MEIDENSHA REPORT 2016

MEIDENSHA REPORT 2016

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

Only environmentally friendly printing
materials and printing methods wereused to produce this report.

This report is printed on
FSC-certified paper sourced
from well-managed forests.

Printed on paper made with woodfrom forest thinning. “Morino
Chonai-kai” (Forest Neighborhood
Association)—Supporting soundforest management.

Only environmentally-friendly, zero-VOC(Volatile organic compounds) 100%vegetable oil inks were used in theprinting of this report.

This report was printed using thewaterless printing method, which
contributes to reduced output ofsolutions from the printing
process that contain organic
compounds.

Contents

Editorial Policy

About Meidensha Report 2016
1

Focusing on value-creating initiatives of the Meiden Group

Profile4

For nearly 120 years, Meidensha Corporation (Meiden) has pursued manufacturing excellence and the creation of value to benefit

Basic information about the Meiden Group, including our
Corporate Philosophy, a business overview, and history

society. This “passion for manufacturing excellence” will continue to be a core value for us as we aim to contribute to society and

03

Meiden Group Corporate Philosophy

19

The Meiden Group Value Creation Process

be a trusted enterprise.

05

Meiden Group Businesses

21

An Example of Value Creation: Value Creation with V-GIS

07

Meiden Group History of Creating Value

09

Financial / Non-Financial Highlights

The Meiden Group produced this report to explain our aim of building medium- to long-term value and achieving an affluent
future for society.

We introduce the process of creating value as based on our
Corporate Philosophy, along with some case studies.

5

Information disclosure tools

2

Meiden uses its website to offer timely information about the Group that is both wide-ranging and detailed.
Website: http://www.meidensha.com

11
MEIDENSHA REPORT 2016

Shareholder/Investor information

CSR /environmental
initiatives

Discovery Life
Lines
Introducing the
Meiden way oftaking challenges

Fact Sheet
Financial
Results

Message from Management

29

Research and Development, and Capital Investments

30

Supply Chain Management

31

Protection of the Environment

35

Human Resources Management

OthersMeidensha Report

Financials
ReportA Foundation for Creating Value
How we practice environmental management and humanresources development to strengthen our competitiveness

Strategy
Representative Director and President Yuji Hamasaki talks
about the progress of our growth strategy and policies going
forward.

Non-financial information

Financial information

Meiden Group CSR 2016
A PDF file with detailed
non-financial information about
the Group.

MeidenBehind Every
Electricity
Scene
A clear and simple
overview of
Meiden’s business3

Overview by Business Segment
We introduce the initiatives and results in each businesssegment, based on our Medium-term Management Plan.

6

Corporate Governance
About our management team and corporate governancesystem15

At a Glance37

Corporate Governance

17

V120 Initiatives in Our Main Business Segments

38

Board of Directors & Executive Officers

39

Compliance40

Risk Management

41

Outline of Meiden Group

Meiden Profile

1

The Value Creation Process

Editorial Policy

Guidelines Used as References

Scope of Report

Inquiries about the CSR Report

Since fiscal 2013, Meiden Group has issued the Meidensha Report
combining our annual report and CSR report.
Meiden Group aims to fully integrate our business and CSR
initiatives. This will let us better support the social infrastructure
people need and lead the way to a more prosperous tomorrow.
We hope that the Meidensha Report will inform and let our readersknow about Group-wide initiatives for achieving our Corporate
Philosophy.

– GRI “Sustainability Reporting Guidelines Version 4”– Ministry of the Environment “Environmental Reporting Guidelines(Fiscal Year 2012 Version)”

The report mainly covers initiatives of Meidensha
Corporation (“Meiden”) and its Group companies. Human
resources data applies to Group companies in Japan,
while environmental reporting data applies to Meiden
and 39 major Group companies (19 in Japan and 20
overseas).

Public Relations Section, General Affairs & Public Relations Division
ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo 141-6029 Japan
TEL: 81-3-6420-8100 FAX: 81-3-5745-3027
Website: http://www.meidensha.com

MEIDENSHA REPORT 2016

Reporting Period

Publication

This report mainly covers initiatives taken in fiscal 2015 (April 1,2015 - March 31, 2016)– Publication of this report: September 2016
– Next scheduled publication: August 2017

Disclaimer
In addition to past and current facts about Meiden Group, this report contains
forecasts for the future based on plans, outlooks and business policies
and strategies in effect at the time of publication. These forecasts are ourassumptions and judgments as based on information available at the time they
were stated, and may differ from actual business activity results and eventsin future owing to changes in conditions. Thank you for your understanding.

MEIDENSHA REPORT 20162

1 Profile

Meiden Group Corporate Philosophy

Corporate Philosophy
The Meiden Group Corporate Philosophy seeks to delight customers byoffering high quality products and services to help solve problems. It is alsopart of our philosophy that through these business activities, we will 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. The Corporate Philosophy expresses our wish to continuallytake on these challenges.

Corporate Mission

This is our legacy from Hosui Shigemune, who founded our company as

Value Provisiona local factory to manufacture and repair electrical machinery. His will remains
our common sense of values, even as these have evolved with the times,

Illuminating amore affluent
tomorrow

For customer peace ofmind and satisfaction
support for our customers.

MEIDEN CYCLE

We continue to create value andFrom product design to commissioning, our highly skilled staff help

In order to realize our Group Corporate Philosophy, we must identify thetechnologies for the realization of a morecustomers solve various issues and realize their dreams by providing

direction for each individual employee to aim towards and provide signposts

affluent and environmentally aware society.

high-quality, socially responsible products and services.

to help them proceed without losing their way. To enable us to do so, we haveand remains at the core of all our business activities. Staying true to thisCorporate Philosophy, the Meiden Group aims to grow with society and beindispensable to it. With that as our goal, we continually take the challenge ofcreating new technologies and value.

We offer complete environmental consideration and appropriate

made these five actions our watchwords. The actions are mutually linked,
with one action calling forth the next, creating a cycle of action and growth.
Based on this image, we call this the Meiden Cycle.

Meiden Group Corporate Philosophy
Corporate Mission

By sharing and practicing
the Meiden Cycle as the ethos

Value Provision

It defines the raison d’être and corporate mission

underlying our actions, we seek

It defines the unique value provisionand core competence

Build Loyalty

to maximize the growth cycle foreach of our employees. And at thesame time, this means that the1

CSR Definition

Under the Meiden Group’s definition of CSR,
“Each and every employee shall work torealize the Group’s corporate philosophy sothat the Meiden Group is needed by society.”

3

MEIDENSHA REPORT 2016

2

Corporate Code of
Conduct

This code defines compliance in conducting
our CSR programs and activities.

3

President’s CSR Policy
OrderThis policy sets forth the policy of our CSR
programs and activities in the medium term.
The Policy Order asks each Group employee
to implement CSR programs and activities intheir daily work. We will draw up specifications
that reflect the given business climate andCSR challenges under the current stage of themedium-term management plan.

4

Meiden Group continues to grow

MEIDEN CYCLE

sustainably, looking towards therealization of the Group Corporate

MEIDEN CYCLE shows the guiding spirits
shared by all members of the Group in
realizing the Group’s corporate philosophy.

Philosophy.

Build Loyalty

To realize the “best product experiences” for the customers, let’s produce the
new added-value.
Take a pride and responsibility that you are engaged in the job that is creating
the “backbone or social infrastructure of the society.”
Make a solid growth as a personal level as well as the corporate level and shouldreach the level of being “admired” or “trusted” with loyalty by the stakeholders.

Keep in Touch

Do not be afraid the potential conflict of opinion with the “associates” and keep intouch with each other beyond the mental barrier.
Have a genuine dialogue with the “customers” to learn their insights.
Have a consciousness of being in touch with the community, the society and theglobal climate.

Think Big

“Is this O.K.?” : Put a question to the status quo.
“Inquisitive mind” and “curiosity.” : You should keep such mind habit.
“The road leading to a solution is not just one” : Please explore every possibility.

Move Ahead“Act now or perish.” : Take a first step with your strong will.
“Action of today will make your future.” : Make your way towards the goal
without hesitation.
“Come from your own action with the challenging target” : Take a positive action.

Have Fun

Let’s enjoy the moment of “personal growth.”
Let’s sincerely enjoy your “job.”
Let’s get “the passion for Manufacturing Excellence”

MEIDENSHA REPORT 20164

1 Profile

Consolidated
employees

Meiden Group Businesses

8,408

Meiden Behind
Every Electricity Scene

Sales breakdownby region

Consolidated
net sales

237.4

Japan

76.9

21.4
1.7

% Asiabillions of yen
Other regions%

Sales breakdownby region
Japan

73

19.6
7.4

% AsiaOther regions

%

%

%

Group
consolidated
subsidiaries

39(19 in Japan, 20 outside Japan)

Outline of
Meiden Group (Fiscal 2015)

Six Meiden Electrical Technologies that Support Our Society
Make
Our products range from large
turbinegenerators,
photovoltaic
power generation and hydroelectric
generating facilities that use renewableenergy sources, to emergency power
generating facilities that play animportant role when disasters occur.
Meiden supplies a wide range of power
facilities, from large-capacity facilities
for power stations to small-to-medium
capacity facilities for commercial
complexes and mobile power supply
facilities.

5

MEIDENSHA REPORT 2016

Send
Electricity generated at each power
station goes through transmission
lines, substations, and distributionlines. As it goes, the voltage isadjusted at each stage before being
delivered to factories, buildings and ourhomes. Meiden transformers change(transform) voltage, while Meiden
breakers cut off the large amounts ofcurrent that occur in accidents. These
Meiden products are essential for safeand reliable electricity transmission anddistribution.

ChangeMeiden power electronics technology
changes or converts electricity fromAC to DC, or vice versa, and controls
this conversion of power. Our powerelectronics technology has evolved,
meeting the needs of the time forenergy saving and improved reliability.
The technology is now utilized invarious fields that require electric power,
including various kinds of power source
equipment, railway facilities, production
facilities, electric vehicles, renewableenergy systems and battery systems.

Move
Meiden motors and automated guided
vehicle (AGV) systems help improve
efficiency at production sites. Meiden
automobile testing systems help
develop electric and hybrid-electricvehicle drive systems that are ecofriendly. Meiden elevator drive systems
help elevators provide powerful,smooth and comfortable ride quality.
Meiden “move” technology, together
with our eco-friendly technology, paves
the way for quality-filled lives.

Control
Meiden controls distributed powersources and heat source facilities tominimize the total energy costs onelectricity and gas. The Meiden Smart
Energy Management System (EMS)
uses ICT technology to support newenergy management.

Care (Protect)
Meiden not only manufactures andsells electrical equipment and facilities,
but also provides a one-stop service
for their installation, maintenance andupgrading, as well as operation andmaintenance services. Meiden guards
the integrity of facilities with our reliable
technical expertise.

MEIDENSHA REPORT 20166

1 Profile

Meiden Group History of Creating Value

Since our foundation, we have been pursuing the art ofmanufacturing excellence that contributes to society throughits outlook of what the society will be like in another 50 years
and even in another 100 years.
1897 -

The 1970s -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 build its own
electric machinery. Meanwhile, Japandepended on imported products
for much of its industrial machinery.
His business at that time was mainly
repair of electrical equipment andmanufacture of switches. However,
his efforts to build made-in-Japan
motors gave him several new ideas fordevelopment 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.
Meiden’s
motor
production
helped to modernize Japaneseindustry and became the cornerstoneof value-building at Meiden that still
persists today.

WEB

The 1980s -A more detailed timeline may be found on our website.
http://www.meidensha.com/corporate/corp_05/index.html

The 1990s -The 2010s -Evolving into “Meiden a PowerElectronics Company”

Evolving into “Meiden a System
Engineering Company”

Approaching Our Centenary

During Japan’s postwar economic
boom, Meiden actively expanded
into the industrial systems businessand contributed to the developmentof industry in Japan. In about 1970,
society was beginning to prize quality
over quantity. Likewise, Meiden
switched its management strategy
from quantity base to quality base.
On the technical side, our aim was todevelop new products that made fulluse of our employees’ creativity. At thistime, we began to cement our status
as a manufacturer of heavy electricalequipment, having developed new
products that combined heavy
electrical technology (power) with thelatest electronics technology.

In the latter half of the 1980s,
economic expansion led Meiden
to boost its production capacity atfactories and upgrade its production
system. We added to our family ofGroup companies and developed
a variety of businesses to make usa stronger enterprise. We grew tohave three core business areas,adding mechatronics and electronics
to our existing power electronics
field. The integration of technologies
from each of these fields to create
management, monitoring, and control
systems, evolves our Group into a
company known as “Meiden a System
Engineering Company.”

Meiden celebrated its 100th anniversary
in 1997. Japan’s business environmentchanged drastically after the collapse of
the bubble economy, and management
had to deal with a time of crisis.
However, the legacy we had inheritedfrom our predecessors, technologies
and well-developed human resources,
became the base for a new era of
expansion as we hit the 100-year
milestone.
Upon our 110th anniversary in
2007, we christened ThinkPark Tower,a facility combining our head officebuilding with pleasant greenery inOsaki, Shinagawa City, Tokyo, where
our company was founded.

Aiming to be “Meiden a Global
Company”
Today, the Meiden Group is expanding
its presence in markets outside Japan,
especially in the ASEAN region. As
part of this, we transferred to ouroverseas subsidiaries a stronger
regional supervisory role; e.g. building
partnerships with enterprises outside
Japan, and opening training centers
for local staff.
We are using ICT and IoT toincrease our product competitivenessand system technology. We alsoenhanced one-stop service businessranging from equipment manufacture
to maintenance, inspection, andoperations and management.
The world is undergoing vastchange, but Meiden will never stop
endeavoring to contribute to theformation of an “affluent future society.”

