SanRex REPORT

2021

Who We are

Bringing a Brighter
Future ThroughPower Electronics
The Sansha Electric Manufacturing Group leads today’s powerelectronics industry as a developer of power semiconductors for
power supply control and conversion and as a specialist in a broadarray of industrial power supplies for various industries, from high to
low electric power.
In a society that is being urged to massively increase energy
efficiency and shift to low-carbon energy to reduce greenhousegas emissions, the Group provides quality technologies as one as aunique partner helping resolve social issues.

The Sansha Electric Manufacturing Group’s Philosophy,
Mission and Vision
Valuable Products for Society

Corporate
Philosophy

MissionVisionProfits and Prosperity for theCompany
Corporate
Statement

Happiness and Stability for
Employees
Leading the New
Power Electronics

What we
aspire to be

Global Power
Solution Partner

Electricity supports the future of the Earth.
We will efficiently and freely change our sector tohelp create a clean energy society.
We will make a continuous effort to create products that are sought by society andcontribute to the development of society by providing products of better quality. Thisis a part of the Sansha Electric Manufacturing Group’s philosophy. Since before theadoption of the sustainable development goals (SDGs), we have worked to resolve
social problems through our business. Commenced in April 2021, the CG23 MediumTerm Management Plan adopted selected eight SDGs from the 17 that are particularly
closely linked with our business activities. We believe that the implementation of ourphilosophy, which is to seek to achieve the SDGs, will lead to the growth of our Group.

Related SDGs

01

SanRex REPORT 2021

Origin of the company nameSansha is a combination of two Japanesewords: “san” meaning three, and “sha,” whichis party. Our business was founded by threeparties: the party who was to operate thebusiness, the party who owned technologies
and participated in the business, and the party
who offered capital. The business was named
Sansha Denki Seisakusho, embodying ourambition to first develop into one of the top
three companies in Japan and 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.”

SanRex is a registered trademark of
Sansha Electric Manufacturing Co., Ltd.
The SanRex trademark is the combination ofSansha Electric Manufacturing’s “San” and “Rec”
from rectifier. The Sansha Electric Manufacturing
Group will capitalize on the electric power
conversion technologies cultivated through thedevelopment of rectifiers and endeavor to build
a prosperous society.
The color red used for SanRex logotype gives
the logo an active look that viewers associatewith energy. It represents the enthusiasm andenergy of the individual employees that work
to realize the philosophy of the Sansha Electric
Manufacturing Group.

Our Performance
Operating profit &ratio of operating profit to net sales

Net sales trend(in million yen)

23,717 24,369
20,06921,875

Operating profit(in million yen)

7.5%
6.2%

19,436

1.1%

1,474

1,833
1.2%

222
2016

2017

2018

2019

2020

(FY)

2016

2017

Return on equity (ROE)

2.6%

0.7%

2018

2.1%

256

416

2019

2020

(FY)

Capital investment
(%)

6.8%

5.7%

Profit ratio (%)

734

720

(in million yen)

641

463
359

-3.5%
2016

2017

2018

2019

2020

(FY)

2016

2017

2018

2019

2020

(FY)

Basic Information
Established in

Share of sales by region

1933(as of fiscal year ended March 31, 2021)

China

Asia (excl. China)

17.0%

9.0%
North
America

3.3%
Developing a power supply for a movie
projector that stabilizes the image on themovie theater screen

Japan

Staff composition(as of fiscal year ended March 31, 2021)

Power
semiconductorbusiness

women

1,381

5.7

employees in the
Sansha Electric
Manufacturing
Group

1.4%

Sales share by segment(as of the end of March 2021)

455

Other

69.3%

billion yenPowersupplybusiness

men

926

13.7

billion yen

Index
Who we are01

Power supply business21

Long-term performance

03

Corporate governance

23

SanRex products

05

The environment

31

Our unique features

07

Society

34

Message from the President

09

Financial data

39

Value creation process

15

Non-financial data

43

Medium-term management plan

17

Company outline

44

Power semiconductor business

19

SanRex REPORT 2021

02

Long-term performance(%)
50

The Sansha Electric
Manufacturing Group’s
history of growth
Since its founding in 1933, the Sansha Electric Manufacturing Grouphas been contributing to the development of society through thecreation of products that society needs.
Nearly four decades have passed since we launched our first overseas
bases in the United States and in Hong Kong in 1983.
The Group will continue to operate with an international mindset.

25

Kunio Shikata,

1983

Honorary Chairman
Representative Director,
President and Chairmanof the Board from 1986
to 2021

SANREX LIMITED established
SANREX CORPORATION establishedNo matter the changes of the era, the most significant
social responsibility that the Sansha Electric
Manufacturing Group has as a manufacturer is toconduct manufacturing that is valuable to society.
Based on the idea that continued corporate growthis achieved by ensuring, through manufacturing,customer satisfaction and profit generation, theGroup will aim to develop and to build positive
relationships with all stakeholders.

Hong Kong
USA

Trends in consolidated net sales andin the ratio of overseas net sales
Consolidated net sales (right scale)
Ratio of overseas net sales (left scale)

0
1933

1948

1950

1933

1955

1960

1965

1970

1975

1970

Establishing the technological foundation that continues
from the foundation of the Group to the present
1933 Sansha Electric Manufacturing foundedBusiness History

1948 Sansha Electric Manufacturing Co., Ltd. established1953 Tokyo District Office (currently Tokyo Branch) established1960 Headquarters Plant
completed in Osaka
1970 Fukuoka Representative
Office (currently Kyushu
Sales Office) establishedYukio Shikata,founding president
Representative Director
and President from theGroup’s foundation to 1972

1933 Develops a choke coil auto transformer, a predecessor to
projector power supplies
1937 Develops a tungar rectifier for
light projectors

1971

1980

1990

Increasing bases and specializationin the development of power semiconductors
1982 Shiga Plant completed in Shiga Prefecture
for the production of power supplies
1985 Okayama Plant completed in
Okayama Prefecture for the
production of power semiconductors
Masao Shikata, second president
Representative Director and President
from 1972 to 1986

1971 Develops an insulated triac that is the first in Japan
1980 Develops a thyristor module and a power transistor for highspeed switching1982 Develops a power transistor module

Product Development

1988 Develops a power MOSFET module

Tungar rectifiers for light projectors

1963 Develops and announces our first power semiconductor and thyristor
1964 Develops an inverter uninterruptible power supply and anelectric power regulator for electric furnaces
1968 Develops a diffusion type of triac and thyristor
1970 Develops a rectifier for plating
Insulated triac

03

SanRex REPORT 2021

1985

Thyristor module

1990

2000

2010

2020

Ratio ofoverseas sales

Ratio ofoverseas sales

Ratio ofoverseas sales

Ratio ofoverseas sales

SANREX ASIA PACIFIC PTE. LTD.
established
SANSHA ELECTRIC MFG.
(GUANGDONG) CO., LTD.
established

32.8%

18%

9.4%

1999

2009

2016

Slovenia

China

Representative office in
Slovenia opened (relocatedto Helsinki in FY2017)2001

Singapore

30.7%

China

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

1994
China

(100 million yen)400

DONGGUAN EASTERNELECTRONICS CO., LTD. established2017
Helsinki Branch establishedFinland
South Korea

Seoul Branch establishedTaiwanTaipei Branch established

200

1999
Internet bubble

1990

1995

1991

2007

Financial crisis

2005

2010

2000

2020

2008

Brisk capital
investment andrecord-high net sales

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

0

2010

2015

2011

Developing a system for increased globalization

2020

2023

2020

Towards a new age

1994

Shiga Plant obtains ISO 9001 certification

2016

SANSHA SOLUTION SERVICE CO., LTD. established in Osaka

1996

Okayama Plant obtains ISO 9001 certification

2016

1997

Achieves listing on the second section of the Osaka
Stock Exchange

SANSHA ELECTRIC EASTERN CO., LTD. (currently SUWA
SANSHA ELECTRIC CO., LTD.) established in Nagano
Prefecture to commence small power supply business

2001

Power Supply System Manufacturing Division obtains
ISO 14001 certification2018

Chubu Sales Office established in Nagoya

2018

Hokuriku Office established in Ishikawa Prefecture

2002

Semiconductor Manufacturing Division obtains
ISO 14001 certification

1991

Develops a planner type transistor module

2014

1993

Develops a solar power conditioner

2002

Develops a lamp power supply for digital cinema projector

Develops a photovoltaic power generation evaluation system
for the National Institute of Advanced Industrial Science andTechnology’s Fukushima Renewable Energy Institute2007

Develops an IGBT chip for inverter for industrial use

2015

Jointly develops a compact SiC power module with
Panasonic Corporation

2016

Participates in the virtual power plant (VPP) construction
demonstration project

2017

Develops a fuel cell power conditioner (20 kW)

2019

Develops a 1500 V string compatible diode module forphotovoltaic power generation

2020

Develops a power supply for storage battery tests

Solar power conditioner

Lamp power supply for
digital cinema projector(FY)

SiC power module

1500 V string
compatible diode module forphotovoltaic power generation

Power supply forstorage battery tests

SanRex REPORT 2021

04

SanRex products

Products of the Sansha Electric
Manufacturing Group That
Support Society
Our Group handles electricity that is higher amperage and higher voltage thanthe electricity used for everyday home electric appliances.
This is the electricity essential to the industrial sector.
Our Group’s products incorporate technologies for freely transforming andefficiently converting electricity.
Below, we showcase some of our products used across broad areas.

Energy & the environment
High efficiency power semiconductors and power
supplies for the domain of renewable energy and newenergy, including solar photovoltaic power generationand hydrogen energy/Power supplies for testingstorage batteries, fuel cells and other technology/
Development of power supplies for plasma ash
melting, seawater electrolysis and other tasks from theperspective of environmental conservation

Solar (PV) power generation

Infrastructure

Uninterruptible power
supplies

Power semiconductors and power supplies ensuring
the long-term, stable operation of social infrastructure
supporting people’s lives, including electric, gas
and water utilities, rail transportation and physicaldistribution/Development of uninterruptible power
supplies and other tools indispensable to business
continuity plans (BCP) in the event of a disaster

Power conditioner
Diode modules

Data centers

Commercial air
conditioners
Diode modules

Medicalequipment
Small embedded
power supplies

Expressways andelectronic tollcollection (ETC)
Uninterruptible power
supplies

Information & communication
Power supplies for surface treatments such as platingplay significant roles in creating the cases, connectors
and printed circuit boards for smartphones, power
semiconductors for the manufacturing robots insmartphone assembly plants and uninterruptible power
supplies in data centers which are equipped with andoperate internet servers and data communication devices.

General industries
Power supplies for the manufacturing of copper foil
used as materials for the anodes of lithium ion batteries,
power supplies for surface treatments necessary in
the automobile coating process and power supplies
for welding, which is a leading process in metal
processing, are examples of how our products havebeen adopted in extensive industrial domains.

Lifestyles, medical care andentertainment
Power semiconductors incorporated into home electric
appliances and elevators for commercial use/Smallembedded power supplies for medical equipment,
automatic teller machines (ATMs) and other devices/Power supplies for lighting equipment are actively usedin movie theaters while power supplies for dimmers
tailored to the specifications of individual facilities areused in TV studios, halls, stadiums and other facilities.

05

SanRex REPORT 2021

Smartphones
Power supplies forsurface treatment

Lithium ion batteries
Power supplies forcopper foil

Automobiles
Power supplies forsurface treatment

HydrogenPower supplies
for hydrogengeneration

New energy
Power supplies for fuel cells
and storage batteries

Fuel cells andstorage batteries
Power supplies for evaluation andcharge-discharge products

Powersemiconductors

What does “freely transforming electricity” mean?

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

Powersupplies
Refer to systems for supplying the electric power necessary
for the operation of machinery and equipment for industrial
purposes. Using power semiconductors, they efficiently
supply stable electric power for a wide variety of applications,
including everything from high to low electric power.

TV studios, halls andstadiums
Power supplies for dimmers

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 Converting alternating current electricity to direct current.
3 Changing the frequency of alternative current electricity.
4 Changing the voltage of direct current 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.

What does “efficiently converting electricity” mean?
There is always a loss of electricity every time a power conversion occurs in theprocess from power generation at a power plant, through transmission lines andpower supply circuits to the final operation of electric appliances by consumers.
To reduce this power loss, we are working to develop high performance power devices.

Elevators
Diode modules

Mobile phone base stations

Auxiliary power supplies
for electric rolling stock

Power supplies for aluminum foil
processing

Diode modules

ATMs

Movie theaters

Small embedded
power supplies

Power supplies forlighting equipment

Railway stations
Control power supplies

Welding machines
Diode modules

Robots for manufacturing
Thyristor modules

Inverters for industrial use
Diode modules

Power plants

Home electric appliances

Power supplies forseawater electrolysis

Discrete semiconductors

Electric bidet toilet seats
Discrete semiconductors

Water supply andsewage facilities
Power supplies forozone sterilizers

Waste disposal plants and contaminatedsubstance disposal plants
Power supplies for plasma ash melting

SanRex REPORT 2021

06

Our unique features

Four unique features of the

1

Business operation in domains that
contribute to a sustainable society

Since its foundation in 1933, the Sansha Electric

Examples of products that help to realize a sustainable society

Manufacturing Group has been conducting

Fuel cell power conditioner

its corporate activities in accordance with its
management principle, “Valuable Products for

FeatureSociety.” Today, the international community
faces climate change and many other social and

It includes a silicon carbide (SiC) module we developed toachieve conversion efficiency of 97.5% or better, one of thehighest in the industry.

environmental issues and businesses are urged toPower loss comparison with a 20-kW three-phasepower conditioner semiconductor

take actions toward the creation of a sustainable

400
Power loss with thesemiconductor (W)society. We provide power
semiconductors, power supplies forstorage batteries and fuel cells andother products and services to help
resolve these issues.

