IDEC Report
2023
Integrated ReportIntroduction

PurposeValue Creation Story

The IDEC Group’s purpose is to create theoptimum environment for humans andmachines, and to achieve safety, ANSHIN*1,
and well-being*2 for people around the world.

Business Strategy

Since its founding in 1945 as Izumi Shokai, the IDEC Group has provided a wide range of products andservices. Leveraging the core technologies created and enhanced through development of industrial
switches and other control devices for machines, we want to make safer, more pleasant points ofcontact between humans and machines at manufacturing sites and in daily life. This is how we desire
to contribute to society.
To thus contribute to the functioning and well-being of society, based on the premise that at times
humans make mistakes and machines break down, we are inspired to pursue and attain consistently
high levels of safety, ANSHIN, and well-being, and protect humans even in unforeseen circumstances.
We are determined to continue providing innovation and value as we enter a new era, sustaining thecommitment we have had since our foundation, expanding it on a global scale, and staying on course
toward the next milestone, the our 100th anniversary.

Foundation For Value
Creation*1 A
 NSHIN denotes a sense of trust and assurance without any fear or stress.
*2 Well-being is a concept that denotes that individuals are in good physical, mental, and social condition,
where one’s rights and self-actualization are realized.

In Harmony with our co-workers,
our customers and society.
GovernanceJoy in fulfilling our mission.

Pioneer the new norm for a safer and sustainable world.
Take on new challenges and embracechange.

To create the optimum environment for humans and machines.

Data

Exhibit honesty, fairness andrespect at all times.

Our values that dictate our attitudes and behaviors.
Be the person everyone can count on.

IDEC Report 2023

Purpose1

Introduction

Contents
Introduction

The IDEC Group published the integrated report “IDEC Report
2023,” referring to the “International Integrated Reporting
Framework” proposed by the Value Reporting Foundation(VRF) and the “Guidance for Collaborative Value Creation” of the
Ministry of Economy, Trade and Industry.
In addition to financial information such as business performance and management
strategy, we have compiled non-financial information. These “invisible” assets, including
ESG, have been compiled in a systematic matter so that our stakeholders can understandour process of improving corporate value and our efforts to realize a sustainable society.

1
2
3
5

Purpose6

Strengths

 rganizations coveredO
IDEC CORPORATION
and IDEC Group companies(32 consolidated subsidiaries)

The information in this report, including
plans, estimates, and strategies, is based on
information available at the time of publicationand contains risks and uncertainties. Actual
results may differ from those stated in thisreport, due to factors such as future economic
conditions and business environment.

History

Value Creation Story
945 Natural Capital
50 Social Relationship Capital
51

Value Provided to Stakeholders

Value Creation Process

10 CEO Message
14 Long-Term Vision
15

Materiality

17

Sustainability Targets and Progress

Sustainability Promotion Policy
18 and Organization

19 Medium-Term Management Plan
Growth Strategy:
20 Actions for Advancing HMI-X
Improving profitability,
23 enhancing business foundationand ESG initiatives

Governance
53 Features of IDEC’s Governance
55 Efforts to Evaluate EffectivenessNominating Committee and
56 Remuneration Committee

59 Director Profiles
60 Executive Officers
61Interview with Outside Directors

63 Outside Director Activities
64 Risk Management

Data

26 Performance
27 HMI (Human-Machine Interface)

68 Non-Financial Data
69 11-Year Key Financial Data

29 Safety & Explosion Protection
30 Industrial Relays & Components

70 Income Statement
71 Balance Sheet

Automation & Sensing

72 Cash Flow Statement
73 Company Overview

Data

32 Systems

GovernanceBusiness Strategy

31

IDEC Report 2023

37 Intellectual Capital
40 Human CapitalFoundation For Value
Creation

 ublication dateP
June 2023

 autionary statement regardingCforward-looking statements

At a Glance

34 Financial Capital
36 Manufacturing CapitalBusiness Strategy

 eriod covered
P
Fiscal Year 2023
(April 1 2022-March 31 2023)

Editorial Policy / Contents

Foundation For Value Creation
Value Creation Story

Editorial Policy

2Introduction

At a Glance
Our Performance(billion yen)

Earnings per share

Value Creation Story

Operating income /Operating income margin

Net sales(yen)

Operating income (billion yen)
Operating income margin (%)

83.9

14.1

348.37

70.8
62.8

Pr

io n
l os

E xp

2023

(FY)

2019

2020

2021

2022

2023

(FY)

2019

2020

2021

2022

2023

(FY)

Our Business

FY2023
total sales

12 83.9%43%

As a leading company in the field of Human-Machine Interface (HMI),
the IDEC Group provides a wide range of products and solutions
that contribute to safety, ANSHIN, and well-being.

35.8 billion
yen

Governance

Safety &2022

95.19 92.83

billion
yen

19%

&
tion
m a ingots
Au S e n

2021

7.5

1.2 billionyen6%

16.3 billion
yen

2020

112.534.0

8.1

Foundation For Value
Creationn

4.8

billionyen

10.3 billion
yen

In

19%
du

s tr

15.5 billion
yen
ia l

Data

IDEC Report 2023

t io

2019

HMI

Automation & Sensing productsthat contribute to the automation ofequipment in many corners of theindustry and in daily life.

ec
ot

tems
Sys

1%

16.8

13.7
4.7

Business Strategy

9.1

Other

264.12

9.7

54.0
5.7

Control panel solutions tailoredto customer needs, robot systemsolutions combining various IDEC
products and collaborative robots
that can work in the same workplacewith humans, and other solutions.

Safety-related products that protect
the safety of workers and explosion
protection products that prevent
accidents in workplaces where
flammable materials are present,such as petrochemical plants.

58.4

Re la
ts
ys & C o m p o n e nElectrical equipment productsthat are incorporated into control
panels and control units used tocontrol mechanical devices andproduction lines.

Various switches and operator
interfaces that serve industry andsociety by functioning where humanand machine interact.

At a Glance3Introduction

Basic Information

15

countries

Ratio ofoverseas sales

Foundation For Value
Creation

IDEC has established development, manufacturing,and sales centers around the world in order toprovide ideal components and solutions thatmatch market and industry needs.
In line with its medium-term management plan,
IDEC is pursuing global expansion by strengthening
its presence in the Chinese and Indian markets,
in which high growth is expected.

Business Strategy

Our Global Network

Value Creation Story

IDEC was founded in Osaka in 1945 as Izumi Shokai.
Soon after, the company began developing
high-quality switch boxes, an indispensable component inmachinery and equipment, and eventually became a generalmanufacturer of control devices for machines.
Through development of a diverse line-up of products that
contribute to automation and the efficiency and safety offactory equipment, IDEC continues to work toward creating
the optimum environment for both humans and machines.

Ratio ofoverseas employees

59

%

69

as

Am

%

E M E A*E M E A*

Governance

990

3,186

Data

28%

24%

898

billion20.2 yenia P

Number of
employees by region

FY2023

FY2023

As

34%
1,088

31%

n

billion34.5 yenn

13.5billion
yen

83.9

billion
yen

Ja pa

16%

41%

7%
210

15.7billion
yen
Sales by region

as

pa

19%

e r ic

Ja

Am

ic
er

P
Asia

acificac

ific* EMEA: Europe, Middle East and Africa

IDEC Report 2023

At a Glance4Expanding
the global
business

Introduction

History(billion yen)

80

Value Creation Story

Responding to global societal challenges;
thinking of our 100th anniversary and beyond.
60

What we have not changed

What we have changed

Development of products that bring together
humans and machines to attain safety, ANSHIN,
and well-being

Product strategy and multi-regional
development that respond to needs ofthe times

Japan

OverseasJapan40
FY 2001

FY 2011

FY 2023

31%

36%

59%

FY 2001

FY 2011

FY 2023

30%

57%

69%

Foundation For Value
Creation

Ratio ofoverseas
employees

Business Strategy

Ratio ofoverseas sales

20

Overseas

Sales history
Net sales

Burst of a Japanese
bubble economy

Oil crisis

1950

1960

1970

1980

1990

Dot-com bubble
burst

2000

Contributing to automation and mechanization,
as a comprehensive control device manufacturer

Creating the “optimum environment
for humans and machines”

When IDEC started to do business, it was initially engaged in thesale of electric appliances, including retail sales. Recognizing
the shortage of switch boxes, that were essential
for many machines, IDEC developed high-quality
switch boxes, which became IDEC’s long-selling
products. The switch boxes as well as explosion
protection products, which were widely used in
textile and chemical plants and petrochemicalcomplexes, helped support Japan’s manufacturingin the postwar reconstruction period.

Propelled by rapid economic growth in Japan, IDEC was transformed
into a comprehensive control device manufacturer. In tandem withthe advance of automation and mechanization of factory equipment,
IDEC expanded into the field of electronics and system products.
Pursuing corporate scale expansion and responding to thetrend for greater mass production, IDEC established overseas
manufacturing and sales sites, and global business expansion led
to further business growth and to a stock listing upgrade to the First
Section of the Tokyo Stock Exchange in 1990.

In manufacturing, environments in which humans
and machines coexist have become common andincreasingly vital for society. In response to this,we developed the first interlock switches andenabling devices in Japan to meet the needs of safety
and productivity-conscious facilities. In addition,
we introduced a robot control cell production
system that realizes multi-product and variablevolume production at our core factory, promoting
automation and labor-savings.

SB metallic switch box

IDEC Report 2023

COVID-19
pandemic

2010

02023 (Fiscal year)

Solving global societal challenges
In its 60th anniversary year, 2005, the company
changed its name to IDEC CORPORATION. In 2017,
IDEC acquired APEM Group of France, as part of its
global business expansion. IDEC strives to develop
new businesses that contribute to solving societal
challenges. We will thus continue to transform and standup to challenges, so that our company becomes truly
global and attains sustainable growth.

Data

Supporting Japan’s manufacturing in the
postwar reconstruction period

Global financial
crisisGovernance

1945

Overseas net sales

History

5

Strengths
1 A diverse line-up of control

Product development based on safety DNA

Industrial switch

No.1

50 %

3 Promotion of international
standardization

70 %

90 %
Industrial Standardization Project Award
Ceremony
Left: Makoto Nagamine, Parliamentary Vice
Minister of Economy, Trade and Industry
Right: Toshihiro Fujita, Senior Executive
Officer, IDEC CORPORATION

expansion through M&A
and partnerships

To expand our business globally, we are actively pursuing mergers and acquisitions (M&A) opportunities and partnershipagreements with companies both in Japan and abroad that can be expected to provide synergy with our business activities.
The addition of France’s APEM to the IDEC Group in 2017 has been a major factor in increased business growth in recent years.

APEM (France) joined the IDEC Group.

Automatic
identification devices

Welcat Inc. joined the
IDEC Group.

Push-in technology

AGV & AMR

A strategic partnership agreement was
concluded with Weidmüller (Germany).

A strategic partnership agreement was
concluded with ez-Wheel (France).

IDEC Report 2023

The Electric Wheel

2021
2019

Data

2018
2017

Governance

4 Global business

Since the 1990s, IDEC has actively participated in the developmentof international standards.
The 3-position enabling device, for which IDEC led the creationof the international standard, has been adopted by major robot
manufacturers worldwide and holds more than 90% of the market share.
In October 2022, Dr. Toshihiro Fujita, Senior Executive Officer,
received the Prime Minister’s Award of Industrial Standardization
Project Award in recognition of his achievements in international
standardization activities for over 20 years.

Foundation For Value
Creation

FY2023 achievements(according to in-house research)

HMI

Active participation in the creation of
P.37
international standards

3 position
enabling device
No.1 both
domesticallyand globally

SB metallic switch box

Business Strategy

IDEC offers more than 100,000 types of HMI products
in Japanfor a variety of industries and customer needs.
As these products protect human life, theyneed to be compatible with standards in various
countries and meet high-level quality and safety
requirements. Our expertise, accumulated
Emergency-stop switch
over many years, and our reputation for
No.1
reliability have enabled our products toin Japanachieve a high market share.

IDEC incorporated an interlock mechanism in the switch
boxes developed in 1950, soon after the company was
founded, in order to ensure operator safety. The resulting
products became enduring best-sellers. This commitment
to safety has become part of our DNA and has served as
the basis for product development since our founding,enabling us to provide high-quality products.

Value Creation Story

device productsHigh market sharein the HMI andsafety sector

Introduction

2 Safety DNA

2022

Safety-related products

Sensing technology

System development

Tokyo Sensor Co., Ltd. joined
the IDEC Group.

IDEC ALPS Technologies
Co., Ltd. was established as a joint
venture company with ALPS ALPINE
CO., LTD.

IDEC FACTORY SOLUTIONS CORPORATION acquired
factory automation business from Squse Co., Ltd.
Strengths

6

The IDEC Group’s technology and products are contributing to resolve various societal challenges in factories andother manufacturing sites as well as in daily life scenes, thereby helping to secure the future of manufacturing and living.

Special vehicles

Installed in the operating sections of vehicles such as
construction machinery and agricultural machinery,
thereby supporting operator safety and ANSHIN.

Value Creation Story

Office buildings

Operator interface

Used to control building management,
monitoring systems, parking lots, elevators,
and so on, contributing to the convenienceand increased safety of office buildings.

Introduction

5 IDEC products and services that contribute to society

Miniature switch
Locker switch

JoystickBusiness Strategy

Control box

Switching power supply

Public transport
Edge switch

Petrochemical andchemical plants

Industrial switch

These products can be usedeven in hazardous areas where
flammable substances areproduced, preventing serious
industrial accidents.

Installed on machine tools, semiconductor
manufacturing equipment, and various
other devices and used as operationand control units on manufacturing lines,
thereby helping to improve productivity,
efficiency, and safety.

Explosion protection
vibration sensor

AMR(Autonomous Mobile Robots)

Sensing equipment
Safety commander

Pilot light

Devices that enable automated transportand sorting of cargo at worksites that needto handle an increased logistics volume,
thereby helping to promote the automationof operations.

Data

Logistics warehouse

Interlock switch

IDEC Report 2023

Governance

Various machine devices in factory
facilities and manufacturing lines

Foundation For Value
Creation

Emergency-stop switch
LED illumination unit

Used to stop trainsin the event of an
emergency and prevent
people from becoming trappedby the railway platform safety barriers,
thereby helping to ensure passenger
safety and support the daily operations ofpublic transport systems.

Explosion
protection LED
illumination unit

Explosion protection
operator interface

Strengths

7Introduction
Value Creation Story

Value Creation Story

Business Strategy
Foundation For Value
Creation
Governance9

Value Creation Process

10 CEO Message
14 Long-Term Vision
15 Materiality
17 Sustainability Targets and Progress

Data

18 Sustainability Promotion Policy and Organization
19 Medium-Term Management PlanIDEC Report 2023

8

Value Creation
Process

P.14

Business activities

Ou

Safety & Explosion
Protection

HMI Development
Capabilities

P.29

P.40

les

r in

Human Capital

n
Ma

uf

ac

tu

Natural Capital
P.45

Social and
Relationship Capital
P.50

P.15-16

PurposePioneer the new norm for a safer
and sustainable world.

Industrial Relays &Components
P.30

Establishment of a pleasant
workplace environment andeducational programs thatenable diverse personnel todemonstrate and improvetheir capabilities

Customers
Reduction of environmental
impact and provision of
products and solutions thatare easy for everyone touse and that achieve safety,
ANSHIN, and well-being

Shareholders / investors

Automation &Sensing

Sustainable growth toincrease our corporate value
and ensure stable returns

P.31

Business partners

Systems

Fulfilling our social
responsibility throughout thevalue chain

P.32

P.51

Data

To create the optimum environment
for humans and machines, and toachieve safety, ANSHIN, andwell-being for people
around the world.
P.1

me

Governance

Sa

tco

Employees

HMI(Human-Machine Interface)
P.27

g

Automationand Labor-saving
Technologies

Products andbusinesses that provide
new value in response
to diversifying needs

Foundation For Value
Creation

P.37

ent

Main related SDGs

opm

Intellectual CapitalCore
Competencies

Businessfoundation

P.36

High Quality

ve lManufacturing
CapitalClimate change

Safety Technology
and Products

De

P.34

or t

Productivity
improvement
Safety, ANSHIN,
and well-being

Financial Capitalut

Pl a n n i n g

Supp

In

t
pu

Outp

ialit y.

Business Strategy

er
M at

der s

Value Creation Story

VisionBy providing products and services t hat integr
ate saf
et y a nd HM
IDEC will lead HMI-X (Human-Machine Interfac
I,
e Trans
fo r m a
h
t
e
o
t
r
e
e
a
t
li
u
z
ib
at
tr
ion of well-b
and cont i o n)eing forou r div
er se st akehol

0
fo r 2 0 3Introduction

We are committed to helping realize a sustainable society and increase our corporate value while fulfilling our Purpose and the ideals
of “The IDEC Way.” Specifically, we strive to meet the following materiality goals through our business activities: “Improve productivity
using control technology,” “Pursuit and realization of safety, ANSHIN, and well-being,” “Response to climate change,” and “Establish
a management structure that promotes value creation, foster an organizational climate, and develop human resources.”

To create the optimum environment
for humans and machines.

The foundation for our corporate activities

IDEC Report 2023

Value Creation Process9Introduction

CEO Message

Value Creation Story

We aim to achieve sustainable growth ona global scale and contribute to solving
societal challenges with the goal of
realizing safety, ANSHIN, and well-being
for people around the world.

Business Strategy

Chairman and Chief Executive Officer

Toshi K. Funaki

GovernanceNet sales & operating income margin
Net sales (billion yen)

Operating income margin (%)

83.9
62.8

9.1

2019

70.8
58.4

54.0

8.1

7.5

2020

2021

13.7

16.8
Data

IDEC Report 2023

In FY2023, despite rising raw material prices and shortagesof certain electronic components used in programmable logic
controllers and other devices, the demand for manufacturing
equipment in the global market remained strong with significant
expansion in industries such as automotive, machine tools,
and robotics.
These favorable market conditions drove a strong influxof orders throughout the year, setting a new record in our
total value of orders received. Meanwhile, we proactively
strengthened and expanded our manufacturing facilities,
adding more production lines for safety-related products and
HMI products—including control switches, a highly profitablesegment that enjoys strong demand worldwide. We also
shifted some production operations overseas and promoted
the introduction of automated equipment.
Furthermore, in order to develop a more efficientbusiness structure, we have been realigning our global
sites, restructuring our Japan sales organization into a sales
company while consolidating our sales offices to two locationsin 2021, as well as overhauling our distributor network. At thesame time, we have worked to further improve our profitability
by optimizing our selling prices globally to reflect the increased
cost of materials, and by introducing new products with higher
profitability.
These reforms and the global rise in capex-driven
demand helped to boost sales and profits across our entire
portfolio, particularly our core businesses of HMI and Safety &Explosion Protection, allowing us to attain our highest level of
performance yet in FY2023. This includes our record-breaking
operating income margin of 16.8%.

Foundation For Value
Creation

The IDEC Group announced a new mediumterm management plan in 2022, setting a targetof achieving net sales of 80 billion yen and an
operating income margin of 16% or higher by
FY2025. However, due to the robust demand forinvestment in manufacturing equipment globally, as
well as our efforts to improve profitability, we haveachieved record-high performance in FY2023 andhave achieved the targets set in the medium-term
management plan in the first year.
However, the global economic outlook remains
uncertain. In order for the IDEC Group to achievesustainable growth while contributing to solving
societal challenges in any market condition, we
defined our ideal state in 2050, and backcasted to
P.14
formulate a vision for 2030.
Going forward, we will promote radical reforms
for further growth, and provide components andsolutions that enable our customers to overcome
diverse challenges in order to realize the company’s
purpose and long-term vision.

Record-breaking performance due tofavorable market conditions and ourefforts to improve profitability

2022

2023 (FY)CEO Message

10

Our vision for 2050

Net sales

Operating income

70.8

billion yen

9.7

FY202383.9

billion yen

14.1

FY2024 targets

81.0

billion yen

13.8

billion yen

billion yen

billion yen

Operating income
margin

13.7%

16.8%

17.0%

ROIC

9.2%

12.5%

10%
or higher

ROE

17.2%

18.9%

15%
or higher

EPS

264 yen

348 yen

326 yenFoundation For Value
Creation

Pioneer the new norm
for a safer and sustainable world.

F Y2022

Business Strategy

P.14

levels that enable them to make large investments in productdevelopment. Meanwhile, unfortunately only a handful ofmanufacturers in Japan achieve profits at such a level.
In order for our Group to succeed in the global control
equipment market, we need to expand our investment in
R&D. Although we dramatically raised our operating income
margin to 16.8% in FY2023, we are still not in a position toadequately compete against the world’s leading players. For
this reason, I think it is vital for us to increase our margin to
20% or more. If we can maintain that level, we will be able
to build a platform that can go toe to toe with European andAmerican manufacturers.
To achieve this goal, we will develop a necessary foundation
for further increasing our profitability in the remaining two yearsof the medium-term management plan, and implement various
reforms in FY2024.

Value Creation Story

In 2023, the global economy remains uncertain, with various
factors such as low economic growth due to high inflationand geopolitical risks potentially affecting the businessenvironment. In addition, megatrends such as the accelerationof digitalization and automation, demographic shifts, andclimate change continue to evolve daily. In response, wehave formulated a long-term vision for 2050 as a pathway
to successfully navigating through those many changes andachieving sustainable growth for our Group through businessactivities that help solve societal challenges. We have also
backcasted from that ideal state to create a vision for 2030.

As we cannot bring our long-term vision to reality without
the commitment of each and every one of our employees,
we are taking actions that allow individuals to maximize theirpotential, in line with our founding principle of “managementwith respect for humanity.” Specifically, we are strengthening
our investment in human capital and striving to revitalize ourorganization by creating a more attractive workplace withhigher job satisfaction. Under the new human resources
system we launched in FY2023, our performance evaluation
criteria now reflect our core values: Harmony, Passion,
Innovation, Integrity, and Commitment. Furthermore, in
FY2024, we re-established our Employee Awards Program
to include categories for honoring employees who embody
our Group’s philosophy, and another that recognizes those
who are role models for their behavior aligned with our
Principles, which are based on our Core Values and represent
the concrete thinking and conduct that employees should
remain mindful of as they perform their duties. This wasdone with the aim of facilitating our further growth by firmly
implanting our philosophy across our organization.

Introduction

Formulating a long-term vision towardsustainable growth

IDEC will drive the future of manufacturing
by creating new possibilities and establishing new standards
that will become the “new norm” of tomorrow’s world.
Through our efforts,
we envision a safer and a more sustainable world,bringing happiness and ANSHIN for all.

Data

IDEC Report 2023

In order to attain sustainable growth, we must carry out radical
reforms. Although we achieved strong results in FY2023, I
am not satisfied with our current level of performance. Our
Group has rapidly globalized since acquiring France’s APEM
in 2017, with more than 60% of our core product sales now
coming from overseas. Going forward, we will further expand
our business globally, with the aim of raising the overseas
share of core product sales to 80% or more within ten years.
As we actively globalize our company, we should takenote that many leading manufacturers of control devices
in Europe and the US generate operating income at highGovernance

The long-term vision was formulated from our Group’s
P.1
corporate philosophy, “The IDEC Way.”Ever since
our founding in 1945, we have strived to create the optimum
environment for humans and machines while providing
products and services that help protect people’s lives evenin unforeseen circumstances. In doing so, we have always
endeavored to help bring forth a society where everyone
can live healthy, happy, and vigorous lives. We will continue
working on realizing safety, ANSHIN, and well-being for people
across the globe by creating new possibilities and pioneering
new standards.

Transformation into a highly profitablestructure through radical reforms

CEO Message

11

Business Strategy
Foundation For Value
Creation

We launched the Technical Solution Sales Department in
FY2023 as an organization that combines various products
into optimal solutions for addressing societal challenges
and the increasingly diverse needs of our customers. This
team has already received hundreds of customer inquiries
on solutions, and is responding to them in collaboration withrelated departments. By strengthening our solutions sales, inaddition to sales of existing components, we seek to further
enhance our global competitiveness.
Furthermore, our new medium-term management
plan includes a new concept that our Group will advance:
HMI-X [Transformation]. In the years since our founding,we have grown as a leader in HMI products that connect
humans and machines. We have evolved with the times by
expanding our business beyond interfaces—the point ofcontact between humans and machines—to also encompass
interactions, the network of connections linking machineswith people and other machines. In the coming years, we
believe that demand will grow for solutions that provide
people with safety, ANSHIN, and well-being, through not
only networked mechanical devices, but also the optimizationof the environment, where the space between humans andmachines coexist.

The know-how in safety that we have developed over
the years is a key part of our DNA. We will leverage thatexpertise to pursue our human-centric HMI-X concept thatwill take our HMI to the next level. To accomplish this, wemust strengthen our software development capabilities
by cultivating our talent and exploring opportunities foracquisitions and partnerships. We will advance HMI-X
by proactively developing new products through our joint
P.20 offering
venture with ALPS ALPINE CO., LTD.,
diverse applications for realizing safety , ANSHIN, and wellbeing, and providing solutions that combine ourP.21
safety equipment with the products of our French partner
P.22
ez-Wheel.
Turning to our regional strategies, we are working to
expand our sales in the high growth potential marketsof Asia. For example, in China, we are stepping up local
manufacturing to serve local consumers, including thedevelopment of products tailored to local needs. We arealso building up a solutions sales organization that will makeour sales processes more efficient. Meanwhile, in India, weare pursuing strategic partnerships and other opportunities
that will enable us to strengthen our sales channels. We
are also considering ways to support our future businessexpansion through collaborations in production and otheroperations with our factory in Thailand.

Value Creation Story

Our first focus of reform is production. Currently, theproducts we develop are manufactured at our factories andthe production equipment used is fabricated at our head
office’s Manufacturing Technology Department. Since thisapproach shields our manufacturing processes from the forcesof competition, it has been an obstacle to the enhancementof our productivity.
We began redesigning our entire Group’s organizational
structure in FY2024 to improve our established practices. One
step we have taken is appointing talent who possess in-depth
experience gained inside and outside our Group to manage
each unit. Also, we plan to restructure our global organization,
including APEM, to enable bilateral supply and technology
exchanges in procurement, supply chains, and production
across our Group, using an approach that strengthens eachfunction. One possibility is to enable IDEC and APEM toshare parts and jointly procure supplies, which would achieve
tremendous cost savings. We will also consider expanding ourrange of manufacturing options to encompass not only ourfactories, but also external manufacturing contractors.
Through production reforms such as these, we will
work to radically lower our costs and strengthen our global
competitiveness.

Advancing HMI-X by offering solutions
and expanding sales in Asia

Introduction

Production reforms throughorganizational restructuring

Governance
Data

IDEC Report
port 2023

CEO Message

12

P.15

Safety, ANSHIN,
and well-being

Improve productivity
using control technology

Pursuit and realization of safety,
ANSHIN, and well-being

Climate change

Business foundation

Response to
climate change

Establish a management structurethat promotes value creation,
fosters an organizational climate,and develops human resources.

IDEC Report 2023

In order to achieve a sustainable society and improve
corporate value, it is essential to strengthen human capitaland revitalize our organization. For this reason, we haveadded “business foundation” as a new materiality issue. We
will promote engagement and work-style reform by aligning
our initiatives with the medium-term management plan andsustainability KPIs.
In addition, we are systematically selecting and training
candidates as our next-generation managers. This humanresource development will provide a foundation for our Group’s
further growth.

Strengthening governanceP.53

We have been taking action to strengthen our governance.
From early on, we proactively appointed outside directors to
our Board of Directors. Since 2016, outside directors haveconstituted more than half of the board’s membership. In 2022,
we appointed outside directors to fill two new roles, supervising
the important challenges of environmental measures and IT
strategy. Female board members make up 30% of the board,
contributing to its diversity.
Another critical challenge that we have been addressing
is the cultivation of the next-generation of executive leaders.

In 2021 we established a voluntary Nominating Committee,
comprised mostly of outside directors, to serve as an advisory
body for the Board of Directors. This provides us with a systemfor objective and independent decision-making concerning thenomination of director candidates and the planning of training
for next-generation executive candidates. The Directors also
hold lectures and interviews as part of the next-generation
training curriculum.
As another way to further strengthen our governance,
we also established a voluntary Remuneration Committeein October 2022, comprised mostly of outside directors, toensure fairness, transparency, and objectivity of our director
remuneration decision-making process. We have designed ourremuneration system to reflect nonfinancial KPIs in addition tofinancial ones, to reinforce our commitment to sustainability.
By pursuing the many different actions I have illustrated
here, the IDEC Group will strive to realize the sustainablegrowth for its entire global organization. Going forward,
everyone in our Group will continue working as one, to fulfill
our Purpose of achieving safety, ANSHIN, and well-being forpeople around the world.

