To Our Shareholders

111Theth Fiscal YearBusiness Report
April 1, 2019

Stock Exchange Code: 6623

March 31, 2020

To Our Shareholders
We are pleased to extend
our greetings to our share­holders in presenting our111th annual report for thefiscal year ended March31, 2020.

Overview of businessD u r i n g t h e p e r i o d u n d e r re v i e w, t h eJapanese economy lacked vitality, affected by
the persistence of US-China trade friction andthe consumption tax hike, despite continuing
improvement in the employment and income
environment. Conditions deteriorated
dramatically towards the end of the fiscal year,
particularly in personal consumption andproduction, due to the impact of the spread of
COVID-19.
In regards to the business conditions of ourgroup, the Electric Power Products Group faced
challenging conditions due to the end of
special replacement demand for transformers
containing PCBs and increased pricecompetition, despite steady demand forsophisticated power distribution products in theNet sales 75.0 billion yen
Electric Power Products GroupOperating income 2.8 billion yen
Motor Products Group(Millions of yen)

80,00060,000(Millions of yen)

74,88378,23280,03475,030041,054

5,135

46,66850,71449,999

4,235

4,000
2,801

3,000
2,000

33,828108th(FY2017)

1

6,767

6,000
5,000

40,00020,000context of the spread of renewable energy. The
Motor Products Group faced sluggish demandfor printed wiring boards, due to the impact of
production adjustments in the electricalappliances and electronics industries caused
by a slowdown in the Chinese economy.
Under such circumstances, our Group has
worked to secure revenue from existingproducts and build the foundations for future
growth, during this first year of the 2023
medium-term management plan “Create thefuture with reliable technology - Innovation andChallenge -.” The Electric Power Products
G ro u p p ro c e e d e d w i t h d e v e l o p i n g a n dlaunching sophisticated power distribution
products on the market, while focusing on
expanding sales of products such as “TOPRUNNER” low loss transformers to the generalmanufacturing industry. We also engaged ininitiatives to strengthen production capabilities,
including renewal of the small transformer
factory, TPS improvement activities and inhouse production of hot water boilers. The
Motor Products Group worked to ramp up
production line of on-vehicle hermetic motors
and package cores, while also promoting
initiatives such as new customer acquisition forour motors and actuators.

31,563109th(FY2018)

29,319110th(FY2019)25,030111th(FY2020)

1,000
0108th(FY2017)

109th(FY2018)

110th(FY2019)

111th(FY2020)

With regard to the consolidated performancefor the fiscal year ended March 31, 2020, bothsales and income decreased compared withthe previous fiscal year, due to a decline in net
sales of products including pole-mounted
transfor mers and printed wiring boards.
Compared with the previous year, net sales
decreased by 6.3% to 75,030 million yen,operating income decreased by 33.9% to 2,801
million yen, ordinary income decreased by
31.9% to 3,306 million yen, and net income
attributable to owners of parent decreased by
12.0% to 2,735 million yen.
Dividend
Our final dividend was 45 yen per share.
Combined with the interim dividend, the totaldividend was 90 yen per share.
Future prospects
With respect to the business conditions
surrounding our group, while in the ElectricPower Products Group, we expect electric
power companies to continue progress to moresophisticated power distribution, we also
expect to see a strengthening of the trend
towards reducing wheeling costs through thereuse and maintenance of aging facilities. The

Motor Products Group projects stronger
demand for on-vehicle motors and printed
wiring boards, against the backdrop of nextgeneration vehicles and the increasing use of
AI and the IoT, but concerns remain regarding
the risk of a slump in demand due to theprolonged effects of the COVID-19 pandemic.
In this context, the Company merged with its
subsidiary AICHI ELEC CO. that manufacturesand sells hermetic motors, this April, andreorganized its operational structure tocomprise two internal companies, the ElectricPower Company and the Motor Company. In
July, the Company also merged with its motor
manufacturing subsidiaries SHIROTORI AICHIELEC CO., LTD. and ENA AICHI ELECTRIC
CO., LTD. The Company will seek for even more
efficient business operation and stronger
development, production and quality in themotors business under this new structure, andaim to achieve the targets of the medium-term
management plan.
We appreciate your continued un­
derstanding and support.
June 2020

Toru SatohPresident

Ordinary income 3.3 billion yen

Net income attributable to owners of parent 2.7 billion yen(Millions of yen)

(Millions of yen)

7,000

7,231
5,073

5,000

4,000

4,852

4,000

3,306

3,000

3,351

3,000

3,109

2,735

2,000

2,000

1,000

1,000
0

5,293

5,000

6,000

108th

(FY2017)

