Integrated Report

IDEC Report 2022

Introduction

Editorial Policy
The IDEC Group published its
first integrated report “IDEC
Report 2022”, referring to the“International Integrated Reporting
Framework” proposed by theValue 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,
which is an invisible asset such as ESG, in asystematic manner, so that our stakeholders
can understand our process of improving
corporate value and our efforts to realize asustainable society.

Value Creation Story

Our Business

Value Creation Foundation

Data

Index

Introduction
At a Glance...................... 02
Purpose........................... 03
IDEC Group History......... 04

Our Business

Value Creation Foundation

Our Business ............... 19
Special Feature ............ 21

Commitment to
Sustainability................. 29
Environment.................. 31

Industrial Switches.......... 23

Value Creation Process.... 05

Industrial Relays &Components. . ................ 24
Automation & Sensing..... 25

The Six Types of Capitalthat IDEC Highly Values... 06
Materiality........................ 07

Safety &Explosion Protection...... 26
Systems . . ..................... 27

CEO Message.................. 09

Contributing to Society
through Business. . .......... 28

Value Creation Story

New Medium-Term
Management Plan............ 12

Period covered
Fiscal Year 2022
(April 1 2021-March 31 2022)
Organizations covered
IDEC CORPORATION and IDEC Group companies(35 consolidated subsidiaries)
Publication dateJune 2022
Cautionary statement
regarding forward-looking statements
The information in this report including plans,estimates, and strategies is based on information
available at the time of publication and contains
risks and uncertainties. Actual results may differ
from those stated in this report, due to factors
such as future economic conditions and businessenvironment.

Index

01

IDEC REPORT 2022

Social............................ 37
Governance...................39

Data
Non-Financial Data........53
11-Year
Key Financial Data........... 54
Income Statement ........ 55

Safety............................ 50

Balance Sheet. . .............. 56
Cash Flow Statement...... 57

Quality........................... 52

Company Overview......... 58

Value Creation Story

Introduction

Our Business

Value Creation Foundation

Data

At a Glance
HMI-based product development

Extensive broad global network (March 31, 2022)

As a leading company in the field of Human-MachineInterface (HMI), the IDEC Group provides a wide range of
products and solutions and contributes to safety, ANSHIN*1,
and well-being*2.

The IDEC Group possesses a development / manufacturing /sales network that provides optimal components, solutions andservices to fulfill market needs and industry needs, with anultimate aim of attaining a solid position worldwide.

Globalpresence

15

Ratio ofoverseas
employees

Ratio ofoverseas sales

56%

countries

69%*1 ANSHIN 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 has been realized.

Americas

227 employeesJapan1,019 employees

2%5%

1.4 billion
yen

Sales ratio

Sales ratio

11.5

30.9

16%

yen
3.7 billion

44%billionyenbillion
yen

13%
yen
8.9 billion

FY2022 total sales

14%
10.0

billion
yen

70.8

47%

billionyen

yen
33.2 billion

19%yen
13.6 billion

Industrial Switches
Industrial Relays & Components
Automation & Sensing

Sales ratio

Sales ratio

11.8

16.6

17%

Safety & Explosion Protection
Systems
Other

1,250 employees
At a Glance02

billionyen

EMEA
Europe, Middle East and Africa

IDEC REPORT 202223%

832 employees

billionyen

Asia PacificIntroduction

Value Creation Story

Our Business

Value Creation Foundation

Data

PurposeThe IDEC Group’s Purpose is to create the optimum
environment for humans and machines, and to achievesafety, ANSHIN, and well-being for people around the world.

As a step towards becoming a truly global company, theIDEC Group has adopted a new philosophy. “The IDECWay” encompasses the following:

Pioneer the new norm for a safer and sustainable world.

To create the optimum environment for humans and machines.

In Harmony with our co-workers,
our customers and society.

Joy in fulfilling our mission.

Since its founding in 1945 as Izumi Shokai, theIDEC Group has provided a wide range of
products and services. Leveraging the coretechnologies created and enhanced throughdevelopment of industrial switches and othercontrol devices for machines, we want to makesafer, more pleasant points of contact between
humans and machines in manufacturing sites
and daily life scenes. This is how we desire tocontribute to society.
To thus contribute to the functioning andwell-being of society, based on the premise thatat times humans make mistakes and machines
break down, we are inspired to pursue and realize
consistently high levels of safety, ANSHIN, andwell-being, and protect humans even in unforeseen
circumstances.
We are determined to continue providing
innovation and value as we enter a new era,sustaining our ceaseless commitment statedabove since our foundation, expanding it on a
global scale and staying on course toward
our next milestone, the 100th anniversary.

PurposeTake on new challenges and embrace change.

Exhibit honesty, fairness and respect at all times.

Be the person everyone can count on.

03

IDEC REPORT 2022

Value Creation Story

Introduction

Our Business

Value Creation Foundation

Data

IDEC Group History
Responding to global societal challenges;
thinking of our 100th anniversary and beyond.

Ratio of overseas sales
2000

2010

31%

36%

Japan

Ratio of overseas employees

What we have notchangedWhat we havechangedDevelopment of productsthat bring together humans
and machines to realize
safety, ANSHIN,
and well-being

Product strategy andmulti-regional developmentthat respond to needsof the times

2000

2010

30%

57%

Overseas

Expanding the
global business

2022

56%
Japan

Overseas(billion yen)

2022

69%

60

40

20

Sales history
Overseas net sales

Net sales

Oil crisis

1945

1950

1960

1970

Supporting Japan’s manufacturingin the postwar reconstruction period
When IDEC started to do business, it was initiallyengaged in the sale of electric appliances,including retail sales. Recognizing the shortageof 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.

SB metallic
switch box

Burst of a Japanese bubble economy

1980

1990

Dot-com bubble burst

2000

Global financial crisis

2010

COVID-19
pandemic

2022 (Fiscal year)

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

Creating the “optimum environment
for humans and machines”

Challenging global societal
challenges

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

In manufacturing, environments in which humans
and machines coexist have become common
and increasingly vital for society. Appropriate
to this, we have developed the first interlock
switches and enabling switches in Japan to meetthe needs for safety and productivity-conscious
facilities. In addition, we have introduced a robot
control cell production system that realizes
multi-product and variable-volume production at
our core factory, promoting automation andlabor-saving.

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

IDEC Group History

04

IDEC REPORT 20220

Introduction

Value Creation Process

Societalchallenges

Our Business

Value Creation Story

Input

Value Creation Foundation

In order to realize “The IDEC Way”, the IDEC Group is committed to working through its business activities for the following Materiality: “Improve
productivity using control technology,” “pursuit and realization of safety, ANSHIN, and well-being,” and “response to climate change.” This is
how we contribute to a sustainable society and increase corporate value.

Materiality

Business activities

OutputProducts andbusinesses thatprovide new value in
response todiversifying needs

Improve productivity
using control
technology

Financial capital

Main associated
SDGs

Core
Competencies

Aging society

Human capitalIndustrial
accidents

Development
Capability of
Human-MachineInterface

Automation andLabor-saving
Technologies

Social andrelationshipcapitaling

Diversity

High Qualitym e ntIntellectual
capitalSafety Technology
and Productsv e lppo

Response to
climate change

P.23

De

Technologicalinnovation

Industrial SwitchesrtManufacturing
capitalPl a n n i n g

Pursuit and realizationof safety, ANSHIN,
and well-beingSup

Globalenvironmental
changes

Data

Sa
les

r
tu
c
a
f
nu
Ma

Natural capitalIndustrial Relays &Components
P.24

Automation &Sensing romotion of safety-consciousPautomation

To employees reation of a comfortable workingCenvironment by promoting decent
work, diversity and inclusion
 % in the frequency rate of0
industrial accidents

P.26

D evelopment and provision of
products that reduce environmental
impact and are easy for everyone
to use rovision of products and services
P
that reduce industrial accidents

P.27

P.07-08

To shareholders

Pioneer the new norm for a safer andsustainable world.

P.03

Provision of collaborative safety
robot systems to support a society
with a declining working population

To customers
Safety & Explosion
Protection

Base of business activities
Corporate
governanceTo society

P.25

Systems

P.06

OutcomeS ustained growth and stable returns

To create the optimum environment forhumans and machines.

Value Creation Process

P.29-52

05

IDEC REPORT 2022

Improved managementtransparency and efficiency

Introduction

Our Business

Value Creation Story

The Six Types of Capital thatIDEC Highly Values

Value Creation Foundation

Data

The capital accumulated by the IDEC Group since its founding will be the source of the Group’s future growth and increased corporate value.
While responding flexibly to changes in the environment, we are determined to realize sustainable growth by enhancing and making
effective use of these six types of capital.

Shareholders’equity ratio

Operatingcash flow

Number of employees(consolidated)

Ratio of overseas
employees

51%

9.7 billion yen

3,328

69%

Financial capital Base for sustainable growth

Human capital New ideas created from the diversity in human resources

P.17

The IDEC Group generates approximately 9.7 billion yen of cash through its operating activities. Cashcreated through global business activities is used for capital investment, R&D investment, and returnto shareholders, with the aim of achieving sustainable growth and increasing corporate value.

Capital investment

2.5 billion yen

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

Manufacturing sites

19Japan : 6 sites
Overseas : 13 sites

Distributors

49

589 companies

Japan : 89 companies
Overseas : 500 companies

Social and relationship capital Strong partnership building

We provide high-quality, reliable products globally by using our expertise on HMIs and safety, which
we have cultivated since our foundation. We also plan and develop molds and manufacturing facilities
using our own production technology to promote higher quality, production efficiency, and automation.

2.6 billion yen

Global sites

Japan : 10 sites
Overseas : 39 sites

Manufacturing capital Further increase in added value

R&D expenses

P.37-38

Trusted relationships with a wide range of stakeholders, including customers, trade partners andlocal communities are essential for us to conduct business activities in a highly volatile global market.
We are globally building relationships that will allow us to advance and grow with our stakeholders.

Employees
holding safety
qualifications

know-how, and intellectual property that
Intellectual capital Technology,
serve as sources of competitive strength652*

CO2 emissions*2

4,420 t-co

12Natural capital Aiming for the sustainable global environment

P.50-51

We are engaged in a variety of technology development activities based on the R&D expense ratio of
4-5% to sales and also actively collaborate with joint development partners. In addition to promotinginternational standardization activities, we encourage employees to obtain Safety Assessor
Qualifications as we seek to conduct safe manufacturing and safety consulting based on internationalsafety standards.

56%
P.31-36

We are striving to reduce environmental load through our business activities as the response to
climate change has become the most important issue on a global scale. We are also focusing on
the development of eco-friendly products based on our original standards such as for improved
energy efficiency, resource savings, space savings, and longer product life.

*1 The number of employees who are certified as Safety Assessor, Safety Basic Assessor, Robot Safety Assessor or Safety Officer

The Six Types of Capital that IDEC Highly Values

Ratio of enhanced
eco-friendly products
in new products*2 IDEC unconsolidated

06

IDEC REPORT 2022

(FY2022 result)Introduction

Materiality

Our Business

Value Creation Story

Value Creation Foundation

Data

We have identified the Materiality that corresponds to the content of a new medium-term management plan (P.12-18) which has started in FY2023.
The IDEC Group is committed to creating the optimum environment for humans and machines, and to achieving safety, ANSHIN, and well-being
for people around the world. This is our Purpose.
We are contributing to the resolution of various societal challenges through our business in order to achieve our Purpose and a sustainable society.

Materiality

Vision for 2030

Productivity improvement

Contribute to improving own productivity and efficiency of own customers
and society around the world by providing the IDEC Group’s long-cultivatedcontrol technology, products and system solutions that have been developed
ever since its foundation.

Improve productivity using control
technology

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

Climate change
Response to climate change

Associated SDGs

Create safety in the workplace and health, happy and vigorous life throughthe realization of the optimum environment for humans and machines.
Respect for humanity and promote decent work to achieve 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.
Reduce CO2 emissions through the in-house use of renewable energy.

Materiality Selection Process
Identifying challenges

Analyzing and creating drafts

Evaluating significanceConfirming validity

 ave dialogue with stakeholders.
HAssess societal challenges trends andmanagement challenges.
Understand international framework, guidelines
and evaluation items of ESG evaluation
organizations.

 he Strategic Planning, CSR, and Environment
T
Promotion Department organize the issues.
Ensure consistency with a medium-term
management plan.

 onduct mapping using two axes of significanceCfor both stakeholders and IDEC Group.
Assign priorities by theme.

Confirm the validity of the identified Materiality
by the Top Management Meeting and theBoard of Directors.
Obtain approval from the Board of Directors.
Schedule to discuss the need for a review
every year.

Materiality

07

IDEC REPORT 2022

Introduction

Materiality

Our Business

Value Creation Story

1

11

9

5

4
Significance to stakeholders

Significance to stakeholders

4

2

7
3

8

10

Significance to business
Category

Productivity
improvement

Well-being
Safety and
ANSHIN
Climate change
Cross-sectional
issuesRisk Aspects

High

6

Low

Data

Looking toward 2030 and beyond, we evaluated both the opportunity and risk aspects of various societal challenges and mapped them on both axes of the significanceto stakeholders and the significance to the IDEC Group. Among them, we have selected three themes that are of particular significance to the realization of a sustainable
society: “Productivity improvement,” “Safety, ANSHIN, well-being,” and “Climate change.” Going forward, we plan to promote specific initiatives by sharing each Materiality
items across the IDEC Group and setting KPIs to realize the vision for 2030.

Opportunity Aspects

High

Value Creation Foundation

High

No.

Opportunity Event

1

Improvement in customers’ productivity and efficiency by provision of control technology
and products

2

Improvement in customers’ productivity and efficiency by provision of solutions

3

Knowledge accumulation and service development by promoting adoption of IoT equipment

4

Creation of safe and healthy working environment by provision of control and safety
devices and various systems

5

Reduction in work time by streamlining work processes and labor-saving

6

Reduction in labor accidents by provision of safety devices

7

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

8

Enhancement in competitiveness through eco-friendly manufacturing

9

Business expansion in renewable energy and other environmental fields

2
12

11

1

5
8

10
3

6

9

Significance to business

Low

High

CategoryNo.

Productivity
improvement1

Decline in competitiveness due to lack of response to technological innovation,
environmental changes, and customer needs

2

Decline in customer satisfaction due to quality and delivery time problems

Well-being

3

Deterioration of the workplace environment and well-being of employees due toharassment and long work times

4

Personal and social hazards resulting from accidents related to products and services

5

Fraud and falsification of inspections, standards certification, and permits

6

Social unrest and impact on operations and product shipments caused by substancesthat cause pollution and health damage

7

Cost and supply instability due to soaring energy prices and shortage of raw materials

8

Supply chain disruption and business disruption due to abnormal weather and natural disasters

9

Decline in social credibility due to CSR and compliance violations, and lack of governancein the global supply chain
Loss of social credibility due to information security accidents, non-compliance with laws
and regulations, and lack of risk management

Safety and
ANSHIN
Climate change

Cross-sectional
issues

10 Fostering of a corporate culture that is based on environmental considerations

7

10

Risk Event

11 Decline in diversity and autonomy of employees
12 Decline in social credibility and employee engagement due to violations of human rights

11 Improvement in ESG relations with investorslaws, regulations and norms

Materiality

08

IDEC REPORT 2022

Introduction

Our Business

Value Creation Story

Value Creation Foundation

Data

CEO Message

We are committed to enhancing our solution offerings andhelping our customers achieve success.
Our ultimate aim is to pursue safety and ANSHIN, andimprove the well-being of overall society.
With the prolonged global spread of COVID-19, changes to workstyle and lifestyle is accelerating more rapidly than ever before.
From a sustainability perspective, response to global climate change is also progressing, and solving societal challenges throughbusiness activities is becoming an increasingly important management issue.
The IDEC Group has been committed to creating the optimum environment for humans and machines, and to achieving safety,
ANSHIN, and well-being for people around the world. Our passion has not changed since the time of our foundation. We havebeen making efforts to realize a society in which everyone can live a healthy, happy and vigorous life.

Making innovative changes and addressing thechallenges in a changing business environment

Chairman andChief Executive Officer

Toshi K. Funaki

During the spread of COVID-19, key words such as automation,
labor saving, non-contact, remote monitoring and operation are
attracting attention, and demand for improved safety, ANSHIN,

The IDEC Group is implementing various initiatives to respond to

and well-being for workers is increasing. In April 2022, the Technicalthe ever-accelerating changes in the environment. While promoting

Solution Sales Department was established as an organization todigital transformation (DX) and business reforms, we review systems,

promote the development of new products based on those needs

based on flexible working practices that are not confined to locationand to strengthen solution offerings.

and time, such as the use of remote work and self-managed labor,

Until now, our sales have been centered on industrial switches andin responding to changes in the working environment.

other various components. Going forward, while strengthening the

In 2020, we established a studio at our head office that serves

components business by utilizing the existing sales network, we will also

as a global information transmission base. In addition to video

focus on solution proposals centered on HMI and safety – our areas

production, we have been using the studio for distribution ofof strength – and develop a system to provide solutions to solve our

product information for promotions, as well as for conducting

customers’ challenges and to help them achieve success. We plan

webinars and briefing sessions. At the same time, we are making

to grow sales by targeting industries that can take advantage of ourefforts to improve service levels and operational efficiency throughknow-how and sales channels and are expected to grow globally,

the introduction of global digital marketing and the automationsuch as machine tools, automotive, robots, Automatic Guided

of work processes.

Vehicles (AGV) and Autonomous Mobile Robots (AMR).

CEO Message

09

IDEC REPORT 2022

Introduction

Our Business

Value Creation Story

Business overview in FY2022

Value Creation Foundation

Data

sensing technologies and know-how, to conduct unprecedented
product development. We are scheduled to launch new products

The world economy has been rapidly normalizing after the COVID-19

in FY2023.

pandemic, and demand for capital investment in the manufacturing

In 2022, we signed a partnership agreement with ez-Wheel of France,industry reached a level much higher than expected in FY2022 (Aprila developer of the world’s first safety wheel drive, to be installed

2021 to March 2022). Demand from automotive, machine tools,

in AGVs and AMRs. In the future, in addition to strengthening oursemiconductor, robotics, and other industries recovered significantly

component sales, including these new products, we will strategicallyin Japan, the Americas, EMEA and Asia Pacific – all regions where thedevelop optimal system solutions that meet the diverse needs and

IDEC Group operates. In the Americas and EMEA, new orders fromchallenges of our customers’.

the medical industry increased, spurred by the COVID-19 pandemic.

Concerning the improvement of profitabilit y, we have been

IDEC’s core industrial switches business and all other products wererestructuring our global sites and supply chains. We are also working

strong despite the shortages in semiconductor-related electronic

to consolidate products, optimize product prices, and improve theparts and some logistical impacts in the second half of FY2022. As aratio of new products that utilize new technologies. Moreover, in orderresult, we achieved record-highs in net sales and orders in FY2022.

to respond to the rapid growth in orders, we are introducing new

Consolidated net sales amounted to 70.8 billion yen (31.1% increaseautomation facilities at our Japanese and overseas manufacturing

YoY) and orders were 94.5 billion yen (63.2% increase YoY).

sites to increase efficiency and expand our production capacity.