CEO Message

Data

Productivity
improvement

P.40

GovernanceMateriality

Increasing investment in human capitalFoundation For Value
Creation

To achieve our long-term vision, we must not only create
economic value through our business activities, but also increasesocial value by reinforcing our commitment to sustainability. As
part of our new long-term vision, we realigned our materiality
and introduced new KPIs that align with our medium-term
management plan. Moving forward, we will work toward
resolving the societal challenges while monitoring our progress.

It goes without saying that we cannot successfully reach our
vision for 2050 without addressing the global challenge ofclimate change. Our environmental strategy is a key pillar of ourbusiness strategy to achieve sustainable growth. Accordingly,
we are seeking to achieve carbon neutrality by 2050, actively
utilizing environmental initiatives as transition opportunities andimplementing strategies that include developing eco-friendly
products, engaging in environmental energy businesses,
and pursuing other activities that contribute to reducing
environmental impact.

Business Strategy

Reinforcing our commitment tosustainability

P.45

Value Creation Story

DX has become a high-priority challenge for us. We areresponding by adopting various systems that can streamline
our operations, and thereby strengthen the foundation of
our business.
In 2022, the digital marketing project we launched in2018 completed its rollout of the common digital platform at
APEM and all other Group offices globally. As this enables
us to provide each customer with personalized and optimal
content, we are now working on creating processes that willlead to acquiring new business opportunities.
In addition, we are continuing with a project initiated in
FY2023 to globally implement two integrated management
systems—one that functions as a platform for enterprise resource
planning (ERP), and another that supports supply chain planning(SCP). These systems will provide integrated management ofvarious business processes and will be interlinked with thedigital marketing platform, sales force automation, and othertools, resulting in greater operational efficiency.

Addressing climate change

Introduction

Streamlining operations through DX

13

Climate change

Business foundation

Response to climatechangeEstablish a management structurethat promotes value creation,
fosters an organizational climate,and develops human resources.

Medium-Term
Management PlanPASSION
FOR YOUR SUCCESSIDEC will drive the future of manufacturing by creating new
possibilities and establishing new standards that will become
the “new norm” of tomorrow’s world. Through our efforts,
we envision a safer and more sustainable world,bringing happiness and ANSHIN for all.

Demographic
changesMateriality

Vision for 2030

Geopoliticalchanges

ClimatechangesAdvancesin diversity

By providing products and services that integrate safety
and HMI, IDEC will lead HMI-X (Human-Machine Interface
Transformation) and contribute to the realization ofwell-being for our diverse stakeholders.

Governance(FY2023-2025)

Advances indigitalization& automation

Foundation For Value
Creation

Safety, ANSHIN, andwell-being
Pursuit and realization of safety,
ANSHIN, and well-being

Pioneer the new norm
for a safer and sustainable world.

Business Strategy

Productivity
improvement
Improve productivity
using control technology

Vision for 2050

Megatrends

Value Creation Story

Global corporations are called upon to address climate change and other challenges
affecting the international community as they navigate tremendous changes in themarket landscape.
We aspire to tackle the challenges faced by society and serve the ever-evolving
needs of our customers while achieving sustainable growth for our Group.
To set the course for these endeavors, we have formulated a long-term vision for 2050,
and backcast it to define our interim vision for 2030.
We are already taking action on sustainability challenges to help society becomesustainable and to increase our corporate value. Going forward, we will also step up
our efforts to make our Group carbon neutral by 2050 and to enhance our humancapital in ways that support our global expansion.

Introduction

Long-term Vision

Four Basic Strategies
Improve profitability

Enhance businessfoundation

Enhance ESG
initiatives

IDEC Report 2023

Back
casting

Data

Promote growthstrategyLong-term Vision14

Materiality

Vision for 2030

Improve productivity
using control technology

Pursuit and realization of safety,
ANSHIN, and well-being

Business foundation
Establish a management structure that promotes
value creation, fosters an organizational climate,and develops human resources.

I mprove safety, productivity, and well-being through technology development, human resource
development, management, and rulemaking.

Contributeto the reduction of the environmental impact of customers and society through theuse of the IDEC Group’s technologies and products.
Reduce CO2 emissions through the in-house use of renewable energy.

 nsure a thorough understanding of “The IDEC Way” and stimulate the company by creatingE
an attractive work, environment that gives employees a sense of purpose.
 romote decent work, as well as diversity & inclusion, to strengthen the company’s humanPcapital, in order to cultivate employees who will be able to innovate and create new value.
Further strengthen governance and compliance to ensure that the company is trusted by society.

Governance4

Response to climate change ealize the optimum environment for both humans and machines to resolve various societal
Rchallenges and make it possible to achieve healthy, happy, and vigorous lives.

Foundation For Value
Creation

3

Climate change ontribute to improving the productivity and efficiency of our customers and society aroundC
the world by providing the IDEC Group’s long-cultivated control technology, products, andsystem solutions that have been developed ever since its foundation.

Business Strategy

2

Safety, ANSHIN, and well-being

Related SDGs

Value Creation Story

1

Productivity improvement

Introduction

Along with formulating its long-term vision for 2050 and interim vision for 2030, IDEC has reviewed its policy toward materiality.
A fourth item, “business foundation,” has been added, and the company is working to devise climate change measures and further
enhance its human capital and governance.

Conduct reviews as appropriate in response tochanges in society and the business environment.
Identifying challenges

IDEC Report 2023

Engagein dialogue with stakeholders andassess trends in societal challenges.
Reassess materiality based on the long-term
vision for 2050 and the interim vision for 2030.
Understand international frameworks/guidelines
and the criteria used by ESG rating agencies.

The
Strategic Planning Department, Corporate
Communication Department, CSR Department,
and Environment Promotion Department
organize and reassess issues and establish
sustainability KPIs.
Ensure consistency with our vision for 2030 and
medium-term management plan.

Evaluating significance
Map
the issues across two axes: significancefor stakeholders and significance for the IDECGroup.
Assign priorities by theme.

Confirming validity
Materiality
policy and sustainability KPIs are
confirmed by the Top Management Meeting and
the Board of Directors.
Obtain approval from the Board of Directors.

Materiality

Data

Materiality
Selection
Process

Analyzing and creating drafts

15

Materiality
Introduction

Identifying challenges and evaluating significanceOpportunity Aspects

Risk Aspects
1

12

2

9

11
3

8

10

5

13

2

Significance to stakeholders

11
7
5

2

Productivity Improvement in customers’ productivity and efficiency by providing solutions
improvement

3

Creation of safe and healthy working environment by providing control and safety devices andvarious systems
Reduction in work time by streamlining work processes and making labor-saving improvements
Safety,ANSHIN, andwell-being Reduction in labor accidents by providing safety devices

7
8

1
2

Productivity
improvement

Climatechange3
45

Safety awareness building and promotion of safety measures by providing safety consultations andseminars

6

Reduction of environmental impact and strengthening of competitiveness through eco-friendly
manufacturing

7

Overview
Decline in competitiveness due to lack of response to technological innovation,
environmental changes, and customer needs
Decline in customer satisfaction due to quality and delivery time problems
Personal and social hazards resulting from accidents related to products and services

Safety,ANSHIN, and Fraud and falsification of inspections, standards certification, and permits
well-being
Social unrest and impact on operations and product shipments caused by substances that cause
pollution and health damage
ClimatechangeCost and supply instability due to soaring energy prices and shortage of raw materials
Supply chain disruption and business disruption due to abnormal weather and natural disasters

Business expansion in renewable energy and other environmental fields

8Insufficient investment in human capital and a deficient working environment, reducing labor productivity
and impeding employee retention

10

Create a work environment that gives people a sense of purpose and promote the digital transformation
to increase labor productivity, secure outstanding talent, and gain new business opportunities

9

Decline in social credibility and employee engagement due to violations of human rights laws, regulations,and norms

11

Hire people with a diversity of values and train and develop human resources to create innovation andstrengthen competitiveness

10

9Achieve viable corporate governance and increase awareness of compliance responsibilities to improve
corporate value

13

Foster of a corporate culture that is based on environmental considerations

14

Improve in ESG relations with investors

IDEC Report 2023

Businessfoundation

Imbalanced skills and characteristics of human resources, resulting in stereotypical thinking and lossof business opportunities

11

Decline in social credibility due to CSR and compliance violations, and lack of governance in the global
supply chain

12

Loss of social credibility due to information security accidents, non-compliance with laws and regulations,and lack of risk management

Materiality

Data

12

Businessfoundation

Governance6

Category

Knowledge accumulation and service development by promoting adoption of IoT equipment

45Significance to business

Overview
Improvement in customers’ productivity and efficiency by providing control technology and products

126Foundation For Value
Creation

Category

1

10Significance to business

1

4

8

9

Business Strategy

Significance to stakeholders

4
7

14

Value Creation Story

3

6

16

Introduction

Sustainability Targets and Progress
Along with a reassessment of materiality, areas for action have been established in order to achieve our vision for 2030, and sustainability KPIs have been selected for each area.
Moreover, materiality and some of the sustainability KPIs are linked to the medium-term management plan.

Vision for 2030

Areas for action

Productivity improvement

Contribute to improving the productivity and efficiency of our Group andcustomers and communities around the world by providing the control
technology, products, and system solutions that we have cultivated since
our founding.

Develop products that meet newcustomer needs and strengthen
our ability to propose solutions
to customer issues

Improve productivity using
control technology

Safety, ANSHIN, and well-being

Improve safety, productivity, and well-being through technology development,
human resource development, management, and rulemaking.

Contribute to the reduction of the environmental impact of customers andsociety through the use of the IDEC Group’s technologies and products.

Achieve safety, ANSHIN, andwell-being by fostering a cultureof safety
Promote environmentallyconscious product development

10%

12%

CAGR in Safety & Explosion Protection
Business (during the past five years)

14%

15%

Cumulative attendees of safety &explosion protection seminars (Japan)

Increase 9% YoY

Increase 5% YoY

Number of cumulative employees holding
safety qualification*1

Increase 3% YoY

Increase 3% YoYFrequency rate of industrial accidents*2

0.58

0

Cumulative ratio of enhanced eco-friendly
products to total new products (vs. FY2020)

74%

60% or higher

Decrease 7%

Decrease 24%

Reduce CO2 emissions through the in-house use of renewable energy.

Reduce environmental impact atour business sites

8%

18%

Decrease 8%

Decrease 24%

Improvement in
the scores for
21 out of all
26 items

Improvement in thescores for
3 main issues*3

Renewable energy utilization ratio
Reduction of industrial wastes(vs. FY2020)

Ensure a thorough understanding of “The IDEC Way” and stimulate thecompany by creating an attractive work environment that gives employees
a sense of purpose.

Create a pleasant work
environment

Establish a management
structure that promotes
value creation, fosters
an organizational climate,and develops human resources

Promote decent work, as well as diversity & inclusion, to strengthen thecompany’s human capital, in order to cultivate employees who will be able
to innovate and create new value.

Improved managementtransparency and effectiveness(as comparedto FY2023)

Ratio of males taking childcare leave*2

58%

90%

Number of female managers*2(including associates in the position ofleader with subordinates)

12

15

Average per human capital training costs*2

JPY 40,000

JPY 70,000

Number of items with below average scores in
the Board of Directors’ effectiveness assessment

18%

20% or lessNumber of serious legal violations

0

0

Data

Further strengthen governance and compliance to ensure that thecompany is trusted by society.

Promote of decent work andincrease investment in
human capital(as comparedto FY2020)

GovernanceBusiness foundation

Engagement score (Japan)

Foundation For Value
Creation

Solution ratio to sales

Reduction of CO2 emissions(vs. FY2020)

Climate change
Response to climate change

FY2025 targets

Business Strategy

Pursuit and realization ofsafety, ANSHIN, and well-being

Realize the optimum environment for both humans and machines toresolve various societal challenges and make it possible to achieve
healthy, happy, and vigorous lives.

Provide products and services
that achieve customer safety,
ANSHIN and well-being

FY2023
achievements

Sustainability KPIs

Value Creation Story

Materiality*1 N umber of employees certified as Safety Assessors, Safety Basic Assessors, Robot Safety Assessors, or Safety Officers*2 IDEC unconsolidated*3 M ain issues: (1) human resource development, (2) strengthening of management abilities, and (3) improvement of the acceptability of human resource systems

IDEC Report 2023

Sustainability Targets and Progress17

Basic Sustainability Policy

We consider the IDEC Group Code of Conduct, the CSR
Charter, and the Ten Principles of the United Nations Global
Compact to be important compasses for guiding our actions
in line with our company philosophy, “The IDEC Way.” We arecommitted to helping achieve the Sustainable Development
Goals (SDGs) by tackling societal challenges through ourbusiness activities. Our efforts toward sustainability are being
spearheaded by the CSR Committee we launched in 2018.
Going forward, we will continue taking action underthe Basic Sustainability Policy to resolve global challenges
through our business activities, with the ultimate aimof realizing a sustainable society. Our efforts include 1)
advancing the safety, health, and well-being of all people
through our participation in and support for the Vision Zerocampaign led by the International Social Security Association(ISSA) under the International Labour Organization (ILO);
2) remaining attentive to climate change and other global
environmental issues through our support for the Task Forceon Climate-related Financial Disclosures (TCFD); and 3)
preparing to respond to future risks and opportunities.

The CSR Committee, chaired by the CEO, was establishedto develop our Group’s CSR action policy. Five specialist
committees were established under it to focus on specificpolicy areas: Environment, Social, Governance, plus two forareas of our strengths, Safety and Quality. Together referred
to as “ESG+Sa+Q,” these specialist committees are eachchaired by an executive officer and consist of knowledgeable,
experienced members who develop measures pertaining totheir respective themes. The CSR Committee meets twice ayear, and important matters discussed are reported to andsupervised by the Top Management Meeting and the Boardof Directors as may be necessary.
CSR Leaders share the content of CSR Committee
discussions with each employee at CSR Workplace Training
sessions, with the aim of putting CSR activities into practiceand creating an open workplace where opinions can beexchanged. In FY2023 employees submitted 354 opinions andproposals, which were shared by the specialist committees.
This feedback is incorporated in our Group’s CSR activities.

Our business activities are founded upon the “Vision: Pioneer
the new norm for a safer and sustainable world” and “Mission:
To create the optimum environment for humans and machines”
stated in our company philosophy, “The IDEC Way.”
Our Principles of “The IDEC Way” and the IDEC Group
Code of Conduct clearly state the actions to be taken to realize
our Vision and Mission. We will carry out those actions inorder to help realize a sustainable society and increase ourcorporate value.

Business Strategy

Sustainability Promotion System

Value Creation Story

Commitment to sustainability

Introduction

Sustainability Promotion Policy and Organization

Redesigned sustainability website
Information on sustainability is posted at:https://us.idec.com/idec-us/en/USD/
sustainability

Foundation For Value
Creation

Board of Directors
Top Management Meeting
CSR Committee

Risk
Management
Committee

SafetyPromotion
Committee

Quality
Management
Committee

CSR Leaders Meeting

CSR Leaders (Departmental Managers)

CSR Workplace Training

Promote each employee’s
understanding of CSR

Data

IDEC Report 2023

SocialContribution
Committee

Governance

Environmental
Strategy
Committee

Chair person: CEO / Committee members: Senior Executive Vice
President, Management Director and Executive Officers

Award-winning photographs in the Environmental Photo Contest held on the theme of “Biodiversity” as one of the events during CSR Month 2022

Sustainability Promotion Policy and Organization

18

Introduction

Medium-Term Management Plan
We will carry out radical reforms to achieve greater profitability
F Y2025(Initial plan)

FY2025(Revised plan)

Net sales

80.0 billion yen

85.0 billion yen

Operating income

13.0 billion yen

15.3 billion yen

Operating income
margin16% or higher

18% or higher

ROIC

10% or higher

10% or higher

ROE

15% or higher

15% or higher

EPS

300 yen or higher

360 yen or higher

or higheror higheror higheror higher

Business Strategy

As we achieved the medium-term management plan’soriginal numerical targets in its first year, we announced an
updated plan in May 2023. We are pursuing radical reforms
under the current plan to realize an operating income marginof 20% or higher in the medium to long-term, with the aim ofachieving greater profitability.
We are also strengthening our business foundation toattain sustainable growth worldwide. These efforts include
reducing our environmental impact toward the achievementof carbon neutrality, and improving employee engagement
through increased investment in human capital, implementationof workstyle reforms, and other measures.

Value Creation Story

We are pursuing four basic strategies under the current mediumterm management plan for FY2023–FY2025: promote growthstrategies, improve profitability, enhance the business foundation,and enhance ESG initiatives. Specific themes linked with ourmateriarities have been defined for each strategy, and we aretaking action on them to realize our slogan of “PASSION FOR
YOUR SUCCESS.” Leveraging the control technologies we havecultivated over the years, we are striving to achieve advancesin our core fields, including answering needs for automation,
unmanned operation, and labor-saving, and increasing safety,
ANSHIN, and well-being. In doing so, we seek to advance our
new concept of HMI-X, help solve societal challenges, andachieve sustainable growth and customer success.

Materiality

1
Megatrends

Societal challenges

Four basic strategies

Action themes

Productivity
improvement

2

3

4

ClimatechangeBusinessfoundation
Foundation For Value
Creation

Safety,ANSHIN, andwell-being

Strengthen sales based on technical problem-solving
Advances indigitalization& automation

Demographic
changes

Rapid sharing of information
Rapid technology innovation

Promotegrowth strategy

Strengthen competitiveness through production reform

Review and consolidate low-profit and unprofitable products

Enhance businessfoundation

Increase operational efficiency by promoting DX trengthen corporate platform by advancing decent work practices,S
promoting diversity, and increasing investment in human capitalImprove management transparency and effectiveness

Data

Gender and age diversification
Emerging Generation Z trengthen business structure by promoting PMI and rigorousS
management of key projects

Promote initiatives to reduce environmental impacts

Climate change
Scarcity of natural resources

Enhance
ESG initiatives
Advancesin diversity

 educe manufacturing costs through Group-wide joint procurement,
Rpart standardization, etc.

Governance

Climatechanges

Unstable political conditions
Geopolitical power shifts
Increase in pandemic risk

E xpand business in China, India, and other focus markets
Build strategic partnerships through M&A and alliances

Aging population
Rise of the middle class

Improve
profitability
Geopoliticalchanges ccelerate product development and sales based on regional andA
industry needs

Create well-being through safety and ANSHIN technology
Improve product quality and manufacturing capabilities

IDEC Report 2023

Medium-Term Management Plan

19

Growth Strategy: Actions for advancing HMI-X

Introduction

Medium-Term Management Plan
1
Multi-use mmWave radar sensors“1A1M series”

Expand new markets through collaborationsindustrial equipment. We were able to create a unique, highly
competitive product optimally matched to the needs of industrial
customers by leveraging our HMI technologies and expertisealong with the technologies that ALPS ALPINE cultivated inconsumer and automotive applications, and by steadily building
up our know-how through joint testing with customers.
In addition to the launched versions, further models
with different lens design for more specific applications areplanned to be offered. This series supports a broad range
of industrial needs, including not only factory automation,
but also for specialized vehicles, parking lots, train stations,and infrastructure.

Business Strategy

Development leveraging each partner’s strengths
The recently launched Multi-use mmWave radar sensors detectobjects using high-frequency radar (in this case, 60GHz), whichenables presence detection and distance determination for
objects up to 10 meters away. This type of radar consumes
little power and operates in a wide range of environmental
conditions, including steam, dust, rain, snow and low sunlight.
Therefore it can be used instead of ultrasonic sensors, both
outdoors and in Factory Automation.
Until now, mmWave radar technology was primarily
used in automobiles, and consequently very few products
incorporating these sensors had been developed for use in

Value Creation Story

As part of the medium-term management plan’s growth strategy,
we will seek to expand new product development and sales
networks through collaborations with leading companies indiverse industries. We will also work to expand new markets
by developing products offering new functions, with the aim ofrealizing the new concept of HMI-X [Transformation].

Examples of usage
Distance determination

Presence detection

 Identification of light-absorbing
materials (rubber, dark-colored
workpieces, etc.)

 etermination of fluid level in tanks
Dfrom the outside via a viewport
Parking lot

Aerial work platform at construction site

Features of our Multi-use mmWave radar sensors
Hardware design that capitalizes on mmWave technology
Unique beamforming know-how enables beam to be kept in a range less prone tofalse detection.
 he first sensors with anti-interference and radio wave emission control functions
Tcertified for use in Japan.
Use of a special reflector (patent pending) expands the range of applications supported

Bluetooth-equipped for easy setup HMI-X
 arious devices can be used to wirelessly monitor the sensor andVmodify its settings
Simple and convenient setting/monitoring tools are available for
laptops, smartphones, and tablets

Algorithms supporting diverse applications

Data

IDEC Report 2023

 etermination of width of vehicles
Dentering carwashes

Governance

IDEC ALPS Technologies Co., Ltd., established as a joint venturewith ALPS ALPINE CO., LTD. in September 2021, carries out
product development aimed at providing new forms of value in
HMI that contribute greater safety and ANSHIN to society. The
joint venture launched the “1A1M series” of Multi-use mmWave(millimeter wave) radar sensors in May 2023. This is the first
product developed through collaboration among IDEC and
ALPS ALPINE sites in Japan and abroad.
This product is also an innovation that combines thestrengths in HMI and sensing technology of two partners withdifferent cultures and way of thinking.
Other products are now being developed. Once marketed,the full product portfolio, including the 1A1M series, is planned
to grow into a JPY 1 billion business over a three-year period.

Foundation For Value
Creation

 ehicle detection in parking lots (anValgorithm for distinguishing between
vehicles and humans will be added)

Since the firmware can be overwritten with various algorithms developed for specificpurposes, the same hardware can be flexibly used to support different applications

Medium-Term Management Plan

20

Growth Strategy: Actions for advancing HMI-X

Introduction

Medium-Term Management Plan
2

Performance study results

Emergency-stop assist system

IDEC Report 2023

7

Prevention of near misses and otherhazards

2 Prevention of hazardous behavior

2

3 Personnel can work confidently
4 Personnel can focus on task
63

5 Prevention of trouble
6 Personnel can work efficiently

5

2

4

stops can be done
7 Emergency
promptlycase ANSHIN Sensor
Recent years have seen a greater deployment of collaborative
robots, which can operate alongside humans in diverse settings
without the use of safety barriers. They are designed to stop moving
upon contact, thereby eliminating the risk for serious collision injuries
to humans. However, personnel may still feel uneasy about the riskof collision, even if minor. Also, the robots need to be restarted every
time they automatically stop. Issues such as these can negatively
affect productivity, efficiency, and worker well-being.
Our ANSHIN Sensor can temporarily stop robotic movement in3

prevention system forcase Trapping
aerial work platforms
A key principle of occupational safety management is to separate
humans from machines by distance and time. However, this canbe difficult to achieve at construction sites, as attested by the manycases of serious worker accidents due to contact with construction
equipment. To help solve this issue, we have created a trapping
prevention system that incorporates various sensors and an
ergonomically designed three-position enabling switch we developed.
This system can be used on aerial work platforms to prevent
personnel from becoming trapped against building structures
such as ceilings and frames, thus protecting them from serious
bodily injury. The greater safety and ANSHIN afforded to workers
enhances their well-being.

Dataassist system1

Not used

Governance

We hold a 70% share of Japan’s market in emergency-stop
switches, offering international standard-compliant products thatincorporate our proprietary safety technology. Once activated,
emergency-stop switches reliably stop the machines they control.
However, they need to be pushed to operate, and this can be anissue when they are installed on mobile robots such as automatic
guided vehicles (AGV) and autonomous mobile robots (AMR),
which have soared in demand in recent years. For example, whena robot is in motion it can be difficult
to push the emergency-stop switch
and attempting to do so may place
the worker at risk of being struck ortrapped by the robot. Meanwhile,
because of population decline, thegrowing shift toward automation,and other factors, the use of selfdriving vehicles and many othertypes of robots is likely to expandin the years ahead. We have
Emergency-stop
responded to this safety challenge

1

System used

response to proximity
or even gentle contact,and can be applied tocollaborative robots,
ANSHIN Sensor
AMR/AGV and othermobile systems, production lines where people and robots work
together, and so forth. It thus can allay worker anxiety aboutmachine contact and prevent the loss of productivity that comesfrom full shutdown of collaborative robots, other automatedequipment, or production lines.

Foundation For Value
Creation1

caseby developing an emergency-stop assist system that enables
personnel to activate emergency stops from a safe position.
Our system is wireless switch worn on the arm of the worker
in charge. By operating this switch, the worker can stop the
AMR, AGV, or other robot in the same manner as pushing the
emergency-stop switch installed on the robot. Since this systemenables stops to be made from a safe position away from therobot, it helps to provide ANSHIN to operators.
A study of the system’s impact showed that it provides
significant benefits, including with regard to hazard prevention,
worker confidence, and emergency stopping performance.

Business Strategy

As part of our efforts to fulfill our Purpose—to create the optimum
environment for humans and machines, and to achieve safety,
ANSHIN, and well-being for people around the world, we develop
and supply a broad range of products and systems designed tosolve the needs of customers in not only the factory automationindustry but also many other sectors. The main focuses of our
medium-term management plan are HMI and safety, and there
is growing demand for collaborative safety / Safety2.0, whereby
P.29
humans and machines collaborate for greater safety.
Accordingly, we are expanding our diverse lineup of applications
that can improve worker well-being by enabling the creation ofenvironments where people can work with ANSHIN.

Value Creation Story

Provide diverse applications forrealizing safety, ANSHIN, and well-being

Example of system in action

Medium-Term Management Plan

21

Growth Strategy: Actions for advancing HMI-X

Introduction

Medium-Term Management Plan
3

Of the many different industries served by IDEC Group products,
our current medium-term management plan is mainly focusing
on four that have strong global growth potential: AGV/AMR,
robotics, automotive, and machine tools. Notably, AGV/AMR
are forecast to grow at an annual average of 20–30% in the
coming years, pointing to significant growth potential for thematerial handling industry.
Robotics

Automotive

Machine Tools

In order to better respond to the different needs of diverse
customers and industries, we are phasing in a system of
support covering the four services below. As of FY2023, wehave deployed services (1) and (2). Our ultimate goal is to provide
full packaged solutions (including software) for building AGV
and AMR. We are exploring opportunities for partnering and
M&A as an avenue for strengthening our software capabilities.

Business Strategy

AGV/AMR

exclusive marketing rights for ez-Wheel products in Japan throughthe partnership agreement, and since FY2023 we have offered
diverse solutions integrating their products with our emergencystop switches, safety laser scanners, and other safety devices.
The use of automated driving wheels is growing as
distribution and manufacturing businesses increasingly
consider adopting AMR to reduce staffing needs and workload
through automated transportation. Meanwhile, our electric
power wheels, which make it easier for workers to transportheavy objects, have been the focus of many customer inquiries
from the automotive industry, which deals with heavy items
on a daily basis. We expect to see greater adoption of bothtypes of wheels in the coming years.

Value Creation Story

Ramp up our solutions forthe growing material handling industry

1 Individual product sales
2 Solutions packaging optimal products
3 Packaged solutions customized for specific applications
4 Full system setup

Semiconductors Special Vehicles

Food andPackaging

Foundation For Value
Creation

Elevators

In addition, group company IDEC AUTO-ID SOLUTIONSCORPORATION offers a broad lineup of automatic identification
devices that help to improve the efficiency of distribution
operations. It is now expanding sales to serve the growing
needs of the material handling industry.

Electric power wheels are a simple solution
for equipping industrial carts with electric
assist, which facilitates transport of heavy
objects that otherwise could not be easily
moved by a single worker.

We are committed to helping customers overcome theirchallenges by creating new value for them. To do this, we are
actively leveraging our technological strengths in core areas
such as HMI, safety, and ANSHIN, while further reinforcing
our software and IoT capabilities.

Medium-Term Management Plan

Data

IDEC Report 2023

Safety wheel drives integrate all functions
necessary for safe automated driving,
including the safe motion functionality
specified by ISO for operation in areas
with people.

