electronicsadsl调制解调器

1ThisisatranslationoftheoriginalnoticeinJapanese.
Intheeventofanydiscrepancy,theoriginalnoticeinJapaneseshallprevail.
(StockCode:6817)March3,2011NOTICEOFTHE56THANNUALGENERALMEETINGOFSHAREHOLDERSDearShareholders,SUMIDACORPORATIONherebywouldliketoinformyouthatthe56thAnnualGeneralMeetingofShareholderswillbeheldasoutlinedbelow.
Pleaseacceptourcordialinvitationtothismeeting.
Ifyouareunabletoattendthemeeting,youmayexerciseyourvotingrightsinwritingorviatheInternet.
Pleaseexaminetheappended"ReferenceMaterialsforAnnualGeneralMeetingofShareholders"andexerciseyourvotingrightsinaccordancewiththeinstructionsgivenonpage3.
Yoursfaithfully,ShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATIONAsahiBuilding3-12-2,Nihonbashi,Chuo-ku,Tokyo1.
DateandTime:1:00p.
m.
,Saturday,March19,2011(Thereceptiondeskwillopenat0:30p.
m.
)2.
Venue:Orion,HotelNikkoTokyo(1stFloor),1-9-1Daiba,Minato-ku,Tokyo3.
MeetingAgenda:-Itemstobereported1.
BusinessReport,ConsolidatedFinancialStatementsandareportontheauditedresultsoftheConsolidatedFinancialStatementsbytheindependentauditorsandtheAuditCommitteeforthe56thterm(January1toDecember31,2010)2.
Non-consolidatedFinancialStatementsforthe56thterm(January1toDecember31,2010)2-ItemtoberesolvedAgenda:Appointmentoften(10)directors4.
DecisionsMadefortheNoticeoftheMeeting(1)IfashareholderdoesnotindicateacceptanceorrejectionoftheagendaitemswhenexercisingavotingrightinwritingorviatheInternet,theCompanywilltreatsuchcasesasindicationsofacceptance.
(2)IntheeventthatashareholderexercisesavotingrightviatheInternet,evenifthevotingformisreturnedtousbymail,theCompanywilltreattheshareholder'sInternetvoteastheeffectiveexerciseofthevotingright.
(3)Ifashareholderexercisesavotingrightinwriting,theshareholderisrequestedtoreturnavotingformtousbymailby5:00p.
m.
onFriday,March18,2011(JST).
(4)IfashareholderexercisesavotingrightviatheInternet,theshareholderisrequestedtodosoby5:00p.
m.
onFriday,March18,2011(JST).
(5)Intheeventthatashareholderexercisesvotingrightsdiversely,theshareholderisrequestedtosubmithis/herintentiontodosoandthereasonforthediverseexerciseofvotingrightstotheCompanyinwritingbythreedaysbeforethemeeting.
IftheReferenceMaterialsforAnnualGeneralMeetingofShareholders,BusinessReport,ConsolidatedandNon-consolidatedFinancialStatementsaresubsequentlyrevised,therevisionsshallbepostedonourWebsite(http://www.
sumida.
com).
3*Shareholdersattendingthemeetinginpersonarerequestedtofilloutthevotingformenclosedwiththisnoticeandsubmititatthereceptiondeskonthedayofthemeeting.
*Ashareholdermayexercisehis/hervotingrightsbydesignatingoneproxywhoisanothershareholderoftheCompanywithvotingrightspursuanttoArticle17oftheArticlesofIncorporation.
Insuchcases,pleasesubmittotheCompanyadocumentprovingtheproxy'spowerofrepresentation(powerofattorney).
*Ifyouareunabletoattendthemeetinginperson,pleaseexerciseyourvotingrightsusingeitherofthebelowmethods.
[Howtosubmityourvotingformbymail]Afterindicatingyouracceptanceorrejectionoftheagendaitemsonthevotingformenclosedwiththisnotice,returntheformtous.
[HowtoexerciseyourvotingrightsviatheInternet]1.
Whenusingacomputer(1)AccesstheWebsiteforExercisingVotingRightsathttp://www.
tosyodai54.
net(2)Afterreadingtherequestslistedonthevotingform,inputtheexerciseofcodeandpasswordfortheexerciseofvotingrights.
(3)Followtheinstructionsgivenonthescreentoexerciseyourvotingrights.
2.
Whenusingamobilephone(1)Thefollowingservicescanbeutilized.
Whenusingamobilephone,accesstheWebsiteforExercisingGeneralShareholderMeetingVotingRights(http://www.
tosyodai54.
net)andfollowtheinstructionsdisplayedonthescreentoexerciseyourvotingrightsinthesamewayasspecifiedin"1.
Whenusingacomputer"above.
-i-mode-EZweb-Yahoo!
Mobile(2)YourmobilephoneneedstobeequippedwithanSSLcommunicationsfunctionforsecureencryptedcommunications.
3.
Pleasenotethatshareholdersaretobearanyandalltelecommunicationscharges,includingcallcharges,andconnectionchargestobepaidtoInternetserviceproviderswhenaccessingtheWebsiteforExercisingVotingRights.
4.
Intheeventthatashareholderexercisesavotingrightonmultipleoccasions,theCompanywilltreattheshareholder'sfinalvoteastheeffectiveexerciseofthevotingright.
PleasedirectanyenquiriesyoumayhaveconcerningtheexerciseofvotingrightsviatheInternetto:Shareholders'RegisterManager:TokyoSecuritiesTransferAgentCo.
,Ltd.
Tel:0120-88-0768(OnlyinJapan,/Toll-freewithinJapan)Operatinghours:9:00a.
m.
to9:00p.
m.
weekdays(JST:excludingSaturdays,Sundaysandholidays)[ToAllInstitutionalInvestors]Intheeventthatyouapplyfortheuseoftheplatformforelectronicexerciseofvotingrights(theso-calledTSEplatform)operatedbyICJ,youmayuseitasyourelectronicmethodforexercisingvotingrightsattheCompany'sGeneralMeetingsofShareholders,inadditiontotheabove-mentionedelectronicmethodviatheInternet.
4BusinessReportforthe56thterm(January1toDecember31,2010)ShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATION5BusinessReport(January1toDecember31,2010)1.
MattersConcerningtheCurrentStatusoftheSumidaGroup(1)Businessconditionsforthefiscalyearunderreview(i)ProgressandresultsofthebusinessTheglobaleconomyin2010sawadramaticrecoveryindemandforautomobilesandotherproductsespeciallyinemergingnationsincludingChinaandIndia.
Thiswasthankstothepublicpoliciestakenbythegovernmentsofmanycountriesinthewakeofthefinancialcrisis,suchastheeconomicstimulusmeasuresandtaxcuts;theyhadafavorableeffectonthemarket.
Intheelectronicpartsindustry,thesteadydemandfordigitaldevices,includingpersonalcomputers,flatscreenTVs,HDDsandcellularphonescontinuedinChinaandotheremergingnationsinAsia.
Afavorablerecoveryindemandforautomotiveandindustrialequipmentwasalsoobserved.
Further,high-endproducts,includingsmartphonesandtabletPCssawstrongergrowththanexpected.
Givensuchcircumstances,theSumidaGroupintegratedbusinessdevelopmenteffortsofthegroupcompanieslocatedovertheworldandpursuedtherealizationofsynergyineveryareaincludingdevelopment,productionandsalesfromaglobalpointofview.
