MEIDENSHA REPORT 2021

MEIDENSHA REPORT 2021

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

www.meidensha.com

Meidensha’s CO2 reduction targets
received SBT certification.

Meidensha was recognized as 2021
Health and Productivity Management
Organization (White 500) in the large
enterprise category in March 2021.

Meidensha was selected as a Healthand Productivity Management Brand
by METI and the TSE in March 2021.

Meidensha was granted Platinum
Kurumin certification by the Minister of
Health, Labour and Welfare in 2021.

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

Contents
03

Meiden Group Corporate Philosophy

05

Message from Management

Our
Value

11

The Path of Value Creation

13

The Meiden Group Value Creation Process

15

Social Value Created through Business

Our
Approach17

ESG Vision

21

Climate Change Responses

25

Manufacturing Strategy

28

Digital Transformation Strategy

in the external environment and share future issues and trends. In addition, we

29

Diversity & Inclusion

work to strategically promote future ESG management by exchanging opinions

30

Innovation Strategy

Editorial Policy
The Meiden Group informs its stakeholders of its attitude and initiatives relating
to social responsibility through the two media, which are Meidensha Report(print edition and web edition) and the Meiden Group’s Sustainability (webedition).

Report Media
Meidensha Report print edition and web edition
A comprehensive collection of financial information
concerning the Meiden Group and nonfinancial
information such as initiatives that contribute toimproving corporate value and management strategies.

The content of these reports is determined after reporting to andconsultation with the Board of Directors. With regard to the content of thereports, we work to collect, analyze, and distribute information that meets our
stakeholders’ expectations and is of interest to our stakeholders through daily
public relations and IR activities, interviews with each department.
Furthermore, the Meiden Group is conducting internal communication
activities as part of the process of drafting reports in order to understand changes

Meiden Group’s Sustainability Web Edition
A summarized introduction focusing on specificinitiatives to tackle CSR issues that we consider
important.
https://meidensha.disclosure.site/en

based on the reports that have been created, and having each department

31
Special Feature Challenge to Achieve Carbon Neutrality by 2050:
		Developing Businesses that Contribute to Becoming
Carbon-Freereflect on its own activities, taking into account outside perspectives.
The Meidensha Report’s Drafting and Approval Process and Responsibility

Status of incorporation of the ESG Index (as of July 2021)

for the Meidensha Report
In drafting this report, we refer to the International Integrated Reporting

Our
Strategy

Framework proposed by the International Integrated Reporting Council(IIRC) and the Guidance for Integrated Corporate Disclosure and CompanyInvestor Dialogues for Collaborative Value Creation proposed by the Ministryof Economy, Trade and Industry, etc. The content of the report is based on
opinions and questions received from stakeholders on a daily basis, andwe drafted it by working with each organization to convey information in a

FTSE Blossom
Japan Index

S&P/JPX Carbon
Efficient Index

SOMPO
Sustainability
Indexmanner that is easily understood from a long-term general perspective, in orderto realize the Meiden Group’s ideal state of being. I have confirmed that thedrafting process and content are correct and proper.

FTSE Russell (registered trademark of FTSE International Limited and Frank Russell Company)
has confirmed through third-party investigation that Meidensha meets the requirements of
the FTSE Blossom Japan Index and has been listed in the Index. The FTSE Blossom Japan

Since 2013, Meidensha has issued the Meidensha Report as an integrated

Index is created by the global index provider, FTSE Russell. It is designed to measure thereport. It is a communication tool for all stakeholders, including shareholders(ESG) measures. The FTSE Blossom Japan Index is widely used for the creation and evaluationand investors, to understand the Company. Going forward, we will use the(Representative Director, President: Takeshi Miida)of sustainable investment funds and other financial instruments.

Corporate
Governance

CDP Evaluation Results (FY2020)• Climate change: B

Disclaimer

Medium-term Management Plan 2024

41

Research and Development and Intellectual Property Strategy

43	Public, Industrial & Commercial Sector Business Group andField Service Engineering Business Group47

Power Infrastructures Business Group

49

Mobility & Electrical Components Business Group

51

Overseas Businesses: Business Expansion in ASEAN

53

Corporate Governance

61

Board of Directors & Executive Officers

63

Outside Directors’ Round-Table Talk

65

Risk Management

66

Compliance67

Overview by Business Segment

68

Financial / Non-Financial Highlights

69

Outline of the Meiden Group

performance of Japanese companies with exceptional environmental, social, and governancereport as a tool for dialog and sincerely face our stakeholders to work tosustainably increase corporate value.

37• Water security: B

In addition to past and current facts about the Meiden Group, this reportcontains forecasts for the future based on plans, outlooks and business
policies and strategies in effect at the time of publication. These forecasts

MSCI ESG Ratings Evaluation (2021)

are our assumptions and judgments as based on information available at the

The MSCI ESG Ratings are ESG ratings by the US-based MSCI. MSCI analyzes
companies’ ESG risk management capabilities and gives one of 7 ratings from
AAA to CCC. In 2021, Meidensha received a rating of A in the MSCI ESG
Ratings.

time they were stated, and may differ from actual business activity results andevents in future owing to changes in conditions.

1

MEIDENSHA REPORT 2021

Corporate
Information

MEIDENSHA REPORT 2021

2

Meiden Group Corporate Philosophy

Meiden Group Corporate Philosophy (Corporate raison d’être)Corporate Mission

Corporate Slogan(Expressing the corporate philosophy in a single phrase)

It defines the raison d’être and corporate mission

Illuminating a more affluent
tomorrow
We continue to create value and technologies
for the realization of a more affluent andenvironmentally aware society.

Value Provision

For us, our “quality” is not only about the quality ofour products and services. There are two things thatmake our quality: “people” and “technology.” People
at Meiden strengthen ties with customers aroundthe world by being truthful and flexible. Meiden
Group technology contributes to society with truly
original products and reliable services created withexpertise. These two attributes make Meiden’s
unique quality, and create new connections withthe future. Making connections with our customers,society, and people living in it. These connections will
expand, and the power we have built will become
the energy for the next generation.
For the peace of mind and joy of our customers,
and the precious lives of people beyond them,
Meiden Group quality will connect with a more
prosperous tomorrow. This is our never-changing
mission.

It defines the unique value provision and core competence

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

(VISION)

In order to realize our Group Corporate Philosophy,
we must identify the direction for each individual
employee to aim towards and provide signposts
to help them proceed without losing their way. To
enable us to do so, we have made these five actions
our watchwords. The actions are mutually linked,
with one action calling forth the next, creating a cycleof action and growth. Based on this image, we callthis the Meiden Cycle.

Important Values

By sharing and practicing the Meiden Cycle as
the ethos underlying our actions, we seek to maximize
the growth cycle for each of our employees.

MEIDEN CYCLE

Ideal State of Being/Vision (Corporate Ideal State of Being)
Work to build a new society through integrity to the earth, society, andpeople, and through the power of co-creation

A sustainability partner that creates personal happiness and asustainable global environment

Important Values (Values Shared by Employees)●

Sustainability ● Diversity ● Integrity and responsibility ● Future-orientation

Corporate
Philosophy(MISSION)

Ideal State of Being/Vision(VALUE)

Build Loyalty

The Meiden Group Corporate Philosophy is as follows: “We seek to delight customers by offering high quality products,
services, and solutions to help solve their problems. Through these business activities, we aim to proactively solve
global environmental problems and other social issues and help achieve more affluent future. We must continually tackle
these challenges.”
This is our legacy from Hosui Shigemune, who founded our company as a local factory to manufacture and repair
electrical machinery. His will remains our common sense of values, even as these have evolved with the times, andremains at the core of all our business activities. Staying true to this Corporate Philosophy, the Meiden Group aims togrow with society and be indispensable to it. With that as our goal, we continually take the challenge of creating newtechnologies and value.

3

MEIDENSHA REPORT 2021

MEIDENSHA REPORT 2021

4

TOP MESSAGE Message from Management

Takeshi Miida
Representative Director, President

Work to build a new society through integrityto the earth, society, and people, and throughthe power of co-creation
Results of Medium-term Management Plan 2020
Under the medium-term management plan, V120 (FY2015
to FY2017), the EV and Overseas businesses werelisted as growth areas. Following on this result, we havepromoted both steady growth in business performance andinvestments for growth areas in the three years of Mediumterm Management Plan 2020 (FY2018 to FY2020).
Some major results of that are that we made sure we
invested in the growth businesses of EV and T&D, and weincreased revenue from the earnings-base businesses ofwater infrastructure and maintenance and servicing. We
also established MEIDEN NANOPROCESS INNOVATIONS,
INC. as an internal startup, promoted partnership with thePolish Startup Elmodis as open innovation, and ensured
that we promote initiatives aimed at further growth.
In the overseas area, we promoted the establishmentof new companies and M&A, etc., in overseas T&D
business in which market growth is anticipated, particularly

5

MEIDENSHA REPORT 2021

in Asian developing nations; however, there are still issues
to be addressed. Specifically, we were unable to re-enter
the overseas electricity market according to plan as a resultof lawsuit problems regarding PRIME MEIDEN LIMITEDin India, etc. Furthermore, in the electronic equipment
business, demand for semiconductor products fell shortof expectations and we failed to reach the targets in theplan. We are aware that overseas T&D remains an area tobe developed; however, we have determined that we havedone everything that we should.
Corporate growth is a cycle of investment andreturn. For many years, Meidensha has withstood times
in which that cycle did not operate effectively; however,under Medium-term Management Plan 2020, in FY2019,
we were able to achieve our highest ever net sales andoperating income while both strengthening our earnings
base and investing for the future. Management is a neverending relay, and while I am President, I believe it is anextremely important mission to think about what I will leave

for the next generation. Therefore, I am aware that the mostsignificant achievement of the Medium-term Management
Plan 2020 is that we have created a pathway for the next
generation.

requires dramatic changes to conventions and values thatpermeate society. I believe that some terms to explain thisinclude “global environmental problems,” “digitalization,”and “shrinking population in Japan.”Formulation of Ideal State of Being/Vision

Realizing a Resilient Society Where Humans Livein Harmony with Nature

The Meiden Group has formulated its 2030 Ideal State ofBeing/Vision with an eye to the worldview of 2050.
Until now, our Ideal State of Being/Vision has been “aheavy electric machinery maker that supports the futureof social infrastructure and industrial advancement, while
realizing sustainable growth and development.” This was
based on the idea that with environmental problems andsustainable growth as major management issues, strategic
development is extremely important from a medium tolong-term perspective.
On the other hand, just as many industries arefacing many technological innovations and rapid anddrastic changes in the business environment, we are no
exception in this respect. In order for the Meiden Groupto grow sustainably, we must go beyond the frameworkof a manufacturer and become "a company that provides
solutions and designs that embrace the challenge ofbuilding a society. In May 2021, we announced our new
Ideal State of Being/Vision, which is to “work to build a
new society through integrity to the earth, society, andpeople, and through the power of co-creation.”

Meidensha’s Ideal Society
When formulating our Ideal State of Being/Vision, first,
we discussed how we thought society should be. This isbecause companies must take the perspective of longterm value creation, rather than merely thinking about
short-term profit, in order to comprehensively steer global
issues in a positive direction. In other words, our Ideal
State of Being/Vision is a statement of the ideal Meiden
Group and the direction we would take by depicting ourideal society and back-calculating from there. In order toachieve our Ideal State of Being/Vision, we have articulated
our specific form and role as a “sustainability partnerthat creates personal happiness and a sustainableglobal environment. This label of “sustainability partner”
has two meanings. The first is a partner as a member ofsociety to achieve a sustainable global environment. The
other indicates our role as a partner to support various
stakeholders such as employees, shareholders, investors,
and customers, to achieve sustainability. Our Ideal Stateof Being/Vision is the result of repeated discussions bymanagement and young personnel, who will lead the
Meiden Group in the future.
Looking at the future of human society and the global
environment, it is clear that humanity is facing manysocial issues, and a paradigm shift is underway, which

Global environmental problems require the mostconsideration. In particular, climate change risks havegreatly impacted our daily lives, the economy, and society.
This is an issue that cannot be overlooked as it greatly
impacts the Meiden Group’s corporate management.
We believe that society can only be established if there
is a healthy earth, and that companies can survive andoperate business. Therefore, engaging sincerely withsocial demands and contributing to the solution of global
environmental problems through business is naturally our
responsibility if we wish to survive as a business, andwe understand that we also need to change our thinking
continue to be accepted by society.
In October 2020, the Japanese government made theCarbon Neutral Declaration, which aims for “effectively zero
greenhouse gas emissions by 2050.” Countries aroundthe world are making declarations that they will aim forzero carbon emissions or carbon neutrality, and society is
expected to shift so that it is more aware of the balance
between the economy and the environment.
To create such a society, it is important to build systems
and conduct technological innovation to achieve carbon
neutrality. For example, on the “electricity production” side,
they need to focus on renewable energy sources, and on
the “electricity consumption” side, they need to reduce
the amount of electricity consumed, and both of which
require technology. This will be difficult without significant
technological advancement; however, accompanied bymechanism creation and technological innovation, we cansee a future where the world changes greatly, just like in theindustrial revolution. Notwithstanding this, we will not beable to achieve such social engineering on our own. We areaware that co-creation and open innovation are essential.
The Meiden Group has contributed to the creationof a sustainable society and the evolution of various
industries through its businesses, products, technologies,
and services in the energy and water treatment sectors,
which support social infrastructure. Going forward, we will
focus on support for decarbonization based on delivery ofenvironmentally considerate products to customers, while
also conducting decarbonization in our own businessactivities. In addition, we aim to provide safety and security
to people, and create a resilient society where people livein harmony with nature by expanding businesses that are
more aware of increasing sales and maintenance andservicing of BCP products.

MEIDENSHA REPORT 2021

6

TOP MESSAGE Message from Management

A Society that Feels Safe, Prosperous, and Exciting
Digital advancement enables anyone around the world toshare a range of information at the same time, no matter
where they are. The impact of this on business will be
extreme. This is because we predict that the accelerationof labor-saving measures in a range of areas will greatlychange the structure of industry as urban areas and offices
become decentralized and knowledge and skills that
had been unrecognized until now become apparent. The
impact of the COVID-19 pandemic on top of these changes
has accelerated this social and economic paradigm shift,
and you could say that this equates to a transition from anindustrial society capitalism to a digital society capitalism.
Until the 20th century, industry required large-scale
investment in infrastructure and mass-production, andvalue was placed on quantitative economic expansion.
Using transportation methods as an example, the advent ofsteam trains caused us to pursue ever shorter timeframes
for the mass transit of people and goods. These days, therapid advancement of digitalization has liberated workers
from the constraints of time and space. With regard totime, as a result of telecommuting, workers have shorter
commuting times and travel times, which results in moredisposable time, and with regard to space, meetings canbe held online, which means that various meetings can beheld at any time, irrespective of time differences.
This is not limited to improved productivity of workers,
but also affects the thoughts and actions of people intheir daily lives. The standard by which people perceive
happiness is shifting from physical criteria, such as safety
and security of their livelihood, to psychological criteria,such as the enjoyment of diverse self-realization and the
pursuit of social connection. In other words, as the world
becomes more convenient, the definition of affluence isbecoming more diverse, and society will value happinessmore going forward.
However, we must not be a society that merely pursues
affluence. We must be a society that can provide a life withpeace and equality, where everyone can enjoy happiness.
I believe that Meidensha has the potential to contributeto the creation of such an ideal society. There are two
reasons for this. The first is that we have developed ourMeiden employees to be forward-thinking and takepride in their work. This future orientation creates better
products and new business models by taking their position
into customers' considerations and it is an importantvalue that must be maintained at all costs. The other isthe promotion of management ambidexterity, which has
become possible through the establishment of an earnings
base under Medium-term Management Plan 2020, as
mentioned previously. In addition to using profit earned inexisting fields to actively search for and invest in new areas
and rolling out products and services that contribute tocarbon neutrality, labor-saving and high-efficiency services

7

MEIDENSHA REPORT 2021

that utilize digitalization, and the BCP business, which
contributes to a safe and secure society, we aim to provide
value that excites society and contributes to the solution of
future social issues.
Using the future orientation that we have developed
as a foundation, we are enhancing systems to accelerate
the creation of a new society. Through the application ofdigital technology, we aim to create a stable, affluent, andexciting society.

A Society in Which Different Communities andPeople Can Coexist
Although the global population continues to grow,market downsizing due to a declining population
is a major issue in Japan, and it is a common challenge
faced by Japanese companies across industries andlocal governments, etc. Going forward, we expect majorchanges in the composition of the Japanese public
infrastructure market, such as social changes as a resultof the declining population and financial difficulties faced
by local governments, advancement of digitalization, andchanging needs such public private partnerships (PPP) andinter-municipal projects.
Also the COVID-19 pandemic has impacted ourcustomers, including electricity companies, municipal
governments, and rail operators, and caused them tochange their way of doing business. This means that theneeds of customers and the value sought by customers ischanging.
As a company that supports social infrastructure,
the Meiden Group has proposed many solutions tosocial issues in addition to ensuring that we make what
our customers need. However, as the composition of themarket and our customers’ needs change, we feel thatthe time has come to reconsider the products, services,and solutions that we provide and our ideal state of being.
For example, electricity companies are facing dramaticchanges in business conditions, such as expanded
operation of networks due to the reform of power systems,
total deregulation of the electricity retail market, ensuring
further neutrality of transmission and distribution business
units through legal separation, and expanded introductionof renewable energy. Retail arms of electricity companies
are increasing their business opportunities by selling
peripheral utilities such as gas, in addition to electricity.
We will not be able to succeed by using the samebusiness tactics as we have previously, in the face of suchgreatly changing business conditions. We deliver many
products to transmission and distribution companies;
however, we must also provide products and solutions inline with the trends of electricity companies. We also conduct
a water treatment and public infrastructure business andare considering ways to combine it with the strengths of
our other businesses. In fact, the Public Infrastructure

Business Planning Group, which we established in
April 2020, is already acting in ways such as promoting
planning, development, and implementation of area-widebusiness models that cater to changing businesses anddiversification of social needs, and proposing value throughthe integration of water and energy.
Going forward, it is a key for the Meiden Group tocollaborate with customers, municipal governments, andcompanies in different industries, to provide maximum
value and contribute to the solution of issues. Of course,
our core goals of providing green, safe, and reliable
electricity, which is the foundation of society and the livesof the people in it, and creating smiles through electricity,remain unchanged. This is the very role of a “sustainability
partner” which is what we aim to be. We aim to createa society in which diverse communities and people cancoexist, by connecting people and supporting diverse
lifestyles through electricity.

The Purpose and Values of the Meiden Group
It is essential for us to undergo a number of changes in orderto achieve our Ideal State of Being/Vision. We will embrace
the challenge of realizing a sustainable planet, while also
creating a source of sustainable growth for Meidensha,
based on technology to create and use electricity, which
has been our bread and butter for more than 120 years
since Meidensha was founded in 1897.
Because of the pride and achievements of the Meiden
Group in contributing to the sustainable development ofsociety by creating and providing a variety of technologies
and services focused on electrical equipment that supportssocial infrastructure, we may be able to seek a future inwhich we just continue to specialize in steadily meeting the
expectations and demands of society and our customers.
However, once we return to the aspiration that we haveheld since our founding, "To build a more affluent world
with the power of electricity," we find that our mission andpurpose is to affluent the lives of many people beyond our
products, to develop our technology, and to affluent theworld through our business.
The founder, Hosui Shigemune believed that when
the age of electricity arrived, it would not only mean the
proliferation of motors, but that the transmission anddistribution of electricity would be necessary, and thatstatic equipment such as transformers would be required
to achieve this. Since our founding, we have manufactured
transformers for lamps in addition to motors, andcontributed to the advancement of electricity in Japan.
Our business, which began with motors, has led todevelopment and production of a range of heavy electricalequipment, and allowed us to grow into the Meiden Group,
which supports modern social infrastructure.
On the other hand, we are now facing the issue

that society is undergoing the aforementioned structuralchanges and we must respond to social issues as they
become apparent. Particularly from the perspective of
the global environment, it is extremely important to beproactive and work together with like-minded compatriots
to achieve a carbon neutral planet. Therefore, I believe weshould remember the DNA of social contribution and spiritof innovation that Hosui Shigemune had from the beginning
as well as the integrity and responsibility to customers thathas supported social infrastructure for more than 120 years
since then, and take on the challenge of creating a newsociety by expanding and strengthening our position, inorder to be an attractive company and organization.

Medium-term Management Plan 2024
Basic Policy
The Medium-term Management Plan 2024, which covers
the four-year period from FY2021 to FY2024, wasestablished by a backcasting approach from our Ideal
State of Being/Vision. It is a basic policy and strategy forthe “jump” phase to achieve high quality growth based on
the results of the past six years of the “hop” phase (V120)
and the “powerful step” phase (Medium-term Management
Plan 2020).
Our three basic policies are realization of highquality growth, promoting ESG management, andpromoting management ambidexterity. In order torealize high-quality growth, we will correctly understandthe needs of society and promote work reforms based on
the two pillars of increasing competitiveness by providing
customer experiences through provision of systems andservices, and conducting a sweeping review of internal
digital transformation and workflow and arranging groupfunctions. In order to promote ESG management, we

MEIDENSHA REPORT 2021

8

TOP MESSAGE Message from Management
Focus Areas and Strategies for an Ideal Society
will strengthen initiatives based on the four values ofsustainability, diversity, integrity and responsibility and futureorientation. In order to promote management ambidexterity,
we will continue to improve existing businesses and use theprofits from these businesses to explore and invest in new
fields. We will promote initiatives to enhancing both humanand organizational capabilities, such as the developmentof innovation processes, the fostering of diverse humanresources who will be responsible for new development,
and the exploration and co-creation of new social needs,
and focus on building a foundation for sustainable growth.

Conducting Organizational Reform
In executing Medium-term Management Plan 2024, we
conducted organizational reform. The purpose of this was(1) to divide our businesses into four groups and clarify
responsibilities and authority for the Sales Business Unit,
the Manufacturing and Engineering Business Unit, andJapanese subsidiaries to swiftly and appropriately respondto environmental changes and diverse customer needs, (2)to achieve multi-skill development and training of personnel
in the Manufacturing and Engineering Business Unit andflexible response to fluctuating production load, and (3)to promote enhancement of planning functions throughcentralization and work reforms.
When thinking about carbon neutrality, thetechnological elements differ in the fields of electricity
production and electricity use. Therefore, we have divided
the conventional Social Infrastructure Business into two
separate business groups, the Power Infrastructures
Business Group, for electricity producers and transmitters,
and the Public, Industrial & Commercial Sector BusinessGroup, for electricity users side, in order to mutuallyenhance the technological elements.
We anticipate that our products will contribute toincreased efficiency in power transmission and distribution.
In terms of power generation, the growth of the wind andhydroelectric power business is key.
On the other hand, for electricity users, it is important todeliver products that are conscious of energy conservation.
This also applies to the Mobility & Electrical Components
Business Group. The Field Service Engineering Business
Unit Group will maintain products produced by these threegroups for safe and reliable use, and provide solution
services for energy conservation and optimization of allelectrical equipment systems.
Dialog with employees is crucial for the fulfillment of
this plan. It is important for all officers, including me, toengage in direct dialog with employees at each site, foremployees to understand the intent of this plan, and forthem to internalize it. We will increase our responsivenessand flexibility as an organization with regard to a range ofdifficult circumstances by ensuring that all employees ofthe Meiden Group are aligned.

9

MEIDENSHA REPORT 2021

Initiatives to Enhance the Foundation for Business
Activities“Production strategy,” “professional development andwork-style reforms,” “research and development strategy,”“building a robust financial base,” and “improving thequality of a foundation for business operations” werepriority measures under Medium-term Management Plan
2020. Under Medium-term Management Plan 2024,
we have used the COVID-19 pandemic as a trigger topromote responses to sudden changes in the environment
in conjunction with these.
With regard to production strategy, we are improving
manufacturing efficiency such as through automation of
manufacturing of mass-produced products and automationof inspection processes. With regard to research anddevelopment strategy, we will inject resources in initiatives
for the development of new businesses and products
under the umbrella of “ambidextrous R&D.” With regard
to building a robust financial base, we will increase asset
turnover ratio, conduct efficient investments, and ensure
return on investments. With regard to improving the qualityof a foundation for business operations we will work tocontinuously improve the quality of products, systems, andservices as a company that supports public infrastructure,
and actively work to eliminate industrial accidents, conduct
thorough corporate governance, and adapt to the newwork-style of remote work, etc.