Governance

In January 2022, we entered into a partnership agreementwith France-based ez-Wheel, a manufacturer that developed theworld’s first safety wheel drive for AGV and AMR to incorporate
drive control and safety features essential to safe automateddriving. ISO (International Organization for Standardization)
publication of an international safety standard in 2020 prompted
requirements for transportation robots and other mobile robots
operating in areas with people to be equipped with a safe
motion monitoring function, generating a growing need for
products compliant with the standard.
Against this backdrop, demand has been rising for ez-Wheel’s
lineup of safety wheel drives, which incorporate safety features
necessary for complying withstandards. Recognizing thispotential, we secured the22Introduction

Medium-Term Management Plan
Improving profitability, enhancing business foundation and ESG initiatives

MarketingAutomation

Sales Force
Automation

Ordermanagement

Production
planning/
management
ERP (Enterprise Resource Planning)
SCP (Supply Chain Planning)

Quality assurance

Inventory management

Example of head office system map following ERP/SCP system introduction

IDEC Report 2023

Procurement
management

Suppliers

We believe that taking actions toward sustainability,
particularly measures for addressing climate change, isan integral part of fulfilling our social responsibilities asa global corporate group. Accordingly, we have defined“response to climate change” as our third material issue.
Also, we have set sustainability KPIs necessary for attaining
our vision for 2030, and are implementing an action plan
for achieving those targets.
How we address climate change in our vision for 2030
 ontribute to the reduction of the environmental impact ofCcustomers and society through our technologies and products.
 educe CO 2 emissions, including by utilizing renewableRenergy at our sites.

In my role as Senior Executive Officer in charge of
R&D & Environment, I constantly think about how we, asa manufacturer, can effectively balance both our pursuit ofdevelopment and our response to environmental issues.
P.45
This report’s section on natural capitalpresents
our thinking and initiatives concerning environmental
management, risk/opportunity analysis, transition
opportunities, and the like.
I will strive to spread our Group’s awareness ofenvironmental action as not only a risk-related factor withsignificant implications for our business continuation, butalso an area of business opportunity with great potential
for us as a manufacturer.
Medium-Term Management Plan

Data

SFA

Further strengthening our environmental
initiatives while pursuing development oftechnologies and new products

GovernanceMA

We are seeking to strengthen our business foundation byaccelerating DX initiatives across our Group that can realize
greater operational efficiency and leaner management. The
ERP and SCP systems that we are now introducing globally
are interlinkable with various existing systems, and thus will
enable integrated management of marketing, sales, order
handling, production planning, procurement, inventory, andother functions. This project is starting with the head office andwill be phased in globally with completion in FY2025, the final
year of the current medium-term management plan.
At the same time, we are carrying out Group-wide work
process reforms, as well as workstyle reforms—such as
introduction of discretionary work and flextime systems while
making effective use of existing systems—in an effort to realize
flexible work arrangements and improve employee engagement.

Tomonori
NishikiFoundation For Value
Creation

Customers&
distributors

Enhancing operational efficiency
through DX

Senior Executive Officer
in charge of R&D& Environment

Business Strategy

We are realigning our global network of manufacturing, sales,and distribution sites as part of our efforts to improve profitability,
a major focus of our medium-term management plan. We took
action to shrink fixed costs by consolidating our nationwide
network of sales offices in Japan into two locations, one inTokyo and one in Osaka, in FY2022—an action spurred by the
COVID-19 pandemic—and by carrying out realignments andstructural reforms at our overseas manufacturing/distribution
sites and supply chains.
Moreover, we globally raised our product prices to reflect theincreased costs of raw materials, and lowered our cost ratio by
optimizing our selling prices and restructuring our product mix toincrease the share of new products offering greater profitability.
As a result, we raised our FY2023 gross profit margin to 44.6%
and operating income margin to 16.8%, enabling us to reach two
key targets of the medium-term management plan in its first year.
Our sales-related initiatives have included launching the
Solution Business Promotion Department, recruiting and training
talent from within and outside the Group to lead the expansion of
our business in providing solutions for customer challenges, andstrengthening our sales organization through the collaboration ofrelated departments. For our component sales, we are leveraging
our established sales networks to further grow sales, while atthe same time stepping up the formation of new networks ineach region that realign our distributor relationships to focus on
distributors eager to sell IDEC products.
In FY2024, we will implement structural reforms to build thefoundation for globally expanding our businesses and increasing
earnings. In particular, we will pursue production reforms aimed atstrengthening our global competitiveness. We will also separate
our procurement and supply chain management functions into
an independent organization to enable objectively optimized
procurement, with the aim of lowering costs and building optimal
supply chains across our Group. We are also working to radicallyoverhaul our production systems and processes to achieve
quality and cost improvements.

Value Creation Story

Building the foundation forhigh profitability

23

Introduction

Medium-Term Management Plan
Enhance ESG initiatives

Introduced new personnel systems

Strengtheningof management

360° assessment of executive personnel
Develop talent for directors and executive
officer candidates
Conduct career development training

Invigorationof communication

 nhance information disseminationE
toward “One IDEC”

Workstyle reform romote working from homeP
Increase work efficiency through digitaltransformation

Promotion of diversity
and inclusion

 onduct career training for women on theCmain career track
Actively recruit global talent

24%

Reduction in industrial wastes

24%

Cumulative ratio of
enhanced eco-friendly products
to total new products

60% or higher

Renewable energy
utilization ratio

18%* vs. FY2020 (excluding renewable energy utilization ratio)

IDEC’s originalenvironmental label (eco-mark)

LED lighting “LF3D” series,
an enhanced eco-friendly product

IssuesMajor initiatives to be taken from FY2024 and beyond

Improve humanresource
development
systemsImprove personnel training through managerial
training, career design training, etc.
Implement a career design program
Prepare to introduce a global talentmanagement system

Invigorationof communication

 urther enhance information dissemination toFachieve “One IDEC”
Ensure full awareness and compliance withregard to the medium-term management plan,
corporate policies, etc.

Promote workstyletransformationand improve
benefit programs hase back in benefit management services
PIntroduce flexible workstyles (discretionary workand flex-time) and promote working from home

Improve thework climateImplement an action plan to resolve workplaceissues in each department

Promotion of diversity
and inclusionImplement policies to support families raisingchildrenMedium-Term Management Plan

Data

IDEC Report 2023

Strengtheningof human resource
management systems

Major initiatives taken in FY2023

Reduction in CO2 emissions

GovernanceIn 2019, IDEC conducted its first employee engagement survey,
and in 2022 conducted a second survey. Five issues from theresults of the 2019 survey were selected, and we are currently
promoting activities to resolve those issues. In the 2022 survey,
the scores for the major metrics “Total Employer Attractiveness”
and “Total Workplace Attractiveness” improved, and the scoresfor most of the other items improved as well.
IDEC also plans to tackle new issues indicated in the
results of the 2022 survey. Increased investment in humancapital and workstyle transformation are already included in
the sustainability KPIs, so we plan to improve human resource
development systems and promote workstyle transformationand so on to boost engagement further and strengthen thebusiness foundation.

IssuesSustainability KPIs (FY2025)

Foundation For Value
Creation

Increase investment in human capital,
promote workstyle transformation andso on to increase engagement andstrengthen the business foundation

are certified as “enhanced eco-friendly products”, and ouroriginal eco-mark is stamped on them, compliant with ISO/JIS
Q 14021 (Type II).
Moreover, in manufacturing and logistics processes as well,
we are working to reduce environmental impact—such as byusing bubble wrap with film containing 25% or more biomass
plastics as product packaging materials—and are proceedingwith management practices that emphasize environmental
issues.
Since FY2023, we have introduced internal carbon pricing(ICP) as a framework to promote environmentally conscious
investment. Converting CO 2 reduction amounts into money
promotes the use in investment decisions of the improved returnon investment achieved through the adoption of ICP.

Business Strategy

IDEC has formulated a new vision for 2050 to “realize a safer andmore sustainable world that brings happiness and ANSHIN to all
people.” To achieve the objective, the medium-term management
plan focuses on strengthening ESG activities, and it also
promotes reducing environmental impact to attain the interim
goal of accomplishing the sustainability KPIs related to climatechange, with the goal of achieving carbon neutrality in 2050.
As part of these initiatives, we are promoting the effective
use of limited resources, based on the concept of a “circular
economy.” At the stage of designing and developing products,
we are working to reduce the number of parts and productweight, a quantify use of recycled plastics, and so on. In addition,
we phased the eco-friendly degree of new products based on
our own standards. New products that meet those standards

Value Creation Story

Promote reduction of environmental
impact to achieve carbon neutrality

24Introduction
Value Creation Story
Business Strategy
Foundation For Value
Creation

Business Strategy

Governance

26 Performance
27 HMI (Human-Machine Interface)
29 Safety & Explosion Protection
30 Industrial Relays & Components

Data

31 Automation & Sensing
32 Systems

IDEC Report 2023

25

HMI (Human-Machine Interface)

Safety & Explosion Protection

Ratio of sales

28.4

26.4

30.9

Sales history (billion yen)

35.8

16.3
Ratio of sales

23.7

43%

19%

12.7
9.8

9.1

9.1

Value Creation Story

2019 2020 2021 2022 2023 (Fiscal year)

2019 2020 2021 2022 2023 (Fiscal year)

Emergency-stop switch

Safety laser scanner

Operator interface

Explosion protection
vibration sensor

Explosion protection
operator interface

Business Strategy

Industrial switch

Introduction

Sales history (billion yen)

Performance

Note: The classifications of product types were partially revised, effective from FY2023. The figures for past fiscal years have been modified to reflect those changes.

Automation & Sensing

Ratio of sales

11.4

13.6
10.3

Sales history (billion yen)

10.3
Ratio of sales

7.2

7.5

7.0

8.5

12%

2019 2020 2021 2022 2023 (Fiscal year)

4.8
Ratio of sales

6%2019 2020 2021 2022 2023 (Fiscal year)

3.5

3.0

3.5

3.7
Governance

19%

15.5

9.8

Systems

Sales history (billion yen)

Sales history (billion yen)Foundation For Value
Creation

Industrial Relays & Components

2019 2020 2021 2022 2023 (Fiscal year)

Data

Industrial relay
Terminal block

IDEC Report 2023

Switchingpower supply

Programmable
logic controller

SensorCloud-based data logger

Performance26

Creating the optimum environment forhumans and machines as a leading company of HMI
offerings lean toward special vehicles, such as construction
and agricultural machinery, and various products serving thematerial handling and new mobility industries. Roughly 75% of
APEM’s sales are from customized products, which are foundat work in many different industries since they are tailored toeach customer’s needs. This focus on customizing products fora wide range of applications is underpinned by APEM’s superb
design and development capabilities, generating high-quality
products that robustly perform under challenging environmental
conditions. We are working to produce even greater synergies
between IDEC and APEM by optimizing manufacturing, sales,
and logistics centers to lower costs and streamline operations,exchanging talent, and localizing sales strategies.

FA-centric markets

Semiconductors

Machine tools

Robotics

Special vehicles, new mobilities,
material handling, etc.

Material handling

Automotive

AGV/AMR

Agricultural
machineryBusiness Strategy

Since 1958 when we began sales of industrial switches, wehave supplied diverse HMI products supporting human-machineinteractions. Our products and the years of design and quality
enhancements we have made to them have enabled us to build
P.6 When France’s APEM joined
up a strong market share.
our Group in 2017, our lineup expanded with not only moreindustrial switches, but also new offerings such as joysticks, LED
indicators, and keyboards. In a world where an enormous arrayof products are needed to serve different regions, applications,and settings, we are enjoying the strong synergy generated by
the combination of IDEC’s and APEM’s diverse product featuresand sales channels.
Whereas IDEC focuses mainly on suppling standard
products to factory automation (FA)-centric markets, APEM’s

Construction
machineryFoundation For Value
Creation

Developing next-generation HMI products
to realize HMI-X

Smart RFID reader“KW2D series”

Touchless switch

Operator interface“HG2J series”

Data

Panel solutions

IDEC Report 2023

Safety commander“HT4P series”

GovernanceSeeking to become the world’s No.1 leader in HMI, the IDEC Groupdevelops products that respond to new needs emerging in the global
market. Today, environments where people and machines work
together are changing. Under HMI-X [Transformation], a new concept
we put forward in 2022, we are aiming to optimize those environmentsby bringing greater interactivity to machine control. To do this, wehave been launching new products—such as smart RFID readers for
managing machine access and operation logs, safety commanders
that can be attached to tablets used at manufacturing sites toensure worker safety, and touchless switches that address needs forcontactless solutions—and have been expanding the lineup of APEM
products to better serve diverse customer needs.
In order for us to continue growing in a landscape where megatrends
and market changes are transforming customer needs in many ways,
we must develop next-generation HMI products that offer new features.
Going forward, we will continue creating new HMI products to further
grow our business and help realize safety, ANSHIN, and well-being.

Value Creation Story

Priority business measures

Introduction

HMI (Human-Machine Interface)

Switch components

Joysticks

HMI (Human-Machine Interface)27

Introduction

HMI (Human-Machine Interface)
Team Member’s Message

Adding safety functions to
manufacturing site tablets

Touchless switches to reduce riskin environments where switches
are operated by many people
In 2022, we marketed a touchless switch that can be used indoors
and outdoors, as one response to the need for contactless operationof switches operated by many people. This product helps to preventthe spread of infectious diseases and provides a touchless solution forhygiene management in food processing, prevention of worker fatigue
due to frequent switch operation, and many other purposes.

Customized remote controls
based on decades of know-how

Leader’s Message

Remote controls enable safer and faster operation of robots and heavymachinery such as cranes and hoists. APEM has built up strong knowhow in this area through decades of developing customized remotecontrols to support diverse industries, including material handling,
agriculture, and construction. The company’s approach to design isfounded on the following considerations: ow can the necessary functions be
Hprovided in an optimal form?

2 ow can the most ergonomic solutionH
be designed?

3

 hat is the most optimal and safest
Wmethod of connecting the productwith the application it supports?

4 ow can the product be designed toHwithstand the impact of falls, and toprevent unintended operations?

APEM panel solution projects that
aim for greater customer satisfaction

Hanh Lin
Project Leader for Panel Solutions
APEM SAS (France)

My duties can be largely divided into three scopes. First,
in the project planning stage I respond to the customer’s
request for a quotation, clarify the customer’s needs, anddetermine the project cost. Once the project begins, I
handle its management, including coordinating with therelevant personnel at APEM and tracking the project’s
progress toward the completion of product development.
Lastly, I handle marketing duties such as managing theprice and margin, providing training, taking part in theunit’s promotional events, and appearing in promotional
videos. As I do so, I work to increase customer satisfactionand expand the panel solutions business.

Data

1

Our touchless switch uses precision sensor technologythat can sense a person’s palm even when wearing
gloves. As developers, we were also keen about the
product’s look. Since it is intended for use in not only
industrial settings, but also public facilities and otherplaces where it will be seen by many people, we opted
for a simple but stylish design that would blend in withthe surroundings.
We were particular about the details. For example,
we explored different lens structures to keep the lightring clearly visible despite its thin profile.

Governance

IDEC Report 2023

Touchless switch

Foundation For Value
Creation

Joystick“XP series”

The “XP series” is a new lineup of midsize joysticks developed in the UK thatare compact and robust. They featurehigh environmental tolerance, withdust and water resistance backed by
an IP67 rating, and are suitable forboth indoor and outdoor applications.
They are combined with various other
APEM products to offer multifunctional
solutions and customizable options.
Two types of handles are available,
making it possible to design products
tailored to each customer’s needs.
The selection of functions and handles
will be expanded in 2023.

Junior Associate
HMI & Panel Product Development Department
IDEC CORPORATIONBusiness Strategy

Mid-size joysticks that serve
diverse customer needs andoffer high environmental
tolerance

Tatsumi Nakamura

Value Creation Story

Safety commander“HT4P series”

High-performance but cheap off-theshelf tablet devices are now often
used as control terminals for robots
at manufacturing sites. Tablets usednear hazardous spots need to beequipped with safety devices such as
an emergency-stop switch, and they
are also required from the standpointof safety standards.
To serve this need, we globallymarket safety commander productsthat can be simply attached to diverse
tablets to provide safety functions. In
October 2022, we released the “HT4P
series”, which incorporates new features
such as wired LAN connectivity.

A fusion of advanced sensor
technology with a stylish design

Remote control

HMI (Human-Machine Interface)28

Since our founding, we have provided diverse products andservices aimed at creating an optimal environment for humans
and machines. At the same time, we have developed andsupplied safety-related products that reduce the risks of using
machinery, and explosion protection products that can besafely used in the presence of flammable gas and liquids. In
so doing, we help customers to achieve both safer operations
and greater productivity.
As a developer and supplier of products that protect people’s
lives, we equip society with a variety of products and services forrealizing safety and ANSHIN. Our goal is to pursue and achieve
the world’s highest level of safety, ANSHIN, and well-being.

The concept of safety has evolved over the years. It started with
the idea of achieving better safety through human attention anddiscernment, referred to as “Safety0.0.” Next came Safety1.0,
which focused on making changes to machinery to protect
workers, such as adding physical separation and stopping
mechanisms. Now society has entered the era of Collaborative
Safety / Safety 2.0, where both safety and productivity are
realized through collaborative relationships between humans
and machines.
The products we develop are designed to provide not only
safety, but also ANSHIN. We strive to improve the well-beingof society as a whole so that industrial workers and everyone
else can live healthy, happy, and vigorous lives.

1

IDEC Report 2023

More automation at manufacturing sites
and increased awareness of worker safety
have led to expansion of the global market
for safety-related products.
We are seeing growth in sales ofaccessories such as interlock switches
that ensure worker safety by sensing whendoors and panels are open or closed, andslide handle actuators that facilitate the useof interlock switches. Also, our lineup of
emergency-stop switches, which boasts ahigh market share, was expanded in 2023
with the launch of a product compliant
with the new ISO 13850 safety standard.
Incorporating our proprietary safety structure,
this product features a shallow panel depth,
and good environmental tolerance andimpact resistance.
Our products for ensuring safety and
ANSHIN in work environments can help toreduce occupational accidents.

It has become a challenge for some oil refineries and chemical plants
to thoroughly maintain their explosion protection areas due to aging
equipment, understaffing, and a shrinking number of skilled engineers.
Our “ES3M series” of wireless vibration sensors are intrinsicallysafe and enable predictive maintenance with their ability to detect
warning signs of equipment failure via a wireless network. Whenused with the “ES3M-RE series” of explosion protection relays, theysignificantly reduce the time and workload required for maintaining
equipment spread across large sites, and thus achieve greater
operational efficiency.

Wireless vibration sensor“ES3M series”

Explosion protection relay“ES3M-RE series”

Safety2.0
Collaborative Safety

Emergency-stopassist system using
wearable stop switch

Human

MachineSafety0.0
Safety by Human Attention

Safety relay module“HR6S series”

Well-being

Human

MachineSafety1.0
Safety by Isolation

Manager’s Message
Expanding safety product sales witha high level of service and support

Bavith Suresh
IDEC EMEA Product Manager
APEM Components Ltd. (UK)IDEC EMEA is expanding sales of its safety products.
To achieve this goal, we will implement a numberof initiatives.
First, with targeted advertising campaigns,
promotional activities, and increased presence attrade shows and conferences. Second, we focus
on developing relationships with key distributors
and customers in the market with a program of“Quick Start!” knowledge transfer sessions, providing
application support and product demonstrations.
Finally, IDEC will continue to invest in its resources toensure that customers in the European market receive
the highest level of service and support.

Safety & Explosion Protection

Data

Interlock switch“HS5L series”

Realizing predictive maintenance of
explosion protection area equipment using IoTInterlock switch“HS5L series”

Governance

Emergency-stop switch“XA series”

Globally expanding sales ofsafety-related products

Robot

Foundation For Value
Creation

Slide handle
actuator

2

HumanBusiness Strategy

A leader in Collaborative Safety /Safety 2.0

Value Creation Story

Priority business measures

As a company that pursues andrealizes world-class safety, ANSHIN,
and well-being, we provide solutions
that enhance safety and productivity

Introduction

Safety & Explosion Protection

29

Broadening lineup of PCB-mounted
components that are smaller andrequire less wiring and labor

The term industrial relay & components collectively refers tovarious electrical components incorporated into control panels/
units used to operate and control machinery and productionlines. They are used for a wide range of applications, including
automated warehouses, industrial machinery, and semiconductor
manufacturing equipment, and so on.
Responding to ever-growing needs for “smarter” facilities
and equipment, space-saving, and quality stabilization, IDEC
adds new technologies to control panel components to provide
operator-friendly production environments offering greater
efficiency and convenience. This is another way that we help
customers find solutions to various challenges.

Decentralization of control units is increasingly being used as asolution for two challenges concerning control panels/units—shrinking their size and reducing the development/assembly
workload. The control units can be cut out from the large control
panels and made into blocks to achieve greater usability andenhance the value chain from development and production tosales and maintenance. There is thus an accelerating trend to
make control units into printed circuit boards (PCBs) for greater
utility. Also, demand for PCB-mounted components is likely togrow with the emergence of new apparatus that set new norms,
and with the rising number of components that leverage IoTtechnology. IDEC has been developing, manufacturing, andselling PCB-mounted components such as industrial relays,
terminal blocks, and circuit protectors. We will continue to focus
on launching new products in the market.

1

No falling
off of screws

Various push-in
products
Simple wiring
No need for
retorquing
maintenanceColorvariations

Universal
designStable quality
Increased
productivity

Rong Ren

Stack

Work by diverse
workers

Deputy General Manager
IDEC Izumi Suzhou Co., Ltd.

Completed

New surface-mounted terminal block thatleverages our mechanical technology
We have launched a revolutionary terminal block that customers caneasily assemble without installation tools. This unique design allows
terminal blocks to easily stacked and assembled by rotating them. This
helps users to be reduce workload, as they can flexibly accommodate
sudden changes in specs and perform maintenance. Since shaft
screws are not used to connect the terminal blocks, the design reduces
the number of parts involved, an advantage that also helps to protect
the environment.

The Suzhou factory mainly manufactures RJ series
industrial relays, which are in high demand in the
Chinese market. We have streamlined production by
adopting automated assembly machines in 2017 andby overhauling our parts supply system to optimize
inventory. We added more automated assembly
machines in FY2023, and plan to install a line of laborsaving machines in FY2024.
We will continue endeavoring to stabilize quality
and costs and to shorten delivery times so that we canmore reliably serve customer needs.

Industrial Relays & Components

Data

IDEC Report 2023

Vibration
resistance
Impact resistance

ReliableRobot
production
Automation

Increasing productivity in China
through line automation

BTBH easy-stack™ terminal block

Solving labor
shortages

Simplified
identification

Snap-in type enables visual/aural
confirmation of wiring connection

Safety and
ANSHINManager’s Message

GovernanceUsing spring-loaded technology: Push-in products, which can be easily
wired by simply plugging in the terminals, can reduce wiring work andachieve stable quality compared to screw products. This provides
benefits that reform how work is done at manufacturing sites, including
prevention of errors by less experienced workers and reduction of
overtime work.

PCB-mounted components

Foundation For Value
Creation

Rotate toEasyassemble

Control panels
Business Strategy

Push-in products enabling well-being at
manufacturing sites

2

Value Creation Story

Priority business measures

Offering a full line-up of products to
help customers overcome
challenges

Introduction

Industrial Relays & Components30

1

We provide diverse applications that help customers to tackle their challenges
Safety and efficiency at construction
sites are improved by monitoring of local
weather data and measurement data
(Sokusyou Niigata Co., Ltd.).

Measurement of environmental conditions
at construction site

Offering optimal solutions throughIoT-supporting products and functions

Control of biomass power generation

Manager’s Message

We offer optimal solutions utilizing our “SG1A series” of cloud-based data loggers thatmake it easy to construct IoT systems, and our “FC6A Plus series” of PLCs that support
MQTT and web server functions.
“SG1A series” of LTE
cloud-based data loggers

MQTT function of“FC6A Plus series”
IoT controllers

Web server function of“FC6A Plus series”
IoT controllers

Simple cloud-based collection
and monitoring of system anddevice data

Cloud-based collection andintegrated monitoring of data frommultiple systems and devices

Simple monitoring of a single
system or device

Proactively leveraging digital tools
for effective marketing activities

Linda Htay
Product Marketing Manager
IDEC CORPORATION (USA)My goal is to bring high quality and innovative products
to market. It is important to understand a new
product offering, so that I can educate both internaland external stakeholders by outlining the products’
unique value and providing hands-on training using
real-world application examples.
Marketing in the digital age is an exciting
challenge. As the internet and new media have added
so many options to a marketer’s toolbox, creating
digital assets like whitepapers and product videos togenerate many leads and opportunities is essential inmarketing strategy.

Automation & Sensing

Data

IDEC Report 2023

Molten aluminum holding furnacemonitoring system

GovernanceIn order to meet the growing anddiverse needs of various industries,
we offer a wide range of sensors
with different detection principles,
distances, and target objects.
Our “1A1M series” of Multi-use mmWave (millimeterwave) radar sensor was developed by IDEC ALPS
Technologies Co., Ltd., our joint venture with ALPS
ALPINE CO., LTD. These sensors, made possible
by applying technologies cultivated in the consumer
and automotive industries to industrial devices, areable to maintain superb object/distance detection
performance in even adverse environments. They
answer unmet market needs and help to resolve
challenges faced by society.

Maintenance workload is reduced
through control of stirling engine used forbiomass power generation, and throughcreation of a remote monitoring systemwith a simple device configuration(EcoSTAGE Co., Ltd.).

Foundation For Value
Creation

Broadening our sensor
lineup to satisfy
increasing demand

Production line availability and workload are
improved by full-time monitoring of molten
aluminum holding furnace conditions
and monitoring of energy consumption(SHIZUOKA GAS ENGINEERING Co.,
Ltd.).

Business Strategy

Amid the decline in working population and spread of IoT,
demand is rising for products that support remote monitoring/
operation and play a key role in streamlining and automating
work processes. We offer a diverse product lineup that serves
those needs.
Our extensive array of solutions can help customers to
streamline and automate their manufacturing operations.
Examples include programmable logic controllers (PLCs) for
controlling machinery and production lines, sensors that detectobjects or changes in conditions, as well as code readers,
RFID systems, and other automatic identification devices thatanswer the growing demand for traceability.

Examples of leveraging IoT to solve customer challenges

Value Creation Story

Priority business measures

Offering optimal solutions matching
the era of IoT and Industry 4.0

Introduction

Automation & Sensing

31

Sticker indicating UL-listed products

Contribution to resolving societal
challenges by working closely withcustomers and providing optimal
solutions to their needs and challenges

1

C ontrol systems businessA utomation businessL ibrary systems business

Integrated system of customer support
Manufacturing
DesignRiskmanagement

Labeling

DeliveryFoundation For Value
Creation

Renovated head office (top)and factory (bottom)

2

IDEC FACTORY SOLUTIONS CORPORATION is a UL-certified
manufacturer that designs and produces control panels
compliant with UL508A, a US standard for industrial control
panels. Its integrated system of customer support covers
preliminary risk assessment, design, manufacturing, and delivery.
Growing demand for products such as EVs and semiconductors
is driving greater investment in factory construction and other fixed
capital in North America. This has expanded the need for factory
solutions that provide a high level of safety compliant with UL
standards. IDEC FACTORY SOLUTIONS’ safety professionals—
all certified safety assessors—answer that need by using theirknowledge and expertise in machine safety to formulate solutions
and provide consulting, starting from the conceptual stage.

A “UL Listed” sticker is affixed to acontrol panel certified by a Nationally
Recognized Testing Laboratory (a thirdparty testing organization recognized by
the US Occupational Safety and HealthAdministration).

Business Strategy

Group company IDEC FACTORY
SOLUTIONS CORPORATION
leverages its core control
technologies as a problemsolving system integrator. It
engages in diverse systems
businesses centered around
IDEC’s strong suit safetyrelated devices and safetysystems. Examples include:

Designing/producing UL508A-certified
control panels and providing machinery
safety consulting to support
machinery manufacturers supplying
the North American market

Value Creation Story

Priority business measures

Introduction

Systems

Team Member’s Message
Proposing robot systems anticipating a futuresociety where humans and robots collaborate

Using digital technology to visualize issues,and stepping up system efficiency solutions

Earning strong trust withsuperb electrical equipment
technology and consulting

Katsunori Oda

AMR use cases

IDEC Report 2023

The food industry faces two key issues that impact society—labor
shortages and food waste/loss. IDEC FACTORY SOLUTIONS provides
the industry with system solutions that support the construction of new
factories and adoption of new technologies.
The company is also stepping up its offerings of factory digitalization
solutions to the factory automation industry. These solutions respondto the need for greater production efficiency through equipment statusmonitoring, predictive maintenance systems, and visualization of theentire production line.

