SanRex REPORT

2022

Special FeatureManagement
material issues
P.23

Introduction

01 Who We are
03 Long-term performance
05 SanRex products
07 Four unique features

09

Message fromthe President#1 Contribution to a carbon-free society and environmental conservation#2 Constructing infrastructure and contributing to industrial development#3 Providing safety, security and new value to improve services#4 Strengthening of manufacturing#5 Reduction of the environmental impact of production activities#6 Promotion of diversity and personnel in action

13

Message from the
Director in charge offinancial affairs

15 Value creation process
17 Progress of the medium-term
management plan
41 Corporate governance

49 Financial data
52 Stock and shareholder data
53 Non-financial data & Outline

Who We are

Bringing a Brighter
Future Through PowerElectronics
The Sansha Electric Manufacturing Group leads today’s power electronics industry as adeveloper of power semiconductors for power supply control and conversion and as a
specialist in a broad array of industrial power supplies for various industries, from highto low electric power.
In a society that is being urged to massively increase energy efficiency and shift to
low-carbon energy to reduce greenhouse gas emissions, the Group provides quality
technologies as one as a unique partner helping resolve social issues.

01

SanRex REPORT 2022

The Sansha Electric Manufacturing Group’s Philosophy,
Mission and Vision
Valuable Products for Society
Profits and Prosperity for the Company
Happiness and Stability for Employees

Corporate
Philosophy

Corporate
Statement

MissionLeading the New
Power Electronics

What we
aspire to be

VisionGlobal Power Solution Partner

Our Performance
Net sales

Operating profit & ratio of operating profit to net sales(in million yen)

23,717 24,369

Operating profit (in million yen)

21,875

19,436

22,675

6.2%

1,474

2017

2018

2019

2020

2021

(FY)

2017

7.5%
5.8%

1,833

2018

2.1%
1.2%
256
2019

2020

Return on equity (ROE)

Capital investment(in million yen)

6.8%

734

5.9%

720

1,316
416

(%)

5.7%

Profit ratio (%)

2021

(FY)

641
513

2.6%
359

-3.5%
2017

2018

2019

2020

2021

(FY)

2017

2018

2019

2020

2021

(FY)

Basic Information (as of the end of March 2022)
Establishedin

China 19.4%

1933

Developing a power
supply for a movie
projector that stabilizes
the image on the movie
theater screen

Japan

64.5%

Share of sales
by region

Asia (excl. China)

10.6%

North America

3.7%

Other 1.8%

Women

472

Staff
composition

Men

933

Power
semiconductorbusiness

34.4%

employees in the Sansha
Electric Manufacturing Group

Share of sales
by segment

Power supply
business

65.6%

1,405

SanRex REPORT 202202Long-term performance

Introduction

The Sansha Electric MFG

01history of growth

Since its founding in 1933, the Sansha Electric Manufacturing Group has been contributing
to the development of society through the creation of products that society needs.
Nearly four decades have passed since we launched our first overseas bases in the UnitedStates and in Hong Kong in 1983.
The Group will continue to operate its business globally.

1992

SANREX EUROPE GMBH established(relocated to Slovenia in 2009)

Germany

Trends in consolidated net sales andin the ratio of overseas net sales

Kunio Shikata,

Honorary Chairman
Representative
Director, President andChairman of the Board
from 1986 to 2021

1933

1948

1950

Consolidated net sales (right scale)
Ratio of overseas net sales (left scale)No matter the changes of the era, themost significant social responsibility that
the Sansha Electric Manufacturing Group
has as a manufacturer is to conduct
manufacturing that is valuable to society.
Based on the idea that continued
corporate growth is achieved by ensuring,
through manufacturing, customer
satisfaction and profit generation, theGroup will aim to develop and to build
positive relationships with all stakeholders.

1955

1960

1983
SANREX LIMITED established
SANREX CORPORATION established1965

Establishing the technological foundation that continues
from the foundation of the Group to the present

1933-1970
Business History

1933
1948
1953
1960
1970

Sansha Denki Seisakusho founded
Sansha Denki Seisakusho Co., Ltd.
establishedTokyo District Office (currently Tokyo Branch)established
Headquarters Plant completed in Osaka
Fukuoka Representative
Office (currently Kyushu Sales
Office) established

1970

1975

Product Development

Develops a choke coil auto transformer,
a predecessor to projector power supplies

1937

Develops a tungar rectifier for
light projectors

1963

1985

Shiga Plant completed in
Shiga Prefecture for the
production of power supplies
Okayama Plant completedin Okayama Prefecture forthe production of power
semiconductors

Yukio Shikata,

1964
1968
1970

03

Develops and announces our first power
semiconductor and thyristor
Develops an inverter uninterruptible power
supply and an electric power regulator forelectric furnaces
Develops a diffusion type of triac andthyristor
Develops a rectifier for plating

Masao Shikata,second president
Representative Director andPresident from 1972 to 1986

1971

Develops an insulated triac that is the first in Japan1980

Develops a thyristor module and a power transistor
for high speed switching

1982

Develops a power transistor module

1988

Develops a power MOSFET module

Insulated triac

SanRex REPORT 2022

1980

1971-1990
1982

Tungar rectifiers forlight projectors

USA

1985

Increasing bases and specialization in thedevelopment of power semiconductors

founding president
Representative Director andPresident from the Group’s foundation to 1972

1933

Hong Kong

Thyristor modules

(%)

50

1990

2000

2010

2021

Ratio ofoverseas sales

Ratio ofoverseas sales

Ratio ofoverseas sales

Ratio ofoverseas sales

9.4%

18%

32.8%

35.5%

SANREX ASIA PACIFIC PTE.
LTD. established
SANSHA
ELECTRIC MFG.

(GUANGDONG)

CO., LTD.
established

1999

2009

Singapore

2001

Slovenia

Representative office in
Slovenia opened

China

1994

SANSHA
ELECTRIC MFG.
(SHANGHAI) CO.,LTD. established

China

2016

400

DONGGUAN EASTERNELECTRONICS CO., LTD. established

China

2017

(100 million yen)Helsinki Branch establishedFinland

South Korea

Seoul Branch establishedTaiwanTaipei Branch established(relocated to Helsinki in FY2017)

25

200

1990

1995

2007

2022

Brisk capital
investment andrecord-high net sales

Russia’s invasion of Ukraine

1999

2008

Internet
bubbleFinancial crisis

2000

0
2005

Developing a system forincreased globalization

1991-2010
1994
1996
1997

2010

1991

Develops a planner type transistor module

2014

1993

Develops a solar power conditioner

2002

Develops a power supply for light source forprojector of digital cinema

2007

Develops an IGBT chip for inverter for industrial use

2016
2016

2015
2016
2017

Solar power conditioner

Lamp power supply for digital
cinema projector

2021

2023

(FY)

2011-2022
2014

2002

2015

Towards a new age

Shiga Plant obtains ISO 9001 certification
Okayama Plant obtains ISO 9001 certification
Achieves listing on the second section of the
Osaka Stock Exchange
Power Supply System Manufacturing Divisionobtains ISO 14001 certification
Semiconductor Manufacturing Division obtains ISO
14001 certification

2001

2020
U.S.-China trade dispute &COVID-19

New building completed at the
Shiga Plant
SANSHA SOLUTION SERVICE
CO., LTD. established in Osaka
SANSHA ELECTRIC EASTERN
CO., LTD. (currently SUWA
SANSHA ELECTRIC CO.,LTD.) established in Nagano
Prefecture to commence small
power supply business

2021

Develops a photovoltaic power
generation evaluation system
for the National Institute ofAdvanced Industrial Science andTechnology’s Fukushima
Renewable Energy Institute
Jointly develops a compact SiC
power module with Panasonic
Corporation
Participates in the virtual
power plant (VPP) construction
demonstration project
Develops a fuel cell power
conditioner

2019

SiC power module

SanRex REPORT 2022

2022

2020
2022

1200 V voltage-resistant SiC
MOSFET discrete semiconductor

OSAKA DENSO
INDUSTRY CO., LTD.
becomes a wholly owned
subsidiary
Listing moves to theStandard Market of theTokyo Stock Exchange

Develops a 1500 V string
compatible diode module
for photovoltaic power
generation
Develops a power supply
for storage battery tests
Releases a 1200 V
SiC MOSFET discrete
semiconductor

Power supply forstorage battery tests

04

SanRex products

Introduction

02

Products of the Sansha Electric MFG

That Support Society
Power semiconductors

Power supplies

Are devices that strictly control theelectric current flow and the voltage
level, including transformation froman alternating current into a direct
current. They are indispensable
to increasing efficiency of electric
power transformation and to energy
conservation.

Refer to systems for supplying theelectric power necessary for theoperation of machinery and equipment
for industrial purposes. Using power
semiconductors, they efficiently supply
stable electric power for a wide variety
of applications, including everythingfrom high to low electric power.

Energy & the environment
Solar (PV) power generation

Information & communication

Power conditioners
Converting the direct current electric energy
obtained from sunlight into alternating current toconnect to the commercial power network

Smartphones

DiodePower supplies for surface treatment

Preventing the backflow of electric current from astorage battery or other device and the subsequentdamage of solar panels

Used for plating, which is a process of placing athin metal film over the surfaces of electronic
components, printed circuit boards and otherparts used in computers and smartphones

New energy
Power conditioners for fuel cells andfor storage batteries
Converting electric energy stored in fuel cells andstorage batteries and connecting to thecommercial power network

HydrogenPower supplies forhydrogen generation
Supplying a stable electric current to
the water electrolysis system necessary
for the production of hydrogen throughthe electrolysis of water

Lithium ion batteries
Power supplies for copper foil
Performing an electrolytic process witha stable electric current to generatecopper foil to be used as an anodematerial for lithium-ion batteries

Fuel cells and storage batteries
Power supplies for testing andevaluation and charge-discharge productsHigh performance power supplies indispensable
in the testing and evaluation of a range ofbatteries and automotive equipment

Power plants
Power supplies forseawater electrolysis
Large current power supplies that generatesodium hypochlorite through the electrolysisof seawater to prevent marine life from
depositing on the plant’s water inlet

05

Waste disposal plants andcontaminated substancedisposal plants
Power supplies for plasma
Power supplies for plasma arc generators that quickly
increase the temperature of waste to be treated to ahigh temperature to suppress the generation of dioxins

SanRex REPORT 2022

What does “efficiently
converting electricity” mean?

What does “freely transforming electricity” mean?
The electricity generated by power plants and other facilities cannot be used as
it is. It must be transformed.
There are roughly four different ways of transforming electricity.
1Converting direct current
electricity to alternating current.

2

 onverting alternating currentCelectricity to direct current.

3Changing the frequency ofalternative current electricity.

4 hanging the voltage of directCcurrent or alternating current
electricity.

The Sansha Electric Manufacturing Group uses technologies based on themethods for these conversions to transform and control electricity in the mannerthat is best suited to the purpose of use of the power supply to support society inmany different areas.

There is always a loss of electricity
every time a power conversion occurs
in the process from power generation
at a power plant, through transmission
lines and power supply circuits to thefinal operation of electric appliances by
consumers.
To reduce this power loss, we areworking to develop high performance
power devices and high efficiency
power supplies.

Infrastructure
General industries

Expressways and electronic tollcollection (ETC)/Stations
Mobile phone base stations

Uninterruptible power
supplies (UPS) and control
power supplies

Power supplies foraluminum foil processing

Maintaining the supply of electric
power for a certain period of time
during a power failure to protect theoperation of equipment and data

Power supplies for electrochemical
etching, which is the process of
expanding the surface area of thealuminum foil used in electrolytic
capacitors that are necessary for the
power supplies for base stations

Auxiliary power supplies
for electric rolling stock

Water supply andsewage facilities

Diode
Supplementary power
supplies that supply
electric voltage andfrequency to lighting, airconditioning and othermachinery in rolling stock

Power supplies forozone sterilizers
Generating ozone to decompose
organic substances in water bydirecting dry air or oxygen andapplying a high voltage toinduce an electric discharge

Automobiles
Power supplies for surface treatment
Used in plating for increasing the abrasion resistanceand oxidation resistance of metal and other surfaces

Manufacturing robots and welders
Thyristor/Diode
Controlling motors and maintaining a constantvoltage to protect electric circuits from overvoltage

Power supplies for welding and cutting
Power supplies for welding and cutting steel sheets

Printed circuit board
Power supplies for surface treatment
Used for plating, which is the process ofcovering the surfaces of printed circuit boards
built in to power supplies with a thin metal film

Inverters for industrial use andcommercial air conditioners
Diode
Stabilizing and controlling motors

Lifestyles, medical careand entertainment
Movie theaters
Power supplies for light sources
Power supplies for projecting images clearly
onto a screen

Home electric appliances andelectric bidet toilet seats

Medical equipment/ATMs
Small embedded power supplies
Power supplies providing stabilized electric power

TriacControlling heaters and motors

Elevators

TV studios, halls and stadiums
Power supplies for dimmers

DiodePower supplies that enable thecontinuous dimming of lighting

Stabilizing and controlling motors

SanRex REPORT 202206

Four unique features

Introduction

Four unique features

03
1of the Sansha Electric MFG

Business operation in domains that
contribute to a sustainable society

Since its foundation in 1933, the Sansha Electric Manufacturing2030 *
564.2

billion yen

Trends in the size of the
global market for fuel cells forbusiness use

Group has been conducting its corporate activities inaccordance with its corporate philosophy, “Valuable Products

2021*

for Society.” Today, the international community faces climate

2018

change and many other social and environmental issues and

106.2

2025*

364.2

billion yen

160.2

billion yen

billion yen

businesses are urged to take actions toward the creation of asustainable society. We provide power semiconductors, power*Forecast

supplies for storage batteries and fuel cells and other products

Source: Fuji Keizai Co., Ltd.: 2020 Latest Trends and Future Outlook of Fuel
Cell-Related Markets

and services to help resolve these issues.
Examples of products that help to realize a sustainable society

Fuel cell power conditioner
FeatureSiC power module

It includes a silicon carbide (SiC) power module wedeveloped to achieve a 97.5% or better conversion
efficiency, one of the highest in the industry.

FeatureProviding enhanced long-term reliability,2 lower
loss and greater compactness

Power loss with thesemiconductor

Power loss comparison with a 20-kW three-phasepower conditioner semiconductor
400

1 A method of molding thermosetting resins in which materials areheated and softened before being pressed into a metal mold

IGBT
Our SiC power module300

 mploying a transfer mold 1 package that is small
Eand has excellent long-term reliability

2 Power cycle resistance that is around three times greater thanour conventional models

200
100

(W)

0

5

15

25

35

Inverter output power supply (A)451200V150A
Vcc 500V fsw 7kHz

production and
2 Integrated
one-stop services including after-sales services
Our power semiconductors supporting high voltage and current

This has made us very familiar with how power semiconductors areare manufactured in an integrated production system including

used in power supplies. That allows us to create proposals that arewafer processing and package assembly. Power supply

highly efficient, safe, and best suited to the specific environment thedevices, circuit boards and other components are manufactured

customer will use them in, including peripheral circuits.

in an integrated production system that includes development,

We believe that maintenance is a vital part of ensuring thedesign and manufacturing.

safety of power supplies. We are ready to provide one-stop

The Sansha Electric Manufacturing Group develops, designs andsupport including efficient installation, operation, maintenancemanufactures both power semiconductors and power supplies.

and replacement.

Process flow of customized productsReceipt oforder

Development
Design

Proposals andafter-sales services to customers

Production

Sansha Electric Manufacturing Co., Ltd.

07

Delivery andtrial operation

Collaboration

SanRex REPORT 2022

Inspection
andoverhaulReplacement
work

Sansha Solution Service Co., Ltd.

market share because of
3 Aourlargeadvanced technologies and services
In the semiconductor thyristor and diode module market that
we target, our Group has the third largest share of the global

Our target markets,
thyristor and diode modules

Approx.

43.0

1market. In the Japanese market of power supplies for plating

billion yen

and other power supplies for surface treatment, we hold thelargest market share.2
Customers have continued to choose our power supplies forPowermodule market

surface treatment for a long time. First, they have superior

Approx. 647.0
billion yen

output stability from startup. Second, we are always ready toprovide wide-ranging support to customers, including delivery,
after-sales services and equipment replacement.
1 Source: Omdia, Annual Power Semiconductor Reports - 2020
2 Estimated by Sansha Electric Manufacturing Co., Ltd. on the basis of the Japan
Plating Suppliers Association: FY2020 Dynamic Statistics of Power Supply Sales

MOS-FET,
IGBT,IPM
Powersemiconductor
market in 2020

605.0

billion yen(93.0%)

13%
33%
54%

Power modules

4,800
billion yen

Discrete semiconductors
ICs for power supplies

Thyristor and diode module
semiconductors

Power supplies forsurface treatment

Third largest share

Largest shareof the global marketof the Japanese market

Source: Omdia, Annual Power Semiconductor Reports - 2020

4 Overseas growth potential

Target ratio ofoverseas sales

50%

In 1983, we established two subsidiaries: SANREX

Ratio of overseas sales

CORPORATION in the US state of New York and SANREX UWA SANSHA ELECTRIC CO., LTD. isS
excluded because all of its sales are in Japan.

LIMITED in Hong Kong. We then opened sales bases in
Singapore in 1999 and in Shanghai, China in 2001 to expand
manufacturing power supplies in Guangdong Province
in China to push ahead with local production for local
consumption in China. To continue our overseas expansion,

43.6%

40.9%

our overseas sales operations. In 1994, we opened a base

39.5%

36.5%

39.4%

32.4%

we set up branches in Helsinki, Finland, Seoul, South Korea

38.8%

30.6%

and Taipei, Taiwan in 2017. We are expanding our businessglobally with the medium- to long-term target of increasing theratio of overseas sales to around 50%.