Aspartofthe"SumidaSilkRoad"strategy,strengtheneditsproductionsystemsbynewlyestablishingsatelliteplantsinHaiPhong,VietnamandHunanandJiangxi,Chinaduringthecurrentfiscalyear.
Italsopushedforwardwithefficientoperationsinthemanufacturingbases,bymeanssuchascuttinglaborcostsandreducingmanufacturingexpenses.
Overallnetsalesforthecurrentfiscalyearincreasedby22.
4%to53,445millionyenfromthepreviousfiscalyear.
Operatingincomeamountedto3,569millionyen(operatinglossof233millionyenforthepreviousfiscalyear)duetotheincreaseofrevenue,aswellasfromtheeffectsofbusinessstructureimprovementbyreducingfixedcostsandtakingothermeasures,andtheeffectsofproductivityimprovementbyreviewingproductionsystems.
Ordinaryincomeamountedto2,241millionyen(ordinarylossof773millionyenforthepreviousfiscalyear)aftertherecordingofinterestexpensesinnon-operatingexpenses,andnetincomeamountedto2,210millionyen(netlossof2,009millionyenforthepreviousfiscalyear).
Thefollowingisthebusinessperformanceinthecurrentfiscalyearbysegment.
TheSumidaGroupiscomposedoftheAsiaPacificBusiness,EUBusiness,andEnvironment/EnergyBusiness.
I.
AsiaPacificBusinessSalesattheAsiaPacificBusinessincreasedby22.
5%yearonyearto29,536millionyenowingtosteadydemandforautomotivedevicesandindustrialequipment.
Operatingincomeincreasedby76.
7%to4,648millionyenduetohighersalesandfromtheeffectsofproductivityimprovement,achievedbyreviewingproductionsystems.
II.
EUBusinessSalesattheEUBusinessincreasedby23.
8%yearonyearto18,688millionyenthankstosteadybusinessforautomotivedevicesandindustrialequipment,despitetheongoingstrong6yenandweakeuro.
Anoperatingincomeof1,368millionyenwasrecordedforthecurrentfiscalyear,comparedwithanoperatinglossof727millionyenforthepreviousfiscalyear.
III.
Environment/EnergyBusinessSalesattheEnvironment/EnergyBusinessincreasedby17.
4%yearonyearto5,220millionyenowingtothesteadybusinessofpowerconditionerequipmentrelatingtorenewableenergy.
AsaresultofbusinessreconstructionactivitiestiedtotheSumidaGroup'spursuitofrealizingsynergyfromaglobalpointofview,operatingincomedecreasedby68.
7%yearonyearto86millionyen.
BusinessSegmentNetSales(millionyen)AsiaPacificBusiness29,536EUBusiness18,688Environment/EnergyBusiness5,220Total53,445(ii)FundprocurementDuringthecurrentfiscalyear,theGrouptookoutbankborrowingsandissuedbondstoprocurefunds.
Thebalancewas30,247millionyen,down1,839millionyenfromthepreviousfiscalyearend.
Additionally,borrowingcommitmentagreementshavebeenconcludedwithnineCompanies'financingbankstoraiseworkingcapitaleffectively.
Theunutilizedcommitmentpertainingtotheborrowingcommitmentasoftheendofthecurrentfiscalyearisshownasfollows:Totalborrowingcommitment:6,250millionyenBorrowingsoutstanding:2,358millionyenUnutilizedcommitment:3,891millionyen(iii)PlantandequipmentinvestmentTheGroupcontinuouslymakesinvestmentstoexpandfacilitiesandenhanceresearchanddevelopmentforrationalizationofproduction,qualityimprovementandincreasingdemand.
Forthecurrentfiscalyear,thetotalinvestmentamountedto2,303millionyen,includingconstantinvestmentsrelatedtothedevelopmentandmanufacturingofnewproducts.
(iv)Businesstransfers,absorption-typedemerger,andincorporation-typedemergerTherewerenorelevantissues.
(v)BusinessacceptancefromothercompaniesTherewerenorelevantissues.
(vi)Successioninrightsandobligationrelatedtothebusinessesofothercompaniesthroughmergerorspin-offbyabsorptionTherewerenorelevantissues.
7(vii)Acquisitionordisposalofshares,otherstakesorstockacquisitionrightsofothercompanies1)SUMIDAAGAftertheGroupfulfilleddemandofpurchasingsharesbyshareholders,thepercentageofitssharesheldbytheSumidaGroupincreasedto94.
3%from93.
9%.
Accordingly,theratioofshareholdinginsubsidiariesofthecompanybytheSumidaGroupalsoincreased.
2)SUMIDAELECTRONICVIETNAMCO.
,LTD.
Underthe"SumidaSilkRoad"strategywhoseaimistostrengthenandenhancecost-efficientproductionsystems,inJanuary2010,theCompanyestablishedSUMIDAELECTRONICVIETNAMCO.
,LTD.
ThisisasatelliteplantinHaiPhong,Vietnam.
TheCompanyrecordeditasaconsolidatedsubsidiary.
3)SUMIDAELECTRIC(CHANGDE)Co.
,Ltd.
Underthe"SumidaSilkRoad"strategywhoseaimistostrengthenandenhancecost-efficientproductionsystems,inMarch2010,theCompanyestablishedSUMIDAELECTRIC(CHANGDE)Co.
,Ltd.
ThisisasatelliteplantinHunan,China.
TheCompanyrecordeditasaconsolidatedsubsidiary.
4)SUMIDAELECTRIC(JI'AN)Co.
,Ltd.
Underthe"SumidaSilkRoad"strategywhoseaimistostrengthenandenhancecost-efficientproductionsystems,inJuly2010,theCompanyestablishedSUMIDAELECTRIC(JI'AN)Co.
,Ltd.
ThisisasatelliteplantinJiangxi,China.
TheCompanyrecordeditasaconsolidatedsubsidiary.
5)SumidaAmericaManufacturing,Inc.
SumidaAmericaManufacturing,Inc.
,whichwasaccountedforasaconsolidatedsubsidiaryinthepreviousfiscalyear,hasbeenexcludedfromthescopeofconsolidationsincethecurrentfiscalyearbecausetheliquidationofthecompanywascompleted.
(2)Summaryofassets,profitandlossesItem53rdTerm(endedDec.
2007)54thTerm(endedDec.
2008)55thTerm(endedDec.
2009)56th(Current)Term(endedDec.
2010)Netsales(millionyen)70,20955,73343,65253,445Netincome(loss)(millionyen)2,855(5,742)(2,009)2,210Netincome(loss)pershare(yen)149.
96(298.
91)(104.
57)115.
05Totalassets(millionyen)71,50960,81454,50449,410Netassets(millionyen)29,91814,70011,0688,848Netassetspershare(yen)1,486.
13718.
04545.
55433.
22Note:Netincome(loss)pershareiscalculatedbasedontheaveragenumberofsharesissuedineachfiscaltermandnetassetspershareiscalculatedbasedonthetotalnumberofsharesissuedattheendofeachfiscalterm.
Incalculatingnetincome(loss)pershareandnetassetspershare,treasurysharesareexcludedfromthetotalnumberofsharesissuedduringeachfiscaltermandfromthetotalnumberofsharesissuedattheendofeachfiscalterm.