2030:

4,472.4
billion yen

IGBT
Our SiC power
module

300
200
100
0
5

15

25

35

Inverter output power supply (A)Outlook of global fuelcell system market

2025

1,148.4

2015

106.4

SiC power module

billion yen

2020

Feature324.2

billion yen

billion yen

Integrated production and one-stop services
including after-sales services

Our power semiconductors supporting

supplies. This has made us very familiar

high voltage and current are manufactured

with how power semiconductors are

in an integrated production systemused in power supplies. That allows us toincluding wafer processing and package

create proposals that are highly efficient,assembly. Power supply devices, circuit

safe, and best suited to the specificboards and other components areenvironment the customer will use them

manufactured in an integrated production

in, including peripheral circuits.

system that includes development, design

We believe that maintenance is a vital partand manufacturing.

of ensuring the safety of power supplies.

The Sansha Electric Manufacturing GroupWe are ready to provide one-stop support

develops, designs and manufactures

including efficient installation, operation,

both power semiconductors and power

maintenance and replacement.

Process flow of customized productsReceiptof orderDevelopment
DesignSanRex REPORT 2021

Trend in share of sales of customized
power supplies that can only realizedwith one-stop services

Customized
products

FY202066.3%

Standard
products

FY2016

49.5%

Proposals and after-sales
services to customers

Production

Sansha Electric Manufacturing Co., Ltd.

07

• Employing a transfer mold1
package that is small and has
excellent long-term reliability• Providing enhanced long-term reliability,2lower loss and greater compactness
1 A method of molding thermosetting resins in which materials are heated and softened
before being pressed into a metal mold
2 Power cycle resistance that is around three times greater than our conventional models

Source: Fuji Keizai Co., Ltd.: 2019 Future Outlook of Fuel CellRelated Technologies and Markets

2

45

The 1,200V 150A
model
Vcc 500V
fsw 7kHz

Deliveryand trial
operation

Collaboration

Inspection
andoverhaulReplacement
work

Sansha Solution Service Co., Ltd.

Sansha Electric MFG

3

A large market share because of ouradvanced technologies and services

In the semiconductor thyristor andFirst, they have superior output stability

diode module market that we target,from startup. Second, we are always

our Group has the third largest shareready to provide wide-ranging support toof the global market.1 The power

customers, including delivery, after-sales

device market is expected to growservices and equipment replacement.

Our target markets, thyristor
and diode modules
Approx.

40

billion yen

to a size that is 1.46 times the 2019
level by 2030.2 In the Japanese marketof plating rectifier and other power
supplies for surface treatment, we holdthe largest market share.3
Our power supplies for surface treatment
continue to be chosen by customers.

1 Source: Omdia, Annual Power Semiconductor
Reports - 2019
2 Source: Fuji Keizai Co., Ltd., 2020 Current Stateand Future Outlook of Next-Generation Power
Devices & Power Electronics-Related Markets
3 Estimated by Sansha Electric Manufacturing Co.,
Ltd. on the basis of the Japan Surface Finishing
Suppliers Association: FY2019 Dynamic Statistics
of Power Supply Sales

Power modulemarket570

billion yen

MOSFET, IGBT
and IPM

569.3

billion yen(92.9%)

2019
Power semiconductor
market4,700

Power modules

billion yen
Power supplies forsurface treatment

Largest shareof the Japanese market

4

Discrete semiconductors

Thyristor and diode module
semiconductors

ICs for power supplies

13%
33%
54%

Third largest shareof the global market

Source: Omdia, Annual Power Semiconductor Reports - 2019

Growth potential in overseas markets

In 1983, we established a subsidiary,
SANREX CORPORATION, in the U.S.
state of New York. We then opened
Target ratio ofoverseas sales

sales bases in Singapore in 1999 and in
Shanghai, China in 2001 to expand ourRatio of overseas sales

overseas sales operations. In 1994, we

SUWA SANSHA ELECTRIC CO., LTD. is excluded because
all of its sales are in Japan.

opened a base manufacturing power

50%

supplies in Guangdong Province in China
to push ahead with local production for
local consumption in China. To continue

32.4%

our overseas expansion, we set up
branches in Helsinki, Finland, Seoul,
South Korea and Taipei, Taiwan in 2017.

36.5%

40.9%
39.4% 39.5% 38.8%

30.6%

28.2%

We are planning to expand our businessglobally with the medium- to long-termtarget of increasing the ratio of overseas
sales from around 40% to 50% or more.

2013

2014

2015

2016

2017

2018

2019

2020

(FY)

SanRex REPORT 2021

08

Message from the President

A Global Power Solution
Innovation and Growth
We are on a growth track.
Throughout fiscal year 2020, circumstanceswere adverse because the impact of
the COVID-19 pandemic was greaterthan expected at the beginning of the
fiscal year. However, there were signs ofrecovery in the second half. I think that wehave had a good start in fiscal year 2021.
Our business with China was thetrigger for the rally. China sales contributearound 17% of our total net sales. In thethird quarter, economic activity became
brisk in China, and this was followed byan increase in inquiries from Japanesecustomers. In the United States, theeconomy is now recovering. However, thesituation remained difficult during fiscal year
2020, due to the restrictions on businessactivities because of the pandemic.
I imagine that the COVID-19
pandemic will continue to impact
the world for some time and thatour business will be affected indifferent ways. When I take a look at
the circumstances surrounding ourbusiness from medium- and long-term
perspectives, there are many domains
where the situation is advantageous.
The world is addressing the Sustainable
Development Goals (SDGs) that are to
be achieved by 2030. The Japanese
government is aiming to establish acarbon-free society by 2050. There09

SanRex REPORT 2021

Partner ThroughHajimu Yoshimura,
Representative Director & President

is a global trend towards renewablemedium-term management plan.

Aiming for innovation andgrowth in the new medium-term
management plan

energy. Demand is still high for factory

However, we accomplished some

automation, which is very compatible

things that will lead to future growth andwith our products. Essentially, we havemade progress in some areas during

a significant track record in the energy

the three-year period. One example is

In April 2021, we began to executeand environmental sectors. I believe

our approach to the domain of power

our new medium-term managementthat we are working in growth areas.

supplies such as fuel cells, hydrogenplan, CG 23. CG 23 features two basic

energy and other new energy. We havepolicies, contributing to the resolution of

already received orders and inquiries.

social issues and innovating to ensure

Originally, solar power conditioners were

sustainable growth. The plan is baseda major contributor to our solar poweron new energy and environmental

business. They have now led to thecontribution. These are the issues thatbusiness of power conditioners for fuelmust be addressed not only in Japan but

cells and storage batteries.

around the world.

Our direction and the issues weface became clear in this threeyear period.
The fiscal year under review was the
final year of the three-year medium-term

Apart from that, we havemanagement plan (2018-2020). The U.S.-

received inquiries from the automobile

China trade dispute had the greatest

industry regarding power supplies for

The first one is that we will

impact during this three-year period. In

the evaluation of fuel cells and storage

have world-leading power electronics

the first summer of the three-year plan,batteries amid a major shift of thetechnologies. The second is that, using

China began to change. In the second

industry from gasoline-powered vehicles

our unique power electronics technologies,

year of the plan, we began to deviate fromto electric ones. Power supplies for

we will thoroughly identify customers’

our management plan. And in the third

evaluation require experience, expertise

problems and resolve them. The third isyear, we faced the COVID-19 pandemic.

and advanced technological capabilities.

that we will have a global perspective.

The Chinese economy impacted all ofSince our competitive advantage can

And finally, we will earn trust and develop

our customers in Japan, and the situation

be exerted in this area, I hope that it will

can unrivaled reputation for quality andsubsequently deteriorated throughout

develop in the future.

sincerity. And we have integrated these

Asia. The business environment that

Our business performance was

In addition, we have determined
four elements of the ideal we aspire to.

four elements into a single slogan, Global

the plan had been based on drasticallydisappointing, but in this three-yearchanged. In that period, I realized more

period, it was good that we were able

We will strive to achieve thestrongly than ever that we had to develop

to clarify the direction we should pursue

quantifiable targets that we have set, net

new competitive products to achieve

and the issues we face.

sales of 26.0 billion yen and operating

Power Solution Partner.

continued growth even in harsh businessprofit of 1.9 billion yen. When calculated,circumstances. This will be defined as

the average annual growth rate becomesa major issue to be tackled in the next

10%, it is challenging under the current

SanRex REPORT 2021

10

Message from the President

conditions. In view of the businesssemiconductor business, we think that

The strategy in this business has

environment, including the progress

the key to the growth of this business is

two axes. One is the energy andsociety is making on decarbonization

to increase the number of new products.

environmental sector. Today, hydrogenand the evolution of power electronics,

We will enrich our lineup of new productsenergy and renewable energy havethis target must be met. In addition,

with, for example, products that are highly

significant momentum. This is a key

the technologies that we possess are

efficient, highly reliable, and that have highdomain for our growth. The shift tofairly high for the size of our business.

voltage resistance, in a bid to boost sales.

renewable energy and the popularization

I am convinced that we can compete

We will particularly focus onof hydrogen energy are global needs

with world-leading companies in terms

technologies such as the transfer moldand agendas toward decarbonization.

of technology. The SDGs are to betechnology which is integrally molding

We will take full-scale actions to addressachieved by 2030, and society aims

semiconductor chips, one of our core

this demand. The other is fundamental

to be carbon-free by 2050, which

technologies and on the silicon carbide

areas, such as power supplies formeans that initiatives for decarbonation(SiC) technology, which is said to be thesurface treatment. This area is whereand power electronics will continue

next semiconductor after silicon.

our company has been strong and holdIn addition, we will endeavor to

the largest market share in Japan. We

Therefore, during this three years, we will

convert power semiconductor plants into

will improve our technologies with aaggressively pursue product/technology

smart factories. Principal manufacturingview toward continued growth. I thinkdevelopment foreseeing further ahead

processes will be automated to

it is important that we expand and shift

beyond the plan period.

dramatically increase production capacity

the scope of our business from sellingand improve quality. We will construct a

power supplies as unit sales to solution

strategy in the new medium-term

system with shorter production lead times

proposals, including the service team ofmanagement plan.

to supply products in a timely manner.

our subsidiary, Sansha Solution Service

after the three years, our plan period.

Let me move on to our businessFirst, looking at the power

11

SanRex REPORT 2021

Next, the power supply business.

Co., Ltd.

Four elements of a

Global Power Solution Partner

We will have world-leading level oftechnologies related to power electronics.
Capitalizing on technologies for powerelectronics, we will thoroughly identify
customers’ problems and resolve them.
We will have a global perspective.
We will operate our business on a wholly global scale.
We will earn the unrivaled trust of society
for our quality and sincerity.

possess is our technological capabilities.

for continuous growth in step with

The name Sansha has long been

the development of society. We haveassociated with technology. We tend to

been engaging as a business in the

feel fulfilled as engineers when working

new energy and environmental sectors

Our Group’s greatest competitiveon challenging issues and to be united insince before the SDGs began to attract

advantage is the synergy between our

working on them. This corporate culture

attention. In addition, our new medium-

power semiconductor business and our

gives us a great advantage. During

term management plan positions thesepower supply business. For example,

our long history, a large number ofsectors as axes of our growth. We havecustomers of our power supplies use

customers have contacted us precisely

a duty to work with a commitment towelding machines and manufacturing

because they faced difficulties. I was

the SDGs. They are global common

robots in their factories. Welding

originally an engineer. Those of us ondevelopment goals.

machines and inverters of manufacturing

the management team will continue

robots both incorporate power

to nurture the spirit of our in-houseenvironmental concerns and other social

semiconductors. We can share theengineers, as we seek to harness ourissues can be broadly divided into two.

views of customers in our two different

technological capability as an asset.

The first is the contribution throughTackling challenging issues torefine our corporate culture ofsolving issues with technologies

Actions against climate change,

our business. And the second is thesegments within our company. Thatallows us to provide finely tuned services.

contribution on the part of a CO2 emitter

Our Group is relatively small. That means

through the shift to smart factories.

that we can take flexible action. We cananswer various inquiries from customers

Realizing the SDGs enables
us to fulfill our management
principles.

and offer services closely tailored to their

With respect to contribution
through business, our power supplies
have a particularly large impact on theneeds. That is a major advantage for our

The new medium-term management

new energy and environmental sectors. At

customers and for us as well.

plan defines six management materiality

energy facilities dealing with high power,

items. These are significant issues

the enhanced conservation efficiency ofAnother competitive advantage we

SanRex REPORT 2021

12

Message from the PresidentManagement Materialities

1
4

Contributing to acarbon-free society
and environmental
conservation

Strengthening
manufacturing

power supplies we offer will considerably

Reducing theenvironmental impact
of production activities

and foster our culture.

