseas, targeting the growing

manufacturing, sales, and service bases of Fuji Electric Consul

0.4 times

0.3 times

0.4 times

Equity Ratio

37%

40%

42%

markets for data centers and semiconductor-related

Neowatt Private Limited (FCN), which was established throughROA (Return on Assets)

3%

4%

4%

applications. In particular, we are working to increase

an M&A. In fiscal 2021, Fuji Electric India Private Ltd. and FCN

ROE (Return on Equity)

8%

11%

10%

Dividend Payout Ratio

40%

29%

—

our market share by offering competitive high-capacity

will be merged to further reinforce our business structure in

uninterruptible power systems (UPSs) for data centers. To

India, advancing to develop and manufacture new medium-

expand global sales, we will increase the number of engineers

and large-capacity UPS models for data centers and power

capable of making comprehensive proposals and emphasize

conditioning systems for the solar power generation market.

Net Sales by Segment(Billions of yen)

900.6

60.8

875.9

52.7

104.4
109.9
137.4

76.6
80.4
157.5

317.5

50.0

345.9

900.0
87.5
84.0
174.0
329.0

standardization and in-house production at factories to further

Power semiconductors business expansion

improve productivity.

 verseas business expansion centered on
OSoutheast Asia and India

We are expanding orders and sales of IGBTs, which contributeto energy saving, downsizing, and weight reduction of

In Southeast Asia, we built a new switchgear and controlgear

equipment in which they are installed, in rapidly growing

218.0

209.2

217.0

system factory and engineering center at Fuji Electric

markets for electrified vehicles, renewable energy, factory

-47.5

-46.3

-41.5

FY2020 Results

FY2021 Management Plan (Target)

Manufacturing (Thailand) Co., Ltd. (FMT) to strengthen local

automation, and air conditioners. We are also making ongoing

FY2019 Resultsengineering and manufacturing capabilities. In addition toinvestments to increase production capacity.

Operating Income by Segment(Billions of yen)

2.2
2.5

1,044
42.5

2.7
3.8
2.3

48.6

1.8
2.7
3.3

60.0

21.6

17.7

22.2

21.8
14.0
-5.3
-4.3

-4.9
FY2019 Results

Plant and Equipment Investments & R&D Expenditures
Our businesses in power electronic systems and semiconductors together account for approximately 90% of total plant andequipment investments and 80% of R&D expenditures.

9.7
16.5

Fiscal 2021 Management Plan

17

providing new global transformer and switchgear products

In addition to creating competitive components andWe are working to attract orders for comprehensive electrical

12.3

In fiscal 2021, Fuji Electric will target net sales of ¥900 billion,up ¥24.1 billion year on year. We expect to benefit fromincreased demand in the Power Electronics Systems Energy,
Semiconductors, and Power Generation segments, as well
as sales expansion through the increased market share andthe introduction of new products in the Food and Beverage
Distribution segment. This is despite an expected decline insales of the Power Electronics Systems Industry segment year
on year as a result of the absence of large-scale projects for IT
solutions business recorded in the previous year.
Sale outside Japan is projected to increase ¥22.6 billion,to ¥244.5 billion, mainly due to higher sales of the PowerElectronics Systems Energy, Semiconductors, and Power
Generation segments in Asia, where demand is expected to
grow further for renewable energy, energy saving, automation,and electrified vehicles.
We will target operating income of ¥60.0 billion, up¥11.4 billion, as the benefit of production growth in the
Semiconductors segment, as well as business restructuring
implemented in fiscal 2020, including the reorganization ofPower electronics systems business expansion

Overview of Fiscal 2020and Fiscal 2021

For the year, consolidated net sales amounted to ¥875.9 billion,
down by ¥24.7 billion year on year. The decline was mainly due
to the rebound from large-scale orders recorded in the previous
fiscal year in the Power Generation segment and a significant
decrease in demand in the Food and Beverage Distribution
segment, which offset the increased demand in the PowerElectronics Systems Industry and Semiconductors segments.
Sales outside Japan rose ¥1.0 billion, to ¥221.9 billion. This
was largely due to higher sales in China thanks to recovery indemand, especially for semiconductors, automation products,
and ED&C components, although sales in Asia and elsewheredeclined due to the rebound from large-scale orders recordedin the previous fiscal year in the Power Electronics Systems
Energy and Power Generation segments.
Despite the decline in net sales, operating income increased¥6.1 billion, to ¥48.6 billion, thanks to companywide efforts
to reduce basic and fixed costs. Net income attributable toowners of parent rose ¥13.1 billion, to a record high of ¥41.9
billion. This resulted from a ¥40.9 billion in extraordinary
income following the sale of certain investment securities tosecure funds for growth investments, which outweighed ¥25.7
billion in expenses for addressing defects in some power
semiconductor products recorded under extraordinary loss.
Due to the improvement in profit, ROE increased 3
percentage points, to 11% year on year. In accordance withour basic policy of paying stable and continuous dividends, wedeclared annual dividends from retained earnings of ¥85 pershare, up ¥5 year on year, for a dividend payout ratio of 29%.

FY2019 Results(Billions of yen)

Main Initiatives

Plant and Equipment Investment

R&D Expenditures(Billions of yen)(Billions of yen)

15.2
-6.8

FY2020 Results

FY2021 Management Plan (Target)

Power Electronics Systems Energy Power Electronics Systems Industry
Semiconductors
Power Generation Food and Beverage Distribution
Others Elimination and Corporation

0.8
2.3
1.0
Ratios for PowerElectronics Systems
and Semiconductors

91%

Sales Outside Japan(Billions of yen)

Ratio of Sales
Outside Japan 25%

220.9
14.7
19.0

25%
221.9
13.3
16.5

62.6

83.9

108.2

123
FY2019 Results

China

79.6

FY2020 Results

Europe1.4 0.8
1.1

48.2
1.1
1.8
1.1

31.3

89%

1.5

35.9
95%

FY2019 Results

FY2020 Results

Power Electronics Systems Semiconductors
Food and Beverage Distribution Others

FY2021 Management Plan (Target)

Power Generation

222

132.4
140 152

13.0

13.8

FY2019 Results

15.6

FY2020 Results FY2021 Management Plan (Target)* Figures for R&D expenditures are classified by segment according to theme andtherefore differ from figures stated in the consolidated financial report.

Main Plant and Equipment Investments and R&D Expenditures

Power
Electronics
Systems

FY2021 Management Plan (Target)

FY2020

FMT: Construction of switchgear and controlgear system factory andengineering center
Chiba Factory: Construction of engineering center

FY2021

Tokyo Factory: Construction of plant system building
India: Expansion of factory and production models

FY2020

Yamanashi Factory: Increasing production capacity for 8-inch wafers
Increasing production capacity for in-vehicle pressure sensors and
IGBT modules for renewable energy

FY2021

Matsumoto and Tsugaru Factories: Increasing production capacity
for 8-inch wafers
Increasing production capacity for IGBT modules for electric vehicles
and renewable energy applications

Americas

the product development system and optimization of theworkforce, in the Food and Beverage Distribution segment,
which was significantly affected by COVID-19. We also
forecast a ¥100 million increase in net income attributable toowners of parent, to ¥42.0 billion, a record-high figure.

1.6

36.4
4.3
2.0

79%

78%
14.0

17.6

33.6
3.3
2.6
12.3

78%

19.9
12.0

1.4

12.9

41.0

12.8

34.5
3.2
2.8

Plant and Equipment Investment

218

165
124.6

Asia and others

27%
244.5
14.6
17.8

61.7

Semiconductors

Research and Development

Global products(transformers, switchgears, large-capacity UPSs)
Products for the mobility field(electrical equipment for railcars, vessel systems)

IGBTs for electrified vehicles
SiC modules
8th-generation IGBT modules for industry

Fuji Electric Report 2021

18

Research and Development
Examples of R&D Initiatives

We attempt to create new customer value
and resolve social issues byintegrating power semiconductor andpower electronics technologies withadvanced digital technologies.

The R&D initiatives described below are aimed at strengthening our power electronics systems business.

Raising power density of power units

Shiro Kondo
Managing Executive Officer
Corporate General Manager, Corporate R&D Headquarters

Fuji Electric has core technologies in such areas as
power semiconductors, power electronics, measurement
and control, and heating and cooling. Utilizing thesetechnologies, we have been involved in many advanced
systems, from energy creation to energy supply
stabilization, energy saving, automation, and mobility
electrification. In the process, we have helped resolved

various issues. Going forward, we will continue providing
new value to our customers by fusing our cutting-edge
digital technologies with real-world ones mainly consistingof our field-based core technologies, which we havecultivated since our foundation. We will also work to solve
social issues through partnerships and open innovation.

Medium- to Long-Term R&D Initiatives

Social issues

Global warming

Changes in
population structure
due to aging

Problems
surrounding
resources andenergyCustomer value

Clean energy

Stable supplyof energy

development and social acceptability research. All of ourresearch divisions are pursuing complex synergies byintegrating advanced digital technologies with various realtechnologies, including those related to energy conversion,materials and properties, structures, insulation, heating andcooling, and mechanical systems.
To address issues that cannot be solved by Fuji Electricalone, such as carbon neutrality, we will value strategic
partnerships while refining our technologies for energy
creation, energy saving, and energy conversion.
*T his means uncovering new customer value from a technology-oriented perspective,
creating an ecosystem with potential customers, and co-creating a product market,
before creating the product itself.

Power
Generation

Power Electronics
Systems Energy

Power Electronics
Systems Industry

Energy saving

Semiconductors
Automation

Medium- to long-term
development themes
Medium-Term Management Planpriority themes[Global products]
Gas insulated switchgears
Large-capacity transformers
Uninterruptible power systems
Monitoring and control systems[Mobility field]
Power electronics equipment
for railcars
Power electronics productfor ships and harbors
Power semiconductors
for electrified vehicles

Digital substations
Environmentally friendly substation equipment
High-voltage direct power electronics product
Smart factories
Next-generation waste heat recovery andapplied technology
Power electronics equipment forelectrified vehicles
SiC devices for electrified vehicles
Smart store systems<FY2023

Fuji Electric Report 2021

Distributed power management systems
and equipment

Next-generation wide-band gap devices

Food and Beverage
Distribution

19

CO2 separation and recovery technology
Hydrogen generation andutilization technology<FY2030

Advanced and fundamental
technologies•

Power density: 81 kW/L
(Output: 37 kW; Capacity: 0.46 L)

Modeling of door drive systems for railcars
Simulation model

Progress of product development processwith digital technology
To achieve better product quality, reliability, and faster development,
we are advancing the digital transformation (DX) of our productdevelopment processes and pushing ahead with initiatives designed
to further expand the capabilities of conventional computer-aided
engineering (CAE).
In developing door drive systems for railcars, by simulating thedriving parts, doors that are loads to bear, electric circuits, andcontrol software together, we determine the performance in the initialstage of development, optimizing the overall design. Compared withthe conventional method of repeating tests on actual equipment, thisreduces development manhours and improves product quality andreliability by validating operations when a malfunction occurs.

SiC power semiconductors
Packaging• Joining• Cooling• Insulation• High-density mounting• Simulation•

RollerReal door

Rail

HangerRailDoor

The simulation includes the door itself as a load in
addition to the driving parts such as rails and rollers.

Intellectual Property Initiatives
Fuji Electric considers intellectual property to be an importantmanagement resource. We are strengthening intellectual
property at the source of business planning and R&D andpromoting global intellectual property strategies, including
the promotion of international standardization. Our aim is tobuild a group of patents that will give us an advantage in ourbusiness, such as:(1) Patents related to enhancing efficiency and energy savingof power electronics equipment(2) Patents related to power semiconductors, including
SiC-related technology(3) Patents related to our food and beverage distribution sector
Among our global intellectual property activities, we arecontinuing to address intellectual property issues overseas
and take measures against counterfeit products. Forinternational standardization, we foster the developmentof standards in close cooperation with the International
Electrotechnical Commission (IEC), which is in charge ofstandards related to electrical and electronics technologies, aswell as other industry organizations in Japan and overseas.
In fiscal 2020, in collaboration with R&D divisions, we
focused on searching for new businesses, partnerships
with other companies, and development themes using the
IP landscape*1. In international standardization activities,
one of our employees was appointed as the Japanese

representative of the Conformity Assessment Board (CAB),
an upper-level IEC committee, and will spearhead activities
toward standardization from fiscal 2021. In addition, theCompany received the Award from Commissioner of
the Japan Patent Office, part of the FY2021 Intellectual
Property Achievement Awards*2 presented by the Ministryof Economy, Trade and Industry and the Japan Patent
Office. The award recognizes our contribution to the creationof better intellectual property systems through opinion
exchange meetings with the Japan Patent Office, proactive
in-house intellectual property activities, and assertive use ofpatent rights at the time of market entry.

Research andDevelopment

To achieve the targets of our FY2023 Medium-Term
Management Plan, we are concentrating resourceson the power electronics systems business and thesemiconductors business. Our aim is to expedite
development of products that will open up new markets
in the mobility field, such as automobiles, railways, andships, as well as global products for expanding ouroverseas business.
As a medium-to long-term initiative, we are strengthening
our technology marketing*, which envisages social
issues 10 years into the future. At the same time, we are
stepping up our search for themes to address increasingly
complex issues through both advanced technology

We are developing technologies to increase the power densityof power units, which are responsible for power conversion in
motor drives, automobiles, rolling stock, and uninterruptible powersystems. This is part of an initiative to dramatically reduce the energy
consumption and size of power electronics equipment on thepathway to carbon neutrality. Specifically, we are developing power
units with more than 20 times the power density of conventional
units by combining and optimizing advanced and fundamental
technologies. These include packaging and cooling structuresdesigned to maximize the performance of SiC power semiconductors
and thermal analysis simulations to evaluate their capabilities.

Power unit

*1 A method that utilizes intellectual property and market information for the benefit ofbusiness and management strategies.
*2 The Ministry of Economy, Trade and Industry and the Japan Patent Office annually
select and present awards to individuals who have contributed to the development
and proliferation of the IP rights system in Japan, as well as to awareness-raising
activities related to the system, and to companies that have effectively utilized thesystem and contributed to its smooth operation and development.

Fuji Electric Report 2021

20

Environment

Performance against Key Environmental Indicators

By deploying our strengths in energy andenvironment technology, we will help addressenvironmental issues across the supply chain.

Environmental Vision
Realize a
Decarbonized Society

Contributions to CO2 emissions
reduction in society throughproducts

Michio Abe

Realize a RecyclingOriented Society

Senior Managing Executive Officer
Corporate General Manager, Production & Procurement Group

Environmental Vision 2050
We aim to achieve a “Decarbonized Society,”“Recycling-Oriented Society,” and “Society in Harmony with
Nature” by expanding use of Fuji Electric’s innovative clean
energy technology and energy-saving products.
Realize a DecarbonizedSociety

Target carbon neutrality acrossthe supply chain

Realize a RecyclingOriented Society

Promote green supply chains and
3R activities to reduce environmental
impact to zero

Realize a Society inHarmony with Nature

Aim for zero influence on the ecosystem bycorporate activities contributing to biodiversity

To limit the temperature rise to 1.5°C above
pre-industrial levels, reduce greenhouse gas emissionsin production by more than 46% (compared to FY2013)
and strive to reduce society’s CO2 emissions throughour products.** Our targets for reducing CO2 emissions from our products will be disclosed in 2022.

countermeasures and associated financial impacts, and wewill disclose details sequentially.
In fiscal 2020, the CDP certified Fuji Electric for thesecond consecutive year as an “A List Company” withexcellent climate change initiatives
and information disclosure. We willcontinue contributing to the creation ofa sustainable society by utilizing energy
and environment technology to resolve
environmental issues.

21

Fuji Electric Report 2021

Board of Directors

Executive Committee
The SDGs Promotion
Committee

Environmental
Vision Promotion
Subcommittee

Permanent

Environmental Manufacturing
Working GroupSpecial Purpose

Climate Control Working Group

Fiscal 2020 Result

480 or less

440

460

(thousand tons)(thousand tons)(thousand tons)(thousand tons)

36,51034,000 or more

41,78036,000(thousand tons / year)(thousand tons / year)(thousand tons / year)

Ratio of waste sent to landfills

1.1%

2.0% or less

1.8%

Less than 1.5%

Water consumption per unitof sales

1.5

1.8 or less

1.5

1.8 or less(tons / ¥100 million)(tons / ¥100 million)(tons / ¥100 million)(tons / ¥100 million)

1,083

1,694 or less819

1,694 or less(tons)(tons)(tons)(tons)

Amount of emissions of volatileorganic compound (VOC)
atmospheric emissions

GHG Emissions
during Production
440,000 tons

Net Sales¥875.9 billion

10,000

52.7
76.6
80.4

(6%)
(8%)

157.5

(17%)

20,000(Unit: Billions of yen)

(4%)
(2%)

(78%)

0.99

(2%)

15.20

(36%)

5.72

Power
Electronics
Systems

Semiconductors

Power
Generation

Food andBeverageDistribution

Total

Sales of Productsthat Contributeto CO2 Emissions
Reductions

23.3

57.3

39.4

35.4

155.4

Net Sales

555.1

157.5

80.4

76.6

875.9

4%

36%

49%

46%

18%

Composition Ratio(14%)* Contribution amounts are calculated based on the reduction of CO2 emissions fromproducts shipped in fiscal 2009 and thereafter that are in operation for one year.

(60%)

19.86
70,000Elimination andCorporation

Sales of Our Products that Contribute to CO2 Emissions
Reductions in Society (FY2020)

Contribution to CO2Emissions Reductions inSociety through Products
41.78 million tons

(9%)

340,000

555.1

Fiscal 2021 Target(thousand tons / year)

(48%)

(17%)

-46.3

Power Electronics Systems Semiconductors
Food and Beverage Distribution Others

Power Generation

FY2020 Calculation of Greenhouse Gas Emissions through the Supply Chainon the Greenhouse Gas Protocol. We aim to reduce
emissions throughout the entire supply chain in order torealize a decarbonized society.

