111.88adsl调制解调器

1ThisisatranslationoftheoriginalnoticeinJapanese.
Intheeventofanydiscrepancy,theoriginalnoticeinJapaneseshallprevail.
(StockCode:6817)March4,2010NOTICEOFTHE55THANNUALGENERALMEETINGOFSHAREHOLDERSDearShareholders,SUMIDACORPORATIONherebywouldliketoinformyouthatthe55thAnnualGeneralMeetingofShareholderswillbeheldasoutlinedbelow.
Pleaseacceptourcordialinvitationtothismeeting.
Ifyouareunabletoattendthemeeting,youmayexerciseyourvotingrightsinwritingorviatheInternet.
Pleaseexaminetheappended"ReferenceMaterialsforAnnualGeneralMeetingofShareholders"andexerciseyourvotingrightsinaccordancewiththeinstructionsgivenonpage3.
Yoursfaithfully,ShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATIONAsahiBuilding3-12-2,Nihonbashi,Chuo-ku,Tokyo1.
DateandTime:2:00p.
m.
,Saturday,March20,2010(Thereceptiondeskwillopenat1:30p.
m.
)2.
Venue:Apollon,HotelNikkoTokyo(1stFloor),1-9-1Daiba,Minato-ku,Tokyo3.
MeetingAgenda:-Itemstobereported1.
BusinessReport,ConsolidatedFinancialStatementsandareportontheauditedresultsoftheConsolidatedFinancialStatementsbytheindependentauditorsandtheAuditCommitteeforthe55thterm(January1toDecember31,2009)2.
Non-consolidatedFinancialStatementsforthe55thterm(January1toDecember31,2009)2-ItemtoberesolvedAgenda:Appointmentoften(10)directors4.
DecisionsMadefortheNoticeoftheMeeting(1)IfashareholderdoesnotindicateacceptanceorrejectionoftheagendaitemswhenexercisingavotingrightinwritingorviatheInternet,theCompanyshalltreatsuchcasesasindicationsofacceptance.
(2)IntheeventthatashareholderexercisesavotingrightviatheInternet,evenifthevotingformisreturnedtousbymail,theCompanyshalltreattheshareholder'sInternetvoteastheeffectiveexerciseofthevotingright.
(3)Ifashareholderexercisesavotingrightinwriting,theshareholderisrequestedtoreturnavotingformtousbymailby5:00p.
m.
onFriday,March19,2010(JST).
(4)IfashareholderexercisesavotingrightviatheInternet,theshareholderisrequestedtodosoby5:00p.
m.
onFriday,March19,2010(JST).
(5)Intheeventthatashareholderexercisesvotingrightsdiversely,theshareholderisrequestedtosubmithis/herintentiontodosoandthereasonforthediverseexerciseofvotingrightstotheCompanyinwritingbythreedaysbeforethemeeting.
IftheReferenceMaterialsforAnnualGeneralMeetingofShareholders,BusinessReport,ConsolidatedandNon-consolidatedFinancialStatementsaresubsequentlyrevised,therevisionsshallbepostedonourWebsite(http://www.
sumida.
com).
3*Shareholdersattendingthemeetinginpersonarerequestedtofilloutthevotingformenclosedwiththisnoticeandsubmititatthereceptiondeskonthedayofthemeeting.
*Ashareholdermayexercisehis/hervotingrightsbydesignatingoneproxywhoisanothershareholderoftheCompanywithvotingrightspursuanttoArticle17oftheArticlesofIncorporation.
Insuchcases,pleasesubmittotheCompanyadocumentprovingtheproxy'spowerofrepresentation(powerofattorney).
*Ifyouareunabletoattendthemeetinginperson,pleaseexerciseyourvotingrightsusingeitherofthebelowmethods.
[Howtosubmityourvotingformbymail]Afterindicatingyouracceptanceorrejectionoftheagendaitemsonthevotingformenclosedwiththisnotice,returntheformtous.
[HowtoexerciseyourvotingrightsviatheInternet]1.
Whenusingacomputer(1)AccesstheWebsiteforExercisingVotingRightsathttp://www.
tosyodai.
54.
net/(2)Afterreadingtherequestslistedonthevotingform,inputtheexerciseofcodeandpasswordfortheexerciseofvotingrights.
(3)Followtheinstructionsgivenonthescreentoexerciseyourvotingrights.
2.
Whenusingamobilephone(1)Thefollowingservicescanbeutilized.
Whenusingamobilephone,accesstheWebsiteforExercisingGeneralShareholderMeetingVotingRights(http://www.
tosyodai.
54.
net/)andfollowtheinstructionsdisplayedonthescreentoexerciseyourvotingrightsinthesamewayasspecifiedin"1.
Whenusingacomputer"above.
-i-mode-EZweb-Yahoo!
Keitai(i-modeisaservicemark/registeredtrademarkofNTTDoCoMo,Inc.
,EZwebisaservicemark/registeredtrademarkofKDDICorp.
,Yahoo!
isaservicemark/registeredtrademarkofUSYahoo!
Inc.
andYahoo!
Keitaiisaservicemark/registeredtrademarkofSoftbankMobileCorp.
)(2)YourmobilephoneneedstobeequippedwithanSSLcommunicationsfunctionforsecureencryptedcommunications.
3.
Pleasenotethatshareholdersaretobearanyandalltelecommunicationscharges,includingcallcharges,andconnectionchargestobepaidtoInternetserviceproviderswhenaccessingtheWebsiteforExercisingVotingRights.
4.
Intheeventthatashareholderexercisesavotingrightonmultipleoccasions,theCompanyshalltreattheshareholder'sfinalvoteastheeffectiveexerciseofthevotingright.
PleasedirectanyenquiriesyoumayhaveconcerningtheexerciseofvotingrightsviatheInternetto:Shareholders'RegisterManager:TokyoSecuritiesTransferAgentCo.
,Ltd.
Tel:0120-88-0768(Tollfreenumber)Operatinghours:9:00a.
m.
to9:00p.
m.
weekdays(excludingSaturdays,Sundaysandholidays)[ToAllInstitutionalInvestors]Intheeventthatinstitutionalinvestorsapplyfortheuseoftheplatformforelectronicexerciseofvotingrights(theso-calledTSEplatform)operatedbyICJ,theymayuseitastheirelectronicmethodforexercisingvotingrightsattheCompany'sGeneralMeetingsofShareholders,inadditiontotheabove-mentionedelectronicmethodviatheInternet.
4BusinessReportforthe55thbusinessterm(January1toDecember31,2009)ShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATION5BusinessReport(January1toDecember31,2009)1.
MattersConcerningtheCurrentStatusoftheSumidaGroup(1)Businessconditionsforthefiscalyearunderreview(i)ProgressandresultsofthebusinessTheglobaleconomy,whichexperiencedadrasticslowdownafterthecollapseofLehmanBrothersinSeptember2008,startedshowingsomesignsofgradualrecoveryasuncertaintyabouttheeconomy'sfutureisbeingsweptawaythankstotheeconomicstimulusmeasuresanddrasticmonetaryeasingpoliciesthatgovernmentsandcentralbanksofmanycountrieshadtakenbythefollowingyear.
Undersuchcircumstances,theeconomiesofemergingnationsincludingChina,Brazil,andIndiaparticularlyregainedrobustgrowthandisbecominglivelier.
Withrespecttotheglobalmarketforelectronicdevices,theU.
S.
market,priortootherareas,startedshowingadropindemandfromthesecondquarterof2008,andtheEuropeanmarketalsostartedtoshrinkinthethirdquarterof2008.
TheAsianmarket,whichhadremainedingoodcondition,alsoexperiencedadrasticdeteriorationinthefourthquarterof2008.
Evenafter2009began,afurthereconomicslumpwasseenacrosstheworldinthefirstquarter.
However,followingsomesignsofrecoverythatstartedappearinginAsiainthesecondquarter,therewasamodestrecoveryintheU.
S.
,andthereafterintheEuropeanmarkets.
Whereasfinaldemandforkeyproducts,includingpersonalcomputers,cellularphones,anddigitalcamerasdrasticallydecreasedinthefirstquarterof2009,ithasbeeninanexpansionaryphasesincethemiddleof2009.
Inaddition,althoughdemandforautomotivepartsandperipheralssharplydeclinedduetotheimpactofproductionadjustmentsbymajorautomotivemanufacturersinJapan,theU.
S.
,andEurope,thankstotheeconomicstimulusmeasuresbythegovernmentsofmanycountries,therehasbeenamodestrecoverysincethemiddleof2009,andinparticularthishasledcustomerstomakeactiveinquiriesaboutelectronicpartsandperipheralsthatarecapableofimprovingautomobilesafetyandenergyefficiency.
Givensuchcircumstances,theSumidaGroupstrivedtoincreasesalesbyreducingfixedcostsineveryarea,includingdevelopment,sales,andadministration,whilefocusingonenhancingefficientoperationsintermsofmanufacturingbyreducingthecostofrawmaterials,cuttinglaborcoststhroughimprovingproductivity,andreducingmanufacturingexpenses.
Overallnetsalesforthefiscalyearunderreviewfellby21.
7%to43,653millionyenfromthepreviousfiscalyearduetoareductioninthemagneticsandautomotivesectorsintheAsiaPacificBusinessandascale-downoftheEUBusiness,reflectingproductionadjustmentsmadeinEuropeanindustries,includingtheautomotive,homeelectricappliances,andindustrialequipmentindustries,althoughsalesattheEnvironment/EnergyBusiness,whichwererecordedonlyforthefourthquarterofthepreviousfiscalyear,madeayear-roundcontribution.
However,lookingatnetsalesineachsix-monthperiod,salesinthefirsthalfdecreasedby11,669millionyen(38.
5%YoYdecrease)to18,645millionyenaffectedbythecollapseofLehmanBrothersparticularlyinthefirstquarter.
Ontheotherhand,netsalesinthesecondhalfrecoveredby412millionyen(1.
6%YoYdecrease)to25,008millionyenduetoamarketrecoveryinemergingnationsanddevelopedcountries.
Intermsofprofit,fromthebeginningofthefiscalyearunderreview,whileworkingtoreducethecostsofrawmaterialsandcutlaborcostsbyimprovingproductivity,wefocusedonreducingfixed6costssuchasmanufacturingoverhead,SGAandR&Dexpenses.
Inthefirsthalf,wepostedanoperatinglossof1,722millionyencomparedwithanoperatingincomeof2,093millionyeninthesameperiodofthepreviousfiscalyearduetoadeclineinrevenuethatoffsettheconstrictedbreak-evennetsales.
