Outline of the DAIHEN Group

Corporate data

Company name

Date established

December 1, 1919

Capital

¥10,596 million

Sales

¥145,044 million (March 2020, consolidated)

Employees

3,876 (As of March 2020, consolidated)

Business

Manufacture, sale and servicing of power

equipment, welding machines, industrial robots,

RF generators for semiconductor manufacturing,

wireless transfer systems, etc.

Head office

2-1-11 Tagawa, Yodogawa-ku, Osaka

location

532-8512 Japan

Tel: +81-6-6301-1212

Business offices

Juso Business Office (Osaka), Rokko Business

and plants

Office (Kobe), Mie Business Office

(Taki-cho, Mie), Kanehira Plant (Osaka),

Chitose Plant (Chitose, Hokkaido)

Regional offices

Hokkaido Regional Office, Tohoku Regional

Office, Tokyo Regional Office, Chubu Regional

Office, Chugoku Regional Office, Kyushu

Regional Office

Website

www.daihen.co.jp

Executive officers (As of June 25, 2020)

Directors and operating officers

President and Chief Executive Officer

Tetsuya Tajiri

Senior Executive Vice President and

Shigekazu Koshino

Member of the Board

Executive Vice President and Member

Kazuo Kamo

of the Board

Senior Vice President and Member

Keiki Morimoto

of the Board

Senior Vice President and Member

Shoichiro Minomo

of the Board

Senior Vice President and Member

Haruhisa Kimura

of the Board

Member of the Board

Kusuo Sanjo

Member of the Board

Keiichi Ando

Head Office (Juso Business Office)

Showrooms (1F Head Office)

Our Head Office Building is registered with Osaka City as a

Tsunami Evacuation Building.

Auditors

Standing Auditor

Naoki Urai

Standing Auditor

Keitaro Takahashi

Auditor

Haruo Urata

Auditor

Masayuki Furusawa

Auditor

Masashi Yoshida

Operating officers / Fellows

Senior Vice President

Shingo Wada

Vice President

Tadashi Kuriyama

Senior Vice President

Kentaro Kaneko

Vice President

Yasuhiko Fujitomi

Senior Vice President

Ichiro Yamano

Vice President

Tong Hongjun

Senior Vice President

Yasuhiro Ohnishi

Vice President

Hideki Imura

Vice President

Yasuhiro Nishimori

Vice President

Kohei Funada

Vice President

Tomoyuki Ueyama

Vice President

Tatsuya Iba

Vice President

Hiroaki Oichi

Vice President

Masana Morioka

Vice President

Ryohei Tanaka

Fellow

Tatsuo Ota

Vice President

Toshiyuki Arai

Fellow

Yuji Yoshizako

Editorial policy

We publish this report to let all of our stakeholders know the kind of business activities we are conducting in the DAIHEN Group and, by doing so, build trust between us. A lot of effort has gone into editing the layout so that people of all walks of life will find the content easy to read and will gain a proper understanding of what we do.

Since last year, we have added more information about our sustainability activities and disclosures, and changed the title from "CSR Report" to (the) "DAIHEN Report". Going forward, we will continue to upgrade the content of the report by adding information that our stakeholders expect and want.

[Opinions and requests are welcome!]

Your opinions and requests are great sources of information that help us to improve not only this report but also our business activities. Let us know what you think.

DAIHEN Website >> Contact Us >> Other inquiries >> Inquiry form

Reporting period

This report covers fiscal year 2019 (April 1, 2019 to March 31, 2020). This report also contains some information from before fiscal 2019 and after April 2020.

Scope of organizations covered

In principle, this report spans the initiatives of the DAIHEN Group, which comprises DAIHEN Corporation and its consolidated subsidiaries. The environmental report contained herein presents the environmental initiatives of our Group plants - in Tottori, Oita, Matsudo, Eniwa, Hirosaki, Kagawa, and Izumiotsu - that are participating in the environmental management system of DAIHEN Corporation.