8(3)Significantmattersoftheparentcompanyandsubsidiaries(i)RelationshipwiththeparentcompanyTherewerenorelevantissues.
(ii)Significantsubsidiaries(AsofDecember31,2010)CompanynameCapital(inthousand)VotingrightsoftheCompany(%)KeybusinessSumidaElectronicComponentsCo.
,Ltd.
50,000yen100ControloftheAsiaPacificbusinessSumidaElectricCo.
,Ltd.
450,000yen100(100)Manufacture,saleandresearch&developmentofcoilsSumidaCorporateServiceIncorporated25,000yen100ControlofGroupmanagementDongguanSumida(TaiPing)ElectricCo.
,Ltd.
305,000HongKongdollars100(100)ManufactureofcoilsSUMIDAELECTRIC(GUANGXI)Co.
,LTD.
17,562yuan100(100)ManufactureofcoilsSumidaElectric(H.
K.
)CompanyLimited245,000HongKongdollars100(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)SaleofcoilsSUMIDAEuropeGmbH25euro100ControloftheEuropeanoperationsSUMIDAComponentsGmbH105euro100(100)ManufactureandsaleofcoilsSUMIDAAG5,848euro94.
3(94.
3)IntermediateholdingcompanyofEuropeanoperationsSUMIDAComponents&ModulesGmbH25euro94.
3(94.
3)ControlofcoilbusinessandsaleofcoilsSUMIDAEMSGmbH25euro94.
3(94.
3)ControllingcompanyofEMSSUMIDALehestenGmbH1,100euro94.
3(94.
3)EMSSUMIDACOMPONENTSDEMEXICO,S.
A.
DEC.
V.
50Mexicopeso69.
7(69.
7)ManufactureofcoilsSUMIDAROMANIAS.
R.
L.
2,791euro94.
3(94.
3)Manufactureofcoils9CompanynameCapital(inthousand)VotingrightsoftheCompany(%)KeybusinessSUMIDAelectronicShanghaiCo.
,Ltd.
37,904yuan94.
3(94.
3)ManufactureandsaleofcoilsSUMIDASLOVENIJA,d.
o.
o.
503euro69.
7(69.
7)ManufactureofcoilsvogtronicsGmbH25euro69.
7(69.
7)ManufactureandsaleofcoilsSUMIDAflexibleconnectionsGmbH26euro100(100)ManufactureandsaleofflatcablesSUMIDAFLEXIBLECONNECTIONSROMANIAS.
R.
L.
156euro100(100)ManufactureandsaleofflatcablesEiwa(Thailand)Co.
,Ltd.
70,000baht100(100)DevelopmentandmanufactureofpowerelectronicsrelatedcoilsEIWA(HK)COMPANYLIMITED52U.
S.
dollars100(100)DevelopmentandmanufactureofpowerelectronicsrelatedcoilsISMARTGLOBALLIMITED25,308euro100IntermediateholdingcompanySumidaFinanceB.
V.
20euro100FinancialcontrolcompanySUMIDAELECTRONICVIETNAMCO.
,LTD.
2,000U.
S.
dollars100(100)ManufactureofpowerelectronicsrelatedcoilsSUMIDAELECTRIC(CHANGDE)CO.
,LTD.
8,796yuan100(100)ManufactureofcoilsSUMIDAELECTRIC(JI'AN)CO.
,LTD.
8,723yuan100(100)ManufactureofcoilsNote:Figuresshowninparenthesesinthecolumnofvotingrightsarethepercentagesheldindirectly.
(4)Issuestoaddress(i)SustainablegrowthandmaintenanceofprofitabilityTheSumidaGroupwillsteadilyexecutethefollowingstrategicinitiativeslistedinthenewMid-TermBusinessPlan(three-yearplan)thatstartedinthefiscaltermendedDecember2010.
Theaimistosustaingrowthandmaintainandimproveprofitabilitybyenhancingexistingbusinesses,realizingsynergyintheGroup,andfosteringgrowththroughM&Asandbusinesstie-ups.
1)Furtherstrengtheningoforganizationalstructureunderthe"GlobalOneSumida"conceptTheaimistointegratebusinessdevelopmenteffortsofthegroupcompanieslocatedovertheworldandconcentratetheirenergiesongrowingmarkets.
TheCompanywillembodyitspursuitofsynergyineveryareaincludingdevelopment,production,andsalesfromaglobalpointofviewbymakingfurthereffortsinthefollowingfiscalyears.
2)Furtherprogressofthe"SumidaSilkRoad"strategyTheCompanywillstrengthenandenhanceitscost-efficientproductionsystemsandestablishalogisticsnetworkthatcanquicklyrespondtoworldwidecustomerneeds.
3)StrengtheningofhumanresourcedevelopmentTheCompanywilldevelophumanresourcesthatformthefoundationofsustainablegrowth,andfosterhumanresourcestobecomeatrulyexcellentcompanybyfullydisseminatingitsmanagementphilosophythroughouttheGroup.
10Inaddition,issuestobeaddressedinrespectivemarketareasfollows:1)ConsumerelectronicsmarketTheCompanywillplaceitsprioritiesonandpouritsresourcesintothegoodsthatareexpectedtogrowquicklyinthenextfewyears,whiledevelopingitssupplychaintomeetshorteningleadtimesanddownwardcostpressurefromconsumers.
2)AutomotivemarketTheCompanywillmaintainandincreasethemarketsharesofitsmarketleadingproducts(ABScoils,Xenonigniters,keylessantennas),whileproactivelypreparingthenext-generationmodels.
3)OtherindustrialmarketsTheCompanywillimproveitspresenceinmarketswithgreatergrowthpotential,suchasrenewableenergyandmedicalgoods,bycooperatingwithoracquiringcompanieswithadvancedandcomplementarytechnologiesandnewproductlines.
(ii)SpeedyandflexiblemanagementinresponsetochangesinbusinessenvironmentAmoremobileandflexiblemanagementattitudeisrequiredtoappropriatelykeepupwiththedrasticallychangingbusinessenvironment.
TheCompanystrivestospeeduptheexecutionofoperationsthroughouttheGroupbysubstantiallyassigningauthoritytotheexecutiveofficersunderthepropercorporategovernancesystemasacompanywithcommittees,alwaysreviewtheprofitabilityofeachbusiness,andefficientlyallocateresourcesbydrasticallyscalingdownthelessprofitablebusinessesandfocusingonthemoreprofitableones.
TheCompanywillpressaheadwithselectionandconcentrationofitsbusinessesbyconsideringwhethertodevelopandcommercializenewproductsonthehorizonbeyondnewMid-TermBusinessPlanandpursuespeedyandflexiblemanagementthatcanaccommodateenvironmentalchange.
(iii)CorporategovernanceThebasicsoftheCompany'scorporategovernancearetomaintaintransparencyandefficiencyofmanagement,meettheexpectationsofstakeholdersandcontinuouslyimprovethecorporatevalue,whichitrecognizesasbeingoneofthemostimportantissuesforitsmanagement.
Inparticular,theroleofgovernanceunderasysteminwhich"execution"and"supervision"aresegregatedthroughdelegationofsubstantialauthorityforexecutingoperationsisextremelyimportant.