However,forthesecondhalf,thelosswasoverturnedandwerecordedanincreaseinrevenueasthebreak-evennetsalessubstantiallydecreasedwithfixedcostsreductionswellunderwayresultinginadrasticincreaseinoperatingincomeof1,489millionyen,comparedwith74millionyeninthesameperiodofthepreviousfiscalyear.
Consequently,forthefull-yearperiod,werecordedanoperatinglossof233millionyencomparedwithanoperatingincomeof2,167millionyeninthepreviousfiscalyear.
Thedecreaseinoperatingincomecouldnotbecomplementedbythereductionofforeignexchangelossesandotherimprovementsinnon-operatingincomeandexpenses.
Asaresult,theordinarylossincreasedfrom146millionyeninthepreviousfiscalyearto774millionyen.
Althoughbusinessstructureimprovementexpenseswereaccruedasextraordinarylosses,netlossreducedfrom5,743millionyeninthepreviousfiscalyearto2,009millionyen.
Thefollowingisthebusinessperformanceintheconsolidatedfiscalyearbysegment.
TheSumidaGroupiscomposedoftheAsiaPacificBusiness,EUBusiness,andEnvironment/EnergyBusiness.
I.
AsiaPacificBusinessSalesatAsiaPacificBusinessdecreasedby25.
0%yearonyearto24,114millionyen.
Salesatthemagneticssectorweredown31.
7%yearonyearto14,390millionyenduetoadecreaseinsalesofPCsandtheirperipherals,AVequipment,communicationequipment,recreationalequipment,automotivepowerdevices,powerinductordevices,andsignals.
Salesattheinvertersectordecreasedby47.
3%yearonyearto556millionyen;whiletherewasanincreaseinsalesofrecreationalequipment,therewerelowersalesofliquidcrystaldisplayTVsandtransformers.
Salesattheautomotivesectordecreasedby15.
3%yearonyearto8,475millionyen;whiletherewasanincreaseinsalesofautomotiveairconditioners,therewerelowersalesofABSandkeylessentrysystems.
II.
EUBusinessSalesattheEUBusinessdecreasedby32.
7%yearonyearto15,092millionyenduetoasharpdeclineinsalesofautomotive-relateddevicesforthefirsthalfandtheimpactofproductionadjustmentsmadebyclientsinthehomeelectricapplianceandindustrialequipmentindustries.
III.
Environment/EnergyBusinessSalesattheEnvironment/EnergyBusiness,whichwererecordedonlyforthefourthquarterofthepreviousfiscalyear,were4,447millionyencomparedwith1,160millionyeninthepreviousfiscalyearowingtoyear-roundcontributionsfromEIWAandMOSTEC,andbecauseweacquiredConcordElectronicsIndustriesCo.
,Ltd.
7BusinessSegmentNetSales(millionyen)AsiaPacificBusiness24,114EUBusiness15,092Environment/EnergyBusiness4,447Total43,653Note:Aboveamountsdonotincludeconsumptiontax.
(ii)FundprocurementDuringthecurrentfiscalyear,theGrouptookoutbankborrowingsandissuedbondstoprocurefunds.
Thebalancedecreased2,101millionyenfromthepreviousfiscalyearend.
Additionally,borrowingcommitmentagreementshavebeenconcludedwithfourCompanies'financingbankstoraiseworkingcapitaleffectively.
Theundisbursedcommitmentpertainingtotheborrowingcommitmentasoftheendofthecurrentfiscalyearisshownasfollows:Totalborrowingcommitment:3,000millionyenBorrowingsoutstanding:-Undisbursedcommitment:3,000millionyen(iii)PlantandequipmentinvestmentTheGroupcontinuouslymakesinvestmentstoexpandfacilitiesandenhanceresearchanddevelopmentforrationalizationofproduction,qualityimprovementandincreasingdemand.
Forthecurrentfiscalyear,thetotalinvestmentamountedto1,199millionyen,includingconstantinvestmentsrelatedtothedevelopmentandmanufacturingofnewproducts.
(iv)Businesstransfers,absorption-typedemerger,andincorporation-typedemergerTherewerenorelevantissues.
(v)BusinessacceptancefromothercompaniesTherewerenorelevantissues.
(vi)Successioninrightsandobligationrelatedtothebusinessesofothercompaniesthroughmergerorspin-offbyabsorptionTherewerenorelevantissues.
(vii)Acquisitionordisposalofshares,otherstakesorstockacquisitionrightsofothercompanies1)SumidaFinanceB.
V.
InJanuary2009,theCompanyestablishedSumidaFinanceB.
V.
inAmsterdam,theNetherlands,awholly-ownedsubsidiarythatengagesinmanagingfundsandforeignexchangeforthegroupcompanies,andrecordeditasaconsolidatedsubsidiary.
2)ConcordElectronicsIndustriesCo.
,Ltd.
InJuly2009,theCompanyacquiredallthesharesofConcordElectronicsIndustriesCo.
,Ltd.
andrecordeditasaconsolidatedsubsidiary.
83)SUMIDAAGAftertheGroupfulfilleddemandofpurchasingsharesbyshareholders,thepercentageofitssharesheldbytheSumidaGroupincreasedto93.
9%from84.
6%.
Accordingly,theratioofshareholdinginsubsidiariesofthecompanybytheSumidaGroupalsoincreased.
(2)Summaryofassets,profitandlossesItem52ndFiscalTerm(endedDec.
2006)53rdFiscalTerm(endedDec.
2007)54thFiscalTerm(endedDec.
2008)55th(Current)FiscalTerm(endedDec.
2009)Netsales(millionyen)63,50870,21055,73443,653Netincome(loss)(millionyen)2,1822,855(5,743)(2,009)Netincome(loss)pershare(yen)111.
88149.
96(298.
91)(104.
57)Totalassets(millionyen)70,16171,51060,81454,505Netassets(millionyen)27,15029,91914,70011,068Netassetspershare(yen)1,383.
751,486.
13718.
04545.
55Note:Netsalesdonotincludeconsumptiontax.
9(3)Significantmattersoftheparentcompanyandsubsidiaries(i)RelationshipwiththeparentcompanyTherewerenorelevantissues.
(ii)SignificantsubsidiariesCompanynameCapital(inthousand)VotingrightsoftheCompany(%)KeybusinessSumidaElectronicComponentsCo.
,Ltd.
50,000yen100ControlofthecoilbusinessSumidaPowerElectronicsCo.
,Ltd.
50,000yen100ControlofthepowerelectronicsbusinessSumidaElectricCo.
,Ltd.
450,000yen100(100)Saleandresearch&developmentofcoilsSumidaCorporateServiceIncorporated25,000yen100ControlofGroupmanagementEIWACo.
,Ltd.
261,200yen100(100)Development,manufacture,andsaleofpowerelectronicsrelatedcoilsMOSTEC,Inc.
40,000yen100(100)DevelopmentofpowerelectronicsrelatedcoilsConcordElectronicsIndustriesCo.
,Ltd.
54,000yen100(100)DevelopmentofpowerelectronicsrelatedcoilsDongguanSumida(TaiPing)ElectricCo.
,Ltd.
305,000HongKongdollars100(100)ManufactureofcoilsSUMIDAELECTRIC(GUANGXI)Co.
,LTD.
17,562yuan100(100)ManufactureofcoilsSumidaElectric(H.
K.
)CompanyLimited245,000HongKongdollars100(100)Manufactureandresearch&developmentofcoilsSUMIDASERVICECOMPANYLIMITED13,000HongKongdollars100(100)InternalservicesSUMIDATRADINGCOMPANYLIMITED80,000HongKongdollars100(100)SaleofcoilsSUMIDATRADINGPTELTD.
6,000Singaporedollars100(100)SaleofcoilsSUMIDAAMERICACOMPONENTSINC.
6,350U.
S.
dollars100(100)SaleofcoilsSumidaAmericaManufacturing,Inc.
4,000U.
S.
dollars100(100)ManufactureofcoilsSMDMARKETING(M)SDN.
BHD.
50Malaysiadollars100(100)SaleofcoilsSUMIDATRADING(SHANGHAI)COMPANYLIMITED8,070yuan100(100)SaleofcoilsTAIWANSUMIDATRADINGCOMPANYLIMITED30,000Taiwandollars100(100)SaleofcoilsSUMIDATRADING(KOREA)COMPANYLIMITED250,000Koreawon100(100)SaleofcoilsSumidaEuropeGmbH25euro100ControlofEuropeanoperationsSUMIDAComponentsGmbH105euro100(100)Manufactureandsaleofcoils10CompanynameCapital(inthousand)VotingrightsoftheCompany(%)KeybusinessSUMIDAAG5,849euro93.
9(93.
9)HoldingcompanySUMIDAAustriaGmbH1,500euro93.
9(93.
9)ManufactureofcomponentsSUMIDAComponents&ModulesGmbH25euro93.
9(93.
9)ControlandsaleofcomponentsSUMIDAEMSGmbH25euro93.
9(93.
9)ControllingcompanyofEMSSUMIDALehestenGmbH1,100euro93.
9(93.
9)EMSSUMIDACOMPONENTSDEMEXICO,S.
A.
DEC.
V.
50Mexicopeso69.
5(69.
5)ManufactureofcomponentsSUMIDAROMANIAS.
R.
L.
2,197euro93.
9(93.
9)ManufactureofcomponentsVOGTelectronicShanghaiCo.
,Ltd.
37,905yuan93.
9(93.
9)ManufactureandsaleofcomponentsSUMIDASLOVENIJA,d.
o.
o.
503euro69.
5(69.
5)ManufactureofcomponentsvogtronicsGmbH25euro69.
5(69.
5)ManufactureandsaleofcomponentsSUMIDAflexibleconnectionsGmbH26euro100(100)ManufactureandsaleofflatcablesSUMIDAFLEXIBLECONNECTIONSROMANIAS.
R.
L.
161euro100(100)ManufactureofflatcablesEiwa(Thailand)Co.
,Ltd.
70,000baht100(100)DevelopmentandmanufactureofpowerelectronicsrelatedcoilsEIWA(HK)COMPANYLIMITED52U.
S.
dollars100(100)DevelopmentandmanufactureofpowerelectronicsrelatedcoilsISMARTGLOBALLIMITED23,309euro100(100)IntermediateholdingcompanySumidaFinanceB.
V.
20euro100(100)FinancialcontrolcompanyNote:Figuresshowninparenthesesinthecolumnofvotingrightsarethepercentagesheldindirectly.
(4)Issuestoaddress(i)SustainablegrowthandmaintenanceofprofitabilityTheSumidaGroupwillsteadilyexecutethestrategicinitiativeslistedintheMid-TermBusinessPlan"TripleEx"withtheaimofsustaininggrowthandmaintainingandimprovingprofitabilitybyenhancingexistingbusinesses,realizingsynergyintheGroup,andfosteringgrowththroughM&Asandbusinesstie-ups.
