MEIDENSHA REPORT 20192019
MEIDENSHA REPORT

ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo 141-6029 Japan

www.meidensha.com

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CONTENTS
Meiden Group Corporate Philosophy ....... 1

Foundation for Creating Value

ProfileESG at the Meiden Group ...................... 28

Meiden Group History .............................. 3

Environment .......................................... 29

Corporate Slogan .................................... 5

Social .................................................... 33
Governance ........................................... 37

to delight customers by offering high quality products and services

The Meiden Group Value Creation
Process ................................................... 7

to help solve their problems. Through these business activities, weMeiden Group Businesses ....................... 9

Corporate Information

aim to fulfill our corporate social responsibility (CSR) by proactively

Overview by Business Segment ............. 11

Financial / Non-Financial Highlights ........ 45

Meiden Group Corporate Philosophy
Corporate Mission

Corporate Slogan

It defines the raison d’être and corporate mission

Expressing the corporate philosophy in a single phrase

Illuminating a more affluent
tomorrow

The Meiden Group Corporate Philosophy is as follows: “We seek

We continue to create value
and technologies for the realization of a more
affluent and environmentally conscious society.

solving global environmental problems and other social issues andValue Provision
It defines the unique value provision and core competence

For customer peace of mind
and satisfaction
We offer complete environmental consideration
and appropriate support for our customers. Fromproduct design to commissioning, our highly
skilled staff help customers solve various issues
and realize their dreams by providing high-quality,
socially responsible products and services.

Strategythese challenges.”

Message from Management .................. 13

This is our legacy from Hosui Shigemune, who founded ourcompany as a local factory to manufacture and repair electricalmachinery. His will remains our common sense of values, even as
these have evolved with the times, and remains at the core of all
our business activities. Staying true to this Corporate Philosophy,
the Meiden Group aims to grow with society and be indispensable
to it. With that as our goal, we continually take the challenge ofcreating new technologies and value.

MEIDEN CYCLE

CSR Definition
Under the Meiden Group’s
definition of CSR, “Eachand every employee shallwork to realize the Group’s
corporate philosophy sothat the Meiden Group isneeded by society.”

Corporate Code of
Conduct
This code definescompliance in conducting
our CSR programs andactivities.

Outline of the Meiden Group .................. 47

helping achieve a more affluent future. We must continually tackle

Build Loyalty

Approach to SDGs ................................ 19
Special Feature 1
Growth Businesses
Automobile-related Business ....... 21
Overseas Business ...................... 25
Special Feature 2
Earnings-Base Businesses ................. 26
Special Feature 3
New Growth Businesses ..................... 27

Editorial Policy

Subject Organizations

The Meiden Group informs its stakeholders of its attitude andinitiatives relating to social responsibility through the two media of the
Meidensha Report (print edition and web edition) and the Meiden
Group CSR (web edition).
With regard to the content of the reports, we work to collect andanalyze information that meets our stakeholders’ expectations and isof interest to our stakeholders through regular notices, IR activities,
and interviews with each department, and distribute it.
Furthermore, the Meiden Group is conducting internal
communication activities as part of the process of drafting reports inorder to understand changes in the external environment and share
future issues and trends. In addition, we work to strategically promote
future CSR initiatives by exchanging opinions based on the reportsthat have been created, and having each department reflect on its
own activities, taking into account outside perspectives.

The report mainly covers initiatives of MEIDENSHA CORPORATION and its
affiliated companies. Human resources data applies to affiliated companies
in Japan, while environmental reporting data applies to Meidensha and its
37 major affiliated companies (19 in Japan and 18 overseas).

President’s CSR Policy
This policy sets forth thepolicy of our CSR programs
and activities in the medium
term. The Policy asks eachGroup employee to implement
CSR programs and activities
in their daily work. We willdraw up specifications thatreflect the given businessclimate and CSR challenges
under the current stage of theMedium-term Management
Plan.

1

MEIDENSHA REPORT 2019

MEIDEN CYCLEMEIDEN CYCLE shows
the guiding spirits sharedby all members of theGroup in realizing theGroup’s corporate
philosophy.

identify the direction for each individual employee to aim towards
and provide signposts to help them proceed without losing theirway. To enable us to do so, we have made these five actions ourwatchwords. The actions are mutually linked, with one action
calling forth the next, creating a cycle of action and growth. Based

Meidensha Report print edition andweb edition (this document)
A comprehensive collection of financial
information concerning the Meiden
Group and non-financial
information such as
initiatives that contributeto improving corporate
value and management
strategies.

Meiden Group CSR web
editionA simple introduction focusing
on specific initiatives to tackle
CSR issues that the Meiden
Group considers important.

underlying our actions, we seek to maximize the growth cycle foreach of our employees.

・ Next scheduled publication: September 2020

Guidelines Used as References
・ IIRC (International Integrated Reporting Council) “International
Integrated Reporting Framework”
・ Ministry of Economy, Trade and Industry “Guidance for Integrated
Corporate Disclosure and Company-Investor Dialogues for
Collaborative Value Creation”
・ Ministry of the Environment “Environmental Reporting Guidelines(Fiscal Year 2018 Version)”

Inquiries about This Report
Meidensha Corporation
Public Relations Section, Public & Investor Relations Division
ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo
141-6029 Japan
TEL: 81-3-6420-8100

FAX: 81-3-5745-3027

Disclaimer

on this image, we call this the MEIDEN CYCLE.
By sharing and practicing the MEIDEN CYCLE as the ethos

・ Publication of this report: September 2019

・ GRI “Sustainability Reporting Standards”

Report MediaIn order to realize our Group Corporate Philosophy, we must

Publication

Reporting Period
This report mainly covers initiatives taken in FY2018 (April 1, 2018 March 31, 2019).
It also includes some information from prior to FY2018 and until
July 2019.

In addition to past and current facts about the Meiden Group, this reportcontains forecasts for the future based on plans, outlooks and business
policies and strategies in effect at the time of publication. These forecasts
are our assumptions and judgments as based on information available atthe time they were stated, and may differ from actual business activity
results and events in future owing to changes in conditions.

MEIDENSHA REPORT 20192

Meiden Group History

Supporting social infrastructure for
120 years.
The Meiden Group’s quality will leadto a more affluent future.
1897

The

Founding and Birth of “Meiden a Motor Company”
In 1897, our founder Hosui
Shigemune started a factory in the
belief that one day Japan would buildits
own
electric
machinery.
Meanwhile, Japan depended on
imported products for much of its
industrial machinery. His business atthat time was mainly repair ofelectrical equipment and manufactureof switches. However, his efforts tobuild made-in-Japan motors gavehim
several
new
ideas
for
development of own products.
In 1901, Shigemune successfully
developed a three-phase induction

motor and sold 18 motors between
1903 and 1904. He continued withresearch and made prototypes in thedesire to develop more products of his
own. His efforts led him to devise an
induction motor design method in 1905.
In the following year, he started
production of motors to his own design
method.
Meidensha’s motor production
helped to modernize Japanese industry
and became the cornerstone ofvalue-building at Meidensha that still
persists today.

A more detailed timeline may be found on our website.

https://www.meidensha.com/corporate/corp_05/index.html

1970

s-

The

1980

s-

The

1990

s-

The

2010

s-

Evolving into “Meiden a PowerElectronics Company”

Evolving into “Meiden a
System Engineering Company”

Approaching Our Centenary

Aiming to Be “Meiden a Global
Company”

During Japan’s postwar economic
boom, Meidensha actively expanded
into the industrial systems business andcontributed to the development ofindustry in Japan. In about 1970, society
was beginning to prize quality overquantity. Likewise, Meidensha switched
its management strategy from quantity
base to quality base. On the technicalside, our aim was to develop new
products that made full use of ouremployees’ creativity. At this time, webegan to cement our status as amanufacturerofheavyelectricalequipment, having developed new
products that combined heavy electrical
technology (power) with the latest
electronics technology.

In the latter half of the 1980s, economic
expansion led Meidensha to boost its
production capacity at factories andupgrade its production system. We
added to our family of Group companies
and developed a variety of businesses tomake us a stronger enterprise.
We grew to have three corebusiness areas, adding mechatronics
and electronics to our existing powerelectronics field. The integration oftechnologies from each of these fields tocreate management, monitoring, andcontrol systems, evolves our Group into
a company known as “Meiden a System
Engineering Company.”

Meidensha
celebrated
its
100th
anniversary in 1997. Japan’s businessenvironment changed drastically after
the collapse of the bubble economy, andmanagement had to deal with a time ofcrisis. However, the legacy we had
inherited from our predecessors,
technologies and well-developed humanresources, became the base for a newera of expansion as we hit the 100-year
milestone.
Upon our 110th anniversary in 2007,
we christened ThinkPark Tower, a facility
combining our head office building withpleasant greenery in Osaki, Shinagawa
City, Tokyo, where our company was
founded.

Today, the Meiden Group is expanding its
presence in markets outside Japan,
especially in the ASEAN region. As partof this, we transferred to our overseas
subsidiariesastrongerregional
supervisory role; e.g. building partnerships
with enterprises outside Japan, andopening training centers for local staff.
We are using IoT and AI to increase
our product competitiveness and systemtechnology. We also enhanced one-stop
service business ranging from equipment
manufacture to maintenance, inspection,and operations and management.
The world is undergoing vastchange, but Meidensha will never stop
endeavoring to contribute to theformation of an “affluent future society.”

Meiden Group History
1897 Company founded as a privately operated factory for electrical machinery

1967 Electronics Device Factory opened in Numazu

1995 Head Office moved to Chuo-ku, Tokyo

2009 Capital and business alliance with Ono Sokki Co., Ltd., for the automotive testing systems business

1913 Osaki Factory established1968 Technical transfer agreement with General Electric for vacuum interrupters

1997 Celebrated 100th anniversary

2012 Japan AE Power Systems Corporation joint venture dissolved

1917 Change of corporate structure from a private company to a listed company

1969 Technical transfer agreement with SEVCON for electrical equipment for forklift trucks

2001 Japan AE Power Systems Corporation established1935 Nagoya Works establishedTechnical transfer agreement with AEG for thyristor rectifiers and processing lines

2003 Merger with MEIDEN ENGINEERING CORPORATION

2013 Spin off of maintenance and service business into four companies including Meiden Engineering
Corporation

1937 Shinagawa Works established1973 Technical transfer agreement with General Electric for high-frequency thyrister inverters

1939 Nishio Works established1976 Gotanda Office opened

1950 KOFU MEIDENSHA ELECTRIC MFG. CO., LTD. established1977 Ota Works established1955 Technical transfer agreement with AEG for air circuit-breakers and transformers

1979 MEIDEN SINGAPORE PTE. LTD. established1958 Head Office moved to Otemachi, Chiyoda-ku, Tokyo

1987 Technological exhibition held to celebrate the company’s 90th anniversary

1961 Numazu Works established1993 R&D Center completed

2005 Work started on a development project near the West Exit ofOsaki Station
2006 Motor development and manufacturing business merged into
KOFU MEIDENSHA ELECTRIC MFG. CO., LTD.
2007 ThinkPark Tower completed and the head office moved to
Shinagawa-ku, Tokyo

2014 Stake acquired in the Indian company, Prime Electric (now PRIME MEIDEN LIMITED)
Added to the IEEE Milestone List (zinc oxide gapless surge arrestor)
2015 Maintenance and after-sales service businesses reorganized into MEIDEN O&M CORPORATION and
MEIDEN ENGINEERING CORPORATION
Tridelta (now TRIDELTA MEIDENSHA GmbH) acquired from Tridelta GmbH2017 Celebrated our 120th anniversary by holding events such as the Meiden Expo2018 Formulation of Medium-term Management Plan 2020

Technical transfer agreement with ASEA for turbine generators

3

MEIDENSHA REPORT 2019

MEIDENSHA REPORT 20194

The quality that is thedriving force behind
our activities

Corporate Slogan

For the peace of mind and satisfaction of
our customers, and the precious lives of people
beyond them, Meiden Group quality will connect
with a more prosperous tomorrow.

We have long-lasting relationships
with our customers, and “quality,”in all senses of the word, isextremely important for maintaining
these relationships, not only interms of product quality, but also
quality of services and people. We
will work with a range ofstakeholders to expand ourbusiness activities, and the driving
force behind this is the “quality” ofpeople and technology.

Quality of the Meiden
Group as seen in a rangeof situations

Heavy machinery should be viewed
as the infrastructure that supports
infrastructure. We see it as our duty
to support infrastructure in a rangeof situations, including working toachieve stable power supply,transmitting electricity to railway
infrastructure,anddelivering
motors and inverters, which areconsidered the heart of electricvehicles, and this is the foundation
upon which we improve quality.

For us, our “quality” is not only about the quality of our products and services. There are twothings that make our quality: “people” and “technology”. People at Meiden Group strengthenties with customers around the world by being truthful and flexible. Meiden Group technology
contributes to society with truly original products and reliable services created with expertise.
These two attributes make Meiden Group’s unique quality, and create new connections withthe future. Making connections with our customers, society, and people living in it. These
connections will expand, and the power we have built will become the energy for the next
generation.
For the peace of mind and joy of our customers, and the precious lives of people beyond

Quality around which theGroup unites based on
our corporate slogan

them, Meiden Group quality will connect with a more prosperous tomorrow. This is ournever-changing mission.
Quality is the basis of all of ourbusiness activities, from sales,development, and production, etc.,
to work performed by managementbusiness units. We believe that all
employees will unite under our
corporate slogan, which will be agreat force behind our businessactivities.

5

MEIDENSHA REPORT 2019

MEIDENSHA REPORT 20196

The Meiden Group Value Creation Process

Areas in which we will contribute to the solutionof social issues through our business strategy

Aiming for sustainable
development of the Meiden Groupand society
The Meiden Group’s corporate mission is “illuminating a more affluent tomorrow”
and we are conducting corporate activities according to the corporate philosophyof “for customer peace of mind and satisfaction.” By continuing to improve thequality of people and technology, which is the driving force behind all of ourbusiness activities, we will provide unique products and reliable services, andcontribute to society as appropriate for the age and the market.
Through this, we aim to provide increased value to the customer byimplementing a business strategy that integrates development, production, sale,and maintenance while strengthening our foundations, and achieve sustainable
development for both the Meiden Group and society.

OUTCOME
Investments for growth andsteady expansion in businessperformance
The Meiden Group will establish competitive superiority andsecure business opportunities by proactively engaging withsocial issues. Under Medium-term Management Plan 2020, weare actively investing and strategizing with regard to equipment,
HR, research and development, and strengthening partnerships,
etc., for a further leap forward.

Medium-term Management Plan 2020 (FY2018 to FY2020)■ Growth Businesses: Overseas Business and Automobile-related Business● Expanding the scale of businesses in line with market growth■ Earnings-base Businesses: Public Infrastructure Business andMaintenance and Servicing Business● Strengthening earnings power through generation of new values■ Strengthening Business Foundations● Manufacturing, development and business promotion capabilities, humanassets fostering and financial strategies

OUTPUT

Optimal capital allocation andstrengthening managementfoundations
Over 120 years, the Meiden Group has ceaselessly continued toadapt, and optimally allocated the various capital that supportsbusiness activities, which has been accumulated throughout its
history. Medium-term Management Plan 2020 aims toefficiently inject capital to support businesses and achievefinancial targets.

Domestic Market● Declining population● Slumping economic
growth rate
● Difficulty in implementing
national and local
government fiscal policies

Business Key Words
Environmental
regulations● Automobile
electrification anddigitalization● Development of the
IoT and AI

Automobile
testingsystems

7

Railwaysystems

MEIDENSHA REPORT 2019

Logistics

Society
Illuminating amore affluent tomorrow

Strategy

Consideration for the environment, a comprehensive customer
support system, and high-quality services are forms of valuethat increase a company’s value for its customers, and they arealso the Meiden Group’s strengths. These forms of value also
win trust from customers and generate robust financial
underpinnings, creating a virtuous cycle that further strengthens
management foundations.

●

CapitalCustomers
Business
Activities

Customers

EnergyImproving the corporate value
and gaining the trust of customers

Meiden Group quality will connect
with a more prosperous tomorrow.

The Business Environment in which the Group Operates (anticipated)

Electricalpower

The Meiden Group will contribute to the solution of social issues,
including Sustainable Development Goals (SDGs) by providing
value to customers. Furthermore, we provide value to society,such as stable power supply, energy efficiency, access to safe
water resources, creation of employment, and shareholder
returns.

INPUT

StrategyOverseas Market● Increasing populationin developing
countries● Increased
infrastructure demand

Solving social issues
by providing value to customers

Water andenvironmental
systems

Plant
constructionengineering

ICT
production

Maintenance

Challenge to create
new technologies and value /Further honing of quality

Qua
t
t
x
x
li ttyy ccoonnnnectiinngg tthhee nneeect
For the peace of mind and satisfaction of our customers, andthe precious lives of the people beyond them, the Meiden Groupwill continue to refine products and services to increase thequality of people and technologies, and embrace the challengeof constantly creating new technologies and value.

MEIDENSHA REPORT 20198

Meiden Group Businesses

The present of the Meiden Group, which has been
involved with the manufacture of heavy electricalequipment and developed businesses in the fieldof social infrastructure for over 120 years
Seven Meiden
Electrical Technologies
that Support Our Society

4

Create - creating electricity -5

Meidensha manufactures equipment for the creation ofelectricity, or in other words, electricity generation. We have awide-ranging product lineup, from high-capacity items that areused in power stations, such as large turbine generators,
generator equipment that utilizes renewable energy, such as
photovoltaic power generation and hydroelectric generation,and emergency generators
for use in the event of adisaster,throughtoportable power equipment.