TheCompanyalwaystriestodevelopasysteminwhichbothdutiesfunctioneffectivelyandefficientlytorealizemoresuitablegovernance.
(iv)CorporatesocialresponsibilityUndertheexistingcircumstances,inwhichcompaniesneedtofulfilllegal,economicandsocialresponsibilitiesmorethanever,andinwhichtheyneedtoactivelycontributetosocietyandmakeconcreteactions,theGroupfulfillsitssocialresponsibilitiesbyperformingbusinessbasedonbasicperspectivessuchasintegrity,disciplineandcommonsense,andatthesametimemakesbroadeffortstofurtherenhancethetrustthatsocietyplacesinitthroughmeasuresincludingreinforcementofthelegalandcompliancefunctions,activecommitmenttoenvironmentalissuesandofferingofscholarships.
11(5)Majorbusinesslines(asofDecember31,2010)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,solenoidcoilsforairconditionerEUBusinessAntennacoils,sensorcoilmodules,ignitioncoilmodules,noisefilters,xDSLsplittermodules,DC/DCconvertertransformers,keylessentryantennacoils,Xenonigniter,Powersteeringcontrolunits,GPSantennas,anti-theftcontrolunits,dieselenginecontrolunits,powersuppliesEnvironment/EnergyBusinessHigh-frequencytransformers,high-frequencychokecoils,edge-wisecoils,stickcoils,motorcoilsforHDD,low-frequencytransformers,harmonicpreventivereactors,reactors,commonmodecoils(6)MajorbusinessofficesoftheSumidaGroup(asofDecember31,2010)Headquarters:Chuo-ku,Tokyo(theCompany)BusinessSupervisingCompanies:SumidaElectronicComponentsCo.
,Ltd.
(Chuo-ku[Tokyo]),SUMIDAEuropeGmbH(Germany),SUMIDAAG(Germany),SumidaCorporateServiceIncorporated(Chuo-ku[Tokyo]),SumidaFinanceB.
V.
(Netherlands)Domesticsalesoffices:SumidaElectricCo.
,Ltd.
(Chuo-ku[Tokyo],Osaka,Nagoyaandotherfouroffices)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),Eiwa(Thailand)Co.
,Ltd.
(Thailand)Domesticproductionbases:SumidaElectricCo.
,Ltd.
(Ueda-shi[Nagano],Mutsu-shi[Aomori])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),Eiwa(Thailand)Co.
,Ltd.
(Thailand),EIWA(HK)COMPANYLIMITED(HongKong),SUMIDAFLEXIBLECONNECTIONSROMANIA12S.
R.
L.
(Romania),SUMIDAELECTRONICVIETNAMCO.
,LTD.
(Vietnam),SUMIDAELECTRIC(JI'AN)CO.
,LTD.
(China),SUMIDAELECTRIC(CHANGDE)CO.
,LTD.
(China)DomesticR&Dcenters:SumidaElectricCo.
,Ltd.
(Chuo-ku[Tokyo],Natori-shi[Miyagi],Komoro-shi[Nagano])OverseasR&Dcenters:SumidaElectric(H.
K.
)CompanyLimited(HongKong),DongguanSumida(TaiPing)ElectricCo.
,Ltd.
(China),SUMIDAComponentsGmbH(Germany),SumidaComponents&ModulesGmbH(Germany),vogtronicsGmbH(Germany),SUMIDAelectronicShanghaiCo.
,Ltd.
(China),SUMIDAflexibleconnectionsGmbH(Germany)(7)Employees(asofDecember31,2010)(i)EmployeesoftheSumidaGroupBusinesssegmentsNumberofemployeesChangesfromtheendofthepreviousfiscalyearAsiaPacificBusiness15,298Increaseby695EUBusiness2,522Decreaseby19Environment/EnergyBusiness2,042Decreaseby59Company-wide(common)141Increaseby3Total20,003Increaseby620Notes:1.
ThenumberofemployeesisthenumberofpersonswhoengageinworkinSumidaGroup.
2.
"Company-wide(common)"indicatesthenumberofemployeespostedinSumidaCorporateServiceIncorporatedwhichcarriesoutaheadquarterandsupportfunction,inSUMIDASERVICECOMPANYLIMITED,SumidaFinanceB.
V.
andintheServiceDepartmentofSumidaElectricCo.
,Ltd.
3.
ThenumberofemployeesintheAsianPacificBusinessincreasedby695fromtheendofthepreviousfiscalyear.
Thiswasattributabletotheincreaseinpersonneltorespondtostrongerdemandinthemarket.
ThenumberofemployeesintheEnvironment/EnergyBusinessdecreasedby59fromtheendofthepreviousfiscalyear.
Thiswasattributabletothebaseconsolidationandorganizationalrestructuring.
4.
Thenumberofemployeesincludesthoseintheconsignedprocessingcompanies.
(ii)EmployeesoftheCompanyTheCompanyisapureholdingcompanyandithasnoemployees.
(8)Majorlenders(asofDecember31,2010)LendersAmountborrowed(millionyen)ResonaBank,Limited5,812SumitomoMitsuiBankingCorporation5,598MizuhoCorporateBank,Ltd.
5,315BankofTokyo-MitsubishiUFJ,Ltd.
5,281(9)PolicyondeterminationofdividendfromsurplusTheCompanyconsidersthereturnofprofitstoitsshareholdersasaprioritybusinessissue.
The13mid-andlong-termpolicyoftheCompanyistomaintainstabledividendpaymentsdependingonitsconsolidatedbusinessresults,whileexpandingthenecessaryinternalreservestoboostitsfuturebusinessandkeepupwiththechangingmanagementenvironment.
TheCompanyshalldecideonthebaseamountofannualdividendatthebeginningofthefiscalyearinaccordancewiththeannualbusinessplanandbasicdividendpayoutratio(25–30%)anddivideitintoquarterstopayonaquarterlybasis.
However,inordertoensurestabledividends,thebaseamountofannualdividendshallbe20yenormorepershare.
Inaddition,inordertohavedividendsreflecttheconsolidatedbusinessresults,ifthedividendamountcalculatedwithconsolidatednetincomeandbasicdividendpayoutratioexceedsthebaseamountofannualdividend,itistheCompany'spolicytoaddtheexcessamounttotheannualdividendwhenpayingdividendsforthefourthquarter.
Regardingtheannualdividendinthecurrentfiscalyear,theCompanydecidedtosetthebaseamountofannualdividendat20yenpershareatthebeginningofthefiscalyear.
Accordingly,theCompanypaid5yenineachthree-monthtermfromthefirstquartertothethirdquarter.
Inthefourthquarter,becausethedividendamountcalculatedwithconsolidatednetincomeandbasicdividendpayoutratioexceededthebaseamountofannualdividend(20yen),theCompanydecidedtopay10yenafteraddingtheexcessamount.
Consequently,theannualdividendtotaled25yen.
DateofBoardofDirectorsresolutionTermTotalamountofdividends(millionyen)Dividendpershare(yen)RecorddateDateofcommencementofpaymentApril26,2010The1stquarter965.
00March31,2010May21,2010July29,2010The2ndquarter965.
00June30,2010August23,2010October28,2010The3rdquarter965.
00September30,2010November22,2010February18,2011The4thquarter19210.