Major ESG Initiatives
Environment Contributing to the realization of a sustainable

society

The Meiden Group Environmental Vision, part of our Basic
Environmental Philosophy, directs us to contribute to therealization of a sustainable society. We are doing this by
mitigating the environmental burden of our business activities
and through our energy and water processing businesses,
products, and technologies supporting social infrastructure.

7

MEIDENSHA REPORT 2016

Society 1 For customer peace of mind and satisfaction

Society 2 For a better workplace

Governance Strengthen corporate governanceWith top-quality products and services, the Meiden Grouphelps our customers find solutions and realize their dreams fortheir peace of mind and satisfaction. For us, anything relevant
to quality is a critical management issue. As such, the Meiden
Group implements key quality policies under the direction of
the President’s Quality Management Policy Directive.

As an enterprise supporting society’s infrastructure, Meiden
actively promotes diversity management. Our goal is toengage our diverse human resources and better bring out
their “Power of being in Touch” and “Agility” so that they cancontinue to meet the expectations of our customers andsociety. We are also working to support our employees bothat work and in the home so that they can choose their working
life styles based on their life stage.

The Meiden Group works for prompt, efficient business
management that is fair and transparent, and we maintain asystem to ensure proper work processes. We have long hadoutside directors on our board as we endeavor to strengthen
the supervisory function. We also host events such as aprogram introducing the Meiden Group to outside directors
and sessions for them to exchange opinions with othermembers of the Board of Directors. Measures like these help
ensure the effectiveness of our governance.
MEIDENSHA REPORT 20168

1 Profile

Financial / Non-Financial Highlights

Financial / Non-Financial Highlights

Non-financial indicators

FY2011FY2012FY2013

FY2014FY2015

Meidensha Corporation and Consolidated Subsidiaries

Number of consolidated subsidiaries

40

43

42

39

39

Japan

25

26

25

21

19

Outside Japan

15

17

17

18

20

Financial indicators

FY2011FY2012FY2013

FY2014FY2015Net sales (millions of yen)

181,106

197,733

216,176

230,299

237,404

Operating income (millions of yen)

6,279

7,881

9,546

9,997

10,517

Ordinary income (millions of yen)

5,266

5,946

7,790

10,502

10,595

Number of employees

7,145

7,920

8,047

8,173

8,408

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

1,679

4,024

6,580

6,868

6,962

Of which, local staff

993

1,086

1,096

1,147

1,800

27

19

34

19

17

Overseas net sales (millions of yen)

25,25637,97645,70455,86464,082

Member(s) did not lose work time

11

9

16

11

9

13.9

19.2

21.1

24.3

27.0

Member(s) lost work time

16

10

18

8

8

Net assets (millions of yen)

211,732

224,623

248,379

255,519

255,024

CO2 emissions (Japan) (kt-CO2)

39

40

42

41

41

Total assets (millions of yen)

53,421

58,07760,60767,405

68,771

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

149

235

360

587

870

Net assets per share (yen)225.63251.64262.50291.35297.64

Net income per share (yen)

7.40

17.74

29.00

30.27

30.68

Equity ratio (%)

24.2

25.4

24.0

25.9

26.5

Return on equity (%)

3.3

7.4

11.3

10.9

10.4

Number of occupational accidents and injuries

Overseas sales ratio (%)

Notes: 4. Figures for employee numbers exclude those employees on temporary contracts.
5. The historic Federation of Electric Power Companies (FEPC) nationwide average electric power CO2 coefficient (receiving end) for each year through FY2013 wasused to calculate CO2 emissions for that year. The historic coefficient for FY2013 was used for calculating FY2014.
6. With the dissolution of the joint venture Japan AE Power Systems Corporation, the Japan AE Power Systems Corporation Numazu Works (AE Power Numazu)
was incorporated into the Meiden Group as Meiden T&D Corporation in April 2012. CO2 emissions figures for FY2011 include data for AE Power Numazu.
7. Reduction of CO2 emissions caused by products is the expected reduction of such emissions caused by products sold.

Number of employees

Cash flows from operating activities (millions of yen)

11,443

Cash flows from investing activities (millions of yen)

9,305

–5,63918,239–7,135

11,165–11,316–8,772

22,597
7,920–10,530

Free cash flows (millions of yen)

5,804

2,170

6,923

2,393

12,067

Cash flows from financing activities (millions of yen)

–5,048–7,749–3,873–5,282–5,847230,299

237,404

Operating income (millions of yen)
9,546

9,997

6,580

13.9

2011

21.1

2012

2013

24.3

1,800
993

224,623

248,379

2015 FY

2011

2012

2013

2014

2015

FY

2011

255,024

29.00

30.27

30.68

5,804

7.40

9

MEIDENSHA REPORT 2016

2011

2012

2013

2014

2015

FY

2011

16
9
2012

2013

11
2014

8
9
2015

FY

Reduction of CO2 emissions caused by products (kt-CO2)
870
587

41
360

2011

2012

9,305

2013

2013

2014

2015

FY

6,923

2014

2015

FY

2011

–7,7492012–3,873–11,316
2013

2012

2013

2014

2015

FY

2011

2012

2013

2014

2015

FY

plan V120 launched in the fiscal year ended March 31, 2016 and by realizing both “strengthening the earnings base for our businesses in

22,597

11,1652011

The Meiden Group aims to further increase its corporate value by solidly implementing policies set out in the new medium-term management
Japan” and “expanding growth of overseas business.” As a result, consolidated net sales in the fiscal year ended March 31, 2016, increased

12,067by 3.1% over the previous fiscal year to ¥237,404 million, operating income grew by 5.2% to ¥10,518 million, and net income attributable to

2,393

2,170

–7,135

2012

149

39

–5,048–5,6392015 FY

FY

11

42

Cash flows from operating activities (millions of yen)
Cash flows from investing activities (millions of yen)
Cash flows from financing activities (millions of yen)Free cash flows (millions of yen)

0

2014

2015

1,096

235

Net income per share (yen)255,519

2014

1,086

8

10

1,147

40

18,239

2013

6,962

4,024

17.74

2012

2013

41

11,4432011

2012

CO2 emissions (Japan) (kt-CO2)

27.0

Net assets (millions of yen)

211,732

2011

1,679

2014

8,408

18

7,881
6,279

19.2

6,868

8,173

16

Net income attributable to owners of parent (millions of yen)
10,517

8,047

Number of occupational accidents and injuries
Member(s) did not lose work timeMember(s) lost work time

7,145

Notes: 1. Net sales figures do not include consumption tax, etc.
2. Operating income for fiscal 2014 has been retroactively changed due to a change in how this number is calculated. (Starting in fiscal 2015, consolidated Group
expenses associated with employees on loan are stated as “operating expenses (sales costs and selling, general and administrative expenses)” instead of “nonoperating expenses.”)
3. Starting with the period ending March 2016, we are changing our figures to net income and will list net income attributable to owners of parent.
Net sales (millions of yen)Overseas sales ratio (%)
216,176
197,733
181,106

Number of local staff

owners of the parent increased by 1.4% to ¥6,962 million.

–5,282–5,847–8,772–10,530

2014

2015

FY

MEIDENSHA REPORT 201610

2 Strategy

Message from Management
Results of fiscal 2015

Outlook for fiscal 2016

New records for orders received andnet sales

Toward fiscal 2017 targets

Though there was some impact from the slowdown ofemerging nations on the export and production sides,
the Japanese economy in fiscal 2015 was supported
by solid corporate profitability, capital investment, andjob climate. Japan was able to sustain a mild economic
recovery. However, things continued to be uncertain for theworld economy, due to falling oil prices, the slow Chinese
economy, and rising US interest rates.
With all this happening, the Meiden Group kicked
off the V120 Medium-term Management Plan, which is athree-year plan from fiscal 2015 to fiscal 2017. Under V120,
we will “enhance product competitiveness” while pursuinga growth strategy to realize two targets: “strengthen theearnings base of the Group’s domestic business” and“expand growth of overseas business.”
As a result, the Group recorded consolidated salesof 237.404 billion yen (up 3.1% year on year). A big
contribution came from rising sales in the businesses
targeted under V120, such as railways outside Japan, small
and medium-sized hydro power plants, dynamometersystems, maintenance and services, and projects foroverseas bases of Japanese companies. We also recorded
operating income of 10.517 billion yen (up 5.2%), ordinary
income of 10.595 billion yen (up 0.9%), and net income
attributable to owners of parent of 6.962 billion yen (up1.4%). Although each of these figures represents a yearon-year increase, none were as high as planned. However,as the starting year of our Medium-term Management Plan,
which looks forward to 2017 (our 120th anniversary) andbeyond, it can be said that fiscal 2015 has laid a goodfoundation for accelerating a new growth.
Among major management indicators, ourshareholders’ equity ratio rose 0.6 points to 26.5%, ROE
dropped 0.5 points to 10.4%, and ROA based on operating
income rose 0.1 points to 4.1%.

Working to achieve the V120 Medium-termManagement Plan, aiming to be a “heavy
electric machinery supplier that supports
the future of social infrastructure and hassustainable growth and development potential”

Greeting from the President
Results for consolidated orders, net sales, and income
Since our founding in 1897, Meidensha Corporation has
created all types of technologies, products, and services
and has served society for its sustainable development.
Occasionally, customers ask us to repair or replaceequipment we sold to them half a century ago. We receive
requests like these because the Meiden Group has supplieda variety of systems throughout Japan and supported many
projects of the nation’s infrastructure. We take this as a signof the trust we have earned through our earnest pursuit ofmanufacturing excellence.
What are customers expecting from us? To meet their
expectations, what do we need and what do we lack?
These are questions we constantly ask ourselves, neverresigning ourselves to the way things are. We have a spirit

11 MEIDENSHA REPORT 2016of challenge that aims to improve on technology and quality
and keep meeting our customers’ expectations. This is the
Meiden Group’s “passion for manufacturing excellence.”
The Meiden Group will continue to prize our “passion
for manufacturing excellence.” My hope is to keep the
Meiden Group a force for a new era of useful solutions forpeople and society.

Fiscal 2015 (Planned)
Orders received

248,000

247,747

Net sales

235,000

237,404

Operating income

11,50010,517

Ordinary income

11,00010,595

Net income
attributable toowners of parent

7,500

6,962

* See pages 15-16 for details of results for each segment.

Representative Director and President(million yen)

Fiscal 2015 (Results)

On the one hand, we expect an increase in downsizing of
the Japanese market. The nation’s population is declining
and both the national and regional governments facefinancial challenges, meaning there will be less new demandfor public infrastructure like electric power and water
processing. On the other hand, more urban infrastructure
is being built, in part for the 2020 Tokyo Olympics andParalympics. We foresee rising demand as private-sector
manufacturers and public agencies plan to replace aging
equipment and Electricity Market Reform makes progress.
We expect the situation to remain unpredictable
outside Japan. However, economically emerging nations,especially in Asia, are predicted to continue growing anddeveloping with the Trans-Pacific Partnership (TPP) and thelaunch of the ASEAN Economic Community. We foresee
infrastructure demand continuing to grow from electric
power companies, private manufacturers, railways, andwater supply and sewage systems.
Thus, I believe the Meiden Group will have manybusiness opportunities in the medium- to long-term.
Given these circumstances, we are planning on
consolidated results as follows: 240 billion yen in sales, 10.5
billion yen in both operating income and ordinary income,and 7 billion yen in net income attributable to owners ofparent. By achieving these sales and profit targets, we aim
for an ROE of 10%.

V120 progress and strategy

Further boosting profitability of major
businesses targeted by V120
We see fiscal 2016, the second year under our Medium-termManagement Plan, as a “challenge year” for building the
momentum to reach our V120 targets. We will continue towork to “increase product competitiveness” for the Meiden
Group’s core heavy electric products that have been oursignature products. By so doing, we will “strengthen the profit
bases in Japan” and “expand overseas business.” We will
also aim to meet our fiscal 2017 targets by further enhancing
the profitability of major businesses targeted by V120, suchas power generation, conversion, and distribution products,
overseas railways, and water processing.
To “strengthen the profit bases in Japan,” we willcontinue to innovate our business models, increasing
our product competitiveness, reinforcing our systemtechnologies with ICT and IoT technologies, and enhancing“one-stop services” for supporting customers’ total facilities
as a package. We will put every effort into taking in orders
from demand to build urban infrastructure and replaceaging equipment of private-sector manufacturers andpublic agencies.

MEIDENSHA REPORT 201612

2 Strategy

Message from Management
Next, we will try to “expand overseas business.” We
will take part in social infrastructure projects of emerging
nations, especially in Asia where demand is forecast to
grow over the medium- to long-term, so that our businesswill grow in step with the pace of growth in each country.
We will focus on participating in new projects of the private
sector manufacturing industry and railway projects as wellas entering in electric power utility markets in Southeast Asiaand the Middle East, where the Meiden Group already has
an extensive track record. It also includes India, which we
see as a growing market. To that end, we will be establishing
new partnerships, reinforcing business functions like sales,
technology, and maintenance services, and making strategic
growth investments. Moreover, to minimize risks related
to exchange rates, contracts, quality, and the like, we will
be putting management systems in place at our regional
headquarters and adding more technical staff there.
Finally, we have worked to “increase productcompetitiveness.” On the development side, we have put
our effort into making our core heavy electric products(power generation, conversion, and distribution products,
motors, inverter, and the like) more competitive in terms ofprice, performance, quality, and originality. This has resulted
in the development of new products. We will continue topour our energy into strengthening fundamental coretechnologies so we can create more distinctive products
in future. On the production side, we will be building
production systems taking advantage of ICT and IoTtechnologies (including updates of our CAD technology)
and working to build optimal supply chains. In addition,with the synergy captured by strengthening links between
our products and systems, we will aim to grow and expand
sustainably in Japan and abroad.

operate our systems appropriately include maintaining ourtraining system and promoting diversity with expanded
opportunities for women. We will also continue initiatives tomaximize motivation.
We also have set up training centers in Singapore
and Thailand to secure and train global talent. Here, we
are improving the technical skills of local employees. In
future, we will be working to post human resources to thebest positions for them within the Group and promote themaccording to their capabilities. This will include actively
promoting local people from places outside Japan to
managerial positions.