2

Transmit - transmitting electricity -Transform - transforming electricity Transforming, or power electronics, refers to converting andcontrolling electricity. Meidensha’s power electronics initiatives,
which began with mercury-arc valves, arenow proving useful in a range of fields,
including power supplies, railway facilities,
production facilities, EVs, renewableenergy, and battery storage systems, while
responding to demands such as energy
efficiency and increased reliability.

Protecting - protecting society We continue to protect the peace of mind and satisfaction of ourcustomers and the valuable lifestyles of the people that they servethrough comprehensive services to protect equipment, from stablesupplyofelectricity
andsystemsthatenableenergy-efficienttransportation through toinstallation, preventative
maintenance,
regularmaintenance,andreplacement of equipment.

6

Electricity generated at power stations passes through electricalequipment such as transmission lines, substations, and feeder
lines, where the voltage is incrementally lowered, before being
delivered to factories, buildings, and homes. We provide
products that are essential
to the safe and stabletransmission of electricity,such as transformers thatchange the voltage ofelectricity and circuit breakers
to shut off excess current in
the event of an accident.

3

The Meiden Group has developed its social infrastructure, industrial systems, and maintenance and servicing businesses
in 13 countries and regions.
Production Sites

Sales and Servicing Sites

TRIDELTA MEIDENSHA GmbH
(Germany)

MEIDEN HANGZHOU DRIVESYSTEMS CO., LTD. (China)

MEIDEN AMERICA, INC. (U.S.A.)

Meidensha’s environmentally friendly transport technology
such as motors and automated guided vehicle (AGV) systems
that are valuable to increase efficiency at manufacturing plants,
environmentally friendly EV/PHEV drive systems, automobile
testing systems that
contributetothedevelopment process,and elevator systems
that enable a powerfulyetsmoothride,
supports more fulfilling
lifestyles.

Meidensha Behind Every Electricity
Scene

1

Moving - moving with electricity -Overseas Network

PRIME MEIDEN LIMITED (India)

MEIDEN SINGAPORE PTE. LTD.
(Singapore)

THAI MEIDENSHA CO., LTD. (Thailand)

Domestic Network
Head Office

Maintenance Bases

Branch Offices, Branches, and Sales offices

General Research Laboratories

Head Office (Shinagawa, Tokyo)

Domestic Production Bases

Supporting - supporting society We provide components that support various production
equipment and services that support the safety of workplaces.
Our mission is to stand alongside our customers and support
them to resolve their issues through distinctive products andservices.

R&D Center (Shinagawa, Tokyo)
Numazu Works(Numazu, Shizuoka Prefecture)

Ota Works(Ota, Gumma Prefecture)

Nagoya Works(Nagoya, Aichi Prefecture)

7

Connecting - connecting with society -KOFU MEIDENSHA ELECTRIC
MFG. CO., LTD.
(Kofu, Yamanashi Prefecture)

A Number of Employees (consolidated) /A Number of Employee Breakdown
by Region*

By connecting our experience and knowhow developed atcustomers’ actual worksites with ICT, we will create efficiency
and optimize social infrastructure, leading to stable
maintenance.
We will create a moreconnected and vibrant future
through the latest IoT and AI
technology.

Consolidated Net Sales (FY2018)

Group Consolidated Subsidiaries*

245.0

37

9,297

billion yen

Japan

78.2%

7,270

Japan

70.7%

173.3

In Japan

19

Asia

20.1%

1,867

Asia

18.1%

44.2

Outside Japan

18

Other Regions

1.7%

160

Other Regions

11.2%

27.4

(billion yen)

9

MEIDENSHA REPORT 2019

* As of March 31, 2019

MEIDENSHA REPORT 201910

Overview by Business Segment

Overview by Business Segment in FY2018
Net Sales (consolidated)

245,033
241,832

237,404

millionsof yen245,033

220,141

SocialInfrastructure
Business

2015

2016

2017

2018 (FY)Operating Income (consolidated)

10,336

millionsof yen11,381

10,517

10,336
8,849

2015

2016

2017

Industrial
Systems
Business

2018 (FY)

Segmental Sales Breakdown (FY2018)

Maintenanceand Servicing
Business

We manufacture and sell equipment for emergency andnon-emergency power generation, hydroelectric power
generation, and power transmission and distribution facilities, topower companies, government agencies, railways, and buildings
and factories in Japan and abroad. The product offerings include
power quality stabilization systems and power generation
systems such as solar power and small and medium-sizedhydro power, as well as energy solution services such as smart
grid systems. We are also involved in the fields of drinking waterand sewerage treatment for local governments in Japan. Our
activities include manufacturing and sales of electrical facilities
for water processing systems and process control systems andinformation networks. We also offer solutions services suchas contract facility management services for drinking water
treatment plants.

Net sales in the segment decreased 6.5% year on year to ¥137,532
million, while operating income decreased by ¥4,187 million, amounting
to a ¥107 million loss.
In the Electricity and Social Infrastructure Systems business, werecorded decreased revenue and profit year on year due to factors suchas the delivery dates of sales being delayed, deterioration of costs inoverseas projects, and impact of unprofitable projects.
In the Railway Systems business, we recorded decreased revenue
and profit year on year due to the impact of a lull in major overseas
projects.
In the Water Infrastructure Systems business, we recorded decreased
revenue and profit year on year due to factors such as lower demandarising from reduced budgets due to difficulties in implementing regional
fiscal policies and the declining population, etc., as well as the impact ofdelays in construction work.

We manufacture and sell motors and inverters for elevators,
textile machinery, industrial vehicles, and electric vehicles. Other
products include vacuum capacitors and industrial computers
for makers of semiconductor manufacturing equipment. We also
manufacture and sell dynamometers and other testing systems
for automobile manufacturers, and logistics support systems forfactories and warehouses.

Net sales in the segment increased 16.2% year on year to ¥65,100
million, while operating income increased 28.2% year on year to ¥5,622
million.
In the Motor and Drive business, we recorded increased revenue andprofit year on year, particularly due to positive sales of motors andinverters for PHEVs/EVs.
In the Electronics business, we recorded increased revenue but
decreased profit year on year, with components for semiconductor
manufacturing equipment being stagnant due to the semiconductor
market being in an adjustment phase.
In the Dynamometer Systems business, operating income increased,with steady investment in testing equipment by automobile
manufacturers and a rebound in orders, in spite of a slight decline in net
sales year on year.

We provide services relating to the remote management
and monitoring of facilities and the proposal of measures forextending the life of facilities, energy conservation, and otherservices related primarily to the maintenance of products we
supply.

We offer property rentals, including office spaces at ThinkPark
Tower (Osaki, Shinagawa City, Tokyo).
Social Infrastructure

55.0%

Industrial Systems

25.0%

Maintenance and Servicing

14.6%

Real Estate

1.3%

Other

4.1%

Real EstateBusiness

We are engaged in the real estate leasing business, centering on theoffice and commercial building ThinkPark Tower (Osaki, Shinagawa City,
Tokyo). Net sales in the segment remained steady from the previous fiscal
year at ¥3,481 million, while operating income rose 6.2% year on year to¥ 1,419 million.

Net Operating Income(Millions of yen)

(Millions of yen)

Other
Business

This segment includes categories not included in any of the above
segments, such as manufacturing and marketing of electrochemicalmeasuring equipment and electric insulation materials, welfare services
for employees, and goods merchandising. Net sales in the segment
increased 1.5% year on year to ¥18,601 million and operating income
increased 60.4% to ¥797 million.

147,049

140,585

137,532

126,530

4,080
3,971
3,297

–107
2015

2016

2017

2018 (FY)

2015

2016

2017

2018 (FY)

5,622

65,10061,090

4,384
4,030

55,552 56,000

2,465

2015

2016

2017

2018 (FY)31,007 33,044 33,962

36,974

2015

2016

2017

2018 (FY)

3,386

3,452

3,463

3,481

2015

This sector includes marketing companies that handle a wide
range of products, welfare services for employees, and others.

11 MEIDENSHA REPORT 2019

We actively promoted our one-stop service initiative that covers frommaintenance and inspection of electrical equipment to maintenance andoperation management, and also aggressively conducting activities todiagnose and make proposals for electrical equipment using private plantand facility walkthrough activities. This resulted in an 8.9% increase in net
sales year on year to ¥36,974 million and a 21.1% increase in operating
income year on year to ¥4,343 million.

Net Sales

2016

2017

2015

2017

3,781

3,587

2015

2016

2017

2018 (FY)

1,280

1,340

1,337

1,419

2015

2016

2017

201８(FY)

2,921

201８(FY)

2018 (FY)

2016

4,343

797
19,712 19,155 18,327

18,6012015201８ (FY)

2016

2017

493

464

497

2015

2016

2017

201８(FY)

MEIDENSHA REPORT 201912

Message from Management
FY2018 Performance and the Plan for FY2019

Based on the same beliefs of ourcompany’s founding, we will carryout the Medium-term Management
Plan 2020 and aim for continuous
improvement of our corporate value.

Looking back on the previous fiscal year, the Japanese
economy was on a moderate recovery trend due to steadydomestic demand and increased capital investment, although
the momentum of external demand weakened. In contrast,
although there has been trade friction between China andthe US, the economic slowdown increased and the outlook
is unclear in China and Europe, the US economic recovery
is steadily continuing, and the overall recovery seems to bemoderate.
In this environment, the Meiden Group has continued
to promote the measures of the Medium-term Management
Plan 2020 that began last year. This has further strengthened
the ESG initiatives that are the foundation of the Group's
sustainable growth, aimed at increasing corporate value.
As a result, the Meiden Group’s FY2018 result were net
sales of 245,033 million yen, an increase of 1.3% from theprevious fiscal year, and the operating income decreased by
9.2%, to 10,336 million. Ordinary income increased by 1.4%
to 10,128 million yen, and net income attributable to ownersof the parent company increased by 8.5% to 7,653 million
yen. Net sales and net income were at record highs, andinvestments were made as planned. The business results ofeach segment will follow below.

Takeshi Miida
Representative Director, President■ Social Infrastructure Business Section

Determination Inherited from the Foundation
and Purpose of MEIDENSHA CORPORATION
Since its founding in 1897, Meidensha has single-mindedly
pursued manufacturing excellence while contributing to
the sustainable growth of society by creating a variety
of technologies, products, and services, with a focus onelectrical equipment relating to social infrastructure. At times,
we are asked to repair equipment that has been in service formore than 50 or even 80 years, and we believe that this isevidence of the trust and confidence placed in Meidensha by
our customers as a company that has continued to deliver arange of systems and maintenance services all over Japan.
Meidensha’s commitment to excellence, exploration,and spirit of challenge in our manufacturing originate from thedetermination of our founder, Hosui Shigemune, to “enrich theworld through the power of electricity.” He was a firm believer
in envisioning prosperous lives for people beyond the productand refining the technology to enrich the world through hisenterprise. This is Meidensha’s very mission and reason forour existence as a heavy electrical equipment manufacturer.
The environment surrounding Meidensha’s management
has changed over the years, and complex social issues
such as climate change are becoming apparent. In the faceof these issues, the Sustainable Development Goals (SDGs)

13 MEIDENSHA REPORT 2019

and the Paris Agreement, which were positioned as agendas
for the whole world to address, were adopted in 2015. The
targets of the SDGs are exceedingly compatible with the
President’s CSR Policy Statement and the business activitiesof the Meiden Group. They include many areas where we cancontribute to a solution with the technologies and expertise
we have cultivated over the years, and we view the challenges
that they pose as great business opportunities.
During the previous fiscal year, we arranged the initiatives
our businesses were involved in according to the individual
SDGs in this report. This fiscal year, we have gone one
step further, and having considered the relationship with the
Meiden Group’s business activities, we have identified five
SDGs as areas that we can contribute to solving social issues
through our business strategy: Goal 6: Ensure availability
and sustainable management of water and sanitation for all;Goal 7: Ensure access to affordable, reliable, sustainable andmodern energy for all; Goal 9: Build resilient infrastructure,promote inclusive and sustainable industrialization and foster
innovation; Goal 11: Make cities and human settlements
inclusive, safe, resilient and sustainable; and Goal 13: Takeurgent action to combat climate change and its impacts.
This allows us to identify priority issues from the SDGs. Goingforward, we will incorporate these issues into our businessstrategy for the next Medium-term Management Plan.

Operating income for the Social Infrastructure Businessdeteriorated by 4.1 billion yen from the previous year,
amounting to a loss of 100 million yen. Unfortunately, in
FY2018, the increase in the cost of overseas projects and thedelay in sales of some projects in electric power and water
infrastructure projects in Japan caused a decline in income
and profit year on year. However, for FY2019, we establishedsafeguards to limit worsening of costs by strengthening
overseas project management and ensuring expected net
sales with the addition of the delayed portion from the previous
fiscal year.

In order to achieve our FY2020 targets, we will promote
cost structure reforms throughout the Group, such as further
strengthening delivery control to ensure that sales are recorded,
and reforming the earnings structure for overseas subsidiaries
such as Singapore. By accelerating these foundation
reinforcement measures, we will achieve our FY2020 targets.

■ Industrial Systems Business Section
Operating income in the Industrial Systems Business
Section increased 1.2 billion yen to 5.6 billion yen. FY2018
saw reduced income and profit in the Electronic Equipment
Business due to the adjustment period in the semiconductor
manufacturing equipment market, while the Industrial Motorand Drive Business – which includes the Electric Vehicle (EV)Business – saw increased income and profit due to positive
sales of motors and inverters for electric vehicles. This was able
to make up for the loss in the Electrical Equipment Business.
In FY2019, in spite of increased sales in the EV Business,
we expect a temporary decline in profits due to start-up anddevelopment costs that will precede the mass production
projects for the following fiscal year and a decline in sales dueto the effect of the adjustment period in the semiconductor
manufacturing equipment market. However, even though
we must keep a close eye on recovery in the semiconductor
market in order to meet our FY2020 targets, we still consider
it possible to meet our targets through growth in other areas,such as EV Business.

■ Maintenance and Servicing Business Section
Operating income in the Maintenance and Servicing Businessincreased 700 million yen to 43.0 billion yen. For the last
several years, we have seen steady results from initiatives
including praise from customers about our proposals,
including initiatives such as one-stop service. In FY2019, we
expect to improve the results of initiatives under the Mediumterm Management Plan 2020 such as one-stop service andcustomer facility walk-throughs, with secure net sales andprofits at a similar level to the previous fiscal year. Similarly, we
expect to be able to achieve our targets for FY2020.

(In billion yen)

FY2017 (results)
Social Infrastructure
Business

Industrial Systems
Business

Maintenance andServicing Business

FY2018 (results)

Difference from thePrevious Year

FY2019 (forecast)

FY2020 (forecast)

Net sales

147.0

137.5

–9.5

154.0

157.0

Operatingincome

4.0

–0.1

–4.1

3.5

4.8

Net sales

56.0

65.1

9.0

65.0

77.0

Operatingincome

4.3

5.6

1.2

3.0

5.5

Net sales

33.9

36.9

3.0

37.0

39.0

Operatingincome

3.5

4.3

0.7

4.3

4.4

MEIDENSHA REPORT 201914

Message from Management

Basic Policies of the Medium-Term
Management Plan 2020
I would take this opportunity to once more explain the Mediumterm Management Plan 2020, which commenced in April lastyear.
Meidensha has begun implementing the Medium-termManagement Plan 2020, which covers a three-year period
from FY2018 to FY2020. In the Medium-term Management
Plan 2020, as part of the “powerful step forward” phase,
we will actively invest and implement equipment, personnel
resources, research and development, and strengthenbusiness partnerships. Positioning the next medium-term
management plan and beyond as a “jump” period, we aim
to achieve “high quality” growth by improving businessprofitability and creating a balanced business structure.
As a fundamental policy under the current Mediumterm Management Plan, business areas are divided into thefollowing three areas to distribute of company resources, witheach area implementing its own strategies.
The first area is “Growth Businesses.” This group isdefined as businesses whose markets are expected to expand
further, such as Overseas and Automobile-related Business.
The group aims to expand business scale by actively investing
resources in this group.
The second area is “Earnings-base Businesses.” This
group is defined as businesses that serve as a base to
generate earnings in a stable manner. This includes the Water
Treatment/Public Infrastructure, Electric Power/Renewable
Energy, and Maintenance/Servicing Businesses. The groupaims to strengthen profitability by reforming business models
and improving productivity.
The final area is “New Growth Businesses.” Goingforward, this Group will make investments to expand thebusiness scale associated with semiconductor manufacturing
equipment. These markets are expected to grow further, andcreate new business.
Based on these policies, we will actively invest andwork to strengthen earning potential with the goal of further
increasing corporate value.

(1) Status of Research and Development
In the research and development sector, during the firstyear of the Medium-term Management Plan 2020, we havededicated ourselves to producing new products and systems
in response to stricter environmental regulations, electrificationand digitalization of automobiles, and the progress of IoT and
AI technologies. Separate explanations will follow for eachsector.

■ Response to Environmental Regulations
To address environmental regulations, we dedicated ourselvesto developing new products that meet the specificationsof electricity companies in countries around the world,
particularly North America and the ASEAN region against a
global backdrop of stricter environmental policies. An exampleof this is the development of the 145 kV Ecotank Type
Vacuum Circuit Breaker, which uses high-pressure dry air asa replacement for SF6 gas, previously used as an insulationgas. In the renewable energy field, we have developed andMedium-term Management Plan 2020 (FY2018-2020)
Powerful Step for a Jump

VisionIdeal state of
being
JUMP

HOP

V120
(FY2015-2017)

Powerful
STEP
Medium-termManagement
Plan 2020(FY2018-2020)

Investment in facilities andhuman assets for major growth■ Enhancing its product competitiveness■ Enhancing earnings power■ Clarification of growth areas

15 MEIDENSHA REPORT 2019

■ Powerful Step:● Investments for growth andsteady expansion in businessperformance

Next
and ensuring
management
plans(FY2021-2024)

Realization of“high-quality” growth■ Expansion of business scale■ “High-quality” growthWell-balanced compositionof business operations● Enhanced profit margin●

A heavy electricmachinery maker that
supports the future ofsocial infrastructure
and industrial
advancement, while
realizing sustainablegrowth anddevelopment

completed the first delivery of solar power generation PCS(SP1000-500) with the highest conversion efficiency in Japan.