2014

SanRex REPORT 2022

2015

2016

2017

2018

2019

2020

2021

(FY)

08

Message from the President

Confident in our direction and potential,
we will be intrepid in our efforts.
Hajimu Yoshimura
Representative Director & President

We manage to operateaccording to the target

One of the achievements for the fiscal
year is growth in new energy. This is a
strategic sector for the power supply

our vision of Global Power Solution Partner
we seek to achieve.
Another achievement is growth in China.

The fiscal year ended March 31, 2022

business. It will also be a future core sector

China is at the heart of our global strategy.

was to us the first year of the new three-for us in connection with our contribution

In the fourth quarter of the previous fiscal

year-long medium-term management

to a carbon-free society and environmental

year, i.e. January to March 2022, capitalplan, CG23, on the basis of our medium-conservation as one of our management

investment became buoyant in the Chinese

term vision of Global Power Solution

material issues, and with our contribution

market. The semiconductor business

Partner and our slogan Change toto resolving social issues as part of thegenerated its highest sales in the past ten

Growth. It was a special year when webasic policy for realization of the CG23

years. Our acquisition of an order related

pictured the future of Sansha Electric

medium-term management plan. We

to capital investment in China is also part

Manufacturing and examined our direction

received brisk orders in new energy, suchof our achievements. It is possible thattowards that future.

as hydrogen, as well as those for fuelthere may be adverse effect of Beijing’s

cells and power conditioners for storage

zero-COVID policy and a reactionary fallstood at 22.6 billion yen as opposed

batteries. For example, we developed

after the results for the fiscal year underto the target of 21.8 billion yen, whilea system of generating electricity from

review. However, China is without doubt a

operating profit was 1.3 billion yen ashydrogen produced with the use of sunlight

growing market from a medium- and long-opposed to the target of 0.8 billion yen. I

energy. It was adopted for a demonstration

term perspective.

believe this is a result of concerted Group-

trial operated by the Iki City Government

wide efforts amid fast-changing social

in Nagasaki Prefecture. We establishedcircumstances, such as the lingering

an example of working towards realizing

COVID-19 pandemic and the Russiana carbon-free society in collaboration withinvasion of Ukraine. I do not want to be

the governmental sector. The emergencecomplacent with these results, but I thinkof projects in which we offer not only

While financial results were healthy overall,

we managed to operate according to thestandalone products but solutions, including

we face a question in terms of ourtarget envisioned in our planning.

the one mentioned above, coincides withproduction structure. This is namely how

As a result of our operations, net sales

09

SanRex REPORT 2022

An urgent need to reconstruct
our production structure

to cope with the shortage of materials
and rising material prices. While we
produce power semiconductors, we use
a large number of semiconductors in our

Numerical targets under the CG23 medium-term
management plan and results for FY2021
Net sales (in million yen)mainstay business of power supplies. We
are experiencing the impact of a global

Operating profit (in million yen)

Operating profit/net sales (%)

semiconductor shortage. Resins and26,00024,00022,675

7.3%

5.8%

5.4%

1,316

1,300

1,900

other raw materials are also in short
supply. We made Group-wide efforts andmanaged to obtain the materials. We
sought new suppliers. Our engineers
studied alternative items. We took all

2021

2022

2023

Plan

possible measures to finally purchase the

(FY)

Plan

P17

materials. The global trend of
decarbonization will gather pace towards
2050. We expect our sales team to
Net sales of the China business

continue receiving a large number ofinquiries, mainly in new energy. We needto create a production system that willallow us to take solid action when we are

Net sales (in million yen)

4,401

4,199
3,597

on a growth track. For this purpose, we

3,306

will regard supply chain development for
the next era as a new issue and will takeswift actions to address it, including thediversification of procurement and thedevelopment of alternative items.

2018

SanRex REPORT 2022

2019

2020

2021

(FY)

10

Message from the President

Results in the second
year are importantenabled us to achieve our growth. We

wishing to become engineers has

will never change this stance since it

increased dramatically. They offer

gives us strength. However, to move toadvantages in their unique attention,

After ending the first year under thethe next stage, we need to be a group

viewpoint and sensibility. Frankly, it

CG23 medium-term managementthat independently solves social issues

is not easy to change what has longplan, we are now certain that ourin addition to addressing customers’

worked for us and our establishedprimary direction is the right one. In

issues. To achieve this objective, assystem. Nonetheless, we will

this respect, results in the second

a manufacturer it is essential that weabsolutely transform them. What isyear are very important. The medium-develop new products. We should be

important is not to achieve genderterm management plan runs for threeproactive in this. We will address thisparity in the number of employees but

years. This period is just the firstchallenge in both the power supply

to create an atmosphere or systemphase of our actions towards whatbusiness and the power semiconductorin which employees can fully display

we aspire to be like ten years frombusiness. For this purpose, we will

their strengths irrespective of gender.

now. Results in the second year are

make robust investments in research

We have upgraded our program forsignificant in the sense of bringing

and development.

accepting a wide variety of people,

some clarity to the future. We needto make powerful steps forward withconfidence.

whereas improvements in our training
program are still ongoing. It is

Advancing diversity without failnecessary to transform them from aOn the occasion of developing

medium- and long-term perspective,

the medium-term management plan,

With respect to strengthening ournot from a short-term one. The Humanwe defined management materiality

business foundations, I believe that

Resources Department has alreadyitems. Our management plan isenhancing diversity will be vital tostarted its efforts. We are planning

based on these. Our management

the future development of Sansha

to further advance diversity for themateriality items were identified from

Electric Manufacturing Co., Ltd. Amid

second year of the medium-term

the standpoint of resolving social

a decline in the working population

management plan.

issues. As a consequence, they are

and an intensifying race to recruitgrouped into two by subject. One

workers, the advancement of women

pertains to solutions to social issues

is a significant issue that we cannot

through business, and the other toignore. We must acknowledge

strengthening the foundations of ourthat companies mainly engaging

business.

in manufacturing like us
constituted a male-oriented

Significance of
new product development

society. I myself was an

Actual and planned capital investment(in million yen)engineer in the past. I
graduated from the faculty

2,100

of engineering at university.
In terms of business, the development

In my faculty, there wereof new products will be a key to the

only a few female students.

second year of the medium-term

Naturally, engineers who

management plan. We have longjoined our Company were

worked to gain trust by sincerely

all males. Today, thetackling and solving customers’ issues

situation is different. Now

and challenges. This is what has

the number of women

720

641
359

2018

2019

2020

513

2021

2022
Plan

(FY)

Management material issues and process for realization of the vision
Social issues

Material issues

Strategy

Response to environmental issues
Response to emerging countries

Solving social issues
through business activities
Strengthening businessfoundations

Medium-term
management plan
Phase 1

Changes in population structureP23-24

P17-18

Response to digital shift

11

SanRex REPORT 2022

FY2021Analysis

Improvement
Investments

Making a greater capital
investment than usual“three” and it is included in our

the entire global community. Whatcompany name, which was coined

our power supplies and our power

based on the fact that our businesssemiconductors have in common isStrengthening of manufacturing is

was established by three parties,

the function of controlling very largeanother issue in strengthening ournamely the business operator, theelectric power loads. It is fundamental

foundations. As I mentioned earlier,provider of technologies and theto electronics. Controlling a highwe managed to achieve our results

provider of capital and after theelectric voltage or current leads

for FY2021 by stretching ourselves toaspiration to be one of the three

to a significant change in power

respond to brisk inquiries. Especially inleading companies in the world. I

consumption. It is applied in thethe semiconductor business, net sales

understand that the leader of this

sector of new energy, which covers

reached 7.8 billion yen, far exceeding

corporate group has a mission to

renewable energy and hydrogen.

the target for the first year based on theattach importance to this aspiration

Our engineers are hard workers andfinal-year net sales target of 8.0 billion

as well as three elements. Specifically,

serious, in a positive sense. They

yen. We need to increase our production

they are employees, technologies,

tackle electricity questions and nevercapacity to ensure constant production

and shareholders. Valuing employees

give up on trying to solve them. I reallyof around 8.0 billion yen and to firmly

means to make them happy. While

like this attitude, and I am proud ofgrasp this opportunity. We will therefore

it is important to increase their job

them. We will believe in our course of

make greater capital investments thansatisfaction and to provide them withaction and our potential. We will bein usual years in semiconductor plants

a good working environment, it isaware of the roles we have to play.

for FY2022. To achieve constant growth,very important to remunerate themWithout losing a sense of gratitude, we

we need to strengthen our production

properly. In addition, it is vital to deliver

will work to resolve social issues. We

structure.

consistent returns to shareholders

will thus aim to be a corporate group

who support us. Our dividend policythat is needed by society and thatis to reliably and continuously pay

achieves sustained growth.

Evolving into a company that isaware of its roles andthat never loses its sense ofgratitude

returns to shareholders with a payout
target of 30%, notwithstanding shortterm fluctuations in our results.
Our businesses and products are
directly linked to the resolution of

The Japanese word “san” means

the environmental issue that faces

Origin of thecompany
nameSansha is a combination of two Japanese words: “san” meaning three,and “sha,” which is party. Our business was founded by three parties:
the party who was to operate the business, the party who owned
technologies and participated in the business, and the party who offeredcapital. The business was named Sansha Denki Seisakusho, embodying
our ambition to first develop into one of the top three companies in Japanand then into one of the top three companies in the world.
At that time, it was common to put founders’ surnames into company
names. However, our top priority was to express our strong determination
through the term we coined, “Sansha.”Phase 2Phase 3

FY2022

FY2023

Realization of
the vision
Contribution to
the SDGs

SanRex REPORT 2022

12

Message from the Director in charge of financial affairs

Making efficient use of our capital forincreasing corporate value

Masaki Fujiwara

Director and Senior Managing Operating Officer

Basic Stance on
Our Capital Policy

and to customers’ problems. We will thus

in addition to business strategies. I

increase our significance as well as ourrecognize that it is the most significant

The 90th anniversary of our founding

corporate value. It is a task we cannot

to repeat the spiral in which theis drawing near. We will utilize electric

bypass if we are to continue our story.

efficient utilization of capital invested

energy conversion technologies that weWith a view to fulfilling our social

leads to net sales growth and in whichhave developed to respond to manyroles and increasing our corporate

the newly gained revenue is used todifferent social demands related to energy

value, financial strategies are importantdevelop future businesses.

Ratio of operating profit to net sales
Net sales (in million yen)

Total asset turnover

Operating profit/net sales (%)

6.2%
21,87523,717

0.87

0.86

7.5%
19,4360.85

22,67524,369

0.83

0.79

5.8%
1.2%
2.1%

2017

13

2018

2019

2020

2021

(FY)

2017

SanRex REPORT 2022

2018

2019

2020

2021

(FY)

Performance indicators

Distribution ofretained earnings

ROA is regrettably at a low level.
We understand that we need to

The Group uses return on assets

improve, firstly, the ratio of operating(ROA) based on consolidated

profit to net sales and, secondly, theWe will appropriate retained earnings

operating profit as an indicator.

total asset turnover.

from operating activities to actively

It consists as portrayed below.

ROA(based on consolidated
operating profit)

As for the ratio of operating profit toinvesting in accomplishing the CG23

net sales, we should create products

medium-term management plan andthat answer the needs of customers

to delivering returns to shareholders

and the market so that their value willin a well-balanced manner. We havebe recognized, while standardizing

a stance of keeping the shareholder

and rationalizing design anddividend payout ratio constant at 30%

manufacturing processes to increaseor higher.
We cannot always raise our position=

cost competitiveness.

in the fields we can serve on the

Regarding total asset turnover,

Consolidated operating profit /Consolidated total assets

we will need to verify whether or notstrength of our efforts alone. We are

the optimization of current assets,convinced that we need to adopt anespecially inventories, and capitalagile and flexible capital policy.
Especially in a situation where theinvestment results in net sales growth.

global trend towards carbon neutrality=

is expected to gather pace, we havea possible option of tying up withother companies sharing the same
Performance indicator target:

Ratio of operating profit
to net sales

orientation in order to keep up withthis speed.
We have recently set a target of(consolidated operating profit /consolidated net sales)(based on consolidated
operating profit)

reducing our CO 2 emissions. We are

Total asset turnover

10% or more in ROA

considering making the necessary*

investments to meet this target in a(consolidated net sales /consolidated total assets)systematic way.

The key to achieving this target is toraise the ratio of operating profit to net
We have selected this indicator for twosales to at least 10% and to achieve areasons. First, the ratio of operating

total asset turnover of at least 1. We

profit to net sales reflects the revenue

will steadily implement the measures

status of our core business. And second,

specified in the CG23 medium-term

total asset turnover indicates how

management plan in a bid to increase

efficiently the assets invested turn into

net sales, profitability and turnover ofsales, and this indicator is a hybrid thatinvested capital.

shows improvement in the consolidated

It is anticipated that attaining thestatement of income and improvement in

ROA target mentioned above will result

the consolidated balance sheet.

in a higher level of return on equity (ratio

The diagram below illustrates the current
figure of this indicator and its past trend.

of profit to equity) and achievement of
ROE exceeding the capital cost.

Return on assets (ROA)

Annual dividends and dividend payout ratio* Based on consolidated operating profit

Annual dividends (yen)

6.5%

42.3%

28
5.1%

20

5.3%

Dividend payout ratio (%)

30.0%
13

15
30.0%

27.2%

1.7%

25

1.0%
2017

2018

2019

2020

2021

(FY)

2017

SanRex REPORT 2022

2018

2019

2020

2021

(FY)

14

Value creation process

Sansha Electric Manufacturing
Financial capital
Stable creation of cash flows and secure andsound financial standing

19.8 billion yen
Equity ratio:
73.0%
Cash and cash equivalents:
5.0 billion yen
Consolidated net assets:

Endeavoring to provide a working environment that allows
individual workers to achieve personal development
by capitalizing on their personality and strengths

Number of employees:

1,405

Percentage of employees
who are female:

33.6%

Intellectual capital

INPUT(FY2021)

Number of plants

Japan
Overseas(in China)(average in the past five years)

42Power consumption

17,825MWh

Utility gas consumption

210,000 m3
53.4 tons

Social capital
Population
shrinkagein Japan

15

Sales network

Japan
Overseas

SanRex REPORT 2022

ERIALITAT

6

Promotion of diversity andpersonnel in action

Intensive environmental conservation activities forcontinuous procurement

PRTR substances

5

Y

Aging of population indeveloped countries
and in China

ERIALITAT

Reduction of theenvironmental impact of
production activities

590 million yen

Natural capital

4

Strengthening of
manufacturing

M

Capital investment

M
M

An integrated production structure ranging fromwafer processing to package assembling for power
semiconductors and from the development anddesign of circuit boards and other components to the
manufacturing of them for power supplies

ERIALIT
AT

Y

Acceleration oftechnologicaladvancement

Management
material issues

Y

Manufacturing capital3

Providing safety, security
and new value to improve
services

M

Social issues

Different kinds of capital that form thefoundation for business activities

ERIALITAT

Y

Shortage of resources

Numbers of patents
and utility modelrights owned

1.2 billion yen
Japan
161
Overseas179

2

Constructing a robust
infrastructure andcontributing to industrial
development

Technologies in the domain of
power electronics that support society

R&D expenses:

ERIALITAT

7
8

P23-40Judgment on situation(consolidated)

M

M

1

Contributing to acarbon-free society andenvironmental conservation
Y

Adapting to climate change(Response to environmental disasters)

ERIALITAT

Human capitalY

Shift to renewablesources of energy

Group’s value creation process
Economic value
Consolidated
net sales
Consolidated
operating profit

BUSINESS MODEL

22,600 million yen
1,300 million yen
900 million yen

Operating cash flow

New products sales*e o f s tr a t e g i e s

Active participation ofhuman resources

le of value chain
Cyc

Power semiconductorbusiness
P19-20

Ratio of overseas
employees

35.9%

Ratio of females in leading
and managerial positions

8.2%*1

Average overtime working
hours per employee

Manufacturing

13.3 hours*2

Core competence

Integrated production andafter-sales services
High market share based on advanced
technologies and services
Overseas growth potential
P07-08Implementation

Development of products
contributing to a sustainable society

After-sales
services

1,600 million yen*1* Products which have been on the market less than
three years since the sales approval are deemed tobe new products.

Decision-making

Researchanddevelopment

25 yenAnnual dividend per share

Risk management

C ycl

5.9%

Return on equity (ROE)

Corporate activities

OUTPUT

Sales

Power supply business
P21-22

Monitoring

OUTCOME

Social value created(FY2021)

Products with improved power
conversion efficiency
Power supplies for surface
treatment (example)

Reduction inenvironmental impact
CO2 emissions
Ratio of reduction from

FY2013 level

Corporate governanceWaste emissions
P41-48Recycling rate

9,916t-CO2*2
31.0%
656.2 tons*2
85.5%*2*1 T
 he data cover Sansha Electric Manufacturing Co.,
Ltd.
*2 T
 he data cover Sansha Electric Manufacturing Co.,
Ltd. and its group companies based in Japan.

SanRex REPORT 2022

16

Progress of the medium-term management plan

Progress of the mediumterm management plan
During the medium-term management plan, we will work to contribute to theresolution of social issues including the realization of a carbon-free society,developing products using power conversion and control technologies as wework to become a Global Power Solution Partner.