Thisfiscalyear,thebusinessenvironmenthasdrasticallychangedalongwiththeglobalrecessionthatbeganintheautumnof2008,forcingSumida'smanagementtotacklevariouschallenges.
However,amidsuchcircumstances,theGroupactivelytriedtodevelopnewbusinesslinesfromalong-termstandpoint.
Aspartoftheseefforts,theGroupnewlyacquiredConcordElectronicsIndustriesCo.
,Ltd.
whichhastechnicalexpertiseandabusinessfoundationrelatingtomedicalandindustrialequipment.
11Ontheotherhand,theGrouphasbeenreinforcingbusinessoperationsthatareintegratedinthegroupasawholebyrestructuringtheorganizationalframeworkundertheconceptof"GlobalOneSumida"toenhancefuturegrowthandbymaximizingsynergyintheGroup,whilemakinggooduseoftheadvantagesoftheaffiliatedcompaniesthatjoinedtheGroupinthepastfewyears.
Sumidawillembodyitspursuitofsynergyineveryareaincludingdevelopment,production,andsalesfromaglobalpointofviewbymakingfurthereffortsinthefollowingfiscalyears.
(ii)SpeedyandflexiblemanagementinresponsetochangesinbusinessenvironmentAmoremobileandflexiblemanagementattitudeisrequiredtoappropriatelykeepupwiththedrasticallychangingbusinessenvironment.
TheCompanystrivestospeeduptheexecutionofoperationsthroughouttheGroupbysubstantiallyassigningauthoritytotheexecutiveofficersunderthepropercorporategovernancesystemasacompanywithcommittees,alwaysreviewtheprofitabilityofeachbusiness,andefficientlyallocateresourcesbydrasticallyscalingdownthelessprofitablebusinessesandfocusingonthemoreprofitableones.
TheCompanywillpressaheadwithselectionandconcentrationofitsbusinessesbyconsideringwhethertodevelopandcommercializenewproductsonthehorizonbeyondnewMid-TermBusinessPlanandpursuespeedyandflexiblemanagementthatcanaccommodateenvironmentalchange.
(iii)CorporategovernanceThebasicsoftheCompany'scorporategovernancearetomaintaintransparencyandefficiencyofmanagement,meettheexpectationsofstakeholdersandcontinuouslyimprovethecorporatevalue,whichitrecognizesasbeingoneofthemostimportantissuesforitsmanagement.
Inparticular,theroleofgovernanceunderasysteminwhich"execution"and"supervision"aresegregatedthroughdelegationofsubstantialauthorityforexecutingoperationsisextremelyimportant.
TheCompanyalwaystriestodevelopasysteminwhichbothdutiesfunctioneffectivelyandefficientlytorealizemoresuitablegovernance.
(iv)CorporatesocialresponsibilityUndertheexistingcircumstances,inwhichcompaniesneedtofulfilllegal,economicandsocialresponsibilitiesmorethanever,andinwhichtheyneedtoactivelycontributetosocietyandmakeconcreteactions,theGroupfulfillsitssocialresponsibilitiesbyperformingbusinessbasedonbasicperspectivessuchasintegrity,disciplineandcommonsense,andatthesametimemakesbroadeffortstofurtherenhancethetrustthatsocietyplacesinitthroughmeasuresincludingreinforcementofthelegalandcompliancefunctions,activecommitmenttoenvironmentalissuesandofferingofscholarships.
12(5)Majorbusinesslines(asofDecember31,2009)LinesofbusinessKeyproductsAsiaPacificBusinessDC/DCconvertertransformers,switchingpowersupplytransformers,stroboscopicaloscillatingtransformers,noisefiltercoils,DC/DCconverterunits,powerinductors,IFT/RFcoils,keylessentryantennacoils,ADSLmodemtransformers,datalinefilters,antennacoils,videofilters,signalinductors,RF-ID,four-wayvalvecoilsCCFLdrivinginvertertransformers,CCFLdrivinginverterunitsABScoils,injectioncoils,antennacoils,sensorcoils,noisefilers,solenoidcoilsforairconditionerEUBusinessAntennacoils,sensorcoilmodules,ignitioncoilmodules,noisefilters,xDSLsplittermodules,DC/DCconvertertransformersPowersteeringcontrolunits,GPSantennas,anti-theftcontrolunits,dieselenginecontrolunits,powersuppliesEnvironment/EnergyBusinessHigh-frequencytransformers,high-frequencychokecoils,edge-wisecoils,stickcoils,motorcoilsforHDD,low-frequencytransformers,harmonicpreventivereactors,reactors,commonmodecoils(6)MajorbusinessofficesoftheSumidaGroup(asofDecember31,2009)Headquarters:Chuo-ku,Tokyo(theCompany)BusinessSupervisingCompanies:SumidaElectronicComponentsCo.
,Ltd.
(Chuo-ku[Tokyo]),SumidaEuropeGmbH(Germany),SUMIDAAG(Germany),SumidaCorporateServiceIncorporated(Chuo-ku[Tokyo]),SumidaFinanceB.
V.
(Netherlands)Domesticsalesoffices:SumidaElectricCo.
,Ltd.
(Chuo-ku[Tokyo],Osaka,Nagoyaandotherthreeoffices),EIWACo.
,Ltd.
(Chuo-ku[Tokyo]),ConcordElectronicsIndustriesCo.
,Ltd.
(Ueda-shi[Nagano])Overseassalesoffices:SUMIDATRADINGCOMPANYLIMITED(HongKong),SUMIDATRADINGPTELTD.
(Singapore),SUMIDAAMERICACOMPONENTSINC.
(U.
S.
),SMDMARKETING(M)SDN.
BHD.
(Malaysia),SUMIDAComponentsGmbH(Germany),SUMIDAAustriaGmbH(Austria),SUMIDATRADING(SHANGHAI)COMPANYLIMITED(China),SUMIDAComponents&ModulesGmbH(Germany),vogtronicsGmbH(Germany),SUMIDALehestenGmbH(Germany),SUMIDAflexibleconnectionsGmbH(Germany),SUMIDATRADING(KOREA)COMPANYLIMITED(SouthKorea),TAIWANSUMIDATRADINGCOMPANYLIMITED(Taiwan)Domesticproductionbases:EIWACo.
,Ltd.
(Komoro-shi[Nagano],Mutsu-shi[Aomori]),ConcordElectronicsIndustriesCo.
,Ltd.
(Ueda-shi[Nagano])Overseasproductionbases:SumidaElectric(H.
K.
)CompanyLimited(HongKong),DongguanSumida(TaiPing)ElectricCo.
,Ltd.
(China),SumidaAmericaManufacturing,Inc.
(U.
S.
),SUMIDAComponentsGmbH(Germany),SUMIDAComponents&ModulesGmbH(Germany),SUMIDAROMANIAS.
R.
L.
(Romania),SUMIDACOMPONENTSDEMEXICO,S.
A.
DEC.
V.
(Mexico),SUMIDASLOVENIJA,d.
o.
o.
(Slovenia),SUMIDALehestenGmbH13(Germany),VOGTelectronicShanghaiCo.
,Ltd.
(China),SUMIDAflexibleconnectionsGmbH(Germany),SUMIDAELECTRIC(GUANGXI)Co.
,LTD.
(China),Eiwa(Thailand)Co.
,Ltd.
(Thailand),EIWA(HK)COMPANYLIMITED(HongKong),SUMIDAFLEXIBLECONNECTIONSROMANIAS.
R.
L.
(Romania)DomesticR&Dcenters:SumidaElectricCo.
,Ltd.
(Chuo-ku[Tokyo],Natori-shi[Miyagi]),EIWACo.
,Ltd.
(Komoro-shi[Nagano]),MOSTEC,Inc.
(Kyotanabe-shi[Kyoto]),ConcordElectronicsIndustriesCo.
,Ltd.
(Ueda-shi[Nagano])OverseasR&Dcenters:SumidaElectric(H.
K.
)CompanyLimited(HongKong),DongguanSumida(TaiPing)ElectricCo.
,Ltd.
(China),SUMIDAComponentsGmbH(Germany),SumidaComponents&ModulesGmbH(Germany),vogtronicsGmbH(Germany),VOGTelectronicShanghaiCo.
,Ltd.
(China),SUMIDAflexibleconnectionsGmbH(Germany)(7)Employees(asofDecember31,2009)(i)EmployeesoftheSumidaGroupBusinesssegmentsNumberofemployeesChangesfromtheendofthepreviousfiscalyearAsiaPacificBusiness14,603---EUBusiness2,541---Environment/EnergyBusiness2,101---Company-wide(common)138---Total19,383Increaseby1,277Notes:1.
Thenumberofemployeesisthenumberofpersonswhoengageinfull-timework.
2.
Aswehavechangedthebusinesssegmentationasofthecurrentfiscalyear,acomparisonperbusinesssegmentagainstthepreviousfiscalyearisnotmentioned.
3.
"Company-wide(common)"indicatesthenumberofemployeespostedinSumidaCorporateServiceIncorporatedwhichcarriesoutaheadquarterandsupportfunction,inSUMIDASERVICECOMPANYLIMITEDandintheServiceDepartmentofSumidaElectricCo.
,Ltd.
4.
Thenumberofemployeesincreasedby1,277fromtheendofthepreviousfiscalyear.
Thiswasattributabletothe92employeesthattheGroupgainedthroughtheacquisitionofConcordElectronicsIndustriesCo.
,Ltd.
andtheincreaseinpersonneltorespondtostrongerdemandinthemarket.
5.
Thenumberofemployeesincludesthoseintheconsignedprocessingcompanies.
(ii)EmployeesoftheCompanyTheCompanyisapureholdingcompanyandithasnoemployees.
(8)Majorlenders(asofDecember31,2009)LendersAmountborrowed(millionyen)SumitomoMitsuiBankingCorporation10,230BankofTokyo-MitsubishiUFJ,Ltd.
5,625ResonaBankLimited5,300MizuhoCorporateBank,Ltd.
5,22514(9)Policyondeterminationofdividendfromsurplus(i)PolicyforthecurrentfiscalyearTheCompanyconsidersthereturnofprofitstoitsshareholders,dependingonitsconsolidatedbusinessresults,tobeaprioritybusinessissue.
Themid-andlong-termpolicyoftheCompanyistomaintainstabledividends.
Regardingtheannualdividendinthefiscalyear,theCompanysetthetargetannualdividendat20yenpershareatthebeginningofthefiscalyear.
Accordingly,althoughtheCompanyrecordedaconsolidatednetloss,itdecidedtopayquarterlydividendsof5yenpersharefromsurplustomakeannualdividendsof20yenpershareforthefiscalyear.