Optimal Allocation of Capital to Focus Areas
Under Medium-term Management Plan 2024, we defined
the four areas of “renewable energy,” “sustainableinfrastructure,” “green mobility,” and “smart industry” asfocus areas to be an attractive company that takes a leadrole in tackling the challenge of creating a new society
through business activities. These are the areas in which
we are most able to leverage our strengths, and we takethe lead in solving social issues and creating social value
through co-creation with other companies and customers.
Furthermore, although we are working to optimally
allocate resources and implement various strategies in focus
areas, we are particularly aware of the following three issues.
The first is the expansion of overseas businesses.
From the perspective of decarbonization, the North
American T&D business has reached a turning point. In
North America, environmental regulations restricting SF6
gas, which contributes greatly to the greenhouse effect, havegrown stricter; demand for environmentally friendly vacuum
circuit breakers has been increasing; and there has been
greater demand for electricity distribution equipment thatuses vacuum interrupters, due to rearrangement of electrical
power systems to accommodate decentralized powersources from renewable energy. Against this backdrop, we
have positioned the North American market as a promisingmarket for the T&D business, and we established MEIDEN

Renewable Energy● Increasing small to medium hydroelectric system capabilities and expansion of the hydroelectric and wind power

generation O&M business● Focusing on expanding solutions businesses that use renewable energy

Sustainable
Infrastructure● Leading the construction of sustainable next-generation infrastructure by fusing high-quality products andmaintenance services, with digital technology● Focusing on expanding environmentally considerate products and incorporating smart technology, such as IoTtechnology, in operation and maintenance of facilities● Enhancing activities to secure new orders for further business expansion in the EV motor and inverter business inGreen Mobility

order to reduce greenhouse gas emissions in the transportation sector● Increasing earning potential by building mass production lines that support low cost and high quality● Focusing on increasing sales of EV testing equipment compatible with model-based development and services, andachieving synergistic effects, as the only manufacturer of both EV components and testing equipment● Enhancing cutting-edge technology, and partnerships and promoting labor-saving and energy-saving measures in

Smart Industry

industry and digitalization in society● Focusing on increasing the level and incorporating smart technology in maintenance of industrial products using digitaltechnology, increasing sales of environmentally considerate motors, and expanding share of semiconductor products

AMERICA SWITCHGEAR, INC. in 2020 to manufacture andsell the world’s first commercialized 145 kV Ecotank Type
Vacuum Circuit Breaker. Although we have reinforced thesocial infrastructure business, particularly in ASEAN, we feelthat we must consider reallocation of resources, including
restructuring to increase efficiency, rather than equally
allocating management resources as we have in the past.
The second is the enhancement of the Field
Service Engineering Business Group, which is rollingout maintenance and servicing of electrical equipment.
The majority of its resources are people, and it is ideal
to incorporate technical service staff throughout the long
lifecycle of products that can span tens of years. However,
the COVID-19 pandemic has limited the movement ofpeople, so if we were to increase personnel at each site,
it would increase fixed costs and decrease earnings.
Therefore, we are focusing on professional development
aimed at multi-skill development, and development of abase for remote monitoring technology, such as technology
for automatic data collection using the Cloud and analysis
of operating status.
The third is reform of the business model of thePower Infrastructures Business Group and the Public,
Industrial & Commercial Sector Business Group. The
need to inject an extremely large number of resources
during the period prior to receiving an order has been an
issue in these business areas for many years. Even so,
we are engaging in initiatives of the Public Infrastructure
Business Planning Group described above, as well as PPP
such as the comprehensive water supply project in theeastern Gunma region, and we are working to create new
business models that utilize these partnerships.
In this way, we will work toward optimal allocationof resources for business expansion in focus areas,
based on changes in business conditions and features ofmanagement resources.

Commitment to ESG Management
In order to realize our ideal society, we must have many
partners that share our determination, including ourcustomers and other companies. In addition to “working tobuild a new society through integrity to the earth, society,and people, and through the power of co-creation,”
we must first ensure that our business is gentle to theenvironment and our employees are happy.
From an environmental perspective, we developed theSecond Meiden Environmental Vision in 2021, with the aimof reducing our environmental impact throughout the value
chain. Specifically, compared to FY2019 levels, we aim to
reduce scope 1 and scope 2 greenhouse gas emissions
by 30% and scope 3 emissions by 15% by 2030. In
order to achieve this, each employee must change theirthinking. In order to truly aim to be an environmentallyconsiderate company, we will work for the entire Meiden
Group to understand the impact their activities have on
the environment, eliminate waste, and increase production
efficiency.
We will contribute to the solution of our customers’issues, support the realization of a sustainable society, andfulfil our responsibility as a company that is a member of asustainable society. This is what we define as the role of a“sustainability partner.”

Aiming to Be a Company that is Chosen by
Customers and Relied on by Society
In 2027, Meidensha will mark its 130th anniversary. By then,we hope to be a company that contributes to the realizationof a carbon neutral society. To this end, it is importantto thoroughly implement Medium-term Management
Plan 2024, so we are committed devote ourselves toimplementing management reforms in this one-year period.
I am proud that each and every Meiden Group
employee sincerely tackles the issues of our customers
and works with the pride that they are supporting social
infrastructure and benefiting society. I sincerely hope that
Meidensha continues to be a company that supportssocial infrastructure in 100 or 200 years from now, while
continuing the social contribution and sincere attitude thatis our corporate DNA.
We will continue to actively challenge ourselves to create
new technologies and new value, in order to contribute to
the realization of an affluent and comfortable future society.

MEIDENSHA REPORT 2021

10

OUR
VALUE

FY2020Spirit of “for Society and for People”
In the Meiji Era, the name of Meidensha represented the concept of creating a place where
ambitious friends can come together to “build a more affluent world through the power ofelectricity.” He was a firm believer in looking beyond products to support the lifestyles ofthe people who use them and use the technologies therein to enrich society. 120 years
have passed since the Company was founded, but we still carry that ambition and belief.

Hosui Shigemune

Since its founding in 1897, Meidensha has single-mindedly pursued
manufacturing excellence while contributing to the sustainable advancementof society by creating a variety of technologies, products, and services, with afocus on the Japanese social infrastructure sector.
Our commitment to manufacturing excellence, inquisitiveness, and spiritof challenge originate in the determination of our founder, Hosui Shigemune,
to “build more affluent tomorrow through the power of electricity.” He was afirm believer in looking beyond products to envision prosperous lives for many
people who use them and refining technologies to enrich society throughbusiness. This has been our very mission as a manufacturer of electricalequipment and the reason for our existence.

1940

Net sales

231.2
8.3

billion yen

Operating income* Figures from FY1990 onwards are consolidated totals.

1960

1980

2000

2020

Establishment of stock company

1897

1970s

1980s

1990s~2000s

2010s

2012~20142015~20172018~2020

Founding and Birth of “The Motor
expert Meiden”

Evolving into “Meiden a PowerElectronics Company”

Evolving into “Meiden a System
Engineering Company”

Approaching Our Centenary

Aiming to Be “Meiden a Global
Company”

Supporting Society through the“POWER” of Manufacturing

Creating a “New Future” throughProduct Strength

Investment in Equipment andPersonnel for Great Growth

In 1897, our founder Hosui Shigemune started
a factory at a time when Japan depended on
imported products for much of its industrial
machinery. His efforts led him to devise an
induction motor design method in 1905. In thefollowing year, he started a full-scale
production of motors to his own design
method.
Meidensha’s motor production helped tomodernize Japanese industry and became thecornerstone of our value-building that still
persists today.

In about 1970, society was beginning to prize
quality over quantity. Likewise, we switched
our management strategy from quantity based
to quality based. On the technical side, our aim
was to develop new products that made fulluse of our employees’ creativity. At this time,
we began to cement our status as amanufacturer of heavy electrical equipment,
having developed new products that combined
heavy electrical technology (power) with thelatest electronics technology.

In the latter half of the 1980s, economic
expansion led us to boost our production
capacity at factories and upgrade our
production system. We expanded our family ofGroup companies and developed a variety ofbusinesses to make us a stronger enterprise.
We grew to have three core business pillers,
adding mechatronics and electronics to ourexisting power electronics field. We integrated
technologies from each of these fields topromote management, monitoring, and control
systems.

Japan’s business environment changed
drastically after the collapse of the bubble
economy, and management was faced with atime of crisis. However, the legacy we had
inherited from our predecessors, technologies
and well-developed human resources, became
the base for a new era of expansion as we hit
the 100-year milestone in 1997. Upon our
110th anniversary in 2007, we christened
ThinkPark Tower, a facility for our head office,surrounded by abundant greenery in Osaki,
Shinagawa City, Tokyo, where our company
was founded.

The Meiden Group has been expanding its
presence in markets outside Japan, especiallyin the ASEAN region. As part of this, wetransferred to our overseas subsidiaries astronger regional supervisory role; e.g. building
partnerships with enterprises outside Japan,
and opening training centers for local staff.
We started to focus on using the IoT and AI to
increase our product competitiveness andsystem technology. We also enhanced our
one-stop service, which ranges fromequipment manufacture to maintenance,
inspection, and operations and management.

Since the Great East Japan Earthquake, in the
midst of great changes in the global businessenvironment, due to changes to Japaneseenergy policies and the high value of the yen,etc., we have conducted business composition
reforms such as group restructuring, expanded
the transmission and distribution business,
which we inherited in FY2012, and establisheda foundation for growth businesses, such as
motors and inverters for electric vehicles, inorder to enhance our manufacturing
capabilities for a new leap forward.

We have continued to benefit from the resultsof the previous medium-term management
plan, and we aimed to jump from aperformance recovery phase to a growthphase. According to this basic idea, we
worked to both strengthen the “earnings baseof businesses in Japan” and “expand
overseas business,” and worked to produce
results through new partnerships such as
EAML Engineering and PRIME MEIDEN
LIMITED in India. In December 2017, wecelebrated our 120th anniversary.

We consider this to be a “powerful step
forward” phase for a future JUMP. We
established new sites and production lines toincrease future revenue through active capital
investment for “Growth Businesses” such as
the Overseas and Automobile-related
Businesses, and increased the earning
capacity of “Earnings-Base Businesses.”
Creation of a foundation is proceeding, such as
opening a new technology center to contributeto the development of high-level personnel,
and a human resources system that is suited tothe changes of the age.

11

MEIDENSHA REPORT 2021

billion yen

Operating income

Our spirit of “for society and for people”
has been testament to our existence
more than 120 years.

The Path of Value Creation

1917 1920

Net sales

Founding Ambition

A more detailed timeline may be found on our website.
https://www.meidensha.com/corporate/corp_05/index.html
A more detailed timeline may befound on our website.

MEIDENSHA REPORT 2021

12

Our Value

The Meiden Group
Value Creation Process

A Resilient
Society Where
Humans Livein Harmony with
NatureSociety and Customers
Partners
Together with our partners,
we will contribute to thesolution of social issues
through our business strategy

Government andAdministrative
Offices

In order to realize our ideal society and our 2030 Ideal State of Being/Vision,
the Meiden Group will conduct reforms with the aim of realizing a sustainable
society and sustainable growth of the Meiden Group.

A Society that
Feels Safe,
Prosperous,and Exciting

Important Values
E

S

S

Customers

Diversity

Sustainability

E

G

Integrity and responsibilityS

A sustainability partner thatcreates personal happinessand a sustainable global
environment

Future-orientation

Focus Areas
toward the
Ideal Society

Local
Communities

2030 Ideal Stateof Being/Vision

Sustainable
Infrastructure

Renewable
EnergyIdeal
SocietyWork to build a newsociety through integrityto the earth, society, andpeople, and throughthe power ofco-creation

Green
Mobility

A Society
Where Different
Communities andPeople Can
Coexist

NPOs/
NGOs

Needs-based
initiatives

Smart
Industry

Carbon Neutrality
Suppliers

Environmental Changes
Digitalization and
Digital Transformation

Global Environmental
Problems

Declining Populationin Japan
13

MEIDENSHA REPORT 2021

Pandemic

Realizing environmentally friendly
lifestyles and industries

Wellbeing
Building a society basedon personal happiness●Supporting decarbonization based on
environmentally considerate products●

Realizing a safe, secure, and convenient
lifestyle●

Shifting toward decarbonization in the
Meiden Group●

Building a society that allows forconnection and diverse lifestyles●

Providing excitement by being a leader
in depicting a new world

Diverse Values
MEIDENSHA REPORT 2021

14

Our Value

Social Value Created through Business

Power Infrastructures Business Group

Public, Industrial & Commercial Sector Business Group

Mobility & Electrical Components Business Group

Field Service Engineering Business Group

The Power Infrastructures Business Group manufactures andsells power generation systems to generate the electricity that
supports industry and lifestyles, substation equipment for powertransmission and distribution, and products and systems forgeneration of renewable energy, which is expected to increase
going forward, and efficient use of electricity.

The Public, Industrial & Commercial Sector Business Group
manufactures and sells various electrical equipment and related
systems through safe and efficient use of electricity in order torealize infrastructure that support people’s affluent lifestyles,
facilities and competitive factories, etc.

The Mobility & Electrical Component Business Group manufacturesand sells precision component products and testing equipment
to support cutting-edge manufacturing and R&D, electric vehicle
drive systems to support the rapidly progressing electrificationof automobiles, and motors and inverters to contribute to various
industries through high efficiency and control technology.

The Field Service Engineering Business Group provides proposals
such as life-extending and energy-saving measures, services suchas remote monitoring of equipment, focusing on maintenance of
products delivered by Meidensha.

Products and Services

Main Customers

Power Generation and T&D Equipment
Sale of generators and T&D products(transformers, switchgears, surgearresters, and vacuum interrupters, etc.)
Power & Energy• Generation, transmission, anddistribution systems• Power monitoring and control systems• Hydroelectric power generationequipment• Photovoltaic PCSs
• Wind power O&M

Products and Services

Main Customers

Products and Services

Social Infrastructure Systems• Heavy industrial manufacturers• Overseas electric power companies,etc.

• Generation, transmission, anddistribution systems• Supervisory control system• UPS• Electric power companies• Power generation companies• Local governments, etc.

Railways

Value
Provision

Realizing green,safe, and stableelectricity
provision• Power supply systems• Supervisory control system• Overhead contact line inspection system

Motor Drive Solutions• Government offices • Broadcasters• Buildings• Facilities• Hospitals• P rivate factories,etc.

• Elevator hoisting machines• Motors for injection molding machinery• Electric forklift motors and inverters• Various general industry motors and inverters• Automatic guided vehicles, etc.

• JR companies• Public railways• Private railways• Overseas urban high speed rail, etc.

• EV/PHEV motors and inverters• Vacuum capacitors• Industrial PCs• Pulse power supplies• Semiconductor manufacturing
equipment manufacturers

Mobility T&S• Automobile production testing systems• Automobile manufacturers(engine benches, drivetrains, dynamometers) • Automotive parts manufacturers• Automotive research institutions, etc.

Achieving Personal Happiness andServices

Main Customers• Maintenance consulting• Preventative maintenance• Corrective maintenance• Operation and management• Breakdown maintenance• Overall diagnosis• Life-extending treatment• Renewal plans• Carbon neutrality (“Support for Highefficiency Installations for Facilities withTargets”(SHIFT))• General building management, etc.

• Government offices• Water infrastructure-related organizations(local governments, etc.)• Railway operators• Various industry-related organizations (ironand steel, automotive, electrical equipment,machinery, etc.)• Facilities, buildings, hospitals, etc.

Technological Training Center: Manabi-ya• Education system with full-time
instructors• On-site education using actual
equipment• Experiential education using ICT

Realizing a secure andsafe society throughmaintenance services
Value
Provision

Value
Provision

Value
Provision

MEIDENSHA REPORT 2021

• Automobile manufacturers• Automotive parts manufacturers

Electronics products• Local governments, including the
Bureau of Sewerage Tokyo Metropolitan
Government• Overseas private businesses, etc.

Contributing
to building
sustainableinfrastructure15• Elevator manufacturers• Machine tool manufacturers• Forklift manufacturers• Warehouse companies• Factories of various manufacturers, etc.

EVs

Water Infrastructure• Monitoring and control systems forfacilities for drinking water and sewage
treatment plants• Power generation, transmission, anddistribution systems• Industrial wastewater treatment systems• Operation and Maintenance• Ceramic Flat Membranes

Main Customers

Contributing
to the realizationof cutting-edge
technology andtechnologicalinnovation formobilitya Sustainable Global Environment
MEIDENSHA REPORT 2021

16

OUR
APPROACH
ESG Vision

Aiming to be a “sustainability partner”
by achieving personal happiness anda sustainable global environment

In the midst of such social upheaval, we havere-depicted our ideal society of 2030 by combining
Meidensha’s DNA of “integrity,” “responsibility,” and “social
contribution,” which are our strengths, with the DNA that
we must not lose of “innovative spirit” and “independence.”
This ideal society is “a resilient society where humans live inharmony with nature,” “a society that feels safe, prosperous,
and exciting,” and “a society where different communities
and people can coexist.” With such a mindset, the Meiden
Group has set its vision of an ideal state of being, whichis to “work to build a new society through integrity to theearth, society, and people, and through the power of cocreation.”

How can we contribute to the creation of such a newsociety? We can realize this new society through businessactivities by focusing on the four areas of “renewableenergy,” “sustainable infrastructure,” “green mobility,”and “smart industry,” based on the infrastructure-related
technology and knowhow that we have developed overmany years, and the trust and results of our customers.
In order to achieve this society, the values that mustbe held by everyone who works in the Meiden Group are“sustainability,” “diversity,” “integrity and responsibility,” and“future-orientation.” We will apply these four values to our
day-to-day activities, and under Medium-term Management
Plan 2024, the Meiden Group aim to take a great jump
and achieve sustainable corporate growth, by promoting
management focused on ESG and sustainability.

The Meiden Group’s ESG Management
Imagining the society aimed for in 2030, and establish an Ideal State of Being/Vision.
Back-calculate what should be done this year, and deepen management and business strategy by focusing on ESG management.
Hypothetical Social Changes

The Meiden Group’s Ideal Society

Climate Change
Digitalization
Diversification

Ideal State of Being/Vision

Back in the Meiji era, one young man had the strong
conviction to “enrich society through the power ofelectricity,” and this became the foundation of the electricity
business called Meidensha. Since its foundation in 1897,
Meidensha has developed a range of businesses that
support society and industry according to the ambitionof the founder, Hosui Shigemune, of “illuminating a more
affluent tomorrow.” As we mark 124 years since thefoundation, times have changed and the social environmentis dramatically different; however, our purpose to “enrichpeople’s living through electricity” is incorporated in our
corporate philosophy and carried in the hearts of every
employee.
When formulating Medium-term Management Plan
2024 launched in April 2021, we established an internal
working group a year before releasing the plan to discuss

17

MEIDENSHA REPORT 2021

the main topic: “how can we become a company that isneeded by society over a long period?”
Currently, the social environment, in which we operate,continues to undergo drastic changes, such as theimpact of accelerating climate change since the industrial
revolution, digitalization through technological innovation,and diversification of values and lifestyles of people.
This has been exacerbated by the sudden spread of the
COVID-19 pandemic in 2020, leading to a year of upheaval.
The whole of society has come to deeply reconsider
the questions of “what is society?” and “what iscommunity?” At an individual level, the frequency of remote
working increased, which has made us deeply grateful foran environment and society in which we can live normal
lives, and have been powerfully aware of the importance ofsociety and community.

DNA that must not be lost
Innovative spirit, independenceWork to build a new society through integrity to the earth, society,

Focus Areas toward
the Ideal Society

Renewable
EnergyImportant Values

Sustainability

E

Background to Development of the Vision

Integrity, responsibility, social contribution

and people, and through the power of co-creation

Managing Executive Officer
Chairman of the ESG Management
Promotion Committee

Akio Ikemori

The Meiden Group’s DNA (Strengths)

A resilient society where humans live in harmony with nature● A society that feels safe, prosperous and exciting● A society where different communities and people can coexist●

Sustainable
Infrastructure

S

Green
MobilityS
Diversity

Smart
Industry

G
Integrity and Responsibility

E

S

Future-orientation

What is a Sustainability Partner?
Based on the initiatives mentioned above, underMedium-term Management Plan 2024, which launchedin April 2021, we established the ESG Management
Promotion Committee, led by the President, and the
ESG Management Promotion Office, which is mainly
responsible for implementation, as a promotion frameworkthat focuses on ESG management. Currently we are
performing identification and analysis of issues, specificactionplans, and KPIs, etc., and we plan to finalize andannounce this in 2021. In addition, we defined the term
“Sustainability Partner” to specifically articulate the Meiden
Group’s ideal form. A “Sustainability Partner” fulfils dual

Work to build a new society
through integrity to the earth, society, and people, and through the power of co-creation
A sustainability partner that creates personal happiness and a sustainable global environment

Carbon Neutrality
Realizing environmentally friendly lifestyles and industries• Supporting decarbonization based on environmentally considerate products• Shifting toward decarbonization in the Meiden Group

Wellbeing
Building a society based on personal happiness•Realizing a safe, secure, and convenient lifestyle •Building a society that allows for connection and diverse lifestyles•Providing excitement by being a leader in depicting a new world

MEIDENSHA REPORT 2021

18

Our Approach

ESG Visionroles to realize the Meiden Group’s goals of achieving
personal happiness and a sustainable global environment.
The first is a partner as a member of society to achievea sustainable global environment. The other indicates ourrole as a partner to accompany various stakeholders suchas employees, shareholders, investors, and customers, toachieve sustainability.

Value Provided as a Sustainability Partner
Our main contributions include contributing to carbon
neutrality, which enables environmentally considerate
lifestyles of people and industry and another is wellbeing,
the idea that focuses on building a society based on
personal happiness. Firstly, contributing to “carbon
neutrality” requires supporting a carbon-free society
based on environmentally considerate products, as wellas, making the Meiden Group shift toward becoming
carbon-free. Secondly, wellbeing requires the provision of

infrastructure and services for safe and secure lifestyles,
the creation of a society with a feeling of connection anddiversity, and the provision of excitement to society by the
Meiden Group taking the lead in depicting a new world.
The role of a “Sustainability Partner” combines these two
aspects, and we have a firm conviction that fulfilling this role
through our business activities will lead to the realization of
our ideal society.

ESG Promotion Structure

President

Changes from ESG Management
FY2021 is the first year for the Meiden Group as a
Sustainability Partner. In 2021, we will firstly ensure
thorough penetration and internalization of “the Meiden
Group’s ideal form and ideal society” and “the importantvalues for us to hold to achieve this, in order to conduct
initiatives” throughout the company.
There are four main changes to promote ESG
management.
The first is value provision. We will focus management
resources on value provision to “carbon neutrality”
and “wellbeing.” With regard to medium-to-long-term
greenhouse gas emissions reduction targets, whichhave been upwardly revised from this fiscal year, we arechanging our business portfolio such as by increasing the
proportion of low-carbon businesses with low emissions tosales ratios, such as EV, maintenance services, and small
and medium-sized hydropower generation businesses asa way to reduce greenhouse gas emissions at the productuse stage.

The second is “method of provision.” We will shift
from our previous business model of selling products andservices to a new business model as a solution designerthat analyzes existing problems and proposes solutions
to those problems. In the end, this will help us lead
improvement and innovations in new society.
The third is our “action guidelines.” We will transition
from a passive, short-sighted, self-completion stance tomore future-oriented proposals and cooperative action
by seeing as the opportunities rather than the risks of themany environmental changes we are experiencing.
Finally, the fourth change of “evaluation criteria” forms
the basis for the above three changes. In addition to theexisting evaluation that is based on a financial perspective,
we will also introduce evaluation criteria for performancethat measures positive impact on people, society, and theenvironment.
In this manner, we hope to create a source ofsustainable growth through management design that backcalculates from these goals.

Environmental Committee
ESG Management Promotion Committee(Chairman: Managing Executive Officer,
Akio Ikemori)Monozukuri & Productivity Improvement ProjectWorkstyle Reform & Corporate DX Promotion Project

ESG Management
Promotion Office

HR Development & Diversity Promotion Project

Business Units
and Planning
Departments
Japanese andOverseas Group
Companies

Strategic Innovations Acceleration Committee

Meiden Group ESG Management Chart

A sustainability partner that creates personal happiness and a sustainable global environment
Value
Provision

Focus areas

Carbon Neutrality

Wellbeing Partner

Support municipal governments andcompanies to move toward carbon-free

Providing safety and security
Creating a society that achieves connection and diverse lifestyles
Providing excitement by being a leader in depicting a new world

Renewable energy

Sustainable infrastructure

Green mobility

Foundation to
supportbusiness
activities

Manufacturing capabilities and productivity

Shifting toward decarbonization in the Meiden Group

Sorting of resources and waste

Sustainability

Human capital (diversity, inclusion, and job satisfaction)

Education and evaluation systems

Diversity

Understanding opportunities and risks

Efficient utilization of resources (portfolio and finance strategy)

MEIDENSHA REPORT 2021

and a key player to realize
sustainability.

Integrity andresponsibility

Stakeholder engagement

Future orientation and innovation

19

continue to fulfil its role as a partner

Value creation, business models, and digital transformation

Dialogs (ESG briefing, etc.)

we need to prepare for future risks while remaining so.
Sustainability management lies at the intersection of thesetwo concerns, and we aim to continue to generate profit
while altering our business model to meet the needs ofsociety, and contributing to society. We embrace thechallenge of creating a new society through dialog with
communities and collaboration transcend company
borders. The Meiden Group will state its “organizational
ambitions” and act accordingly.

The Meiden Group will

Design of new social systems (framework)

Disclosure (Annual Report and CSR Report)

The social responsibility of companies has come into
question as society is undergoing dramatic changes.
Corporate activities over the next few decades will
determine the fate of the global environment and the futureof global society. We believe that social contribution, which
has been treated as a peripheral concern until now will
become a central concern, and ESG management is a partof that. That is not to say that we can forget the original
purpose of companies, which is to “generate profit,” but

Smart industry

Products, systems, and services based on electricity (environmentally friendly)
Methods

Conclusion

External evaluation
Futureorientation

MEIDENSHA REPORT 2021

20

Our Approach

Climate Change Responses
Environmental Vision
The Meiden Group will “contribute to the creation of asustainable society” through its businesses in the energy
which support social infrastructure and water treatment,
as well as its products, technologies, and services, which
it has developed up to this point, while minimizing theenvironmental impact of its business activities.
The Environmental Vision identifies realizing “a carbonfree society,” “a circulating society,” and “a society inharmony with nature” as the missions of a 21st-century
company, and lists them as goals. We are working toconduct ESG management with “human resources andcommunication” at its core.

A Carbon-freeSociety

Promote the 3Rs for resources

A Society in Harmony
with Nature
Conserve natural resources

Human Resources andCommunication* Details concerning the Environmental Vision are available on the website.
https://meidensha.disclosure.site/en/themes/78

The Meiden Group aims to engage in environmental
management and achieve corporate growth by adapting
to and mitigating climate change, recycling resources, andconserving biodiversity which are defined as issues, inorder to achieve a sustainable society.

Disclosure Based on TCFD*1
Recommendations
Meidensha has endorsed the TCFD recommendations, andconducted disclosure in accordance with the information
disclosure framework recommended by TCFD (governance,
strategy, risk management, and metrics and targets, relating
to risks and opportunities associated with climate change).
Going forward we will consider further widening the scopeof disclosure, and we will further enhance governanceand business strategies
relating to climate change,
according to the results of
scenario analysis.

21

MEIDENSHA REPORT 2021

*1 TCFD: Task Force on Climate-related Financial Disclosure established by the Financial
Stability Board (FSB).
*2 S
 BT Initiative: An international initiative by the United Nations Global Compact (UNGC),
the Worldwide Fund for Nature (WWF), the CDP, and the World Resources Institute (WRI).
*3 Paris Agreement: An international framework “to limit average global temperature rise
to below 2°C compared to pre-industrial levels and to strive to limit it to 1.5°C,” which
was adopted at COP21 in 2015.