We have also significantly reduced sales and administrative

In regards to strengthening our business foundation, we are

expenses by promoting digitalization, and by restructuring ourenriching digital contents by utilizing our studio, revamping our core

manufacturing, sales and distribution sites to further reducing

IT systems, and improving our sales and personnel systems in order

fixed costs. We have also improved the gross profit margin by

to achieve greater efficiency and company-wide optimization.

reviewing our product mix and pricing. As a result, we reachedrecord high earnings with operating income of 9.7 billion yen(139.3% increase YoY) and an operating income margin of 13.7%.

Pea
ce
fu

Over the years, corporate management has beenchanging from a time, where increase in sales, profitsand scale was desired, to now, where social
responsibility, environment, and the safety, health, andwell-being are considered necessary in the realization ofa sustainable society. It is no exaggeration to say thatcompanies that realize health, happiness, and/or wellbeing management are nowadays recognized as being
the most valued.
The first step in improving well-being is securing
employee safety. Injuries and diseases in the workplace
all have causes. It is essential to remove these causes to
the greatest extent possible and establish a “preventive
culture” that prevents disasters from even occurring.
Since its inception, the IDEC Group has been
contributing to creating a safer and more pleasantenvironment globally, by providing products that protect
the human life, and offering a variety of control devices
that enable efficient and innovative work to realize safety
and ANSHIN in the workplace.
By creating the optimum environment for humans andmachines, we will continue our efforts aimed at
improving the well-being of our employees as well as forthe entire society.

In order to create the optimum environment for humans and

l

hy
alt
he

Four basic strategies for pursuing and realizing
safety, ANSHIN, and well-being

Aiming to improve well-beingof all people

Well-beingmachines, and to achieve safety, ANSHIN, and well-being forpeople around the world, we are taking measures in line with ourfour basic strategies: promotion of growth strategy; improvement

The IDEC Group’s exhibit utilizing digital contents
at an online trade show in 2022

of profitabilit y; strengthening of business foundation; a n dresstrengthening of ESG initiatives.
As part of the growth strategy, we are collaborating with leading
companies in various industries to develop new products andili e nt s o ciet

ies

Source:WHO. Towards developing WHO’s agenda on well-being.
Page 16. 2021.
Available from:
https://apps.who.int/iris/rest/bitstreams/1398270/retrieve

expand our sales network. In 2021, IDEC ALPS Technologies
CORPORATION was established as a joint venture with ALPS
ALPINE CO., LTD. Our target is to utilize both companies’ HMI,CEO Message

10

IDEC REPORT 2022

Introduction

Our Business

Value Creation Story

Value Creation Foundation

Data

In addition, in order to accelerate efforts to realize a sustainable

In the area of governance, we have established and publishedsociety and improve corporate value under “The IDEC Way”, wethe IDEC Corporate Governance Policy in response to the revised

have identified the Materiality which should be focused in line withgovernance code, in order to meet the higher levels of governance

Global efforts are underway to achieve carbon neutrality by 2050

the establishment of a new medium-term management plan. In

than expected in the Prime Market—one of the three new market

toward the realization of the Paris Agreement of 2015. In order tolight of the growing impact of climate change and other societal

segments operated by the Tokyo Stock Exchange from April 4,

achieve sustainable growth, I believe it is important to contributechallenges, the “response to climate change” has been selected

2022. This is how we strive to further strengthen governance. In

to society by connecting societal challenges, such as climate

as one of the Materiality, and we are determined to make efforts toApril 2021, a voluntary Nominating Committee, with a majority ofchange to our business. The IDEC Group has been making various

achieve our vision for 2030.

outside directors, was established as an advisory body for the Board

efforts to achieve the Sustainable Development Goals (SDGs)

In 2021, in order to further strengthen our environmental response,of Directors. The system was established to determine, objectively

by addressing these societal challenges through its business

we established the Environment Promotion Department, assigned

and independently, the nomination of candidates for directors andactivities. In 2009, we joined the United Nations Global Compact,a Senior Executive Officer to be in charge of environment, andthe development plan for next-generation candidates for seniorand have been undertaking activities based on its Ten Principles.

expressed our support for the Task Force on Climate-related

management. In order to further improve the effectiveness of the

In 2018, we established the CSR Committee, and have been

Financial Disclosures (TCFD). We conducted scenario analyses

Board of Directors, we start conducting an effectiveness evaluation

promoting continuous CSR activities focused on environment,of climate-related risks and opportunities in line with the TCFD

by a third-party organization in FY2022 and identify issues forsocial, governance, safety, and quality.

guidance between 2021 and 2022, and have decided to disclose

improvement based on the objective evaluation. We always focus on

the information based on the TCFD recommendations. We also set

transparency and efficiency in management.

Strengthening efforts in sustainability to realize asustainable society and increase corporate value

a goal of reducing CO 2 emissions by 24% from the FY2020 level
by FY2025, and raising eco-friendly products ratio to 60% of all

Commitment to sustainability

P.29-52

new products.

Evaluation by society
The IDEC Group has been selected as an index constituent
of SOMPO Sustainabilit y Index managed by SOMPO AssetManagement Co., Ltd. since 2021 and of FTSE Blossom JapanOn the social side, we are actively promoting decent work, andmaking efforts to create a pleasant workplace environment where
diverse human resources can participate regardless of gender or
nationality, to be empowered and prevents overworking. Human
resources development is another focus area. In view of theresults of the Employee Engagement Survey, we have introduced
a new personnel system in FY2023. Under the new system, weare promoting the clarification of career plans, the improvementof employee engagement and motivation, and the development ofprofessional staff. What we hope to achieve by globally advancing
d e c e nt wo r k i s to i m p rove th e we l l-b e i n g of ID EC G ro u p
employees to achieve their success, respectively, and to create avirtuous cycle in which the employee success ultimately leads tothe customer success.

CEO Message

11

IDEC REPORT 2022

Sector Relative Index managed by FTSE Russel (U.K.) since 2022.

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

New Medium-Term Management Plan FY2023-2025
PASSION FOR YOUR SUCCESS

Enhanced industry-specific market strategies

In recent years, the world has seen megatrends such as the advance of digitalization and automation,

In light of the megatrends, the new medium-term management plan focuses, among the eightchanges in social structure and environment due to demographic changes and climate change, and theshift to a more complex society that is highly volatile and difficult to predict, known as VUCA (Volatility,

highlighted industries, on AGVs and AMRs and robotics— two industries with high growth potentials in

Uncertainty, Complexity, and Ambiguity). In addition, an aging society in many countries, the increase of the

global—and automotive and machine tools markets. We are expecting compound annual growth rates

world population, global warming and the rapid progress of technological innovation are becoming societalof 20-30% for AGVs and AMRs, despite the market not yet being very large, and 6-7% for robots.

challenges that global companies have to address.
Back in 2017, the IDEC Group announced a medium-term management plan. However, the outbreak of the
COVID-19 infections and other factors significantly changed the business environment, and we reviewed the plan
based on the current megatrends and societal challenges. Then in May 2022, we announced a new mediumterm management plan which set FY2025 as the final year. Under a new slogan “PASSION FOR YOUR
SUCCESS,” we will promote initiatives that address key areas such as needs for automation, and unmanned
and labor-saving operations, as well as the enhanced awareness of safety, ANSHIN, and well-being, based

AGV and AMR

Robotics

Automotive

Machine Tools

Elevators

Semiconductors

Special Vehicles

Food and Packaging

on the control technology we have cultivated over the years. We are thereby aiming to contribute to solving
societal challenges and to achieve sustainable growth and customer success.

Megatrends
Advance ofdigitalization &automation

Demographic
changesGeopoliticalchangesSocietal challenges
Rapid sharing of information
Rapid technology innovation

Aging population
Rise of the middle class

Unstable political conditions
Geopolitical power shifts
Increase in pandemic risk

Climatechanges

Climate change
Scarcity of natural resources

Advances indiversity

Gender and age diversification
Emerging Generation Z

IDEC’s role
Enable digitization with
IoT enabled devices

In order to expand sales in these markets, it is essential not only to sell existing components, but also

Enhance productivity via
automation technologies and solutions

to develop new products based on industry needs, and to strengthen sales of solutions. In the mature

Establish a safe workplace for all bydeveloping innovative safety solutions

by making challenge-solving proposals, including packaging of best-suited products for each industry.

markets such as Japan, the Americas, and EMEA, we plan to enhance our competitiveness particularly
In Japan, we will also seek to restructure and strengthen sales channels and to establish a system for

Create products and solutions
for rapidly evolving markets
such as mobility

expanding APEM products. Our focus in the Americas is to strengthen automation products such as
programmable logic controllers, and in EMEA, our plan is to expand sales of IDEC products utilizing

Reduce carbon footprintand design products
which are environmentally friendly

APEM’s network. In growth markets such as China and India, we will promote business expansion

Develop new HMI interface solutions
that promote
ANSHIN and well-beingorganizational reform and will work to develop a solution sales organization that enables high-efficiency

by further enhancing our presence. In China, where significant growth is expected, we will makesales by accelerating local production for local consumption through product development based on
local needs.

Respond to diverse needs
through customization

New Medium-Term Management Plan

12

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

New Medium-Term Management Plan FY2023-2025
By promoting the new concept “HMI-X”, IDEC will provide products and solutions to address
customer challenges, helping them to create the optimal environment for humans and machines.
Expansion of business area: From “Interface” to “Interaction” andleading to “the Realization of Optimal Environment”
As a leading company in Human-Machine Interface (HMI) business, IDEC has expanded over a wide
geographic range. Together with changing times, IDEC’s business area has expanded from “Interface”,
which connects humans with machines in various aspects of manufacturing and living, such as industrial
switches and operator interfaces, to “Interaction” where a network connects humans with machines,
or a machine with another machine, increasingly due to development of the Internet of Things (IoT) andother changes in technology and society. The next step will be the “Optimal Environment” which includes
the space in which humans and machines coexist, in addition to networked mechanical devices. In thiscontext we anticipate growing demand for realizing safety, ANSHIN and well-being for people.
In light of this background, we are promoting human-centered “HMI-X [Transformation]” as a new concept
for the IDEC Group, which further evolves the thinking of HMI by utilizing the safety DNA we have cultivatedso far. By promoting HMI-X, we aim to realize our Purpose—to create the optimum environment forhumans and machines, and to achieve safety, ANSHIN, and well-being for people around the world.

Realize the optimal environment by more interactive control in the changing
environment where humans and machines work together

Control in an environment where
humans are isolated from machines

Control in an environment where
humans and machines work together

New Medium-Term Management Plan

13

IDEC REPORT 2022

Data

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

New Medium-Term Management Plan FY2023-2025
IDEC’s Solutions
Strengthen the highly-profitable industrial switches business andthe safety business with its global growth potential

Leverage IDEC’s core technology to explore
potential demand and create new value.

As a manufacturer of diverse HMI products and other control devices, IDEC has the top market share in

Implement software for
specific applications

Japan and the third largest worldwide in industrial switches, which account for about 50% of its sales.

Gather on-site informationfrom remote areas

IDEC has also always focused on safety-related products since its foundation. In order to achieve themanagement plan for FY2025, we will continue to strengthen the highly-profitable industrial switchesbusiness and the safety business with its global growth potential.
In the industrial switches business, our strategy is to expand our product line-up and develop NEW HMI
products that incorporate new functions, in order to strengthen our global competitiveness and expand
our global market share. In the safety business, we will accelerate the overseas development where market
expansion is expected by expanding our product portfolio to meet regional needs. We will also work on
creating innovative products that feature ANSHIN in addition to high safety.

Driving HMI-X [Transformation] through solution deployment

Realize market-specific
NEW HMIIn order to respond to extremely diverse customer needs and challenges, driven by recently emerging

Provide a friendly environment
where people and machines
work in harmony

megatrends and market changes, we have to deploy various solutions, which combine not only our
existing industrial switches and other components but also NEW HMI products, which are being
developed based on the unique needs of each industry, such as makers of machine tools and robots;

Solution examples using ez-Wheel products

various sensors of IDEC ALPS Technologies CORPORATION (established in 2021); and new software that
we intend to strengthen development by promoting human resource investment. In addition to thus utilizing

1 Select optimal IDEC products, based on safety

IDEC’s core technologies, we are working with our partners to achieve solutions that meet the anticipatedknowledge and the type of application, andpackage them with ez-Wheel products.

demand of our customers.
Specific examples include solutions that utilize products from ez-Wheel (France), which concluded a2 Package an improved system of hardware andsoftware for specific applications, using IDEC
and ez-Wheel products.

partnership agreement with IDEC in 2022. ez-Wheel is a manufacturer of safety wheel drive for AGVs
and AMRs with the drive control and safety features required for autonomous driving. Going forward,

3 Establish integrated customer systems, combining

beyond sales of wheels, we can now offer a wider range of proposals tailored to the needs of customers

hardware and software, through means such as
automation of a warehouse system with AMR,
using IDEC and ez-Wheel products.

by combining ez-Wheel products and IDEC products as a business alliance partner. By enhancing such
solutions, we will help advance HMI-X [Transformation] and create new value.

New Medium-Term Management Plan

14

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

New Medium-Term Management Plan FY2023-2025
Outline of the medium-term management plan with FY2025 as the final year
The new medium term management plan’s minimum targets are sales of over 80 billion yen, operating

Specifically, we will actively promote the IDEC Group’s new concept “HMI-X [Transformation]” in all the

income of over 13 billion yen, and an operating income margin of over 16% in FY2025, with the ultimate

countries where we are active, and aim to achieve sustainable growth by conducting activities based on

aim of realizing an operating income margin of 20% in the long term. We have also created a new slogan,

the following four basic strategies.

“PASSION FOR YOUR SUCCESS” and will create an environment that enables us to realize customer
success, by providing advanced products, solutions and exemplary services.

VisionMissionSloganFour Basic Strategies

Pioneer the new norm for a safer and sustainable world.
To create the optimum environment forhumans and machines.

Promote Growth
StrategyStrengthen sales based on technical problem-solving
Accelerate product development and launch based on regional
and industry needs
E xpand business in China, India and other focus markets, and by
M&A and alliances

PASSION FOR YOUR SUCCESSFY2022

FY2023 (plan)

FY2025 (plan)

Net sales

70.8 billion yen

74.5 billion yen

80 billion yen or more

Operatingincome9.7 billion yen

10.8 billion yen

13 billion yen or more

Operatingincome margin

13.7%

14.5%

16% or higher

ROIC

9.2%

10.0%

10% or higher

ROE

17.2%*

14.5%

15% or higher

EPS

264 yen*

250 yen

300 yen or more

Improve
Profitability

 ptimize production structure and processes to reduceOcost, inventory and improve lead time
Review and optimize SG&A cost
Identify and concentrate unprofitable products and businesses(CAGR: 5% or higher)

Enhance Business
Foundation

Environment Promote initiatives to reduce environmental impacts
SocietyPromote diversity

Governance Improve management transparency and efficiency

Enhance ESG
initiatives* Excluding the impact from extraordinary income, etc., the ROE was approximately 15%
and EPS was approximately 221 yen in FY2022.

New Medium-Term Management Plan

Promote decent work practices
Strengthen business structure by promoting PMI and rigorous
management of key projects
Promote digital marketing at global level

15

IDEC REPORT 2022

SafetyQuality reate well-being through safety and ANSHIN technology
CImprove product quality and manufacturing capabilities

Introduction

Our Business

Value Creation Story

Value Creation Foundation

Data

New Medium-Term Management Plan FY2023-2025
Our financial goal is to improve profitability and efficiency
in order to achieve sustainable and highly profitable growth.

Net sales and operating income margin

Improve profitability

Net income and ROE
Net income (billion yen)

Operating income margin (%)

Net sales(billion yen)

ROE (%)

7.9

70.8

Promote selection and concentrationto achieve a higher operating income margin.

59.8
10.2

In order to improve profitability, we make continuous efforts toeliminate or consolidate materials and products, and acceleratecost reduction and enhance production efficiency.
We will also consolidate sites in the world, to make our supply
structure more efficient, and we introduce digital marketing to
improve sales efficiency.

62.8

58.4

9.1

8.1

54.0

13.7

17.2*

5.3

7.5

3.7

13.5

8.2

2018

2019

2020

2021

2022

(FY)

2018

2019

3.0

2.8

6.8

6.5

2020

2021

2022

(FY)

*T
 he ROE in FY2022 was approximately 15%
excluding the impact from extraordinary income, etc.

Improve capital efficiency

Goal:
Consistently maintain

Increase capital efficiency andsecure ROE/ROIC of 10% or higher.

ROE

10% or higher
ROIC

Activity Drivers

NOPAT

÷
We believe we have done well in managing inventories and fixed assets
while expanding sales, and have improved asset turnover, which
resulted in the most recent ROE of 17.2% (approximately 15% excluding
the impact from extraordinary income, etc.) and ROIC of 9.2%.
Going forward, our focus will be to improve the efficiency of fixed
assets, such as working capital and production facilities, in order
to increase capital efficiency so as to exceed the expected capital
cost (6%).

Invested capital
Capital cost 6%

÷Financial leverage

New Medium-Term Management Plan

Equity capital

16

IDEC REPORT 2022

Operating income

×
Effective tax rate

Sales increase
Cost reduction
Reduction in SG&A expenses

Cash Conversion Cycle (CCC)
Production efficiency /capacity utilization
Fixed assets turnover rate

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

Introduction

Our Business

Value Creation Story

Value Creation Foundation

Data

New Medium-Term Management Plan FY2023-2025
Cash flows (billion yen)

Cash flow and dividend policy

Operating CF

Annual dividend per share and payout ratio

Investment CF

Financial CF

9.7

Increase operating cash flow,
aggressively make new investments,
and give return to shareholders.

4.9

Operating cash flow has been steadily increasing due to sales
growth driven by robust control demand, and business efficiency
improvement. We will continue to strive to increase operating
cash flow, promote DX to improve efficiency, and make growthinvestments to expand business areas.
We also pay dividends in a stable and constructive manner. In FY2022
we increased the dividend from 50 yen to 100 yen per share.

6.1

4.1

7.4

6.9

4.9

Dividends (yen)

FCF

8.3

100
Commemorative
dividend (20 yen)

4.3

3.5

50
-0.9
-3.9

-2.7 -2.9

Payout ratio (%)

50

50

50

52.5

53.9

2020

2021

-1.4

-2.0
-3.6

-3.1

-3.7

44.4

37.9

29.3
-8.6
2018

2019

2020

2021

2022

(FY)

2018

2019

2022

Aggressive investment aimed for medium- to long-term growth

IssuesInvestment for
growthPrevious medium-term plan (FY2018-2022)

New medium-term plan (FY2023-2025)

Investment in M&A and alliances ……… APEM (HMI), Welcat (Automation), Tokyo Sensor(Safety), and Squse (System) joined the IDEC Group.
Investment in new products……………… Invested in the HMI/Safety/Automation field.
Establishment of a new site……………… Established a new site in India.
Establishment of a new company……… Established IDEC ALPS Technologies

Investment in M&A and alliances ……… M &A and alliances for enhancing the safetybusiness, AGV industries, software, andengineering field.
Strengthen partnerships in China and India.

Investment in new products……………… Proactively invest in the NEW HMI and safetybusinesses.

CORPORATION.

Sites and equipment ………………………… Introduced automation and labor-saving systems.

Improve efficiency
Strengthen thebusiness foundation

Restructured manufacturing sites and establishednew logistic sites in China, Taiwan and EU.

Investment in human resources………… Invested on the development of human resources.
Investment in DX……………………………… Implement digital marketing platform.

Introduced Teams to the entire company, updated
the personnel system.

Investment in sustainability……………… Installed solar power generation equipment.