DateofBoardofDirectorsresolutionTermTotalamountofdividends(millionyen)Dividendpershare(yen)RecorddateDateofcommencementofpaymentApril27,2009The1stquarter965.
00March31,2009May29,2009July24,2009The2ndquarter965.
00June30,2009August20,2009October22,2009The3rdquarter965.
00September30,2009November20,2009February18,2010The4thquarter965.
00December31,2009March5,2010(ii)PolicyforthenextfiscalyearConsideringthereturnofprofitstoitsshareholderstobeoneoftheprioritybusinessissues,theCompanyhasbeenstrivingtoensurestabledividendsthatreflectitsconsolidatedbusinessresultsasitsmid-andlong-termpolicy,whileenrichingthenecessaryinternalreservestoexpanditsfuturebusinessandkeepupwiththechangingmanagementenvironment.
Asfordetailsofthewaywewillpaydividendsfromsurplus,theCompanyshalldecideonthebaseamountofannualdividendatthebeginningofthenextfiscalyearinaccordancewiththeannualbusinessplanandbasicdividendpayoutratio(25–30%)anddivideitintoquarterstopayonaquarterlybasis.
However,inordertoensurestabledividends,theannualdividendshallbe20yenormorepershare.
Inaddition,inordertohavedividendsreflecttheconsolidatedbusinessresults,ifthedividendamountcalculatedwithconsolidatednetincomeandbasicdividendpayoutratioexceedsthebaseamountofannualdividend,theCompanyshalladdtheexcessamounttotheannualdividendwhenpayingdividendsforthefourthquarter.
Note:PursuanttoArticle459oftheCompaniesAct,theCompanystipulatesintheArticlesofIncorporationthatitshallbeentitledtoallocatedividendsfromsurplusonpredeterminedrecorddates(March31,June30,September30andDecember31)byaresolutionoftheBoardofDirectors.
(10)OtherimportantmattersconcerningtheSumidaGroupTherearenorelevantissues.
152.
MattersConcerningtheCompany(1)SharesoftheCompany(i)Numberofsharesissuable:70,000,000shares(ii)Totalnumberofsharesoutstanding:19,944,317shares(includingtreasurystock)(iii)NumberofshareholdersasofDecember31,2009:6,489(iv)Majorshareholders(top10shareholders,excludingtreasurystock)NameofshareholdersNumberofstockheld(thousandshares)Ratioofthenumberofstockheld(%)YawataBuildingCo.
,Ltd.
5,21027.
12JapanTrusteeServicesBank,Ltd.
1,8389.
57TheChaseManhattanBank1,0155.
28TheMasterTrustBankofJapan,Ltd.
9114.
74NorthernTrustCompanyAVFC5442.
83ShigeyukiYawata5422.
82StateStreetBankandTrustCompany4532.
36JPMorganChaseBank3982.
07NikkoCitiTrustandBankingCorporation(TrustAccount)3481.
81NipponLifeInsuranceCompany2601.
35Note:Theratioofthenumberofstockheldhasbeencalculatedexcludingtreasuryshares(731,669shares).
(2)MattersconcerningtheCompany'sstockacquisitionrights(i)StockacquisitionrightsgrantedtoandheldbytheCompany'sofficersincompensationforexerciseoftheirduties(asofDecember31,2009)Therewerenorelevantissues.
(ii)StockacquisitionrightsgrantedtoemployeesincompensationforexerciseoftheirdutiesduringthecurrentfiscalyearTherewerenorelevantissues.
(iii)OtherimportantmattersconcerningstockacquisitionrightsTherewerenorelevantissues.
16(3)MattersconcerningcorporateofficersoftheCompany(i)Directorsandexecutiveofficers(asofDecember31,2009)NamePositionandresponsibilityattheCompanyConcurrentoccupationsorpositionsatotherorganizationsShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEO(ChairmanoftheBoardofDirectors)Representativedirector,SumidaEuropeGmbHChiuKaSheungDirector,RepresentativeExecutiveOfficerandGroupPresidentRepresentativedirector,SumidaElectronicComponentsCo.
,Ltd.
Representativedirector,SumidaEuropeGmbHRobertE.
PattersonDirector(MemberoftheNominationCommitteeandCompensationCommittee)ManagingDirector,PeninsulaEquityPartnersAshokB.
MelwaniDirector(MemberoftheNominationCommittee)CEO,A.
B.
MelwaniTadakazuKoizumiDirector(ChairmanoftheAuditCommittee)Outsidecorporateauditor,DataApplicationsCo.
,Ltd.
KazuhideKondoDirector(MemberoftheAuditCommittee)MasatoTsuruDirector(ChairmanoftheNominationCommittee)RepresentativeDirector,CEOandChairman,NOKCorporationKotaroMiyagiDirector(ChairmanoftheCompensationCommittee)UlrichRuetzDirector(MemberoftheCompensationCommittee)HideoKamoshitaDirectorMasaruHattoriDirector(MemberoftheAuditCommittee)OutsideAuditor,RyohinKeikakuCo.
,Ltd.
SaburoMatsudaRepresentativeExecutiveOfficerandCFOTomoharuSusekiExecutiveOfficerandCOOHans-JoachimDittloffExecutiveOfficerandCOORyojiIwanagaExecutiveOfficerNotes:1.
Messrs.
RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetzandMasaruHattoriareoutsidedirectorssetforthinArticle2,Item15oftheCompaniesAct.
2.
TheCompanyhasvoluntarilysetupaBoardofIndependentDirectorsconsistingofalloutsidedirectors;Chairman:Mr.
KotaroMiyagi3.
Asidefromstatutorycommittees(Nomination,AuditandCompensationCommittees),theCompanyhasvoluntarilysetupaStrategyCommitteeandaRiskManagementCommittee.
MembersoftheStrategyCommittee:Messrs.
ShigeyukiYawata,KotaroMiyagi,RobertE.
Patterson,AshokB.
Melwani,UlrichRuetz.
MembersoftheRiskManagementCommittee:Messrs.
ShigeyukiYawata,ChiuKaSheung,SaburoMatsuda,TomoharuSuseki,KotaroMiyagiandMasaruHattori.
4.
Mr.
KazuhideKondo,memberoftheAuditCommittee,isacertifiedpublicaccountant,whileMr.
MasaruHattori,memberoftheAuditCommittee,hasyearsofexperienceintheaccountingsectionofORIXCorporation.
Bothmembersthushavegoodknowledgeoffinanceandaccounting.
(ii)DirectorswhoretiredduringthisfiscalyearTherearenorelevantissues.
17(iii)PolicytodeterminethecompensationsofdirectorsandexecutiveofficersbytheCompensationCommitteeandthedetailsofthepolicyA.
Scopeofdecisionandextentofdisclosure"Theamountofindividualcompensationfordirectorsandexecutiveofficers"thattheCompensationCommitteedefinesanddisclosesshallbethetotalamountofcompensationpaidbytheSumidaGroup.
Itisseparatelydisclosedtobothdirectorsandexecutiveofficers.
B.
Directors'compensationThedirectors'compensationshallbedeterminedbyreflectingtheposition,responsibilityandworkinghoursofeachdirector,andinconsiderationoftheeconomictrendsandthebusinessenvironmentoftheCompany.
Directors'compensationiscomposedofthefollowingsixelementsandthiswillnotbepaidtothosewhoserveasexecutiveofficerconcurrently.
1)BasiccompensationCompensationfortheresponsibilitiesasdirector(includingthecompensationfortheresponsibilitiesofthemembersoftheNominationandCompensationCommittees)2)CompensationofAuditCommitteemembersCompensationfortheresponsibilitiesasthememberoftheAuditCommittee3)CompensationofStrategyCommitteemembersCompensationfortheknowledgeandinsightprovidedbythememberoftheStrategyCommittee4)Compensationoffull-timersCompensationforfull-timedirectors5)CompensationforChairmanofBoardofIndependentDirectors6)OverseasdirectorcompensationCompensationfordirectorsresidingoverseasC.
Executiveofficers'compensationForexecutiveofficers'compensation,corporateperformance-linkedcompensationshallbeadoptedinadditiontothefixedcompensationinordertomaintainandraisethemotivationfortheexecutionofoperations.
Executiveofficers'compensationiscomposedofthefollowingfourelements:1)BasiccompensationBasiccompensationshallbeonafixedbasisinconsiderationofthepositionandresponsibilityasanexecutiveofficerwithintheCompany,andanyadditionalpostasanofficeratsubsidiaries.
Theamountofcompensationshallbedeterminedbytakingintoaccountthepreviousoperationalperformanceandcomparisonwiththeactualcompensationforthepriorfiscalyear.
2)Short-termincentivesThesecompensationsareintendedtomaintainandraisetheshort-termmotivation,andthebaseamountshallbedetermineddependingonthepositionandresponsibilityofeachexecutiveofficer.
TheamounttobepaidwillbechangedinaccordancewiththetargetperformancesetatthebeginningofthetermandtheactualperformanceandexecutionofdutiesoftheGroupasawholeorthefunctionincharge.
Additional18bonusesmaybepaidtoanydistinguishedachievement,forwhichtheCompensationCommitteegivescredit.
3)Long-termincentivesTheCompanyshallgrantthiscompensationtomaintainandraisethemedium-andlong-termmotivationofexecutiveofficers,andtopreventthelossofsuchofficers.
4)PensionplansTheCompanyshallgrantthiscompensationtohelpretiredexecutiveofficers(aged68orolder)havestablelivesafterretirement.
(iv)Totalamountofcompensationpaidtodirectorsandexecutiveofficers(Period:January1toDecember31,2009)AmountdeterminedbytheresolutionoftheCompensationCommitteeContributionforpensionplansTotalItemPayeesAmountpaid(millionyen)PayeesAmountpaid(millionyen)Amountpaid(millionyen)Executiveofficers6408349457Directors220––20Outsidedirectors769––69Total15497349546Notes:1.
Officersasoftheendofthefiscalyearincludesixexecutiveofficers,fourdirectors,andsevenoutsidedirectors.
Astwoofthesixexecutiveofficersserveasdirectorsconcurrently,thetotalnumberofofficersisfifteen.
Directors'compensationarenotpaidtothosewhoconcurrentlyserveasexecutiveofficeranddirector,andtherefore,theyareincludedinthefiguresshowninthecolumnofexecutiveofficersandexcludedfromthefiguresindicatedinthecolumnofdirectors.
2.
Incentivecompensation(1)Theamountsofcompensationpaidtoexecutiveofficersincludeincentivecompensationsforthecurrentfiscalyear(includingreservesrecordedinaccordancewiththeJapaneseAccountingStandard).