3
6

Offering safety,
security and new value
to improve services

Promoting diversity
and the active
participation ofhuman resourcesmanagement plan is based on the

In the meantime, diversity is vitalbusiness environment that is foreseeableof higher efficiency will be an endlessto global expansion. In particular, I feelat present. Depending on circumstances,challenge that we will continue to tackle.

we lag behind in terms of promoting

it may have to be revised. Given the

We will never retreat from our stance of

women to managerial positions. I will

current progress of vaccinations,continuously producing valuable products

make a difference in this respect while I

particularly in developed countries,

needed by society. That is linked with ouram president.

we anticipate that the pandemic will

reduce power consumption. The pursuit

Group’s raison d’être. Our management

We will dispense with stereotypes

eventually come to an end. The speed

principle is expressed in the following

and carry out major reforms inwith which this will happen will varyphrases: “Valuable Products for Society,”recruitment, development andsignificantly depending on the progress“Profits and Prosperity for the Company,”

appointment from scratch. Actually, weof vaccinations.

“Happiness and Stability for Employees.”

have female sales staff. They earn highEvery morning, I myself recite thesemarks from customers.

Another uncertainty is the risk thatthe market situation changes considerablyphrases before starting work. They are

Another key point is an open

the basis for our activities. I understandcorporate culture. I find our internalthat realizing the SDGs will lead to thecommunication already active but I thinkrealization of our management principles.

we can make it even better. When I wascharge of the lighting department. Whenin my previous position, I worked for a

I was responsible for the LED business,time in Boston in the United States. As

I saw conventional incandescent lamps

you know, they call each other by theirand halogen lamps disappear as theyfirst names there. At the time, I was vice

were replaced with LED lamps. It is

president, but it did not matter. Therepossible that something that is performing

was nothing like the hierarchy we have inwell at present to suddenly be replaced

We have identified the promotion ofJapan. Their discussions were open andwith something else.

diversity and the active participation

active. I hope to introduce a flexible andof human resources as one ofopen culture like this to our Group.

We will work harder than everbefore to develop personnel andto foster our corporate culture.

with the emergence of an alternativemeans or technology.
In my previous position, I was in

We must always remain keenly
aware of this. And the way to overcome

management’s materiality items. Since I

this risk is to conduct active research andbecame president, I have been aspiring

development activities and to anticipate

to make this company a team of people
who think and run on their own. To do

13

2
5

Constructing robust
infrastructure andcontributing toindustrial development

Ready to sense market changes

needs. It is very important to always be
prepared to sense something new andthis, we will invest actively in our people

COVID-19 poses an uncertain risk.

to put it into research and development.

to further accelerate their development

Naturally, the new medium-term

Our business dates back to more than 80

SanRex REPORT 2021

years ago, when our founder created amentioned at the beginning, the global

power supply for projectors. At that time,

shift to new energy and renewable energy

power supplies were unstable and that is

is to our advantage. We will be aware

why the power supply business started.

that we are already in an environment

Today, digital projection is the mainstream

for growth, and we will provide useful

in movie theaters. We must not forget

products that are needed by society tothat we owe what we are now to ourachieve sustained growth and boost ourcommitment to discovering needs, doing

corporate value.

research and overcoming major changes.
And we must remain keenly aware thatsomething similar could happen again
and create new products.

Hajimu Yoshimura,
Representative Director & President

Attaining sustained growth toincrease corporate value
Finally, I will speak about returns toshareholders. We have a basic stance ofconsistently offering stable dividends. We
aim to maintain a payout ratio of roughly
30%. On the basis of this thinking, wehave set the annual dividend for the fiscal
year at 15 yen per share.
The Sansha Electric Manufacturing
Group will seek new growth under its
new medium-term management plan. As

Corporate Philosophy

Valuable Products for Society
Make a continuous effort to create products that aresought by society and contribute to the developmentof society by providing products of better quality

Profits and Prosperity for the Company
Always endeavor to raise awareness, aim for prosperity,
secure profits and fulfill social responsibility for the Company

Happiness and Stability for Employees
Always look to the future in high spirits and ensure happinessand a stable life for employees through trust and cooperation

SanRex REPORT 2021

14

Value creation process

Sansha Electric MFG’s
Changes inthe external
environment

INPUT
Different kinds of capitalthat form the foundation forbusiness activities

FY2020Financial capital
Stable creation of cash flows and secure andsound financial standing

Rise of renewable energy
and new energy

Consolidated net assets:

19.3 billion yen
77.8%

Equity ratio:
Cash and cash equivalents:

5.8 billion yen

Human capital01

Endeavoring to provide a working environmentthat allows individual workers to achieve
personal development by capitalizing on theirpersonality and strengths

Strengthening resilience andthe ability to adapt to natural
disasters and developing
business continuity plans(BCP)

Contributing to acarbon-free society andenvironmental conservation

1,381

Number of employees (consolidated):

Intellectual capital
Technologies in the domain of power electronics
that support society
R&D expenses:

1.2 billion yen

Numbers of patents andutility model rights owned

Japan

157

Overseas 194

Manufacturing capital
Technological innovation

An integrated production structure ranging
from wafer processing to package assemblingfor power semiconductors and from thedevelopment and design of circuit boards andother components to the manufacturing of themfor power supplies
Number of plants

Japan

3

Overseas2(in China)

Capital investment

Preventing environmental
pollution(average in the past five years)

580 million yen

Intensive environmental conservation activities
for continuous procurement
Power consumption

14,113 MWh

Water consumption

140,000m3

Social Capital
Coexistence with local communities

Others15

SanRex REPORT 2021

02
Constructing a robust
infrastructure andcontributing to industrial
development

03
Improving services byoffering safety, security andnew value

04
Strengthening
manufacturing

05
Reducing theenvironmental impact of
production activities

06

Natural capital*1

Work style reforms

Management
materiality

P34-35

Promoting diversity andthe active participation ofhuman resources

P17-18Judgmentonsituation

value creation process
OUTCOME

BUSINESSMODELOUTPUT

Corporate activities

Social value createdRelated SDG Goals

Risk management

C ycl

e o f s tr a t e g i e s
FY2020Decision-making
Economic value

Cy
Researchanddevelopmentf v al u e c h a
cle o

in

million yen

400

Consolidated operating
incomemillion yen

2.6%
1,700

Return on equity (ROE)Core
competence

Manufacturing

Power semiconductorbusiness
P19-20Development of products contributing
to a sustainable society
Integrated production andafter-sales services

million yen

Annual dividend per share

15 yen1,400

million yen(non-consolidated)

Implementation* Products which have been on the market
three years or less since the sales approval
are deemed to be new products.

Active participation ofhuman resources

Overseas growth potential
P07-08Operating cash flow

New products* sales

High market share based on advanced
technologies and services

After-sales
services

19,400Consolidated net sales

Sales

Power supply business
P21-22

Ratio of overseas employees

37.4%

Ratio of females in leading
and managerial positions

6.7%*1

Ration of paid leave taken

72.3%*1

Products with improved power
conversion efficiency(e.g. Power supplies for copper foil)

Monitoring

345.3

Reduction in CO2emissionstons CO2 per year

(from conventional models)* Based on emissions from products sold in
FY2020 calculated on the assumption that they
are operated for 22 hours a day, 350 days a year
* CO2 emission factor announced by Japan’s
Ministry of the Environment: 0.47 kg CO2

Corporate governanceP23-30

Reduction inenvironmental impact
Annual CO2 reduction
Industrial waste reduction

1,094

tons CO2*2

62 tons*2*1 Data covering Sansha Electric Manufacturing Co., Ltd. and Suwa Sansha Electric Co., Ltd.
*2 Data covering Sansha Electric Manufacturing Co., Ltd., Sansha Solution Service Co., Ltd. and Suwa Sansha Electric Co., Ltd.
SanRex REPORT 2021

16

Special Feature Medium-term management plan

In May 2021, we announced our new medium-term
management plan, CG23.
The following outlines the plan and features the growthstrategies for the individual business segments.

The Sansha Electric Manufacturing Group will take actions towards
continuous growth and development together with society.
During the new medium-term management plan, we will work from a global perspective to contribute to theresolution of social issues including the realization of a carbon-free society, developing products using power
conversion and control technologies. As we work to become a Global Power Solution Partner, we will conduct
these efforts in accordance with our Group’s management principle, “Valuable Products for Society.”
We will carry out priority measures to transform the foundation of our business and provide safe and secure products
and services.

Basic policy for the realization for CG23
Contribution to the resolution of social issues

Innovation for continuous growth

Basic policy regarding capital measures
Our Group endeavors to increase its corporate value through the
expansion of business and the increase of earning power. We will
carry out the medium-term management plan to achieve this.
Measures required to increasing earning power include,
first, product development and sales promotion matched tocustomers’ needs, second, continuous efforts to increase
production efficiency and reduce costs, and third, a change ofmindset and actions to eliminate waste and seek additional value.
Capital measures are meant to support these activities. For

these measures, our basic policy is to maintain a sufficientlevel of shareholders’ equity to ensure stable management amidchanges in business environment and efficiently use and manage
the invested capital. In addition, we will basically pay stable dividends
from the perspective of valuing our shareholders. In parallel, we haveestablished a flexible shareholder return policy to achieve optimal
capital allocation based on medium- and long-term perspectives.
We will aim to raise return on equity (ROE) to a level exceeding capital
cost (8.4% based on WACC calculation for the past three years).

Management material issues
The Sansha Electric Manufacturing Group has determined
the material issues that are the key issues to be tackled forcontinuous growth in line with social development. With reference
to the Sustainable Development Goals (SDGs), the Global
Reporting Initiative (GRI), the Responsible Business Alliance(RBA) Code of Conduct* and major trends, we have determined1
2
3

Contribution to acarbon-free society
and environmental
conservation

Construction ofrobust infrastructure
and contribution toindustrial development

Providing safety,
security and new value
to improve services

17

SanRex REPORT 2021

these material issues in view of their impact on shareholders andon our Group. Each time a new medium-term management plan
is formulated, we will revise them in consideration of changes inbusiness circumstances and society.
*The RBA Code of Conduct is guidance formulated for electronics industry andelectronic equipment-related industry supply chains.

Risks

Opportunities

Strategy elay in shift to renewableDenergy and new energy
Cost competition following market
expansion (entry of overseas
manufacturers into markets) oves towards the reduction of CO2 emissions toMrealize a low-carbon societyHopes laid on renewable energy and energy
conservation to help slow climate changeMarket expectations after the introduction of power
generation using hydrogen

Natural disasters
 estabilization ofDinternational financeIntroduction of equipment as a BCP measure
following increased awareness of disaster control
Economic development and population growth inemerging countries
Increased contribution of Japanese companies’
overseas business
Popularization of 5G

P22

Product incidents and failuresIntensifying international
competition
Cyberattacks

Advancement of AI and IoT technologies
Progress in communications infrastructureShift to new work styles (autonomous/automatedoperations or operation with fewer personnel) due
to the shrinkage of the working population

P22

P20
P22

P36

Related SDG Goals

Financial targets
FY2020 result

FY2021 plan

FY2022 plan

FY2023 plan

19,430 million yen

21,800 million yen

24,000 million yen

26,000 million yen

Operating profit

410 million yen

800 million yen

1,300 million yen

1,900 million yen

Ordinary profit

440 million yen

800 million yen

1,300 million yen

1,900 million yen

Profit attributable to owners of parent

490 million yen

550 million yen

900 million yen

1,300 million yen

Net sales

Earnings per share

35.42 yen

39.15 yen

64.07 yen

92.54 yen

Return on equity (ROE)

2.6 %

2.8 %

4.4 %

6.1 %

Previous medium-term management plan 2018/4/1
Four tasks

Achievements

Global expansion

Expansion into new
business domains

Cultivation in existing
business domains

Strengthening ofbusiness foundations

Development of power conditioners
for the evaluation of fuel cells
Expansion of sales of uninterruptible
power supplies (UPS)
Expansion of the semiconductortransfer mold product lineup

Tasks in the power semiconductor businessContribution to a shift to smaller, higher efficiency
industrial equipment
Increase of activity in growing industrial
sectors such as servos, inverters forindustrial use, and welding machines
Investment in higher quality, greater
yields and automation

Tasks in the power supply business

Increase of business bases: Chubu Sales
Office and the Hokuriku Office opened
Failures and reasons

Failure to fulfill performance targets
Economic slowdown triggered by the U.S.-China trade dispute
Decrease in customers’ capital investment due to COVID-19

Increase of efforts for products related
to new energy and electric vehicles
Strengthening of the solution business

4
5
6

Strengthening of
manufacturing

Reduction of theenvironmental
impact of production
activities

Promotion ofdiversity andpersonnel in action

Risks

2021/3/31

Lack of development of new productsthat are cost competitive

Opportunities

StrategyIncreasing uncertainty aroundthe world
Decrease of skilled engineers

Digital technology innovation
Government moves to protect
domestic businesses

P20

Increased cost of response
actions utflow of chemical substancesO
Water pollution

Increased strictness ofenvironmental regulations

Intensifying competition for
workforce due to Japan’s
shrinking working population
Outflow of competent humanresources

Higher labor productivity following
work style reforms
Innovation

Related SDG Goals

P31 35

P37 38

SanRex REPORT 2021

18

Special Feature Medium-term management plan

Power semiconductorbusiness
Manufacturing base
Okayama Plant at Nagi-cho, Okayama Prefecture
Integrated production from wafer processing to package assemblyStrengths and Features

Share of
sales

29.4%

1

We develop and manufacture planar power
semiconductors and also semiconductors
based on our original mesa technology toachieve high voltage resistance and low loss.