■ Response to Electrification of Automobiles
Regarding electrification of automobiles, in the EV Business,
we have developed integrated electric drive units that combine
motors and inverters in order to achieve smaller, lighter EV
drive systems. Furthermore, we are currently developing
three-in-one units that include reducers as well as aiming todevelop even smaller, lighter units. With regard to inverters,
we are working to develop the use of silicon carbide (SiC) insemiconductors to improve cooling technologies for powerdevices and peripheral components, with the aim of further
increasing efficiency and miniaturization.
In the Dynamometer Systems Business, we developed
an electric torque amplifier transmission testing equipment.
This equipment was awarded the FY2018 Agency for Natural
Resources and Energy Commissioner’s Prize for achieving 60%
energy conservation at testing and world-class functionality,
by using an ultra-low-inertia dynamometer (PMDY).

■ Enhancing Digital Technology of IoT and AI
We are dedicated to enhancing digital technology such as
IoT and AI in order to provide new services. In the Water
Infrastructure Business, we are developing AI automation andlabor-saving technology to ensure the transmission of skills forengineers placed in wastewater treatment facilities. The use of
AI will allow situational judgement equivalent to that of a skilled
engineer. This technology was applied in the Ministry of Land,
Infrastructure, Transport and Tourism’s FY2018 Demonstration
Study of Breakthrough by Dynamic Approach in Sewage HighTechnology (B-DASH Project) conducted in conjunction with
Hiroshima City and NJS Co., Ltd. We are now investigating
future commercial uses. Beyond these examples, regarding
electromotive applications, we increased the functionality ofwire breakage analysis with our Visual Rope Tester, whichapplies Meidensha’s image measurement technology.

■ Initiatives for New BusinessTo turn to initiatives for New Business, we establishedtechnology that creates oxide films at room temperatureusing ozone-ethylene radical (OER) generation technology
reliant on Meidensha’s pure ozone generators. We expect thistechnology to contribute to a wide range of film deposition
applications such as semiconductors and displays. Goingforward, we plan to develop and increase sales of OER
deposition process equipment that incorporates pure ozone
generators. In addition, we are promoting open innovationsuch as collaboration with startup companies using the Silicon
Valley office in the United States. Internally, we are soliciting
new business ideas and conducting activities to nurture futurebusiness.

■ Company-Wide Core Technology
With our core technologies, we are promoting the introductionof model-based development techniques in order to increase
product quality and speed up development. Particularly
regarding motors, we incorporated new technologies
such as sonic analysis and shape optimization technology
and promoted the sophistication of analysis and design.
Furthermore, we developed evaluation technology forsemiconductor components and materials (metals and carbon
fiber reinforced plastics (CRFP), etc.) used in products, andbegan initiatives aimed at increasing product reliability.

(2) Status of Capital Investment
With regards to capital investment, we are actively driving
capital investment focusing on manufacturing equipment
for expanding growth and data processing equipment for
operational efficiency.
Regarding the Overseas Power Business, MEIDENSIGAPORE PTE. LTD. has been conducting capital investment
for processing of transformer components and rationalizationof assembly processes.
With respect to data processing, we increased
sophistication of production management systems in orderto optimize production processes and introduced RPA (workautomation system) in order to increase work efficiency.
In the EV Business, we commenced augmentation of EV
component mass production equipment with a total value of
7.0 billion yen at three sites in Numazu, Nagoya, and Kofu.
Furthermore, in May 2019, we established a subsidiaryfor the manufacture and sale of EV motors and inverters, etc.,
in China, the world’s largest automobile market. This is thefirst overseas manufacturing site for the EV Business. Goingforward, we will consider further capital investment as the EV
market expands.
In the Medium-term Management Plan 2020, we plan
to spend the largest amount we have ever spent on capital
investment. Depreciation expenses and capital requirements
will increase; however, we aim to increase the scale of ourbusiness and improve financial indicators such as return on
invested capital (ROIC) through a steady return on investment.

Looking Towards the Completion of MediumTerm Management Plan 2020
The following is an explanation of the progress of the growthstrategy in each of the three business areas looking towards
the completion of Medium-term Management Plan 2020.

i) Growth Business
The Overseas Transformer Business, which is expected
to expand mainly in emerging Asian countries and theAutomobile-related Business, has made significant progress inthe electrification and digitization of cars, placing it as a growth

MEIDENSHA REPORT 201916

Message from Managementbusiness. We are actively investing resources into thesebusinesses to expand our business scale.
Within the Overseas T&D Business, we have further invested
personnel resources into the overseas electrical power sector toachieve participation in local markets as quickly as possible. Thishas been accomplished through the promotion of partnerships
with local companies in Southeast Asia. We are accelerating ourstrategy by entering the Indian market with a focus on the Indiantransformer manufacturer PRIME MEIDEN LIMITED (PML),
introducing PML products to the Japanese market.
In the Overseas Railway Sector, we are increasing
personnel resources and strengthening project managementwith a goal to complete large-scale projects including the
project to update the North-South and East-West lines in
Singapore.
Within Automobile-related Businesses, we beganenhancement of mass production equipment in the EV Businesswith a goal of receiving orders for new mass production
projects. Furthermore, we focused on enhancements to ourcompetitiveness such as improving development efficiency
through EV motor design support programs using AI, andincreasing the number of development personnel.
In the Dynamometer Systems Business, we collaborated
with FEV Japan, which is part of the German automotiveengineering company, the FEV Group. By enhancing simulation
and analysis technology, we aim to increase product sales androll out engineering services. This will result in a synergistic
effect for the EV motor and inverter businesses.

ii) Earnings-Base BusinessWe have placed the Water Treatment and Public Infrastructure
Business, the Electricity and Renewable Energy Business, andthe Maintenance and Servicing Business in Japan, etc., in the
Earnings-base Business group. We are striving to strengthen
profitability by reforming business models and improving
productivity as the lifespan of facilities, energy conservation,
widespread infrastructure services, and public-private
partnerships are increasing due to the population decline andlocal government financial difficulties.
In both the Water Treatment and Public Infrastructure
Business and the Electricity and Renewable Energy Business,
we launched the inter-departmental Infrastructure Solutions
Project and we are promoting proposals of inter-departmental
solutions for power companies and local governments. In
addition, we are engaging in public private partnerships (PPP)such as the comprehensive water supply project in the eastern
Gunma region, and working to create new business models
that utilize these partnerships going forward.
In the Japanese Manufacturing Business, we created
new systems to merge product sales and maintenance andservicing in order to enhance lifecycle engineering. Taking
advantage of the mobility of the maintenance and servicing
business, which has many sites in Japan, we will aim to
improve profitability by expanding orders for maintenance andservice and replacement of aging equipment.

17 MEIDENSHA REPORT 2019iii) New Growth Business[Environment]

We are promoting new market development and new
product development in New Growth Businesses such as the
Ceramic Flat-sheet Membrane and the Semiconductor-related
Businesses.
In the Ceramic Flat-sheet Membrane Business, we
received our first order from Siemens for new water treatment
systems (for treatment of wastewater from petrochemical
manufacturers). Going forward, we will continue to develop
product applications to expand orders.
In the Semiconductor-related Business, we aim toincrease the voltage and increase the capacitance of vacuum
capacitors that support semiconductor miniaturization,
multi-layered memory, and introduce new products such as
variable vacuum capacitors that support next-generation
communication standards. Furthermore, we are working
to create business that will lead to new growth such ascommercializing carbon nano-type cold cathode x-ray tubes,
which enable smaller, lighter weight x-ray inspection devices.

The Meiden Group has drafted First Meiden Environmental
Vision and aims to reduce greenhouse gas emissions
from business activities by 30% (compared to FY2017) by
FY2030. In addition, we are a member of the Ministry of theEnvironment's “Corporate 2°C Target Network” working not
only on business activities but also on reducing greenhousegas emissions through products and services. We will focus
on expanding sales of environmentally friendly products suchas EV motors, inverters and vacuum products, and creating
solutions for improving energy efficiency.

ESG initiatives
Finally, an explanation of Meidensha’s ESG initiatives.
In addition to ongoing improvement of products, systems,
and services, we are actively working to increase the qualityof our core business activities such as eliminating workplace
accidents, strengthening corporate governance, reducing
greenhouse gas emissions, and conducting employee work
style reforms.

[Quality]
With regards to mass-produced products, we will increase
productivity and improve quality by automating inspection
processes using image processing technology, introducing
smart factories using the IoT and AI, and automating design.
Furthermore, regarding overseas EPC projects, our focus is onenhancing management systems by creating an advance risk
identification system.

[Safety]
We are also focusing on safety experience education toeliminate occupational accidents. We are working to increasesafety awareness through devices that allow people toexperience accidents such as electrocution, and VR content
that allows people to experience the danger of working in highplaces.

[Corporate Governance]
We will work to further improve the effectiveness of the Boardof Directors and conduct appropriate, transparent information
disclosure through activities that effectively utilize outside
directors and outside audit & supervisory board members.
Some examples include establishing a voluntary Nomination
and Remuneration Committee and conducting meetings to
exchange opinions with the themes of management issues
and strategy.

[Personnel Development]
To develop personnel that are capable of supporting ourbusiness in the future, we are working to systematically
expand technology training, training for selected nextgeneration management candidates, and develop personnel
who can think and act with a broad and independent
perspective beyond the bounds of their own area of expertiseand role. In addition, we invite local staff working at overseas
subsidiaries to Japan and foster executive candidates inoverseas businesses through exchanges with Meidensha
management, tours of domestic bases and product delivery
sites, and practical training at each workplace.

[Work Style Reform]
Based on the execution plan “Smart Work 2020”, we arefocusing on business reforms by utilizing RPA, and working
to reduce overtime hours and promote paid vacations in
response to stricter regulations. Furthermore, we are rollingout various measures including childcare and nursing care
support to create an environment that is conducive to work,with an eye to achieving diversity. In addition, we have theshared belief that “nothing is more valuable than good health”
within the Company, and so have drafted the President’s
Health and Wellness Management Policy Statement. We will
promote positive support for employees' voluntary health andwellness activities.
Our growth strategies and key measures under the current
Medium-term Management Plan aim to achieve growth andthe creation of new businesses in new business fields by (1)“As a good opportunity” to boost business expansion in growthbusinesses such as the overseas transformer and automobilerelated businesses, (2) “Reform” to strengthen profitabilityof revenue-based businesses such as public infrastructurebusiness and maintenance service business, and (3) “Evolving”
to expand growth and create new businesses in new businessareas by strengthening manufacturing, sales and development
capabilities, and developing personnel resources and financial
strategies. Furthermore, we feel that we will be able to complete
the Medium-term Management Plan 2020 by ensuring thatthese measures are implemented and actively promoting
ESG initiatives based on business activities conducted along
themes such as “quality,” “safety,” “corporate governance,”“environment,” and “work style reform.”

Becoming a Company Indispensable to Society
The “quality” referred to in our corporate slogan “quality
connecting the next” is not only about the quality of our
products and services. There are two parts that make ourquality: “people” and “technology”. I believe that the passion
and exceptional skill of employees is what will drive theCompany going forward.
The “舎 sha” in our company’s name, Meidensha,
is a Chinese character meaning “house.” It refers to our
founder’s wish to create a place that brings people whoshare a determination to “enrich society through the powerof electricity.” This philosophy remains the same even today
as the business continues to diversify and spread its wings
throughout the world.
The Meiden Group will keep our founding spirit anddetermination close to our hearts as we continue to pursue
manufacturing excellence looking fifty and even 100 years into
the future. In doing so, we aim to be a company that plays arole in creating a sustainable society and is truly indispensable
to society.

MEIDENSHA REPORT 201918

The Meiden Group’s Approach to SDGs

Approach to SDGs

Earnestly responding to the expectationsof society, including SDGs, and providing

As a heavy electric equipment manufacturer supporting thefuture of social infrastructure, the evolution of industry, andachieving sustainable growth and development, the Meiden
Group contributes to the seventeen goals of the SDGs through all
business activities. Furthermore, in order to continue contributing
to the SDGs in the future, it is necessary to seriously address
the expectations of society and accurately grasp key social

value to society through businessissues as important issues for the company. To do this, we haveestablished areas that contribute to solving social issues throughbusiness strategies.
The Meiden Group will continue to actively challenge itself tocreate new technologies and new value, in order to contribute to
the realization of a vibrant and comfortable future society.

Corporate Mission
Illuminating a more affluent tomorrow
We continue to create value and technologies for the realization of a more affluent
and environmentally conscious society.

Relevance of Meiden Group Business
Activities to the SDGs
At the UN Sustainable Development Summit in 2015, the world
adopted common goals known as the Sustainable Development
Goals (SDGs). The SDGs are challenges the international
community is addressing over the 15 years from 2016 to 2030.
The targets of the SDGs are very compatible with the
President’s CSR Policy Statement and business activities of the
Meiden Group. They include many areas where we can contributeto a solution with technologies and expertise we have cultivatedover the years. Thus, to really learn and take advantage of theopportunities and challenges presented by the SDGs, we laid out
the effects that our business activities have on the environmentand society. This process considered the entire value chain andissues specific to the countries where we do business. It even
included any negative impacts of our business activities.
The Meiden Group will continue to pursue manufacturing
excellence that benefits society, create value, and help solve
social issues that include those addressed by the SDGs.

Areas in which we will contribute to the solution of social issues through our business strategy

Status of SDGs Initiatives
Understanding of SDGs

Identifying priority issues

FY2018FY2019• Organize impact areas in countries where we conductbusiness and business activities• Consideration of the connections between businessactivities and SDGs; establishing areas that contributeto the solution of social issues through our businessstrategies• Arrange related initiatives in accordance with each
SDG

Collaboration with Partners

Areas that we will engage in through all business activities• Conduct training for management

Environment

Society

Human Resources

Management Foundationof Our Business Activities

TopicsConducting SDGs Training for Management

ESG Issues

In FY2018, we invited outside instructors to give seminars about
SDGs (Sustainable Development Goals) for management.
At the seminars, we received instruction on topics such as“Why are SDGs attracting attention?” “The need for companies
to work toward SDGs,” and “Challenges the Meiden Groupis facing to achieve SDGs.” These seminars provided an
opportunity to share ideas linking SDGs and management
through active question and answer sessions.

19 MEIDENSHA REPORT 2019

MEIDENSHA REPORT 201920

Special Feature 1: Growth Businesses

Raising Production Capacity

Automobile-related Business 1

EV inverters

Aiming to build production
systems suited to the market
and achieve strong growth in
the EV business

Beforeinvestment

Numazu Works
Operations began in April 2019

13

After
investment25

10 thousand units/year
Inverter integrated motor units

Nagoya Works
Operations beginning inNovember 2019 (planned)

017

10 thousand units/year
EV motors

Changes in Environment Facing Automobile
Industry and Expanding Electric Vehicle
Market
The world’s climate change problem and increasingly rigorous
environmental regulations are behind the projected growth indemand for EV motors, inverters, and other products. At
Meidensha, we see EVs as a growth business.
The electrification and digitalization of automobiles can bethought of as a once-in-a-century revolution. We foresee
massive growth for the electric vehicle market and greater
demand for smaller, high-efficiency EV motors and inverters.
Under Medium-term Management Plan 2020, Meidensha isactively committing resources to this field, aiming to build
production systems suited to the market and expand ourAutomobile-related Business.
* Here, “EV” refers to electric vehicles, which includes fully electric vehicles (FEV),
plug-in hybrid electric vehicles (PHEV), and hybrid electric vehicles (HEV).

Market Forecast for EV Drive System Motors
and Inverters (EVs + PHEVs)(billions of
yen)
3,000
2,000
1,000
0
2015

2020

2025

2030

2035

* As calculated by Meidensha

Expanding Product Lineup

Maximum output power (kW)Expanding our product lineup to boost sales
Three-in-one
units*

150* Motor/inverter/ reducers
Inverter integrated motor units

100

HEV generators
PHEV motors, inverters50

Kei-car EV motors, inverters
2010

21 MEIDENSHA REPORT 2019

2015

2020

2025

KOFU MEIDENSHA
ELECTRIC MFG.
CO., LTD.
Operations beginning inNovember 2019 (planned)20

EV motors

MEIDEN HANGZHOUDRIVE TECHNOLOGYCO., LTD.
Operations beginning inMarch 2021 (planned)

37

10 thousand units/year0

17

10 thousand units/year

Buildup of EV Component Mass Production
Equipment in Japan
Since its founding in 1897, Meidensha has overcome a large
number of challenges. In the process, it became known as“Meiden a Motor Company,” a reference in part to the industrial
motors we made for spinning and threshing machines. Later,
Meidensha’s motors and the inverters that control them founda wide range of applications and usage environments,
including elevators and forklifts. In the process, we developed
wide-ranging technologies. Then in 1990, we started
developing EV motors and inverters based on thosetechnologies. In 1991, our motors and inverters were used in
the IZA EV, which we had jointly developed with Tokyo ElectricPower Company, Inc. (now Tokyo Electric Power Company
Holdings, Inc.). They were further adopted for use in Mitsubishi
Motors Corporation’s i-MiEV, the first mass-produced EV. We
currently provide motors and inverters for Mitsubishi Motors’
OUTLANDER PHEV as well. We have an extensive trackrecord, having produced for over 230,000 vehicles in total.
Presently, our 100% subsidiary KOFU MEIDENSHA
ELECTRIC MFG. CO., LTD. manufactures EV motors and ourNumazu Works makes EV inverters. However, in July 2018, we
decided to pursue an approximately ¥7 billion buildup of EV
component production equipment. The buildup, which isspread across three domestic works (Numazu, Nagoya, andKofu), will help us win new mass production orders.
Through this investment, we plan to add a new EV
component production base at Nagoya Works, build mass

New EV inverter production line at Numazu Works

production lines, and establish a production system capable ofputting out 170,000 inverter integrated motor units yearly.
KOFU MEIDENSHA ELECTRIC MFG. CO., LTD., meanwhile, isconstructing a new building and adding to its mass production
equipment. This will bring its EV motor production capacity to
370,000 units yearly when combined with its existingproduction lines. Mass production from the equipment
implemented at the Nagoya and Kofu Works is scheduled tostart in FY2019. The buildup of the EV inverter production
equipment at Numazu Works is complete, raising thatworkplace’s production capacity to 250,000 units annually.
Mass production began in April 2019.