Our expertise in control panel design and production
enabled our company to become certified as a
UL508A control panel manufacturer. This dramaticallyincreased the number of consultations we receivefrom Japanese manufacturers that supply machineryto the US market. Machinery designed for use in
the US has to meet steep electrical requirements,
including high short circuit current ratings, and it’sdifficult to do that with conventional Japanese design
theory. Our extensive know-how in electrical design
and ability to provide consultation on machine safetycompliant with ANSI/NFPA 79* has earned strong
trust from many clients.

Data

There is a rising need for solutions that improve productivity by utilizing
automation in ways that achieve greater value added—such as automating
conveyance processes at factories by using AMRs and automaticallylinking them with the production systems. IDEC FACTORY SOLUTIONS
offers total systems that expand the value added of AMRs. To do this,it visualizes customer needs through simulations performed at theconceptual stage, originally develops customized top modules (conveyors,
lifters, etc.), and adds features such as automatic linkage with elevators.

Governance

Sales Development Team,
Control Systems Division
IDEC FACTORY SOLUTIONS CORPORATION* U S Electrical Standard for Industrial Machinery, written by theAmerican National Standards Institute (ANSI)

Systems32

Introduction
Value Creation Story

Foundation For
Value Creation

Business Strategy
Foundation For Value
Creation
Governance

34 Financial Capital
36 Manufacturing Capital
37 Intellectual Capital
40 Human Capital
45 Natural Capital

Data

50 Social Relationship Capital
51 Value Provided to Stakeholders

IDEC Report 2023

33

Introduction

Financial Capital
The foundation for sustainable growth
For further information, pleaserefer to the Investor relationsof the IDEC website.

The IDEC Group generates approximately 7 billion yen of cash through its operating
activities. Cash created through global business activities is mainly used forinvesting in equipment/facilities, R&D, and human capital, and for providing returns
to shareholders—all with the aim of achieving sustainable growth and increasing ourcorporate value.

Productivity improvement

Value Creation Story

Related materialities

https://us.idec.com/idec-us/en/
USD/ir-en

Business foundation

Business Strategy

 ontribute to improving the productivity and efficiency of our customers and society around the world byC
providing the IDEC Group’s long-cultivated control technology, products, and system solutions that have beendeveloped ever since its foundation.
Promote decent work, as well as diversity & inclusion, to strengthen the company’s human capital, in order tocultivate employees who will be able to innovate and create new value.

Implementing a financial strategy aimed at improving profitability and capital efficiency
Boost operating income margin evenhigher through diverse reforms

Improve capitalefficiency

Increase capital efficiency and secure
ROE/ROIC at 10% or higher

sales while also taking action to improve our operating income
margin—a KPI of the medium-term management plan—by
optimizing selling prices, lower our cost ratio by automating andstreamlining production processes, and strengthen the quality of
our management by appropriately controlling SG&A expenses.
Recognizing that further increases in ROE and ROIC
required improvement of not only our profitability, but also ourcapital efficiency, we consolidated certain product offerings,
identified unprofitable products, optimized fixed assets related
to the global realignment of our operating sites, proactively
expanded investments that set the stage for future reforms,

We have defined ROE and ROIC as indicators for actions aimed
at increasing our corporate value through the creation of returns
exceeding capital costs. Our goal is to consistently maintainboth at 10% or higher. In FY2023, we globally increased ourNet sales (billion yen)

Net income and ROE

Operating income margin (%)

Net income (billion yen)

83.9
62.8

17.2

18.9

ROE

ROIC

NOPAT*IDEC Report 2023

Operating income

70.8
58.4

8.1

54.0

13.7

8.2
3.7

7.5

Effective tax rate

10.1

16.8
6.8

6.5

3.0

2.8

2020

2021

Invested capital

7.9

Capital cost 6%

2020

2021

2022

2023 (FY)2019

Sales increase
Optimization of selling prices
Cost reduction
Reduction of SG&A expenses
Cash Conversion Cycle (CCC)
Production efficiency
Capacity utilization
Fixed assets turnover rate

Financial leverage
Equity capital* Net operating income after tax

2019

Activity drivers

Data

9.1

Consistently maintain 10% or higher

ROE(%)

GovernanceNet sales and operating income margin

and aggressively managed our cash flows. As a result of theseand other actions, we achieved ROE of 18.9% and ROIC of
12.5% in FY2023.
Going forward, we will continue working to improve thecapital efficiency of working capital, production facilities, andso on to consistently exceed the expected capital cost (6%). We
will also strive to further improve our profitability by reforming
our global organization and creating an environment thatenables us to radically cut costs.

Foundation For Value
Creation

Improve
profitability

2022

Optimization of D/E ratio(Optimum capital structure)
Reduction in capital costs

2023 (FY)

Financial Capital

34

Financial Capital
Introduction

Our operating cash flow has been trending upward over the longrun, buoyed by sales growth in a robust operating environmentand by improved business efficiency. We have been providing
our shareholders with stable returns while securing the funds
for the capex and R&D needed to strengthen our global
competitiveness. Our payout ratio has remained at a high levelof 30% to 50%, and was 37.3% for FY2023. We have also been
agilely buying back shares depending on the going share price;
in FY2022 we repurchased 1,000,000 of our shares, totaling
2.5 billion yen.
Looking ahead, we will continue to aggressively pursue thevarious investments needed to drive our medium- to long-range
growth, while seeking to increase shareholder value by returningbusiness profits to our shareholders.

The IDEC Group is increasing growth investments to accelerate
its future global business expansion. We are also exploring
M&A and alliance opportunities in mainly domains and regions
where we can achieve synergies with our existing businesses:
HMI and safety, where we can make the most of our strengths;
the high growth potential AGV/AMR industry; and software andengineering for supporting the strengthening of our solutions
business. We will also invest in human capital by recruiting andtraining DX talent for leading our transformation and people
with the high-level specialized knowledge needed to develop
the optimal solutions for each customer’s challenges, and byincreasing our spending on training for all employees. As forinvestments in sustainability, we will consider possibilities for
installing solar generators at our offices and factories around

Annual dividend per share and payout ratio
Dividends (yen)

130

50

IssuesStrengthen partnerships in China and India

200

37.9

100

Growthinvestments

0
2019

2020

2021

2022

2023 (FY)2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (FY)

6.1

6.9
3.5

4.9

7.4

8.3

4.3

(3.1)

(2.7)

(3.6)
(2.0)

2019

2020

2021

IDEC Report 2023

Utilization of borrowed capital

9.7

(3.7)

7.0

Capex
(incl. DX investments)

3.9
(1.4)
(8.6)
2022

Sales Cash flow

(3.1)
(4.4)
2023 (FY)

Growth investments

Shareholder returns
Strengthening offinancial base, etc.

Cash in

Capex

Cash out

Sites and equipment
Increase manufacturing sites and introduce automation and laborsaving systems, optimize sites
Investment in DX
Upgrade ERP, introduce global SCP system, and develop talentmanagement system
Data

(2.9)

(billion yen)

Investment CF
FCF

Investment in human resources
Investment in expanded training spending and global talent development

GovernanceOperating CF
Financial CF

Investment in new products
Proactively invest in the New HMI and safety businesses

Investment in sustainability
Consider installing solar generators, replacing air conditioning
equipment with energy-saving models, developing eco-friendly
products, and pursuing applied research on environmentallysound materials

Capital allocation (FY2025)

Cash flows

Medium-term management plan
Investment in M&A and alliances
M&A and alliances for enhancing the safety business, AGV
industries, software, and engineering field

300

37.3

50

Aggressive investment aimed for medium to long-term growth

Dividend-included TOPIX (%)

400

100

Commemorative dividend(20 yen)IDEC(%)

Foundation For Value
Creation

52.5

500

53.9

44.4

50

Total shareholder return

Payout ratio (%)

the world, increasing the portfolio share of eco-friendly productsthat help to reduce environmental impact, and pursuing appliedresearch on environmentally sound materials.
As for capex, we will continue to invest in ongoing initiatives
for optimizing our global sites, introducing automation/laborsaving equipment, developing IT infrastructure, and making otherimprovements. In addition, we will advance our DX, including by
globally deploying the ERP and SCP systems that are essential
for improving efficiency across our Group and realizing globally
integrated supply chain management.
By expanding growth investments and shareholder returns
from a long-range perspective, we will meet the expectationsof our stakeholders.

Business Strategy

Investment strategy for further growth

Value Creation Story

Shareholder return policy

Shareholder
returns

Measures for returns
Proactively pay dividends at a dividend payout ratio of 30-50%, acquire
treasury stock in a timely manner in view of the stock price level

Financial Capital

35

Introduction

Manufacturing Capital
Manufacturing technology organization leveraging insights
and expertise accumulated over many years

Related materialities

Productivity improvement

Safety, ANSHIN, and well-being

Contribute to improving the productivity and efficiency of our customers and society aroundthe world by providing the IDEC Group’s long-cultivated control technology, products, andsystem solutions that have been developed ever since its foundation.

Value Creation Story

We operate a Manufacturing Technology Department that designs and manufactures diverse production equipment used
by Japan and overseas Group companies, including dies, jigs, and robot-supported automated assembly equipment.
We constantly strives to improve our Group’s production efficiency by leveraging manufacturing technology insights andexpertise accumulated over more than 70 years.
Major sustainability KPIs (FY2025)

Frequency rate ofindustrial accidents 0(IDEC unconsolidated)

Designing and manufacturing production
equipment to improve our productivity

IDEC Report 2023

Molding die

Resin part molding line

We are committed to improving the safety, ANSHIN,
and well-being of people around the world through ourmanufacturing capabilities. We do this by using the HMI
and safety insights we have amassed since our founding
to provide high-quality, highly reliable products globally,enhance quality and production efficiency, and promote
automation. We have also worked to reorganize ourmanufacturing sites and devise measures to strengthen
production capacity. Going forward, however, we willplace greater emphasis on strengthening our ability totransform ourselves so that our manufacturing operations
can cope with the increasingly challenging changes in the
manufacturing environment.
The Manufacturing Division is at a key turning point andfaces a major transformation. To enable the IDEC Group tocontinue its sustainable growth in anticipation of its 100th
anniversary, we will initiate further structural reforms for
production and continue our thorough pursuit of improved
quality, reduced production costs, and shorter delivery times.

Data

Die manufacturing process

Daisuke Yuguchi
Division General Manager
Manufacturing Division
IDEC CORPORATION

Governance* T he Quality Management and Quality Control Examination® is a registered trademarkof the Japanese Standards Association.

Manager’s Message
Structural reform of production in pursuitof improved quality, reduced production
costs, and shorter delivery times

Foundation For Value
Creation

The Manufacturing Technology Department designs andmanufactures a diverse array of production equipment that isused at our manufacturing sites both in Japan and overseas,
strengthening product manufacturing and achieving ongoing
improvements in productivity.
Precision machining and assembly technologies, including
die technology, are the core of product manufacturing. Dies
include both molding dies, into which molten plastic material
and the like is poured and then cooled to solidify and form
the products, and press dies that are used to shear and bendplate-like or tape-like metal materials. It is no exaggeration to
say that these technologies determine the quality of products.
Even maintenance is conducted in-house to maintain andimprove product quality. Our production efficiency is enhancedby our technical expertise in die design and manufacture,assembly technologies enabling diverse assembly methods,

and concurrent coordination with product design departments.
In addition to dies, the Manufacturing Technology Department
also manufactures in-house various other types of equipment used
at our manufacturing sites. We are able to further improve theproductivity of our Japanese and overseas factories by supplying
them with customized production equipment. These are optimallyselected combinations of manufacturing approaches that are
tailored to the characteristics of each product group, such as
production quantity and product shape. Moreover, the use of
our own switches and safety-related products helps to ensure
equipment safety.
We continuously make improvements through QC circle
activities at our Japanese and overseas manufacturing sites, andthrough problem-solving reviews at our monthly corporate-wide
quality meetings, with the aim of further increasing quality acrossour Group. We also provide Group employees with continuing
training in quality and encourage them to acquire QC certification.
As of April 30, 2023, the Quality Management and Quality Control
Examination®* certification has been acquired by 660 employees.

Business Strategy

Improve safety, productivity, and well-being through technology development, humanresource development, management, and rulemaking.

Automated assembly line

Manufacturing Capital

36

Introduction

Intellectual Capital
Active promotion of international standardization activities

Related materialities

Major sustainability KPIs (FY2025)

Safety, ANSHIN, and well-being

Realize the optimum environment for both humans and machines to resolve
various societal challenges and make it possible to achieve healthy, happy,
and vigorous lives.

Developing safety personnel
level to commit to human resource training, to formulate andimplement rules such as standards and norms, and to realize
well-being.
For this reason, IDEC is reinforcing its intellectual capital bypromoting various initiatives from the four aspects of Technology,
People, Rulemaking, and Management.

Technology

Reaching out to the world
through international
standardization andrulemaking

P.21

PeopleEnsuring safety at workby promoting
safety management
P.43

Qualification attesting to the level of safety knowledge
and designing competency for technical staff(As of April 2023)

Qualifications of knowledge and competence inoccupational safety management for administrative staff
Number of employees qualified as Safety Officers

IDEC Report 2023

560
peopleNumber of employees qualified as Safety Assessors,
Safety Basic Assessors and Robot Safety Assessors

Data

Taking to a higher levelsafety at work throughthe development ofsafety personnel

Management

To ensure safety of manufacturing and safety promotions basedon international safety standards, IDEC encourages employees
to obtain safety qualifications and pays for the cost of taking
examinations and renewing the certification.
As a result, we have the highest number of qualified personof Safety Lead Assessors in Japan, which is the highest level of
personnel certification for machinery safety. We also encourage
employees to obtain the Robot Safety Assessor certification,
which certifies that they are qualified to possess basic robot
safety knowledge, and the Safety Officer certification, which
certifies management personnel for their knowledge ofoccupational safety management and their ability to perform it.
We provide safety consulting services that aim to achieve both
safety and productivity, such as supporting risk assessments andproposing and developing risk reduction measures at industrial
workplaces, utilizing our extensive experience in manufacturing
and our advanced knowledge of safety.

Governance

Rulemaking

Creating workplaces
around the world
where workers feel wellrewarded and satisfied

Creating well-being at
work around the world
with IDEC’s safety and
ANSHIN technologies

Number of cumulative employees holding safety
qualification 3% increase from the previous year

Foundation For Value
Creation

Since our founding, IDEC has supplied society with a variety
of products and services with control technology at its core as
a company that develops and provides products that protect
human life. In order to realize a society in which everyone canlive healthy, happy, and full of life, it is important not only on thetechnical aspects to supply products with high performance,ease of use, and stable quality, but also on the management

 umulative attendees of safety & explosion protection
Cseminars 5% increase from the previous year

Business Strategy

Improvesafety, productivity, and well-being through technology development,
human resource development, management, and rulemaking.

Activities to ensure well-being beyond safety

Value Creation Story

In industrial fields where new technological developments such as ICT and collaborative robots are advancing in addition
to market globalization, realizing a safe working environment that leaves no one left behind has become a pressing societal
concern. We make positive impacts toward the realization of a safety, ANSHIN, well-being, and sustainable society bysolving societal challenges through the formation of social rules, including the development of human resources to support
safety and international standardization activities.

113
peopleIntellectual Capital

37

Examples of specific activities

Intellectual Capital

IEC standardization activities

1,624

1,733

40,09920192020

42,328

2021

1,904

45,554

2022

1,970

49,6342023 (FY)

Activities to create new rules and mechanisms
such as international standards and certifications
for people, products, and services.

Strategic proactivity
approach

Activities to take the initiative in changing orrevising existing international standards in orderto gain an advantage in certification, or to utilize
revised information on international standards
obtained proactively and ahead of othercompanies for business purposes.

Passive reaction
approach

Activities conducted when necessary, such as
checking conformity with laws and regulations
and published international standards andcertification-related work, in order to conduct
market research and determine specifications
for new development, renewal development, anddesign modification of existing product groups.

The IDEC Group’s safety training plan
Basic safety training

FY2020
Basic safety training

For all IDEC Group
employees in Japan

 dvanced safety
A
training

For sales department
employees in Japan

Basic safety training

For executives of our Suzhou
factory in China

Basic safety training

For executives of ourfactories in Thailand andTaiwanFY2021
FY2022
FY2023-IDEC Report 2023

For all IDEC employees

400,000
Shipment of robots in the world
Shipment of IDEC enabling devices

200,000
0

2001

2006

2011

2016

2021

(FY)

ISO standardization activities
IDEC has been participating in the working group for the technicalcommittee on robot safety to develop the ISO 10218 series ofinternational standards relating to the safety of various industrial
robots including collaborative robots, robot cells and their systems.
Due to the expansion of the automotive and semiconductor
industries, the automation of manufacturing and the increase inprocesses requiring the substitution of human labor because of
the decrease in working population, the use of industrial robots isincreasing worldwide. In line with this, there is a need for HMI andsafety-related products to ensure the safety of operations thatinvolve both humans and robots.
IDEC contributes to the development and revision of standards
with the product and safety knowledge it has accumulated throughthe supply of various HMI and safety-related products that are
effective in safety, ANSHIN, and well-being.
Intellectual Capital

38

Data

Strategic creation
approach

600,000

Governance

Types of international standardization activities in IDEC

800,000
Foundation For Value
Creation

In order to become a company that pursues and realizes thehighest level of safety, ANSHIN, and well-being in the world, we
provide safety training to all employees.
In FY2021, safety training was expanded to our groupcompanies in Japan, and in FY2022, safety training wasprovided to executives at our Suzhou factory in China, one ofour major overseas production sites. From FY2023 onward, weare expanding the scope of safety training to include executive
employees at our factories in Thailand and Taiwan.
In the safety training, participants learn about IDEC’ssafety history (DNA), safety concepts, safety products, andthe latest information such as Vision Zero and Collaborative
Safety / Safety2.0”, and also take a comprehension test after
the training to consolidate their knowledge.

Global robot and enabling device shipments (FY2001 - 2023)

Business Strategy

38,254

1,838

 umulative numberCof attendees
Cumulative numberof seminars held

Value Creation Story

Cumulative number of attendees andnumber of safety and explosion
protection seminars held (IDEC unconsolidated)

IDEC has been involved in the formation of social rules throughactive participation in international standardization activities.
From the 1960s to the 1990s, IDEC expanded its market
mainly by utilizing existing rules, but since the 1990s, IDEC has
actively participated in technical committees of IEC (International
Electrotechnical Commission) and ISO (International Organizationfor Standardization), proposing and promoting international safety
standards in response to new technological developments in the
global society. IDEC itself has been active in shaping the rules by
proposing and promoting the development of international safety
standards in response to new technological developments in the
global community. And since 2017, by focusing on activities tocreate rules based on new ideas such as Vision Zero and wellbeing, we aim to achieve our Purpose: “to create the optimal
environment for humans and machines, and to achieve safety,
ANSHIN, and well-being for people around the world.”
International standardization activities are defined in
the following three categories, and we have establisheda dedicated unit, the International Standardization and
Collaborative Safety Department, within our headquarters topromote a variety of activities.
Among the three categories, we are particularly focusing on“creative” and “proactive” international standardization activities,
which we advocate to the world with Japanese leadership. We arealso aiming for further growth of our business through continuous
human resource development through on-the-job training.

At the Advisory Committee on Safety (IEC ACOS), one of the six
technical advisory committees of the IEC, a Japanese representative
expert from IDEC introduced “Collaborative Safety / Safety2.0” andproposed the need to develop an IEC Guide on Collaborative Safety.
As a result, the development of the IEC Guide was approved in 2022,
and it is expected to be officially published in the near future after
voting by each national committee of IEC member body.
In addition to the above, IDEC has registered as an expert
in various international standardization committees, including
the control switch working group, and has participated in thedevelopment of international standards.
Through these activities, IDEC has made significant
contributions to the development of standards for 3-position
enabling devices, which have a global market share of over 90%,
and to the revision of standards for emergency-stop switches.
Cumulative shipments of enabling devices exceeded 6.3 million
units by FY2023, contributing to improved safety, ANSHIN, andwell-being not only at manufacturing sites but also at a wide rangeof sites in the construction industry and other various industries.

Introduction

In addition, various free safety seminars (online) from basic toadvanced and practical are provided to help customers use safetyrelated products and explosion protection products properly.

Resolving societal challenges throughsocial rulemaking

Toshihiro Fujita

Based on Dr. Fujita’s vision, IGSAP wasestablished to promote from Japan the conceptof Collaborative Safety / Safety2.0, which aims
to achieve both safety and productivity by
sharing information between human, machines,
and the environment using ICT, rather thanisolating human and machines. IGSAP is
actively promoting international standardization
activities related to safety.
After 2020, Dr. Fujita has served as one of
the six members of the Vision Zero Task Groupof the Global Coalition for Safety and Health atWork, which is led by the International Labor
Organization (ILO), a specialized agency of theUnited Nations. As the only
representative from Asia,
he is participating in thesafety, health, and wellbeing rulemaking activities.
He was appointed as
the person in charge ofpromoting the Vision ZeroIDEC Report 2023

Promoting activities
for the establishment of a personnel
qualification certification system
for machinery safety
and its international standardization
With the support and guidance of the METI at a
project of the Nippon Electric Control Equipment
Industries Association (NECA), Dr. Fujita proposedand developed the Safety Assessor (SA) program,which aims to train and certify personnel who
can safely design and operate machinery, andcontributed to establish this system.
In 2003, related industrial association
standards (NECA standards) were establishedand the JC was founded with the aim of becoming
a global certification body originating fromJapan and began operating the SA program in
2004, while promoting it globally. As a result of
adoption by the Official Development Assistance(ODA) program, etc., more than 25,000 persons
have been qualified under the SA program inJapan and other countries, including in seven

Promoting the international standardizationof ‘fine bubbles*’ from Japan
With the support of the METI, he established
the FBIA as a standardization organization andproposed to ISO to establish ISO/TC 281 (finebubble technology), in order to make fine bubble
technology a Japanese industry and create newmarkets. He led the publication of 15 Japaneseproposed international standards on definitions,
measurements and applications.
In Japan, he has also established acertification system that goes hand in hand withstandardization, achieving 31 certifications at theend of FY2022, and has contributed significantly
to the creation and growth of the fine bubble
industry by improving social recognition of finebubbles and creating an international standards
scheme for fine bubbles at the initiative of Japan.

Data

IDEC has developed a 3-position enabling device
that improves the safety of industrial robots,
one of the key industries in which Japanesecompanies hold 60% of the global market share,
and Dr. Fujita contributed to the developmentof the IEC standard for the 3-position enabling
device in 2006. The devices have been widelyused not only in Japan but also by overseas
manufacturers for safety operations of the robot,
and currently their global market share is morethan 90%.
Under his leadership, we led the revision of
the standard to include examples of applicationas safety devices not only for conventional robot
teaching devices, but also for machine tools,
construction machinery and others in 2020. This
revision has shown the devices to be effective
in many new fields, such as in many types ofequipment and construction sites, and has
contributed to ensuring worker safety in a variety
of workplaces where people and machinery
coexist.

Governance

Advocating Collaborative Safety /Safety2.0, a next-generation safetyconcept originating in Japan,
and announcing it globallycountries in Asia, contributing to ensure safetyat manufacturing sites both at home and abroad.
At IGSAP, in addition to the existing SA
program for engineers, a new Safety Officer (SO)program for managers has been established.
Adoption of this program in Japan and othercountries has helped to further reduce accidents.

Foundation For Value
CreationContributing to
the improvement of safety at workin a wide variety of applications,
including industrial robots

Summit Japan 2022 and contributed to thecompilation of the Tokyo
Declaration on Vision Zerofor All, the basis for the newmanifesto, which includes
collaborative safety, at thetime of the summit in May.

Business Strategy

Contributing to well-being that goes beyond safety,
for workplaces in the age of human-machine collaboration

Value Creation Story

Senior Executive Officer
Management of Technology

Introduction

ColumnIDEC had a bitter experience of losing market share because the international standard
for switches, one of its main products, was created at the initiative of foreign countries,
and the typical Japanese round hole for panel mounting of switches at that time wasout of the standard. From this experience, Dr. Toshihiro Fujita, Senior Executive Officer,
realized the importance of participating international standardization activities from Japan,
and has been making efforts to lead international standardization activities in Japanby visiting and interacting with many European and US companies, standardization
organizations, and certification bodies.
In order to promote international standardization activities originating in Japan, he has proposed and implemented
the establishment of Japan Certification Corporation (JC), the Fine Bubble Industry Association (FBIA), and the Institute of
Global Safety Promotion (IGSAP), and actively promoted new international standardization and rulemaking with the supportof the Ministry of Economy, Trade and Industry (METI).
In 2022, he received the Prime Minister’s Commendation for Industrial Standardization from the METI for his significant
contribution to international standardization activities in Japan. The following is an overview of the main activities of the
project to this point.

* Fine bubbles are bubbles smaller than 100 µm (= 0.1 mm) in diameterand are expected to be used in a variety of industries.

Intellectual Capital

39

Introduction

Human Capital
New ideas created from the diversity in human resources
For further information, pleaserefer to the “Social” of the
IDEC sustainability website.

We are committed to creating a pleasant workplace environment where diversity ingender, age, nationality, culture, lifestyle, and more is respected. In keeping with the“Management with respect for humanity” principle that we have subscribed to since
our foundation, we are working to foster a corporate culture where employees withdiverse personalities and values can fully demonstrate their abilities.

 nsure a thorough understanding of “The IDEC Way” and stimulate the company byEcreating an attractive work environment that gives employees a sense of purpose.
 romote decent work, as well as diversity & inclusion, to strengthen the company’s humanPcapital, in order to cultivate employees who will be able to innovate and create new value.

*1 Main issues: (1) human resource development, (2) strengthening of management abilities, and (3) improvement of the acceptability of human resource systems*2 IDEC unconsolidated

Governance

Strategies

Representative Directors

Managing Director

Strategic Planning DivisionCorporate Communications Department

Strategic Planning
Department

Human Resourcesand General Affairs
Department

Company-Wide Health &Safety Committee

The IDEC Group has established the following as its main purpose:“Create the optimum environment for humans and machines, andto achieve safety, ANSHIN, and well-being for people around theworld.” This main purpose and the company’s vision (Pioneer the
new norm for a safer and sustainable world) constitute “The IDEC
Way.” The goal of “The IDEC Way” is to realize a safer and moresustainable society that brings happiness and ANSHIN to all people.
To achieve the vision of the IDEC Group, we will further expand
our activities on a global scale and strive to contribute to theresolution of various societal challenges through our businessactivities. To this end, we have made it a priority to hire and train
personnel with diverse strengths who are able to manifest theircapabilities and their passion and open the way to the future to
become the leaders of the next-generation. We will continue toactively promote diversity & inclusion and carry out a variety ofhuman resource development policies.
We will also protect the safety and mental and physical healthof our employees, and will strive to ensure a healthy working
environment that is free from discrimination.

Data

CSR Department

Human resource development policy
In-house environment improvement policy

Governance

In FY2023, a new Strategic Planning Division was established as
an organization under the direct control of representative directors
to work together to draft management strategies and personnel
strategies. The new division, working in coordination with related
departments, leads the formulation of long-term visions, mediumterm management plans, sustainability KPIs, management andpersonnel strategies, and the managing of our management
resources. Critical matters are referred to the Top Management
Meeting, whose policy decisions are reported to the Board of
Directors.
In addition, a new Decent Work Promotion Subcommittee
was established in 2022 as a specialist subcommittee of theCompany-Wide Health & Safety Committee. The subcommittee
works to create a rewarding workplace environment and increase
employee satisfaction in order to achieve employee well-being.

Foundation For Value
Creation

IDEC has established “Business foundation: Establish amanagement structure that promotes value creation, foster anorganizational climate and develop human resources” as one ofits four materiality goals. Corporate revitalization and strengthening
human capital will be indispensable in order to achieve sustainablegrowth and increase our corporate value. Accordingly, we arecarrying out various initiatives to this end based on the vision weestablished for 2030, and in coordination with the policies in themedium-term management plan and the sustainability KPIs.
We have conducted an employee engagement survey since2019, and have made the resulting “Engagement score” one of
our sustainability KPIs. We are working to improve engagement bydetermining the current situation and the issues to be resolved andthen implementing measures centering on priority issues. In addition,
initiatives to promote decent work as well as diversity & inclusion
will be essential to further expand our business activities globally.
We will focus our efforts on hiring global talent and increasing the
proportion of female managers to ensure human resource diversity.
We have defined filling important positions and conducting
leadership training as medium to long-term human resource
strategies. We will systematically select and train candidates tobecome the next-generation of managers as part of our efforts toachieve sustainable growth for all Group companies.