In addition to greenhouse gas emissions from our own
business activities (Scope 1 and 2), we calculate indirectemissions generated in our supply chain (Scope 3*1) based

Scope: All global bases
Unit : 1,000 t-CO2

Scope 1 and 2

CO2: 335

Scope 3
Upstream

Downstream(Use of fuel and electricity)

Purchased materials* : 1,794

Product use: 3,612

Non-CO2 GHGs: 102<Calculation range>
All purchased materials/parts/outsourced services• Materials: Iron, copper, plastic, etc.
• Parts: Electronic parts, mechanical parts, etc.
• Outsourced services: Processing, assembly,
construction, utility work, etc.

<Calculation range>
Consumer products*3• Power supply components for TVs and PCs• Vending machines, showcases, change dispensers• Compact UPSs
• Document management systems(Use of insulating gas, CFC substitutes,
etc.)

Fuji Electric Environmental Promotion System

Fiscal 2020 Target

460

Net Sales, Greenhouse Gas (GHG) Emissions during
Production, and Contribution to CO2 Emissions Reduction inSociety through Products (FY2020)

Fiscal 2030 Target

Environmental Management Promotion System
To advance discussions about issues related to the SDGs,
such as protecting the environment and tackling climatechange, as well as to evaluate viable countermeasures,
we established the SDGs Promotion Committee,
a company-wide body consisting of executive officers,
and its subordinate organization, the Environmental Vision
Promotion Subcommittee. Under the umbrella of thesubcommittee, we have set up specialized organizations forindividual environmental management issues to formulate
policies and action plans and to manage progress.
The policies and results of these initiatives aredeliberated and evaluated by the SDGs Promotion
Committee, then reported to the Executive Committee andthe Board of Directors (for deliberation as necessary).

Realize a Society inHarmony with Nature

Fiscal 2019 Result

2

Key ESG Issues

The expanding efforts of the international community tofulfill the SDGs are making it increasingly important toengage in environmental activities such as mitigating global
warming, efficiently using natural resources, and preserving
biodiversity. In June 2019 we formulated the Environmental
Vision 2050 to determine the direction of the Company’senvironmental activities. Guided by this vision, we continue
to achieve steady results.
Meanwhile, countries around the world are taking major
steps toward decarbonization, and this movement isspreading to the social and industrial sectors as a new
growth strategy. With this in mind, we have decided toreview our Environmental Vision 2050 in fiscal 2021 fromthe perspective of strengthening our business, and also
to consider specific measures to realize the vision. We
will clarify the environmental goals that we must actively
address in the long term and strive to make our entire
supply chain carbon neutral by 2050 in order to achieve a
decarbonized society.
We are rigorously reinforcing measures related to the
3Rs (Reduce, Reuse, Recycle) to make effective use oflimited resources. Amid increasing expectations to createa recycling-oriented circular economy, we will also pursue
environmental load mitigation measures to reduce the ratioof waste sent to landfills and lessen the impact on theecosystem from the perspective of decarbonization.
With respect to information disclosure, since declaring
our support for the Task Force on Climate-related Financial
Disclosures (TFCD) last year, we have been identifying
the risks and opportunities that climate change poses
to our business activities, while analyzing potential

Indicator
Greenhouse gas emissions
during production

Capital goods: 103
Fuel procurement: 53
Movement, transportation, etc.: 13
Waste: 6
Business travel: 4
Commuting: 14
Emissions from offices: 6

Scope 1, 2, & 3 total: 6,042*1 Calculated in accordance with the Ministry of the Environment’s “Basic Guidelines on Accounting for Greenhouse Gas Emissions
Throughout the Supply Chain (Ver. 3.0).”*2 Starting in fiscal 2020, we have included products and services procured from company-wide direct materials in our calculations.
*3 Calculated to the extent that it affects the final product.
The calculation method for industrial products is under development.
By the end of fiscal 2021, we plan to expand the coverage to 80% or more of the total emissions of all products, and release theresults to the public.

Fuji Electric Report 2021

22

Realize a Decarbonized Society
We have expressed our commitment to help realize adecarbonized society. Going forward, we will work to achievecarbon neutrality throughout our supply chain by reducing CO2

Realize a Society in Harmony with Nature
GHG Emissions during Production (10,000 t-CO )
2

54

52

48

emissions generated during the operation of our products, in

46

44
-46%

addition to production-related activities, including procurement

29

and transportation.

We aim to ensure that our products are designed andevaluations annually. To preserve biodiversity, meanwhile,

manufactured in a way that does not adversely affect theeach site engages in its own environmental protection

ecosystem so our customers can use them with peace

activities to meet local needs. In the future, we study ways toof mind. We set indicators for reducing the use of volatile

foster greater coexistence with nature from the perspective oforganic compounds (VOCs), which are chemical substances

contributing to decarbonization.

that lead to environmental degradation, and conduct

Reducing GHG emissions during production
Our Fiscal 2030 Target includes efforts to reduce greenhousegas (GHG) emissions during production. Based on this plan, we
have created annual targets and are working to achieve them.
In fiscal 2020, our use of electricity and fuel increased in line

Base Year 2013

2017

2018

2019

2020

2030 target(FY)

Contribution to CO2 Emissions Reductions in Society throughOur Products (10,000 t-CO )2with strong sales of semiconductors, resulting in an increase
in CO2 emissions from the relevant divisions. However, overall

3,162

2,579

GHG emissions were pushed down thanks to various factors.

3,651

4,178

527

energy-saving equipment throughout the Company helped us
reduce GHG emissions during production to 440,000 tons,
which exceeded our target.
We have announced that we will raise our fiscal 2030
reduction target to over 46% (compared with fiscal 2013) andwill study specific measures to achieve this going forward.

2017

2018

2019

2020

Power electronics systems : 179
Inverters (10 years)
High-efficiency motors (10 years), etc.
Semiconductors : 84
IGBT modules (7 years), etc.

Power generation : 258
Biomass-based power generation (20 years)
Geothermal power generation (30 years), etc.
Food and beverage distribution : 5
Vending machines (8 years), etc.

Figures in parentheses indicate number of years of operation used in calculation.

Below 2°C
Scenario

Scenario in which stringent measures are taken to limit the global
average temperature rise as of 2100 to 2°C above the preindustrial average.

World Energy Outlook 2020
Issued by the International Energy Agency (IEA)

4°C Scenario

Scenario in which a global temperature rise of around 4°C above
the Industrial Revolution period is assumed unless measuresexceeding the current level are taken.

IPCC Fifth Report
Issued by United Nations Intergovernmental Panel on Climate
Change (IPCC)

After identifying risks and opportunities for each business

The table below shows the main risks and opportunities

segment and value chain process, we pinpoint items ofthat we should consider. Based on these, we will continue

generation plant business, which took delivery of four clean

high importance and summarize them from a company-wide

promoting disclosure of adaptation measures and financial

biomass power generation systems that use heat fromperspective.

impacts.

products was 41.78 million tons*, which exceeded our target.

wood waste and agricultural waste as fuel. Our increased

emissions reductions in society through products.

production of IGBTs in the semiconductor business also madeA significant contributor to this result was our power

Scenarioa contribution.

16.6% to 18.4%. At the Matsumoto Factory, we increased the

Recycle) throughout our supply chain, including through life

recovery rate of recycled water by improving methods used forcycle assessments at the design stage, green procurement,

maintaining the filtration membranes.
linear economy to a recycling-oriented economy in order towaste sent to landfill (less than 1.0%) and water consumption

establish “green supply chains” as stated in our Environmental

per unit of sales (less than 1.8 tons per ¥100 million).

Vision 2050.

In fiscal 2020, the ratio of waste sent to landfill was 1.8%.
With regard to sludge treatment at overseas semiconductor
factories, sludge recycling was temporarily suspended due

Amount and Ratio ofWaste Sent to Landfill (t)2.3%

to COVID-19, and the sludge was sent to landfill. Although
this caused the disposal rate to deteriorate by 0.7 percentage• Increase in demand for energy-saving
products and environmentally friendly
products• Increased costs associated withdecarbonization of existing production
equipment (capital investment, etc.)• Increase in demand from RE100 customers
through decarbonization of manufacturing
processes• Prohibition of use of solvents and refrigerants
containing gases with high greenhouse effect• Increase in demand due to development asa result of establishing production processes
that do not use greenhouse gases• Soaring prices of currently used metals andmaterials (iron, silicon, etc.)• Increased usage rate of recycled materials

Shifts in the energy mix• Stricter regulations on fossil
fuels• Increased use of renewableenergyetc.

• Loss of business opportunities due todelay in establishing CO2 emission control
technologies for thermal power generation
facilities• Increased demand for related products due
to changes in power source composition(increased use of renewable energy)

Frequent occurrence of extreme
weather events• Increasing frequency andseverity of disasters• Sea level riseetc.

• Delays in parts delivery due to damage tosuppliers and distribution warehouses• Delays in parts procurement, shipping anddelivery due to disrupted distribution network• Shutdown due to damage to factories• Delays in plant works• Increase in demand resulting from active
investment in BCP measures by customers

Below 2°C

Water Consumption andRecycling Rate (1,000 t)

762

points (compared with previous year), our sludge reprocessing

13,478
1.8%

1.6%
543

activities have now returned to pre-COVID levels.

13,398

18.4%
16.6%

12,523
1.1%

12.2%

489

345

13,3364°C

8.8%

We are focusing on reducing water consumption volumes

Opportunities• Loss of sales opportunities due to delay inadopting CO2 reduction technology

We will continue promoting a transition from the traditional

set targets for the Fiscal 2030 Target to reduce the ratio of

Risks

Key ESG Issues

We are committed to practicing the 3Rs (Reduce, Reuse,

Main External Factors to Consider

Increase in power demand due
to advances in electrification•S trengthening of energy
saving•D
 issemination of power
storage•S trengthening of digital
infrastructureetc.

*C ontribution amounts are calculated based on the reduction of CO2 emissions fromproducts shipped in fiscal 2009 and thereafter that are in operation for one year.

Realize a Recycling-Oriented Society

and reducing the ratio of waste sent to landfill. We have also

Adoption Scenario

In fiscal 2020, the CO2 emissions reduction effect of ourbusiness activities, we have set a target for contribution to CO2emissions during equipment operation.

* The Task Force on Climate-related Financial Disclosures (TCFD) is an internationalframework that promotes the disclosure of climate-related risks, opportunities, andfinancial impacts. In 2017, it announced a proposal to require companies to disclose
climate-related information.

Overview
Contribution to emissions reductions in FY2020 (compared with previous year) and main
contributing products

As part of our efforts to create environmental value through our

The use of our clean energy and energy-efficient equipment

the entire value chain.

climate-related information.

(FY)

Contribution to CO2 emissions reductions in society
through products

by our customers contributes to the reduction of CO2

recommendations and have since progressively disclosed

Here, we analyzed climate-related risks and opportunities(Malaysia) Sdn. Bhd., and at the Fukiage Factory, whichto those with lower potency. In addition, the switch tousing two temperature rise scenarios, below 2°C and 4°C for

related to the Strategy section are being considered as below.

development at the semiconductor factory of Fuji Electricfrom sulfur hexafluoride (SF6) and other high-potency GHGs

In June 2020, we declared our support for the TCFD*

Among the TCFD disclosure request items, our efforts

These included ongoing production-related technologicalproduces high-voltage circuit breakers, as well as our switch

Approach to Disclose Climate-Related Information in Accordance with
TCFD Recommendations

through recycling, and we are installing recycling equipment
in semiconductor factories, which use a lot of water. In fiscal
2020, the recycling rate for the entire company increased from23

Fuji Electric Report 2021

2017

2018

2019

2020 (FY)

Amount of waste sent to landfill
Ratio of waste sent to landfill

2017

2018

2019

Water Consumption
Water recycling rate

2020 (FY)

Items other than Strategy are available on our website.
https://www.fujielectric.com/company/csr/global_environment/management_02_03.html

Fuji Electric Report 2021

24

Human Resources
To reinforce operating foundations forsustainable growth, we will promote further
revitalization and training of human resources.

Revising the treatment system for employees
over 60

Takeshi Kadoshima
Managing Executive Officer
General Manager, Human Resources and General Affairs Office

One of Fuji Electric’s management policies states that
we will “maximize our strengths as a team, respecting
employees’ diverse ambition,” and respecting humanrights, ensuring occupational health and safety, andprotecting employee health are fundamental for everything.
We are proactively working on initiatives that include
promoting active employee participation, cultivating ourhuman resources, and properly deploying our personnel for
medium- and long-term development of our business.
We believe it is important that our human resource
measures encompass a broad range of issues inside andoutside the Company and that they are implemented ina timely manner reflecting the responses in our annual
employee awareness surveys.
To achieve sustainable growth, in addition to promoting
the advancement of female employees, which is our focus,
we are working continuously to develop environments andsystems that enable employees over 60 years old anddifferently abled employees to play active roles. We are also
actively working to foster future management candidates
while striving to provide efficient and productive workstyles
by developing environments and systems that allow fordiverse and flexible workstyles.

Respect for Human Rights
Based on the United Nations Guiding Principles on
Business and Human Rights, we are working to establish asustainable corporate structure that is never involved in orcomplicit in human rights violations. We engage in humanrights due diligence* to respect the human rights of all
people working for our company and all people involved inour corporate activities.
In February 2020, we formulated the Policy for Human
Rights of the Employees and the Guidelines on Employee
Human Rights. Based on these, we conducted
self-assessments of the status of respect for human rights
at our operating sites and consolidated subsidiaries inJapan and overseas. The latest assessment revealed
that there were no issues that conflicted with our humanrights policy, but we will continue working to make regularassessments and improvements. With respect to humanrights training for employees, we provided human rights
education as part of our level-specific training, which is
conducted at each employee’s career milestone, as well as
harassment prevention training to line managers. Each of
our operating sites and affiliated companies also conduct
their own human rights training, and a total of 20,701
employees received such training.

Promoting Active Participation of Diverse Human Resources
Based on one of our management policies, which statesthat we will “maximize our strengths as a team, respecting
employees’ diverse ambition,” we promote diversity as apriority element of our human resource strategy.

Promoting the advancement of female employees
Among our diversity initiatives, we place particular attention
to stepping up efforts to promote the advancement of
women. In a society with a declining birthrate, aging
population, and diversifying values, it is essential as acompany to demonstrate our comprehensive strengths inorder to achieve sustainable growth, and further boosting
the participation of women is a vital part of this.
To promote the advancement of female employees,
we are pursuing three main initiatives: proactive

25

Fuji Electric Report 2021

recruitment, provision of career advancement opportunities
for motivated employees, and support in terms ofenvironments and systems, such as balancing work andfamily obligations, improving workplace environments, andproviding career continuity.
Ratio of Female Hired / Ratio of Female Managers /Number of Female Employees in Supervisory Positions
2019

2020

2021

Ratio of female hired*1

(FY)

21%

22%

20%

2023 (Target)

20%

Ratio of female managers*2

2.3%

2.5%

2.8%

3.0%

No. of female employees insupervisory positions*3

249

268

300

400

Data collected from Fuji Electric and consolidated subsidiaries that adopt the same personnel
system (6 companies in total)*1 Graduates from universities or technical colleges*2 Managerial positions or above*3 Assistant manager or above

Promoting the active participation ofdifferently abled people
The Group established Fuji Electric Frontier in 1994 as a
special-purpose subsidiary under the Act on Employment
Promotion etc. of Persons with Disabilities. Since then, we
have established bases in all of our major operating sites(12 in total) to actively secure and expand work areas fordifferently abled persons and to ensure stable recruitment.
We are also securing and expanding work areas fordifferently abled people. In addition to the existing internal
document delivery and cleaning work, we are focusing
on developing the skills of each employee and expanding
work areas, including manufacturing sites. We continue
to hire about 20 differently abled people each year, andthe employment ratio of such people as of June 2021 was
2.92%, well above the statutory employment rate.

Workstyle reforms
We seek to provide a balanced approach to workstyles
through the companywide Pro-7 activities aimed at

Overtime Work Hours /Number of Paid Vacation Days Acquired Annually
(FY)

2018

2019

2020

Average monthly
overtime workhours

24.04 h / month

23.83 h / month

18.90 h / month

Average numberof paid vacation
days acquired
annually

14.5 days

16.5 days

17.3 days

Data collected from Fuji Electric Co., Ltd. and consolidated subsidiaries that adopt the same
personnel system (6 companies in total)*1 Flexible Location Work System
A system that allows employees to work from home or at an operating site other thanthe one to which they are officially assigned.
*2 Sliding Work Hours System
A system that allows employees to change their starting time to a pre-registered time
without changing their scheduled daily working hours.

Key ESG Issues*H uman rights due diligence
Efforts to recognize, prevent, and deal with human rights violation risks in advance

Promoting the active participation of employees aged 60
and above will become increasingly important in light of
expectations of an aging future labor force. To this end, weestablished our Selective Retirement Age System, whichallows regular employees to choose one of the various
retirement ages between 60 and 65. We also introduced the
Senior Task System in which management-level employees
aged 60 and over receive treatment matched to the value of
their work. The aim is to boost motivation of individuals who
continuously show significant performance by paying as highcompensation as when they were under age 60.
We also formulated the Employment Guidelines for
Employees over 65 to create an environment where
employees with advanced skills and expertise can continue
to play an active role in the Company up to age 75.

enhancing work efficiency and quality to improve
productivity and by embracing a perspective on work-lifebalance characterized by focusing on one’s job while atwork and resting properly outside of work.
With the enforcement of the workstyle reform-related
acts in April 2019, we have worked hard to reduce
long working hours and encourage employees to use
vacation time. We have made steady improvements bychanging attitudes through steady awareness-raising andeducational activities, and by visualizing actual working
hours through the enhancement of IT-based management
support systems.
We also have two systems to promote flexibility inworking hours and locations: Flexible Location Work
System*1 and Sliding Work Hours System*2. The use of
these systems has steadily increased as they also help
prevent the spread of COVID-19.
We have positioned our efforts to overcome the new
constraints and obstacles caused by the COVID-19
pandemic as workstyle reforms. Here, we are proactively
working on both Companywide themes, such as various
work systems, as well as business-specific themes. We
will continue promoting flexible workstyles with the aim of
improving work efficiency through the best mix of physicalattendance and teleworking.