Contribution to theresolution of social issues

Basic policy for therealization for CG23
Numerical targets

Innovation for continuous growth

FY2021

Net sales

FY2022

FY2023Medium-term
management plan

Results

Medium-term
management plan

Results forecast*Medium-term
management plan

21,800 million yen

22,675 million yen

24,000 million yen

26,000 million yen

26,000 million yen

Semiconductor business

6,300 million yen

7,791 million yen

6,900 million yen

7,800 million yen

7,400 million yen

Power supply business

15,500 million yen

14,884 million yen

17,100 million yen

18,200 million yen

18,600 million yen

800 million yen

1,316 million yen

1,300 million yen

1,600 million yen

1,900 million yen

Semiconductor business

200 million yen

767 million yen

300 million yen

400 million yen

400 million yen

Power supply business

600 million yen

548 million yen

1,000 million yen

1,200 million yen

1,500 million yen

Ordinary profit

800 million yen

1,313 million yen

1,300 million yen

1,600 million yen

1,900 million yen

Profit attributable to owners of parent

500 million yen

1,147 million yen

900 million yen

1,200 million yen

1,300 million yen

39.15 yen

83.30 yen

64.07 yen

93.40 yen

92.54 yen

2.8 %

5.9 %

4.4 %

6.0 %

6.1 %

Operating profit

Earnings per share
Return on equity (ROE)*Announced on May 10, 2022

Roadmap
Products
Semiconductors
Production
Businesses
Business foundations

17

Power
supplies

Products

Building foundations

Creating new domains

Increasing profitability towards re-growth

FY2021

FY2022

FY2023

Productization
Upsize and establish
automation technologies

Develop elemental
technologies

Introduce equipment for rationalization,
automation and upsizing
Enlarge the hydrogenand new energy sectors

Production

Increase added valueStandardize designs and parts

Widen thelineup ofmodelsStart mass
production
Put new lines into
operation

Extend models
Shorten lead time

Operation fornet sales of
8 billion yen

Structure for high quality andhigh extra value

Overseas businessSelect markets andproducts to focus on

Set up new dealers and service networks

Take area- and product-specificapproaches to capture markets

Environmental activities

Analyze the current state and set goals

Commence
projects

CO2 reduction by 46% in 2030

Personnel
development

Diversity

Encourage careerdevelopment

GlobalEstablish a global personnel
development system

Implement
countermeasures

Increase the ratio of women
employees and positively
promote them
Give overseas business experience andraise global awareness
Boost technology
management skills

Technology Build up basic andspecialized technical skills

SanRex REPORT 2022

An autonomous
organization

Overview of fiscal 2021

attention to the impacts of the Group’s business activities
on society and the global environment. On the basis of that,In the first year of the CG23 medium-term management

we set a new CO 2 reduction target and launched a projectplan, businesses were affected by COVID-19. In Japan,

for accelerating reduction efforts not only at plants but

a state of emergency was declared, while vaccinations

throughout the Group.

proceeded. Economic activities gradually resumed.

Personnel is another part of the business foundations

However, a new COVID-19 variant emerged in the fourththat are of paramount importance to corporate growth andquarter, resulting in a resurgence in infections. That createddevelopment. Because of the pandemic, we postponed the

supply chain disorders and material supply shortages.

overseas business experience program we had planned.

Business circumstances remained uncertain.

Instead, we started training personnel to work actively

With respect to the environment surrounding the Group,

outside Japan by launching a language learning support

demand related to industrial equipment was strong. The

program. We ran a systematic training course on poweruse of new and renewable energy expanded, aiming forelectronics technologies, which are a source of the Group’s

decarbonization, while demand for power semiconductors

competitiveness. We worked to train engineering personnel

surged dramatically. In the meantime, material supply

for the purpose of improving basic and specialized

shortages and rising prices of materials aggravated to atechnological skills.

level where they had adverse effect on corporate revenues.

As a result of these actions, consolidated financial

Under these circumstances, the Group defined the first

results for the first year were driven by strong demand foryear of the CG23 medium-term management plan as a year

semiconductors to surpass the target for the first fiscal year

for building the foundations for growth. Our production,of the medium-term management plan. Specifically, net

sales and engineering teams worked as one to carry out

sales stood at 22,675 million yen, operating profit at 1,316

activities for firmly capturing markets in growth sectors,

million yen, ordinary profit at 1,313 million yen, and profit

such as hydrogen and new energy. As for overseas

attributable to owners of parent at 1,147 million yen.

business, we selected what markets and products to focus
on and drew a map of regional strategies. Amid restrictions
on sales activities caused by the pandemic, we conducted

Future initiatives

business negotiations online, participated in online
exhibitions and utilized websites in an active effort to boost

We believe that the second year of the plan will be a

the publicity of our products. In response to difficulties inmajor turning point for achieving stable growth in the

procuring components, which had not been anticipatedfuture. To solidify the foundations for business, we willat the beginning of the fiscal year, we selected alternative

invest in rationalization, automation and CO 2 emission

items and made advance arrangements. We also took steps

cuts with a view towards innovation in manufacturing. In

to standardize parts.

addition, to expand the areas where we can operate in

As for sustainability, the Group has a basic policy ofthe new energy sector, we will make intensive efforts inseeking to solve social issues through its products andmarketing and accelerate our research and development

services. Meanwhile, we understand that we need to pay fullin new domains.

Major capital
investments in FY2021

Power semiconductorbusiness

Power supply business

346 million yen

136 million yen

Mainly for introducing
automated equipment toprincipal processes

Mainly for introducing
automated equipment

Company-wide

29 million yen

TOPIC

OSAKA DENSO INDUSTRY CO., LTD.
becomes a subsidiary.
OSAKA DENSO INDUSTRY CO., LTD.
is a supplier of core materials to ourpower supply business. We made it
into a subsidiary to ensure stablesupply of components. In addition to
constant supply of core materials, we
expect to enjoy synergies based on
joint purchases of raw and othermaterials for producing transformers
and expansion of sales channels fortransformers.

Location

Higashiyodogawa-ku, Osaka

Capital

12 million yen

Data ofincorporation

April 1955

Representative

Representative Director
Hajime Katsushima

Number of
employees37(as of the end of March 2022)

SanRex REPORT 2022

18

Progress of the medium-term management planPowersemiconductorbusinessStrengths and features
The Sansha Electric Manufacturing Group does notdevelop or manufacture integrated circuit semiconductors
such as memory or microcomputers. Instead, it develops
power semiconductors. These are used in diverse power
supplies for the conversion of high voltages or currents
between direct current and alternating current, forcontrolling the current and voltage levels and for otherpurposes. They are adopted to customers’ different
production systems and incorporated into a broad rangeof power supply products to play significant roles in them.

Independently developed power
semiconductors with high voltage
resistance, high current and low power
loss characteristics
We develop and manufacture planar power
semiconductors and also semiconductors based on our
original mesa technology to achieve high voltage resistanceand low loss.

Packaging technologies for high reliability
Our original chip packaging technologies suited for power
semiconductors gain high marks for their long-term
reliability in key industrial applications.

Synergy with the power supply business
Since our foundation we have been developing andmanufacturing power supplies. Therefore, we are familiar
with how power semiconductors are used in power
supplies. This enables us to propose solutions that best
suit customers’ operating environments and applications.

Segments

Power modules
Used mainly in a wide range of industrial machinery andbusiness facilities, including commercial air conditioners,
auxiliary power supplies for rail rolling stock and solar (PV)power generation systems

Power discrete semiconductors
Used mainly in white goods

Other
Chips
(or small piece of silicon substrate with electriccharacteristics, such as diodes and thyristors)

19

SanRex REPORT 2022

FY2021 initiatives

Broaden the product lineup based on theconcept of high current, voltage resistance,
efficiency and reliability
Main newly developed products

Share of sales

34.4%

Silicon carbide (SiC)-MOSFET discrete
semiconductor(FY2021)· An insulation package with heat dissipation properties· Industry’s lowest-class power loss
Main applications
Induction heating, electric vehicle (EV) battery
chargers, contactless chargers and others

Insulated gate bipolar transistor (IGBT) module

Net sales

Reduction of power loss achieved in the low
switching frequency range(in million yen)

7,800

7,791
7,016

6,816
5,688

5,709

Main applications
Tungsten inert gas (TIG) welders, pulse reverse
rectifiers for surface treatment, and others

Power discrete
2,162 semiconductors

Automated equipment introduced to principal
processes with a view towards a smart factory
Demand for power semiconductors is expected to grow amid thetrend towards a carbon-free society. We will introduce automated5,629 Power modules

equipment for continuously increasing production efficiency andlowering the ratio of process defects due to unevenness in an aim
for quality, cost and delivery (QCD) improvement.
2017

2018

2019

2020

2021

2022

(FY)

Plan

Future issues

Establish operation for net sales of 8 billion yen
Segment profit

In a bid to achieve growth of the semiconductor business and to(in million yen)establish stable operations for net sales of 8 billion yen, we will767

increase the pace of the following actions in the second year of657

the medium-term management plan.
452

the lineup of SiC power
1 Broaden
semiconductors to cultivate new markets

400
172

investments for rationalization and
2 Makeautomation and for upsizing wafers-368

According to the forecast of financial results for FY2022, net
sales will remain flat and operating profit will shrink, given thatthe capital investment mentioned above is expected to produce
its effect of increasing production in one or two years and that
2017

2018

2019

2020

2021

2022
Plan

(FY)

increases in depreciation and in research and development
expenses related to SiC are anticipated. For FY2022, we areplanning to make capital investment worth around 1.2 billion yen
in the semiconductor business.

SanRex REPORT 2022

20

Progress of the medium-term management plan

Power supply
businessStrengths and features

Since we developed a power supply for projectors ensuring
the projection of stable images onto movie theater screensin 1933, we have been utilizing technologies that freelytransform and efficiently convert electricity to develop andmanufacture a wide variety of power supplies supporting
the environmental and energy sectors, the infrastructure andHigh-efficiency power conversion technology
We excel in technology for the quick, high precision conversionof electricity while keeping power loss to a low level. We lead theindustry in the development of power conditioners for fuel cells
equipped with our silicon carbide (SiC) modules, power supplies
for hydrogen generation and other new high-efficiency products.

facility equipment sectors and entertainment-related sectors.
As we engage in integrated production including

Wide range of development from small custommade to large industrial power supplies

development, design and manufacturing, we are able toprovide standard products and also customized products
tailored to customers’ requests with short delivery lead times.
After delivering products to customers, we consistently
provide maintenance and other support services.

We are ready to design and develop unique power supplies,
ranging from small customized power supplies to large industrial
power supplies, in accordance with customers’ specifications.

Segments

For general industries
Large capacity power supplies for industrial use that are used in
the production facilities of large steel, chemical, electricalmachinery and other manufacturing plants.

Power supplies for surface treatment
Surface treatment includes plating, coating and aluminum
anodization. Our power supplies for surface treatment are used
to manufacture smartphones, electronic components, printed
circuit boards, automobiles and other products.

For light sources and dimming
Power supplies for light sources are used for projection
mapping and in movie theaters, studios and other facilities.
Power supplies for dimming serve the purpose of controlling
power for light source lamps.
They are used for stage lighting in theaters, halls, TV studios
and elsewhere.

Inverters
Uninterruptible power supplies (UPS), solar (PV) power
generation, power conditioning systems (PCS) compatible with
fuel cells and storage batteries and others are delivered chiefly
to power plants, data centers and large factories.

Small embedded power supplies
Small capacity power supplies are incorporated into financial
institutions’ automatic teller machines (ATMs), medical
equipment, communication equipment and printers.

Other power supplies
They include electric power regulators for heating to increase
the temperature to a high level while controlling electric powerand charge-discharge products.

21

SanRex REPORT 2022

FY2021 initiatives

Enlarge the hydrogen and new energy andenvironmental sectors
We worked hard to propose power conditioners for solar (PV)power generation systems, inverters for power storage systems
Share of sales

and fuel cells and other power supplies. These applications will

65.6%

play significant roles in creating a carbon-free society. We gradually
receive inquiries on power supplies for testing and evaluating(FY2021)lithium-ion batteries and many other kinds of batteries.

Net sales(in million yen)

16,700

New product development

18,20017,553

Fuel cells Power conditioners

16,186

Strengthen fundamental sectors

14,884
13,727
2,467

4,215
537
1,689

For generalindustries

Orders for power supplies for surface treatment increased amid

For surface
treatment, welding
machines andcutting machines
For light sourcesand dimming

such as automobiles and information and communication terminals.

Inverters

SANREX CORPORATION. However, it was unable to adapt togrowing demand for printed circuit boards from growing sectors
SANSHA ELECTRIC MFG. (GUANGDONG) CO., LTD., a subsidiaryin China engaging in production, newly developed a plasma welder
for North America and started to receive orders via U.S.-based
increasing difficulties in procuring parts and to sharply increasing

4,226

1,748

2017

2018

2019

2020

demand. It thus piled up a backlog of orders.

Small embedded
power supplies
Other power
supplies andservices

2021

2022

(FY)

Plan

New product development
Plasma welder for North America

Segment profit(in million yen)

Future issues

1,381
1,200

We have defined priority measures for the second year of themedium-term management plan as follows.

Step up marketing activities in hydrogen, new energy

817

environmental sectors and carry out proactive
1 andsales activities.

624

548

design and production to improve
2 Standardize
efficiency with a view to shortening lead time.

244

more proposals on systems and solutions
3 Makeinstead of focusing on sales of standalone products.
2017

2018

2019

2020

2021

2022
Plan

(FY)

an extensive lineup ranging from small4 Provide
capacity models to large-capacity ones.

SanRex REPORT 2022

22

Special Feature: Management Material Issues

SpecialFeatureManagement material issues

Understand social issues
We selected socially important issues referencing the
Sustainable Development Goals (SDGs) and otherinternational initiatives, the code of conduct in the industry
the Group is a part of (the Responsible Business Alliance(RBA) Code of Conduct*), major guidelines (the Global
Reporting Initiative (GRI) and ISO 26000) and megatrends.

ERIALIT
AT

1

Y

M

Process of identifying material issues

Contribution to a carbon-free society
and environmental conservation*The RBA Code of Conduct is guidance formulated for electronics
industry and electric equipment-related industry supply chains.

Analyze the selected issues
We analyzed and assessed how significantly the selectedsocial issues interested stakeholders, the size of theirimpact and how significant they are to the Group to
create a draft set of material issues.

Risks

Interruption of business activities due to climate changeor large disasterIncreased strictness of environmental regulations

Opportunities

Increase in business opportunities related to renewableenergy and new energyImprovement in views on CO2 reduction effect of highefficiency products
Rising momentum of global environmental conservation
Initiatives

RelatedSDGs

P25·26

Identify and review material issues

M

Perspective of society andshareholders

23

4Strengthening of manufacturing

High
Risks

Decline in technological strengths due to a decrease inskilled engineersProgress in the technologies of competitors
Delays in manufacturing and shipping due to difficulties
in procuring raw materials

Opportunities

Development of new products using our accumulated
intellectual property

Related
SDGs

Perspective of impact on business

ERIALITATY

The management team assessed the appropriateness ofthe draft and determined the priority material issues to beaddressed in March 2021. The Board of Directors
adopted a resolution regarding them concurrently with themedium-term management plan. Going forward, eachtime a new medium-term management plan is formulated,
we will revise them in consideration of changes inbusiness circumstances and society.

High

SanRex REPORT 2022

Initiatives
P31·32

Sustainability
Approach to Sustainability
Today, the international community faces climate change andand increase value for both business and society.

many other social and environmental issues and businesses

We will behave in a manner that fully considers the impact

are required to act towards the establishment of a sustainableof the Group’s business activities on society and the global

society. In this context, we will endeavor to resolve social

environment. We will strive to earn the trust of stakeholders

issues through our products and services and work to create

through dialogue.

In accordance with the corporate philosophy and together with customers we will aid the development ofsociety by creating safe, secure and reliable products.

Basic policy

Promotion
structure

The Group understands that actions to address sustainability issues are a priority management issue from the perspectiveof increasing corporate value over the medium and long term. The Board of Directors determines the basic policy and the
Corporate Planning Conference discusses specific actions and studies measures. Related committees collaboratively
implement individual measures with other internal committees.
Corporate Philosophy
Board of Directors (to develop and make decisions on the basic policy for promoting sustainability)
Corporate Planning Conference

The president and the executive general managers of the Corporate Planning, Sales, Engineering Research And Development and Manufacturing
Divisions attend the conference (to discuss sustainability actions).
Safety and HealthCommittee

Personnel Development
Committee

Environmental Promotion
Committee

Development Committee
and Quality Committee

Internal Control Committee

Labor practices

Human rights

Environment

Consumers

Fair operating practices

M

2

Constructing a robust infrastructure andcontributing to industrial development

ERIALITAT

3Y

ERIALITATY

M

Collaboration

Providing safety, security and new value
to improve services

Risks oss of capital investment opportunities due to large
LdisasterRisks

 roduct incidents and failures
PIntensifying international competition

Opportunities

Necessity of constructing resilient infrastructure able towithstand intensifying disasters as the climate changes
Economic growth in developing and emerging countries

Opportunities

Increase in business opportunities resulting fromprogress in IoT technologies

Initiatives

Related
SDGs

M

P29·30

Reduction of the environmental impact
of production activities

ERIALITAT

6Y

ERIALITAT

5

Initiatives

Related
SDGs

YM

P27·28Promotion of diversity andpersonnel in action

Risks

Increase in costs for complying with stricter
environmental regulations
Decrease in corporate value and deterioration of
reputation due to the increase of the Group’s CO2
emissionsRisks

Intensifying competition for personnel being recruitedH arassment

Opportunities

Increase in competitiveness through energy andresource conservation, decrease in environmental
impact and increase of productivity

Opportunities reation of innovation rooted in diversity
CImprovement of work-life balance to increase employee
satisfaction

Related
SDGs

Initiatives
P33·36

Related
SDGs

SanRex REPORT 2022

Initiatives
P37~4024

ERIALIT
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1

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Special Feature: Management Material Issues

Contribution to a carbon-free society andenvironmental conservation

Reasons for
identification

The Sansha Electric Manufacturing Group has achieved growth by integrating power semiconductor
technologies that aid energy creation, storage and conservation with power conversion and control
technologies to develop technologies and new products based on the creation of power electronics products.
We maintain an attitude based on our corporate philosophy, “Valuable Products for Society.” In the situation
where the whole world is working to establish a carbon-free society, we understand that it is important for theGroup to provide new value.