E ngagement score (Japan)
Improvement in the scores for 3 main
issues (as compared to FY2023)*1
Number of female managers 15*2
Ratio of males taking childcare leave 90%*2

Business Strategy

Human resource strategies

Value Creation Story

Major sustainability KPIs (FY2025)

Business foundation

Related materialities

https://us.idec.com/idec-us/en/
USD/sustainability/social

Decent Work Promotion
Subcommittee

Healthcare Center

IDEC Report 2023

Human Capital40

Human CapitalMultifaceted evaluation system
In FY2023, a new multifaceted evaluation system was introduced
in an effort to enable employees to realize things about their
daily work behavior and job performance, in order to change
self-awareness and bring about a change in behavior.
Career Development Meeting

New personnel system

GRADE 8Training for newly appointed
executive officers

IDEC Leadership
Challenge Program

GRADE 2New employee training

Position-based
training

Selective training

Overseas training
Language education

Training programs

IDEC Report 2023

Products
Quality

Promotionof AI / DX

Explosion
protection
robotsJob-based education

Personal
development

Career planningtraining

Career seminars
for women, career
training by age
group, etc.

Other

Through coordination by relevant departments beginning with
the Decent Work Promotion Subcommittee, IDEC will work tocreate a work environment that is rewarding for all employees.
Rate of paid
leave taken

Ratio of males taking
childcare leave

Rate of return to work
after childcare leave

77

58

100

%

%

Data

GRADE 1

Overseas training
program

Optimization of working time management
Support for balancing career and family
Achievement of flexible work styles
Support for empowering women
Governance

Grade 2-5 training
Training for newly appointed
leaders

Tele-education / e-learning

GRADE 3

Safety Assessor training

GRADE 4IDEC General
Management
ProgramOnline learning

GRADE 5Training before
overseas
assignments

Specialized instruction by individual
departments

Training for newly appointed
department heads

English conversation / online English conversation

IDEC Advanced
Management
Program

GRADE 7
GRADE 6IDEC Top
Management
ProgramTraining programs
The IDEC Group has created various training programs to develop
employees through investment in human resources, in orderto resolve various societal challenges and achieve customer
success. In addition to organized in-house and outside training

We have implemented various workstyle transformation
initiatives, such as increasing work efficiency through DX,
building an IT infrastructure that includes telephones, etc.,
introducing a planned paid holiday program, and encouraging
male employees to take childcare leave. To enable more flexible
working styles, we have launched discretionary work and weare currently reassessing flex-time systems, existing work-fromhome programs and special leave systems.
Moreover, in FY2023 we established a Decent Work
Promotion Subcommittee to strive to create a rewarding
workplace environment where employees can work with ANSHIN
in order to increase employee satisfaction and achieve employee
well-being. The following objectives have been established andcross-departmental information sharing and company-wide
policies are currently being studied.

Foundation For Value
Creation

A new personnel system was introduced in 2022 based on
issues with personnel-related systems (relating to evaluations,pay, bonuses, promotions, etc.) that were identified in the first
employee engagement survey, conducted in 2019.
Under the new personnel system, multiple career tracks
were created to accommodate diverse career aspirations andprovide opportunities for individuals to realize their particularpreferences and strengths. The new personnel system also
increases transparency with regard to “objective management(evaluations)” and “renumeration” and ensures fair assessment
and treatment of desired roles, actions, and job performance.

Promoting decent work

Business Strategy

Beginning in FY2023, we have held a Career Development
Meeting as a new initiative to support employee growth andplace the right people in the right jobs within the organization.
At the Meeting, the department heads within each division
gather to share and clarify issues relating to developing member
capabilities and so on, study the allocation of roles, andconsider employee training plans including future promotion.
Attendees also share feedback from group analysis of stresscheck data, and trends and opinions relating to self-reporting,in order to help to improve the working environment.

programs and career advancement support programs, we havealso introduced an overseas training program for young employees
to develop personnel who can succeed in the global arena.
Moreover, to achieve sustainable growth for the IDEC Group
as a whole, we have also introduced a selective training programfor early training of the next-generation managerial candidates
who will lead our Group in the future.

Value Creation Story

We have introduced a personnel system that is based on ourhuman resource development policy and employee engagement
surveys. We also conduct multifaceted evaluations and work
to improve our training systems to strengthen human resource
development. In addition, we created the Career Development
Meeting as a mechanism for considering the development ofeach and every employee.

Introduction

Strengthening of human resource
management systems%

FY2023 IDEC unconsolidated

Human Capital41

Human Capital
Recruitment and promotion of foreign nationals

Employee composition by region
Americas

210

31%

Japan

990

34%

FY2023

1,088

28%

EMEA

898

Asia Pacific

Number of female managers
FY20238

12

FY2025(targets)

15

IDEC unconsolidated (including assistant managers with subordinates)

IDEC Report 2023

We have employed the Special Provisions for Corporate Groups
since FY2022. As of the end of FY2023, there were 41 disabled
persons (converted value 50 persons) employed by the IDECGroup in Japan, an employment rate of 3.0%.
Through regular interviews with employees with disabilities,
we check on their work
situation and strive toimprove the working
e nv iro nm e nt in a neffort to maintain an
employment rate thatis above the legally
mandated employment
rate.

Implementing operational reforms
to promote personnel policythat reflects the changing times

Huang Wei
Manager
Personnel Administration Department
IDEC (SHANGHAI) CORPORATION

I joined IDEC because I was attracted to the company’s
challenging spirit of “opening up a new field.” I have led
a variety of operational reforms that include establishing
the foundation for various personnel systems, integrating
Chinese sales companies, redesigning organizations, andintroducing personnel training programs from a medium
to long-term perspective.
I am working to ensure that personnel policy reflects
the changing times, with the aim of utilizing the special
attributes of IDEC (SHANGHAI) CORPORATION, which
has sales offices across the country, in order to succeedin the Chinese market, where the competition to attract
talented personnel is fierce.

Data

FY2021

 reating employment and involvement opportunities forCdisabled persons

Manager’s Message

Governance

We promote the empowerment of women as part of ourcommitment to creating an environment and culture that enable
diverse human resources to take on challenges.
We have set a goal of having at least 15 female managers
at IDEC unconsolidated by the end of FY2025. We also conduct
awareness-raising training for senior managers—who are thekey to promoting women’s empowerment—and career training
for all female employees. The ratio of female managers on aconsolidated basis was 23.2% in FY2023.

Intranet for LGBTQ+ issues

Foundation For Value
Creation

Cultivation and promotion of female managers

Our recruitment of mid-career talent actively strives to hire people
with highly specialized capabilities. In the three years from FY2021
through FY2023, IDEC unconsolidated hired a total of 57 mid-career
individuals, of whom 16 were managerial hires.
Moreover, we actively promote the hiring and training of people
experienced in DX and AI who can lead business innovation, as wellas people with highly specialized knowledge who can be entrustedwith engineering sales and new product development and so on
and can propose ideal solutions to resolve customer issues.
We will continue to actively recruit mid-career personnel withthe specialist capabilities and knowledge needed to strengthen
our business.

In FY2022, we began in-house education relating to LGBTQ+
issues to establish a workplace environment that enables all
people to work with energy and enthusiasm. We conduct training
for people who serve as in-house consultation contacts and post
specific information on thecompany intranet regarding
basic responses to persons
coming so it can be read by
all employees in order todeepen understanding of
LGBTQ+ issues.
We will continue to work
to create an environment inwhich employee identities
are not compromised.

Business Strategy

69%

Recruitment and promotion of mid-career personnel

7%

Ratio ofoverseas
employees

As of the end of FY2023, IDEC unconsolidated had 63 employees
who were foreign nationals, including two executive officers andtwo department heads. IDEC hires personnel without regard tonationality, and foreign nationals are working in many different
departments.
We are also making an effort to improve the environment
for foreign nationals, such as translating the minutes of major
meetings into multiple languages.

Understanding of and support for LGBTQ+

Value Creation Story

We carry out diversity & inclusion initiatives and strive to improve
our support systems and create an environment in which diverse
employees with different experiences, specialist knowledge, andexpertise can be active while respecting one another’s humanity,
without regard to gender, sexual orientation, gender identity,
nationality, social status, family origin, religion, etc.

Introduction

IDEC diversity & inclusion

Regular interviews

Human Capital42

Human Capital
Introduction

Maintaining employee healthand establishing a culture of safetyActive promotion of health and safety at manufacturing sites

Activities of the Company-Wide Health & Safety Committee

A Company-Wide Health & Safety Committee has been
established to oversee the health and safety organizations at
each site. The Committee works across our Group to prevent
industrial accidents, improve employee health, and create apleasant work environment. It also serves as a forum for activities
such as discussing issues and solutions relating to labor, health,and safety and sharing information throughout the organization.

IDEC Group Code of Conduct

Compliance training
Data

IDEC Report 2023

The IDEC Group Code of Conduct—our basic action guidelines
for conducting our duties—have been published in Japan andoverseas.
It is positioned under the Group philosophy “The IDEC Way,”and the actions that employees should take are consolidated in thethree pillars of Workplace, Social, and Business to make it easy
to communicate in all countries and regions where we operate.
The Code of Conduct is available to Group employees via thecorporate intranet in Japanese, English, Chinese, French, Thai,
Vietnamese, and Khmer.
Compliance training consisting of training to ensure anunderstanding of the Code of Conduct and case study researchbased on examples of compliance violations is conducted on
an ongoing basis within position-based training. Moreover,audits to determine whether there have been any complianceviolations are conducted as part of internal audits. We are fully
aware of the risk of compliance violations and failing to realize
the importance of maintaining compliance.

GovernanceWith the goal of becoming world’s most committed company
to pursuing and achieving safety, ANSHIN, and well-being, in2018 IDEC became the first Japanese company to support andregister for the Vision Zero campaign for occupational healthand safety, and established a dedicated department to promote
Vision Zero. Diverse initiatives are also carried out by our Safety
Promotion Committee and Quality Management Committee,
which are specialist committees of the CSR Committee.
In 2019, the Takino factory became our first worksite
to acquire certification under ISO 45001, an international
standard for occupational health and safety management
systems. Subsequently, in 2022, all of our distribution andmanufacturing sites in Japan—Tatsuno Distribution Centerand the four factories in Takino, Fukusaki, Amagasaki, andKiba—acquired ISO 45001 certification, as did the Suzhou

ComplianceFoundation For Value
Creation

Fitness gym in the Well-being Center

Four specialist subcommittees have been established under
it for four areas: traffic safety, health promotion, equipment
safety, and decent work. These subcommittees work to identify
company-wide issues and discuss solutions to them, among
other activities.

Business Strategy

In-house corporate clinic

factory in FY2023. In the future, they are expected to be joinedby the factories in Taiwan and Thailand.
Each site endeavors to further develop a safe andcomfortable workplace through activities such as conducting
cross-functional risk assessments and having employees reportissues they notice as a step toward improving the working
environment and preventing occupational accidents. The sites
also proactively provide training designed to equip employeeswith the knowledge and technology they need to strongly
promote workplace safety and peace of mind. In recognition ofthese efforts, the Japan Industrial Safety and Health Association
honored IDEC in 2022 with its Chairperson’s Prize, which isawarded to only one company each year. We helped leadthe 2022 Vision Zero Summit Japan as a partner company,
communicating to the world our various initiatives for realizing
a world where people can work safely and healthily, including
our global actions for promoting preventive culture.
A book published by Nikkei
Business Publications in May
2023 spotlighted our safety culture
best practices alongside thoseof renowned global companies
such as L’Oréal, Nike, and BMW,further cementing our reputation
as a company committed to
global promotion of well-being.
Going forward, we will continue
to pursue well-being technologies
Nikkei BP publishingthat maximize human potential.

Value Creation Story

Since keeping employees and their family members physicallyand mentally healthy is vital to the IDEC Group, we adopted the
IDEC Group Health Declaration and carry out health initiatives. The
first step for better well-being is to ensure the safety and healthof employees. We are taking action to eliminate or prevent thecauses of injuries, diseases, and other dangers in the workplace.
In 2019, we constructed a Well-being Center at the head
office in order to promote employee health. Featuring facilities
such as a fitness gym and a Healthcare Center, it has a staff ofdedicated occupational physicians and full-time occupational
health nurses who help employees to manage their health. An inhouse corporate clinic was added to it in 2022 in keeping with ouraim to ensure the mental and physical well-being of all employees.

Human Capital

43

Human Capital

Total Workplace Attractiveness

3.12

3.16

Total Employer Attractiveness

3.01

3.12

including higher scores for the overall indicators “Total Workplace
Attractiveness” and “Total Employer Attractiveness.” However,improvements are still needed for many items, and a companywide effort will be mounted to implement corrective action for
the results of the second survey.
Also, a new Employee Awards Program was introduced in
FY2024. In addition to award categories established for specificareas, award categories for employees who embody the Group’s
philosophy and exemplary employees who have taken action
in line with the IDEC Principles—which are based on our Core
Values and represent the concrete thinking and conduct that
employees should remain mindful of as they perform theirduties—have also been established in an effort to ensure that
all employees understand the Group’s philosophy.
In this way, various policies are being implemented to
improve employee engagement.

Risk management
In materiality analysis, the risks and opportunities relating tohuman capital are mapped on the twin axes of stakeholder
importance and business activity importance, and the risks
associated with human capital as a “Business foundation”
are integrated with the IDEC Group risk map and managed.
Critical risk items are assessed and managed by the Risk
Management Committee, and the risks and opportunities
relating to human capital are reassessed annually at the
P.66
Strategic Planning Division.

Metrics and targets
The IDEC Group has made “Establish a management structurethat promotes value creation, foster an organizational climate
and develop human resources” one of its materiality goals,
P.15
and has defined its vision for 2030.
In order to achieve this vision, we have establishedsustainability KPIs for activities in the areas of “Create apleasant workplace environment” and “Promote decent
work and increase investment in human capital,” and we are
implementing initiatives to achieve these goals.
Create a pleasant work environmentJapan

Engagement score
FY2025(Targets)
Improvement in
the scores for 3
main issues*

FY2023
Improvement in
the scores for 21
out of all 26 items(as compared to FY2020)(as compared to FY2023)

Main issues: (1) human resource development, (2) strengthening of management
abilities, and (3) improvement of the acceptability of human resource systems
IDEC unconsolidated

Ratio of males taking childcare leave
FY2021

FY202350 %58 %Investment in human capital

FY2025(Targets)

90 %IDEC unconsolidated

Number of female managers
FY2021

FY20238

12

FY2025(Targets)15* including assistant managers with subordinates

Average per capita training costs
FY2023
JPY

40,000

FY2025(Targets)
JPY

Data

IDEC Report 2023

2022 score

GovernanceIn 2019, we conducted our first employee engagement survey
to increase trust between the company and employees andboost overall employee motivation. Various initiatives have been
implemented based on the issues revealed by the results ofthe first survey.
The second employee engagement survey was conductedin October 2022. The results showed certain positive effects ofthe measures that had been implemented, with improvements

2019 score

Foundation For Value
Creation

Increased employee engagement

Item

Business Strategy

Click here for Detailed Human-Rights Policy

Results of engagement survey

Value Creation Story

We have maintained “Management with respect for humanity”
as one of our principles ever since our founding. We haveupheld a commitment to human rights in our business activities
as a fundamental principle to help advance sustainable social
development, while ensuring that everyone involved with the IDECGroup has a strong awareness of the importance of human rights.
We have established the IDEC Group Code of Conduct
to define specific guidelines for behavior based on “The IDEC
Way.” With regard to behavior in relation to human rights
and the work environment, the Code of Conduct establishes
behavioral guidelines to ensure respect for humanity, suchas not discriminating based on gender, nationality, social
status, family origin, religion, etc. We also support and respect
international norms relating to human rights, such as theInternational Bill of Human Rights, the UN Guiding Principles
on Business and Human Rights, and the Declaration on
Fundamental Principles and Rights at Work of the International
Labour Organization. IDEC is also a signatory to the UN Global
Compact and supports its ten principles.
Our Board of Directors is responsible for supervisingcompliance with regard to the commitment to human rights
issues and related activities. Based on its fundamental policy
on human rights, the IDEC Group will continue taking action toensure respect for human rights on the part of all employees
and stakeholders.
In addition, we are currently studying the implementationof human rights due diligence.

Introduction

Respect for human rights

70,000

Human Capital

44

Introduction

Natural Capital
Realize a sustainable society

Related materialities

Climate change ontribute to the reduction of the environmental impact of customers
Cand society through the use of the IDEC Group’s technologies andproducts.
Reduce CO2 emissions through the in-house use of renewable energy.

IDEC Report 2023

Examples of enhanced eco-friendly products

Easy

Rotate toassemble

Stack

Completed
φ22 Smart RFID Reader“KW2D series”

Surface mount terminal
block “BTBH-H series”

KW2D has a compact andsmart design ideal for factory
automation environments, andit can be mounted on φ22mm
panel cut-out. Data can berecorded as electronic data by
combining with a touch panel,
which contributes to saving
resources such as paperless.

Easily assemble the required
number of terminal blocks
without tools. No connecting
rod required, which achieved
the reduction of the numberof parts, and eco-friendly
product.

Resource-saving/ Space-saving /Reduce man-hours

Mainevaluation
pointsResource-saving/ Weight-saving /Reduce man-hours

Effects
Space-saving (totalheight of panel 9mm,
depth 48.5mm)

Data

We have established “The Procedure Manual for the Development of EcoFriendly Products” and are developing products with the aim of achieving
energy-saving, resource-saving and decarbonization from the design stage
onward. We are reducing the number of parts used, making products more
lightweight, phasing in the use of recycled plastics, and calculating a life
cycle assessment (LCA) and carbon footprint (CFP) for major products.
In addition, we score the degree of environmental consideration of new
products based on the IDEC’s own standards. New products that meetthe standards are certified as “enhanced eco-friendly products” and arestamped with the IDEC’s original eco-mark, compliant with ISO/JIS Q
14021 (Type II). The cumulative ratio of enhanced eco-friendly products
launched since FY2020 was 74.1% as of FY2023.
Moreover, as a framework of promoting investments in environmentallyconscious development, we introduced internal carbon pricing (ICP) in
FY2023. In the initial year and FY2024, the ICP was set at JPY 6,000
and 8,000, respectively, and the price will be reassessed each year.
To ensure that the ICP concept is thoroughly disseminated within thecompany, the Environmental Strategy Committee has selected modelcases and is calculating CO2 emissions reduction amount and studying
the impact on return on investment after applying ICP. As examples
of studying, we are conducting simulations on the introduction of newenergy-saving manufacturing equipment, investment in the developmentof eco-friendly products with a lower environmental impact than existingproducts, the installation of energy-saving air conditioning equipment,
and replacement of gasoline vehicles with electric ones.

 enewable energy utilization ratio 18%
RReduction of CO 2 emissions 24% (vs. FY2020)
Reduction of industrial wastes 24% (vs. FY2020)
Cumulative ratio of enhanced eco-friendly products tototal new products 60% or higher (vs. FY2020)

Governance

The IDEC Group has formulated its long-term vision for 2050 andinterim vision for 2030. As a global corporation, the Group aims toachieve sustainable growth while tackling societal challenges that
include measures to deal with global warming and climate change.
Actions to ensure sustainability, in particular initiatives forclimate change, are essential for companies from the standpointof both responding to increased social needs and preserving the
global environment. Moreover, in the effort to achieve sustainablegrowth, environmental strategies are an important part of theGroup’s business strategy, and therefore an environmental
response is viewed as a transition opportunity. We will implement
strategies for helping to achieve our Group’s main purpose of
ensuring safety, ANSHIN, and well-being for people aroundthe world, through the development of eco-friendly products,
environmental energy business, and other activities.
Specifically, “Promotion of initiatives to reduce environmental
impact” are included as one item in the basic strategy outlinedin the medium-term management plan. We have establishedsustainability KPIs and are pursuing an action plan that reflects
our transition opportunities toward the achievement of the goal.
Beginning with what can be achieved right now, we are
addressing to achieve carbon neutrality in order to realize ourvision for 2050.

Major sustainability KPIs (FY2025)

Foundation For Value
Creation

Development of eco-friendly products
and equipment investment

https://us.idec.com/idec-us/en/USD/
sustainability/environment

Business Strategy

The environmental management of the
IDEC GroupFor further information, please referto the “Environment” of the IDEC
sustainability website.

Value Creation Story

Regarding the relationship between the global environment and corporate
management, the IDEC Group recognizes that all humans desire to exist inharmony with the planet, and therefore the company’s basic environmental
policy is to act to preserve the environment as the most important issue for all
business activities, and to strive to achieve sustainable development.

Reduce the number ofparts (non-use of screws)/ Decrease the installedheight by 7mm compared toconventional products

Natural Capital

45

Natural Capital

Replacement of plastic bags used in production processes withreusable plastic cases (Suzhou factory)

Biodiversity

Solar power generated (MWh)23,21524,211

19,092

8,239

2019

IDEC Report 2023

2020

2021

2022

2023

(FY)

The Suzhou factory (China) has addressed the initiative
to reduce the amount of non-reusable plastic bags by using
reusable soft trays and buckets instead of plastic bags. The
final goal is to use zero plastic bags, and to reduce 2.7 ton ofplastic bags annually. We plan to spread the similar initiative toother factories in Japan and overseas.
We are also reassessing our use of product packing
materials. In December 2021, we began using bubble wrap madeNatural CapitalData

14,565

The grease ozonizer which constantly
purifies grease traps

We consider biodiversity to be critical for our business continuity,and carry out diverse activities to protect biodiversity. In April
2023, the IDEC head office’s green space was selected as a
private business green space with excellent conservation andcreation activities under the Social and Environmental Green
Evaluation System Operation, Management and Active use
program (SEGES OMA) of the Organization forLandscape and Urban Green Infrastructure.
Through green space development centering
on native species, we provide a habitat for wild
birds, insects and so on, helping to preserveand improve biodiversity.
IDEC approved and signed the statement of
BUSINESS FOR NATURE at the 15th Conferenceof the Parties (COP15) for mandatory assessment
and disclosure of biodiversity framework.

Governance

The garbage disposer

The amount of solar power generation in the environmental
energy business (Japan)of film containing 25% or more biomass plastics at two sites
in Japan. Through this and other actions, we have addressedGroup-wide initiatives to reduce our environmental impact forrealizing a circular economy.
In the future, we plan to further activate our Global
Environmental Management System network and deploy eachenvironmental initiative throughout the entire IDEC Group.

Foundation For Value
Creation

IDEC SYSTEMS & CONTROLS CORPORATION, a groupcompany, is developing a renewable energy business thatprovides one-stop services from solar power plant construction
to follow-up from 2012.
There has been an increase in adoption of the selfconsumption solar power generation equipment utilizing theroofs of buildings such as factories, warehouses, stores, facilities
in recent years. It helps to reduce CO2 emissions through green
energy use. It also makes an invisible contribution to the safety
and ANSHIN of the local community by providing emergency
power to neighboring areas in the event of a disaster. We aim
to achieve a better society through promoting the business.

To achieve carbon neutrality, the IDEC Group has addressed
initiatives for circular economy to use limited resources effectively.
As a manufacturer, we pursue management practices thatemphasize reducing environmental impact and considering
environmental issues at all stages, from product design anddevelopment through manufacturing processes, logistics, andpacking materials.
One example is the movement toward paperless operations
to reduce paper consumption at workplaces by digitalization ofreferences and design drawings in quality-related departments.
Moreover, in February 2022 the head office cafeteria installed
a garbage disposer which decomposes garbage into water andcarbon dioxide, as well as a unit that separates and collects theoils, leftover food, and vegetable scraps in wastewater in orderto purify the grease traps constantly. By introducing them, it isexpected to reduce approximately 8 ton of garbage discharged
from the head office cafeteria each year to almost zero.

Business Strategy

Environmental energy businessRealizing a circular economy

Value Creation Story

By accelerating the introduction of our own solar power
generation facilities for our offices and factories both in Japanand overseas, we are reducing the environmental impact wecreate by replacing electricity with renewable energy.
IDEC (unconsolidated) operated one additional power
generation facility in FY2023, and is planning to operate three
new facilities in FY2024.
Among our Japanese group companies, power generation
facilities have been installed in the factory and head office of
IDEC FACTORY SOLUTIONS CORPORATION. Globally, solar
power generation facilities are also in operation at our US office
and factory and our UK factory.

Introduction

Expanded adoption of self-consumption
solar power generation46

Natural Capital
Introduction

Information disclosure based on the
TCFD recommendations
Governance

Strategy

scenario) and NZE (1.5°C scenario) as transition scenarios, and
IPCC Fifth Assessment Report’s RCP2.6 (2°C scenario) and
RCP8.5 (4°C scenario) as physical risk scenarios.
Based on the recognition of the world image in accordancewith each scenario, we have conducted analyses of IDEC Group’s
risks and opportunities.
Energy-related CO 2 emissions in each WEO scenario(2010 – 2050)

Business Strategy
Foundation For Value
Creation

Since the pandemic of COVID-19 in 2020, and especially in
2022, energy supply issues have risen caused by the worldwide
unstable status in Europe, etc. Not only the unstable frameworkof energy supply-demand has been visible, but the price increase
and inflation have proceeded due to the price escalation offuels. The amount of fossil fuel consumption including coaland oil has increased in EU, and the amount of CO2 emissions
has increased due to the economic recovery on a world scale,
which was reported in WEO 2022 that it would be difficult toaccomplish the target of reducing CO2 emissions defined at
the Paris Agreement.
Considering the above situations, we have selected two
transition risk scenarios and two physical risk scenarios,
respectively. One is a scenario to “hold the increase in the global
average temperature to well below 2°C above pre-industrial
levels and pursue efforts to limit the temperature increase to
1.5°C above pre-industrial levels” as a long-term target of theParis Agreement, and the other one is in accordance with thecurrent world status.
Specifically, we have selected WEO 2022’s STEPS (2.6°C

Value Creation Story

The Environmental Strategy Committee, which is a specialist
committee of the CSR Committee chaired by the CEO, plays a keyrole in the effort to disclose climate-related financial information.
The Environmental Strategy Committee meets monthly
under direction by the Senior Executive Officer in charge of
the Environment. For striving activities further shifted to theenvironmental management, the Committee was changed its
name from the Environment Management Committee to theEnvironmental Strategy Committee in December 2022 in order
to incorporate responses to the environment into business plan
strategically. Its activities include the audit of environmental items
for eco-friendly products, calculation of product carbon footprint,
encouragement of using internal carbon price, preparation fordisclosing climate change-related information based on the
TCFD recommendations, and planning and operation of theenvironmental events.
Decisions made by the Environmental Strategy Committee
are determined through the CSR Committee or by the direct
submission to the Top Management Meeting, where the policy
is decided, and then reported to the Board of Directors.

Selection on scenarios(Source: WEO 2022 issued by IEA)

Framework of the environmental governance
Environmental strategy

Top Management Meeting

CSR Committee
Chairperson: CEO

Top management of Global
Environmental Management System:
Senior Executive Officer in charge of theEnvironment
IDEC’s EMS Individual
departments and Group
companies in JapanIDEC FACTORY SOLUTIONSEMSE S G Sa Q

E: Environmental Strategy
Committee
Chairperson: Senior Executive
Officer in charge of the Environment

IDEC Report 2023

The Environmental Strategy Committee has picked up theassumed risks and opportunities of the IDEC Group by reference
to the risk and opportunity items of the CDP Climate Change
Questionnaires. Specifically, we have quantified potential
financial impact figure, magnitude of potential impact, likelihood,timeframe, and selected prioritized risk and opportunity items
in a quantitative manner.

Subsequently, we have assumed the external environmental
changes and the business impacts caused by them, considered
responses by the IDEC Group as environmental strategies, anddescribed them in the list and mapping of risks and opportunities.
The list and map for the top five items are shown on page 48.
For the detailed study results, see our sustainability website.

Data

Committees

Risks and opportunities

Governance

Board of Directors

Environmental Management
System (EMS)

Each overseas sites EMS

Link to IDEC website
Overseas sales companies
Responsible persons incharge of the environment

Click here for detailed risks list

Click here for detailed opportunities list

Click here for detailed mapping of risks and opportunities

Natural Capital

47

Natural Capital
Risk management

Risks List

1

Increase in material costs

Short-termA espond to temporary sharp rise in material prices by deep mutual understanding withR
suppliers and customers continuously.
Reduce manufacturing costs in anticipation of material cost increases in the medium to longterm, and reduce costs through redesigned products in a planned manner.

2

Changing customers’
behavior

CPlace the environmental strategy as one of the focused item in the medium to long-term plan,and check progress as a sustainability KPI.
Increase the cumulative ratio of enhanced eco-friendly products for new products in themedium to long-term plans (sustainability KPI).
Promote to develop technology on a continuing basis relating to consideration andintroduction of eco-friendly packing materials and components.