Sites and equipment ………………………… Increase manufacturing sites, introduce
automation and labor-saving systems.
Optimize sites.

Investment in human resources………… Invest on developing global human resources.
Investment in DX ……………………………… Update ERP, introduce supply chain planningsystem, and arrange a talent management system.

Investment in sustainability……………… Install solar power generation equipment anddevelop eco-friendly products.

(Japan:Hyogo, Aichi, Gifu / Taiwan, etc.)

Measures for returns………………………… Continuously paid dividends at a dividend payout

Shareholder returns

ratio of 30-50%.
Acquired treasury stock in a timely manner in viewof the stock price level.

New Medium-Term Management Plan

17

Measures for returns………………………… P roactively pay dividends at a dividend payout

IDEC REPORT 2022

ratio of 30-50%.
Acquire treasury stock in a timely manner in viewof the stock price level.

(FY)Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

New Medium-Term Management Plan FY2023-2025
We will strengthen ESG efforts with the aim of contributing torealization of a sustainable society.
Contributing to the realizationof a low-carbon, circulating society

Medium-term plan target for FY2025

Related
SDGs

Vision for 2030 concerning
climate change(FY2020 basis)

24%
24%
60% orReduction in CO2 emissions

In conjunction with the formulation of the new medium-term management plan, we have

Reduction inindustrial wastes

identified three Materiality initiatives. One is to “respond to climate change,” a growing societal
challenge on a global base. We tackle this challenge as an important management issue. Toward

Cumulative ratio of
eco-friendly products
to total new products

2030, we aim to help realize a sustainable society by helping reduce the environmental impact ofour customers and society through use of the IDEC Group’s technology and products.

Expansion of human capital initiatives
As part of strengthening our business foundation, we conducted an employee engagement
survey, extracted issues from the survey results, and have promoted measures to addressthese issues. They include strengthening of human resource management systems, promotionof diversity and inclusion, and workstyle innovation. A second survey will be conducted in 2022
and a global survey is also scheduled in the future. Through the resolution of the issues thatreflected the opinions of our employees, we will strengthen investment in human capital andseek to raise employee engagement.

Further enhancement of governanceIn order to improve management transparency and efficiency, the appointment of outside

Initiatives to be taken fromFY2023 and beyond

Strengtheningof human resource
management systems

 lanned and introduced new personnelPsystems based on issue analysis.

 perate, maintain, and firmly establishO
new personnel systems, including a
training course system and payroll system.

Promotion ofdiversity andinclusion

 onducted LGBTQ training and management
C
training for empowerment of women.
Established a system for recruiting global talent

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

Strengthening ofmanagement andcareer development

 romoted workplace improvement programs.
PConducted training for selected
employees to develop management talent.

 ive multi-faceted executive feedback.
GDevelop management talent for directors
and executive officer candidates.
Conduct career development training.

Communication
activation

 evamped corporate intranet.
RBuilt an in-house studio.

 nhance information transmission toward
E“One IDEC”

Workstyle reform eployed Microsoft 365 company-wide.
DStrengthened the IT and office
infrastructure.

Introduce and develop various systems
based on flexible working styles.
Continuously promote operational efficiency.

Ratio of outside directors

Ratio of female directors(As of June 30, 2022)(As of June 30, 2022)

6 outside 6 male67%

in relation to management issues. By continuing efforts to enhance the effectiveness of
directors, we are striving to enhance our corporate credibility and corporate value in a stable3 femaledirectors directors

Ratio of outside
directors

directors have newly joined who are knowledgeable about the areas that we want to strengthen

higherMajor initiatives taken up to FY2022

directorsof directors. In 2022, based on the expertise analysis of directors using a skills matrix, two educe CO2 emissions through the in-houseRuse of renewable energy.

Issues3 inside

directors has been promoted, and independent outside directors now represent a majority

 ontribute to the reduction of the environmental
C
impact of customers and society through theuse of IDEC Group technology and products.

directors

Distribution of tenure periods(As of June 30, 2022)

2

10 yearsor moredirectors

Ratio of female
directors

Ratio of less than
three years

33%

44%
3-9 years
directors

3and long-term manner.

New Medium-Term Management Plan

18

IDEC REPORT 2022

3 years or less

4 directors

Introduction

Our Business

Value Creation Story

Our Business

Value Creation Foundation

Data

Providing optimal products and solutions that meet the needs of the times.
To respond to diverse and changing customer needs, IDEC provides a broad range of products and solutions centered on
its control technology. We are committed to supporting the future of manufacturing and daily life by continuously providing
new value through the use of core technologies we have innovated over many years.

Our Business

19

IDEC REPORT 2022

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Our BusinessIndustrial Switches
IDEC and APEM brand switches serve
industry and society by functioning
where human and machine interact.

Industrial Relays &Components

Automation & Sensing

Electrical equipment products areincorporated into control panels andcontrol units used to control mechanicaldevices and production lines.

Automation & Sensing products contributeto the automation of equipment in manyindustrial fields and in various aspects ofdaily life.

Industrial
relaysSafety & Explosion
Protection
Safety-related products protect the safetyof workers and explosion protection
products prevent accidents in theworkplaces such as petrochemical plants
where flammable materials are present.

Programmable logic
controllers (PLC)

Industrial
switches

Depending on specific customer needs,
systems combine various IDEC products
and collaborative robots that can workin the same workplace with humans.

Safety laser
scanners

Smart RFID
readers

Terminal
blocksSystems

Control panel solution
Operator
interfaces

Edge switchesLED
illumination units

Cloud-based
data logger

Circuitprotectors

Metal switches

Joysticks

P.23

Switching power supplies

Sensors

P.24

Explosion
protection
vibration sensors

Explosion
protection operator
interfaces

P.25

Our Business20

Library system solution

P.26

IDEC REPORT 2022

Robot system solution

P.27

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Special Feature APEM: Strengthen and expanded synergies
APEM - whose headquarters are in France- joined the IDEC Group in

primarily targeting special vehicles, such as construction andSince 2017, the IDEC Group has been restructuring manufacturing,2017. It is a well-established HMI manufacturer, in business since 1952.

agricultural machinery, material handling or defense sectors.

sales and distribution sites in several countries to reduce costs and

APEM designs, manufactures and sells switches, joysticks, LED

IDEC and APEM are realizing synergies in the “switch” productimprove operational efficiency.

indicators and control panels, and has an extensive networklines, which are required to be broad, depending on the region,

We have also been integrating our sales structure. In Europe,

around the world. With the addition of APEM which little overlaps

application, and specific usage conditions, as both companies

IDEC’s control products, such as safety-related products andand neatly complements IDEC in terms of product lines and target

make good use of their product features and sales channels.

automation products, were added to the APEM lineup, whichmarkets, the IDEC Group has expanded its global sales force,

APEM has R&D centers in France, the U.S., the U.K. and Denmark.

resulted in an increase in sales of IDEC products. In the Americas,

particularly in Europe, and has raised its overseas ratio close toBy establishing manufacturing facilities in countries such as

we are promoting sales strategies aimed at further synergies

60% of total sales.

France, Tunisia and other parts of EMEA and the U.S., APEM has

between IDEC and APEM. In the Asia Pacific region––an area of

While IDEC has developed plastic standard products for the factory

created a development and manufacturing system that meetsstrength for IDEC, we are promoting APEM brand products, using

automation (FA) industry, APEM’s strength lies in customized metal

global needs. The company focuses on custom-made products to

IDEC’s sales network to develop relationships with new customers

and other products. APEM’s products are used in a wide range

respond to a wide variety of applications, and provides high-quality

and new markets.

of industries as the company designs and develops products that

products with excellent environmental resistance. Approximately

Further optimization of our global technical and commercial locations

take into account the specific environment of each application,

75% of APEM’s sales are custom-made products.

should lead to additional sales and improvement of our profitability.

APEM products

APEM’s focus industry

Components

Joysticks

Panel solutions

Agricultural machinery

Material handling

Construction machinery

The History of APEM

2000-2016

1970’s-1990’s
1952

1971
Established as aswitch manufacturer.

Expanded productline-up of miniatureswitches.

1984

SINCE

International Expansion

Industrialization Take-Off
Entered the panel
solution market
through acquisition.

Special Feature

2004

Expanded a productline-up of LED
indicators.

21

2005

IDEC REPORT 2022

2017

Emergence of an HMI Leader
Entered the joystickmarket throughacquisition.

2017

2022
Joinedthe IDEC Group.

Celebrates
70 yearsof Innovation.

Introduction

Value Creation Story

Sales ratio (FY2022)
IDEC

Value Creation Foundation

Our Business

Data

Roadmap for work with APEM for restructuring of manufacturing, sales and distribution sites
Manufacturing

APEM

EMEA

FY2018FY2019FY2020Consolidated APEM’s
factories in France.

C onsolidated APEM’s
factories in the U.K.

C onsolidated
distribution centers.

Consolidated IDEC sales
office into APEM.

C onsolidated
distribution centers of
IDEC and APEM.

Consolidated APEM’s
factories in the U.S.

AmericasJapanand Asia
Pacific
Asia Pacific

Distribution
FY2021

FY2022

 egan sales of
B
APEM products.

D evelop a strategy focusedon HMI and safety products
for the AGV, robotics andmachine tools industries.

Established a base inGermany (Hamburg).

Start a projectto expand sales.

Transferred all sales
functions to IDEC.

A PEM employees
moved to the IDEC
office (China).

FY2023 (plan)S tart manufacturing at an
APEM’s new Tunisia factory.

A PEM representative
agencies began selling
IDEC products.

Started cross sales.

Japan

Sales

 romote a sales strategyP
to expand synergies.

Develop a businessstrategy to promote salesof APEM products.

Consolidated
APEM bases
into IDEC (China).

 onsolidated Asia
C
Pacific sales networks
of IDEC and APEM.

Implement custom
responses and totalsolution proposals.

APEM is a leading company with unique features in the HMI field
Strength 1

Strength 2

Flexible product customization to meet customer needs

The main feature of APEM is that all products listed in the catalog canbe customized to fulfill customer needs and specifications. The
combination of options and custom elements allows APEM to offer
unique products, from the most simple to the most complex.
In addition, with robust development processes, based on the
Advanced Product Quality Planning (APQP) method, APEM supports
custom design specifications for exclusive HMI requirements. APEM
strong product design and development capability are also groundedin the control of many increasingly complex technologies.
* Advanced Product Quality Planning (APQP):
A framework of procedures and operations from product design to development andmanufacturing from the viewpoint of ensuring quality

High product quality through total management

Another strength of APEM is its vertical control
of all development and manufacturing stages in
an integrated way. This organization enables
APEM to achieve consistent quality standards
in all aspects of manufacturing, from raw
materials to finished products.
APEM’s offering of joysticks and panel solutions
which incorporate its proprietary components
has also led to its quality assurance.

Examples of ergonomic customized solutions

Special Feature

22

Central management of each process

IDEC REPORT 2022

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Industrial Switches
Priority business measures

Creating the optimum environment for humans andmachines, as a leading company of industrial switches
Since 1958 when we began sales of industrial switches, we have developed
FY2022
Sales ratio

a diverse product line-up and have gained a high market share in Japanthrough continuous design reviews and quality improvements. In 2017,47%

the APEM Group of France joined the IDEC Group. This has enabled us
to achieve a more optimal geographical portfolio. We are now promoting
business expansion as both IDEC and APEM work to complement eachother in industries and regions of their strengths to expand sales, generatesynergies in technology, and develop next-generation HMI products.
We are determined to continue providing diverse HMI solutions with the aim

Net sales (billion yen)

28.2 29.7 27.3

of becoming a top global company in industrial switches.

33.2

Participating in the rapidly growing AGV and AMR
market by accelerating joint development with APEM

25.1

In recent years, as a solution to the labor shortage in the manufacturingindustry, manpower reduction and automation have been increased infactories and warehouses, and demand for AGV and AMR has increased.

Touchless switches to reduce risk inenvironments where an unspecified large
number of people operate
Due to the COVID-19 pandemic, there is an increasing demand fortouchless switching to replace conventional switches operated bya large number of people, for elevators and other equipment. We
thus introduced a touchless switch that can be used indoors or
outdoors in 2022.
In addition to this means to help prevent transmission of infectious
disease, we intend to introduce touchless switching in a wide variety of
applications, including food processing hygiene management andsituations where people feel exhausted by high-frequency operations.

Touchlessswitches

In addition, due to the revision of international safety standards, the manual2018 2019 2020 2021 2022

(FY)

controller equipped with the AGV and AMR requires the installation of
emergency-stop switches and hold-to-run functions (which turns the machine

Business overview for FY2022
Sales of both IDEC and APEM werestrong, and sales increased particularly
in Japan, the Americas and Europe
because demand for capital investmentin the manufacturing industry has been
at a high level combined with economic
normalization after emergence of the
COVID-19 pandemic.
In Asia Pacific, sales increased mainly
in China, where demand continued
to increase.

on only when the button is pressed). Each industrial makers are required torespond accordingly.
In response to these needs, we are working on joint development of highvalue-added manual controllers that take advantage of the strengths ofboth IDEC and APEC. We are incorporating the opinions of major AGV
manufacturers in Europe and the Americas in product development
and aim for product launching for sales expansion.

Adding an advanced function to “safety commanders” withsafety features attached to tablets used at manufacturing sites
High-function but cheap off-the-shelf tablet devices are now often used as control
terminals of robots at manufacturing sites. The tablets which are used near sources ofdanger from machinery, need to be equipped with safety devices, such as an emergencystop switch. They are also required from the standpoint of safety standards.
IDEC has therefore released safety commanders that can be easily attached to various
off-the-shelf tablets available in the global market. In 2022 we plan to launch the HT4P
safety commander with an additional wired LAN communication function. We strive tofurther improve convenience in manufacturing sites.

Safer and easier to operate

Product development that leverages the strengths of both companies

Lower cost
Development technology forhigh security products
Know-how for handheld devices

Development technology
for joysticks
Ergonomic design development

Industrial Switches

23

More efficient operation
Manual controller
under development

IDEC REPORT 2022

Safety Commander “HT4P Series”

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Industrial Relays & Components
Priority business measures

Offering a full line-up of products to help customers
overcome challenges
Industrial relays and components is a collective term for various electronic
FY2022
Sales ratio

devices incorporated inside control panels and control boxes that are used in theoperation and control of machinery and manufacturing lines. They are in use in

19%

a wide variety of settings, such as manufacturing sites, automated warehouses,
industrial machinery, and semiconductor manufacturing equipment.
Responding to ever-growing needs for “smarter” facilities and equipment,
space-saving, and quality stabilization, IDEC adds new technologies to

Push-in products enabling well-being of manufacturing sites

various devices installed inside control panels, thereby providing more-

Spring-type push-in products thatcan be easily wired by simply
plugging in the terminals can
reduce wiring work and achieve
stable quality compared to use ofscrew type products.
They thus contribute to workstyle
improvement of the manufacturing
sites, by means such as making
less experienced workers have asense of accomplishment and by
reducing overtime hours.

efficient, highly-convenient, operator-friendly production environments, andNet sales (billion yen)assisting customers find solutions to various challenges.

13.6
11.3 11.4

10.3

Broadening PCB-mounted products that are smaller
in size and require less wiring and less man-hours

9.8

As a solution to the challenges of the control panels and the control part –reducing their size and reducing man-hours in development and assembly,
decentralizing of the control part is increasing. The control units are cut out
2018 2019 2020 2021 2022

(FY)

from the large control panels and are made into blocks for greater usability

Simple wiring
No need oftightening work
X
Solving labor
shortages

No falling off
of a screw
X
Safety and
ANSHIN

Vibration
resistanceShockresistanceX
ReliableColorvariations
X
Simplified
identification

Robot
production
Automation
X
Stable quality
Increased
productivity

Universal
designX
Work bydiverse workers

and strengthening the value chain from development and production tosales and maintenance. There is thus an accelerating trend to make control

Business overview for FY2022
Sales of switching power supply
products increased in all regions. The
growth was driven by new equipment
for remote work (increased due tothe COVID-19 pandemic), increased
demand for power supplies for salesof new products. In Japan, sales of
LED illumination units and control
relays for favorably-selling machine
tools increased.
Sales of control relays in the key
markets of the Americas and China
were also strong and the overall
segment sales increased.

units into “PCBs (printed circuit boards) of controls” as the control unit canbe separated from the large panel into a block for greater utility.

Industry-specific LED illumination units help resolve challenges

Demand for PCB-mounted equipment is expected to grow more and more,

We sell the LF3D series of LED illumination units that are ideal for machine tools, where
they satisfy needs to reduce multiple shadows and reflections of lighting sources,
improving visibility at hand.
In addition, the LF1B-N type yellow light-emitting type emits only a single yellow lightthat does not contain the wavelength of the blue component in typical LED lighting, andis therefore highly popular for use with ANSHIN in semiconductor manufacturing
equipment. IDEC supports the growth of various industries by providing products
incorporating advanced technology to satisfy market needs.

in line with an increase in new devices born from the creation of a newnormal environment and various devices utilizing IoT technologies. IDEC has
been developing, manufacturing and selling PCB-mounted equipment suchas industrial relays, terminal blocks and circuit protectors. We will continue
to focus on launching new products in the market.

For PCB circuit protector “NRP Series” (left)
Terminal block “BP Series” (right)

Slim power relays for PCB“RJ Series”

Industrial Relays & Components

24

IDEC REPORT 2022

LED illumination unit “LF3D Series”

LED illumination unit
“LF1B-N Series”

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Automation & Sensing
Priority business measures

Offering optimal solutions matching the era of IoT
and Industry 4.0
Along with a decline in Japan’s working population and permeation of IoT, we
FY2022
Sales ratio

see an increase in need to support remote monitoring and operations, and anincrease in demand for key devices that promote work efficiency and automation.

14%

We have a diverse product line-up precisely related to that need and demand.
IDEC’s solutions contribute to higher levels of automation and efficiency inmanufacturing. These solutions include automation products, such as PLCs
(to control machinery, equipment, and assembly lines) as well as operator

Launching products that enable the IoT

interfaces (to create more comfortable operating environments), and further

Because of the need for efficient operation of facilities as a way to combat the decline inJapan’s working population and the COVID-19 movement restrictions, we launched a new
cloud-based data logger that makes it easy to build an IoT system in Japan. By simply
installing it on the device and equipment, it enables remote monitoring and data acquisition.
We have also launched a 7-inch operator interface, demand of which is growing in all
regions. Through enhanced response to IoT-related demand, we are contributing toresolving societal challenges.

include sensing products such as sensors (to detect physical objects and8.2

Net sales (billion yen)changes in conditions), code readers (with potential growth in demand

10.0

for traceability application), and RFIDs and other automatic identification

8.8

9.0

products.