Fostering Next-Generation Management
We are also taking active measures to foster future
management candidates who will lead our sustainablegrowth.
Our human resource development covers three mainareas. The first focuses on carefully selected young
employees. Here, we select talented young employees
from the three levels of general manager, manager, andassistant manager and register them as management
candidates. The second is effective on-the-job training.
From early in their careers, these registered individuals
are systematically trained through a job rotation plan
designed for them to accumulate the required experiencein multiple businesses and job categories, as well as

overseas businesses to learn required high viewpointand comprehensiveness for management. The thirdis participation in selective training. Here, employees
participate in training both inside and outside the Company
in a program designed to provide experience and skills thatare difficult to acquire through on-the-job training, suchas learning management skills by experiencing different
management styles and by working in teams to formulate
business proposals. In addition to replacing registeredmembers once a year, we share and discuss registeredmembers, rotation results, and the status of selective
training with the executive officers to run the PDCA cycle
as an ongoing initiative.

Fuji Electric Report 2021

26

Sustainable Procurement
We promote procurement activities with our business partners to ensure fair and equitable transactions and to create a supply
chain that supports a sustainable society.

Fuji Electric CSR Procurement Guidelines

Basic Policies

Fuji Electric has established the Fuji Electric CSR

Alliance (RBA) that promotes CSR in global supply

Procurement Guidelines, which summarize our requests

chains, and the Guidelines for Responsible BusinessWith corporate activities increasingly globalized anda supply chain that supports a sustainable society.” Weto our business partners in order to reduce risks involved

Conduct, which is published by the Japan Electronics andsupply chains complicated, companies are under strong

ensure fair and equitable transactions that comply within CSR in a supply chain. We consulted the RBA Code ofInformation Technology Industries Association (JEITA), whilepressure to extend their corporate social responsibility

laws and regulations in Japan and overseas, and engage

Conduct, which is published by the Responsible Businesscreating the Guidelines.

(CSR) to supply chains. The Fuji Electric Code of Conduct

in procurement activities that are compatible with thestates that the Company, along with its business partners,

sustainability of the environment, society, and governance.

Subjects in the Fuji Electric CSR Procurement Guidelines“will promote procurement activities aimed at creating

Fuji Electric Purchasing Policy
Selection of Suppliers
Our procurement activities are based upon open and equitable trade. Our doors are always open to new partnerships with potential suppliers. To assure our suppliers with good business opportunities, we will respond to any
quotations from suppliers, and are ready to release required corporate information that would help future partners
meet their respective business needs. We will select suppliers objectively according to the results of our evaluations, regarding the product’s quality, cost, delivery, supply stability, and considerations to the environment.

Confidence in Information
Fuji Electric treats information from suppliers regarding products, estimates and purchasing records, equivalent to

1. Human Rights and Labor

4. Fair Trade and Ethics

7. Business Continuity Plan

Prohibition of forced labor, childlabor, inhumane treatment, anddiscrimination, etc.

Anti-corruption, prohibition of improper
provision and receipt of advantages,
and respect of intellectual property, etc.

Development and preparation ofa business continuity plan

2. Health and Safety

5. Quality and Safety

Occupational safety, emergency
preparedness, work-related accidents
and occupational illnesses, etc.

Product safety, quality control, andprovision of accurate information about
products and services

8. Establishment ofManagement Systems

3. Environment

6. Information Security

9. Social Contribution

Reduction in greenhouse gas
emissions, management of water,
waste, and chemical substances, etc.

Defense against cyber-attacks, protectionof personal information, and preventionof leakage of confidential information

Engagement in social contribution
activities

Supplier guidelines, request forcompliance, etc.

our own, thus keeping such information in strict confidence.

Promotion of Procurement Activities Compatible with CSR
Fuji Electric works with its suppliers to promote procurement activities compatible with CSR. These activities
encompass human rights and labor, health and safety, the environment, fair trade and ethics, quality and safety,
information security, business continuity plans, establishment of management systems, and social contributions.

Status of the 2020 self-assessment of CSR procurement
In fiscal 2020, we expanded the target of our survey tocommunicating closely with our business partners so that

include business partners of our consolidated subsidiaries

we will continue to work together to create a supply chain

in Japan and overseas. Of about 4,200 business partners

that supports a sustainable society.

in total, 673 major partners in Japan and overseas, which
made up the top 80% of our subsidiaries’ suppliers in

Assessment Results
C
36
(5%)

fiscal 2019, cooperated in the self-assessment of their

Fuji Electric asks its business partners to conduct the

Guidelines. We gave them feedback based on their

PDCA for Self-Assessment of CSR Procurement

partners were rated D, which means they needed to work

self-assessment of CSR procurement in accordance with
the Fuji Electric CSR Procurement Guidelines. This
self-assessment helps us see a clear picture of CSR

B
83
(12%)

assessment results. The survey found that 37 business• Implement self-assessment of
CSR procurement

Business
Collaborative
partner survey measuresinitiatives in our supply chain. Furthermore, in providing• Select companies for
self-assessment• Present example
initiatives by Fuji Electricand other companies

on improvements in their efforts to fulfill their CSR. We

673
in total

Key ESG Issues

efforts based on the Fuji Electric CSR Procurement

Sustainable Procurement Activities with Business Partners

D
37
(6%)

A
517
(77%)

made sure that these partners were interviewed so theywould have a deeper understanding of CSR initiatives,
and that issues were successfully resolved. We will keep

their answers to the questions in the assessment, ourbusiness partners gain a better understanding of Fuji
Electric’s CSR philosophy and what we would like them tocomply with and practice. If any business partner seems• Establish improvement
activities

Improvement

Check• On-site observation(once a year oras necessary)

Numbers of Companies That Conducted Self-Assessment

to need more efforts in terms of CSR, we work with them
reducing risks involved in CSR in a supply chain.

27

Fuji Electric Report 2021

A
B

The business partner considers CSR as an organizational
challenge and is planning specific actions.

15

C

The business partner considers CSR as an organizational
challenge.

79

D

The business partner should consider CSR as anorganizational challenge and should work on improvements.

Total

Fuji Electric

425

673

528

51

94

Japan

425

572

506

51

Overseas

0

101

22

0

FY 2019

Business Partners

Description

The business partner considers CSR as an organizational
challenge and takes specific actions.

Consolidated
Subsidiary
Overseas

Consolidated
Subsidiary inJapan

so that they will achieve a higher level of CSR, thereby

Ratings
Rating

FY 2020

Fuji Electric Report 2021

28

Corporate GovernanceNomination and Remuneration Committee

We continue our efforts to further improve the transparency and supervisory function of management for stronger
corporate governance in order to realize our corporate philosophy.

Basic Policies
In strengthening our corporate governance, our basic
policies are to protect shareholder rights and ensure
their equal treatment, cooperate appropriately with

non-shareholder stakeholders, ensure proper information
disclosure and transparency, execute the duties of the Boardof Directors, and engage in dialogue with shareholders.

Corporate Governance Framework
Fuji Electric’s corporate governance framework consistsof the Board of Directors, which performs the functionsof management supervision and making important
decisions, and the Audit & Supervisory Board, which is incharge of the management audit function. As a company
employing the corporate auditor system, Fuji Electric’s
Audit & Supervisory Board suitably undertakes auditsof the Company’s Directors and Executive Officers andguarantees objectivity and neutrality.
The Company actively appoints Outside Officers thatsatisfy the requirements for Independent Directors / Audit& Supervisory Board Members, endeavors to strengthen
management supervisory and auditing functions, and has
established the Nomination and Remuneration Committee

comprising a majority of Outside Officers as an advisory
body to the Board of Directors.
Also, in order to clarify the roles of management andexecution, we have introduced an executive officer system
in an effort to clearly define the responsibilities of eachbusiness and streamline business execution. We areendeavoring to build an effective corporate governanceframework with the use of the Executive Committee,
which discusses and reports on important matters related
to management as an advisory body to the President
and Chairman of the Board of Directors, as well as othercommittees tasked with planning and promoting key
business strategy issues and key external issues, such aslegal compliance.

Corporate Governance Framework
General Meeting of Shareholders
Appointment/
Dismissal

Appointment/
Dismissal

Fuji Electric

Board of Directors

Appointment/
Dismissal

Audit & Supervisory Board

Comprising 9 Directors(including 3 Outside Directors)
Consultation
Recommendations

Audit

Oversight
ReportNomination andRemuneration Committee

Comprising 5 Audit &Supervisory Board Members(including 3 Outside Audit &Supervisory Board Members)

Cooperation

Accounting Auditors

Audit• Fuji Electric Compliance Promotion Committee• Health & Safety Promotion Committee

Internal Auditing Divisions
Committees*

Subsidiaries
Audit & Supervisory Board Members

Accounting Auditors

Executive Committee
President

Executive Committee
Members
Internal Auditing Divisions

Major Regulations and Committees Comprising Internal Control Systems
Corporate Philosophy
Fuji Electric Code of Conduct
Fuji Electric Job Authority Rules
Fuji Electric Compliance Promotion Committee

29

Fuji Electric Report 2021

(1) Policy on the composition of the Board of Directors(2) Policies and criteria regarding the appointment or dismissal of Directors, thePresident and Chairman of the Board of Directors, and Audit & Supervisory
Board Members(3) Appointment or dismissal of Directors, the President and Chairman of theBoard of Directors, and Audit & Supervisory Board Members(4) Matters regarding the formulation and implementation of a succession plan for
the President and Chairman of the Board of Directors(5) Policies and criteria regarding the remuneration of Directors and Audit &Supervisory Board Members(6) Details of remuneration for Directors and Audit & Supervisory Board Members

Nomination and Remuneration Committee (Fiscal 2020)
The Committee Chairman Outside Director
Toshihito Tamba
Committee Members
Outside Directors	Naoomi Tachikawa,
Yoshitsugu Hayashi
Standing Directors	Michihiro Kitazawa,
Kenzo Sugai

In fiscal 2020, the Nomination and Remuneration
Committee convened on two occasions to deliberate thematters and reported the results to the Board of Directors.

Appointment of Directors and Audit & Supervisory Board Members
Fuji Electric’s policy on nominating candidates for Directors
and Audit & Supervisory Board Members is to decide on
candidates by taking into account such factors as theoverall balance of qualifications and experience on the
Board of Directors, and other viewpoints such as diversity.
Persons with the qualifications, experience, and otherattributes required to execute the Company’s management
policies are appointed as Standing Directors. In addition
to the officers who supervise sales, manufacturing,
management, and the power electronics systems businessas our core business, we have appointed the officer
responsible for our technology development division asStanding Director.
Persons equipped with the insight and experience
required to make multilateral business decisions who also
have an understanding of Fuji Electric’s management are

appointed as Outside Directors. For instance, managers oflisted companies or experts in academic fields closely related
to Fuji Electric’s business domains. Each Director’s termof office is one year so that we maintain the management
framework capable of making clear the responsibilities ofmanagement in each fiscal year and of responding quickly tochanges in the business environment.
Persons familiar with the Company’s operations in general
who also possess expert knowledge and experience areappointed as Standing Audit & Supervisory Board Members.
Persons equipped with the expert knowledge andexperience required to undertake audits who also have an
understanding of Fuji Electric’s management are appointed
as Outside Audit & Supervisory Board Members. For
instance, corporate managers, persons with experience asa standing auditor of a listed company, or legal experts.

Key business strategy issues

Executive Officers

Standing Audit &Supervisory Board Members

Board of Directors

Matters for Consultation

The committee comprises at least three Directors as
members, the majority of which are elected from among
the Company’s Outside Directors. The chairman iselected from among the Outside Directors that sit on thecommittee as members.

Key ESG Issues

Deliberation
Report• SDGs Promotion Committee

Legal compliance andother key external issues

Executive Committee
President* Committees
Key issues for Fuji Electric froman SDGs perspective

Fuji Electric has established the Nomination andRemuneration Committee as the advisory body for the
Board of Directors in order to enhance the Company’s
corporate governance by reinforcing the fairness,transparency, and objectivity of procedures concerning thenomination of and remuneration for Directors and Audit &Supervisory Board Members.

Fuji Electric Compliance Regulations
Fuji Electric Compliance Program
Business Ethics Whistle-Blowing Systems
Fuji Electric Risk Management Rules

Fuji Electric Rules for Prevention of Insider Trading
Fuji Electric Group Contingency Plan for
Emergency Situations
Auditor Liaison Committee etc.

• Skills Development Committee• Production Technology Committee• Technology Development Committee• International Standardization Committee

Independence Criteria for Outside Officers
Fuji Electric judges the applicable candidate to be fully
independent from the Company when he/she does not fallunder any of the conditions listed below, in addition to thecriteria for independence stipulated by domestic financial
exchanges, including the Tokyo Stock Exchange.
(1) Major shareholder
A major shareholder of the Company (who owns 10%
or more of the voting rights) or its executor of business.
(2) Major business partner
A business partner (consultants such as lawyers,certified public accountants, and tax accountants,
as well as consulting firms such as law firms, audit
firms, and tax firms) or a person executing its business
whose transactions with the Company exceed 2% of
the annual consolidated net sales of the Company or
the other entity in the past three fiscal years.

(3) Major lender, etc.
A financial institution, other major creditor, or a person
executing the business of these institutions that is
indispensable for the Company’s funding and on
which the Company depends to the extent that it isirreplaceable.
(4) Accounting Auditor
A certified public accountant who belongs to anauditing firm that serves as the Accounting Auditor of
the Company or employee, etc. of such auditing firm.
(5) Donee
A person executing the business of an organization
which receives a donation exceeding 10 million yen peryear that is greater than 2% of its annual income fromthe Company for the past three fiscal years.

Fuji Electric Report 2021

30

List of Officers (As of September 1, 2021)
Directors

Michihiro Kitazawa
President andChairman of theBoard of Directors

Activities of Outside Officers in Fiscal 2020

Chairman of the Board of Directors
Nomination and Remuneration
Committee member
President
General Management

Junichi Arai
Director

Nomination and Remuneration
Committee member
Executive Vice President
Assistant to the President

Kenzo Sugai
Elected Corporate
Director

Nomination and Remuneration
Committee chairman
Director,
Tokyo Century Corporation

Toshihito Tamba
Outside Director

Shiro Kondo
Director

Audit &
Supervisory
Board
Members

Senior Managing Executive Officer
Corporate General Manager,
Corporate Management Planning
Headquarters
General Manager,
Export Administration Office
In charge of compliance management
and crisis management

Managing Executive Officer
Corporate General Manager,
Corporate R&D Headquarters

To strengthen our management supervisory and auditing functions, and to ensure the validity and appropriateness of ourimportant decisions, the Officers play the proper roles as stated below.
Outside Directors

Name

Status of Attendance at Board of
Directors Meetings
Status of Attendance at Nomination
and Remuneration Committee(Meetings Attended/Meetings Held)

Yoshio Okuno
Standing Audit &Supervisory Board
MemberChairman of the Audit &Supervisory Board

Toshihito Tamba

13/13
2/2

Junichi Matsumoto
Naoomi Tachikawa
Outside Director

Nomination and Remuneration
Committee member

Standing Audit &Supervisory Board
MemberNomination and Remuneration

Tetsuo Hiramatsu

Yoshitsugu Hayashi Committee member

Outside Audit &Supervisory Board
MemberDistinguished Professor and Director,
Center for Sustainable Development andGlobal Smart Cities, Chubu University

Outside Director

DirectorNaoomi Tachikawa

Senior Managing Executive Officer

Yuko Katsuta

Power Electronics Energy Business andIndustry BusinessOutside Audit &Supervisory Board
MemberMasatsugu Tomotaka In charge of Power Electronics Sales,

Board of Directors
Mr. Tachikawa offered opinions as necessary on all areas of Fuji Electric’s management, including on the following
matters, based on his professional standpoint and considerable insight as a manager of listed companies.
• Managing the progress of management plans• Managing the progress of large-scale orders
Nomination and Remuneration Committee
Mr. Tachikawa carried out the supervisory function in appointment of candidates for Directors and Audit &Supervisory Board Members and the process of determining remunerations for Directors and Audit & Supervisory
Board Members from an objective and neutral standpoint.
Board of Directors
Mr. Hayashi offered opinions as necessary on all areas of Fuji Electric’s management, including on the following
matters, based on his professional standpoint and considerable insight about environmental engineering, a field thatis closely related to the Company’s management policies.
• Initiatives aimed at reducing Fuji Electric’s environmental footprint• Appropriate ways to carry out research and development
Nomination and Remuneration Committee
Mr. Hayashi carried out the supervisory function in appointment of candidates for Directors and Audit & Supervisory
Board Members and the process of determining remunerations for Directors and Audit & Supervisory Board
Members from an objective and neutral standpoint.