An inverter integrated motor unit of the kind to be produced at Nagoya Works

Expansion of EV Business Production Basein China
Meidensha
founded
MEIDENHANGZHOU
DRIVE
TECHNOLOGY CO., LTD. as our first EV business production

base outside Japan in May 2019. It is located in China, theworld’s largest automobile market.
Construction of its factory will begin in November 2019,with operations scheduled to start in March 2021. EV motors
produced here will be delivered to automobile manufacturers in
China.

Future Expansion
The EV components produced as a result of the recent capital
investments in Japan and abroad will include some invertersthat will sell by themselves, but basically the plan is to deliver tofinished automobile manufacturers. We are building production
systems in Japan and China, and our product lineup will growto include inverter integrated motor units along with the existing
stand-alone motors and inverters. We are currently jointly
developing EV components with a number of finishedautomobile manufacturers and plan to expand the range of ourcustomers.
In doing so, we are taking full advantage of thetechnological strengths we have earned as a pioneer of EV
motor and inverter production. We intend to leverage thesestrengths to speed up development of new products likethree-in-one units, which include speed reducers along with EV
motors and inverters. We will also consider additional
investments as markets continue to expand. We foresee
demand growing for EV components, so we will be bolstering
our production systems for those as we aim to expand our EV
business.

MEIDENSHA REPORT 201922

Special Feature 1: Growth Businesses
Automobile-related Business 2

Stepping up our partnershipstrategy, creating new
automobile electrificationand digitalization
technologies and new value

In August 2019, we installed this product at our Ota
Works, calling it our “Demonstration Bench for Electric
Vehicles.” We will also use it to provide testing services for ourcustomers and a facility for Meidensha R&D.
Meidensha aims to leverage the synergy of our EV motorand inverter product business and automobile testing
equipment systems business to become an engineering
manufacturer for the age of electrification and digitalization.
By increasing the performance of testing equipment andstrengthening simulation and analysis going forward, we will
enhance our technological strengths, expand the scale of ourbusiness, and create new technologies and new value
together with our customers and partners.
About FEV

Building Partnerships That Further
Strengthen Products and Systems

FLEXIBILITY

Meidensha has greatly contributed to the development of
automobile technology, such as by delivering Japan’s firstelectric dynamometer in 1920 and Japan’s first chassis
dynamometer*1 in 1927. Currently the automobile market is ina time of great transformation, as evidenced by the shift toelectric vehicles and autonomous driving. These trends areleading in turn to new events in the development of autos using
dynamometer systems, such as the introduction ofmodel-based development.*2 To maintain our position as apioneer in testing systems during this age of electrification anddigitalization, we are collaborating more with outside partners
and using our accumulated technologies and experience tocreate new technologies and value.
Our Medium-term Management Plan 2020 likewise calls
for strengthening partnerships, and accordingly we haveadopted various measures as described below.

Better response tocustomers*3 A method that searches for the optimal allocation of a material in a given space toensure high motor performance

EFFICIENCYStrengthening Model-Based Development inPartnership with FEVMore efficient work

SOFTWARE
FEV’s strength
Advanced software

23 MEIDENSHA REPORT 2019

EV Motor Design Assistance Program
Developed with Hokkaido University with
AI-based Topology Optimization Method
Using a topology optimization method*3 that taps the power ofAI, Meidensha has jointly developed a design assistanceprogram for EV motor with Hokkaido University.
Conventionally, the shapes of the magnets and air gaps withina rotor have had to be determined using a combination ofdesigner experience, simulation, and experimental data. WithAI, the optimal shapes can be explored and designed
automatically. Using the recently developed design program, adesigner need only set target motor characteristics andconditions to find the optimal shape. This enables us toprovide EV motors that increase riding comfort, lower noise,
conserve energy, and otherwise meet customer requirements.

*1 A vehicle testing system used indoors to simulate a variety of on-road operating
conditions for automobiles*2 A development technique that runs a virtual simulation of preliminary automobile
development and performance evaluation processes

In March 2019, we formed a business partnership with FEVJapan Co., Ltd., a 100% subsidiary of the German firm FEVGroup Holding GmbH (below, FEV). Under this partnership,
Meidensha dynamometer systems will be sold that incorporate
FEV software. This solution will support the digitalization ofdesign and development through the model-based
development of automobiles. As a high-function open
program, FEV’s software will help make design anddevelopment work faster and more efficient. It will allow users
to build testing environments that incorporate user models andtherebyspeed
upmodel-based
developmentof
automobile-related products.

The FEV Group, based in Germany, is an engineering firm that develops
vehicles as well as engines and power trains for automobiles and thelike.

HARDWARE
Meidensha’s strength
Automobile
dynamometer systems
and engineers

Designing a motor using the new program

MEIDENSHA REPORT 201924

Special Feature 1: Growth Businesses

Special Feature 2: Earnings-Base Businesses

Overseas Business

Strengthening the Overseas T&D Business for emerging
Asian economies and other markets primed for growth

Changing our business model with public-private partnerships
and boosting earning capacity by increasing productivity

As populations grow and become urbanized in emerging economies, especially in Asia, these countries are seeing
growing infrastructure demand. In the industrialized nations, environmental regulations are growing stricter. Both ofthese trends present business opportunities for Meidensha. As such, we are bolstering our Social Infrastructure
Business with a particular emphasis on the Overseas T&D Business.

We have placed the Water Treatment and Public Infrastructure Business, the Electricity and Renewable Energy
Business, and the Maintenance and Servicing Business in Japan, etc., in the Earnings-base Business group. We are
striving to strengthen profitability by reforming business models and improving productivity as the lifespan of
facilities, energy conservation, widespread infrastructure services, and public-private partnerships are increasing
due to the population decline and local government financial difficulties.

Expanding Business in New Markets

Development of Algorithm to Optimize
Power Distribution Networks and Minimize
Their Loss, with Tohoku University

Expanding VI Sales in North America
Vacuum interrupters (VI) are made with Meidensha’s
outstanding vacuum technology. VIs are incorporated into
vacuum circuit breakers (VCB) and cubicle-type gas insulated
switchgear (C-GIS) that we make, and are also sold asstand-alone products to transmission/distribution equipment
manufacturers.
There is growing demand in North America for power
distribution equipment incorporating VIs. This is because of
demand to replace aging power equipment, to regulate SF6
gas having powerful greenhouse effect for the sake of theenvironment, and to reorganize the power system toincorporate decentralized power sources such as renewableenergy. As part of this reorganization, microgrids (small-scale
power systems) are becoming more pervasive. Microgrids
have a function (island mode) to operate independently of themain power grid when there is an outage. This lets themprovide electric power to limited local areas. Also, power
distribution networks are being established that allow cities
and towns to supply electricity to each other during outages.
This is boosting demand for distribution equipment for 38 kV
and below. In response, the Meiden Group is promoting VI
sales more actively in North America, which is a new market tous. Orders taken from this market have risen sharply in the last
four-five years.
Demand in the North American market is expected to
grow even further. To promote VI sales, we aim to expand ourshare from the existing customers and approach new ones insearch of orders.

Vacuum interrupters (VI)

25 MEIDENSHA REPORT 2019

Expanding Business in Emerging Economies of
ASEAN

GIS Order from Singapore PowerGrid Ltd
MEIDEN SINGAPORE PTE. LTD., a Singapore subsidiary of
Meidensha, won a major order in January 2019 for about
4,000 panels of cubicle-type gas insulated switchgear (C-GIS)
for their substations. The order came from SP PowerGrid Ltd.
(SPPG), a Singapore power company. The products supplied
are being manufactured by MEIDEN SINGAPORE PTE. LTD.
and Meidensha’s Numazu Works. MEIDEN SINGAPORE PTE.
LTD. is also overseeing equipment delivery and installation.
SPPG has continued to order substation equipment from
MEIDEN SINGAPORE PTE. LTD. since 2005. As our customer,
SPPG trusts our quality backed by a long track record andappreciates the advantages that a local manufacturer can
provide, such as courteous local support and a stable supply.
The Meiden Group’s involvement in the Singapore
infrastructure business goes back to 1964, predating theRepublic of Singapore’s independence. From then until today,
the Meiden Group has endeavored to help maintainSingapore’s power grid by working for local production of
infrastructure equipment for local use. The effort has included
setting up a production base in Singapore and maintaining a
production system there. We will contribute to the further
development of countries and regions around Singapore byusing the trust, track record, and expertise we haveaccumulated from our hub in Singapore to meet the vigorous
demand for electric power infrastructure, especially in ASEAN,
and provide safe and trusted equipment.

High-voltage cubicle-type gas insulated switchgear (C-GIS)

In July 2019, Meidensha, in collaboration with Tohoku
University, developed a new algorithm that simultaneously
calculates the optimal network configuration and a procedure
for switching to the configuration. In the Electricity Systems
Reform, Japan will start separating power generation from
distribution and transmission in 2020. Some of the challenges
that have surfaced are the need to lower wheeling costs anddeal with the increasing complexity of the power distribution
network as more distributed generators, like photovoltaic
generation systems, come online. The recently developed
algorithm enables the user of a commercially available desktop
computer to choose the optimal network configuration from anastronomical number of choices and calculate more than 100
switching procedure steps in 1 to 15 seconds, and often much
faster. Our estimates indicate that when applied to a standard
model of Japanese power distribution networks, the algorithm
could yield an approximately 0.79% reduction in power
distribution loss (based on electricity demand data at 10 p.m.).
For Japan as a whole, that corresponds to about 13.7 GWhless loss annually (enough to power 3,800 typical households)
while reducing CO2 emissions by 6,800 tons each year.
Going forward, we will propose the algorithm as a tool tosupport the operation and management of power distribution
systems for power transmission and distribution services andaim to make a commercial version available in future.

Meidensha, Hiroshima City Study
Technology Using AI to Automate, Save
Labor in Sewage Treatment Plant Operation
Technology proposed by Meidensha, Hiroshima City, and NJSCo., Ltd. has been adopted as part of the FY2018
Breakthrough by Dynamic Approach in Sewage HighTechnology (B-DASH) Project, which is sponsored by the
Ministry of Land, Infrastructure, Transport and Tourism. Now it
is part of a feasibility study on practical application to automate
operations and save labor at sewage treatment plants with AI.
The project accumulates and analyzes such input data as
operation records, water quality analysis, images of sewage
treatment, and anomalies when breakdowns happen. It uses
AI to present output estimating set variables for how best to
respond as it aims to make operations automatic and more
efficient. By visualizing how experienced engineers behave andthink during the course of operations, the technology could
make it easier to hand down their expertise. It also has thepotential to detect anomalies that go unnoticed when humans

operate systems and to realize new operating methods that
could, for example, discover phenomena related to the causeof the anomalies.

Monitoring/control room at a sewage treatment plant

ISO 55001 certification earned
Anticipating outsourcing of water supply andsewerage infrastructure to private sector
In September 2018, MEIDEN FACILITY SERVICECORPORATION obtained the ISO 55001 certification,
an international asset management system standard. Its
certification covers comprehensive consignment of business
operations and maintenance and technological proposals
in the sewerage sector. In November 2018, Meidensha and
MEIDEN AQUA BUSINESS CORPORATION jointly obtained
the ISO 55001 certification covering comprehensive
consignment of business operations and technological
proposals in the water supply and sewage sector. Social
infrastructure built during and after Japan’s high economic
growth is rapidly aging. With that in mind, more operators
are turning to asset management to appropriately maintain,
manage, and update their water supply and seweragefacilities.
The ISO 55001 certification could become a prerequisite
for submitting a bid for projects in future. Meidensha and
MEIDEN AQUA BUSINESS CORPORATION expect thecertification will boost opportunities for them to win more
contracts.

ISO 55001 certificate awarding ceremonies
MEIDENSHA REPORT 201926

Foundation
for Creating
Value

Special Feature 3: New Growth Businesses

Using years of accumulated technologies and experienceto create business for new growth
We are leveraging the technologies and experience cultivated by the Meiden Group over our long history as afoundation for nurturing “New Growth Businesses.” Such businesses include the Ceramic Flat-sheet Membrane and
Semiconductor-related Businesses. In these areas, we are breaking into new markets and developing new products.

Establishing Deposition Technology with
Pure Ozone
In April 2018, jointly with the National
Institute of Advanced Industrial Scienceand Technology (AIST), we establishedthe world’s first room-temperaturedeposition technology using a sourcegas (one used as a material for oxidefilm) along with OER processing
technology* that uses 100% pureozone from Meidensha’s pure ozone
generator (AIST and Meidensha havejointly applied for the patent). This
makes it possible to put deposits onfilms that are vulnerable to heatdamage.
Additionally, in May 2019, we established atomic layer
deposition technology with extremely low vapor permeability(patent jointly applied for). It
can potentially be applied ina wide range of fields going
forward, including sealingof semiconductors anddisplays and modificationof automobile windshields.
*OER processing technology:
Meidensha’s proprietary technology that causes a reaction between ethylene gas andhigh purity ozone gas from Meidensha’s pure ozone generator to generate highly activehydroxyl (OH) radicals at room temperature (Meidensha has applied for patent). This
technology makes it possible to reform, deposit films on, and cleanse organic materials(non-metals) at room temperature.

Development of Cold-Cathode X-ray Tube
Using Carbon Nanostructures Completed
Meidensha has successfully commercialized a cold-cathode
X-ray tube using carbon nanostructures by combining
Meidensha’s vacuum technology with cold-cathode X-ray
technology from the National Institute of Advanced Industrial
Science and Technology (AIST). This tube is the component of
X-ray inspection devices that generates the X-ray. Compared
to conventional hot-cathode X-ray tubes, the new technology
can be more energy-efficient and made smaller and lighter.
Thus, inspection system in turn can be smaller and lighter. A
more compact system could lead to the expansion of

27 MEIDENSHA REPORT 2019

applications to the non-destructive inspection market in thefield of infrastructure, such as plant piping inspections, and islikely to be used for applications like baggage inspection at
stations and event venues.

Cold-cathode X-ray Tubes with Carbon Nanostructures

First Order Received for Ceramic Flat-Sheet
Membranes for Siemens PACT® MBR*
SystemIn October 2018, we received an order from Siemens forceramic flat-sheet membranes for wastewater treatment. The
ceramic filter product, used for cleaning soiled water andwastewater, is being supplied to a petrochemical complex in
China. This is the first order Meidensha has received from
Siemens since that company agreed in December 2016 to use
Meidensha’s ceramic flat-sheet membranes in its new PACT®
MBR system technology. The PACT® MBR system is a newwastewater treatment system. It combines activated carbon,bioremediation, and membrane filtration into a very compact
form. Ceramic flat-sheet membranes have been selected foruse in the PACT® MBR system because of their highly durable,
abrasion resistant, and long service life characteristics
compared to conventional polymeric membranes typicallyused in membrane bioreactors.

ESG
ESG at the Meiden GroupESG initiatives are the foundation of sustained growth at the
Meiden Group and the very embodiment of the Meiden Group
Corporate Philosophy.
The Meiden Group’s Approach toStrengthening ESG

Reasons Why ESG Initiatives Increase
Corporate Value

The Meiden Group Corporate Philosophy is as follows: “Weseek to delight customers by offering high quality products andservices to help solve their problems. Through these businessactivities, we aim to fulfill our corporate social responsibility(CSR) by proactively solving global environmental problems
and other social issues and helping achieve a more affluent
future. We must continually tackle these challenges.”
The President’s CSR Policy Statement sets out three key
issues for the Meiden Group to address: environment, society,and human assets (resources). By taking on these three key
issues, with initiatives built on the fundamental management
elements of “compliance,” “corporate governance,” and “riskmanagement,” we ensure our sustained growth and offer
value to society through our business.

Increased corporate value leads to sustained growth and isa positive thing for all stakeholders. Employees are treatedbetter and thus more satisfied, while other outcomes are good
relations with business partners, greater customer satisfaction,and returns to our shareholders and investors.

Increase in sales and prots / Reduction in costs
Creation of business opportunities
Business risk avoidance and reduction
Strengthening trust in stakeholder relationships /brand image improvement
Increase employee loyalty /Build up technology, experience and expertiseSociety

Human Resources

Provide values needed by society

Produce work that gives pride to ouremployees and creates positive working
environments

We accept our responsibilities as good corporate
citizens through many initiatives, including: resolutionof customer issues; promotion of community
involvement and proactive communication; proper
information disclosure at the correct time, etc.

We will tackle these issues: create a positive working
environment that brings out the best potential andunique talents of each employee; promote better
work-life balance; and develop abundant anddiverse talent, as human resources are precious to
the Group.