Towards carbon neutrality
The significance of the efforts in the energy conversion sector isconsumption to a low level. Based on these technologies, we

increasing, as it is responsible for more than 40% of greenhousedevelop power conditioners for solar (PV) power generation

gas emissions. It is particularly necessary to increase the use of

systems, inverters for power storage systems and fuel cells

sunlight, wind power, biomass and other renewable sources ofand other power supply devices. They play significant roles

energy. Announced in April 2021, the Green Growth Strategy set

in the creation of a carbon-free society. We also internallyspecific goals not only in the area of next-generation renewableproduce high-voltage and large-current power semiconductors

energy but also in the storage battery, semiconductor and manyand high efficiency next-generation compound semiconductor

other related sectors.

modules. They are core devices supporting the power supply

Since our foundation, we have nurtured power source
technologies to limit the loss involved in power storage ordevices above. We are always able to deliver leading-edge
technologies to society.

The new energy solution domains where the Sansha Electric Manufacturing Group operates

Energy creation

Generating electric power

Sunlight, wind power, biomass and other renewable sources of energy are important
low-carbon sources of energy that emit no greenhouse gases.
Solar (PV) power generation and power from hydrogen production, fuel cells
and different kinds of storage batteries produce direct current electricity. To sellthis electricity to electric power companies or use it to operate alternating current
devices, it is necessary to convert it into alternating current electricity using of apower conditioner. We have been involved for many years in the commercialization

Fuel cell power conditionerof power semiconductor devices as well as the power converters that use them.
We will continue our efforts to ubiquitize new energy.

25

SanRex REPORT 2022

Solar power conditioner

Energy storage

Storing electric power

In solar power generation, output fluctuates considerably depending on the weather
conditions. This makes it necessary to use power storage systems to store surplus electricity
generated and supply the stored power when the generated electricity is insufficient.
Power storage systems do not just store electricity. With the peak-reduction1 andpeak-shifting2 features during periods of peak power consumption, they level power

1 Reducing electricity used during highconsumption periods
2 Shifting activities from high electricityconsumption periods to low electricityconsumption periods to level fluctuations in
power consumption.

consumption to lower the electricity bill. We will serve to reduce greenhouse gas
emissions by privately consuming backup power supplies at the time of disasteremergency and electricity produced by solar (PV) power generation.

Energy conservation

Efficiently consuming electric power

Silicon carbide (SiC) power devices are attracting attention as key

Power loss of the SiC-MOSFET module mounted in a
20-kW power conditioner

devices for energy conservation in high-voltage and large-current

Semiconductor loss (W)applications, because they feature lower loss and higher-speed
operations than conventional silicon devices. Our SiC-MOSFET
modules feature enhanced long-term reliability, low loss and a smaller
size achieved using our original packaging
technology. They are suited for high speed
switching.

IGBT

Independently developed SiCMOSFET module

400
300

Loss
reduced

200
100
0

5

15

25

Inverter output power supply (A)3545

The 1,200 V 150 A modelVcc 500V fsw 7kHz

Products aiding environmental conservation
The Group is working to reduce the environmental impact of its production activities and also to design and develop productsthat reduce environmental impact.

Copyright C
SUMITOMOPRECISIONPRODUCTS
Co.,Ltd All rights
reserved.

Power supply for plasma arc
generation

Power supply for ozone
generation

DC power supply for seawaterelectrolysis

To melt the incineration ash from the
combustion of industrial waste, it is necessary
to quickly achieve a high temperature, which
requires a large output. When waste is put
into a melting furnace, the plasma arc tends
to be unstable. Our power supplies for plasmaarc generation incorporate a high speed
control response technology to suppress
plasma arc interruption or fluctuation andsupport constant operation.

Ozone has a strong oxidizing ability andproduces deodorizing and other effects.
Ozone cannot be generated without a power
supply applying a high voltage at a highfrequency to the discharge tube.
We have developed power supplies withdifferent capacities suited to a wide variety of
applications, ranging from small-sized products(with an output of several kilowatts) for swimming
pools to large-sized ones (with an output ofseveral hundred kilowatts) for water purifying
plants and sewage treatment plants. Thus, we
support the improvement of water environments.

In many cases, our direct current (DC) power
supplies for seawater electrolysis are installedin power plants, in other plants in coastal
industrial zones and in other outdoor
environments in coastal areas. Therefore, they
are designed to be resistant to salt damage
and otherwise suited for adverse installation
conditions.
The large-current power supplies necessaryfor electrolysis are prone to generating highharmonics that affect electric power systems. We
introduce our power conversion technology tosuppress these high harmonics.

Implementation Examples

Evaluation system for power conditioners for
new energy
Introduced at: National Institute of Advanced Industrial Science and Technology (AIST)’s
Fukushima Renewable Energy Institute
AIST’s Fukushima Renewable Energy Institute engages in the development of technologies forsolar (PV) power generation, wind power generation, the use of hydrogen, geothermal energy
management and peripheral technologies with a view toward accelerating the ubiquitization ofrenewable energy in Japan and overseas. Our expertise is in accurately reproducing thecharacteristics and conditions of individual energy sources for power conditioners. Leveraging thisexpertise, we delivered a 5-megavolt-ampere simulator system.

SanRex REPORT 2022

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Special Feature: Management Material Issues

Constructing a robust infrastructure andcontributing to industrial development

Reasons for
identification

In recent years, earthquakes and typhoons have caused large-scale and long-lasting power outages. They
have tremendously damaged corporate activities.
The Sansha Electric Manufacturing Group develops backup power supplies based on its power electronics
technologies to support social infrastructure.
At the same time, our power supplies for surface treatment have the largest share of the Japanese market.
They are used for plating electronic and other components of automobiles, motorcycles and other transport
devices, industrial machinery, precision equipment, computers, communication equipment and otherequipment. They support the development of industry.
We will continue to provide our technological strengths to support the development of industry.

Helping increase the resilience of social infrastructure
The recent increase in natural disasters has been attributed

many different production lines. They help maintain social

to global climate change. In Japan, typhoon damage isinfrastructure in the event of disaster. The Group provides

worsening and the frequency of torrential rains and floods is

power conditioners with power storage and grid stabilization

increasing. In preparation for disasters like these, industry is

features and systems that control power peak reduction andimplementing measures focused on resilience. One of them isshifting for the microgrid plans studied by different regions.

the consideration of microgrid plans* in different regions. These

Our power supplies for surface treatment are employed inplans are an attempt to establish an independent regional

Japan and around the world. They support the manufacturing

power supply in an emergency such as a large power failureof key parts of a digital society, such as electronic components,

following a disaster. This is very significant in earthquake-prone

semiconductors and electric and electronic circuit boards. A

Japan. Microgrids will display their strengths when thermal,

constant supply of these parts is vital to maintain and expand

nuclear and other power generation facilities are severely

information and communication infrastructure. The Group’s

impacted. Resilience is also undermined by supply chain

power supplies and power semiconductors greatly assist thedisruptions due to the pandemic and war. These are big themaintenance and continuity of stable supply chains.

challenges facing global industries.
The Group manufactures and sells uninterruptible power
supplies (UPS) used as emergency power supplies during
power outages during a natural disaster. The Group’s
UPS products are installed in hospitals, expressways and27* A method for distributed power supply using small power generation facilities
close to the power consumers for the continual supply of electric power.

SanRex REPORT 2022

Case Study

1

Uninterruptible power supplies developed to help ensure the safety of expressways
Expressways play an important role in wide-area distribution and interregional exchange and linkage. They are a key part of the foundation ofsociety and the economy. When a disaster strikes, the importance oftransportation increases to enable relief to arrive quickly. For toll gates,
tunnel lighting, emergency alarm systems and other important facilities andequipment on expressways, uninterruptible power supplies (UPS) and private
power generation systems need to ensure that the supply of power continues
from the beginning of a power failure to the restoration of the power supplied
Uninterruptible
power supplies(UPS)

by the electric power company. Our UPS systems are found at 100 or more
locations on the nationwide expressway network. They are the emergency
power supplies for tunnel lighting and for computers for the electronic tollcollection (ETC) devices at toll gates. They ensure safety on expressways.
Point
In FY2021, we developed a UPS equipped with lithium-ion batteries.
While lead batteries require regular maintenance, lithium-ion batteries do not. This
also reduces environmental impact.

2

DC power supplies supporting surface treatment technologies developed to support
significant fundamental technologies for industry
Plating is applied to the surface of iron and other metal materials to increase
corrosion resistance, functionality and decorativeness. Plating takes the formof a thin film made of gold, silver, nickel or other material. Incorporating ourelectric power control technologies, our power supplies for surface treatment
are used in the plating process for automobiles, motorcycles and othertransport devices, industrial machinery, precision equipment and electronic
components for computers and communication equipment.
Point
Power supplies forsurface treatment

Under the medium-term management plan, we will expand our lineup of power
supplies for surface treatment with the goal of expanding overseas sales.
Commercialization was complete in FY2021. In FY2022 and later, we will increase
sales in Asia and China.

Power conversion technologies improved, helping reduce CO2 emissions
We have specified the CO2 emissions from the operationof our 2015 model of power source for surface treatment
as the reference level. We will develop new products with

CO2 emissions reduction by improving the power conversion
efficiency of power supplies for surface treatment(t-CO2)higher power conversion efficiency in the future to reduce

Approx.

6.6%

CO2 emissions by around 6.6% in FY2030.

reduction(1,441 t-CO2)

Operating conditions:	Operating 12 hours perday, 250 days a year
Emission factor:
0.047 kg-CO2/kWh

21,90921,762

21,150* CO2 emission factor announced by Japan’s Ministry of
the Environment

2015

Reference

SanRex REPORT 2022

2020

2025
Plan

20,468
2030

(FY)

Plan

28

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Special Feature: Management Material Issues

Providing safety, security and new value toimprove services

Reasons for
identification

The Sansha Electric Manufacturing Group’s power semiconductors and power supplies are intended for use
in industrial equipment. Given that they operate inside our customers’ power supplies for production processequipment and backup power supplies that support infrastructure, they need to be safe and high quality. We
are working unceasingly to improve quality, keeping in mind that the provision of reliable, reassuring quality
to customers is greatly connected to social contribution and the conservation of the global environment.
In addition, daily maintenance and inspection are indispensable in the safe, long-term use of large
power supplies.
The Group will accelerate its provision of comprehensive solutions including maintenance, inspection, repair
and other support services.

Efforts to improve quality
To ensure that a level of quality that satisfies customers isand after-sales services. Through this, we are working tomaintained, the Group has established procedures for its quality

improve quality to provide customers with products that satisfy

assurance activities at each stage of its operations, including

their needs and earn their trust.

product planning, development, design, delivery to customers

Quality assurance system diagram
Customers and markets

Corporate Philosophy, Management Policy and Quality Policy
Customerneeds

Receipt of anorder

Manufacturing

Development
and design

Process inspection

Design review
MarketresearchThe
customers’
voices29

Product
planning

Prototyping

Raw material
procurement

Design verification

Acceptanceinspection
Sharing of
information

Product Quality Assurance Department

SanRex REPORT 2022

Shipping
inspection

Shipping

Setup,
maintenance,
inspection andafter-sales
servicesThe
customers’
voicesAbility to propose solutions tailored to customer needs
The Group conducts the integrated production of high-

The medium-term management plan states that one of thevoltage and large-current power semiconductors and power

priority measures for the power supply business is to accelerate

supplies. This means that we internally conduct all processes

the proposal of systems that combine power conditioners withranging from wafer processing to package assembly for power

storage batteries and network functions, rather than proposals

semiconductors and every process from the development andrelated to power conditioners alone. A strength of the Group isdesign of circuit boards to their assembly for power supplies.

the flexibility of its development and manufacturing. We will help

This allows us to provide customers with the proposals that

customers solve their problems by proposing systems based

are best suited to their needs from the perspective of highon this strength.

efficiency, safety and other features.

For an example of implementation, see page 26.

Total solution services deliver safe and secure power supplies
Sansha Solution Service is implementing four priority measures

Sansha Solution Service Co., Ltd. is a group company providing
maintenance services. Headquartered in Osaka, it has service

in the medium-term management plan to enhance the total

offices in Tokyo, Nagoya and Fukuoka. It provides customer

solution services of the Sansha Electric Manufacturing Group.

support in collaboration with overseas bases to ensure safety
and security.
Four priority measures under the
medium-term management plan

1 Improve quality of services

FY2021 Initiatives
Increase service staff and sign contracts with new service
partners to improve the service structure
Train service staff to develop their skills

2 Accelerate construction of themaintenance structure
3 Enhance the construction work

implementation structure
4 Propose long-term service plans

Carry out a demonstration trial of the remote maintenance systemIncrease staff qualified as construction management engineers
for construction work
 ropose long-term maintenance services for a recommendedP
operation period from the start of operations

UPS inspection

The Group will expand remote maintenance services and accelerate long-term service plans to help customers use our products
without worry for the long term and thereby help resolve their problems.
Sansha Electric Manufacturing Group’s comprehensive solution services
Operations of Sansha Solution Service Co., Ltd.
Construction
management

Sansha Electric Manufacturing Co., Ltd.

Work tendered

Sales
department
Receipt oforder

Emergency
private power
generation
Product sales

Customers
DeliveryTechnology andmanufacturing
department
Production

Trial
operation

Inspection andoverhaulReplacement work
Battery
replacement

Equipment monitoring

SanRex REPORT 2022

Commissioned
work

30

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Special Feature: Management Material Issues

Strengthening of manufacturing

Reasons for
identification

The most significant social responsibility that the Sansha Electric Manufacturing Group has to fulfill asa manufacturer of power semiconductors and power supplies is to implement manufacturing that isvaluable to society.
We will continuously increase our technological strengths to achieve customer satisfaction. In parallel,
we will strive to create social value and maintain our continuous growth.

Research and development
Leveraging technology to achieve carbon neutrality
The Group engages in product development for the industrial

Research and development expense(Million yen)

1,400

power electronics market for serving energy creation, storage

1,305

1,204 1,223 1,250

1,387

point

and conservation. At the time of development, we integrate
three core technologies for power conversion, control and power

700

semiconductors. Since our foundation, we have always been
responding to the demands of the times and creating high-0

performance and high value-added products. This experience

2018

2019

2020

2021

drives us to continuously advance our technologies to open the
Under the CG23 Medium-Term Management Plan (from April(FY)(organization of the Engineering Research and Development Division)

2021 to March 2024), we will seek to increase the sophistication

Technology
Planning
Departmentof our fundamental technologies for developing technologies that
aid the conservation of the global environment and for providing
extensive solutions for industrial equipment in accordance with
our new product development philosophy. With a view toward
the establishment of a carbon-neutral society in particular, we are
striving to create technologies that will open the way to the future.
Our core technologies and future direction

31

Plan

Research and development structure

way to a new age.

Core technologies

R&D and productdevelopment subjects

Electric power and energy
conversion technologies

Increase in efficiency andsize reduction

Control technologies

Systematization andacceleration

Power semiconductors

2022

These expenses aredefined as
investments in the
future to increasetechnologicalstrengths and develop
products that are
valuable to society.

High voltage, high capacity
and high reliability

Engineering
Research andDevelopment
Division

Discover subjects for future technology
development efforts and conduct
preliminary surveys and studies ontechnologies

Development
Department -1ST
SectionDevelop power conditioners, uninterruptible
power supplies (UPS) and power suppliers
for testing and evaluation, including
customization

Development
Department -2ND
SectionMainly develop power supplies forsurface treatment, power supplies for
welders and power supplies for lighting
equipment and other mass produced items

Semiconductor
Development
Department

Develop wafers to modules

Semiconductor
AppliedTechnology
Center· Carry out marketing of power
semiconductors from the technologicalperspective· Enrich applied applications for customers

point
We believe that the teams for developing semiconductors and power supplies inthe Engineering Research and Development Division bring about a sense of unity indevelopment from devices to equipment. The organizational structure above isbased on the idea that an absence of organizational boundaries will lead to the
speedy development of superior products.

SanRex REPORT 2022

Intellectual property
Concept behind the intellectual property strategy

Employee invention incentive program

The Group understands that the intellectual property

We have an employee invention incentive program aimed

strategy is inseparable from the technology strategy and theat encouraging engineers to develop inventions and atmanagement strategy. We regard intellectual property as asupporting corporate development by protecting and utilizing

source of competitiveness and as one of our most important

their inventions.

management resources. Therefore, we implement the
intellectual property strategy with attention to whether or not aparticular technology should be monopolized by the company,
not whether or not it can be patented. We will protect,Applications for and ownership of intellectual property rights
Number of patent applications

manage and utilize intellectual property in order to maintainand increase corporate and brand value.

30

21

20

Intellectual property activities

17

19

2019

2020

24
13

12

10

In accordance with the policy shown below, the Group actively
obtains intellectual property rights to research and development

0

2017

achievements and makes effective use of their protection forboosting business competitiveness.

1

2018

2021

2022

(FY)

Plan

Number of patents owned

Actively obtain intellectual property rights over inventions such as
new technologies, circuits, methods and original designs as wellas conceived property.

2File applications for international intellectual property rights inaccordance with the global strategy.

3

To expand business in emerging countries, continuously collectinformation on counterfeit products through overseas resident
staff to take appropriate measures to address them.