8.2

Advancing new product development by establishinga joint venture with ALPS ALPINEIn September 2021, we established IDEC ALPS Technologies CORPORATION,

Cloud-based
data logger“SG1A Series”

a joint venture with ALPS ALPINE CO., LTD., a manufacturer of electronic parts
2018 2019 2020 2021 2022

(FY)

and automotive information equipment. By combining IDEC’s FA knowledge

Operator interface“HG2J Series”

with ALPS ALPINE’s HMI and sensing technologies, we will promote theBusiness overview for FY2022
In the automation business, demandfor PLCs and operator interfaces rapidly
recovered in Japan, the Americas, andEurope, and sales increased up to thefirst half of FY2022. In the Americas, the
COVID-19 pandemic boosted demand,and sales of PLC were strong for new
customers in the medical field. From thesecond half of the year, however, thebusiness was affected by the difficulty insourcing electronic parts worldwide.
On the other hand, the sensing businessincreased sales mainly in the overseas
markets. The overall automation & sensing
business has favorably performed bothin Japan and overseas.

development of new products for the FA and industrial machinery fields andestablish a solution-oriented business model.
We are conducting business planning, product development, and sales
and manufacturing for industrial machinery, leveraging the strengths of bothcompanies. Our target is a market launch of new products in FY2023.
Strengths of IDEC and ALPS ALPINE

Industry leader of HMI and safety forindustrial machinery
Deep knowledge and high recognitionof industrial machinery
High-quality, wide-variety andvariable-volume production
Solution proposals that meetcustomer needs

Broadening the variety available in sensors andaccessories to satisfy increasing demand
In order to meet the growing and diverse needs of various industries, we offer a wide rangeof sensors with different detection principles, distances and detection objects. The
miniature photoelectric switch “SA2E Series” has achieved a response time of 0.5ms,
which is one-half that of conventional products, making it possible to detect objects at highspeed. As accessories, our product line-up includes a portable sensor checker, whichallows easy testing of sensors at manufacturing site or on a desk without being connected
to a power outlet.

Industry leader of HMI for automotive
and consumer use
Sensing technology
High-quality, safe production
Software integration

Automation & Sensing

Miniature photoelectric switch “SA2E Series”

25

IDEC REPORT 2022

Sensor checker “SA1P Series”

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Safety & Explosion Protection
Priority business measures

As a company that pursues and realizes world-classsafety, ANSHIN and well-being, we provide solutions
that enhance safety and productivity
FY2022
Sales ratio

From the day the company was founded, the IDEC Group has been deliveringa variety of products and services to the public with the aim of creating the13%

optimum environment for humans and machines. Through those activities,
we contribute to realizing both the safety of operators and the improvement of
productivity by developing and providing safety-related products that reduce
the risk of using machinery and equipment, and explosion protection productsthat can be safely used in the presence of flammable gas or liquid.
As a company that develops and provides products that protect the lives of

6.4

Net sales (billion yen)people, we are making efforts to improve well-being throughout society in

8.9

order to contribute to enabling everyone to lead a healthy, happy and vigorous

6.9

6.7

life. Our products and services realize both safety and productivity not only in
6.5

manufacturing sites but also in a variety of scenes. We are working to improvesafety, ANSHIN and well-being in diverse working environments.

Globally expanding sales of safety-related products
More automation at manufacturing sites and increased awareness of labor2018 2019 2020 2021 2022

(FY)

safety have led to expansion of the global market for safety-related products.

Contributing to improved safety and well-being for workers
at construction and civil engineering sites
As an example of the many ways IDEC products playa role in safety assurance, IDEC supplies a threeposition enabling switch that is developed based on
ergonomics and vital for construction-related system.
The system prevents serious accidents of on-site
workers being trapped between a vehicle for work atheight and a building frame or ceiling. It is being
increasingly adopted by DAIWA HOUSE INDUSTRY
CO., LTD. and other rental companies.
We are committed to providing
solutions to ensure the safety ofvarious workplaces, regardlessof the industries.
Three-position
enabling switches

Thanks to our product development and sales efforts focused on industries in
Business overview for FY2022
Sales increased globally due to a steadyrecovery in capital investment demand.
Sales of safety-related products
increased, driven by growth in demandof interlock switches particularly inJapan and China, and strong salesof enabling switches in Europe, theAmericas, and Japan.
Sales of explosion protection products
increased mainly in Japan.

which safety-related products are used, our overseas sales have significantly
increased in recent years, with notable sales growth of interlock switches.
Particularly in China, demand is rapidly expanding and is expected to continue
growing in the future. We are therefore working to partially transfer interlock
switches production to a local base in addition to a base in Japan, in order toestablish a system of local production to better meet Chinese demand.
Sales of “HS5L Series” interlock switches
Japan

Overseas

The IoT enables predictive maintenance of equipment
and devices in explosion protection areas
IDEC’s ES3M series wireless vibration sensor, which is intrinsically safe and explosion
protection, can be used in hazardous locations such as petroleum refineries and chemicalplants. By detecting the warning signs of equipment failure through the wireless network
using the ES3M series, “predictive maintenance” can be achieved. This product ensuressafety and ANSHIN especially in explosion protection areas where there are risks
associated with aging of the facility and of not carrying out sufficient maintenance due tolabor shortage or a decline in availability of skilled engineers.

Wireless vibration
sensor “ES3M Series”
2018

2019

2020

2021

2022

Safety & Explosion Protection

(FY)

26

IDEC REPORT 2022

Introduction

Value Creation Story

Value Creation Foundation

Our Business

Data

Systems
Priority business measures

Contribution to resolving societal challenges byworking closely with customers and providing optimal
solutions to their needs and challenges
FY2022
Sales ratio

As a system integrator, IDEC FACTORY SOLUTIONS CORPORATION, agroup company, supplies systems and various application packages to meet5%

customer needs. The systems are based on safety-related products andsafety systems that are the strengths of IDEC, and combine various makers’
collaborative robots, vision sensors, artificial intelligence (AI), AMR, and otherproducts. In 2021, we were registered as a certified manufacturer of control
panels for the UL 508A Standard for industrial control panels in the U.S.
By utilizing 3D CAD (EPLAN) for control panel design and manufacturing

Net sales (billion yen)capability both in Japan and overseas, we are focusing on reducing design and

3.7

production man-hour and improving quality. We are also developing the library

3.5
3.0

3.5

systems business, centered on automatic lending systems that help improve the

3.0

efficiency and convenience of library operations, and including the system forentry and exit and PC lockers.

2018 2019 2020 2021 2022

(FY)

Contribution to the automation needs in the food industry
and other workplaces
The food industry nowadays faces societal challenges such as food waste loss, labor
shortage, and need to reduce plastic use. The industry’s efforts to reduce food waste
losses by extending expiration dates has led to an increase in demand for chilled
and frozen foods. In response to this demand, we are proposing systems centeredon automation of inter-process transport and an automation of the producer’s laststage of packing products in boxes or cases.
We will also utilize IDEC group’s know-how and propose IoT-based production visibility
systems and “line solutions” that automate multiple processes.

Enhancing robot system proposals in anticipation of
the arrival of a new collaborative society of humans
and robots

Adoption of IoTIDEC FACTORY SOLUTIONS CORPORATION is offering application cells
Business overview for FY2022
Demand for AMR increased markedly
and collaborative safety robot systems
were introduced in new markets. IDEC
acquired Squse Co., Ltd. in April 2021
and its sales to the food industry also
contributed to segment sales. Orderbooking in FY2022 reached a record
high, driven by strong orders received
for control panels and systems for thesemiconductor and logistics industries.
Overall sales, increased only slightly
from the previous year even though a
prolonged delivery period of components
for systems, caused by a worldwide
shortage of semiconductors and difficult
procurement of some parts.

HACCP*compliant

that utilize the offline simulation software “RoboDK”, which has a libraryof almost all robots, and that can be operated easily and without robot
teaching even at small and medium-sized companies. We also intend to* HACCP:Hazard Analysis and Critical Control Pointdevelop our own products to meet customer needs, such as conveyors andlifters mounted on top of the AMR.

Expanding production capacity in the systems

In addition, we focus on risk assessment

In response to growing demand, IDEC FACTORY
SOLUTIONS CORPORATION built a new factoryin 2021 and a new head office in 2022.
Aiming for further business expansion, we
have relocated the Collaborative Safety Robot
Technical Center to the new head office andare expanding production capacity for robot
systems.

support services for industrial robots,
collaborative robots and service robots bysafety professionals who are certified assafety assessors. We thus provide optimal
system solutions.
Various robot systems

Systems

27

IDEC REPORT 2022

The new head office, which wascompleted in 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Contributing to Society through Business
The IDEC Group’s technology and products are contributing to resolve various societal challenges in factories and othermanufacturing sites as well as in everyday life, thereby helping to securing the future of manufacturing and living.

Office buildings

Special vehicles

IDEC’s control panels and touch panels forcontrol various equipment such as surveillancesystems and parking lots and elevatorswitches, maintenance control boxes contributeto the convenience and increased safety ofoffice buildings.

IDEC’s various switches are used in theoperating section of various special vehicles,
including construction machinery (i.e., power
shovels, cranes) and agricultural machinery(i.e., tractors), and support the safety and
ANSHIN of the operator.

Switchingpower supply

Operator
interfaceControl box

MiniatureswitchLocker switch

Joystick

Public transport

Logistics warehouse

IDEC’s emergency-stop switches to stop trainsin times of an emergency, edge switches toprevent people from being trapped by fallprevention railway platform fences, and LED
illumination units support the safety of daily
operations of public transport and their users.

IDEC’s hand-free code readers, sensing devices
that detect and sort a wide variety of objects,
and robots that can automatically transportcargo are utilized to promote automation of workat sites, enabling them to handle an increased
volume in logistics.

Emergency stop
switchEdge switch

LED illumination
unit

Sensingequipment

Various machine devices in factory facilities and manufacturing lines
IDEC’s products are installed on machine tools, semiconductor
manufacturing equipment and various other devices, and arealso used as operating, control and safety devices in various
manufacturing lines. Our wide range of technologies and productlines and solutions, including switches and safety equipment,
allow us to make optimal proposals that meet the needs of the
manufacturing sites.

Industrial
switchPilot light

InterlockswitchContributing to Society through Business

AMR

Petrochemical and chemical plants

Safetycommander

28

IDEC’s explosion protection products can be usedin hazardous areas where flammable gas or liquid
is generated. The products help prevent serious
industrial accidents caused by an explosion, andcreate an environment in which workers can worksafely and efficiently.

IDEC REPORT 2022

Explosion
protection
vibration
sensor

Explosion
protection LED
illumination unit

Explosion
protection
operator
interfaceIntroduction

Value Creation Story

Commitment to
Sustainability

Our Business

Value Creation Foundation

Data

Based on our company philosophy “The IDEC Way”, the IDEC Group Code of Conduct, CSR Charter, and the Ten
Principles of the United Nations Global Compact have been identified as our important guidelines and we arecommitted to achieving the Sustainable Development Goals (SDGs) in pursuit of proposing solutions to societal
challenges through our business activities. The CSR Committee, which was launched in 2018, has played a keyrole in promoting sustainable activities.
Under the Basic Sustainability Policy, we have made efforts to resolve global challenges through our businessactivities with the ultimate aim of realizing a sustainable society. Our efforts include 1) an approach to pursue safety,
health, and well-being of all people inside and outside the IDEC Group through endorsement and registration of the
Vision Zero campaign promoted by the International Social Security Association (ISSA) under the International
Labour Organization (ILO) umbrella; 2) consideration on climate change and other global environmental issues
through support for the Task Force on Climate-related Financial Disclosures (TCFD); and 3) preparation of
responses to risks and opportunities in the future.

Basic Sustainability Policy
We are engaged in business activities based on the “Vision: Pioneer
the new norm for a safer and sustainable world” and “Mission: To
create the optimum environment for humans and machines” asstated 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 actually take the actions in order to help
realize a sustainable society and increase our corporate value.

This is an entry photo for IDEC’s in-house environmental photo contest conducted in 2021 under the concept of “Nature to be preserved for future generations.”

Commitment to Sustainability

29

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Sustainability Promotion System
The CSR Committee, chaired by the CEO, has been established as a body to develop the CSR action policy of
the IDEC Group. Under the CSR Committee, “ESG+Sa+Q” five specialized committees—Environment, Social,
Governance, plus two for areas of our strengths, Safety and Quality—were established, each in charge ofpromoting a particular area of CSR activities.
Each specialized committee, chaired by an executive officer, consists of individuals with expertise andexperience, and tackles measures according to their respective themes. The CSR Committee meets twice a year,
and important matters discussed are reported to and supervised by the Top Management Meeting and the Boardof Directors as may be necessary.
CSR Leaders share the contents of CSR Committee discussions with each employee at CSR Workplace Training
sessions, aiming to “put CSR activities into practice” and “create an open workplace” where opinions can beexchanged. In FY2022 employees submitted about 2,000 opinions and proposals, which were shared by eachspecialized committee. These are incorporated in the CSR activities of the IDEC Group.

Board of Directors
Top Management Meeting
CSR Committee
Chairperson: CEO / Committee members: Senior Executive Vice President, Management Director and Executive Officers
Environment
Management
Committee

SocialContribution
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

Information disclosure on the website
IDEC’s CSR information is available on the corporate website.
https://us.idec.com/idec-us/en/USD/corporate_social_responsibility

Commitment to Sustainability

30

IDEC REPORT 2022

Data

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

Environment
Target SDGs
Climate change has become a major global societal challenge and the IDEC Group identifies it as one of our important management issues.
We will promote initiatives to realize a sustainable society.

Climate change initiatives andinformation disclosure based on
the TCFD recommendations

Governance system addressing to climate change

the TCFD Consortium in May 2021. With regard
to the four requirements (governance, strategy,
risk management, and metrics and targets)based on the TCFD recommendations, we

NameOverview

Number ofmeetings

Board of Directors

Supervision of important matters related to climate change

7 times per year*

Top Management Meeting

Decision making of important matters related to climate change

8 times per year*

T h e ID EC G ro u p h a s b e e n c o ns c i o u s ofmade preparations according to the steps of thee c o -friendliness since its foundation in 1945scenario analysis advocated by Japan’s Ministry

through its “Save all” and “Pursuit of saving”

of the Environment, and disclosed climate change

CSR Committee

Review of important items related to climate change, andsubmission of these to the Top Management Meeting

Twice a year

bywords. We have formulated “The IDEC Way”

initiatives and relevant information that align withManagement of climate-related opportunities

Once a monthin 2019 and have since been maintained a

the TCFD guidance for the first time in FY2023.

Environment Management
Committee

management focus on environmental issues

By enhancing information disclosure, we aim at

Risk Management Committee

Management of climate-related risks

Twice a year

and reduction of environmental impact throughachieving the management that is even more

Executive Officer in charge

Senior Executive Officer in Charge of the Environment

the realization of safety, ANSHIN, and well-being.

eco-friendly and realizing a sustainable society.

Responsible Departments

Strategic Planning , Environment Promotion, Accounting , CSR, HR&GA

Responding to climate change is a major societal
challenge globally. We identify it as one of our* Decision making and supervision of the submitted items by the CSR
Committee are conducted twice a year.

Governancepriority issues. Having set the Vision for 2030 in

The Environment Management Committee,

the Materiality, we are promoting various initiatives

which is a specialist committee of the CSR

aimed at achieving a sustainable society.

Committee chaired by the CEO, plays a key role

Vision for 2030 concerning
climate changeContributing to the reduction of theenvironmental impact of customers andsociety through the use of the IDECGroup’s technologies and products.
 educe CO 2 emissions through theRin-house use of renewable energy.
P.07

The disclosure process of climate-related financial information1

in the effort to disclose climate-related financial

Scenario selection

information.
The Environment Management Committee

Adoption of two scenarios for transition
risks and physical risks, respectively basedon IDEC’s current state and future goals

meets monthly under direction by the Senior
Executive Officer in Charge of the Environment.

2
Identification of climaterelated risks and opportunities
Scenario analysis, and identification andorganization of climate-related physicalrisks, opportunities, and transition risks

Also, the Environment Promotion Department
was established in October 2021 to strengthen
environmental efforts and is involved in theCommittee’s activities. Decisions made by theBased on that background, we expressed our

Committee are submitted to the Top Management

support for the Task Force on Climate-related

Meeting, where the policy is decided, and thenFinancial Disclosures (TCFD) and participated inreported to the Board of Directors.

Environment

31

3
Assessment of business impact anddetermination of significance4
Review and reflection of
measuresAnalysis and assessment of business
impact of risks and opportunities todetermine their significance

Review of measures to respond to risks andopportunities according to their significance,
recommendations to business plans, andreflection to metrics and targets

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

Environment

List of climate-related risks and opportunities
Strategy: Scenario Selection

Strategy: Risks and opportunities

In order to evaluate the impact ofBased on the assumed scenarios, thec l i m a t e - related risks and opportunities, we

Environment Management Committee examined

selected two authorized scenarios for each of

the risks and opportunities that may be caused

transition risks and physical risks. The baselineby climate change. We identified transition

scenarios, assuming society in 2030, are one

risks, physical risks, and transition opportunities

in which the increase in average temperature isby category, and conducted analysis of their

kept below 2°C compared to the level at the timebusiness impact and time period, evaluation ofof the pre-Industrial Revolution, and the second

major items, and mapping of the analysis results.

wherein the measures against global warming

A lthough r isks are not ex pe cte d to haveremain conventional and the temperaturesignificant business impact in the current

continues to rise.

situation and in the short term, we will continue

Type

1 Increase in carbon pricing (increase in carbon tax and power charges)
2 Tighter obligation to report emissions
Policy and3 Tighter orders and regulations for existing products and services
laws
4 Litigation (initiated by stakeholders)
Transition risk
Risk

Note: Both scenarios are based on the World Energy
Outlook (WEO) issued by the International
Energy Outlook (IEO) .

Physical risk scenariostransition opportunities in our business strategy.
Mapping of climate-related risks andopportunities

2.5

STEPS

2.0

APS
SDS
NZE

0.5
2080

Source: IEA (2021) World Energy Outlook
All rights reserved.

2100

E2

B2

E1

Opportunity

3.0

2060

A

C

Medium to long
Medium to long

C
C

C
B

Chronic
risks

Interruption of power supply caused by effects of extreme

2 fluctuation in rainfall and weather patterns

Nature destruction and unexpected accidents caused by the

3 progress in conversion from thermal power generation to otherpower generation methods

Business impact(degrees celsius)

2040

Short to medium

1

Median surface temperature risesby the WEO scenario

2020

C

of cost in capital investment for energy saving and
4 Generation
renewable energy

Lack or suspension of supply of natural resources caused byHigh

Note: Representative Concentration Pathways (RCP)
by the International Conference on Parallel
Processing (ICPP)

2000

B

B

1 effects of extreme fluctuation in rainfall and weather patterns

ICPP’s RCP8.5 (4°C scenario)

1.0

A

Acute risks 2 Pandemic or stalled economic activities caused by a new virus outbreak
3 Increased lead time in raw material procurement

ICPP’s RCP2.6 (2°C scenario)

1.5

Medium to long

1 caused by extreme weather events

F

A1

C2
F2 B4 2 C1
3
B1
D2 1
E3
5
D1
C4
B3
F1 C3 4
A3

Migration
3
opportunities

4

Increase in sales of core products driven by the spread ofenergy-saving equipment and manufacturing equipment
Increase in market share and sales through manufacturingwith low environmental impact
Business expansion in the environmental field driven by
expanding use of solar power generation and fine bubbles,and diversified services
Greater needs for and business expansion of remote monitoring
and automatic control as effects of changing human behavior
Business expansion of safety-related products in response to
the worsening work environment caused by abnormal weather

Medium to longB

B

Short to medium
Short to medium

C
B

B
C

Medium to long

B

C

Medium to longB

B

Medium to longC

D

Medium to longC

B

Short to longB

B

Short to longB

B

Short to medium

B

C

Medium to longB

C

Definition of occurrence probability and business impact

A4
A2
Low

2

5

F3

C
C
B
B

Medium to long

Damage to manufacturing sites and supply chain disruption

Physical risk

Stated Policies Scenario (STEPS)B

3 Changes in raw material quality and properties

1 User product satisfaction (environmental)
Reputation 2 Increasing concerns or negative feedback by stakeholders

a more resilient company and incorporate theA

Medium to longDE

Medium to long
Short to medium
MediumShort to medium

2 (including introduction or increase of carbon taxes)

Increase in raw material procurement and manufacturing costs

C

Medium to long
Long

B
D
C
D

C
B
B
B

2 Failure to invest in new technology
Technology 3 Cost of moving to a low emission technology
4 Technology delays to competitors
1 Changes in customer behavior or irregular changes in market trends
MarketOccurrence Businessprobability impact

A
A
B
D

Medium to long

1 lower emissions

B

Time period

Short to medium

Replacement of existing products and services with options withmedium- to long-term risks, aiming to becomeSustainable Development Scenario (SDS)

Major
item

Item

A

to systematically implement measures to address

Transition risk scenarios

Category

Occurrence probability

A May occur almost certainly.
Occurrence B
probability
May occur when a few conditions are met.