Outside Audit & Supervisory Board Members
Name

Division

President and Chairman of
the Board of Directors

Michihiro Kitazawa

General Management

Executive Vice President andElected Corporate Director

Kenzo Sugai

Assistant to the President

Senior Managing Executive Officer

Michio Abe

Corporate General Manager, Production & Procurement Group, In charge of Power Generation Business

Senior Managing Executive Officer

Masatsugu Tomotaka

In charge of Power Electronics Sales, Power Electronics Energy Business and Industry Business

Senior Managing Executive Officer

Junichi Arai

Corporate General Manager, Corporate Management Planning Headquarters; General Manager,
Export Administration Office; In charge of compliance management and crisis management

Managing Executive Officer

Toru Housen

Corporate General Manager, Semiconductors Business GroupManaging Executive Officer

Takeshi Kadoshima

General Manager, Human Resources and General Affairs Office

Managing Executive Officer

Shiro Kondo

Corporate General Manager, Corporate R&D Headquarters

Managing Executive Officer

Masashi Kawano

Corporate General Manager, Power Electronics Energy Business GroupManaging Executive Officer

Hiroshi Tetsutani

Corporate General Manager, Power Electronics Industry Business Group

Executive Officer

Kenji Goto

Deputy Corporate General Manager, Power Electronics Energy Business Group

Executive Officer

Masahiro Morimoto

President and Representative Director, Fuji Electric FA Components & Systems Co., Ltd.

Executive Officer

Tadao Horie

Corporate General Manager, Power Generation Business Group

Executive Officer

Yoshitada Miyoshi

General Manager, President’s Office; In charge of SDGs Promotion; In charge of Public Relations and Investor Relations

Executive Officer

Masato Miyake

General Manager, Legal Office, Corporate Management Planning Headquarters

Executive Officer

Keiichi Asano

Corporate General Manager, Food and Beverage Distribution Business Group

Executive Officer

Takashi Obinata

Deputy Corporate General Manager, Production & Procurement Group; General Manager, Production Technology Center

Executive Officer

Hiroshi Ishii

Corporate General Manager, Power Electronics Sales Group

Fuji Electric Report 2021

2/2

Board of Directors
Mr. Tamba offered opinions as necessary on all areas of Fuji Electric’s management, including on the following
matters, based on his professional standpoint and considerable insight as a manager of listed companies.
• Formulation of a business plan taking into account changes in the market environment• Appropriate ways to carry out IR activities
Nomination and Remuneration Committee
Mr. Tamba led the supervisory function in appointment of candidates for Directors and Audit & Supervisory Board
Members and the process of determining remunerations for Directors and Audit & Supervisory Board Members froman objective and neutral standpoint.

Name

Tetsuo Hiramatsu

Hirohiko Takaoka

Yuko Katsuta

Status of Attendance at Board of
Directors Meetings
Status of Attendance at Audit &Supervisory Board Meetings(Meetings Attended/Meetings Held)

13/13
7/7

9/9*
5/5*

9/9*
5/5*

Key ESG Issues

31

13/13

Partner,
ITN Partners

Executive Officers
Position

2/2

Outside Audit &Supervisory Board
MemberYoshitsugu Hayashi

Director

13/13

Hirohiko Takaoka

Senior Managing Executive Officer
Corporate General Manager,
Production & Procurement GroupIn charge of Power Generation BusinessMichio Abe

President & Representative Director,
Chuo-Nittochi Group Co., Ltd.
President & Representative Director,
Chuo-Nittochi Co., Ltd.

Main Activities

Main Activities

Mr. Hiramatsu confirmed and offered opinions as necessary at meetings of the Board of Directors concerning
agenda items and the status of Fuji Electric’s business activities based on his extensive experience and considerable
insight as a manager at financial institutions. At meetings of the Audit & Supervisory Board, he confirmed andoffered opinions on the legal compliance of the overall business activities of Fuji Electric.
Mr. Takaoka confirmed and offered opinions as necessary at meetings of the Board of Directors concerning agenda
items and the status of Fuji Electric’s business activities based on his extensive experience and considerable insightas an experienced Full-time Audit & Supervisory Board Member, etc. of listed companies. At meetings of the Audit& Supervisory Board, he confirmed and offered opinions on the legal compliance of the overall business activities ofFuji Electric.
Ms. Katsuta confirmed and offered opinions as necessary at meetings of the Board of Directors concerning agenda
items and the status of Fuji Electric’s business activities based on her expert knowledge as an attorney. At meetingsof the Audit & Supervisory Board, she confirmed and offered opinions on the legal compliance of the overall businessactivities of Fuji Electric.

* S ince Mr. Hirohiko Takaoka and Ms. Yuko Katsuta newly assumed the office of Auditor at the conclusion of the 144th Ordinary General Meeting of Shareholders held on August 6, 2020, the above status on attendance at theBoard of Directors and the Audit & Supervisory Board meetings refers to those meetings held after their assumption.

Fuji Electric Report 2021

32

Remuneration for Directors and Audit & Supervisory Board Members

Evaluation of Effectiveness of the Board of Directors

Process of determining remuneration

Policy regarding decisions on remuneration

Consulted by the Board of Directors, the Nomination andRemuneration Committee discusses policies and criteria
concerning remuneration as well as the details of remuneration.
The Board of Directors resolves on the policy for the final
decisions respecting the details of the committee’s report thatthe Board of Directors has received from the Committee.
The actual decision on individual remuneration amounts isleft to the discretion of President and Chairman of the Board of
Directors, but within the limit resolved at the General Meetingof Shareholders and with reference to the details of thecommittee’s report.

We have established a remuneration system and remunerationlevels that are deemed appropriate for their respective
duties and in accordance with shareholder mandates, giving
due consideration to the aims of securing and maintaining
competent personnel and providing incentives for the
improvement of business performance.
We routinely verify that the system and levels areappropriate or whether they need reviewing in light of changes
in the operating environment or objective external data.

We conduct the evaluation of the effectiveness of the Board of
Directors with the use of a third-party survey in order to verify
whether the Board of Directors is properly fulfilling its expectedroles and functions and to facilitate further improvements
thereof. The results of the survey are reported to the Board of
Directors, and issues that require improvement going forward
are shared with everyone.
The issues that have been shared based on the results ofthis effectiveness evaluation are addressed in turn according
to a schedule clearly defined for each, so that we continue
working to enhance the functions of the Board of Directors.

Classification-Based Remuneration System
Classification

Remuneration System

The amount of performance-linked remuneration for Standing Directors is based on the payment level that pushes up the proportionof performance-linked remuneration when there is a rise in the consolidated ratio of operating income to net sales, which is set as a
critical target in the medium-term management plan. The previous year’s consolidated performance (e.g., net sales, operating income,net income, and dividends) is taken into account to make the final decision. The consolidated ratio of operating income to net sales forfiscal 2020 was 5.5%, and performance-linked remuneration accounted for about 35% of the remuneration.
Standing Directors

Base Remuneration
Base remuneration is a predetermined amount that is paid monthly at a certain time to executives according to their position. A portionof the base remuneration is contributed to the director shareholding association to share the economic interests of shareholders and as
an incentive to make management aware of share value.
Performance-Linked Remuneration
Performance-linked remuneration is paid annually at a certain time only in instances in which dividends are paid to all shareholders
from retained earnings. The total amount of executive performance remuneration shall be within 1.0% of consolidated net income forthe fiscal year prior to the date of payment in order to make the link with consolidated results for each fiscal year more clearly.

Standing Audit &Supervisory Board Members
Outside Directors and Outside Audit &Supervisory Board Members

A predetermined amount is paid monthly at a certain time to executives according to their position as base remuneration. Stocks in the
Company may be acquired at their own discretion.

Remuneration by Classification (Fiscal 2020)
Classification

Standing Directors

Discussed the following subjects:• Each segment’s business plans
and strategies• Research and development strategies

Report on dialogue withinstitutional investors

Reported the status of IR activities,
opinions and requests from analysists
and institutional investors

Scope of evaluation

Fiscal 2020 Board of Directors (13 meetings in total)

Subjects

All Directors and Audit & Supervisory Board Members (13 people in total)

Evaluation method

Anonymous survey conducted by a third party

Evaluation period

January to February 2021

Main question categories(1) Board of Directors make-up, administration, discussions, and monitoring functions(2) Support structure and training for Directors and Audit & Supervisory Board Members(3) Dialogue with shareholders(4) Initiatives implemented by Directors and Audit & Supervisory Board Members themselves

Evaluation process(1) Subjects answer a survey conducted by a third party(2) The third party identifies issues based on a results report and advice(3) Board of Directors analyzes, discusses, and assesses the findings

Summary ofevaluation results

Every part of what the Board of Directors does, which includes discussions as well as support for
Directors and Audit & Supervisory Board Members, earned mostly positive assessments, thereby
assuring the overall effectiveness of the Board of Directors.

Issues to address

In light of the opinions in the survey calling for more in-depth discussions about further improvements inthe administration of the Board of Directors and the medium- to long-term issues, it was recognized thatchallenges lie ahead in order to further improve the Board’s functions and invigorate discussions.

Performance-Linked Remuneration

384

243

140

5

Internal Control System

58

58

—

2

With the aim of complying with laws and regulations, managing

and the articles of incorporation, Fuji Electric has establishedthe risk of loss, and securing the efficiency of the execution ofand promotes a compliance system in order to secure theduties, the Fuji Electric Board of Directors has determined basic

transparency and soundness of business execution.

51

51

Number of Recipients—

8

Amount of Contributions to the Director Shareholding Association(Millions of Yen)

Shares of the Company Acquired(Hundreds of Shares)

Directors

20

60

Audit & Supervisory Board Members

4

12

Before taking office, Standing Officers undergo compliancetraining, which also encompasses legal and taxation matters.
They are also provided opportunities after taking office toacquire necessary knowledge on an ongoing basis.
Before taking office, Outside Officers are briefed on the stateof the Company and the roles they are expected to perform.
After taking office, they have the chance to deepen theirunderstanding of the Company’s business by attending internal
technology presentations and inspecting production sites.

Fuji Electric Report 2021

Further discussion of themedium- to long-term
issues (e.g., medium-term
management plan, ESG)

Base Remuneration

Training Policy for Directors and Audit & Supervisory Board Members

33

Major Initiatives in Fiscal 2020

Total Remuneration(Millions of Yen)

Amount of Contributions to Director Shareholding Association and Shares of the Company Acquired (Fiscal 2020)
Classification

Opinions and Issues Raised

Key ESG Issues

Standing Audit &Supervisory Board Members
Outside Directors and Outside Audit &Supervisory Board Members

Remuneration by Type (Millions of Yen)

Opinions, Issues Raised, and Actions as a Result of the 2019
Effectiveness Evaluation of the Board of Directors

policies concerning the establishment of an internal control
system as stipulated in the Companies Act of Japan, andthe Company discloses those policies. Fuji Electric discloses
information on the implementation of its internal control system,
thereby taking steps to respond promptly and accurately to thedemands placed upon the Company by society.

Main systems based on the internal control system ompliance system
C(Please refer to page 41 for details.)

 isk management system
R(Please refer to page 43 for details.)
Based on regulations and other systems pertaining tomanaging the risk of loss, Fuji Electric has developed an
appropriate risk management system in order to manage
business risks in a coordinated, systematic manner. In
regard to specific cross-sectional risks, the Company
determines departments to put in charge of each risk,
thereby establishing a risk management system.

Based on systems for ensuring that Directors and employees
perform their duties in a manner that is compliant with laws

Mr. Takaoka and Ms. Katsuta, Outside Audit &Supervisory Board Members, visiting the Kawasaki Factory

Fuji Electric Report 2021

34

Audit & Supervisory Board Members and Internal Audits

Policy on Cross-Shareholding

Strengthening collaboration between
audit functions

Fuji Electric holds listed shares as a matter of policy in order tomaintain and strengthen relations with its investee companies.
We will sell these cross-shareholdings when the rationality ofholding them is not recognized, and even if certain rationality isrecognized, we will reduce them while paying attention to theimpact on management and business. In fiscal 2020, we soldmultiple listed stocks we held (as of March 31, 2021, we hold74 listed stocks).
The Board of Directors periodically evaluates the rationalityof shareholding in light of whether it is necessary to maintainand strengthen relations with the investee companies and of

and internal audit functions (Internal Audit Office). We willcontinue to strengthen this collaboration going forward, with aparticular focus on project management for large-scale projects,
compliance audits, and audits at overseas subsidiaries.

We ensure the effectiveness of Fuji Electric’s audit functions
by reinforcing collaboration between statutory audit functions(Audit & Supervisory Board Members, Accounting Auditors)
Main Initiatives for Strengthening Collaboration
Fuji Electric

Key matters shared by Auditor Liaison
Committee (once yearly)

Statutory audit functions

Internal audit functions

the comparison of capital cost and return. The details of thereview are disclosed.
The voting rights that come with cross-shareholding are
exercised after considering all relevant factors, including
whether the proposed action will help the issuing company
to establish an appropriate corporate governance frameworkand to increase its medium- to long-term corporate value, andwhat impact the action will have on Fuji Electric. We also havedialogue regarding the details of the proposal, among others,with the issuing company as necessary.

Audit & Supervisory Board
Accounting Auditors

Audit &
Supervisory Board Members

Internal Audit OfficeInformation shared between Audit &Supervisory Board Members andthe Internal Audit Office (once monthly)Group Auditor Committee (every quarter)

Dialogue with Shareholders and Investors
Information shared by Auditor Liaison
Committee (once monthly)

Subsidiary, which is a large company under the Companies Act

Statutory audit functions

Accounting Auditors

Internal audit functions

Audit &
Supervisory Board Members

Internal Audit Office

Basic policies
We disclose information in accordance with various laws andregulations. Even if we are not required to do so by law, we
also strive to disclose corporate information thought to havea significant impact on investment decisions in a timely, fair,and equitable manner, so that we might earn the trust of ourshareholders and investors and ensure they have a proper
understanding of the Company.

Explanatory forums for analysts and institutional investors• Financial results presentations(May, July, and October 2020; January 2021)• Management plan presentations (October 2020)• Business strategy presentations (October 2020)• ESG Small Meeting (February 2021)

Opinions of analysts and institutional investors
Major initiatives in fiscal 2020
Audits by the Audit & Supervisory Board Members
Supervisory Board Members communicated to the Outside
Audit & Supervisory Board Members.
Main tasks• Attending and offering opinions at meetings of the Board of Directors, theExecutive Committee, the Compliance Promotion Committee, and otherimportant committees• Reviewing documents pertaining to important resolutions• Receiving explanations on the status of operational execution from
Directors and internal auditing divisions• Investigating the status of operations and assets at Fuji Electric,
consolidated subsidiaries in Japan and overseas, and companies
undertaking M&As (done remotely as necessary)

Internal audits
Every second year, the internal auditing divisions as bodies
directly under the President perform the following audits on Fuji
Electric’s business divisions and subsidiaries in accordancewith internal auditing standards and annual audit plans.
Type of Audit

35

A total of 34 bases were audited in fiscal 2020, and many of
the audits were done remotely, particularly those of overseas
bases. No risks or inadequacies with the potential to seriously
affect management were discovered.
Main Tasks

Organizational management

Evaluating the appropriateness of management and administration(development of regulations, approval procedures, performance management, etc.)

Risk management

Evaluating the effectiveness of risk management systems and risk response

Compliance

Checking for compliance with laws and regulations based on the Fuji Electric Compliance Program and confirming legal complianceBusiness execution

Evaluating the appropriateness, efficiency, and effectiveness of business execution(booking of sales and purchases, investments, cash flow, etc.)

Accounting

Evaluating the appropriateness of cost accounting and the soundness of assets and liabilities

Fuji Electric Report 2021

We actively engage in dialogue with analysts and institutional
investors, and the information shared at briefings and theprincipal feedback and requests we receive during private
meetings are shared with the executive officers and Board of
Directors, so that we discuss them as management issues.
The main opinions and requests received from analysts andinstitutional investors in fiscal 2020 are as follows.
Main opinions and requests

Timely disclosure (examples)

General management and business• Publication of more information about business opportunities andgrowth strategies to achieve decarbonization• Promotion of further growth investing in power semiconductors• Promotion of measures to improve the profitability of the ED&C
components and factory automation businesses• More rigorous risk management for power generation projects• Notice of Postponement of Announcement of Financial Results for
Fiscal Year Ended March 31, 2020 (April 2020)• Losses Caused Due to Semiconductor Product Defect (November 2020)• Announcement Concerning the Sale of Investment Securities(January 2021)• Announcement Concerning the Result of the Sale of Investment Securities(March 2021)

ESG• Review of the environmental protection policy to achieve decarbonization• Disclosure of information related to the TCFD recommendations
under discussion• Promotion of more women to directors and managers• Further reduction in cross-shareholding

Fuji Electric Report 2021

Key ESG Issues

Audit & Supervisory Board Members conduct audits inaccordance with the audit policies and duties assigned and incompliance with the standards for audits established by the
Audit & Supervisory Board. They report the details and results of
their audits to the Audit & Supervisory Board.
In fiscal 2020, the Audit & Supervisory Board convened
seven times in total. Every meeting was attended by all of theCompany’s Audit & Supervisory Board Members. During themeetings, the Audit & Supervisory Board mainly reviewed audit
policies and plans, the appropriateness of auditing methods
and results of the Accounting Auditors, and undertook an
assessment of the Accounting Auditors. It also reported on
and reviewed important matters that the Standing Audit &We had to defer the public disclosure of the full-year financial
results for fiscal 2019 and the management plan for fiscal
2020 due to the COVID-19 pandemic. Given this situation, we
handled more media coverage on conference calls or online,
provided more elaborate information than ever to disclose at
the IR briefings, and published more detailed IR informationon our website in order to ensure that our shareholders
and investors have a clearer understanding of our businessenvironment and business strategies.
Furthermore, we held an “ESG Small Meeting” for a
discussion that focused on subjects of interest to ESG
investors in order to enhance our action toward growing ESG
investments.