Net sales (in million yen)Power modules
Power discrete semiconductors and others

5,751

7,016

6,816

1,770

1,657

1,344

4,407

2016

5,246

2017

5,688

5,709

1,433

1,575

4,255

4,134

2019

2020

2 Packaging technologies for high reliability
Our original packaging technologies suited for power
semiconductors gain high marks for theirlong-term reliability.

5,158

2018

3 Synergy with the power supply business(FY)

Segment profit (in million yen)

657
452

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

Segments

172

77

Independently developed power
semiconductors with high voltage
resistance, high current and low
power loss characteristics

Power modules
-368
2016

2017

2018

2019

2020

(FY)

This segment is characterized by the significant
contribution of overseas operations, especially Chinese
operations. While demand began to slow in the second
half of FY2017, sales also declined in FY2019 and FY2020,
amid the U.S.-China trade dispute and the COVID-19
pandemic. This caused profit to slide. The segment
produced a loss in FY2019. However, we worked toincrease profitability by, for instance, improving production
efficiency. Profit figures for FY2020 were positive.

19

SanRex REPORT 2021

Used mainly in a wide range of industrial
machinery and business facilities, includingcommercial air conditioners, auxiliary power
supplies for rail rolling stock and solar (PV)power generation systems

Power discrete semiconductors
Mainly used in household appliances

Other
Chips (or small piece of silicon substratewith electric characteristics, such as diodes
and thyristors)

The Sansha Electric Manufacturing Group does not develop or manufacture integrated circuitsemiconductors 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, for controlling the current and voltage levels and for other purposes. Our power
semiconductors play significant roles in customers’ diverse production facilities as well as in power supplies
and many other power supply products.

Businessstrategy

Seek higher levels of current, voltage resistance,
efficiency and reliability to increase market share.

Broaden the product lineup based on the concept of high current,
voltage resistance, efficiency and reliability.

*A method of molding thermosetting resins in which materials are heated andsoftened before being pressed into a metal mold

Product portfolio strategy
Fiscal year ending March 31, 2024

Fiscal year ended March 31, 2021

The size of the circle roughly represents our sales of the particular product.

Increase the market share
Market growth rate

Sansha Electric Manufacturing Co., Ltd. embarked on a power
semiconductor business as it developed an alloy junction thyristor
in 1963. We have since been developing, manufacturing and sellinga large number of general-purpose modules and customized
modules to meet customer needs.
During the medium-term management plan, we will be enriching the
product lineup based on a concept of low leakage current, low loss
and low environmental impact that will help reduce CO2 emissionsin addition to the high voltage resistance that characterizes themesa technology, a compilation of the technologies we havecultivated.
For SiC power modules, we will expand the product line in the highreliability large-sized transfer mold* package as a feature of our products
and strive to expand sales by promoting them in new applications.

SiC

Transfer mold modules
Wafer chips

Discretesemiconductors+
0%-

Diode & thyristor modules
1

2.5

5

Market share

10

25

50

100%

Estimated by Sansha Electric Manufacturing Co., Ltd.
Horizontal axis is logarithmic

Aiming to establish smart factories
We introduce automated equipment to principal processes toincrease production efficiency and to eliminate process defects
due to unevenness. The development and design departments
will work to standardize structures and components and to
streamline the design process. In addition, we will strengthen theconnection between process data and the central semiconductor
management system to visualize the production process andimplement the centralized management of the system for raw
material procurement and inventory management. This will enable
us to constantly improve quality, cost and delivery times (QCD)
in an effort to realize the policy behind the Okayama Plant’s
production activities, which is to employ original technologies forthe timely delivery of unique products that respond to customers’
requests when they are needed.

Currently

In the future

Connection withmission-criticalsystems

Connection withindividual systems

Production scheduleWarehousemanagement system
Results collection
systemQuality data
management system utomated principal
A
processes
Visualized production
process
Standardized structures

QCD
improvement

Production process management

SanRex REPORT 2021

20

Special Feature Medium-term management plan

Power supply business
Manufacturing base

Net sales (in million yen) or surface treatment,F
welding machines andcutting machines
Other inverters

14,318
3,946
2,913
1,521
4,365
1,570

2016

17,553

16,186

7,223

1,593
1,450

1,531
1,437

4,703

4,554

3,345

2,634

2,806

3,164

2018

 ongguan Eastern Electronics Co., Ltd. inDGuangdong Province, China
Small embedded power supplies

6,784
5,738
1,938
953

1,998
559

2,162

2020

Wide range of development from

custom-made to large
2 smallindustrial power supplies

Segments

3,267

2019

We excel in technology for the quick, high precision
conversion of electricity while keeping power loss to alow level. We lead the industry in the development of
power conditioners for fuel cells equipped with our siliconcarbide (SiC) modules, power supplies for hydrogengeneration and other new high-efficiency products.

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

13,727

6,319

2017

 ansha Electric Manufacturing (Guangdong)S
Co., Ltd. in Guangdong Province, China
Power supplies for surface treatment,
welding machines and cutting machines

1 High-efficiency power conversion technology

70.6%

16,700 uwa Sansha Electric Co., Ltd in Chino,S
Nagano Prefecture
Small embedded power supplies

Strengths and Features

Share ofsales

 or general industries
FFor light sourcesand dimming
Small embedded
power supplies

Shiga Plant at Moriyama, Shiga Prefecture
Power supplies for general industries, inverters
and other large capacity power supplies(FY)

Segment profit (in million yen)

1,381

For generalindustries

Large capacity power supplies for industrial usethat are used in the production facilities of large
steel, chemical, electrical machinery and othermanufacturing plants

Powersupplies
for surface
treatment

Surface treatment includes plating, coating andaluminum anodization. Our power supplies forsurface treatment have the largest share of theJapanese market, and are used to manufacture
smartphones, electronic components, printed
circuit boards, automobiles and other products.

817
624
244

145
2016

Power supplies for light sources are used in theme
For light
sources and parks, projection mapping, movie theaters, studios,schools and elsewhere, and power supplies for thedimming

2017

2018

2019

2020

(FY)

This segment saw sales and profit drop hugely for FY2020.
In the previous fiscal year, capital investment began to be
restrained due to the U.S.-China trade dispute. In and after
the final part of the fiscal year, COVID-19 temporarily affected
overseas production and led to the further postponement oflarge-scale and other investments in the market. Even inthese circumstances, investments in communication andnew energy began to rally earlier than in other domains, andthere was an increase in orders received.

21

SanRex REPORT 2021

dimming includes those for controlling power for lightsource lamp, for stage lighting in theaters, halls, TV
studios and hotels. In recent years, we have been
dealing in power supplies for lasers as well.

Other
inverters

Uninterruptible power supplies (UPS), power
conditioners (PCS) for solar (PV) power generation,
fuel cells and other storage batteries related to newenergy are delivered chiefly to power plants, data
centers and large factories.

Smallembedded
power
supplies

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

Since we developed a power supply for projectors ensuring the projection of stable images onto movie theater
screens in 1933, we have been utilizing technologies that freely transform and efficiently convert electricity todevelop and manufacture a wide variety of power supplies supporting the environmental and energy sectors,
the infrastructure and facility equipment sectors and entertainment-related sectors.
As we engage in integrated production including development, design and production, we are able to provide
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.

Businessstrategy

Enlarge the hydrogen energy and new energy
sector and strengthen fundamental sectors

Enlarge the hydrogen and new energy and environmental sectors
The active utilization of hydrogen and new energy is anticipated
for the realization of a carbon-free society. Sansha Electric
Manufacturing Co., Ltd. has long been developing andmanufacturing power conditioners for solar (PV) power generation
systems and delivering them to a large number of customers.
During the medium-term management plan that starts in FY2021,
we will use the technologies cultivated for solar power conditioners
to accelerate the development of power conditioners for fuel cells

and storage batteries.
Technology for using storage batteries to store
and adjust the supply of electricity is indispensable
Power supplies for storage
in the use of renewable energy as a main power
battery testingsource. Efforts to develop and practically apply
these technologies are being made. Sansha Electric ManufacturingCo., Ltd. will develop and provide power supplies for the testingand evaluation of storage batteries and fuel cells.

Strengthen fundamental sectors
Product portfolio strategy
Fiscal year ended March 31, 2021

Fiscal year ending March 31, 2024

The size of the circle roughly represents our sales of the particular product.

Growing domains
Large power supplies

Fuel cells
Storage batteries
Power conditioners+

Market growth rate

Our power supplies for surface treatment have the largest shareof the Japanese market.* In anticipation of demand for equipment
for printed circuit boards, electronic components and aluminum
anodization following the growth in the 5G-ready smartphone market
and in the electric vehicle (EV) market, we will develop new productswith higher power conversion efficiency and increase sales efforts.
Regarding power supplies for copper foil which is used as anodematerial for lithium-ion batteries, we will work to provide models thathave greater efficiency than conventional power supplies.
Uninterruptible power supplies (UPS) are used in data centers andinfrastructure facilities where no instantaneous voltage reduction or
power outage is permissible. We will respond to the extensive needfor UPSs based on the idea that these facilities must be preparedfor power failures or other problems that are becoming more
frequent due to natural disasters, irrespective of business type, scaleor region. Over the past decade, the domestic market has beenstable and there have been no major changes. We will enrich ourmaintenance and other services with a view toward achieving ourtarget of increasing our market share for models with the capacity
range of 10 to 110 kVA.

Uninterruptible power
supplies (10 to 100 kVA)

0%-

Welding machines(incl. laser processing
machines)

Systems for evaluation

Overseas power supplies
for surface treatment
2.5

1Market share5

Domestic power supplies
for surface treatment

Fundamental sectors
10

25

50

100%

Estimated by Sansha Electric Manufacturing Co., Ltd.
Horizontal axis is logarithmic*Estimated by Sansha Electric Manufacturing Co., Ltd. on the basis of the Japan
Plating Suppliers Association’s FY2019 Dynamic Statistics of Power Supply Sales

Shifting from selling standalone power supplies to proposals of solutions
In 2012, the feed-in tariff (FIT) scheme came into effect, underwhich the electricity generated from sunlight, wind power and otherrenewable sources of energy were to be purchased by electricity
utilities. After a massive decrease in the FIT purchase rate, there isa shift towards the consumption of the electricity produced insteadof its sale. In view of this, demand for storage batteries is expected
to rise steadily. Sansha Electric Manufacturing Co., Ltd. proposes
not only standalone power conditioners for storage batteries but
systems that include storage battery control and network functions.
Sansha Solution Service Co., Ltd., one of our subsidiaries, hasconstructed a maintenance support structure to build closer
relationships with customers.

Energy storage system mechanism
Remote monitoring
InternetSolar
panels

DC/DC
Converter
StoragebatteriesPower
receivingfacility Grid
SwitchPCS(with EMS)

General load
Important load

Scope of delivery
PCS: Power conditioner
EMS: Energy management system
SanRex REPORT 2021

22

ESG Corporate governanceDirectors · Audit & Supervisory Board Member

6

8

7

1

2

3

4

5

Skill matrix
Specific knowledge that we expect

Independence

Directors

HajimuYoshimura
MasakiFujiwara
Hiroshi
ZumotoAkira Uno
Koichi Ina

Audit &
Supervisory
Board Members

IchiroKitanoKazuhiro
Egawa
Eriko
Nashioka

23

SanRex REPORT 2021

Corporate
management

Management
Strategy

Knowledge
about theCompany’s
business

Production
Finance,technology, accounting andLegal affairs
research andtax practicedevelopment
finance

Overseas
postingexperienceDirectors (as of June 25, 2021)
1 Representative Director & President

2 Director and Senior Managing Operating Officer

3 Director and Managing Operating Officer

Hajimu Yoshimura

Masaki Fujiwara

Hiroshi ZumotoServing as
director for

Serving as
director for

Serving as
director for

6 years

Owning

19,300shares of our stockHas rich experience and extensive knowledge
cultivated as a business manager in thePanasonic Group, and also possesses
abundant knowledge of global management as
he once served as vice president of an overseas
subsidiary in the same group. Since assuming
his position as our company’s Representative
Director & President in 2018, he has been using
his experience and advanced knowledge asa business manager and strong leadership tocarry out the growth strategy and managerialreforms with a vision of being a Global Power
Solution Partner.