C onsider and adopt eco-friendly components, and promote to raise awareness of theCimportance of consideration for the environment in the whole processes of developing
new products.
Consider to develop technology with the awareness of reducing CO2 emissions in the overall
recycling and life cycle.
By collaborating with other companies in the long term, incorporate technologies that we do
not possess in a planned manner and integrate them with our core technologies.

B educe the impact of increased energy purchase price by introducing the self-consumptionRsolar power energy in a planner manner.
Reduce indirect costs by making efforts of saving energies and improving operation ratios atfactories.

MarketTransition risk

Technology 3Long-term

D

A: Increased direct costs B: Increased direct and indirect costs C: Reduced sales due to decreased demand for products and services
D: Reduced sales due to decreased production capacity

Likely nhance BCP measures to increase our company’s resilience.
EPrepare hazard maps of manufacturing sites and find potential risks.
Prepare a recovery plan for each site and procedure manuals for employees to ensurebusiness continuity in the event of a disaster.
Change manufacturing sites to be multi-skilled for flagship products.

High

Opportunities List
Item

Long-term

Responses by the IDEC GroupA

 xpand proposals relating to solar power generation business and fine bubble solutions forE
new markets.
Innovate our environmental business, using the response as an opportunity.
Develop products that use HMI and sensing technologies based on new needs, andpropose solutions to resolve issues.

Develop new products andservices through R&D andtechnology innovations

Long-term

B

3

Develop and/or enhance of
low-emission products andservices

Long-termB rovide low-emission products and services throughout the life cycle, based on the concept
Pof developing eco-friendly product we have currently addressed.

B reakaway from prolongation of our conventional technologies.
BEnhance software and systems-related technologies by promoting M&A and businesscollaborations, etc. as well as adoption and development of human resources.
Promote to incorporate new technologies to meet diverse needs through cooperation andcollaboration with other companies.
Foster a corporate culture of well-being.

4

5

Use new technologies

Participate in the renewableenergy program and adapt toenergy-saving measures

Long-termLong-termA eploy environment-related business such as solar power generation and fine bubble solutions.
DEnter into new markets using our new business as a door opener.
Provide products and services that meet new market needs.

3

2

1

5

5
3

Medium-high4MediumMedium-low
Likelihood

Between 1 billion yen and 10 billion yen

Potential financial
impact figure

Data

2

 ccelerate technology innovation of flagship products based on environmental aspects as well.
ADevelop new products to meet the demands for market well-being and promote proposals
for solutions.
A pplied research of easy recyclable materials to products.

4

Governance

Resource
efficiency

Diverse business activities

1

Potential
financial impact

Magnitude of impact

1

Timeframe

Foundation For Value
Creation

Climate change

Risks
Opportunities

Virtually certain

5

Mediumterm

Very likely

Chronic
risks

Tendency of carbon
pricing

Mapping of major climate-related risks and opportunities

Unlikely

4

Mediumterm

Very unlikely

Physical risk

Current
regulations

Technology delays tocompetitors(uncertain market signals)

The identified results of risks and opportunities related to climatechange, and risk items that have been assessed as important in
our mapping and were considered at the Environmental Strategy
Committee, are managed by referring to an integrated risk mapof the IDEC Group. They are also reflected in the environmentrelated risks and opportunities associated with the materiality.
The Environment Promotion Department describes
environmental risk management items on a risk management
table annually, specifies performance indicators, and reports
the progress of the achievement to the Risk Monitoring
Subcommittee.

Business Strategy

Responses by the IDEC Group

Value Creation Story

Potential
financial impact

More likely than not

Timeframe

About as likely as not

ItemLong-term

Introduction

Risks and opportunities

Strategy

Between 100 million yen and 1 billion yen

Less than 100 million yen

A: Increased sales through entry into new and developing markets B: Increased sales as a result of increased demand for products and services

IDEC Report 2023

Natural Capital48

Natural Capital
Metrics and targets

CO 2 emissions

Return On Carbon (ROC)IDEC (consolidated)(million yen/1,000 t-CO 2)(Emission unit: t-CO2)
Scope 2

Scope 3
upstream

Scope 3downstream

FY20201,152

10,791--

FY2021

948

11,390--

FY2022897

12,146--FY2023781

10,371

213,925

870,694

1,261

742
394

Governance

Scope 1

328
2020

2021

2022

2023

(FY)

CO 2 emissions (Scope 1 & 2)
IDEC (consolidated)
11,943

12,338229

2021

13,043Emission intensity(kg-CO 2 /million yen)

11,152

Scope 1: Emission unit (t-CO 2)
Scope 2 Emission unit(t-CO 2)

184

133

2022

2023 (FY)

Data

205

2020

IDEC Report 2023

Foundation For Value
Creation

consumption solar power generation equipment and switch tocontracts for power with a lower emissions factor, the effect ofstarting introduction of CO2-free power to major domestic factories
including head office is expected, and we are working to achieve
the medium-term reduction target.
As for Scope 3, we began calculating both upstream(Categories 1-8) and downstream (Categories 9-15) emissions for
the IDEC Group (consolidated) in FY2023. Generally, Category 11,
use of sold products accounts for most of the Scope 3 emissions
amount. Therefore, we seek to reduce the in-use CO2 emissions
amount of products we offer to customers by the further promotionof developing eco-friendly products as a manufacturer.
As for upstream, category 1, purchased goods and services
accounts for the majority. Based on the CSR procurement
guidelines and the green procurement guidelines we provide to
our suppliers, we continue to request suppliers to improve their
responses to environment and reduce the CO2 emissions amount.
In the future, we plan to improve our supplier engagement with our
major customers by establishing more specific metrics.

Business Strategy

Our medium-term management plan sets the targets to reduce
Scope 1 and Scope 2 CO2 emissions by 24% by FY2025, and by
50% by 2031 (compared to the levels in FY2020). From FY2024,
we introduce the system that the progress level of achievement isreflected to executive compensation.
As for the CO2 emissions amount of FY2023, we have switched
to a power company with a lower emissions factor, and additional
self-consumption solar power generation equipment has started
operation, which resulted in the decrease of Scope 2 CO2 emissions
amount compared to that of FY2022. A factory operation increased
due to a strong increase in sales, which resulted in the increased
tendency of in-house CO2 emissions amount compared to that of
FY2020, but we could finally achieve the result of decreasing it slightly
compared to that of FY2021. Each factory is working to increase
the operation ratio, which resulted in the decreased intensity ofcarbon emissions steadily. Also, they have significantly increased
our Return On Carbon (ROC), an indicator of the extent to which
earnings have been efficiently achieved versus the amount of CO2
emissions reductions implemented.
In FY2024, in addition to the introduction of additional self-

Value Creation Story

The IDEC has considers environmental strategy to be an
important part of its business strategy and a transfer planreflects in the medium-term management plan. Specifically, we
have set metrics and targets for reducing the CO 2 emissions
amount to achieve a carbon neutrality, and we have establishedsustainability KPIs of the medium-term management plan
together with other environmental targets.
As measures for reducing in-house CO2 emissions amount,
we have introduced self-consumption solar power generations
in a planned manner, and we start to introduce CO2 -free power
partially in Japan since FY2024. We have also established the
CSR procurement guidelines and green procurement guidelines
to request our suppliers to reduce the environmental impact
every year.
As for businesses, we are working to develop ecofriendly products and to increase the degree of contributionof our business, such as the environmental energy business.
Therefore, we consider analysis of risks and opportunities
to be an important process for incorporating environmental
strategy into our business strategy. As shown in the list of major
opportunities, we study the future responses of our Group basedon elements that can serve as opportunities for our transition.
What we have considered are reflected in stages in medium tolong-term management plans and are incorporated into more
specific action plans. In addition, as those metrics, we start toconsider quantifying the degree of contribution of our businessfor environment-related business activities.
As for the development of eco-friendly products, one of thecore environment-related business activities, we are penetrating
the need for eco-friendly products and its importance to thebusiness contribution, as well as using transition opportunities
to create business opportunities to each department morethan ever.
Naturally, such activities relating to the transition plan will
be promoted as efforts whose environmental aspects are inharmony with realizing the main purpose of the IDEC Group,
to “achieve safety, ANSHIN, and well-being for people aroundthe world”.

Introduction

Transition plan

Natural Capital

49

Introduction

Social Relationship Capital
Growing together through dialogue with diverse stakeholders
Building good relationships with diverse stakeholders—employees, customers, shareholders/investors, business partners, global andlocal communities, government agencies/industry groups, and others—is crucial for increasing our corporate value.
IDEC employs various means of communication to respond to stakeholder‘s views, expectations, and needs in order to fulfill its
corporate social responsibilities.

Safety, ANSHIN, and well-being

Climate change

Value Creation Story

Related materialities

Business foundation

Improve safety, productivity, and well-being through technology development, human resource development, management, and rulemaking.
 ontribute to the reduction of the environmental impact of customers and society through the use of the IDEC Group’s technologies
Cand products.

Educational activities designed toachieve safety, ANSHIN, and well-being

In order to promote business activities that consider human rights,
labor, health and safety, the environment, and other areas throughout
the supply chain, we have established the “IDEC Group CSR
Procurement Guidelines” and “IDEC Group Green Procurement
Guidelines,” and published them in Japanese, English, Chinese,and Thai. In cooperation with our suppliers, we are promoting
CSR procurement that address societal challenges (responsible
procurement activities with consideration given to sustainability).
As part of our supply chain management, we conduct site
visits and self-assessments of suppliers through the use ofquestionnaires.
We will continue to request suppliers for their cooperation in
CSR procurement, understanding the suppliers’ current situationand making proposals in accordance with the CSR Procurement
Guidelines.

Since its founding, IDEC has ranked contributing to society
through corporate development among its basic management
policies. We support and promote activities by each and every
employee to contribute not only through his or her businessactivities but also through social contributions and volunteer
activities, as corporate citizens rooted in their local communities.
At our head office cafeteria, we introduced a Table For
Two (TFT) donation program to provide assistance for funding
school lunches for children in developing countries. We also
conduct food drives for people needing assistance. In addition,
we introduced a teaching curriculum for regional revitalization inwhich employees periodically visit schools to provide lectures.
We also conduct regular clean-up activities in communities.
Overseas, a volunteer team made up of employees of the Suzhou
factory regularly visits welfare facilities for the disabled and childwelfare institutions. In this way, the entire IDEC Group conducts
activities to contribute to society.

Procurement activities with suppliers
Establishment of CSR
Procurement Guidelines

1

Step

2 CSR Procurement Briefing

Step

3

Step

4 Site visits

Step

5 Problem solution proposals

https://us.idec.com/
idec-us/en/USD/
sustainability/partner
Data

Step

Learn more

Self-assessments throughthe use of questionnaires

Food drive support

IDEC Report 2023

GovernanceSocial contribution activities

Foundation For Value
Creation

In 2018, IDEC became the first company in Japan to registerwith and support the Vision Zero campaign for occupationalsafety and health. This campaign, led by top management andaimed at achieving safety, health and well-being at companies, isbeing promoted by the International Social Security Association(ISSA) under the International Labour Organization (ILO), a United
Nations specialized agency.
Subsequently, IDEC became involved with the activitiesof the corporate promotion task group of The Global Coalition
for Safety and Health at Work, which was set up through theleadership of the ILO, and the company played a leading role in
the Second Vision Zero Summit held online in Japan in May 2022.
At the summit, IDEC spoke to the attendees located inplaces around the world about its commitment to pursuingand achieving the world’s highest level of safety, ANSHIN andwell-being through its business activities. Let’s take for example
its world-leading collaborative safety technology. IDEC also
described its culture of prevention activities on a global scale
aimed at protecting people from serious industrial accidents
in order to achieve a world in which people can work in safety
and health. We will continue
to promote these activities in
the future as well.

Supply chain management

Business Strategy

Further strengthen governance and compliance to ensure that the company is trusted by society.

Suzhou factory volunteer teamSocial Relationship Capital

50

Introduction

Value Provided to Stakeholders
Stakeholder engagement

Employees

Customers

Engagement survey

Human resource development programs
Internal reporting system,
in-house consultation liaison

Customer support center ales activities andS
webinarsIssue of supplier communications

Involvement in the local
community

Exhibitions

IDEC Report, Shareholder
Newsletter, Notice of Annual General
Meeting of Shareholders, etc.

Distributor briefings and visits

CSR activities in each region

 haring of IDEC Group CSR
SProcurement Guidelines articipation in the Global
P
Coalition for Safety and Healthat Work (NPO) and planning andholding of Vision Zero Summit
Japan 2022

 esponse to customerRinquiries

Implementation of position-based training,
LGBTQ+ training, compliance training, etc.
Implementation of senior staff training topromote empowerment of women, career
seminars for female employees issemination ofD
information through thewebsite and social media

 rovision of opportunities to developP
capabilities through training and seminars

 xhibiting at bothE
real-world and online
exhibitions, etc.

 pgrading of information throughU
revision of financial results briefing
materials distribution
 olding of financial results briefingsHand video distributionIndividual interviews and small
meetings with investors

 SR visits and surveys forC
suppliers and improvement
guidance

Briefings for private investors

 haring of information withS
suppliersIssue of IDEC Report, Shareholder
Newsletter, and various other media

Online briefings for distributors

 isclosures in accordance withD
the Task Force on Climate-related
Financial Disclosures (TCFD)

Visits to distributors

 upport for Table for Two (NPO)S
and the council of social welfareJ oint research witheducational and research
institutions

 ispatching of instructors toDlocal schools to conduct visiting
lectures resentations at internationalP
forums, international
academic conferences,
technical committee
meetings, etc.

 ctivities to support children
Afrom needy families

 romotion of activities atPvarious industry groups

Governance

Local cleanup activities nhanced disclosure of sustainabilityE
information

 eduction ofR
environmental impact andprovision of products andsolutions that are easy foreveryone to use and that
achieve safety, ANSHIN,
and well-being

 ustainable growth to increase ourS
corporate value and ensure stable
returns imely disclosure andTcommunication of appropriate
information

 ulfilling our social responsibilityFthroughout the value chain
 artnership based on fair tradeP
and trust ontribution to resolution ofC
societal challenges throughbusiness activities and CSR
activities

Data

IDEC Report 2023

 articipation in industry
Pgroups and initiatives

Foundation For Value
Creation rompt disclosure and enhancedP
content of Annual General Meeting of
Shareholders reference materials

 pgraded dissemination of informationUthrough company newsletter and intranet

Outcomes

 ollaboration withC
international organizations,
government agencies, andeducational institutions

Website eedback within theFcompany regarding
opinions and requests
relating to products andservices stablishment of a pleasant workplaceEenvironment and educational programs thatenable diverse personnel to demonstrate andimprove their capabilities

Government agencies /industry groups

Dialogue with local governments

Supplier visits ealth checkups and mental healthcareH
survey, establishment of in-house corporate
clinic in HQ raining program for next-generationT
executive candidates

Dialogue with NGOs and NPOs

Briefings for private investors

Employee awards program

Major
activities SR assessment survey
Cfor suppliers

Financial results briefings
Small meetings

Company newsletter and intranet

 iscussion forums and briefings on the newDpersonnel system

Individual interviews with investors

Website and social media

Labor-management council

 urveys of career aspirations andS
understanding of duties throughself-reporting

Global and local communities

Business Strategy

Means ofengagement

Various types of training

Business partners

 nnual General Meeting ofA
Shareholders

Mental healthcare survey
 ommunication of information fromCmanagement

Shareholders / investors

Value Creation Story

Basic approach
The IDEC Group places great value on dialogue with a wide range of stakeholders in order to conduct business in accordance with the changing needs of society.
Through communication activities such as dissemination of information and direct dialogue, we aim to deepen understanding of the IDEC Group among our stakeholders and improve corporate value
by promoting sustainability while reflecting various opinions and issues in management.

Improvement of ourcorporate value throughconstructive dialogue

Value Provided to Stakeholders

51

Introduction
Value Creation Story
Business Strategy
Foundation For Value
Creation

Governance
53 Features of IDEC’s Governance

Governance

55 Efforts to Evaluate EffectivenessNominating Committee and

56 Remuneration Committee
59 Director Profiles
60 Executive Officers

61 Interview with Outside Directors
Data

63 Outside Director Activities
64 Risk Management

IDEC Report 2023

52

Introduction

Governance
A commitment to effective governanceFor further information, pleaserefer to the “Governance” of the
IDEC sustainability website.

The IDEC Group is further enhancing its governance system toensure management transparency and effectiveness on behalfof its shareholders and other stakeholders.

Value Creation Story

Business foundation

Related materialities

https://us.idec.com/idec-us/en/
USD/sustainability/governance

Major sustainability KPIs (FY2025)

 urther strengthen governance and complianceF
to ensure that the company is trusted by society.

 umber of items with below average scores in the Board of Directors’Neffectiveness assessment 20% or less
Number of serious legal violations 0

Outside directors represent more than half of all directors,
and all of them are independent officers

Insidedirectors

4

The effectiveness of the Board of Directors has been

3 continuously evaluated since FY2016(As of June 30, 2023)(As of June 30, 2023)

Outsidedirectors

Male
directors

6

7

Ratio ofoutsidedirectors

60 %Outside directors actively participate in outside directors’

4 exchange sessions and other events

Time as director

Ratio of female directors(As of June 30, 2023)

Femaledirectors

10 yearsor more3

2

Ratio of lessthan 3 years

3-9 years

40 %Ratio offemaledirectors

30 %less than 3
years

4

4

Foundation For Value
Creation

1
2 Females make up 30% of the Board of Directors

Ratio of outside directors

Business Strategy

Features of IDEC’s governance

General Meeting of Shareholders
Appointment / Dismissal

IDEC Report 2023

Reporting(excluding Audit &Supervisory Committee members)

Remuneration Committee(Majority being outside directors)

Audit &
Supervisory
Committee

Accounting
AuditorReportingAppointment of representative directors by the Board of Directors

Executionof BusinessDirectors(Audit & Supervisory
Committee members)

Appointment / Dismissal

Auditing by the Audit & Supervisory Committee

Top Management Meeting

Accounting auditing

Internal
Auditing Dept.

CEO
Executive Officers’ Meeting

CSR Committee
Various committees

Various departments / Group companies

Data

The basis of the IDEC Group’s corporate governance is to ensure
management transparency and effectiveness for the sake ofshareholders and other stakeholders. For this reason, we assign
outside directors and separate the management supervisory
function from the executive function so as to always maintain ahigh priority on transparency and effectiveness.
Guided by these principles, we formulated and issued the
IDEC Corporate Governance Policy to improve our corporate
value in line with “The IDEC Way,” which was established in
2019. We are taking action under this policy to further strengthen
our governance practices so that we can govern our company
more effectively.

(Majority being outside directors)

Appointment / Dismissal

Board of Directors
Directors

Governance

IDEC Corporate Governance Policy

Nominating Committee

Cooperation
Instructions / Reporting
Auditing

Governance53

GovernanceIn the interest of maintaining its financial health, the IDEC Group
does not, in principle, hold shares in other companies except
when there is a rationale for doing so.
A rationale for cross-shareholding exists when the Board of
Directors has decided that a particular case of cross-shareholding
promises to increase the IDEC Group’s corporate value by realizing
synergies and improving both sides’ competitive advantages in
the market. Such decisions must be based on a validation of
the profitability of the cross-shareholding relationship that duly
examines the risks, costs, and returns involved from a medium
to long-term perspective, and must comprehensively consider
the intended aims, such as maintaining and strengthening abusiness relationship or establishing a capital or business alliance.

Timeline

Board of Directors composition

60 %

30 %

67%

33%

67%

11%

70 %

10 %

57%

14%

Augmented areas of expertise

based on skills matrix
Audit & Supervisory
Committee members

Increased number of female

June 2022

directors
Established a voluntary

Remuneration Committee

June 2021

June 2018

June 2016

Audit & Supervisory
Committee members

Established a voluntary

Nominating Committee

Audit & Supervisory
Committee members

Transformed into a Company

with an Audit & Supervisory
Committee

Audit & Supervisory
Committee members

Established IDEC Corporate

Governance Policy

InsideIDEC Report 2023

Male

FemaleOutsideMale

FemaleConstructive dialogue with shareholders,investors, and analysts
We proactively engage with our shareholders and investors togain their confidence in and fair evaluation of our management,with the aim of facilitating the IDEC Group’s sustainable growthand improving its corporate value over the medium to long-term.
This includes diligently responding to requests for interviews fromshareholders and individual and institutional investors. Informationacquired from those interactions, including appraisals and opinions
concerning markets, is regularly reported to the Board of Directors.
In FY2023, we received the opinions of shareholders andinvestors on matters such as the activities of outside directors,
the efforts of the Nominating Committee and Remuneration
Committee, training of next-generation executive candidates,and our environmental initiatives. These opinions were shared
as feedback with the Board of Directors, and we are taking
concrete action to address them, while working to further expand
disclosure. We are also continuing to enhance investor relations
tools such as our Shareholder Newsletter and website to betterhelp shareholders and individual investors make informed
investment decisions. At the same time, we proactively disclose
our financial results, management strategy, and sustainability
actions, and publish news and features on various topics.

Governance

Data

Ratio of female directors

GovernanceRatio of outside directors

To ensure the credibility of our Group’s financial reporting, wehave established the Internal Control Policy on Financial Reportingand clearly defined our Group-wide system for implementingthat policy, in line with standards for assessing internal controls
on financial reporting. We have also created a framework forcontinuous self-auditing by divisions and Group companies andindependent monitoring by the Internal Auditing Department.

Foundation For Value
Creation

June 2023

Features and institutional design

Internal control system

Business Strategy

The IDEC Group has separated the business executive function
and the supervisory function of the management in order torealize efficient corporate management, and has proactively
appointed outside directors since early on. In 2016, the IDEC
Corporate Governance Policy was established to set forth andcommunicate our views on governance and our operating policy.
In June 2018, we transformed into a Company with an Audit &Supervisory Committee. We established a voluntary Nominating
Committee in 2021, and a Remuneration Committee in 2022.
We have ensured that outside directors constitute themajority of all directors since 2016. Today, the Board of Directors
is a diverse body made up of men and women with different
backgrounds and areas of expertise.

Furthermore, the Company regularly validates the significanceof existing cross-shareholdings in light of various criteria, including
the purpose of holding those shares. If a particular case of crossshareholding is determined to be inappropriate, the shares are soldoff after taking into account diverse considerations such as the impact
on the Company and the market, and the issuer’s financial strategy.

Value Creation Story

Policy for cross-shareholding

Introduction

Evolution of governance54

GovernanceFurther enhancement ofBoard of Directors
discussions

Communication withshareholders
and investors

IDEC Report 2023

 olding of individual meetings with outsideH
directors to share initiative updates and exchange
opinions on ESG
 emiannual reports on CSR Committee initiatives
S
at the Board of Directors

Evaluation method

Anonymous questionnaire

Survey period

Response period: February to March 2023

Questionnaire
compilation

Compiled by an external organization

Response status

All targets answered

Challenges identified in FY2023
effectiveness evaluation

Actions to be taken iscussion of business outlook with respect toDcapital efficiency

Haveprogress updates on the medium-term
management plan include analysis of capital efficiency
and discussion of measures iscussion of thinking on how to ensureDdiversity of core talent and policies for humanresource development and internal environment
development

Continue
holding individual meetings that tap into thespecialized expertise of each outside director to share
updates on initiatives, and include opportunities fordiscussion of management strategy

 olding of outside directors’ exchange sessions
Hand other opportunities for opinion exchange
among the directors

 iscussion by the Board of Directors
D
concerning basic policy on sustainability (ESG,
SDGs, etc.), measures for improvement, anddisclosures, and reflection of those discussions
in management strategy

Increase
opportunities for ESG challenges to be reported
to the Board of Directors, and create opportunities forexchange of opinions and information at outside directors’
exchange sessions, etc., so as to increase the entire Boardof Directors’ awareness and invigorate discussion

 roup-wide discussion and reporting on
Gbusiness updates, plans, outlooks, etc

Developmentof internal control systems, andstrengthening of monitoring of their operation

 ctively share information on the situation and challenges
Aof Group companies, and respond through internal audits,
the Audit & Supervisory Committee, and coordination by
the Board of Directors

 imely sharing of questions raised at financial
T
results briefing and investor/shareholder
relations activities nhancement of discussions based on dialogueEwith shareholders and investors

 arry out shareholder relations activities using the Integrated
C
Report, and report to the Board of Directors regarding
investors’ comments on institutional investor briefings andother investor relations activities

 unning of Nominating Committee andR
implementation of next-generation executive
training planEstablishment of Remuneration Committee

 nsuring of effectiveness with respect toEadequate sharing of content of committee
discussions with the Board of Directors

 eport committee activity updates and content ofR
committee discussions to the entire Board of Directors

Data

Formulation of
succession plans andremuneration system xchange of opinions on formulation of theEmedium-term management plan with respect tocapital efficiency

All directors except the CEO

GovernanceImprovethe monitoring function of
the Board of Directors

Actions taken in FY2023

Target members

Foundation For Value
Creation

Improvement ofoutside directors’
performance

The FY2023 evaluation found that the board’s effectivenesshad improved over the previous year with respect to discussionof the business portfolio, director involvement in remuneration
system design and the successor training plan, and dialogue withshareholders, among other areas. On the whole, the board was
judged to function effectively, but several issues were identified.
The following actions are being taken to address the key issues.

Business Strategy

Issues identified in FY2023

Outline of the effectiveness evaluation in FY2023

Value Creation Story

In order to improve the effectiveness of the Board of Directors, anevaluation of all directors except the CEO has been conductedusing a questionnaire method every year since FY2016.
Since FY2022, a third-party organization has conducted thequestionnaire survey and analyzed the responses. The resultsof their evaluation are reported to the Board of Directors, whose
members share the issues identified and continuously strive to
make improvements.

Introduction

Efforts to evaluate effectiveness arry out successor training and firmly implant operation ofC
remuneration systems

Efforts to Evaluate Effectiveness55

Governance
Policy and procedure for director
appointment and dismissal
worldwide. Candidates for representative director and otherexecutive positions are provided with general management
training tailored to their future duties, and with opportunities toparticipate in important meetings, including the Top Management
Meeting and the Executive Officers’ Meeting.
The Nominating Committee receives reports on the progressof development of candidates, and expresses opinions on
succession planning to the Board of Directors.

The process of selecting candidates for directorships is based ona skills matrix outlining the expected skills and other requirements.
The Nominating Committee recommends candidates to theBoard of Directors on the basis of the skills matrix review, andthe nominations are made part of the agenda of the General
Meeting of Shareholders through voting at a Board of Directors
meeting attended by a majority of independent outside directors.
Directors who are deemed to no longer possess the
expected skills and qualities of their position are considered
for dismissal. Also, if a director is found to have violated laws,
regulations, the articles of incorporation, or otherwise be unfit
for the discharge of their duties, the Board of Directors, acting
on a report by the Nominating Committee, votes on whether
to include a proposal for the director’s dismissal in the General
Meeting of Shareholders agenda. This vote must be made at a
meeting attended by a majority of independent outside directors.

Value Creation Story

We established a voluntary Nominating Committee in 2021
as an advisory body to the Board of Directors for objective,
independent decision-making on director nominations andplans for developing next-generation executive candidates.
The committee is made up of a majority of outside directors
and frankly communicates its objective opinions on candidate
selection and training to the management.
Our succession planning program seeks to continuallycultivate talent who can help lead our sustainable growth

Introduction

The voluntary Nominating Committee
and succession planning

Business Strategy

Correspondence between medium-term management plan and director skill areas
Four Basic Strategies

Skills matrix of the Board of Directors

P.19

Action Themes

Required Skill Elements

Strengthen sales based on technical problem-solving

Promotegrowthstrategy ccelerate product development and sales on regional and industryA
needs
Expand business in China, India and other focus markets

International business
Sales and marketing
R&D and manufacturing

Build strategic partnerships through M&A and alliances

Improve
profitability

 educe manufacturing costs through Group-wide jointRprocurement, part standardization, etc.