36

Round-Table Discussion among the Audit & Supervisory Board Members

Audit & Supervisory Board Initiatives to Help Improve
the Effectiveness of Corporate GovernanceHaving the institutional design of a listed company, Fuji Electric has chosen to adopt the format of a company
employing the corporate auditor system. This has various advantages. For example, the effectiveness ofbase. In fiscal 2020, we visited a total of 83 divisions andbases, including through remote audits. We also endeavor
to share information by sending monthly activity reports tooutside Audit & Supervisory Board Members regarding thegeneral status of visiting audit, including the main points ofthe three-way audits.

audits can be ensured by on-site audits by Standing Audit & Supervisory Board Members. Also, auditor

Hiramatsu

independence is ensured. With this format, moreover, we can expect audits of substantial validity based on

We believe that the activities of our Audit & Supervisory
Board Members are quite faithful to our auditing standards
and other norms. We are also gradually improving theauditing environment to enhance the effectiveness of audits.
In fiscal 2020, for example, one person who is independent
from Directors has joined the staff to assist the Audit &Supervisory Board Members on a full-time basis.
Of the three-way audits, the internal auditing divisions
are the most important partners for Audit & Supervisory
Board Members, from my standpoint as an Outside Audit& Supervisory Board Member, rather than focus in details
of individual cases, I try to view things from the perspectiveof whether they are useful to management. On the other
hand, we expect the accounting auditor to simply give us
a fair and strict opinions. To this end, we carefully monitor
how well the accounting auditor, which does not have any
compulsory investigative powers, makes decisions with ourclose cooperation. I also believe that the current frequencyof visiting audit by Standing Audit & Supervisory Board
Members is appropriate, and the results are reported to us
as needed, which is very helpful.
As an Outside Audit & Supervisory Board Members,
when I receive various reports I pay attention to the hidden
side—estimating the size of the iceberg, so to speak. As forvisiting audit during the COVID-19 pandemic, I would like to
see further improvements with respect to compensating forareas that cannot be handled properly by online inspections
in order to increase effectiveness of audits.

proper management decision-making principles while eliminating potential risks associated with self-audits.
This round-table discussion among Audit & Supervisory Board Members took up the current status of that
Board’s efforts to further improve the effectiveness of corporate governance under this institutional design,
as well as challenges being faced.

Yoshio Okuno

Junichi Matsumoto

Tetsuo Hiramatsu

Hirohiko Takaoka

Yuko Katsuta

Standing Audit & Supervisory
Board Member

Standing Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Activities of Audit & Supervisory Board Members: Evaluations and Issues
Key points
Emphasis on close cooperation between Audit & Supervisory Board Members, internal auditing divisions,Takaokaensure the effectiveness of audits
Importance of sharing awareness of risk at the audit planning stage in order to further improve effectivenessConsideration of opportunities for Standing Audit & Supervisory Board Members to accompany outside

I have only been an outside member for one year, but
as mentioned before, I believe that the three-way audits,

KatsutaIt’s been a year since I became an Outside Audit &Supervisory Board Member. While our company’s businesscovers a wide range of fields, our standing members arereally energetic in conducting numerous on-site audits, andthey share the results with us on a monthly basis. I havethe opportunity to hear from the internal auditing divisions
and accounting auditor on a regular basis, and I believe wehave managed to conduct well-balanced three-way audits
utilizing new methods, such as self-audit tools and data
analysis based on digital audits. In the future, we need tocontinue striving to improve the efficiency, accuracy, andeffectiveness of our audits, while also referring to casestudies of other companies.
In terms of understanding our company’s business,
I receive business strategy explanations by relevant
executive officers at Board meetings and join factoryinspections. I also read the monthly company magazine,
which introduces the technical details of new products,
activities at each business site, and initiatives related to theSDGs, and I find it very meaningful. In the future, it would
be helpful to get more information about the activities of
the Fuji Electric Group Auditor Committee. I’d also like theopportunity to witness on-site audits by standing members
in order to deepen my understanding.

Key ESG Issues

and accounting auditor, as well as on-site audits by Standing Audit & Supervisory Board Members to

on-site audits, and information sharing—which areimportant for a company employing the corporate auditor
system—are being conducted appropriately as prescribed.
As we expand our business, especially overseas, one of
our future issues will be to strengthen cooperation at theaudit planning stage, especially in the three-way audits,in order to increase the effectiveness of audits by Audit& Supervisory Board Members with a limited number of
personnel. In other words, it will become more importantfor members to communicate their requests, such as aboutareas that should receive close scrutiny and other matters,
based on our risk awareness, to their partners—internal
auditing divisions and the accounting auditor—in advance.

members on on-site audits to further improve the latter’s understanding of the Company’s business
Okuno
To ensure the effectiveness of audits, we place importanceon strengthening each audit function through so-called“three-way audits” based on cooperation between Audit& Supervisory Board Members, internal auditing divisions,and the accounting auditor, as well as through on-site
audits. Please tell us your opinion about this.

MatsumotoWith regard to three-way audits, we, Standing Audit &Supervisory Board Members, receive reports on audit

37

Fuji Electric Report 2021

results and exchange opinions with the internal auditing
divisions at annual Audit & Supervisory Board, as well as
at monthly liaison meetings. In addition, we collaborate
with the accounting auditor, receiving detailed explanations
and exchanging opinions at each juncture of making audit
plans, quarterly reviews, and annual audit reports.
As for on-site audits, Standing Audit & Supervisory
Board Members basically visit each division of theCompany and consolidated subsidiaries in Japan every
year, as well as overseas consolidated subsidiaries every
year or two, depending on the position of the relevant

Key Audit Matters to Address Diversified Management Risks
Key points
Growing importance of compliance of overseas subsidiaries as our business expands overseas
Need to pay more attention to supply chain risk, quality risk, etc.
Okuno
In addition to introducing a key audit matters (KAM) system
last year, our Compliance Promotion Committee, which
is run by the executive divisions, cited “strengthening
compliance activities at overseas subsidiaries” as a new key

issue in its medium-term compliance policy, and the Audit& Supervisory Board is monitoring this closely. With thediversification of management risks, the number of issues
that the Board needs to follow is increasing. Please tell us
about your current perceptions and comment on issues.

Fuji Electric Report 2021

38

Matsumoto

their legal systems and cultures are different from those inimproving the effectiveness of corporate governance, I am

information and materials to be considered in the

To audit the risk management system, we check theJapan. For subsidiaries in Southeast Asia, positioned asreminded of the importance of audit reports by Audit &decision-making process, and whether the existence

operational status of the risk management sheet (riska focus region, perhaps it may be a good idea to create

Supervisory Board Members. Failure to issue such reportsof other options and associated risks have been fully

management PDCA cycle) prepared by the executive

new systems and structures to strengthen the compliancein a prescribed manner can lead to a serious situation

discussed in light of their respective merits and demerits.

divisions in accordance with internal regulations. As formonitoring function.

for the Company. I want to make sure that people in the

I hope to contribute by confirming the validity of theCompany do not forget this.

decision-making process to ensure that the Board ofcompliance, through the Compliance Promotion Committee

Among the various business risks, we are paying

and other bodies, we audit the status of addressing andparticular attention to supply chain risk. I understand that

progress of compliance programs for each law, as well as

we are strengthening our assessments of suppliers, but a

Takaokathere are still many aspects of our company’s business thatthe status of our internal reporting system. Compliance atfuture challenge will be how to cover secondary and tertiary

In addition to independence and expertise, Audit &I do not fully understand, I would like to continue providing

overseas subsidiaries will become increasingly important as

suppliers. In addition, the more core components you

Supervisory Board Members must also be ethical andnecessary advice by utilizing the knowledge and expertise

we expand our overseas operations.

Directors makes rational management decisions. Althoughpurchase from a single supplier, the higher the risk. I hear

say what they need to say to directors. However, extreme

I have gained through my experience as an in-house

The most important aspect of compliance is education.

that we are working on multi-sourcing of purchased parts

over-emphasis on risk and excessively conservative

attorney and working in corporate legal affairs.

For this reason, it is extremely important for executives andand materials in order to ensure stable procurement, and I

risk-taking are also problems. With this in mind, I hopemanagers to repeatedly send out messages to employees

hope we will forge ahead without omission.

to give advice on properly managing risk in a preventiveof Governance,” I feel we still have some weaknesses inso that every corner of the organization remains fully awareof the need to comply with laws and regulations.

As for today’s theme, “Helping Improve the Effectivenessmanner. Personally, I have experiences of working interms of diversity, including with respect to appointing

measures have been taken to protect against cybergeneral affairs departments, being corporate management,

women and foreign nationals as executives and managers.

As for information risk, I understand that various security
attacks, but I think we also need to pay attention to theand an auditor of companies. In the process, I’ve gained

I understand that the Company is making various efforts to

Hiramatsu

risk of physical removal of information assets, especially atknowledge about corporate governance structure and risk

promote the advancement of women. Since this takes time

Every time a major scandal occurs in Japanese companies,

overseas subsidiaries.

management, and I hope to use this knowledge to fulfill myto produce results, however, I think we should consider

duties and meet the expectations of stakeholders.

developing a medium- to long-term plan and disclosing

the legal authority of auditors is strengthened, and I believe

Then there is quality risk, which is a major factor in ourthat our “three lines of defense” form a solid control basecredibility as a manufacturer. In fiscal 2020, we posted

when it comes to dealing with diversified risks. The first line

a major loss due to the cost of corrective measures for

KatsutaSupervisory Board Member so our company can furtherof defense is day-to-day internal control by the front-line

product defects. I hope we will take all possible measures

The Audit & Supervisory Board is an independent

meet the expectations of society.

business execution divisions. The second line of defenseat the three lines of defense while being aware of the “tip ofbody entrusted by shareholders, and its members

is professional oversight by finance, legal, corporate

the iceberg” mentioned earlier.

are responsible for auditing the execution of duties

Okuno

by directors. In general, discussion topics tend to be

Thank you very much for your valuable comments andmanagement planning, and other appropriate internal

it externally. I hope to contribute as an Outside Audit &control divisions. And the third line of defense is monitoring

Katsutabrought up to the Board of Directors after they have beensuggestions. Keeping in mind what you have pointed

by the internal auditing divisions.

Among the KAM items mentioned earlier, in fiscal 2020

discussed and the policy has been formulated to a certain

out, we would like to step up our activities as Audit &As an Outside Audit & Supervisory Board Member,

we took a series of measures to appropriately address theextent. In that sense, I try to ask questions and give

Supervisory Board Members and help further improve thewhenever I hear reports of problems at other companies,

problem with some of our power semiconductor products.

opinions from the perspective of whether there is sufficienteffectiveness of corporate governance.

I try to check frankly whether each line of defense is

In the process, I feel we have gained a certain level offunctioning properly, without preconceptions that it cannot

understanding from our customers and shareholders.

happen at our company.

In terms of compliance at overseas subsidiaries, I

Takaokaprocurement process. Procurement fraud needs to be

Given plans to expand our business globally in the future,addressed in conjunction with the anti-corruption laws of

I believe that strengthening compliance at our overseas

each country, and extraterritorial application also should

subsidiaries will be a major priority. Overseas subsidiaries

be considered.

Key ESG Issues

think the most likely place for fraud to occur is in theare more difficult to monitor than domestic ones, andRole of Outside Audit & Supervisory Board Members

39

Okuno

Hiramatsu

Finally, utilizing your expertise and experience fromThrough my work experience at financial institutions, Ia neutral and objective standpoint as Outside Audit

have seen a great many companies, and as the current& Supervisory Board Members, please tell us how

president of a company I have some understanding of

you would like to contribute to the Board and foster

the hardships faced by corporate managers. From thosefurther improvements in the effectiveness of corporate

perspectives, I would like to offer opinions that will begovernance.

useful in making management decisions. As an aid to

Fuji Electric Report 2021

Measures to protect against COVID-19 were taken for the round-table discussion, and participants wore masks except when photographs were taken.

Fuji Electric Report 2021

40

ComplianceFuji Electric employs thorough measures to ensure compliance with laws and corporate ethics and always acts with

Fuji Electric Business Ethics Whistle-Blowing Systems

the highest ethical standards to achieve sustained corporate growth.

To prevent infractions of laws and regulations and ensureprohibiting disadvantageous treatment and retaliatory or

early detection, we have introduced and are operating thediscriminatory acts on the grounds of whistle-blowing.

Fuji Electric Business Ethics Whistle-Blowing Systems.

In addition, we take all necessary steps to resolve

Under these systems, internal and external parties canissues raised by whistle-blowers, including fact-finding

report real or suspected violations of laws, regulations,investigations, corrective actions, and recurrence

or internal rules including matters related to bribery andprevention measures.

Basic Policies
Fuji Electric has a basic policy that gives top priority to

guideline for compliance. We also globally promote

global compliance. Based on this policy, we established thecompliance through the Fuji Electric Compliance Program andFuji Electric Compliance Regulations, which is a concrete

the Fuji Electric Business Ethics Whistle-Blowing Systems.

corruption to the president of Fuji Electric via contact points
Business Ethics Whistle-Blowing Systems(anonymous reporting is also possible).

Promotion System

Business Ethics Helpline

We established the Fuji Electric Compliance Promotion

to deliberate on compliance execution and planning andCommittee to ensure full compliance with laws and social

reports the results of these deliberations, including mattersnorms globally. The Committee is headed by the Chairman

related to preventing corruption, to the Board of Directors.

of the Board of Directors and consists of the managers

In the event of a compliance infraction, the Committee(managers of businesses and corporate department heads)

has a system in place to take any necessary measures

responsible for regulating laws and acts, with Standing

after deliberating on fact-finding investigations, corrective

Audit & Supervisory Board Members and outside experts

actions, recurrence prevention measures, internal(attorneys) as observers. It meets twice each fiscal year

punishments, and internal and external disclosures.

Whistle-blower (external)

Whistle-blower (internal)

External lawyer

General manager of the legal office

The Business Ethics Helpline handles notifications fromour employees in Japan and overseas (including dispatch
employees). It is thoroughly promoted among employees
through the publication of case examples of solutions on
the Company magazine and the intranet.

Inform details of whistle-blowing

Partner Hotline

Report of whistle-blowing

The Partner Hotline handles notifications from our suppliers
about Fuji Electric’s materials procurement operations.
We spread awareness of the system among businessPresident
Determine the department to deal withwhistle-blowing case (taking whistle-blower
protection into account)

Reportresults

Department to deal with the whistle-blowing caseat explanatory forums for subcontractors.

Board of Directors

As a result of these initiatives, there were 47 reports

President and Chairman of the Board of Directors (Executive Committee)

Fuji Electric
Compliance Promotion Committee

Business Ethics Helpline

partners through postings on the Company’s website andFuji Electric Compliance Regulations

Fuji Electric
Compliance Program

Partner Hotline

made to the whistle-blowing systems in fiscal 2020 (25 inBusiness Ethics Whistle-Blowing Systems
Business Ethics Helpline (reports from employees)
Partner Hotline (reports from materials suppliers)

fiscal 2019).
We also work meticulously to protect whistle-blowers
by keeping their personal information confidential andReport results
Share results

General manager of the legal office
Feedback (except for cases ofanonymous whistle-blowing)

External lawyer
Feedback(except for cases ofanonymous whistle-blowing)

Whistle-blower (internal/external)* In-house contact points and external lawyers receive
whistle-blowing reports.

Status of Promotion

Results of Promotion

Fuji Electric Compliance Program

Anti-corruption

Competition laws

Fuji Electric established and implements the Fuji Electric

Compliance education

Through our Antimonopoly Act Compliance Manual,

We promote wide-ranging compliance education anddirective on the prevention of corruption, we established

the Foreign Competition Law Compliance Manual, andnumbers 1 to 4 below) of domestic and overseas laws

instruction through level-specific and job-specific groupthe policy that no employee is to offer or receive bribes

other regulations, we are enhancing measures to prevent(including those related to anti-corruption, fair competition,

training and e-learning programs, as well as displaying

to or from public- or private-sector officials in any country

the violation of competition laws. We also perform dailylabor, human rights, product safety, the environment,

posters internally and distributing pamphlets.

or region. Prevention of corruption is reinforced throughmonitoring by confirming quotations and estimates via an

thorough rules, daily monitoring, auditing, and training.

extensive bidding information management system andtaxation, accounting, information security, and export
management) for the Company and other Group companies

Examples of Training Conducted in Fiscal 2020

For officers and employees involved in corruption, ourextensive record-keeping. In addition, our auditing divisions

Participants

policy is to consider disciplinary action based on our work

perform audits in accordance with auditing guidelines, andrules and take strict measures accordingly. In fiscal 2020,

we conduct extensive level-specific and job-specific training.

however, there were no incidents of officers or employees

In fiscal 2020, there were no serious problems related

in Japan and overseas including ones that newly joined theGroup. The Fuji Electric Compliance Promotion Committee
continuously reviews the program and makes revisions.
Moreover, as part of our efforts to verify and review theeffectiveness of our compliance program, we continue ourinitiatives to acquire external certifications.
1. E
 stablishment, revision, abolition, and dissemination ofinternal rules
2. C onstant monitoring of status of compliance with laws
and internal rules
3. Auditing of status of compliance with respect to 1 and 2
4. Compliance education

41

Fuji Electric Report 2021

Level-specifictraining

Newly appointed
executives

25

Newly appointed
managers

120

Important laws andregulations (e.g. competition
laws and anti-corruption)
Points to consider when
performing duties

269

Overview of complianceand important laws andregulations (e.g. competition
laws and anti-corruption)

Sales andadministrative
2,316
division employees

Compliance frameworkand important laws andregulations (e.g. competition
laws and anti-corruption)

New employees

Job-specifictraining

Details

violating anticorruption rules, including notifications

to competition laws that warranted disclosure, including

received through the Business Ethics Whistle-Blowing

notifications received through the Fuji Electric Business

Systems, and no fines, surcharges, or settlements related

Ethics Whistle-Blowing Systems.

Key ESG Issues

On the basis of the Fuji Electric Code of Conduct and aCompliance Program bringing together four aspects (seeto corruption were incurred.