S
Social*PACT® MBR(Powered Activated Carbon Treatment Membrane Bioreactor)

E

G

Environment

Governance

Filtered water

Environment
Promote strategic environmental management

Ceramic flat-sheet membrane

Air for cleaning
membrane

We contribute to society through the offering ofproducts and services for the environment andenergy. At the same time, we will work to reduce theenvironmental impact of our business activities.

Compliance, Corporate Governance,
Risk Management
Management foundation of our business activities
By strengthening these building blocks of managementfoundation, we hope to further cultivate the corporate
culture necessary for CSR management.

MEIDENSHA REPORT 201928

Foundation
for Creating
Value

E NVIRONMENT

Strategic Environmental Management
FY2019 Environmental Targets (Japan)

Environment

Strategic Targets
Contribute to environment
through products andservices

Environmental Vision
As a medium-term guideline to assist us in advancing environmental management, the Meiden Group has formulated an
Environmental Vision that indicates the stance that we should adopt and the appropriate direction for our environmental activities.
We seek to contribute to the realization of a sustainable society by means of the reduction of the environmental impact resulting fromour business activities and the deployment of the business activities, products, technologies, and services that we have developed
to date in the fields of energy and water treatment to support social infrastructure.
Our Environmental Vision identifies the mitigation of climate change, the building of a recycling society, and the conservation of
biodiversity as the missions of a 21st century company, and establishes targets for how we should perform in our business activities
and what we should aim for in our products. We work to implement environmental management with a corporate culture that highly
values the environment as the foundation that helps us to achieve these targets.
Deployment of Action Plans

What wecan do forPlanetEarth

Mitigating
ClimateChangeMeiden Group Environmental Vision

Realize arecyclingsociety

Conserving
biodiversity

A. Mitigating Climate Change

B. Conserving Resources(Building a Recycling Society)

C. Conserving biodiversity

D. Foster a corporate culture thathighly values the environment

Meiden Group Environmental Vision
A Corporate Culture that Highly
Values the Environment

Develop to
Action Plans

Medium-term Management Plan 2020, an Action Plan for FY2018–FY2020
Strategic Targets

Actions

Corresponding “Environmental Vision”

1) Expand businesses that contribute to the environment
1. Contribute to environment throughproducts and services

Reduce the environmental
impact of business
operations

Promote environmental
management

3) Promote the 3Rs (reduce, reuse, recycle)

B. Realize a recycling society5) Maintain biodiversity

4. Improve employees’ environmental
awareness
5. Reform environmental awarenessC. Conserve biodiversity

2) Strengthen value chain management
1) Develop environmental management personnel
2) Conduct environmental training and awareness raising

Zero emissions*1 at 9 sites*2

Conserve water resources

Measure and analyze water data: 4 main manufacturing sites*3

Conserve biodiversity

Conservation of ecosystems: 4 main manufacturing sites*3

Strengthen value chain management

Green procurement rate (as measured by Meidensha’s standards): 85%
or greater◦Expanded ESG investment◦Price competition (low cost, premium
pricing)

Society◦Spread of responsibility to entire value
chain (upstream and downstream)◦Improvement of employment / labor
conditions

Technology◦Enhanced efficiency of electric power
conversion◦Advancement of ICT, IoT technology◦Development of new energy / alternative
energy technology

D. Foster a corporate culture thathighly values the environment

A. Mitigating Climate Change

C. Conserving biodiversity❶ Contribute to the reduction of CO2 emissions through the sale of energy-related
products and systems (i.e., products for renewable energy resources, etc.)❶ Contribute to securing water resources through our water processing systems
business.

❷ Promote environmentally conscious product design and reduce CO2 emissions in
the product life cycle.

❷ Conduct risk management on chemical materials and promote the reduction ofvery risky hazardous chemical materials, as well as initiatives to find alternative
materials on a basis to reduce or replace harmful chemicals.

29 MEIDENSHA REPORT 2019

Total wastes: –1% (compared to FY2017)

Promote the 3Rs

EconomyTargets that Express Our Environmental Vision❷ Promote zero emissions of waste products from our production activities.

VOC emissions: 80 tons or lessGovernment(political)
Laws and
Regulations

1) Strengthen management of Meiden Group companies❶ Promote the 3Rs (Reduce, Reuse and Recycle) of waste materials in the various
stages of the product life cycle.

Manage chemicals properly◦Revision of Feed-in Tariff Scheme for
Renewable Energy◦Deregulation of electric power industry,
revision of power supply structure◦Flow of processes to implement carbon
pricing◦Energy conservation regulations& standards (business operations,products)◦Stronger regulations on hazardous
chemical substances

2) Contribute to sustainable society

B. Conserving Resources (Building a Recycling Society)Total emissions (Scope 1+2): –2% (compared to FY2017)

The Meiden Group has appointed a Enterprise Crisis Management Committee (CMC) to respond cross-organizationally to risks tothe survival of our businesses. Working through the CMC, the Meiden Group Environmental Committee collaborates with various
other committees concerned with compliance, security trade control, information security, quality, product technology, safety andhealth, pandemics, and more.
The Meiden Group identifies environment-related risks and opportunities and implements a variety of initiatives.

1) Disclose information, conduct PR❸ Reduce CO2 emissions in our production activities.

Reduce greenhouse gas emissions

Risk Management

A. Mitigating Climate Change

4) Maintain water resources

3. Promote environmental communication

Reduction in emissions over the life cycle of new products (specific areas)

Phenomena (issues) Related to Environment2) Manage chemicals properly

Contribute a 800,000 t/year reduction in CO2 emissions by ECBs

Promote environmentally conscious
designResponding to Environmental Risks and Opportunities

2) Promote environmentally conscious design

1) Reduce greenhouse gas emissions

FY2019 Environmental Targets (Japan)*1 Meiden Group definition of zero emissions: To achieve a non-recycling rate of less than 1.0% of the total volume of waste (including industrial waste, general waste, and saleable waste,
but excluding construction sludge, etc.).
*2 Scope of zero emissions initiatives: manufacturing sites in Japan (Numazu Works, Ota Works, Nagoya Works, KOFU MEIDENSHA ELECTRIC MFG. CO., LTD., MEIDEN CHEMICAL
CO., LTD. (Sagami Works), HOKUTO DENKO CORPORATION (Atsugi Works)), Engineering Service Business Units and two Construction Service Business Units*3 Main four manufacturing sites: Numazu Works, Ota Works, Nagoya Works, and KOFU MEIDENSHA ELECTRIC MFG. CO., LTD.

3) Manage chemicals in products

2. Reduce the environmental impact ofbusiness operations

Actions

Reputation /Needs◦Demand for information disclosure(accountability)◦Lifestyle changes (ecology-oriented)

NaturalEnvironment◦Changes of temperature andprecipitation volume◦Increase of local disasters (sudden
downpours, tornadoes, etc.)◦Ecosystem irregularities (increase oforganisms that carry infectious disease)

D. Foster a corporate culture that highly values the environment❶ Promote environmental communication: Actively disclose our environmental
activities and results and promote two-way communication with our stakeholders.
❷ Foster environmental awareness: For mitigating Climate Change, increase
environmental literacy to promote environmentally conscious R&D and productdevelopment and cultivate the Group’s individuals who actively perform local
community and social contribution programs by acting on their own initiative.

Risks

Opportunities

Carrying Out Initiatives

Short-term cost increases◦Rising cost of energy increases
our costs (procurement, shipping,
manufacturing, scrapping, etc.)
directly and indirectly.

Growth of new markets◦Markets for products andservices related to renewableenergy and energy conservation
are growing.

Decline of productcompetitiveness◦It will get harder to sell productsthat do not meet environmental
regulations and standards.
◦We will lose share if we cannot
meet the needs of a market
looking for environmentallyconscious products.

Differentiation withenvironmentally conscious
products◦Being among the first to bringproducts that meet regulations,etc., to market and offering lowenvironmental impact products
and services make us morecompetitive.

Expand products’ contribution to theenvironment◦Expand sales of products related
to renewable energy and energy
conservation (wind, hydroelectric,
and solar power equipment, EV/PHEV
electric equipment, transformers,
motors, inverters, etc.)◦Develop environmentally conscious
products, implement new technologies(which are more compact, lightweight,
efficient, energy-conserving, etc.)

Decline of corporate value◦Our image, evaluations (credit
ratings, etc.), and share prices
will decline if our business is
not seen as environmentallyconscious.

Better business performancethrough environmental
management◦By running businesses that help
solve environmental issues, we
can enhance our corporate value
and business performance.

Increase of local disasters◦Flooding and other disasters
can stop operations and cut the
supply chain.

Responding to natural disasters◦Demand for flood control anddisaster prevention and response(e.g., securing the power supply)is rising.

Diversify financial assets◦Issue green bonds, etc.
Reduce the environmental impact ofbusiness operations◦Promote energy conservation (capital
investment, visualization, etc.)◦Promote the 3Rs, eliminate harmful
chemicals◦Maintain water resources, consider
biodiversity
Improve business efficiency◦Promote Smart Work, etc.
Promote environmental management◦Promote business risk management◦Strengthen value chain management◦Practice environmental communication(information disclosure, etc.)
Deploy infrastructure-support products
during disaster◦(emergency power supply equipment,
mobile power supply cars, UPSs, remotemonitoring systems, etc.)

MEIDENSHA REPORT 201930

Foundation
for Creating
Value

Environment

FY2018 Environmental Targets and Results

Climate Change Countermeasures

Reducing Water Consumption

Following is a summary of how well we achieved our targets for FY2018. We are examining further measures based on our target
achievement status and will incorporate this information into future plans.

The Meiden Group aims to reduce greenhouse gas emissions
from business activities by 30% by FY2030 (compared to
FY2017 levels).
This target was determined using Science Based Targets(SBT) in conformity with the Paris Agreement*2. We work
for with stakeholders in the Meiden Group’s supply chain,including customers and business partners, to set common
objectives for the challenges we share.
Under the Medium-term Management Plan 2020, ourtargets for FY2018, FY2019, and FY2020 are reductionsof 1%, 2%, and 4%, respectively (compared to emissions
in Japan in FY2017). These steps were decided to help us
achieve our aims for 2030. We will periodically revise thosetargets.

We are concerned about the possibility of water leaks fromburied water supply pipes on factory grounds as our facilities
age. We are systematically updating pipes and placing morepipes above ground for easy maintenance and inspections.

Legend: ○ Achieved △ Not achieved (better than previous year) × Not achieved

FY2018 Environmental Target Achievement Status (Japan)
Strategic Targets

Actions

FY2018 Targets (Japan)

Contribute toenvironment throughproducts and services

Promote environmentally conscious
designPromote environmental
management

Achievement

Contribute a 800,000 t/year reduction in CO2 emissions by ECBs

841,000 t/year〇

Increase percentage of Green Products (as measured by Meidensha’s
standards)

21 Green Products

×

Total emissions (Scope 1+2): –1% (compared to FY2017)–18% (compared to FY2017)〇

VOC emissions: 80 tons or less96 tons×

Total wastes: –1% (compared to FY2017)+4% (compared to FY2017)

×Promote the 3Rs

Zero emissions* at 9 sites*

Achieved at all 9 sites〇

Conserve water resources

Measure and analyze water data: 4 main manufacturing sites*3

Extension of flowmeters, etc.

〇

Conserve biodiversity

Survey of ecosystems (plants, etc.): 4 main manufacturing sites*

Conducted at each site〇

Reduce greenhouse gas emissions

Reduce theenvironmental impact
of business operations

FY2018 Results

Manage chemicals properly

1

2

3

Green procurement rate (as measured by Meidensha’s standards): 80%
or greater

Strengthen value chain management*2 Paris Agreement: A new framework for tackling global warming from 2020, adopted
by the 21st Conference of the parties (COP21) to the UN Framework Convention on
Climate Change.

〇

85%*1 Meiden Group definition of zero emissions: To achieve a non-recycling rate of less than 1.0% of the total volume of waste (including industrial waste, general waste, and saleable waste,
but excluding construction sludge, etc.).
*2 Scope of zero emissions initiatives: manufacturing sites in Japan (Numazu Works, Ota Works, Nagoya Works, KOFU MEIDENSHA ELECTRIC MFG. CO., LTD., MEIDEN CHEMICAL
CO., LTD. (Sagami Works), HOKUTO DENKO CORPORATION (Atsugi Works)), Engineering Service Business Units and two Construction Service Business Units*3 Main four manufacturing sites: Numazu Works, Ota Works, Nagoya Works, and KOFU MEIDENSHA ELECTRIC MFG. CO., LTD.

Promoting Business that Contributes
to the Environment (“Eco-contributing
Businesses” (ECBs))The Meiden Group aims to benefit the environment by using
renewable energy like solar, wind and hydroelectric power andby supplying products and services that are more efficient andthus energy saving.
In FY2018, we aimed to provide environmental contribution(the expected curbing effect of CO2 emissions from productssold) of about 800,000 t/year. We increased shipment ofelectric vehicles and transformers and high-voltage inverters
for the overseas market, enabling us to achieve our target for
the fiscal year, reaching emissions reductions totaling 841,000
t/year.
Reducing CO2 Emissions Caused by Products

Turbine generators(10,000t-CO2)

841,000 t/year
reduction in
CO2 emissions

100

Electric forklift
controllers

CO2 emission reduction
target – 800,000 t/year

1,500

1,390

■ Scope 1 (city gas and fuel combustion, etc.) ■ Scope 2 (electric power, etc.)
1%
2%
4%
30%
reduction
reduction
reduction
reduction

Any time we develop a new product, we evaluate it for energy
and resource conservation, recyclability, environmental safety,
and more, based on our Product Environmental Assessment
Standard. If a product meets those standards, we certify it asa Meiden Green Product.
For the evaluation item “consideration of lifecycle,” wecalculate CO2 emissions according to a life cycle assessment(LCA), and we encourage environmentally conscious design inorder to reduce CO2 emissions.

FY2017(Benchmark year)

FY2018FY2019FY2020

FY2030To address emissions stemming from energy consumption, we are working thoroughly
to conserve energy through production streamlining, capital investments, etc., andconverting to renewable energy. In addition, we are practicing strict control and making
technological innovations to address direct emissions of GHGs like SF6 gas.

A Meiden Green Product registered in FY2018MEIDACS II is a measurement control system that is used
when testing automotive parts. It improves functionality
through human centered design, improves operability by using
the docking window method, and enables efficient work.
Compliant with the WLTP*1 standard.
This product has the following advantages over its
predecessor (MEIDACS DY 6000P).

（t-CO₂）50,00040,000■ Emissions (Japan)
Basic unit (Japan)
0.24
41,015■ Emissions (Overseas)
Basic unit (Overseas)

0.23

0.24
0.21

40,11338,3750.16

30,000◦Improved maintainability through front-access maintenance*1 WLTP: Worldwide harmonized Light vehicles Test Procedure

10,000Life cycle CO2 emissions

0
2014 Result2015 Result

31 MEIDENSHA REPORT 20192016 Result2017 Result

2018 Result (FY)92%

* Comparison against
equivalent previous
Meiden productThis productPrevious product(Developed in FY2005)

2015

2016

2017

2018

500
0

2014

(FY)

* Water usage volume includes tap water, water for industrial use, and ground water.

0.14

35,850

Also known as

Meidensha Corporation Green Bonds

Maturity

5 years

Total amount of
issue

6.0 billion yen

Coupon rate

0.26%

(Basic unit)
0.25

Issue price

100 yen for each 100 of corporate bonds

Date of issue/dateof maturity

July 23, 2019 to July 23, 2024

0.20

Redemption
methodBullet payment at maturity

0.15

Subscription
methodOpen invitation

0.10

Security/guarantee Unsecured and non-guaranteed

7,824

0.05

RatingBBB+ (Japan Credit Rating Agency, Ltd./Rating andInvestment Information, Inc.)

0.00

Use of proceeds

To provide partial funding of enhancement of massproduction facilities for electric vehicle components

Lead managing
underwriter

SMBC Nikko Securities Inc.

Green Bond
Structuring AgentSMBC Nikko Securities Inc.

Principles withwhich to confirm
compliance

Climate bond standard version 2.1
Low Carbon Transport (Land) Standard Version 1.0 (CBI)Green Bond Principles 2018 (ICMA)
Green Bond Guidelines 2017 Edition (MOE)

0.21
37,149

0.14
0.12

8,904

9,531

8,683

[Meidensha Green Bonds] Outline

0.12

8,470

60

20

1,085

Name of bonds

Amount of CO2 Emissions from Energy Sources

20,000

100

1,203

1,000

Meidensha Corporation 2nd Series Unsecured Straight Bonds(with pari passu agreement limited to corporate bonds)(Green Bonds)[Product] MEIDACS II Measurement Control System

92

1,238

Issue of Green Bonds
In July 2019, we issued green bonds through public offering for the
purpose of funding mass-production equipment for Motors andInverters for Electric Vehicles.
In June 2018, Meidensha pledged to reduce greenhouse gas
emissions by 30% by FY2030 (compared to FY2017 levels) and as
part of the the First Meiden Environmental Vision and we are promoting
reduction of environmental impact. Furthermore, we understand that
contributing to the achievement of sustainable development goals(SDGs) is a major management issue facing the Company and weare promoting the environmental contribution business by rolling out
environmentally conscious products and services.
By issuing green bonds, we plan to expand our capitalprocurement resources and deepen the understanding of a wide
range of stakeholders regarding our active environmental initiatives.