R&D and manufacturing

Enhancebusinessfoundation

Increase operational efficiency by promoting DX

IT strategy
 ersonnel affairs andPdevelopment

Promote initiatives to reduce environmental impacts

Legal affairs and risk management

4

Personnel affairs and development

7

Financing and accounting

3

R&D and manufacturing

4

Sales and marketing

6

International business8

 trengthen corporate platform by advancing decent work practices,S
promoting diversity, and increasing investment in human capital ersonnel affairs andPdevelopment

Industry knowledge

5

Improve management transparency and effectiveness egal affairs and riskLmanagement

IT strategy

3

Environmental measures

Environmental measures

3

Create well-being through safety and ANSHIN technology
Improve product quality and manufacturing capabilities

IDEC Report 2023

5

Enhancement priority

Nominating Committee and Remuneration Committee

Data

Enhance
ESG
initiatives

No. of relevant directors

Corporate management andmanagement strategy

IT strategy

Review and consolidate low-profit and unprofitable products
 trengthen business structure by promoting PMI and rigorousS
management of key projects

P.59

Governance

Strengthen competitiveness through production reform

Skill area

Foundation For Value
Creation

Four basic strategies of the medium-term management plan56

GovernanceIntroducing a new director and IDEC’s succession plan

Nominating Committee members
ChairmanToshi K. FunakiRepresentative
Director Chairman
Members

Outside Director

Yasuo Himeiwa

Outside Director,
Certified Accountant

Michiko Kanai

Outside Director,
Lawyer

New Director

Remuneration Committee members

Representative
Director Chairman
Members

Hiroshi Kobayashi
Hideyuki Ohkubo
Yasuo Himeiwa

Outside Director
Outside Director
Outside Director,
Certified Accountant

Michiko Kanai

Outside Director,
LawyerFoundation For Value
Creation

Takao Funaki joined IDEC CORPORATION (USA) in 1995, working
in the IT and Marketing departments. Later, he moved to IDECCORPORATION’s Marketing department and was put in chargeof global strategy. Afterwards, he headed IDEC Australia andthen IDEC Germany, where he oversaw the realignment of IDEC’s
European organization. He also launched the digital marketingtransformation project and led the development of global marketing
platform. Starting in FY2023 he concurrently served as Executive
Officer in charge of US Business and President of APEM Inc.,
working to strengthen our business in North America. As a director
newly appointed in FY2024, he is in charge of not only our North
American business, but also manufacturing, procurement & SCM,
and is working hard to reform our production systems worldwide.

ChairmanToshi K. Funaki

Newly appointed Director

Takao Funaki

Business Strategy

Hiroshi Kobayashi

Value Creation Story

We established a voluntary Nominating
Committee in 2021 as an advisory body to theBoard of Directors for objective, independent
decision-making on director nominations andplans for developing next-generation executive
candidates. We also created a voluntary
Remuneration Committee in 2022 to review
and deliberate on remuneration systems.

sessions with outside directors, and lectures on
specialized topics. The candidates were also
given opportunities to attend sessions of the
Top Management Meeting and the Board of
Directors’ Meeting to directly experience actual
management issues and come into close contact
with executive officers and directors. In its third
meeting of FY2023, the committee discussed
and reported the selection of director candidates
for the next fiscal year from among the nextgeneration executive candidates.

Introduction

Activities of the Nominating Committee
and Remuneration Committee (April 1, 2022 – March 31, 2023)

The voluntar y Nominating Commit tee
established in 2021 discussed the selection of
next-generation executive candidates and how
to train them, and then developed and launcheda succession plan for cultivating tomorrow’s
executive leadership.
In its second year, FY2023, the committee
carried out a training program for people
selected as nex t-generation executive
candidates. The training included activities suchas external seminars, one-on-one action learning

A Remuneration Committee meeting

Date

Meeting

Sept. 14, 2022

Training Report Meeting

Remuneration Committee Activities
Main focuses

Participants
3 members

Preliminary Briefing

3 members

Nov. 8, 2022

1st Meeting of theNominating Committee

Skills matrix-based recommendation of candidates for new
director appointments for next fiscal year, and scheduling of
successor training

All members

Dec. 7, 2022

2nd Meeting of theNominating Committee

Confirmation of director candidates for next fiscal year andscheduling of future nominations

All membersMar. 23, 2023

3rd Meeting of theNominating Committee

Decision on content of report to director candidates

All members

Nov. 2, 2022

IDEC Report 2023

Meeting

Main focuses

ParticipantsNov. 2, 2022

Preliminary Briefing

Briefing and preliminary questions on Remuneration
Committee discussions and grand design for remuneration

4 members

Nov. 8, 2022

1st Meeting of theRemuneration Committee

General discussion of grand design for executive
remuneration

All members

Dec. 7, 2022

2nd Meeting of theRemuneration Committee

Discussion of grand design for remuneration systems, andsystem details

All membersMar. 23, 2023

3rd Meeting of theRemuneration Committee

Decision on remuneration systems to be applied in the next
fiscal year

All members

Nominating Committee and Remuneration Committee

Data

Training reports by next-generation executive candidates
Briefing and preliminary questions on Nominating Committee
discussions, training reports by next-generation executive
candidates

Date

GovernanceNominating Committee Activities

57

Governance(Established as secretariat ofRemuneration Committee)

Strategic Planning Division
members

Proposaldrafting

PSU 10%

RS 5%

40%
Non-residents of Japan
Bonus

25%

Phantom shares

Basicremuneration
60%

60%

Non-monetary (share-based) remuneration

Comprises performance share units as a medium-term incentive,
and restricted stocks as a long-term incentive.
Performance share units are provided in the form of theCompany’s common stock, subject to restrictions on transfer. The
amount is based on a finalized number of share units calculated bymultiplying the number of share units provided to each position by apayout coefficient reflecting the degree of achievement of financial
KPIs and nonfinancial KPIs (e.g., CO2 reduction rate) that are focusesof the medium-term management plan.
Restricted stocks are provided in the form of the Company’scommon stock, subject to restrictions on transfer. The amount isequivalent to a standard amount determined by taking into accountthe Company’s performance, the scope of the director’s duties, andvarious circumstances. In cases where the director is not a resident ofJapan as of the provision of share-based remuneration, an equivalentamount of phantom shares is provided in lieu of performance share
units and restricted stocks.
In cases where a director is guilty of serious misconduct,
violations, etc., the Board of Directors will, based on the report madeby the Remuneration Committee, demand forfeiture or repayment of
the director’s bonus and share-based remuneration, partially or in full.

Remuneration at the individual level is discussed by the Remuneration
Committee, which reports the results to the Board of Directors.
Decisions on matters concerning individual remuneration are madesolely by the CEO at Board meetings where independent outside
directors constitute the majority. In making these decisions, the CEO is
expected to respect the Remuneration Committee’s report.

Linkage
Formula

Bonus

Base amount×
Corporate performancecoefficient×
Individual assessment
coefficient
3-year total number ofshare units provided, as
set for the position
×

PSU

Corporate performancecoefficient (including
nonfinancial assessments)
×
Individual assessment
coefficientRS

When rights are
establishedAt payment

Number of restricted
stocks provided, as set
for each position

Corporate performance &individual assessment-* Level of preceding
fiscal year’s operating
income margin

Corporate performance &individual assessment
Share price whenrights established* Achievement rate for final
fiscal year of medium-term
management plan
(Number of shares provided
each year is fixed)* Fluctuation in asset value(Number of shares provided
each year is fixed)

rights established

Share price when
* Fluctuation in asset value

Data

Senior executive officer in chargeof corporate strategy planning

Residents of Japan

GovernanceWorking Group

Approx.
weightFoundation For Value
Creation

Presentation

Performance-based cash remuneration whose amount reflects therelevant KPIs. The amount is paid in 12 equal monthly installments,
together with the monthly basic remuneration. Specifically, theamount is calculated by multiplying the standard bonus set for the
position by a payout coefficient (0–200%) indicative of the director’s
performance for the fiscal year.

Long-term
remuneration
Incentive to improve
corporate value

Business Strategy

Discussion

Performance-based remuneration (bonus)

Medium-term
remuneration
Incentive to achieve
the medium-term
management plan

Value Creation Story

Reporting

Fixed monthly amount determined by comprehensively taking
into account the director’s position/duties and the Company’s
performance.

Cash remuneration

Consultation

Remuneration
Committee

Decisions

Basic remuneration

Short-term
remuneration
Incentive to achieve thefiscal year plan
Share-based
remuneration

Board of Directors

Remuneration for directors other than outside directors and directors
who are Audit & Supervisory Committee members comprises basic
remuneration (a fixed amount based on position), performance-linked
remuneration (bonus), and non-monetary (share-based) remuneration,
calculated in a ratio of 60 : 25 : 15. Remuneration for outside directors
and directors who are Audit & Supervisory Committee members islimited to fixed basic remuneration, in the interest of preserving theindependence of their management oversight role.

Fixed
remuneration

System for reviewing officer
remuneration systems

Overview of new remuneration system

Performance-based
remuneration

As was indicated by the results of the survey
on the effectiveness of the Board of Directors
and by other observations, there were issues
in the design of our system of remuneration
for directors, and a need to establish a
Remuneration Committee. We launched avoluntary Remuneration Committee with amajority of outside directors on October 1, 2022
as a body for reviewing and deliberating on the
director remuneration system. Since then, thecommittee has been examining remuneration
system proposals.
Through this committee, we are working
to increase objectivity and transparency in not
only next-generation executive training andselection, but also the remuneration decisionmaking process.
In FY2023, the committee reviewed anddiscussed our officer remuneration system with
the input of outside experts. Using the insights
gained, the committee developed a new granddesign for remuneration.

Introduction

Establishment of voluntary
Remuneration Committee* PSU: performance share units, RS: restricted stocks

Outside experts

IDEC Report 2023

Nominating Committee and Remuneration Committee

58

Governance
Expected skills matrix of the Board of Directors

indicates contributing areas/roles;

Introduction

Director profiles
indicates contributing areas/roles with particularly high expectations

Directors

Directors (Audit & Supervisory Committee Members)

OutsideOutsideOutsideOutsideDirector

Director

Director

Director

Director

Director

Toshi K. Funaki

Mikio Funaki

Takuji Yamamoto

Takao Funaki

Hiroshi Kobayashi

Hideyuki Ohkubo

Mariko Sugiyama

Yasuo Himeiwa

Michiko Kanai

Eri Nakajima

Mr. Funaki has been the
CEO since 1997. His
extensive experience
as a business leader
has given him deep
insights on international
business, industries,
and more.

Mr. Funaki has served
as Senior Executive
Vice President since2006. He has a wealthof experience gained
mainly from overseas
operations of IDECCORPORATION and
its group companies.

Mr. Yamamoto becamea Director for IDECCORPORATION after
serving as Executive
Of ficer for OMRONCorporation and theCEO of an overseas
OMRON subsidiar y.
He has considerable
experience andachievements in thecontrol device industry.

Mr. Funaki worked at
IDEC CORPORATION(USA) before heading
Australia and Germany.
In his concurrent posts
as an Senior Executive
Of ficer of IDECCORPORATION and
President of APEM Inc. He
is working to strengthen
the Group’s businessin Nor th America,
procurement & SCM,
and manufacturing.

Mr. Kobayashi previously
served as Senior Executive
Officer, Division General
Manager in charge ofRegional Operations(Asia & Oceania) for
Honda Motor C o.,Ltd. He has extensive
experience in Japanand overseas, andinsights from theautomobile industry.

Mr. Ohkubo previously
worked for Mitsubishi
Electric Corporationin posts such as
Representative Executive
Officer, overseeing theirfactor y au to m atio nsystems business,
export management, andproduction systems.
He has in-depth
knowledge and broad
experience in the FA
business.

As an Outside Director for
IDEC CORPORATION,
Ms. Sugiyama provides
oversight and advice on
IT/DX strategy, drawing
upon her experience in
the IT industry, which
includes serving as an
Executive Director for
Salesforce Japan Co.,Ltd.

Mr. Himeiwa is a Certified
Public Accountant. In
2020 he was appointed
by IDEC CORPORATION
as an Outside Director
who is an Audit andSupervisory Committee
Member. He uses his
knowledge of financing
and accounting to
c o n t r i b u te to t h estrengthening of IDEC’s
auditing system.

Ms. Kanai is an attorney.
She became an Outside
D i r e c to r f o r I D E C
CORPORATION in 2016.
She contributes to thestrengthening of legal
aspe cts of IDEC’s
auditing system withher high-level expertiseas a lawyer.

Ms. Nakajima was
appointed by IDECCORPOR ATION as
an Outside Director
in 2022 to draw upon
her past experience
as a Ministry of theEnvironment official
and Deputy Governorof Nagano Prefecture.
She contributes to thestrengthening of IDEC’s
auditing system withregard to environmental
measures.

Foundation For Value
Creation

OutsideDirector,
Senior Executive Officer

Business Strategy

OutsideManaging Director

Value Creation Story

Senior Executive Vice
President, COO

Newly appointed

Chairman and CEO

Corporate management
and management strategy
Legal affairs andrisk management

Governance

Personnel affairs anddevelopment
Financing and accounting
R&D and manufacturing
Sales and marketing
International business

Data

Industry knowledge
IT strategy
Environmental measures

IDEC Report 2023

Director Profiles

59GovernanceIntroduction

Executive Officers
Senior Executive Officers

Value Creation Story

Senior Executive Officer
Marketing and Strategy

Senior Executive Officer
Management of Technology

Senior Executive Officer
Japan Sales & Greater China

Tomonori Nishiki

Shinichi Yoshimi

Arnaud Mondi

Toshihiro Fujita

Yasuharu Kawanaka

Executive Officer
Products Strategy

Executive Officer
New Business Development

Executive Officer
APEM and Manufacturing

Executive Officer
Quality Assurance

Executive Officer
Internal Control

Yasunori Kawanaka

Hirotsugu Harada

Marc Enjalbert

Masaki Tsuri

Yoshihiko Nishiyama

Foundation For Value
Creation

Senior Executive Officer
Strategic Planning

Business Strategy

Senior Executive Officer
R&D & Environment

Executive Officers

Governance

Executive Officers

Data

IDEC Report 2023

60

Introduction

Interview
with Outside Directors

Value Creation Story

Mariko Sugiyama and Eri Nakajima, appointed as outside directors
in June 2022, were interviewed on behalf of IDEC employees by Yuki
Takahashi, General Affairs & Legal Group Manager for the Strategic
Planning Division, and Rieko Motoyama, Manager of the Corporate
Communication Department.
The interview took place in the head office’s courtyard and focused on
the two directors’ impressions of IDEC and their thoughts on some key
challenges going forward—human capital, DX, and environmental action.

Business Strategy

The “Forest of IZUMI” area of the head office’s
courtyard was certified in 2023 as a green
space under the SEGES OMA program of
the Organization for Landscape and Urban
Green Infrastructure.

Outside Director

Mariko Sugiyama

Outside Director(Audit & Supervisory Committee Member)

Eri Nakajima

P.46

and needs. The manufacturing industry’s workplace culture
was built up by men and remains an atmosphere. However, if
manufacturers develop a culture that puts women in managerial
positions and empowers them to exercise leadership in theirown style, I think that the number of women who can play activeroles will grow. Women’s empowerment and diversity should bepositioned as bigger priorities in management strategy.

Sugiyama IDEC’s willingness to embrace new things andto take on challenges without fearing change ran counter tothe image I had of the manufacturing industry. I think that’s
because the management has that sort of vision. The Boardof Directors meetings aren’t rubber-stamp gatherings. Instead,
everyone frankly expresses their thoughts. The management
listens carefully and I really gain new insights with each meeting.
Nakajima I have the same impression. I strongly sensethat everyone—from the CEO to the staffs—is passionate about
taking on new things like DX and environmental and societal
challenges and about staying ahead of the changing needs ofthe times. The Board of Directors has a climate that encourages
everyone to speak freely. I think that it’s wonderful to have such anenvironment where corporate matters can be discussed candidly.

Sugiyama I think that those initiatives will gain momentum as
leaders—not just top management but also worksite managers—
acquire a better understanding of the significance and value thatdiversity has for the company, and as they strive to promote
diversity. I believe that IDEC should powerfully communicate
the message that it can provide customers with better value
by developing the same balance of diversity as found in society
and customers’ organizations. I also feel that it is vital for thoseinitiatives to be more strongly driven by an understanding of thesignificance of diversity, rather than by just the uniform opinionof people above a certain age.
Nakajima I agree. I’d like to see the company cultivate anenvironment where all employees, both women and men, canstay motivated and work in a way attuned to their aspirations

How do you feel about IDEC’s talentdevelopment efforts?
Sugiyama Digital transformation requires creativity, so it’s
important to equip your people with thinking skills like design
thinking and logical thinking. I think that one effective approachto talent development is to map out each person’s skills—for
example, you could plot the common skill set for internalizing
the core values of “The IDEC Way” on the horizontal axis, andthe specific technical skills needed for the job on the verticalaxis—and then provide systematic training that targets the
weaknesses identified.

Interview with Outside Directors

Data

IDEC Report 2023

Governance

As a recent trend, businesses are
expected to take action to empower
women and invest in human capital.
What’s your take on IDEC’s initiatives
in these areas?

Foundation For Value
Creation

Almost one year has passed since you
became outside directors.
What are your impressions of IDEC as
a company and the Board of Directors’
atmosphere?

61

easier to integrate management strategy and environmental
strategy.

Are there any other actions that you
want IDEC to take for the future?
Sugiyama A key step toward increasing your corporate
value is to build up your people’s expertise, so I think that IDEC
should pursue strategic job rotation that provides employeeswith greater opportunity to gain new experiences. This would
also help strengthen cross-functional ties, as employees get tolearn about what other departments do.
Nakajima The head office has a courtyard where
employees can stop by, and I think IDEC should create similar
green spaces at its factories as well, as one way of advancing
environmental action while also improving productivity. This
would also contribute to the local community’s biodiversity. I
would like for IDEC to develop its workplace environments inways that enable employees to take greater pleasure in their jobs.
Sugiyama & Nakajima We both would like to haveopportunities to get together with employees for laid-backchats over coffee, so that we could hear their honest opinions
about various issues and find out what things excite them. IDEC
appointed us as outside directors even though we don’t have abackground in manufacturing. In a sense, we think that decision
reveals an IDEC that is seeking to transition to its next turning
point. That’s why we think that we could be of greater service
to IDEC if we more broadly and openly gain a better picture of
the company and its people.

Governance
Data

Interview with Outside Directors

Foundation For Value
Creation

IDEC Report 2023

Sugiyama One of the really big needs now for strengthening
a business’s foundation is to enhance the accuracy of its
forecasting of things like demand and available-to-promise
inventory. The next important step after that, I think, is todetermine how to link your accumulated data within the value
chain. Another concern for businesses going forward is figuring
out how to successfully exploit AI as Japan’s population shrinks.
I don’t think that we can move to the next level of humanmachine coexistence by going through digital transformation
processes where people end up doing the same things they
were doing before. Instead, we need to ascertain what things
can be accomplished through AI and how value can be added
to them through human activity.
Nakajima In terms of environmental challenges, I thinkthat IDEC should work on moving away from the use of plastic,
which makes up a significant proportion of the material usedin switches. Reducing this type of plastic may not have a big
impact on the oceans compared with the reduction of singleuse plastics, but I believe that finding cost-effective plastic
substitutes is an important challenge, including with regard
to decarbonization. Another challenge that should be tackled
is assessing the impact of climate change on the company’s
financials. This is something that investors look at, and I think that
establishing a clear relationship between environmental initiatives
and improvement of the company’s profitability would make it

Business Strategy

Sugiyama IDEC’s medium-term management strategy
shows a strong commitment to increasing profitability, but
the company cannot make sound decisions without a global
perspective of the whole organization. For example, when dealing
with procurement or inventory challenges through optimization
on a company-wide level rather than a limited basis, you can gainmuch from the insights and precision that digital transformation
provides. Digital technology enables you to rapidly evolve your

What challenges do you think IDEC
should work on harder?

Value Creation Story

IDEC has turned to both of you toshare your experience and insights
regarding the key challenges of digitaltransformation and environmental
strategy. What sort of role do you want
to play in addressing those challenges,
and how do you want to leverage yourprofessional expertise?

work processes in a short time. In fact, in many cases you’ll
gain access to a wider set of options after just a year. I see thisas an area where I can input my expertise.
Nakajima I think that IDEC as a whole, including the functions
in charge of environmental measures, is taking a forward-thinking
approach to environmental challenges. The Board of Directors’
recent discussion of TCFD gave me the sense that IDEC’s own
people are carefully analyzing the related issues instead of relying
on outside consultants, and that the company’s environmental
initiatives are being advanced not just by the environmental teams
but also with the involvement of other functions. I would like for
IDEC’s messaging to spotlight the fact that its efforts addressing
environmental challenges and other SDGs aren’t just one elementof its contributions to society, but represent an integral part of thestrategic development of its business.

Introduction

Nakajima One impression that I’ve gotten from the reports
I read as a member of the Audit & Supervisory Committee isthat IDEC’s administrative functions should be beefed up alittle more. I think that as a group with many companies under
its wing, IDEC needs to strengthen its pool of talent who can
support the administrative processes of subsidiaries. It would
be a good idea for the company to strategically develop people
who have a cross-functional perspective that enables them totake a bird’s-eye view of many different departments.

62

Outside Director

Outside Director

Michiko
Kanai

Hideyuki
OhkuboValue Creation Story

Hiroshi
Kobayashi

Mr. Ohkubo held three meetings in
2022 on how to address challenges
faced by our manufacturing division.
He provides advice that taps into
the in-depth knowledge and broad
experience in factory automationthat he cultivated over many years.
His par ticipation in the nextgeneration executive candidates
training program includes holding
a leadership workshop.

Introduction

Outside Director

As a member of the Nominating
Committee and the Remuneration
Committee, Mr. Kobayashi actively
contributes his opinions on nextgeneration executive candidates
training and remuneration systems.
In addition to giving a lecture on
global strategy to next-generation
executive candidates in March 2022,
he regularly provides them with action
learning opportunities through oneon-one meetings.

As part of our next-generation executive candidates training program, Ms. Kanai led aseminar in August 2022 in which she used her expertise as a lawyer to instruct candidates
on compliance challenges that managers need to address, including how to discourage andrespond to misconduct, and anti-harassment measures.
Also, she actively contributes to oversight by providing her legal insights as a member of
the Nominating Committee and Remuneration Committee.

Business Strategy

Outside Director Activities

Outside Director

Eri
Nakajima

Drawing upon her past experience,
Ms. Nakajima provides IDEC withadvice on its women’s empowerment
initiatives. In November 2022, sheheld an online meeting with project
members in which she shared herexperiences, approaches for changing
mindsets, and other insights, making
for a productive exchange.
She also uses her knowledge ofenvironmental policy to inspect the
progress of our environmental actions.

Governance

Yasuo
Himeiwa

Foundation For Value
Creation

Outside Director

As a full-time Audit and Supervisory
Committee member, Mr. Himeiwa
vigorously suppor ts auditing andoversight through close coordination
with the executive officer in charge ofinternal control and the committee’s
secretariat.
In October 2022, he used his
insights as a certified accountant tolead a seminar for next-generation
executive candidates that covered
topics such as “Corporate Governanceand Corporate Reporting.”

Outside directors are independent professionals
who are actively involved in IDEC’s commitment to achieving further business growth.
They attend Board of Directors meetings and candidly express independent observations
grounded in their sophisticated expertise and management experience.
In addition, they hold separate meetings on specific business challenges
and topics with the relevant functions, and support our next-generation executive
candidates training curriculum through lectures and one-on-one meetings with candidates.

Outside Director

MarikoSugiyama

IDEC Report 2023

Data

Ms. Sugiyama holds meetings with members of our ongoing ERP system project, andprovides briefings and advice on the project’s progress.
In December 2022, she held a roundtable with members of our project for promoting
women’s empowerment, sharing her own experiences and effective approaches.

Outside Director Activities

63GovernanceIntroduction

Business continuity planning

We have adopted risk management rules aimed at preventing
risks from occurring and at minimizing damage when they dooccur. We have also established under the CSR Committee a
Risk Management Committee chaired by the CEO to continuously
oversee the Group’s risk management and to respond to risks
that occur.
The Risk Management Committee has a Risk Monitoring
Subcommittee and a BCP Preparatory Subcommittee to selectand evaluate risks and to monitor risk reduction efforts, as well as
to advance Group-wide business continuity planning. A Hotline
Contact has also been established within the Committee todevelop whistleblowing channels and respond to whistleblower
reports.
The Risk Management Committee reports these initiatives
at the CSR Committee’s semiannual meetings, and the CSR
Committee reports them to the Board of Directors. The Risk
Management Committee can directly report important events
such as whistleblower reports to the Board of Directors asnecessary, assuring that risk information is properly conveyed
to the management.

The Risk Management Committee’s BCP Preparatory Subcommittee
was established to advance business continuity planning to prepare
for earthquakes and other natural disasters, which represent highrisk events for our Group. This team develops our BCP and the basic
policies and initial action flows for disaster response, in coordination
with manufacturing department and factories.

Our BCP approach

Basic BCP policy

Risk Monitoring
Subcommittee

BCP Preparatory
Subcommittee

Hotline Contact

Evacuation procedures

Disaster prevention/
mitigation measures

ETF organization
Initial action flow

Recovery/continuation ofbusiness operations
Created for each worksite
and major operation
BCP
Local ETF organization
Recovery action flow

Our basic policy on crisis response

DataIn line with the basic human resource policy of respecting people,
we will place top priority on the safety of our employees andtheir families.
As part of our commitment to realizing a safe and sustainable
society, we will establish measures and systems for continuing
to meet customer needs during crises by maintaining our
supply of safe, reliable products and services, at the expectedlevel of quality.
We recognize the importance of carrying out crisis preparation/
training on a regular basis, and will develop strategies andorganizations for this and crisis countermeasures.

IDEC Report 2023

ETF actions

Governance

BCP action
coordinators

BCP

Initial action plan

All employees

Foundation For Value
Creation

Emergency actions
Immediate post-disasteractions

CSR Committee

Emergency task
force (ETF) members

priority after safety is to ensure that our products can continued to bedelivered to customers following a disaster. These plans are designed
to limit shipment stoppages to no more than one week.
Other ongoing actions include creating manuals outlining step-bystep procedures for the entire flow of emergency response actions, andmaintaining disaster-resilient communications infrastructure, systems
for checking the welfare of our employees and supplier staff, and stocksof emergency supplies.

Business Strategy

Business continuity planning involves maintaining a BCP to ensure thatbusiness operations can continue to function in the event of a disaster orother emergency. The IDEC Group goes a step further by also defining theinitial actions to be taken in a disaster prior to the BCP implementation
phase, and by routinely developing disaster countermeasures. In linewith our basic human resource policy of cherishing our people, we haveestablished a basic policy for crisis response that places top priority on
the safety of our employees and their families at all times.
In the BCPs formulated for each manufacturing site, the second

Normal times

Risk Management Committee

In addition, we map out the initial actions to be taken by each
emergency task force member in a disaster, and create manuals
and checklists for guiding those actions. We also routinely review
our disaster countermeasures, and use the corporate intranet
to communicate information for raising the disaster prevention
awareness of all employees.

Value Creation Story

Risk management system and operation

In order to limit damage in the event of a disaster, we will routinely implement
measures for preventing furnishings from overturning and parts/products
from falling, such as joining cabinets together and installing retainer bars.

Risk Management64

GovernanceWe carry out the following actions to prevent bribery and otherforms of corruption, and to ensure compliance.
 e have established and disseminated the IDEC Group CodeW
of Conduct to clarify basic guidelines for the conduct ofbusiness activities.
 e have signed the UN Global Compact, which calls for corruptionW
prevention. We have made it our policy to prevent corruption
by prohibiting all forms of bribery, corruption, robbery, andembezzlement, and we clearly declare and make known our
prohibition of such acts.
 e have conducted compliance training to deepen employees’W
understanding of the IDEC Group Code of Conduct and policies.
 ur internal audits examine whether Group companies complyOwith laws, regulations, and rules.

Major responses tohigh-risk events in FY2023
No

Number of internal reports
FY2021

FY2022

FY202358

6Consultation andreporting

IDEC Report 2023

1

Damage to IDEC’s
sites in Kansai
region sites by anearthquake with aseismic intensity oflower 6 or higher

Response
notification

IDEC Hotline

6

Occurrence of aserious productaccident that could
affect the humanbodyInstituted system for monitoring
complaints/failure reports from themarket to enable early detection of andresponse to major complaint-generating
issuesEvaluated risks in new productdevelopment and implemented
measures to prevent issues during
production

19

Leakage ofcritical corporate
information, thirdparty confidential
information, andpersonal informationIdentified types of critical internal
information and formulated rules for
managing each type
Increased our knowledge of how toprevent information leaks

Lawyer firm
Collaboration

Internal contact venue(e-mail/mail)Risk Management Committee
Hotline Contact

Receipt notification
External contact venue(Web/phone)
External contractors

Global Hotline(Web)

Investigation, response,and corrective action

Response notification

togti n c eor of fip
R ee a dhthReporting to the groupcompany

ReportingeDirection, reporting, andcollaboration
Overseas group companies
Hotline Contact
Investigation, response,and corrective action

Data

Consultation andreportingInstruction andreportingBoard of Directors

Response
reportingResponse
notification

Consulters and informants(overseas group companies)

Actions ormulated business continuity planF
and improved manufacturing site’s
emergency response capabilities
Reduced risk by taking out anappropriate insurance policy
Developed an emergency contact
network and a means of checking
employee safety

GovernanceConsultation andreportinghttps://us.idec.com/governance/complianceInternal Directors

Internal reporting system diagram

Consulters and informants(head office and group companies
in Japan)

Risk event

Follow this link for more informationon our anti-corruption commitments.

