Amountadsl调制解调器

NOTICEOFTHE60THANNUALGENERALMEETINGOFSHAREHOLDERSTimeandDate:12:00noon,Saturday,March21,2015(JST)(Thereceptiondeskwillopenat11:30a.
m.
,JST.
)Venue:Orion,HotelNikkoTokyo(1stFloor),1-9-1,Daiba,Minato-ku,TokyoAgenda1:Electionofseven(7)directorsAgenda2:Issuanceofperformance-linkedstockacquisitionrightsStockCode:6817TableofContentsNoticeoftheGeneralMeetingofShareholdersNoticeofthe60thAnnualGeneralMeetingofShareholders1ConcerningtheExerciseofVotingRightsReferenceMaterialsforAnnualGeneralMeetingofShareholdersAgenda1:Electionofseven(7)directors4Agenda2:Issuanceofperformance-linkedstockacquisitionrights12AttachedDocumentstotheNoticeoftheGeneralMeetingofShareholdersBusinessReport1.
MattersConcerningtheCurrentStatusoftheSumidaGroup202.
MattersConcerningtheCompany·31ConsolidatedFinancialStatements45Non-consolidatedFinancialStatements·49AuditReport·531ThisisatranslationoftheoriginalnoticeinJapanese.
Intheeventofanydiscrepancy,theoriginalnoticeinJapaneseshallprevail.
(StockCode:6817)March2,2015NOTICEOFTHE60THANNUALGENERALMEETINGOFSHAREHOLDERSDearShareholders,SUMIDACORPORATION(the"Company")herebywouldliketoinformyouthatthe60thAnnualGeneralMeetingofShareholderswillbeheldasoutlinedbelow.
Pleaseacceptourcordialinvitationtothismeeting.
Ifyouareunabletoattendthemeetinginperson,youmayexerciseyourvotingrightsinwritingorviatheInternet.
Pleaseexaminetheappended"ReferenceMaterialsforAnnualGeneralMeetingofShareholders"andexerciseyourvotingrightsinaccordancewiththeinstructionsgivenonpage3.
Yoursfaithfully,ShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATIONSuitenguHokushinBuilding,1-39-5,NihonbashiKakigara-cho,Chuo-ku,Tokyo1.
TimeandDate:12:00noon,Saturday,March21,2015(JST)(Thereceptiondeskwillopenat11:30a.
m.
,JST.
)2.
Venue:Orion,HotelNikkoTokyo(1stFloor),1-9-1,Daiba,Minato-ku,Tokyo3.
MeetingAgenda:-Itemstobereported1.
BusinessReport,ConsolidatedFinancialStatementsandreportsontheauditedresultsoftheConsolidatedFinancialStatementsbytheindependentauditorsandtheAuditCommitteeforthe60thterm(January1toDecember31,2014)2.
Non-consolidatedFinancialStatementsforthe60thterm(January1toDecember31,2014)-ItemtoberesolvedAgenda1:Electionofseven(7)directorsAgenda2:Issuanceofperformance-linkedstockacquisitionrights24.
DecisionsMadefortheNoticeoftheMeeting(1)IfashareholderdoesnotindicateacceptanceorrejectionoftheagendaitemswhenexercisingavotingrightinwritingorviatheInternet,theCompanywilltreatsuchcasesasindicationsofacceptance.
(2)IntheeventthatashareholderexercisesavotingrightviatheInternet,evenifthevotingformisreturnedtousbymail,theCompanywilltreattheshareholder'sInternetvoteastheeffectiveexerciseofthevotingright.
(3)Ifashareholderexercisesavotingrightinwriting,theshareholderisrequestedtoreturnthevotingformtousbymailby5:00p.
m.
onFriday,March20,2015(JST).
(4)IfashareholderexercisesavotingrightviatheInternet,theshareholderisrequestedtodosoby5:00p.
m.
onFriday,March20,2015(JST).
(5)Intheeventthatashareholderexercisesvotingrightsdiversely,theshareholderisrequestedtosubmithis/herintentiontodosoandthereasonforthediverseexerciseofvotingrightstotheCompanyinwritingbythreedaysbeforethemeeting.
IftheReferenceMaterialsforAnnualGeneralMeetingofShareholders,BusinessReport,andNon-consolidatedandConsolidatedFinancialStatementsaresubsequentlyrevised,therevisionsshallbepostedontheCompany'swebsite.
TheCompany'swebsite(http://www.
sumida.
com)3*Shareholdersattendingthemeetinginpersonarerequestedtosubmitthevotingformenclosedwiththisnoticeatthereceptiondeskonthedayofthemeeting.
*Ashareholdermayexercisehis/hervotingrightsbydesignatingoneproxywhoisanothershareholderoftheCompanywithvotingrightspursuanttoArticle17oftheArticlesofIncorporation.
Insuchcases,pleasesubmittotheCompanyadocumentprovingtheproxy'spowerofrepresentation(powerofattorney).
*Ifyouareunabletoattendthemeetinginperson,pleaseexerciseyourvotingrightsusingeitherofthebelowmethods.
[ExercisingVotingRightsbyMail]Afterindicatingyouracceptanceorrejectionoftheagendaitemsonthevotingformenclosedwiththisnotice,returnitwithoutaffixingastamp.
Votestobereceivedby:5:00p.
m.
,Friday,March20,2015(JST)[ExercisingVotingRightsviatheInternet]PleaseaccesstheWebsiteforExercisingVotingRights(http://www.
tosyodai54.
net)withacomputer,smartphone,ormobilephone,andenterthelog-inIDandtemporarypasswordshownonthevotingformenclosedwiththisnotice.
Followtheinstructionsgivenonthescreentoindicateyouracceptanceorrejection.
Votestobegivenby:5:00p.
m.
,Friday,March20,2015(JST)1.
Pleasenotethatshareholdersaretobearanyandalltelecommunicationscharges,includingcallcharges,andconnectionchargestobepaidtoInternetserviceproviderswhenaccessingtheWebsiteforExercisingVotingRights.
2.
Forshareholderswhointendtoexercisevotingrightsviamobilephonesorsmartphones,pleasenotethatitmaynotbepossibletodosousingcertainmodels.
3.
IntheeventthatashareholderexercisesavotingrightonmultipleoccasionsviatheInternet,theCompanywilltreattheshareholder'sfinalvoteastheeffectiveexerciseofthevotingright.
PleasedirectanyinquiriesyoumayhaveconcerningtheexerciseofvotingrightsviatheInternetto:Shareholders'RegisterManager:TransferAgentDepartment(HelpDesk),MitsubishiUFJTrustandBankingCorporationTel:0120-173-027(Toll-free,availableonlyinJapan)Operatinghours:9:00a.
m.
to9:00p.
m.
(JST)[ToAllInstitutionalInvestors]Intheeventthatyouapplyfortheuseoftheplatformforelectronicexerciseofvotingrights(theso-calledTSEplatform)operatedbyICJ,youmayuseitasyourelectronicmethodforexercisingvotingrightsattheCompany'sGeneralMeetingsofShareholders,inadditiontotheabove-mentionedelectronicmethodsviatheInternet.
4ReferenceMaterialsforAnnualGeneralMeetingofShareholdersAgenda1:Electionofseven(7)directorsThetermsofofficeofsix(6)directorswillexpireattheconclusionofthisAnnualGeneralMeetingofShareholders.
TheCompanyrequeststheelectionofseven(7)directorsasnominatedbytheNominationCommittee.
Thecandidatesforthedirectors'positionsareasfollows.
Six(6)ofthecandidatesfordirector,namelyMessrs.
JohjiSato,PakHongAuyang,SoichiroUchida,YukihiroMoroe,AtsushiKatoandMichaelMühlbayer,seekthepositionsasoutsidedirectorsasstipulatedinArticle2,Paragraph3,Item7oftheOrdinanceforEnforcementoftheCompaniesAct.
No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany1Re-electionShigeyukiYawata(October28,1951)(Briefpersonalprofile)919,331Nov.
1977JoinedtheCompanyMar.
1988DirectorMar.
1990RepresentativeDirectorandSeniorManagingDirectorApr.
1991RepresentativeDirectorandVicePresidentMar.
1992RepresentativeDirectorandPresidentApr.
2003Director,RepresentativeExecutiveOfficerandCEO(Todate)(PositionanddutiesattheCompany)Director(ChairmanoftheBoardofDirectors),RepresentativeExecutiveOfficerandCEO,Member,NominationCommittee,Member,CompensationCommitteeandChairman,RiskManagementCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)ManagingDirector,SUMIDAEuropeGmbH5No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany2Re-election/OutsideJohjiSato(November20,1953)(Briefpersonalprofile)0Apr.
1982JoinedChuoCoopers&LybrandAssociates,Inc.
Sep.
1985AssignedtoLondonOffice,Coopers&LybrandUK(CurrentlyPricewaterhouseCoopersLLP)Oct.
1989Partner(InternationalCorporateTaxDivision),LondonOffice,Coopers&LybrandUK(CurrentlyPricewaterhouseCoopersLLP)Jul.
1995LeadPartner(JapaneseBusinessGroupinEurope,theMiddleEastandAfrica),LondonOffice,Coopers&LybrandUK(CurrentlyPricewaterhouseCoopersLLP)Jul.
2002ChairPartner,JapaneseBusinessSteeringCommittee,CentralCluster(Europe,theMiddleEast,AfricaandIndia),PricewaterhouseCoopersLLPMay2012ExecutiveSeniorDirector(GlobalJapaneseBusiness),PricewaterhouseCoopersCo.
,Ltd.
Mar.
2013DirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Chairman,AuditCommitteeandMember,RiskManagementCommitteeReasonsfortheselectionofcandidatesnominatedforoutsidedirectorMr.
JohjiSatohasbeeninvolvedintheprovisionofadviceregardingtaxationandinvestmenttoglobalcorporationsovermanyyears,andhasheldvariouspostsincludingpartneratPricewaterhouseCoopersLLP.
TheCompanyproposedhimasacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedonthemanagerialknowledgeandexperiencethathehasaccumulatedthroughouthiscareer,especiallyinthefieldsofaccountingandtaxation.
HecurrentlyservesasoutsidedirectoroftheCompany.
Thelengthofhisserviceasoutsidedirectorwillbetwo(2)yearsattheconclusionofthisAnnualGeneralMeetingofShareholders.
6No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany3Re-election/OutsidePakHongAuyang(December24,1967)(Briefpersonalprofile)0Sep.
1991JoinedComputimeGroupLimitedSep.
2002CEO,ComputimeGroupLimitedNov.
2009Chairman,VidaNovaVenturesJul.
2010Co-CEO&ExecutiveDirector,Touchmedia(Todate)Mar.
2013DirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Chairman,NominationCommitteeandCompensationCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)Co-CEO&ExecutiveDirector,TouchmediaViceChairman,DragonchipLimitedOutsideDirector,GrayhillHongKongCompanyLimitedDirector,QVIVOLimitedDirector,GreenlinkGlobalLimitedReasonsfortheselectionofcandidatesnominatedforoutsidedirectorMr.
PakHongAuyangwasengagedinthemanagementofelectroniccontrolproductsmanufacturerComputimeGroupLimitedofHongKong,andcurrentlyservesasamanagerordirectoratAsiancompaniesmainlyinChinaandHongKong.
TheCompanyproposedhimasacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheAsianmarket.
HecurrentlyservesasoutsidedirectoroftheCompany.
Thelengthofhisserviceasoutsidedirectorwillbetwo(2)yearsattheconclusionofthisAnnualGeneralMeetingofShareholders.
7No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany4Re-election/OutsideSoichiroUchida(November8,1953)(Briefpersonalprofile)0Mar.
1981JoinedNOKCORPORATIONJun.
1993Director,NOKCORPORATIONJun.
2007SeniorManagingDirector,SYNZTECCo.
,Ltd.
Jun.
2010RepresentativeDirector&President,SYNZTECCo.
,Ltd.
Apr.
2013Adviser,NOKCORPORATION(Todate)Mar.
2014DirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Member,AuditCommittee,NominationCommittee,CompensationCommitteeandRiskManagementCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)Adviser,NOKCORPORATIONReasonsfortheselectionofcandidatesnominatedforoutsidedirectorMr.
SoichiroUchidahasservedasdirectorofNOKCORPORATIONformanyyearsandengagedinthemanagementofSYNZTECCo.
,Ltd.
TheCompanyproposedhimasacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheautomotivecomponentsindustry.
HecurrentlyservesasoutsidedirectoroftheCompany.
Thelengthofhisserviceasoutsidedirectorwillbeone(1)yearattheconclusionofthisAnnualGeneralMeetingofShareholders.
8No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany5Re-election/OutsideYukihiroMoroe(July18,1955)(Briefpersonalprofile)0Nov.
1985JoinedTheNomuraSecuritiesCo.
,Ltd.
Jul.
1988JoinedGoldmanSachsJapanNov.
1998ManagingDirector,GoldmanSachsJapanAug.
2008RepresentativeDirector,YUMECapitalCo.
,Ltd.
(Todate)RepresentativeDirector,ItohanJapanCo.
,Ltd.
(Todate)Oct.
2008OutsideDirector,NIPPONPARKINGDEVELOPMENTCo.
,Ltd.
Jun.
2009OutsideCorporateAuditor,OisixInc.
(Todate)Mar.
2014DirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Member,AuditCommittee(Importantconcurrentoccupationsorpositionsatotherorganizations)RepresentativeDirector,YUMECapitalCo.
,Ltd.
RepresentativeDirector,ItohanJapanCo.
,Ltd.
OutsideCorporateAuditor,OisixInc.
ReasonsfortheselectionofcandidatesnominatedforoutsidedirectorMr.
YukihiroMoroehasaccumulatedawealthofexperienceinthefinancialindustryovermanyyears,andcurrentlyengagesinmanagementandservesasdirectorandoutsidecorporateauditoratseveralcompanies.
TheCompanyproposedhimasacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheexperienceandinsightthathehasaccumulatedthroughouthiscareer.
HecurrentlyservesasoutsidedirectoroftheCompany.
Thelengthofhisserviceasoutsidedirectorwillbeone(1)yearattheconclusionofthisAnnualGeneralMeetingofShareholders.
9No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany6Newlynominated/OutsideAtsushiKato(April14,1943)(Briefpersonalprofile)0Apr.
1968Establishedataxaccountantoffice,DirectorOct.
1971JoinedTokyoOffice,Coopers&LybrandJul.
1983Partner,TokyoOffice,Coopers&LybrandJul.
1984RepresentativePartner,ChuoAuditCorporation(laterChuoAoyamaAuditCorporation,aPricewaterhouseCoopersmemberfirm)duetoamergerJul.
2001Part-timemember,AccountingStandardsBoardofJapan(ASBJ)Sep.
2006RepresentativePartner,PricewaterhouseCoopersAarata(aPricewaterhouseCoopersmemberfirm)Feb.
2007RepresentativeDirectorandPresident,ControlSolutionsInternational,Inc.
Apr.
2009Full-timeMember,AccountingStandardsBoardofJapan(ASBJ)Apr.
2010Full-timeViceChairman,AccountingStandardsBoardofJapan(ASBJ)Apr.
2013CertifiedPublicAccountant,AtsushiKatoCertifiedPublicAccountantOffice(Todate)(Importantconcurrentoccupationsorpositionsatotherorganizations)AtsushiKatoCertifiedPublicAccountantOfficeReasonsfortheselectionofcandidatesnominatedforoutsidedirectorMr.
AtsushiKatohasbeeninvolvedintheprovisionofadviceandactivitiesregardingfinance,audit,internalcontrolandInternationalFinancialReportingStandards(IFRS)forglobalcorporationsovermanyyears,andhasheldvariouspostsincludingpartneratCoopers&Lybrand(C&L).
TheCompanyproposedhimasacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedonthemanagerialknowledgeandexperiencethathehasaccumulatedthroughouthiscareer,especiallyinthefieldsofaccountingandtaxation.
10No.
Name(Dateofbirth)BriefpersonalprofileandpositionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany7Newlynominated/OutsideMichaelMühlbayer(February22,1955)(Briefpersonalprofile)0Oct.
1985JoinedDaimlerAGApr.
1994Manager,TreasuryControl,MTUFriedrichshafenGmbH,DaimlerAGGroupApr.
1997ExecutiveVicePresident,TEMICTELEFUNKENMikroelektronikGmbH,DaimlerAGGroupNov.
1998ExecutiveVicePresident,NewYorkOffice,Mercedes-BenzCreditCorp,U.
S.
,DaimlerAGGroupNov.
1998ExecutiveVicePresident,DetroitOffice,ChryslerFinancialCorp,U.
S.
Aug.
2000SeniorVicePresident(Treasury),DaimlerChryslerAGJul.
2005SeniorVicePresident(InvestorRelations&Treasury),DaimlerAGReasonsfortheselectionofcandidatesnominatedforoutsidedirectorMr.
MichaelMühlbayerhasbeeninvolvedinfinanceofDaimlerAG,aGermanautomobilemanufacturer,overmanyyears.
TheCompanyproposedhimasacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,especiallyinthefieldoffinance,andhisinsightintotheautomobileandelectricandelectronicsindustriesandtheEuropeanandU.
S.
markets.
Notes:1.
SUMIDAEuropeGmbHisasubsidiaryoftheCompany.
Amongotherthings,theCompanyloansfundstothesubsidiary.
2.
TherearenospecialinterestrelationshipsbetweenthecandidatesandtheCompany.
3.
Five(5)ofthecandidatesforoutsidedirector,Messrs.
JohjiSato,PakHongAuyang,YukihiroMoroe,AtsushiKatoandMichaelMühlbayer,willbedesignatedasindependentdirectorsoftheCompanyinaccordancewiththerulesoftheTokyoStockExchangeandtheirnameswillbenotifiedtothesaidstockexchange.
Reasonsfortheselection:Five(5)ofthecandidatesnominatedfordirector,Messrs.
ShigeyukiYawata,JohjiSato,PakHongAuyang,SoichiroUchidaandYukihiroMoroe,havesufficientlyservedasdirectorswhodeterminebasicmanagementpoliciesandsuperviseoperations.
TheCompanythereforerequeststoreelectthemasdirectors.
Reasonsfortheselectionofcandidatesnominatedforoutsidedirector,independenceasoutsidedirectorsandtheexplanationofliabilitylimitationcontractswithoutsidedirectorsareasfollows.
(1)ReasonsfortheselectionofcandidatesnominatedforoutsidedirectorTheCompanyisacompanyemployingacommittee-basedcorporategovernancestructure,calledacompany-with-committees.
Atacompany-with-committees,theboardofdirectorsspecializesinsupervisingmanagement,whileacommitteemadeupofamajorityofoutsidedirectorsisestablishedtoimprovethetransparencyofmanagementandexecutiveofficersareinstalledasanorgantoworkfull-timefortheexecutionofoperations.
Thus,acompany-with-committeesclearlyseparates"supervisionofmanagement"from"executionofoperations"tomakethemfunctioneffectively.
Suchacompanygenerallyneedstoelectmultipleoutsidedirectors.
Tofurtherenhancethefunctionsoftheboardofdirectors,theCompanyistomakeoutsidedirectorsaccountforamajorityofdirectors,andherebyrequeststheelectionofsix(6)outsidedirectors.
(2)Independenceofcandidatesforoutsidedirector(i)NoneofthecandidatesforoutsidedirectorhavebeenmanagingmembersoftheCompanyorbusinessoperators11thathavespecificrelationswiththeCompanyinthepast.
(ii)NoneofthecandidatesforoutsidedirectorhavereceivedorplantoreceivealargeamountofmoneyorotherpropertyfromtheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompany.
(iii)NoneofthecandidatesforoutsidedirectorhaverelativesinthethirddegreeorcloserwithmanagingmembersoftheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompany.
(3)LiabilitylimitationcontractswithoutsidedirectorsTheCompanyhasenteredintoliabilitylimitationcontractswiththecandidatesMessrs.
JohjiSato,PakHongAuyang,SoichiroUchidaandYukihiroMoroe,whoarecurrentlyoutsidedirectorsoftheCompany.
(Outlineofthecontractsisstatedonpages38to39oftheBusinessReport.
)Incaseoftheirre-election,theCompanywillcontinuetheaboveliabilitylimitationcontractswiththem.
IfMessrs.
AtsushiKatoandMichaelMühlbayerareelectedasdirectors,theCompanywillalsoenterintotheaboveliabilitylimitationcontractwitheachofthem.
12Agenda2:Issuanceofperformance-linkedstockacquisitionrightsPursuanttotheprovisionsofArticles236,238and239oftheCompaniesAct,theCompanyrequestsapprovalforthedeterminationofofferingtermsforstockacquisitionrightstobeissuedasstockoptionstodirectorsandemployeesoftheCompany'ssubsidiaries,tobeentrustedtotheboardofdirectorsoftheCompany(the"BoardofDirectors")ortotheexecutiveofficeroftheCompanydelegatedbyresolutionoftheBoardofDirectors.
1.
ReasonsfortheneedtosolicitsubscribersforstockacquisitionrightsonparticularlyfavorabletermsTheSumidaGroupformulatedtheMid-TermBusinessPlancoveringthethree-yearperiodfromthefiscalyearendingDecember31,2015,tothefiscalyearendingDecember31,2017.
InaimingtoachievethetargetsintheMid-TermBusinessPlan,realizesustainablegrowthandenhancemid-andlong-termcorporatevalue,stockacquisitionrightswillbeissued,withoutcontribution,todirectorsandemployeesoftheCompany'ssubsidiaries,uponexerciseofwhichsharesaredeliveredonstipulationthatthevalueofpropertytobecontributeduponexerciseofthestockacquisitionrightsisone(1)yenpershare,asamid-termincentiveplantofurtherboostmotivationandmoraleofdirectorsandemployeesoftheCompany'ssubsidiaries.
Asstipulatedin"(viii)Termsandconditionsforexercisingstockacquisitionrights"in2.
(3)below,thesestockacquisitionrightsmaybeexercisedonlyifthenumericaltargetof2,600millionyenormoreofnetincomeintheconsolidatedstatementofincomeforthefiscalyearendingDecember31,2017,whichisoneofthebusinessresultstargetsintheSumidaGroup'sMid-TermBusinessPlan,isachieved.
Therefore,theircontentsconsistofcommitmentstowardtheGroup'sbusinessresultstargetsbythedirectorsandemployeesoftheCompany'ssubsidiarieseligibletoreceivethestockacquisitionrights.
Inaddition,theCompany'spolicyistodelivertreasurysharestotheextentpossibleiftheCompanyholdstreasurysharesuponexerciseofthestockacquisitionrights.
2.
Detailsof,maximumnumberof,andmattersregardingpaymentforstockacquisitionrightsforwhichofferingtermsmaybedeterminedbasedonthedecisionofthisAnnualGeneralMeetingofShareholders(1)MaximumnumberofstockacquisitionrightsforwhichofferingtermsmaybedeterminedbasedonthisentrustmentThemaximumnumberofthestockacquisitionrightsshallbe3,600,withthetermsspecifiedin(3)below.
Theupperlimitoftheaggregatenumberofsharestobedelivereduponexerciseofthestockacquisitionrightsshallbe360,000sharesofcommonstockoftheCompany.
IntheeventthattheNumberofSharesGrantedisadjustedpursuantto(3)(i)below,theupperlimitoftheaggregatenumberofsharestobedelivereduponexerciseofthestockacquisitionrightsshallbethenumberobtainedbymultiplyingtheNumberofSharesGrantedafteradjustmentbythemaximumnumberofstockacquisitionrights.
(2)AmounttobepaidinforstockacquisitionrightsforwhichofferingtermsmaybedeterminedbasedonthisentrustmentMonetarypaymentisnotrequiredforthestockacquisitionrightsastheyareissuedwithout13contribution.
(3)Detailsofthestockacquisitionrightsforwhichofferingtermsmaybedeterminedbasedonthisentrustment(i)ClassandnumberofsharestobedelivereduponexerciseofstockacquisitionrightsTheclassofsharestobedelivereduponexerciseofthestockacquisitionrightsshallbecommonstockandthenumberofsharestobedelivereduponexerciseofone(1)stockacquisitionright(hereinafterthe"NumberofSharesGranted")shallbe100.
Notwithstandingtheforegoing,intheeventthattheCompanycarriesoutasharesplit(includinganyallotmentofshareswithoutcontribution;thesameshallapplyhereinafter)orashareconsolidationofcommonsharesoftheCompanyafterthedateoftheresolutionatthisAnnualGeneralMeetingofShareholders(hereinafterthe"ResolutionDate"),theNumberofSharesGrantedforstockacquisitionrightsthatareunexercisedasofthetimeofthesharesplitorshareconsolidationshallbeadjustedaccordingtothefollowingformula.
Anyfractionofone(1)shareresultingfromthisadjustmentshallbediscarded.
NumberofSharesGrantedafteradjustment=NumberofSharesGrantedbeforeadjustmentxRatioofsharesplitorconsolidationInaddition,intheeventthatitisnecessaryfortheCompanytomakeanadjustmenttotheNumberofSharesGrantedincaseswheretheCompanycarriesoutamerger,companysplit,shareexchange,sharetransfer,etc.
,theCompanymaymakeanappropriateadjustmenttakingintoaccountthemergerratioandotherconditions,totheextentreasonable.
(ii)ValueofpropertytobecontributeduponexerciseofstockacquisitionrightsThevalueofpropertytobecontributeduponexerciseofone(1)stockacquisitionrightshallbetheamountobtainedbymultiplyingone(1)yen,whichistheamounttobepaidinperone(1)sharetobedelivereduponexerciseofthestockacquisitionrights(hereinafterthe"ExercisePrice"),bytheNumberofSharesGranted.
Notwithstandingtheforegoing,iftheCompanycarriesoutasharesplitorshareconsolidationofcommonsharesoftheCompanyaftertheResolutionDate,theExercisePriceforstockacquisitionrightsthatareunexercisedasofthetimeofthesharesplitorshareconsolidationshallbeadjustedaccordingtothefollowingformula.
Anyfractionofone(1)yenresultingfromthisadjustmentshallberoundeduptothenearestyen.
ExercisePriceafteradjustment=ExercisePricebeforeadjustmentx1RatioofsharesplitorconsolidationInaddition,intheeventthatitisnecessaryfortheCompanytomakeanadjustmenttotheExercisePriceincaseswheretheCompanycarriesoutamerger,companysplit,shareexchange,sharetransfer,etc.
,theCompanymaymakeanappropriateadjustmenttakingintoaccountthemergerratioandotherconditions,totheextentreasonable.
14(iii)ExerciseperiodofthestockacquisitionrightsTheexerciseperiodofthestockacquisitionrightsshallbeaperiodstipulatedbytheBoardofDirectorsorbytheexecutiveofficeroftheCompanydelegatedbyresolutionoftheBoardofDirectors,andshallbewithinthree(3)yearsfromthedayimmediatelyfollowingthedateonwhichtheCompanyfilesitsannualsecuritiesreportforthefiscalyearendingDecember31,2017,pursuanttotheFinancialInstrumentsandExchangeAct.
(iv)Mattersconcerningcapitalstockandlegalcapitalsurplusincreasesineventofissuanceofsharesuponexerciseofstockacquisitionrights(a)Theamountofcapitalstockincreaseintheeventofanissuanceofsharesuponexerciseofthestockacquisitionrightsshallbehalfthemaximumamountofincreaseincapitalstock,etc.
,calculatedinaccordancewiththeprovisioninArticle17,Paragraph1oftheOrdinanceonAccountingofCompanies.