109th(FY2018)

110th(FY2019)

111th(FY2020)0108th(FY2017)

109th(FY2018)

110th(FY2019)

111th(FY2020)

2Performance at each GroupElectric Power Products GroupNet sales 25.0 billion yen
Sales breakdown

Business description
This Group supports electric power infrastructure through the design
and manufacture of electrical equipment, such as different types ofelectric power transformers, electric power protection and control
devices, and equipment related to renewable energy, as well as
overseas substation construction.
breakdown
Overview Salesof FY2020
Compared with the previous year, net sales
decreased by 14.6% to 25,030 million yen andsegment income decreased by 41.9% to 2,390
33%
million yen. Sales of pole-mountedtransformers
and substation construction declined
significantly, despite favorable performances ofstep voltage regulators for power distributionlines and “TOP RUNNER” low loss transformers
for the general manufacturing industry.

33%

Net sales trend (Millions of Yen)

31,563109th(FY2018)

29,319110th(FY2019)

25,030111th(FY2020)Main products

Pole-mounted transformers

3“TOP RUNNER”
low loss transformers

Digital-type protection
and control devices

Step voltage regulators(SVR)

Power conditioners

On-load tap-changing
transformers (LRT)

Installation of substations

Motor Products GroupNet sales 49.9 billion yen
Sales breakdown

Business description
This Group supplies products that facilitate daily living, including linear
actuators, controllers and handsets for electric beds, various small
motors including hermetic motors for air conditioners, printed wiringboards and shutter operators.

breakdown
Overview Salesof FY2020
Compared with the previous year, net sales
decreased by 1.4% to 49,999 million yen andsegment income increased by 15.2% to 1,917
million yen. With
67%regard to sales, printed wiringboards continued to lower than the previousyear. Segment income was higher than theprevious year thanks to changes in the sales
composition and a reduction in materials costs,
despite the decrease in net sales.

67%

Net sales trend (Millions of Yen)
46,668109th(FY2018)

50,714110th(FY2019)

49,999111th(FY2020)Main products

Linear actuators,controllers and handsets

Hot water boilers

Hermetic motors

Powder processing &drying equipment

Printed wiring boards

Shutter operators

Fans and controllers for
cattle farms

4

Financial report
Consolidated Balance Sheets
Assets

FY2020FY2019(As of March 31, 2020) (As of March 31, 2019)

Current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total assets

61,71926,966
16,906337
9,722

88,68564,88525,27015,241
182
9,847

90,156(Millions of Yen)

Liabilities andNet Assets

FY2020Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

Consolidated Statements of Income

25,783
8,506
34,28928,518
7,962
36,481

52,322977
1,095
54,39588,68550,556
1,687
1,430
53,67490,156(Millions of Yen)FY2020FY2019(From April 1, 2019
to March 31, 2020)(From April 1, 2018
to March 31, 2019)

Net sales

75,03080,034

Cost of sales

65,29368,706Gross profit

9,736

11,327

Selling, general and administrative expenses

6,935

7,091

Operating income

2,801

4,235

Non-operating income

706

819

Non-operating expenses
Ordinary income

201

203

3,306

4,852

Extraordinary income

94

19

Extraordinary losses

25325

3,375

4,546

882

1,149

Income before income taxes
Income taxes-current

5FY2019(As of March 31, 2020) (As of March 31, 2019)

Income taxes-deferred

(300)

246

Net income

2,792

3,149

Net income attributable to non-controlling interests

56

39

Net income attributable to owners of parent

2,735

3,109

Non-Consolidated Balance Sheets
Assets

FY2020FY2019(As of March 31, 2020) (As of March 31, 2019)

Current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total assets

30,743
21,8236,929
40
14,85452,56730,97523,2907,221
48
16,02054,265(Millions of Yen)

Liabilities andNet Assets

FY2019FY2020(As of March 31, 2020) (As of March 31, 2019)

Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Valuation and translation adjustments
Total net assets
Total liabilities and net assets

Non-Consolidated Statements of Income

9,727
3,377
13,105

12,3562,440
14,79738,792670
39,462
52,56738,3771,090
39,46754,265(Millions of Yen)FY2020FY2019(From April 1, 2019
to March 31, 2020)(From April 1, 2018
to March 31, 2019)

Net sales31,946

34,964

Cost of sales

27,021

28,564Gross profit

4,924

6,399

Selling, general and administrative expenses

3,777

3,912

Operating income

1,147

2,487

Non-operating income

621

582

Non-operating expenses

12264

1,646

3,005

Extraordinary income

9318

Extraordinary losses

6317

1,733

2,706

Income taxes-current

497

818

Income taxes-deferred(34)