Japan

United States

400

200
100
0

South Korea

Others

337

343

347

33
29
45
68

42
30
47
62

52
30
48
58

53
29
49
55

55
28
47
49

149

156

155

161

157

2017

2018

2019

2020

2021

324

300

China

336

(FY)

Supply chain management
The Group carries out sustainable procurement activities
throughout its supply chain to operate its business, which1

We will observe laws, ordinances, social norms
and equivalence and place importance onhuman rights and the environment.

2

We will offer fair transaction opportunities tosuppliers.

3

We will carry out procurement activities
based on mutual understanding andrelationships of trust with suppliers.

encompasses an extensive lineup of products all over theworld. For this purpose, we ask suppliers to understandand comply with our Procurement Policy, which stipulates

Procurement
Policythe observance of laws, ordinances and social norms,
consideration of human rights and industrial safety, use of
conflict-free minerals, consideration of the environment andthe upholding of other social responsibilities.
In addition, we impartially evaluate and choose suppliers in

Use of conflict-free minerals

accordance with the criteria below.

The Group has drawn up the Sansha Electric Manufacturing

1

Our suppliers must observe laws, ordinances, social norms andequivalence and place importance on human rights and the environment.

2

Our suppliers must have a sound financial position andinformation management systems.

tantalum, tungsten or gold, that are produced using inhumane3

Our suppliers must supply materials and services with anappropriate quality, price and delivery lead time.

surrounding region.

4

Our suppliers must have the ability to ensure stable supply andflexibly respond to changes in supply and demand.

5

Our suppliers must conduct value analysis (VA) and value
engineering (VE) activities* to achieve mutual prosperity.

6

Our suppliers must carry out risk management activities, such as
business continuity planning, under normal circumstances to holda capacity to continue supplying even in unexpected disaster orother extreme situations.

Group Conflict Minerals Response Policy. From a humanitarianpoint of view, we will not use any conflict minerals, such as tin,practices in the Democratic Republic of the Congo and theSansha Electric Manufacturing Group Conflict
Minerals Response Policy
https://www.sansha.co.jp/csr/purchase.html* Value analysis (VA): Activities reducing the cost of mass-produced products
throughout the entire value chain
Value engineering (VE): Activities thinking about the maximization of value fromthe process of product development (consideration of design)

SanRex REPORT 2022

32

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Special Feature: Management Material Issues

Reduction of the environmental impact of
production activities

Reasons for
identification

The international community is accelerating climate action.
The Sansha Electric Manufacturing Group is aware that conservation of the global environment is an
obligation to the next generation.
We understand that the reduction of environmental impact of business activities is one of our top
priority issues. We will accelerate our activities to protect the global environment and work to realize asustainable society.

Sansha Electric Manufacturing Group Environmental Policy
We are continuously pursuing action to protect the environment in accordance with the environmental policy.

Basic Philosophy

We are aware that conservation of the global environment is a corporate social responsibility.
We will work to reduce environmental impact and consider biodiversity to aid the realization ofa sustainable society.

Basic policy

1

Observance of environmental laws and regulations

5

We will observe environmental laws and regulations andmeet equivalent requirements.

2

Prevention of global warming
We will work to reduce greenhouse gas emissions frombusiness activities.

3

Contribution to a recycling-oriented society
We will push ahead with the 3Rs, reduce, reuse and recycle,
to realize a sustainable recycling-oriented society.

4

We will always strive to create environmentally-friendly
product designs to provide products with little environmental
impact throughout their life cycle.

6

Consideration of biodiversity conservation
All our personnel will be aware of importance of conserving
biodiversity and act in due consideration of it.

7

Reduction of hazardous substances
We will work to reduce emissions of substances thatadversely impact the environment and to prevent pollution.

33

Reduction of the environmental impact of products

SanRex REPORT 2022

Continuous improvement of the environmental
management system
We will be aware of impact our business activities andproducts have on the environment and work to continuously
improve our environmental management system.

Promotion structure
The Group has established the Environmental Management

Board of Directors

Implementation Committee. Under the control of theenvironmental manager, it is an organization that implements
environmental conservation activities. This committee develops

Corporate Planning
Conference

Internal Control Committee

plans for environmental conservation activities. The plans are

Environmental Manager (Director)

discussed at the Corporate Planning Conference and at theEnvironmental Management
Implementation Committee

Internal Control Committee and decisions on them are madeby the Board of Directors.
The Quality and Environment Management Department acts

Departments and basesas the administrative office for the Environmental Management
Implementation Committee, which comprises managers fromindividual departments and bases.
We will work to conserve the environment for the realizationof a sustainable society

Actions towards carbon neutrality in 2050

I have supported factories in their acquisition of the ISO 14001

We recognize the importance of constantly lowering CO2 andcertification of environmental management systems and thewaste emissions from production activities. Based on thisconstruction of internal systems for compliance with Europe’s

understanding, we decided in FY2021 to reduce groupwide

RoHS Directive and other regulations regarding the chemicals

CO2 emissions by 46% from the FY2013 level by 2030 andcontained in products.

to achieve carbon neutrality in 2050. We have since been

My current duties are related to our Group’s actions reducing

accelerating our actions to achieve our goals.

CO2 emissions. They include education and other activities to

In FY2021, groupwide CO2 emissions were 9,916 tons ofincrease the environmental awareness of the Group’s personnel

CO2. This figure is 31% lower than in FY2013.

and actions toward meeting theSansha Electric Manufacturing
Group’s CO2 emissions

CO2 emissions reduction target
for 2030 in collaboration with

(t-CO2)2030

20,000the Group’s bases and the CO2

CO2 ( Scope 1,2 )emissions reduction working group.

46% reduction

15,000We will continue doing what

( Vs.FY2013 )we can for the conservation of

10,000

Yumiko Fukuoka

Carbonneutrality

5,000

Section Manager,
Quality andEnvironmental Management
Department

0

2013

2021 2025
Results

2030

2035

2040

2045 2050(FY)

the global environment, including
the reduction of CO2 emissions,for the realization of a sustainable
society.

Estimate

Actions at Okayama Plant
Processes using electric furnaces are a necessary part of thetons CO2 before modification (FY2016) to 476.2 tons CO2

wafer process, which is part of the manufacturing process ofafter modification (FY2019). In the remaining building, we

power semiconductors. Strict air conditioning management is

are rationalizing the wafer process to conserve energy inrequired in cleanrooms. These two operations consume hugeconsideration of productivity. We will check if the electricamounts of power totaling around 70% of the entire Group’s

furnaces are more effectively used paying attention not only topower consumption.

power consumption but also to operation percentages.

The Okayama Plant stopped using a heavy oil boiler for
steam humidification and introduced a heat pump chiller* in
one of the two buildings with production equipment. It also

Heavy oil consumption(liter)200,000

began using dry fog, which does not wet objects exposed

182,090

to it. We are positively utilizing waste heat in a bid to reduceenergy consumption. Discontinuing the use of heavy oil
had the greatest impact on energy conservation. Total CO2

100,000

83,55880,05175,02871,210

2018

2019

2020

2021

emissions from air conditioning decreased from 1,257.3*Heat pump chillers are devices that circulate heat from a low-temperaturesection to a high-temperature section using a refrigerant as a heat transfer
medium to maintain a constant temperature

0

SanRex REPORT 2022

2017

(FY)

34

Special Feature: Management Material Issues

Management of chemical substances
Basic stance
The process of manufacturing power semiconductors involves many different chemical substances with environmental risks.
In accordance with its environmental policy, the Group is working to reduce consumption of these chemicals by increasing productivity,
including the improvement of manufacturing processes and yield ratios, and is also working to appropriately treat them to prevent pollution.
Proper control of chemicals in the
manufacturing process

manufacturing process from their suppliersA t the time of the adoption of a new material: Select materials
with lower environmental impactA t the time of the revision of related laws: Check if any
changes have been made to the content of the SDS
Create an SDS (for any of our products that require an SDS)C heck and report the amounts of class I designatedchemical substancesand properly controls them to comply withTechnology department

The Okayama Plant obtains the safety
data sheets of the chemicals used in the

Governor of Okayama Prefecture

Notification

 t the start of mass production: Implement
Amanagement and training considering industrial safetyAt time of the revision of related laws:
Check for any changes in SDS information, reconsider
details of management and provide trainingCheck and report the amounts of class I designatedchemical substances
Create an SDS to be submitted to the manufacturingcontractor

environmental laws and regulations, to beable to act in the event of an accident andSDS

for the management of its work. Pursuant
to the Act on the Assessment of Releases

SDS

Sales
departmentof Specified Chemical Substances inMaterials
department

the Environment and the Promotion of

Manufacturing site
SDS

Management Improvement (PRTR Law)*, it

SDS

assesses and calculates the amounts of the

SDS

SDS

targeted materials that it handles, releases
Buyersand transfers and submits the data to the

Suppliers

Manufacturing contractors

prefectural governor on an annual basis.
* PRTR Law
Establishes a system under which the sources and quantities of chemicals that involve environmental pollution risks that are released into the environment, such as the air,water or soil, and the quantities of these chemicals that are moved in the form of waste (amount transferred outside) are assessed, calculated and published.

Substances whose notification is obligated under the PRTR Law

NumberSubstance(kg)

Emissions

FY2021
Handling volume

Air

Water

Transfer amount
Soil

External site

Sewerage
networks

53

Ethylbenzene

3,557

1,200

0

0

2,400

0

80

Xylene

5,512

1,900

0

0

3,600

0

265

Tetrahydromethylphthalic anhydride

5,045

0

0

0

25

0

296

1,2,4-trimethylbenzene

3,283

280

0

0

3,000

0

297

1,3,5-trimethylbenzene

1,127

380

0

0

750

0

304

Lead

8,548

0

0

0

0

0

320

Nonylphenol

695

150

0

0

400

0

374

Hydrogen fluoride and its water soluble salt

11,425

4.5

380

0

0

0

384

1-bromopropane

8,529

1,500

0

0

7,100

0

438

Methylnaphthalene

1,660

35

0

0

720

0

453

Molybdenum and its compounds

121

0

0

0

0

0

Management of chemicals contained in products

The volume of PRTR substances handled

In compliance with laws and regulations such as the European
(t)

51.1

53.4

52.7
37.4

Union’s Directive on Restriction of the Use of Certain Hazardous
Substances (RoHS) in Electrical and Electronic Equipment,

43.2

the Sansha Electric Manufacturing Group has formulated
the Sansha Electric Manufacturing Chemical Substances
Management Rank Guidelines to require that suppliers rigidly
manage the chemicals contained in products. In addition, toensure the reliability of chemical substance data, we make surethat our procuring departments work with the Product Quality

2017

35

2018

2019

2020

2021

(FY)

Assurance Department to develop a management structure.

SanRex REPORT 2022

Waste reduction
Our plants have been using reusable shipping containers andtaking other actions in an effort to minimize waste emissions
from business activities and to reduce packing materials andcushioning materials.

Waste emissions and recycling ratio
Total emissions (left scale)
Recycling ratio (right scale)

(t)

88.2

The amount of waste emitted in FY2021 increased by around
8% year on year. This is due mainly to an increase in imports of

(%)

100

1,000
86.5

86.3

600
400

materials with cardboard for new products in a bid to reduce

200

plastic consumption.

80

794.6

764.1

60

large members which resulted in the generation of waste wood.
In the future, we will successively replace plastic packing

85.5

83.4

800

620.1

656.2

606.5

40
20
0

0

From this fiscal year onwards, a larger scope of disclosure

2017

applies. Data for the five past years, including general waste
emissions from plants and also the offices, have been recalculated.

2018

2019

2020

2021

(FY)

The data covers Sansha Electric Manufacturing Co., Ltd. and its groupcompanies based in Japan.

Reduction of water consumption
The semiconductor manufacturing process necessarily

Water consumption

consumes a vast amount of pure water for the removal of(1,000 m3)

etching and cleaning chemicals and the cooling of equipment.

200

As global warming worsens, the risk of failing to procure

150

water due to droughts and water shortages and flooding
damage intensifies around the world. The reduction of theIndustrial water
10.9

9.7

155.2

151.0

3.6

Our Okayama Plant replaced its filtration equipment in 2019

3.9

3.5

138.5

100

corporate consumption of water is a significant issue.

Clean water

135.7

129.3

50

to decrease its consumption of industrial water. In 2020, it replaced the pure water system and increased its reuse of water0

to reduce industrial water consumption. In FY2021, its water
consumption surged around 5% because of an increase in

2017

2018

2019

2020

2021

(FY)

Data is from the Okayama Plant of Sansha Electric Manufacturing Co., Ltd.

production volume.
The Okayama Plant has set a more challenging water
consumption reduction target in an endeavor to effectively use
water resources.

Prevention of water pollution
Our Okayama Plant runs wastewater treatment facilities to

Wastewater volume and chemical oxygen demand (COD) load

purify the wastewater from the manufacturing process and discharge treated wastewater that fulfills our standards which are
more strict than specified in laws and regulations. To control

Wastewater volume (left scale)
COD load (right scale)(1,000 m3)

150

136.8

137.8
124.0

wastewater contamination, we are working to reduce anddetoxify hazardous substances and to collect non-detoxifiable

100

267.8
115.9

120.1

245.4

hazardous substances. We also inspect water quality regularly
and monitor wastewater quality.

(kg)

300

203.1

197.2

200

222.3

50

100

0

0

2017

2018

2019

2020

2021

(FY)

Data is from the Okayama Plant of Sansha Electric Manufacturing Co., Ltd.

Wastewater treatment facilities
at the Okayama Plant

SanRex REPORT 2022

36

ERIALIT
AT

6

Y

M

Special Feature: Management Material Issues

Promotion of diversity andpersonnel in action

Reasons for
identification

Happiness and Stability for Employees is part of the Sansha Electric Manufacturing Group’s corporate
philosophy. We believe that our staff’s happiness is one of the most important parts of our business’s
foundation for corporate growth and development.
Additionally, we are convinced that personnel who think and act independently are essential for theGroup’s continuous growth. We are focused on increasing employee independence.
The Group believes that respecting the human rights of all individuals involved in the Group, including its
employees, is a vital part of the global operations of our business.

Personnel management for continuous growth
Our basic policy for personnel development is that employee
development leads to corporate growth. We will nurture ourstaff through the operation of our business and strive to build
an environment that enables individual employees to develop

Independent thinking and acting
Requiredqualities

Have a can-do spirit
Communicate with a wide variety of people
Eager to learn and very curious

leveraging their own personalities and strengths.

| Priority measures in the medium-term management plan | Personnel development
The Group endeavors to realize a sustainable society throughPriority measures for personnel development

power semiconductors and power supplies. It is necessary for
us to continue to develop technologies, and the developmentof engineering personnel is an indispensable part of innovation.
To accelerate the global expansion of the Group’s business, weDevelop the next generationof employees

emphasize hiring non-Japanese nationals and developing global
leaders who will take charge of overseas-related duties.
The average age of our employees is now 46.2 years. As
Japan’s population continues to age, we are working hardto develop the staff that will support our business in the next

Think and act
independently

generation.

Develop employees that areexperts in technology

37

SanRex REPORT 2022

Develop employees able to work
actively in global markets

For this reason, the personnel development system wasTraining expenses per employee

revised and new training programs were added in the medium-(Yen)term management plan.

30,00026,135

The global personnel development initiative has beensuspended due to the COVID-19 pandemic. Instead, we have

20,000introduced a language skill acquisition support program andother measures to build a foundation for employees actively
working in global markets.

17,441

18,45420172018

17,023

16,92320192020

10,0000

Personnel development system
https://www.sansha.co.jp/csr/hr.html

2021

(FY)

The data covers Sansha Electric Manufacturing Co., Ltd. and its groupcompanies based in Japan.

Developing an environment where diverse employees can demonstrate their capabilities
Career development

Work-life balance

We introduced the programs mentioned below to create

We continuously strive to ensure that working hours are properly

an environment that supports the career development ofmanaged and to reduce the amount of overtime worked. We are

personnel who think and act independently.

improving the working environment to provide a foundation for all
employees, irrespective of gender, to establish a healthy work-lifebalance. Programs we have introduced include an annual leave

Qualification acquisition
support system

Free agent (FA) program

The company pays examination feesand reward money to employees
acquiring qualifications with a view
toward supporting them.

Employees can communicate theirwish to be transferred to their
desired department directly to the
Human Resources Department.

saving program that allows employees to take expired annual paid
leave for medical treatment and nursing care and a commemorative
event leave program that encourages workers to take holidays fortheir preschool children’s birthdays and other events.

Male employees’ use of childcare leave
We have seen a gradual increase in the number of male
employees taking childcare leave since the first time amale employee used this leave program in FY2019. To
continue to increase the percentage of people using thechildcare leave system, we will publicize the program andask superiors to encourage their subordinates to takeleave. We will improve the working environment to help
our personnel balance work and childcare.
Support for return from childcare leave
We ensure that employees wishing to resume working
after childcare leave consult with their superiors to enable
their smooth return to the workplace.
This is meant to remove anxiety about the return andfacilitate their superiors’ understanding of their worklife balance. Through this, we strive to create a working
environment that enables employees to establish ahealthy balance between childcare and their career.
Sansha Electric Manufacturing Co., Ltd. acquired
Kurumin certification under the program run by the
Ministry of Health, Labour and Welfare in August
26, 2022. The goal of this program is to recognize
companies that support childcare in accordancewith the Act on Advancement of Measures to
Support Raising Next-Generation Children.
Companies achieving their goals and fulfilling predetermined criteria are certified by the Minister of
Health, Labour and Welfare.