Steady pursuit of four action plans forachieving strategy and creating a new value(1) Building new partnerships
We will use Group resources to increase our competitiveness.
We will build strategic partnerships with other industry
sectors, universities and research institutes, enterprises
outside Japan, and so on to combine Group strengths
with external resources and knowledge. In this manner,
we will more efficiently enhance our technical strengths,
sales channels and distribution network, and production
functions. Specifically, in Japan we will step up ourpartnership with EAML Engineering Co., Ltd. to strengthen
our small and medium-sized hydro power business. A
closer collaboration with ORGANO CORPORATION will
likewise enhance our solution proposal capability for entire
public water and sewer facilities.
Outside Japan, we have acquired a 100% interestin TRIDELTA Überspannungsableiter GmbH, a German
manufacturer and seller of surge arresters, to expand ourown surge arrester sales channels and acquire a local
production base. Additionally, we are working with our
Indian transformer production and sales company Prime
Meiden Ltd. to expand business in India and the regions in
the west of India. Furthermore, we are creating partnerships
with public agencies. This includes a joint verification test
in industrial wastewater processing with Singapore’s Public
Utility Board.

The Meiden Group will be pursuing the following four
action plans to firmly carry out the V120 Medium-termManagement Plan and creating a new value.

(2) Nurturing of Group employees
It is our human resources that support the Meiden Group’sbusiness strategy. Our initiatives to treat people right and(3) Strengthening CSR initiatives
At the Meiden Group, corporate governance, compliance,and risk management are fundamental to corporate
management. With regard to corporate governance inparticular, we are endeavoring to make management
fairer and more efficient. The efforts include enhancing theeffectiveness of our executive officer system, and decisionmaking and supervising functions of the board of directors.
Another approach is ensuring appropriate information
disclosures to shareholders and other stakeholders throughIR initiatives and the like.
We consider the environment, society, and humanresources to be critical issues. We will fulfill our social
responsibility by paying due consideration to these issues
consistently.
◎ Developing solid financial strength
We will set financial targets that aim to realize our objectivesof improving self-capital by enhancing profitability, improving
the free-cash-flow level by effective use of assets, andsecuring a stable financial position employing various
methods of capital procurement. We will work on improving
our financial strength by working as a Group to achievethese targets.

Growing toward our 120th anniversary and beyond

Building a new future with strong
products
The Meiden Group will celebrate its 120th anniversary infiscal 2017, the culminating year of V120. We will continue
to step up our efforts for new growth by steadily carrying
out V120 while adapting flexibly to the current businessenvironment.
A strength of the Group is three key features; i.e.
“Sense of Mission”, “Power of being in Touch” and “Agility.”
The wellspring of value creation is a “Sense of Mission” insupport of the social infrastructure (developed over our long
history with our customers). The “Power of being in Touch,”which refers to the deep level of communication across thewide spectrum of networks with our customers and acrossthe-board co-operation among Meiden Group companies.
“Agility,” which refers to our ability to respond quickly andflexibly to meet the needs and solve the problems of ourcustomers. We will continue to sustain and build on thesethree strengths as we seek to maximize our corporate
value.
We will continue to take bold challenges to create a
new value and technologies for the realization of a more
affluent society in future.

President’s CSR Policy Statement
Environment

SocietyHuman
resources

Management foundation of our business activities
Management foundation of our business activities
Compliance, Corporate Governance and Risk Management

By strengthening these building blocks of management foundation, we hope tofurther cultivate the corporate culture necessary for CSR management.

[ Environment ]Promote strategic environmental management

We contribute to society through the offering of products and services for theenvironment and energy. At the same time, we will work to reduce the environmental
impact of our business activities.

[ Society ]Provide values needed by society

VisionStrategic Importance of our Medium-term Management Plan V120

Corporate
expansion
FY

V120(FY2015～2017)237.4 billion yen
FY2015
13 MEIDENSHA REPORT 2016

Increased
profitability

2017

Heavy electric machinery
manufacturer that continually
grows and develops
while supporting
the future of social
infrastructure

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

[ Human resources ]Produce work that gives pride to our employees and creates
positive working environments

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

270 billion yen

MEIDENSHA REPORT 201614

3 Overview by Business Segment

At a GlanceSocial Infrastructure Systems BusinessWe manufacture and sell equipment for emergency and non-emergency power generation,hydroelectric power generation, and power transmission and distribution facilities, to powercompanies, government agencies, railways, and buildings and factories in Japan andabroad. The product offerings include power quality stabilization systems and power
generation systems such as solar power and small and medium-sized hydro power, as wellas energy solution services such as smart grid systems.
We are also involved in the fields of drinking water and sewerage treatment for local
governments in Japan. Our activities include manufacturing and sales of electrical facilities
for water processing systems and process control systems and information networks. We
also offer solutions services such as contract facility management services for drinking
water treatment plants.

Net Sales
Net sales in this segment declined 0.3% from the previous fiscal year to ¥140,585 million, while
operating income fell 24.2% to ¥3,971 million, in part because of rising costs caused by troubles
with certain products. In our electric power and social infrastructure systems businesses, we saw
electric power companies in Japan increase equipment updates, along with rising demand forsmall and medium-sized hydro power facilities. Meanwhile, there was increase in demand fromJapanese companies for substation and distribution equipment for their production bases outside
Japan. However, numbers fell overall year on year, in part because of a drop in solar power
products due to lower prices on renewable energy. In our railway systems business, sales werestrong for railway projects in Southeast Asia, like Malaysia, Thailand, and Singapore. They lifted thenumbers over the previous fiscal year. Sales in the water and environmental business rose over theprevious year because of electrical facility updates in large wastewater treatment plants in Japanand solid demand for drinking water treatment facility management services.

141,014

Millions of yen

140,585

Net Operating Millions of yen
Income
5,243
3,971

2014

2015 FYNet Sales

Millions of yen

2014

2015 FY

Consolidated Sales

237,404

Millions of yen

Net Operating Income

10,517

Industrial Systems BusinessWe 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 forautomobile manufacturers, and logistics support systems for factories and warehouses.

Millions of yen

Net sales in this segment reflected solid private sector capital investment and increased 10.2%
over the previous fiscal year to ¥61,090 million, while operating income grew 33.3% to ¥4,030
million. In the motor and inverter business, general industrial products (for elevators, etc.) wereabout the same as the previous year, but strong demand for motors and inverters used on
Mitsubishi Motors Corporation’s PHEV helped lift the overall numbers higher. The electronicequipment business saw rising numbers, with solid demand particularly for vacuum capacitors,
pulse power supplies, and the like. Numbers were up over the previous fiscal year in the
dynamometer and logistic systems business. Automobile manufacturers and others upped theircapital investment in advanced technologies and R&D to enhance performance, and there wassolid demand for logistics equipment to further rationalize and save labor on production lines.

55,41461,090Net Operating Millions of yen
Income
4,030
3,023

2014

2015 FYNet Sales

Millions of yen

2014

2015 FYNet Sales
Millions of yen

216,176

230,299 237,404

Maintenance and Servicing BusinessWe provide services relating to the remote management and monitoring of facilities and the
proposal of measures for extending the life of facilities, energy conservation, and otherservices related primarily to the maintenance of products we supply.
2013

2014

2015

Thanks to increasing demand for maintenance and the implementation of facility-wide one-stop
service, offering everything from equipment production and maintenance & inspection to facility
management and operations management, net sales in the segment increased 4.1% over theprevious fiscal year to ¥31,007 million, while operating income grew 14.6% to ¥2,921 million.

29,773

Net Operating Millions of yen
Income31,007
2,550

2,921

FY
2014

2015 FYNet Sales

Millions of yen

2014

2015 FYNet Operating Income
Millions of yen

9,546

9,997

10,517

Real Estate BusinessWe offer property rentals, including office spaces at ThinkPark Tower (Osaki, Shinagawa
City, Tokyo).
2013

2014

2015

FY

3,289

The Group is engaged in the real estate leasing business, centering on the office and commercial
building ThinkPark Tower (Osaki, Shinagawa City, Tokyo). The net sales in the segment totaled¥3,386 million – nearly the same level of the previous fiscal year, and operating income amounted
to ¥1,280 million.

* Operating income for fiscal 2014 has been retroactively
restated due to a change in presentation. (Starting infiscal 2015, consolidated Group expenses associatedwith employees on loan are stated as “operating
expenses” instead of “non-operating expenses.”)

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

15 MEIDENSHA REPORT 2016

3,386

2014

2015 FYNet Sales

Millions of yen

20,467This segment includes categories not included in any of the above segments, such as
manufacturing and marketing of electrochemical measuring equipment and electric insulationmaterials, welfare services for employees, and goods merchandising. Net sales in the segment
declined 3.7% from the previous fiscal year to ¥19,712 million, and operating income grew 30.2%
to ¥493 million.

Net Operating Millions of yen
Income
1,240

1,280

2014

2015 FYNet Operating Millions of yen
Income19,712

493
378

2014

2015 FY

2014

2015 FY

MEIDENSHA REPORT 201616

3 Overview by Business Segment

V120 Initiatives in Our Main Business Segments

V120 Initiatives in Our Main Business Segments
In our power and social infrastructure systems business, wewill expand our range of products and services responding
to the problems and the needs of power utilities. For
instance, there are the upgrading of facilities, the need toreduce costs and rationalize operation, and maintenancein line with Electric System Reform. In addition, we willcontinuously enhance our initiatives in relation to areas with
future growth potential, including our small and mediumsized hydroelectric business and other renewable energyrelated businesses. As for overseas, we will engage withpower companies in emerging nations in Asia. Meanwhile
we enhance our sales and service system targeting private
manufacturing companies, in particular Japanese-affiliatedcompanies.
In our water and environmental system-related
business, we will enhance our ability to respond to
customers’ needs. For instance, it is done by boosting ourability to provide solutions using ICT/IoT one-stop services,making our equipment last longer, and increasing energy
conservation performance. We will work to develop new
businesses such as private-public partnerships (PPP) by
taking advantage of strategic partnerships. That covers
enhancing our ability to provide comprehensive responses,
from plant design to operation and maintenancemanagement, including services in relation to mechanicalequipment. We will make particular efforts in the area ofinternational sales of ceramic flat membranes, one of our
specialty products.
In our railway system-related business, we aim toincrease our sales of power regeneration equipment andoverhead cable inspection equipment in the domestic
market. As for overseas, we are currently involved in a
number of large-scale projects in Asia and the Middle East.
Net sales (100 million yen)

Maintenance and Servicing Business
These are the areas in which we foresee ongoing significant
demand into the future. We will therefore make efforts toenhance our project management-related systems in orderto further expand this area of our business and boost our
profitability.

Industrial Systems BusinessIn our PHEV and EV motor and inverter-related business,even greater miniaturization and increased efficiency
through continuous basic technological development andproduct development will give us enhancement of our
product competitiveness and sales increases.
In our applied motor and inverter business, wehave developed high-speed motors and transformerless medium-voltage inverters as new Meiden specialty
products. In the future, we will make use of the basic
technologies and mass production technologies developedin our PHEV and EV motor and inverter-related business.
Thus we work to boost the competitiveness and increase
sales of specialty products including motors and inverters
for elevators and forklifts.
In our dynamic measurement system-related business,
we will work to enhance our ability to provide solutions forautomotive base model development. By boosting theperformance of evaluation systems, we will increase thesophistication of vehicle evaluations in tests, contributing
to the reduction of automotive development time and therealization of increased quality. In V120, we are working toincrease the vibration performance of our dynamometers,
seeking to act as a system integrator in the automotive
development process.

Operating income (100 million yen)
1,660
1,460

1,405

Net sales (100 million yen)

610

630
550

28

40

310

29

2015 (Actual)

Operating income (100 million yen)

320

340

31

32

2016 (Projected)

2017 (Target)

Profitability target
FY 2015 results

FY 2015~2017 target

ROE

10.4%

At least 10%

ROA(Operating profit basis)

4.1%

At least 5%

Securing of investment
resources

Investment Plan

Capital investment

R&D expense

30% or higher increasein overseas sales

FY 2015 results

FY 2015~2017
Cumulative amount over three years

8.3 billion yen

At least 28 billion yen

Growth investment
budget40

Net sales (100 million yen)

Financial targets

Operating income (100 million yen)

77

50

Domestically, we are expanding the scope of ourmaintenance services business area from its traditional
focus on electrical equipment to encompass mechanicalequipment. We are also enhancing our ability to provide
a one-stop service for entire facilities, from equipment
manufacture to inspection and servicing and operation andmaintenance management. Furthermore, a rationalizationof our maintenance services using ICT and the IoT will betackled as well. By means of these initiatives, we will boost
our profitability by accessing new needs, for instance foroutsourcing of maintenance management and operation ofdomestic public facilities and measures to more sustainableinfrastructures.
As for overseas, we will proceed with the upgradingand enhancement of our maintenance services system, inline with the increasing supply of Group products to private
manufacturing companies, with a focus on Japaneseaffiliated companies.