36

1,270

1,851

Ordinary income

Income before income taxes

Net income

6Topics
Electric Power Products Group
Delivery of 110kV-class truck-mounted mobile transformer with the highest capacity in JapanWe developed a 1 1 0kV-classtruck-mounted mobile transformer
with a capacity of 1 2MVA, thehighest in Japan, and delivered it
to The Chugoku Electric PowerCo., Inc.
The gross mass of this producthas been reduced to 20 tons or lessthrough the use of aluminum alloys
in the transformer tank, allowing it
to be transported on public roads
without a special vehicle permit,greatly enhancing mobility. For this reason, in the event that electricity transmission isdisrupted due to the malfunction of a substation from a natural disaster or other accident, it
can be dispatched immediately to the site of the problem, and contribute to the prompt
resumption of electricity transmission.
Electric Power Products Group
Development of remote control thyristor type step voltage regulators (A2-TVR*)
We developed the remote control A 2-TVR, an A 2-TVR with theaddition of remote control and measurement functions.
This product enables the remote acquisition of information on
voltage and current, and the change of set points in real time. By
combining it with systems to automate electricity distribution, it
facilitates appropriate control of voltage across all distribution lines.
We will continue research aimed at increasing product functionality,and develop products that contribute to enhancing the quality ofelectric power.
* Aichi Advanced-Thyristor type step Voltage Regulator

7

Electric Power Products Group
Development of a distance protective relay device
We developed distance protective relay devices, used to protect the electric
power system in the event of a breakdown in power transmission.
If a breakdown or other problem occurs in power transmission through the highresistivity grounded system (154kV, 77kV or less) that transmits electricity from thepower station to substations, this product will calculate the distance to the locationof the breakdown, swiftly and reliably disconnect the section in which thebreakdown occurred, and thus minimize the area without power. The product alsoutilizes dual protection relay units, in order to further enhance reliability. In the eventthat one of the protection relay units malfunctions, the other, fully-functional
protection relay units will disconnect the section in which the breakdown occurred,protecting the electric power system.
We will continue to develop devices necessary to ensure a stable supply ofelectricity, and engage in promotion of these devices targeting electric powercompanies and other customers.

Electric Power Products Group
Development of an electric power static condenser protective relay device
Together with Chubu Electric Power Grid Co., Inc. and C-TECH CORPORATION,
we jointly developed a protective relay device that will disconnect static condensers(SCs)* from the electric power system in the event of electric power SC malfunction.
This device enables the connection and disconnection of SCs according to apredetermined time schedule. Size reduction and cost savings have been achieved
through the use of universal protection and control relay units.
*Condensers for high voltage, special high voltage, etc. applications. They are used to improve power factor
and adjust voltage.

Electric Power Products Group
Development of a converter for induction generators
We developed, and launched a converter for induction generators,
targeting biomass power generation businesses.
This product converts alternating current from induction generators into
direct current. When used in conjunction with our power conditioners, theconverted direct current can then be linked into the electric power system,
facilitating the construction of power generation systems. With this system,
we aim to extend the useful life of power generators, by enabling a soft startwhen they are linked into the electric power system.
Biomass power generation businesses plan to commence operation ofthis product in August this year.
8Electric Power Products Group
Development of server-intensive type widely-linked server device
We developed a server-intensive type widely-linked server device for theautomated power distribution system of Chubu Electric Power Co., Inc. Thisdevelopment was aimed at enhancing cyber-security, reducing upkeep andmaintenance costs, and enhancing system availability in times of disaster.
Previously, servers were distributed across each branch of the electricalcompany, but this device enables control of the entire coverage area from asingle location.

Electric Power Products Group
Arab Republic of Egypt: Construction of a solar power generation facility
We constructed a solar power generation facility within thegrounds of the Egypt-Japan University of Science andTechnology. We undertook all steps of the process, from designof the overall system of the power generation facility, to designof the building structures and the facility itself, design andmanufacture of electrical devices such as power conditioners,
procurement of construction materials, on-site construction andelectrical works, and on-site adjustment and testing.
This formed part of the “Project for Introduction of Clean
Energy by Solar Electricity Generation System,” with the nonfinancial backing of the Japanese government. Solar panels
were installed at three locations within the university grounds, with a total output of 560kW. The
electricity generated is used to supply the university itself.
Motor Products GroupNew production line for shaded-pole motors for use in kerosene fan heaters
We installed a new production line for shaded-pole motors
for use in kerosene fan heaters, and commenced production.
This has boosted our production capacity up to 480 thousand
units per year. The new production line encompasses allprocesses from winding and assembly through to inspection.
We will continue to respond to new demand, and improveand expand our facilities to further enhance quality andproductivity.