7 years

Owning13,400shares of our stockHas rich experience and broad knowledge basedon his service in various positions mainly theareas of management and accounting in thePanasonic Group. He also served as a director at
an overseas subsidiary of the Panasonic Group,
where he acquired good knowledge about global
management. Since appointed to his present
post in June 2014, he has been in charge of theadministrative department and the corporate
planning department. He is also a Nomination andCompensation Committee member.
Status of important concurrent holding of positionsO utside Audit & Supervisory Board Member,
Kubota Corporation

4 Independent Outside Director

5 Independent Outside Director

Akira Uno

Koichi Ina

Serving as
director for

7 years

Owning10,200shares of our stock

Has advanced knowledge of financial affairs due
to his work experience at a financial institution.
Since appointed to his present position inJune 2014, he has been contributing to theimprovement of the effectiveness of the decisionmaking and supervisory functions of our Boardof Directors from a perspective independent
from our management team. He also chairs our
Nomination and Compensation Committee.
Status of important concurrent holding of positions
Outside Director, Hashimoto Sogyo Holdings Ltd.
Specially Appointed Professor, Graduate School of
Economics, Kyoto University (Ph.D. in economics)
Senior Executive Fellow, DMG Mori Co., Ltd.

Serving as
director for

2 yearsn/a

Owning6,000

shares of our stock

Joined us in 1982 and engaged in productivity
improvement and the strengthening of the
production system as a person responsible for
production technologies. He was appointed as
Operating Officer in charge of the Semiconductor
Manufacturing Division in April 2012, and as COO
of Semiconductor Business in April 2020 to takecharge of development, manufacturing and sales
operations for the promotion of business. He
became a Director in June 2021.
Status of important concurrent holding of positionsC hairman of the Board, Sansha Electric MFG(Shanghai) Co., Ltd.

Owning15,800shares of our stock

Holds a good deal of experience and knowledge
after working in the management team of aleading automobile manufacturer in Japan.
He also possesses advanced knowledgeof 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.
Status of important concurrent holding of positions
Outside Director, Kubota Corporation
Chairman, Central Japan Industries Association

Audit & Supervisory Board Members (as of June 25, 2021)
6 Full-Time Audit & Supervisory Board Member

7 Independent Outside Audit & Supervisory

8 Independent Outside Audit & Supervisory

Ichiro Kitano

Kazuhiro Egawa

Eriko Nashioka

Serving as an Audit &Supervisory Board
Member for

Serving as an Audit &Supervisory Board
Member for

Serving as an Audit &Supervisory Board
Member for

5 years

Owning

4,700

shares of our stock

Joined us in 1982. He has an abundance ofworking experience and knowledge after longserving as a person responsible for product design
and the manufacturing of power supplies in ourcompany. Since being appointed to his present
position in June 2016, he has been making
appropriate suggestions based on his experienceand knowledge and conducting on-site inspections
to help improve the effectiveness of the Audit &Supervisory Board’s auditing as a whole.
Status of important concurrent holding of positions
Audit & Supervisory Board Member, Sansha Solution
Service Co., Ltd.
Audit & Supervisory Board Member, Suwa Sansha
Electric Co., Ltd.

Board Member

1 yearOwning100

shares of our stock

Possesses advanced knowledge of corporate
legal affairs cultivated through long experience asa lawyer and appropriately advises the Board of
Directors from an expert viewpoint. He also has aperspective on business administration nurtured
through his rich experience serving as a corporate
operating officer.
Status of important concurrent holding of positions
Head of Eiwa Law OfficeOutside Director (Audit and Supervisory Committee
Member), SK-Electronics Co., Ltd.

Board Member

1 yearOwning0

shares of our stockHas 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 Research Committee of
the Japanese Institute of Certified Public Accountants
and several committees of the Ministry of theEnvironment and the Ministry of Economy, Tradeand Industry. She appropriately advises the Board of
Directors from an expert viewpoint.
Status of important concurrent holding of positions
Representative Director, Institute for Environmental
Management Accounting
Head of Nashioka Accounting OfficeLecturer (commissioned), Faculty of Commerce,
Doshisha University

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24

ESG Corporate governanceCorporate governance
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 inconsideration of the shareholders’ interests.

Actions for improving corporate governance

1984

2006

2007

2011

2014

Corporate Planning
Conference established

Operating Officer
system introduced

Officer retirement benefit
system abolishedDirectors’ term ofoffice shortened to
one year

Outside Directors
introduced

A whistleblowing contact
established within theinternal audit department

2016

2017

2018

2019

2020

Assessment of theeffectiveness of
the Board of
Directors begun

Risk Management
Committee(currently Internal Control
Committee) establishedStandards forassessment byoutside accounting
auditors formulated

Nomination andCompensation
Committee
establishedOutside officers elected to ensure that atleast one third of officers are outside officers
Female Outside Audit & Supervisory Board
Member elected
Additional whistleblowing contact establishedwithin the Audit & Supervisory Board

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SanRex REPORT 2021

Corporate governance system chart
General Meeting of Shareholders
Appointment and dismissal

Appointment and dismissal
Board of Directors

Report and advise

ReportNomination andCompensation Committee

AdviseCorporate lawyer

With 3 inside and2 outside members

Appointment, dismissal
and instruction

ReportReportAccounting
auditing
Accounting
AuditorInstruct/
provideguidance

AdviseRepresentative
Director

ReportInternal Control
Committee

Auditing

ReportInstruction

Audit &
Supervisory
Board

Instruct/provide guidance

Corporate Planning
Conference

Regulation Committee

Appointment and dismissal

Collaboration
Audit Department

Instruct/provide guidance

ReportWith 1 insideand 2 outside
members

Collaboration

Business departments and group companies

ReportAppointment and dismissal
Collaboration

Grounds for choosing the current corporate governance system
Our business targets niche and highly technical markets based

perspective, including regarding the decision-making of theon power electronics technologies. Our basic principle is to

Board of Directors.

appoint Directors who are insiders with advanced knowledge

From the perspective of monitoring the management of theand experience in relevant areas. However, we also electcompany, we have established a system to increase theOutside Directors to ensure the stability of our businessindependence of the outside Audit & Supervisory Board

foundations and the transparency of management, and wemembers to ensure the fair and objective monitoring of

ask them to advise us appropriately from an independent

corporate social responsibility.

Nomination and Compensation Committee
We established the Nomination and Compensation Committee in

The committee is composed as follows.

November 2019. Its objectives are to nominate Directors and Audit& Supervisory Board Members and to increase the independence,transparency and objectiveness of the Board of Directors’ functions

1

Directors selected by the Board of Directors.

regarding Directors’ remuneration and other matters. The committee
will enhance our accountability and corporate governance. To

2ensure the fairness and transparency of the committee, an advisory
body focused on decisions regarding the nomination of prospective
Directors and Audit & Supervisory Board Members and on Directors’

The committee consists of at least three

Independent Outside Directors make up half ofthe committee or more.

3

remuneration, the committee deliberates about these matters and

The committee is chaired by a person selectedfrom among the Independent Outside Directors.

reports to the Board of Directors.

Current committee
members

Deliberations of thecommittee

Chairman

Akira Uno, Independent
Outside Director
Members

Koichi Ina, Independent
Outside Director
Hajimu Yoshimura,
Representative Director &President
Masaki Fujiwara, Director

Date of meeting

The committee had four meetings in FY2020. Every meeting was attended by all its
members to discuss policies on the nomination of Directors and Audit & Supervisory
Board Members, matters regarding their appointment and dismissal, a policy regarding
the determination of Directors’ remuneration, a system for their remuneration and details
about remuneration and other matters regarding individual Directors.
Nomination

Proposal regarding Appointment byApril 23, 2020
the General Meeting of Shareholders
August 26, 2020

Remuneration for officers
Performance-based remuneration for Directors andremuneration for individual Directors

Criteria for Appointment anddismissal of officers

December 23, 2020

Prospective officers

January 29, 2021

Personnel affairs related to officers
for FY2021

Basic policy, amounts of remuneration for officers,
structure of remuneration for officers and different systems

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26

ESG Corporate governanceCriteria for Appointment and dismissal of Directors and Audit &Supervisory Board Members
Appointment criteria
Eligible individuals must be of excellent character, have

Prospective Outside Directors and Audit & Supervisory

1 excellent insight and business sense, and be familiar with

6 Board Members must fulfill our criteria for independence.

Eligible individuals must be capable of analyzing and making
2 decisions from a companywide perspective and in an
objective manner.

The appointment of any specific prospective Director mustallow the Board of Directors to maintain diversity in terms of
7 experience and expertise, to efficiently and effectively fulfill
its functions and ensure its well-balanced supervision of thebusiness of the entire company.

various management issues.

Eligible individuals must be able to actively state their own

3 views from a companywide perspective.

Eligible individuals must be able to spare the time and4 energy required to properly fulfill their duties and roles as
Directors and Audit & Supervisory Board Members.
Eligible individuals must meet the statutory requirements for

5 Directors and Audit & Supervisory Board Members.

The appointment of any specific prospective Audit &Supervisory Board Member must ensure a balance interms of knowledge, experience and expertise.
8 At least one of the Audit & Supervisory Board Members
must have significant knowledge of financial affairs
and accounting.

Procedures for appointment
The decision to hold an appointment of the prospective
Directors and Audit & Supervisory Board Members isdetermined by the Board of Directors in accordance with
their appointment criteria after the deliberation of the
1 Nomination and Compensation Committee.
The decision to hold an appointment of prospective Audit& Supervisory Board Members is referred to the Board of
Directors after the deliberation and approval of the Audit &Supervisory Board.

Resolutions on the appointment of the prospective Directors

2 and Audit & Supervisory Board Members nominated forthese posts by the Board of Directors are made by theGeneral Meeting of Shareholders.

Criteria for dismissal
A person is found to have committed any serious violation of

3 value by failing to perform their duties.

A person is confirmed to have severely deviated from the

4 difficult for a person to properly perform their duties.

1 any law, ordinance or the Articles of Incorporation.
2 criteria for appointment.

A person has caused remarkable damage to the corporate
Any other event has occurred in which it is considered

Procedures for dismissal
Dismissal of a Director or an Audit & Supervisory Board
Member is determined by the Board of Directors after
the deliberation of the Nomination and Compensation
Committee in light of the criteria for the dismissal of Directors
1 and Audit & Supervisory Board Members.
The decision on the dismissal of Audit & Supervisory Board
Members is referred to the Board of Directors after the
deliberation and approval of the Audit & Supervisory Board.

Resolutions on the dismissal of a Director or an Audit &Supervisory Board Member are made by the General Meetingof Shareholders following a resolution of the Board of Directors.
(In accordance with the provisions of the Companies
2 Act, an ordinary resolution of the General Meeting of
Shareholders is required for dismissal of a Director and a
special resolution is required for the dismissal of an Audit &Supervisory Board Member.)Criteria for independence
An Outside Officer to whom none of the following conditions applies can be Independent Officer.
The Officer engages or was engaged in our Group’s

1 execution of business at present or in the past.

The Officer engages or was engaged in the executionof the business of any of the Group’s major business
partners (any customer or supplier to whom the Group
2 pays more than 1% of its annual consolidated net sales in
the most recent fiscal year), its parent company or any of
its important subsidiaries.
The Officer engages in the execution of the business ofany financial institution or any other large creditor thatis indispensable in our Group’s procurement of funds
3 and on which our Group is so dependent in a way that
it is irreplaceable, or its parent company or any of its
important subsidiaries.

27

SanRex REPORT 2021

The Officer is a consultant, accountant, tax accountant,lawyer or similar professional who receives from our Group
4 any money or other asset worth more than ten million yen(on average for the past three years) in addition to the
remuneration provided to them for their duties as officer.
The Officer belongs to the audit corporation conducting

5 accounting audits for our Group or used to audit our Group.
The Officer is a major shareholder with an ownership ratioof 10% or more according to our most recent register of
6 shareholders or engages in the execution of business ofan organization or a group of organizations that is a major
shareholder as defined above.
The Officer is a spouse or a relative within the second degreeof kinship of any person to whom items 1 to 6 apply or any

7 person engaging in the past three years in the execution of abusiness to which any of these items 2 to 5 apply.

Basic stance on the 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 longterm increase of our corporate value. It must encourage officers to perform their duties to their utmost abilities inaccordance with our Group vision and to contribute to the improvement of financial results.

2

On the basis of the data collected by outside research bodies, remuneration for officers will consist of baseremuneration, which is a fixed amount for individual posts, and performance-based remuneration, to ensure thatthe sound incentives matched with the Directors’ duties will serve their intended functions.

3

Remuneration for Outside Directors and for inside and outside Audit & Supervisory Board Members will consist
solely of base remuneration, as they are independent from the execution of business and variable performancebased 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 that took
place on June 28, 1993 to set an annual upper limit of 40
million yen.

Stance on performance-based remuneration
The performance indicator for performance-based
remuneration is consolidated operating profit ratio,
chosen because it is the most important performanceindicator related to the evaluation of performance during
the fiscal year under review. We calculated performancebased remuneration by multiplying the standard amountfor the specific post by the coefficient appropriate to theconsolidated operating profit ratio.