Amount of Greenhouse Gas Emissions from Business
Activities

Development of Environmentally
Conscious Products

40

1,183

Topics◦13% saving in power consumption through a highperformance multi-core CPU80(1,000m³)
2,000

(年度)

0

2014

2015

2016

2017

2018

(FY)

* The electric power CO2 coefficient used was the CO2 emissions coefficient proposedby the Electric Power Council for a Low Carbon Society. For figures through FY2017,
we used the adjusted factor for each fiscal year; for FY2018, we used the adjusted
FY2017 factor.
* For the factor for electricity usage in each overseas country, we used the averagevalues from 2010 to 2012 as stated in CO2 Emissions from Fuel Combustion (2014
Edition) issued by the International Energy Agency (IEA). For fuel oil and fuel gas,
we used the emissions factors for each country published in the Greenhouse Gas
Protocol Initiative (GHG Protocol).
* Basic units are emissions (t-CO2) divided by net sales (million yen).

Please refer to the website for specific details about Meidensha Green Bonds.

MEIDENSHA REPORT 201932

Foundation
for Creating
Value

S OCIAL
Human Resources

Basic Approach

Promoting Diversity Management

As issues facing our customers and society as a whole
become increasingly complicated and unclear, it is importantto have personnel with the abilities to think flexibly and act
courageously, creating the value necessary to solve theseissues in order to enhance corporate competitiveness. For thisreason, we are determined to achieve sustainable growth byfocusing on employing and developing competent personnel
and creating an environment where each person can derive
pride and fulfillment from their work.
In order for the employees to maximize their abilities, it
is important to promote diversity management and createa workplace in which a diverse range of employees canparticipate with a healthy mind and body. Specifically, by
engaging as a group in initiatives such as achieving a work-lifebalance, and improving occupational health and safety, we will
enhance the corporate value for the entire group.

Even though we are in an age of changing business models
and technical innovation, personnel remain an essential partof business growth. We believe that creating an environment
where diverse personnel can participate and providing
opportunities for that participation is the key function ofbusinesses. We value each individual employee and actively
promote diversity to enable diverse working styles without
concern for the age, gender, nationality, or culture of workers,
in order to maximize the abilities of each individual and be acompany that is fulfilling and conducive to work.

Plan and Targets
We implement many training programs to encourage
employee growth in different aspects as employees, membersof society, and professionals. As the business environment
under Medium-term Management Plan 2020 becomesincreasingly unclear, we are focusing on creating the value
necessary to solve these issues in order to enhance corporate
competitiveness and training personnel to think flexibly and act
courageously.
Furthermore, as development of global operations
accelerates, there are increasing opportunities for technicalcollaboration, etc., with foreign companies, as well as working
with people with different viewpoints or abilities.

Promotion of Respect for Human
RightsHuman Rights Education for Officers and Employees
The entire Meiden Group understands international norms(Universal Declaration of Human Rights and International Bill of
Human Rights) and is working to conduct education activities
focused on human rights, with the aim of ensuring “respectfor human rights,” which is listed in the Meidensha Corporate
Code of Conduct.
We conduct periodic group training and video educational
activities, relating to compliance and harassment for all Group
employees and improve understanding and awareness byproviding opportunities for individuals to reexamine theirworkplace and views.
With regard to mental health, we conduct education aspart of our level-dependent education in the second year
after joining the company, and we are reinforcing our efforts inrelation to younger employees.

33 MEIDENSHA REPORT 2019

Promotion of Opportunities for and Participation by
Female Personnel
Meidensha is renowned for promoting female participation in
the workplace, and in November 2017, we received the grade
3 Eruboshi mark, which is the highest level.
Going forward, we will formulate an
action plan in accordance with the intent
of the Act on the Promotion of Women’sParticipation, and promote policies suchas the promotion of accessing childcare
leave for men and actively hiring andtraining female technology-related staff.
Promotion of Participation by Foreign Employees
As an aspect of promoting diversity, the Meiden Group hires
employees irrespective of nationality, and these workers
participate in various fields, including sales, development anddesign after joining the Company. Also we provide various
kinds of support to help foreign employees quickly adjust to
the work and lifestyle in Japan, as well as tailored support toimprove work skills with a personal development manager
assigned to each individual, etc.

Work Style Reform
Rolling Out “Smart Work 2020”—Working towards a reduction in annual total hours
worked—Under the previous medium-term management plan, theMeiden Group started an initiative to reduce total actual
working hours per year as part of Smart Work V120. Under
Medium-term Management Plan 2020, we will enhance
initiatives aimed at production efficiency to promote productivity
reform activities, increase business efficiency through Robotic
Process Automation (RPA), etc., and utilize telework, etc., toachieve flexible work styles, based on the reflection on the
results of V120, under the banner of Smart Work 2020.
Smart Work 2020 Vision and Targets
We will achieve work styles based on legal complianceby reviewing and reforming work styles, themselves, andeliminating working on holidays and excessive overtime on
business days.

People thatworked 80
hours ofovertime permonth

People thatworked 720
hours ofovertime per
year

Zero

Zero

Occupational Safety and HealthSupport for Flexible Work Styles
Meidensha instituted work from home and satellite officesystems in FY2015 as options to achieve a balance between
work and childcare, etc., and increase productivity. In FY2018,
we participated in Telework Days, which is promoted by
the Ministry of Internal Affairs and Communications andother relevant ministries andagencies in order to ensure
further uptake and expand
the user base. A total of 369
Meidensha employees took
part over the three-day periodof July 23 to 25.
The renovated Numazu satellite officeSince FY2017, the Meiden Group has provided opportunities toshare information and exchange opinions about occupationalsafety and health management, and we hold conferences for
the Meiden Group’s safety and health and health management
managers for the purpose of raising the management leveland fostering unity throughout the entire Group. The second
conference, which was held in November 2018, was held at the
Numazu Works, and participants exchanged opinions about
safety and health, participated in factory observations, andexperienced safety experience education. On this occasion, we
also invited safety managers
from MEIDEN SINGAPORE
PTE. LTD., which is ourSingapore subsidiary, to talkabout overseas health andsafety, which provided an
opportunity for us to broadly
learn about worksites andConferences for the Meiden Group’s
safety and health initiatives at safety and health and health management
managers
an overseas subsidiary.

Employee Survey Results (results and impressions of telework)

Promoting Health Management

17%
10%
8%

Average daysof paid leave
taken

Average hoursof overtime

Annual total
hours worked

20 days per
24 hours per
1,950 hours perperson per year person per month
person■ Improved work productivity or work90
% feltthat it was
effective

24% ■
41%

efficiency
Shorter commuting time (travel
time)■ Allows for childcare or nursing care,etc. (able to use time effectively
after work to pick up children, etc.)■ Did not think it was particularly
effective■ Other

HR Development
Development of Personnel that are able to Implement
and Promote Our Business Strategy
In FY2018, we established the Meiden Youth Academy inorder to enhance technical education for young employees.
In the past, we conducted technical education for technicalemployees; however at Meiden Youth Academy, we provide
opportunities to gain fundamental knowledge about electricity,which is essential to understand Meidensha’s products andtechnologies, for all workers in their first three years at thecompany, irrespective of whether they are in a technical oradministrative role.
Furthermore, in FY2019, Meidensha newly established
the Career Development Management Program for the
purpose of systematically and strategically developing the next
generation of personnel. We aim to conduct initiatives suchas sending young and mid-level personnel to attend businessschool and conducting professional exchange for people indifferent business units and develop personnel that can think
and act with a broad perspective and outlook that exceed thebounds of their areas of specialty and roles.

Health Promotion: Aiming to Maintain and Improve the
Health of Employees
The President’s Safety and Health Management Policy statesthat “nothing is more valuable than good health,” and the
Meiden Group is conducting measures and implementing asystem to improve the health of employees. We have followed
up employees that receive comments in their periodic healthexamination results and conducted initiatives such as mental
health measures, health management of workers that work
long hours, and various forms of health education on an
ongoing basis. In order to further enhance these initiatives,
we drafted the President’s Health and Wellness Management
Policy Statement and commenced its implementation in
FY2019.
Furthermore, in order to realize the Meiden Group’s
corporate philosophy of “illuminating a more affluent
tomorrow,” it is important for employees to maintain their
physical and mental health and work with vigor and purpose.
We are promoting activities as an organization to support thehealth of each individual such as sharing the belief that “nothingis more valuable than good health” with all employees andactively supporting employees’ own health activities. Throughthese activities, we are working to become a company thatenables employees and their families to live a vigorous andhealthy lifestyle.

MEIDENSHA REPORT 201934

Foundation
for Creating
Value

SocialQuality Management

Basic Approach
The Meiden Group must continue contributing to the solutionsof customers’ problems by providing high-quality products andservices at all times, in order to continue to be relied on andchosen by customers and society. To do this, it is importantthat we implement the following three things: “initiatives toimprove quality,” “promoting initiatives to collect customers’
needs,” and “developing human resources to support the
supply of high-quality products.” As our customers’ partner,
the Meiden Group aims for all employees to listen to customers,
act quickly, and improve quality, in order to increase customer
satisfaction.

Plan and Targets
Under Medium-term Management Plan 2020, we will promote
initiatives to improve quality with the quantitative target of
reducing the number of defects and the cost of rectifying
defects by half in comparison with 2017 results and contributeto increased profits by increasing customer satisfaction andreducing unnecessary costs.

Supply Chain Management

Developing Human Resources to
Support the Supply of High-quality
Products
In order to increase all employees’ awareness of quality andimpart basic knowledge of quality management, we conduct
education relating to quality management technology for all
employees that are involved with manufacturing, even if they
are not directly connected to the Production Business Unit.
We conduct training that includes drills relating to the role ofquality management, how to promote reform, seven tools for
quality control, analysis based on the five whys, preventing
human error, and preventing defects and recurrence, etc., foreach level of employee such as new employees and groupleaders. We are in the process of rolling out the curriculum forJapanese and overseas subsidiaries.

Initiatives to Improve Quality
The Meiden Group has determined items that need to be
managed from the perspectives of “no defective unit accepted”“no defective unit made here” and “no defective unit shall leavehere” in order to improve quality in each internal process, suchas development, design, manufacture, testing, and inspection,
including purchasing parts and materials, etc., from affiliates,
and we conduct activities accordingly.

Promoting Initiatives to Collect
Customers’ Needs
In order to provide products and services that satisfy ourcustomers, we are gathering and analyzing the needs of ourcustomers on a daily basis, including information and requests
provided by customers, complaints, and market trends, andimplementing activities that lead to concrete actions such as
proposing solutions, developing new products, and engaging
in servicing and various improvement activities.
In development, sales, engineering, manufacturing,and local construction departments that have contact
with customers, we work to improve our activities throughthe PDCA cycle, by reviewing and evaluating tasks being
conducted at each department, creating a plan for the next
fiscal year in each fiscal year, and conducting self-evaluation of
the results of activities.
Furthermore, we will revitalize CS activities throughincreasing the efficiency of information transmission byrebuilding our system to collect information on customers’
needs and through the activities of the Company-wide
Committee.

Training scene

Technical Skills Maintenance Training
for Safety and Security
At the technology center adjacent to Numazu Works, we
conduct training programs for workmanship and technical skills
maintenance engineers. We raise engineers who contributeto the stable, safe, and efficient operation of customers’
equipment through practical training using real equipment.
Instructors are veteran engineers with extensive real-world
experience and the curriculum is formulated to allow participants
to touch and experience actual equipment, such as extra
high-voltage and high-voltage receiving substation equipment,
computers, power converter equipment, generators, androtating machinery. Maintenance training is conducted eachyear for customers to whom Meidensha’s products havebeen supplied. Participants deepen their understanding of
the internal composition of machinery through cross-sectionalmodels of products, and gain experience of actually operating
disconnecting switches and circuit breakers, testing protective
relays, and using generating equipment and inverters, etc.

Technical training (high voltage inverter)

35 MEIDENSHA REPORT 2019

Basic Approach
It is important to build equal and fair relationships that allow
for mutual growth with suppliers, in order to provide better
products and services to customers consistently. On the other
hand, while procurement risks in the supply chain become
greater as globalization of businesses and business activities
continues, it is necessary to identify potential risks in advanceand to minimize them.
The Meiden Group is working to build good partnerships
with suppliers and a sound and strong supply chain, by
promoting “CSR activities involving the entire supply chain andrisk evaluation,” “communication with business partners,” and“enhancing group procurement systems.”

Plan and Targets
The Meiden Group promotes enhanced supply chain
management based on the basic policy of Medium-termManagement Plan 2020.
We are working to conduct fair and impartial transactions,and to improve CSR further while strengthening partnerships
to help business partners understand the importance ofpromoting CSR in the supply chain.
We are continuing activities to support the acquisition of
EMS certification by our business partners and supporting
CSR promotions such as through follow-up education after
EMS certification has been acquired and education concerning
information security measures.

Promotion of CSR that Involve
the Entire Supply Chain and Risk
Evaluation
Evaluation of Suppliers
We convey the importance of CSR and our philosophy to ourbusiness partners, including legal compliance, environmental
protection, and community contribution, which are the basic
policies of the procurement section. In addition to quality,
delivery date, price, technological development proficiency,
and environmental certification, etc. we evaluate our business
partners’ social responsibility for the risks of environmentand social issues such as human rights and labor, fair tradeprinciples, social contribution, environmental conservation,and management of chemical substances. Through thisevaluation, we work to gain an understanding of businessconditions relating to social issues such as climate change,
biodiversity, environmental management, human rights, andworking environments, and then to identify suppliers whichhave a high-risk.
We conduct appropriate, fair, and impartial procedures
for all business partners through surveys relating to CSR
promotion and environmental conservation activities at thetime of the first transaction. Furthermore, we evaluate suppliers
through our business partners evaluation system and issue ascore card each year based on the results.

Promoting Communication with
Business Partners and Activities to
Reduce Environmental Impact in the
Supply Chain
Holding Meidensha Partners Meetings
We recommenced Meidensha Partners Meetings in FY2019
in order to enhance two-way communication with Business
Partners and strengthen relationships. The President gives
messages to business partners concerning future Meidensha
policies, and awards to praise the assistance and contribution
towards business activities and production activities. We
appreciate them face-to-face, and reward exceptional
activities and results.

President’s message

Companies that received awards in FY2018

Promoting and Supporting Eco-Action 21 Certification
and Registration
In FY2018, we held a study group for the Eco-Action 21
environmental management system (greening program) forsmall and medium-sized enterprises without environmental
management systems, which is endorsed by the Ministry of
the Environment, in the Meiden Group’s four regions, for the
fourth consecutive year, and we promoted and supported
certification and registration. As a result, 16 participating
business partners received certification, and a ceremony toconfer certification and registration certificates was held at
each production location. (A total of 90 suppliers have an EMS
and hold Eco-Action 21 certification.)
Also, we conducted follow-up education and individual
visits for the 74 companies that had received certification up
to 2017, and created opportunities for discussing and sharing
information with educators.
We will continue providing support for our business
partners in relation to Eco-Action 21 certification andregistration activities, and aim to spread environmental
management systems and environmental improvements
throughout the entire value chain.

Follow-up education in the Numazu district

MEIDENSHA REPORT 201936

Foundation
for Creating
Value

G OVERNANCE

Message from the Chairman of the Board of Directors

We aim to continually increase our corporate value by
strengthening governance both offensively and defensively.
My Duty as the Chairman of the Boardof Directors

Continually Strengthening theGovernance System

The chief duty of the Board of Directors is to make importantmanagement decisions and oversee the execution of business
operations. As Chairman of the Board of Directors, I aim torealize the corporate philosophy of “illuminating a more affluent
tomorrow” and “for customer peace of mind and satisfaction”
and to continuously improve corporate value by enhancing theeffectiveness of the Board of Directors. To this end, we areworking to strengthen the supervisory function of the Board of
Directors, revitalize the act of deliberation, and put a governancesystem in place that strikes the right balance of offensive anddefensive elements.

Meidensha has long worked to make governance more effective.
For example, we introduced our executive officer system in 2003.
Our objective in introducing this system was not only to speed
up decision-making, but to separate the execution of operations
from supervision of those same operations, strengthening thesupervisory function of the Board of Directors. Since Japan’s
Corporate Governance Code came into effect in 2015, we haveplaced particular focus on three points.
First, the further promotion of separation of supervision andexecution. Previously, the President had served as Chairman forboth the Board of Directors and the Executive Committee, the37 MEIDENSHA REPORT 2019decision-making body for specific business operations. However,when the new Chairman and new President took office in June
2018, we took the opportunity to assign the Chairman the task ofheading the Board of Directors and the President that of leading
the Executive Committee. As Chairman, I have begun to turnmore toward supervision, while continuing my involvement inbusiness operations. What I am most focused on as Chairmanof the Board of Directors is not only the agendas set forth in theregulations, but also proper development of the board agenda,
thorough discussion, and the realization of appropriate decisions.
Under our governance system, it is the Chairman who develops
an agenda consisting of management issues deemed important
for the medium- to long-term, and taking account of changes inthe business environment. Doing this requires having an adequate
understanding of the Meiden Group’s wide range of products,
its systems, service, and other businesses, and topics such as
risk management and compliance. Rather than outside directors,
who are not involved with day-to-day business operations, or the
President, whose job mostly consists of business operations, I
believe this role is best filled by the Chairman, whose job has
shifted to the realm of supervision.
Second, the establishment of a voluntary Nominating
and Remuneration Committee,*1 chaired by an independent
outside director as an advisory body for the Board of Directors.
Where previously these decisions were made within set rules,
establishing a formal committee enables an independent
outside director to appropriately participate and offer advice
concerning nominations and remuneration. Thus promoting
the independence and objectivity of the Board of Directors’
nominating and remuneration functions, and building stronger
accountability.
Third, evaluating the effectiveness of the Board of Directors.
We began these evaluations in FY2016. We conductedquestionnaire surveying all directors and audit & supervisoryboard members, including those outside the company, andused the survey results to begin a dialogue exchange. However,
we recognize that we can continue to further improve theeffectiveness of the Board of Directors, such as reviewing thecontent and methods to be discussed by the Board of Directors.
*1 Meidensha established a voluntary Remuneration Committee in December 2017.
In December 2018, the Committee took on the functions of a voluntary nominationcommittee to become the Nomination and Remuneration Committee.