(2)Aslong-termincentives,pseudostocksdependingonthepositionsoftheexecutiveofficersforthenexttermshallbegranted,withunderlyingassetscalculatedbymultiplyingthetotalamountofdividendforthistermbytheratedesignatedbytheCompany.
3.
Theamountsofcompensationpaidtoexecutiveofficersincludenon-cashcompensationforexecutiveofficers(amountofpropertybenefitsforperformanceofduties)of15millionyenasexpensesforcompany-sponsoredhousingforcorporateofficers.
(v)MattersconcerningoutsidedirectorsA.
ImportantconcurrentoccupationsorpositionsatotherorganizationsThisisasdescribedinthelistof(i)Directorsandexecutiveofficersabove.
TherearenobusinessrelationshipsbetweentheCompanyandothercompanieswheretheyholdtheadditionalposts.
B.
Relationshipswithspeciallyrelatedcompaniesincludingmainclients1)NoneoftheoutsidedirectorshaveeverservedasbusinessexecutorsoftheCompanyoritsspeciallyrelatedcompanies.
2)NoneoftheoutsidedirectorsarerelativeswithinthethirddegreeofrelationshipwithdirectorsandexecutiveofficersoftheCompany.
19C.
Mainactivitiesduringthecurrentfiscalyear1)AttendanceofoutsidedirectorsNameTheBoardofDirectorsmeetingsAuditCommitteemeetingsNominationCommitteemeetingsCompensationCommitteemeetingsStrategyCommitteemeetingsRiskManagementCommitteemeetingsRobertE.
Patterson6/61/15/66/6AshokB.
Melwani6/61/16/6KazuhideKondo6/68/10MasatoTsuru6/61/1KotaroMiyagi6/6(10/10)6/66/64/4UlrichRuetz5/66/65/6MasaruHattori6/610/104/4Notes:1.
TheCompanyestablishedtheRiskManagementCommittee.
MembersincludetheChairmanoftheBoardofIndependentDirectorsandamemberoftheAuditCommitteeaswellasanexecutiveofficer(s)andhis/herstaffmembers.
2.
Mr.
KotaroMiyagiattendedtheAuditCommitteeasanobserverinthepositionofchairmanoftheBoardofIndependentDirectors.
2)Statementsofeachoutsidedirector(a)Mr.
RobertE.
PattersonAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsonatimelybasis,mainlyfromthestandpointofalegalexpert,inconsiderationofactualmodelofU.
S.
corporategovernance.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofdiscussingandactualizingthelineupandcompositionoftheBoardandexecutiveofficersappropriateforthebusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
(b)Mr.
AshokB.
MelwaniAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutiveofanAsiancompany.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofdiscussingandactualizing20thelineupandcompositionoftheBoardandexecutiveofficersappropriateforthebusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
(c)Mr.
KazuhideKondoAtthemeetingsoftheBoardofDirectors,Mr.
Kondomadenecessaryremarksindeliberationsasappropriate,mainlyfromtheperspectiveofafinancialandaccountingexpert.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberations,fromtheperspectiveofpromotingcompliancemanagementthroughauditsandleadingittoenhancethecorporatevalue.
(d)Mr.
MasatoTsuruAtthemeetingsoftheBoardofDirectors,hemadenecessaryandtimelyremarksindeliberations,mainlyfromapointofviewofabusinessexecutiveandbasedontheknowledgeonautomobileindustry.
AschairmanoftheNominationCommittee,heledhearingsofbillsintermsofdiscussingandactualizingthelineupandcompositionoftheBoardandexecutiveofficersappropriateforbusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
Hedecidedcandidatesfordirectorsandrecommendedcandidatesforexecutiveofficers.
(e)Mr.
KotaroMiyagiAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheviewpointofabusinessexecutiveandbasedontheknowledgeonelectricmachineryindustry.
AschairmanoftheCompensationCommittee,heledthedeliberationsfromtheperspectiveofdeterminingfairlyandproperthecompensationbasesfordirectorsandexecutiveofficers,anddefinesthepolicyonthedetailsandamountofindividualcompensationreceivedbydirectorsandexecutiveofficers.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
AschairmanoftheBoardofIndependentDirectorsmeetings,heleddeliberationsfairlyandequitably,andorchestratestheopinionsoftheBoardofIndependentDirectors.
AttheRiskManagementCommitteemeetings,hemakesnecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
21(f)Mr.
UlrichRuetzAtthemeetingsoftheBoardofDirectors,Mr.
Ulrichmadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutiveofaEuropeancompany.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
(g)Mr.
MasaruHattoriAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutive.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberations,fromtheperspectiveofpromotingcompliancemanagementthroughauditsandleadingittoenhancethecorporatevalue.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
3)BoardofIndependentDirectorsTheCompanyestablishedtheBoardofIndependentDirectorsthatconsistsofalloutsidedirectors.
AlloutsidedirectorsattendedtwomeetingsheldduringthistermtodiscussandreviewbettercorporategovernanceandtheroleoftheBoardofDirectorsfromthepositionofrepresentingshareholders.
D.
OutlineofliabilitylimitationcontractsInordertoobtainexcellentdirectorsfromoutside,theCompanyhasmadeprovisionslimitingliabilityfordamagesunderParagraph1,Article423oftheCompaniesActintheArticlesofIncorporationpursuanttotheprovisionsunderParagraph1,Article427ofthesaidlaw.
Inaccordancewiththeaforementionedprovisions,theCompanyhasenteredintoliabilitylimitationcontractswithsevenoutsidedirectors.
ThelimitofliabilityfordamagesundersuchcontractshasbeensetattheminimumliabilityprovidedforunderParagraph1,Article425oftheCompaniesAct.
However,liabilitylimitationisappliedonlywhentherelevantoutsidedirectorshavecarriedouttheirduties,forwhichtheyaresupposedtoassumeliability,ingoodfaithorwithoutgrossnegligence.
E.
TotalamountofcompensationsreceivedfromtheparentcompanyorsubsidiariesTherewerenorelevantissues.
22(4)Independentauditors(i)Name:KPMGAZSA&Co.
(ii)Amountofcompensations:Amounttobepaid(millionyen)Amountofcompensationsforthecurrentfiscalyear72TotalamountofmoneyandotherpropertybenefitstobepaidbytheCompanyanditssubsidiariestoindependentauditors100Note:IntheauditagreementconcludedbetweentheCompanyandtheindependentauditor,compensationforauditsisnotclearlyclassifiedintocompensationbasedontheCompaniesActandcompensationinaccordancewiththeFinancialInstrumentsandExchangeLaw,andsincethatcompensationcannotsubstantiallybedividedeither,theitem"Amountofcompensationforthecurrentfiscalyear"showsthesumoftheseamounts.
(iii)AuditingofconsolidatedsubsidiariesImportantconsolidatedsubsidiariesoftheCompanythatarelocatedabroadshallbeaudited(onlythosestipulatedbytheCompaniesActorFinancialInstrumentsandExchangeLaw(includingforeignlawsandregulationsthataretheequivalentoftheselaws))byeitheranauditingfirmoracertifiedpublicaccountant(includingthosewhopossessequivalentqualificationsabroad)whoisnotanindependentauditorattheCompany.
(iv)Detailsofnon-auditservicesTherewerenorelevantissues.
(v)Policyondeterminationofaregardingdismissalornon-reappointmentoftheindependentauditorWhentheAuditCommitteedeemsthatanyofthefollowingitemsinParagraph1,Article340oftheCompaniesActapplytotheindependentauditor,thatindependentauditorshallbedismissedwiththeconsentofallthecommitteemembers.
Inaddition,theAuditCommitteewillannuallydiscusswhethertoreappointtheindependentauditorinconsiderationofthequalityoftheauditperformedbytheindependentauditorandtheeffectivenessandefficiencyofitsauditperformance.
(5)Systemtosecurepropernessofoperations(i)SystemtoensurethatExecutiveOfficersandemployeescomplywiththeapplicablelaws,regulationsandtheArticlesofIncorporationwithregardtotheirbusinessactivitiesSUMIDAhasestablished"SumidaBusinessPrinciples(hereinafter,the'Principles')"whichembodiesthegroup'svision,managementprinciples,commitment,codeofconduct,corporategovernanceprinciples,andenvironmentpolicy.
RepresentativeexecutiveofficersshallbuildupasystemtomonitorforcompliancewhichenablestoensurethattheExecutiveOfficersandemployeesperformtheirdutiesinaccordancewiththePrinciples.
Detailsareasfollows:(a)Alldirectors,officersandemployeesshallalwaysberemindedtounderstandandembodythePrinciples.
ThePrinciples,whichiswritteninfourlanguages,Japanese,English,ChineseandGerman,isalwaysputonthecompany'sintranetandabookletisdistributedtoallmembersofthegroup,sothatitenablestheemployeestocheckandconfirmtheiractivitiesandbehaviorsasneeded.
TheCorporateGovernanceOffice*shallberesponsible23formonitoringandverifyinghowthePrincipleshavebeenobserved.
(b)Whilecomplianceisrecognizedasthebaseofcorporategovernance,SUMIDAregardsitinamoreproactivemannerratherthansimplylimitingtheissuetotheobservanceoflaw,withactivities,whicharedefinedinawiderscopeasCorporateSocialResponsibilities(CSR),basedonintegrity,anddisciplineandcommonsense.
TheCorporateGovernanceOfficeshallbeprimarilyresponsiblefortheenhancementofthegroup'soverallsystemandmonitoringitsactivities.
(c)TheCorporateGovernanceOfficeshallreportthesituationoftheaforementionedactivitiestotheRepresentativeExecutiveOfficersandtheAuditCommittee,andasummaryofwhichshallbereportedtotheBoardofDirectors.
(d)RepresentativeExecutiveOfficersshallverifytheeffectivenessofinternalcontrol,includingcompliance,andshallsendreportstotheBoardofDirectors.
*TheCorporateGovernanceOfficeisreporttoRepresentativeExecutiveOfficersandmadeupoftheRiskManagementOffice,ComplianceOfficeandInternalGovernmentTeam.
(ii)SystemregardingthepreservationandmanagementofinformationofExecutiveOfficers'businessactivitiesRepresentativeExecutiveOfficersshallcentrallymanageimportantinformationrelatedtoexecutionofdutiesthroughclarificationofthelevelofimportanceofinformationaswellastheperiodandplaceofsafekeeping,inaccordancewiththerulesandregulationsregardinginformationanddocumentmanagement.
DocumentsareavailabletotheDirectorsatalltimes.
(iii)SystemandregulationswithregardtoriskmanagementRepresentativeExecutiveOfficerandCEO,astheChiefRiskManagementOfficerwhotakesthehighestresponsibilityforriskmanagement,shallestablishtheRiskManagementCommittee,whichisresponsibleforoverseeingriskmanagement,andshallsetuptheRiskManagementOffice,whichisresponsibleforexecutingthedutiesofsaidCommittee,withintheCorporateGovernanceOffice.