The amount of performance-based remuneration
for Directors is discussed by the Nomination andCompensation Committee in accordance with theconsolidated operating profit ratio for the fiscal year underreview and reported to the Board of Directors. The Boardof Directors determines the amount of performance-based
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 underreview 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
is delegated 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 theamounts of remuneration for individual Directors reported
after deliberations by the Nomination and Compensation
Committee within the limit on total remuneration inaccordance with other resolutions that have been

adopted at the General Meeting of Shareholders. The
reason this duty has been delegated is that we believe
the Representative Director & President can appropriately
determine the remuneration for individual Directors inconsideration of our overall financial results and otherfacts. The Nomination and Compensation Committee
reviews the appropriateness of the determination of
remuneration under the delegated authority prior todecisions coming into affect.
Remuneration for Audit & Supervisory Board Members isdetermined through deliberation among them within thelimit for the total remuneration for Audit & Supervisory
Board Members as determined by a resolution passed at
the General Meeting of Shareholders.

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28

ESG Corporate governanceEvaluation of the effectiveness of the Board of Directors
Outline of evaluation and analysis process
Questionnaire survey
Conducted in December

Analysis of responses tothe survey
February

Discussions at
the Board of Directors
February 5 questions on the composition, roles, operations and2
culture of the Board of Directors
9 questions on corporate strategies and decision-making
9 questions on the internal control system questions on advisory committees, successor plans9and other matters

Outline of evaluation results andaction plan
The Board of Directors evaluates its own overall
effectiveness to increase its effectiveness andthe corporate value of the Group. This evaluation
includes the Directors and Audit & Supervisory
Board Members. The self-evaluation and its
findings for FY2020 are outlined on the right.
In response to the findings on the right, the Boardof Directors has confirmed that it will continue
its endeavors to improve its effectiveness.

MethodDate
Findings

Questionnaire 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
From December 23, 2020 to February 25, 2021
Regarding the enhancement of the information provided
to outside officers, which was defined as a task for theprevious fiscal year, cloud services ensuring information
security were used to provide outside officers with quicker
access to information and more time for consideration
before discussion.
For the fiscal year under review, we selected the issue ofverifying that business resources were efficiently used.

Comment from Independent Outside Director

I hope for continued growth and increase incorporate value.
Our Board of Directors consists of inside
Directors with expert knowledge in thearea of power electronics and Outside
Directors. Outside Directors capitalize on theirexperience as corporate managers and theirskills in their respective areas of specializationto actively participate in the discussions andbusiness reports of the Board of Directors
and proposals on specific operational
improvements and management tasks.
We ensure that Outside Directors are half ormore of the Nomination and Compensation
Committee, the establishment of whichis arbitrary. It discusses personnel affairs
concerning officers and the remunerationof officers to maintain objectiveness andtransparency.
With a view towards sustainable corporate
management in line with the medium- andlong-term management plan, we executebusiness in accordance with specific action
policies, including technical development,

29

SanRex REPORT 2021

the acceleration of digital transformation (DX)and actions in the domains of renewableenergy, new energy and other domains weare strong in.
As an Independent Outside Director, I believe
that, with our mission of achieving carbon
neutrality, our company’s corporate value
has the potential for infinite growth. To realize
this corporate value, we hope to invest in
new fields using our stable financial standing
with an equity ratio of at least 70%.
We run a large number of group companies
inside and outside Japan. To optimize
corporate value, I think it is necessary to
improve group governance.
From the standpoint of my knowledge
in industry, government and academia,
personnel are the most important part ofsustainable corporate management. And I
hope that we will develop skilled personnel
through our efforts to recruit and develop
personnel from the perspective of diversity.

Akira Uno,
Independent
Outside Director

Risk management
Basic stanceAs the risks facing businesses are diversifying, the Groupidentifies the various risks involved in its businesses, constructs
a management system for risk prevention and takes actions tominimize the impact of risks. Our basic stance is to respondswiftly and appropriately to respond under the authority of the
management team when any risk becomes a reality.

Risk management system
The Group has established the Internal Control Committee
chaired by the Director and Executive General Manager of the
Corporate Planning Division. To manage and prevent risk, we
are working to develop our emergency response capabilities
to address emergency situations when they occur. We haveestablished a system for reporting to the Board of Directors as
appropriate. The Internal Control Committee discusses policies

and specific measures to address risks that are presumed to
be involved in the Group’s business activities and to instructindividual departments. Concerning quality issues in particular,
the quality management departments established in individual
divisions will carry out the cross-sectoral management ofdivisional quality assurance operations to resolve any issues
quickly and precisely.

System diagram
Instruction
Instruction

ReportCollaboration
Relevant committees

Board ofDirectors

ReportInternal Control
Committee

Quality CommitteeE nvironmental
Management
Implementation
Committee

 afety and HealthS
Committee
Export Control Committee
Regulation Committee
Standards Committee

Auditing

Department
conducting
risk control
measures

Audit
Department

ReportAudit &
Supervisory Board(monitoring)Compliance
Basic stance

Whistleblowing system

The Group endeavors to develop a corporate culture focused oncompliance and construct a compliance promotion system tobuild a sound business foundation as a business entity trusted
by society.

The Group has set up compliance helpdesks (whistleblowing
contacts) to be contacted regarding inquiries about complianceand for the reporting of any dishonest conduct. Upon the
notification of any dishonest conduct, the Group will investigate
the facts and take corrective and preventive actions.
In accordance with the Whistleblower Protection Act and tothoroughly protect whistleblowers, the whistleblowing systemprohibits the dismissal or any other disadvantageous treatmentof a person for their whistleblowing.

Compliance training
To increase awareness of compliance, the Group provides
training and other education, including e-learning programs, oncompliance in general and on laws and regulations related tobusiness duties. Every November is determined to be a monthfor focusing on harassment prevention. We hold discussions
in workplaces and otherwise encourage communication in
workplaces to prevent harassment.

Whistleblowing process flow
PresidentInternal Control Committee
Report on corrective andpreventive actions

ReportCompliance helpdesks (in the Audit Department, the Human
Resources Department and the Audit & Supervisory Board)
Inquiries andwhistleblowing

Advice, report on
results, and others

Whistleblower

Investigation

Department(s) and/or person(s) involved in thewhistleblowing report

SanRex REPORT 2021

30

ESG The environment

The Environment
Towards the achievement of the SDGs
While the climate action of the international
community accelerates, the Sansha Electric
Manufacturing Group understands that theconservation of the global environment is a duty
that must be fulfilled for the next generation.
We believe the reduction of environmental impact
through our business activities is one of our top
priority issues. Working to reduce environmental
impacts and considering biodiversity, we contributeto the realization of a sustainable society.

Solar (PV) power
generation facilities

Waste reduction
Management of chemical substances
Prevention of water pollution

Reduction of energy consumption inbusiness activities

Management of chemical substances
Prevention of water pollution

Solar panels installed on the roof of the Shiga Plant

Environmental Policy
1

Observance of environmental laws and regulations
We will observe environmental laws and regulations and meetequivalent requirements.

2

3

4

31

5

Prevention of global warming
We will work to conserve energy and reduce emissions of
substances that cause global warming.

Reduction of the environmental impact of products
We will always strive to create environmentally-friendly productdesigns to provide products with little environmental impact
throughout their life cycle.

6

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

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

7

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

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

SanRex REPORT 2021

Reduction of energy consumption
The Sansha Electric Manufacturing Group is accelerating its
energy conservation in its production activities to reduce its
energy consumption.

Past actions
We introduced LED lighting equipment. The Okayama Plant
introduced an air conditioner for outdoor air treatment
designed to use waste heat from production equipment’s
cooling water to preheat and reheat outdoor air and to use
hot water instead of steam as the heat medium for heating
and reheating. In addition, it is shifting heat sources fromsteam boilers to heat pump modular chillers to achieve a
steam-free process. This has achieved significant results,
and the Okayama Plant won an award from the Chugoku
Bureau of Economy, Trade and Industry as an excellent
energy management operator in FY2020.

Trend in CO2 emissions
CO2 emissions(tons CO2)
15,000Equivalent to the amountabsorbed by approx.

49,000Japanese cedar trees*

11,488

11,484
10,221

10,000

8,713

8,026

5,000

0

2016

Future actions
We will continue to press ahead with the visualizationof energy in factories. We will understand energy in the
production process to increase efficiency and reduce waste
in energy consumption.

Annual CO2 reduction

2017

2018

2019

2020

(FY)

* Calculated by dividing the annual absorption amount by an approximate
average of 14 kg per tree, according to the Ministry of the Environment and theForestry Agency
Data includes Sansha Electric Manufacturing Co., Ltd. and Suwa Sansha
Electric Co., Ltd.

Solar (PV) power generating facilities
The Shiga Plant installed 630 solar
panels on its roof in April 2014 aspart of its global environmental
conservation efforts. It generates
approximately 170,000 kWh ofpower per year using these panelsand our power conditioner.

Trend in solar (PV) power generation at the Shiga Plant
Annual power generation
(kWh)

Power
consumption at

200,000

177,128
175,052 179,543 177,841 168,043

40

households*

150,000* Calculated using
4,397 kWh as theannual power
consumption perhousehold by building
type (specific unit)
according to the Ministryof the Environment

100,000
50,0000

The monitor screen displays
the current power generation.

2016

2017

2018

2019

2020

(FY)

Waste reduction
Our plants in Japan are striving to minimize the waste

Trends in industrial waste emissions and recycling ratio

generated by business activities and encouraging recycling to
reduce the final volume of waste disposed of in landfills.

Past actions

Total emissions (left scale)(t)
800

We encourage recycling waste into valuable resources.

Future actions

400 84.5

We will reduce the waste itself produced by plants.
We will reuse chemicals through distillation or by using
filtration and other technologies.

89.2

(%)
100

738

711

682
600

Recycling ratio (right scale)

86.9

86.6

580

518
84.2

200

90
80
70

0

60

2016

2017

2018

2019

2020

(FY)

SanRex REPORT 2021

32

ESG The environment / SocietyManagement of chemical substances
Actions at Okayama Plant

Trend in the volume of PRTR substances handled

The power semiconductor manufacturing process uses a hugeamount of chemicals. The Okayama Plant does not only observe(t)
60

applicable laws and regulations but endeavors to increase

52.7

51.1

productivity through the improvement of the manufacturing
process and the yield to reduce chemical consumption and to

43.2

40.4

40

37.4

treat wastewater to detoxify it.
Monitoring the status of emissions and the transfer of substances
subject to the Pollutant Release and Transfer Register (PRTR)*

20

under the Act on Confirmation, etc. of Release Amounts ofSpecific Chemical Substances in the Environment and Promotion

0of Improvements to the Management, the Okayama Plant strives
to constantly reduce total emissions and the volume of PRTR
substances transferred for environmental conservation purposes.

2016

2017

2018

2019

2020

(FY)

* A system under which the amounts of substances that may cause
environmental pollution that are transferred and emitted are registeredManagement of chemicals contained in products
In compliance with laws and regulations such as the European

Rank Guidelines to require that suppliers rigidly manage theUnion’s Directive on Restriction of Hazardous Substanceschemicals contained in products. In addition, to ensure the(RoHS) in Electrical and Electronic Equipment, the Sansha

reliability of chemical substance data, we make sure that ourElectric Manufacturing Group has formulated the Sansha

procuring departments work with the Product Quality AssuranceElectric Manufacturing Chemical Substances Management

Department to develop a management structure.

Management Structure
Sansha Electric Manufacturing Co., Ltd.

Request based on the Sansha Electric
Manufacturing Chemical Substances
Management Rank Guidelines

Suppliers

Procuringdepartment

Acquisition of conformity certificate

Collaboration

Customers

Product Quality Assurance Department
Performing regular sampling inspections

DeliveryRequestRoHS conformity report

Acceptanceinspection

Manufacturing

Accepting department

Shipping Shipping
inspection

Prevention of water pollution
Our Okayama Plant engages in the manufacturing of power

Trends in wastewater volume and chemical
oxygen demand (COD) load

semiconductors. It runs wastewater treatment facilities to purify
the wastewater from the manufacturing process and discharge

Wastewater volume (left scale)
COD load (right scale)treated wastewater that fulfills our standards which are more(m )strict than specified in laws and regulations. It regularly inspects

140,000

3

water quality and monitors wastewater quality.

136,899
134,027(kg)
300

137,807

245.4
222.3

130,000

218.2

200

197.2
124,002203.1

120,000

100

115,909
Wastewater treatment
facilities at the
Okayama Plant

33

SanRex REPORT 2021

110,000

0

2016

2017

2018

2019

2020

(FY)

Society
Towards the achievement of the SDGs
The Sansha Electric Manufacturing Group is convincedthat it will earn the trust of society and increase its
corporate value by conducting business activities
in a highly transparent manner characterized bycompliance, corporate ethics and attention to social
norms while improving the soundness of management
and properly fulfilling its accountability to society. We
also believe that harmony and mutual prosperity withour business partners, local communities, employees
and other stakeholders rooted in awareness for social
responsibilities will help us earn the trust of society.
The Sansha Electric Manufacturing Group will actively
take on roles in the resolution of issues faced by local
communities through its business activities with a view
toward the achievement of the Sustainable Development
Goals (SDGs) and the realization of a sustainable society.

Ensuring equality
and fairness inworkplaces

Constructionof resilient
infrastructure

Solar (PV) power
generating facilities

Manufacturing thatputs quality first

Creation of fulfilling
workplaces

Reduction of energy
consumption inbusiness activities

Contribution to local communities
The Sansha Electric Manufacturing Group will actively
participate in social contribution activities with a view
toward establishing a more fulfilling, human-friendly society.