FY2030 greenhouse gas emissions reduction targets

First Meiden Environmental Vision (Released in May 2018)

Second Meiden Environmental Vision (From April 2021)

Emissions from business activities (scope 1+2)

30% reduction (compared to FY2017)30% reduction (compared to FY2019)

Emissions from product use (scope 3, category 11)NA

15% reduction (compared to FY2019)

Refer to p.68 – “Performance Highlights” for the Meiden Group’s performance of greenhouse gas reduction volume

Main Measures to Cut Greenhouse Gas Emissions
FY2030 greenhouse gas emissions reduction targets

Reduction measures (extract)
Replacing SF6 gas (replacement with dry air, etc.)
Capital investment (replacing aging equipment, introducing high-efficiency equipment, replacing gas with electricity, etc.)●R enewable energy procurement (non-fossil fuel certificate, power menu, etc.)●S witching company-owned cars to electric vehicles● 

Emissions from business activities (scope 1+2)
30% reduction (compared to FY2019)

Emissions from product use (scope 3, category 11)
15% reduction (compared to FY2019)
Overall●

Eco-friendly product design (eliminating use of SF6 gas, and downsizing products and making them more efficient)
Revising business portfolio (increasing ratio of businesses with low carbon emissions per unit of sales such as EV,
maintenance services and small and medium-sized hydropower generation)●●

Generating innovation
Introducing internal carbon pricing●●Introducing Internal Carbon Pricing
to make investment decisions. For now, we will makead-hoc reforms starting from the following conditions.
● Internal carbon price: 3,000 yen/t- CO2 (be amended
at any time in the future)● 
Subject to application: Capital proposals for FY2021
onwards (for the time being, the system will be usedfor visualization, and will not incur any actual cost)

Internal carbon pricing is a mechanism that creates an
economic incentive to reduce emissions and promotes
investment by setting a carbon price in the company andusing it to calculate the cost of greenhouse gas emissions.
Meidensha introduced an internal carbon pricing
system in April 2021. We will convert carbon emissions
from capital investment plans to expenses using aninternal carbon price through the system. It will be a tool

Simulation of Business Portfolio
Revision
During the formulation of the Meiden Group’s
FY2030 greenhouse gas emissions reduction
targets, we conducted a simulation of net
sales and emissions from a business portfolio
revision regarding the product use stage (scope
3, category 11).
We found that by increasing the ratio of
low carbon businesses with low emissions perunit of sales such as EV, maintenance services,and small and medium-sized hydropower
generation, and we had a potential to
comfortably achieve both increased sales andreduced emissions.

TOPICS

Awareness of Climate Change

Metrics and Targets
In consideration of stepping toward accelerating becominga carbon-neutral society by 2050, the Meiden Group has
upwardly revised its FY2030 greenhouse gas emission
reduction targets, which is an intermediate stage of it. As
the Second Meiden Environmental Vision, we aim for a
30% reduction of emissions from business activities (scope1+2), and a 15% reduction of emissions from product use(scope 3, category 11) by FY2030 compared to FY2019
levels. These targets received SBT certification as they
were recognized by the Science Based Targets (SBT)
initiative*2 as being consistent with the Paris Agreement*3.
To attain these targets, we joined the Ministry of theEnvironment’s “FY2020 project to support model businesses
in compiling a plan to reduce CO2 emissions toward realizing
SBTs.” With that support, Meiden has compiled the FY2021
version of the Meiden Group’s plan to reduce greenhousegas emissions toward attaining SBTs. This plan outlines
initial ideas for an implementation plan and specific reduction
measures to implement long-term reduction measuresby the target year statedin the Second Meiden
Environmental Vision. We
will revise and optimize it asappropriate.

FY2030 Greenhouse Gas Emissions Reduction Targets (Second Meiden Environmental Vision)

TOPICSA CirculatingSociety

Reduce greenhouse gas
emissions

Governance/Risk Management
Under the direction of the President, who is the head of
the top management, the Executive Officer in charge ofenvironmental issues (Director & Senior Managing Executive
Officer, Norio Takekawa) oversees the environmental
management of the entire Meiden Group, while the GM
of Environmental Management Program Administration
Division promotes maintenance and improvement of theenvironmental management system. As the highest decisionmaking body with regard to environmental activities, theMeiden Group Environmental Committee, which is chairedby the Executive Officer in charge of environmental issues,
identifies issues, including risks posed by climate change
and deliberates concerning environmental targets, actionplans, and emergency response, etc., as well as determining
environmental management direction.
In FY2021, we established the ESG Management
Promotion Committee to debate management issues relating
to all aspects of environment (E), society (S), and governance(G). We plan for it to monitor risks and opportunities, including
climate change, in conjunction with the existing Environmental
Committee and Risk Management Committee.

Meiden Group Scope 3, Category 11 Reduction Simulation
Percentage of net sales
in each business sector

Scope 3 (category 11)
Emissions volume (t- CO2)6,000,000

5,000,000

Reducing total
emissions by
pursuing productefficiency andincreasing the
proportion of
low-carbon products
in each business
field

4,000,000

Other

3,000,000

Mobility and electricalcomponents sector

2,000,000

Field service
engineering sector
Public, industrial, andcommercial sector

1,000,000

00FY2019(base year)

FY2030(target year)

FY2019(base year)

FY2030(target year)

Power infrastructure
sectorNote: T he above graph is an estimate from a simulation and does not amount to a commitment
to a business plan.

MEIDENSHA REPORT 2021

22

Our Approach

Climate Change Responses

Scenario Selection and Outlooks
The Meiden Group analyzed the IEA and IPCC’s scenarios of below 2°C and 3°C.
Due to increased environmental awareness, countries have come up with various policies, so we determined that the
4°C scenario was not possible and we used the current scenario of 3°C.

Scenario Analysis
When understanding the effects of climate change on the Meiden Group and working out responses, first, we listed risks andopportunities from perspectives such as policy and legal restrictions and technology, and summarized management risks
and opportunities. The risks and opportunities facing the Meiden Group are as follows.

Below 2°C Scenario (SDS, RCP2.6)

3°C Scenario (STEPS, RCP6.0)
There will be opportunities in the renewable energy and ZEV markets

Opportunities will further increase while there will also be more limitations on business

Opportunities

Risks

Expansion of the renewable energy, energy conservation,and electrification businesses● Expansion of railway-related businesses

Losing orders due to not meeting customers’ demands
Intensified competition● Increased costs due to review of production equipment
and suppliers●Transition risks

Policy and legal
restrictions

Technology●③Tightening of recycling
regulationsー④Tightening of chemical
substance regulations●⑤Renewable energy subsidy
policies●●Expansion of the renewable energy, energy conservation,and electrification businesses● Acceleration of energy management technology●⑥Spread of renewableenergy and energy-efficienttechnologies⑦Spread of CO2 utilization andstorage technologies⑧Fall of fossil fuel prices

Market⑨Transition to a decentralizedsociety

Physical risks

Expansion of EV-related businesses due to ZEV market
expansion

Evaluation⑩Changed standards ofcustomers and investors

Urgent⑪Increased frequency ofabnormal weather events

Chronic⑫Rising of average temperature

Increased development and production cost forrecyclable products●

Increased development and production cost
Decline in businesses that use SF6 gas●Decreased competitiveness due to late application oftechnology● Increased development and production cost
Slowdown of the renewable energy, energy conservation,and electrification business●Wide-scale reduction in greenhouse gas emissions●

Expansion of the renewable energy, energy conservation,and electrification businesses● Fuel cost reduction●

Expansion of decentralized power source and VPPbusinesses●

Loss of business expansion opportunities due to late VPP
participation

Increased corporate value through expansion of theenvironmental contribution business● Securing various capital procurement opportunities●

Shrinking of environmentally negative businesses
Increased costs due to responding to traceability
requirements●

Suspension of production lines and sites, reduced sales,and delayed delivery● Supply chain review and increased procurement costs●

Increased demand for BCP products and services●Banks/
investors

Worse labor environment ● Increased energy consumption
Reduced sales due to voluntarily refraining from working
in summer season

Degree of risk impact⑪ Increased frequency of abnormal① Increased cost of greenhousegas emissions⑧ Fall of fossil fuel prices

Degree of opportunity impact

MEIDENSHA REPORT 2021

1.3-fold increase in rain, 1.5-fold or
greater increase in probability offloods, 2.0-fold increase days 30°C
or higher, and 1.8 to 2.0-foldincrease in heat stroke risk
compared to now

Impact at
2°C

Impact at
3°C

Meidensha’s response

Expansion of the renewable energy
business through accelerated introductionof renewable energy＋＋＋＋

Development and promotion of expansion strategies forhydroelectric, wind power, and photovoltaic-related businesses

Introduction of a carbon tax－－－－

Formulation of scope 1 and 2 reduction targets and greenhousegas reduction

Expansion of EV business

+++++

+++++

Development and promotion of expansion strategies for EV
motors and inverters-related businesses

Expansion of mobility T&S (test & solution)business+++

Development and promotion of expansion strategies for
expansion of EV-related mobility T&S (test & solution) businesses④Tightening of chemical
substance regulations

Expansion of SF6 gasless products
because of prohibition of SF6 gas use+++

Development and promotion of expansion strategies for SF6 lessproducts in the Power transmission and distribution business⑧Fall of fossil fuel prices

Reduction of fuel costs+++

Electrification and increased efficiency of equipment andreducing the use of gasses that are the source of greenhousegas emissions⑪Increased frequency
of abnormal weather
events

Production stoppages, equipment damage,and collapse of supply chains due to floods

－－－－

－－－－

Formulation of BCPs, decentralization of EV factory production
sites, and diversification of suppliers, etc.

⑫Rising of averagetemperature

Deterioration in production efficiency due
to worsening of the labor environment－－－

Promotion of labor-saving measures and automation forfactories, maintenance, and worksites, and enhancement ofhealth management

Increased cost of energy consumption, etc.

－－－－

Promotion of labor-saving and space-saving measures at factories①Increased cost ofgreenhouse gas
emissions②Tightening of ZEVregulations*“Impact” refers to the impact on operating income⑦ Spread of CO2 utilization and storage technologies

Notes 1. The top-right section indicates items that would have a great impact for the Meiden Group
2. Items that would have a particularly great impact and require detailed analysis are highlighted in dark yellow

Physical⑥ Spread of renewable energy and energy-efficient technologies⑨ Transition to a decentralized society

23

Transitional② Tightening of ZEV regulations

regulations⑤ Renewable energy subsidy policies

Business partners

Banks/
investors

1.1-fold increase in rain, 1.3-foldincrease days 30°C or higher,
and 1.6 to 1.8-fold increasein heat stroke risk
compared to now

No emphasis onenvironmental
consideration

Evaluated financial impact

Item④ Tightening of chemical substance③ Tightening of recycling regulations

Business
partners

Investment decisions
based on businesspotentials

We identified items that would particularly impact the Meiden Group’s achievements and calculated the impact on FY2030(net sales: 340.0 billion yen) operating income in each scenario. Based on the results of this analysis, we are reflecting theresults in our business strategy to further expand our environmental contribution businesses such as EV and renewableenergy businesses.

●

Next, we analyzed the matters that could have a serious impact on the Meiden Group for each value chain, and prepared
the following matrix. Risks and opportunities that would greatly impact management are analyzed in detail and response
measures are considered in the following paragraphs.

⑩ Changed standards of customers and investors

Losing the right to bid
if not an environmentallyfriendly company

Greatly increased business
continuity risk fromfloods, etc.

Companies

Major Climate-related Risks, Opportunities, and Responses

Importance of Risks and Opportunities⑫ Rising of average temperature

Intensified competition
New players●Expansion of the automation and remote control
businesses●weather events

Investment only
in businesses witha positive impact
on the environmentand society

Renewableenergy to accountfor 35% of electricity
generated in the world

Expanded renewableenergy market

Slightly increased business
continuity risk fromfloods, etc.

Companies

ー

●

●

Intensified competition

New players

Intensified competition

Expanded EV and dynamometer
markets

Renewableenergy to accountfor 50% of electricity
generated in the world

Greatly expanded
renewable energy market●

Expansion of the renewable energy businessGovernments and municipalities

Carbon tax
Tighter SF6 gas regulations●

Expansion of the SF6 gasless business

Increased
renewable energy
technology

Increased numberof ZEVs to 140 million(average annual growth
rate: 27%)

Governments and municipalities

Greatly expanded
EV and dynamometer
markets

Policy and legal restrictions●

Suddenly
increased renewableenergy technology

Increased numberof ZEVs to 240 million(average annual growth
rate: 34%)

Market②Tightening of ZEV regulations

Increased manufacturing and development costs due tocarbon taxes●Urgent●・Not introducing a carbon tax and not imposing additional strict
regulations on public nuisance and chemical substances
・Based on tighter ZEV regulations and existing renewable energy
policies

Chronic①Increased cost of greenhousegas emissions

・Introduction of a carbon tax in order to achieve the target of 2°C (¥10,000/t-CO2)
・Promotion of tighter ZEV regulations, renewable energy subsidies,and management of chemical substances
・Strict damaging emissions regulations on large industrial facilities

Future Path
We have identified the growth opportunities and risks facing the Meiden Group by analyzing TCFD; however, in most
instances, calculation of the impact is merely a rough estimate, and further precision is needed. Furthermore, we have only
analyzed some items with a large impact, and we will continue to promote analysis, including for items that were not analyzed
on this occasion.
MEIDENSHA REPORT 2021

24

Our Approach

Manufacturing Strategy
Aiming for manufacturing that“benefits everyone” throughimprovements in QCDSE.

Director & Senior Managing Executive
Officer
Monozukuri & Productivity Improvement
Project Leader

Norio Takekawa
Becoming an Attractive Company to the Earth,Society, and People through Meidensha’s
Unique Manufacturing

Medium-term Management Plan 2024 Key Action Items
Key Items

Action Items

Reducing Costs and Increasing
Product Competitiveness

Reduce variable costs by linking procurement andfactories●R educe processing costs by linking production staff
and factories●R educe fixed costs●E stablish Meiden “Monozukuri” standards

Enhancing Quality Control●Enhancing Occupational Healthand Safety

●

● 

Reducing Greenhouse Gas
Emissions from Production
Activities
Improving Production Sites

25

Quality Control

Establish a culture of safety experience education
Keep everyone informed about near-miss incidents

Implement SF6 gas controls in products andprocesses●C onsider electrification of all production equipmentthat uses fossil fuels●Enhance BCP measures at production sites, etc.

●

MEIDENSHA REPORT 2021

Activities to Prevent Defects in Mass-Produced Products
As activities for a carbon-free society are accelerating
and technology for electrification, computerization, andartificial intelligence of vehicles is evolving rapidly, we will
focus on “electrification,” and contribute to society throughautomation of automobiles with a focus on the EV Business.
As thorough quality control measures for mass
Image analysis of liquid gasket application

For the Meiden Group, which is involved with social
infrastructure, it is an important responsibility to steadily
continue to create high-quality products. We value our spirit of“craftsmanship” and work to conduct quality control activities
in order to be trusted and depended on by customers
and society. We will work to provide safe and high-quality
products and services to satisfy our customers and improve
profits by eliminating unnecessary costs through that each
employee is not only aware of social responsibility in relation
to Meiden Group’s products and services, as well as thescale of the impact that defects could have on society, but
engage in quality control activities from the perspective of“no defective unit accepted,” “no defective unit made in ourfactory,” and “no defective unit shall leave our factory.”
Enhancing Quality Control
Suppliers(partner companies)

Factories

No defective unit accepted
Review of suppliers’ quality
audits and receiving
inspection items

Revise the QR map, standards, and procedures●

produced products such as EV components, we areworking to eliminate human error by increasing automation,and in order to discover missing parts, detect the positionof screw holes and cables, and control tightening
position, we adopt image analysis. We are also working
to management of shrink-fitting conditions and adhesive
curing conditions, through temperature control, and linkwith a traceability database created through centralized
management of process data, etc. We aim to provide
products of consistent quality by promoting these various
defect prevention activities.

Development, design,and manufacture

Testing and inspection

No defective unit
made in our factory

No defective unit
shall leave our factory

FMEA, DR, and generalinspection of standards andprocedures

Optimization of test items
at internal and affiliate sites

TOPICS

We gave divided products manufactured by the Meiden Group
into “mass production,” “equipment,” and “systems,” andestablished manufacturing strategies suited to the featuresof each group, and we will enhance product competitivenessby improving quality, cost, delivery, safety, and environment.
In this way, we will not only improve the quality of products,
but by reforming the awareness of employees involved
with manufacturing, we will foster worksites with a senseof achievement and growth, and remain a company that is
attractive to the earth, society, and people.
Policies under Medium-term Management Plan 2024 are“reduce costs and increase product competitiveness,” “enhancequality control,” “enhance occupational health and safety,”“establish manufacturing activities to achieve the Environmental
Vision,” and “improve production sites.” With regard to reducing
costs and increasing product competitiveness, for example inthe mass-produced EV components production process, we
are working to realize overall cost reduction in mixed production
by using cooperative robots and image recognition technology
in combination with manual labor and incorporate design
feedback from eye tracking tools of skilled and experienced
workers in equipment manufacturing.
With regard to enhancing quality control, we aim to increase
added value by expanding customer service operations, whichhave mainly managed information about faults such as urgent
issues and product inquiries, to remote monitoring service,feeding back customer requests, maintenance and operational
data to product development and design, and also the creationof new services, etc., by using data from sources such asremaining life assessment and preventative maintenance.
From an occupational health and safety perspective,
we are focusing on further establishing a culture of safety
experience education and promoting health management.
With regard to establishing manufacturing activities to achieve
the Environmental Vision, we will tighten management of
SF6 gas at factories and direct investment to enhancing
environmental equipment. As for improving production sites,from a BCP perspective, we will work to establish internal
standards to ensure that production continues.

Implementing and Complying with Standards andProcedures
We are broadening the application of Quality Control Process
Chart (QC Process Chart) that is mainly employed by the
Manufacturing Business Unit to the Sales Business Unit andthe Technology Business unit under the name of the QR map.
By applying the QR map, we are able to prevent tasks frombeing overlooked and ensure that everyone completes tasks
at the same level, which enables us to reduce the risk ofdefects arising due to variation between people in charge. The
QR map is linked to “standards and procedures” that promotetasks in each process. We prevent defects by conducting
an overall examination and revision of these standards andprocedures to ensuring that their content relates to preventionof recurrence of defects or occurrence of similar defects.
Furthermore, we are promoting checks of whether QC
process charts are being filled in without omission, in order
to confirm that each process is being thoroughly conducted.

Quality Improvement Initiatives Using the IoT
We conduct data feedback, etc., for development to improve
quality and consistency, through production process reforms
using the IoT. In FY2020, it became difficult to conduct preshipping product inspections by customers visiting our factories
as before, due to the impact of the COVID-19 pandemic. As aresult, we developed and commenced operation of the Meiden
Standard System, which is capable of remote examination andapproval for remote product inspection before shipping.
We also developed surface coating image inspection
equipment to quantitively evaluate the quality of surface coating,and introduced initiatives to check quality and prevent variation
by quantifying color irregularities and roughness of sheet metalthat had been visually inspected until now through image analysis.
Going forward, we aim to use accumulated evaluation data to
optimize coating processes such as amount of coating andpolishing time.
We also introduced line of sight analysis tools called “eyetracking” and began an initiative to visualize the hand and eye
movements of experienced personnel with intuition and skill forthe purpose of transferring the skills and knowhow of experienced
personnel to the next generation. By getting workers to wear
glasses fitted with a miniature camera, we are able to record
the workers’ field of vision, and visualize the fine hand and eye
movements that had been inarticulable until now, and reflect
these in our procedures.

Surface coating image inspection equipment

Eye tracking (line of sight analysis tool)

MEIDENSHA REPORT 2021

26

Our Approach

Manufacturing Strategy

Digital Transformation
Strategy
Value added to manufacturing andenhanced corporate reforms throughthe promotion of digital transformation.

Occupational Health and Safety
As the Meiden Group, we consider employees’ health andsafety to be central to management value and has theoverarching policies of “prioritizing safety above all else”
and “nothing is more valuable than good health.” We have
explicitly stated that ensuring the safety and health of each
employee is at the core of corporate management, and weare working to eliminate workplace accidents and maintainand improve health. We will implement our Corporate Codeof Conduct of “working to ensure a safe environment thatis conducive to work and achieve comfort and affluence
for employees,” and aim to be a leading health and safetycompany, through revitalization of health and safety
activities for all national and local businesses.
Promoting the Occupational Safety and HealthManagement System
The Meiden Group obtained OHSAS18001 certification for
four production sites in Japan and five sites overseas. In
FY2018, we promoted transition to the international standard
ISO 45001 and started to expand application. With regard
to ISO 45001, in FY2019, we jointly acquired certification
for four Japanese production sites (Numazu Works, Ota
Works, Nagoya Works, and KOFU MEIDENSHA ELECTRIC
MFG. CO., LTD. *including on-site affiliates), and in FY2020,
we acquired the certification for Japanese workplaces otherthan production sites (Tokyo Area Administration Office,branches) and construction services business units (Plant
Construction & Engineering Business (PCEB) Group).
At present, 70% of the entire group has outside
certification (ISO45001 and OHSAS18001) on a per-employee basis. In FY2021, we plan to acquire certification
for four Japanese affiliates, and going forward, we willcontinue to build and promote the Occupational Safety
and Health Management System.
Promoting Safety Experience Education
In 2014, we created the first hands-on safety experience
truck, and conducted safety education for workers suchas group employees and contractors that work on site, by
taking the truck directly to worksites, in order to promote
safety education. As at Meidensha, many companies areconcerned about safety education at worksites, and weare also marketing our safety education to them.
In November 2019, we created hands-on safety
experience truck no. 2 to conduct safety education for
employees, and conducted safety experience education for
production sites (Numazu Works, Ota Works, Nagoya Works,
and KOFU MEIDENSHA ELECTRIC MFG. CO., LTD.).
Safety experience trucks are fitted with equipment thatallows users to realistically experience industrial accidents
on site in a virtual environment.

Key Action Items for Digital Transformation
We are promoting the Meiden Group’s digital transformation
under the following three headings.

Safety experience truck* Health and productivity management is a registered trademark of Nonprofit Organization Kenkokeiei.

1Creating new products and services through digital technology● Improving the O&M business focusing on smart maintenance● Contributing to smart cities, etc.

2

Thoroughly standardizing and creating efficiency in value chains

3

Building and strengthening our digital platform

In April 2021, we launched the Workstyle Reform & Corporate
DX Promotion Project and conduct activities accordingly.
Officers with a high awareness of reform were selected as

Hideki Miyazawa
members of the project. The project’s catchphrase is “thenew age requires a new work.” This means that we must
increase our competitiveness internally by flexibly adapting
our work to the new age. Until now, we have promoted theintroduction of RPA, which is a work automation solution
since FY2018, and we reduced work by approximately
70,000 hours in the three years to FY2020. We will roll out
this project with the aim of further promoting this initiative,
and reforming organizations so that they are faster and more
responsive to changes in the external environment throughwork process standardization and increased efficiency.

Developing Digital Professionals to Accelerate
Digital Transformation
When promoting digital transformation, it is essential to have
digital human resources, so we are promoting professional
development through various programs. For example, three
years ago, we created the Basic ICT Course to teach all
new employees the minimum level of ICT knowledge that we
expect them to know, as part of the Meiden Youth Academy,
which is an education program for new employees.
Furthermore, it is essential to have different capabilities fromthose we had previously, such as design and agile thinking
in order to discover the issues our customers are facing andcreate new value for customers through repeated hypothesis
testing. To date, we have taught these ways of thinking toyoung engineers, with a focus on the Development Division,in conjunction with outside vendors, and we are working
to conduct digital professional development to accelerate
digital transformation reforms.

Conducting PoC for Introduction of the IoT for Extra-High-Voltage Substations at the Numazu Works

President Miida holding the Health and Productivity
Management Brand plaqueIn FY2021, core equipment in extra-high-voltage substations inside the Numazu Works reached the age of replacement,
so we are rebuilding them to outdoor extra-high-voltage substations. In conjunction with this, we are connecting
transmission & distribution equipment that comprises the substations to the IoT and conducting PoC (proof of concept
testing) to remotely monitor the entirety of extra-high-voltage substations.
Data such as temperature, humidity, vibration, current, and images through sensors affixed with monitoredequipment is uploaded to the Cloud, which enables remote monitoring of thestatus of transmission & distribution equipment comprising substations. This data isstored for a long period, and it is used as a test bed for research and development,
including for algorithm verification, such as for inspection efficiency testing that gives
consideration to smart security promoted by METI, equipment diagnostics, andremaining service life diagnostics. Going forward, this will lead to formal proposals
through field verification at customer locations, based on the results of this PoC.
Image of substation abnormality alert screen

MEIDENSHA REPORT 2021

28

TOPICSTOPICSIn 2019, the Meiden Group announced the President’s Health and Wellness
Management Policy Statement, shared our belief that “nothing is morevaluable than good health” with all employees, supported employees own
health activities such as by rolling out Smart Challenge Meiden 5, which
includes five health activities to combat passive smoking, help people toquit smoking, and combat lifestyle diseases, etc., and promoted efforts to
support each person’s health through organizational mechanisms.
Through these initiatives, we were selected as a Health and Productivity
Management Brand by METI and the TSE in recognition of being an exceptional
health and productivity management* listed company. We also received Healthand Productivity Management Organization (White 500) certification, which is
granted by METI that conduct exceptional health management. Going forward,
the Meiden Group will work to remain a leader in health management.

MEIDENSHA REPORT 2021

Until now, the Meiden Group has leveraged its superior
technological capabilities and engineering to contribute to
the solution of issues faced by our customers. In order toachieve sustainable growth going forward, it is important for
us to discover customers’ issues by ourselves and propose
new value to customers. The Meiden Group’s aim for digitaltransformation is “to rebuild our competitiveness throughdigitalization,” by acquiring new capabilities from digitaltechnology in addition to our existing competitiveness oftechnological capabilities and engineering.