Scale: 12 billion yen
9.9 billion yen

At least 30 billion yen

Realization of long-term
strategySocial Infrastructure Business

Strengtheningof profit baseof domestic
businesses

Increased growthin overseas
businesses

Strengthening of productcompetitiveness39* Refer to P. 29 for more detail regarding research and development and facility investments.
2015 (Actual)

2016 (Projected)

Four-pole turbine generator

17 MEIDENSHA REPORT 20162017 (Target)

V-GIS: The world’s first 145kV gas-insulated
switchgear incorporating vacuum interrupters2015 (Actual)

2016 (Projected)

2017 (Target)

Monitoring and control system for railway use

High-speed PM motor

Transformer-lessmedium-voltage inverter

Vacuum capacitors

Maintenance

MEIDENSHA REPORT 201618

4 The Value Creation Process

The Meiden Group Value Creation Process

The Value Creation Process We Seek to Realize
through Actualization of Our Corporate Philosophy

The Meiden Group conducts its corporate activities based on a philosophy of value provision “For customer peace of mind and satisfaction,” with
“Illuminating a more affluent tomorrow” as our corporate mission. Our New Medium-term Management Plan, “V120”, which we are currently
implementing, sets out financial targets and strategies for realization by fiscal 2017, which serve as markers towards the realization of these goals.
The foundations for the implementation of our strategy are responses to social problems and risks, the creation of a system of corporate governance,
and the cultivation of human resources. While continuing to bolster these foundations, we will maximize the value we provide and will realize
sustainable growth and development. This can be achieved by strengthening of our products competitiveness as the cornerstone of all our activities
for development of business strategies that are consistent across development, manufacturing and sales.

1- Increasing demand for electricity with increase in global population- The worsening of climate change and the depletion of resources with thedevelopment of the world economy- Responses to the aging of existing infrastructure in Japan and increasingneed for energy conservation- Increasing need for access to safe water resources throughout the world

Main business risks- Economic trends- Changes in laws and regulations- Worsening political situations and different business practices in overseas
countries- Fluctuation in prices of materials- Natural disasters

Capital that supports the Meiden Group businesses

Corporate Mission

Strategy(≫ P11-16)

ResearchandDevelopment

3

Corporate
activities(≫ P17-18, 21-28)▲▲▲

Creating a new
future throughproduct power* From the next page, we
introduce actual
examples of value
creation.

▲▲

Natural capital (Environmental resources essential to businessactivities)- Natural resources (oil resources, water, minerals, etc.) and energy
resources used in production activities

Total assets

Net income per share

30.68 yen

255.0 billion yen

Construction
andInstallation

Sales
Technology

For customer peace of mind
and satisfaction
We will consider the environment and offer comprehensive customer
support to ensure our customers’ peace of mind and satisfaction. We
will also actively assist our customers in solving their problems andrealizing their cherished dreams through the provision of high-quality
products and services.

Concrete examples of the provision of value① Consideration of the environment

Manufacturing▲

Social capital (Relationships of trust with stakeholders)- Relationships of trust and dialogue with stakeholders, in particularcustomers- Cooperation with suppliers implementing the same CSR activities as
Meidensha Corporation

Sales

MaintenanceMedium-term Management Plan,
V120

Human capital (Human resources)- The ability, experience, and ambition of human resources who support thesustainable growth of the company- Corporate governance system- Training facilities

Operating income 10.5 billion yen

4

Manufacturing capital (Infrastructure/Equipment)- Technology and expertise developed since the foundation of the company(All departments)

Net profit attributable to237.4 billion yen shareholders of the parent company 6.96 billion yen

Value provided to customers

2- Own capital and funds procured from financial institutions that can be
employed to conduct business activities

Intellectual capital (Technology/Expertise)

Net sales

Earning
Trust(P7-8: Evolution in value creation by the Meiden Group)

Financial capital (Funds)- Production bases and production equipment that provide the foundation
for product competitiveness- Network for provision of maintenance services

Increasing the corporate value of the Meiden Group

Building trust by continuing to
respond to the expectations of
our customers and society

Social issues that we recognize

Design• Conservation of energy and resources• Securing of water resources② Comprehensive customer support

Foundations forvalue creation(≫ P29-36)- Research and development /Facility investments- Supply chain management- Environmental protection- Human resources management
Etc.

• Optimal engineering that considers the customer’s perspective• Safe, secure, and efficient equipment operation

Corporate governance(≫ P37-40)- Corporate governance- Introducing our executives- Compliance- Risk management③ High-quality products and services• High-quality, high-performance, and high-efficiency

Understanding Diverse Business Risks and Identifying
Social Problems

Steadily Realizing our Strategy through Optimal
Allocation of Capital

Challenge of Creating Value in Our Corporate
Activities

Provision of Unique Value and the Meiden Group’s
Strengths

The Meiden Group’s business activities are affected by a range of risks and social problems.
Actively responding to these helps to ensure competitive superiority and the ability to securebusiness opportunities. Recognition of this fact was the impetus for the formulation of our
New Medium-term Management Plan, V120.

The Meiden Group has ceaselessly transformed itself over the course of its
119 years of existence. The optimal allocation of the various forms of capital that wehave accumulated over our history has supported our business activities. Seeking toensure efficient investment of the capital that supports our business in order torealize our financial targets, our Medium-term Management Plan, V120, sets out
four key action plans: ①Build new partnerships; ②Shift management resources
based on “business direction”; ③Set and implement financial targets; and④Strengthen corporate governance.

What actually creates value is the value chain stretching from research anddevelopment to maintenance. In their day-to-day business activities, each of ouremployees takes up their responsibility as a manufacturer of electrical machinerythat supports social infrastructure, and challenges themselves to create newtechnologies and new value through creative thinking. And these daily efforts arealso connected to expanding our total capital, increasing the corporate value of the
Meiden Group as a whole.

Consideration for the environment, a comprehensive customer support system, andhigh-quality services are forms of value that increase a company’s value for its customers,
and they are also Meiden’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.

19 MEIDENSHA REPORT 2016

MEIDENSHA REPORT 201620

4 The Value Creation Process

An Example of Value Creation

Maximizing Value to Customers throughEfforts on Every Front Value Creation with V-GIS

Research andDevelopment

MaintenanceConstruction andInstallation

Sales
In fiscal 2017, the concluding year of our Mediumterm Management Plan, V120, the Meiden Group willcelebrate its 120th anniversary. Since the foundationof the company, we have cultivated the firm foundationof the technologies and experience and a spirit ofchallenge to meet the expectations of our customers
and society. With these inheritances, we will speed up
the momentum towards the realization of new growththrough the implementation of V120, seeking to further
increase our corporate value.
As an example of the process of value creationby the Meiden Group, we would like to introduce
the Meiden V-GIS, the world’s first 145kV-class gasinsulated switchgear (GIS) incorporating a 145kV
single-break vacuum circuit breaker (VCB) at various
stages from its development to on-site commissioning.

The transparent section of the image
shows the vacuum interrupters

V-GIS
The world’s first 145kV-class gas-insulated
switchgear (GIS) incorporating a vacuum circuit

Sales
Technology

breaker (VCB)

What is Meiden’s new V-GIS?
Manufacturing

21 MEIDENSHA REPORT 2016

DesignA gas-insulated switchgear (GIS) is a device employed in the
power-receiving section of a high-voltage substation that
supplies power in large factories and similar facilities. Gasinsulated switchgear plays an important role in ensuring
the stable supply of power. The switchgear incorporates avariety of devices including circuit breakers, isolators, andsurge arresters, and its interior is filled with an insulating gas(SF6 gas). Meiden has succeeded in significantly reducing
the size of GIS by employing compact layouts for themultiple devices they contain.
In fiscal 2015, we supplied a new product to one of
our customers. The V-GIS is a 145kV GIS incorporatinga vacuum circuit breaker. (The “V” in the product namestands for “vacuum”.)

Background to the Development of the
V-GIS
Today, there is an increasing shift in production bases,
centering especially on the manufacturing industry, fromJapan to offshore locations, in particular the ASEAN
nations. Via its subsidiaries in the ASEAN region, Meiden
has responded to the diverse needs of its customers
through the engineering of power receiving substation
systems. Meiden has built relationships of trust withcustomers by responding to their diverse needs through theprovision of systems that combine medium/high-voltage
equipment including transformers, circuit breakers, andgas-insulated switchgear manufactured both by Meiden
and by other companies. As a result, Meiden has long
had a high level of brand recognition in the ASEAN region,
and Japanese companies advancing into the region havehigh expectations of our ability to engineer power receiving
substation systems.
Increasing demand for the construction of new
facilities and the upgrading of existing facilities is expectedin the ASEAN region. In future, therefore, it will be essential
for us to strengthen our product competitiveness in order toincrease sales in the region. We therefore set out to develop
the V-GIS as a key component of high-voltage powerreceiving substation systems which would distinguish us
from our competitors.
MEIDENSHA REPORT 201622

4 The Value Creation Process

An Example of Value Creation

Our main sources of value
creationIntellectual capital

The Role of Circuit Breakers andMeiden’s Mission
Circuit breakers are devices that cut off current
when large currents flow into power transmission
networks due to short circuits or other accidents,
in order to prevent large-scale power outages.
Meiden began manufacturing circuit breakers in
1907. In the 1960s, we commenced manufacturing
vacuum circuit breakers. Vacuum circuit breakers
incorporate cylindrical devices known as vacuum
interrupters. The vacuum inside these devices gives
excellent performance in extinguishing arcs that
occur when current is cut off, enabling current to be
cut off rapidly and securely.
The use of two vacuum interrupters in series
would make it possible to cut off a higher voltage.
However, this required more space, and would
increase cost. What was needed was a “singlebreak” system, which would realize superior
performance using a single vacuum interrupter.
Having manufactured vacuum circuit breakers sincethe 1960s, Meiden has a stock of technologies inthis area spanning half a century. We also possess a
responsibility and a sense of mission as an electricalequipment manufacturer that has supported
Japan’s power transmission network for a century.
With an unparalleled understanding of the roleof circuit breakers, we applied the technologicalexpertise fostered by the ongoing development ofhigh-performance vacuum circuit breakers to thedevelopment of the V-GIS.

Research andDevelopment

The technologies and R&D capability
cultivated since our foundation
Human capital

The ability, experience and ambition of our
R&D engineers

Strengthening Our Customeroriented Engineering Ability
Meiden’s sales division will put our productdevelopment division to work based on anunderstanding of customers’ needs, and continuously
monitor those needs even after delivery of the product.
Having understood our customers’ needs, oursales engineering division will propose a product thatmeets those needs. After receiving approval fromthe customer, we will instruct our factory division to
design and manufacture the product.
Recently, we have been gathering information
on Vietnam and Myanmar, where infrastructuredevelopment are in progress. We monitor, identify, andanalyze the needs of Japanese companies advancing
into these markets and we actively propose solutions
for them. Our subsidiaries in the ASEAN region havea proud history of responding successfully to theircustomers’ needs, thus have built solid relationshipsof trust with their customers. In future, we intend to
stimulate an effect of mutual complementarity andsynergy by having both Japanese staff members
and local staff members work together in providing
engineering support at our ASEAN subsidiaries.
It also enhances Meiden Group sales activities.
In concrete terms, we will establish gas-insulated
switchgear (GIS) configurations suited to different
power systems, and work to strengthen our productcompetitiveness in the power utility market.
We are also making PR efforts for potential
customers. Our fiscal 2017 sales target for V-GIS in
the ASEAN region is 15 or more units.

Our main sources of value creation
Manufacturing capital

Sales bases with a firm foundation in their regions
Human capital

The ability to steadily implement projects
Social capital

Relationships of trust with customers, cooperation
with public institutions

23 MEIDENSHA REPORT 2016

Sales

Sales
Technology

MEIDENSHA REPORT 201624

4 The Value Creation Process

An Example of Value Creation

Main sources of value
creation
Manufacturing capital

High-quality products: “JAPAN Quality”

Reduction of Costs throughComprehensive Quality
Management and the Use of IPIntellectual capital

Creativity backed up by experience and results
Natural capital

DesignA Single-break Vacuum Circuit Breaker– A Product of the Application of Our
Abundant Technological Experience
The 145kV single-break vacuum circuit breaker(VCB) employed in our V-GIS was developed ona foundation of vacuum technology cultivated by
Meiden over many years. Our conventional 145kVclass vacuum circuit breaker units have employed
two vacuum interrupters connected in series perphase. To make it possible to use one vacuum
interrupter for each phase, we replaced the glass
insulation tubes with ceramic tubes, and developed
a high-performance vacuum interrupter able tointerrupt current at a higher voltage.
Because the vacuum interrupters are
positioned inside a ground plane (a tank) in a 145kVclass gas-insulated switchgear, the insulation
performance must be greater than that required
for a porcelain type circuit breaker. In addition to
the use of ceramic insulation tubes, we revised
the insulation design of the interrupter as a whole,and established conditioning technology to boost
insulation performance.
These initiatives enabled us to reduce both thecost of the vacuum interrupters and the size of thegas-insulated switchgear. In addition, study of the
dynamic characteristics of vacuum circuit breakers(VCB) using the analysis of mechanical systems
enabled us to reduce development time for the VCB
actuators.