Reference guidelines

  • Guidelines 2013 of the Global Reporting Initiative (GRI)
  • Environmental Reporting Guidelines (Fiscal 2012 Version), Ministry of the Environment, Japan
  • Environmental Accounting Guidelines (Fiscal 2005 Version), Ministry of the Environment, Japan
  • JIS Z 26000, Japanese Standards Association

Next issue

The next issue of this report is scheduled for summer 2021.

Disclaimer

This report includes our plans and prospects as of the date of publication; projections based on management plans and management policies; and past and current data on the DAIHEN Group. The reader is advised that these projections are assumptions or judgments based on the best information available at the time, and the possibility exists that future business performance may differ due to changes in various conditions, unforeseen results, and changes to forecast business activities.

Contents

Corporate data, Executive officers

1

Editorial policy, Contents

2

Message from the President

3

The DAIHEN Group's Corporate Objectives

5

The DAIHEN Group and SDGs

7

Fiscal 2019 Results of the "DAIHEN Value 2020"

9

Medium-term Business Plan

Special How DAIHEN products are helping to

Feature solve social issues

11

DAIHEN Products in Society

15

History of the DAIHEN Group

17

Businesses of the DAIHEN Group

19

Roles Played by DAIHEN Group Companies

21

Global Network

23

Financial Performance of the DAIHEN Group

25

Social Report

Corporate Governance

26

Our Relationship with Our Customers

29

Our Commitment to Our Shareholders

31

Our Commitment to Our Suppliers

32

Our Commitment to Our Employees

33

Our Commitment to Society and Local Communities

37

Environmental Report

Promoting Environmental Management

The environmental impact of our business activities

39

Environmental management at the DAIHEN Group

40

Environmental initiatives: plans and results

41

The DAIHEN Group's 6th Voluntary Environmental

Action Plan

43

Environmental preservation initiatives: policies and

systems

44

Environmental management system

45

DAIHEN Group environmental accounting in fiscal 2019

46

Processes

Prevention of global warming

47

Waste reduction

48

Air pollution control

49

Environmental Protection Activities of

Major Business Sites

50

Environmental Preservation Initiatives of

Our Business Ofces/Plants

Environmental impact data for fiscal 2019

51

Environmental Preservation Initiatives of

Plants Outside Japan

Initiatives in fiscal 2019

55

1 DAIHEN REPORT 2020

DAIHEN REPORT 2020 2

Message from the President

Doing what we can to shape a sustainable world

Through its business activities, the DAIHEN Group is making concerted efforts to solve a diversity of social issues and shape a sustainable world.

Since the company's founding in 1919, DAIHEN has helped to improve the electrical infrastructure that powers modern life and elevate manufacturing around the world to new heights by developing and marketing products that society needs - like transformers, welding machines, industrial robots, high-frequency plasma generators, wireless transfer systems and more.

From the very beginning, we have purposely sought to "please our customers and serve society" through the business we do. It was then and is still now our mission to create and deliver products that meet and exceed customer expectations. This drives us to better understand what customers need and do everything within

our power to provide them with greater benefit and added-value.

Within the DAIHEN Group, we also understand society's growing expectations that businesses should be doing more to achieve the SDGs (Sustainable Development Goals) advocated by the United Nations. Viewing it as a top priority, we are looking squarely at societal issues like the damage being caused to the global environment, the labor shortages that are predicted to come from falling birthrates and the need for stronger national resilience, and searching for promising solutions through product development and new business creation.

All of these thought processes underscore our push as a "development-driven

company" and are guiding us, in the last year of our DAIHEN Value 2020 medium-term business plan, to go beyond current product categories to create unique products of future growth potential and, at the same time, transition business from making standalone products to offering complete system solutions. Whether it means to develop products and systems that will build more smart communities or put more EVs on the road, or supply equipment that automates entire factories, we will be making a concerted effort through our business activities at DAIHEN to solve society's woes and shape a sustainable world.