May have a significant impact on operating margin.
Business B
impactC May have a significant impact on sales and profits.

D The probability of occurrence is not high.

D There is no significant impact on the business.

May occur when certain conditions are met.

High

C

 Risks Opportunities
Major risks and opportunities in red.
The symbols and numbers are mirrored by those in the “List of
climate-related risks and opportunities”.

Environment

32

May have a significant impact on business

A continuity and growth.

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

Environment

Risk management

Metrics and targets

The identified results of risks and opportunities

Our medium-term management plan sets therelated to climate change, and the risk items

targets to reduce Scope1 and Scope2 CO 2that have been assessed as important in ouremissions by 24% by FY2025 and by 50% by

Scope1

Scope2

Scope3 upstream

Scope3 downstream

mapping, are managed by referring to an

FY2031 (compared to the levels in FY2020).

FY2020

553

3,997

-

-

integrated risk map of the IDEC Group (P.49).

With regard to Scope3, we began calculating

FY2021

501

4,360

68,900-

They are also reflected in the environment-

upstream (Categories 1-7) emissions in Japan in

FY2022505

4,169

112,900-

related risks and opportunities associated of the

FY2021. We will expand the range of calculation

Materiality (P.08).

to the Scope3 downstream (Categories 8-15)

Important items of risk and opportunity are

and make preparation for its disclosure. The

evaluated by the Environment Management

expansion of global-based disclosure is also

Commit tee, taking into account both theproceeding at the same time.

likelihood and extent of impact. The Environment

As for the reduction of industrial waste, we

Promotion Department describes environmental

have set a target of 24% reduction by FY2025

risk management items on a risk management(compared to the level in FY2020).

table annually, specifies performance indicators,

Going forward we plan to set targets and work on

and reports the progress of the achievement toother metrics, which include the results of shifting

CO2 Emissions (Scope1&2)

the Risk Monitoring Subcommittee (P.48).

to renewable energy, the ratio of eco-friendly

Scope1: Emission unit (t-CO2)

CO2 emissions
IDEC (Japan*)*Japan=IDEC non-consolidated + group companies in JapanIDEC (consolidated)

products to total new products, as well asTransition planestablishing of internal carbon prices, and theimportant part of its business strategy and isstudy of international disclosure standards.

to long-term business strategy.
In the future, we will make more accuratequantification of risks and opportunities, continue
to monitor qualitative information, and estimate
the financial impact of quantitative items over the
medium- to long-term, in particular to improve thetransition plan and its disclosure method.

Reduction inindustrial wastes
Cumulative ratio of
eco-friendly
products to total
new products

Scope3 upstream

Scope3 downstream

10,791--

FY2021

948

11,390--

FY2022897

12,129--

Scope2: Emission unit (t-CO2)

Emission intensity (kg-CO2/million yen)

IDEC (consolidated)
4,861

4,674

11,943

2020

12,33813,026

229
205

162

24%
24%
60% or

151

2021

2022

184
(FY)

2020

2021

2022

(FY)

Calculations of Supply chain CO 2 emissions

more

Environment

Scope2

1,152

197

Medium-term plan target
for FY2025
Reduction in
CO2 emissions

Scope1
FY20204,550

promoting the reflection of its environmental
response to its annual policy and medium-(Emission unit: t-CO2)

IDEC (Japan)

ISO 14001 compliance at all global bases,

IDEC considers the climate strategy as an(Emission unit: t-CO2)

33

Scope1

The amount of emissions from a reporting company’s GHG
emission sources to the air directly.

Scope2

The amount of indirect emission from energy sources.

Scope3

The amount of indirect emissions related to reporting
company’s business activities in the Group’s supply chain notwithin a Scope1&2 boundary.

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Environment

TCFD reference table
The following index provides references to the IDEC Group’s disclosures on recommendations of the
Task Force on Climate-related Financial Disclosure.

Governance
TCFD
Recommendations

Risk management
Disclose the organization’s governancearound climate-related risks and opportunities
Recommended disclosure

TCFD
Recommendations

Where applicable in IDEC Report 2022
Sustainability promotion system

Describe the board’s oversight ofclimate-related risks and opportunities.

a)

Describe management’s role in assessing
and managing climate-related risks andopportunities.

b)

Recommended disclosurea)Describe the organization’s
processes for identifying andassessing climate-related risks.

b)

Describe the organization’s processes
for managing climate-related risks.

c)

Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated
into the organization’s overall risk
management.

P.30

Governance
Governance system to address to climate change

P.31

Corporate governance system

P.39

Sustainability promotion system

P.30

Governance
Governance system to address to climate change

P.31

Corporate governance system

P.39

Risk management system

P.48

Strategy
TCFD
Recommendations

Disclose the actual and potential impact of climate-related risks andopportunities on the organization’s business, strategy and financial planningwhere such information is material.

Recommended disclosure

Materiality-based risks and opportunities

a)

b)

c)

Describe the impact of climate-relatedrisks and opportunities on theorganization’s businesses, strategy
and financial planning.

TCFD
Recommendations

P.08

P.49

Value creation process

P.05

Materiality

P.07

Transition plan

P.33

a)

Steps for disclosing climate-related financial information

P.31

Strategy: Risks and opportunities
Mapping of climate-related risks and opportunities
List of climate-related risks and opportunities

P.32

Risk map and identification of high risk events

P.49

Strategy: Risks and opportunities
List of climate-related risks and opportunities

P.32

Risk management
Transition plan

P.33

P.33

34

Where applicable in IDEC Report 2022

Metrics and targets
Disclose the metrics used by theorganization to assess climate-related
Environment
risks and opportunities in line with its
strategy and risk management process. Non-financial datab)Disclose Scope1, Scope2, and, if
CO2 emissions
appropriate, Scope3 greenhouse gas(GHG) emissions, and the related risks.

c)

Metrics and targets
Describe the targets used by theorganization to manage climate-relatedrisks and opportunities andEnvironment
performance against targets.

P.32

Environment

P.08

Disclose the metrics and targets used to assess and manage relevant
climate-related risks and opportunities where such information is material.

Recommended disclosure

P.32

Risk map and identification of high risk events

Strategy: Scenario Selection
Describe the resilience of theorganization’s strategy, taking into
consideration different climate-related
Transition plan
scenarios, including a 2°C or lower
scenario.

Where applicable in IDEC Report 2022
Materiality-based risks and opportunities

Metrics and targets

Where applicable in IDEC Report 2022

Describe the climate-related risks andStrategy: Risks and opportunities
opportunities the organization has
Mapping of climate-related risks and opportunities
identified over the short, medium,
List of climate-related risks and opportunities
and long term.

Disclose how the organization identifies, evaluates,
and manages climate-related risks.

IDEC REPORT 2022

P.33
P.35
P.53
P.33
P.53
P.33
P.35

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Environment
In conjunction with the ongoing increase in green procurement and green purchasing, and developing eco-friendly products,
we are promoting global environmental management, including obtaining ISO 14001 certification and adopting solar power
generation in Japan and overseas.

Solar power generation amount in theenvironmental energy businessElectricity usage (IDEC unconsolidated)
Specific energy consumption (kWh/million yen)
Electricity usage (thousand kWh)
377

354

354

Solar power generation amount (thousand kWh)

23,215354

19,092295
11,501

11,077

10,434

9,860

14,565

10,494

Expanded adoption ofself-consuming solar power
generation

Environmental energy business

By accelerating the introduction of our own solare n e rg y b u s i n e s s th at p rov i d e s o n e -sto p

power generation facilities for our offices andservices from solar power plant construction

factories both in Japan and overseas, we areto fo ll ow-u p. O u r pa r ti cu l a r fo cu s is th e

reducing the environmental impact we create byintroduction of dedicated, own-use solar

replacing electricity with renewable energy.

power generation facilities, utilizing the roofs

IDEC (unconsolidated) made investment for oneof buildings such as factories, warehouses,

additional power generation facility in FY2022,

stores, and facilities. There has been an increase

and plans investment for three more facilities inin adoption of this type in recent years, as it

FY2023. The amount of investment in FY2023

helps reduce CO 2 emissions and can provide

is expected to increase by approximately 3.7

emergency power to neighboring areas in thetimes that of FY2022, or about 0.14 billion yen.

event of a disaster, thereby contributing to theAmong the group companies, IDEC FACTORY

safety and ANSHIN of the local community.

SOLUTIONS CORPORATION installed a solar

We plan to introduce more similar cases withpower generation facility in its new factory,

the aim of achieving a better society.

IDEC SYSTEMS & CONTROLS CORPORATION,
a group company, is developing a renewablewhich started operation in FY2022. Solar power
8,498

generation facilities are also in operation at our

8,239

U.S. office and our factory in Taiwan.

Fine bubble business
IDEC is conducting research on the application

2018

2019

2020

2021

2022

(FY)

We strive to raise the awareness of energy
conservation among employees through posters
and stickers that encourage energy conservation.
At the same time, we have systematicallyintroduced acquired self-consuming solar power
generation facilities so as to reduce electricity
usage based on traditional fuel.

2018

2019

2020

2021

2022

of its world-leading fine bubble (microscopic(FY)

bubble) technology in the environment andIn addition to 4 solar power plants in the Kansaiarea, we added 11 new solar power plants in
FY2022. We are working to transfer from fossil
fuel to renewable energy for power generation,with the aim of contributing to helping to slow
global warming.

industries. Specifically, applications are being
IDEC CORPORATION (U.S.)

industrial cleaning and various applications in
the agricultural and fisheries industry.

*Some past fiscal year data has been corrected.
APEM Inc. (U.S.)

Environment

made in a wide range of fields, such as for

35

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Environment

Promotion of developing
eco-friendly products

The IDEC Group’s environmental
activities in 15 countries and regions

Efforts in Japan to reduce theenvironmental impact

Enhancement ofenvironmental education

In light of trends such as reducing environmental

During the CSR month of October, various

Conventionally, packaging wraps and cardboard

As par t of ef for ts to raise e nvironme ntal

impact in society and protecting the globali n i t i a t i v e s a r e i m p l e m e n t e d to a d d r e s s

to transpor t materials were used between

awareness among employees, we haveenvironment, we have specified procedures

environmental issues at our global bases.

domestic factories. We have newly adopted

d i s tr i b u te d th e s e r i e s of m u s t-k n ow

re u s a b l e e c o -f r i e n d l y pac k i n g ba n d a n denvironmental words in Japanese andin consideration of the environment in thedevelopment process of new products.

IDEC ASIA (THAILAND) CO., LTD.

uniform-sized folding containers. This not only

English via internal intranet since F Y2022.

In FY2023, “The Procedure Manual for the

Paper bags handmade from recycled copy

reduces the volume of packaging materials andFrom FY2023, E-Learning courses on theseDevelopment of Eco-Friendly Products” haswrapping paper were given to hospitals which

cardboard used, but also reduces man-hours.

environmental words has been launched.

been revised, which scores the degree ofsuffered from a shortage of medicine bags

Specifically, the session will be included in theenvironmental consideration of new products

for patients.

ISO 14001 training plan, and will be graduallybased on IDEC’s own standards such as energy

rolled out to other offices nationwide.

efficiency improvement, resource saving, space

In order to expand the course globally, we are insaving, and a longer product life. IDEC’s original

the process of the multilingual development ofeco mark is stamped on products that meet thethese educational tools, starting from English.

required scores set in the procedure in a way of

Going forward, we will strengthen cooperation

appealing to customers.

with environmental key persons at our major

Our target is to make eco-friendly products

bases. A target for FY2024 is to cooperate withrepresent 60% of all new products launchedsince FY2020 on a cumulative basis.

Example of eco-friendly products

Reduction of about 1.1 tons of packaging materials
and 17 tons of cardboard

IDEC TAIWAN CORPORATION
In addition to reducing the number of copies

We are also considering the introductionused by shif ting to electronic means, theo f n e w p ro d u c t p a c k a g i n g m ate r i a l s. I n

company installed containers for recycling

December 2021, we began to use bubble wrap

resources and has since been promoting themade of film containing 25% or more biomass

sorting and recycling of waste.

plastics at two sites. We plan to expand use of

the key persons and to make effective use of theenvironmental education tools at each base.

this material in various other places in Japan
from FY2023.

LF3D series LED illumination units
Energy saving
Space saving

Moreover, efforts made at IDEC headquarters

Luminous
efficiency

37% increase
Volume 50% decreasei n c l u d e th e re d u c ti o n of c o py m a c h i n e s
installed on each floor so as to reduce usageof copy paper, and the campaign for notusing plastic bottles.

* Compared to the conventional model

Environment

36

IDEC REPORT 2022

Web tools for environmental education

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

SocialTarget SDGs
In keeping with IDEC’s group vision—to realize a safer and more sustainable society that brings happiness and
ANSHIN to all people—we will continue to implement activities that respond to social issues and establish good
relationships with society.

Rate of return to work afterchildcare leave (IDEC unconsolidated)
Rate of return to work after childcare leave (%)
Employees (male) who take childcare leave
Employees (female) who take childcare leave
100

100

100

17

15
7
7

2018

12

14

2019

Promotion of empowerment of womensafety, ANSHIN, and well-being for people

As part of creating an environment and culture where diversearound the world by creating the optimum

human resources can take up a challenge, we are promoting

environment for people and machines, we are

empowerment of women. In FY2022, management training

making efforts to realize a society in which

sessions, with invited external lecturers, were conducted foreveryone can live healthy, happy, and vigorous

executives (division general managers) and deputy division

life. The IDEC Group intends to achieve

general managers, who are expected to play a key role insustainable growth through the creation of

empowerment of women.

innovations that lead to solutions to societal

The development programs for women and men, as

challenges by implementing measures including

candidates for next-generation executives, were also

Rate of paid leave taken

promotion of DX (Digital Transformation),

introduced. Our target is to have at least 15 female(IDEC unconsolidated)and by deploying a diverse workforce fully

managers* by FY2025.

exercising its individual and combined abilities.

*Including female associates in the position of leader with subordinates

75

15

12

1

In keeping with IDEC’s Purpose of realizing

14.7

19
14

Diversity and Inclusion

Rate of paid leave taken (%)
Number of days of paid leave taken (days)

100

100

Aiming for a sustainable society

7

2020

82

82

82

Promoting of Decent Work

Understanding of and support for LGBTQ

15.7

16.1

15.9

We are work ing on creating work place

In order to encourage proper understanding and change

environments where diverse human resourcesof consciousness and behavior toward the LGBTQ gender

are empowered and are comfor table atgroup, all employees in the Japanese group companies

work. Based on the results of our employee

attended an E-Learning session on the theme and took aengagement survey, we have introduced aknowledge test in FY2022. The distribution of the Ally seal

new personnel system in FY2023, which will

representing a person who understands and supports

lead to clarifying career plans and improving

LGBTQ people is an example of our continuing efforts toemployees’ engagement and motivation. We

raise awareness.

69
13.6

9

5

6

2021

2022

(FY)

In order to make it easy for not only female
employees but also male employees to be
involved in childcare, the first three days ofchildcare leave are paid leave days. We also sendan email notifying the childcare leave program tomale employees whose spouses have delivered ababy, and encourage them to take childcare leave.

2018

2019

2020

2021

2022

(FY)

Our target is 80% or higher as the rate of paid
leave taken. We also encourage employees totake paid leave days throughout the year in aplanned manner and to take them during certain
periods, such as summer and around Christmas.

will also promote decent work by strengthening
the recruitment of technology talent to support

Offering of a variety of career plan options

DX, advancing the development of experts

We have expanded career plan options for employees bythrough the introduction of online AI learning

establishing a multiple-path career course that adapts to theand other measures, and enhancing operational

direction of career goals and self-growth for our employees,

efficiency.

and a second career support system that supports careeradvancement through career change or return to school.

Social37

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

SocialPromotion of employee safety andwell-being

Respect for human rights

Supply chain management

Social Contribution Activities

In the “IDEC Group Code of Conduct”, weIn order to promote business activities thatWe designate every October as a “CSR Month”

Since keeping employees and their familyemphasize consideration for human rights

consider human rights, labor, health and safety,

and strive to raise group-wide awareness ofmembers physically and mentally healthy is vitalby stating that “We respect humanity, do not

the environment, and other risks throughout

societal challenges in Japan and overseas. The

to the IDEC Group, we adopted the IDEC Groupdiscriminate based on gender, nationality, social

the supply chain, we have established thetheme in FY2022 was “Sustainable Society”;

Health Declaration and are promoting healthstatus, family origin, religion, etc., and strive“IDEC Group CSR Procurement Guidelines”

employees were encouraged to think about

initiatives. The first step for better well-being

to create a workplace that promotes diversity

and published them in Japanese, English,

what each could do and take actions, while

is to ensure the safety of employees. We arewithout racism, gender discrimination andChinese, and Thai. In cooperation with our

relevant information was distributed and events

promoting efforts to eliminate and prevent thediscrimination against people with disabilities”.

suppliers, we are promoting CSR procurement

were held. Our social contribution activities,causes of injuries, diseases, and other dangers

We assign great importance to human rights.

that address societal challenges (responsible

including our CSR activities and SDGs efforts,in the workplace.

The Code of Conduct also clearly states

procurement activities with consideration given

are shared with our employees

In 2019, in order to promote employee health,that sexual, power, and any other forms of

to sustainability).

through our internal intranet

a Well-being Center with a fitness gym and aharassment activities are not to be conducted,

As par t of supply chain management, weand company newsletters to

Healthcare Center was constructed at the head

and we have established the “Anti-Harassment

conduct surveys via questionnaires and site

invigorate the CSR activities ofoffice, where an industrial physician and full-timeRules,” which defines what employees should

visits. We will continue to grasp the updated

the entire IDEC Group.

health care professionals are working on healthobserve and what actions they should take inbusiness situation, make solution proposals

management. Furthermore, in FY2023, an in-

the event of a suspected workplace harassment.

in accordance with the CSR Procurement

house corporate clinic will open in the Well-being

In addition, a consultation office has been set

Guidelines, and request suppliers for their

Center of the head office in keeping with our aim

up within the Human Resources and Generalcontinued cooperation in CSR procurement.

to ensure the mental and physical well-being of

Affairs Department, enabling broad response to

all employees.

employees’ problems and worries.