Other
Other than the above, there were no compliance infractions
with the potential to seriously impact management.

Fuji Electric Report 2021

42

Risk Management
Fuji Electric is strengthening its risk management to maximize corporate value and minimize the potential impact of risks.

Basic Policies
Based on the Fuji Electric Risk Management Rules, theCompany manages risk in a coordinated, systematicmanner. We practice appropriate management and counter
various risks that could affect the Company’s management

in order to prevent risks from materializing (crisis situations),
thereby minimizing the impact on management in the eventthat risks materialize.

Types of Risks and Risk Management System
Risk categories
Fuji Electric divides risks into categories and conducts risk
management optimized for each category.
Given that recent years have seen natural disasters
attributable to climate change (e.g., torrential rain) occur withincreasing frequency, we established a new system to manage
climate change risks and added “climate change” to the list of
external risks in April 2021.

External Risks
Risks related tothe external
environment• Economic trends• Attacks from outside• Natural disasters
and accidents• Climate change
Other

Risk management system
Fuji Electric’s business divisions and affiliated companies
are responsible for managing risk related to their businessactivities as a part of their business duty, developing
appropriate risk management systems, and implementing risk
countermeasures.
Significant risks, such as those related to business plans
and large-scale investments, are reported at the Executive
Committee as appropriate to facilitate the sharing of
information. We also have manuals in place to ensure thatrisks are steadily managed. We provide training in handlingeach type of risk and inform the whole Company about ourefforts to manage risks through company magazines and otherappropriate means.
The internal auditing divisions conduct regular audits toconfirm whether or not risk management is being properly
performed at each business division and affiliated company.

Board ofDirectors

Business Risks
Risks related to business activities
Strategic Risks

Operational Risks

Common Risks

Risks related topolicies andstrategies• Management
strategy• Businesses
environment• Corporate
governance• Partnering andwithdrawal
Other

Risks related tobusiness processes• Quality, cost, anddeadlines for all
aspects ofbusiness, such asorders, production,
shipment andservices
Other

Risks related tobusiness activities• Human rights andlabor practices• Compliance• Information
systems• Environmental
pollution
Other

Audit &
Audit Supervisory Board Cooperation

Accounting Auditor

Executive Committee

ReportInternal Auditing
Divisions

ReportEach Group and Each Office(General Manager)

Audit

ReportDivisions, Area Operations,
Factories, Subsidiaries
Details of the list of major risks can be found on our website.
https://www.fujielectric.com/ir/management/governance/risk_factors.html

43

Fuji Electric Report 2021

Annual Risk Management Process

ActionUnderstand and evaluate risks

Check

Conduct mid-year
progress check

By identifying, assessing, and addressing supply chain risks,
we aim to build stable material procurement and production
systems over the medium and long terms. If a natural disaster
hits, our BCP system automatically identifies business partners
located in the affected area. In fiscal 2020, we registeredabout 9,000 sets of data on our primary and secondary
business partners in the system, which are 4,000 more thanthe previous fiscal year, so that we will be able to more quickly
and accurately grasp the potential impact of a disaster on thesafety and production operations of our business partners.
We also checked whether the 100,000-plus items ofmaterials that our major production bases in Japan use
are sourced from multiple vendors (multi-sourcing*). Somematerials are purchased from a single vendor, and thus
we urge the production bases to source these materials,
especially those that are more critical than the others, frommultiple suppliers. We also encourage them to explore
alternative materials or reconsider the product design andspecifications. In doing so, we work to reduce risks to material
procurement and production.
*Multi-sourcing refers to a system in which materials are sourced from multiple business
partners.

Implementation of information security measures
To protect confidential and personal information properly,
Fuji Electric has formulated and is implementing a policy
and regulations related to information security. We have alsoestablished information management systems at Fuji Electricand Group Companies in Japan and overseas and instituted
various safety protocols, including operational site access andinformation access management systems. We also endeavor toprevent information leaks while maintaining and strengthening
information security by instituting annual training programs for
employees and conducting inspections and improvements
through effective management and audits of workplaces.
In fiscal 2020, to address increasingly diversified andsophisticated cyber-security threats, we revised our information
security policy, established an anti-cyber-attack manual,
improved our computer security incident response team andsecurity operation center (CSIRT/SOC), and monitored andcontrolled any attacks. We also continue to improve our defense
and detection system and hold cyber security training tobecome more prepared for any new threats.
At the Group companies requiring high-level information
security management, a total of five departments (in three of
those Group companies) have acquired information security
management system (ISMS) certification. In addition, Fuji
Electric Co., Ltd. and four of its subsidiaries have acquired
Privacy Mark certification.

Responding to COVID-19

Plan

Improve and implement risk
countermeasures*Business Continuity Plan

The Quality Assurance WG aims to achieve stable anduniform quality level in accordance with its High Reliability
Activities Policy, promoting activities toward the goal acrossthe Company. Each year, the WG collects all serious
complaints received and continually provide recurrence
prevention diagnosis that is intended to re-assess theeffectiveness of recurrence prevention. The WG also reports
any serious quality problem that has arisen promptly to the
President and relevant staff in accordance with the rules
and regulations to share what risks are involved, and quickly
addresses the problem.
During fiscal 2020, we continued working to visualize
production, quality information, and traceability using IoT at ourfactories. We also expanded our plan for the digitization andautomation of tests and inspections to include more types ofequipment, and phased in statistical quality management, aspart of our efforts to further improve the accuracy, reliability,
and speed of our quality management.

Key ESG Issues

possible. Hence, we have guidelines in place on preparations
for possible emergencies, emergency calls and messages, andan emergency task force to set up.

Risk Management Process
When annual budgets are formulated, business divisions andaffiliated companies understand and evaluate risks related totheir business activities.
Policies and countermeasures in response to risks (aversion,
mitigation, relocation, retention, and so forth) are consideredbased on their impact on management and frequency ofoccurrence, and each division and affiliated company appoints
a person in charge of policy and countermeasure execution.
We also conduct mid-year progress checks at the endof the second quarter of each fiscal year to improve andeffectively implement risk countermeasures.

In order to uphold its social responsibilities as a company,
Fuji Electric aims to continue core operations even if natural
disasters, accidents, and other unexpected events occur by
providing a stable supply of high-performance, high-quality
products and services required by its customers.
Based on the Disaster Prevention and Procedural Manual,
all of Fuji Electric’s bases have developed disaster-response
systems and put in place comprehensive measures to ensurethat structures and facilities are earthquake resistant. They also
stockpile emergency goods, conduct regular drills, and takeother preventive measures.
We have formulated business continuity plans (BCP*) at thehead office, factories, and area operations that serve as contact
points with customers. We have also established Companywide
BCPs for our procurement sections, which manage our supply
chain, and for IT sections, which manage our information
systems. Fuji Electric also has Resilience certification.
In fiscal 2020, we again conducted safety confirmation training
for all employees in order to strengthen our disaster response
capabilities. Going forward, we will continue enhancing our BCP
to strengthen our business continuity capabilities.

Procurement BCP

Oversight and Report

Emergency response
If an emergency arises due to a large-scale disaster or any
other serious causes, we need to act to prevent the situationfrom becoming any worse and resolve the situation as soon asStrengthening Our Business Continuity Capabilities

Do

Consider policies and countermeasures
to address risks
Results of education drills
Organizational changes,
personnel reassignments
Revision of laws, regulations, etc.
Apply experiences of addressing risks

Audits by Auditing Divisions (Management system and operational status)

Our approach to quality improvement
The Quality Assurance, Design Technology, Technology
Standardization, and Factory Digitization Promotion Working
Groups (WGs) as well as Manufacturing Subcommittee havebeen set up under the Production Technology Committee,
which is a Companywide body led by the President. The
subcommittee and WGs work together to improve our
production technologies and quality.

Our basic policy is to take prompt and appropriate measureswith top priority on respecting human life, preventing thesituation from worsening, and minimizing damage. To preventthe spread of infections, we not only make sure that Three Cs(closed spaces, crowded places, and close-contact settings)
are avoided, but have actively adopted telecommuting, sliding
work hours, and online meetings.

Fuji Electric Report 2021

44

Overview of Segments

Power Electronics Systems Energy
In addition to promoting systems-related
business, mainly in Southeast Asia, we willdevelop global products and strengthen
our engineering systems to expand ourcomprehensive electrical equipment business.
Masashi Kawano
Managing Executive Officer

Business
Areas[Energy management]
Substation equipment, Energy management systems,
Smart meters[Power supply and facility systems]
Uninterruptible power systems (UPS),
Switchgears and controlgears[ED&C components]
Power distribution and control equipment

SuppliedtoPower companies, Material plants (steel, chemical, etc.),
Data centers, Semiconductor factories,
Machine manufacturers

Strengths• Package proposals from a wide range of products andsystems to maintenance services, contributing to stable
power supply and power optimization• Extensive delivery record and engineering experience instable power supply and power optimization• Energy-saving expertise developed at Fuji Electric’s
factories in Japan and overseas

Net Sales

Operating Income(Billions of yen)(Billions of yen)

218.0

217.0

209.2

5.7%

FY2020Results

FY2021
Management
Plan

Operating Margin

7.0%

15.2

14.0

12.3

FY2019Results

6.7%

FY2019Results

FY2020Results

FY2021
Management
Plan

Corporate General Manager, Power Electronics Systems Energy Business Group

Awareness of Market Needs and Business Opportunities

also strengthen our ability to propose systems for dataof UPSs, our core product, we will consolidate the

In Southeast Asia, India, and the Middle East, where

centers and the power and materials sectors throughdevelopment function in the Tokyo Factory and increase

collaboration between FMT’s engineering center and local

and train engineers who can make proposals of

production bases (in Thailand, Singapore, and India).

comprehensive solutions, thereby raising our technicalMeanwhile, the Kobe Plant and FMT will provide technicalsupport capabilities. At our production bases in Japan andand production support to Fuji Electric Consul Neowatt

overseas, we will improve production technology, promote

Private Limited (FCN) for the launch of production of

in-house production and product standardization, andmedium- and large-capacity UPSs in India.

reduce costs.

Expanding our comprehensive electricalequipment business

Strengthening our ED&C components businessIn fiscal 2020, we focused on developing a large-capacity

United States and China, combined with the impact of

UPS (1,200 kVA) for large-scale data centers, while

capital investment curtailments due to the spread ofmaking proposals for comprehensive electrical equipment

COVID-19, led to a significant decline in demand forfor Japanese and foreign-affiliated data centers andmachine tools. To build a structure that is not affected bysemiconductor factories. In fiscal 2021, we will acceleratedemand fluctuations, we have been working to thoroughly

development of an ultra-large-capacity UPS (2,400 kVA)

reduce fixed costs. In fiscal 2021, we will continue efforts

in order to win business from data centers, which arefrom fiscal 2020 to strengthen our business constitution.

becoming even larger in scale. We will also aim to

To this end, we will strengthen the competitiveness of

expand orders for overseas projects by promoting vendor

existing models, emphasize development of differentiatedregistration based on our track record in Japan withproducts, and rigorously cut fixed costs by improving theforeign-affiliated data centers. To strengthen development

efficiency of manufacturing.

Large-Capacity UPS for Large Data Centers

Sales to Data Centers

In Japan, we look forward to ongoing steadysteady economic growth is expected over a medium- toinvestments—to replace aging substation equipment,

long-term, investments continued to be made in social

including transformers and switchgears delivered to steel,and industrial infrastructure such as substation and datachemical, and other material plants and railway companies

centers, as well as in semiconductor factories. We also

in the 1970s and 1980s—aimed at preventing accidents

benefitted from robust demand for substation equipment,

and improving efficiency of maintenance, including throughswitchgears and controlgears, and other equipment

remote operation.

needed for the stable supply of electricity. The data center

Meanwhile, the need to save energy and reduce CO2

market is particularly strong, evidenced by an increase inemissions has led to increased demand for visualization

construction of large-scale data centers as informationand optimization of factory-wide energy usage, fromsystems move to the cloud and e-commerce systems

the perspective of decarbonization and energy costprogress. Meanwhile, there are calls for uninterruptible

containment. In addition to introducing products with highpower systems (UPSs), which contribute to the stable

power conversion efficiency, customers will have more

supply of electric power, to have larger capacity and be

opportunities to use energy management systems (EMSs)

made more compact and energy-efficient.

to achieve optimal energy supply and demand control.

Fiscal 2020 Results and Fiscal 2021 Business Plan
In fiscal 2020, sales in this segment amounted to ¥209.2

business, particularly in Southeast Asia, by launchingbillion, down ¥8.8 billion from the previous year. This was

global products and strengthening our engineering

due to the impact of large-scale projects for industrial

support system. At the same time, we will expand our

power supply equipment in the previous year, as well ascomprehensive electrical equipment business for dataa decline in demand of smart meters, switchgears andcenters and semiconductor factories and take advantage

controlgears, ED&C components, and the like. Operatingof growing demand for ED&C components, the market forincome increased ¥1.7 billion year on year, to ¥14.0

which began to recover in the second half of the previous• Capacity: 1,200 kVA/1,200 kW

billion, thanks to our emphasis on cost reductions, whichfiscal year. For the year, we forecast sales of ¥217.0 billion,• World’s smallest footprint (3,500 mm wide × 900 mm deep),

compensated for a decrease in sales volume.

up ¥7.8 billion year on year, and operating income of ¥15.2

7500WX Series (released in April 2021)

Japan

Overseas• Industry’s highest power conversion efficiency: 96.6%

188

allowing more servers to be installed144

billion, up ¥1.2 billion.
100

Promoting systems-related business,
mainly in Southeast Asia

Manufacturing (Thailand) Co., Ltd. (FMT). In fiscal 2021,

Until fiscal 2020, we sought to strengthen our plant

Asian and Indian markets and expand our lineup ofbusiness by building a new switchgear and controlgear

products offering a wide range of voltages and capacities,

system factory and engineering center at Fuji Electric

including transformers, switchgears, and UPSs. We will

Fuji Electric Report 2021

Growth
rate
(%)

33

Overseas
(%)

41

33

Priority Measures

45

31

205

we will develop new global products for the Southeast

FY2018Results

Overview of Segments

In fiscal 2021, we will work to expand our overseas

In fiscal 2020, the prolonged trade friction between theJapan

FY2019Results

FY2020Results

FY2021
Management Plan

*FY2018 (benchmark year) Results is assigned 100 for comparison purposes

Fuji Electric Report 2021

46

Power Electronics Systems Industry[Automation systems]
Inverters, Motors, Servo systems, Controllers,
Programmable operator interfaces, Measuring instruments,
Sensors, FA systems, Drive control systems,
Measuring and control systems[Social solutions]
Drive systems and door systems for railcars,
Exhaust gas cleaning systems for ships,
Radiation monitoring systems[Equipment construction]
Electrical equipment construction,
Air conditioning equipment construction[IT Solutions]
ICT-related equipment and software

Net Sales

Operating Income(Billions of yen)(Billions of yen)Suppliedto

Air conditioning and water treatment facilities,
Machine manufacturers, Material plants (steel, chemical, etc.),
Railway companies, Shipbuilding companies,
Public agencies and local government

FY2019Results

Corporate General Manager, Power Electronics Systems Industry Business GroupStrengths• Early development of power electronics equipped withpower semiconductors• Extensive product lineup tailored to customer applications• Engineering capabilities built up over a substantial delivery
track record

Awareness of Market Needs and Business Opportunities

and leverage the sales power of Fuji Electric Vietnam Co.,
Ltd. and the engineering capabilities of FCAC to establish
a framework for increasing sales in our plant business. We
will use the framework to expand our systems business forharbor cranes and food and beverage plants, in addition
to cement and waste treatment plants. In India, we haveleveraged the sales channels of Electric Consul Neowatt
Private Limited (FCN) that we acquired in 2019 to increase
sales of inverters, servo systems, UPSs, and other products
for spinning and other assembly machinery, as well as for
hospitals and other healthcare applications. In fiscal 2021,
we will fully integrate management and sales channels in
India through the merger of FCN and Fuji Electric India
Private Ltd. We will also enhance competitiveness bystrengthening our local design capability and developing
local procurement and manufacturing systems for powerelectronics including inverters. In addition, we will step up
production and engineering of switchgears and controlgears
at Fuji Gemco Private Limited and engage in businessnegotiations for systems in the steel and crane sectors.
In North America, we will collaborate with Fuji SEMEC
Inc. to further strengthen our manufacturing andengineering systems for mass production of doors to
expand our railcars business.

BusinessAreas

We will accelerate overseas businessexpansion by promoting partnershipstrategies, mainly in Southeast Asia and India,
to strengthen our local design local production
for local consumption.
Hiroshi Tetsutani
Managing Executive Officer

The Japanese industrial sector is facing rising demandfor environmental measures to address decarbonization,
as well as labor shortages and the need for work-stylereforms. Accordingly, companies are expected toincreasingly adopt automation, labor saving, and remotecontrol technologies at their manufacturing sites. In thematerials sector including steel and chemicals, one of
our focus areas, we plan to continue building optimal
production systems, upgrading facilities to strengthen
competitiveness, renewing aging facilities, and investingin energy savings and CO2 emission control technologies
aimed at decarbonization. Due to the aging and shortageof maintenance personnel, meanwhile, passing on

know-how and reducing the burden of maintenance work
have become challenges.
In Southeast Asia and India, where steady economic
growth is expected over a medium- to long-term,
facilities are being automated to save energy and improve
production efficiency in the wake of power shortages.
We also look forward to new capital investments andequipment renewal demand in various material-related
sectors, including steel and cement.
In China, we anticipate investments in factory
automation and labor saving, as well as environmental
measures to save energy, under that government’s New
Infrastructure Project.