25 MEIDENSHA REPORT 2016

Social capital

Collaboration with overseas subsidiaries,
cooperation with overseas suppliers

We source some of the main components used inthe V-GIS from overseas in order to reduce costs.
In the case of the tank, when we decided onoverseas procurement, we selected the materials at
the drawing stage, and had samples manufactured
for inspection. As part of this process, we sought
to ensure the high standards of quality in use inJapan for important quality controlled items such as
coatings. To make this possible, we have translated
the work instructions we use at our Numazu Works
into the relevant languages, enabling us to achievea quality management standard equivalent toour domestic standard, and realize a high-quality
product. In addition, when parts for the productwere manufactured, quality was monitored over
several periods, and we worked to ensure that nodefective parts were shipped.
Voltage transformers for power consumption
measurement were subjected to a witness test by
the Thai Provincial Electricity Authority (PEA). We
therefore comprehensively evaluated and selectedsuppliers based on considerations including quality,
adequate ability to respond to overseas customers,
and flexibility (including the area of services).

Our main sources of value
creation

Energy conservation, reduction of use ofgreenhouse gases

Manufacturing

Features of the V-GIS
1

Outstanding energy efficiency• The developed VCB operates three to five times as often as SF6 gas
circuit breakers (GCB) used in conventional breaker sections, butuses half the energy for operation
2

Environmentally friendly• Reduces the use of SF6 gas, a strong greenhouse gas, byapproximately 60%
3High-reliability current breaking performance• Increased number of operation: 10,000 times at load current;
30 times at rated breaking current• Excellent switching capability, able to break even with repeatedlightning strikes and able to interrupt load current even in the event ofa gas leak4

Increasing the Quality of
Manufacturing Transfer Operations
In order to prevent the occurrence of initial defects
of manufacturing product, we implemented adesign review (DR) in relation to the assembly test
procedure from the stage of development anddesign. We identified the essential tools in advance,and prepared the necessary documents, such asprocess check-lists, and deployed them to ensure
the manufacture of high-quality products.

Ease of inspection• Because vacuum circuit breakers interrupt current inside vacuum
interrupters, there is no need to conduct internal inspections• The use of long-life grease and long-life O rings has extended the lifeof the device

SF6 gas circuit breaker (GCB)

Maximum number ofoperation of breaker section
Rated current Rated breaking current

5x

3x

Vacuum circuit breaker (VCB)

OperatingenergyVolume ofSF6 gas

-50%

-80%

MEIDENSHA REPORT 201626

4 The Value Creation Process

An Example of Value Creation

Localization to Increase ProductCompetitiveness and Our senseof Responsibility as an Electrical
Equipment Manufacturer

Our main sources of value creation
Intellectual capital

Expertise enabling smooth, safe and rapid equipment
deliveryConstruction andInstallation

Maintenance

Smooth, Safe and Rapid Delivery of
Equipment
In fiscal 2015, we delivered the first V-GIS to a
Japanese-affiliated company in Thailand. Thailand isa major market for the V-GIS, and our Thai subsidiary,
Thai Meidensha Co., Ltd. undertakes the installationof the product. Thai Meidensha has delivered a large
amount of super-high-voltage equipment over thecourse of its history. Hence it has the knowledge
and expertise to ensure the smooth, highly-efficient,
rapid, and safe delivery of the product.
For the on-site assembly of the V-GIS, we
redesigned the tools employed in the coupling of thegas-insulated switchgear (GIS) and the transformer
to ensure safer assembly. In addition, the supervisor
and the operators are designated, the work
procedure is laid out, and a check-list is preparedprior to the installation work, and the work itself isconducted in a planned and systematic manner.
In order to boost the technical abilities of thelocal staff members at our Asian subsidiaries, we aremaking committed efforts to develop the technicalskill of local engineering personnel to the samelevel as that of Thai Meidensha personnel. This isdone by conducting experiential training programsin cooperation with our Plant Construction &Engineering Division.

27 MEIDENSHA REPORT 2016

Human capital

Local staff possessing sophisticated technologicalexpertise and a strong sense of responsibility

We are training Thai staff at our Numazu Works inorder to enable us to rely on local staff. They will
be responsible for the installation of gas-insulated
switchgear (GIS) and the supervision of tests infuture. This initiative intends to increase the qualityof the work conducted in Thailand. This will also
reduce costs for Japanese test supervisors, andwill also benefit us in terms of price competition
with other companies. In the future, we intend to
expand our sales with Thai Meidensha as an Asian
manufacturing and sales base.
We will also conduct periodic follow-up visits tocustomers following delivery of the V-GIS in order tosurvey the status of operation of the products. The
information we obtain will be employed in making
improvements to future products, enabling us to
manufacture and deliver an improved, more userfriendly and appealing product to our customers. We
have also commenced training programmes in thearea of power receiving and distribution equipment,from design to delivery, with a focus on Meiden Asia
Pte Ltd., which will enable us to further enhance ourability to provide rapid response.
Advancing localization in this way will cultivate
a sense of their responsibility as manufacturersof electrical equipment among our local staff. As
a result, it will lead to the supply of even better
products to our customers.

We aim to become a heavy electricalindustry supplier with sustainablegrowth and development potential in
support of future social infrastructure
As shown in the example of our V-GIS, the Meiden
Group is focusing its energies on enhancing its
product power in the area of heavy electricalequipment in which we have our origins, creating acycle that will generate sustainable growth.
We will continuously contribute to make more
affluent and more livable future societies. We ensure
the peace of mind and satisfaction of our customers
through consideration for the environment andcomprehensive customer support. We also assist
our customers in solving their problems and realizing
their cherished dreams through the provision ofhigh-quality products and services. These cannot
be done without the challenges of continuously
creating new technologies and new value by all of
the Group’s employees.

MEIDENSHA REPORT 201628

5 A Foundation for Creating Value

5 A Foundation for Creating Value

Research and Development, and Capital Investments

Supply Chain Management

Research and Development, and Capital
Investments

Supply Chain Management

We are actively engaging in research and development programs, capital investment to assist the progress of
our “Manufacturing Excellence” in preparation for a new leap forward of the Meiden Group.

Research and Development

In order to realize the increased product competitiveness
which is a goal of V120, we have focused on thedevelopment of technologies. These include technologies
for structural analysis and electromagnetic flux analysis, andinsulating materials and other material technologies, in ourcore product areas, generators, switchgear, transformers,
and motors and inverters. These efforts have enabled us tocreate new products and improve and reduce the cost of
the existing products.
In the area of switchgear, we have developed theworld’s first 145kV gas-insulated switchgear incorporatinga vacuum interrupter (V-GIS). The first product has beendelivered within the ASEAN region (to Thailand), and is
now in operation. In the future we will continue to make
improvements to electrode materials and the overall
structure of the product, expanding the area of applicationof the V-GIS, and extending the product family.
In the area of transformers, we are working to develop
extra high-voltage and high-capacity technologies to raisethe voltage rating to 154kV and higher of our eco-friendly
transformer family that uses plant-sourced oils as insulatingoils. By making improvements from materials upwards, weare seeking to extend the life of our products.
In the area of EV-related products, we are pushingahead with development efforts to enhance our productcompetitiveness by further reducing the size and cost andincreasing the efficiency of our motors and inverters.
In the area of motors, we have developed a compact
and high-efficiency high-speed motor (250kW; 20,000rpm)
that can be used in applications such as aeration blowers
and compressors. We will work to develop higher-speed
and higher-capacity products that will be able to contributeto opening up new markets in Japan and overseas.
In the area of inverters, we have developed atransformer-less medium-voltage inverter using aproprietary circuit design, which has achieved the world’s
highest efficiency at the world’s lowest volume. In future, wewill work to expand the lineup of this product.
Seeking to boost our fundamental technologicalcapacity, we have established a development method thatmakes use of computers for large-scale analyses in orderto reform and improve our development processes. In
Trends in R&D expenses

Capital Investments

Under our mission to support social infrastructure, we haveinvested mainly in production facilities in order to strengthen
our product competitiveness. Domestic investments havetargeted the rebuilding of our CAD system to increase theefficiency of our production processes. As measures toincrease the production of high-demand products, we havealso expanded our vacuum capacitor production facilities, andupgraded the heat treatment vacuum furnaces for vacuum
interrupters. As of overseas, we invested in order-receiving,purchasing, and accounting systems to support businessexpansion, and the construction of a production facility toassemble ceramic flat sheet membrane units in Singapore.
In the area of real estate, we invested in the construction ofa rental apartment block as an efficient means of utilizing thesite of a former company residential building.

12,0009,680

10,261
9,090

9,970

10,000

8,000

8,000

6,000

6,000

4,000

4,000

2,000

2,000

0

2012

29 MEIDENSHA REPORT 2016

2013

2014

2015

FY

0

8,882

2012

9,249

2013

Basic Procurement Policy▶ Compliance with applicable laws and social norms▶ Fair trade based on free competition▶ Consideration for the environment

8,887

2014

8,314

2015

Promote a Stronger Group Procurement
Organization
We are working to build a stronger procurement organization
throughout the Meiden Group. We conduct periodic Meiden
Group Procurement Meetings and refine the programs to
improve the Group’s common procurement platform.

▶ Building healthy partnerships

Programs to improve the procurement platform

Promote CSR Programs that Include theSupply Chain
Meiden Group practices CSR to maintain fair trade thatallows for mutual growth for procurement of materials.
We prepared a “Meiden Group Supply Chain CSR
Promotion Guidebook” based on CSR initiatives that theGroup practices throughout its business. We provide theguidebook to suppliers along with a request that they andtheir own suppliers practice similar CSR initiatives. The
guidebook is based on the Supply Chain CSR Deployment
Guidebook (August 2006 Edition) of the Japan Electronics
and Information Technology Industries Association (JEITA).

Promote Green Procurement Activities
We consider sourcing as a part of our supply chain
CSR activities. Since fiscal 2014, we issue the “Green
Procurement Guidelines” as our environmental guiding
principles in our supply chain activities. By issuing CSR
survey sheets (including environmental activities survey
sheets) to our suppliers, we are able to understand theirprograms for CSR and environmental protection activities.
In this manner, they help us in our CSR procurement
activities including our green sourcing.

Our Response to Conflict Minerals Issue
Meiden Group policy on conflict minerals Issue• Strictly comply withlaws and regulations• Strictly implement
CSR procurement• Strengthen risk
management (BCP
and internal controls)• Strengthen HR
development

At a Meiden Group Procurement Meeting

TOPICS“Eco-Action 21” Certification andRegistration
In fiscal 2015, Meiden held study meetings (“Greening
Programs”) in three districts to advance certification
and registration under Eco-Action 21, the environmental
management system recommended by the Ministryof the Environment. We intended these meetings forsmall and medium-sized enterprises that had not yet
earned certification for environmental management. All
27 suppliers who took part in the programs have sincereceived certification and were given certificates ofcertification and registration in a ceremony held in each of
our relevant production bases.
The Meiden Group will continue to support supplierinitiatives to acquire Eco-Action 21 certification andregistration and will aim to promote environmental
management systems and make environmental
improvements throughout the value chain.

The Meiden Group works to prohibit the use of conflictminerals –tantalum, tin, gold, and tungsten mined in the
Democratic Republic of the Congo and surrounding nations,which help fund armed groups that repeatedly engage inhuman trafficking, forced labor, child labor, abuse, or otherinhumane acts.

Millions of yen

12,000

Meiden Group Basic Procurement Policy

Green Procurement

Trends in value of capital investment

Millions of yen

10,000the area of generating equipment, we have visualized thetemperature distribution within the machine by conducting
analyses of the flow of heat in the entire product, enabling
us to improve cooling efficiency and reduce the size andcost of the products. In future, we will apply this method tothe development of other products, and work to develop
advanced analytic technologies to enable us to realize
model-based development.
In addition, in an effort to increase the added valueof the Group’s businesses and products, we are working
to create one-stop service systems for the inspection,
maintenance management and operational managementof power, small and medium-sized hydropower, waterand sewage and other facilities using ICT and the IoT.
Our goal is to collect and analyze operational data fromour customers’ facilities, and to use them to increase
the efficiency of existing equipment and detect potential
malfunctions in advance, enabling us to make proposals
of optimal operating plans for customers. We have also
applied cloud technology we had established in our waterand environment business area to develop Japan’s first
online diagnostic and monitoring system for the predictionof remaining transformer life. In future, we intend to develop
a new business area, applying this technology to otherinfrastructure equipment.

The Meiden Group practices a “supply chain CSR” program in its procurement of materials. Our CSR initiatives
and Corporate Code of Conduct are based on our Corporate Philosophy. We ask our business partners topractice every aspect of CSR in their business activities to the same degree as we do in our own.

FY

The Meiden Group practices responsible minerals
procurement to fulfill our CSR. In fiscal 2015, we examinedmaterials we had purchased over the previous year fromabout 800 major suppliers. The results did not show any
involvement in conflict on the part of the Meiden Group.

Certification ceremony in the Numazu district

MEIDENSHA REPORT 201630

5 A Foundation for Creating Value

Research and ofProtection
Development,
the Environment
and Capital Investments

Protection of the Environment

EMS Measures and Promotion WG
Affiliates outside Japan

Yuji Hamasaki
President
Meidensha Corporation(1st April 2016)

GM in charge of EMS (GM of EMPAD)
Administrative Office (EMPAD)

Affiliates in Japan(5) After establishing an environmental management system, we strive to maintain andimprove it through the QC tool of the PDCA (Plan-Do-Check-Act) Cycle and achieve
our environmental goals(6) We strive to implement initiatives including environmental education and PR
activities in order to increase all of our employees’ understanding of environmental
management and environmental protection and in so doing, we shall activate ourenvironmental programs.
(7) We endeavor to publicize our environmental initiatives both within the Group and tosociety and promote broader communication with our stakeholders.