Anyfractionofone(1)yenresultingfromthecalculationshallberoundeduptothenearestyen.
(b)Theamountoflegalcapitalsurplusincreaseintheeventofanissuanceofsharesuponexerciseofthestockacquisitionrightsshallbetheamountobtainedbysubtractingthecapitalstockincreasestipulatedin(a)abovefromthemaximumamountofincreaseincapitalstock,etc.
,describedin(a)above.
(v)RestrictiononthetransferofstockacquisitionrightsAnytransferofthestockacquisitionrightsshallbesubjecttotheapprovaloftheBoardofDirectors.
(vi)Mattersregardingrepurchaseofstockacquisitionrights(a)Intheeventthatanyoftheagendaitemssetforthin1),2),3),4)and5)belowisapprovedataGeneralMeetingofShareholdersoftheCompany(or,ifaresolutionataGeneralMeetingofShareholdersisnotrequired,isresolvedbytheBoardofDirectorsordeterminedbytheexecutiveofficeroftheCompanydelegatedbyresolutionoftheBoardofDirectors),theCompanymayacquirethestockacquisitionrightswithoutcontributiononthedatetobeseparatelydeterminedbytheBoardofDirectorsordeterminedbytheexecutiveofficeroftheCompanydelegatedbyresolutionoftheBoardofDirectors:1)AgendaitemforapprovalofamergeragreementunderwhichtheCompanyshallbecomeadisappearingcompany;2)Agendaitemforapprovalofabsorption-typecompanysplitagreementorincorporation-typecompanysplitplanunderwhichtheCompanyshallbecomeasplitcompany;3)AgendaitemforapprovalofashareexchangeagreementorsharetransferplanunderwhichtheCompanyshallbecomeawholly-ownedsubsidiary;4)AgendaitemforapprovalofanamendmenttotheArticlesofIncorporationinordertoestablishtheprovisionthatanacquisitionbywayoftransferofallsharestobeissuedbytheCompanyshallrequiretheapprovaloftheCompany;and5)AgendaitemforapprovalofanamendmenttotheArticlesofIncorporationinordertoestablishtheprovisionthatanacquisitionbywayoftransferofaclassofsharestobedelivereduponexerciseofthestockacquisitionrightsshallrequiretheapprovaloftheCompanyorthattheCompanymayacquireallofsuchclassofsharesbyresolutionat15aGeneralMeetingofShareholders.
(b)IntheeventthataholderofthestockacquisitionrightsoraSuccessorofRightsasdefinedin(viii)(e)belowisnomorepossibletoexercisehis/herstockacquisitionrightsduetotheprovisionssetforthin(viii)beloworbyotherreasonsbeforeexercisinghis/herrights,theCompanymayacquirethestockacquisitionrightswithoutcontribution.
(vii)HandlingofstockacquisitionrightsinrelationtoanactofstructuralreorganizationIntheeventthattheCompanycarriesoutamerger(limitedtocaseswheretheCompanydisappearsduetothemerger),anabsorption-typeorincorporation-typecompanysplit(limitedtocaseswheretheCompanybecomesasplitcompany),orashareexchangeortransfer(limitedtocaseswheretheCompanybecomesawholly-ownedsubsidiary)(collectively,the"ActofStructuralReorganization"),theCompanyshall,ineachoftheabovecases,deliverthestockacquisitionrightsofanyoftherelevantcompaniessetforthinArticle236,Paragraph1,Items8(a)to8(e)oftheCompaniesAct(hereinafterreferredtoasthe"ReorganizedCompany")totheholdersofthestockacquisitionrightsremainingasoftheeffectivedateoftherelevantActofStructuralReorganization(hereinafterthe"RemainingStockAcquisitionRights")inaccordancewiththefollowingtermsandconditions.
Inthiscase,theRemainingStockAcquisitionRightsshallbeextinguishedandtheReorganizedCompanyshallissuenewstockacquisitionrights;provided,however,thattheforegoingshallbeontheconditionthatdeliveryofsuchstockacquisitionrightsoftheReorganizedCompanyinaccordancewiththefollowingtermsandconditionsisstipulatedinamergeragreement,anabsorption-typecompanysplitagreement,anincorporation-typecompanysplitplan,ashareexchangeagreementorasharetransferplan.
(a)NumberofstockacquisitionrightsoftheReorganizedCompanytobedeliveredAnumberequaltothenumberoftheRemainingStockAcquisitionRightsheldbytheholdershallbedeliveredtoeachsuchholder.
(b)ClassofsharesoftheReorganizedCompanytobedelivereduponexerciseofstockacquisitionrightsSharesofcommonstockoftheReorganizedCompany(c)NumberofsharesoftheReorganizedCompanytobedelivereduponexerciseofstockacquisitionrightsTobedeterminedinaccordancewith(i)above,takingintoconsiderationtheconditions,etc.
oftheActofStructuralReorganization.
(d)ValueofpropertytobecontributeduponexerciseofstockacquisitionrightsThevalueofpropertytobecontributeduponexerciseofeachstockacquisitionrighttobedeliveredshallbetheamountobtainedbymultiplyingtheamountpersharetobepaidinafterreorganizationobtainedbyadjustingtheExercisePricesetforthin(ii)abovebythenumberofsharesoftheReorganizedCompanytobedelivereduponexerciseofrelevantstockacquisitionrightsasdeterminedinaccordancewith(c)above,takingintoconsiderationtheconditions,etc.
oftheActofStructuralReorganization.
(e)ExerciseperiodofthestockacquisitionrightsFromandincludingwhicheveristhelaterofthecommencementdateoftheperiodduring16whichthestockacquisitionrightsmaybeexercisedasprovidedforin(iii)above(hereinafterthe"ExercisePeriod")ortheeffectivedateoftheActofStructuralReorganization,toandincludingtheexpirydateoftheExercisePeriod.
(f)TermsandconditionsforexercisingstockacquisitionrightsTobedeterminedinaccordancewith(viii)below.
(g)MattersconcerningcapitalstockandlegalcapitalsurplusincreasesineventofissuanceofsharesuponexerciseofstockacquisitionrightsTobedeterminedinaccordancewith(iv)above.
(h)MattersconcerningacquisitionofstockacquisitionrightsTobedeterminedinaccordancewith(vi)above.
(i)RestrictiononacquisitionofstockacquisitionrightsbywayoftransferAcquisitionofthestockacquisitionrightsbywayoftransfershallbesubjecttotheapprovalbyresolutionoftheboardofdirectorsoftheReorganizedCompany(oradirectoroftheReorganizedCompanyiftheReorganizedCompanyisnotacompanywithaboardofdirectors).
(viii)Termsandconditionsforexercisingstockacquisitionrights(a)Whenthenumericaltargetof2,600millionyenormoreofnetincomeintheconsolidatedstatementofincomeforthefiscalyearendingDecember31,2017,intheannualsecuritiesreportfiledforthesaidfiscalyearpursuanttotheFinancialInstrumentsandExchangeAct,(hereinafterthe"NumericalTarget")isachieved,holdersofthestockacquisitionrightsmayexercisetheirstockacquisitionrightsuptothenumberofstockacquisitionrightsallottedtoeachholderofthestockacquisitionrights.
Inthiscase,theachievementrateoftheNumericalTargetshallnotbetakenintoconsideration,andstockacquisitionrightsmaybeexercisedonlyiftheNumericalTargetassetforthaboveisachieved.
(b)HoldersofthestockacquisitionrightsmustbeinapositionofdirectororemployeeofasubsidiaryoftheCompany(collectively,the"RequiredPosition")untilthetimeofexerciseofthestockacquisitionrightsonacontinuingbasis.
(c)Withregardtoholdersofthestockacquisitionrights,theremustnotbeasituationwheredismissalofdirectorhasbeenadoptedatageneralmeetingofshareholdersoftherelevantsubsidiaryoftheCompany,orwherepunitivedismissalhasbeendecidedpursuanttotherulesofemploymentoftheCompanyoritssubsidiary,orasimilarsituation,asofthetimeofexerciseofthestockacquisitionrights.
(d)Notwithstanding(b)above,stockacquisitionrightsmaybeexercisedevenwhenaholderofthestockacquisitionrightshaslosttheRequiredPosition,ifthereasonforthelossoftheRequiredPositionismandatoryretirementattheagelimit,retirementbecauseofreachingcontractualage-limit,retirementassignedbycompany,retirementmainlybecauseofphysicaldisabilityresultingfromoccupationalinjuryorillness,dismissalbecauseofunavoidableoperationalreason(layoff)orresignationorretirementsimilartothese.
Inthiscase,theholdermayexercisestockacquisitionrightsonlyfromandincludingwhicheverislaterofthedateoflossoftheRequiredPositionorthe17commencementdateoftheExercisePeriod,toandincludingthedateonwhichone(1)yearhaselapsedfromtheaforesaiddateontheconditionthatthelastdayisonorbeforetheexpirationdateoftheExercisePeriod.
(e)Whenaholderofthestockacquisitionrightshaspassedaway,his/herheirmayexercisethestockacquisitionrightsif(I)theholderhasmettheconditionsof(b)aboveand(c)aboveimmediatelybeforethedeath,or(II)theholderhadbeenabletoexercisestockacquisitionrightsinaccordancewiththeprovisionof(d)aboveimmediatelybeforethedeath(suchheirwhomayexercisethestockacquisitionrightsishereinafterreferredtoas"SuccessorofRights");provided,however,thatinthecaseof(I),aSuccessorofRightsmayexercisestockacquisitionrightsonlyfromandincludingwhicheverislaterofthedateofdeathoftherelevantholderofthestockacquisitionrightsorthecommencementdateoftheExercisePeriod,toandincludingthedateonwhichone(1)yearhaselapsedfromtheaforesaiddateontheconditionthatthelastdayisonorbeforetheexpirationdateoftheExercisePeriod,andinthecaseof(II)aSuccessorofRightsmayexercisestockacquisitionrightsduringthesameperiodastheperiodallowedfortherelevantholderofthestockacquisitionrightstoexercisethoseinaccordancewith(d)above.
(f)WhenaSuccessorofRightspassesaway,his/herheirmaynotexercisethestockacquisitionrights.
(g)AholderofthestockacquisitionrightsoraSuccessorofRightsmaynotexercisetheallottedstockacquisitionrightsininstallments.
(h)OthertermsandconditionsshallbeasperspecificationsintheStockAcquisitionRightsAllotmentAgreementtobeenteredintobetweentheCompanyandholdersofthestockacquisitionrights.
(ix)Handlingoffractionsofone(1)shareresultingfromexerciseofstockacquisitionrightsAnyfractionofone(1)shareincludedinthenumberofsharestobedeliveredtoaholderofthestockacquisitionrightswhoexercisedstockacquisitionrightsshallbediscarded.
(4)OthermattersregardingstockacquisitionrightsDetailsoftheabovemattersandofferingtermsforstockacquisitionrightsshallbeprovidedforbytheBoardofDirectorsortheexecutiveofficeroftheCompanydelegatedbyresolutionoftheBoardofDirectors.
(Reference)TheCompanyplanstoissuestockacquisitionrightstoexecutiveofficersoftheCompanywithtermsandconditionsforexercisethataresimilartoamedium-termincentiveplantoachievethetargetsoftheCompany'sMid-TermBusinessPlan,realizesustainablegrowthandenhancemedium-tolong-termcorporatevalue.
WithregardtostockacquisitionrightstobeallottedtoexecutiveofficersoftheCompany,thepaid-inamountwillbetheamountobtainedbymultiplyingthefairvalueofastockacquisitionrightcalculatedbytheformulaoftheBlack-SholesModelbythenumberofstockacquisitionrightstobeallottedtoeachexecutiveofficer.
TheCompensationCommitteehas,ontheconditionthatthisagendaitemisapprovedandadopted,decidedtogranttoeachexecutiveofficerremunerationatthesameamountastheamounttobepaidin(righttoclaimtheremunerationand18obligationtopaytheamounttobepaidinwillbeoffset),andhasalsodecidedthat,asspecificsofindividualremuneration,etc.
ofexecutiveofficers,thedetailsofstockacquisitionrightswillbesimilartothosesetforthin2.
(3)above.
19BusinessReportforthe60thterm(January1toDecember31,2014)ShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATION20BusinessReport(January1toDecember31,2014)1.
MattersConcerningtheCurrentStatusoftheSumidaGroup(1)Businessconditionsforthefiscalyearunderreview(i)ProgressandresultsofthebusinessLookingattheglobaleconomyinthecurrentfiscalyear,althoughtheEuropeaneconomyshowedsignsofrecovery,therecoverywasslow,anditcouldnotgetoutofthestagnation.
EmergingcountriesincludingChinaexperiencedeconomicslowdowns,andtheslowinggrowthrateswereaconcern.
TheJapaneseeconomydidnotshowarobustrecoverypartlyduetodecreaseddemandinreactiontolast-minutedemandbroughtbytheraisedconsumptiontax.
Meanwhile,economicactivitiesintheU.
S.
temporarilyslowedduetoacoldwaveatthebeginningoftheyear,buttheeconomypickedupthereafterandcontinuedtoshowastrongrecovery.
Intheelectronicdevicesmarket,whiletheproductionvolumeofproductssuchasPCsandTVsdidnotincrease,thatofsmartphonesandtabletPCssteadilygrew.
Inaddition,aselectronicpartsrelatedtoindustrialequipmentcontinuedstrong,benefitingfromcapitalinvestment,etc.
inChinaaswellasanincreaseintheautomobileproduction,advanceinautomotiveelectrificationofhybridvehicles,electriccars,etc.
andotherfactors,demandforelectronicpartsincreased.
Undersuchcircumstances,fortheSumidaGroup,demandforconsumerelectronicsrelatedproductsforsmartphonesandtabletPCsremainedingoodshape.