Internal Digital Transformation Reforms:
Launching the Workstyle Reform & Corporate
DX Promotion Project

Promoting Health Management

27

The Goal of Digital Transformation is
Rebuild Corporate Competitiveness ThroughDigitalization

Managing Executive Officer
Workstyle Reform & Corporate DX
Promotion Project Leader

Our Approach

Diversity & Inclusion

Innovation Strategy

Working to attract human resources withdiverse attributes, sensibilities, abilities,
values, and experiences, etc., andcreate workplaces where individuals candemonstrate their strengths.

Promoting “ambidextrous management”
in order to accelerate creation of a newsociety through innovation.

Director & Senior Managing Executive Officer
HR Development & Diversity Promotion
Project Leader

There is rapid social changes which cause social issues andcomplexified needs. In this situation, for the Meiden Groupto remain needed by society, it is essential to create working
environment, as well as to secure and train personnel, which
accept and leverage diversity. The Meiden Group considers
people to be the most important foundation to support
companies, and that the growth of each individual is a greatsource of the provision of new value to all stakeholders.
We believe that new value is created by combining theknowledge and knowhow that we have developed to thispoint with new concepts and ideas will lead to the realizationof the ideal society that Meiden Group envisions. We arepromoting Group initiatives to achieve diversity and inclusion.
In April 2021, we launched the HR Development &Diversity Promotion Project, and we are promoting theconsideration and implementation of various measures withthe following three aims: “① realization of a company where
diverse personnel can play a role and conducting work stylereforms to this end”; “② ensuring diversity and optimally

29

MEIDENSHA REPORT 2021

Developing and Commercializing Ideas From
Organization and Individual

placing personnel to promote innovation”; and “③ urban
development to support diverse work styles and lifestyles.”With regard to ①, we will root out unconscious bias,
promote participation by female employees, work with people
with disabilities, cater to the needs of the LGBTQ community,
introduce diverse working patterns and an in-house
recruitment system with by which employees can direct
their own career, and promote environmental improvement
and building systems for such, with the aim of being anorganization that allows participation by diverse personnel.
With regard to ②, we are promoting innovation by:-
actively seeking outside personnel with different
knowledge and knowhow through mid-career hiring.
-
increasing the number of cross-border personnel
through outside secondment.
- deploying those personnel to the Planning Business Unit.
With regard to ③, we leverage the Meiden Group’s
technology and proposal capabilities and contribute to
the development of a society that supports diverse work
styles and lifestyles such as by contributing to the creationof infrastructure that is fit for the peculiarities and needs ofcountries and regions.

Voices of Workers at Overseas Subsidiaries
National staff of overseas Group companies andthe promotion team in Japan held discussions
relating to cultural differences, diversity andinclusion, in order to exchange opinions withpeople with different backgrounds and values,
etc., and learn new ideas and ways of thinking.
Going forward, we will continue to promotecreation of an atmosphere and professional
development toleverage diversity
by providing
opportunities fordiscussion within
the Meiden Group.

HR Development & Diversity
Promotion Project

MEIDEN AMERICA, INC.
Human Resources

Ayako Sasamoto

Olivia Thompson

TOPICS

Implementing Measures to Listen to the Opinions of aRange of Employees
In FY2020, we provided various
opportunities for employees toexchange opinions with each otherabout on-site issues. We had theMeeting to Exchange Ideas on
Diversity, which had participantsof all genders and ages from new
recruits through to experienced
employees, and also exchanged
opinions about activities to improve
working conditions such as theintroduction of female uniforms forfemale employees who work at
manufacturing sites and factories.
Going forward, we will continue
to listen to the opinions of employees
and conduct initiatives to leverage
the Meidensha spirit and individuality.

Nobuaki Tamaki

Masayuki Iwao

The Growth of Each Individual Will Be theSource for Continuing to Provide New Value.

Director & Senior Managing Executive
Officer
Chairman of the Strategic Innovations
Acceleration Committee

Meidensha established the Strategic Innovations Acceleration
Committee in FY2021, and we are working to “organize
innovation processes,” “secure and train innovative personnel,”and “exploration and co-creation of new social needs,” inorder to enhance the mindset of accepting the challenge ofcreating a new society for the future in 2030 and 2050.
The external environment in which companies operate
is undergoing great changes, and corporate innovationmust include new ways of thinking and new initiatives on
business, and a broad range of socially aware activities in
addition to technological innovation. In these conditions,to this point, we have conducted activities to quickly catchup to the latest market and technological trends by having
established a location in Silicon Valley, and investment in
the Polish startup Elmodis Sp. z o.o. (Elmodis).
Medium-term Management Plan 2024 includes“promoting management ambidexterity” in order toaccelerate creation of a new society through innovation.
We aim to use revenue gained from existing businesses toactively search for and invest in new areas, and develop andcommercialize ideas from organization and individual.
We are not only working to reform existing businesses
and growth businesses, but we are working to create new
businesses to build a carbon-free and resilient society, andimplement labor-saving and high-efficiency measures using
new digital technology, etc. We also established points ofcontact with outside the Company and created systems toquickly grasp social issues and needs, in order to achieve
innovation through co-creation with other companies, withthe aim of being a company that can grow through creationof self-directed businesses and innovation.

M

E

S

S

A

G

E

Aiming to Uncover New Markets ThroughShared Wisdom
Elmodis was foundedto achieve a solution
related to the use ofelectrical motor signals
and electric signatures
for complete machinery
diagnostics, which after
several years of deep
analysis and verification
has been successfully
Elmodis Sp. z o.o. CEO
completed. Elmodis
Artur Hanc
helps to optimize energy
and operational efficiency using advanced IoT. ML
and AI technologies. Quick and simple installationof electrical equipment combined with our Cloud
AI system can provide customers with diagnostic
information, remote monitoring and energy efficiency intheir operations.
As Elmodis Team, we are very excited to be partof the Meidensha family with an investment in 2020.
Based on close partnership we can share solutions
and knowledge between the parties. Elmodis can learn
more about machines parameters from Meidensha
implementations. Meidensha can develop its own
product with technology from Elmodis, and new
business models in line with current global customer
expectations. It gives great opportunities to develop
new implementations and conquer new markets
through synergy of cooperation between companies.

Medium-term Management Plan 2024 Key Action Items
Priority Items
1. Organization of the innovation process● Introduction of a stage-gate system for theme implementation
processes● Agile resource-allocation + swift decision-making

Results/Output
Outline of 2030 and 2050 goals

Systematization
Theme promotion

2. Securing and training innovative personnel● Promotion of seminars by experts and the professional development program● In-company recruitment of innovative personnel● Promoting systems that lead to fostering positive mindsets andreforming atmosphere

Reinforcing
people

3. Exploration and co-creation of new social needs● Establishment of places for co-creation: Connection with each sitewith Osaki (head office) serving as a hub● Transmission of information concerning innovation activities● Consideration of using venture capital funds

Reinforcing
placesSecuring activities budget

Reinforcing funds

Sustainable global environment

Generating innovation

Labor-saving/high-efficiency
production activities
Providing safety and security
Providing excitement
Ripple effects

Branding

Increased motivation

Securing personnel

MEIDENSHA REPORT 2021

30

Our Approach
Special FeaturePower Station Output

Challenge to Achieve Carbon Neutrality by 2050:
Developing Businesses that Contribute to Becoming Carbon-free

Hachiryu Wind Farm

28,000kW(equivalent to electricity consumption of
approximately 15,300 average households)

Renewable
EnergyRenewable Energy to Realize a Carbon-neutral World

Wajima Community Wind Farm

20,000Aiming to expand business by taking advantage of decentralized society and carbon neutrality.

Hachiryu Wind Farm

Increasing Sales of Power Conditioners for Proliferation of Community Symbiosis
Photovoltaic Power Generation
There have recently been many initiatives to expand theintroduction of photovoltaic generation at manufacturingbases, offices, and public facilities, etc., and switch toelectricity from natural energy sources for the operation offacilities, in order to cater to the trend of carbon neutrality.
To this point, Meidensha has developed and manufactured
power conditioning systems (PCSs) for photovoltaic
power generation with additional functionality such as highconversion efficiency and guaranteed power supply during
blackouts, and we have delivered a total of approximately
1,000MW to more than 1,500 sites in Japan and overseas.
In recent years there has been increased demand for
installing photovoltaic power generation systems and storage
batteries in same places in order to use renewable power as a
power source in an emergency due to heightened awarenessof BCP, in addition to the perspective of environmental
protection. We developed a PCS that is capable of charging
storage batteries directly from photovoltaic generation using

direct current, without the need for electricity conversion toalternating current, in order to limit loss and maximize effectiveenergy use in such a system. We will deliver products that are
fit for the age and such as including a function of connection
to EV batteries, and cater to the requirements of society,including increasing carbon reduction and resilience.

Komekurayama Solar Power Plant in Yamanashi

Contributing to Becoming Carbon-free and Regional Development
Through the Spread of Small to Medium Hydroelectric Power Systems
EAML Engineering CO., LTD. was established in 1947 after the war, by Shiro Oda, who was determined to work for the
improvement and betterment of society by building small hydroelectric power stations in order to revitalize rural villages toalleviate electricity shortages and increase food production. He contributed to the economic recovery of many rural villages,
particularly in the Chugoku region. Now, we have inherited that determination and developed an extensive record andknowledge relating to the construction of small hydroelectric power stations.
As we aim for renewable energy to be our main power source, hydroelectric power, which has
supported Japan since the 1950s, is a valuable power source that is only minimally affected by weather
and time of day, etc. Also, it is a synchronous power source that can maintain network stability, andcomprises entirely Japanese-made equipment with a long expected product life of over 60 years.
In Japan, which is blessed with rivers with ample water and mountainous regions, it ispossible to build even more small hydroelectric power stations. We believe that hydroelectric
power is a form of renewable energy that is in harmony with the environment and can makelong-term contributions to communities by expanding utilization as geographically distributed
power sources that can maintain a stable power output and is key for regional development.
“We will continue to work for the improvement and betterment of society”
EAML Engineering CO.,LTD.
The Meiden Group will contribute to carbon neutrality with the aim of creating a more
President & Representative Director
affluent and livable society and effecting dynamic regional development through our unified
Katsumasa Yamaguchihydroelectric power initiatives.

31

MEIDENSHA REPORT 2021

kW(equivalent to electricity consumption of
approximately 8,700 average households)

Choshi Shiosai Wind Farm

Expansion of Wind Power O&M Business
The Meiden Group’s wind power business began with the commencement of
power sales generated from onshore wind power generation system in Choshi,
Chiba, by the Meiden subsidiary, M WINDS CO., LTD., in 2003. After that, we
commenced operations in Mitane (formerly Hachiryu) Town, Akita, and Wajima
City, Ishikawa. We have a total of 30 wind turbines in these three locations, andalso we conduct O&M for approximately 50 other wind turbines around Japan,
meaning we conduct O&M for a total of approximately 80 wind turbines. We areproud that we not only own wind turbines but we have also developed knowhow
relating to business operation and O&M.
Going forward, as demand for the wind power business is expected toincrease in order to achieve carbon neutrality, we are honing our O&M capabilities
at our own wind power stations in order to ensure we cater to expanding demandof the O&M business in addition to the existing power sales business.
At the Hachiryu Wind Farm, which is currently owned by the Company(operation commenced in FY2006), we have begun to consider replacement ofwind turbines with larger units in line with the times. We plan to commence powersales of 20 years of FITs from FY2025.
Going forward, we will work with the aim of increasing the scale and numberof locations of the O&M business, and we are investigating opportunities for
the O&M business to enter the offshore wind power market, for which demandis expected to increase in the future, based on the technology and knowhow
developed through onshore wind power.

3,000

kW

(equivalent to electricity consumption of
approximately 1,200 average households)* Annual electricity consumption per householdcalculated as 4,322 kWh(from the Ministry of the Environment’s 2017
Statistical Survey of Household CO2 Emissions(confirmed values))

Total output of the three power stations isequivalent toapproximately

25,200average households

M

E

S

S

A

G

E

MEIDENSHA REPORT 2021

32

Working to Achieve Safety and Conduct Activities Rooted in
Local Communities
M WINDS CO., LTD. is a company that conducts wind power generation andwind power station O&M operations. In our O&M operations, we are constantly
striving for safety. Wind turbine maintenance requires work in high places andnarrow spaces, and we often use heavy objects. In order to finish our work without
accident or incident, we devise work plans with thorough advance consideration,and conduct risk assessment activities before and after work.
At present, we are aware that we must conduct activities rooted in local
communities on a daily basis through local response to environmental assessment
for turbine replacement.
When Japan declared its intent to become carbon neutral, we truly felt thewinds of change, and we hope to ride these winds by expanding O&M, including
for the offshore wind power station that is scheduled to be built nearby.

M WINDS CO., LTD.
Akita Sales OfficeHiroaki Tanaka

Our Approach

Challenge to Achieve Carbon Neutrality by 2050:
Special Feature

Developing Businesses that Contribute to Becoming Carbon-free

Smart Operation of Water Treatment Equipment Using ICT and AI

Sustainable
Infrastructure

Building Sustainable Next-generation
Infrastructure
Actively working to create a new society by producing products and technologies
that cater to the needs of the environment and consumers.

Increasing Sales of Eco Friendly Type Vacuum Circuit Breaker in the North American Market
Meidensha started producing circuit breakers using oil and air in 1907. Subsequently, in
2004, we released a 72kV dead tank type vacuum circuit breaker (VCB) that uses dry
air for insulation, far ahead of our competitors through the accumulation of technology
over approximately 100 years. This product does not use any SF6 gas, which has 23,500
times the effect on global warming of CO2. This solves the demand for replacement ofaging power equipment and the need for VCB’s that comply with tightening restrictions
that continue to increase, particularly in North America.
With that in mind, in April 2020, we established MEIDEN AMERICA SWITCHGEAR,
INC. as Meiden Group’s first U.S. manufacturing site for manufacturing VCBs and salesof vacuum interrupters (VIs), which are a core component of VCBs, and released a
145 kV EcoFriendly Type VCB in the North American Market. Meidensha already had arecord of selling VCBs in North America, so theestablishment of a new site has been receiving
interest and attention from the market. We willcontribute to the construction of sustainableinfrastructure in the future, by providing
products that meet the demands of society,such as tightening restrictions on greenhousegas emissions, with an eye to achieving carbon
neutrality in North America.

MEIDEN AMERICA SWITCHGEAR, INC.
Managing Director

Technology proposed in conjunction with the cities ofHiroshima and Funabashi, along with NJS Co., Ltd.
was selected for the Ministry of Land, Infrastructure,
Transport and Tourism’s FY2021 Demonstration Studyof Breakthrough by Dynamic Approach in Sewage HighTechnology (B-DASH) Project. We implement demonstration
projects of cutting-edge supporting technology for operationof sewerage treatment facilities using AI. AI determines thetreatment status through AI from data such as operation
history, water quality analysis, and images of treatment, andproviding real-time guidance relating to estimated operating
volume, treatment method, and estimated quality of treatedwater, aiming to achieve optimal operation.
A demonstration project of a wide-area supervisory
control system for sewage treatment facilities that uses
ICT, which was jointly proposed with the Japan Sewage
Works Agency, Toshiba Infrastructure Systems &Solutions Corporation, Hitachi, Ltd., Mitsubishi Electric
Corporation, METAWATER. CO., LTD., and Kurashiki
City, was also selected for the FY2021 B-DASH project.
We aim to create a wide-area supervisory control
system using elemental technology to integrate multiple

supervisory control systems installed at sewage treatment facilities
without the need for large-scale modifications.
Optimization and efficiency of operation and management
using this ICT and AI technology lead to reduced maintenanceand management expenses and energy-saving measures, andwe expect further contribution to reducing carbon emissions.
Understanding
conditions

Causes and responses
Water quality estimates

Indication ofoperation

AI technology to support operation of sewerage treatment facilities
Detection

Identification

Inference

Image processing AI

Response determination AI

Operation AI

Estimation
Water quality estimation AI
Input
Operational
data

Image

OutputDaily
reportWater quality
analysis

Operational
guidance
AI output results

●

●

●

●

Operational data

Determination of treatment
statusEstimate of treated water quality
Indication of response method
Derivation of operation volume

Image of sewerage treatment facility operation using AI

M

Minoru Kaneda

E

S

S

A

G

E

Providing New Added Value by Promoting Utilization of Operational Data Through Digital Technology
Social infrastructure, including water supply and sewage systems, is facing many
issues, including declining population in Japan, financial difficulties of municipal
governments, aging equipment, intensification of natural disasters caused by climatechange, and succession of technology, and solutions will inevitably involve the use ofdigital technology. We will solve customers’ issues by promoting use of operational
data and images of facilities in systems that use digital technology, etc., and providing
new added value.
The Meiden Group is involved with many facility management businesses,
including maintenance, and we have been working to create efficiency and save laborby incorporating on-site viewpoints. Going forward, we will continue to contribute to
the reduction of lifecycle costs and the realization of a carbon-free society, by providing
systems for the inheritance of technology for optimal operation and management.

Managing Executive Officer
General Manager of the Water
Infrastructure Systems Business Unit

Satoshi Momenya

72.5 kV Eco Friendly dead tank type vacuum circuit breaker being assembled by MEIDEN AMERICASWITCHGEAR, INC.

T

Joint Development of SF6 Gas-free Gas insulated Switchgear
Against a backdrop of increasing market demand for environmentally considerate
products, Meidensha has promoted joint development of 72 kV and 84 kV gas insulated
switchgear (GIS) that uses natural origin gas and does not use any SF6 gas with
Toshiba Energy Systems & Solutions Corporation since 2020. Meidensha is responsible
for the VCB units, which are core components of the products. Both companies aim tocomplete type approval testing to confirm compliance with certain regulations by March2022 and establish mass production systems and commercialize the products during
FY2022. Through this development and supply of GIS using natural origin gas, we willcontribute to the achievement of carbon neutrality, which is being promoted by countries
around the world.

MEIDENSHA REPORT 2021

P

I

C

S

Numazu Smart City Project (X-Tech NUMAZU)

Power Utility & Energy Sector Business
Unit Engineering Division
Power Engineering Section 2

Yuhi Kasai
33

O

The Numazu Works (Numazu City, Shizuoka), which is Meidensha’s largest production
site commenced operation in 1961. We are also participating in the new community
planning initiative in Numazu, called X-Tech NUMAZU, which uses cutting-edge
technology such as ICT.
We hope to fully display our knowhow and knowledge relating to all aspectsof social infrastructure, focusing on those related to the energy and environment,
where we have developed our business for around 120 years, assist municipal
governments and regions to solve the issues they are facing, show our gratitude to
the community by contributing to improvement of convenience and quality of life forall residents, which is the goal of the initiative, and realize a new sustainable society
where communities and companies prosper together.

Executive Officers Executive Officer
General Manager of the Public Infrastructure
Business Planning Group

Takeo Suzuki
MEIDENSHA REPORT 2021

34

Our Approach

Green
Mobility

Challenge to Achieve Carbon Neutrality by 2050:
Special Feature

Developing Businesses that Contribute to Becoming Carbon-freeContributing to the Promotion of a Clean Mobility
Society
We delivered products to the world’s first mass-produced EV. As the only company in the world
with both EV drive components and testing equipment business, we will contribute to theproliferation of electric vehicles for a carbon-free society.

Smart
Industry

Contributing to the Realization of a Sustainable
Society Through Life Cycle Engineering
We will contribute to energy conservation and reduction of greenhouse gas emissions byprolonging the service life of existing equipment through maintenance and servicing, andmaking optimal equipment replacement proposals.

Realizing a New Mobility Society by Increasing Production Capacity and Developing Products

Contributing to Optimization of Customers’ Equipment Through Smart Solution Proposals

We released our EV motors and inverters on the market in 2009 as a distillation of our knowhow
relating to motor development and design technology, which was our origin of business, andmotor speed control, which we have refined over many years. They have already been fitted
to approximately 530,000 vehicles around the world.
During the period of the previous medium-term management plan, we promoted increased
production capacity with the aim of increasing the number of vehicle models fitted with our
products and expanding our business in the future. Following on from the operation of new lines in
Kofu and Nagoya in FY2020, we will commence mass-production in Hangzhou, China in FY2021.
Against a backdrop of a trend toward increased environmental protection, countries around theworld, including Japan, are accelerating the electrification of automobiles. We will promote thedevelopment of motors and inverters to realize the high-output, small-size, light-weight, and lownoise that are essential for high-quality EVs, while fully utilizing our fundamental technologicalcapabilities, production technology, and customization capabilities. Going forward, we will continue
to contribute to the realization of a carbon-free society by releasing better products in the market.

The Meiden Group has been conducting walk-throughs, where we accompany
customers to discover latent issues in the operation of equipment, since 2017.
However, walk-throughs focus on electrical equipment, which is our specialty, so ourability to solve issues relating to other equipment through this activity was limited.
Smart solutions include support for the solution of issues in all equipment,
including HVAC and heating equipment other than electrical equipment inconjunction with partners. Furthermore, with regard to natural disasters, which are
occurring more frequently due to climate change, we will make optimal proposals
for the use of mobile power supply vehicles and emergency generators for BCPs
(business continuity plans) and disaster response measures.
Through smart solutions, we will contribute to our customers’ environmental
management through providing services such as optimizing operation of each pieceof equipment and replacement with high-efficiency equipment in order to reducecarbon emissions, and analysis of installation environment of customers’ equipment.

Managing Executive Officer
KOFU MEIDENSHA ELECTRIC MFG.
CO., LTD.
Representative Director & President

Kuniake Yasukawa

Total Support from Planning Through to Equipment Replacement by Promoting the SHIFT Business
The Meiden Group was selected as an organization to
support the development of plans to promote reduction ofcarbon emissions from factories and worksites, as part ofthe subsidized project to promote support for high-efficiency
installations for facilities with targets (SHIFT Project), which
was supported by the Ministry of the Environment in FY2021.
This project comprises development of a project tosupport the development of plans to reduce carbon emissions
based thereon the assessment of potential for CO2 emission
reductions for small to medium-sized enterprises with factories
producing annual CO2 emissions of at least 50 t but less than
3,000 t, and an equipment replacement support projectthat introduces high-efficiency equipment and changes fuel
The MEIDEN e-Axle, which combines a motor, an inverter, and gears in a single unit

35

MEIDENSHA REPORT 2021

M

Nagoya EV Factory, which commenced operation in December 2020

Contributing to Further Proliferation of New Mobility Through the Commencement ofContracting Business of EV Motor Certification Testing in Japan
Since we delivered Japan’s first electric dynamometer in
1920, Meidensha has delivered numerous testing systems
that have contributed to global automobile environmental
strategies (fuel economy, gas emissions, and noise
reduction strategies, etc.) focusing on research institutions,and automobile and parts manufacturers.
At the research and development laboratory in the
Ota Works, we conduct research and development of
next-generation products for various testing system andcontracted testing business using our own testing equipment.

sources at factories and worksites with CO2 emissions of 50 t
or more. This project is the successor to the ASSET Project
and the Project to Promote Assessment of CO2 Reduction
Potential, which were subsidized until FY2020 and combined.
MEIDEN ENGINIEERING CORPORATION has beenregistered as an assessment organization for the Project toPromote Assessment of CO2 Reduction Potential since FY2017,and promotes carbon reduction initiatives through CO2 reduction
proposals for customers’ factories and offices. In this way, we
will provide total support from development of CO2 reductionplans through to replacement of equipment to meet targets, andwork with our customers’ initiatives to become carbon-free.

Tests can be widely conducted on individual components
and units (engines, EV motors, e-Axles) through to complete
automobiles. In FY2020, we commenced contracted EV
motor certification test for domestic.
Meidensha is the only company with both an EVBusiness and a Testing Equipment System Business, making
us a pioneer in the field. Going forward, we will create newtechnology and new value, and contribute to the realizationof a new mobility society by leveraging the needs and issues
identified through testing to development of relevant products.

E

S

S

A

G

E

Working to Provide Maintenance and Servicing with a Mission to Protect the Global Environment for the Future
I am responsible for modification designs relating to maintenance and servicing ofwater treatment equipment. I make proposals for extension of equipment service life
by replacement of equipment inside panels and instrumentation equipment, etc., in
accordance with customer demands, based on findings from inspections and walkthroughs. These proposals not only include preventative maintenance, etc., but I feel thatthey also provide support for customers’ efforts to become carbon-free by reducing waste
through extension of equipment service life, and thus, reducing CO2 through reduced
energy usage and increased efficiency. Going forward, I will remain acutely aware that
acquiring my own knowledge relating to the handling of a range of equipment has a great
impact on the lifecycle of products, and I hope to continue to support the realization of acarbon-free society through maintenance and servicing of customers’ equipment, basedon my great sense of purpose to protect the future global environment as a single engineer.

MEIDEN ENGINIEERING CORPORATION
Kanto Branch Office, Sales and Engineering
Division, Engineering Section 2

Yoshimi Ohama
MEIDENSHA REPORT 2021

36

OUR STRATEGY
Medium-term Management Plan 2024

Take a great jump towards
building a new society bypromoting ESG management
Managing Executive Officers(responsible for corporate policy planning and finance)

Akio Inoue

Outline of Medium-term Management Plan 2024
Global environmental problems are worsening due to climate change and the impact of the COVID-19
pandemic is increasing in the business environment in which the Meiden Group operates. Furthermore,as digitalization accelerates people’s values and lifestyles are changing. In Japan, the birthrate is
declining and both the population and social infrastructure are aging, necessitating a shift away fromconventional social systems.
1. Term of the Plan
With regard to the COVID-19 pandemic, vaccination efforts
have been progressing worldwide and we are graduallyseeing a brighter outlook, but in some regions, we mustremain vigilant. In these conditions, we have set the termof the plan as four years. In FY2021, which is the first yearof the plan, we will thoroughly deliberate specific strategies
for FY2022 to FY2024 while undergoing gradual recovery
from the COVID-19 pandemic.