Research andDevelopment Department(1) By promoting the development of new products and innovative technologies andproviding such products to wider global markets, we endeavor to positively contributeto the society.
(2) We strive to design and develop environmentally conscious products by conducting
environmental impact evaluation for the product’s life cycle, from initial material
procurement to final disposal.
(3) We strive to promote environmentally conscious business processes with green
initiatives: promoting energy saving, promoting the 3Rs (reduce, reuse and recycle)
and reducing the release of hazardous material to reduce the environmental impact
from our business activities(4) After establishing our internal guidelines, we endeavor to comply with the related
environmental laws, regulations, rules and other required matters and strive toprevent the pollutions from our operations.

Meiden Group Environmental Committee
Chairman: Executive Officer (Environment)

All Meiden Environmental
Internal Audit

Head Office

2. Policies:

President (CEO of EMS)
Executive Officer (Environment)(Executive Duties of EMS)

Plant Construction &
Engineering Business Division

With our basic environmental philosophy: “Contribute to people, society and the global environment,” Meiden Group aims to help build a sustainable society and to realize the growthof the Group and actively implement environmental management to tackle important issues: mitigating climate change, efficient use of resources (building a recycling society) andconserving biodiversity.

Meiden Group EMS Promotion Organization

Kofu Meidensha Electric

1. Philosophy:

Meiden Group promotes an environmental management
system (EMS) at each level and at the Group-wide level.
In our EMS organization, the chief executive officer is our
President and the officer carrying out EMS executive duties
is our executive officer (environment) who oversees theoverall EMS management of the entire Meiden Group.
The general manager (GM) in charge of EMS is theGeneral Manager of the Environmental Management
Program Administration Division (EMPAD). The GM
maintains and improves EMS of the Meiden Group. The GM
organizes the All-Meiden Environmental Internal Audit Group(AMEIA Group) as an independent organization and the
AMEIA Group inspects and monitors the status of the EMS
program, conditions of compliance with related laws andregulations and makes proposals for EMS improvements.
Our executive officer (environment) is the chairmanof the Meiden Group Environmental Committee (MGEC),
which is our EMS Organization’s highest decision-making
body in relation to environmental activities. The MGEC sets

Meiden Nagoya Works

President’s Environmental Management Policy Statement for Fiscal 2016
We shall enhance our corporate value by two ways: (1) Contribute in building the better environment for society through our products, construction works and services and (2)Positively conduct programs to lower environmental footprints through the promotion of energy saving in our business activities and reduction of chemical materials in our products

Environmental Management Promotion Frameworkenvironmental targets and formulates action plans, conducts
management reviews, responds to emergency situations andreviews and reports on the activities of environmental measures
and working groups (WGs) and EMS promotion WGs. The MGEC
decides the policy directions of our EMS.

Meiden Ohta Works

Basic Environmental Philosophy

Strategic Environmental Management Initiatives

Meiden Numazu Works

Under our Basic Environmental Philosophy, every individual employee of Meiden Group promotes environmental
management that contributes to the protection of the global environment and the realization of an affluent
society through our core business.

Meiden Group Environmental Targets / Status of Achievement of Targets (in Japan)

Targets that express our Environmental Vision

Mitigating Climate
ChangeWhat we can dofor Planet Earth

Realize arecycling society

Conserving
biodiversity

Strategic Targets

A. Mitigating Climate Change

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

1. Expand products’
contribution to theenvironment

Meiden Group
Environmental Vision

B. Conserving Resources(Building a Recycling Society)
C. Conserving biodiversity

Vision (Fiscal 2020)

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 from ourbusiness activities and the deployment of the businesses,
products and technologies that we have developed to datein the fields of energy and water treatment to support social
infrastructure.
Our Environmental Vision identifies the mitigation ofclimate change, the building of a recycling society, andthe conservation of biodiversity as the missions of a 21st
century company, and establishes targets for how weshould perform in our business activities and what weshould aim for in our products. We work to implement
environmental management with a corporate culture thathighly values the environment as the foundation that helps
us to achieve these targets.

Deployment of Action Plans

D. Foster a corporate culture thathighly values the environment

1. Expand products’
contribution to theenvironment

2. Reduce theenvironmental impact
of business activities

3. Promote
environmental
management
4. Improve employees’
environmental
awareness

Actions

Corresponding “Environmental Vision”

Expand products and businesses that
contribute to the environment
Strengthen management of chemicals
in products
Reduce greenhouse gas emissions

A. Mitigating Climate Change

Promote reduction of waste discharge by
3Rs (Reduce, Reuse and Recycle)

B. Realize a recycling society

Eliminate hazardous chemical
substances in products

C. Conserve biodiversity

Promote environmental communication
Promote value chain management
Promote maintenance of biodiversity andmanagement of green zones
Improve environmental education

C. Conserving biodiversity

1 Contribute to the reduction of CO2 emissions through the sale of energy-related
products and systems (i.e., products for renewable energy resources, etc.)
2 Promote environmentally conscious product design and reduce CO2 emissions in
the product life cycle.
3 Reduce CO2 emissions in our production activities.

1 Contribute to securing water resources through our water processing systems business.
2 Conduct risk management on chemical materials and promote the reduction of very riskyhazardous chemical materials, as well as initiatives to find alternative materials on a basis
to reduce or replace harmful chemicals.

1 Promote the 3Rs (Reduce, Reuse and Recycle) of waste materials in the various
stages of the product life cycle.
2 Promote zero emissions of waste products from our production activities.

31 MEIDENSHA REPORT 2016

3. Promote
environmental
management

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

Expand products and businesses that
contribute to the environment

Fiscal 2015 Targets

Fiscal 2015 Results

Evaluation

Contribute 620 thousand t/year reduction in CO2 emissions by
ECBs

Contributed 870 thousand t/year reduction in CO2 emissions
by ECBs○

Conduct LCA assessments in new products

Conducted LCA assessments for all new products○

Reduce energy consumption per unit of production by 1% from2014 levels

Reduced energy consumption per unit of production by 1% from2014 levels○

Reduce SF6 output amount to less than 3% of purchased amount

Reduced SF6 output amount to 1.9% of purchased amount○

Zero emissions*1 at 9 sites(Major production hubs in Japan*2, engineering service business
units (BUs) and construction service business units (BUs))

Achieved zero emissions at all applicable locations○

Reduce waste emissions per unit of production*3 by 2%

Reduced waste emissions per unit of production by 20.8%
against the level of fiscal 2014○

Eliminate hazardous chemical
substances in products

Reduce VOC emissions by 30% (against the level of fiscal 2000)

Reduced VOC emissions by 50% (against the level of fiscal 2000)○

Promote value chain management

Support supplier EMS systems (20 companies)

EcoAction 21 acquired by 27 companies○

Promote maintenance of biodiversity
and management of green zones

Manage green zones by factories in a manner that is considerateof biodiversity<Main four locations>*4

Conducted environmental conservation activities etc., at our fourmain locations○

Promote reduction of waste discharge
by 3Rs (Reduce, Reuse and Recycle)

Meiden Group V120 Medium-term Targets (in Japan) and Fiscal 2016 Environmental Targets
Strategic Targets
1. Expand products’
contribution to theenvironment

Actions
Expand products and businesses that contributeto the environment

Reduce greenhouse gas emissions

D. Foster a corporate culture thathighly values the environment

A. Mitigating Climate Change

B. Conserving Resources (Building a Recycling Society)

2. Reduce theenvironmental impact
of business activities

V120 Plan
Strategic Targets

Actions

Reduce greenhouse gas emissions

Develop to Action Plans

Action Plan (Fiscal 2015 – Fiscal 2017)

Environmental Vision

2. Reduce theenvironmental impact
of business activities

3. Promote
environmental
management

V120 Targets (Fiscal 2017 Targets)

Fiscal 2016 Environmental Targets

Contribute 800 thousand t/year reduction in CO2 emissions by ECBs

Contribute 800 thousand t/year reduction in CO2 emissions by ECBs

Conduct LCA assessments in each product category

Disclose LCA data for new products

Reduce energy consumption per unit of production by 3% from2014 levels

Reduce energy consumption per unit of production by 2% from2014 levels

Reduce SF6 output amount to less than 3% of purchased amount

Reduce SF6 output amount to less than 3% of purchased amount

Zero emissions*1 at 9 sites(Major production hubs in Japan*2, engineering service business
units (BUs) and construction service business units (BUs))

Zero emissions*1 at 9 sites(Major production hubs in Japan, engineering service business units(BUs) and construction service business units (BUs))

Reduce waste emissions per unit of production*3 by 8%

Reduce waste emissions per unit of production by 5% against thelevel of fiscal 2014

Eliminate hazardous chemical substances in
products

Reduce VOC emissions by 30% (against the level of fiscal 2000)

Reduce VOC emissions by 30% (against the level of fiscal 2000)

Promote value chain management

EMS system certified by 45 suppliers

EMS system certified by 27 suppliers

Promote maintenance of biodiversity andmanagement of green zones

Utilize green zones by factories in a manner that is considerate ofbiodiversity<Main four locations>*4

Manage green zones by factories in a manner that is considerateof biodiversity<Main four locations>

Promote reduction of waste discharge by 3Rs(Reduce, Reuse and Recycle)*1 Meiden Group definition of zero emissions: To achieve efficient use of resource rate in a range that is less than 1.0% of the total volume of waste (including industrial waste, general waste, and saleable waste, but
excluding construction sludge, etc.) is not recycled.
*2 Major production hubs: Meiden Numazu Works, Meiden Ohta Works, Meiden Nagoya Works, Kofu Meidensha Electric, Meiden Chemical (Sagami Works), Hokuto Denko (Atsugi Works)*3 Waste emissions per unit of production (t/million yen) is the amount of waste produced (t) for a given amount of production yield (million yen)
*4 Main four locations: Meiden Numazu Works, Meiden Ohta Works, Meiden Nagoya Works, and Kofu Meidensha

MEIDENSHA REPORT 201632

5 A Foundation for Creating Value

Research and ofProtection
Development,
the Environment
and Capital Investments

Promoting Business that Contributes
to the Environment (“Eco-contributing
Businesses” (ECBs))

TOPICS

Toyama Prefecture Hayatsuki River
Shoreline Land Improvement District

Contribute to Mitigating Climate Change by Reducing CO2
Emissions from Products
The Meiden Group aims to benefit the environment by using
renewable energy like solar, wind and hydroelectric power
and with products and services that are more efficient andthus energy saving.
In fiscal 2015, we included more products in our
calculation of environmental benefit (the expected CO2
emissions curbing effect from products sold). This
calculation showed a benefit of about 870,000 t/year,
exceeding our target of 620,000 t/year.
CO2 emission reduction(10,000t-CO2)

Hayatsuki River Shoreline No. 1 Power Horizontal axis cross-flow hydro-turbine
Stationand horizontal axis induction generator

100

Hydroelectric
power systems

PCSs for solar
power generation

80

MotorsInverters

Development of Environmentally Conscious
Products (ECP)

870,000 t/year reduction
in CO2 emissions

60
40

A Meiden Green Product* registered in fiscal 2015
CO2 emission reduction target – 620,000 t/year[AC/DC converter for storage batteries (power storage
system)]200This power station was built to take advantage of unused
potential energy from the Hayatsuki River, provide
sustainable energy, and cut maintenance and management
costs for the land improvement facility. The power station
generates 530 kW of electricity using abundant water
available from the Suke River (used for agriculture) and its
net head of about 18 m.

2009
result2010
result2011
result2012
result2013
result2014
result2015
resultFY

An AC/DC converter for storage batteries has a loadleveling function to reduce contracted demand and an
autonomous operating function for BCP purposes.

Environmental Initiatives related toBusiness Activities
Reducing CO2 Emissions from Our Business Activities
Most of the greenhouse gas emissions caused by the Meiden
Group results from energy that is used in our businessactivities. In response, we have switched to energy efficient
LED lighting and metal-halide lamps in our factories andhave systematically updated our air conditioning systems.
We are in addition improving the operation of our existing
facilities, reviewing their management, and rationalizing
energy consumption through both capital investment andfacility operation.
With our consistent energy-saving study circles andhave undertaken grass roots-level activities that carefully
control air conditioning use helped us share knowledge andraise awareness about energy conservation.
The results of the above activities have been as
follows: in the Meiden Group as a whole, although energy
consumption rose by the equivalent of about 150 kl ofcrude oil (a gain of 0.8%), which increased CO2 emissions
by about 350 tons, we have increased the efficiency of ourenergy usage and we achieved our fiscal 2015 target of
reducing energy consumption per unit of production* by
1% from fiscal 2014.

Trends in CO2 emissions (Domestic)(t-CO2)

Automobile fuel

Energy usage

50,00040,00042,31939,79239,264
1,834

1,813

37,43037,9791,910

41,36541,015
1,857

1,850

39,15839,51530,00020,00040,40910,000
0

2011

2012

2013

2014

2015

FY

* The “CO2 emission factor for electricity usage,” published by the Federation of Electric Power
Companies of Japan, is used as the electric power CO2 indicator. For figures through fiscal 2014,
we use the adjusted factor (with credits) for each fiscal year; for fiscal 2015, we use the fiscal
2014 figure.

Energy consumption and rate of improvement in energy
consumption per unit of production (Domestic)

Fiscal 2014
energy consumption

18,980kl

Fiscal 2015
energy consumption

19,132kl

Rate of reduction ofenergy consumption+0.8%
Rate of improvement in energy
consumption per unit ofproduction due to increased
efficiency in production
processes* Energy consumption per unit of production:
An indicator, found by dividing the amount of energy used by the amount of production at eachfactory or department

1%

TOPICS
Object products / businesses
Power conditioners for solar power
generation
Wind power sales business

CO2 emissions reduction

Calculating CO2 Emissions in the Supply
Chain (SCOPE 3)

Emissions curbed if conventional power
replaced by renewable energy

Hydropower generators*
Electrical components for electric vehicles

Emissions curbed if replacing gasoline
vehicle of same gradePower conditioners for storage batteries*

Emissions curbed by replacing pumpedstorage power generation (or replaced with ahigher efficiency product)

Electrical components for electric forklifts*
Engines / turbine generators*
Transformers*

Emissions curbed by replacing conventional
Meiden products(lowering energy losses)
Total: 870,000 tons

(Note 1) The * mark indicates products added to scope of calculation in fiscal 2015.
(Note 2) Calculated by multiplying the difference in CO2 emissions during usage stage by estimatedproduct life and number of units sold each year. However, in the case of wind power sales,
calculation is based on of the actual amount of electricity generated annually.