TheRiskManagementOfficeshallsetouttheinternalriskmanagementrulesandtherebyidentifyandanalyzepotentialrisksandformulateandmanagepreventivemeasuresfromaglobalbusinessperspectivethroughplacementofariskmanagementmonitoringsysteminmajorbusinessbasesoftheGroupincludingoverseassites.
Intheeventthatariskmaterializes,theRiskManagementOfficeshalldiscusscountermeasurestominimizelosses.
Executiveofficersandemployeesshallperformtheirdutiesincompliancewiththerules.
TheCorporateGovernanceOfficeshallmonitorandevaluatetheimplementationoftheabove,andshallreportthesituationtotheRepresentativeExecutiveOfficersandtheAuditCommittee,anddeliverasummarytotheBoardofDirectors.
(iv)Systemtoensuretheeffectivenessandefficiencyofexecutiveofficers'businessactivitiesExecutiveofficersshallsetupasystembasedonthePrinciplestoensureaproperdecision-makingprocessandsurveillanceofindividualactivitiesandtherebyenhancetheoperatingefficiency.
Detailsareasfollows:(a)EachRepresentativeExecutiveOfficershallsetupanAdvisoryBoardastheneedarises,withwhomtheyshallconsultandengageinsufficientdiscussionwhenmakingimportantdecisions.
24(b)RepresentativeExecutiveOfficersshallsetoutregulationsfortheauthorityanddecision-makingprocessandconductregularreviewsofthesituation.
(c)RepresentativeExecutiveOfficersshallmakeregularreviewsoftheachievementandprogressofbusinessandensurefurtherproprietyandefficiencyofmanagementbygivingfeedbackoftheresultsofthedecision-makingprocess.
(d)RepresentativeExecutiveOfficersshallensureasmoothdecision-makingprocessbycollecting,analyzingandcommunicatingonSUMIDA'sbusinessactivities,aswellassharingandarchivingthenecessaryinformation.
(v)SystemtoensuretheproprietyofbusinessofthegroupconsistingoftheCompanyanditssubsidiariesSUMIDACorporationisaholdingcompanywithbusinessactivitiesconductedbyitsgroupcompanies.
Inlightofthis,DirectorsandExecutiveOfficersshallalwaysperformtheirdutieswiththeviewofgroupgovernance.
Inaddition,theCompanyperformsinternalauditsbyassigninginternalauditorsinmajorsubsidiariesandotherappropriateaffiliatesandhasanauditorofthebusiness-controllingcompaniesperformauditstoseehowthoseinternalauditsweredone.
TheCorporateGovernanceOfficeoverseescomplianceandriskmanagementoperationsandalsopreparesinternalauditreportswithreferencetoauditreportsreceivedfromtheauditorofthebusiness-controllingcompanies.
ThesereportsarethensubmittedtotheRepresentativeExecutiveOfficersandtheAuditCommittee.
TheAuditCommitteeshallcarryoutitsauditincooperationwithCorporateGovernanceOffice.
TheCorporateGovernanceOfficeshalltakechargeofinternalcontrolofnotonlytheCompany,butalsotheentireGroup.
(vi)SystemwithregardtoemployeeswhoassisttheAuditCommitteeandmattersconcerningtheindependenceofthoseemployeesfromexecutiveofficersTheCorporateGovernanceOfficeshallberesponsibleforthesecretariatoftheAuditCommittee.
Anydecisionswithregardtochangesortransfersofpersonnel,reorganizationoranyotherconsiderations,whichmayhavematerialeffectonthedutiesofemployees,shallrequirethepriorapprovaloftheAuditCommittee.
(vii)SystemwherebyexecutiveofficersandemployeesreporttotheAuditCommitteeoritsmembersTheCorporateGovernanceOfficeshallsetouttherulesforexecutiveofficersandemployeestoreportthefollowingmatters,andtherebyreportthemtotheAuditCommittee.
AsummaryofthefollowingmattersshallbereportedtotheBoardofDirectors.
(a)Incidents,whichmaycausemateriallossesand/orgainsto,ormaterialdamageand/orbenefitto,theCompany(b)Anyactualincidentorpotentialriskinvolvinganactualorsuspectedmisconduct,malpracticeorbreachoflaws,regulationsorMemorandum&ArticlesofIncorporationbythedirectorsandexecutiveofficers(c)Monthlyaccountingstatementsonaconsolidatedbasis(d)Monthlyinternalauditreport(e)Monthlyreportsfromthemainoperatingdivisions(f)Otherimportantmatters25(viii)SystemtoensuretheeffectivenessofauditsexecutedbytheAuditCommitteemembersToensuretheeffectivenessofauditexecutedbytheAuditCommitteemembers,thefollowingmattersshallbeperformed(a)TheCorporateGovernanceOfficeshallhavepriorconsultationswiththeAuditCommitteewhensettingouttheannualauditpoliciesandplans.
TheOfficeshallalsoreporttheprogressandresultsofinternalaudittotheAuditCommittee.
TheAuditCommitteemayrequesttheCorporateGovernanceOfficeforanadditionalauditasnecessary.
(b)ExternalauditorsshallexplaintotheAuditCommitteeitsauditingplanattheoutsetofthefinancialyearandreporttotheAuditCommitteetheprogressofitsinterimauditandtheend-termauditresults,etc.
Furthermore,theexternalauditorsmayhaveconsultationsanddiscussionswiththeAuditCommitteeifneeded.
(c)Inordertoensuretheindependenceofauditorsfromtheexecutiveofficers,aswellastoguaranteetheimplementationoftheauditactivities,decisionsontheauditors'compensationrequiretheAuditCommittee'spriorconsent.
(6)BasicpolicyregardingcontrolofacompanyTheCompanyhasnotspecificallydefinedabasicpolicyforthosewhocontrolthefinancialandbusinessguidelinesofacompany.
Note:Theamountsofmoneyandthenumbersofsharesdescribedinthisbusinessreportareroundedtothenearestunitshown.
26ConsolidatedandNon-consolidatedFinancialStatementsforthe55thbusinessterm(January1toDecember31,2009)ConsolidatedBalanceSheetConsolidatedStatementofIncomeConsolidatedStatementofChangesinShareholders'EquityNon-consolidatedBalanceSheetNon-consolidatedStatementofIncomeNon-consolidatedStatementofChangesinShareholders'EquityShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATION27ConsolidatedBalanceSheetAsofDecember31,2009MillionsofyenASSETSCurrentassets:Cashanddeposits9,317Notesandaccountsreceivable-trade10,423Merchandiseandfinishedgoods3,084Workinprocess718Rawmaterialsandsupplies2,692Deferredtaxassets377Incometaxesreceivable510Other1,538Allowancefordoubtfulaccounts(40)Totalcurrentassets28,619NoncurrentassetsProperty,plantandequipmentBuildingsandstructures12,063Machinery,equipmentandvehicles26,300Tools,furnitureandfixtures4,303Land1,633Constructioninprogress313Accumulateddepreciation(29,324)Totalproperty,plantandequipment15,288Intangibleassets:Goodwill3,838Leaseholdright565Software127Other470Totalintangibleassets5,000Investmentsandotherassets:Investmentsecurities481Deferredtaxassets3,614Other1,411Allowancefordoubtfulaccounts(3)Totalinvestmentsandotherassets5,503Totalnoncurrentassets25,791Deferredassets95Totalassets54,50528ConsolidatedBalanceSheetAsofDecember31,2009MillionsofyenLIABILITIESCurrentliabilities:Notesandaccountspayable-trade3,832Short-termloanspayable18,484Currentportionofbonds1,090Currentportionoflong-termloanspayable2,886Accountspayable-other1,279Accruedexpenses1,580Incometaxespayable366Other632Totalcurrentliabilities30,149Noncurrentliabilities:Bondspayable4,075Long-termloanspayable5,551Provisionforretirementbenefits1,050Provisionfordirectors'retirementbenefits29Deferredtaxliabilities443Leaseobligations670Other1,470Totalnoncurrentliabilities13,288Totalliabilities43,437NETASSETSShareholders'equity:Capitalstock7,217Capitalsurplus7,030Retainedearnings5,125Treasurystock(1,524)Totalshareholders'equity17,848Valuationandtranslationadjustments:Valuationdifferenceonavailable-for-salesecurities28Foreigncurrencytranslationadjustment(7,394)Totalvaluationandtranslationadjustments(7,366)Minorityinterests586Totalnetassets11,068Totalliabilitiesandnetassets54,50529ConsolidatedStatementofIncomeYearendedDecember31,2009MillionsofyenNetsales43,653Costofsales35,075Grossprofit8,578Selling,generalandadministrativeexpenses8,811Operatingloss233Non-operatingincome:Interestanddividendsincome42Gainonvaluationofderivatives190Other134366Non-operatingexpenses:Interestexpenses650Foreignexchangelosses146Other111907Ordinaryloss774Extraordinaryincome:Gainonsalesofnoncurrentassets14Gainonsalesofinvestmentsecurities190Other79283Extraordinarylosses:Lossonsalesandretirementofnoncurrentassets112Businessstructureimprovementexpenses1,185Revisedlossonsaleofaffiliatedcompanies428Other1491,874Lossbeforeincometaxesandminorityinterests2,365Incometaxes-current309Incometaxes-deferred(723)Minorityinterestsinincome58Netloss2,00930ConsolidatedStatementofChangesinShareholders'EquityYearendedDecember31,2009(Millionsofyen)Shareholders'equityCapitalstockCapitalsurplusRetainedearningsTreasurystockTotalshareholders'equityBalanceasofDec.
31,20087,2177,0309,423(1,524)22,146ChangesofitemsduringtheperiodDividendsfromsurplus(481)(481)Netloss(2,009)(2,009)Purchaseoftreasurystock(0)(0)Disposaloftreasurystock(0)00Effectofchangesinaccountingpoliciesappliedtoforeignsubsidiaries(1,808)(1,808)Netchangesofitemsotherthanshareholders'equityTotalchangesofitemsduringtheperiod--(4,298)(0)(4,298)BalanceasofDec.
31,20097,2177,0305,125(1,524)17,848(Millionsofyen)ValuationandtranslationadjustmentsValuationdifferenceonavailable-for-salesecuritiesDeferredgainsorlossesonhedgesForeigncurrencytranslationadjustmentTotalvaluationandtranslationadjustmentsMinorityinterestsTotalnetassetsBalanceasofDec.