A memory of childcare leave
About two years ago I learned that childcare leave was available tomen as well. In the past couple of years, circumstances havechanged. Men taking childcare leave is no longer rare now. I myself
used to be hesitant to take it. When my second child was born, I
was less hesitant and I became more positive about taking leave
to reduce the burdens on my wife.
I consulted my boss about taking childcare leave. Luckily, otherstaff in the department were able to cover my duties, so I took
about a month of childcare leave to take care of my second childand about two months of leave for the third. During these shortperiods, I was able to reduce the burdens on my wife when she
was not at her best and to communicate with our children.
Observing their growth, I realized my responsibility and significanceas their father more strongly than before. After
returning to work, I was able to handle myduties more responsibly.
Some may feel awkward about householdchores and some may have no idea
about what to do while on childcare
leave. However, what you can do or
feel like doing will naturally increase
as you spend time with your family. I
feel very happy to have taken
childcare leave.
Quality and Environmental
Management Department
Yusuke Miyazaki

SanRex REPORT 2022

38

Special Feature: Management Material Issues

Promotion of diversity
The Sansha Electric Manufacturing Group respects every person’s race, nationality, origin, faith, creed, gender, sexual
preferences, age and disability status as a part of their individual identity and strive to build a worker-friendly system.

Promotion of active participation of female employees
The advancement of women is a priority subject that we are

Percentages of leaders and managers that are women

addressing. We take various steps to enable the women we

Number of leaders and managers
Leaders and managers that are women (left scale)
Percentage of leaders and managers that are women (right scale)

employ to develop. This includes skill development training
for women employees, encouraging a shift in the mindsets of(people)(%)

personnel including those supervising women, and job rotation

500

10.0

to enable women to work in broader fields. We are striving to400

construct an environment that is friendly to our workers who
are women by interviewing people taking childcare leave before
returning to work, implementing a system of reduced working
hours measured by the minute, and making it possible to takenursing care leave on an hourly basis.
As a result of these actions, we received three-star Eruboshi

12

10

26

18

21

200

0

6.0
4.0

4.3

3.5

certification in December 2021. Under this certification program,
the Minister of Health, Labour and Welfare certifies companies

8.0

6.3

300

100

8.2

7.5

2.0

274

268

269

259

291

0

2017

2018

2019

2020

2021

(FY)

Data covers Sansha Electric Manufacturing Co., Ltd.

developing and submitting notification of their plans of actionin accordance with the Act on the Promotion of Female

External recognition

Participation and Career Advancement in the Workplace.
Companies must apply to prefectural labour bureaus and meet
predetermined criteria and be engaged in outstanding efforts forthe advancement of women.
In FY2019, we formulated a plan of action pursuant to the
Act on the Promotion of Female Participation and Career
Advancement in the Workplace for the period from April 1,

Three-star Eruboshi certificationacquired under the Act on the
Promotion of Female Participation
and Career Advancement

Certified as a Leading Company with
Actively Participating Women in
Osaka-shi

Certified by the Shiga Prefectural
Government’s program certifying
companies that enable women toadvance their careers

One of our employees was chosen
as a role model in FY2019 by the
Okayama Prefectural Government as
a part of their Women in the Land ofSunshine project2019 to March 31, 2022. It set a target of at least 7% of ouremployees in leadership positions (heads of teams and higher)
being women by the end of FY2021. We fulfilled this target, with
8.2% of our employees in leadership positions being women.
We will continue working to increase career awareness anddevelop management skills to nurture women leaders.
The new plan of action for the period from April 1, 2022 toMarch 31, 2025 set the targets specified below.

39

Target 1

Target 2

Increasing the percentage of new graduates recruited thatare women to 20% or higher

Control the average overtime working hours of regular
employees to 15 hours or less per month

Initiatives

Initiatives

1 Increase recruitment activities conducted by employeesthat are women2 Active distribution of information about the good
performance of employees that are women

SanRex REPORT 2022

1 Toughen overtime work management using theattendance management system

2 Provide labor management training to managers

A woman leader displaying her great strength
The Audit Department checks how internal rules are observed inperformance audits and internal control actions and submits proposals to aid
the prevention of misconduct and the improvement of operations. My current
position allows me to take an overall look at the entire company. Often
interacting with staff in other departments, I can propose improvements. This
gives me a sense of fulfillment. When I clearly envision my role of serving thecompany through audits, my professional goals become clear and my small
experience of succeeding and achieving these goals brings about a sense offulfillment. This energizes me to do my next task and in my personal life as
well. Some young staff members may not have clear goals. I would advise
them to think again about what they want to achieve through their work. I
hope that an environment friendly to women workers will be developed andthat more women will aim to be leaders and mangers.

General Manager of the Audit Department
Yoshiko Sakagami

Employment of persons with disabilities
The Group proactively employs workers with disabilities. We
assign duties suited to their unique characteristics to ensure thatevery one of them can work without worries and that they are able
to display their strengths as a valuable part of our work-force.
To move forward with the employment of workers with

Percentage of employees with disabilities

2.4

2.5

providing employment support for people with disabilities and1.5

hiring interns from these institutions. In addition, we are working

1.0

to help staff acquire qualification as Working Life Counselors for

0.5

Persons with Disabilities.
In November 2021, our Okayama Plant received an award as
a leading company in the employment of disabled workers in

Statutory employment rate

3.0

2.0

disabilities, we are organizing plant tours for institutions

Okayama.

Results

(%)

2.7

2.7

2.7

2.2
1.8

2.0

2.2

2.3

2.2

0

2017

2018

2019

2020

2021

(FY)

The data covers Sansha Electric Manufacturing Co., Ltd. and its groupcompanies based in Japan.

SanRex REPORT 2022

40

Corporate governanceCorporate governanceDirectors · Audit & Supervisory Board Member (as of June 28, 2022)
Directors

Hajimu Yoshimura
Representative Director & President

Masaki Fujiwara

Hiroshi ZumotoHas rich experience and broad knowledge
based on his service in various positions
mainly the areas of management andaccounting in the Panasonic Group. He also
served as a director at an overseas subsidiaryof the Panasonic Group, where he acquired
good knowledge about global management.
Since appointed to his present post inJune 2014, he has been in charge of theadministrative department and the corporate
planning department. He is also a Nomination
and Compensation Committee member.

Joined us in 1982 and engaged in productivity
improvement and the strengthening of the
production system as a person responsible for
production technologies. Since his appointment
as Director in June 2021 after holding important
positions in the semiconductor business from2012, he has been using his sophisticated skills
and expertise in the semiconductor businessto control this business. He has also beensupervising our corporate management.

Director and Senior Managing Operating Officer

Has rich experience and extensive knowledge
cultivated as a business manager in the PanasonicGroup, and also possesses abundant knowledgeof global management as he once served asvice president of an overseas subsidiary in thesame group. Since assuming his position as ourcompany’s Representative Director & President
in 2018, he has been using his experience andadvanced knowledge as a business manager andstrong leadership to carry out the growth strategy
and managerial reforms with a vision of being a
Global Power Solution Partner.

Director and Managing Operating Officer

Serving as director for
Owning

7 years

Serving as director for
Owning21,800 shares of our stock

8 years

Serving as director for
Owning

14,700 shares of our stock

1 year8,400 shares of our stock

Status of important concurrent holding of positions

Chairman of the Board, Sansha Electric
Manufacturing (Shanghai) Co., Ltd.

Hajime Katsushima

Akira Uno

Koichi Ina

Joined us in 1981. Worked in research anddevelopment to develop products in the newenergy sector. In November 2016, he wasappointed representative director of a
subsidiary to engage in corporate
management. Currently, he is demonstrating
his leadership as the person responsible forour power supply business.
He became a Director in June 2022.

Has advanced knowledge of financial affairs due
to his work experience at a financial institution.
Since appointed to his present position in June
2014, he has been contributing to theimprovement of the effectiveness of the decisionmaking and supervisory functions of our Board of
Directors from a perspective independent fromour management team. He also chairs theNomination and Compensation Committee.

Holds a good deal of experience and knowledge
after working in the management team of aleading automobile manufacturer in Japan. He
also possesses advanced knowledge of
production technology and research anddevelopment since he worked as an engineer infactory management. Since being appointed tohis present position in June 2019, he has been
leveraging the knowledge above to help improvethe effectiveness of the decision-making andsupervisory functions of our Board of Directors
from a perspective independent from ourmanagement team. He is also a Nomination andCompensation Committee member.

Director and Managing Operating Officer

Serving as director for
Owningn/a
10,700 shares of our stock

Independent Outside Director

Serving as director for
Owning

8 years
10,800 shares of our stock

Status of important concurrent holding of positions

Status of important concurrent holding of positions

Chairman of the Board, SANREX LIMITED
Chairman of the Board, SANSHA ELECTRIC MFG.
(GUANGDONG) CO., LTD.

Outside Director, Hashimoto Sogyo Holdings Ltd.
Fellow ,School of Business at Graduate School of
Economics, Kyoto University (Doctor of Economics)
Senior Executive Fellow, DMG Mori Co., Ltd.

Independent Outside Director

Serving as director for
Owning

3 years
20,900 shares of our stock

Status of important concurrent holding of positions

Outside Director, Kubota Corporation
Chairman, Central Japan Industries Association

41

SanRex REPORT 2022

Audit & Supervisory Board Members

Ichiro Kitano

Full-Time Audit & Supervisory Board Member

Possesses advanced knowledge of corporate
legal affairs cultivated through long experience
as a lawyer and appropriately advises the Boardof Directors from an expert viewpoint. He also
has a perspective on business administration
nurtured through his rich experience serving asa corporate operating officer.

Has great experience and advanced knowledge
as a certified public accountant and a licensed
tax accountant. She worked as a member of theEnvironmental Accounting Technical Committee
under the Management Study and ResearchCommittee of the Japanese Institute of Certified
Public Accountants and several committeesof the Ministry of the Environment and theMinistry of Economy, Trade and Industry. She
appropriately advises the Board of Directors
from an expert viewpoint.

Serving as director for
OwningIndependent Outside Audit & Supervisory
Board Member

2 years
200 shares of our stock

Status of important concurrent holding of positions

6 years
5,000 shares of our stock

OwningEriko Nashioka

Independent Outside Audit & Supervisory
Board Member

Joined us in 1982. He has an abundance ofworking experience and knowledge after longserving as a person responsible for productdesign and the manufacturing of power supplies
in our company. Since being appointed an Audit& Supervisory Board Member in June 2016,he has been making appropriate suggestions
based on his experience and knowledge andconducting on-site inspections to help improvethe effectiveness of the Audit & Supervisory
Board’s auditing as a whole.
Serving as director for

Kazuhiro Egawa

Head of Eiwa Law OfficeOutside Director (Audit and Supervisory Committee
Member), SK-Electronics Co., Ltd.

Status of important concurrent holding of positions

Serving as director for
OwningAudit & Supervisory Board Member, Sansha Solution
Service Co., Ltd.
Audit & Supervisory Board Member, Suwa Sansha
Electric Co., Ltd.

2 years
600 shares of our stock

Status of important concurrent holding of positions

Outside Director (Audit and Supervisory Committee
Member), Fukushima Galilei Co., Ltd.; Outside Audit& Supervisory Board Member, Osaka Gas Co., Ltd.,
Representative Director, Institute for Environmental
Management Accounting, Head of Nashioka
Accounting Office, Lecturer (part-time), Faculty ofCommerce, Doshisha University

Skill matrix
Knowledge and experience particularly expected by the Company
Independence

Corporate
management andmanagement
strategyOverseasbusiness
experience

Businessstrategy

R&D andproduction

Finance andaccounting

Legal affairs andcomplianceHajimu Yoshimura

Directors

Masaki Fujiwara
Hiroshi Zumoto
Hajime Katsushima
Akira Uno
Koichi Ina
Ichiro Kitano

Audit &
Supervisory
Board
Members

Kazuhiro Egawa
Eriko Nashioka

Skills for ensuring the effectivenessof the Board of Directors

Overall business
management
skillsManagement experience as a representative director or
officer in a company

Overseasbusiness
experience

Experience as a representative of overseas subsidiary,head of overseas business division, or executive officer

Requires overseas business management experience, andknowledge and experience of an overseas business environment
to respond to global business development

R&D andproduction
Finance andaccounting

Functional coreskillsSkill requirements

Corporate
Requires management experience and achievements in corporate
management andmanagement and the formulation and promotion of management
management
strategies to realize the Group’s growth strategy
strategy

Businessstrategy

Business coreskillsReasons for selecting skills

Legal affairs andcompliance

As the Company’s business area is a niche and highly specialized
market based on power electronics technology, this position requires ahigh level of knowledge in such area as well as experience in executing
business strategies
Requires knowledge and experience to develop safe, secure,and high-quality products and realize integrated production fromdesign to production
Requires accurate financial reporting, efficient management of invested
capital, and knowledge and experience to enhance shareholder
returns
Requires knowledge and experience in legal affairs and compliancefields to ensure effective corporate governance and improve theeffectiveness of the Board of Directors.

Executive in charge of business division, head ofdivision and person with equivalent experience as senior
management
Executive in charge of R&D and production division, headof division and person with equivalent experience as senior
management
Executive in charge of accounting and finance division, headof division, person with equivalent experience and person withexperience in auditing firm, etc.
Experience as executive in charge of legal affairs andcompliance, head of division, and person with experience ina law firm, etc.

Koichi Ina

Hiroshi Zumoto

Ichiro Kitano

Hajimu Yoshimura

Masaki Fujiwara

Eriko Nashioka

Kazuhiro
Egawa

Akira Uno

Hajime Katsushima

SanRex REPORT 2022

42

Corporate governanceCorporate governance system chart
Number of meetings held in FY2021

Board of Directors

15 meetings

The Board of Directors holds a regular meeting
each month in principle and extraordinary
meetings as needed. It makes decisions on
basic management policies and important
strategies. It is also defined as an organizationthat supervises business execution by Directors
and Operating Officers. For the purposesof strengthening the business foundations
and enhancing the function of supervising
management, we cap the number of directors
to eight or fewer. For further strengthening
corporate governance, the term of each director
is set at one year.

Number of meetings held in FY2021

Nomination andCompensation Committee

Number of meetings held in FY2021

Audit &
Supervisory Board

4 meetings

13 meetings

It holds a regular meeting each month in principle
as well as ad hoc meetings. It makes resolutions
and deliver reports on necessary matters.
In accordance with the audit policies and plans
prepared in conformity with the audit standards
determined by the Audit & Supervisory Board,
Audit & Supervisory Board Members attend
Board of Directors’ meetings and otherimportant meetings, view significant documents
and materials, visit and inspect the head officeand other principal facilities and receive reports
from Directors, Operating Officers and otherpersonnel on the execution of duties to enable
close collaboration with them.

It is chaired by an Outside Director, and amajority of its members must be Outside
Directors. Deliberations on remunerationfor officers are joined by an Outside Audit &Supervisory Board Member as an observer.
It discusses policies for nominating Directors
and Audit & Supervisory Board Members,
matters related to appointment anddismissal, policies on the determination of
directors’ remuneration and the remuneration
system, remuneration for individuals andother subjects. It then submits reports to
the Board of Directors.

General Meeting of Shareholders
Appointment and dismissal

Appointment
and dismissal
Report and advise

Board of Directors

Nomination andReport Compensation Committee

With 4 inside and2 outside members

AdviseAccounting
auditing

Instruct/
provideguidance

Representative
Director

ReportAccounting
AuditorRegulation
Committee
Internal Control
Committee

Corporate lawyer

Appointment, dismissal andinstruction

ReportReportAppointment
and dismissal

AdviseReportInstruction

Auditing

Instruct/provide guidance

Corporate
Planning
Conference

Audit Department
Instruct/provide
guidance

ReportCollaboration

Collaboration

Audit &
Supervisory
Board

With 1
inside and2 outside
members

Business departments andgroup companies
ReportAppointment and dismissal
Collaboration

Number of meetings held in FY2021

Regulation Committee

2 meetings

It is chaired by the Director and the
Executive General Manager of the Corporate
Planning Division and attended by Operating
Officers and presidents of subsidiaries
based in Japan.
It discusses the creation of regulations
and detailed rules as needed and delivers
reports on important regulations to theBoard of Directors.

43

Number of meetings held in FY2021

Internal Control
Committee

12 meetings

It is chaired by the Director and the Executive
General Manager of the Corporate Planning
Division and attended by Inside Directors,
Operating Officers, presidents of subsidiaries
based in Japan and heads of relevant
departments. It holds at least one meeting eachmonth in principle. It provides overall control andsupervision of matters related to risk management
and compliance in the whole Group. A mechanism
has been established in which it submits reports
to the Board of Directors as appropriate.

SanRex REPORT 2022

Number of meetings held in FY2021

Corporate Planning
Conference

12 meetings

It is attended by Inside Directors, Full-Time Audit &Supervisory Board Members, Operating Officers,
presidents of subsidiaries based in Japan and theheads of relevant departments. It holds at least
one meeting each month in principle. It makes
advance deliberations on important businessexecution matters for which resolutions are set to
be made at meetings of the Board of Directors.
It also monitors the overall state of progress inthe management plan and manages day-to-day
actions such as solutions to problems.

Basic stance on corporate governanceOur stance on corporate governance is based on our management principles.
We believe that our top priority is the ensuring of the effectiveness of our corporate governance through the creation of a highly
transparent and efficient management system that meets the needs of society in consideration of the shareholders’ interests.