The following are features of this product, withcomparisons to a Meiden product developed in fiscal 2006.
▶ Fits in a standard (20-foot) container; 10% lighter, 30%
smaller▶ Uses a three-level inverter; 20% less energy
consumption

In fiscal 2015, we took part in the Ministry of the Environment’s“supply chain emissions calculation support program.”Through this program, we calculated the CO2 emissions not
only from our own business activities, but throughout the whole
supply chain, including indirect emissions in both upstream
and downstream sectors.
By visualize the environmental impact imposed at eachstage of the supply chain, we were able to make one problem
clear: that a high percentage of our emissions falls in “Useof sold products” (Scope 3, Category 11) and “Purchased
goods and services” (Scope 3, Category 1). To promote
our environmental measures, we will address the entire
supply chain, by mitigating the downstream burden throughenvironmentally friendly design of products and the upstream
burden through green procurement.

❶ Purchased products and services 7.5%
❷ Capital goods 0.38%❸ Fuel- and energy-related activities
not included in Scope 1 or 2 0.01%❹ Upstream transportation anddistribution 0.01%❹ Downstream transportation anddistribution 0.01%❺ Waste generated in operations
0.01%❻ Business travel 0.03%❼ Employee commuting 0.01%
End-of-life treatment of soldproducts 0.04%
Downstream leased assets
0.15%

SCOPE3

Supply chain emissions[breakdown]
SCOPE1, 2
1%
SCOPE399%

11Use of sold products
92%Life cycle CO2 emissions

Newer productFiscal 2006 product

80%
100%

WEB

For an overview of the environmental impact of our business activities, see “Meiden Group CSR 2016” (PDF version). We have also
undergone a third-party verification of energy and CO2 (exclusive of portion from automotive fuel). See “Meiden Group CSR 2016”(PDF version).

Solar power generation facility for Tokushima-shi No. 10 Water Purification Plant

33 MEIDENSHA REPORT 2016

MEIDENSHA REPORT 201634

5 A Foundation for Creating Value

Human Resources Management

Human Resources Management
The Meiden Group aims to maintain a fair and just employment system and a positive workplace to enable each
employee to exercise his or her potential.

Promote Fair and Just Employment Practices
and Respect Diversity in the Workplace
Employment Policy
We are working on providing fair opportunities to enablea diverse range of employees to prove and demonstrate
their potential, free from obstacles based on age, gender,
nationality, etc. We are working hard to build a positiveenvironment that provides the opportunities for each
employee to prove and show their unique individuality
through action programs. (e.g. diversity education
programs at all levels, a personnel treatment system forcareer development and review of personnel evaluation,and holding opinion-exchange working group meetings byfemale workers in Japan, etc.)
We also provide employee training based on these corelabour standards of the ILO*: freedom of association andthe effective recognition of the right to collective bargaining;
the elimination of all forms of forced or compulsory labour;
the effective abolition of child labour; and the elimination of
discrimination in respect of employment and occupation.
* ILO (International Labour Organization): A United Nations organization that provides advice andinstruction to national governments on improving labor conditions and social welfare.

Hiring of People with Disabilities, and Re-Employment System
Meiden Universal Service K.K., an exceptional subsidiary,provides a workplace for people with mental disabilities. We
have worked to increase employment for this population by
expanding the company’s reach, including new branches
at manufacturing facilities in various regions. In 2015,
Meiden Universal Service was honored for its contribution
to the employment and occupational independence of
persons with mental disabilities over the years. It received acommendation from the Governor of Gunma Prefecture asa “Business of Excellence for the Employment of Persons
with Disabilities in Gunma Prefecture.”
In Japan, we amended our re-employment systemapplicable to those who reach the mandatory retirement
age of 60 as of April 2013. We now offer employment
opportunities to all applicable and re-employment-seeking
people by giving job descriptions and entering re-employment
contracts.

Promoting Diversity (Encouraging women to play active roles)
Since fiscal 2014, the Meiden Group has implemented
diversity promotion programs. Through such efforts, we
aim to produce new value by making the best use of theuniqueness and individual talent of each employee.
In fiscal 2015, we gave diversity training on childcare
and nursing care to staff at all levels. Among other events,
we held opinion-exchange working group meetings forfemale workers in Japan. The purpose of events like theseis to motivate and draw out the potential of each individual,
male or female, and encourage a corporate culture in which
women play an active part.
We will continue to develop action plans in keepingwith the intent of the Act Concerning Promotion of Women’s
Career Activities. We will make it our policy to increase thepercentage of women in managerial positions and actively
hire and develop women as technical employees.

Human Resources Development
Human Resources Development Policy
1. Following the spirit of the Corporate Philosophy
and Corporate Code of Conduct, we will support
improvement of each employee’s skill level throughtraining (talent development) and improvement oforganizational performance (improvement of results) andthereby offer greater value to customers.
2. We will enrich our range of elective and voluntaryparticipation technical and language trainings, etc.,
establishing a training system that is more targetedrather than being something for everyone.

Various Training Programs
We provide various training programs for the personal
development of our employees as Meiden Group
employees, as members of society, and as professionals. In
fiscal 2015, we conducted training programs for overseas
Meiden Group managers and engineers, with the training
courses given in Japanese, English, and Chinese. We also
invite overseas Meiden Group technicians to Japan, where
they join the training programs at their mother factories. We
will continue to reinforce these educational programs todevelop globally-minded talent.

A re-employed employee giving instructions

Rate of employment of people with disabilities (Meiden Group)
2010/6

2011/6

2012/6

2013/6

2014/6

2015/6

1.95%

2.09%

2.12%

2.13%

2.18%

2.19%

35 MEIDENSHA REPORT 2016

Training programs for overseas Meiden Groupengineers

Building a Positive Workplace with Job
Satisfaction
Personnel Treatment System
Since April 2015, we have revised our personnel
treatment system for general staff members in Japan.
That intends to inspire our employees to contribute to
the Company and increase their motivation to work.
This system aims to reward employees who havemade higher contributions or worked hard according
to their actual contributions through our multi-track
job qualification systems by balancing the “job role”
and “job contribution.” This system additionally aims
to meet various working styles, allowing employees towork in their preferred work locations.
Major initiatives
1. MBO Performance Measuring System
In order to ensure high evaluation transparency, we use the MBO(management by objectives) performance measuring system coordinatedwith TQM (Total Quality Management) activities.
2. Self-reporting system
The self-reporting system helps employees develop personal talent andform career plans.
3. Meister program
The Meister program gives special benefits to employees who contributeto Meiden Group through excellent craftsmanship. We treat them as
high-level experts. So far, we have certified nine employees as Meister
between fiscal 2008 and fiscal 2015.
4. Job rotation program
We have adopted a job rotation program to develop the abilities of ouryoung employees.

This follows our Basic Policy: “To secure a safe and positive
work environment and help in realizing the work-life balanceand better lives of our employees.”WEB

For more information about the President’s Safety and
Health Management Policy, see “Meiden Group CSR
2016”.

Occupational Safety and Health(OSH) Management Initiatives- Aiming to Eliminate Occupational Accidents and Injuries
There were fewer occupational accidents and injuries infiscal 2015 than fiscal 2014, but there is still far to go toeliminate them. We analyzed the causes of these incidents
and found that human factors (unsafe behaviors) wereto blame for most of them. Our hope is to reflect on thesituations and eliminate these unsafe behaviors to raise andreinforce health and safety awareness. Following is a list of
new initiatives introduced in fiscal 2015.
▶ Expanding

hazard prediction training (previously given mainly to
production, construction, and maintenance staff) to general staff, sales,and sales engineering departments.
▶ Expanding safety sense training (previously limited to the construction
departments) to production staff, including affiliated companies, anddevelop it as a Group program.
▶ Taking heat stroke prevention measures in the whole Group.
▶ Distributing individual hazard-prediction self-check cards to all employeesof the Meiden Group in Japan as a way of increasing safety and healthawareness.
▶ Providing online OSH training.
* Information on the number of occupational accidents and injuries may be found at our website.

Flexible Work Styles

TOPICSIn fiscal 2015, we started work-at-home and satellite officeprograms. The work-at-home system gives employees
work-style choices that can raise productivity. Employees
are allowed to work at their own homes, which helps themaccomplish childcare or nursing care in addition to work. The
satellite office program was inaugurated to boost efficiency
and shorten commuting times for those employees who live
far from their workplaces. These employees can work in
office spaces outside their usual work area, which allows
them to work with more flexibility.

Having Acquired OHSAS18001 Occupational Healthand Safety Management System Certification atFour Major Production Bases in Japan

Occupational Safety and HealthManagement Initiatives
Safety and Health Initiatives Based on President’s Safety and
Health Management Policy
Each fiscal year, Meiden Group draws up a President’s
Safety and Health Management Policy and undertakes
safety and health initiatives in keeping with the policy.
We draw up English and Chinese versions of this policy
and apply the same initiatives to overseas Meiden Group
companies.
Recognizing that the occupational safety and health(OSH) of each employee are fundamental to the Group’s
operations, we work to eliminate occupational accidents
and maintain and improve each employee’s health at work.

Our effort to acquire OHSAS18001 certification beganin fiscal 2013. In fiscal 2014, we newly established aGroup supervisory department called the “Operational
Health and Safety Management Department.” It
promotes acquisition of the certification and bolsters OSH
management initiatives. The department endeavors toenhance Group employee OSH. Their programs include
checking compliance with relevant laws and regulations
and providing guidance to improve it to increase OSH
awareness; providing instructions to strengthen ourmanagement programs; providing support for establishingappropriate risk assessment operating systems; andholding and planning legally-required trainings anddeveloping a sense for safety.
The Meiden Ohta Works acquired OHSAS18001
certification in October 2015, followed by Meiden Numazu
Works in December 2015 and Meiden Nagoya Works andKofu Meidensha Electric Mfg. Co., Ltd. in January 2016. Ineach case, certification was also acquired by all affiliatedcompanies on the grounds of the respective premises.
Therefore, all four major production bases finishedobtaining certification during fiscal 2015. Additionally,
Meiden Singapore, a major overseas production base,earned its certification in fiscal 2013.
The Meiden Group will continue to promote its OSH
management system and build workplaces where all
employees, in Japan and abroad, can work safely andhealthfully.

MEIDENSHA REPORT 201636

6 Corporate Governance

6 Corporate GovernanceCorporate Governance

Board of Directors & Executive Officers

Corporate Governance

Board of Directors & Executive Officers

We strive to conduct corporate management in a fair, highly transparent, fast and efficient manner and to
improve the governance structure to secure the fairness of business practices.

Corporate Governance System
Basic Approach
In order to realize the Group’s philosophy, we view it isessential to secure self-sustainability and self-governanceand formulated the “Basic Policy to Improve theGovernance Structure to Secure the Fairness of Business
Practices” in May 2006, and thus have been promoting
stronger corporate governance. Certain basic policies
were amended at the meeting of the board of directorsthat occurred in May, 2015, to reflect a revision of theCompanies Act.
The Governance Structure to Secure the Fairness of Business Practices
System to ensure the directors’ performance of their duties complies withapplicable laws and regulations and the terms of the provisions in the
Articles of Incorporation
2. System to manage and store information relating to the directors’
performance of their duties
3. Internal rules and risk management system against risk-causing losses
4. System to secure directors’ efficient execution of their duties
5. System to ensure employees’ performance of their duties complies withapplicable laws and regulations and the terms of the provisions of the
Articles of Incorporation
6. System to ensure appropriate business conduct by the group comprising
the Company as well as its subsidiaries
Matters relating to employees who assist the performance of duties by
7.
corporate auditors
8. Matters relating to the separation of corporate auditors assisting
employees from the supervision of the directors
9. System for directors and employees of the Company and subsidiaries toreport to auditors, and other systems pertaining to reporting to auditors
10. Matters pertaining to procedures for advance payment or reimbursementof costs arising from the performance of auditors’ duties and policies
relating to performance of said duties
11. Other systems to ensure effective enforcement of auditing by the
corporate auditor
1.

Policy Actions Update *As of end of June, 2016
In June 2003, the Company adopted an executive officer
system. At the same time, we sought to reinforce thefunctions of the Board of Directors. For a part of these
efforts, we separated the “decision-making authority andsupervisory functions” and the “business performance
functions” from the Board of Directors. The former functions
were assigned to the Company’s directors, and the latterto the representative directors and executive officers who
were delegated duties by the representative directors. As
a result, the Board of Directors is responsible for making
decisions from the standpoint of the entire Group, and foroverseeing the overall management of the Group.
Executive officers appointed by the Board of Directors
are responsible for executing their designated duties incompliance with the Group management policies decided
by the Board, within the scope of authority given to themby the representative directors. The executive officers
perform their duties actively under the supervision of therepresentative directors.