Amidsttheadvanceinautomotiveelectrification,autosalesremainedhealthyworldwide,anddemandforautomotive-relatedproductscontinuedtoexpand,especiallysupportedbyrobustsalesofluxuryvehicles.
Intheindustry-relatedproductssector,ordersforproductsrelatedtocapitalinvestment,suchasforindustrialequipment,remainedfirm.
Giventhesecircumstances,theSumidaGroupexpandedplantsinMexicoandothercountriesduringthecurrentfiscalyearinordertomeetexpandingdemandforautomotive-relatedproducts.
Fortheindustry-relatedproducts,aimingtodevelopmarketsandexpandsalesforindustrialequipment,energy,andmedicalandhealthcare,theGroupnewlyestablishedSumidaPowerTechnologyCo.
,Ltd.
asoneofthestrategiesandpromotedthestrengtheningofproductsformedicalequipment,whichisexpectedtogrowinfuture.
Asaresult,netsalesforthecurrentfiscalyearincreasedby13,669millionyen(21.
4%)fromthepreviousfiscalyearto77,563millionyen,whichwaspartlyattributabletothedepreciationoftheyenandtheappreciationoftheU.
S.
dollarandeurocomparedtothepreviousfiscalyearinadditiontorobustsalesofautomotive-relatedproductsinEurope,NorthAmerica,etc.
supportedbytheadvanceinautomotiveelectrificationforthesafety,environmentandcomfortandstrongproductionofluxuryvehicles,andsalesgrowthofFAequipmentandindustrialequipmentintheindustry-relatedproductssector,despitecontinuedsluggishgrowthofconsumerelectronicsrelatedproductswiththeexceptionofthoseforsmartphonesandtabletPCs.
Operatingincomeincreasedby97.
0%yearonyearto3,345millionyenowingtoproductivityimprovementandpricereductionforrawmaterialsaswellasrevenueincrease.
Ordinaryincomeincreasedby152.
8%yearonyearto2,799millionyenduetointerest21expensesof524millionyenandotherexpensesasnon-operatingexpenses.
Incomebeforeincometaxesincreasedby286.
6%yearonyearto3,162millionyen,owingpartlytoextraordinaryincomeofinsuranceincomefromflooddamage,etc.
inGermanyof495millionyen,governmentsubsidyfortheflooddamageof359millionyen,andreversalofimpairmentlossrecognizedforthepreviousfiscalyearonbuildingsofconsolidatedsubsidiariesinGermanydamagedbythefloodbasedonIFRSof137millionyen,despiteextraordinarylossesincludinglossonflooddamageinGermanyinJune2013of303millionyenandadditionalcontributionsofsocialinsuranceinChinaof310millionyen.
Netincomewas1,346millionyen(forthepreviousfiscalyear,netlossof2,008millionyenpartlyduetotheimpactofflooddamageinGermanyandthereviewofrecoverabilityofdeferredtaxassets).
(Reportingsegmentinformation)Thefollowingisthebusinessperformanceinthecurrentfiscalyearbyreportingsegment.
1)AsiaPacificBusinessIntheAsiaPacificBusiness,salesforindustrialequipmentremainedstrongintheindustrial-relatedproductssectordespitethesluggishgrowthofconsumerelectronicsrelatedproductswiththeexceptionofthoseforsmartphonesandtabletPCs.
Moreover,owingtohealthydemandforautomotive-relatedproductsprimarilyforsmartentrysysteminNorthAmericaandotherareasaswellasABSandESC,thedepreciationoftheyencomparedtothepreviousfiscalyear,andotherfactors,netsalesforthecurrentfiscalyearincreasedby15.
6%yearonyearto47,061millionyen.
Segmentprofitincreasedby50.
2%yearonyearto3,443millionyen.
2)EUBusinessIntheEUBusiness,owingtostrongsalesofautomotive-relatedproductsprimarilyforsmartentriesandHIDlampsandthedepreciationoftheyencomparedtothepreviousfiscalyear,despitenosignsofsignificantchangesinconsumerelectronicsrelatedproductsandindustryrelatedproducts,netsalesincreasedby31.
6%yearonyearto30,501millionyen.
Segmentprofitincreasedby42.
1%yearonyearto1,957millionyen.
BusinesssegmentNetsales(millionyen)AsiaPacificBusiness47,061EUBusiness30,501Total77,56322(Reference)Lookingatthecompositionofsalesbymarket,theshareofsalesderivedfromconsumerelectronicsrelatedproductsremainedunchangedat25%,whilethesharederivedfromindustryrelatedproductsdecreasedfrom18%to16%.
Meanwhile,thesharederivedfromautomotive-relatedproducts,salesofwhichwererobust,increasedfrom57%inthepreviousfiscalyearto59%.
(ii)Fundprocurement1)LoancommitmentagreementsInordertoraiseworkingcapitaleffectively,theGrouphasconcludedloancommitmentagreementswith9ofitsfinancingbanksamountingduringthecurrentfiscalyear.
Unusedloancommitmentsareasfollows:AsofDecember31,2014(millionyen)Totalloancommitments4,600Outstandingborrowings1,890Balance2,7102)GlobalcommitmentlineagreementsInordertoraiseworkingcapitaleffectively,theCompanyhasconcludedglobalcommitmentlineagreementswith5ofitsfinancingbanks.
Unusedglobalcommitmentlinesareasfollows:AsofDecember31,2014(millionyen)Totalglobalcommitmentlines3,600Outstandingborrowings–Balance3,600(iii)PlantandequipmentinvestmentTheGroupcontinuouslymakesinvestmentstoexpandfacilitiesandenhanceresearchanddevelopmentforrationalizationofproduction,qualityimprovementandincreasingdemand.
Forthecurrentfiscalyear,totalinvestmentamountedto6,109millionyen,includingconstantinvestmentsrelatedtothedevelopmentandmanufacturingofnewproducts,additionalinstallmentofautomotive-relatedfacilitiestomeetactivedemand,expansionofsatelliteplantsinChina,productionautomation,andexpansionoffacilities.
23(iv)Acquisitionordisposalofshares,otherstakesorstockacquisitionrightsofothercompaniesSUMIDAAGAftertheGroupfulfilleddemandofpurchasingsharesbyshareholders,thepercentageofSUMIDAAGsharesheldbytheSumidaGroupincreasedto97.
078%from97.
090%.
Accordingly,theratioofshareholdinginsubsidiariesofthecompanybytheSumidaGroupalsoincreased.
(2)Summaryofassets,profitandlosses57thterm(endedDec.
2011)58thterm(endedDec.
2012)59thterm(endedDec.
2013)60th(current)term(endedDec.
2014)Netsales(millionyen)52,75951,30063,89377,563Netincome(loss)(millionyen)496725(2,008)1,346Netincome(loss)pershare(yen)25.
8537.
78(91.
41)58.
01Totalassets(millionyen)47,49746,79056,74370,110Netassets(millionyen)7,1869,86614,51017,724Netassetspershare(yen)348.
92479.
38583.
50711.
88Notes:1.
Netincome(loss)pershareiscalculatedbasedontheaveragenumberofsharesissuedineachfiscaltermandnetassetspershareiscalculatedbasedonthetotalnumberofsharesissuedattheendofeachfiscalterm.
Incalculatingnetincome(loss)pershareandnetassetspershare,treasurysharesareexcludedfromthetotalaveragenumberofsharesissuedduringeachfiscaltermandfromthetotalnumberofsharesissuedattheendofeachfiscalterm.
2.
AmendmentstoIAS19werepublishedonJune16,2011andhavetakeneffectfromthefiscalyearwhichhadstartedfromJanuary1,2013.
Accordingly,startingfromthe59thterm(2013),theamendedIAS19wasappliedtoapartoftheconsolidatedsubsidiaries.
Thischangeinaccountingpolicyhasbeenappliedretroactively.
Thefiguresforthe58thterm(2012)havebeenadjustedretroactivelytoreflectthechange.
Thecumulativeimpactonthe57thterm(2011)hasbeenreflectedinnetassetsasofthebeginningofthe2012fiscalyear.
24(3)Significantmattersoftheparentcompanyandsubsidiaries(i)ParentcompanyTherewerenorelevantissues.
(ii)SignificantsubsidiariesCompanynameCapital(inthousand)VotingrightsoftheCompany(%)KeybusinessSumidaElectronicComponentsCo.
,Ltd.
50,000yen100ControloftheAsiaPacificBusinessSumidaElectricCo.
,Ltd.
450,000yen100(100)Manufacture,saleandresearch&developmentofcoilsSumidaCorporateServiceIncorporated25,000yen100ControlofGroupmanagementSumidaPowerTechnologyCo.
,Ltd.
301,000yen100(100)ManufactureandsaleofcoilsDongguanSumida(TaiPing)ElectricCo.
,Ltd.
305,000HongKongdollars100(100)ManufactureofcoilsSUMIDAELECTRIC(GUANGXI)CO.
,LTD.
17,561yuan100(100)ManufactureofcoilsSumidaElectric(H.
K.
)CompanyLimited255,000HongKongdollars100(100)Manufactureandresearch&developmentofcoilsSUMIDASERVICECOMPANYLIMITED13,000HongKongdollars100(100)GroupinternalservicesSUMIDATRADINGCOMPANYLIMITED80,000HongKongdollars100(100)SaleofcoilsSUMIDATRADINGPTE.
LTD.
6,000Singaporedollars100(100)SaleofcoilsSUMIDAAMERICACOMPONENTSINC.
6,350U.
S.
dollars100(100)SaleofcoilsSUMIDATRADING(SHANGHAI)COMPANYLIMITED8,070yuan100(100)SaleofcoilsTAIWANSUMIDATRADINGCOMPANYLIMITED30,000Taiwandollars100(100)SaleofcoilsSUMIDATRADING(KOREA)COMPANYLIMITED250,000Koreawon100(100)SaleofcoilsSUMIDAEuropeGmbH25euro100ControloftheEUBusinessSUMIDAComponentsGmbH105euro97.
1(97.
1)ManufactureandsaleofcoilsSUMIDAAG7,344euro97.
1(97.
1)IntermediateholdingcompanyoftheEUBusinessSUMIDAComponents&ModulesGmbH25euro97.
1(97.
1)Manufacture,saleandresearch&developmentofcoilsSUMIDAEMSGmbH25euro97.
1(97.
1)ControllingcompanyofEMSSUMIDALehestenGmbH1,100euro97.
1(97.
1)EMSSUMIDACOMPONENTSDEMEXICO,S.
A.
DEC.
V.
50Mexicopeso71.
9(71.
9)ManufactureofcoilsSUMIDAROMANIAS.
R.
L.
3,101euro97.
1(97.
1)Manufactureofcoils25CompanynameCapital(inthousand)VotingrightsoftheCompany(%)KeybusinessSUMIDAelectronicShanghaiCo.
,Ltd.
37,904yuan97.
1(97.
1)ManufactureandsaleofcoilsSUMIDASlovenija,d.
o.
o.
503euro71.
9(71.
9)ManufactureofcoilsvogtronicsGmbH25euro71.
9(71.
9)ManufactureandsaleofcoilsSUMIDAflexibleconnectionsGmbH25euro97.
1(97.
1)ManufactureandsaleofflatcablesSUMIDAFLEXIBLECONNECTIONSROMANIAS.
R.
L.
156euro97.
1(97.
1)ManufactureandsaleofflatcablesSumidaElectric(Thailand)Co.
,Ltd.
70,000baht100(100)DevelopmentandmanufactureofpowerelectronicsrelatedcoilsISMARTGLOBALLIMITED6,308euro100IntermediateholdingcompanySumidaFinanceB.
V.
20euro100FinancialcontrolcompanySUMIDAELECTRONICVIETNAMCO.
,LTD.
2,000U.
S.
dollars100(100)ManufactureofcoilsSumidaElectric(Changde)Co.
,Ltd.
8,796yuan100(100)ManufactureofcoilsSumidaElectric(JI'AN)Co.
,Ltd.
44,900yuan100(100)ManufactureofcoilsGuangzhouSumidaElectricCo.
,Ltd.
129,394yuan100(100)ManufactureofcoilsSumidaTechnologiesInc.
200Canadiandollars100(100)Research&developmentofcoilsSUMIDAElectronicSuQianCo.
,Ltd.
4,500yuan97.
1(97.
1)ManufactureofcoilsNote:1.
Figuresshowninparenthesesinthecolumnofvotingrightsarethepercentagesheldindirectly.
(4)Issuestoaddress(i)ChaoticglobalsituationAlthoughtheU.
S.
economyisrecovering,theEuropeaneconomyisyettomountasubstantiverecoveryfromthecreditcrisis.
Ontheotherhand,theemergingeconomies,whichweredrivingtheworldeconomy,havereachedaturningpointofgrowth.
Withinthisglobaldynamic,thepotentialgrowthabilityintheemergingeconomieshasnotchanged;inemergingeconomiessuchasChina,theireconomicgrowthwhichisincreasingtheirsignificanceassalesmarketsbeyondtheirhistoricalpositioningasproductionlocationsremainsunchanged.
Giventhesecircumstances,theGroupwillhavetoadjustitsplanningapproachsothattheGroup'sactionsarequicklyresponsivetochangesandtrendsastheyemerge.
(ii)Improvingcorporatevalue(Businessexpansionintonewfields)TheCompanywillleverageitsexpertisetodevelopproductsfornewapplicationsinautomotive-relatedproductsandspecializeingrowthsegmentswithanemphasisonprofitabilityinconsumerelectronicsrelatedproducts.
Moreover,itwillseekbusiness26expansionintheindustry-relatedproductssector,focusingonthefieldsofindustrialequipment,energy,medicalandhealthcare,identificationsystems,security,lighting,etc.
(Sales)Inadditiontotheautomotive-relatedbusiness,theCompanywillfocusonexpandingtheU.