Fiscal 2020 Results and Fiscal 2021 Business Planfor low-voltage inverters and other components, as wellas equipment construction projects in China, Japan andother overseas countries. However, we expect a decline
in projects related to the GIGA School Concept, which
generated special demand in fiscal 2020. For fiscal 2021,
we forecast sales of ¥329.0 billion, down ¥16.9 billion year
on year. Despite a decrease in sales volumes, we forecast
sales income of ¥22.2 billion, up ¥0.4 billion, due toincreased sales volumes of components and reinforcementof our business structure.

Priority Measures
Expand overseas business throughpartnership strategies
In China, we have enjoyed growth in sales of mediumvoltage inverters used for pumps for public facilities andinfrastructure, including electric power, gas, and watersupply, by utilizing the sales channels of our partner,
Shanghai Electric Group.
In fiscal 2021, we will expand our target markets to47

Fuji Electric Report 2021

include manufacturing facilities, mainly cement andchemical plants, and develop systems that combine our
medium-voltage inverters with electric motors handled by
Shanghai Electric Group.
In Southeast Asia, we are strengthening our partnershipstrategy with Fuji CAC Joint Stock Company (FCAC), which
we acquired in 2016 with the aim of establishing a regional
based type business system. In Vietnam, we will combine

Reinforce the FA-related components businessCommitted to creating robust systems, we are working to
improve competitiveness and strengthen the constitutionof our components with the aim of improving profitability.
In fiscal 2020, we promoted the standardization ofcomponents (platform creation) in power electronics,
centered on our N-MEGA Series of low-voltage inverters,in order to lower procurement and production costs by
reducing the number of components, and to facilitatecustomized and knockdown production at overseas bases.
In fiscal 2021, we will globally deploy and reap the benefitsof the products that we created a platform while expanding
platform development for servos, measuring instruments,and other power electronics.

345.9

329.0

5.2%

16.5

FY2020Results

FY2021
Management
Plan

FY2019Results

6.3%

Operating Margin

6.7%

21.8

22.2

FY2020Results

FY2021
Management
Plan

Expand plant business and services using
AI and IoT
To date, we have leveraged our products, technologies,
and know-how related to drive control, measurement
control, industrial heating, and the like to propose
comprehensive solutions to customers in the steel,casting, waste treatment and ceramic sectors in Japan.
However, our customers’ production lines and systems
were becoming increasingly complex, which presented achallenge. In fiscal 2021, therefore, we will build a plantsystem building at the Tokyo Factory to house facilities forverifying these increasingly complex customer systems
and improve the quality of our engineering services.
The manufacturing industry plants and production
facilities are facing numerous problems that include aging
equipment, aging maintenance personnel, and a shortageof human resources. To address these problems, wewill deploy AI and IoT technologies to provide ourcomprehensive smart service for equipment security andmaintenance to optimize equipment maintenance—from
maintenance planning to equipment monitoring andproposals for maintenance management measures—inorder to expand our sales volume. We will also leverage
our track records and know-how in Japan to expand ourplant business overseas.
N-MEGA Series, Our First Line of Low-Voltage Inverters
Based on Platform Creation (Standardization of Components)

Overview of Segments

In fiscal 2020, sales in this segment totaled ¥345.9 billion,up ¥28.4 billion year on year. Main factors included a large
special order related to the GIGA School Concept in theacademic sector, as well as increased demand for servo
systems and other components in China and India, andhigher demand for scrubbers and other systems for vesseltransportation. Operating income increased ¥5.2 billion, to¥21.8 billion, due to increased sales volumes and a lessfavorable sales mix.
In fiscal 2021, we look forward to an increase in demand

317.5(Released in March 2021)

Applications:
General industry (conveyance machinery, etc.)
End-user fields (steel, cranes, etc.)

Fuji Electric Report 2021

48

Semiconductors
We will continue increasing our power
semiconductor production capacity to expand
our business in the markets for electrified
vehicles and renewable energy.

Business
Areas

Industrial field, Automotive field, Information field

Suppliedto[Industry]
Inverters, Machine tools, Air conditioners,
Solar and wind power, Electric railways[Automobile]
Motor drives for electrified vehicles (EVs, HEVs, etc.),
Engine control, Brake control[Information][Media] Hard disks (data centers, PCs)
[Photoconductors] Copiers, printers

Strengths

Toru Housen
Managing Executive Officer
Corporate General Manager, Semiconductors Business Group

Awareness of Market Needs and Business Opportunities
Power semiconductors help save energy thanks to theirhigh levels of conversion efficiency and power control.
Demand for these devices is rising globally due to various
factors. These include increases in energy consumption
due to economic growth and technological progress,
environmental regulations, and growing investments in
automation in the manufacturing sector.
In the automotive field, the shift from gasoline-powered
vehicles to electrified vehicles (xEVs) is gaining momentum
in various countries around the world, and demand for

power semiconductors is expected to grow, including forinverters used to drive xEV motors.
In the industrial field, we look forward to growth indemand for these devices used in multiple applications.
In addition to the high-speed communication standard(5G) and semiconductor manufacturing equipment, theseinclude renewable energy fields, such as solar and wind
power, bolstered by rising demand for clean energy, as wellas energy-efficient air conditioners, mainly in China.

Fiscal 2020 Results and Fiscal 2021 Business Plan
In fiscal 2020, the rapidly expanding market for
automobile electrification led to an increase in thenumber of manufacturers and vehicle models using
power semiconductors for xEVs, resulting in a significant
jump in sales of these devices used in automobiles. We
also posted increased sales of power semiconductors
for use in renewable energy fields, such as solar andwind power generation, as well as in factory automation
and air conditioners, mainly in the Chinese market. As
a result, sales in this segment climbed ¥20.1 billion
year on year, to ¥157.5 billion. Despite an increased in
expenses related to investments to increase our power

semiconductor production capacity, operating income
rose ¥7.9 billion, to ¥17.7 billion, due to increases in sales
and production volumes.
In fiscal 2021, we will work to increase orders for
power semiconductors—targeting the markets for xEVs,
renewable energy, factory automation, and air conditioners,
mainly in China, where demand remains strong—while
continuing to increase our production capacity. For theyear, we forecast sales of ¥174.0 billion, up ¥16.5 billion
year on year, and operating income of ¥21.6 billion, up¥3.9 billion.

exceeding that of the market.

Industrial power semiconductors: Expanding
sales of 7th-generation IGBT modules
In fiscal 2020, we posted a year-on-year increasein sales, boosted by higher demand for 7th-generation
IGBT modules—which reduce losses by around 30%
compared with existing chips and feature high heatdissipation and high reliability—mainly in the markets
for renewable energy, factory automation, and air
conditioners, centered on China. We also expanded
our product lineup and started mass production of the
X Series IGBT-IPM*. This module contributes to energy
savings in equipment on which it is installed thanks to its
industry-leading low-loss performance.
In fiscal 2021, we will strive to increase sales of
7th-generation IGBT modules mainly in the Chinese
renewable energy, factory automation, and air conditioner
markets, where demand remains strong.
*7th-generation IGBT module equipped with IGBT driving circuits and a self-protection
function to prevent failures due to overcurrent, overheating, etc.

xEV Production Trend & Fuji Electric’s IGBT Sales Plan

49

Fuji Electric Report 2021

7.1%

11.2%

Operating Margin

12.4%

21.6
17.7

FY2019Results

FY2020Results

FY2021
Management
Plan

FY2019Results

FY2020Results

FY2021
Management
Plan

Accelerating increase in production capacityand promoting development of
next-generation products
For the manufacturing process of power semiconductor
chips, we are making continuous investments toincrease the production capacity for 8-inch wafers. For
the assembly process, we are investing to increase theproduction capacity for automotive and industrial products.
We are also emphasizing technological and productdevelopment of next-generation IGBT modules and SiC
modules in order to strengthen the competitiveness of ourpower semiconductors.
Plant and Equipment Investment (Whole Segment)(Billions of yen)

41.0
28.1

31.3
19.9

FY2018Results

FY2019Results

FY2020Results

FY2021
Management Plan

8-Inch Wafer Production Capacity (Front-End Process)
296

Overview of Segments

In fiscal 2020, sales of automotive products increased
significantly over the previous year thanks to our full-scale
manufacturing of the 4th-generation direct liquid coolingmodules, whose mass production began in fiscal 2019, as
well as an increase in the number of vehicle models using
those modules.
Our 4th-generation direct liquid cooling module isa power semiconductor for xEV motor drive inverters

157.5

174.0

280

Priority Measures
Accelerating use of power semiconductors
for xEVs(Billions of yen)

9.7

*RC-IGBT: Acronym for reverse conducting insulated gate bipolar transistor. An RC-IGBT
arranges two types of semiconductors with differing functions—IGBTs and freewheeling
diodes (FWDs)—alternately in a straight line on a single chip. This permits much greater
miniaturization compared with arranging the IGBTs and FWDs on two separate chips.

Fuji Electric’s IGBT sales

Operating Income(Billions of yen)

137.4

[Power semiconductors]• Proprietary devices that greatly improve power
conversion efficiency• Packaging technologies that achieve high levels ofheat dissipation and reliability• Product development capabilities of IGBT modules that
contribute to increasing the efficiency, compactness,and reliability of power electronics

xEV* production

Net Sales

233

with 36% higher power density than conventional
devices. It incorporates RC-IGBT*, which we developed
independently ahead of our competitors, and uses a
direct liquid cooling structure with higher heat dissipation
performance than previous products. It contributes
to higher efficiency, smaller size, and lighter weight ofequipment on which it is installed.
Anticipating further growth in the xEV market, in fiscal
2021 we will continue working to broaden the adoptionof our products, with the aim of generating sales growth

183
100

100

FY2019Results

195

130

FY2020Results

188
100

FY2021
Management Plan

For both production and sales, FY2019 (benchmark year) is assigned 100 forcomparison purposes
Figures for xEV production reflect our predictions based on research company forecasts*xEV: Sum of full-hybrid vehicles and electric vehicles (EVs)

FY2018Results

FY2019Results

FY2020Results

FY2021
Management Plan

For production capacity (year-end), FY2018 (benchmark year) is assigned 100 forcomparison purposes

Fuji Electric Report 2021

50

Power Generation
We will expedite the transformation of
our business portfolio to increase orders
in renewable energy and distributed
power sources.

Business
Areas[Renewable and new energy]
Geothermal power, Hydro power, Solar power,
Wind power, Fuel cells[Thermal power][Nuclear power-related equipment]

SuppliedtoJapanese and overseas power generation companies

Strengths• Engineering capabilities across the whole plant• One-stop proposal capabilities in geothermal power• Industry leading delivery track record• Extensive delivery track record in hydro power• Power storage control technologies and economic
efficiency in solar and wind power

Net Sales

Operating Income(Billions of yen)(Billions of yen)

109.9
80.4

3.1%

2.3

2.5

Operating Margin

3.9%

3.3

FY2019Results

Tadao Horie

84.0

2.1%

FY2020Results

FY2021
Management
Plan

FY2019Results

FY2020Results

FY2021
Management
Plan

Executive Officer
Corporate General Manager, Power Generation Business Group

Awareness of Market Needs and Business Opportunities
The market for renewable energy sources that do notemit greenhouse gases is growing as decarbonization
becomes a global trend. In solar power generation, thishas helped revitalize projects that have been certified
under Japan’s Feed-In Tariff (FIT) Scheme but are not yet
operational. In wind power generation, meanwhile, more
and more companies are participating in both onshore
and offshore projects in Japan, stimulating new project
concepts. In geothermal power generation, projects
are under development in Southeast Asia, which hasabundant geothermal resources, and plans to utilize

small-scale heat sources are earmarked for Japan.
Meanwhile, there is growing demand for hydro power,
which is a stable source of electricity. In Japan, the volume
of hydro power generated is increasing as aging power
generation facilities get replaced and output rises. And innuclear power generation, there is increasing demand fordecommissioning of facilities and treatment of waste.
In the after-sales business, there is a growing need toenhance operability and capacity utilization ratio to copewith changes in the electricity supply-demand balance.

Fiscal 2020 Results and Fiscal 2021 Business Plan
In fiscal 2020, sales in this segment declined ¥29.5 billion
year on year, to ¥80.4 billion, due to rebound from large-scale
thermal power and solar power projects recorded in theprevious fiscal year. Operating income edged up ¥0.2 billion,to ¥2.5 billion, reflecting discrepancies between projects.
In fiscal 2021, we look forward to increased sales ofrenewable energy, including geothermal power, as well as
nuclear power-related equipment and after-sales business.

For the year, we forecast sales of ¥84.0 billion, up ¥3.6
billion year on year, and operating income of ¥3.3 billion, up¥0.8 billion.
Going forward, we will focus on expanding sales in the
renewable energy field and after-sales business. Our aim
is to continue pursuing year-on-year increases in the ratioof sales in the carbon-free field and after-sales business to
net sales.

Priority Measures

Expanding orders for renewable energy
Solar and wind power
Our strengths lie in our high-efficiency power conditioning
systems equipped with our own power semiconductors,
as well as solutions that use storage batteries to contributeto power system stabilization and peak shifts. Leveraging
these strengths, we are promoting increased orders.
We are engaged in a large-scale self-consumption
wind power generation facility under an EPC contract in51

Fuji Electric Report 2021

Hydro power
Deploying our strength in design technology for producing
highly efficient turbines according to installation location,
we provide hydro power generation systems that combine
generators, control devices, and auxiliary equipment.
In fiscal 2020, we continued attracting high-level
orders, as we did in the previous fiscal year. Our orderbacklog at the beginning of fiscal 2021 had grown around2.7-fold for the past 3 years.
In fiscal 2021, to address strong demand, we willreinforce our response capability at customer sites
and work to expand applications of our differentiatedproducts, including hybrid servo systems that reducerisks to the water environment.

Geothermal power
In geothermal power, where we have the largest market
share in the industry, we are expanding sales in Japan,
Asia, Africa and other regions with geothermal resources,
taking advantage of our one-stop proposal capabilities
backed by our extensive track record.

Contributing to nuclear decommissioning andwaste treatment

In maintenance and replacement services, we will continue

Since participating in the construction of Japan’s firstcommercial nuclear power plant, we have been involvedin the entire lifecycle of nuclear facilities, from design andproduction of fuel fabrication facilities to decommissioning.
In the process, we have accumulated significant
technologies and experience.
Amid progressive efforts to improve the safety of
nuclear-related facilities, we will contribute to safe andsecure decommissioning and waste treatment by utilizing
our strengths in remote handling (including nuclear fuelremoval and storage), radiation measurement, radioactive
waste cutting and solidification, and other technologies.

Sales Ratio by Carbon Free / Carbon Emitting

Sales Ratio by Service / New Installations

Expanding our after-sales businessJapan, which made good progress in fiscal 2020. We also
received new orders for electrical equipment for mega solar
and offshore wind power generation facilities.
In fiscal 2021, we will continue striving to increase
orders for solar and wind power generation, demand forwhich is growing in Japan and overseas, by leveraging
our electric power stabilization solutions and other
differentiated products.

promoting onshore and onsite projects that bring together
all functions in each customer’s region, from sales toprocurement, installation, and after-sales service.
In fiscal 2020, we rolled out technical services thatutilize both remote and real (on-site) responses, resulting
in higher sales in our after-sales business even during the
COVID-19 pandemic.
In fiscal 2021, we will strive to expand our after-sales
business while building a foundation to develop
higher-value-added solutions, including changing fuelmixes and operational procedures to reduce greenhousegas emissions.

Carbon emitting

44%

Carbon free

New installations

40%

56%

60%

FY2020Results

56%

55%

44%

45%

FY2020Results

FY2021
Management Plan

67%
31%

FY2019Results

Service

33%
69%

Overview of Segments

In addition to increasing orders for renewable energy andexpanding our after-sales business. we are promoting
safe decommissioning and waste treatment initiatives fornuclear-related equipment.

In fiscal 2020, we received an order for a complete set of
power generation equipment for the Tauhara Geothermal
Power Station in New Zealand. With an output of 152 MW,
it will be the world’s largest single -geothermal power unit.
In fiscal 2021, we will expand sales of power generationequipment for small-scale heat sources of 5 MW or lessin Japan, while overseas we will improve our market
presence and expedite activities to win orders bystrengthening relationships with local companies andreinforcing our supply chain.

FY2021
Management Plan

FY2019Results

Fuji Electric Report 2021

52

Food and Beverage Distribution
We will promote our growth strategy bygrasping changes in the market andaccelerating efforts to introduce
new products and develop new customers.
Keiichi Asano

Business
Areas[Vending machines]
Beverage vending machines,
Vending machines for food and other goods[Store distribution]
Store facilities and equipment,
Automatic change dispensers

Suppliedto

Beverage manufacturers, Vending machine operators,
Convenience stores, Supermarkets,
POS manufacturers

Strengths• Top share of the vending machine market in Japan,
China (beverage) and Thailand* Our estimate• Heating and cooling technologies that efficiently heat andcool products• Automation technologies built up throughvending machines that contribute to labor saving

Net Sales

Operating Income(Billions of yen)(Billions of yen)

104.4

3.7%

87.5

76.6

-6.9%

Operating Margin

3.1%

3.8

2.7

-5.3
FY2019Results

FY2020Results

FY2021
Management
Plan

FY2019Results

FY2020Results

FY2021
Management
Plan

Executive Officer
Corporate General Manager, Food and Beverage Distribution Business Group

Awareness of Market Needs and Business Opportunities
The vending machine market in Japan continued to

In store distribution, where our main customers arecontract slightly due to increasing competition fromconvenience stores and supermarkets, demand isconvenience stores and other sales channels andincreasing for renovations to accommodate changes insaturation of locations where vending machines are

lifestyles resulting from the COVID-19 pandemic. Moreover,installed. In fiscal 2021, we expect demand to remain on abusiness opportunities are increasing to address thepar with fiscal 2020 amid ongoing investment curtailments

growing need for food loss reduction.

among beverage manufacturers (our customers) stemming

In China and other overseas vending machine markets,from the spread of COVID-19. On the other hand, there

responding to diversifying customer needs has become

is a growing need for more efficient operation of vending

an issue. In addition to demand among major beveragemachines, contact-free, non-face-to-face machines tomanufacturers for energy saving and eco-friendliness, ouravoid infectious diseases, and eco-friendliness to help

store-based customers are increasingly looking to vending

realize a decarbonized society.

machines as a way to expand their satellite locations.