Foundation For Value
Creation

 hen a report has been received through our hotline, the Risk
W
Management Committee sends the report to the Board of
Directors, which reports on risk monitoring activities twice a year
through the CSR Committee and is supervised by the Board of
Directors.

The Risk Monitoring Committee regularly identifies and evaluatesrisks based on the assumed risk events that may negatively impact
the IDEC Group’s continued business expansion and corporate
value enhancement. Concerning each risk event, an evaluationquestionnaire is conducted using the “probability of occurrence,”“magnitude of damage” and “impact” as measures, and theresults are plotted on the risk map relative to the assessment.
The risk events evaluated include climate change risks that theEnvironmental Strategy Committee has judged to be significant
issues. Also, risk events that have a high probability of occurrence
are considered high-risk events. Each department responsible fora particular high-risk event is assigned a risk reduction target, andgauges its progress toward the target on a semiannual basis.

Business Strategy

The IDEC Hotline has been established as a contact venue
that allows users to select external and internal contact andanonymously or with real names in accordance with the users’situation. We have established internal reporting and operation
rules to protect the confidentiality of consultation and reporting,and to prohibit unfavorable treatment of users.
When a report is made, the Hotline Contact establishedwithin the Risk Management Committee will promptly respondto the report, and work at resolving the problem and preventing
recurrence. The report is also promptly communicated to the top
management, and regularly reported to the Board of Directors so
as to share risk information. In a case wherein the management
may be involved, a system exists to ensure independence andto liaise with an outside lawyer firm.
In order for the system to function globally, we are preparing
for establishing the “Global Hotline” in sequence, which enables
overseas group company employees to report directly to thehead office contact venue.

Risk map and identification ofhigh-risk events

Value Creation Story

Corruption prevention

Introduction

Internal reporting system* Item numbers correspond to risk event numbers on the following page.
* See the following page for explanations of the risk map and high-risk events.

Risk Management65

GovernanceRisk category

External factor risks

1 2b 614

3

Impact

7

20
2
13

5

8
9

10

3

5
16

15

Damage to our Kansai region sites by an earthquake witha seismic intensity of lower 6 or higher

4
22 14b19
4

Businessstrategy risks

Conflict or terrorist attack in the local area of IDEC sites

Assessed as a high-risk event, as in FY2022—

2b

The business impact of local conflicts, anti-Japanese demonstrations, and otherdisturbances was recognized as a risk event and added as a risk derivative to 2

New

3

Occurrence of cluster infections at our sites

Impact was assessed as lower due to changes such as implementation of infection
prevention measures and change of awareness on viral infection

4

Product specification change caused by external factors(part obsolescence, procurement difficulty)

Assessed as high-risk because its impact and probability of occurrence were deemedhigher based on our having faced a product specification change due to difficulty inprocuring electronic parts

5

Difficulty to procure parts, leading to long delays indelivery times

Assessed as high-risk because its impact and probability of occurrence were deemed higher
based on our having faced a delivery delay due to difficulty in procuring electronic parts

6

Occurrence of a serious product accident that could
affect the human body

Assessed as a high-risk event with considerable impact, as in FY2022

7

Fraudulent representation of quality through falsification of
product performances and data

Assessed as having a slightly lower probability of occurrence due to implementation ofrisk-mitigating measures

8

Distribution of products containing prohibited substances

Assessed as having a higher risk versus FY2022 in light of the potential impact onstandards of the risk that parts procured contain prohibited substances

9

Strategic investment risk (financial impact of M&A,
corporate alliances, and other strategic investments)

Assessed as being at a level similar to FY2022

10

Occurrence of a severe or more industrial accident

Probability of occurrence was lowered slightly by actions taken by the Health & Safety
Committee

Resources andinfrastructure
risks

11

Sabotage, strike-related business outage

Probability of occurrence increased versus FY2022 due to inclusion of Group companies

12

More than half a day of infrastructure outages caused bysystem and network failure, etc.

Probability of occurrence

Cyberattack was redefined as a separate, derivative risk and the impact of outages due toother reasons was deemed to be lower

12b Long-term network outage due to cyberattack
13

Internal factor
risks

14

Assessed as having greater impact due to the likelihood of longer outages

New

Suspension of sales and claims for damages due toinfringement of other companies’ intellectual property rights

Assessed as being at a level similar to FY2022—

Inaction on human rights issues (child/slave labor, etc.)

Assessed as having considerable impact because inaction could lead to boycotts andreputational risks in a global business environment where human rights awareness is growing—

14b Decline in employee morale due to harassment

Compliancerisks

Tax penalty due to improper handling of accounting andtax affairs

Assessed as having higher risk due to inclusion of Group companies

16

Large-amount embezzlement, malpractice, and bribery
by employees

Assessed as being at a level similar to FY2022

17

Insider trading by senior executives

Assessed as having slightly higher probability of occurrence due to potential effect ofbusiness performance18

On-site inspection by the Fair Trade Commission due toviolations of the Anti-Monopoly Act and the Subcontract Act

Assessed as being at a level similar to FY2022

19

Leakage of critical corporate information, third-party
confidential information, and personal information

Assessed as having higher risk due to inclusion of Group companies

20

Business suspension due to improper license and approval

Assessed as having greater impact, including with regard to certification, etc.

—

21

Difficulty to collect sales receivables, loan loss

Assessed as being at a level similar to FY2022

22

Asset impairment risk

Assessed as higher versus FY2022 due to factors such as business performance, inventory, etc.

1

Increase in raw material costs

Assessed as high-risk because it could have a direct impact on production/procurement
costs and lead to higher costs due to difficulty in procuring parts

—

~

2

Changes in customer behavior

Assessed as not posing significant risk on a short to medium-term basis—

3

Technology gap with competitors

Lags in eco-friendly technology were assessed as leading to future business risks—

Trends in carbon pricing

Assessed as having a growing impact from regulation driven by rising global movement to
reduce CO2 emissions—

Temperature fluctuations

While temperature fluctuations could lead to various risks such as natural disasters, thiswas assessed as having a lower probability in the short and medium-term—

Transition risks

4
Physical risk

IDEC Report 2023

—

Data

Climate changerisks

Now seen as a risk following our review of risk event definitions

15

GovernanceAccounting
and financial
risks

—

Foundation For Value
Creation* Climate change risks reflect events that the Environmental Strategy
Committee assessed as high-risk.
P.48*Risks are evaluated on a short to medium-term basis. Long-term climate
risks have been re-evaluated on a short to medium-term basis.
* Risks inside the red box are judged to be high-risk events.

—

Business Strategy

21

12

—

Impact on our overseas staff and site operations due tointerstate affairs or public disorder

18
11

Although this risk can be slightly reduced with business continuity planning, it wasassessed as a high-risk event because the probability of occurrence was judged higher
than in FY2022 based on Nankai Trough earthquake forecasting

2

1

12b

17

1

FY2023 risk
asessments

FY2023 risk assessments

Value Creation Story

2

Risk event

5

Introduction

Risk map

No

Risk Management

66

Introduction
Value Creation Story

Data

Business Strategy
Foundation For Value
Creation
Governance

68 Non-Financial Data
69 11-Year Key Financial Data
70 Income Statement
71 Balance Sheet

Data

72 Cash Flow Statement
73 Company Overview

IDEC Report 2023

67

Natural Capital

Human Capital
Scope

FY2023

CO 2 emissions

GovernanceScope

FY2023

Human resource development
781

Average per capita training costs (yen)

Scope2 (t-CO2)

10,371Engagement

Scope3 (Category1)(t-CO2)

167,513

Scope3 (Category2)(t-CO2)

12,710

Scope3 (Category3)(t-CO2)

15,556

Scope3 (Category4)(t-CO2)

15,418

Scope3 (Category5)(t-CO2)

204

Japan

Overall workplace attractiveness

553

Diversity & inclusion

Scope3 (Category7)(t-CO2)

1,971

Number of employees

Scope3 (Category8)(t-CO2)

40,0003.12(+0.11 fromprevious rating)
3.16(+0.04 fromprevious rating)

3,186

0

Male

1,349
401

Consolidated

1,837

725

FemaleScope3 (Category10)(t-CO2)0

Number of managers

Scope3 (Category11)(t-CO2)

846,560

Male

Scope3 (Category12)(t-CO2)

23,409FemaleScope3 (Category13)(t-CO2)0

Ratio female managers

Scope3 (Category14)(t-CO2)0

Ratio of employees with disabilities

Japan

3.0%

Scope3 (Category15)(t-CO2)0

Gender pay gap (full-time employees)

Unconsolidated

79.0%

Scope3 (Category9)(t-CO2)

11,152/133

ROC (million yen/1,000t-CO2)

1,261

Female (years)

Electric power

Male (years)

Consolidated

26,824

Male

Solar power generated in-house: total (1,000 kWh)

25,624

FemaleSolar power generated in-house:portion self-consumed (1,000 kWh)

Consolidated

1,147

Renewable energy purchases (1,000 kWh)

1,143

Renewable energy usage

8.2%

17.1
Unconsolidated

12.3

0.58

Fatalities due to occupational accidents

Consolidated

0

HealthHealth checkup rate

414/
4.94

Compliance

1,057/
12.61

Number of internal reports

17/
0.20

100%
Unconsolidated

Industrial waste generated (t)/Industrial waste intensity (kg/million yen)

Paper consumption (t)/Paper use intensity (kg/million yen)

58.3%

Frequency rate of industrial accidents

290/
3.46

Consolidated

68.8%
Unconsolidated

Occupational health & safety

General waste generated (t)/General waste intensity (kg/million yen)

Material recycled (t)/Recycling intensity (kg/million yen)

18.0

Stress check participation

Unconsolidated

95.9%

6

Ratio of outside directors

67%

Ratio of female directors

33%

Ratio with less than 3 years of service
Number of meetings held

0
Consolidated

6

44%
Unconsolidated

7

Attendance rate

98%

Outside director attendance rate

98%

Number of items with below average scores in
the Board of Directors’ effectivenessassessment

18%

Audit & Supervisory Committee
3

Number of members
Ratio of outside directors
Number of meetings held

Unconsolidated

Attendance rate

100%
9
100%

Nominating Committee
4

Number of members
Ratio of outside directors
Number of meetings held

Unconsolidated

Attendance rate

75%
3
100%

Remuneration Committee
5

Number of members
Ratio of outside directors
Number of meetings held

Unconsolidated

Attendance rate

80%
3
100%

Corruption prevention
Bribery-related fines, penalties,
or settlements (yen)Political contributions (yen)Number of serious legal violations
Violations of human rights policy (incidents)

100%

9

Employees disciplined or terminated forviolations of anti-corruption policy

GovernanceWaste generation & resource recycling

93
23.2%

Utilization of childcare leave (full-time employees)

Power consumption (1,000kWh)

308

Number of directors
Number of outside directors

Foundation For Value
Creation

In-house CO2 emissions (t-CO2)/
intensity per sales (kg-CO2 /million yen)

Average length of service (full-time employees)

FY2023Business Strategy

Consolidated

Unconsolidated

Overall employer attractiveness

Scope3 (Category6)(t-CO2)

Scope
Board of Directors

Value Creation Story

Scope1 (t-CO2)

Introduction

Non-Financial Data0
Consolidated000Water consumption (m3)/
Water use intensity (m3/million yen)
Industrial water consumption (m3)Groundwater consumption (m )3

IDEC Report 2023

Consolidated

Data

Water use
64,534/
0.77
3,413
0

Non-Financial Data

68

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2023(Million yen)(Thousands of
U.S. dollars)
1US$=133.54

83,869628,044

Operating results
Net sales

29,34336,31942,173

43,46843,42659,78362,75758,35553,98370,78913,062

15,406

17,11718,01718,02726,022

26,97325,04022,78330,31037,376

279,886

11,627

13,063

14,207

14,841

14,47919,90921,244

20,336

18,742

20,63823,315

174,592

Operating income

1,434

2,342

2,910

3,176

3,547

6,112

5,728

4,704

4,041

9,672

14,060105,287

Net income attributable to owners of parent company

1,859

1,456

2,096

1,708

2,440

5,296

3,700

3,006

2,803

7,896

10,14475,962

Cash flows from operating activities

2,204

4,633

1,925

5,690

2,644

4,926

6,119

6,928

7,443

9,652

7,009

52,486

Cash flows from investing activities(3,800)(2,493)(1,169)(18)(21,190)(858)(2,665)(2,037)(3,147)(1,386)(3,110)(23,289)

Free cash flows(1,595)

2,139

756

5,671

(18,545)

4,067

3,453

4,890

4,295

8,265

3,899

29,197

Cash flows from financing activities

1,261(1,929)(891)(2,611)

19,929(3,926)(2,878)(3,605)(3,672)(8,578)(4,403)(32,971)

Value Creation Story

Gross income
SG&A expense

Introduction

11-Year Key Financial Data

Cash flows

Business Strategy

Financial position
42,49645,77849,37849,32885,441

91,53089,03287,02588,252

94,960104,235

780,553

26,95828,801

32,121

31,97633,35545,00545,50942,72542,963

48,66058,465437,809(Yen)(U.S. dollars)Information per share
Earnings per share (EPS)

61.03

49.14

69.45

56.50

80.68

170.37112.53

95.19

92.83

264.12348.37

2.61

Book-value per share (BPS)

914.98959.56

1,062.53

1,057.28

1,102.20

1,370.01

1,383.18

1,365.73

1,432.43

1,677.51

1,998.30

14.96

Annual cash dividends (yen)

30.00

30.00

35.00

36.00

40.00

50.00

50.00

50.00

50.00

100.00130.000.97

Foundation For Value
Creation

Total assets
EquityOther financial data
4.9%

6.4%

6.9%

7.3%

8.2%

10.2%

9.1%

8.1%

7.5%

13.7%

16.8%

Return on equity (ROE)

7.0%

5.2%

6.9%

5.3%

7.5%

13.5%

8.2%

6.8%

6.5%

17.2%

18.9%

Return on assets (ROA)

4.6%

3.3%

4.4%

3.5%

3.6%

6.0%

4.1%

3.4%

3.2%

8.6%

14.5%

Equity ratio

63.4%

62.9%

65.1%

64.8%

39.0%

49.2%

51.1%

49.1%

48.7%

51.2%

56.1%

Capital expenditure

5,701

2,277

1,761

1,500

2,103

1,991

4,122

2,673

3,567

2,503

4,088

30,613

-

-

-

-

-

-

-

143

171

497

1,166

8,731

Depreciation and amortization expense

1,335

1,699

1,677

1,519

1,141

2,398

2,701

3,016

2,981

3,264

3,544

26,539R&D expense

2,394

1,857

2,110

2,328

2,242

2,202

2,359

2,325

2,343

2,593

2,958

22,151(portion spent on right-of-use assets etc.)

GovernanceOperating income margin

Data

IDEC Report 2023

11-Year Key Financial Data

69

Consolidated Income Statement and Consolidated Comprehensive Income Statement
FY2023

FY2023

FY2022

FY2023

FY2023Fiscal year ending
March 2023
(Million yen)

Fiscal year ending March 2023
(Thousands of U.S. dollars)
1US$=133.54

Fiscal year ending
March 2022
(Million yen)

Fiscal year ending
March 2023
(Million yen)

Fiscal year ending March 2023
(Thousands of U.S. dollars)
1US$=133.54

Net sales

70,78983,869628,044

Net income

7,835

10,107

Cost of sales

40,47946,492

348,150

Other comprehensive income

75,68530,31037,376

279,886

Valuation difference on other securities

(46)

(17)

(127)

SG&A expense

20,63823,315

174,592

Exchange translation adjustment account

2,200

2,725

20,406

Operating income

9,672

14,060105,287

Remeasurements of defined benefit plans
Other comprehensive income

38

100

749

96

45

337

Foreign exchange gain

722

467

3,497

Other

272

326

2,441

1,129

938

7,024

Total non-operating income
Non-operating expenses
Interest expense

131

107

801

Derivative loss

30

170

1,273

Derivative valuation loss

105

—

—

Other

135

318

2,381

403

596

4,463

10,39814,403

107,855(292)
19,987

9,999

12,776

95,672

10,06012,813

95,949

(60)

(37)

(277)

(Breakdown)Comprehensive income attributableto owners of parent company
Comprehensive income attributable tonon-controlling interests

Foundation For Value
Creation

Total non-operating expenses
Ordinary income

Comprehensive income

(39)
2,669

Business Strategy

Interest and dividends received
Investment gain under the equity method

10
2,164

Value Creation Story

Gross income

Non-operating income

Introduction

FY2022
Fiscal year ending
March 2022
(Million yen)

Extraordinary income
Gain on sale of fixed assets

911

32

240

Gain on sale of investment securities

—

119

891

Gain on reversal of stock acquisition rights

22

31

232

Total extraordinary income

933

183

1,370

Extraordinary losses
5

5

37

56

50

374

Loss on subsidiary restructuring

—

129

966

Total extraordinary losses

61

185

1,385

Net income before income taxes

11,27014,401

107,840

Income taxes - current

3,603

4,480

33,548

Income taxes - deferred

(168)

(186)

(1,393)

Total income taxes

3,435

4,293

32,148Net income

7,835

10,10775,685

(60)

(37)

(277)

Net income attributable to owners of parent company

7,896

10,14475,962IDEC Report 2023

Data

Net loss attributable to non-controlling shareholders

Governance

Loss on sale of fixed assets
Loss on disposal of fixed assets

Income Statement70

FY2022

FY2023

FY2023

FY2022

FY2023

FY2023Fiscal year ending
March 2022
(Million yen)

Fiscal year ending
March 2023
(Million yen)

Fiscal year ending March 2023
(Thousands of U.S. dollars)
1US$=133.54

Fiscal year ending
March 2022
(Million yen)

Fiscal year ending
March 2023
(Million yen)

Fiscal year ending March 2023
(Thousands of U.S. dollars)
1US$=133.54

Liabilities

AssetsCurrent liabilities

Current assets
17,896

18,408137,846

Notes and accounts receivable - trade

11,402

12,987

97,252

Electronically recorded monetary claim

892

1,022

7,653

Merchandise and manufactured goods

7,767

11,777

88,191Work in progress

1,959

2,323

17,396

Raw materials and supplies

5,845

6,555

Other

1,426
(19)
47,171

Total current assets

5,186

4,916

36,813

2,183

1,948

14,587

Short-term borrowing

3,800

5,000

37,442Long-term borrowing to be repaid within one year

2,105

11,93589,374
3,722

Lease obligations

360

497

Accounts payable

809

1,040

7,788

49,086

Accrued expenses

2,803

2,969

22,233

1,466

10,978

Income taxes payable

(23)

(172)

54,518408,252

Tangible fixed assets
9,652

9,843

73,708

2,626

1,911

14,310Contract liabilities

584

686

5,137

Deposit

207

156

1,168

Product warranty reserve

40

37

277

Other

953

959

7,181

21,66032,059240,070

18,2606,525

48,862962

1,530

11,457

2,799

3,007

22,518

Total current liabilities
Fixed liabilities

Machinery, equipment and vehicles (net amount)

2,875

3,513

26,307

Tools, equipment and supplies (net amount)

1,609

1,727

12,932

Lease obligations

Land

5,797

5,848

43,792

Deferred tax liabilities

Long-term borrowing

190

1,423

Reserve for retirement benefits for directors

1,061

1,754

13,135Retirement benefit liabilities

Construction in progress

1,018

887

6,642

Total tangible fixed assets

22,227

23,766

177,969

Intangible fixed assets
Trademark rights

45

50

374

1,577

1,557

11,659Asset retirement obligations

90

120

899

Other

556

571

4,276

Total long-term liabilities
Total liabilities

24,291

13,362100,060

45,95145,422

340,138

2,383

2,411

18,055

Customer-related assets

7,587

7,634

57,166

Shareholders’ equity

Software

1,064

1,138

8,522

Common stock

10,056

10,05675,303

Goodwill

11,593

11,636

87,135

Capital surplus

9,231

9,397

70,368Retained earnings

34,02240,532

303,520

Treasury stock(7,759)(7,299)(54,658)

Total shareholders’ equity

45,551

52,687394,541

Total intangible fixed assets

62

63

472

22,691

22,885

171,372

Investments and other assets
Investment securities

419

601

4,501

Long-term loans

114

49

367

Retirement benefit assets
Deferred tax assets

Net assets

Accumulated other comprehensive income
Unrealized gains on other marketable securities
Foreign currency translation adjustments

326

318

2,381

Remeasurements for retirement benefits

1,343

1,490

11,158

Total accumulated other comprehensive income

42

24

180

3,061

5,787

43,335

6

(33)

(247)

3,109

5,778

43,268
2,598

702

641

4,800

Stock acquisition rights

311

347

(36)

(36)

(270)

Non-controlling interests

37

—

—

49,00858,813

440,415

94,960104,235

780,553

Total investments and other assets
Total assets

IDEC Report 2023

2,870

3,065

22,95247,78949,717372,300

94,960104,235

780,553

Total net assets
Total liabilities and net assets

Balance Sheet

Data

Other
Allowance for doubtful accounts
Total fixed assets

Governance

Other

Foundation For Value
Creation

211

Right-of-use assets (net amount)

Lease assets (net amount)

Business Strategy

Fixed assets
Buildings and structures (net amount)Notes and accounts payable - trade
Electronically recorded monetary debt

Value Creation Story

Cash and deposits

Allowance for doubtful accounts

Introduction

Consolidated Balance Sheet

71

FY2022

FY2023

FY2023

FY2022

FY2023

FY2023Fiscal year ending
March 2022
(Million yen)

Fiscal year ending
March 2023
(Million yen)

Fiscal year ending March 2023
(Thousands of U.S. dollars)
1US$=133.54

Fiscal year ending
March 2022
(Million yen)

Fiscal year ending
March 2023
(Million yen)

Fiscal year ending March 2023
(Thousands of U.S. dollars)
1US$=133.54

Net income before income taxes

11,27014,401

107,840

Payments into time deposits(2,360)(3,523)(26,382)

Depreciation

3,264

3,544

26,539Proceeds from withdrawal of time deposits

1,688

3,116

23,334

—

129

966

Payments for acquisition of tangible fixed assets(1,718)(2,586)(19,365)

Cash flows from operating activities

Loss (gain) on sale of investment securities
Goodwill amortization
Increase (decrease) in allowance for doubtful
accounts
Increase or decrease in retirement benefit assets
and liabilities
Interest and dividends received

Cash flows from investing activities

—

(119)

(891)

Proceeds from sale of tangible fixed assets

1,656

42

315

897

887

6,642

Payments for acquisition of intangible fixed assets

(287)

(338)

(2,531)

(31)

2

15

Payments for acquisition of investment securities

(6)

(144)

(1,078)Proceeds from sale of investment securities

—

182

1,363

(420)

—

—

64

63

472

(77)

(87)

(651)

Payments for business acquisition

(38)

(100)

(749)

Proceeds from collection of long-term loans

131

107

801

(252)

(403)

(3,018)Cash flows from investing activities
Cash flows from financing activities

Other

(2)

76

569

(1,386)(3,110)(23,289)

(96)

(45)

(337)

23

(4)

(30)

Increase in short-term borrowing

20,65026,100195,447

Derivative loss (gain)

105

103

771

Repayment of short-term borrowing(21,700)(24,900)(186,461)

Loss (gain) on sale of fixed assets

(906)

(26)

(195)

Increase in long-term borrowing

—

200

1,498

Loss on disposal of fixed assets

56

50

374

Repayment of long-term borrowing(2,730)(2,105)(15,763)

Decrease (increase) in sales receivable(1,831)(1,477)(11,060)

Payments for acquisition of treasury stock(2,453)(1)(7)

Decrease (increase) in inventories(3,031)(4,471)(33,481)

Cash dividends paid

(1,948)(3,628)(27,168)

Increase (decrease) in advance payment

(157)

—

—

Proceeds from non-controlling shareholders

Increase (decrease) in contract liabilities

584

73

547

Repayment of lease obligations

Decrease (increase) in accounts receivable
Increase (decrease) in trade payable

15

4

30

1,425

(554)

(4,149)

74

22

165

96

77

577

Increase (decrease) in consumption taxes
receivable/payable

(211)

45

337

Increase (decrease) in deposit

(67)

(50)

(374)

Other

(26)

84

629

Subtotal

11,216

12,191

91,291

63

118

884

(132)

(107)

(801)

Income taxes(1,495)(5,193)(38,887)

Cash flows from operating activities

9,652

7,009

52,486

Interest and dividend income received
Interest expense paid

Effect of exchange rate changes on cash andcash equivalents

—

—

(523)

(3,916)

20

454

3,400

(8,578)(4,403)(32,971)

507

369

2,763

194

(133)

(996)

Cash and cash equivalents at beginning of year

15,00915,203

113,846

Cash and cash equivalents at end of year

15,203

15,070112,850

Net increase (decrease) in cash and cash equivalents

Governance

Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses

Other
Cash flows from financing activities

98
(514)

Foundation For Value
Creation

Investment loss (gain) under the equity method
Increase (decrease) in product warranty reserve

Business Strategy

Interest expense
Foreign exchange loss (gain)

Value Creation Story

Loss on subsidiary restructuring

Introduction

Consolidated Cash Flow Statement

Data

IDEC Report 2023

Cash Flow Statement

72

Introduction

Company Overview
Corporate Data
IDEC CORPORATION

EstablishedMarch 26, 1947

Capital Stock¥10,056,605,173

Number of Employees

Stock Listing

Value Creation Story

Corporate Name

3,186 (consolidated; as of March 31, 2023)* Excluding contract and temporary employees
Prime Market, Tokyo Stock Exchange

Business Strategy

2-6-64, Nishi-Miyahara, Yodogawa-ku,
Head OfficeOsaka 532-0004 Japan
Phone: +81-6-6398-2500 (Main number)
1-16-1, Kaigan, Minato-ku,

Tokyo Sales BranchTokyo 105-0022 Japan
Phone: +81-3-6625-5180 (Main number)

Shares of the Company As of March 31, 2023

Sales Branches

Number of shares authorized

150,000,000

Number of shares issued

33,224,485

Number of shareholders

8,114Tokyo, Osaka

Evaluation by Society (Inclusion in Indices)
FTSE Russell (U.K.)

Distribution of Shareholders

FTSE Russell (U.K.)
FTSE Blossom Japan Sector Relative Index

SOMPO Asset Management
SOMPO Sustainability Index

S&P/JPX Carbon Efficient Index

Individuals and others
9,827 thousand
shares (29.6%)

Securities companies
314 thousand shares (1.0%)

Financial
institutions
9,268 thousand
shares (27.9%)

Foreigncorporations
7,721 thousand
shares (23.2%)
Other corporations
2,125 thousand shares (6.4%)

Numberof shares(Thousands ofshares)Holdings(%)

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

4,795

16.39

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

3,379

11.55

JP MORGAN CHASE BANK 385632

1,334

4.56

Funaki Kosan Ltd.

1,041

3.56

THE BANK OF
NE W YORK MELLON 140 044

589

2.02

Shareholders

Kazutaka Fujita

408

1.40

Toshihiro Fujita

348

1.19

STATE STREE T BANK WEST
CLIENT - TRE AT Y 505234

335

1.15

JP MORGAN CHASE BANK 385781

329

1.13

THE CHASE MANHAT TAN BANK, N.A.
LONDON SECS LENDING OMNIBUS
ACCOUNT

325

1.11

Data

JPX Group

Treasury stock
3,966 thousand
shares (11.9%)

As of March 31, 2023

Governance

As of March 31, 2023

FTSE Blossom Japan Index

IDEC Report 2023

Major Shareholders (Top 10)

Amagasaki, Fukusaki, Takino, Kiba, Kyoto

Foundation For Value
Creation

Factories

Note: T he description of major shareholders above conforms to the content disclosed in the
Annual Securities Report.

Company Overview

73