37 MEIDENSHA REPORT 2016

As of June 29, 2016

Representative Directors
Two of the ten members of the Board of Directors
are independent outside directors, who have no stake in
Meidensha’s management. This structure is designed toreinforce corporate governance by enhancing the Board’s
supervisory function concerning the execution of duties.
Meidensha has also adopted a corporate auditor
system. The Board of Corporate Auditors consists of four
members, two of whom are outside corporate auditors.
Each of the auditors communicates with directors, theinternal auditing department, and other related departments,
while adhering to the auditing policies, allotted duties, andauditing rules for corporate auditors stipulated by the Boardof Corporate Auditors. The corporate auditors attend Boardof Directors meetings and other important meetings, andaudit the execution of duties by directors by monitoringbusiness operations and financial conditions of the Group.
We have an Internal Auditors Office to assist the Board of
Corporate Auditors under the direct control of the Board.
In addition, we have an Internal Auditing Division,
which directly reports to the president, fulfilling the role ofdiagnosing the Group’s corporate fitness level in a regularmanner. This 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
at home and abroad. It also reports the results of internal
audits to top management, and offers advice to the related
employees on their performance of business duties.
With respect to requirements regarding the guidanceof the internal control system for financial reporting inaccordance with the Financial Instruments and Exchange
Law in Japan, the Company adopted basic policies that
conform to the Implementation Guidance for Management
Assessment and Audit of Internal Controls over Financial
Reporting (ICFR) by Japan’s Financial Services Agency.
The Internal Auditing Division independently audits theeffectiveness of internal control systems in terms of
implementation status and improvements at the Company
as well as at the overall Group level.
Corporate Governance Structure: Supervision and Management and Internal Control System

General Meeting of Shareholders
Board of Directors
Directors(includes two outside directors)

Representative Director, President

Junzo Inamura

Yuji Hamasaki

Representative Director,
Executive Vice President

Representative Director,
Executive Vice President

Kozo Masaki

Takeshi Miida

Director and Senior Managing Executive Officers
Mamoru Sugii

Tadayoshi Machimura Masamichi Kuramoto

Tetsuya Morikawa

Directors
Hiroyuki Takenaka(Outside Director)

Junji Yasui(Outside Director)

Senior Corporate Auditors
Kazuyuki Tanaka

Tetsushi Tanaka

Corporate Auditors
Yoshiaki Shin
(Outside Corporate
Auditor)

Mitsuru Nawata(Outside Corporate
Auditor)Managing Executive Officers
Toru Akiya

Nobutoshi Ohashi

Kazumi Ikarashi

Akira Yamamoto

Manabu Yokoi

Michihiko Katoh

Teruhisa Abo

Satoru Kameyama

Noritaka Matsushita

Isamu Sutoh

Tomoyasu Hachiro

Nobuaki Tamaki

Tatsuki Mochizuki

Hiroshi Toke

Accounting Auditor

Representative
Directors
Executive Officers

Board ofCorporate Auditors
Corporate Auditors(includes two outside auditors)

Representative Director, Chairman

Internal Auditing
Unit

Each Business Unit
Internal reporting line (Compliance Office)Compliance Committee
Compliance Manager

Compliance Hotline
External reporting line (law firm)

Executive Officers
Shigetaka Wakabayashi Kazuhiko Furukawa
Masayuki Iwao

Akio Inoue

Norio Takekawa

MEIDENSHA REPORT 201638

6 Corporate Governance

6 Corporate GovernanceCorporate GovernanceCompliance

Risk Management

Compliance

Risk Management

Meiden Group considers compliance initiatives to be a key part of our practice of CSR. We work to comply withthe law, society’s expectations, and social norms and ethics in general.

The entire Meiden Group is stepping up its risk management system, working to prevent various risks andminimize impacts if such events occur.

Compliance System at Meiden GroupA Stronger Risk Management System

Compliance Policy and System

The Meiden Group has a system in place to control risk
management. The Director for risk management andCompany-Wide Risk Management Committee (RMC) areappointed to respond to major cross-organizational crises.
The RMC works with each working group committee(WGC) and meets as a rule at least twice a year to maintaincountermeasures to critical risks threatening the business
continuity of the Meiden Group. They perform risk surveys
to discover new risks and study measures against them.

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

Overseas affiliate disaster response offices

Area disaster response offices

Company-Wide Disaster Response OfficeCompliance managers

RMC Office,General Affairs, Legal Affairs

Company-Wide RMC

New Influenza Strains Emergency Response OfficeCompliance managers

Chairman (RMC)

Company and area safety and health committees

Compliance Office

President

Product and Technology Deliberation Committee

Compliance Office

Relations between Company-Wide RMC and existing organizations

Company-wide Quality Assurance Council

Compliance Committee

The Company-Wide RMC

Product Liability Committee

Compliance Committee

3. Deciding company policies on crises that do happen

Meiden Group Environmental Committee

Meiden Group Compliance System

The Compliance Committee hold Compliance Information
Exchange Meetings at major business premises in Japanevery year. The purpose is to maintain and raise complianceawareness and receive input from people in each workplace.
The Compliance Information Exchange Meetings also
serve as education for compliance managers and selected
employees of the Group companies, who also have theopportunity to exchange views with the Compliance
Committee. These events were held at 22 locations in fiscal
2015, inviting a total of 1,043.
The Committee reported on their companies’
compliance activities, including individual whistleblower
cases and how the company responded to them. Training
was also given on workplace harassment and the Act
against Delay in Payment of Subcontract Proceeds, Etc. to
Subcontractors. Legal affairs staff gave further training toensure legal compliance in sales, with practical examples.
The participants talked about their workplace conditions,expressing their opinions and hopes to the Committee andasking many questions. We aim to reflect these participants’
input in formulating this fiscal year’s compliance programs
to ensure even better compliance activities.

Information Security Committee

Meiden Compliance System

Compliance Education and Information Exchange Meetings

2. Encouraging measures to prevent crises before they
happenSafety and Trade Control Committee

Meiden Group Compliance System* The whistleblower system is available to Meiden Group employees anddirectors as well as to employees and directors at business partners.

1. Establishing basic policies on major and crossorganizational risks

Compliance Committee

Meiden Group Code of Conduct (COC) defines that weshall strive to ensure compliance with applicable laws andregulations of our business operations-related matters,other applicable laws and regulations at home and abroad,social and ethical norms, and its underlining spirit, and weshall conduct our businesses with strong corporate ethics
and good corporate social sense.
Given this policy, Meiden and its Group companies
established a compliance committee at each level asper Meiden Group Compliance Promotion Rules. These
committees actively communicate with each other andpromote CSR programs.
The purpose of our Compliance Committee is to decideon policies for compliance programs, arrange complianceawareness campaigns, respond to internal information on
COC violations, and compile the common committee’s
opinions on various events that have occurred and takeaction to resolve the issues. The activities of the Committee
are reported to the representative director (Compliance) andlawyer and we strongly promote our compliance programs
and secure the transparency of those programs.
Each workplace has a compliance manager, whomakes sure that the Committee’s policies are well understoodand the business activities comply with the applicable laws,
regulations and social norms. The compliance manager
also offers consultation to any employee who seeks advice
on some problem and, when necessary, reports to the headof the workplace to offer advice to correct the problem. The
compliance manager reports periodically on these activities
to the Committee.

anonymous basis. For the Public Whistleblower System, thecontact points by phone are available at internal telephones
and the external third-party phone. The third-party phone
is located at the law firm to protect the whistleblower andto secure fairness in response to compliance violation
information.
The Compliance Committee studies information thatis brought to the above points of contact, and, if necessary,consults with a lawyer for resolution. Those who reportproblems are protected under the Whistleblower Protection
Act.

of an earthquake occurring directly beneath Tokyo.
Additionally, we gave a briefing to general employees on
emergency functions and supply reserves at our Head Officebuilding as a way of sharing vital information with them. We
also brought in digital radios for inter-base communication
during disasters and are working to step up our disastercountermeasures.

Priority Initiatives for Fiscal 2016
The Meiden Group will study specific measures, anticipatinga variety of enterprise risks.
We will also start to draw up business continuity
plans (BCP) in preparation for a large-scale disaster. Other
approaches we plan to step up include emergency rescue
drills, safety check system operating drills, and training on
measures for employees stranded and unable to get home.
These will help increase our readiness when disaster strikes.

Strengthening Information Security Management
The Meiden Group understands that ensuring the securityof the information we handle is a most critical issue. We
therefore protect these assets from disasters, accidents,
criminals, errors, and other threats. We also maintainand enhance information management to prevent leaks,
tampering, or theft.
In fiscal 2015, we repeated online courses on
information security to the entire Meiden Group andstepped up physical measures to further strengthen
information security. We worked to prevent information
leaks from equipment, took measures against unauthorized
trespassing and access, and took steps against virus
infections.

Information security control system

Whistleblower System on Compliance
Meiden has a whistleblower system on compliance. This
is to prevent illegal actions or misconduct and to solve
problems as early as possible if such illegal action or
misconduct occurs.
For this whistleblower system, there are two routes:
an internal hotline system for compliance violations (Internal
Hotline System) and a whistleblower hotline for public
interests (Public Whistleblower System).
For the Internal Hotline System, any employee in Japan
can enter the ‘hot-line site on compliance violations’ on an

39 MEIDENSHA REPORT 2016

Consider response to individual major risks

Priority Initiatives for Fiscal 2015

Information Exchange Meeting

In fiscal 2015, we conducted a study of frameworks tomanage risks of disaster, terrorism, and the like outside
Japan and effective systems for checking the safety ofoverseas employees.
As part of our efforts towards disaster prevention, we
worked with the community to run a drill under the scenario

President
Information Security Committee
Persons responsible in departments

Information
Security Office

Person responsible for enacting
security measures

MEIDENSHA REPORT 201640

6 Corporate GovernanceCorporate
Outlineof Meiden
GovernanceGroup

Outline of Meiden Group

Area CodeCompany Name

CapitalBusiness Entity

Singapore

MEIDEN SINGAPORE PTE. LTD.*

S$25.4 million

Manufacture and sale of transformers, switchboards, andcircuit breakers, maintenance and after-sale service ofelectrical equipment, electrical engineering and import/
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$21.5 million

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

China

MEIDEN HANGZHOU DRIVE SYSTEMS
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

1

Corporate Data as of March 31, 2016
Corporate NameMEIDENSHA CORPORATION

Capital¥17,070 million

Established

June 1, 1917
(Since December 22, 1897)

Consolidated Sales¥237,404 million

Representative
Director, President

Yuji Hamasaki

Consolidated Numberof Employees

8,408

Head Office

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

Consolidated
Subsidiaries

39 (19 in Japan, 20 overseas)

Consolidated Subsidiary Companies as of March 31, 2016
Area CodeCompany Name

CapitalBusiness Entity

Japan

Kofu Meidensha Electric Mfg.Co.,Ltd.

¥400 million

Manufacture and sales of electric motors

Japan

Meiden Plant Systems Corporation¥400 million

Construction services

Japan

Meiden Engineering Corporation¥400 million

Manufacture, sale, lease, installation, wiring and provisionof maintenance services (maintenance and inspection,
modification, repair, etc.) for electrical equipment,machinery and devices

Total number ofauthorized shares

576,000,000

Total number of issued
shares227,637,704(Including treasury shares of 748,304)

Number of shareholders

14,060¥330 million

Business of wind farm and consulting services

Japan

MEIDEN SHOJI Co., Ltd.

¥300 million

Sales of electric components

Japan

MEIDEN KOHSAN CO., LTD.

¥100 million

Sales of products and materials, and agent services of
insurance

Japan

Japan

Japan

MEIDEN CHEMICAL CO., LTD.

Meiden System Manufacturing
Corporation

Meiden System Solution Corporation¥100 million¥95 million

Share data (As of March 31, 2016)
Tokyo Stock Exchange,
Nagoya Stock Exchange

M WINDS Co., Ltd.

Meiden O&M Corporation

Another 24 companies

Stock Listing

Japan

Japan

*1. Specified subsidiary

Strategic proposal and comprehensive management of
manufacture, sale, lease, installation, wiring and provisionof maintenance services (maintenance and inspection,
modification, repair, etc.) for electrical equipment,machinery and devices and provision of related education

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

Distribution of sharesby shareholder
6
5

1

4

3

2

1

Financial institutions

39.85%

2

Securities companies

3.74%

3

Business companies

21.24%

4

Overseas investors

15.89%

5

Individuals

18.95%

6

Other

0.33%

Major shareholders
Number of shares held
(1,000 shares)

Shareholding ratio (%)

The Master Trust Bank of Japan, Ltd.

18,631

8.21

Japan Trustee Services Bank, Ltd.

14,045

6.19

Sumitomo Electric Industries, Ltd.

13,156

5.80

Sumitomo Mitsui Banking Corporation

11,209

4.94

NEC Corporation

8,730

3.85

Sumitomo Mitsui Trust Bank, Limited

7,500

3.31

CBNY-GOVERNMEMT OF NORWAY

6,001

2.65

SUMITOMO LIFE INSURANCE COMPANY

5,307

2.34

Meidensha employees stock ownership

4,912

2.17

Mitsui Sumitomo Insurance Company, Limited

4,377

1.93
(Note) The shareholding ratio excludes treasury shares.

41 MEIDENSHA REPORT 2016

MEIDENSHA REPORT 2016

42

MEIDENSHA REPORT 2016

MEIDENSHA REPORT 2016

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

Only environmentally friendly printing
materials and printing methods wereused to produce this report.

This report is printed on
FSC-certified paper sourced
from well-managed forests.

Printed on paper made with woodfrom forest thinning. “Morino
Chonai-kai” (Forest Neighborhood
Association)—Supporting soundforest management.

Only environmentally-friendly, zero-VOC(Volatile organic compounds) 100%vegetable oil inks were used in theprinting of this report.

This report was printed using thewaterless printing method, which
contributes to reduced output ofsolutions from the printing
process that contain organic
compounds.