S.
salesofhightechnologyapplicationssuchasenergy,medicalandsecurityrelatedareaswhichhaveextremelyhighpotentialforgrowthandexpandingChinasalesbystrengtheningdesign-incapabilitiesandre-engineeringthedistributionsystemwithinChinatoexpandbusinesswithChinesemanufacturers.
(Manufacturing)TheSumidaGroupwillfurtheracceleratetheautomationofproductionlines,whichtheGrouphasbeenpromotingforsometime,particularlyforautomotive-relatedproductswithlongproductlifecyclesandlowervolumefluctuations.
Moreover,theGroupwillstrengthenitsoverallpurchasingpowerthroughunificationoftheprocurementsystemandfocusonasinglecontactwindowtosuppliers,expeditingtheglobaloptimizationofsuppliers.
TheSumidaGroupwilllowerdirectlaborcostsbycontinuouslypromotingthetransferofproductiontolowcostsites,primarilysatelliteplants,inaccordancewiththe"SumidaSilkRoad"strategy.
Combinedwiththeon-goingdevelopmentofandtransferofproductiontonewlowcostsitesinbothAsiaandEurope,theGroupbelievesthatevengreaterreductionsindirectlaborcostswillbepossible.
TheGroupwillstriveformanufacturingcostreductionbyfurtherpromotinglowcostoperationsatitsmanufacturingbases.
(Development)TheSumidaGroupwillworktoreconstructitsdevelopmentstructure,acceleratepersonnelexpansionanddevelopmentofnewproductsandproductiontechnology,developproductstargetedathighlyprofitablemarkets,andcarryoutmarketlaunches.
(Finance)TheSumidaGroupwillcontinuouslyestimatecashflowofthewholeGroup,andbasedontheestimation,usecashpoolingtoutilizeefficientcashmanagementandacceleraterepaymentofdebts.
Furthermore,theGroupwillraisecapitalefficiencythroughreducinginventoryandimprovingaccountsreceivableandpayableterms.
(iii)ContinuingfocusoncorporategovernanceDevelopmentsintheJapanesebusinessenvironmentshowthattheCompany'sfocusiscorrect.
ThebasicsoftheCompany'scorporategovernancearetomaintaintransparencyandefficiencyofmanagement,meettheexpectationsofstakeholdersandcontinuouslyimprovethecorporatevalue,whichitrecognizesasbeingoneofthemostimportantissuesforitsmanagement.
Inparticular,theroleofgovernanceunderasysteminwhich"execution"and"supervision"aresegregatedthroughdelegationofsubstantialauthorityforexecutingoperationsisextremelyimportant.
TheCompanyalwaystriestodevelopasysteminwhichbothdutiesfunctioneffectivelyandefficientlytorealizemoresuitablegovernance.
(iv)PursuingcorporatesocialresponsibilityAlsoofcontinuingimportancetotheCompanyiscorporatesocialresponsibility.
Undertheexistingcircumstances,inwhichcompaniesneedtofulfilllegal,economicandsocialresponsibilitiesmorethanever,andinwhichtheyneedtoactivelycontributetosocietyandmakeconcreteactions,theGroupfulfillsitssocialresponsibilitiesbyperformingbusiness27basedonbasicprinciplessuchasintegrity,disciplineandcommonsense,andatthesametimemakesbroadeffortstofurtherenhancethetrustthatsocietyplacesinitthroughmeasuresincludingreinforcementofthelegalandcompliancefunctionsandactivecommitmenttoenvironmentalandsocialissues.
(5)Majorbusinesslines(asofDecember31,2014)LinesofbusinessKeyproductsAsiaPacificBusinessDC/DCconvertertransformers,switchingpowersupplytransformers,stroboscopicaloscillatingtransformers,noisefiltercoils,DC/DCconverterunits,powerinductors,IFT/RFcoils,keylessentryantennacoils,ADSLmodemtransformers,datalinefilters,antennacoils,videofilters,signalinductors,RF-ID,four-wayvalvecoils,CCFLdrivinginvertertransformers,ABScoils,injectioncoils,antennacoils,sensorcoils,noisefilers,solenoidcoilsforautomotiveairconditioner,high-frequencytransformers,high-frequencychokecoils,edge-wisecoils,stickcoils,motorcoilsforHDD,low-frequencytransformers,harmonicpreventivereactors,reactors,commonmodecoilsEUBusinessAntennacoils,sensorcoilmodules,ignitioncoilmodules,noisefilters,xDSLsplittermodules,DC/DCconvertertransformers,keylessentryantennacoils,Xenonigniter,powersteeringcontrolunits,GPSantennas,anti-theftcontrolunits,dieselenginecontrolunits,powersupplies,high-frequencytransformers,high-frequencychokecoils,edge-wisecoils,stickcoils,motorcoilsforHDD,low-frequencytransformers,harmonicpreventivereactors,reactors,commonmodecoils28(6)MajorbusinessofficesoftheSumidaGroup(asofDecember31,2014)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.
(Saitama-shi[Saitama],Kawasaki-shi[Kanagawa],Osaka-shi,Nagoya-shi,Natori-shi[Miyagi],Komoro-shi[Nagano]),SumidaPowerTechnologyCo.
,Ltd.
(Ueda-shi[Nagano])Overseassalesoffices:SUMIDATRADINGCOMPANYLIMITED(HongKong),SUMIDATRADINGPTE.
LTD.
(Singapore),SUMIDAAMERICACOMPONENTSINC.
(U.
S.
),SUMIDAComponentsGmbH(Germany),SUMIDATRADING(SHANGHAI)COMPANYLIMITED(China),SUMIDAComponents&ModulesGmbH(Germany),vogtronicsGmbH(Germany),SUMIDALehestenGmbH(Germany),SUMIDAflexibleconnectionsGmbH(Germany),SUMIDATRADING(KOREA)COMPANYLIMITED(SouthKorea),TAIWANSUMIDATRADINGCOMPANYLIMITED(Taiwan),SumidaElectric(Thailand)Co.
,Ltd.
(Thailand),SUMIDAelectronicShanghaiCo.
,Ltd.
(China)Domesticproductionbases:SumidaElectricCo.
,Ltd.
(Mutsu-shi[Aomori]),SumidaPowerTechnologyCo.
,Ltd.
(Ueda-shi[Nagano])Overseasproductionbases:SumidaElectric(H.
K.
)CompanyLimited(HongKong),DongguanSumida(TaiPing)ElectricCo.
,Ltd.
(China),SUMIDAComponentsGmbH(Germany),SUMIDAComponents&ModulesGmbH(Germany),SUMIDAROMANIAS.
R.
L.
(Romania),SUMIDACOMPONENTSDEMEXICO,S.
A.
DEC.
V.
(Mexico),SUMIDASlovenija,d.
o.
o.
(Slovenia),SUMIDALehestenGmbH(Germany),SUMIDAelectronicShanghaiCo.
,Ltd.
(China),SUMIDAflexibleconnectionsGmbH(Germany),SUMIDAELECTRIC(GUANGXI)CO.
,LTD.
(China),SumidaElectric(Thailand)Co.
,Ltd.
(Thailand),SUMIDAFLEXIBLECONNECTIONSROMANIAS.
R.
L.
(Romania),SUMIDAELECTRONICVIETNAMCO.
,LTD.
(Vietnam),SumidaElectric(JI'AN)Co.
,Ltd.
(China),SumidaElectric(Changde)Co.
,Ltd.
(China),GuangzhouSumidaElectricCo.
,Ltd.
(China),SUMIDAElectronicSuQianCo.
,Ltd.
(China)DomesticR&Dcenters:SumidaElectricCo.
,Ltd.
(Natori-shi[Miyagi],Komoro-shi[Nagano])OverseasR&Dcenters:SumidaElectric(H.
K.
)CompanyLimited(HongKong),SUMIDAAMERICACOMPONENTSINC.
(U.
S.
),SUMIDAComponentsGmbH(Germany),SUMIDAComponents&ModulesGmbH(Germany),SUMIDAflexibleconnectionsGmbH29(Germany),SumidaTechnologiesInc.
(Canada)(7)Employees(asofDecember31,2014)(i)EmployeesoftheSumidaGroupBusinesssegmentsNumberofemployeesChangesfromtheendofthepreviousfiscalyearAsiaPacificBusiness17,334Increaseby1,021EUBusiness3,016Increaseby198Company-wide(common)111Decreaseby3Total20,461Increaseby1,216Notes:1.
ThenumberofemployeesisthenumberofpersonswhoengageinworkintheSumidaGroup.
2.
"Company-wide(common)"indicatesthenumberofemployeespostedinSumidaCorporateServiceIncorporatedwhichcarriesoutaheadquarterandsupportfunction,inSumidaElectric(H.
K.
)CompanyLimitedandintheServiceDepartmentofSumidaElectricCo.
,Ltd.
3.
Thenumberofemployeesincludesthoseintheconsignedprocessingcompanies.
(ii)EmployeesoftheCompanyTheCompanyisapureholdingcompanyandithasnoemployees.
(8)Majorlenders(asofDecember31,2014)LendersAmountborrowed(millionyen)SumitomoMitsuiBankingCorporation10,381ResonaBank,Limited6,418MizuhoBank,Ltd.
5,102TheBankofTokyo-MitsubishiUFJ,Ltd.
4,609SumitomoMitsuiTrustBank,Limited3,49130(9)PolicyondeterminationofdividendofsurplusTheCompanyconsidersthereturnofprofitstoitsshareholdersasaprioritybusinessissue.
Themid-andlong-termpolicyoftheCompanyistomaintainstabledividendpaymentsdependingonitsconsolidatedbusinessresults,whileexpandingtheinternalreservesnecessarytoreinforceitsfinancialstructureinordertosecurefuturebusinessgrowthandhandlechangesinthebusinessenvironment.
Regardingspecificpaymentmethodofdividendofsurplusinordertoensurestabledividends,thebaseamountofannualdividendshallbe20yenormorepershareandpaystheamountobtainedbydividingthebaseamountofannualdividendwhichwasdeterminedatthebeginningofthefiscalyearintoquartersonaquarterlybasis.
Inaddition,inordertohavedividendsreflecttheconsolidatedbusinessresults,basedonthebasicdividendpayoutratio(25to30%),ifthedividendamountcalculatedwithconsolidatednetincomeandbasicdividendpayoutratioexceedsthebaseamountofannualdividend,itistheCompany'spolicytoaddtheexcessamounttotheannualdividendwhenpayingdividendsforyear-end.
Regardingtheannualdividendinthecurrentfiscalyear,theCompanydecidedtosetthebaseamountofannualdividendat20yenpershareatthebeginningofthefiscalyear,andpaid5yenineachquarter.
Asaresultofthepaymentof5yenforeachquarter,theamountofannualdividendwas20yen.
Detailsofdividendofsurplusforthecurrentfiscalyearareasfollows:DateofBoardofDirectorsresolutionTermTotalamountofdividends(millionyen)Dividendpershare(yen)RecorddateDateofcommencementofpaymentApril24,2014The1stquarter1165.
00March31,2014May28,2014July30,2014The2ndquarter1165.
00June30,2014August26,2014October30,2014The3rdquarter1165.
00September30,2014November28,2014February10,2015(Scheduled)The4thquarter1165.
00December31,2014March3,2015Note:PursuanttoArticle459oftheCompaniesAct,theCompanystipulatesintheArticlesofIncorporationthatitshallbeentitledtoallocatedividendsofsurplusonpredeterminedrecorddates(March31,June30,September30andDecember31)byaresolutionoftheBoardofDirectors.
312.
MattersConcerningtheCompany(1)SharesoftheCompany(asofDecember31,2014)(i)Numberofsharesissuable:70,000,000shares(ii)Totalnumberofsharesissued:23,944,317shares(includingtreasuryshares)(iii)NumberofshareholdersasofDecember31,2014:6,840(iv)Majorshareholders(top10shareholders,excludingtreasuryshares)NameofshareholdersNumberofstockheld(thousandshares)Ratioofthenumberofstockheld(%)YawataBuildingCo.
,Ltd.
4,81220.
73JapanTrusteeServicesBank,Ltd.
(TrustAccount)2,66711.
49TheMasterTrustBankofJapan,Ltd.
(TrustAccount)1,0224.
40ShigeyukiYawata9193.
96THECHASEMANHATTANBANK,N.
A.
LONDONSECSLENDINGOMNIBUSACCOUNT6062.
61MasakazuMatsuo5422.
34RBCISBA/CLUXNONRESIDENT/DOMESTICRATE4501.
94JapanTrusteeServicesBank,Ltd.
(TDKCorporationRetirementBenefitTrustAccountreentrustedbySumitomoMitsuiTrustBank,Limited)3291.
42Trust&CustodyServicesBank,Ltd.
(SecuritiesInvestmentTrustAccount)2671.
15BBHBOSTONCUSTODIANFORJAPANEQUITYPREMIUMFUNDOFCREDITSUISSEUNIVER6203732461.
06Notes:1.
AlthoughtheCompanyholds733,020sharesoftreasuryshares,itisexcludedfromthelistofmajorshareholdersabove.
2.
Theratioofthenumberofstockheldhasbeencalculatedexcludingtreasuryshares.
(v)OthersignificantmattersconcerningsharesTherewerenorelevantissuesattheendofthisfiscalyear.
(2)MattersconcerningtheCompany'sstockacquisitionrightsTherewerenorelevantissuesattheendofthisfiscalyear.