2. Medium-term Management Plan 2024 Basic Policy
Under V120, which was the medium-term management
plan before last, the Meiden Group clarified its policy towards

Reflecting on Medium-term Management Plan 2020
In a harsh business environment, the results of initiatives could be seen in performance.
The Meiden Group considered Medium-term Management
Plan 2020 to be a “powerful step forward” phase in orderto jump in the future. We have conducted active investment
in growth businesses such as Overseas Transmission andDistribution Business and EV, enhanced Earnings-based
Businesses through business model reforms and increased
productivity, and worked to create a new growth businesses
in semiconductor related businesses etc.
With regard to Growth Businesses, in the Overseas
Transmission and Distribution Business, we conducted capital
participation in overseas local companies and establishedoverseas sites, while in the EV Business, we establishedoverseas sites and conducted capital investment in Japanand overseas, in addition to promoting the creation of afoundation for growth. As for Earnings-based Businesses, weestablished a business unit to plan solutions for the Japanese
infrastructure market, reinforced information sharing between
business units, increased efficiency of internal tasks,
conducted quality control based on data, and increased thequality of maintenance and service using digital tools. In New
Growth Businesses, the business intended for semiconductor
is gradually growing and becoming an area supporting theresults of the Meiden Group, even though it did not greatly
increase in scale. We have also been focused on unearthing
new markets and developed new businesses, such as
launching new companies using pure ozone technology andinvesting in a Polish startup that specializes in motor analysis.
In conjunction with our initiatives for business activities,
we have also been worked to increase the “quality” of our
foundation for activities. From an environmental perspective,
we promoted initiatives to reduce the energy consumption of
production processes and eliminate SF6 gas, etc., based on
the First Meiden Environmental Vision. Furthermore, we were

37

MEIDENSHA REPORT 2021

recognized by the Ministry of Health, Labour and Welfare andthe Ministry of Economy, Trade and Industry for working toestablish a positive workplace environment for employees.
With regard to corporate governance, we transitioned froma company with an Audit & Supervisory Board to a company
with an Audit & Supervisory Committee in order to enhancethe oversight function of the Board of Directors and speed
up decision making. We also implemented various measures
to realize a spirit which is the inside of our slogan, “quality
connecting the next”, in every aspect of corporate activities,
including conducting training with regard to improper conduct
and harassment and building systems for prompt discovery.
Through the results of such initiatives, we ensured that
we have improved our results, and achieved our highest
ever net sales and operating income in FY2019. In FY2020,
amid a severe business environment, we achieved
operating income of ¥8.3 billion, which we believe shows
the results of initiatives up to this point, even though we did
not achieve the targets in the medium-term management
plan due to the COVID-19 pandemic.

Main Results of Medium-term Management Plan 2020
Active investment in the EV business (Japan and China)● Results led by the Public Infrastructure Business and theMaintenance and Servicing Business● 	 Promotion of partnerships
		 (FEV Group Holding GmbH in Germany andElmodis Sp. z o.o in Poland, etc.)● Establishment of new companies
		 (MEIDEN AMERICA SWITCHGEAR, INC. in the U.S.A. and
MEIDEN NANOPRESS INNOVATIONS, INC.)● Investment in a Vietnamese switchgear manufacturer
		 (VIETSTAR INDUSTRY CORPORATION in Vietnam)●

businesses in which it will promote growth, while underMedium-Term Management Plan 2020, we conductedinvestment to ensure both improved performance andgrowth. We consider Medium-term Management Plan
2024 to be our “jump” phase, where we will produce
results from our investments under the previous mediumterm management plan, further strengthen our revenue
base, and achieve “high-quality” growth.
In recent years, awareness of SDGs has increased, andwe will develop our management and business strategies
around ESG, while creating a foundation for sustainablegrowth in 2024 and beyond by promoting ambidextrous
management.

Generating results from initiatives to increase growth and earning power, and realizing “high-quality” growth.
Corresponding to the changes of the times and promoting ESG-focused management to build a new society.
2015-2017
V120

2018-2020
Medium-termManagement Plan 2020

HOP

Powerful
STEP

Establishingan earnings baseStrengthening
the earnings base2021-2024
Medium-term Management Plan 2024

JUMP
Realization of“high-quality” growth

Growth investments
Establishing growth areas

Finding new areas2025
onwardPromoting managementambidexterity

Promoting
ESG
Management

Climate change countermeasures (carbon neutral)
Highly probablechanges of the times

Ideal State of Being/Vision

Work to build a newsociety through integrity to
the earth, society, andpeople, and through thepower of co-creation

Digital transformation (DX)
Different communities, human diversity

3. Group Strategies
In order to ensure optimization and efficiency of businesses,
we have divided businesses into four groups to correspondswiftly and appropriately to the changing environment anddiversifying customer needs. We will promote strategies
for each group in order to realize our ideal new society, in
accordance with social changes.
1. Power Infrastructures Business GroupIn addition to our previous businesses aimed at powercompanies, we will focus on expanding Small and Mediumsized HydroPower Generation Business or O&M Businessof Hydro and Wind Power, and developing our solutions
business, which uses renewable energy. In the Overseas
Transmission and Distribution Business, we will work to
expand our businesses and increase earnings in India,

Vietnam, and North America, in which we conducted
capital investment in addition to the Singapore market,
which is our base.
2. Public, Industrial & Commercial Sector Business GroupWe will promote solution proposals to municipal
governments, etc., to respond to the new issues ofwidespread infrastructure services, becoming carbonfree, and BCPs. We will also focus on creating businesssynergy through collaboration with the Field Service
Engineering Business Group. With regard to the Overseas
Rail Business, in addition to completion and increasing
profitability of existing projects, we will sustainably improve
an importance of existence of the Meiden Group throughnew projects and contribute to the creation of railway
infrastructure.
MEIDENSHA REPORT 2021

38

Our Strategy

Medium-term Management Plan 2024

4. Field Service Engineering Business Group
Against a backdrop of rising demand for BCPs, energy
conservation, and prolonging of equipment life, we will workfor further expand and increase revenue through of our
one-stop solution for service for electrical equipment repair,

In order to solve social issues including environmental
issues, we must expand business into new areas beyond
its framework, in addition to conventional business areas,
and it is essential to conduct innovation and launch new
businesses. Under the current medium-term management
plan, we will work to conduct “ambidextrous management”
where we improve existing businesses while also searchingfor and investing in new business areas. As exploring andinvesting in new business areas, we will challenge ourselvesto contribute to carbon neutrality through environmentallyfriendly products and services, reduce labor and increase
efficiency through digitalization, build a resilient society
through BCP products and services, etc., allocate resources
to enable these, create new value, and create a new society.
We will also actively engage in partnerships in order to achieve
innovation through co-creation with other companies.

Shift earnings obtained in existing fields to investment in new fields, and accelerate the creation of a new society.

by shifting earnings obtained in existing businesses to active
exploration of and investment in new fields

Products andservices that
contribute tocarbon neutrality

Three-pronged structure supporting
innovation to strengthen both individuals
and the organization
1) Organization of the innovation process
2) Training of diverse personnel to handle new development
3) Exploration and co-creation of new social needs

5. Promotion of ESG Management
We aim to realize a “jump” by promoting management
focused on ESG, and be a company that grows in asustainable manner.
Under the current medium-term management plan, we
have defined “our ideal society to be achieved by 2030” andexpressed our “ideal state of being,” “vision,” and “importantvalues,” according to social changes. In order to achieveeach of these, we have used a back-calculating approach
to identify the following focus areas in which we can leverage
the strengths of the Meiden Group, and we take the lead insolving social issues and creating social value through cocreation with other companies and customers.
Led by the ESG Business Unit, which we established

39

MEIDENSHA REPORT 2021

Marketdevelop and commercialize organizational
and individual ideas

Existing Peripheral New

Establish a budget for investment in new fields, andServices that savehuman resources
and increase efficiency
through the use ofdigital solutions
BCP businessthat contributes
to a safe andsecure society

Excitement
Cultivate the existing
peripheral area

Existing

Peripheral

Excitement

Promoting management ambidexterity

Create new value that supports a new society (Target: Net sales of ¥5 billion in FY2024)

New

Technology, products, and services

in April, we promote activities at company-level for
specific initiatives and setting targets in order to conduct
ESG management. We also develop the Second Meiden
Environmental Vision, which raised greenhouse gas
reduction targets to SBT certification standards, and wecontribute to further reductions in environmental impact.
Related pages ▶ p.17-20: ESG Vision

4-Year cumulative
operating cash flow:¥70-75 billion

Increase corporate value
through business● Continue stable dividend(payout ratio at 30% level)●

Expansion of net worth: ¥120 billion
Reduction and effective use of assets● Net D/E ratio: 0.25~0.3 times●●(In billion yen)

FY2020 results

FY2021 forecast

FY2024 targets

Orders

221.3

240.0

300.0

Net sales

231.2

245.0

300.0

Operating income

8.3

10.0

18.0

Ordinary income

8.4

10.0

17.5

Net income attributable to owners of parent

7.3

7.0

12.0

ROE

8.0%

7.1%

10.0%

ROIC

4.2%

4.8%

8.0%

Operating profit margin

3.6%

4.1%

6.0%

Capital investment (general investment)

10.8

4-Year cumulative ¥40.0 billion

Growth investment budget

6.4

4-Year cumulative ¥20.0 billion

Research and development expenditure

9.4

4-Year cumulative ¥40.0 billion

Net worth

96.5

Power Infrastructures Business
Group
Public, Industrial & Commercial
Sector Business Group
Mobility & Electrical Components
Business Group
Field Service Engineering BusinessGroup

Real Estate

Others (including elimination)

Total

100.0

29.8%
FY2020 results

6. Financial Strategy
The Meiden Group will conduct investments for longterm growth and shareholder returns as long as financial
soundness is also increased. Under the current medium-term
management plan, we anticipate 4-year cumulative operating
cash flow between ¥70.0 billion and ¥75.0 billion. Our policy

Growth investments: Invest in EV business and wind power
replacement, etc.
General investments: Investments in the renewal of existing production
equipment, environmental measures, etc.

Financial Targets (consolidated)

Consolidated dividend payout ratio
Provide newvalue that
excites people

Investing in growth and make shareholder
returns after improving financial soundness.

Shareholder
returns

4. Promoting Ambidextrous Management

is to use this as resources to conduct capital investment andshareholder returns, and to reinforce our financial base.
Our financial strategy is to have net worth of ¥120.0
billion and increase a net D/E ratio by 0.25~0.30 times by
the end of FY2024. Our investment strategy is to conduct
capital investments of ¥60.0 billion in as well as general andgrowth investments. With regard to shareholder returns, wewill determine the value of dividends with a target payout
ratio of 30% on the assumption of stable dividends.
Through a series of measures, we aim to achieveorders of ¥300.0 billion, net sales of ¥300.0 billion,
operating income of ¥18.0 billion, ordinary income of ¥17.5
billion, and net income attributable to owners of parent of¥12.0 billion by end of FY2024, which is the final fiscal yearof Medium-term Management Plan 2024.
We have set targets of ROE of 10%, ROIC of 8%,
and operating profit margin of 6%, and we aim to achieve
high-quality growth and be a company that grows in asustainable manner through ESG management.

Investment
strategy

inspection, maintenance, and operation management in asingle package, in addition, we aim to incorporate smart
technology in maintenance services and provide new
solutions through the use of ICT.

Financialstrategy

3. Mobility & Electrical Components Business GroupIn the motor and inverter business intended for EV, we
are developing our business with a focus on automotive
manufacturers in order to realize a clean mobility society. In
the EV business, we will promote product development andcapital investment in order to achieve our FY2028 targetof net sales of ¥100.0 billion, achieve business expansion,and return on investment as a result.
With regard to the logistics business and semiconductor-related businesses, etc., we will enhance cuttingedge technology and partnerships, and promote labor-saving
and energy-saving measures in industry and digitalization
in society. We will focus on smartification of technology inmaintenance of industrial products using digital technology,
increasing sales of environmentally considerate motors, andexpanding share of products for semiconductors.

120.0
Stable at 30%

FY2021 forecast

FY2024 targets

Orders

47.8

51.5

58.0

Net sales

45.9

47.5

55.5

Operating income

(0.3)

(1.0)

2.0

Orders

81.0

79.5

95.8

Net sales

88.6

91.3

92.8

Operating income

3.3

3.8

5.6

Orders

48.0

65.3

100.0

Net sales

52.4

65.9

100.0

Operating income

(0.1)

1.5

8.1

Orders

39.3

39.5

42.0

Net sales

38.7

39.4

41.0

Operating income

5.7

5.8

6.0

Orders

3.4

3.2

3.2

Net sales

3.4

3.2

3.2

Operating income

1.3

1.1

1.1

Orders

1.8

1.0

1.0

Net sales

2.2

(2.3)

7.5

Operating income

(1.5)

(1.2)

(4.8)

Orders

221.3

240.0

300.0

Net sales

231.2

245.0

300.0

8.3

10.0

18.0

Operating income

Note: FY2020 results have been adjusted to reflect the new segments and revision of headquarters expense allocations from FY2021 onward

MEIDENSHA REPORT 2021

40

Our Strategy

M

Research and Development and Intellectual Property Strategy

Medium-term Management Plan 2024 Researchand Development Corporate Strategy
Recently, the social environment has become harsher andmore complicated due to factors such as global warming
and resulting intensification of natural disasters, anddeclining productive population due to aging in Japan.
We are seeing great changes in social life and work-styles
with factors such as popularization of normalizationof protective societies by enhancing dissemination of
information and advocacy for environmentally-friendly
lifestyles through zero emissions.
In this environment, the Meiden Group will promote theintegration of energy and information systems, and aims tocreate products and services that contribute to the solutionof social issues through technology, in order to realize asociety where everyone can live safely and securely.
Focusing on technology required to realize theMedium-term Management Plan 2024 Research andDevelopment Corporate Strategy

Social Issues● Global warming● Pandemic● Energy mix and instability● Aging population and labor
shortages

Present
R&D that contributes tothe maintenance andexpansion of existing
businesses

41

MEIDENSHA REPORT 2021

Enhancing Competitiveness of Existing Businesses
by Increasing Development Capabilities

2024

Future Vision《Ideal state of being》
R&D that continues to create new value
with innovation and foresightEnvironmentally-considerate
products (elimination of SF6 gas)
● Electrification of automobiles● Promotion of renewable energy● Digital transformation and AI (O&M)●

Masahiko Suzuki

Ambidextrous R&D

Enhancing competitiveness ofexisting businesses by increasing
development capabilities●

Managing Executive Officer
General Manager Research& Development Group

Meiden Group’s ideal society, it is important to enhance
product competitiveness through ongoing QCD
improvement at existing businesses, while for the Meiden
Group to grow, it is necessary to create new products
and new businesses.
Amidst changing business conditions, in order
to approach our ideal state of being for research anddevelopment of always continuing to produce newvalue through innovation and foresight, it is essential
for us to conduct ambidextrous R&D that includes“enhancing competitiveness of existing businesses”
and “considering matters from a system perspective
and developing new products and new businesses” byincreasing development capabilities. This is supported
by continuous evolution of foundational technologies
that support our products and technologies, andexpansion and enhancement of strategic intellectual
property activities that support businesses and R&D.

Considering matters from a systemperspective and developing new
products and new businesses
CO2 reduction
Clean energy (hydrogen)● DC network (power-saving)● BCP, CASE, digital transformation,
and AI● Safe society (counterterrorism, etc.)●●

Swift responsiveness

Foresight

Society Realized
Through the Power of Electricity
Zero CO2 society
Society that is resilient against natural disasters● Safe and secure society●●● Continuous evolution of foundational technologies that support our products and technologies
Expansion and enhancement of strategic intellectual property activities that support businesses and R&D

S

A

G

E

Aiming to create links inside and outside the Meiden Group and produce products and services
that contribute to the solution of social issues

Focusing on response to increasing environmental needs and creation of new products andsystems using digital technology such as the IoT and AI

145 kV tank type vacuum circuit breakerS

R&D Key Measures

Results of Research and Development under Medium-term Management Plan 2020

Through the three years of Medium-term Management Plan
2020, we conducted research and development with the aimof solving recent social issues. To respond to environmental
problems, we enhanced vacuum technology and products withthe aim of eliminating the use of SF6 gas, which is a highly potent
greenhouse gas. With regard to environmentally considerate
electric vehicles, we are promoting development of drive systems
with the aim of reducing size and weight. We have focused on
creation of new products and systems using digital technology
such as the IoT and AI to deal with social issues of declining
population, aging society, and natural disasters, etc.

E

We will enhance our core products and services, which
is where our strengths lie, by leveraging our technology
and knowhow relating to heavy electric products
developed since Meidensha was founded.
In the power sector, we are working to expand our lineup
of vacuum circuit breakers (VCBs) with the aim of reducing
environmental impact. Under Medium-term Management
Plan 2020, we released the 145 kV Eco tank Type Vacuum
Circuit Breaker as the world’s first commercial SF6 gas-freetank type vacuum circuit breaker over 100 kV, in response
to tighter environmental regulations in the North American
market. As environmental regulations grow tighter, we areworking to develop foundational technology for vacuum
interrupters (VIs) with the goal of producing SF6 gas-free
245 kV VCBs, in order to cater to the needs of the market.
We also aim to commercialize inertial inverters that prevent
large-scale blackouts by maintaining the proper frequency
in order to safely and stably connect renewable energy,
which will become even more common going forward, topower transmission networks.
With regard to environmentally-considerate electricvehicles, we commercialized integrated EV drive system(motors and inverters). And for automobile testing field, we
also developed EV dynamometers suited to high-speed,
high-torque for EV motors demands in the Mobility T&S
Business. Going forward, we will continue to conductadvance development to promote the uptake of EVs throughthe new EV Components Advance Development Section.
With regard to R&D
processes we value ourrelationships with customers
and we will develop
products that are truly
sought by our customers
through the establishmentof the Product Design
Phase Project Management Vacuum arc observation experiment for
VCB development
Department.

Considering Matters from a System Perspective and Developing New
Products and New Businesses
We will conduct research and development to realize “a zero CO2 society,” “a societythat is resilient against natural disasters,” and “a safe and secure society” with the aimof realizing a society where people live in harmony with the earth. To this end, we haveestablished Advanced Technology Research Laboratories, and we are embracing thechallenge of discovering exciting R&D themes by developing innovative personnel and
Related page ▶ p.30: Innovation Strategy
building a theme implementation framework.

R&D Expenses (Millions of yen)
(FY)
2016

9,462

2017

9,402

2018

9,458

2019
2020
2021
(Forecast)

10,467
9,468
10,700Intellectual Property Strategy

Creation and acquisition of intellectual property rights to enhance existing businesses competitiveness, andpromotion of intellectual property activities that contribute to developing new products and businesses
Under Medium-term Management Plan 2020, we rolled
out strategic intellectual property activities focusing on
the overseas power sector, the automobile-related sector,
the digital technology sectors including IoT and AI, andwe worked to protect R&D results and enhance productcompetitiveness. Under Medium-term Management Plan
2024, we will further enhance intellectual property activities inorder to enhance the competitiveness of existing businesses
and develop new products and new businesses.
Expanding Strategic Intellectual Property Activities
To enhance the competitiveness of existing businesses,
we will expand strategic intellectual property activities
such as promoting identification and acquiring rights tocore technologies with market dominance, in conjunction

with the newly established Product Design Phase ProjectManagement Department, and aim to create and acquire
intellectual property rights from a business perspective.
Intellectual Property Activities for ESG Management
Leveraging of intellectual property rights overenvironmental technology in promoting co-creation with
global, private enterprises and public institutions are ouraim, and the discovery of businesses that contribute to
the development of new products and businesses, andthe creation of innovation are also aspects of this concept.
By promoting intellectual property activities such as these,
we will accelerate the spread of environmental technology,
and contribute to solution of social issues such as thoserelated to SDGs and realization of ESG management.

MEIDENSHA REPORT 2021

42

Our Strategy

Public, Industrial & Commercial Sector Business Groupand Field Service Engineering Business Group
Medium-term Management Plan 2024 Key Measures

FY2024 Management Targets

Orders95.8

billion yen[79.5]billion yen

Net sales

92.8

billion yen[91.3]billion yen

Operating income

5.6

billion yen[3.8]
billion yen

Parentheses indicate FY2021 forecasts

Representative Director & Executive Vice President
in charge of the Public, Industrial & Commercial Sector
Business Group and Field Service Engineering Business Group

Public, Industrial & Commercial
Sector Business Group
Business Environment (Risks and Opportunities)
Since it was founded, the Meiden Group has
been involved with business that supports social
infrastructure, and contributed to the creation of amore affluent society. In recent years, people havestrongly demanded that social infrastructure be “safeand secure” due to increasing severity of natural
disasters due to climate change and the impact ofthe pandemic, etc. The business environment inwhich Meidensha operates and customer needs are
significantly changing, including the need to replaceaging equipment, increasing awareness of BusinessContinuity Plan (BCP), and global environmental
problems. We are aware that the business
opportunities to contribute are increasing for us,
who have products related to safe and secure social
infrastructure, and environmental and BCP products.
However, due to acceleration of digitalization,
we are cautious of risks that new competitors may
emerge, or that we may be left out of the market
due to slow adoption of digital technology. As an
example of recent changes, from the perspectiveof sustainability, a trend is growing to adopt
environmentally friendly products as corporate
responsibility to realize a sustainable society interms of conducting capital investment. We aim to
be a company that continues to build new social
infrastructure and support an affluent tomorrowthrough provision of products and maintenance andservicing that anticipates customer needs and social
trends so that customers believe “It was the rightchoice that I installed that Meidensha product orsystem” when looking back in 20 or 30 years’ time.

43

MEIDENSHA REPORT 2021

Shosuke Mori
Reflecting on Medium-term Management Plan 2020
We have worked to provide solutions to issues directly facing
municipal governments, etc., by focusing our infrastructurebusiness knowledge, under the leadership of the Public
Infrastructure Business Planning Group that was establishedin April 2020. With regard to public infrastructure such as theWater Infrastructure Business, we have experienced work
stoppages and delays in some projects due to the COVID-19
pandemic; however, overall business performance remained
firm. In the Railways Business, we made sure we worked
on projects to replace existing equipment in Japan andpromoted market development through Meidensha’s
specialty products such as overhead contact line inspection
system; however, postponement of new projects in Japanand delay or cancellation of overseas railway projects due tolimitations on financial activities as a result of the COVID-19
pandemic prevented us from building a stable revenue base.
With regard to the Social Infrastructure Systems, we are
gradually promoting expanded sales for specialty productsthat contribute to enhanced resilience for the public sector
and reduced environmental impact; however, increasing
earning capacity of businesses based in the ASEAN region
that are aimed at Japanese companies is an issue.

Medium-term Management Plan 2024 Corporate Strategy
For local and municipal governments, etc., we will promote
activities to propose solutions to respond to new issues
such as widespread infrastructure services, becoming
decarbonization, and BCP, and focus on creating businesssynergy in conjunction with the Field Service Engineering
Business Group. With regard to the overseas railway business,in addition to completion and increasing earning capacity ofexisting projects, we will sustainably improve an importanceof existence of the Meiden Group through new projects andcontribute to the creation of railway infrastructure.

Public Infrastructure BusinessSupporting safe and secure water supply through technology, products,
services, and solutions that leverage digital transformation (DX)The importance of water infrastructure lies in acontinuation of providing safe and secure social
infrastructure to customers. Going forward, we aim to
be a business that is continuously needed by society
by using DX to evolve our technology, product, service,and solution strategies. With regard to products, it isimportant to develop environmentally-considerate
products for water treatment facilities. Specifically,
we are promoting expanded sales of energy-efficient
products such as high-efficiency transformers andrenewable energy products, etc. In addition, we will
make proposals for the optimal operation of watersupply and sewerage facilities through supervisory
control that actively utilize the IoT, saving energy throughAI diagnostic functions, etc., and operational support
for appropriate control of water quality and flow, etc.
With regard to facility operation, we will ensure
dominance by proposing reduced labor in maintenanceand management through DX in the midst of a shift
from on-premises work to the Cloud. Recently, there

has also been an increase in operation of facilities
through public-private partnerships. We will leverage
our knowhow accumulated over many years throughon-site maintenance and management facilities, andgoing forward, in order to optimize the operation ofwhole facilities, we will expand our business areas
through partnership strategies to collaborate withcompanies, including those in other fields and local
companies.

Water purification plant maintenance

Railways BusinessSupporting railroad infrastructure and contributing to carbon neutrality
In addition to continuing to deliver equipment that
supports safe and steady transport by rail systems,
it is important to respond to needs such as assisting
railway operators to become decarbonization,
conducting energy-efficient and remote maintenance,and prolonging the service life of equipment.
In Japan, we will increase our capacity to caterto replacement of existing equipment, which is ourbusiness revenue base, by contributing to energyefficient maintenance through proposals of theoverhead contact line inspection system, Catenary
Eye, which relies on image recognition, and expanding
sales of specialty products such as electrical equipment
mold products and impedance bonds.
Overseas, where there is strong demand for new
construction, we will not only increase profit of improving
risk management capabilities and earning capacity byenhancing project management, but also winning new
projects, particularly in the ASEAN region, by working

with local subsidiaries and business partners. Froma medium to long-term perspective, we anticipate
that there will be a movement towards utilization ofrenewable energy and hydrogen, etc., with a view toachieving net zero GHG emissions by 2050. We willremain sensitively aware of our customers’ businesstrends and changes, and rapidly and flexibly makeproposals.

Rail vehicle fitted with the overhead contact line inspection system, Catenary Eye

MEIDENSHA REPORT 2021

44

Our Strategy

Public, Industrial & Commercial Sector Business Group and Field Service
Engineering Business Group
Social Infrastructure Systems BusinessContributing to building a decarbonization, resilient society by linking
products and maintenance
Recently, customer needs have included resilient
products that contribute to BCP policies andenvironmentally considerate products that contributeto becoming decarbonization. In addition, maintenanceof equipment has been insufficient for both government
and private customers due to labor shortages, so weare enhancing our optimal technological proposals thatlast for the each life cycle of equipment in conjunction
with the Field Service Engineering Business Unit.
For customers in Japan, we are working to enhance
proposals for BCP products such as mobile power
supply vehicle, emergency generators, and power
storage systems, and improve value provision throughField Service Engineering BusinessGroup
Business Environment (Risks and Opportunities)
With regard to market conditions for the Japanesemaintenance and servicing business, against a
backdrop of heightened awareness of BCP anddisaster prevention due to the recent frequently
occurring natural disasters, increased need to prolong
facilities life, and customers’ shortage of maintenancetechnicians, we expect the need and demand forthese things to further increase going forward.
Although it is unclear how long the impact of shrinking
budgets for customers due to the worsening businessenvironment as a result of the COVID-19 pandemic
will last, we will roll out “Life Cycle Engineering” that
integrates products with maintenance that cater tobecoming decarbonization, ESG, and SDGs.
FY2024 Management Targets

Orders42.0

billion yen[39.5]billion yen

Net sales

41.0

billion yen[39.4]billion yen

Operating income

6.0billion yen[5.8]
billion yen

Parentheses indicate
FY2021 forecasts

45

MEIDENSHA REPORT 2021

the use of ICT. In overseas markets, we will enhance
activities to receive orders for stable EPC projects,
mainly targeting Japanese companies, and delivering
customers security and reliability while increasing profit
by enhancing project risk management.
Recently, there have been more and morecompanies engaged with environmental managementwith awareness of SDGs, carbon neutrality, and RE100.
We will work to break into markets for products thatcater to social changes and needs, by further focusing
on development of specialty products, including
expanding our line of environmentally considerate
products, etc.