Participation in the virtual power plant construction demonstration project
We take part in the Ministry of Economy, Trade and Industry’s
demonstration project for the construction of virtual
power plants (VPP)* using consumers’ energy resources.
The goals of this demonstration project are, amid theprogress of deregulation in the electric power market andPower conditioner for the VPP
demonstration installed in our
Shiga Plant

electric power system reforms, to achieve unprecedented
energy management towards the establishment of energy
infrastructure aiding the efficient utilization of energy

Power conditioner for the VPP
demonstration installed in our former
Osaka Plant

Recognized as a company taking on the Zero-Emissions
Challenge by the Ministry of Economy, Trade and Industry

throughout society.
*A virtual power plant is a system in which small power generation and storage
facilities in many households, offices and commercial buildings, factories andothers are operated together like a single power plant, instead of constructing
a large power plant, by integrating and remotely controlling them using IoT andother information technologies.

In recognition of our participation in thisdemonstration project, we have been selected as acompany taking on the Zero-Emissions Challenge,
which leverages innovation to pave the way toward
the realization of a decarbonized society.

Diagram of the virtual power plant construction demonstration project (image)
Virtual power plant (consumer facility)

Large power sources
Thermal power
generation

Day-time operation ofan EcoCute electric heatpump system

Example virtual
power plant
operations

Recharging anddischarging storage
batteries in office buildings
and commercial facilities
Recharging anddischarging electric vehicles

Power grid
Monitoring
andcontrol

Aggregator*

Wind power
generation

Nuclear power
generation
Hydroelectric
power generation
Photovoltaic
power generation

More effective use of renewable energy (continuity of
power generation)*An aggregator is a marketer, broker, local public entity, non-profit organization or other party that
effectively balances consumers’ power demand to successfully provide energy management services.

SanRex REPORT 2021

34

ESG Society

Participation in the industry-academia-government collaborative
project for the creation of the SUWARIKA Brand
Since 2018, Suwa Sansha Electric Co., Ltd. has been part

Suwa Sansha Electric Co., Ltd. developed a general-purposeof the project creating the SUWARIKA Brand. This projecttransmitter circuit board that complies with IoT wirelessis part of the Chino city government’s general strategy forregional revitalization in Nagano Prefecture, addressing
the shrinking, aging local population with its declining

communication standards through the SUWARIKA Brand
creation project.

birth rate. Chiefly run by the Suwa University of Science,

A social issue faced by mountainous areas is flood damage,this project aims to create new demand and high value-

including the flooding of small rivers, damage of which isadded jobs and to accelerate the regeneration of industry

becoming more frequent every year. The general-purposein this industry-academia-government collaborationtransmitter circuit board is used tofor the resolution of local issues
and the development of workers
leveraging state-of-the-art IoT andmonitor water levels for the accurate
prediction of river water levels

communication technologies andand the detection of abnormalities

local resources including the rich

attributable to the flow of debris.

natural environment and advanced

Monitoring the level of the river water, thewater level gauge in the photo incorporates
the general-purpose transmitter circuit board.

manufacturing technologies.

Technology and quality
The Sansha Electric Manufacturing Group’s management
principle is, “Make a continuous effort to create
products that are sought by society and contribute to thedevelopment of society by providing products of better
quality.” We engage in manufacturing with quality-first as a
guiding principle and foundation for our corporate activities.

Efforts to improve quality
Our Group’s power semiconductors and power supplies areto customers is greatly connected to social contribution and theintended for use in industrial equipment. They play significant

conservation of the global environment.

roles inside our customers’ power supplies for production

In addition, our Group will establish a system for the development

process equipment and backup power supplies that supportof our employees to enable them to find the true causes ofinfrastructure. This requires them to be high quality and very safe.
Any trouble in the production process can lead to an adverse
environmental impact due to the suspension of production or thequality issues and take corrective measures as we develop
quality awareness within the Group. We will also encourage themwasting of materials. We will untiringly work to improve quality,

to pass the QC Kentei (Quality Management and Quality Control

keeping in mind that the provision of reliable, reassuring quality

Examination) to strengthen their management of quality.

1

Customer satisfaction and customer-first policy
Establish customer satisfaction as the top priority and carefully
respond to the demands of society.

2

Consistent structure
Respond to customer requirements through an integrated system
including everything from proposals and orders to development,
manufacturing, and after-sales service.

Quality
Policy

3

4

5

35

SanRex REPORT 2021

Technical strengths for high quality

SanRex Producer System (S-PS) activities
The Sansha Electric Manufacturing
Group actively conducts S-PS
activities, which are aimed at
improving individual workplaces.
To carry out an operation consistently

Operate the power supply business and the semiconductor business intandem to integrate semiconductor and power conversion technologies
to achieve high quality through advanced technological strengths.

from beginning to end, in the S-PS

Companywide activities for quality improvement

complete activities. We regularly

Work on quality improvement as a companywide concerted effort
through a small-group activity basis, which is unique to our company.

provide opportunities for small

Response to needs of the times

activities. Groups with outstanding

Quickly respond to the needs of the times, including solutions to energy
issues and for the conservation of the natural environment to servecauses through quality and the use of advanced technologies.

achievements are honored, inspiring

activities, it is fundamental that small

Written proposals on display

groups independently carry out andgroups to present the results of theirto step up their activities.

Meeting for the presentationof results

Quality assurance system
To ensure that a level of quality that satisfies customers isdevelopment, design, delivery to customers and after-sales

maintained, Sansha Electric Manufacturing Co., Ltd. hasservices. Through this, we are working to improve quality toestablished procedures for its quality assurance activities

provide customers with products that satisfy their needs andat each stage of its operations, including product planning,earn their trust.

Quality assurance system diagram
Customers and markets

Corporate Philosophy, Management Policy and Quality Policy
Customer needs

Receipt ofan orderManufacturing

Development anddesignProcess inspection

Design review
Market research

Product
planning

Prototyping

Raw material
procurement

Design verification

Acceptance inspection

Shipping
inspection

Shipping

The customers’
voices

Sharing of information

The customers’
voices

Setup,
maintenance,
inspection andafter-sales
services

Product Quality Assurance Department

Power supply maintenance services
Sansha Solution Service Co., Ltd. provides maintenance

The Sansha Electric Manufacturing Group engages in theand inspection services for power supplies. Headquartereddevelopment, manufacturing and sale of power supplies.

in Osaka, it has service offices in Tokyo, Nagoya andIt will also accelerate its development of comprehensive

Fukuoka. In collaboration with the Group’s overseas sales

solutions including maintenance, inspection, repair andcompanies, the Group provides customer support.

other support services.

Sansha Solution Service Co., Ltd. provides extensive
support services for power supply equipment to customers,
including support for installation, setup, operations andmaintenance. Among the issues faced by customers, large
power supplies are likely to have an enormous impact on
systems if they stop working. They need daily maintenanceand inspection, and there is increasing demand for them.
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

Production

Product sales

CustomerReceipt of an orderTechnology andmanufacturing department

Emergency private
power generation

DeliveryTrial
operation

Inspection andoverhaulEquipment monitoring

Replacement
work

Battery replacement
Commissioned work

SanRex REPORT 2021

36

ESG Society

Personnel
The Sansha Electric Manufacturing Group’s
management principle includes the phrase,“Happiness and Stability for Employees.” We
believe that our staff’s happiness is one of themost important parts of our business’s foundation
for growth and development.

The Group will strive to develop an environmentthat helps every individual employee develop inlight of their unique personalities and strengths
and help them work to maximize their abilities
and create corporate value.

Personnel development
Basic stance
Priority measures for personnel development

A basic policy of the Sansha Electric Manufacturing Group is that
employees’ growth leads to corporate growth. An essential requirement
for the Group’s continuous growth is personnel who think and act
independently. In an era where reform is required, we will continue
working to develop personnel with broad perspectives and diverse
experiences, being capable of directing our businesses in the future.

Develop the next generationof employees

In accordance with the mid-term management plan, we will improve
our personnel development system, including our rank-specificdevelopment programs, to increase the abilities of our workforce.

Think and act independently

The personnel measures are focused on the development of future
generations of employees, the development of individuals that are able
to work actively in global markets, and the development of employeesthat are experts in technology. We continue to work to achieve theDevelop employees
able to work actively
in global markets

Develop employeesthat are experts intechnology

growth of our workforce to fulfill our mid-term management plan andsupport the sustainable increase of our corporate value.
Personnel development system
Rank-specific training
and promotion
training

Training
for allpersonnel

Ethics and complianceManagement principle

SanRex REPORT 2021

Distance learning

37

Acquisition of public qualifications

New employees

Basic technologies

Promotion of active participation of female employees

Follow-up

Overseas businessexperience program

Evaluation
personnel

Personnel in their thirdyear of service

Overseas trainee
program

Technical skills

Mentors for new
employees

Associates

Increasing motivation ofyoung employees

Technology
management

Professional training at individual factories

Initial-level leaders

ActiveSpecific to
Personnel participation Supporting
factories or
personal
management of female development
skillsemployees

Rank-specific training in factories

Leaders

Personnel eligible forpromotion

Language skill acquisition support program

Newly appointed
section managers

Employees thatare experts intechnology

Personnel
management

Newly appointed
Deputy General
Managers

Personnel
assessment

Management

Training for senior
managers

Employees working
actively in global
markets

Promotion of diversity
Basic stance
The Sansha Electric Manufacturing Group stipulates respect

infringe on anyone’s personal dignity due to their race, nationality,

for human rights as a part of its code of conduct. We believebirth, religion, belief, gender, sexual orientation, age, disability or otherthat respecting the human rights of all individuals involved in our

characteristic. At our workplaces, we work to enable the development

business, including employees, is a vital part of operating ourof our employees, the empowerment of women, the diversity ofbusiness globally. We will not discriminate against anyone or

our workforce, and the achievement of healthy work-life balances.

Promotion of active participation of
female employees

Women leaders and managers

It is said that today we are experiencing an era of uncertainty,
with social circumstances drastically changing. In this current

1,000

situation, it is necessary that we ensure that our employees who
have diverse values display their capabilities to the fullest degree.
Based on the idea that the active participation of women is very

Number of male employees
Number of female employees
Women leaders and managers(%)
Percentage of female leaders and managers (right scale)
10

800

160

in the workplace since FY2016. We are engaged in many different

200 2.9of gender, to take on new challenges without being swayed bystereotypes, skill development training for women employees, the

11

13

169

170

0

19

22

8

6.7

6

171

5.6

400

actions to forge a culture encouraging all employees, irrespective

154

600

important, we have been working on promoting their advancement
approaches that enable our women employees to develop, including

9

3.9

3.3

4
2

704

713

702

695

694

2016

2017

2018

2019

2020

0

(FY)
Data includes Sansha Electric Manufacturing Co., Ltd., Sansha Solution Service
Co., Ltd. and Suwa Sansha Electric Co., Ltd.

External recognition

encouragement of a shift in thinking, including the mindset of theirsuperiors and job rotation to enable women to work in broader fields.
We have set the number and percentage of women leading
within the Group as key performance indicators for our initiatives

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

empowering women. We have set targets to ensure that we areconstantly developing women leaders. In the future, we will takeactions in view of promotion to female managers, including raisingof career awareness and improvement in management skills.

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

One of our employees waschosen as a role model by
the Okayama Prefectural
Government as a part oftheir Women in the Land ofSunshine project.

Work-life balance

Support for return from childcare leave

We strive continuously to ensure that working hours are properly

We ensure that employees wishing to resume working after

managed and to reduce the amount of overtime worked. We

childcare leave consult with their superiors to enable their smooth

are improving the working environment to make sure that all

return to the workplace.

employees, irrespective of gender, are able to establish a healthy

This is meant to remove anxiety about the return and facilitate theirwork-life balance. For this, we have introduced several programs

superiors’ understanding of their work-life balance. Through this,including an annual leave saving program that allows employees

we strive to create a working environment that enables employees

to take expired annual paid leave for medical treatment, childcare

to establish a healthy balance between childcare and their career.

and volunteer activities, and a commemorative event leave

Taking childcare leave

program that encourages workers to take holidays for their

FY2016FY2017FY2018FY2019FY2020

Total

8

7

12

5

19

Number of
employees taking Male
childcare leave

0

0

0

1

4

Female

8

7

12

4

15

Total

100.0%

100.0%

88.9%

91.7%

100.0%

Male

0.0%

0.0%

0.0%

100.0%

100.0%

Female 100.0%

100.0%

88.9%

90.9%

100.0%

children’s birthdays and other events.
We will continue our efforts to create a worker-friendly working
environment that enables employees to work with peace ofmind and achieve a healthy work-life balance.
Average overtime hours and percentage of annual paid leave taken
Average overtime hours (left scale)
Percentage of annual paid leave taken (right scale)(hours permonth)
20
15

71.9

71.7

74.8

72.3

60

10
5

(%)
80

40

12.2

14.8
10.1

0

2018

2019

2020

Data includes Sansha Electric Manufacturing Co., Ltd., Sansha Solution Service
Co., Ltd. and Suwa Sansha Electric Co., Ltd.