Characteristics of the corporate governance system
Outside Directors make up atleast one third of the Board

The Nomination andCompensation Committee is established voluntarily

Actions for improving corporate governance
1984

2006

Corporate
Planning
Conference
established

Operating
Officersystemintroduced

2018Standards forassessment byoutside accounting
auditors formulated

2007

2011

2014

2016

Officer retirement A whistleblowing
benefit system
contact establishedabolishedwithin the internal
audit department

Directors’
term of officeshortened to
one year

Outside Directors
introduced

Assessment of
the effectivenessof the Board of
Directors begun

2019
Nomination andCompensation
Committee
established

2020
Outside officers elected
to ensure that at least
one third of officers areoutside officers

Risk Management Committee(currently Internal Control
Committee) established

2021
FemaleOutside Audit &Supervisory Board
Member elected

Additional whistleblowing
contact establishedwithin the Audit &Supervisory Board

Whistleblowing contact within
the Audit & Supervisory Board
abolished and a new contact
placed at an outside law firm

A complianceawareness surveyof all employees
conducted

Nomination and Compensation Committee
We established the Nomination and Compensation Committee

Composition of the Committee

in November 2019. Its objectives are to nominate Directors
and Audit & Supervisory Board Members and to increase the1

The committee consists of at least three Directors
selected by the Board of Directors.

2

Independent Outside Directors make up half of thecommittee or more.

3

The committee is chaired by a person selected fromamong the Independent Outside Directors.

4

Meetings of the committee are attended by an Outside
Audit & Supervisory Board Member as an observer.

independence, transparency and objectiveness of the Boardof Directors’ functions regarding Directors’ remuneration andother matters. The committee will enhance our accountability andcorporate governance. To ensure the fairness and transparencyof the committee, an advisory body focused on decisions
regarding the nomination of prospective Directors and Audit &Supervisory Board Members and on Directors’ remuneration,
the committee deliberates about these matters and reports to
the Board of Directors. Since December 2021, an Independent
Outside Audit & Supervisory Board Member has been taking
part in deliberations on remuneration for officers as an observer.
Current committee members

Deliberations of the committee

Chair

The committee had four meetings in FY2021. Each of them was attended by all the committee members.
To increase the transparency and fairness of election and remuneration for officers, it worked to clarify theofficer election procedures and discussed the basic policy and system concerning remuneration for officers
as well as remuneration for individuals and other issues and sent its advice to the Board of Directors.
For FY2021, it also discussed the view-point of successor planning, specified what knowledge,
experience, skills and expertise are required for officers to ensure that the Board of Directors would have awellbalanced composition.

Akira Uno

Independent Outside Director

Members

Koichi Ina

Independent Outside Director

Hajimu Yoshimura

Date of meeting

Nomination

Remuneration for officers

Representative Director & President

April 22, 2021

Performance-based remuneration for
Proposal regarding election of Directors by the
Directors and remuneration for individual
General Meeting of Shareholders
Directors

Masaki Fujiwara

August 25, 2021

Viewpoint of successor planning and skill matrix-

ObserverDecember 27, 2021

Prospective officers

Basic policy on remuneration for officers,
amounts of remuneration for officers,
structure of remuneration for officers anddifferent systems

January 27, 2022

Appointment of officers for FY2022 andskill matrix-

Director(for deliberations on remuneration for officers only)

Kazuhiro Egawa

Independent Outside Audit &Supervisory Board Member

SanRex REPORT 2022

44

Corporate governanceCriteria for appointment and dismissal of officers
Appointment criteria

1

Such person has an excellent personality, knowledge andmanagement sense, and is familiar with managerial issues.

2

Such person has a superior ability to make analysis and judgment
objectively from a company-wide perspective.

3

Such person can state his/her opinion positively from a companywide perspective.

4

Such person can secure time and effort required to properly
perform his/her duties and responsibilities as Director/Corporate
Auditor.

5

Such person satisfies statutory eligibility requirements for Director/
Corporate Auditor.

6

As for a candidate for Outside Director/Outside Corporate Auditor,
such person satisfies the Company’s criteria for judgment of
independence.

7

The appointment of such candidate for Director maintains the diversityof experience and expertise, has the Board of Directors exercise its
function most efficiently and effectively, and brings a balance so thatmanagement is supervised throughout the Company.

8

The appointment of such candidate for Corporate Auditor brings abalance among knowledge, experience and expertise.
At least one Corporate Auditor has considerable knowledge infinance and accounting.

Dismissal Criteria

1

Cases where a material fact in violation of laws, regulations or
the Articles of Incorporation is found.

3

Cases where the corporate value is significantly damaged bya failure to perform duties.

2

Cases where a significant deviation from the appointment
criteria is found.

4

Cases where an event occurs that makes appropriate executionof duties difficult.

Criteria for independence
Outside Officers to whom none of the following conditions applies can be “Independent Officers.”

1

Person who performs or has performed duties of the Group4

Consultant, accountant, tax accountant or lawyer who
earns money or other assets over 10 million yen (averageof the past three years) in a year from the Group other thandirector’s remuneration

2

Person who performs duties of a major business partner of theGroup (customer or supplier whose transaction amount exceeds
1% of the annual consolidated sales in the latest businessperiod) or its parent company or important subsidiary5

Member of the audit firm which performs an accounting auditof the Group or staff who has been directly engaged in auditof the Group

6

Person who performs duties of a major shareholder, a major
shareholder organization or its group whose shareholding ratio is
more than 10% in the Company’s latest shareholder registry7

Person who satisfied conditions 2 through 5 above in thepast three years or a partner/relative within the second degreeof kinship of a person listed in 1 through 6 above

3

Person who performs duties of a financial institution which isessential to the Group’s funding and cannot be replaced and on
which the Group relies, or other major creditor or its parent
company or important subsidiary

Activities of Outside Officers
Status of attendance at Board of Directors’ meetings

Akira Uno

Attended 15 of 15 meetings

OutsideDirectors

Status of main activities
 t the Board of Directors, he actively made remarks and proposals on theAbasis of his deep insight into financial affairs and abundant experience andknowledge as a member of management in many companies.
 s chairman of the Nomination and Compensation Committee, he playedA
important roles such as presiding over the proceedings, nominating Directors
and other personnel, discussing remuneration and drafting reports.
 t the Board of Directors, he actively made remarks and proposals
Awith the use of his abundant experience and knowledge as a memberof management at a leading Japanese carmaker.

Koichi Ina

Attended 15 of 15 meetings

 e served as a member of the Nomination and Compensation
H
Committee. He discussed nomination of Directors and other personnel
and remuneration and played a significant role in submitting reports to
the Board of Directors.
 t the time of factory inspection, he gave advice based on his
Aextensive experience and knowledge as an engineer.

Status of attendanceat Board of Directors’
meetings

OutsideAudit &
Supervisory
Board
Members

Kazuhiro
Egawa

Eriko
NashiokaAttended 15 of 15
meetings

Attended 15 of 15
meetings

Status of attendanceat Audit & Supervisory
Board meetings

Attended 13 of 13
meetings

Attended 13 of 13
meetings

Status of main activities
 t the Board of Directors and at the Audit & Supervisory Board, heAplayed vital roles by, for example, making remarks mainly from his
expert viewpoint as a lawyer.
He conducted visiting inspections of factories and subsidiaries in Japan.
 e has been taking part in deliberations on remuneration for Officers
Hat the Nomination and Compensation Committee as an observer since
December 27, 2021.
 he played important roles at the Board of Directors and at the Audit
S& Supervisory Board as she made remarks as appropriate chiefly fromher expert standpoint as a certified public accountant and with the useof her knowledge on environmental accounting and others related tosustainability.
She conducted visiting inspections of factories and subsidiaries in Japan

45

SanRex REPORT 2022

Officer remuneration system
We have formulated a policy regarding the determination of remuneration for officers and the method for calculating it. It is as follows.

1

The officer remuneration system must
be intended to promote our continuous
growth and medium- and long-term
increase of our corporate value. It mustencourage officers to perform their duties
to their utmost abilities in accordancewith our Group vision and to contribute to
the improvement of financial results.

2

On the basis of the data collected byoutside research bodies, remuneration for
officers will consist of base remuneration,
which is a fixed amount for individual
posts, and performance-based
remuneration, to ensure that the soundincentives matched with the Directors’
duties will serve their intended functions.

3

Remuneration for Outside Directors andfor inside and outside Audit & Supervisory
Board Members will consist solely of baseremuneration, as they are independent
from the execution of business andvariable performance-based remuneration
is not appropriate for them.

Process of deliberation and determination of remuneration for officers
Matters regarding a
resolution of the General
Meeting of Shareholders
on remuneration for
officers and others

A resolution on monetary remuneration for Directors was
passed at the ordinary General Meeting of Shareholders forthe 74th term that took place on June 27, 2008, establishingan annual upper limit of 300 million yen, excluding theemployee wages of any Director who is also an employee.
Resolution on the monetary compensation for Audit &Supervisory Board Members was adopted by the ordinary
General Meeting of Shareholders for the 59th term thattook place on June 28, 1993 to set an annual upper limitof 40 million yen.

Stance on performancebased remuneration

The performance indicator for performance-based remunerationis consolidated operating profit ratio, chosen because it is
the most important performance indicator related to theevaluation of performance during the fiscal year under review.
We calculated performance-based remuneration by multiplying
the standard amount for the specific post by the coefficientappropriate to the consolidated operating profit ratio.

The amount of performance-based remuneration for Directors is
discussed by the Nomination and Compensation Committee inaccordance with the consolidated operating profit ratio for the
fiscal year under review and reported to the Board of Directors.
The Board of Directors determines the amount of performancebased remuneration for Directors in accordance with the reportfrom the Nomination and Compensation Committee.

Matters regarding
determination of
remuneration for
individual officers
and others

Base remuneration for Directors for the fiscal year under review
is the fixed remuneration for specific posts under the Regulations
on Remuneration for Directors and has been discussed by the
Nomination and Compensation Committee on the basis of officer
remuneration data surveyed by an outside research body.
The determination of remuneration for individual Directors isdelegated to Hajimu Yoshimura as Representative Director& President, on the basis of the resolution of the Board of
Directors. The Representative Director & President will determine
remuneration in accordance the amounts of remuneration
for individual Directors reported after deliberations by the
Nomination and Compensation Committee within the limit on
total remuneration in accordance with other resolutions thathave been adopted at the General Meeting of Shareholders.
The reason this duty has been delegated is that we believe theRepresentative Director & President can appropriately determine
the remuneration for individual Directors in consideration of ouroverall financial results and other facts. The Nomination andCompensation Committee reviews the appropriateness of thedetermination of remuneration under the delegated authority prior
to decisions coming into affect.
Remuneration for Audit & Supervisory Board Members isdetermined through deliberation among them within the limit for
the total remuneration for Audit & Supervisory Board Members
as determined by a resolution passed at the General Meeting of
Shareholders.

Evaluation of the effectiveness of the Boardof Directors

Evaluation of effectiveness of the Audit &Supervisory Board

The Board of Directors evaluates its own overall effectivenessIn FY2021, the Audit & Supervisory Board conducted a self-

to increase its effectiveness and the corporate value of theevaluation on its effectiveness for the purpose of assessing its

Group. This evaluation includes the Directors and Audit &functions, roles, actions and effectiveness.

Supervisory Board Members. The results of the evaluation for
FY2021 are summarized as follows.
Date

From December 27, 2021 to February 25, 2022

Date

From December 27, 2021 to February 25, 2022

MethodQuestionnaire survey
52 questions about the composition, roles, and operations of
the Board of Directors, their determination of strategies andorientation, the internal control system and other matters

MethodQuestionnaire survey
Evaluation in a total of 18 items on a four-grade scale

Summary ofevaluation
results

 igh marks were generally given to roles and services
H
played by Board of Directors members, leadership of thechairperson and the culture of the Board of Directors.

Evaluation
results

The self-evaluation concluded that the Audit & Supervisory
Board functioned effectively in FY2021.

Futureinitiatives

The full-time Audit & Supervisory Board Member and theinternal audit department share monthly reports on internal
audits and business audit reports. A liaison meeting
between the Audit & Supervisory Board Members andthe Audit Department takes place per month for sharing
information about their respective auditing activities.
However, there was no opportunity of direct informationexchange between Outside Audit & Supervisory Board
Members and the internal audit department. We havehence decided to hold a liaison meeting including Outside
Audit & Supervisory Board Members regularly and toensure sharing of monthly reports and other materials
produced by the internal audit department.

 here still remained some problems with monitoringTof management resources and with the successor
development plan.
In comparison with the evaluation in the previous fiscal
year, the improvement in supervision of remuneration
for Directors and in the Nomination and Compensation
Committee gained high marks. On the other hand, theimprovement in information offering to Outside Officers
was poorly rated and remained to be addressed.

Measures forincreasing
effectivenessIn response to the evaluation results mentioned above,
we will implement measures listed below.
Increase opportunities of discussing medium- and longterm strategies, policies and ESG actions at the Board of
Directors
Regularly organize meetings of information exchange
among Outside Officers and meetings of opinion
exchange between the President and Outside Officers

SanRex REPORT 2022

46

Corporate governanceComment from Independent Outside Director

I hope for continuous growth as a manufacturer
Apart from matters for resolution, theCompany’s Board of Directors receive
monthly results and plans about orders andsales and reports on the state regarding
priority tasks from the Sales Division. It also
receives from the Corporate Planning
Division, the Engineering Research andDevelopment Division, the Semiconductor
Manufacturing Division and the Power
Supply System Manufacturing Divisionperiodical reports on their respective current
statuses and future action policies.
The Board of Directors is run under theleadership of its Chairperson. All its
members make frank remarks and engage
in free discussions based on their respective
expertise and skills as well as theexperience they have accumulated. I feelthat they are a great help to managerial
judgments, sound decision-making andconsideration of future directions withdiverse views taken into account.
The Nomination and Compensation
Committee is chaired by an Independent
Outside Director. It ensures logical objectivity

and transparency in terms of the stance andimplementation of appointment andremuneration for officers.
Since I am from the manufacturing sector, I
visit our factories on a regular basis. I strongly
feel that these factories have a favorable
culture, with workers seriously and sincerely
practicing their manufacturing duties andswiftly addressing improvements. In view ofthe factory atmosphere and the state of theBoard of Directors, I feel that the Company
will achieve further growth in the future as amanufacturing company.
The world is now undergoing drasticchanges such as decarbonization and digitaltransformation (DX). Most companies arefacing a struggle for survival. We are making
every effort to continuously develop ourstrengths, to create more competitive
products and to become a company that will
greatly serve society. I will endeavor to be as
closely involved in this activity as possible.

Koichi Ina
Independent Outside Director

Risk management
Basic stance

Risk management system

As the risks facing businesses are diversifying, the GroupThe Group has established the Internal Control Committee

identifies the various risks involved in its businesses,

chaired by the Director and Executive General Manager of theconstructs a management system for risk prevention andCorporate Planning Division. To manage and prevent risk,takes actions to minimize the impact of risks. Our basic

we are working to develop our emergency response capabilities

stance is to respond swiftly and appropriately to respondto address emergency situations when they occur. We haveunder the authority of the management team when any risk

established a system for reporting to the Board of Directors

becomes a reality.

as appropriate. The committee discusses policies and specificmeasures to address risks that are presumed to be involvedin the Group’s business activities and to instruct individual
departments. Concerning quality issues in particular, the quality
management departments established in individual divisions will
carry out the cross-sectoral management of divisional quality
assurance operations to resolve any issues quickly and precisely.

Major risks and response measures
Risks

Details

Changes in
economic
environment

Impacts of economic slowdown and decline
in capital investment demand on businessperformance

Business risks
Strategic risks

Product defects, delays in productdevelopment, suspension of OEM supply andcollaboration, rising prices of raw materials,
delays in procurement, changes in financial
positions of contractors, country risks,competition risks, information security risks
and labor shortage

Environmental
risks
Financial risks

Treasury risks
Naturalrisks andpandemics

47

RoHS Directive and other environmental
regulations and spillage of chemical
substances
Impacts of fluctuations in foreign exchange
rates and interest rates and a slide in shareprice on business performance
Impacts of impairment in long-term assets,occurrence of retirement benefit obligations,changes in accounting and/or taxation
systems on business performance
Damage to manufacturing bases and others
caused by natural disasters and businesssuspension due to a pandemic

Response policy and measures
Sales strategy that does not depend on any specific region or industryImprovement in technology development,
quality and maintenance services
 anufacturing cost cuts, enhancement inMproductivity and expense reduction

Consideration of alternative procurement
for main parts and revision to production
contractors
Collection of information on country risks
Information security enhancement andmanagement of contractors
Enhancement of employment system aswell as education and training programs

 uality management based on quality
Q
management standards that comply withlaws and ordinances

Chemicals management in strict
compliance with standards andprocedures

Forward foreign exchange contracts

Reduction of cross-shareholding stocks

 egular reviews on possibility of collectingR
the remaining value of assets

Regular monitoring of pension asset
management at the internal committee
for pension asset management

 rills for swift first response to large-scaleDdisasters

SanRex REPORT 2022

Formulation of a business continuity plan
(BCP)
Encouragement of commuting off rush
hours and working from home

Compliance
Basic stance
The Group’s corporate philosophy is universal to the Groupand the basis of its business operation and standards ofconduct. We are convinced that the Group’s corporate value

Sansha Electric Manufacturing Group
Behavioral Charter

will be increased by developing a corporate culture that values

1 We contribute to the development of a sustainable

compliance and by building sound business foundations as asociety by developing and providing products andservices that are useful to society.

company winning trust from society.

2 We will address the globalization of businessOur mission is to create a product needed by society. No
matter how society changes, the customer-first principle isactivities and engage in fair, transparent and freecompetition and in proper commercial transactions.

the starting point of business. Customer satisfaction leads

3 We will proactively contribute to society and protect
the global environment.

to continuous corporate development. We will think from the

4 We will disclose necessary information to society in astandpoint of customers to create products that are safe,

timely manner, engage in constructive dialogue withall stakeholders, and strive to maintain and develop
relationships of trust.

secure and reliable in a bid to serve social development
together with customers. In pursuit of harmony and mutual

5 We will respect human rights and diversity, ensure a

prosperity with the global environment and local communities,

safe and comfortable working environment, and realize
comfortable, relaxed and affluence.

we also endeavor to remain a company that makes fair andproper transactions globally and that earns the trust of society.
The Group has adopted the Sansha Electric Manufacturing
Group Behavioral Charter for constantly reviewing our businessactivities with a view to realizing our corporate philosophy.