Reflecting on Medium-term Management Plan 2020
Demand for maintenance services-related that cater to
BCP and energy conservation, and prolong the service
life of facilities has been strong, even during the COVID-19
pandemic, and in FY2020, we marked a new record,
exceeding the previous fiscal year’s record high results. Overthe last three years, we have ensured that we walked thepath of growth by rolling out our “One-Stop Service”, etc.
In October 2020, we established the new technology
center, “Manabi-ya,” at the Numazu Works, which hasenabled hands-on training using actual equipment on
assumption of an actual worksite environment. By increasing
understanding of product life cycles (manufacturing,
quality assurance, inspection, maintenance, prolonging
life, refurbishment, and responding to malfunctions), we
educate and hand down technology and skills to young
workers at an early stage, allowing them to increaseawareness of quality and safety by experiencing incidents
and accidents that they would not be able to experience
in reality through experiential education in a virtual oraugmented reality environment using ICT.

Medium-term Management Plan 2024 Corporate Strategy
We will aim to jump into “customer solution services
through enhanced linkage between products sales andmaintenance service, based on life cycle engineering” andfulfil our role as the revenue base of the Meiden Group.
We will work to further expand through of our onestop solution for services for electrical equipment repair,inspection, maintenance, and operation management
in a single package. In addition, we aim to provide new
solutions through smartification of maintenance services
using ICT and collaborating with manual services areas.

Medium-term Management Plan 2024 Key Measures

Contribute to the solution of customers’ issues in our role as building
bridges between products and services
MEIDEN ENGINEERING CORPORATION, which is
the Meiden Group’s core maintenance and servicing
company, has received daily praise from customers for its
fast and precise response and advanced technologicalcapabilities. It has a full complement of replete personnel
at maintenance and servicing sites in 35 locations around
Japan. Under Medium-term Management Plan 2024, we
will incorporate environmental conservation proposals
such as conserving energy and reducing greenhouse gas
emission in our “One-Stop Solution” services, promote“Smart Security,” which is represented by remote
maintenance and condition monitoring, etc., and roll out
a mobile power supply vehicle rental service with partnercompanies, in order to strengthen links between products
and maintenance and servicing in BCP measures. We
will not only educate young technicians by using the newtechnology center, Manabi-ya, but also work to create
workplaces in which experienced technicians exhibit
their abilities, and promote the provision of smart solution
services to optimally solve the issues of our customers
equipment as a whole based on life cycle engineering.
Provision of smart solution services is possible
due to linking delivery of products with maintenanceand servicing, and being able to provide products fromwithin the Group is a major point of differentiation fromother companies. In particular, for private customers that
do not have their own equipment technicians, Meiden
Engineering’s technology service staff frequently visit
worksites, so they are able to regularly communicate withcustomers and understand their needs. Going forward,
through these activities, we will continue to make original
proposals to increase customer satisfaction, by taking
on customers’ issues and requirements.
Over the Meiden Group’s history of more than 120
years, Meidensha products have operated at many sites
in various regions, and we serve customers at morethan 7,000 locations in Japan through the maintenanceand servicing business. We will use the trust of ourcustomers as fuel to work to solve customers’ issues
and contribute to
the realization of asustainable society
in our role as abuilding
bridges
between products
and services.
Maintenance education using AR

Message from the President of MEIDEN ENGINEERING CORPORATIONMEIDEN ENGINEERING CORPORATION (MEC) has been loved for over half a century
MEC’s employees have worked closely with communities at 35 sites throughout Japan, without forgetting to focus
on customers, leading to receiving praise for technological capabilities by continuing to sincerely attend to ourcustomers’ needs as required and build trust over many years. The “MEC spirit,” which embodies this corporate
culture, continues to be passed from generation to generation. By expanding innovation, sharing informationand laterally connecting organizations, we form “trinity” with customers, sales, and technology to provide “MEC
Quality” services through swift judgment. We have promoted development of specialty maintenance and servicing
technology, including our advanced diagnostic technology, retrofit technology, andreplacement technology, and we have worked to conduct professional development
and support our technological service staff in obtaining qualifications. It took time
for our One-Stop Solution for services to take hold since we started rolling it out
in FY2014, but now, we have shown results from our site-oriented proposals byenhancing “Walk-Throughs” to inspect equipment alongside customers. It will not
be easy, but going forward, we will continue to promote the life cycle engineeringthat linked products and maintenance and the Facility Management Business inorder to lead to the solution of issues such as maintenance of customers’ facilities
MEIDEN ENGINEERING CORPORATION
in remaining optimal condition and measures to become decarbonization and thePresident
MEC team as one aims to make a jump to solution services.
Katsumi Kurihara

MEIDENSHA REPORT 2021

46

Our Strategy

Power Infrastructures Business Group
Medium-term Management Plan 2024 Key Measures

FY2024 Management Targets

Orders58.0

billion yen[51.5]billion yen

Net sales

55.5

billion yen[47.5]billion yen

Operating income

2.0billion yen[ 1.0 ]billion yen

Parentheses indicate FY2021 forecasts

Director and Senior Managing Executive Officer
in charge of the Power Infrastructures Business Group

Nobuaki Tamaki

Business Environment (Risks and Opportunities)

Reflecting on Medium-term Management Plan 2020

Japanese electricity transmission charges areunder pressure to become lower, and a certain
amount of generation capacity has already been
secured, so not many new projects are expected
for generators, transmission and distribution
equipment. The business environment for thisfield is not easy to navigate. In overseas markets,
demand for generation, power transmission anddistribution infrastructure continues to grow;however, competition is intensifying, including for
major global companies. Local manufacturers
are also developing. Meidensha must develop
competitiveness to remain standing in the face ofboth these threats, and ensuring profitability is amajor issue.
From a medium-term perspective, the recent
trend of carbon neutrality is expected to be agreat boon to the Meiden Group. In addition to the
product areas of hydroelectric power generationand photovoltaic PCSs, we own wind farms for theelectricity sales business, as well as O&M knowhowthat we are building up through the operation ofthese. These results and this knowledge, which wehave accumulated over many years, is a valuable
resource for Meidensha, and we expect great
growth from leveraging it going forward.

In the business mainly intended for Japanese powercompanies we have been able to secure a certain share anda certain level of sales, against a backdrop of cost reduction
efforts, etc., by dividing labor with overseas production sites.
In addition, we have contributed to the environment throughthe power sale business by wind power generation and byreceiving orders and undertaking construction in large-scalehydroelectric power generation projects.
In the Power Generation and T&D Business, which is
focused on overseas markets, in addition to intensifying
the competitive environment, restrictions on activities andeconomic disruption in FY2020, etc., due to the COVID-19
pandemic, have had a great impact, leading to results that fell
greatly short of our targets in the medium-term management
plan. However, we have promoted the establishment of sites
for future business growth. For example, in the U.S., which
is trending towards tougher environmental protection, we
have established a new company to manufacture and sell
environmental products for electrical power companies, and
we also invested in a Vietnamese switchgear manufacturer
to develop as a core location in the Mekong region.

47

MEIDENSHA REPORT 2021

Medium-term Management Plan 2024 Corporate Strategy
In the business intended for power companies, along withpromoting proposals for new systems using digital transformationand increased sales of products for reducing carbon emissions,
we will focus on development of O&M businesses of small andmedium-sized hydroelectric power generation and wind power
generation, which are able to link social trends, with our specialty
technology, and our solutions business, which uses renewableenergy, etc. In the Overseas T&D Business, we will work toincrease revenue in the Singapore market, which is our base,while expanding the business and achieving contribution toquick earnings in our sites in India, Vietnam, and North America.

Power Generation and T&D BusinessBusiness development focused on ESG and rebuilding production systems
In the power generation sector, we will increase
competitiveness, including maximizing value and services,in the renewable energy-related business, by enhancing
earning capabilities of the hydropower business. In the
T&D sector, we will promote increased utilization of ourIndian locations, increase revenue by making steady
growth of businesses in the U.S. and Vietnam, where we
conducted investments under the previous medium-term
management plan. Furthermore, we will work to review
our business base, etc., by reconstructing our sites.
As the trend towards self-sufficiency or domesticoriented proceeds in countries around the world,going forward, we believe the movement to procure
from nearby countries and regions will grow stronger.
Since 2015, we have built a base network, which
covered region by a wide area, not just spots, that
includes TRIDELTA MEIDENSHA GmbH in Germany,
PRIME MEIDEN LIMITED in India, MEIDEN AMERICASWITCHGEAR, INC., in the U.S., and VIETSTAR MEIDENCORPORATION in Vietnam, which was brought into theGroup through investment, and we will quickly build arevenue system based on this global framework.
We will also expand our lineup of productsthat contribute to the environment, including powertransmission products that do not include SF6 gas, andaim to develop our businesses to make our presence
felt in each region by honing our ability to cater to local
specifications, features, and market demands.

MEIDEN AMERICA SWITCHGEAR, INC.

Power & Energy Business

Taking advantage of diversified society and carbon neutrality as anopportunity to expand businessAlong with the existing business for power companies,
we will focus on the renewable energy business withthe aim of contributing to a carbon-free society.
In addition to aiming to expand our specialty
Hydroelectric Power Generation Business, we areaccelerating the rollout of PCSs for photovoltaic generationand power storage system. We have listened to recent
customer needs, and we have promoted research anddevelopment into multifunction PCSs that contribute to
local production and consumption of energy and local
BCP by combining storage batteries with functions to use
power from renewable sources, such as solar power, tocharge electric vehicles. Regarding wind power, we aim
to leverage the knowledge and skills developed over yearsof operating wind farms to expand the O&M business andpromote increased sales of interconnection facilities, etc.
At the same time, we will further focus on proposals
for systems that utilize local renewable energy based on
knowledge from verification tests which is progressing
in various districts. We will also enhance proposals topower companies and businesses in the supply anddemand adjustment market to incorporate growth of the
T&D products market due to servicing T&D networks as
a result of increased investment in renewable energy.
Going forward, research, development, andinnovation become important to contribute to thecreation of a sustainable society. We will contributeto the creation of clean energy and livable cities bypromoting systems to effectively utilize younger humanresources and collaborate beyond the company.

Hydroelectric power generation equipment

MEIDENSHA REPORT 2021

48

Our Strategy

Mobility & Electrical Components Business Group
Medium-term Management Plan 2024 Key Measures

FY2024 Management Targets

Orders100.0billion yen[65.3]billion yen

Net sales

100.0billion yen[65.9]billion yen

Operating income

8.1

billion yen[1.5]
billion yen

Parentheses indicate
FY2021 forecasts

Director and Senior Managing Executive Officer
in charge of the Mobility & Electrical Component Business Group

Tatsuki Mochizuki

Business Environment (Risks and Opportunities)

Reflecting on Medium-term Management Plan 2020

In the EV market, we expect the market to growsignificantly towards 2030, buoyed by government's
support and the rising global tide of carbon neutrality.
In particular, in the Chinese market, where the Meiden
Group has established a new production site, althoughsignificant growth is expected, we are aware that anincreased number of players poses a risk. Goingforward, we expect to see the commodification ofmobility, and differentiation of in-house technology andproducts positioning in the industry will be important.
In the automotive industry, capital investment and R&D
investment have been significantly flown into CASE
related demand in order to realize a new mobility
society that caters to stricter environmental regulations
and the increased safety needs of an aging society,etc., and we must also propose our mobility T&S
products in accordance with these needs.
On the other hand, in the elevator and industrial
vehicle sector, we are currently seeing a gradual
recovery from last year’s tendency to limit capital
investment. Electrification is playing a major role inthis, and we see opportunities such as a movementof motorizing not only smaller models, but mediumsized forklifts in the field of electric forklifts andexpected electrification of construction machinery
as well. Furthermore, introduction of Automatic
Guided Vehicle (AGV) systems is expected toincrease due to a trend towards unmanned andfully automated production lines, including from theperspective of infection control measures.
In the semiconductor market, we expect themarket to continue to expand with increasing
demand for semiconductors due to lifestyle changes
such as 5G and the popularity of remote work, which
will be a boon for the Electronics Products Business.

Although demand for semiconductors has moved on from thetemporary leveling off to be at a high level in the Electronics
Products Business, the EV Business, Motor Drive Solutions
Business, and Mobility T&S Business were greatly impacted by
the headwind of the pandemic in FY2020. In the EV Business,investment in production lines is steadily progressing in Numazu,
Kofu, and Nagoya in Japan and also in China, and these lines
are gradually starting in sequence. We have also decided toinvest in a second line in China. In the Mobility T&S Business,
we have worked to accelerate development and increase
orders received for CASE related products, and in the Motor
Drive Solutions Business, we have launched new products
such as gearless high-speed drive systems for machineryand an AGV fitted with a cooperative robot manufactured by
FANUC. In the Electronics Products Business, we were able toestablish production systems that match with the expansion of
the semiconductor manufacturing equipment market, while we
did not achieve our target of increasing sales of new products.

49

MEIDENSHA REPORT 2021

Medium-term Management Plan 2024 Corporate
StrategyWith regard to developing the EV Business with an eye torealizing a clean mobility society, we will further promote
product development and the creation of competitive
production lines, as well as business expansion and quick
return on investment, to achieve our FY2028 target of net salesof ¥100 billion. With regard to the Logistics and Electronics
Products Businesses, etc., we aim to promote businessdevelopment that contributes to labor-saving and energysaving measures in industry and digitalization in society, etc.,
by pursuing cutting-edge technology and strengthening
partnerships. We will also incorporate smartification ofmaintenance of industrial products using digital technology,
increase sales of environmentally considerate motors, andexpand our share of semiconductor products.

EV and Mobility T&S Businesses

Contributing to the proliferation of electric vehicles for a carbon-freesociety and the promotion of next-generation mobility development
In the EV business, we will produce results from previous
capital investment. With regard to creating production
capacity, in FY2020, we decided to conduct additional
capital investment in China worth approximately ¥4.8
billion, in order to cater to strong local demand. We
plan to commence this new operation in 2023. With
regard to technological development, we will focus on
further miniaturization and increased output of the three
in one product, MEIDEN e-Axle, and work to evolve thefoundational technologies of cooling, high-speed, andnoiseless technologies. By establishing a unique mixed
flow production lines that produce multiple products on asingle production line as our weapon, we will enhance our
production capabilities, constantly improve our products,
and focus on developing new customers.

In the Mobility T&S Business, in addition to selling
dynamometers, by utilizing our technology, we aim
to develop the peripheral businesses such as testing,certification/evaluation support, and the support forcompliant with new regulations, in order to cater tothe trend of electrification and automation of vehicles.
Specifically, we will work toward package sales of HILS*,
and high-speed EV motor testing equipment, expanding
vehicle development engineering in conjunction with FEVJapan Co., Ltd., with which we have already had businesstie-ups, and contracting EV motor certification test, etc.
* HILS (Hardware-In-the-LoopSimulation): A development simulatorof simulated actual vehicles that
digitize engine functionality andvehicle behavior, etc.
EV motor stand-alone evaluation benchMotor Drive Solutions BusinessContributing to energy-saving, labor-saving, and power saving measures,
through electrification and digitalization
In the Motor Drive Solutions Business, we aim to combine the motor analysis and remote monitoring technologyof the Polish company, Elmodis Sp. z o.o., in which we invested in 2020, with our knowledge of hardware, in orderto further improve the quality of our motor products and maximize added value, such as by providing maintenanceand servicing solutions utilizing the IoT.
In the industrial vehicle sector, with regard to forklift drive and motors, we will focus on
increasing our market share by providing products for manufacturers’ new models, anddeveloping products for the electric construction machinery field, which is expected to growgoing forward. In the logistics sector, we will increase collaboration with system integrators androbot manufacturers, and increase sales of AGVs fitted with cooperative robots, etc., to cater tothe trend towards automation and labor reduction.
From a medium to long-term perspective, we will increase our range of products that
contribute to the environment, such as high-efficiency and gearless products, and create abusiness to contribute to customers’ efforts to reduce resource usage and environmental impact,
RocoMo-Vby establishing maintenance technology through the IoT.
Electronics Products BusinessContributing to future enrichment through the digitalization of society
We have provided many products to the semiconductor
industry, and in particular, our specialty is vacuum
capacitors, for which we have secured a high global
market share. As investment in the semiconductor
sector is active around the world, we aim to further
expand our vacuum capacitor market share, particularly
in North America, through speedy development ofcustom products and enhanced proposal capabilities.

In addition, we will aim to bring “Cold-cathode X-ray
Tubes” which developed as a new business area, tothe market promptly while increasing the current andvoltage.
Our component products are a way for people torealize their dreams. Going forward, we will continue toaim to realize an exciting society and remain a businessthat provides both social and financial value.

MEIDENSHA REPORT 2021

50

Our Strategy

Overseas Businesses: Business Expansion in ASEAN

VIETNAM
Business expansion in the Mekong region through additional investment
in our Vietnamese subsidiary

SINGAPORE

Business continuity with the infectious diseases countermeasures on site
At present, MEIDEN SINGAPORE PTE. LTD. has been
pursuing replacement and enhancements of equipmenton the North-South and East-West MRT* lines and also
a power equipment construction project with the aimof opening whole line of the Thomson-East Coast Linein Singapore. However, in FY2020, the circumstances
continued to prevent us from proceeding as we would have
liked, such as the projects being temporarily suspended,
due to the implementation of measures such as a socalled circuit breaker lockdown in Singapore as a responseto the COVID-19 pandemic. Even after resuming projects,
there have been strict limitations on the number of workers
and the extent of work area as the work is conductedunderground; however, we are continuing with projects
giving the utmost priority to infection diseases control
measures and safety. Although the completion had been
delayed, Stage 2 of the Thomson-East Coast line openedin August 2021. The opening of this railway will make thelives of the people of Singapore more convenient andcomfortable, and we will continue to ensure we proceedwith construction to complete the projects.
* MRT (Mass Rapid Transit): The most complete urban rail system in Southeast Asia,
whose construction has been proceeded as one of the major projects in Singapore’s
modernization plan since the country was founded.

51

MEIDENSHA REPORT 2021

In January 2020, the Singaporean company, MEIDENASIA PTE.LTD. entered an investment agreement toacquire 44.8% of the shares of the local Vietnamese
switchgear manufacturer, Vietstar Industry Corporationand commenced capital participation, in order to enter
the Vietnamese power infrastructure market and expand
the business in the Mekong region. In April 2021, MEIDENASIA PTE.LTD. conducted additional investment in Vietstar
Industry Corporation, increasing its investment ratio to
69.7%. The company changed the name to VIETSTARMEIDEN CORPORATION, due to joining the Meiden Group
as a subsidiary.
Vietnam, where strong economic growth continues,
even compared to other Asian developing nations, has
maintained positive GDP growth, even in the midst of the
COVID-19 pandemic, which began in 2020. Going forward,
the entry of foreign companies and vigorous infrastructure
investment is expected to continue. Investment in electricalinfrastructure to support stable provision of electricity is
expected to increase, as a result of ongoing increases indemand for electricity due to rapid economic development.
VIETSTAR MEIDEN CORPORATION was establishedin 2002 with headquarters in Ho Chi Minh City, Vietnam. It
mainly manufactures and sells low-voltage and mediumvoltage switchgear. It is a major supplier to powercompanies and the private sector in Vietnam and isconsidered to be a top-class manufacturer in Vietnam. Until
now, the Meiden Group has not had a base of operations
in Vietnam, and the main business involvement in Vietnam
has been through exports from Japan, Singapore, etc. By
using the commercial and manufacturing capabilities of
VIETSTAR MEIDEN CORPORATION, which recently joined
the Meiden Group, as much as possible, we will support
supply of electricity for the country's stable economic
activities and comfortable lifestyles in Vietnam. We will also
aim to enter the Vietnamese power infrastructure market
as the Meiden Group, and increase our presence in the
Mekong region in the future.

VIETSTAR MEIDEN CORPORATIONINDONESIA
Aiming to have the largest share of 150 kV substation projects in Indonesia

Managing Executive Officer
MEIDEN SINGAPORE PTE. LTD.
Managing Director

Hiroshi Toke

Indonesia is anticipated to develop distribution network andchange industrial area due to infrastructure construction andfurther investment by Chinese and Korean companies, andit’s said that will grow into huge market with population about
300 million in 2030. Furthermore, domestic market andeconomy are expected to expand as a result of increased
domestic consumption, and business opportunities are
expected to increase as a result of increased investment.
This year, PT. MEIDEN ENGINEERING INDONESIA
celebrates 30th anniversary since its establishment in 1991.
Since then, we have been developing business rooted in
the local area, as company that deliver and install power
generation equipment, power transmission and distribution
equipment, testing equipment for automotive industry, as
well as engineering work. In particular, as for conducting
150 kV substation work is regulated by license restrictions
and only P.T. MEIDEN ENGINEERING INDONESIA ispermitted among Japanese companies.

P.T. MEIDEN ENGINEERING INDONESIA will utilize
our experience and know-how to expand our market share
while considering collaboration with other companies in theindustry in order to further increase sales in the future.

150 kV gas-insulated switchgear on-site testingSingapore MRT Thomson-East Coast line construction

MEIDENSHA REPORT 2021

52

CORPORATE
GOVERNANCE
Corporate Governance

Basic Approach
Under our corporate mission of “illuminating
a more affluent tomorrow” and our corporate
philosophy of providing the value “for customer
peace of mind and satisfaction,” our group ofcompanies takes the basic stance that we
maintain fair and steady business activities
with respect for people and the global
environment, operate businesses focusing
on profit while constantly pursuing newtechnology and high quality, and endeavor tocontribute to prosperity of society.
In order to implement this basic stance,
we formulated the “Basic Policy to Improve
the Governance to Secure Fair Business
Practices” at the regular Board of Directors’
meeting held in May 2006, and revised it at
the Board of Directors’ meeting held in June
2020, in accordance with the transition to
a company with an Audit & Supervisory
Committee, and further enhancement of theinternal control promotion system.
The Company will work to further improve
the fairness, efficiency, and transparencyof management by promoting initiatives toenhance corporate governance in accordancewith the Corporate Governance Code.

M

S

A

G

E

I believe that the Board of Directors has two purposes. One is to improve corporate performance, and the other is
not to allow improper conduct. Since I assumed the position of President in 2013, I have been interested in the roleof the Board of Directors and the activities of the Executive Officers’ Meeting that are concerned with the Board of
Directors. This is based on the belief that debate in the Executive Officers’ Meeting should be more aware of the Boardof Directors and thereby improve all of management. Our management systems have undergone great changes as aresult of the institution of a voluntary Nomination & Compensation Committee three years ago, and the transition to acompany with an audit and supervisory committee last year, spurred by the enactment of the Corporate Governance
Code in 2015. The process of learning and consolidating rules such as the purpose, responsibilities, and authority ofthe various meetings was practical study for those of us in management, including outside directors.
Naturally, we will not be satisfied if this is a mere formality. It is the duty of the Board of Directors and the Executive
Officers' Meeting to initiate debate by the Board of Directors, produce substantially great results through the PDCA
cycle, and institute sustainable management systems. We will work to conduct PDCA in order to be such an organizationthat continues to learn.
Last year, we worked to develop Medium-term Management Plan 2024. The Boardof Directors debated the plan from an early stage. I hope we devote our efforts toorganizational and personnel development, in order to achieve our ideal state of beingof “work to build a new society through integrity to the earth, society, and people, andthrough the power of co-creation” and continue to be a company that contributes tosociety. Human resources are the source of sustainable growth for the Company, and theNomination and Compensation Committee also discusses matters such as early trainingof the next crop of managers and the next generation of employees. We will enable theMeiden Group to embrace the challenge of creating a new society.
Director and Chairman

Yuji Hamasaki

Transition to a Stronger Corporate Governance System
Commencement of stronger corporate
governance to increase the effectivenessof the Board of Directors
Purpose/results
Enhancement ofdecision-making andoversight functions of
the Board of Directors

Enhancementof transparency
and soundness ofmanagement

Promotion of corporate governancereforms based on the Corporate
Governance Code

Revitalizing andenhancing debate by
the Board of Directors

Deeper corporate governancesystem based on suddenly
changing economic conditions

From FY2003

From FY2015

From FY2018

2003◦ Introduction of executive officer system
2012◦ Revision of the rules of internal approval

2015◦R evision of Board of Directors agenda
standards

2018◦ Separation of the roles of chairman of
the Board of Directors and chairman of
the Executive Officers’ Meeting2019◦ Elimination of quotas for number of directors
2020◦ Revision of the Board of Directors agenda
standards and decision-making regulations◦ Transition to a company with an Audit &Supervisory Committee◦ Proportion of outside directors at least 1/3◦ Election of female outside director (1 person)

2006◦ Establishment of basic internal control
policy2012◦ Commencement of reporting to the Boardof Directors on internal control adjustment
status2013

MEIDENSHA REPORT 2021

S

Message from the Chairman of the Board of Directors

Separation ofoversight andexecution ofmanagement

53E◦ Enhancement of information sharing withoutside officers
2014◦ Commencement of meetings to exchange
opinions with outside officers

2015

◦R
 evision of basic internal control system

policy2016◦C ommencement of evaluation ofeffectiveness of the Board of Directors◦C ommencement of evaluation of crossshareholdings
2017◦E stablishment of the voluntary
Compensation Committee
2015◦C ommencement of explanatory programfor new outside officers

2018◦ Establishment of the voluntary

Nomination & Compensation Committee
2019◦ Change of directors’ term of office to
one year◦ Abolition of Senior Advisor system
2020◦ Revision of basic internal control policy◦ Establishment of the Group for Promotionof Internal Control
2018◦ Commencement of advance explanationof Board of Directors agenda items to
outside officers

MEIDENSHA REPORT 2021

54

Corporate Governance

1 The Company’s Board of Directors

Corporate Governance Structure andInitiatives(c) In order to enhance supervisory functions to ensure
appropriate corporate governance and fundamental
management policy decisions while enhancing
flexible and agile business execution along with theexecutive officer system introduced in June 2003, in
combination with transition of authority mentioned in
the previous section.