Revitalizing Deliberation at Board of
Directors Meetings
Japan’s Corporate Governance Code lists “establishing anenvironment where appropriate risk-taking by the senior
management is supported” as one of the major roles andduties of the Board of Directors. The key phrase is “revitalize
deliberation” at the Board of Directors meetings. Specifically, thefollowing innovations and reforms have been implemented.
First, we invite outside directors and outside audit &supervisory board members with extensive knowledge andexperience. Their knowledge and experience encourage muchneeded, active discussion at Board of Directors meetings.
However, outside officers need to give their opinions after having
a thorough understanding of the company's business andbackground, including issues unique to the company and matters
to focus on, in addition to the broad perspectives they bring. For
that reason, we hold introductory sessions explaining the natureof Meidensha’s business, and advanced briefings on individual

situations. In addition to those, we are increasing opportunities
for outside officers to learn more, such as dialogue sessions after
Board of Directors Meetings and topical reports from various
departments. When outside officers develop a deep level ofunderstanding, they share opinions, questions, and observations
from a perspective internal officers do not usually see, and thatmakes Board of Directors meetings even more effective.
Our next step is to act on the discussions and decisions madeat Board of Directors meetings with a shared awareness of our
medium- to long-term growth story, taking account of the uniquecharacteristics and issues of our Social Infrastructure Business,
Industrial Systems Business, and Maintenance and Servicing
Business. This is how we practice governance “offensively,”and Meidensha’s business opportunities are growing. There is
the electrification and digitalization of automobiles, an increasing
number of railroad projects overseas, and a broadening ofwater and energy infrastructure services in Japan. During thedevelopment of the Medium-term Management Plan 2020, we
took a long-term (10-year) perspective on how to capture thesebusiness opportunities. We decided to use the present as a
powerful step toward our next medium-term management plan.
We held detailed discussions on investments and measures totake, including strengthening facilities, workforce, research anddevelopment, and business partnerships.
In this way, decisions on important matters are deliberated
based on a sufficient amount of information to ensure support
for appropriate risk-taking. Moreover, when such discussions
take place during meetings of the Board of Directors, it deepens
the executive committee’s own discussions. At the Board of
Directors, questions are asked from a multifaceted perspective,
and so in order for the executive side to answer it, it must be
carefully considered by the Executive Committee. I would like tobecome a bridge between the two by providing feedback to theBoard of Directors on the agenda formulation and discussions of
the Board of Directors.

Governance with a Balance ofOffense and Defense
The job of strengthening corporate governance is never finished,
and offensive and defensive governance are two sides of thesame coin. The external environment facing our business is everchanging, and management issues are growing increasingly
complex. Furthermore, the public view of compliance andcorporate misconduct has become stricter. Therefore, interms of defensive governance, in addition to compliance, risk
management, and QCD (quality, cost, delivery), we are actively
working to improve the quality of our business activities throughsafety, environmental measures, and work style reforms. On theother hand, regarding offensive governance aimed at improving
corporate value, I would like to further enhance discussions on
medium- to long-term business strategies.
I will continue working to improve accountability andtransparency for our shareholders and investors, improve
our corporate value over the medium to long term, and meetthe expectations of our shareholders, investors, and all otherstakeholders.

Representative Director, Chairman

Yuji Hamasaki
MEIDENSHA REPORT 201938

Foundation
for Creating
Value

GovernanceCorporate Governance
Basic Approachto Improve the Governance to Secure Fair Business Practices”
at the regular Board of Directors meeting held in May 2006
(this basic policy was later amended at the regular Board of
Directors meeting held in May, 2015, to reflect the revision of
the Companies Act).
The Company will work to further improve the efficiency
and fairness of management by promoting initiatives toenhance corporate governance in accordance with the
Corporate Governance Code.

Under our corporate mission of “illuminating a more affluent
tomorrow” and our corporate philosophy of providing thevalue “for customer peace of mind and satisfaction,” ourgroup of companies takes the basic stance that we maintain
fair and steady business activities with respect for people andthe global environment, operate businesses focusing on profit
while constantly pursuing new technology and high quality,and endeavor to contribute to prosperity of society. In order toimplement this basic stance, we formulated the “Basic Policy

Corporate Governance Structure: Supervision and Management and Internal Control System

General Meeting of Shareholders
Appoint / dismiss

Appoint / dismiss

Board of Directors

Audit & Supervisory Board

Directors (includes two outside directors)

Audit & Supervisory Board Members(includes two outside audit &supervisory board members)

Audit

Oversee

Dismiss
Audit

Representative
Directors
OverseeAppoint / dismiss

Accounting Auditor① Executive Officer System
Meidensha introduced an executive officer system in June 2003
in order to streamline the Board of Directors so as to “speed
up corporate decision-making and enhance its supervisory
function.” At the same time, we strengthened the functionsof the Board of Directors and separated the “decision-making
and supervisory functions” and the “executive functions” thatthe Board of Directors used to have. The former functions
were assigned to the Board of Directors and the latter to the
executive directors and executive officers to whom the duties
were delegated by the representative directors.
Executive functions for business operations are carriedout according to resolutions and decisions of the executive
committee, which is a decision-making body for executivefunctions, and the executive directors and executive officers,
who have the authority to carry out executive functions, under
the supervision of the Board of Directors. In this way, business
operations are executed autonomously, flexibly, and swiftly.
Furthermore, with the Board of Directors having broadly
assigned authority to conduct executive functions to the
executive officers, directors and executive officers in chargeof operations are required to submit status reports on theexecution of operations to the Board of Directors at least once
every three months in order to ensure that the supervisory
function of the Board of Directors properly works.

Internal Auditing Unit
MonitorExecutive Officers

Compliance Committee
Compliance Manager

Audit
Supervise

Each Business Unit
Compliance Hotline

Internal reporting line (Compliance Office)Corporate Governance Structure andInitiatives
Meidensha clearly separates important management
decision-making and operational decision-making in the rulesof the Board of Directors and the rules of internal approval
procedures, and ensures flexible executive functions.
The executive committee, which comprises executive
directors and executive officers, has been created for executive
decision-making, and decides matters based on the rules ofinternal approvals, as well as matters for which consultationfrom a whole company perspective is required.

39 MEIDENSHA REPORT 2019

₁ Features of Institutional Design

External reporting line (law firm)

Furthermore, we have established review meetings as
an advisory body that operates separately from the decisionmaking structure in order to create a system for in-depth
discussion and consideration of important management
matters.
Outline of Corporate Governance Structure
Form of Organization

Company with audit & supervisory board
members

Directors

Number of directors (outside directors): 9 (2)Audit & Supervisory
Board Members

Number of audit & supervisory board
members (outside audit & supervisory board
members): 4 (2)Number of
Independent Officers

4 (2 outside directors and 2 outside audit &supervisory board members)② Composition of Directors
There are currently nine directors, and we believe that thisnumber is appropriate to ensure thorough consideration to
make appropriate and swift decisions to address the drasticallychanging business environment.
Furthermore, two of the nine directors are outside
directors who carry out a supervisory function for execution ofoperations in order to strengthen corporate governance.
Meidensha’s outside directors satisfy the requirements of
independent directors as stipulated in the rules of the Tokyo
Stock Exchange.
③ Policy for Appointment of Candidates for Director andAppointment/Dismissal Process
When appointing Meidensha’s directors, it is our basic policy
to appoint appropriate personnel that will ensure diversity andbalance of the Board of Directors and contribute to increasing
Meidensha’s corporate value based on individual directors’abilities, knowledge, and experience, etc.
The number of directors is a number that we deem
appropriate to fully deliberate on the management issues of
the Company, with an upper limit of fifteen members.
Based on the above, we conduct selection of candidates
for director that will contribute to the enhancement of theBoard of Directors decision-making function and oversightfunction, by resolution of the Board of Directors, with advice

from the Nomination and Remuneration Committee* (voluntarycommittee), which is chaired by an independent outside
director. The candidates are then presented at the General
Meeting of Shareholders.
Furthermore, with regard to dismissal of directors, if it is
discovered that a director has breached the law or the Articles
of Incorporation, or committed acts that flagrantly breach thedirector’s selection policy, the Board of Directors will take thenecessary steps to dismiss said director with the advice of theNomination and Remuneration Committee.
* Meidensha established a voluntary Remuneration Committee in December 2017.
In December 2018, the Committee took on the functions of a voluntary nominationcommittee to become the Nomination and Remuneration Committee. The Nomination
and Remuneration Committee is chaired by an independent outside director and iscomprised of two outside directors, the chairman of the Board of Directors and thepresident of the Board of Directors.

₂ Effectiveness Evaluation of theBoard of Directors
Meidensha has a mechanism in place to conduct an analysis
and evaluation of the effectiveness of the Board of Directors
in order to strengthen the supervisory function of the Boardof Directors.
With regard to the activities of the Board of Directors in
FY2018, all the directors and auditors, including the outside
directors and outside audit & supervisory board members,
conducted a self-evaluation of the effectiveness of the Boardof Directors, and the following discussions took place at themeeting of the Board of Directors in May 2019.
ⅰ Items EvaluatedComposition and operation (resolution and deliberation
methods, etc.) of the Board of Directors, self-evaluations
concerning effectiveness of the Board of Directors, other
opinions
ⅱ Outline of Analysis and Evaluation Results
The results of the evaluation of each director and audit& supervisory board member were collected, and after
deliberation by the Board of Directors, it was determined thatthe quality of operation and deliberation is sufficient, sufficient
opinions and advice have been received from outside directors
and outside audit & supervisory board members, and theeffectiveness of the Board of Directors is currently secure.
Also, further revitalization of deliberations of the Boardof Directors was confirmed through these evaluations. We
will also increase understanding of Meidensha’s businessenvironment and strategy and provide ongoing opportunities
for discussion such as through explanations in advance,
meetings to exchange opinions, and explanatory programs
outside of the initiatives of the Board of Directors referred to
below.

MEIDENSHA REPORT 201940

Foundation
for Creating
Value

GovernanceTraining of Directors and Audit & Supervisory Board
Members
Legal training is conducted for officers on an annual basis,for the purpose of improving the effectiveness of the Boardof Directors and internal control. In FY2018, we promoted
risk management at each department and conducted training
relating to governance, which was conducted by outside
lawyers, for our officers, as part of internal control activities
conducted at all companies. The Meiden Group conductedtraining on the Companies Act for new officers of Meidensha
and affiliated companies.

₃ Initiatives to Utilize Outside
Directors
Meidensha seeks active participation in management byoutside officers, in order to enhance the supervisory functionof the Board of Directors. As such, we are conducting thefollowing initiatives to ensure free and active debates.
① Initiatives at the Board of Directors
ⅰ Advance Explanation of Agendas of the Board of
Directors
We give explanations in advance so that directors are able
to confirm the content of agenda items prior to participating
in meetings of the board of directors. Our system allows us
to accept questions, etc., relating to the content of agendas
in advance and prepare an explanation to be given at themeeting of the Board of Directors, and this revitalizes andenriches deliberations.
ⅱ Timely and Appropriate Sharing of Information
Besides the agenda for the meeting, Meidensha provides
briefings on current topics relating to the company at meetingsof the Board of Directors, with the aim of timely and appropriate
sharing of information with outside directors, so that they canshare the status of the Company in a timely fashion.
② Initiatives Outside of the Board of Directors
ⅰ Introductory Sessions
Primarily for newly appointed outside directors and outside
audit & supervisory board members, we provide opportunities
for them to understand the Company’s business.
The officers or general managers in charge of eachbusiness explain their business and Meidensha’s governancesystem to the outside officers, answer their questions andexchange opinions with them.
ⅱ Meeting for Exchange of Opinions
Besides legally-required board meetings, we organize monthly
meetings for an exchange of opinions in order to best use
the knowledge of the outside directors and outside audit &supervisory board members.

41 MEIDENSHA REPORT 2019

In these meetings, participants vigorously exchange
opinions, mainly concerning matters relating to corporate
governance and the Company’s management issues andstrategy. The meetings also serve as preliminaries to discussmatters prior to passing resolutions at the Board of Directors.

₄ Audit & Supervisory Board Members
and the Audit & Supervisory Board
Meidensha is a company with audit & supervisory board
members. Each audit & supervisory board member (two of thefour members are outside audit & supervisory board members)
performs his assignment of duties in accordance with theauditing policies and the auditing rules for audit & supervisoryboard members stipulated by the Audit & Supervisory Board.
They communicate with directors, the internal auditing
department, and other relevant departments, attend meetingsof the Board of Directors and other important meetings, andinvestigate the business and financial conditions, in order to
audit the execution of directors’ duties.
The Company also has Internal Auditors Office to assist
the Audit & Supervisory Board under the direct control of theBoard.

₅ Internal Auditing System
We have an internal auditing division under the direct control of
the President. The Internal Auditing Division conducts internal
audits to check the effectiveness and efficiency of business
operations, the reliability of financial reporting, the status ofcompliance with laws and regulations, and the maintenanceof assets, covering the Company and all Group companies athome and abroad.
Since FY2016, we have conducted risk management
using Control Self Assessment (CSA) at each Meidensha
factory and each Japanese subsidiary in order to enhanceinternal control and increase the efficiency of risk audits ateach business unit.
In FY2018, we conducted joint audits with other existing
internal business units in the course of overseas internal audits
and joint audits with third parties through outside consulting at
three locations in China to enhance internal control functions.

ⅱ Composition of Remuneration
Remuneration of directors is performance-linked annual
remuneration, and comprises basic remuneration andincentive remuneration according to each role. Of thesetypes of remuneration, incentive remuneration comprises
remuneration that is linked to business performance as ashort-term incentive and stock remuneration as a medium- tolong-term incentive.
Target Proportion of Each Type of Remuneration(if 100% of targets were achieved)
Basic
Remuneration：

PerformanceLinked
Remuneration

80%

15%

The level of remuneration of Meidensha’s directors isdetermined based on external objective remuneration market
data, economic conditions, industry trends, and Meidensha’s
business circumstances, etc., and it is confirmed by the
Nomination and Remuneration Committee referred to above.

5%

Position

Chairman

Yuji Hamasaki

Representative Director, Chairman

Takeshi Miida

Representative Director, President

Hiroyuki Takenaka

Director (Outside/Independent Officer)

Junji Yasui

Board Director (Outside/Independent Officer)〇

Dialogues with Shareholders andInvestors
Basic Approach and IR System

Performance-linked remuneration, which is a short-term
incentive, varies from 0 to 140 depending on the degree ofachievement of targets, with perfect achievement of targets
counting as 100. We use operating income, which is also used
for our financial targets in Medium-term Management Plan
2020, as a performance evaluation indicator, and also giveconsideration to revisions according to operating conditions
and changes to the roles of each officer, etc.

When any shareholders wish a dialogue with the Company
that will contribute to medium to long-term improvement of theCompany’s corporate value, it is Meidensha’s policy that theCompany’s management conducts the dialogue to the extent
reasonably possible.
A system is in place where an executive officer is placedin charge of IR matters and an IR-specialist department
conducts activities to enhance constructive dialogue withshareholders, including institutional investors and strengthens
external communication.

Calculation Formula
Basic Remuneration
for Each Position

Coefficient According to Achievementof Target Operating Income (0.0 to 1.4)

Stock remuneration, which is a medium to long-term incentive,
grants shares to the Officers’ Shareholders Association for the
purpose of further promoting sharing of profit and loss withshareholders.
ⅳ Remuneration Determination Procedures
The Nomination and Remuneration Committee confirms andconsiders the content of the remuneration system and theamount of remuneration from an objective perspective prior todetermination by the Board of Directors.
FY2018 Results
Total Amount of
Remuneration, etc.
(millions of yen)

Officers’ Remunerationⅰ Level of Remuneration

Stock
Remuneration

Nameⅲ Incentive Remuneration System

Classification

Directors remuneration policy：

Composition of the Nomination and Remuneration
Committee

Total Amount of Each Typeof Remuneration, etc.
(millions of yen)Basicremuneration

Incentive
remuneration

Results Briefings
We hold results briefings twice a year in May and November.
We also commenced briefings for individual investors in
FY2018.
We will continue to work to ensure an even fuller disclosureof information through results briefings, individual IR sessions,conferences, the website, and this report, etc., and continue
to engage in dialogue with shareholders and investors.
Main IR Activities in FY2018
Individual Sessions

NumberJapanese Investors

78

Foreign Investors

64

Total

142

Numberof People

Directors (excluding
outside directors)

393

343

50

11

Audit & Supervisory
Board Members(excluding outside
audit & supervisoryboard members)

44

44

-

3

Outside Officers

20

20

-

4

The materials for the results briefings are available for viewing. Please visit“Fact Sheet for Account Settlement Briefing Session” under “Investors” on the
Corporate website.

https://www.meidensha.com/ir/ir_04/ir_04_03/index.html

1. The amount paid to directors includes performance-linked remuneration for
FY2018.
2. The amount of remuneration paid to directors that concurrently serve as employees
does not include the amount of remuneration paid to them as employees.

MEIDENSHA REPORT 201942

Foundation
for Creating
Value

GovernanceRisk Management / Compliance

Board of Directors & Executive Officers as of July, 2019

Representative Director,
Chairman

Representative Director,
President

Representative Director,
Executive Vice President

Director,
Executive Vice President

Risk Management
Basic Approach
In order to understand risks that may arise in the future andto respond appropriately as the environment in which we
operate becomes increasingly complex and uncertain, theMeiden Group established and operates the Enterprise Crisis
Management Committee, and aims to establish a system torespond to all risks.