9Outline of the Company and Status of Shares
Corporate Data (As of March 31, 2020)

Status of Shares (As of March 31, 2020)
Total number of shares authorized to be issued  23,912,200 shares
9,500,000 sharesTotal number of shares issued Established:

May 27, 1942

Capital:4,053 million yen

Number of Employees: 840 (Consolidated: 2,349)
Head Office:

Major shareholders (top ten shareholders)

1, Aichi-cho, Kasugai city, Aichi pref.,Number of shares Shareholding ratio (%)(thousand shares)

486-8666, JAPAN
Phone +81-568-31-1111

Board of Directors and Auditors(As of June 26, 2020)

5,791 persons

Number of shareholders

Chubu Electric Power Co., Inc.

2,326

24.5

TSUCHIYA CORPORATION

646

6.8

Furukawa Electric Co., Ltd.

565

5.9

BBH FOR FIDELITY LOW — PRICED STOCK FUND
(PRINCIPAL ALL SECTOR SUBPORTFOLIO)

319

3.3

President

Toru SatohMUFG Bank, Ltd.

312

3.2

Managing Director

Kazuo Kobayashi

3.1Toshiyuki Miyakawa

Japan Trustee Services Bank,
Ltd. (trust account 4)

303

Managing Director
Director

Naoji Yamashita

Kawaguchi Kosan Co., Ltd.

200

2.1

HIKARI TSUSHIN, INC.

186

1.9

Meiji Yasuda Life Insurance
Company

175

1.8

NORTHERN TRUST CO. (AVFC)
RE FIDELITY FUNDS

173

1.8

Director

Hisashi Tajima

Director

Junichi Takahashi

Director

Masaki Kakihara

DirectorYoshikazu Suda

Director

Shinobu KatoDirector (Outside)

Nozomu Amano

Director (Outside)

Hideshige Seo

Auditor

Hideki Hosoe

Auditor (Outside)

Akinori Kataoka

Auditor (Outside)

Masatoshi Hori

Note 1	Numbers of shares are rounded down to the nearest
thousand shares.
Note 2	The treasury shares (4,235 shares) were excluded in thecalculation of the shareholding ratio.

Distribution of shares by shareholder
Foreigninvestors
10.9%

Individual
investors
26.0%

Domestic
investors
Financial institutions
89.1%
and securities firms
Other companies,
16.3%
etc.
46.8%

10Shareholder Data
Shareholder Data
Business Year

April 1 to March 31 of the following year

Ordinary General Meeting Juneof Shareholders
Reference Date

Ordinary General Meeting of Shareholders
March 31
Year-end dividendMarch 31
September 30
Interim dividend

Stock Transfer Agent andSumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo, JAPANAccount Management
Institution for Special Accounts
Handling Office

Stock Transfer Agency Business
Planning Department,
Sumitomo Mitsui Trust Bank, Limited
3-15-33, Sakae, Naka-ku, Nagoya, JAPAN

Reference

Stock Transfer Agency Business
Planning Department,
Sumitomo Mitsui Trust Bank, Limited
2-8-4, Izumi, Suginami-ku, Tokyo
168-0063, JAPAN
Telephone +81-120-782-031 (toll-free)

Public Notices

Public notices shall be madeelectronically.
Public notice URL:
http://www.aichidenki.jp
If electronic notice is impossible due toaccidents or other unavoidable
circumstances, the notice shall be
posted in the Chunichi Shimbun which
is published in Nagoya city.

Information regarding the share buyback
and additional purchase program for
fractional shares less than one unit
(shares less than 100 shares)
Frameworks are in place to ask the Company to buyback or request additional purchases of fractional
shares less than one unit. If you are interested, pleasecontact the following.

Contacts for various procedures(Changes in name or address, buyback and additionalpurchase of fractional shares less than one unit)
For shareholders who have an account with asecurities company
Please contact your securities company.
For shareholders who do not have an account with asecurities company
P lease contact Sumitomo Mitsui Trust Bank,Limited.

Concerning outstanding dividend payments
Please contact Sumitomo Mitsui Trust Bank, Limited.

Create the future with reliable technology - Innovation and Challenge A valuable company that creates good products,
develops good human resources, and establishes good relationship