The Company transitioned to a company with an Audit& Supervisory Committee in June 2020 for the following
purposes, in order to further strengthen corporate
governance. The main purposes of transitioning to acompany with an Audit & Supervisory Committee are as
follows.

Outline of Corporate Governance Structure(a) In order for the Directors who are members of Audit& Supervisory Committee having right to vote in
the Board of Directors as well as having the rightto express position statement on nomination andcompensation at meetings of shareholders to further
enhance the supervisory function by utilizing the legal
authority.
(b) In order to further enhance discussions on
management strategies, etc. by transferring the Boardof Directors’ meeting to a monitoring type, since a
portion of the Board of Directors’ authority to makedecision on business execution has been transferredto the executive directors (Executive Officers’ Meeting).

Form of Organization

Company with an Audit & Supervisory Committee

Directors

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

Number of directors (outside directors): 5 (3)Number of Independent
Officers

5 (2 outside directors and 3 outside directors(Audit & Supervisory Committee members))

General Meeting of Shareholders

Advice/Recommendation(Voluntary
Committee)
Nomination &Compensation
Committee

Appointment and Dismissal

Board ofDirectors

Appointment and Dismissal

Audit and Supervisory
Committee
Directors Who Are Audit &Supervisory Committee Members

Directors

Transfer of Authority and Oversight

Audit / Oversee

Support andAdvisory Division
for Audit &Supervisory
Committee

Cooperation
Request / Instruct

Executive StructureInternal
Auditing

Executive Officers’ Meeting

Internal Auditing Division

Cooperation

Accounting
AuditorExecutive Directors and Executive Officers
Direction and Orders

Monitor / Oversee

Executive Divisions
Subsidiaries

55

MEIDENSHA REPORT 2021

Support /Monitor① Composition of Board of Directors
The Company’s Board of Directors consists of 14 Directors,
including five directors who are Audit & Supervisory Committee
members, and five Outside Directors, including three Audit& Supervisory Committee members. In order to ensure theeffectiveness of the supervisory functions of outside directors,
the Company attempt to ensure that at least one-third of
the Board of Directors meets the Company’s Criteria for
Determining the Independence of outside directors.
Meidensha’s outside directors satisfy the requirements
of independent directors as stipulated in the rules of theTokyo Stock Exchange.
② Policy for Appointment of Candidates for Directorand Appointment/Dismissal Process

Corporate Governance Structure: Supervision and Management and Internal Control System

Appointment and Dismissal

In principle, the Board of Directors convenes on a regularmonthly basis and holds ad-hoc meetings as necessary,to discuss major executive matters, business issues, andmanagement issues related to the Company’s businessexecution. In FY2020, the Board of Directors held 13 meetings,
and the attendance rate of each director, apart from one, was
100% (the attendance rate for one director was 92.3%).

Group forPromotionof Internal
ControlAccounting Audit
MonitorCompliance Committee

The basic policy for the appointment of directors of theCompany is to ensure the diversity of the Board of
Directors as a whole and to balance the expertise requiredof the Company’s Board of Directors with the awareness,experience, and abilities of individual Directors.
The basic policy for the appointment of directors who
are Audit & Supervisory Committee members is to ensure
overall diversity of directors who are Audit & Supervisory
Committee members and a balanced composition,according to knowledge and experience, etc., relating toaccounting, finance, and law, etc.
The number of directors is stipulated as a number thatis sufficient to fully deliberate on management issues, withan upper limit of 15 members.
Based on the above, we conduct a nominationof candidates for director that will contribute to theenhancement of the Board of Directors decision-making
function and oversight function, by resolution of theBoard of Directors, with advice from the Nomination andCompensation Committee* (voluntary committee), which ischaired by an independent outside director. The candidates
are then presented at the General Meeting of Shareholders.
Furthermore, with regard to the dismissal of directors,
if it is discovered that a director has breached the law
or the Articles of Incorporation, or committed acts thatflagrantly breach the director’s nomination policy, theBoard of Directors will take the necessary steps to dismiss
said director with the advice of the Nomination andCompensation Committee.

* Meidensha established a voluntary Compensation Committee in December 2017.
In December 2018, the Committee took on the functions of a voluntary nominationcommittee to become the Nomination and Compensation Committee. The Nomination
and Compensation Committee is chaired by an independent outside director and iscomprised of two outside directors, the chairman of the Board of Directors, and thepresident of the Board of Directors.

③ Executive Officer System and Executive Structure
Meidensha introduced an executive officer system in June
2003 in order to streamline the Board of Directors, aswell as to accelerate management decision-making andto enhance supervisory functions. At the same time, wesought to reinforce the functions of the Board of Directors bypromoting the separation of the decision-making authority
and supervisory function from the business performance
function held by the Board of Directors.
Executive officers selected by the Board of Directors
assume responsibility for the execution of specified tasks
within the scope of authority transferred by the Executive
Officers’ Meeting and the President, and nimbly perform
executive functions under the supervision of the Board of
Directors, each director and the Executive Officers’ Meeting,in accordance with the Meiden Group’s management
policies determined by the Board of Directors.
The Executive Officers’ Meeting, which comprises
executive directors and executive officers with specificroles, is created for executive decision-making, and decides
matters based on the rules of internal approval, as wellas matters for which consultation from a full-company
perspective is required.
Furthermore, apart from the meeting body to makedecisions, we established advisory and internal bodies
such as review and strategy meetings, and with regard
to important management matters, we created a system
wherein thorough discussion and deliberation are
conducted prior to decision making, and follow-up strategy
and planning and improvement initiatives are conductedfollowing decision-making.
The outline and main points of the proceedings at the
Executive Officers’ Meeting and other internal meetings arereported as the status of business execution at the Regular Boardof Directors meetings to ensure and improve the effectivenessand supervisory functions of the Board of Directors.
As to execute business, executive directors and executive
officers with the authority are taking attempt initiatives agilely bymaking resolutions and settlements. In this way, we are working
to conduct executive functions autonomously and nimbly.
With the transfer of a portion of authority for businessexecution from the Board of Directors to the executive
directors and executive officers, officers and executive
officers must submit a business execution status report to
the Board of Directors at least once every three months inorder to ensure the effectiveness of functional supervisionby the Board of Directors.

MEIDENSHA REPORT 2021

56

Corporate Governance

2 Effectiveness Evaluation of theBoard of Directors
Meidensha has a mechanism in place to conduct ananalysis and evaluation of the effectiveness of the Board of
Directors in order to strengthen the supervisory function of
the Board of Directors.
With regard to the activities of the Board of Directors in
FY2020, all members of the Board of Directors, including
outside directors, conducted self-evaluations of theeffectiveness of the Board of Directors, and the following
discussions took place at the meeting of the Board of
Directors in May 2021.
i Items EvaluatedComposition and operation (resolution and deliberation
methods, etc.) of the Board of Directors, self-evaluations
concerning effectiveness of the Board of Directors, evaluationof revision to the standards for matters to be resolved by
the Board of Directors after transition to a company with an
Audit & Supervisory Committee, other opinions
ii Outline of Analysis and Evaluation Results
The results of the evaluation of each director werecollected, and after deliberation by the members of Boardof Directors, it was determined that the quality of operationand deliberation is sufficient, sufficient opinions andadvice have been received from outside directors, and theeffectiveness of the Board of Directors is currently secure.
In addition, in the course of evaluation, we promoted
the transition of the Board of Directors to a monitoring typeand reaffirmed the policy to further enhance the supervisory
function of the Board of Directors through the delegationof major executive functions and establishment of internal
decision-making and supervision rules.
Going forward, we will continue to promote initiatives tofurther increase the effectiveness of the Board of Directors,
such as deepening understanding of the Company’sbusiness environment and strategy, through measures
including the advance explanation and consultation
regarding agenda items of the Board of Directors discussed
below, training for newly appointed outside directors, andproviding ongoing opportunities for discussion, in order todetermine issues identified through analysis and evaluation.

Officer training

57

MEIDENSHA REPORT 2021

Training for Officers
Legal training is conducted for officers on an annual
basis, for the purpose of improving the effectiveness of
the Board of Directors and internal control. In FY2020, we
conducted training for our officers by outside instructors,
relating to compliance in relation to overseas bribery andharassment, as part of internal control activities conducted
at all companies. The Meiden Group conducted trainings
on the Companies Act for new officers of Meidensha andaffiliated companies.

3 Initiatives to Utilize Outside Directors
Meidensha seeks active participation in management byoutside directors, in order to enhance the supervisory functionof the Board of Directors. As such, we are conducting thefollowing initiatives to ensure free and active debates.
i Advance Explanation of Agenda Items of the Boardof Directors
We give explanations in advance so that directors are able
to confirm the content of agenda items prior to participating
in meetings of the board of directors. Our system allows us
to accept questions, etc., relating to the content of agendas
in advance and prepare an explanation to be given at themeeting of the Board of Directors, and this revitalizes andenriches deliberations.
ⅱ Matters for Discussion by the Board of Directors
In addition to agenda items and reporting matters of
the Board of Directors, we take up matters concerning
our basic management plans, such as the Mediumterm Management Plan and major themes required of acompany with an audit & supervisory committee, anddiscuss tracing, etc., as matters for consultation.
We will leverage the knowledge of outside directors
to facilitate active exchange of opinions concerning theCompany’s management issues and strategies, as well as
corporate governance, and use this as an opportunity tobuild consensus at the planning stage, prior to resolutions
by the Board of Directors.
iii Timely and Appropriate Sharing of Information
Besides the agenda for the meeting, Meidensha provides
briefings on current topics relating to the company at meetingsof the Board of Directors, with the aim of timely and appropriate
sharing of information with outside directors, so that they canshare the status of the Company in a timely fashion.
iv Introductory Sessions for New Directors
We create opportunities to explain the Company’s businessand structures, primarily to aid the understanding of newly
appointed outside directors.
The officers or general managers in charge of eachbusiness explain their business, group-wide themes, andMeidensha’s governance system to the outside directors,
answer their questions, and exchange opinions with them.

4 Auditing System
The Company transitioned from the prior institutional structureof a company with an Audit & Supervisory Board to a company
with an Audit & Supervisory Committee at the Annual General
Meeting of Shareholders held on June 26, 2020.
The Audit and Supervisory Committee consists of five
directors, including three outside directors, who are Audit& Supervisory Committee members, and there is also a
Support and Advisory Division for Audit and Supervisory
Committee has been established as a staff organization to
support the Audit and Supervisory Committee.
The committee communicates with directors, theInternal Auditing Division, and other related divisions,while adhering to the auditing policies, allotted duties, andauditing rules, etc., for Audit & Supervisory Committee
members stipulated by the Audit & Supervisory Committee.
Committee members attend meetings of the Board of
Directors and other important meetings, and audit theexecution of directors’ duties through investigations ofbusiness and financial conditions.
Directors who are Audit & Supervisory Committee
members are granted authority, such as voting rights atmeetings of the Board of Directors and the right to present
a position statement at meetings of the Board of Directors
relating to nomination and compensation of officers. We
are therefore promoting the establishment of an auditing
framework and the enhancement of various initiatives tofurther strengthen the supervisory function of the Boardof Directors, which is the aim of altering our institutional
design, through new activities such as monitoring andauditing, etc. of the transfer of authority to executive
directors and the status of the governance that guarantees
it, in addition to the auditing activities, and by further
strengthening cooperation with outside directors, etc.

5 Internal Auditing System
The Internal Auditing Division conducts internal audits to checkthe effectiveness and efficiency of business operations, thereliability of financial reporting, the status of compliance withlaws and regulations, and the maintenance of assets, covering
the Company and all Group companies at home and abroad.
Since FY2018, we have conducted risk management
using control self assessment (CSA) at each Meidensha
factory and each Japanese subsidiary in order to enhanceinternal control and increase the efficiency of risk audits ateach business unit.
In April 2020, we improved the framework for promotinginternal control by establishing the Group for Promotion ofInternal Control. The Enterprise Risk Management Division
establishes risk management systems integrating the entire
group, and promotes enhancement of internal control functions
through joint monitoring of internal control systems by the Audit& Supervisory Committee and the Internal Auditing Division.

In FY2020, we conducted new standardized audits
using audit standardization tools as new initiatives toimprove the comprehensiveness of audits. Going forward,
we aim to expand standardized audits to domestic andoverseas subsidiaries and ensure that enhanced.
In FY2021, we are transitioning from rotating audits
to a risk approach. We are developing a risk-based
annual auditing plan, which will comprehensively cover allcompanies and prioritize high-risk areas.

6 Strengthening Group Governance
The Meiden Group is working to continuously strengthengroup governance by developing basic policies basedon the “Basic Policy to Improve Governance Structure to
Secure Fair Business Practices” at each Meiden Group
company, establishing a regulatory framework, andimplementing the PDCA cycle.
1. Establishing a Framework(1) Meidensha’s Board of Directors has established
the Corporate Policy Planning Group, the Overseas
Business Strategic Management Group, and theEnterprise Risk Management Division of the Groupfor Promotion of Internal Control as group-wide
management organizations, and created a system forGroup companies to report to Meidensha.
(2) There is a system to dispatch general officers or nonstanding officers from Meidensha to Group companies
to oversee the operations of said Group companies.
(3) Meidensha dispatches non-standing auditors to majordomestic Group companies to strengthen audits.
(4) Meidensha’s Internal Auditing Division conducts audits
to ensure appropriate business practices at each Group
company.
2. Main Initiatives in FY2020(1) 
The Compliance Committee met once in each halfof the fiscal year, and in the second half, we lookedback on previous compliance promotion activities,
including group-wide compliance training, reaffirmed
the significance and effectiveness of each activity, andconfirmed that we will continue and develop each activity.
(2) W e established the Enterprise Risk Management
Division of the Group for Promotion of Internal Control asa department to promote group governance and drafted
the Basic Risk Management Regulations.
We established a new Internal Control Committee at
each Group company, and shared information concerning
the main risks faced by the Meiden Group in order toensure the fullness of the risk management system.
(3) At the Overseas Strategy Meeting held once eachyear, we worked to establish a reporting system forsubsidiaries as an opportunity to share the main risks
faced by overseas subsidiaries, and consider andthoroughly implement measures.

MEIDENSHA REPORT 2021

58

Corporate Governance(4) The Internal Auditing Division conducted internal
audits of three domestic subsidiaries and 16 overseas
subsidiaries, commenced new standardized audits
using audit standardization tools, and worked toincrease the comprehensiveness of audits, particularly
for some overseas subsidiaries.

Officers’ Compensation
Directors compensation policy
i Level and System of Compensation
The level of compensation of Meidensha’s directors isdetermined based on external objective compensation
market data, economic conditions, industry trends, andMeidensha’s business circumstances, etc. The content of
the officers’ compensation system is determined by theinternal officers’ compensation regulations having received
consultation and confirmation by the aforementioned
Nomination and Compensation Committee, giving
consideration to this level.
ii Composition of Compensation(a) Directors (excluding Audit & Supervisory Committee
members and outside directors)
Compensation of directors (excluding Audit &Supervisory Committee members and outside directors)
is based on annual salary system with performancelinked
compensation,
andcomprises
basic
compensation according to each role and incentive
compensation. Of these types of compensation,
incentive compensation comprises compensationthat is linked to business performance as a short-term
incentive and stock compensation as a medium tolong-term incentive.
Target Proportion of Each Type of Compensation(if 100% of targets were achieved)
Basic Compensation

70％：

Performance-Linked
Compensation

20％：

Stock Compensation

10％(b) Directors and Outside Directors Who Are Audit &Supervisory Committee Members
Directors and outside directors who are Audit &Supervisory Committee members only receive basic
compensation on annual salary system basis.
iii Incentive Compensation System
Performance-based compensation, which is a short-term
incentive, varies from 0 to 140 depending on the degreeof achievement of targets, with perfect achievement oftargets counting as 100. We use operating income, whichis also used for our financial targets in the Medium-termManagement Plan, as a performance evaluation indicator,and give consideration to revisions according to operating
conditions and changes to the roles of each officer, etc.

59

MEIDENSHA REPORT 2021

Calculation Formula
Basic Compensation for Each
Position

Coefficient According to Achievement of Target
Operating Income (0.0 to 1.4)

Stock compensation, which is a medium to long-term
incentive, grants shares to the Officers’ Shareholders
Association for the purpose of further promoting sharing of
profit and loss with shareholders.
iv Compensation Determination Procedures
The Nomination and Compensation Committee confirms
and considers the content of the compensation system andthe amount of compensation from an objective perspective
prior to determination by the Board of Directors.
FY2020 Results

Classification

Total Amount of Each Typeof Compensation, etc.
Total Amount of(millions of yen)
Number ofCompensation,
Peopleetc.
Basic
Incentive(millions of yen)compensation compensation

Directors (excluding
Audit & Supervisory
Committee members
and Outside Directors)

310

Outside directors(excluding Audit &Supervisory Committee
members)

16

16

-

2

Directors who are
Audit and Supervisory
Committee members(excluding Outside
Directors)

40

40

-

2

Outside directors
who are Audit &Supervisory Committee
members

18

18

-

3

Outside directors
who are Audit &Supervisory Committee
members

10

10

-

2

Outside auditors

3

3

-

2

Total

397

223

310

87

87

with shareholders, including institutional investors andstrengthens external communication. These activities
are regularly reported to and discussed by the Board of
Directors.
Results Briefings
We hold results briefings twice a year in May and October.
In FY2020, we distributed a video of the President’s results
briefing to analysts and institutional investors on the dayof the presentation and conducted teleconferences forquestion-and-answer sessions the next day, instead ofholding in-person briefings, in order to prevent the spreadof Novel Coronavirus disease (COVID-19).
IR Briefing for Overseas Investors
As there was no FY2020 international road show due tothe pandemic, we actively contacted major international
investors and conducted individual interviews by
telephone. Meidensha was commenced its first foreign
securities company coverage amid increased attention
from overseas investors.

7

18

Notes 1．The amount paid to directors includes performance-linked compensation for FY2020.
2．The total of the above people who receive compensation is an aggregate number.
Three auditors (of whom two were outside auditors) retired at the end of their terms,
thereafter assuming roles as directors who are Audit & Supervisory Committee
members, so the actual number of people who received compensation was 15.

Individual Business Briefings (Small Meetings)
Since FY2018, we have held small meetings once a year.
We set a different business theme each year, and create an
opportunity to better understand the Company’s businessby conducting briefings and Q&A by responsible officers.
At the small meeting held in December 2020, we
conducted a briefing by a general officer of the T&D
business (Director and Senior Managing Executive Officer
Nobuaki Tamaki) with the theme of “business strategy for
vacuum products and expansion into North America.” Themeeting was attended by 10 analysts.
Main IR Activities in FY2020
Individual Sessions

NumberDomestic Investors

124

Overseas Investors

32

Total

156

The materials for the results briefings are available for viewing. Please visit “Fact
Sheet for Account Settlement Briefing Session” under “Investors” on the Corporatewebsite.
https://www.meidensha.com/ir/ir_04/index.html

Dialogues with Shareholders and Investors
Basic Approach and IR System
When any shareholders wish to have a dialogue with
the Company that will contribute to medium to longterm improvement of the Company’s corporate value, it
is Meidensha’s policy that the Company’s management
conducts the dialogue to the extent possible.
A system is in place where a Director is placed incharge of IR matters and an IR-specialist department
conducts activities to enhance constructive dialogue

Opinions of Analysts and Institutional
Investors
We publish a quarterly IR report, which includes the opinions
and requests given at results briefings and individualinterviews, and this is reported to executive officers anddirectors. The main opinions provided by analysts andinstitutional investors in FY2020 are as follows.

Management that is more aware of capital efficiency
 anagement and disclosure of each business group’s management targets
M● A stance for enhancing shareholder returns● A business area for future investment● Measures for improved profitability of overseas businesses and atimeline for achievement● A timeline and sense of scale of business benefits from carbon neutrality● Active information disclosure relating to ESG management● Policies relating to cross-shareholdings and antitakeover measures●●

Going forward, we will ensure even fuller disclosureof information through results briefings, individual IR,
conferences, the website, and this report, etc., and continue
to engage in dialog with shareholders and investors.

M

E

S

S

A

G

E

Message from an Analyst

Expectations of a Stronger Revenue Baseas a Result of Institutional Reform
The dominance of Meidensha in the industrial electronics
sector is due to its well-balanced business portfolio, thatis, the majority of revenue is coming from stable stockbusinesses led by the Field Service Engineering Business,
and also having multiple drivers of growth from which
structural expansion is expected going forward. On theother hand, I can see the fact that some businesses arestuck with low revenue, and seasonality with profit being
disproportionately weighted to the fourth quarter, which areimportant areas for reform. With regard to the EV Business,
which is the most significant driver of performance, highgrowth can be expected due to the support of government
policies, etc. However, there is an impression that it is still
difficult to foresee the scenario of winning price competition
with competitors in increasing scale of the standard
equipment market, due to the difficulty for the company todemonstrate its strength in "Customizability."
The focus of the new medium-term management plan isthe clarification of responsibilities and authority of each businessgroup by conducting institutional reforms, and I expect
advancements such as swift decision-making and optimizationof outside manufacturing expenses to lead to enhanced earningpotential. Meidensha has a positive attitude towards dialog
such as bringing up timely themes at financial results briefings
and small meetings, and this helps us understand changes
in the industry and Meidensha’s business opportunities. The
scale of businesses such as the EV Businesses, in whichmarket fluctuations are great,is expanding, so I hope
the quarterly disclosure will
be further enhanced going
forward.
SMBC Nikko Securities Inc.
Equity Research Senior Analyst(in charge of industrial electronics)

Kazutaka Yoshizumi

MEIDENSHA REPORT 2021

60

Corporate Governance

Board of Directors & Executive Officers as of July, 2021

Note: Attendance of meetings is recorded as “attended/held” (for the period from April 1, 2020 to March 31, 2021)

Composition of the Board of Directors
Audit & Supervisory
Committee Member

Name

Yuji Hamasaki

Outside(Independent
Officer)

Director and Chairman
Director, Chairman

FY2020 attendance

Sectors in which specialization can be particularly demonstrated

Board of Directors

Nomination &Compensation
Committee

13/13

4/4

●

4/4

●

Takeshi Miida

Representative Director andPresident

13/13

Shosuke Mori

Representative Director andExecutive Vice President

13/13

Norio Takekawa

Director and Senior Managing
Executive Officer

13/13

Nobuaki Tamaki

Director and Senior Managing
Executive Officer

13/13

Masayuki Iwao

Director and Senior Managing
Executive Officer

Assumed rolein June 2021

Tatsuki Mochizuki

Director and Senior Managing
Executive Officer

Assumed rolein June 2021

Audit & Supervisory
Committee

Management
and businessstrategy/M&A

Sales/Marketing

R&D/Technology

Manufacturing/
Construction/
Maintenance●Overseas/
International
businesses

Accounting/Finance

Legal affairs/Riskmanagement

CSR/ESG

●

●

●

●

●

●

●

●

●

●

Composition of Meidensha’s
Board of Directors(Skill Matrix)

●

●

●

●

●

●

Director

Hiroyuki Takenaka

Junji Yasui

Head of the Nomination &Compensation Committee

Director

Director

Tadayoshi Machimura

Chairman of the Audit &Supervisory Committee

◎

12/13

4/4

●

●

◎

13/13

4/4

●

●

Full-time Audit& Supervisory
Committee Member

10/10

11/11

Assumed rolein June 2021

Assumed rolein June 2021

13/13

11/11

Michihiko Kato

Director

Full-time Audit& Supervisory
Committee Member

Yoshiaki Shin

Director

Audit & Supervisory
Committee Member

◎

●

●

●

●

●

When appointing Meidensha’s
Board of Directors, it isour basic policy to appoint
appropriate personnel, who will
ensure diversity and balanceof the Board of Directors
as a whole and contributeto increasing Meidensha’s
corporate value based on
individual directors’ abilities,
knowledge, and experience,etc. Based on this policy wemake appointments that willcontribute to the decisionmaking and oversight functionsof the Board of Directors, andthe composition of the Board of
Directors reflects this.

Managing Executive Officers
●

●

●

●

Kuniake Yasukawa Satoshi Momenya
Masahiko Suzuki Hideki Miyazawa
Akio Ikemori
Akio Inoue
Hiroshi Toke●

Executive Officers

61

Mitsuru Nawata

Director

Audit & Supervisory
Committee Member

◎

13/13

11/11

Keiko Hayashi

Director

Audit & Supervisory
Committee Member

◎

10/10

11/11

MEIDENSHA REPORT 2021

●

●

●

●

●

Noritaka Matsushita
Hisahiro Murashima
Norio Mizutani
Takeo Suzuki
Katsunori Suzuki
Munekazu Shiratori
Kuniteru Yamaoka

Katsuyuki Watanabe
Seiji Kato
Kazuhiro Yamada
Nobuya Ono
Hiroshi Takahata
Katsumi Shimamura
Takehisa Koganezawa

MEIDENSHA REPORT 2021

62Hayashi I think that’s absolutely correct. It is employees
who add spirit to management plans. When formulating thisplan, we established working groups for young personnel,
etc., and gave consideration to their findings. I think it isnecessary for everyone, including experienced employees,
to be aware of their involvement in management. I believethat this will result in “leveraging diversity.” With the view ofdiverse perspectives, I hope that individuals consider how tomake their company better, and link it to better management.