Learn more

Examples of the details of consultation

https://us.idec.com/csr/partner

 uman relations, harassment, and mentalH
health in the workplace
Worries over childcare, nursing care, andcareer issues
Consultation on diversity

Fitness gym in the Well-being Center

Step

1

Establishment of CSR Procurement
Guidelines

Retention rate of new graduates after theirfirst three years

Step

2

CSR Procurement Briefing

Step

3

Questionnaire survey

Retention rate
Workers joined in Workers with IDEC
(unconsolidated)
April 2019as of April 1, 2022

Step

4

Visit survey

Step

5

Problem solution proposals

100%

20

20

SocialProcurement activities with suppliers

38

IDEC REPORT 2022

Contributing to the developmentof the next-generation robot Sler!
IDEC FACTORY SOLUTIONS CORPORATION isproviding support for the Robot System Integration
Competition for high school students nationwide,
which will be held from FY2023. The company isoffering IDEC’s safety-related products free ofcharge and is guiding students on safety mattersand competition themes. Through this activity, we
aim to improve robot-related technologies of highschool students, develop human resources for
future robot system integrators(Slers), and thereby help solve
industry’s labor shortage.

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

GovernanceTarget SDGs
The IDEC Group is promoting further enhancement of its governance system
to ensure management transparency and efficiency on behalf of its shareholders and other stakeholders.

IDEC Corporate Governance Policy
The basis of the IDEC Group’s corporate

IDEC Way”, which was established in 2019 as agovernance is to ensure management

new philosophy toward becoming a truly global

transparency and efficiency for shareholders

company, the IDEC Corporate Governanceand other stakeholders. For this reason, we

Policy has been established and published toassign outside directors and separate thefurther strengthen corporate governance.

management supervisory function from theexecution function so as to always maintain a

IDEC Corporate
Governance Policy

high priority on transparency and efficiency.

https://us.idec.com/idec-us/en/USD/
about-IDEC/ir/investors/governance

Under this concept, in order to realize theimprovement of corporate value based on “TheFeatures of governance in IDEC utside directors representO
more than half of all directors.

The evaluation of the effectiveness of the Board of
Directors has been continuously conducted since FY2016.

 ll outside directors areA
independent officers.

 utside directors actively participate in outsideO
directors’ exchange sessions and other events.

General Meeting of Shareholders
Appointment/Dismissal

Nominating
Committee

ReportingRatio of outside directors

Ratio of female directors

Distribution of tenure periods(As of June 30, 2022)(As of June 30, 2022)(As of June 30, 2022)

3

6

insidedirectors

outsidedirectors

6 male3 femaledirectors

directors

Ratio of outside
directors

Ratio offemale directors

67%

33%

10 yearsor moreBoard of Directors
Director

Director(excluding Audit &Supervisory
Committee members)(Majority beingoutside directors)

Appointment/Dismissal

Appointment/Dismissal

Appointment of representative
directors by the Board of Directors

Director(Audit &Supervisory
Committee
members)

Audit &
Supervisory
Committee

Accounting
Auditor

Audit by the Audit &Supervisory Committee

3 years or less2 directors

4 directors

Execution Top Management MeetingofBusinessCEO

Ratio of lessthan three years

44%

Executive Officers’ Meeting

Internal Auditing
Dept.

CSR Committee
Various Committees

3-9 years

Various Departments / Group Companies

3 directors
Cooperation

Governance

39

Instructions / Reporting

IDEC REPORT 2022

Auditing

Accounting
Auditors

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Governance

Evolution of governance

The voluntary Nominating
Committee and succession
planning

Proactive engagement by outside
directors

The IDEC Group has separated the businesson governance and our operating policy. In June

execution function and the supervisory function

2018, we transformed our status to being aof the management, in order to realize efficientCompany with an Audit & Supervisory Committee.

A voluntary Nominating Committee has been

independent role in various ways. At the Board

corporate management, and has proactively

In 2022, we have newly appointed outside

established as an advisory body for the Boardof Directors, they express candid opinions based

appointed outside directors since early on. In

directors in areas that we believe their contributionof D ire cto r s w ith a m a jo r i t y of m e m b e r s

on their high level of expertise and management

2016, the IDEC Corporate Governance Policy

was needed, regarding such matters as related tobeing outside directors since 2021 in order toexperience, and participate in the discussion

was established to set forth and inform our viewthe environment and IT.

objectively and independently decide nominationfrom an independent standpoint. They are alsoof candidates for directors and a development

actively involved in the growth of the Company’splan of next-generation executive candidates.

business, including the holding of individual

In FY2022 the Nominating Committee held one

sessions with a responsible department or

meeting, which was attended by all the members.

departments concerning a business issue or

When nominating candidates for a director post,

subject, and lectures and interviews in thethe Nominating Committee is responsible forcurriculum for next-generation training.

the process of selecting and recommending

With the objective of enhancing communication

candidates for decisions by the Board of Directors.

among outside directors’ exchange session

In the development of successors to executives,

have been held since F Y2019. In F Y2022,

including representative directors, with theoutside directors deepened examination of

objective to continually produce personnel

medium- to long-term strategic policies of the

who contribute to the sustainable and global

IDEC Group through active discussions anddevelopment of the IDEC Group, candidates

exchange of views.

Timeline

June
2012

June
2016

June
2018

of theFeatures and institutional design Composition
Board of Directors
Appointment of outside
directors to be half of all
directors

Ratio of outside
directors

Ratio of female
directors

50%

Establishment of IDEC
Corporate Governance Policy

Transform to Company with an
Audit & Supervisory
Committee status

0%

57%

14%

10%

70%

Outside directors play a professional andattend training in subjects of general management

Audit & Supervisory
Committee members

knowledge according to their job level, and areprovided with the opportunity to participate

June
2021

Establishment of a voluntary
Nominating Committee

June
2022

Enhance areas or rangeof expertise
Increased number offemale directors

Audit & Supervisory
Committee members

in impor tant meetings, including the Top

11%

67%

M a nag e me nt M e eting a nd the E xe cu ti ve
Officers’ Meeting. The Nominating Committee
receives reports on the progress of development

Audit & Supervisory
Committee members

InsideMale

Female67%

of candidates, and the committee members

33%

express their opinions on the development planand report to the Board of Directors.

OutsideMale

FemaleGovernance

40

IDEC REPORT 2022

Outside directors’ exchange session

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Governance

Remuneration policy for directors
IDEC’s remuneration system for directors is basedon fixed remuneration according to their positionand performance-linked remuneration basedon the premise of contribution to the Officers’

Constructive dialogue withshareholders, investors and analysts

opinion on the remuneration at the General Shareholder
Meeting in advance, and not just each director’s position
but also the Company’s performance is considered forexecutive directors, or expertise and management
experience in other companies for outside directors,
and the Board of Directors, of which the majority iscomposed of independent outside directors, makes a
final decision to leave the matter to the CEO.

We a re ac ti ve l y e ng ag e d in S h a re ho ld e r
Relations (SR) and IR activities with the aim ofobtaining credibility and appropriate evaluation

Shareholding Association, so that the remuneration
serves as incentives for achieving sustainablegrowth and links with shareholder interests. Policyof our manage me nt, and of e nhancing
sustainable growth and medium- to long-term

Policy for cross-shareholding

corporate value. Our directors and executives

regarding remuneration decisions is set forth

The IDEC Group’s policy is to hold an appropriate

respond diligently to requests for information or

below. Independent outside directors, however,number of shares only if we have a rationale

interviews from shareholders and institutional

have only fixed remuneration because they play afor holding them, and to reduce or sell sharesor individual investors. The information obtained

supervisory function from an independent position.

for which we cannot find rationale, as may beduring these SR and IR activities, as well as

appropriate. Once a year or more, the Board of

market evaluations and opinions, are regularly

Directors verifies whether to keep as-is each ofreported to the Board of Directors.

all cross-holding shares, with due consideration

We also seek to enhance IR tools such asof the business activity needs (such as forshareholder letters and corporate websites thatmaintaining and strengthening a business alliancehelp shareholders and individual investors makeor transaction), our cost of capital, and the stock

investment decisions. We are forthcoming about

price trends of these issuing companies.

disclosing sustainability information and news

Policy on remuneration decisions
 he basic remuneration for the Company’s directorsT
is fixed monthly remuneration, which is determinedby comprehensively taking into account the position,
responsibilities and business performance of theCompany.
he performance-linked remuneration is a cashTremuneration based on the premise of contribution to
the Officers’ Shareholding Association, and uses theconsolidated operating income margin for its calculation
because the said ratio is a basic indicator of the Group’s
earnings status. Comprehensively taking into accountthe changes in the said indicator for each fiscal year, thetotal amount is determined, which is then divided by the
grant ratio according to the position, resulting in
performance-linked remuneration for each director. This
performance-linked remuneration is divided into 12 equalparts and paid monthly.
 he percentage of performance-linked remuneration isTdetermined roughly within the range of 10% to 20% of
the amount of remuneration for representative directors
and 5% to 10% of the amount of remuneration for otherexecutive directors.
 s for the details of individual remuneration for directors
A(excluding directors who are members of the Audit& Supervisory Committee), the Audit & Supervisory
Committee deliberates whether or not to express its

topics in addition to financial information andInternal control systemmanagement strategies.

In order to ensure the credibility of the financial
reporting of the IDEC Group, we have prepared
relevant regulations and have establishedappropriate systems in accordance with theinternal control evaluation criteria for financial
repor ting. T he Internal Control Policy on
Financial Reporting is established to clarify
the overall Group’s promotion structure, andto establish a framework for continuous self-

Online live broadcast of the financial results briefing

inspection at each division and group company
and for independent monitoring by the Internal
Auditing Department.

Governance

41

IDEC REPORT 2022

Data

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

GovernanceEfforts to evaluate effectiveness
Issues specified in FY2022

In order to improve the effectiveness of theBoard of Directors, an evaluation of all directors

FY2022 evaluation results by the third-party organization

Fostering of next-generation executive candidates

except the CEO has been conducted using aIncrease in opportunities to consider medium- to long-term
management strategies

questionnaire method every year since FY2016.
As the Corporate Gover nance Code and nhanced transparency, efficiency, and monitoringE
capabilities in management

other governing document require a more

 ecognition of the communication contents withR
shareholders and investors

sophisticated governance system that takes into
account objective evaluation, a questionnaire
survey and a third-party organization’s results

Actions taken in FY2022

analysis have been carried out since FY2022.
The evaluation results are reported to the Board
improvements are being made continuously.

 stablished a Nominating Committee; offered opinions onE
the next-generation executive development plan; andincreased contact opportunities including the interviews
with candidates for executive development

Outline of the effectiveness evaluation
in FY2022

 arried out discussion and exchanges of opinions onCmedium- to long-term strategy at get-together meetings
with outside directorsof Directors, and the issues are shared, andTarget members

All directors except
the CEO (8)Evaluation method

Anonymous questionnaire

Survey period

Response period:
February to March 2022

Questionnaire compilation

Compiled by an externalorganization

Response status

All targets answered

December elected candidates for directors of the next fiscal yearSwith a higher level of expertise, in order to strengthen
monitoring capabilities nhanced feedback to the Board of Directors regardingEcommunication with shareholders and investors,
including briefing meetings

January

Review the issues of the ongoing fiscal year.
Study the questionnaire for this fiscal year.

The effectiveness of the Board of Directors was determined to be ensured. The evaluationof the composition and discussions of the Board of Directors, including the diversity of themembers and the free and constructive exchange of opinions during the meetings, wasabove the average of other companies, and the overall evaluation was generally positive.
The evaluation results also presented future issues for further improvement in
effectiveness. They include the operation of the Nominating Committee established in
the previous fiscal year, the revitalization of ESG-related discussions, and discussions
based on dialogue with shareholders and investors.

Set up survey questions.

February urther enhancement of discussions at the Board of Directors, such asFreviewing initiatives on ESG issues and business portfolios, conducting active
discussions on the design of remuneration systems, and conducting
discussions based on dialogue with shareholders and investors.
 ormulation and implementation of succession plans, including appropriateFnomination processes based on skills matrix and sufficient deliberation todevelop selection criteria.
 nhancement of the performance of outside directors by further facilitating theE
exercise of the supervisory function of outside directors and encouraging
communication between outside directors and inside directors.

March

Carry out the survey.

GovernanceFuture issues based on the FY2022 evaluation results

42

Compile and analyze survey results.
Report to the Board of Directors.

IDEC REPORT 2022

May and June
Disclose the results in governancereports, etc.

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

Governance

Board of Directors
Expected Skills Matrix of the Board of Directors ( indicates contributing areas/roles

indicates contributing areas with particularly high expectations)

Directors

Expected contributing
areas and roles

Directors(Audit & Supervisory Committee Members)

Chairmanand CEO

Senior Executive
Vice President, COO

Managing
Director

OutsideOutside

Newly-appointed Outside

OutsideOutside

Newly-appointed Outside

Director

Director

Director

Director

Director

Director

Toshi K. Funaki

Mikio Funaki

Takuji Yamamoto

Hiroshi Kobayashi

Hideyuki Ohkubo

Mariko Sugiyama

Yasuo Himeiwa

Michiko Kanai

Eri Nakajima

Corporate management
and management strategy
Legal affairs andrisk management
Personnel affairs anddevelopment
Financing and accounting
R&D and manufacturing
Sales and marketing
International businessIndustry knowledge
IT strategy
Environmental measures

Governance

43

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Governance

Senior Executive Officers

ArnaudMondi
Senior Executive
OfficerMarketing & Strategy

Executive Officers

AtsushiMatsumoto

Hirotsugu
HaradaExecutive Officer
Product Development

Executive Officer
New Business
Development

Yoshihiko
Nishiyama

Masaki
Tsuri

Executive Officer
Accounting

Executive Officer
Quality Assurance

Marc
Enjalbert

Takao
Funaki

Executive Officer
APEM

Executive Officer
U.S. BusinessToshihiro
FujitaSenior Executive
OfficerManagement ofTechnology

Yasuharu
Kawanaka

Koji
Akamatsu

Senior Executive
OfficerJapan Sales &Greater China

Senior Executive
Officer
Manufacturing & SCM

Tomonori
NishikiShinichi
YoshimiSenior Executive
Officer
Technology
Development &Environment

Senior Executive
Officer
Strategic Planning

GovernanceYasunori
Kawanaka
Executive Officer
Products Strategy

44

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

GovernanceDialogue with outside directors

We aim to further enhance the functions of the Board of Directors inorder to achieve sustainable growth and rising corporate value of IDEC

Outside Director(Audit & Supervisory
Committee Member)Michiko Kanai
LawyerA highly transparent governancesystem ensuring extensive
discussions that satisfy theoutside directors
IDEC has appointed outside directors
from an early stage, and they represented ahalf of the directors back in 2012. At IDEC’s
Board of Directors’ meetings, outside directors
freely express questions and opinions. How
do you evaluate our governance systems andour structure and management of the Boardof Directors?
Himeiwa I agree that IDEC has a transparent
governance system as outside directors
represent a majority of the Board of Directors,
as well as the Audit & Supervisory Committee
and the Nominating Committee. I also findthat IDEC has been making progressive
efforts, such as clearly showing a skills matrixof the directors in the notice of shareholders’annual general meeting from early on.
Kanai You are right. From the beginning of
my appointment, outside directors represented
a majority and I had the impression of IDEC
being an advanced company. In particular,
I felt the presence of the strong will of the
CEO when IDEC appointed management
veterans of a bigger, more advanced global
manufacturer as an outside director andasked for their advices.
The Board of Directors would be easily
managed if internal directors represented amajority. However, IDEC intentionally hasoutside directors as a majority of the Board,
receives their questions and suggestions,
responds to each of these, and listenscandidly regarding what needs to be said.
I saw that the outside directors functioned
effectively since my first day and I havealways been impressed with the will of the
management to make the Board of Directors
function well.
Himeiwa In order to enhance the discussion
at the Board of Directors meetings, I would
appreciate to receive meeting materials in
advance, for preparation.
Kanai Since the agenda items and materials
are prepared based on the discussions of
the Top Management Meeting, it might bedifficult timewise. However, it would certainly
be nice if the key points and additional
information of new or important agenda items
are included in the materials beforehand.

Valuing what only outside
experts can see and say
The range of activities of outside directors
is increasing, including provision of opinions
on individual matters and participation in the
Audit & Supervisory Committee and theNominating Committee, in addition to theBoard of Directors. What do you have in mind
when working as an outside director, while
keeping an eye on improving governance?

Himeiwa I am an accounting expert, so I am
conscious of giving advice from an accounting
standpoint. Advice coming from outsideaccounting experts may be easier for the
management to understand and listen to. I am
particularly conscious of whether governanceis working properly, and I always try to ask
questions if there is any uncertainty. This isbased on my view that accounting fraud canoccur at any company. I also find it importantthat the Audit & Supervisory Committee
detects and reports potential risks tomanagement at an early stage.

Outside Director(Audit & Supervisory
Committee Member)

Yasuo Himeiwa
CertifiedAccountant

Kanai At the Board of Directors meeting, I
keep it in mind to ask questions if I don’t
understand or am not satisfied, and I makesure to understand the facts. Concerning
the legal aspect, it is important whether the
directors make sufficient discussions inmaking big decisions, seek the opinions ofexperts, and reach the best businessjudgements as the Board of Directors. When
IDEC acquired APEM, the outside directors
gave various opinions, had numerous
discussions, and spent a long time studying
the matter. From the legal perspective, I wantto make sure whether such a process isbeing taken properly.
Himeiwa I agree with you. I can see thatthe management is not merely following
formalities but is earnestly trying to listen to
the opinions of outside directors and toengage in extensive discussions.

Appointed as outside director in June 2016, Kanai has
been a Director and Audit & Supervisory Committee
Member since 2018.

Appointed as outside director (Audit & Supervisory
Committee Member) in 2020, Himeiwa has also served as
Chairman of the Audit & Supervisory Committee since 2021.

Governance

45

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Governance

Development of next-generation
management and ESG activities
in the core operations being
positioned as challenges forrealizing sustainable growth
The post-COVID-19 future outlook is so
uncertain, and companies have to copewith constantly changing issues, including
the response to ESG and other non-financial
matters. What do you see as the current
challenges of IDEC and will you give us
advice on how we can raise corporate value
going forward?
Himeiwa Successor planning is one major
issue. Since the current management teamcannot last forever, the next team must be
established and ready when the time comes.
In that sense, nurturing successors is thecurrent priority issue and that is why a
Nominating Committee has been establishedto tackle it.

industrial disasters. This will be a tailwind
for IDEC. I would like to think about ESG
activities as a contributing factor to
profitability, not as a cost-raising factor.

Kanai This is also an area of interest to
institutional investors and many otherstakeholders. We should also think about
how to announce it so that it will bepositively received.

Kanai Indeed. That point of view will
become more and more important. When
IDEC started CSR activities, it was hard tolink them to business. Even if the idea of theactivity itself is good, it would not becomesustained unless generating profit. Let’s
engage in more core business activities
which link to ESG issues.

The current management teamhas strong leadership, and is actively taking
action to improve corporate value, as we cansee in the case of flexible share buybacks.
Analysts must also be interested in how thenext-generation management team would
be shaped. Companies function under astrong leadership system or under a groupleadership system. In either case, it would
be important to make the next generation
visible soon.
Himeiwa

Importance of communication
among directors outside themeetings

In my view, it is important that eachof the next-generation management team toproactively think of themselves as the final
decision maker in their area of expertise.
Kanai

Finally, do you have any wish concerning
themes to be covered at the outside directors’
exchange session or how information should
be provided?
Kanai Mainly due to the COVID-19 pandemic,
we have had few opportunities to meet andtalk with each other over the past few years.
I hope that we will get to meet with eachother more often, especially as we arewelcoming new directors.