00December31,2010March4,2011Note:PursuanttoArticle459oftheCompaniesAct,theCompanystipulatesintheArticlesofIncorporationthatitshallbeentitledtoallocatedividendsfromsurplusonpredeterminedrecorddates(March31,June30,September30andDecember31)byaresolutionoftheBoardofDirectors.
(10)OtherimportantmattersconcerningtheSumidaGroupTherearenorelevantissues.
142.
MattersConcerningtheCompany(asofDecember31,2010)(1)SharesoftheCompany(i)Numberofsharesissuable:70,000,000shares(ii)Totalnumberofsharesissued:19,944,317shares(includingtreasurystock)(iii)NumberofshareholdersasofDecember31,2010:6,742(iv)Majorshareholders(top10shareholders,excludingtreasurystock)NameofshareholdersNumberofstockheld(thousandshares)Ratioofthenumberofstockheld(%)YawataBuildingCo.
,Ltd.
5,21027.
11JapanTrusteeServicesBank,Ltd.
1,8709.
73TheChaseManhattanBank7403.
85TheMasterTrustBankofJapan,Ltd.
6883.
58ShigeyukiYawata5612.
92StateStreetBankandTrustCompany4352.
26WaheiTakeda3711.
93TheNomuraTrustandBankingCo.
,Ltd.
(Trustaccount)3251.
69CreditSuisseSecurities(Europe),Limited.
2921.
52NipponLifeInsuranceCompany2601.
35Note:Theratioofthenumberofstockheldhasbeencalculatedexcludingtreasuryshares(731,940shares).
(2)MattersconcerningtheCompany'sstockacquisitionrights(i)StockacquisitionrightsgrantedtoandheldbytheCompany'sofficersincompensationforexerciseoftheirdutiesTherewerenorelevantissues.
(ii)StockacquisitionrightsgrantedtoemployeesincompensationforexerciseoftheirdutiesduringthecurrentfiscalyearTherewerenorelevantissues.
(iii)OtherimportantmattersconcerningstockacquisitionrightsTherewerenorelevantissues.
15(3)MattersconcerningcorporateofficersoftheCompany(i)Directorsandexecutiveofficers(asofDecember31,2010)PositionattheCompanyNameResponsibilityattheCompanyandimportantconcurrentoccupationsorpositionsatothercompaniesDirector,RepresentativeExecutiveOfficerandCEOShigeyukiYawataChairmanoftheBoardofDirectors,StrategyCommittee,andRiskManagementCommitteeRepresentativeDirector,SUMIDAEuropeGmbHDirector,RepresentativeExecutiveOfficerandDeputyCEOChiuKaSheungMemberoftheRiskManagementCommitteeRepresentativeDirector,SumidaElectronicComponentsCo.
,Ltd.
RepresentativeDirector,SUMIDAEuropeGmbHDirectorRobertE.
PattersonMemberoftheNominationCommittee,CompensationCommitteeandStrategyCommitteeManagingDirector,PeninsulaVenturesOutsideDirector,mondoBIOTECHholdingAGDirectorAshokB.
MelwaniMemberoftheNominationCommitteeandStrategyCommitteeCEO,ABMelwaniPTE,Ltd.
DirectorKazuhideKondoMemberoftheAuditCommitteeDirectorMasatoTsuruChairmanoftheNominationCommitteeRepresentativeDirector,CEOandChairman,NOKCorporationDirectorKotaroMiyagiChairmanoftheCompensationCommitteeMemberoftheAuditCommittee,StrategyCommitteeandRiskManagementCommitteeLeadIndependentDirectorDirectorUlrichRuetzMemberoftheCompensationCommitteeandStrategyCommitteeOutsideDirector,ProgressWerkOberkirchAGOutsideDirector,WüstenrotHoldingAGOutsideDirector,Wüstenrot&WürttembergischeAGDirectorMasaruHattoriChairmanoftheAuditCommittee,MemberoftheRiskManagementCommitteeOutsideCorporateAuditor,RyohinKeikakuCo.
,Ltd.
DirectorCharlesF.
MartinMemberoftheNominationCommitteeandStrategyCommitteeCEO,Martin&Company,Inc.
RepresentativeExecutiveOfficerandCFOSaburoMatsudaMemberoftheRiskManagementCommitteeRepresentativeDirector,SumidaFinanceB.
V.
RepresentativeExecutiveOfficer,PresidentTomoharuSusekiMemberoftheRiskManagementCommitteeRepresentativeDirectorandPresident,SumidaElectronicComponentsCo.
,Ltd.
ExecutiveOfficerHans-JoachimDittloffRepresentativeDirectorandPresident,SUMIDAEuropeGmbHExecutiveOfficerRyojiIwanagaRepresentativeDirectorandPresident,SumidaCorporateServiceIncorporatedNotes:1.
Messrs.
RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetz,16MasaruHattoriandCharlesF.
MartinareoutsidedirectorssetforthinArticle2,Item15oftheCompaniesAct.
2.
Eight(8)outsidedirectors,RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetz,MasaruHattoriandCharlesF.
Martin,havebeendesignatedasindependentdirectorsoftheCompanyinaccordancewiththerulesoftheTokyoStockExchangeandtheirnameshavebeennotifiedtothesaidstockexchange.
3.
Asidefromstatutorycommittees(Nomination,AuditandCompensationCommittees),theCompanyhasvoluntarilysetupaStrategyCommitteeandaRiskManagementCommittee.
4.
AlloutsidedirectorsholdvoluntaryIndependentDirectorsmeetingsonregularbasis.
5.
Mr.
KazuhideKondo,memberoftheAuditCommittee,isacertifiedpublicaccountant,whileMr.
MasaruHattori,memberoftheAuditCommittee,hasyearsofexperienceintheaccountingsectionofORIXCorporation.
Bothmembersthushavegoodknowledgeoffinanceandaccounting.
(ii)DirectorswhoretiredduringthisfiscalyearNameDateofretirementReasonforretirementPositionandresponsibilityattheCompanyandimportantconcurrentoccupationsorpositionsatothercompaniesatthetimeofretirementTadakazuKoizumiMarch20,2010ExpirationofhistermofofficeDirector(ChairmanoftheAuditCommittee),Outsidecorporateauditor,DataApplicationsCo.
,Ltd.
HideoKamoshitaMarch20,2010ExpirationofhistermofofficeDirector(iii)PolicytodeterminetheamountofcompensationfordirectorsandexecutiveofficersbytheCompensationCommittee1.
Scopeofdecisionandextentofdisclosure"Theamountofindividualcompensationfordirectorsandexecutiveofficers"thattheCompensationCommitteedefinesanddisclosesshallbethetotalamountofcompensationpaidbytheSumidaGroupinordertoenhanceitstransparency.
Itshallbedisclosedseparatelyfordirectorsandexecutiveofficers.
2.
Directors'compensationThedirectors'compensationshallbedeterminedbyreflectingthepositionandresponsibilityofeachdirector,andinconsiderationoftheeconomictrendsandthebusinessenvironmentoftheCompany.
Directors'compensationiscomposedofthefollowingfiveelementsandthiswillnotbepaidtothosewhoserveasexecutiveofficerconcurrently.