I ask for your continued understanding and support of what we do here at DAIHEN.

Tetsuya Tajiri

President and Chief Executive Officer

3 DAIHEN REPORT 2020

DAIHEN REPORT 2020 4

The DAIHEN Group's Corporate Objectives

The DAIHEN Group is committed to achieving simultaneous "contentment for all".

Though it may sound like a juggling act, our prime objective in the DAIHEN Group is to make all of our stakeholders - customers, employees and their families, shareholders, suppliers and hosting communities - happy at the same time. We call it "simultaneous contentment for all". (For an explanation of respective returns we target for each category of stakeholder, see page 10.)

All of the people that work for the DAIHEN Group play an important role in achieving that objective. It requires a concerted effort of our entire workforce and their adherence to the work disciplines and code of conduct we define as the "DAIHEN Way".

Achieving Simultaneous

Corporate

Objective

(then president Keijiro

* Including our customers, employees and

local communities

Corporate philosophy

Reliability & Creativity

DAIHEN aims to achieve

healthy growth and contribute

to society by creating value

while upholding the relationship

of trust we have established

with our stakeholders.

Contentment for All*

Kobayashi, 1985)

their families, shareholders, suppliers, and

Building on our founding spirit

The company was founded on the principles of "superior quality, reasonable prices and on-time delivery". Those principles are alive and well today as our "Founding Spirit".

DAIHEN

Group

The DAIHEN

Way

Support for local initiatives and environmental protection

Reasonable pricing

The conduct policy and disciplined work

methods of DAIHEN Group employees

Reliability

Appropriate

Support and

Regional

payments and fair

Fulfilling our

Increasing our

business dealings

empathy for our

Community

dividends and

business

role, trust

activities, trust

Providing products and

share price

systems that help

Low cost and

Customers

customers increase

steady supply of

the social value of their

Increasing

high-quality

business

Investment

rewards

materials, trust

for positive

and trust

Suppliers

results

Employees

andShareholders their families

DAIHEN's

Action

Charter

For the market

  • We shall provide safe, high-quality products that meet customer needs and satisfy our customers with timely services and a straightforward response. In this way, we shall win the confidence of our customers through our business activities.
  • We shall remain sensitive to change and enthusiastically create new products and technologies while developing new markets.

With our fellow workers

  • We shall nurture an environment in which our employees are highly motivated to maximize their abilities and we shall properly evaluate the performance of our employees.
  • We shall voice our frank opinions and shall jointly develop a vision for the future as well as an innovation plan. With a strong will, we shall prevail against our competitors.

To win the condence of shareholders

  • We shall continuously develop a stable business so that we can earn profits and increase our corporate value. In addition, we shall publicly disclose accurate information as necessary.

For all

our suppliers

  • We shall conduct honest trade with our suppliers so that they receive appropriate payment for the products and services they provide.

As members of society

  • When we do business, we shall observe the laws and regulations of the corresponding country or region and shall respect their cultural norms and customs. In addition, we shall strive to protect the environment so that we can maintain good relations with society.
  • We shall respect human rights and shall treat all people equally. We shall not intrude on personal privacy and shall act sensibly as a member of society.

5 DAIHEN REPORT 2020

DAIHEN REPORT 2020 6

The DAIHEN Group and SDGs

Doing our part to achieve SDGs

Advocated by the United Nations since 2015, SDGs raise 17 goals societies around the world should strive to achieve with regard to social issues such as poverty, inequality and climate change. As a corporate citizen whose prime objective has long been the "simultaneous contentment for all", the DAIHEN Group has innately contributed to the sustainable development of society for some time by using our technological abilities to create unique products that fulfill a useful purpose. In fact, every aspect of the businesses we undertake can be tied to goals that are expressed in one way or another by SDGs. Going forward, we are intent on proving ourselves useful to specific causes and making further contributions to sustainable development through even closer correlations between our business activities and SDGs.