Main initiatives

Anti-bribery Initiatives

Whistleblowing system

We have developed an anti-bribery and corruption policy.

The Group has set up compliance helpdesks (whistleblowing

We also observe all anti-bribery regulations in all countries

contacts) to be contacted regarding inquiries about

and regions where the Group operates business, including

compliance and for the reporting of any dishonest conduct.

Japan’s Unfair Competition Prevention Act and the United

In addition to internal helpdesks, we launched a new one

States’ Foreign Corrupt Practices Act. We will refrain from any

at an outside law firm in October 2021 in order to receive

conduct that could lead to misunderstanding about collusion

reports and inquiries from group companies including thosewith politics and government and strive to build sound andoutside Japan.

transparent relationships. The Sansha Electric Manufacturing

Upon inquiry or notification of any dishonest conduct,

Group Action Policies ban excessive entertainment,

the Group will investigate the facts and take corrective andstipulating that gifts, entertainment and suchlike to businesspreventive actions.

partners and their officers and employees must not exceed
the level that is appropriate according to social norms.

In accordance with the Whistleblower Protection Act andto thoroughly protect whistleblowers, the whistleblowing
system prohibits the dismissal or any other disadvantageous
treatment of a person for their whistleblowing.

Sansha Electric Manufacturing Group
Basic Policy for Prevention of Bribery and Corruption
https://www.sansha.co.jp/ir/governance.html

Compliance awareness survey

Whistleblowing process flow

We conduct a compliance awareness survey in the form of a

Whistleblower

questionnaire. Its findings are reported to all employees. The
Board of Directors reviews of whether or not the Group hasa corporate culture that respects the objectives and the spirit
behind the Sansha Electric Manufacturing Group Behavioral
Charter. The Internal Control Committee endeavors to
identify risks on the basis of the survey results and improves

ReportPerson(s) and/or department(s)involved in thewhistleblowing
reporteducational and awareness-raising activities regarding

Internal helpdesks(in the Human Resources
Department and the Audit
Department)

ReportSharing of
information

Outside helpdesk(in a law firm)

Investigation

compliance.

ReportOrder forcorrective andpreventive
actions

SanRex REPORT 2022

Sharing of
information

Instruction on
investigation

ReportPerson in charge of the administrative department(Executive General Manager of the
Corporate Planning Division)48

Financial data

Trends in major financial
indicators in the past 11 years

FY2011FY2012FY2013

78th

79th

80th

FY201481th

business
periodbusiness
periodbusiness
periodbusiness
periodNet sales

26,393

20,547

23,27922,113
14,943Fiscal year (million yen)Japan

16,811

14,591

16,697

Overseas

9,581

5,956

6,582

7,169

Cost of sales

20,95915,46916,70815,726Gross profit

5,434

5,078

6,570

6,387

Selling, general and administrative expenses

3,528

3,452

4,078

4,085

Operating profit

1,905

1,536

2,492

2,301

Ordinary profit

1,858

1,616

2,582

2,289

Profit before income taxes

1,946

1,231

2,542

2,281

Profit attributable to owners of parent

1,295

910

1,651

1,506

Capital investment

693

708

3,040

1,011

Depreciation

846

846

872

1,056

Research and development expenses

763

594

664

688

Cash flows from operating activities

3,837

1,675

621

2,886

Cash flows from investing activities

78

(617)

(1,858)(2,244)

Cash flows from financing activities(1,510)

(960)

334

20

8,982

5,341

6,372

7,039

(97)

(177)

352

859

Net sales

17,411

15,205

16,906

15,073

Segment profit

2,003

1,713

2,139

1,442

5,575

5,879

5,212

6,204

Segment information (million yen)
Semiconductor businessNet sales
Segment profit
Power supply business

As of the end of fiscal year (million yen)
Cash and cash equivalents
Interest-bearing debt

2,701

1,936

1,560

1,832

Total assets

24,26023,63327,60228,007

Net assets

13,005

14,06916,756

18,665

Earnings per share

102.4472.01

114.75100.80Net assets per share

1,028.54

1,112.74

1,121.30

1,249.11

Dividends per share

12.5

15.0

15.0

17.0

7.2

7.5

10.7

10.4

Per-share data (yen)Financial indicators (%)
Operating profit/net sales
Return On Assets (ROA)

5.2

3.8

6.4

5.4

Equity ratio

53.6

59.5

60.7

66.6

Return On Equity (ROE)

10.4

6.7

10.7

8.5

Dividend payout ratio

12.2

20.8

13.1

16.9

Total shareholder return

73.2

96.3

104.4

110.4

Ratio of dividends to net assets

1.2

1.3

1.3

1.4

Total number of issued shares

12,650,000

14,950,000

14,950,000

14,950,000

Total number of treasury shares

5,851

6,046

6,541

7,099

457

590

627

648

Shares and share prices

Share price at the end of period (yen)Price earnings ratio (PER)

4.46

8.19

5.46

6.43

Price book-value ratio (PBR)

0.44

0.53

0.56

0.52

49

SanRex REPORT 2022

FY2015

FY2016FY2017FY2018FY2019FY2020

82th

83th

84th

85th

86th

87th

FY202188th

business
periodbusiness
periodbusiness
periodbusiness
periodbusiness
periodbusiness
periodbusiness
period22,191

20,06923,71724,36921,875

19,436

22,675

15,40013,451

16,026

16,927

15,165

13,462

14,626

6,790

6,618

7,691

7,442

6,709

5,973

8,049

16,421

15,652

17,515

17,93017,281

15,027

17,227

5,770

4,417

6,202

6,438

4,594

4,408

5,447

3,893

4,194

4,727

4,605

4,337

3,992

4,131

1,876

222

1,474

1,833

256

416

1,316

1,801

217

1,480

1,804

243

441

1,313

1,710

281

1,471

1,793

290

612

1,320

1,172

126

1,065

1,339

(680)

497

1,147

407

463

734

720

641

359

513

970

955

977

955

1,030

948

920

703

511

904

1,305

1,204

1,223

1,250

1,401

1,844

3,560

746

36

1,729

940

(321)

(2,594)

(499)

(658)

(571)

(355)

(317)

(1,484)(94)(1,135)

(961)

(659)

(249)

(1,666)

6,103

5,751

7,016

6,816

5,688

5,709

7,791

180

77

657

452

(368)

172

767

16,087

14,31816,70017,553

16,186

13,727

14,884

1,695

145

817

1,381

624

244

548

5,654

4,966

6,820

5,963

4,659

5,870

5,026

1,001

1,150

200

100

-

-

-

26,16925,72527,81728,532

24,051

24,84627,146

18,421

18,24819,314

19,952

18,48919,336

19,810

79.29

8.71

73.48

93.44

(48.22)

35.42

83.30

1,271.07

1,259.14

1,332.69

1,410.77

1,316.15

1,376.49

1,541.90

23.0

10.0

20.0

28.0

13.0

15.0

25.0

8.5

1.1

6.2

7.5

1.2

2.1

5.8

4.3

0.5

4.0

4.8

(2.6)

2.0

4.4

70.4

70.9

69.4

69.9

76.9

77.8

73.0

6.3

0.7

5.7

6.8

(3.5)

2.6

5.9

29.0

114.8

27.2

30.0

-

42.3

30.0

100.7

93.4

269.5

155.0

97.1

153.7

155.0

1.8

0.8

1.5

2.0

1.0

1.1

1.7

14,950,000

14,950,000

14,950,000

14,950,000

14,950,000

14,950,000

14,950,000

457,099

457,099

457,099

807,120902,122902,122

2,102,122

563

506

1,615

853

469

817

800

7.10

58.09

21.98

9.13

-

23.07

9.60

0.44

0.40

1.21

0.60

0.36

0.59

0.52

SanRex REPORT 2022

50

Financial data / Stock and shareholder data

Consolidated balance sheets
Assets(million yen)

FY2020

FY202187th

88th

business
periodbusiness
period18,594

20,819Total current assets

FY2020Liabilities andnet assets
Current liabilities
Non-current liabilities

Non-current assets
Property, plant and equipment(million yen)

5,282

5,259

87th

FY202188th

business
periodbusiness
period

4,806

6,905

703

431

Total liabilities

5,509

7,336

18,87918,795457

1,014

19,336

19,81024,84627,146

Intangible assets

156

143

Investments and other assets

812

924

Total non-current assets

6,251

6,326

Shareholders’ equity
Accumulated othercomprehensive income
Total net assets

Total assets

24,84627,146

Total liabilities and net assets

Consolidated statements of income(million yen)
FY202087th

FY202188th

business
periodbusiness
periodNet sales

19,436

22,675

Cost of sales

15,027

17,227Gross profit

4,408

5,447

Selling, general and administrative expenses

3,992

4,131

Operating profit

416

1,316

Ordinary profit

441

1,313

Profit before income taxes

612

1,320

Total income taxes

115

173

Profit497

1,147

Profit attributable to owners of parent

497

1,147

Consolidated statements of comprehensive income(million yen)
FY202087th

FY202188th

business
periodbusiness
periodProfit497

1,147

Other comprehensive income

490

557

Comprehensive income

988

1,704

Comprehensive income attributable to owners of parent

988

1,704

Consolidated statements of cash flows(million yen)
FY202087th

FY202188th

business
periodbusiness
periodNet cash provided by (used in) operating activities

1,729

940

Net cash provided by (used in) investing activities

(355)

(317)

Net cash provided by (used in) financing activities(249)(1,666)86

198

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

1,211

(844)

Cash and cash equivalents at beginning of period

4,659

5,870

Cash and cash equivalents at end of period

5,870

5,026

51

SanRex REPORT 2022

Stock and shareholder data (as of March 31, 2022)
Stock exchange listing

Tokyo Stock Exchange Standard Market (securities code 6882)*as of April 4, 2022

Administrator of shareholders’ register

Sumitomo Mitsui Trust Bank, Ltd

Number of shares issued

14,950,000

Number of shareholders

7,278

Major shareholders (ten largest shareholders)Name

Number of shares held
(unit: thousands)

Shareholding ratio (%)

2,164

16.85

Miyashiro Limited Liability Company

758

5.90

BNY GCM CLIENT ACCOUNT JPRD AC ISG(FE-AC)

614

4.78

Employee Shareholding Association ofSansha Electric Manufacturing

394

3.07

Kunio Shikata

330

2.57

The Senshu Ikeda Bank, Ltd.

314

2.44

Sumitomo Mitsui Banking Corporation

280

2.18

Yukiya Morita

242

1.88

Hideo Shikata

228

1.78

DFA INTL SMALL CAP VALUE PORTFOLIO

206

1.61

Panasonic Corporation(Notes)1. The number of shares held is rounded
down to the nearest thousand.
2. S ansha Electric ManufacturingCo., Ltd. owns 2,102,122 treasury
shares, but excluded itself from thelist of major shareholders.
3. T he shareholding ratio is calculated
disregarding treasury shares androunding to three decimal places.
4. Panasonic Corporation changed its
company name to Panasonic Holdings
Corporation on April 1, 2022.

Distribution by type of shareholders
Financial institutions

Securities companies

839 thousand shares / 5.62%

360 thousand shares / 2.41%

Non-Japanese national individuals

1,838 thousand shares / 12.31%
Individuals

Number of shares

In own or company name2,102 thousand shares / 14.07%

14,950(Notes)1. The number of shares held is rounded
down to the nearest thousand.
2. T he shareholding ratio is calculated
disregarding shares of less than one
trading unit and display by rounding
to three decimal places.

6,165 thousand shares / 41.28%

thousand shares

Other corporations based in Japan

3,630 thousand shares / 24.31%

Monthly trends in share price and trading volume
(Yen)

(Yen)

TOPIX

Closing price

1,500

2,500

1,200

2,000

900

1,500

600

1,000

300

500

0

0

(Shares)

Trading volume

6,000,000
4,000,000
2,000,000
0
4

5

6

7

8

9 10 11 12 1
2019

2

3

4

5

6

7

8

9 10 11 12 1
2020

SanRex REPORT 2022

2

3

4

5

6

7

8

9 10 11 12
2021

1

2

3 (Month)(Fiscal year)52

Non-financial data / Company outline

Non-financial data
Number of employees (consolidated)
Male

Average duration of service*

Female

Male

1,457

1,414

1,402

1,381

1,405

476

485

477

455

472

981

929

925

926

933

2017

2018

2019

2020

2021

Female

17.4

18.1

(FY)

Turnover ratio*

14.5

2017

Gender average

17.8

18.6

14.2

2018

19.1

14.6

2019

(years)

18.8

18.2

19.6

15.2

2020

18.7

19.6

15.1

2021

(FY)

Number of occupational accidents with lost worktime*
(%)

1

1
3.4

2.5

2017

2018

2.8

2.4

2.6

2019

2020

2021

(FY)

Number of employees taking childcare leave*
Male

2017

0

0

0

2018

2019

2020

2021

(FY)

Percentage of employees returning from childcare leave*

FemaleMale

Female

(%)

19
100.0
12

15

7

88.9

0.0

0.0

2017

2018

90.9

100.0

100.0

100.0

2020

2021

5
4
1

2017

2018

4

2019

2
2

2020

2021

(FY)

Number of employees with shortened
working hours to care for children*
Male

100.0

100.0

2019

(FY)

Average overtime hours and percentage ofannual paid leave taken*

FemaleAverage overtime hours
Percentage of annual paid leave taken

13

74.8

71.9

(hours per month)
(%)

74.2

72.3

71.7

12

9
5

3
2017

2018

12.2
3

2019

2020

2021

(FY)

Female

16
4

11

2017

2017

10

2018

Male

18

18

17

5

4

3

13

14

2019

2020

2019

2020

13.3

12

2021

(FY)

Female

13
8

14

2021

2018

18
5

7
4

(FY)

2017

* Sansha Electric Manufacturing Co., Ltd. and its group companies based in Japan

53

9.4

Number of employees hired through mid-career recruitment*

1
12

10.1

1

Number of employees hired through traditional recruitment*
Male

14.8

SanRex REPORT 2022

5

3

2018

2019

3

13

2020

2021

(FY)

Company outline (as of March 31, 2022)
Company nameSansha Electric Manufacturing Co., Ltd.

Date of foundation

March 8, 1933

Data ofincorporation

April 28, 1948

Headquarters
location

3-1-56, Nishiawaji, Higashiyodogawa-ku,
Osaka 533-0031 Japan

Capital

2.7 billion yen

Consolidated
subsidiaries

Japan
SANSHA SOLUTION SERVICE CO., LTD.
(Osaka)SUWA SANSHA ELECTRIC CO., LTD. (Nagano
Prefecture)
OSAKA DENSO INDUSTRY CO., LTD. (Osaka)
Overseas
SANREX CORPORATION (USA)SANREX ASIA PACIFIC PTE. LTD. (Singapore)

Number of
employees(consolidated)

1,405 (901 in Japan, 504 overseas)

Branches, sales
offices and otherofficesTokyo, Aichi, Fukuoka, Ishikawa,
Finland, South Korea and Taiwan

Plants andlaboratories

Osaka, Shiga and Okayama

SANREX LIMITED (Hong Kong)
SANSHA ELECTRIC MFG. (SHANGHAI) CO.,LTD. (China)
SANSHA ELECTRIC MFG. (GUANGDONG) CO.,LTD. (China)
DONGGUAN EASTERN ELECTRONICS CO.,LTD. (China)

SanRex Report survey
We welcome your feedback and suggestions on this report.
https://www.sansha.co.jp/eng/ir/integrated.html

Editorial policy
The SanRex Report is edited
for the purpose of reporting to
its stakeholders, in an easy-tounderstand manner, the Sansha
Electric Manufacturing Group’s
efforts towards continuous
growth and medium- and longterm value creation. For moredetailed information and figures,
please see our website.

Scope of reporting

Sansha Electric Manufacturing Co., Ltd. and its nine consolidated subsidiaries
However, the applicable scope of reporting is specified on a case-by-case basis if it
differs from the above.

Period covered

Fiscal year 2021 (from April 1, 2021 to March 31, 2022)

Contact for inquiries

Public Relations Department
Phone: +81-6-6321-0321 (switchboard number)sanrex-ir@sansha.co.jp

Disclaimer

This report contains plans, strategies and forward looking statements such as
financial outlooks. They are based on the information available at the time of
publication and on certain assumptions that are deemed reasonable. Please notethat results may differ from these statements due to a variety of factors.

SanRex REPORT 2022

54

Corporate Philosophy

Valuable
Products for Society
Make a continuous effort to create
products that are sought by society
and contribute to the developmentof society by providing products ofbetter quality

3-1-56 Nishiawaji, Higashiyodogawa-ku, Osaka, Osaka, Japan
Phone: +81-6-6321-0321 (main) Fax: +81-6-6321-8621

SanRex is a registered trademark of
Sansha Electric Manufacturing Co., Ltd.

Profits andProsperity for theCompany

Happiness andStability for Employees

Always endeavor to raiseawareness, aim for prosperity,
secure profits and fulfill social
responsibility for the Company

Always look to the future in highspirits and ensure happiness anda stable life for employees throughtrust and cooperation

https://www.sansha.co.jp/eng/

The SanRex trademark is the combination of Sansha Electric Manufacturing’s “San” and “Rec” from rectifier.
The Sansha Electric Manufacturing Group will capitalize on the electric power conversion technologies cultivatedthrough the development of rectifiers and endeavor to build a prosperous society.
The color red used for SanRex logotype gives the logo an active look that viewers associate with energy.
It represents the enthusiasm and energy of the individual employees that work to realize the philosophy of theSansha Electric Manufacturing Group.