31,200821(198)(8,174)(8,351)90514,700ChangesofitemsduringtheperiodDividendsfromsurplus(481)Netloss(2,009)Purchaseoftreasurystock(0)Disposaloftreasurystock0Effectofchangesinaccountingpoliciesappliedtoforeignsubsidiaries(1,808)Netchangesofitemsotherthanshareholders'equity7198780985(319)666Totalchangesofitemsduringtheperiod7198780985(319)(3,632)BalanceasofDec.
31,200928-(7,394)(7,366)58611,06831Non-consolidatedBalanceSheetAsofDecember31,2009MillionsofyenASSETSCurrentassets:Cashanddeposits1,559Notesreceivable-trade382Prepaidexpenses51Deferredtaxassets10Short-termloansreceivable4,011Incometaxesreceivable200Accountsreceivable-other1,524Other630Totalcurrentassets8,367NoncurrentassetsProperty,plantandequipmentBuildings916Structures26Machineryandequipment5Land505Totalproperty,plantandequipment1,452Intangibleassets:Telephonesubscriptionright4Software13Totalintangibleassets17Investmentsandotherassets:Investmentsecurities327Stocksofsubsidiariesandaffiliates34,796Long-termprepaidexpenses27Deferredtaxassets773Insurancefunds933Other127Totalinvestmentsandotherassets36,983Totalnoncurrentassets38,452Deferredassets75Totalassets46,89432Non-consolidatedBalanceSheetAsofDecember31,2009MillionsofyenLIABILITIESCurrentliabilities:Short-termloanspayable16,580Currentportionofbonds700Currentportionoflong-termloanspayable2,548Accountspayable-other16Accruedexpenses59Incometaxespayable4Depositsreceived1,401Totalcurrentliabilities21,308Noncurrentliabilities:Bondspayable3,650Long-termloanspayable5,136Totalnoncurrentliabilities8,786Totalliabilities30,094NETASSETSShareholders'equity:Capitalstock7,217Capitalsurplus7,030Legalcapitalsurplus7,030Retainedearnings4,075Legalretainedearnings264Otherretainedearnings3,811Generalreserve3,100Retainedearningsbroughtforward711Treasurystock(1,524)Totalshareholders'equity16,798Valuationandtranslationadjustments2Valuationdifferenceonavailable-for-salesecurities2Totalnetassets16,800Totalliabilitiesandnetassets46,89433Non-consolidatedStatementofIncomeYearendedDecember31,2009MillionsofyenOperatingrevenue387Operatingexpenses521Operatingloss134Non-operatingincome:Interestincome42Dividendsincome341Foreignexchangegains55Other11449Non-operatingexpenses:Interestexpenses334Other72406Ordinaryloss91Extraordinaryincome:Gainonsalesofinvestmentsecurities188188Extraordinarylosses:Lossonretirementofnoncurrentassets28Headofficetransfercost22Other3282Incomebeforeincometaxes15Incometaxes-current(86)Incometaxes-deferred218Netloss11734Non-consolidatedStatementofChangesinShareholders'EquityYearendedDecember31,2009(Millionsofyen)Shareholders'equityCapitalsurplusRetainedearningsOtherretainedearningsCapitalstockLegalcapitalsurplusTotalcapitalsurplusLegalretainedearningsGeneralreserveRetainedearningsbroughtforwardTotalretainedearningsTreasurystockTotalshareholders'equityBalanceasofDec.
31,20087,2177,0307,0302643,1001,3094,673(1,524)17,396ChangesofitemsduringtheperiodDividendsfromsurplus(481)(481)(481)Netincome(117)(117)(117)Purchaseoftreasurystock(0)(0)Disposaloftreasurystock(0)(0)00Netchangesofitemsotherthanshareholders'equityTotalchangesofitemsduringtheperiod598)(598)(0)(598)BalanceasofDec.
31,20097,2177,0307,0302643,1007114,075(1,524)16,798(Millionsofyen)ValuationandtranslationadjustmentsValuationdifferenceonavailable-for-salesecuritiesTotalvaluationandtranslationadjustmentsTotalnetassetsBalanceasofDec.
31,20080017,396ChangesofitemsduringtheperiodDividendsfromsurplus(481)Netincomeloss(117)Purchaseoftreasurystock(0)Disposaloftreasurystock0Netchangesofitemsotherthanshareholders'equity222Totalchangesofitemsduringtheperiod22(596)BalanceasofDec.
31,20092216,80035AuditReportTheAuditCommitteehasauditedtheperformanceofdutiesbyDirectorsandExecutiveOfficersforthe55thFiscalYearfromJanuary1,2009toDecember31,2009.
Wereportthemethodsandtheresultsoftheauditasfollows.
1.
MethodsusedinauditsandcontentofauditsTheAuditCommitteeobservedandexaminedtheresolutionsoftheBoardofDirectorsregardingtheorganizationofthesystemstipulatedin(b)and(e),Item1,Paragraph1ofArticle416oftheCompaniesActandthestatusofthesystembasedonsaidresolutions(internalcontrolsystems).
Wealsoinspectedincooperationwiththeinternalcontroldivisiontheprocessandthecontentofthedecisionmakingonthesignificantmeeting,thecontentofthemajorauthorizeddocumentsandotherimportantdocumentsrelatedtosignificantbusinessoperation,businessperformanceoftheExecutiveOfficers,andtheCompany'soperationandconditionofpropertyinaccordancewiththeauditingpoliciestheAuditCommitteeestablished,thesegregationofdutiesandothers.
Withrespecttosubsidiaries,theAuditCommitteetookstepstofacilitatecommunicationwiththedirectors,executiveofficersandcompanyauditorsofsubsidiariesand,whennecessary,receivedreportsfromsubsidiariesonthestatusoftheirbusinesses.
Inaddition,theAuditCommitteealsoobservedandverifiedwhethertheindependentauditorwasmaintainingitsindependenceandwascarryingoutitsauditsinanappropriatemanner.
TheAuditCommitteereceivedreportsfromtheindependentauditorontheexecutionofitsdutiesand,whennecessary,requestedexplanationsregardingthosereports.
TheAuditCommitteealsoreceivednotificationfromtheindependentauditorthatitwastakingstepstoimprovethe"systemforensuringtheproperexecutionofitsduties"(asenumeratedinitemsofArticle131oftheCorporateAccountingRules)incompliancewiththe"QualityControlStandardsRelatingtoAuditing"(adoptedbytheBusinessAccountingDeliberationCouncilonOctober28,2005).
Whennecessary,AuditCommitteerequestedexplanationsonthesereportsandnotificationsandconfirmedthatthesystemunderwhichtheindependentauditoroperatedwasfunctioningappropriately.
Basedontheforegoingmethods,theAuditCommitteealsoexaminedtheBusinessReport,theNon-consolidatedFinancialStatements(Non-consolidatedBalanceSheet,Non-consolidatedStatementofIncome,Non-consolidatedStatementofChangesinShareholders'Equity,andnotestoNon-consolidatedFinancialStatements)andsupportingschedules,andtheConsolidatedFinancialStatements(ConsolidatedBalanceSheet,ConsolidatedStatementofIncome,ConsolidatedStatementofChangesinShareholders'Equity,andnotestoConsolidatedFinancialStatements)relatedtothefiscalyearunderreview.
(Translation)362.
ResultsoftheAudit(1)ResultsofauditofBusinessReport(i)Inouropinion,theBusinessReportandsupportingschedulesfairlypresentthesituationoftheCompany,incompliancewiththeprovisionsofapplicablelaws,regulationsandtheArticlesofIncorporation.
(ii)NeitherimproperactionsintheexecutionofdutiesbyDirectorsandExecutiveOfficers,normaterialfactsinviolationoftheprovisionsofapplicablelaws,regulationsortheArticlesofIncorporation,werefound.
(iii)Inouropinion,thecontentoftheresolutionbytheBoardofDirectorsregardinginternalcontrolsystemswasappropriate,and,furthermore,allactionsofDirectorsandExecutiveOfficerswithrespecttoexecutinginternalcontrolsystemswerecarriedoutappropriately.
(2)ResultsoftheauditofNon-consolidatedFinancialStatementsandsupportingschedulesInouropinion,theauditingmethodsusedbytheindependentauditor,KPMGAZSA&Co.
andtheresultsofitsauditwereappropriate.
(3)ResultsoftheauditofConsolidatedFinancialStatementsInouropinion,theauditingmethodsusedbytheindependentauditor,KPMGAZSA&Co.
andtheresultsofitsauditwereappropriate.
February16,2010AuditCommitteeSUMIDACORPORATIONTadakazuKoizumi(Seal)MemberoftheAuditCommitteeKazuhideKondo(Seal)MemberoftheAuditCommitteeMasaruHattori(Seal)MemberoftheAuditCommitteeMessrs.
KazuhideKondoandMasaruHattoriareoutsidedirectorsasstipulatedinArticle2,Item15andArticle400,Paragraph3oftheCompaniesAct.
37ReferenceMaterialsforAnnualGeneralMeetingofShareholdersAgenda:Appointmentoften(10)directorsThetenureofofficeofeleven(11)directorswillexpireattheendofthisAnnualGeneralMeetingofShareholders.
TheCompanyrequeststheappointmentoften(10)directorsbasedonthedecisionoftheNominationCommittee.
Thecandidatesforthedirectors'positionsareasfollows.
Eight(8)ofthecandidatesfordirector,RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetz,MasaruHattoriandCharlesF.
MartinseekpositionsasoutsidedirectorsasstipulatedinArticle2,Paragraph3,Item7oftheOrdinanceforEnforcementoftheCompaniesAct.
No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany,andimportantconcurrentoccupationsorpositionsatotherorganizationsNumberofsharesheldintheCompany(Briefpersonalprofile)Nov.
1977Mar.
1988Mar.
1990Apr.
1991Mar.
1992Apr.
2003JoinedtheCompanyDirectorRepresentativeDirectorandSeniorManagingDirectorRepresentativeDirectorandVicePresidentRepresentativeDirectorandPresidentDirector,RepresentativeExecutiveOfficerandCEO(Todate)1ShigeyukiYawata(October28,1951)(PositionanddutiesattheCompany)Director(ChairmanoftheBoardofDirectors),RepresentativeExecutiveOfficerandCEO(Importantconcurrentoccupationsorpositionsatotherorganizations)Representativedirector,SumidaEuropeGmbH542,47438No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany,andimportantconcurrentoccupationsorpositionsatotherorganizationsNumberofsharesheldintheCompany(Briefpersonalprofile)Apr.
1983Dec.
1987Mar.
1996Jun.
2000Mar.
2001Jul.
2001Apr.
2003Jan.
2004JoinedSumidaElectric(H.
K.