Offering to society IDEC’s
products that contribute tosustainability
Kanai IDEC’s products are also highly
related to sustainability, such as safety. I
believe IDEC can appeal to society morestrongly regarding such aspects.

Himeiwa At the exchange session in
2020, I was grateful to learn about some
IDEC products from the executive officers
and department heads. The opportunity to
be informed about the latest products andbusinesses is so precious.

Himeiwa Although the CSR Committee
and others have been engaged in ESG
activities, we will need a viewpoint of linking
ESG activities with businesses. Productsthat protect human safety will be increasingly
needed in society to prevent accidents andGovernanceKanai I really understood the products
better when they were explained while I waslooking at the actual products.

46

IDEC REPORT 2022

Himeiwa It may not be easy for presenters
to be prepared but that would be a great
training for presentation, too, and they may
have new discoveries or be encouraged byreceiving questions and opinions fromoutside directors. I would appreciate tohave such an opportunity again. A factory
visit will be also useful.
Kanai Outside directors’ own awarenessalso increases when they exchange
information on various aspects of thecompany’s situation and management, notonly at the meetings of the Board of
Directors, but also by having opportunities
for directors to get together and candidly
speak with each other. I think such an
opportunity would be worthwhile.

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

GovernanceComplianceInternal Reporting system

The IDEC Group Code of Conduct—our basic

The IDEC Hotline has been established as

to share risk information. In a case wherein theaction guidelines for conducting our duties—

a contact venue that allows users to selectmanagement may be involved, a system exists

have been published in Japan and overseas. It

external and internal contact and anonymously

to ensure independence and to liaise with anis positioned under the group philosophy “Theor with real names in accordance with the users’

outside lawyer firm.

IDEC Way”, and the actions that employees

situation. We have established internal reporting

In order for the system to function globally,should take are consolidated in the threeand operation rules to protect the confidentiality

we are preparing for establishing the “Global

pillars of Workplace, Social, and Business toof consultation and reporting, and to prohibit

Hotline” in sequence, which enables overseas

make it easy to communicate in all countries

unfavorable treatment of users.

group company employees to report directly toand regions where we operate. The Code ofWhen a report is made, the Hotline Contact

the head office contact venue.

Conduct in Japanese, English, Chinese, French,

established within the Risk Management

Thai, Vietnamese, and Khmer are available forCommittee will promptly respond to the report,

IDEC Group Code of Conduct

all group company employees in Japan andand work at resolving the problem and preventing

overseas via internal intranet.

re c u r re n c e. T h e re p o r t i s a l s o p ro m ptl y

In addition, we have also disclosed explanatorycommunicated to the top management, andmaterials explaining the main purpose of eachregularly reported to the Board of Directors so as

Number of internal reporting cases
FY2020

FY2021

FY20227

5

8

Code’s items and its relationship with “The IDECWay” for better understanding.

Internal Reporting System diagram

Compliance training sessions are ongoing by

Consultation
and reporting

theme and job level, respectively. In FY2022, on

office, and introduced a system that enables
employees to watch it via intranet, making it

Consulters andinformants

Corruption prevention

possible for more employees to have training

We have signed the United Nations Global

opportunities.

Compact, which calls for corruption prevention.

(head office and groupcompanies in Japan)

Response
reportingConsultation
and reporting
Response
notification

We prohibit br ib e r y, c or r uption, robb e r yConsulters andinformants

anti-corruption laws, and are committed topreventing corruption.

(overseas groupcompanies)

Governance47

Consultation
and reporting

Response
notification

IDEC REPORT 2022

Lawyer firm
Collaboration

Internal contact
venue(e-mail/mail)External contact
venue(Web/phone)
External contractors

or embezzlement of any kind, comply with

Instruction
and reporting

Receipt
notification
Response
notificationo
gt e
tin fficor d op
Re h e athe

Global Hotline(Web)

Reporting to
the groupcompany

Risk Management
Committee
Hotline contact
Investigation, response,and corrective action

Direction, reporting,and collaboration

Overseas groupcompanies
Hotline contact
Investigation, response,and corrective action

Board of Directors

Compliance training

video of the training at a studio set up in the head

InsideDirectors

Reportingthe basis of COVID-19 pandemic, we filmed a

IDEC Hotline

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

GovernanceRisk management system andoperation

Risk Monitoring Subcommittee

BCP Preparatory Subcommittee

Concerning high-risk events shown on the risk

In order to prepare for earthquakes and otherWe have adopted our risk management rules

the IDEC Group. A Hotline Contact has also

map, an annual risk reduction target is set for

natural disasters—one of the high-risk events for

aimed at preventing risk occurrence in advancebeen established within the Committee toeach department in charge, and the progress

the IDEC Group, a Preparatory Subcommittee

and minimizing the damage in case of a risk

maintenance an internal reporting venue andtoward attaining the target is checked every

for promotion of a business continuity plan

occurrence. The Risk Management Committee

respond to reporting events.

six months: in the first half and the second(BCP) has been set up. It is currently studying

has been established under the CSR Committee,

The Risk Management Committee repor ts

half of the fiscal year. At the end of the fiscal

and drafting basic policies for disaster response,chaired by the CEO, to be responsible for overall

these initiatives at the CSR Committee, which

year, we review the risk map showing high-initial response flows, and a BCP.

group risk management at normal times and formeets twice a year, and the CSR Committee

risk events, and identify next risk events that

We consider it a high-risk event if a huge

response to occurred risk.

reports them to the Board of Directors. The Risk

should be addressed on a priority basis. We also

earthquake strikes and damages the areas where

The Risk Management Commit tee has

Management Committee can directly reportmanage risks, including climate change risks,

our head office and main factories are located.

a R i s k M o n i to r i n g S u b c o m m i t te e a n d aimportant events such as reporting eventsand regularly check the response status of theAssumptions have been made concerning how

BCP Preparatory Subcommittee within theor information to the Board of Directors as

responsible departments.

each person in charge of an emergency task force

Committee to select and evaluate risks andnecessary, assuring risk information is properly

shall act as an initial response to the disaster, andto monitor risk reduction efforts, as well as toconveyed to the management.

* See details of the risk map and the identified high-risk
events on the next page.

P

prepared, and the necessary disaster prevention

work toward the development of BCP acrossthe necessary manuals and checklists have beenmeasures are periodically reviewed in normal
times. We also disseminate information via our
corporate intranet to raise employees’ awarenessA

CSR Committee

Plan
Do
BCP Preparatory
SubcommitteeDfor disaster prevention.

C

Risk Management Committee

Risk Monitoring
Subcommittee

Risk monitoring
activities

Check

Hotline Contact

ActionGovernance48

Set risk reduction targets.
Implement risk reduction efforts.
Conduct risk assessment
questionnaire.
Review the risk map and identify
high-risk events.

IDEC REPORT 2022

A page from the corporate Intranet

Introduction

Value Creation Story

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Value Creation Foundation

Data

GovernanceRisk map and identification of highrisk events

High

Risk Category

The Risk Monitoring Commit tee regularly
identifies and evaluates risks based on theassumed risk events that may negatively impact

2

the continued business expansion and thecorporate value enhancement of the IDEC Group.

E1
A1
C1

Impact“probability of occurrence,” “magnitude of

6
3

17

Concerning each risk event, an evaluationquestionnaire is conducted using theExternal factor risks

1

7

damage” and “impact” as measures, and the20

results are plotted on the risk map relative tothe assessment. Climate change risks, which

8

were evaluated as important by the Environment

18
21

22

5

16

4
14
19

Management Committee, are also integrated as“risk events” and evaluated in the map.
Events that are evaluated as having a highprobability of occurrence or impact are identified
as “high-risk events” and are deployed tothe competent department to prioritize risk
reduction initiatives and their situations are
regularly monitored.

Low

Probability of occurrence

High

Internal factor risks

11

15

Businessstrategy risks

B1

9
10 12

13

C2

6

Occurrence of a cluster of infections within
IDEC’s business site

Promoted to create “factories that are resistant to infections” by taking thorough preventive
measures, non-contact temperature screening of all employees at manufacturing bases,
and automated hand washing taps. Also hosted workplace vaccination.

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

Promoted early detection and early response to abnormalities by monitoring failure
information in market claims and developing alert functions and critical claim
management lists.

Governance49

2

Conflict or terrorist attack in the local area of IDEC’s sites

3

Occurrence of a cluster of infections within an IDEC’s business site

4

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

5

Difficulty to procure parts, leading to long delays in delivery times

6

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

7

Quality falsification caused by the falsification of product performancesand data

8

Distribution of products containing prohibited substances

9

Strategic investment risk

10 Occurrence of a severe or more industrial accident
11 Sabotage, strike-related business outage
More than half a day of infrastructure outages caused by system failure,
network failure, etc.
Suspension of sales and claims for damages due to infringement of other13
companies’ intellectual property rights
12

16 Large-amount embezzlement, malpractice, and bribery by employees
17 Insider trading by senior executives
On-site inspection by the Fair Trade Commission due to violations of theAnti-Monopoly Act and the Subcontract Act
Leakage of critical corporate information, third-party confidential
19
information, and personal information
20 Business suspension due to improper license and approval
18

Climate change risks

3

Established a Preparatory Subcommittee for BCP formulation and promoted discussion
and formulation of basic policies for disaster response, initial response flow, and business
continuity plans.

Damage to IDEC sites in the Kansai region by an earthquake with aseismic intensity of the lower 6 range or above

15 Tax penalty due to improper handling of accounting and tax affairs

Accounting andfinancial risks

Damage to IDEC’s sites in the Kansai region
by an earthquake with a seismic intensity of
the lower 6 range or above

Risk Event1

14 Harassment by senior executives

Compliancerisks*Climate change risks (A1-E1) reflect events that the Environmental Management
Committee assessed as a high risk (P.32).
*External/internal factor risks are evaluated on a short- to medium-term basis,
while climate change risks are evaluated on a medium- to long-term basis.
Arrows indicate the climate change risks that are expected to be affected byexternal/internal risk factors.
*The risks plotted within the red box are judged as high risk events.

Examples of responses to high-risk events
1

Resources andinfrastructure
risks

No.

21 Difficulty to collect sales receivables, loan loss
22 Asset impairment risk
A1 Increase in carbon pricing (increase in carbon tax and power charges)
B1

Transition risks

C1 Changes in customer behavior or irregular changes in market trends
Increase in raw material procurement and manufacturing costs(including introduction and hike of carbon taxes)
Damage to production sites and supply chain disruption caused by
E1
increased severe weather events

C2

Physical risk

IDEC REPORT 2022

Replacement of existing products and services with options withlower emissions

Introduction

Value Creation Story

Our Business

Data

Value Creation Foundation

SafetyTarget SDGs
As a company that develops and provides products that protect the lives of people, we have promoted safety and
ANSHIN aiming at the creation of safe and comfortable environment in the global community. At the same time,through our work we have been taking initiatives to improve the well-being of people.

Beyond safety, creating well-being
Since IDEC’s founding, as a company that

Qualification attesting to the level ofsafety knowledge and designingcompetency for technical staff
Number of employees holding
Safety Assessor/
Safety Basic Assessor/
Robot Safety Assessor
Certificates(As of April 2022)

547

Cumulative number of attendees
Cumulative number of seminars held

37,115

Qualification attesting to the occupationalsafety management knowledge and theability to perform for administrative staff
Number of employees holding
Safety Officer Certificates(As of April 2022)

Safety seminars and explosion protection
seminars: cumulative number of attendees
and seminars held (IDEC unconsolidated)

1,570

38,254
1,624

40,0991,733

42,3281,838

45,554
1,904* The counting method has been reviewed in 2022.

We strongly support and participate in the

lives of people, we have delivered to society a wide

activities of the Task Group of Vision Zero at therange of various products and services with coreEnterprise Level, Global Coalition for Safety andcontrol technology. In order to create a society

Health at Work, established at the initiative ofin which all workers in different workplaces can

the International Labour Organization (ILO), andlive healthily, happily and vigorously, it is important

we made many presentations at the 2nd Vision

not only in terms of technology to supply products

Zero Summit held in Japan in May 2022. IDEC

with high performance, ease of use, and stable

presented our world-leading collaborative safety

quality, but also to provide human resource

technologies and communicated to the world

training, compliance with rules such as standards

its commitment to pursue and create safety,

and codes, and commitment by management to

ANSHIN, and well-being through its business, as

achieve well-being.

well as to raising awareness of global prevention

That is why IDEC is promoting safety initiatives

culture activities for the world where people arefrom four aspects of Technology, People,

protected from serious workplace accidents andRulemaking, and Management.

therefore can work safely and healthily.

Technology

105

IDEC encourages employees to obtain Safety
Assessor qualification in order to ensure safety
manufacturing and to perform safety consulting
based on international safety standards.
Examination fees and certification renewal fees
are borne by the Company.

develops and provides products that protect the

2018

2019

2020

2021

2022

(FY)

Online basic, advanced, and practical seminars
for safe, correct use of safety-related products
and explosion protection products are conducted
for free for our customers.

SafetyRulemaking

Making the world’s
workplaces worth
working and living in

IDEC’s safety and
ANSHIN technology
help create
well-being inworkplaces aroundthe world.

50

IDEC REPORT 2022

Approach the world
through international
standardization andrule formation.

PeopleManagement

Raise the level ofworkplace safety
through thedevelopment ofsafety personnel.

Promote awarenessof safety
management toestablish safety inworkplaces.

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

SafetyTechnology

PeopleRulemaking

Management

Pursuit of safety and ANSHIN technologies

Development of safety personnel

Formation of rules to influence the world

Consolidation and expansion of ISO 45001

IDEC is pursuing safety of the environment

Safety training sessions are conducted for all

International standardization plays a major role in

The Takino factory became the first worksite ofwhere humans and machines coexist and is

employees, with the aim of developing staff who canhelping resolve societal challenges and strengthening

IDEC that acquired ISO 45001, an international

focusing on the development of technology

make “safety and ANSHIN” proposals to society.

the international competitiveness of industries.

standard for occupational health and safety

for machinery safety and explosion protection

Safety training sessions were held for all IDECIDEC participates in a technical committee ofm a n a g e m e n t s y s t e m s , i n M a r c h 2 019 .

safety, while promoting the control device andemployees in FY2020 and for employees of thethe International Electrotechnical Commission

Then in FY2022, IDEC’s five locations—thecontrol systems business. By providing the next-

IDEC Group companies in Japan in FY2021.

(IEC) and advances standardization activities

Tatsuno Distribution Center as well as the four

generation safety philosophy “Collaborative

The training sessions were also conducted

through a framework for promoting the trinity offactories in Takino, Fukusaki, Amagasaki, andSafety / Safety2.0” and safety technology withfor executives of the Suzhou factory, a major

development, standardization, and recognition

Kiba— acquired ISO 45001 under a common

risk assessment to customers outside of them a n u fa c tu r i n g s i te i n C h i n a, i n F Y2022.

of intellectual property. In particular, in the

management system.

FA field, we are also vigorously working toFurthermore, they will be extended to executives

standardization of the three-position enabling

With Vision Zero’s approach to zero accidents

create an environment that ensures safety whileof factories in Thailand and Taiwan from FY2023

switches for safe operation of robots, we haveand the Seven Golden Rules for healthy work,

maintaining productivity. This scope of safety

onward.The training sessions cover the IDEC’scontributed to the creation of IEC standards based

we are working on improving safety, health, andis positioned as a key area in the five pillars ofhistor y and thoughts on safety and safety

on the IDEC specification, which became de facto

well-being of all people in our workplace, and

IDEC’s CSR activities: Environment, Social,

products, as well as the latest trends, including

standard, and have acquired a market position.

creating a workplace environment that is more

Governance, Safety, and Quality.

Vision Zero and Safety2.0 topics. After the training

We will continue to contribute to the advancement

comfortable to work with.

We will continue developing more advanced

sessions, a comprehension test is conducted toof society through technological development

hardware and software as well as their relevant

help participants retain the knowledge.

and rulemaking in the area ofstandards that will enhance the safet y ofcollaborative safety through ourindustrial sites. We are thereby aiming toinnovation and originality.
Safety training basics

become a company that pursues and realizes
world-class safety and ANSHIN.
Corporate Social
Responsibility (CSR)

Improve of Management
Efficiency

FY2020For all IDEC employees

Safety training basics

FY2021

For all IDEC Group employees in Japan

7 Invest inpeopleAdvanced safety training

FY2022

Eradication of occupational
and industrial accidents

Pursue higher
productivity

AnswerCollaborative Safety and Safety2.0 technology
through ICT technology innovation for solutions
Solve societal challenges by using next-generation safety technology

FY2023-For sales department employees in Japan

FY2022

1 Take leadership
100

1

2

0

For executives of the Suzhou factorySafety training basics0 efine3D
targets

Collaborative Safety / Safety2.0
announcement at the IEC meeting (U.S.)

The IDEC Group’s Safety Training Plan

51

IDEC REPORT 2022

Management36

5 On-site health 4 Health and safety systemand safety

For executives of the factories inThailand and Taiwan

100

7

2 I dentify
hazards

6 Improve
qualifications

Safety training basics

SafetyFY20195

4

On-site executives

Attainment levels of Seven Golden Rules of Vision ZeroIntroduction

Value Creation Story

Our Business

Data

Value Creation Foundation

Quality
Target SDGs
With the aim of deliver safety and ANSHIN products and services to customers, the IDEC Group has establisheda quality assurance system that pledges “IDEC – excellence in quality”. We are thus engaged in development,
manufacturing, sales, and service supply.

Employees holding “Quality Management andQuality Control Examination” Certificates
Number of employees holding “Quality Management
and Quality Control Examination” Certificates

555

614

646

674

675

Employees holding “Quality Management andQuality Control Examination” Certificates bygrade (As of November 2021)

675+1from November 2020

Grade 1 2

Grade 4 170

Establishment of
IDEC Quality Standard

Monthly Corporate-wide
Quality Meeting

The IDEC Quality Standard unifying the IDECAs globalization progresses, innovative changes

Group’s thinking on the quality of our products

are required in approaches for quality including

and services has been established, reflecting

production and procurement. Thus, monthly

the global diversity of cultures and values incorporate-wide quality meetings attended

the IDEC Group. Our aim is to ensure all of

by employees in quality-related departments

our employees consistently fulfill our quality

are held to improve our quality management

responsibilities and mission.

system across the IDEC Group by strengthening

This Standard is applied to the entire IDEC Group,

cooperation and raising awareness of quality.

consistent with The IDEC Way (the Group’s

Although the Global Qualit y Conferences

new philosophy established in 2019) and IDEC

have been currently postponed due to theGroup Code of Conduct (the Group’s common

COVID-19 pandemic, they are regularly held

behavioral guideline established in 2020).

with the members from each country involved in

Based on our new Standard, we will advance

manufacturing quality at overseas manufacturing

our global quality assurance activities.

sites to discuss various issues such as quality
control and quality improvement, conduct

Grade Pre-1 7675

workshops, and share results and know-how.

Grade 2 68

Grade 3 428

2018

2019

2020

2021

2022

(FY)

Aiming at checking and enhancing competence for
quality improvement at a high level, we encourage
employees to qualify for “Quality Management andQuality Control Examination” Certificates issued by
The Japanese Society for Quality Control.

In FY2022, the number of employees holding “Quality
Management and Quality Control Examination”
qualifications such as Grade 4 and 3 decreased,
whereas the number of Grade 2 holders who can solve
and improve quality issues independently increased by
7 as a result of continuous QC circle activities andquality control trainings.