Correlations between DAIHEN Group business activities and SDGs

Breakdown

Recent important activities of the DAIHEN Group

ESG

Related SDGs

Read

qualification

more

• Building a product portfolio of a minimum 40% unique useful products that

E

Customers

help customers develop business value and address social challenges

Environment

all"

• Investing 5% of sales in development in order to continue creating unique

S

for

useful products

Society

"ContentmentDAIHEN's objectiveprime

Employees and

• Providing performance-based pay as a "3rd bonus"

* Assuming 5% or greater year-on-year increase in operating income:

their families

Pages 5

1 month's pay if ¥8 billion - 2 months' pay (max.) if ¥12 billion

and 6

Shareholders

• 30% dividend ratio against 3-year average profit

S

Suppliers

Society

• Returning 50% of cost reductions

Regional

• Building a product portfolio of a minimum 75% environment-friendly products

• Donating 1% of operating income to child welfare/protection in communities

community

that host important business sites

• "Smart Energy Management"

Providing products and systems for controlling and managing the growing

2020)

Development of

diversity of decentralized power sources, and products and systems that

E

contribute to the spread of new power applications like EVs, etc.

-

unique products for

Environment

new domains and

• "Smart Factory Automation"

Page 9

2018

S

system solutions

Providing products and systems that help automate entire factories

Society

(fiscal

business

• "Material Fine Processing"

plan

Providing new processes for bonding, cutting and processing metals, resins

and other materials using high-precision control

business

Group-wide "Loss

• Automating production across the group

E

• Improved productivity of transformers for private sector businesses by

Cutting (Cost

introducing straight-through production.

Environment

Page 10

term

Optimization)

• Automating back-office operations and eliminating simple jobs using RPA*

S

Initiative"

* RPA (Robotic Process Automation) means to replace and automate repetitive

Society

-

work performed by humans on PC by programming software to do the job.

medium

Establishing

3rd

"D-Servicing"

• Monitoring the state of IoT robotics

S

practices via

• Production/Operation management and remote support

Page 10

Society

stronger engineering

• Launched "Remote Maintenance Service"

sales

• Created a Compliance Committee.

Compliance

• Imparting compliance education using the DAIHEN Code of Ethics and Guide to

Compliance with Laws and Regulations

Page 27

governance

• Providing learning opportunities focused on contracting and individual laws and regulations

• Established a "Helpline" to prevent and discover illegal acts before they go too far.

• Strengthening information security (Creation of an Information Security Committee,

E

Environment

enforcing an information security policy, promoting awareness activities, etc.)

G

Corporate

• Intellectual property activities

Governance

• Zero-defects quality activities under our quality policy (Creation of a Quality

Risk management

Management Committee, acquisitions of ISO 9001, implementation of education

Page 28

activities, etc.)

• Preparations for natural disasters and accidents (Creation of a Health & Safety

Committee, registering business sites as Tsunami Evacuation Buildings, stocking

emergency supplies, etc.)

• Internal audits

Breakdown

Recent important activities of the DAIHEN Group

ESG

Related SDGs

Read

qualification

more

Information disclosuresto

shareholders/ investors

• Personalized IR activities (direct phone calls, telephone surveys and

S

Improvements to

reporting, etc.)

Governance

Society

• Staging IR briefings for institutional investors

Page 31

IR activities

G

• Releasing useful information above and beyond legal disclosure requirements

swiftly, fairly and accurately via our website and other media

procurement

• Posting desired materials on our website

Materials

to all parties

• Adopted a basic policy on materials procurement.