1)BasiccompensationCompensationfortheresponsibilitiesasdirector(includingthecompensationfortheresponsibilitiesofthemembersoftheNominationandCompensationCommittees)2)CompensationofAuditCommitteemembersCompensationfortheresponsibilitiesasthememberoftheAuditCommittee3)CompensationofStrategyCommitteemembersCompensationfortheknowledgeandinsightprovidedbythememberoftheStrategyCommittee4)CompensationofLeadIndependentDirectorCompensationfortheresponsibilitiesasLeadIndependentDirector5)OverseasdirectorcompensationCompensationfordirectorsresidingoverseas173.
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)PensionplansTheCompanyshallgrantthiscompensationasadditionalbenefittopublicpensioninconsiderationoftheirserviceperiodinordertohelpeligibleretiredexecutiveofficers(startingwiththoseaged68orolder)havestablelivesafterretirement.
(iv)Totalamountofcompensationpaidtodirectorsandexecutiveofficers(Period:January1toDecember31,2010)BasiccompensationShort-termincentiveLong-termincentivePensionplanTotalItemNumberofpayees(millionyen)(millionyen)(millionyen)(millionyen)(millionyen)Executiveofficers62702345063619Directors25–––5Outsidedirectors892–––92Total163672345063716Notes:1.
AsoftheendofthisfiscalyeartheCompanyhassixexecutiveofficers,twodirectors,andeightoutsidedirectors.
Astwoofthesixexecutiveofficersserveasdirectorsconcurrently,thetotalnumberofofficersisfourteen.
Directors'compensationarenotpaidtothosewhoconcurrentlyserveasexecutiveofficeranddirector,andtherefore,theyareincludedinthefiguresshownintherowofexecutiveofficersandexcludedfromthefiguresindicatedintherowofdirectors.
TheaboverowofdirectorsindicatesamountspaidduringtheperiodfromJanuarytoMarch2010totwodirectorswhoretiredattheendofthe55thAnnualGeneralMeetingofShareholders,whichwasheld18onMarch20,2010.
2.
ThefiguresareconsolidatedcompensationoftheGroup.
CompensationrelatingtotheCompanyconsistsof114millionyenforsixexecutiveoffices,5millionyenfortwodirectorsand92millionyenforeightoutsidedirectors.
3.
Long-termincentivecompensationPhantomstocksdependingonthepositionsoftheexecutiveofficersforthenextfiscalyearshallbegranted,withunderlyingassetscalculatedbymultiplyingthetotalamountofdividendforthisfiscalyearbytheratedesignatedbytheCompany.
4.
Thecellsofdirectorsandoutsidedirectorsinthebasiccompensationrowindicatethesumofbasiccompensation,compensationofAuditCommitteemembers,compensationofStrategyCommitteemembers,compensationofLeadIndependentDirectorsandcompensationofoverseasdirectors.
5.
Inadditiontotheabovecompensations,theGrouppaidfringebenefitstotaling24millionyen(including7millionyenbornebytheCompany)toeligibleexecutiveofficers.
(v)Mattersconcerningoutsidedirectors1.
ImportantconcurrentoccupationsorpositionsatothercompaniesThisisasdescribedinthelistof(i)directorsandexecutiveofficersabove.
TherearenobusinessrelationshipsbetweentheCompanyandothercompanieswheretheyholdtheadditionalposts.
2.
Relationshipswithspeciallyrelatedcompaniesincludingmainclients1)NoneoftheoutsidedirectorshaveeverservedasbusinessexecutorsoftheCompanyoritsspeciallyrelatedcompanies.
2)NoneoftheoutsidedirectorsarerelativeswithinthethirddegreeofrelationshipwithdirectorsandexecutiveofficersoftheCompany.
3.
Mainactivitiesduringthecurrentfiscalyear1)AttendanceofoutsidedirectorsNameTheBoardofDirectorsmeetingsAuditCommitteemeetingsNominationCommitteemeetingsCompensationCommitteemeetingsStrategyCommitteemeetingsRiskManagementCommitteemeetingsRobertE.
Patterson5/62/26/65/5AshokB.
Melwani5/62/24/5KazuhideKondo6/611/11MasatoTsuru5/62/2KotaroMiyagi6/69/96/65/54/4UlrichRuetz5/66/65/5MasaruHattori5/611/114/4CharlesF.
Martin5/51/14/4Notes:1.
TheCompanyestablishedtheRiskManagementCommittee.
MembersincludetheLeadIndependentDirectorandChairmanoftheAuditCommitteeaswellasexecutiveofficersandtheirstaffmembers.
2.
Mr.
KotaroMiyagiwasappointedasamemberoftheAuditCommitteeonMarch20,2010.
TheabovefigureindicateshisattendanceatAuditCommitteemeetingsthatwereheldafterhisappointment.
3.
Mr.
CharlesF.
Martinwasappointedasdirector,amemberoftheNominationCommitteeandamemberoftheStrategyCommitteeonMarch20,2010.
TheabovefigureindicateshisattendanceattheBoardofDirectorsmeetings,NominationCommitteemeetingsandStrategyCommitteemeetingsthatwereheldafterhisappointment.
192)Statementsofeachoutsidedirector(a)Mr.
RobertE.
PattersonAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsonatimelybasis,mainlyfromthestandpointofalegalexpert,inconsiderationofactualmodelofU.
S.
corporategovernance.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofdiscussingandactualizingthelineupandcompositionoftheBoardandexecutiveofficersappropriateforthebusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
(b)Mr.
AshokB.
MelwaniAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutiveofanAsiancompany.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofdiscussingandactualizingthelineupandcompositionoftheBoardandexecutiveofficersappropriateforthebusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
(c)Mr.
KazuhideKondoAtthemeetingsoftheBoardofDirectors,Mr.
Kondomadenecessaryremarksindeliberationsasappropriate,mainlyfromtheperspectiveofafinancialandaccountingexpert.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberations,fromtheperspectiveofpromotingcompliancemanagementthroughauditsandleadingittoenhancethecorporatevalue.
(d)Mr.
MasatoTsuruAtthemeetingsoftheBoardofDirectors,hemadenecessaryandtimelyremarksindeliberations,mainlyfromapointofviewofabusinessexecutiveandbasedontheknowledgeonautomobileindustry.
20AschairmanoftheNominationCommittee,heledhearingsofbillsintermsofdiscussingandactualizingthelineupandcompositionoftheBoardandexecutiveofficersappropriateforbusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
Hedecidedcandidatesfordirectorsandrecommendedcandidatesforexecutiveofficers.
(e)Mr.
KotaroMiyagiAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheviewpointofabusinessexecutiveandbasedontheknowledgeonelectricandelectronicsindustry.
AschairmanoftheCompensationCommittee,heledthedeliberationsfromtheperspectiveofdeterminingfairlyandproperthecompensationbasesfordirectorsandexecutiveofficers,anddefinesthepolicyonthedetailsandamountofindividualcompensationreceivedbydirectorsandexecutiveofficers.
AttheAuditCommitteemeetings,hemadenecessaryandtimelyremarksindeliberations,fromtheperspectiveofpromotingcompliancemanagementthroughauditsandleadingittoenhancethecorporatevalue.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
AsLeadIndependentDirector,heleddeliberationsfairlyandequitably,andorchestratestheopinionsoftheIndependentDirectors.
(f)Mr.
UlrichRuetzAtthemeetingsoftheBoardofDirectors,Mr.
Ulrichmadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutiveofaEuropeancompany.
AttheCompensationCommitteemeetings,hemadenecessaryandtimelyremarksindeliberationsinordertofairlyandproperlydeterminethecompensationbasesfordirectorsandexecutiveofficers.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
(g)Mr.
MasaruHattoriAtthemeetingsoftheBoardofDirectors,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofabusinessexecutive.
AschairmanoftheAuditCommitteemeetings,heledthedeliberationsfromtheperspectiveofpromotingcompliancemanagementthroughauditsandleadingit21toenhancethecorporatevalue,andperformedauditsoftheBusinessReport,theNon-consolidatedFinancialStatements,theConsolidatedFinancialStatements,etc.
AttheRiskManagementCommitteemeetings,hemadenecessaryremarksinriskidentificationandplanningofrisk-aversemeasuresonatimelybasis.
(h)Mr.
CharlesF.
MartinAtthemeetingsoftheBoardofDirectorsheldafterhisappointmentonMarch20,2010,hemadenecessaryremarksindeliberationsfromtimetotime,mainlyfromtheperspectiveofafinancialstrategyexpert.
AttheNominationCommitteemeetings,hemadenecessaryremarksindeliberationsonatimelybasis,fromthestandpointofdiscussingandactualizingthelineupandcompositionoftheBoardandexecutiveofficersappropriateforthebusinessdevelopmentoftheCompany,andtheidealdirectorsandexecutiveofficersrequired.
AttheStrategyCommitteemeetings,hemadenecessaryandtimelyremarksforstrategyformulationtoenhancethecorporatevalueoftheCompanyandactualizetheMid-TermBusinessPlan.
3)IndependentDirectorsmeetingTheCompanyholdsIndependentDirectorsmeetingswithalloutsidedirectors.
AlloutsidedirectorsattendedtwomeetingsheldduringthistermtodiscussandreviewbettercorporategovernanceandtheroleoftheBoardofDirectorsfromthepositionofrepresentingshareholders.
4.
OutlineofliabilitylimitationcontractsInordertoobtainexcellentdirectorsfromoutside,theCompanyhasmadeprovisionslimitingliabilityfordamagesunderParagraph1,Article423oftheCompaniesActintheArticlesofIncorporationpursuanttotheprovisionsunderParagraph1,Article427ofthesaidlaw.
Inaccordancewiththeaforementionedprovisions,theCompanyhasenteredintoliabilitylimitationcontractswitheightoutsidedirectors.
ThelimitofliabilityfordamagesundersuchcontractshasbeensetattheminimumliabilityprovidedforunderParagraph1,Article425oftheCompaniesAct.
However,liabilitylimitationisappliedonlywhentherelevantoutsidedirectorshavecarriedouttheirduties,forwhichtheyaresupposedtoassumeliability,ingoodfaithorwithoutgrossnegligence.
5.
TotalamountofcompensationsreceivedfromthesubsidiariesTherewerenorelevantissues.
22(4)Independentauditors(i)Name:KPMGAZSALLCKPMGAZSALLCchangeditsnamefromKPMGAZSA&Co.
asofJuly1,2010asaresultofachangeinauditingfirmcategory.
(ii)Amountofcompensations:Amounttobepaid(millionyen)Amountofcompensationsforthecurrentfiscalyear90TotalamountofmoneyandotherpropertybenefitstobepaidbytheCompanyanditssubsidiariestoindependentauditors90Note:SinceintheauditagreementconcludedbetweentheCompanyandtheindependentauditor,compensationforauditsisnotclearlyclassifiedintocompensationbasedontheCompaniesActandcompensationinaccordancewiththeFinancialInstrumentsandExchangeLaw,andsincethatcompensationcannotsubstantiallybedividedeither,theitem"Amountofcompensationforthecurrentfiscalyear"showsthesumoftheseamounts.
(iii)AuditingofconsolidatedsubsidiariesImportantconsolidatedsubsidiariesoftheCompanythatarelocatedabroad,suchasSumidaElectric(H.
K.
)CompanyLimited,SUMIDATRADINGCOMPANYLIMITEDandSUMIDAAG,wereaudited(onlythosestipulatedbytheCompaniesActorFinancialInstrumentsandExchangeLaw[includingforeignlawsandregulationsthataretheequivalentoftheselaws])byeitheranauditingfirmoracertifiedpublicaccountant(includingthosewhopossessequivalentqualificationsabroad)whoisnotanindependentauditorattheCompany.
(iv)Detailsofnon-auditservicesTherewerenorelevantissues.
(v)Policyondeterminationofaregardingdismissalornon-reappointmentoftheindependentauditorWhentheAuditCommitteefindsthatanyoftheitemsinParagraph1,Article340oftheCompaniesActapplytotheindependentauditor,thatindependentauditorshallbedismissedwiththeconsentofallthecommitteemembers.
Inaddition,theAuditCommitteewillannuallydiscusswhethertoreappointtheindependentauditorinconsiderationofthequalityoftheauditperformedbytheindependentauditorandtheeffectivenessandefficiencyofitsauditperformance.
(5)Systemtosecurepropernessofoperations(i)Systemtoensurethatexecutiveofficersandemployeescomplywiththeapplicablelaws,regulationsandtheArticlesofIncorporationwithregardtotheirbusinessactivitiesTheGrouphasestablished"SumidaBusinessPrinciples(hereinafter,the'Principles')"whichembodiesthegroup'svision,managementprinciples,commitment,codeofconduct,corporategovernanceprinciples,andenvironmentpolicy.
RepresentativeexecutiveofficersshallbuildupasystemtomonitorforcompliancewhichenablestoensurethattheexecutiveofficersandemployeesperformtheirdutiesinaccordancewiththePrinciples.
Detailsareasfollows:(a)Alldirectors,officersandemployeesshallalwaysberemindedtounderstandandembody23thePrinciples.
ThePrinciples,whichiswritteninfourlanguages,Japanese,English,ChineseandGerman,isalwaysputonthecompany'sintranetandabookletisdistributedtoallmembersofthegroup,sothatitenablestheemployeestocheckandconfirmtheiractivitiesandbehaviorsasneeded.
TheCorporateGovernanceOffice*shallberesponsibleformonitoringandverifyinghowthePrincipleshavebeenobserved.
(b)Whilecomplianceisrecognizedasthebaseofcorporategovernance,SUMIDAregardsitinamoreproactivemannerratherthansimplylimitingtheissuetotheobservanceoflaw,withactivities,whicharedefinedinawiderscopeasCorporateSocialResponsibilities(CSR),basedonintegrity,anddisciplineandcommonsense.
TheCorporateGovernanceOfficeshallbeprimarilyresponsiblefortheenhancementofthegroup'soverallsystemandmonitoringitsactivities.
(c)TheCorporateGovernanceOfficeshallreportthesituationoftheaforementionedactivitiestotheRepresentativeExecutiveOfficersandtheAuditCommittee,andasummaryofwhichshallbereportedtotheBoardofDirectors.
(d)RepresentativeExecutiveOfficersshallverifytheeffectivenessofinternalcontrol,includingcompliance,andshallsendreportstotheBoardofDirectors.
*TheCorporateGovernanceOfficeisreporttoRepresentativeExecutiveOfficersandmadeupoftheRiskManagementOffice,ComplianceOfficeandInternalGovernmentTeam.