)CompanyLimitedBranchHeadoftheCompany,HongKongDirectorManagingDirectorRepresentativeDirectorRepresentativeDirectorandCOODirector,RepresentativeExecutiveOfficerandCOODirector,RepresentativeExecutiveOfficerandGroupPresident(Todate)2ChiuKaSheung(October23,1957)(PositionanddutiesattheCompany)Director,RepresentativeExecutiveOfficerandGroupPresident(Importantconcurrentoccupationsorpositionsatotherorganizations)Representativedirector,SumidaElectronicComponentsCo.
,Ltd.
Representativedirector,SumidaEuropeGmbH60,500(Briefpersonalprofile)Dec.
1972Jan.
1978Nov.
1999Jan.
2001Apr.
2003Dec.
2007RegisteredAttorney,California,U.
S.
A.
JoinedGrahamJamesLLP(Squire,SandersandDempseyLLP)RepresentativePartnerSUMIDAAdvisoryBoardManagingDirector,PeninsulaEquityPartnersSUMIDADirectorResignedSquire,SandersandDempseyLLPRepresentativePartner(Todate)3RobertE.
Patterson(September14,1942)(PositionanddutiesattheCompany)Director,Member,NominationCommitteeandCompensationCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)ManagingDirector,PeninsulaEquityPartners1,700(Briefpersonalprofile)Apr.
1989Sep.
1998Apr.
1999Nov.
1999Apr.
2003CEO,M.
B.
MelwaniResignedM.
B.
MelwaniCEOCEO,A.
B.
MelwaniSUMIDAAdvisoryBoardSUMIDADirector(Todate)4AshokB.
Melwani(November26,1958)(PositionanddutiesattheCompany)Director,Member,NominationCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)CEO,A.
B.
Melwani11,09739No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany,andimportantconcurrentoccupationsorpositionsatotherorganizationsNumberofsharesheldintheCompany(Briefpersonalprofile)Mar.
1967May1996Jun.
2003Mar.
2004Jun.
2004Jun.
2008RegisteredCharteredAccountantRepresentativePartner,OtaShowa&Co.
(CurrentlyErnst&YoungShinNihonLLC)ResignedOtaShowa&Co.
,RepresentativePartnerSUMIDADirectorCorporateAuditor,AjinomotoCo.
,Inc.
ResignedAjinomotoCorporateAuditor(Todate)5KazuhideKondo(April1,1941)(PositionanddutiesattheCompany)Director,Member,AuditCommittee0(Briefpersonalprofile)Jun.
1985Jun.
1989Mar.
2005RepresentativeDirector,ChiefExecutiveOfficer,NOKCorporationRepresentativeDirectorandChairman,NOKCorporationSUMIDADirector(Todate)6MasatoTsuru(January11,1948)(PositionanddutiesattheCompany)Director,Chairman,NominationCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)RepresentativeDirector,CEOandChairman,NOKCorporation0(Briefpersonalprofile)Mar.
1995Mar.
2001Mar.
2004Mar.
2006Director,CanonFull-TimeCorporateAuditor,CanonResignedCanonFull-TimeCorporateAuditorSUMIDADirector(Todate)7KotaroMiyagi(June17,1940)(PositionanddutiesattheCompany)Director,Chairman,CompensationCommittee2,900(Briefpersonalprofile)Feb.
1983Jan.
1994Oct.
1997Apr.
2003Mar.
2007Director,BERUGmbH(CurrentlyBERUAG)PresidentCEOResignedBERUGmbHCEOSUMIDADirector(Todate)8UlrichRuetz(March15,1940)(PositionanddutiesattheCompany)Director,Member,CompensationCommittee3,00040No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany,andimportantconcurrentoccupationsorpositionsatotherorganizationsNumberofsharesheldintheCompany(Briefpersonalprofile)Jul.
1974Jun.
2002Jun.
2005Jan.
2006Jan.
2008Mar.
2008May2008Jun.
2009JoinedOrientLeasing(CurrentlyORIX)CorporateAuditor,FujiFireandMarineInsuranceDirector,FujiFireandMarineInsuranceExecutiveVicePresident,ORIXCorporationResignedORIXCorporationExecutiveVicePresidentSUMIDADirectorOutsideAuditor,RyohinKeikakuCo.
,Ltd.
ResignedFujiFireandMarineInsuranceDirector(Todate)9MasaruHattori(February12,1945)(PositionanddutiesattheCompany)Director,Member,AuditCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)OutsideAuditor,RyohinKeikakuCo.
,Ltd.
0(Briefpersonalprofile)May1988Apr.
1997Jul.
1999Apr.
2001Apr.
2008Dec.
2009JoinedBankersTrustCompanyPrincipal,MergersandAcquisitions,Tokyo,JapanJoinedDeutscheBankGroupManagingDirector,MergersandAcquisitions,Tokyo,Japan,DeutscheSecuritiesLtd.
RetiredfromDeutscheSecuritiesInc.
PresidentandCEO,Martin&CompanyInc.
(Todate)10CharlesF.
Martin(April21,1955)(Importantconcurrentoccupationsorpositionsatotherorganizations)PresidentandCEO,Martin&Company,Inc.
0Notes:1.
SumidaElectronicComponentsCo.
,Ltd.
andSumidaEuropeGmbHaresubsidiariesoftheCompany.
TheCompanyloanscapitaletc.
tothesesubsidiaries.
2.
TherearenospecialinterestrelationshipsbetweenthecandidatesandtheCompany.
3.
Two(2)ofthecandidatesfordirector,Messrs.
RobertE.
PattersonandAshokB.
Melwani,weremadeoutsidedirectors,startingfromthe51stfiscalyear,aftertheCompanyhadconsideredlegalinterpretationandtheactualstateoftheirbusinessactivities.
Reasonsofappointment:Nine(9)ofthecandidatesfordirector,Messrs.
ShigeyukiYawata,ChiuKaSheung,RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetzandMasaruHattorihavesufficientlyservedasdirectorswhomakeimportantmanagementdecisionsaswellassuperviseoperations.
TheCompanythereforerequeststhemtobeinthesameposition.
PleaserefertothefollowingparagraphforthereasontoappointMr.
CharlesF.
Martin.
41Reasonsfortheselectionofcandidatesforoutsidedirector,independenceasoutsidedirectorsandliabilitylimitationcontractswithoutsidedirectorsareasfollows.
(1)ReasonsfortheselectionofcandidatesforoutsidedirectorTheCompanyisacompanyemployingacommittee-basedcorporategovernancestructure,calledacompany-with-committees.
Atacompany-with-committees,theboardofdirectorsspecializesinsupervisingmanagement,whileacommitteemadeupofamajorityofoutsidedirectorsisestablishedtoimprovethetransparencyofmanagementandexecutiveofficersareinstalledasanorgantoworkfull-timefortheexecutionofoperations.
Thus,acompanywithcommitteesclearlyseparates"supervisionofmanagement"from"executionofduties"tomakethemfunctioneffectively.
Suchacompanygenerallyneedstoselectmultipleoutsidedirectors.
Tofurtherenhancethefunctionsoftheboardofdirectors,theCompanyaimstomakeoutsidedirectorsaccountforamajorityofdirectors,andherebyrequeststheappointmentofeight(8)outsidedirectors.
(i)RobertE.
PattersonisaU.
S.
attorney(currentlyoninactivestatus),andhasservedasanoutsidedirectorofaU.
S.
corporationformanyyears.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedonhisknowledgeandexperienceasalegalexpert,whichhavebeenaccumulatedthroughhiscareer,andhisinsightintocorporategovernanceatU.
S.
corporationsandintotheU.
S.
market.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefouryearsattheendofthisAnnualGeneralMeetingofShareholders.
(ii)AshokB.
MelwanihasmanagedacorporationinSingaporeforalongtime.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andforhisinsightintotheAsianmarket.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefouryearsattheendofthisAnnualGeneralMeetingofShareholders.
(iii)KazuhideKondoisacertifiedpublicaccountantandservedasanoutsidecorporateauditorofotherBusiness.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheexpertiseandexperienceinfinancialaffairsandaccountingthathehasaccumulatedthroughouthiscareer.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbesixyearsattheendofthisAnnualGeneralMeetingofShareholders.
(iv)MasatoTsuruhaslongengagedinthemanagementofNOK.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheautomobileindustry.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefiveyearsattheendofthisAnnualGeneralMeetingofShareholders.
(v)KotaroMiyagiservedasPresidentofanoverseasunitofCanon,andDirectorandfull-timeCorporateAuditorofCanon.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andforhisinsightintotheelectricalmachineryindustry.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefouryearsattheendofthisAnnualGeneralMeetingofShareholders.
(vi)UlrichRuetzhasengagedinthemanagementofBERUAGofGermanyforalongtime.
HecurrentlyservesasanoutsidedirectorofaEuropeancorporation.
TheCompanymadehima42candidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andforhisinsightintotheautomobileandelectricalmachineryindustriesandtheEuropeanmarket.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbethreeyearsattheendofthisAnnualGeneralMeetingofShareholders.
(vii)MasaruHattoriservedasanexecutivemanagingdirectorofORIXandanoutsidedirectorofFujifireandmarineinsurance.
HeservesasanoutsideauditorofRyohinKeikakuCo.
,Ltd.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,especiallyinthecorporateplanningandaccountingfields,andforhisinsightintotheaudit.
ThelengthofhisserviceasanoutsidedirectorwillbetwoyearattheendofthisAnnualGeneralMeetingofShareholders.
(viii)CharlesF.
MartinhasadvisedovermanyyearsonfinancialstrategyandM&Asinthefieldofinvestmentbanking,amongothers.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedonhisknowledgeonfinancialstrategyandcorporatevalueenhancementmeasuresfosteredthroughouthiscareer.
(2)Independenceofcandidatesforoutsidedirector(i)NoneofthecandidatesforoutsidedirectorhavebeenmanagingmembersoftheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompanyinthepast.
(ii)NoneofthecandidatesforoutsidedirectorhavereceivedorplantoreceivealargeamountofmoneyorotherpropertyfromtheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompany.
(iii)NoneofthecandidatesforoutsidedirectorhaverelativesinthethirddegreeorcloserwithdirectorsorexecutiveofficersoftheCompany.
(3)LiabilitylimitationcontractswithoutsidedirectorsTheCompanyhasenteredintoliabilitylimitationcontractswithcandidateswithRobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagiUlrichRuetzandMasaruHattori,whoarecurrentlyoutsidedirectorsoftheCompany.
(Outlineofthecontractsarestatedonpage21oftheBusinessReport.
)Iftheirreappointmentisapproved,theCompanywillcontinuetheaboveliabilitylimitationcontractswiththem.
IfCharlesF.
Martinisappointedasdirector,theCompanywillalsoenterintoaliabilitylimitationcontractwithhim.