Society

environment

Promoting business

• Holding meetings to explain our procurement policy and practices to

E

with suppliers that is

suppliers (honoring outstanding suppliers)

Environment

Page 32

mutually beneficial

S

• Promotion of green procurement activities that overtly protect the global

  • Cost-reductionactivities that emphasize VE/VA proposals
  • Personnel rating system with clear evaluation criteria
  • Fair, acceptable treatment
  • Career self-discovery and plotting program and mentoring program for new employees

(Personnel)

Motivating

• Implementing level-based training by position/role

personnel systems

• Assigning personnel to positions that match their skills and desires (Internal

FA system, self-declared career goals)

S

• Systems for stimulating the urge to learn (Online learning, support programs

Pages 33

for acquiring qualifications/licensing)

Society

Employees

• Promotion of work-life balance

G

and 34

Governance

• Support systems that allow employees to both work and raise children /

Creating workplace

provide care to family members

• Hiring persons with physical challenges

environments where

• Hiring and proactively using more women in line with the Act on the

people of all nature

Promotion of Women's Participation and Advancement in the Workplace

can enjoy working

• Imparting education on harassment

• Strengthening communications (DAIHEN Group Heart Festival etc.)

• Adopted a basic policy of "prioritizing health and safety in all business activities".

Safety&

• Improving health and safety levels via audits by experts

health and safety

• Reducing our exposure to risks by tracking and managing major risks with ledgers

S

• Enforcing the practice of heads-up meetings before starting work

Enforcement of

Pages 35

• Strengthening 6 S (seiri [sort], seiton [keep orderly], seiso [clean], seiketsu

Health

[standardize the 3 foregoing activities], shitsuke [sustain the practices] and seibi

and 36

activities

Society

[service]) activities

• Implementing thorough measures to prevent heat exhaustion

• Established and implemented "Safety Check Day".

• Improving workplace environments (Earthquake reinforcing work, planting, etc.)

• Staging of DAIHEN festivals

hostingwithSymbiosis communities

• Having business offices partake in and sponsor local events

• Donations to groups that promote public interests

• Cerezo Osaka Platinum Sponsor

E

Communication with

• Factory tours for nearby schools, shadowing and internship opportunities

Pages 37

• Disaster evacuation support for community residents

Environment

hosting communities

• Social welfare support (Donating items to community groups for bazaars)

S

and 38

• Support for education/academics (Dispatching employees to teach at universities)

Society

• Support for culture/arts (Support activities for philharmonic orchestras etc.)

• Cleanup activities around business offices/plants

• Donations to administrative subrogations regarding waste that contains high

concentrations of PCB

• Keeping EMSs compliant with ISO 14001:2015 or better

• Promotion of green procurement activities

• Zero tolerance for accidents that harm or impact the environment

Environmental

• Creation of environment-friendly products

• Expansion of environment-friendly product lines/business

management

actions

Pages

• Value creation for customers via environment-friendly products

(Volunteer plan of

41-43

• Improvements in recycle rates

action)

• Practical contributions to preventing climate change (Reductions in CO2 emissions)

• Promotion of efforts to protect biodiversity (Reductions in water consumption)

-friendly

• Waste reduction (Sorting, efforts with packaging, etc.)

• Prevention of air pollution (Reductions in emissions of PRTR substances)

Environmental

• Responding to environmental complaints, prevention of reoccurrences

environmental

• Increasing opportunities to learn about the environment and implementing

E

management

Page 45

internal awareness activities

Environment

systems

• Internal environmental audits

Environmental

• Promoting environmental protection activities based on appropriate

Page 46

of

accounting

cost-sharing

Promotion

• Reductions in energy consumption

• Using our own products to manage and visualize electricity consumption

Energy/

• Introduction of LED lighting and energy-saving equipment

Pages

• Operation of solar power systems

Resource-saving

• Thermal insulation for roofs and walls of plants

47-49

activities

• Implementation of "Cool Biz" and "Warm Biz"

• Reductions in paper consumption, promotion of paperless practices

• Promotion of recycling, recovery and reuse

The pages indicated under "Read more" report on DAIHEN Group activities we think represent our best contributions to SDGs.

7 DAIHEN REPORT 2020

DAIHEN REPORT 2020 8

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Daihen Corporation published this content on 11 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 October 2023 08:58:06 UTC.