Quality

The IDEC Quality Standard portable cardthat can be checked at all times
The corporate-wide quality meeting
held in February 2022

52

IDEC REPORT 2022

Non-Financial Data

Introduction

Value Creation Story

Our Business

IDEC unconsolidated*Some past fiscal year data has been corrected.

CO2 emissions

4,420t-CO

Paper consumption

237t

8,080kg

Emission intensity (kg-CO 2 /million yen)
CO2 emissions (t-CO2)

2018

Basic unit of paper consumption (kg/million yen)
Paper consumption (kg)

10.37
164

167

147

7.59

124

2019

4,330

4,656

4,420

7.23

2020

2021

2022

(FY)

231

226

2018

2019

0.40

9.33

6.65
306

5,151

+181kgY-O-Y

Basic unit of waste (kg/million yen)
Waste ( t )

203

6,193

-23t

Y-O-Y

2

Data

Waste amount2-236t-COY-O-YValue Creation Foundation

2020

260

237

2021

2022

12,320

(FY)

2018

0.42
0.46
14,5410.28

12,496

2019

2020

0.23

7,899

8,080

2021

2022

(FY)

We have set concrete targets for CO 2 emissions reduction tomeasure climate changes. Within the Scope1 and the Scope2, ourtargets are to reduce emissions by 24% in FY2025, 50% by FY2031,
and 100% by FY2051 compared to the results in FY2020. Measures
we are using include the in-house expansion of solar power
generation facilities and the efficiency improvement of our buildings
and manufacturing facilities.

Due to the nature of IDEC products, our ratio of waste plastics intotal industrial waste is large. Our specific reduction efforts are tointernally expand the range and increase the amount of target
materials for recycling, to reduce the number of parts and theamount of materials to be used throughout the product design-tomanufacturing process, and to set goals for wherein reduction in
input amount leads to reduction in emissions.

Our internal applications for approval are no longer paper-based but
managed via workflow system, digitally. Externally-publisheddocuments are also gradually replaced with electronic files, with theunderstanding and cooperation of customers. We are also strongly
promoting changes in workplace conditions, including theintentional reduction of multi-function printers, in order to encouragea paper-free workstyle.

Employment ratio and number of people with disabilities

Ratio and number of female managers

Frequency rate of industrial accidents

2.83%

6.62%

0.54%

+0.27%

Y-O-Y

2.56
1.91
24

1.92
24

2.83

26

6.62
3.13

28

6

4.06
8

3.72
7

4.32

10

8

2019

2020

2021

2022

(FY)

Our ratio of employees with disabilities exceeds the quota set by theJapanese Government. We regularly hold interviews with these
employees to check their work situation and arrange an appropriate
working environment for them. Our aim is to create a workplace
where diverse human resources can demonstrate their own
personal talents.

2018

2019

2020

2021

2022

(FY)

In addition to the development programs for women and men as
candidates for next-generation executives, we conducted two
management training sessions in FY2022 for executives, who play a
key role in empowerment of female employees. Our target is to haveat least 15 female managers by FY2025.

Non-Financial Data

53

0.54

0.44

0.00
2018

+0.54%Y-O-Y

Frequency rate of industrial accidents (%)

Ratio of female managers to all managers (%)
Number of female managers** Including female associates in the position of leader with subordinates

2.05
31

+2.30%Y-O-Y

Ratio of employees with disabilities (%)
Number of employees with disabilities

IDEC REPORT 2022

2018

2019

0.00

0.00

2020

2021

2022

(FY)

In the event of an industrial accident, we will immediately take safetymeasures in the department where it occurred, and work at preventing
similar accidents by rechecking the status of safety management and bydisseminating throughout the company the contents of the measures
based on analysis of the accidents and raising internal awareness.
Our target is to achieve a zero percent of industrial accident frequency.

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

11-Year Key Financial Data
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2022(Million yen)(Thousands of U.S.
dollars)
1US$=122.41

Financial Data
Operating results
Net sales

32,557

29,34336,31942,173

43,46843,42659,78362,75758,35553,98370,789578,294

Gross income

14,416

13,062

15,406

17,11718,01718,02726,022

26,97325,04022,78330,310247,610

SG&A expense

11,647

11,627

13,063

14,207

14,841

14,47919,90921,244

20,336

18,742

20,638

168,597

Operating income

2,769

1,434

2,342

2,910

3,176

3,547

6,112

5,728

4,704

4,041

9,672

79,013

Net income attributable to owners of parent company

1,788

1,859

1,456

2,096

1,708

2,440

5,296

3,700

3,006

2,803

7,896

64,505

Cash flows
Cash flows from operating activities

2,239

2,204

4,633

1,925

5,690

2,644

4,926

6,119

6,928

7,443

9,652

78,850Cash flows from investing activities(2,806)(3,800)(2,493)(1,169)(18)(21,190)(858)(2,665)(2,037)(3,147)(1,386)(11,323)

Free cash flows(567)(1,595)

2,139

756

5,671

(18,545)

4,067

3,453

4,890

4,295

8,265

67,519Cash flows from financing activities

(169)

1,261

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

19,929(3,926)(2,878)(3,605)(3,672)(8,578)(70,076)

Total assets

38,53842,49645,77849,37849,32885,441

91,53089,03287,02588,252

94,960775,754

Equity26,03026,95828,801

32,121

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

48,660397,517(Yen)(U.S. dollars)

Earnings per share (EPS)

57.48

61.03

49.14

69.45

56.50

80.68

170.37112.53

95.19

92.83

264.12

2.16

Book-value per share (BPS)

836.67914.98959.56

1,062.53

1,057.28

1,102.20

1,370.01

1,383.18

1,365.73

1,432.43

1,677.51

13.70

Annual cash dividends (yen)

30.00

30.00

30.00

35.00

36.00

40.00

50.00

50.00

50.00

50.00

100.000.82

Operating income margin

8.5%

4.9%

6.4%

6.9%

7.3%

8.2%

10.2%

9.1%

8.1%

7.5%

13.7%

Return on equity (ROE)

7.0%

7.0%

5.2%

6.9%

5.3%

7.5%

13.5%

8.2%

6.8%

6.5%

17.2%

Return on assets (ROA)

4.7%

4.6%

3.3%

4.4%

3.5%

3.6%

6.0%

4.1%

3.4%

3.2%

8.6%

Equity ratio

67.5%

63.4%

62.9%

65.1%

64.8%

39.0%

49.2%

51.1%

49.1%

48.7%

51.2%

Capital expenditure

4,741

5,701

2,277

1,761

1,500

2,103

1,991

4,122

2,673

3,567

2,503

20,448Depreciation and amortization expense

1,337

1,335

1,699

1,677

1,519

1,141

2,398

2,701

3,016

2,981

3,264

26,664R&D expense

2,462

2,394

1,857

2,110

2,328

2,242

2,202

2,359

2,325

2,343

2,593

21,183Financial position

Information per share

Other financial data

Non-financial Data
Non-financial information
Number of employees (consolidated)

2,040

2,102

2,287

2,109

2,222

3,911

3,873

3,654

3,683

3,780

3,328

Power consumption (thousand kWh)*

11,014

11,075

12,206

12,307

11,931

10,943

11,501

11,077

10,434

9,860

10,494CO2 emissions (t-CO2)*

3,942

3,967

5,762

5,809

6,626

5,709

6,193

5,151

4,330

4,656

4,420

91

166

136

101

101

145

231

226

306

260

237

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.44

0.00

0.00

0.54

Waste amount (t)*Frequency rate of industrial accidents (%)*
* IDEC (unconsolidated)

11-Year Key Financial Data

54

IDEC REPORT 2022

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Consolidated Income Statement and Consolidated Comprehensive Income Statement
FY2021

Fiscal year ending
March 2021
(Million yen)

FY2022

Fiscal year ending
March 2022
(Million yen)

FY2022

FY2021

Fiscal year ending March 2022
(Thousands of U.S. dollars)
1US$=122.41

FY2022

FY2022

Fiscal year ending
March 2021
(Million yen)

Fiscal year ending
March 2022
(Million yen)

Fiscal year ending March 2022
(Thousands of U.S. dollars)
1US$=122.41

2,803

7,835

64,006

Net sales

53,98370,789578,294

Net income

Cost of sales

31,19940,479330,684

Other comprehensive income

Gross income

22,78330,310247,610

Valuation difference on other securities

(178)

(46)

(376)

SG&A expense

18,742

20,638

168,597

Exchange translation adjustment account

1,162

2,200

17,972

Operating income

4,041

9,672

79,013Remeasurements of defined benefit plans
Other comprehensive income

Non-operating income
Interest and dividends received

49

38

310

Comprehensive income

Investment gain under the equity method

109

96

784

(Breakdown)

Foreign exchange gain

716

722

5,898

Other

139

272

2,222

1,015

1,129

9,223
1,070

Total non-operating income

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

Non-operating expenses
Interest expense

166

131

Derivative valuation loss

574

105

858

Other

212

165

1,348

Total non-operating expenses

953

403

3,292

Ordinary income

4,104

10,39884,944
7,442

Extraordinary income
Gain on sale of fixed assets
Gain on sale of investment securities
Gain on reversal of stock acquisition rights
Total extraordinary income

7

911

430

—

—

3

22

180

440

933

7,622

Extraordinary losses
Loss on sale of fixed assets

0

5

41

Loss on disposal of fixed assets

79

56

457

Loss on business liquidation

214

—

—

Total extraordinary losses

293

61

498

Net income before income taxes

4,251

11,27092,068

Income taxes - current

1,476

3,603

29,434

Income taxes - deferred

(28)

(168)

(1,372)

Total income taxes

1,447

3,435

28,061

Net income

2,803

7,835

64,006Net loss attributable to non-controlling shareholders

—

(60)

(490)

Net income attributable to owners of parent company

2,803

7,896

64,505

Income Statement

55

IDEC REPORT 2022

6

10

82

990

2,164

17,678

3,794

9,999

81,685

3,794

10,06082,183

—

(60)

(490)

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Consolidated Balance SheetFY2021

As of March 31, 2022
(Million yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claim
Merchandise and manufactured goods
Work in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures (net amount)
Machinery, equipment and vehicles(net amount)
Tools, equipment and supplies (net amount)Land
Lease assets (net amount)
Right-of-use assets (net amount)
Construction in progress
Total tangible fixed assets
Intangible fixed assets
Trademark rights
Customer-related assets
Software
Goodwill
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Long-term loans
Retirement benefit assets
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

FY2022As of March 31, 2022
(Million yen)

FY2021

FY2022As of March 31, 2022
(Thousands of U.S. dollars)
1US$=122.41

16,783
9,147
741
6,490
1,356
4,071
1,273
(47)
39,815

17,896
11,402
892
7,767
1,959
5,845
1,426

146,197
93,146
7,287
63,451
16,00447,74911,649(19)
47,171(155)
385,353

9,005

9,652

78,850

3,167

2,875

23,487

1,402
6,267
240
878
1,131
22,093

1,609
5,797
211
1,061
1,018
22,227

13,14447,357
1,724
8,668
8,316
181,578

2,474
7,909
1,109
12,10863
23,665

2,383
7,587
1,064
11,59362
22,691

19,467
61,9808,692
94,706506
185,369

379
154
308
1,090
781
(37)
2,677
48,436
88,252

419
114
326
1,343
702

3,423
931
2,663
10,971
5,735

(36)

(294)

2,870
47,78994,96023,446
390,401
775,754

Balance Sheet

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded monetary debt
Short-term borrowing
Long-term borrowing to be repaid within one year
Lease obligations
Accounts payable
Accrued expenses
Income taxes payable
Contract liabilities
Advance payment
Deposit
Product warranty reserve
Other
Total current liabilities
Fixed liabilities
Long-term borrowing
Lease obligations
Deferred tax liabilities
Reserve for retirement benefits for directors
Retirement benefit liabilities
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains on other marketable securities
Foreign currency translation adjustments
Remeasurements for retirement benefits
Total accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

56

IDEC REPORT 2022

FY2022

FY2022As of March 31, 2022
(Million yen)

As of March 31, 2022
(Million yen)

As of March 31, 2022
(Thousands of U.S. dollars)
1US$=122.41

3,991
1,360
4,850
2,730
328
730
2,612
719
—
157
274
17
1,188
18,959

5,186
2,183
3,800
2,105
360
809
2,803
2,626
584
—
207
40
953
21,66042,366
17,83431,043
17,1962,941
6,609
22,89821,452
4,771
—
1,691
327
7,785
176,946

20,365
844
2,667
37
1,688
60
517
26,18045,14018,260
962
2,799
45
1,577
90
556
24,29145,951

149,171
7,859
22,866368
12,883
735
4,542
198,440
375,386

10,056
9,215
28,076(5,329)42,01810,056
9,231
34,02282,15075,411
277,935(7,759)(63,385)

45,551

372,118

42
3,061
6
3,109
311
37
49,00894,960343
25,00649
25,3982,541
302
400,359775,754

88
860
(4)
944
148
—
43,111
88,252

Introduction

Value Creation Story

Our Business

Value Creation Foundation

Data

Consolidated Cash Flow Statement
FY2021

FY2022

FY2022

FY2021(1,699)(2,360)(19,279)—

1,688

13,790

Payments for acquisition of marketable securities

(426)

—

—

Proceeds from sale of marketable securities

1,699

—

—

7,328

Payments for acquisition of tangible fixed assets(3,140)(1,718)(14,035)(253)

Proceeds from sale of tangible fixed assets

113

1,656

13,528

Payments for acquisition of intangible fixed assets

(255)

(287)

(2,345)(49)

Fiscal year ending March 2022
(Thousands of U.S. dollars)
1US$=122.41

Net income before income taxes

4,251

11,27092,068

Payments into time deposits

Depreciation

2,981

3,264

26,664

Proceeds from withdrawal of time deposits

Loss on business liquidation

214

—

—

Loss (gain) on sale of investment securities

(430)

—

—

Goodwill amortization

789

897

(6)

(31)

Cash flows from operating activities

(77)

(629)

Interest and dividends received

(49)

(38)

(310)

Interest expense

166

131

1,070

Foreign exchange loss (gain)

(541)

(252)

(2,059)Investment loss (gain) under the equity method

(109)

(96)

(784)

Increase (decrease) in product warranty reserve

(1)

23

188

Derivative loss (gain)

574

105

858

Loss (gain) on sale of fixed assets

(6)

(906)

(7,401)

Loss on disposal of fixed assets

79

56

457

Decrease (increase) in sales receivable50(1,831)(14,958)

Decrease (increase) in inventories

522(3,031)(24,761)

Increase (decrease) in advance payment

9

(157)

(1,283)

Increase (decrease) in contract liabilities

—

584

4,771

Decrease (increase) in accounts receivable

86

15

123

Increase (decrease) in trade payable

334

1,425

11,641

Increase (decrease) in accounts payable

(64)

74

605

Increase (decrease) in accrued expenses

(345)

96

784

Increase (decrease) in unpaid consumption tax, etc.

(163)

(211)

(1,724)

Increase (decrease) in deposit

103

(67)

(547)

Other

538

(26)

(212)

Subtotal

8,984

11,216

91,627

50

63

515

(170)

(132)

(1,078)

Income taxes(1,420)(1,495)(12,213)

Cash flows from operating activities

7,443

9,652

78,850Interest expense paid

Fiscal year ending March 2022
(Thousands of U.S. dollars)
1US$=122.41

Cash flows from investing activities

1

Interest and dividend income received

FY2022

Fiscal year ending
March 2022
(Million yen)

Fiscal year ending
March 2022
(Million yen)

Increase (decrease) in allowancefor doubtful accounts
Increase or decrease in retirement benefit
assets and liabilities

FY2022

Fiscal year ending
March 2021
(Million yen)

Fiscal year ending
March 2021
(Million yen)

Cash Flow Statement

Payments for acquisition of investment securities

(5)

(6)

Proceeds from sale of investment securities

485

—

—

Payments for business acquisition

—

(420)

(3,431)

Proceeds from collection of long-term loans

65

64

523

Other

16

(2)

(16)

(3,147)(1,386)(11,323)

Increase in short-term borrowing

25,51920,650168,695

Repayment of short-term borrowing(27,529)(21,700)(177,273)

Increase in long-term borrowing

12,100——

Repayment of long-term borrowing(9,838)(2,730)(22,302)

Payments for acquisition of treasury stock(2,034)(2,453)(20,039)

Cash dividends paid

(1,529)(1,948)(15,914)

—

98

801

(359)

(514)

(4,199)

(1)

20

163

(3,672)(8,578)(70,076)

393

507

4,142

Cash flows from investing activities
Cash flows from financing activities

Proceeds from non-controlling shareholders
Repayment of lease obligations
Other
Cash flows from financing activities
Effect of exchange rate changes on cash
and cash equivalents
Net increase (decrease) in cash
and cash equivalents

57

1,016

194

1,585

Cash and cash equivalents at beginning of year

13,99315,009122,613

Cash and cash equivalents at end of year

15,00915,203

124,197

IDEC REPORT 2022

Company Overview
Corporate Data
Corporate Name IDEC CORPORATIONHead Office

2-6-64, Nishi-Miyahara, Yodogawa-ku,
Osaka 532-0004 Japan
Phone: +81-6-6398-2500 (Main number)

EstablishedMarch 26, 1947

Tokyo Sales
Branch

1-16-1, Kaigan, Minato-ku,
Tokyo 105-0022 Japan
Phone: +81-3-6625-5180 (Main number)

Capital Stock¥10,056,605,173

Factories

Amagasaki, Fukusaki, Takino, Kiba

No. of
Employees

3,328 (consolidated; as of March 31, 2022)

Sales Branches

Tokyo, Osaka

Stock Listing

Prime Market, Tokyo Stock Exchange* Excluding contract and temporary employees

Shares of the Company

As of March 31, 2022

Number of shares authorized

150,000,000

Number of shares issued

33,224,485

Number of shareholders

7,885

shares (12.7%)

shares (30.7%)

Securities companies

329 thousand

shares (1.0%)

Holdings
(%)

15.49

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

2,852

9.83

JP MORGAN CHASE BANK 385632

1,351

4.66

Funaki Kosan Ltd.

1,041

3.59

THE BANK OF NEW YORK MELLON 140044

542

1.87

CLEARSTREAM BANKING S.A.

477

1.65

Kazutaka Fujita

408

1.41

Toshihiro Fujita

403

1.39

Foreign corporations

JP MORGAN CHASE BANK 385781

342

1.18

shares (23.3%)

THE CHASE MANHATTAN BANK, N.A. LONDONSECS LENDING OMNIBUS ACCOUNT

335

1.16

Financial institutions

8,586 thousand
shares (25.8%)

Individuals and others

10,212 thousand

Shareholders

4,492

As of March 31, 2022
Treasury stock

As of March 31, 2022
Number of shares(Thousands ofshares)The Master Trust Bank of Japan, Ltd. (Account in trust)Distribution of Shareholders
4,216 thousand

Major Shareholders (Top 10)

7,751 thousand

Other corporations
2,127 thousand
shares (6.4%)

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

Company Overview

58

IDEC REPORT 2022

Evaluation by Society (Inclusion in Indices)
FTSE Russell (U.K.)
FTSE Blossom Japan Sector
Relative Index

SOMPO AssetManagement
SOMPO Sustainability Index

JPX Group
S&P/JPX Carbon
Efficient Index

https://us.idec.com/