Fiscal 2020 Results and Fiscal 2021 Business Plan

Offering high-value-added vending machinesthat meet social needs

to major beverage manufacturers who are seeking

In March 2021, we developed a completely contact-freemachines and coffee vending machines for convenience

vending machine that enables customers to purchasestores and store-based customers.

products without touching the machine, thus responding

Elsewhere in Asia, the vending machine market is

to social needs for contact-free, non-face-to-face andexpanding, especially in Thailand. In response, we will

cashless solutions. The machine is equipped with aprovide new beverage manufacturers and store-based

two-way telecommunication device that we developed

customers with cashless vending machines, food vending

in-house. It allows users to complete the entire process,machines, vending machine convenience stores, and otherfrom product selection to payment via smartphone. Also,

offerings that meet local needs.

the delivery port opens and closes automatically.
vending machine operators urgently need to improve the

Proposing solutions that meet the diverse
needs of stores

efficiency of product replenishment and other operations. In

In store distribution, we will provide comprehensive

response, we are planning a new service-based businesssolutions for convenience stores by combining our corethat will use AI to support product demand forecasting andshowcases with counter fixtures, automatic change

sales planning, which are necessary for efficient vending

dispensers, vending machine convenience stores, andstore operation management systems.

Meanwhile, domestic beverage manufacturers andIn fiscal 2020, sales declined ¥27.9 billion year on year, to

new products, a greater share of the convenience store

machine operations. This service and our high-value-added¥76.6 billion, due to curtail investment in vending machines

facilities market, and an increase in renovation projects.

vending machines will enable us to capture new demand.

and postponement of projects for convenience stores.

For the year, we forecast sales of ¥87.5 billion, up ¥10.9

Despite efforts to reduce fixed costs, the segment posted

billion year on year. We also project operating income ofan operating loss of ¥5.3 billion, decrease of ¥9.1 billion
from the previous fiscal year.
Although we expect market conditions to remain severe
in fiscal 2021, we anticipate an increase in our share of theJapanese-level quality. We will also provide food vending

For showcases, we will deploy our heating and coolingtechnology and airflow control technology to develop
freshness maintaining showcases that help reduce food¥2.7 billion, increase of ¥8.0 billion from fiscal 2020, thanks

Expanding our vending machine businessin China and the rest of Asia

to increased sales volume, business restructuring in the

In China, where environmental awareness is increasing, we

realize a decarbonized society.

previous fiscal year, further cost reductions, and pricewill offer energy-saving and eco-friendly vending machines

loss and fluorocarbon-free (CO2) showcases that help

revisions for some unprofitable models.

domestic vending machine market, higher sales mainly of
Overview of Segments

Priority Measures
Reinforcing our constitution throughbusiness restructuring

we reassigned personnel to growth areas in the GroupCounter fixturesand reassessed our plant and equipment investment plan.

In fiscal 2020, we undertook business restructuring

In fiscal 2021, we will reap the maximum benefits

in response to significant declines in demand both inof our business restructuring and improve profitability

Japan and overseas. We also strengthened our businessthrough further cost reductions in manufacturing and theconstitution by significantly reducing fixed costs throughintroduction of high-value-added products.

Sales growing

a review of our product development system. In addition,
Completely contact-free vending machine

53

Fuji Electric Report 2021

Vending machine
convenience store
Saves laborStore operation
management system
Saves labor

Automatic change
dispenser

Fluorocarbon-free
showcase

Freshness maintaining
showcase

Contact-free, non-face-to-faceEco-friendliness

Food loss reduction

Comprehensive solutions for convenience stores

Fuji Electric Report 2021

54

Consolidated Financial and Non-Financial Highlights
Financial Highlights
Millions of yen

Fiscal Year

Operating Results
Net sales
Japan
Overseas
Operating income
Net Income Attributable to Owners of Parent
R&D and Capital Investment
R&D expenditures
Plant and equipment investment*2
Depreciation and amortization*3
Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
Cash flows from financing activities
Financial Position
Total assets*4
Total net assets
EquityNet interest-bearing debt
Interest-bearing debt
Financial Indicators
Ratio of operating income to net sales (%)
ROE (Return on equity) (%)
ROA (Return on assets) (%)*4
Equity ratio (%)*4
Net debt-equity ratio (times)*5
Debt-equity ratio (times)*6
Per Share Data *7
Net income
Net assets
Cash dividends

Thousands of
U.S. dollars*1

2012

2013

2014

2015

2016

2017

2018

2019

2020

2020

745,781
567,314
178,466
21,992
26,368759,911582,223
177,688
33,136
19,582810,678605,763
204,915
39,31627,978813,550
597,757
215,793
45,00630,644

837,765
632,723
205,042
44,70940,978893,451
674,744
218,707
55,962
37,763914,915
682,503
232,41259,97240,267

900,604
679,719
220,885
42,51528,793875,927654,020
221,907
48,59541,926

7,962,980
5,945,639
2,017,340
441,779
381,154

31,16031,771
31,05432,02926,91630,84935,02329,041
33,61535,94927,65029,72334,91027,14929,44535,62026,46530,151

33,66943,33830,90634,457
48,20832,31933,56235,89036,194305,114326,281
329,039

55,342(24,286)
31,055(56,827)

53,651(9,649)44,002(50,570)

51,459(22,750)
28,708(33,827)

48,450(19,410)29,040(31,567)

58,185
9,748
67,934(56,082)

53,146(14,550)
38,596(46,887)

54,949(21,448)
33,501(38,172)

46,087(27,621)
18,466
16,91826,931
23,47750,408(39,518)

244,827
213,435
458,262(359,276)

765,563
215,672
194,572
217,417257,105

810,774
251,225
227,181200,340
233,753904,522319,636
290,339
194,579
226,474

845,378
260,980
230,399
189,374
220,213886,663
323,863291,216
141,578
183,465914,744366,546
330,636
130,177
163,507952,659
392,061
352,922
124,850
153,985

996,827
406,002
365,620
153,617217,364

1,051,952
461,254
416,997
140,872
216,205

9,563,209
4,193,224
3,790,881
1,280,658
1,965,503

2.9
14.7
3.4
25.4
1.1
1.3

4.4
9.3
2.5
28.0
0.9
1.0

4.8
10.8
3.3
32.1
0.7
0.8

5.5
11.8
3.5
27.3
0.8
1.0

5.3
15.7
4.7
32.8
0.5
0.6

6.3
12.1
4.2
36.1
0.4
0.5

6.6
11.8
4.3
37.0
0.4
0.4

4.7
8.0
3.0
36.7
0.4
0.6

5.5
10.7
4.1
39.6
0.3
0.5

—
—
—
—
—
—
Yen

36.90
272.295.00

27.41
317.96
7.00

39.16
406.399.00

42.90
322.52
10.00

57.36
407.68
11.00

2012

2013

2014

2015

24,956
18,271
6,685

25,52418,022
7,502

25,74017,814
7,926

50.2

53.6

392

601

U.S. dollars*1

264.342,314.50
14.00

281.892,470.65
48.00

201.572,559.60
80.00

293.52
2,919.34
85.00

2016

2017

2018

2019

2020

26,50817,635
8,873

26,503
17,716
8,787

27,00917,7049,305

27,416
17,647
9,769

27,96017,681
10,27927,593
17,647
9,946

—
—
—

53.8

51.9

46.7

48.4

52.1

45.6

43.7

—

1,043

1,598

2,230

2,579

3,162

3,651

4,178

—

2.668
26.5390.773

Non-Financial Highlights
Fiscal Year

Employees
Japan
Overseas
Total greenhouse gas emissions fromproduction activities (10,000 t-CO2)
Reductions in CO2 emissions throughproducts (10,000 t-CO2)*8

Detailed financial information is available on our website.

*6 Debt-equity ratio is the ratio of interest-bearing debt to equity.
*7 Effective October 1, 2018, the Company conducted an 1-for-5 common stock consolidation. Amounts for net income per share and net assets per share have been calculated
assuming that the stock consolidation took place on April 1, 2017. The amount of dividend ¥48 per share for the year ended March 31, 2019 is total of the interim dividend of ¥8 pershare and the year-end dividend of ¥40 per share. Since the Company conducted an 1-for-5 common stock consolidation effective October 1, 2018, the interim dividend of ¥8 does notreflect stock consolidation effect and the annual dividend of ¥40 reflects stock consolidation effect. If the stock consolidation effect is also considered to the interim dividend per share,
the interim dividend of ¥8 per share without the effect is equivalent to ¥40 per share with the stock consolidation effect. Accordingly, the annual dividend for fiscal 2018 amounted to¥80 per share, including adjusted interim dividend of ¥40 per share and year-end dividend ¥40 per share.
*8 The contributions to CO2 emission reductions refers to CO2 emission reductions from products shipped in and after fiscal 2009 that were in operation for a year.
Calculated based on the Ministry of Economy, Trade and Industry’s Guideline for Quantifying Greenhouse Gas Emission Reduction Contribution.

Basic information*1 The U.S. dollar amounts represent the arithmetic results of translating yen into dollars at ¥110 = U.S. $1, the approximate exchange rate at March 31, 2021.
*2 Plant and equipment investment is the total of investment in tangible fixed assets, including acquisition amounts for lease contracts.
*3 Depreciation and amortization expense is the total of the depreciation of tangible fixed assets and amortization of intangible assets.
*4 Effective April 1, 2018, the Company have adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, revised on February 16, 2018).
As such, major management indicators in consolidated accounting period as of March 31, 2018 have been adjusted to retroactively apply said accounting standards.
*5 Net debt-equity ratio is the ratio of net interest-bearing debt (interest-bearing debt + lease obligations – cash and cash equivalents) to equity.

2020

https://www.fujielectric.com/ir/library/financial_results/index.html

55

Fuji Electric Report 2021

Fuji Electric Report 2021

56

Corporate Data

History
Fuji Electric continues to evolve in step with the times and with society, with technology as our driving force.

Company Information (As of March 31, 2021)
Company Name

FUJI ELECTRIC CO., LTD.

Established

August 29, 1923

Company

Technology

1920

1923	
Fuji Electric Manufacturing Co., Ltd.,established

Consolidated Subsidiary

74 (Japan 23, Overseas 51)

Equity Method Affiliate

4

Head Office

1-1, Tanabeshinden, Kawasaki-ku, Kawasaki-shi, Kanagawa 210-9530, Japan	Established as a capital and technology alliance
between Japan-based Furukawa Electric Co., Ltd.

Japan
¥47.6 billion

Employees (Consolidated)

27,593 (Japan 17,647, Overseas 9,946)

Net Sales (Consolidated)¥875.9 billion (Year ended March 31, 2021)

Stock Code6504

Began manufacturing electric motors (Photo 3)

1925

Began manufacturing transformers

1930

Began manufacturing mercury-vapor rectifiers
4,850 HP Francis turbine (Photo 4)company with characteristics inherited from industry in both countries.

1925

Began operation of the Kawasaki Factory

1937

Began manufacturing watt-hour meters

1942

Began operation of the Matsumoto Factory

1954

Began manufacturing ultra-compact magnetic switches (Photo 5)

1955

Full-scale entry into thermal power generation business1943	
Began operation of the Fukiage Factory and Tokyo Factory

Began operation of the Mie Factory

1959

Began manufacturing silicon diodes

1961

Began operation of the Chiba Factory

1965Electric propulsion system fitted to Antarctic exploration ship Fuji
the Tokai Nuclear Power Plant

Number of Shareholders(Present: Fuji Electric Corp. of America)

1966

Released medium and large capacity UPSs (200 kVA)

Began operation of the Otawara Factory

1969

Released vending machines (Photo 6)

1984	
Changed company name to Fuji Electric Co., Ltd.

1973

Released open showcases

1987	
Established Fuji Electric Gesellschaft mit beschränkter Haftung

1974

Released installation-type ultrasonic flowmeters

1975

Began manufacturing bipolar transistors

1973

35,775(Present: Fuji Electric Europe GmbH)

1988	
Established Fuji Electric Power Supply (Thailand) Co., Ltd.

Major Shareholders
Voting rights(%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

17,090

11.97

Custody Bank of Japan, Ltd. (Trust Account)

15,738

11.02

FUJITSU LIMITED

4,066

2.85

Asahi Mutual Life Insurance Company

3,955

2.77

National Mutual Insurance Federation of Agricultural Cooperatives

3,359

2.35

FANUC CORPORATION

2,684

1.88

STATE STREET BANK AND TRUST COMPANY 505001

2,287

1.60

FURUKAWA CO., LTD.

2,205

1.54

THE BANK OF NEW YORK MELLON 140044

2,067

1.45

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

2,026

1.42

Shareholders’ names

Notes: 1
 . Treasury stock of 6,457,667 shares is excluded from the above list of top 10 shareholders.
2. T he ratio of shareholding is calculated by deducting the number of treasury stock from the total number of shares outstanding based on the provisions of the Ordinance for
Enforcement of the Companies Act.

Share Distribution by Shareholder Typegeneral-purpose inverters (Photo 7)

1989	
Established Singapore Fuji Electric Co., Ltd.
(Present: Fuji Electric Asia Pacific Pte. Ltd.)1991

Began operation of the Yamanashi Factory

1980

Released the programmable logic controller “MICREX-P”

1995

Established Fuji Electric (Thailand) Co., Ltd.

1988

Supplied world’s first EIC integrated control system to a steel company

1995

Established Fuji Electric Philippines, Inc.

1988

Began manufacturing 1st-generation IGBTs (Photo 8)

1996

Established Fuji Electric (Malaysia) Sdn. Bhd.

1997	
Supplied the world’s first large-capacity
1997	
Expansion of 4th-generation IGBT product lineup(Present: Fuji Electric (China) Co., Ltd.)

2002

Introduced our corporate symbol mark (Photo 1)(Photo 1)

Supplied 100 kW phosphoric acid fuel cells

2002

Supplied environmental radiation monitoring systems

2010	
Development of SiC modules ofnext-generation power semiconductors (Photo 9)

owing to shift to pure holding company system(Photo 9)

2011

Released hybrid heat pump vending machines

2003	
Established Dalian Fuji Bingshan Vending Machine Co., Ltd.

2012

Released power conditioning systems for mega solar

2008	
Fuji Electric FA Components & Systems Co., Ltd., merged

2016	
Began shipping direct water-cooled power modules forautomotive applications (built-in RC-IGBT)

Holding (%)

147

68,809,473

46.09

2008	
Established METAWATER Co., Ltd. as a joint venture with

Other corporations in Japan

438

12,476,584

8.36

Foreign corporations

649

46,027,987

30.83

2009

Established Fuji Electric India Private Ltd.

Individuals and others

34,541

21,982,947

14.72

2010

Began operation of the Tsukuba Factory

Total

35,775

149,296,991

100.002011	
Changed company name toNGK Insulators, Ltd.

2017

Supplied SiC-equipped main converters for Shinkansen trains

2017

Delivered one of Japan’s largest geothermal binary plants

2018

Began shipping 7th-generation RC-IGBTs for industrial equipment

2018

Supplied exhaust gas cleaning systems for ships

2019

Released on-site diagnostic system that uses analytics and AI (Photo 10)
Basic information

Number of shares

Financial institutions/Securities firms

Fuji Electric Co., Ltd.
2011

Established PT. Fuji Electric Indonesia

2013

Established Fuji Electric Vietnam Co., Ltd.

(Photo 2)2014	Created new corporate brand emblem for products (Photo 2)

Fuji Electric Report 2021

2000

1998

2003	
Changed company name to Fuji Electric Holdings Co., Ltd.,

Note: “Individuals and others” includes treasury stock.

57(Photo 8)

flat IGBT equipped main converters for Shinkansen trains

1999	
Established Fuji Electric (Shanghai) Co., Ltd.

operations with Schneider Electric Japan Ltd.
Number of shareholders(Photo 7)

1977	
Received an order for our first full-scale geothermal power generation facility(power distribution and control equipment joint venture)

Type(Photo 6)

1976	
Began manufacturing(Present: Fuji Electric Manufacturing (Thailand) Co., Ltd.)
Number of shares(1,000s)(Photo 5)

1966	
Supplied nuclear pressure vessels and other equipment to1970	
Established Fuji Electric Co., Ltd., USA

Issued and Outstanding Shares 149,296,991(Photo 4)

1944

1968	
Began operation of the Kobe Factory and Suzuka Factory

Stock Information (As of March 31, 2021)(Photo 3)

1936	
Built first hydraulic turbine,and German-based Siemens AG. The result was a

Head Office Business Address	Gate City Ohsaki, East Tower, 11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032,
Capital Stock

Company emblem,“FS” mark

1924(Photo 10)

Fuji Electric Report 2021

58

This mark symbolizes
the commitment of Fuji Electric
to environmental protection

External Evaluation
Fuji Electric has been selected as a component of the following
socially responsible investment (SRI) indexes, as a company withoutstanding CSR performance.

We have received the following awards and certification inrecognition of our outstanding initiatives to promote diversity.

We have received the following certifications as a company exhibiting
excellence in health and productivity management.

Based on the universal design (UD) concept,
we have adopted fonts that are easy to read (and difficult to misread)by more and more people.

Gate City Ohsaki, East Tower,
11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Contacts: Public Relations and IR Dept., President’s Office
TEL: +81-3-5435-7111 https://www.fujielectric.com

00A9-E-0002c Published in Japan 2021.9