Future Internal Control Issues

Director & Audit andSupervisory Committee
MemberOutside Director

Director & Audit andSupervisory Committee
MemberOutside Director

Director & Audit and Supervisory
Committee Member
Outside Director

Mitsuru Nawata

Yoshiaki Shin

Keiko Hayashi

Outside Directors’ Round-Table Talk
The Meiden Group adopted a company with an Audit & Supervisory Committee in June 2020, and is
working to enhance corporate governance such as by enhancing oversight functions through changes
to institutional design. For the release of the Meidensha Report 2021, we asked three outside directors
who are Audit & Supervisory Committee members to talk about topics, including changes to the Meiden
Group’s corporate governance as a result of the transition to a company with an Audit & Supervisory
Committee, expectations of Medium-term Management Plan 2024, which came into force this fiscal
year, and their plans for the future as outside directors.

Changes to the Company after Transition to a Company with an Audit & Supervisory Committee
Shin
In June last year, the Group transitioned to acompany with an Audit & Supervisory Committee, and thenumber of outside directors in the entire Board of Directors
increased from two to five, leading to more spirited
debate. We not only provide advice and a supervisory
function, but we are now more likely to actively debate
management policies according to individual expertise.
The responsibilities of outside directors have increased andI feel that our presence is also increasing.
Hayashi When I became an outside director in June last year,
the management outlined that they were aiming to enhance
governance furthermore. As they said, we have received
thorough explanations of company’s initiatives. This leads tolively debate by the Board of Directors, and I can see that theirattitude of sincerely utilizing governance in the management.

63

MEIDENSHA REPORT 2021

Nawata I feel that the content of debate at the executiveside prior to the Board of Directors meetings became very
deep. It is extremely valuable that we receive sufficient
prior explanation of agenda items from responsible officers
so that we are able to have sufficient discussion, andunderstand and summarize the proposals in advance. In
addition, it is necessary to have an opportunity to express
and discuss our thought at the Board of Directors meetings,
and in order to do achieve this, I hope that we continue tobe provided a place where sufficient debates are enabled,
without overfilling the agenda of the meetings.
Shin We have spent a year trying to establish systems after
the establishment of the Audit & Supervisory Committee.
With regard to the Audit & Supervisory Committee Audit &Supervisory Standards, we have established them as thebasis for our future activities, giving consideration to thewording of each provision. Through this discussion, we had
an informative opportunity to coordinate our understanding
among Audit & Supervisory Committee members, andbecome fully aware of our own roles.

Expectations for Medium-termManagement Plan 2024
Nawata Medium-term Management Plan 2024 has
been debated over time. Outside directors also attended
the focus meeting, which is attended by executive officers,
where we observed internal debate and were given theopportunity to express our own opinions. This plan is set to
be a four year term with consideration of the circumstancesof the COVID-19 pandemic, with spending this whole year,
it will pursue more specific strategies, while clarifying its
form after four years. With willingness, we will follow up onthese regularly to ensure that the plan will be accomplished.
Shin
I am expecting each employee to reflect thismanagement plan in their conduct while having a clear
vision of Meidensha in four years, and they must build
the plan as a “medium-term management plan for eachindividual.” Plans made by management only can be anarmchair theories; it is extremely important for it to beunderstood and implemented on site.

Nawata The Audit & Supervisory Committee has created
opportunities to make reports concerning risk management.
Risk management is how we prevent companies frommaking errors. It is a form of internal control, where it
is important to learn from past errors and implement
recurrence prevention measures. The improvement
activities conducted at each business unit on a daily basis
are also connected to risk management, and I hope we canincorporate them in management in the future.
Shin I would like Meidensha’s BCP (business continuityplan) to be formulated and disseminated from theperspective that it will not merely restore site functionality ofown, but also rapidly contribute to society. In particular, thecompany has been reminded of the role, which is able tohow quickly provide its own products to society as natural
disasters have become more frequent since the Great East
Japan Earthquake. I hope that Meiden Group thoroughly
embodies vision for its BCP goals and implement it.
Hayashi In terms of social trends, I believe that investment
in systems such as the introduction of smart technology
to maintenance through digital transformation using IT
technology is also a form of risk management. This is true
from the perspective of corporate competitiveness, butalso, in businesses relating to infrastructure, if one of servers
were to be attacked, it would have a tremendous impact onsociety. With that in mind and from the perspective of risk
management, it is necessary to attract personnel who are wellversed in digital transformation, to accumulate knowledge
about digital transformation and to respond quickly. I would
also like the Company to continue to clearly explain the issues
it is currently facing, as this is also shareholders’ concerns.

MEIDENSHA REPORT 2021

64

Corporate GovernanceRisk Management

Compliance

Basic ApproachWith regard to business activities in the near future, wemust precisely understand various business risks that may
manifest in the future and ensure that we provide for themin order to guide our business strategy to success andincrease corporate value in unstable global circumstanceswith increasing complexity and lack of clarity. With thisawareness, we consider that it is necessary for eachbusiness unit of the Meiden Group to increase its sensitivity
when considering business risks, establish its own PDCA
risk management systems, and establish a system tounderstand and control major business risks throughout
the entire Group, while enhancing risk management during
times of normal operation through the establishment of a
specialized risk management department. Furthermore,
we aim to create a system that is capable of responding toconstant change and all risks by creating a risk management
system for all companies that incorporates BusinessContinuity Management (BCM) in order to respond to risks
to the business continuity of the entire Group.

The Enterprise Risk Management Division gathers CSA
risk information from each business unit, collects a range ofrisk information in conjunction with the Headquarters staff
business units and the various committees, and identifies
key business risks to be dealt with by the entire Meiden
Group. The Risk Management Committee is chaired by
the head of the Group for Promotion of Internal Control.
Key members of the Headquarters staff business units
scrutinize the Meiden Group’s major business risks thathave been identified by the Enterprise Risk Management
Division and debate response policies each half.
Managers further debate business risks debated by
the Risk Management Committee at the Executive Officers'
Meeting and the Board of Directors, stipulate key business risksfacing the Meiden Group, and determine response policies.

Business Continuity Plan (BCP)

Risk Management Structure

Basic BCP Policy
The Meiden Group Basic BCP Policy stipulates the Meiden
Group’s basic policy on business continuity, business
continuity targets, and response in the event of a disaster,etc., and is applied at each business unit and subsidiary.

Operation of the Risk management Committee
Risk management through CSA of business units is
conducted with the support of the Group for Promotionof Internal Control and the staff business unit. The Internal
Auditing Division conducts risk evaluation and control
verification through CSA for each business unit at the timeof business audits, and reports the results to the Executive
Officers’ Meeting, the Board of Directors, and prominent
managers from time to time.

[Basic Business Continuity Policy](1) In the event of a disaster, it is our utmost priority
to ensure the safety of all employees, their family
members, and customers.
(2) We contribute to swift reconstruction and recovery fromdisasters, considering our corporate social responsibility
as a company that supports social infrastructure.
(3) Limit impact on customers and Meidensha’s
businesses as much as possible.

The Meiden Group’s Risk Management Structure

Board of Directors

Audit & Supervisory Committee

Cooperation

Executive Officers’ Meeting

President

Risk control directions

Presentation of information on major risks

Composition ofcommittees

Sharing
information
on major risks

Risk Management Committee[Selection of major risks facing all companies]

Composition of committees[First line]

Major risk information

Business units

Factories

Construction
business units

65

Researchlaboratories

Sales
locations

Subsidiaries

MEIDENSHA REPORT 2021

Presentation in Numazu

The Meiden Group fully understands domestic andoverseas laws, including those relating to corporate
activities, customs, and all other social norms and spirit.
The Meiden Group complies with and respects these,and has developed the Meiden Group Code of Conduct
to constantly maintain a high standard of corporate ethics
and social decency.
In accordance with this code of conduct, the Meiden
Group aims to sincerely engage in activities to live up to thetrust of customers and society. Directors, executive officers,
and general managers of Meidensha and each Group
company play a central role in promoting compliance ineach of their workplaces, in accordance with the Meiden
Group Compliance Promotion Rules.

Anti-corruption Measures
Meidensha stipulated “absolute prohibitions” through a
resolution of the Board of Directors’ Meeting on December
26, 2012. These “absolute prohibitions” prohibit profitsharing with national public servants, correspondence withcompetitors, etc., such as bid-rigging or cartel behavior,collection of confidential information such as target prices
and job prices from customers, etc. “Absolute prohibitions”
are thoroughly enforced within the Group.
In 2016, we developed the Meiden Group Bribery
Prevention Policy in order to prevent corruption. The
principles were revised in 2020 in order to make them easierto understand. They have been disseminated throughout
the Group once more in two volumes – the Meiden Group
Bribery Prevention Policy and the Guidelines for the Meiden
Group Bribery Prevention Policy.

[Third line]

Internal Auditing Division[Conducting audits of risksfacing each business unit][Second line]

Meidensha received the Superior Practice Award in theBusiness Continuity Division and was praised for its
business continuity planning (BCP) for all business units
in 2018, as well as its system of business continuity
management (BCM).
The BCAO Awards are administered by the BusinessContinuity Advancement Organization (BCAO) to recognize
individuals or groups that have contributed to the spreadand implementation of business continuity, in order topromote the proliferation of business continuity in Japan.

Officer Training
In FY2020, we conducted training for officers relating toprevention of bribery of foreign public servants administeredby external instructors. The training was attended by thepresidents of overseas Group companies in addition to
officers of Meidensha. In 2021, providing entertainment
to public servants was an issue throughout society, so
in March 2021, we, including our officers, reaffirmed ourcommitment to appropriate treatment of public servants,
etc.

Staff business units[Conducting risk management foreach business unit]
Business
divisions

External Communication of Information
We widely disseminated information about the Meiden
Group’s disaster-prevention and BCP initiatives throughonline seminars and presentations, etc.
At presentations, we mainly introduce examples of
our actual initiatives,
and try to makepresentations usefulfor participatingcompanies to theirimplement activities.

Compliance Policy

BCAO Awards 2019: Superior Practice AwardManagement [Examination of major risks facing all companies]

Group Company Internal Control Committee[Sharing major risks facing all companies]

Promotion of creating Business Continuity Plans (BCP)
We hold workshops regularly at each business unit forbusiness managers and BCP promotion managers tounderstand and formulate effective BCPs.
In FY2020, we held workshops in dispersed locations
as well as hybrid workshops that take place both online
and in person, in order to ensure the effectiveness ofworkshops andavoid the three Cs(Closed spaces,
C ro w d e d p l a c e s
andClosecontact settings)
that contributeto
COVID-19
Workshops
transmission.

Risk information

Control risk support

Enterprise Risk Management Division[Collection of risks facing all companies]
Risk information

Cooperation

Each staff business unit
[Support for business units]
Committees relating to risks

September 29, 2020: Online award ceremony

MEIDENSHA REPORT 2021

66

CORPORATEINFORMATION
Overview by Business Segment

3,177

3,654

4,080
3,297

146,074

Net Operating Income (Millions of yen)

134,041

147,049

137,532

Net sales in the segment decreased 8.2% year on year to¥134,041 million, and operating income fell by ¥477 million to¥3,177 million.
In domestic businesses, we worked steadily and rolled out
initiatives to ensure that the COVID-19 pandemic does not impact
on-site construction, and steadily proceeded with large-scale
projects in the power & energy and water infrastructure sectors, etc.
With regard to overseas businesses, focusing on power
generation, T&D, and railways sectors, results fell short of theprevious fiscal year due to restrictions on activities and declining
demand, etc., in each country.

Net Sales (Millions of yen)2016 2017 2018 2019 2020 (FY)Consolidated basis
Financial indicators

FY2016FY2017FY2018FY2019FY2020Net sales (millions of yen)
Operating income (millions of yen)
Ordinary income (millions of yen)
Net income attributable to owners of parent (millions of yen)

220,141
8,849
8,209
5,743

241,832
11,381
9,992
7,056

245,033
10,336
10,128
7,653

255,748
12,725
11,481
8,208

231,254
8,384
8,465
7,303

Overseas net sales (millions of yen)Overseas sales ratio (%)

58,73026.7

74,15430.7

71,72529.3

70,41027.5

48,42020.9

247,646
74,312
1,614.00
126.56

264,457
81,2291,768.27
155.52

265,586
84,497
1,845.21
168.68

270,410
90,1171,920.01
180.91

279,059
99,736
2,127.74
160.98

29.6

30.3

31.5

32.2

34.6

11,840(12,031)3,767

17,975(7,582)(11,230)

14,365(8,074)(3,101)

10,416(13,700)
3,735

14,601(13,117)(1,402)

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

8.2
ー

9.2
6.6

9.3
5.9

9.6
6.9

8.0
4.2

Dividend payout ratio (%)

31.6

28.9

26.7

27.6

29.8

Total shareholder return (%)(Comparative indicator: TOPIX dividend included)

78.6
114.7

82.5
132.9

64.2
126.2

70.3
114.2

102.7
162.3

Net assets (millions of yen)
Total assets (millions of yen)
Net assets per share (yen)Net income per share (yen)(107)

SocialInfrastructure
Business* Overview by business segment according toprevious business segment classifications.

126,530

Overview by Business Segment in FY2020

Financial / Non-Financial Highlights

Equity ratio (%)

2016 2017 2018 2019 2020

(FY)

4,384

65,885

65,10056,0003,272

55,552

52,401

Notes 1.	On October 1, 2018, we conducted a reverse stock split at a ratio of one share for every five shares of common stock. Thus, we calculated net assets per share and net income
per share on the premise that said reverse stock split had been conducted at the start of FY2015.
2. ROIC has been calculated since FY2017.
3.	We have used TOPIX dividend included, which is adopted by more companies, for the comparative indicator for total shareholder return, for the purpose of facilitating easy comparison.

(286)

2,465

Industrial
Systems
Business

Net sales in the segment decreased 20.5% year on year to¥52,401 million, and operating income deteriorated by ¥3,558
million to negative ¥286 million.
The electronics products sector, which benefited frompositive developments in the semiconductor industry was a highlevel of demand throughout the year. However, results in the EV
business, the motor drive business and the dynamometer systembusiness, which is easily affected by capital investment trends inthe automotive industry, fell greatly short of the previous fiscal year.

5,622

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

FY2016FY2017FY2018R&D expenses (millions of yen)

9,462

9,402

9,458

10,467

9,468

Capital expenditure (millions of yen)

7,355

7,584

7,895

16,042

15,575

Number of employees

8,474

8,995

9,297

9,599

9,468

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

2,016

2,002

2,019

1,978

1,980

ー

3.92

3.88

3.70

3.95

0.96

0.29

0.99

0.60

0.76

CO2 emissions from energy sources (Japan) (t-CO2)

ー

34,27435,17535,02333,678CO2 emissions from energy sources (Overseas) (t-CO2)

ー

9,123

9,007

8,656

11,340ー

65,96556,07653,47354,205ーーー

7,600,980

7,314,136

ーーー

6,370,000

6,050,000

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

800

733

841

848

990

Amount of waste generated (Japan) (kt)

6.6

7.1

7.8

6.4

10.0

5,778

Percentage of female employees in executive positions (%)
Lost time accidents rate

4,343

3,781

3,587

38,76638,32436,97433,962

33,044Maintenanceand Servicing
Business

Net sales in the segment increased 1.2% year on year to ¥38,766
million, and operating income rose by ¥90 million to ¥5,778 million.
Demand for maintenance services that cater to BCP andenergy conservation, and prolong the service life of equipment
has been strong, even during the COVID-19 pandemic, and werecorded our best ever results, exceeding the previous fiscal year.

2016 2017 2018 2019 2020

5,688

2016 2017 2018 2019 2020 (FY)Non-financial indicators

Greenhouse gas emissions from business activities (Scope 1 and 2)
2016 2017 2018 2019 2020 (FY)2016 2017 2018 2019 2020

(FY)

(Consolidated) [t-CO2]
Greenhouse gas emissions from the value chain (Scope 3)

Real EstateBusiness2016 2017 2018 2019 2020 (FY)(Consolidated) [t-CO2]

1,349

1,353

1,419

1,337

Greenhouse gas emissions from product use (Scope 3, category 11)
1,340

3,481

3,443

3,481

3,452

We are engaged in the real estate leasing business, centeringon the office and commercial building ThinkPark Tower (Osaki,
Shinagawa-ku, Tokyo). Net sales in the segment totaled ¥3,443
million, on par with the level achieved in the previous fiscal year,
and operating income deteriorated by ¥3 million to ¥1,349 million.

3,463(Consolidated) [t-CO2]

2016 2017 2018 2019 2020

(FY)

67

MEIDENSHA REPORT 2021

857

797

135

497

464

19,844

16,567

18,601

19,15518,327

Other Business2016 2017 2018 2019 2020 (FY)2016 2017 2018 2019 2020

(FY)

FY2020Recycling rate (Japan) (%)

99.6

99.1

99.3

99.6

94.6

Water consumption (Japan) (thousand m3)

1,238

1,203

1,085

1,768

1,490

Wastewater (Japan) (thousand m3)

1,664

1,914

2,113

2,206

2,288

32

28

38

60

35

CSR spending (millions of yen)This segment includes categories not included in any of the above
segments, such as manufacturing and marketing of electrochemicalmeasuring equipment and electric insulation materials, welfare services
for employees, and goods merchandising. Net sales in the segment
decreased 16.5% year on year to ¥16,567 million and operating income
fell ¥722 million to ¥135 million due to factors such as deterioration inbusiness conditions as a result of the impact of the COVID-19 pandemic.

FY2019Notes 1. Figures for employee numbers exclude those employees on temporary contracts.
2. Total actual annual working hours are the actual working hours calculated by subtracting leave hours from the sum of official working hours and overtime hours (averaged per employee).
3.	The percentage of female employees in executive positions refers to the percentage calculated by dividing the number of female employees in executive positions by the total
number of executive positions.
4. Japanese emissions: Fuel oil and fuel gas use the Table of Calculation Methods and Emission Factors for the Calculation, Reporting, and Publication System published by the
Ministry of the Environment. Electricity uses the Table of Emission Factors for Individual Power Companies published by the Ministry of the Environment.
5.	Overseas emissions: Fuel oil and fuel gas use the emission factors for each country published by the GHG Protocol. Electricity uses average factors per country from 2010 to2012 published by the International Energy Agency (IEA).
6. Reduction of CO2 emissions caused by products is the expected reduction of such emissions caused by products sold.
7. Measurement points for water consumption were changed in FY2019 in order to increase precision, so there is no continuity with FY2018 and before.
8. CSR spending includes donations and sponsorship funding.

MEIDENSHA REPORT 2021

68

Corporate Information

Outline of the Meiden Group
Corporate Data as of March 31, 2021
Corporate Name
Established

MEIDENSHA CORPORATION

CapitalJune 1, 1917 (Since December 22, 1897)

Representative Director, President
Head OfficeCountry/
RegionTakeshi Miida

Hong Kong MEIDEN PACIFIC (CHINA) LIMITED¥17,070 million

Consolidated Sales¥231,254 million

Consolidated Number of Employees

ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo,

Consolidated Subsidiaries

India

42 (22 in Japan, 20 overseas)

Main Subsidiary Companies (as of April, 2021)

Japan

Sale of switchgear and technical consulting
Import and sale of Meiden Group products, engineering tasks, construction, after-sale service,procurement of Indian products, and export operations
Manufacture and sale of transformers, and engineering

Indonesia

P.T. MEIDEN ENGINEERING INDONESIA

Sale and design of electrical equipment, installation, construction, and technical consulting such as
after-sale service

Korea

MEIDEN KOREA CO., LTD.*

Sale, installation, testing of dynamometer products, servicing and maintenance, and import andexport operations

MEIDEN MALAYSIA SDN. BHD.

Electrical engineering, technical consulting, and after-sale service

MEIDEN METAL ENGINEERING SDN.
BHD.

Manufacture and sale of transformer housing and radiators, etc.

MEIDEN ASIA PTE. LTD.

ASEAN regional presiding company
Business strategy creation, legal affairs, HR, IT, maintenance, technical engineering, servicing,materials, R&D, etc., for the ASEAN region

Malaysia

Company NameMEIDEN INDIA PRIVATE LIMITED*Business Entity

PRIME MEIDEN LIMITED

9,647

141-6029 JapanCountry/
RegionCompany NameBusiness Entity

MEIDEN PLANT SYSTEMSCORPORATION

Design and contracting for electricity and building construction, and manufacture, repair,refurbishment of electrical equipment, etc.

MEIDEN SYSTEM MANUFACTURING
CORPORATION

Manufacture and sale of switchboards, control panels, and their components

MEIDEN SINGAPORE PTE. LTD.

Manufacture and sale of transformers, switchgear, and circuit breakers

MEIDEN SYSTEM SOLUTIONCORPORATION

Software development, design, production, sale, and rental, and maintenance and management ofcomputer systems and networks

Thailand

THAI MEIDENSHA CO., LTD.

Electrical construction and technical consulting

MEIDEN TECHNO SYSTEMS CO., LTD.

Maintenance, inspection, renovation and refurbishment of transformers and switchgear,
manufacture of products and parts for transformers and switchgear, installation of transformers
and switchgear, and worker dispatch business

VietnamSingapore

Germany

MEIDEN ELECTRIC (THAILAND）LTD.

Sale of switchboards and technical consulting

VIETSTAR MEIDEN CORPORATION

Manufacture and sale of low and medium-voltage switchgear

MEIDEN EUROPE GmbH

Sale of electrical equipment and import and export operations

TRIDELTA MEIDENSHA GmbH

Manufacture and sale of lightning arresters for electrical and railway, and peripherals for lightning
arresters

MEIDEN AMERICA, INC.

System engineering and after-sale service for dynamometer products, and sale of component
products

MEIDEN AMERICA SWITCHGEAR, INC.

Manufacture and sale of vacuum circuit breakers, and sale of vacuum interrupters

EAML Engineering CO.,LTD.

Design, manufacture, sale, and repair of hydroelectric generators and peripherals

M WINDS CO., LTD.

Development, design, manufacture, testing, and consulting for wind power generation systems

M WINDS HACHIRYU CO., LTD.

Wind power generation business

NOTO COMMUNITY WIND POWER CO.,LTD.

Wind power generation business

MEIDEN AQUA BUSINESS COMPANY

Maintenance and operation management for water, sewerage and industrial water treatment facilities,
industrial wastewater treatment facilities, and general and industrial waste treatment facilities

KOFU MEIDENSHA ELECTRIC MFG.
CO.,LTD.

Manufacture and sale of PM motors, elevator motors, industrial vehicle motors, brushless motors,
and induction motors

Share data as of March 31, 2021

MEIDEN KIDEN KOGYO CO., LTD.

Repair and overhaul of eddy current dynamometers, mechatronic equipment, motors, generators,
and dynamometers, and high-precision machining

Stock Listing

MEIDEN O&M CORPORATION

Drafting strategies for maintenance business activities, supervision, and education planning

MEIDEN ENGINEERING CORPORATION

Manufacture, sale, installation, and wiring of electrical equipment, machinery, tools, and devices,maintenance and inspection services, refurbishment, and repair

MEIDEN FACILITY SERVICECORPORATION

Upkeep, operation, maintenance, etc., of facilities etc.

U.S.A.

* Non-consolidated subsidiaries
Note: The list of affiliates includes VIETSTAR MEIDEN CORPORATION, which was established in April 2021.

Tokyo Stock Exchange, Nagoya Stock Exchange

Total number of authorized shares
Total number of issued shares
Number of shareholders

115,200,000

45,527,540 (Including treasury
shares of 157,831)

Distribution ofshares byshareholder

16,163

SADO MEIDEN SERVICE CORPORATION Upkeep, operation, maintenance, etc., of facilities etc. in Sado region
CHUO ENTERPRICE CORPORATION

All tasks relating to management and operation of facilities, maintenance and safety inspections,sanitation, cleaning, security, construction, energy-conservation measures, and other building
management

MEIDEN SHOJI CO., LTD.

Sale of electrical and electronic equipment products

MEIDEN KOHSAN CO., LTD.

Sale of goods and materials, and insurance agency

MEIDEN CHEMICAL CO., LTD.

Manufacture of electrical equipment mold products, and insulating varnish, resin, etc.

HOKUTO DENKO CORPORATION

Manufacture and sale of electrochemical measurement devices, and manufacture of water quality
measurement devices

MEIDEN NANOPROCESS INNOVATIONS, Development, design, manufacture, and sale of pure ozone generators and thin film deposition
INC.
equipment

Securities companies

2.29%

Business companies

20.75%

Overseas investors

16.19%

Individuals

19.58%

Other

0.35%

Major Shareholders
Names of Shareholders

Number of Shares Held (1,000 shares)

Shareholding Ratio (%)

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

4,325,200

9.53

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

3,355,300

7.40

Sumitomo Electric Industries, Ltd.

2,631,385

5.80

Cleaning, security for buildings, structures, and incidental facilities, and greening and maintenanceof land

Sumitomo Mitsui Banking Corporation

2,241,835

4.94

MEIDEN MASTER PARTNERSCORPORATION

Worker dispatch business

NEC Corporation

1,746,150

3.85

Sumitomo Mitsui Trust Bank, Limited

1,500,000

3.31

Sumitomo Life Insurance Company

1,061,400

2.34

Meidensha Employees Stock Ownership Group

1,016,371

2.24

Mei-ei Ownership Group

621,344

1.37

Mei-yu Ownership Group

615,306

1.36

MEIDENSHA (SHANGHAI) CORPORATEMANAGEMENT CO., LTD.

Chinese regional presiding company
Management consulting services for affiliates, sale of electrical equipment, import and export
operations, procurement, maintenance, and after-sale service

MEIDEN HANGZHOU DRIVE SYSTEMS
CO., LTD.

Manufacture and sale of dedicated elevator motors, inverters, and automated guided vehicles(AGV)

Manufacture and sale of medium-voltage cubicle-type gas insulated switchgear and vacuum circuit
SHANGHAI MEIDENSHA CHANGCHENG
breakers
SWITCHGEAR CO., LTD
Manufacture and sale of high and low voltage panels, and import and export operations
MEIDEN (HANGZHOU) DRIVETECHNOLOGY CO., LTD.

69

40.84%MEIDEN UNIVERSAL SERVICE LTD.*

MEIDEN ZHENGZHOU ELECTRIC CO., LTD. Manufacture and sale of GIS lightning arresters, and zinc oxide blocks for lighting arresters, etc.

China

Financial institutions

MEIDENSHA REPORT 2021

Manufacture and sale of EV components

Note: The shareholding ratio excludes treasury shares.

MEIDENSHA REPORT 2021

70