Yuji Hamasaki

Takeshi Miida

Masamichi Kuramoto

Shosuke Mori

[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)(Newly appointed in June of
2019)

The Enterprise Crisis Management Committee
Chairman (President)
Deputy Chairman (Chief Crisis Officer)
Enterprise Crisis Management Committee

Directors & Senior Managing Executive Officers

Outside Directors[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)

Outside Audit & Supervisory Board Members

Taketora Ito

Seiji Kato

Yoshiaki Shin

Mitsuru Nawata[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)
Audit & Supervisory Board Meetings:
100% (6 out of 6)[Record of Attendance]
Board of Directors’ Meetings:
100% (10 out of 10)
Audit & Supervisory Board Meetings:
100% (6 out of 6)[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)
Audit & Supervisory Board Meetings:
100% (6 out of 6)[Record of Attendance]
Board of Directors’ Meetings:
92.3% (12 out of 13)
Audit & Supervisory Board Meetings:
83.3% (5 out of 6)

BCM Committee[Record of Attendance]
Board of Directors’ Meetings:
100% (13 out of 13)

Central/Regional Healthand Safety Committee[Record of Attendance]
Board of Directors’ Meetings:
100% (10 out of 10)

Product and Technology
Deliberation Committee[Record of Attendance]
Board of Directors’ Meetings:
100% (10 out of 10)

Quality Assurance Council[Record of Attendance]
Board of Directors’ Meetings:
100% (10 out of 10)

Product Liability Committee

Junji Yasui

Meiden Group
Environmental Committee

Hiroyuki Takenaka

Information Security
Committee

Nobuaki Tamaki

Safety andTrade Control Committee

Compliance Committee

Norio Takekawa

Consider response to individual major risks

Initiatives to Establish a Risk Management System
At the Meiden Group, comprehensive risk management has
been conducted since FY2018 for each business unit using
Control Self Assessment (CSA) at each domestic works andaffiliate. Through this method, each business unit defines
future uncertainties that may impede the fulfillment of businessplans as risks from a wide range of factors such as external
environment and business processes and devises andimplements measures to respond to these risks according
to an evaluation of the severity of each risk. In addition, eachbusiness unit re-evaluates the success of this series of control
activities in their own business unit, which will lead to further
ongoing control activities.
With regard to internal auditing of the business risksof each business unit, we ensure that risk management isconducted through top-down style local interviews withpre-prepared questions conducted by the internal auditing
division and the aforementioned bottom-up style Control Self
Assessment (CSA) conducted by each business unit.
Formulation of Business Continuity Plan (BCPs)

Managing Executive Officers

Executive Officers

Kazumi Ikarashi

Tatsuki Mochizuki

Kazuhiko Furukawa

Minoru Kaneda

Akio Ikemori

Michihiko Kato

Kuniake Yasukawa

Noritaka Matsushita

Hisahiro Murashima

Takashi Furuta

Satoru Kameyama

Masahiko Suzuki

Isamu Suto

Satoshi Momenya

Takeo Suzuki

Akio Inoue

Norio Mizutani

Katsunori Suzuki

Hiroshi Toke

Hideki Miyazawa

Masayuki Iwao

43 MEIDENSHA REPORT 2019

In FY2018, the Committee convened for the second
time, and adopted (a) the Meiden Group BCM Promotion
System and (b) the Business Continuity Plan (BCP) Basic
Policy. Furthermore, in order to promote implementation, theCorporate BCP Promotion Committee and BCP promotion
committees of each business were created to enhancecompany-wide promotion.
Increasing Effectiveness of BCPs

Works with each committee to address new problems andissues affecting more than one committee

Nobutoshi Ohashi

Audit & Supervisory Board Members

CMC Office: General Affairs

2. Establishing and operating the BCM Committee: We
established the BCM Committee as the final decisionmaking body with regard to the Meiden Group’s business
continuity. It comprises members of managing executive
officer level and above and it is independent from theEnterprise Crisis Management Committee.

We conducted the following initiatives to promote formulationof BCPs as a Group-wide project in FY2018.
1. Conducting BCP introduction education: We conducted
BCP introduction education for the heads of each business
unit, disseminated information about the importance of
BCPs and announced the commencement of formulationof a Group-wide BCP.

Based on resolutions of the BCM committee, we conducted thefollowing initiatives to enhance disaster response measures.
1. Distributing disaster response cards to all employees(including employees of Group companies) and formulatinga natural disaster response manual (for the disaster
response headquarters)
2. Improving functionality(renewal) of the safety
confirmation system andensuring implementation
3. Restructuring thecorporate disaster
response headquarters
and conducting training
Corporate disaster response headquarters(first)training

Compliance
Whistleblower System on Compliance
Meidensha has a whistleblower system for compliance. This
is to prevent illegal actions and misconduct and to solve
problems as early as possible. This whistleblower system
includes the Compliance Hotline for discussing a broad rangeof compliance issues including breaches of laws such as
the Antimonopoly Act and bribery regulations, breaches ofinternal or external rules, and labor problems, the Harassment
Consultation Hotline, which is specifically designed to deal withharassment, and the Public Whistleblower Hotline for early
detection and rectification of unlawful acts, etc. Furthermore,
we established a supplier-specific whistleblower hotline in
FY2018.
The Compliance Committee studies information thatis brought to the above points of contact, and, if necessary,consults with a lawyer before resolving issues. We are working
to increase the dependability of management of information,such as the names of whistleblowers, of and the whistleblower
system as a whole, in accordance with national guidelines, toensure that whistleblowers are not disadvantaged by using thesystem.

MEIDENSHA REPORT 201944

Financial / Non-Financial Highlights
Consolidated basis
Financial indicators

FY2014FY2015FY2016FY2017FY2018Non-financial indicators

Net sales (millions of yen)

Number of consolidated subsidiaries

FY2014FY2015FY2016FY2017FY2018

39

39

38

37

37

230,299

237,404

220,141

241,832

245,033

Operating income (millions of yen)

9,997

10,517

8,849

11,381

10,336

Japan

21

19

18

19

19

Ordinary income (millions of yen)

10,502

10,595

8,209

9,992

10,128Outside Japan

18

20

20

18

18

Net income attributable to owners of parent(millions of yen)

6,868

6,962

5,743

7,056

7,653

R&D expenses (millions of yen)

10,261

9,970

9,462

9,402

9,458

Overseas net sales (millions of yen)

55,86364,08258,73074,15471,725

Capital expenditure (millions of yen)

8,887

8,314

7,355

7,584

7,895

24.3

27.0

26.7

30.7

29.3

Number of employees

8,173

8,408

8,474

8,995

9,297

Net assets (millions of yen)

255,519

255,024

247,646

264,457

265,586

Of which, local staff

Total assets (millions of yen)

67,405

68,771

74,312

81,22984,497

Net assets per share (yen)1,456.77

1,488.21

1,614.00

1,768.27

1,845.21

Net income per share (yen)151.34

153.42126.56155.52168.68

25.9

26.5

29.6

30.3

31.5

Cash flows from operating activities(millions of yen)

11,165

22,597

11,84017,975

14,365

Cash flows from investing activities(millions of yen)

(8,772)(10,530)(12,031)(7,582)(8,074)

Cash flows from financing activities(millions of yen)

(5,282)(5,847)

3,767(11,230)(3,101)

10.9

10.4

8.2

9.2

9.3

—

—

—

6.6

5.9

23.1

26.1

31.6

28.9

26.7

Overseas sales ratio (%)

Equity ratio (%)

ROE (%)ROIC (Operating-income-based) (%)
Dividend payout ratio (%)

Operating income (millions of yen)
Net income attributable to owners of parent (millions of yen)

245,033
9,997
6,868

55,863

2014

64,082
2015

58,7302016

74,1542017

10,336

8,849
6,962

7,653

7,056

5,743

25.9

2018

(FY)

2014

2015

2016

2017

2018

(FY)

Operating income decreased 9.2% year on year while
ordinary income increased 1.4% year on year with net
income attributable to owners of parent at a record
high.

26.5

29.6

1,893

2,078

2,083

2,016

2,002

2,019

Percentage of female employees in
executive positions (%)

2.05

2.47

2.70

3.30

3.60

Lost time accidents rate

0.59

0.44

0.96

0.29

0.99

CO2 emissions (Japan) (kt-CO2)

41

41

39

36

38

Reduction of CO2 emissions caused byproducts (kt-CO2)

587

870

800

733

841

CSR spending (millions of yen)

22

19

32

28

38

Figures for employee numbers exclude those employees on temporary contracts.
The number of local staff is the number of staff that have been directly employed by overseas consolidated subsidiaries.
Total actual annual working hours are the actual working hours calculated by subtracting leave hours from the sum of official working hours and overtime hours (averaged per
employee).
8. The percentage of female employees in executive positions refers to the percentage calculated by dividing the number of female employees in executive positions by the total
number of executive positions.
9. Lost time accidents rate is calculated per calendar year. “Rate” indicates the number of people that have been killed or injured as a result of industrial accidents per million
hours of work. If the same person is hurt in more than one accident, the number of people that have been killed or injured reflects the number of accidents.
10. The CO2 emission coefficients suggested by the Electric Power Council for a Low-Carbon Society (ELCS) were used as the CO2 emission coefficient for electricity. The
adjusted factor for FY2017 was used for FY2018, while that for the respective fiscal year was used for those fiscal years up to FY2017.
11. Reduction of CO2 emissions caused by products is the expected reduction of such emissions caused by products sold.
12. CSR spending includes donations and sponsorship funding.
R&D expenses (millions of yen)

264,457

265,586

30.3

31.5

2014

2015

2016

2017

2018 (FY)Net assets increased 0.4% year on year and equity
ratio was up 1.2 points.

9,970

2015

9,462

2016

Capital expenditure (millions of yen)

9,402

2017

9,458

2018 (FY)R&D expenses remained largely unchanged year on year.
We have devoted ourselves to producing new products
and systems that cater to tightening environmental
regulations, electrification and digitalization of
automobiles, and the progress of IoT and AI technologies.

8,887

2014

8,314

2015

7,355

7,584

7,895

2016

2017

2018 (FY)

Capital expenditure increased 4.1% year on year. We
conducted investment relating to information
processing, including improvement of factory
production systems and RPA.

0.99

0.96

41

41

39

10.9

9,297

8,408

8,474

8,995

1,147

1,499

1,354

1,316

1,893

2014

2015

2016

2017

2018 (FY)8,173

168.68126.56

Number of employees
Number of local staff

CO2 emissions (Japan) (kt-CO2)

Lost time accidents rate

Dividend payout ratio (%)

ROE (%)ROIC (Operating-income-based) (%)

155.52

255,024 247,646

1,316

2014

Net income per share (yen)153.42

10,517

Net assets (millions of yen)
Equity ratio (%)

255,519

1,354

10,261

71,725Net sales increased 1.3% year on year. Overseas sales
ratio was 29.3%.

151.34

11,381

1,499

Notes: 5.
6.
7.

Notes: 1. Operating income for FY2014 has been retroactively changed due to a change in how this number is calculated. (Starting in FY2015, consolidated Group expenses associatedwith employees on loan are included in as “operating expenses (sales costs and selling, general and administrative expenses)” instead of “non-operating expenses.”)
2. Starting in FY2015, we show “net income attributable to owners of parent,” instead of “net income.”
3. On October 1, 2018, we conducted a reverse stock split at a ratio of one share for every five shares of common stock. Thus, we calculated net assets per share and net income
per share on the premise that said reverse stock split had been conducted in FY2014.
4. ROIC has been calculated since FY2017.

Net sales (millions of yen)Overseas net sales (millions of yen)
241,832
230,299 237,404 220,141

1,147

Total actual annual working hours(hours/year/employee)

The number of employees and the number of overseas
local staff increased year on year.

Reduction of CO2 emissions caused by products (kt-CO2)

870
36

38

800

841
733

587

10.4
8.2

9.2

9.3
23.1

26.1

31.6

28.9

26.7

0.59
0.44

6.6

0.29

5.9
2014

2014

2015

2016

2017

2018 (FY)Net income per share increased by 13.16 yen year on
year to 168.68 yen.

45 MEIDENSHA REPORT 2019

2014

2015

2016

2017

2018

(FY)

ROE rose by 0.1 point year on year, while operating
income-based ROIC fell by 0.7 points year on year.

2014

2015

2016

2017

2018

(FY)

We aim to achieve a 30% consolidated payout ratio in
the medium to long term, and paid an annual dividendof 45 yen, accounting for the reverse stock split for the
year-end dividend.

2015

2016

2017

2018 (FY)We are working to improve employees’ sensitivity todanger, including conducting enhancement ofmanagement systems and following up danger
predication; however, in spite of this, the rate ofindustrial accidents rose year on year.

2014

2015

2016

2017

2018 (FY)We pursued energy-efficiency measures such as work
efficiency and improving the operation of air
conditioners and compressors, however, our CO2
emissions in Japan increased due to increased
production.

2014

2015

2016

2017

2018 (FY)

We increased shipment of electric vehicles andtransformers and high-voltage inverters for theoverseas market, reaching emissions reductions
totaling 841,000 t/year.

MEIDENSHA REPORT 201946

Outline of the Meiden Group

Corporate Data as of March 31, 2019
Area CodeCorporate Name MEIDENSHA CORPORATION

Capital ¥17,070 million

Established June 1, 1917 (Since December 22, 1897)

Consolidated Sales ¥245,033 million

Representative Director, President Takeshi Miida

Consolidated Number of Employees 9,297

Head Office

ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo,
141-6029 Japan

CapitalBusiness Entity

S$35.0 million

Regional headquarter in ASEAN; formulation of businessstrategies for the ASEAN region; legal affairs; humanaffairs; IT; maintenance; technical engineering services;materials; R&D

MEIDEN SINGAPORE PTE. LTD.*1

S$25.0 million

Manufacture and sale of transformers, switchboards,
and circuit breakers, maintenance and after-sale serviceof electrical equipment, electrical engineering andimport/export operations, and overseas procurement

Thai

THAI MEIDENSHA CO., LTD.

TB30.0 million

Electrical engineering, technical consulting, after-saleservice, and import/export operations

U.S.A.

MEIDEN AMERICA, INC.*1

US$21.0 million

System engineering, sales, technical consulting, andafter-sale service of dynamo products

China

MEIDEN HANGZHOU DRIVESYSTEMS CO., LTD.*1

US$19.0 million

Manufacture of PM motors and other specialist electricaldevices, general purpose inverters, and assembly units
for automatic guided vehicles

Germany

TRIDELTA MEIDENSHA GmbH€78 thousand

Manufacture and sale of electric power / electric railroad
lightning arresters and lightning arrester accessories

PRIME MEIDEN LIMITED*1

INR 1,161 million

Manufacture and sale of transformers, and engineering

Singapore

Company NameMEIDEN ASIA PTE. LTD.*1

Consolidated Subsidiaries 37 (19 in Japan, 18 overseas)

Singapore

Main Consolidated Subsidiary Companies as of March 31, 2019
Area Code

Japan

Japan

Japan

Japan

Japan

Company Name

KOFU MEIDENSHA ELECTRIC MFG.
CO.,LTD.*1
MEIDEN PLANT SYSTEMSCORPORATIONMEIDEN ENGINEERINGCORPORATION

M WINDS CO., LTD.

MEIDEN SHOJI CO., LTD.

Capital¥400 million¥400 million¥400 million¥330 million¥300 million

Business Entity

Manufacturing and sales of motors

Construction services

Manufacture, sale, lease, installation, wiring andprovision of maintenance services (maintenance andinspection, modification, repair, etc.) for electricalequipment, machinery and devices
Development, design, manufacturing, and testing ofwind-turbine generator systems as well as related
consulting

Sales of electric components

India*1. Specified subsidiary

Another 20 companies

Share data as of March 31, 2019

Financial institutions 35.24%

Distribution ofshares byshareholder

Total number of authorized shares 115,200,000
Total number of issued shares 45,527,540 (Including treasury
shares of 156,040)

Japan

Japan

MEIDEN KOHSAN CO., LTD.

MEIDEN O&M CORPORATIONJapan

MEIDEN CHEMICAL CO., LTD.

Japan

MEIDEN SYSTEM MANUFACTURING
CORPORATIONJapan

MEIDEN SYSTEM SOLUTIONCORPORATION¥100 million

Sales of products and materials, and agent services of
insurance¥100 million

Strategic proposal and comprehensive managementof manufacture, sale, lease, installation, wiring andprovision of maintenance services (maintenance andinspection, modification, repair, etc.) for electricalequipment, machinery and devices and provision ofrelated education¥95 million

Insulating varnish and molded instrument transformer¥90 million

Manufacture and sale of switchboards, control panels,
and their components¥50 million

Software development, design, production, sale, andrental, and maintenance and management of computer
systems and networks

0.96%

Securities companies

Stock Listing Tokyo Stock Exchange, Nagoya Stock Exchange

Number of shareholders 14,844

Business companies 21.20%
Overseas investors

21.02%

Individuals

21.24%

Other

0.34%

Major Shareholders
Names of Shareholders

Number of Shares Held
(1,000 shares)

Shareholding Ratio (%)

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

2,704

5.96

Sumitomo Electric Industries, Ltd.

2,631

5.80

Sumitomo Mitsui Banking Corporation

2,241

4.94

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

2,222

4.90

NEC Corporation

1,746

3.85

Sumitomo Mitsui Trust Bank, Limited

1,500

3.31

Sumitomo Life Insurance Company

1,061

2.34

Meidensha Employees Stock Ownership Group

957

2.11

Japan Trustee Services Bank, Ltd. (account 5 in trust)

772

1.70

JP MORGAN CHASE BANK 385151

653

1.44

(Note) The shareholding ratio excludes treasury shares.

47 MEIDENSHA REPORT 2019

MEIDENSHA REPORT 201948