32(3)MattersconcerningcorporateofficersoftheCompany(i)Directorsandexecutiveofficers(asofDecember31,2014)PositionattheCompanyNameDutiesattheCompanyandimportantconcurrentoccupationsorpositionsatotherorganizationsDirector,RepresentativeExecutiveOfficerandCEOShigeyukiYawataChairmanoftheBoardofDirectors,memberoftheNominationCommitteeandCompensationCommitteeandChairmanoftheRiskManagementCommitteeManagingDirector,SUMIDAEuropeGmbHDirectorUlrichRuetzMemberoftheNominationCommitteeandCompensationCommitteeOutsideDirector,ProgressWerkOberkirchAGOutsideDirector,WüstenrotHoldingAGOutsideDirector,Wüstenrot&WürttembergischeAGDirectorJohjiSatoChairmanoftheAuditCommitteeandmemberoftheRiskManagementCommitteeDirectorPakHongAuyangChairmanoftheNominationCommitteeandCompensationCommitteeCo-CEO&ExecutiveDirector,TouchmediaViceChairman,DragonchipLimitedOutsideDirector,GrayhillHongKongCompanyLimitedDirector,QVIVOLimitedDirector,GreenlinkGlobalLimitedDirectorSoichiroUchidaMemberoftheAuditCommittee,NominationCommittee,CompensationCommitteeandRiskManagementCommitteeAdviser,NOKCORPORATIONDirectorYukihiroMoroeMemberofAuditCommitteeRepresentativeDirector,YUMECapitalCo.
,Ltd.
RepresentativeDirector,ItohanJapanCo.
,Ltd.
OutsideCorporateAuditor,OisixInc.
RepresentativeExecutiveOfficer,PresidentTomoharuSusekiMemberoftheRiskManagementCommitteeRepresentativeDirectorandPresident,SumidaElectronicComponentsCo.
,Ltd.
ManagingDirector,SUMIDAEuropeGmbHRepresentativeExecutiveOfficerandCFOYoshiyukiHondaMemberoftheRiskManagementCommitteeRepresentativeDirector,SumidaFinanceB.
V.
ManagingDirector,SUMIDAEuropeGmbHExecutiveOfficerPaulHofbauerManagingDirector,SUMIDAEuropeGmbHExecutiveOfficerTakatoshiOyoRepresentativeDirector,SumidaElectric(H.
K.
)CompanyLimitedNotes:1.
Messrs.
UlrichRuetz,JohjiSato,PakHongAuyang,SoichiroUchidaandYukihiroMoroeareoutsidedirectorssetforthinArticle2,Item15oftheCompaniesAct.
2.
Messrs.
UlrichRuetz,JohjiSato,PakHongAuyangandYukihiroMoroehavebeendesignatedasindependentdirectorsoftheCompanyinaccordancewiththerulesoftheTokyoStockExchangeandtheirnameshavebeennotifiedtothesaidstockexchange.
3.
Asidefromstatutorycommittees(Nomination,AuditandCompensationCommittees),theCompanyhasvoluntarilysetupaRiskManagementCommittee.
4.
AlloutsidedirectorsholdvoluntaryIndependentDirectorsmeetingsonregularbasis.
5.
Mr.
JohjiSato,memberoftheAuditCommittee,hasbeeninvolvedintheprovisionofadviceregardingtaxationandinvestmenttoglobalcorporationsovermanyyearswhileMr.
YukihiroMoroe,memberoftheAuditCommittee,hasexperiencedinthefinancialindustryovermanyyearsandhasbeeninvolvedinrunningseveralcompanies.
Bothmembersthushavegoodknowledgeoffinanceandaccounting.
33(ii)DirectorsandexecutiveofficerswhoretiredduringthisfiscalyearNameDateofretirementReasonforretirementPositionanddutiesattheCompanyandimportantconcurrentoccupationsorpositionsatotherorganizationsatthetimeofretirementKotaroMiyagiMarch21,2014ExpirationofhistermofofficeOutsideDirectorMemberoftheAuditCommitteeChairmanoftheCompensationCommitteeMemberoftheRiskManagementCommitteeLeadDirectorMasaruHattoriMarch21,2014ExpirationofhistermofofficeOutsideDirectorChairmanoftheAuditCommitteeMemberoftheRiskManagementCommitteeOutsideCorporateAuditor,RyohinKeikakuCo.
,Ltd.
CharlesF.
MartinMarch21,2014ExpirationofhistermofofficeOutsideDirectorChairmanoftheNominationCommitteeCEO,Martin&CompanyInc.
ShinjiYokoMarch21,2014ExpirationofhistermofofficeOutsideDirectorMemberoftheNominationCommitteeandCompensationCommitteeExternalDirector,LITE-ONJAPANLTD.
RyojiIwanagaMarch21,2014ExpirationofhistermofofficeExecutiveOfficerRepresentativeDirectorandPresident,SumidaCorporateServiceIncorporated(iii)PolicytodeterminetheamountofcompensationfordirectorsandexecutiveofficersbytheCompensationCommittee1.
Scopeofdecisionandextentofdisclosure"Theamountofindividualcompensationfordirectorsandexecutiveofficers"thattheCompensationCommitteedefinesanddisclosesshallbethetotalamountofcompensationpaidbytheSumidaGroupinordertoenhanceitstransparency.
Itshallbedisclosedseparatelyfordirectorsandexecutiveofficers.
2.
Directors'compensationThedirectors'compensationshallbedeterminedbyreflectingthepositionandresponsibilityofeachdirector,andinconsiderationoftheeconomictrendsandthebusinessenvironmentoftheCompany.
Directors'compensationiscomposedofthefollowingthreeelementsandthiswillnotbepaidtothosewhoserveasexecutiveofficerconcurrently.
1)BasiccompensationCompensationfortheresponsibilitiesasdirector(includingthecompensationfortheresponsibilitiesofthemembersoftheNominationandCompensationCommittees)2)CompensationofAuditCommitteemembersCompensationfortheresponsibilitiesasthememberoftheAuditCommittee3)CompensationofLeadDirectorCompensationfortheresponsibilitiesasLeadDirector343.
Executiveofficers'compensationForexecutiveofficers'compensation,incentivecompensation(corporateperformance-linkedcompensation)shallbeadoptedinadditiontothebasiccompensation(fixedcompensation)inordertomaintainandraisethemotivationfortheexecutionofoperations.
Executiveofficers'compensationiscomposedofthefollowingfourelements:1)BasiccompensationBasiccompensationshallbeonafixedbasisinconsiderationofthepositionandresponsibilityasanexecutiveofficerwithintheCompany,andanyadditionalpostasanofficeratsubsidiaries.
Theamountofcompensationshallbedeterminedbytakingintoaccountthepreviousoperationalperformanceandcomparisonwiththeactualcompensationforthepreviousfiscalyear.
2)Short-termincentivesThesecompensationsareintendedtomaintainandraisetheshort-termmotivation,andthebaseamountshallbedetermineddependingonthepositionandresponsibilityofeachexecutiveofficer.
TheamounttobepaidwillbechangedinaccordancewiththetargetperformancesetatthebeginningofthetermandtheactualperformanceandexecutionofdutiesoftheGroupasawholeorthefunctionincharge.
AdditionalbonusesmaybepaidtoanydistinguishedachievementforwhichtheCompensationCommitteegivescredit.
3)Long-termincentivesTheCompanyshallgrantthiscompensationtomaintainandraisethemedium-andlong-termmotivationofexecutiveofficers,andtopreventthelossofsuchofficers.
4)PensionplansTheCompanyshallgrantthiscompensationasadditionalbenefittopublicpensioninconsiderationoftheirserviceperiodinordertohelpeligibleretiredexecutiveofficershavestablelivesafterretirement.
(iv)Totalamountofcompensationpaidtodirectorsandexecutiveofficers(Period:January1toDecember31,2014)CategoryNumberofpayeesBasiccompensationShort-termincentiveLong-termincentivePensionplanTotal(millionyen)(millionyen)(millionyen)(millionyen)(millionyen)Executiveofficers6201944751394Directors0Outsidedirectors942–––42Total15243944751436Notes:1.
Duringthecurrentfiscalyear,theCompanyhassixexecutiveofficers,onedirectorandnineoutsidedirectors.
Asoneofthesixexecutiveofficersservesasadirectorconcurrently,thetotalnumberofofficersisfifteen.
Directors'compensationsarenotpaidtothosewhoconcurrentlyserveasexecutiveofficeranddirector,andtherefore,theyareincludedinthefiguresshownintherowofexecutiveofficersandexcludedfromthefiguresindicatedintherowofdirectors.
Thenumberofpersonsintheaboverowsofexecutiveofficersandoutsidedirectorsincludeoneexecutiveofficerandfouroutsidedirectorswhoretiredattheconclusionofthe59thAnnualGeneralMeetingof35Shareholders,whichwasheldonMarch21,2014andtheamountsofthesamerowsincludethecompensationowingtothoseexecutiveofficerandoutsidedirectorsfortheperiodsfromJanuary2014totherespectivedaysofretirementorresignation.
2.
ThefiguresareconsolidatedcompensationoftheGroup.
CompensationrelatingtotheCompanyconsistsof201millionyenforsixexecutiveofficers,and42millionyenfornineoutsidedirectors.
3.
Long-termincentivecompensationPhantomstocksdependingonthepositionsoftheexecutiveofficersforthenextfiscalyearshallbegranted,withunderlyingassetscalculatedbymultiplyingthetotalamountofdividendforthisfiscalyearbytheratedesignatedbytheCompany.
4.
Thecellofoutsidedirectorsinthebasiccompensationrowindicatesthesumofbasiccompensation,compensationofAuditCommitteemembersandcompensationofLeadDirector.
5.
Inadditiontotheabovecompensations,theGrouppaidfringebenefitstotaling22millionyen(including5millionyenpaidbytheCompany)toeligibleexecutiveofficersandretirementbenefitsof27millionyen(fullypaidbyasubsidiary)toanexecutiveofficer,whoretiredattheconclusionofthe59thAnnualGeneralMeetingofShareholders,whichwasheldonMarch21,2014.
(v)Mattersconcerningoutsidedirectors1.
ImportantconcurrentoccupationsorpositionsatotherorganizationsThisisasdescribedinthelistof(i)Directorsandexecutiveofficersabove.
TherearenobusinessrelationshipsbetweentheCompanyandotherorganizationswheretheyholdtheadditionalposts.
2.
RelativesofmanagingmembersoftheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompanysuchasmainclients1)NoneoftheoutsidedirectorshavebeenmanagingmembersoftheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompanyinthepast.
2)NoneoftheoutsidedirectorshaverelativesinthethirddegreeorcloserwithmanagingmembersoftheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompany.
3.
Mainactivitiesduringthecurrentfiscalyear1)AttendanceofoutsidedirectorsNameTheBoardofDirectorsmeetingsAuditCommitteemeetingsNominationCommitteemeetingsCompensationCommitteemeetingsRiskManagementCommitteemeetingsKotaroMiyagi1/13/32/21/1UlrichRuetz6/65/56/6MasaruHattori1/13/31/1CharlesF.
Martin1/1ShinjiYoko1/11/12/2JohjiSato6/610/103/3PakHongAuyang6/65/55/5SoichiroUchida5/56/74/44/43/3YukihiroMoroe5/57/7Notes:1.
TheCompanyestablishedtheRiskManagementCommittee.
MembersincludetheLeadDirectorandChairmanoftheAuditCommitteeaswellasexecutiveofficersandtheirstaffmembers.
2.
AsMr.
SoichiroUchidawasappointedasadirectorandamemberoftheAuditCommittee,Nomination36CommitteeandCompensationCommitteeonMarch21,2014,hisattendanceatmeetingsheldafterthisdateisrecorded.
3.
AsMr.
YukihiroMoroewasappointedasadirectorandamemberoftheAuditCommitteeonMarch21,2014,hisattendanceatmeetingsheldafterthisdateisrecorded.
2)Statementsofeachoutsidedirector(a)Mr.
KotaroMiyagiAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheviewpointofabusinessexecutiveandbasedontheknowledgeonelectricandelectronicsindustry.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberations,fromtheperspectiveofpromotingcompliancemanagementthroughauditsandleveragingittoenhancethecorporatevalue.
AschairmanoftheCompensationCommittee,heledthedeliberationsfromtheperspectiveofdeterminingfairlyandproperlythecompensationbasesfordirectorsandexecutiveofficers,anddefinedthepolicyonthedetailsandamountofindividualcompensationreceivedbydirectorsandexecutiveofficers.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
AsLeadDirector,heleddeliberationsfairlyandequitably,andorchestratedtheopinionsoftheIndependentDirectors.
(b)Mr.
UlrichRuetzAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutiveofaEuropeancompany.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofexaminingandactualizingthelineupandorganizationoftheBoardandexecutiveofficersappropriateandrequiredforthebusinessdevelopmentoftheCompany.
(c)Mr.
MasaruHattoriAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutive.
AschairmanoftheAuditCommitteemeetings,heledthedeliberationsfromtheperspectiveofpromotingcompliancemanagementthroughauditsandleveragingittoenhancethecorporatevalue,andperformedauditsoftheBusinessReport,theNon-consolidatedFinancialStatements,theConsolidatedFinancial37Statements,etc.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
(d)Mr.
CharlesF.
MartinAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofafinancialstrategyexpert.
AschairmanoftheNominationCommittee,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofexaminingandactualizingthelineupandorganizationoftheBoardandexecutiveofficersappropriateandrequiredforthebusinessdevelopmentoftheCompany.
(e)Mr.
ShinjiYokoAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofhisknowledgeandexperienceasabusinessexecutivethatheaccumulatedthroughouthiscareerandanexpertintheelectroniccomponentsindustry.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofexaminingandactualizingthelineupandorganizationoftheBoardandexecutiveofficersappropriateandrequiredforthebusinessdevelopmentoftheCompany.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
(f)Mr.
JohjiSatoAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofafinancialstrategyexpert.
AschairmanoftheAuditCommitteemeetings,heledthedeliberationsfromtheperspectiveofpromotingcompliancemanagementthroughauditsandleveragingittoenhancethecorporatevalue,andperformedauditsoftheBusinessReport,theNon-consolidatedFinancialStatements,theConsolidatedFinancialStatements,etc.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
(g)Mr.
PakHongAuyangAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofacorporatebusinessexecutive.
AschairmanoftheNominationCommitteemeetings,hemadenecessary38remarksindeliberationsonatimelybasis,fromthestandpointofexaminingandactualizingthelineupandorganizationoftheBoardandexecutiveofficersappropriateandrequiredforthebusinessdevelopmentoftheCompany.
AschairmanoftheCompensationCommittee,heledthedeliberationsfromtheperspectiveofdeterminingfairlyandproperlythecompensationbasesfordirectorsandexecutiveofficers,anddefinedthepolicyonthedetailsandamountofindividualcompensationreceivedbydirectorsandexecutiveofficers.
(h)Mr.
SoichiroUchidaAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofacorporatebusinessexecutive.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsfromtheperspectiveofpromotingcompliancemanagementthroughauditsandleveragingittoenhancethecorporatevalue.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofexaminingandactualizingthelineupandorganizationoftheBoardandexecutiveofficersappropriateandrequiredforthebusinessdevelopmentoftheCompany.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
(i)Mr.
YukihiroMoroeAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofacorporatebusinessexecutive.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsfromtheperspectiveofpromotingcompliancemanagementthroughauditsandleveragingittoenhancethecorporatevalue.
4.
IndependentDirectorsmeetingTheCompanyholdsIndependentDirectorsmeetingswithalloutsidedirectors.
AlloutsidedirectorsattendedonemeetingheldduringthistermtodiscussandreviewbettercorporategovernanceandtheroleoftheBoardofDirectorsfromthepositionofrepresentingshareholders.
5.
OutlineofliabilitylimitationcontractsInordertoobtainexcellentdirectorsfromoutside,theCompanyhasmadeprovisionslimitingliabilityfordamagesunderArticle423,Paragraph1oftheCompaniesActintheArticlesofIncorporationpursuanttotheprovisionsunderArticle427,Paragraph1ofthe39saidact.
Inaccordancewiththeaforementionedprovisions,theCompanyhasenteredintoliabilitylimitationcontractswithnineoutsidedirectors.
ThelimitofliabilityfordamagesundersuchcontractshasbeensetattheminimumliabilityprovidedforunderArticle425,Paragraph1oftheCompaniesAct.
However,liabilitylimitationisappliedonlywhentherelevantoutsidedirectorshavecarriedouttheirduties,forwhichtheyaresupposedtoassumeliability,ingoodfaithorwithoutgrossnegligence.
6.
TotalamountofcompensationsreceivedfromthesubsidiariesTherewerenorelevantissues.
7.
CriteriaandpolicyrelatingtoindependenceTheCompanyhasnotdefinedspecificcriteriarelatingtoindependenceinelectingoutsidedirectors.
However,withreferencetotheEnforcementRulesforSecuritiesListingRegulationsoftheTokyoStockExchange,theCompanycarefullyinvestigatesandexaminesthebeneficialinterestsandotherrelationshipsbetweenoutsidedirectorsandtheCompanyandensurestheabsenceofpossibleconflictsofinterestwithordinaryshareholders.
Meanwhile,theCompanyfocusesonelectionofoutsidedirectorswhohaveawealthofexperienceandknowledgerelatingtomanagementinawidearrayofbusinessfieldsandhighlevelsofexpertise.
40(4)Independentauditors(i)Name:KPMGAZSALLC(ii)Amountofcompensations:Amounttobepaid(millionyen)Amountofcompensationsforthecurrentfiscalyear77TotalamountofmoneyandotherpropertybenefitstobepaidbytheCompanyanditssubsidiariestoindependentauditors110Note:SinceintheauditagreementconcludedbetweentheCompanyandtheindependentauditor,compensationforauditsisnotclearlyclassifiedintocompensationbasedontheCompaniesActandcompensationinaccordancewiththeFinancialInstrumentsandExchangeAct,andsincethatcompensationcannotsubstantiallybedividedeither,theitem"Amountofcompensationsforthecurrentfiscalyear"showsthesumoftheseamounts.
(iii)AuditingofconsolidatedsubsidiariesSubsidiariesoftheCompany,suchasSumidaElectric(H.
K.
)CompanyLimited,SUMIDATRADINGCOMPANYLIMITEDandSUMIDAAG,wereauditedbyeitheracertifiedpublicaccountantoranauditingfirmwhoisnotanindependentauditorattheCompany.
(iv)Detailsofnon-auditservicesOtherthantheserviceswhicharedefinedintheArticle2(1)ofCertifiedPublicAccountantsAct(non-auditservices),theCompanyentruststheindependentauditortocarryoutservicessuchasadvisoryworkregardingtheintroductionofIFRS.
(v)Policyondeterminationofdismissalornon-reappointmentoftheindependentauditorWhentheAuditCommitteefindsthatanyoftheitemsinArticle340,Paragraph1oftheCompaniesActapplytotheindependentauditor,thatindependentauditorshallbedismissedwiththeconsentofallthecommitteemembers.
Inaddition,theAuditCommitteewillannuallydiscusswhethertoreappointtheindependentauditorinconsiderationofthequalityoftheauditperformedbytheindependentauditorandtheeffectivenessandefficiencyofitsauditperformance.
41(5)Systemtosecurepropernessofoperations(i)Systemtoensurethatexecutiveofficersandemployeescomplywiththeapplicablelaws,regulationsandtheArticlesofIncorporationwithregardtotheirbusinessactivitiesTheGrouphasestablished"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*shallberesponsibleformonitoringandverifyinghowthePrincipleshavebeenobserved.
(b)Whilecomplianceisrecognizedasthebaseofcorporategovernance,SUMIDAregardsitinamoreproactivemannerratherthansimplylimitingtheissuetotheobservanceoflawsandregulations,bydefiningitasactivitiestopositivelyfulfillourCorporateSocialResponsibility(CSR)basedonintegrity,disciplineandcommonsense.
TheCorporateGovernanceOfficeshallbeprimarilyresponsiblefortheenhancementoftheGroup'soverallsystemandmonitoringitsactivities.
(c)TheCorporateGovernanceOfficeshallreportthesituationoftheaforementionedactivitiestotherepresentativeexecutiveofficersandtheAuditCommittee,andasummaryofwhichshallbereportedtotheBoardofDirectors.
(d)Representativeexecutiveofficersshallverifytheeffectivenessofinternalcontrol,includingcompliance,andshallsendreportstotheBoardofDirectors.
*TheCorporateGovernanceOfficereportstorepresentativeexecutiveofficersandmadeupoftheRiskManagementOffice,ComplianceOfficeandInternalAudit.
(ii)Systemregardingthepreservationandmanagementofinformationofexecutiveofficers'businessactivitiesRepresentativeexecutiveofficersshallcentrallymanageimportantinformationrelatedtoexecutionofdutieswithclarifyingthelevelofimportanceofinformationaswellastheperiodandplaceofsafekeeping,inaccordancewiththerulesandregulationsregardinginformationanddocumentmanagement.
Documentsareavailabletothedirectorsatalltimes.
(iii)SystemandregulationswithregardtoriskmanagementRepresentativeExecutiveOfficerandCEO,astheChiefRiskManagementOfficerwhotakesthehighestresponsibilityforriskmanagement,shallestablishtheRiskManagementCommittee,whichisresponsibleforoverseeingriskmanagement,andshallsetuptheRiskManagementOffice,whichisresponsibleforexecutingthedutiesofsaidCommittee,withintheCorporateGovernanceOffice.
TheRiskManagementOfficeshallsetouttheinternalriskmanagementrulesandtherebyidentifyandanalyzepotentialrisksandformulateandmanagepreventivemeasuresfromaglobalbusinessperspectivethroughplacementofariskmanagementmonitoringsysteminmajorbusinessbasesoftheGroupincludingoverseassites.
42Intheeventthatariskmaterializes,theRiskManagementOfficeshalldiscusscountermeasurestominimizelosses.
Executiveofficersandemployeesshallperformtheirdutiesincompliancewiththerules.
TheCorporateGovernanceOfficeshallmonitorandevaluatetheimplementationoftheabove,andshallreportthesituationtotherepresentativeexecutiveofficersandtheAuditCommittee,anddeliverasummarytotheBoardofDirectors.
(iv)Systemtoensuretheeffectivenessandefficiencyofexecutiveofficers'businessactivitiesExecutiveofficersshallsetupasystembasedonthePrinciplestoensureaproperdecision-makingprocessandsurveillanceofindividualactivitiesandtherebyenhancetheoperatingefficiency.
Detailsareasfollows:(a)EachrepresentativeexecutiveofficershallsetupanAdvisoryBoardastheneedarises,withwhomtheyshallconsultandengageinsufficientdiscussionwhenmakingimportantdecisions.
(b)Representativeexecutiveofficersshallsetouttheauthorityandregulationsfordecision-makingprocessandconductregularreviewsofthesituation.
(c)Representativeexecutiveofficersshallmakeregularreviewsoftheachievementandprogressofbusinessestheyareresponsiblefordecision-makingthereofandensurefurtherproprietyandefficiencyofmanagementandexecutionofoperationbygivingfeedbackoftheresultsofthereview.
(d)Representativeexecutiveofficersshallensureaproperandquickdecision-makingprocessbysmoothlycollecting,analyzing,communicating,sharingandarchivingthenecessaryinformationonSUMIDA'sbusinessactivities.
(v)SystemtoensuretheproprietyofbusinessoftheGroupconsistingoftheCompanyanditssubsidiariesSUMIDACORPORATIONisapureholdingcompanywithbusinessactivitiesconductedbyitsgroupcompanies.
Inlightofthis,directorsandexecutiveofficersshallalwaysperformtheirdutieswiththeviewofgroupgovernance.
TheCorporateGovernanceOfficeoverseescomplianceandriskmanagementoperations.
ItalsoperformsinternalauditsandthensubmitstheresultstotherepresentativeexecutiveofficersandtheAuditCommitteeasinternalauditreports.
TheAuditCommitteeshallcarryoutitsauditincooperationwithCorporateGovernanceOffice.
TheCorporateGovernanceOfficeshalltakechargeofinternalcontrolofnotonlytheCompany,butalsotheentireGroup.
(vi)MatterswithregardtoemployeeswhoassisttheAuditCommitteeandmattersconcerningtheindependenceofthoseemployeesfromexecutiveofficersTheCorporateGovernanceOfficeshallberesponsibleforthesecretariatoftheAuditCommittee.
Anydecisionswithregardtochangesortransfersofpersonnel,reorganizationoranyotherconsiderationsshallrequirethepriorapprovaloftheAuditCommittee.
(vii)SystemwherebyexecutiveofficersandemployeesreporttotheAuditCommitteeandothersystemsforreportingtotheAuditCommitteeTheCorporateGovernanceOfficeshallsetouttherulesforrepresentativeexecutiveofficers,executiveofficersandemployeestoreportthefollowingmatters,andtherebyreportthemtotheAuditCommittee.
AsummaryofthefollowingmattersshallbereportedtotheBoardof43Directors.
(a)Incidents,whichmaycausemateriallossesand/orgainsto,ormaterialdamageand/orbenefitto,theCompany(b)Whentherearisesanymaterialfactorpossibilitythereofinvolvingmisconductormalpractice,breachoflawsandregulationsorArticlesofIncorporationinrelationtotheexecutionofdutiesofthedirectorsorexecutiveofficers,suchfact(c)Monthlyaccountingstatementsonaconsolidatedbasis(d)Internalauditreport(e)Monthlyreportsfromthemainoperatingdivisions(f)Otherimportantmatters(viii)SystemtoensuretheeffectivenessofauditsexecutedbytheAuditCommitteemembersToensuretheeffectivenessofauditexecutedbytheAuditCommitteemembers,thefollowingmattersshallbeperformed.
(a)TheCorporateGovernanceOfficeshallhavepriorconsultationswiththeAuditCommitteewhensettingouttheannualauditpoliciesandplans.
TheOfficeshallalsoreporttheprogressandresultsofinternalaudittotheAuditCommittee.
TheAuditCommitteemayrequesttheCorporateGovernanceOfficeforanadditionalauditifnecessary.
(b)IndependentauditorsshallexplaintotheAuditCommitteeitsauditingplanattheoutsetofthefiscalyearandreporttotheAuditCommitteetheprogressofitsinterimauditandtheend-termauditresults,etc.
Furthermore,theindependentauditorsmayhaveconsultationsanddiscussionswiththeAuditCommitteeifneeded.
(c)Inordertoensuretheindependenceofindependentauditorsfromtheexecutiveofficers,aswellastoguaranteetheimplementationoftheauditactivities,decisionsontheindependentauditors'compensationshallrequiretheAuditCommittee'spriorconsent.
Note:Theamountsofmoneyandthenumbersofsharesdescribedinthisbusinessreportareroundeddowntothenearestunits.