20

9.4

0

2017

Percentageof employees
returning fromchildcare leave(FY)

External
recognition

Lively advanced Company
Certification obtained fromthe Nagano Prefectural
Government

Data includes Sansha Electric Manufacturing Co., Ltd., Sansha Solution Service
Co., Ltd. and Suwa Sansha Electric Co., Ltd.
SanRex REPORT 2021

38

Financial data

Trends in major financial
indicators in the past 11 years

FY2010FY2011FY2012FY2013business
periodbusiness
periodbusiness
periodbusiness
periodNet sales

26,164

26,393

20,547

23,279Japan

17,581

16,811

14,591

16,697

77th

78th

79th

80th

Fiscal year (million yen)Overseas

8,582

9,581

5,956

6,582

Cost of sales

20,653

20,95915,46916,708Gross profit

5,511

5,434

5,078

6,570

Selling, general and administrative expenses

3,539

3,528

3,452

4,078

Operating profit

1,971

1,905

1,536

2,492

Ordinary profit

1,871

1,858

1,616

2,582

Profit before income taxes

1,910

1,946

1,231

2,542

Profit attributable to owners of parent

1,789

1,295

910

1,651

Capital investment

353

693

708

3,040

Depreciation

908

846

846

872

Research and development expenses

779

763

594

664

Cash flows from operating activities

1,328

3,837

1,675

621

Cash flows from investing activities

(271)

78

(617)

(1,858)Cash flows from financing activities(249)(1,510)

(960)

334

Cash and cash equivalents

3,187

5,575

5,879

5,212

Interest-bearing debt

4,076

2,701

1,936

1,560

Total assets

25,49824,26023,63327,602

Net assets

11,841

13,005

14,06916,756

Earnings per share

141.54102.4472.01

114.75

Net assets per share

936.42

1,028.54

1,112.74

1,121.30

Dividends per share

10.0

12.5

15.0

15.0

Operating profit/net sales

7.5

7.2

7.5

10.7

Return On Assets (ROA)

7.5

5.2

3.8

6.4

Equity ratio

46.4

53.6

59.5

60.7

Return On Equity (ROE)

16.1

10.4

6.7

10.7

Dividend payout ratio

7.1

12.2

20.8

13.1

Ratio of dividends to net assets

1.1

1.2

1.3

1.3

12,650,000

12,650,000

14,950,000

14,950,000

4,714

5,851

6,046

6,541

Share price at the end of period (yen)

641

457

590

627

Price earnings ratio (PER)

4.53

4.46

8.19

5.46

Price book-value ratio (PBR)

0.68

0.44

0.53

0.56

As of the end of fiscal year (million yen)

Per-share data (yen)Financial indicators (%)

Shares and share prices
Total number of issued shares
Total number of treasury shares

39

SanRex REPORT 2021

FY2014

FY2015FY2016FY2017FY2018FY2019FY2020business
periodbusiness
periodbusiness
periodbusiness
periodbusiness
periodbusiness
periodbusiness
period22,11322,191

20,06923,71724,36921,875

19,436

14,943

15,40013,451

16,026

16,927

15,165

13,462

81st

82nd

83rd

84th

85th

86th

87th

7,169

6,790

6,618

7,691

7,442

6,709

5,973

15,726

16,421

15,652

17,515

17,93017,281

15,027

6,387

5,770

4,417

6,202

6,438

4,594

4,408

4,085

3,893

4,194

4,727

4,605

4,337

3,992

2,301

1,876

222

1,474

1,833

256

416

2,289

1,801

217

1,480

1,804

243

441

2,281

1,710

281

1,471

1,793

290

612

1,506

1,172

126

1,065

1,339

(680)

497

1,011

407

463

734

720

641

359

1,056

970

955

977

955

1,030

948

688

703

511

904

1,305

1,204

1,223

2,886

1,401

1,844

3,560

746

36

1,729

(2,244)(321)(2,594)

(499)

(658)

(571)

(355)

20

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

(961)

(659)

(249)

6,204

5,654

4,966

6,820

5,963

4,659

5,870

1,832

1,001

1,150

200

100

-

-

28,007

26,16925,72527,81728,532

24,051

24,846

18,665

18,421

18,24819,314

19,952

18,48919,336100.80

79.29

8.71

73.48

93.44

(48.22)35.42

1,249.11

1,271.07

1,259.14

1,332.69

1,410.77

1,316.15

1,376.49

17.0

23.0

10.0

20.0

28.0

13.0

15.0

10.4

8.5

1.1

6.2

7.5

1.2

2.1

5.4

4.3

0.5

4.0

4.8

(2.6)

2.0

66.6

70.4

70.9

69.4

69.9

76.9

77.8

8.5

6.3

0.7

5.7

6.8

(3.5)

2.6

16.9

29.0

114.8

27.2

30.0

-

42.3

1.4

1.8

0.8

1.5

2.0

1.0

1.1

14,950,000

14,950,000

14,950,000

14,950,000

14,950,000

14,950,000

14,950,000

7,099

457,099

457,099

457,099

807,120902,122902,122

648

563

506

1,615

853

469

817

6.43

7.10

58.09

21.98

9.13

-

23.07

0.52

0.44

0.40

1.21

0.60

0.36

0.59

SanRex REPORT 2021

40

Financial data

Consolidated balance sheets(million yen)

AssetsTotal current assets

87th

Liabilities andnet assets

18,594Current liabilities

FY2019FY2020business
periodbusiness
period86th

17,611(million yen)

FY2020business
periodbusiness
period

86th

87th

4,889

4,806

673

703

Total liabilities

5,562

5,509

Shareholders’ equity

18,522

18,879(33)

457

Non-current liabilities

Non-current assets

FY2019

5,710

5,282

Intangible assets

282

156

Investments and other assets

446

812

Total non-current assets

6,440

6,251

Total net assets

18,48919,336

Total assets

24,051

24,846

Total liabilities and net assets

24,051

24,846

Property, plant and equipment

Accumulated othercomprehensive income

Consolidated statements of income(million yen)

FY2019FY2020business
periodbusiness
period

86th

41

87th

Net sales

21,875

19,436

Cost of sales

17,281

15,027Gross profit

4,594

4,408

Selling, general and administrative expenses

4,337

3,992

Operating profit

256

416

Ordinary profit

243

441

Profit before income taxes

290

612

Total income taxes

971

115

Profit (loss)

(680)

497

Profit (loss) attributable to owners of parent

(680)

497

SanRex REPORT 2021

Consolidated statements of comprehensive income(million yen)

FY2019FY2020business
periodbusiness
period86th

87th

Profit (loss)

(680)

497

Other comprehensive income

(361)

490

(1,042)988(1,042)988

Comprehensive income

Comprehensive income attributable to owners of parent

Consolidated statements of cash flows(million yen)

FY2019FY2020business
periodbusiness
period86th

87th

Net cash provided by (used in) operating activities

36

1,729

Net cash provided by (used in) investing activities

(571)

(355)

Net cash provided by (used in) financing activities

(659)

(249)

Effect of exchange rate changes on cash and cash equivalents

(34)

86

(1,228)

1,211

(74)

-

Cash and cash equivalents at beginning of period

5,963

4,659

Cash and cash equivalents at end of period

4,659

5,870

Net increase (decrease) in cash and cash equivalents
Increase (decrease) in cash and cash equivalents resulting from accounting term alterations of subsidiaries

SanRex REPORT 2021

42

Non-financial data / Company outline

Non-financial data
Number of employees (Consolidated)

Male

Number of employees in Japan

Male

FemaleAverage duration of service

Male
FemaleGender average

Female17.1

1,451 1,457 1,414 1,402 1,381
476

476

485

477

455

864
160

975

2016

981

929

2017

2018

925

2019

871
169

(FY)

Average overtime hours

704

713

702

695

694

2016

2017

2018

2019

2020

2016

10.1

2017

2018

2019

72.1

9.4

2020

(FY)

2016

71.9

2017

71.7

2018

2016

74.8

2018

2019

2020

(FY)

19.6

14.6

15.2

2016

2017

2018

2019

2020

(FY)

Percentage of employees with disabilities
(%)

(FY)

2.6

2.4

2016

2017

2017

2018

Male

19

2.7

2019

2020

(FY)

Female(%)

100.0 100.0

100.0 100.0
88.9

15

7

2016

2.7
1.8

Percentage of employees returningfrom childcare leave

Female12

Number of employees with shortened
working hours to care for children

Male

2020

22

8

2017

19.1

14.2

72.3

2019

13

11

18.6

14.5

Number of employees taking
childcare leave

Male

9

18.1

13.5

(%)

Number of women in managerial positions

19

(FY)

Percentage of annual paid leave taken

14.8
10.8

18.8

18.2

171

(hours per month)

12.2

17.8

865

865
170

17.9

926

2020

867
154

17.4

(years)

100.0
90.9

5
2018

4
1

4

2019

2020

(FY)

0.0

0.0

0.0

2016

2017

2018

2019

2020

(FY)

Number of occupational accidents withlost worktime

Turnover ratio

Female

(%)

9
5

5

2016

2.8

3

3

2017

2018

2019

2020

(FY)

2016

Number of employees hired throughtraditional recruitment

Male

17
2

16
4
1

15

2016

43

12

2017

SanRex REPORT 2021

11
10

2018

2.5

2017

3.4

2018

Male

18

5

4

12

2019

Female

7
4

14

2020

2020

(FY)

13
8

13

2019

2.4

Number of employees hired throughmid-career recruitment

Female

18

2.8

1
(FY)

2016

2017

5

3

2018

2019

3
2020

(FY)

0

1

0

0

0

2016

2017

2018

2019

2020

(FY)

Company outline (as of March 31, 2021)
Company nameSansha Electric Manufacturing Co., Ltd.

Date of foundation

March 8, 1933

Data of incorporation

April 28, 1948

Headquarters location

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

Capital

2.7 billion yen

Number of employees(consolidated)

1,381 (865 in Japan, 516 overseas)

Branches, sales offices
and other offices

Tokyo, Aichi, Fukuoka, Ishikawa, Finland,South Korea and Taiwan

Plants andlaboratories

Osaka, Shiga and Okayama

Consolidated subsidiaries
Japan SANSHA SOLUTION SERVICE CO., LTD. (Osaka)
SUWA SANSHA ELECTRIC CO., LTD. (Nagano Prefecture)
Overseas SANREX CORPORATION (USA)SANREX ASIA PACIFIC PTE. LTD. (Singapore)
SANREX LIMITED (Hong Kong)
SANSHA ELECTRIC MFG. (SHANGHAI) CO., LTD. (China)
SANSHA ELECTRIC MFG. (GUANGDONG) CO., LTD. (China)
DONGGUAN EASTERN ELECTRONICS CO., LTD. (China)

Stock and Shareholder Data (as of March 31, 2021)
Stock exchange listing

Second Section, Tokyo Stock Exchange(Securities Code: 6882)

Number of shares issued

14,950,000

Administrator ofshareholders’ register

Sumitomo Mitsui Trust Bank, Ltd

Number of shareholders

5,698

Distribution by type of shareholders

Major shareholders (ten largest shareholders)Name

Number of shares held Shareholding(unit: thousands)
ratio (%)

Panasonic Corporation

3,364

23.95

Miyashiro Limited Liability Company

758

5.40

Employee Shareholding Association ofSansha Electric Manufacturing

382

2.72

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

339

2.41

Kunio Shikata

330

2.35

Sumitomo Mitsui Trust Bank, Limited

326

2.32

CGML PB CLIENT ACCOUNT/COLLATERAL

325

2.32

The Senshu Ikeda Bank, Ltd.

314

2.24

Yukiya Morita

300

2.14

Sumitomo Mitsui Banking Corporation

280

1.99

(Notes)1. The number of shares held is rounded down to the nearest thousand.
2. We, Sansha Electric Manufacturing Co., Ltd., own 902 thousand treasury
shares, but we excluded ourselves from the list of major shareholders.
3. The shareholding ratio is calculated disregarding treasury shares androunding to two decimal places.

Editorial policy
The SanRex Report is edited
for the purpose of reporting to
its stakeholders, in an easyto-understand manner, theSansha Electric Manufacturing
Group’s efforts towards
continuous growth andmedium- and long-term value
creation. For more detailed
information and figures,
please see our website.

https://www.
sansha.co.jp/eng/
ir/integrated.html

Non-Japanese national
individuals

Securities companies

1,216 thousand shares
8.14%

264 thousand shares
1.77%

Financial institutions
1,567
thousand shares
10.48%

14,950thousandsharesOther corporations
based in Japan
4,769 thousand shares
31.90%

Individuals andothers7,132 thousand shares
47.71%(Notes)1. The number of shares held is rounded down to the nearest thousand.
2. The figure for “individuals and others” includes 902 thousand treasury shares.
3. The shareholding ratio is rounded to two decimal places.

Scope of reporting

Sansha Electric Manufacturing Co., Ltd. and its eight 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 2020 (from April 1, 2020 to March 31, 2021)

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
note that results may differ from these statements due to a variety of factors.

SanRex REPORT 2021

44

3-1-56, Nishiawaji, Higashiyodogawa-ku, Osaka, 533-0031, Japan
Phone: +81-6-6321-0321 (main)
Fax: +81-6-6321-8621

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