44ConsolidatedandNon-consolidatedFinancialStatementsforthe60thterm(January1toDecember31,2014)ConsolidatedBalanceSheetConsolidatedStatementofIncomeConsolidatedStatementofChangesinShareholders'EquityNon-consolidatedBalanceSheetNon-consolidatedStatementofIncomeNon-consolidatedStatementofChangesinShareholders'EquityShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATION45ConsolidatedBalanceSheet(Millionsofyen)60thtermAsofDecember31,2014(Reference)59thtermAsofDecember31,2013ASSETSCurrentassets:Cashanddeposits3,7533,581Notesandaccountsreceivable-trade17,01312,840Merchandiseandfinishedgoods7,7216,082Workinprocess1,5051,188Rawmaterialsandsupplies4,8923,767Deferredtaxassets290193Incometaxesreceivable405313Other2,9421,890Allowancefordoubtfulaccounts(192)(270)Totalcurrentassets38,33229,588Non-currentassets:Property,plantandequipmentBuildingsandstructures12,96611,756Machinery,equipmentandvehicles40,78533,880Tools,furnitureandfixtures4,8864,748Land1,4121,393Leasedassets1,3871,166Constructioninprogress2,0321,582Accumulateddepreciation(40,450)(36,391)Totalproperty,plantandequipment23,01818,136Intangibleassets:Goodwill2,4862,671Leaseholdright620550Software168109Softwareinprogress-61Other251334Totalintangibleassets3,5273,727Investmentsandotherassets:Investmentsecurities528534Deferredtaxassets3,5163,773Other1,214896Allowancefordoubtfulaccounts(76)-Totalinvestmentsandotherassets5,1825,204Totalnon-currentassets31,72827,068DeferredassetsBusinesscommencementexpenses1217Bondissuancecost2957Shareissuancecost811Totaldeferredassets4986Totalassets70,11056,743Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
46ConsolidatedBalanceSheet(Millionsofyen)60thtermAsofDecember31,2014(Reference)59thtermAsofDecember31,2013LIABILITIESCurrentliabilities:Notesandaccountspayable-trade7,9316,393Short-termloanspayable4,56510,843Currentportionofbonds4,520770Currentportionoflong-termloanspayable7,2164,523Accountspayable-other1,1481,187Accruedexpenses2,9372,316Incometaxespayable673405Deferredtaxliabilities-23Other1,048889Totalcurrentliabilities30,04227,352Non-currentliabilities:Bondspayable9005,420Long-termloanspayable17,3146,335Provisionforretirementbenefits-1,269Netdefinedbenefitliability1,583-Deferredtaxliabilities1,184748Leaseobligations757623Other603483Totalnon-currentliabilities22,34414,880Totalliabilities52,38642,233NETASSETSShareholders'equity:Capitalstock8,1438,143Capitalsurplus7,9567,956Retainedearnings5,7194,836Treasuryshares(1,524)(1,524)Totalshareholders'equity20,29419,412Accumulatedothercomprehensiveincome:Valuationdifferenceonavailable-for-salesecurities6846Foreigncurrencytranslationadjustment(3,687)(5,914)Remeasurementsofdefinedbenefitplans(152)-Totalaccumulatedothercomprehensiveincome(3,770)(5,868)Minorityinterests1,200966Totalnetassets17,72414,510Totalliabilitiesandnetassets70,11056,743Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
47ConsolidatedStatementofIncome(Millionsofyen)60thtermYearendedDecember31,2014(Reference)59thtermYearendedDecember31,2013Netsales77,56363,893Costofsales63,69152,841Grossprofit13,87111,052Selling,generalandadministrativeexpenses10,5259,353Operatingincome3,3451,698Non-operatingincome:Interestincome1317Dividendsincome11Gainonvaluationofderivatives17170Foreignexchangegains95-Gainonsalesofinvestmentsecurities47-Other3152205241Non-operatingexpenses:Interestexpenses524461Foreignexchangelosses-188Commissionfee9285Other13496751832Ordinaryincome2,7991,107Extraordinaryincome:Gainonsalesofnon-currentassets181,188Insuranceincome4951,426Subsidyincome359-Reversalofimpairmentloss137-Other-201,0102,634Extraordinarylosses:Lossonsalesandretirementofnon-currentassets1922Lossonliquidationofsubsidiariesandassociates-22Impairmentloss1748Lossondisaster3031,742Businessstructureimprovementexpenses13388Additionalcontributionsofsocialinsurance310-6472,924Incomebeforeincometaxes3,162817Incometaxes-current988602Incometaxes-deferred6692,089Incomebeforeminorityinterests1,503(1,873)Minorityinterestsinincome157134Netincome(loss)1,346(2,008)Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
48ConsolidatedStatementofChangesinShareholders'EquityYearendedDecember31,2014(Millionsofyen)Shareholders'equityCapitalstockCapitalsurplusRetainedearningsTreasurysharesTotalshareholders'equityBalanceasofJan.
1,20148,1437,9564,836(1,524)19,412ChangesofitemsduringperiodDividendsofsurplus(464)(464)Netincome1,3461,346Purchaseoftreasuryshares(0)(0)Netchangesofitemsotherthanshareholders'equityTotalchangesofitemsduringperiod--882(0)881BalanceasofDec.
31,20148,1437,9565,719(1,524)20,294(Millionsofyen)AccumulatedothercomprehensiveincomeMinorityinterestsTotalnetassetsValuationdifferenceonavailable-for-salesecuritiesForeigncurrencytranslationadjustmentRemeasure-mentsofdefinedbenefitplansTotalaccumulatedothercomprehen-siveincomeBalanceasofJan.
1,201446(5,914)-(5,868)96614,510ChangesofitemsduringperiodDividendsofsurplus(464)Netincome1,346Purchaseoftreasuryshares(0)Netchangesofitemsotherthanshareholders'equity222,227(152)2,0972342,332Totalchangesofitemsduringperiod222,227(152)2,0972343,214BalanceasofDec.
31,201468(3,687)(152)(3,770)1,20017,724Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
49Non-consolidatedBalanceSheet(Millionsofyen)60thtermAsofDecember31,2014(Reference)59thtermAsofDecember31,2013ASSETSCurrentassets:Cashanddeposits139204Notesreceivable-trade-157Prepaidexpenses11640Deferredtaxassets15967Short-termloansreceivable3,3505,909Incometaxesreceivable78-Consumptiontaxesreceivable1626Accountsreceivable-other1231,209Other195-Totalcurrentassets4,1807,617Non-currentassets:Property,plantandequipmentBuildings771798Structures1214Machineryandequipment-1Tools,furnitureandfixtures22Land503503Leasedassets68Totalproperty,plantandequipment1,2961,329Intangibleassets:Telephonesubscriptionright33Software640Softwareinprogress-61Totalintangibleassets6865Investmentsandotherassets:Investmentsecurities366342Stocksofsubsidiariesandassociates29,02029,020Long-termloansreceivable9,250-Long-termprepaidexpenses13830Insurancefunds645612Other66Totalinvestmentsandotherassets39,42930,013Totalnon-currentassets40,79431,407DeferredassetsBondissuancecost2957Shareissuancecost611Totaldeferredassets3568Totalassets45,00939,093Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
50Non-consolidatedBalanceSheet(Millionsofyen)60thtermAsofDecember31,2014(Reference)59thtermAsofDecember31,2013LIABILITIESCurrentliabilities:Short-termloanspayable1,4003,559Currentportionofbonds4,520770Currentportionoflong-termloanspayable3,2673,309Accountspayable-other5571Accruedexpenses7727Incometaxespayable-38Depositsreceived4,7274,586Other68Totalcurrentliabilities14,05512,372Non-currentliabilities:Bondspayable9005,420Long-termloanspayable10,4392,865Deferredtaxliabilities1,5961,247Other6356Totalnon-currentliabilities13,0009,589Totalliabilities27,05521,961NETASSETSShareholders'equity:Capitalstock8,1438,143Capitalsurplus7,9567,956Legalcapitalsurplus7,9567,956Retainedearnings3,3502,543Legalretainedearnings264264Otherretainedearnings3,0852,279Retainedearningsbroughtforward3,0852,279Treasuryshares(1,524)(1,524)Totalshareholders'equity17,92517,118ValuationandtranslationadjustmentsValuationdifferenceonavailable-for-salesecurities2812Totalvaluationandtranslationadjustments2812Totalnetassets17,95417,131Totalliabilitiesandnetassets45,00939,093Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
51Non-consolidatedStatementofIncome(Millionsofyen)60thtermYearendedDecember31,2014(Reference)59thtermYearendedDecember31,2013Operatingrevenue2,3211,848Operatingexpenses529497Operatingincome1,7921,350Non-operatingincome:Interestincome15589Foreignexchangegains-1Other1015791Non-operatingexpenses:Interestexpenses200172Interestonbonds6269Amortizationofbondissuancecost2843Foreignexchangelosses23-Commissionfee7161Other43391350Ordinaryincome1,5571,092Extraordinarylosses:Impairmentloss113Officetransferexpenses-4118Incomebeforeincometaxes1,5561,074Incometaxes-current36(270)Incometaxes-deferred248908Netincome1,271435Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
52Non-consolidatedStatementofChangesinShareholders'EquityYearendedDecember31,2014(Millionsofyen)Shareholders'equityCapitalstockCapitalsurplusRetainedearningsTreasurysharesTotalshareholders'equityLegalcapitalsurplusTotalcapitalsurplusLegalretainedearningsOtherretainedearningsTotalretainedearningsRetainedearningsbroughtforwardBalanceasofJan.
1,20148,1437,9567,9562642,2792,543(1,524)17,118ChangesofitemsduringperiodDividendsofsurplus(464)(464)(464)Netincome1,2711,2711,271Purchaseoftreasuryshares(0)(0)DisposaloftreasurysharesNetchangesofitemsotherthanshareholders'equityTotalchangesofitemsduringperiod----806806(0)806BalanceasofDec.
31,20148,1437,9567,9562643,0853,350(1,524)17,925(Millionsofyen)ValuationandtranslationadjustmentsTotalnetassetsValuationdifferenceonavailable-for-salesecuritiesTotalvaluationandtranslationadjustmentsBalanceasofJan.
1,2014121217,131ChangesofitemsduringperiodDividendsofsurplus(464)Netincome1,271Purchaseoftreasuryshares(0)DisposaloftreasurysharesNetchangesofitemsotherthanshareholders'equity151515Totalchangesofitemsduringperiod1515822BalanceasofDec.
31,2014282817,954Note:Theamountsofmoneydescribedaboveareroundeddowntothenearestmillionyen.
53(Translation)AuditReportTheAuditCommitteehasauditedtheperformanceofdutiesbydirectorsandexecutiveofficersforthe60thtermfromJanuary1,2014toDecember31,2014.
Wereportthemethodsandtheresultsoftheauditasfollows.
1.
MethodsusedinauditsandcontentofauditsWithrespecttotheresolutionsoftheBoardofDirectorsregardingtheorganizationofthesystemstipulatedinArticle416,Paragraph1,Item1,(b)and(e)oftheCompaniesActandthestatusofthesystembasedonsaidresolutions(internalcontrolsystems),theAuditCommitteereceivedreportsfromdirectors,executiveofficers,employeesandothers,requestedexplanationsonthosereports,whennecessary,andexpressedanopinionconcerningtheestablishmentandoperationofthesystem.
Wealsoinspectedincooperationwiththeinternalcontroldivisiontheprocessandcontentofthedecisionmakingatsignificantmeetings,thecontentofthemajorauthorizationdocumentsandotherimportantdocumentsrelatedtobusinessoperations,thebusinessperformanceoftheexecutiveofficers,andtheCompany'soperationandconditionofpropertyinaccordancewiththeauditingpoliciesestablishedbytheAuditCommittee,thesegregationofdutiesandothers.
Withrespecttosubsidiaries,theAuditCommitteetookstepstofacilitatecommunicationwiththedirectorsandothersofsubsidiariesand,whennecessary,receivedreportsfromsubsidiariesonthestatusoftheirbusinesses.
Inaddition,theAuditCommitteealsomonitoredandverifiedwhethertheindependentauditorwasmaintainingitsindependenceandwascarryingoutitsauditsinanappropriatemanner.
TheAuditCommitteereceivedreportsfromtheindependentauditorontheexecutionofitsdutiesand,whennecessary,requestedexplanationsregardingthosereports.
TheAuditCommitteealsoreceivednotificationfromtheindependentauditorthatitimplementedthe"systemforensuringtheproperexecutionofitsduties"(asenumeratedinitemsofArticle131oftheCorporateAccountingRules)incompliancewiththe"QualityControlStandardsRelatingtoAuditing"(adoptedbytheBusinessAccountingDeliberationCouncilonOctober28,2005).
Whennecessary,AuditCommitteerequestedexplanationsonthenotification.
Basedontheforegoingmethods,theAuditCommitteealsoexaminedtheBusinessReport,theNon-consolidatedFinancialStatements(Non-consolidatedBalanceSheet,Non-consolidatedStatementofIncome,Non-consolidatedStatementofChangesinShareholders'Equity,andnotestoNon-consolidatedFinancialStatements)andsupportingschedules,andtheConsolidatedFinancialStatements(ConsolidatedBalanceSheet,ConsolidatedStatementofIncome,ConsolidatedStatementofChangesinShareholders'Equity,andnotestoConsolidatedFinancialStatements)relatedtothefiscalyear.
542.
ResultsoftheAudit(1)ResultsofauditofBusinessReport(i)Inouropinion,theBusinessReportandsupportingschedulesfairlypresentthesituationoftheCompany,incompliancewiththeprovisionsofapplicablelawsandregulations,andtheArticlesofIncorporation.
(ii)Neitherimproperactionsintheexecutionofdutiesbydirectorsandexecutiveofficers,normaterialfactsinviolationoftheprovisionsofapplicablelawsandregulationsortheArticlesofIncorporation,werefound.
(iii)Inouropinion,thecontentoftheresolutionbytheBoardofDirectorsregardinginternalcontrolsystemswasappropriate;furthermore,nothingwaspointedoutregardingthecontentsoftheBusinessReportsandtheexecutionofdutiesbydirectorsandexecutiveofficerswithrespecttoexecutinginternalcontrolsystems.
(2)ResultsoftheauditofNon-consolidatedFinancialStatementsandsupportingschedulesInouropinion,theauditingmethodsusedbytheindependentauditor,KPMGAZSALLCandtheresultsofitsauditwereappropriate.
(3)ResultsoftheauditofConsolidatedFinancialStatementsInouropinion,theauditingmethodsusedbytheindependentauditor,KPMGAZSALLCandtheresultsofitsauditwereappropriate.
February9,2015AuditCommitteeSUMIDACORPORATIONJohjiSato(Seal)MemberoftheAuditCommitteeSoichiroUchida(Seal)MemberoftheAuditCommitteeYukihiroMoroe(Seal)MemberoftheAuditCommitteeNote:ThethreemembersoftheAuditCommitteeareoutsidedirectorsasstipulatedinArticle2,Item15andArticle400,Paragraph3oftheCompaniesAct.