(ii)SystemregardingthepreservationandmanagementofinformationofExecutiveOfficers'businessactivitiesRepresentativeExecutiveOfficersshallcentrallymanageimportantinformationrelatedtoexecutionofdutiesthroughclarificationofthelevelofimportanceofinformationaswellastheperiodandplaceofsafekeeping,inaccordancewiththerulesandregulationsregardinginformationanddocumentmanagement.
DocumentsareavailabletotheDirectorsatalltimes.
(iii)SystemandregulationswithregardtoriskmanagementRepresentativeExecutiveOfficerandCEO,astheChiefRiskManagementOfficerwhotakesthehighestresponsibilityforriskmanagement,shallestablishtheRiskManagementCommittee,whichisresponsibleforoverseeingriskmanagement,andshallsetuptheRiskManagementOffice,whichisresponsibleforexecutingthedutiesofsaidCommittee,withintheCorporateGovernanceOffice.
TheRiskManagementOfficeshallsetouttheinternalriskmanagementrulesandtherebyidentifyandanalyzepotentialrisksandformulateandmanagepreventivemeasuresfromaglobalbusinessperspectivethroughplacementofariskmanagementmonitoringsysteminmajorbusinessbasesoftheGroupincludingoverseassites.
Intheeventthatariskmaterializes,theRiskManagementOfficeshalldiscusscountermeasurestominimizelosses.
Executiveofficersandemployeesshallperformtheirdutiesincompliancewiththerules.
TheCorporateGovernanceOfficeshallmonitorandevaluatetheimplementationoftheabove,andshallreportthesituationtotheRepresentativeExecutiveOfficersandtheAuditCommittee,anddeliverasummarytotheBoardofDirectors.
(iv)Systemtoensuretheeffectivenessandefficiencyofexecutiveofficers'businessactivitiesExecutiveofficersshallsetupasystembasedonthePrinciplestoensureaproperdecision-makingprocessandsurveillanceofindividualactivitiesandtherebyenhancetheoperatingefficiency.
Detailsareasfollows:24(a)EachRepresentativeExecutiveOfficershallsetupanAdvisoryBoardastheneedarises,withwhomtheyshallconsultandengageinsufficientdiscussionwhenmakingimportantdecisions.
(b)RepresentativeExecutiveOfficersshallsetoutregulationsfortheauthorityanddecision-makingprocessandconductregularreviewsofthesituation.
(c)RepresentativeExecutiveOfficersshallmakeregularreviewsoftheachievementandprogressofbusinessandensurefurtherproprietyandefficiencyofmanagementbygivingfeedbackoftheresultsofthereview.
(d)RepresentativeExecutiveOfficersshallensureaproperandquickdecision-makingprocessbysmoothlycollecting,analyzing,communicating,sharingandarchivingthenecessaryinformationonSUMIDA'sbusinessactivities.
(v)SystemtoensuretheproprietyofbusinessofthegroupconsistingoftheCompanyanditssubsidiariesSUMIDACorporationisaholdingcompanywithbusinessactivitiesconductedbyitsgroupcompanies.
Inlightofthis,DirectorsandExecutiveOfficersshallalwaysperformtheirdutieswiththeviewofgroupgovernance.
Inaddition,theCompanyperformsinternalauditsbyassigninginternalauditorsinmajorsubsidiariesandotherappropriateaffiliatesandhasanauditorofthebusiness-controllingcompaniesperformauditstoseehowthoseinternalauditsweredone.
TheCorporateGovernanceOfficeoverseescomplianceandriskmanagementoperationsandalsopreparesinternalauditreportswithreferencetoauditreportsreceivedfromtheauditorofthebusiness-controllingcompanies.
ThesereportsarethensubmittedtotheRepresentativeExecutiveOfficersandtheAuditCommittee.
TheAuditCommitteeshallcarryoutitsauditincooperationwithCorporateGovernanceOffice.
TheCorporateGovernanceOfficeshalltakechargeofinternalcontrolofnotonlytheCompany,butalsotheentireGroup.
(vi)SystemwithregardtoemployeeswhoassisttheAuditCommitteeandmattersconcerningtheindependenceofthoseemployeesfromexecutiveofficersTheCorporateGovernanceOfficeshallberesponsibleforthesecretariatoftheAuditCommittee.
Anydecisionswithregardtochangesortransfersofpersonnel,reorganizationoranyotherconsiderationsshallrequirethepriorapprovaloftheAuditCommittee.
(vii)SystemwherebyexecutiveofficersandemployeesreporttotheAuditCommitteeoritsmembersTheCorporateGovernanceOfficeshallsetouttherulesforexecutiveofficersandemployeestoreportthefollowingmatters,andtherebyreportthemtotheAuditCommittee.
AsummaryofthefollowingmattersshallbereportedtotheBoardofDirectors.
(a)Incidents,whichmaycausemateriallossesand/orgainsto,ormaterialdamageand/orbenefitto,theCompany(b)Whentherearisesanymaterialfactorpossibilitythereofinvolvingmisconductormalpractice,breachoflawsandregulationsorArticlesofIncorporationinrelationtotheexecutionofdutiesofthedirectorsorexecutiveofficers,suchfact(c)Monthlyaccountingstatementsonaconsolidatedbasis(d)Internalauditreport25(e)Monthlyreportsfromthemainoperatingdivisions(f)Otherimportantmatters(viii)SystemtoensuretheeffectivenessofauditsexecutedbytheAuditCommitteemembersToensuretheeffectivenessofauditexecutedbytheAuditCommitteemembers,thefollowingmattersshallbeperformed(a)TheCorporateGovernanceOfficeshallhavepriorconsultationswiththeAuditCommitteewhensettingouttheannualauditpoliciesandplans.
TheOfficeshallalsoreporttheprogressandresultsofinternalaudittotheAuditCommittee.
TheAuditCommitteemayrequesttheCorporateGovernanceOfficeforanadditionalauditifnecessary.
(b)IndependentauditorsshallexplaintotheAuditCommitteeitsauditingplanattheoutsetofthefinancialyearandreporttotheAuditCommitteetheprogressofitsinterimauditandtheend-termauditresults,etc.
Furthermore,theindependentauditorsmayhaveconsultationsanddiscussionswiththeAuditCommitteeifneeded.
(c)Inordertoensuretheindependenceofindependentauditorsfromtheexecutiveofficers,aswellastoguaranteetheimplementationoftheauditactivities,decisionsontheindependentauditors'compensationshallrequiretheAuditCommittee'spriorconsent.
(6)BasicpolicyregardingcontrolofacompanyTheCompanyhasnotspecificallydefinedabasicpolicyforthosewhocontrolthefinancialandbusinessguidelinesofacompany.
Note:Theamountsofmoneyandthenumbersofsharesdescribedinthisbusinessreportareroundeddowntothenearestunits.
26ConsolidatedandNon-consolidatedFinancialStatementsforthe56thterm(January1toDecember31,2010)ConsolidatedBalanceSheetConsolidatedStatementofIncomeConsolidatedStatementofChangesinShareholders'EquityNon-consolidatedBalanceSheetNon-consolidatedStatementofIncomeNon-consolidatedStatementofChangesinShareholders'EquityShigeyukiYawataDirector,RepresentativeExecutiveOfficerandCEOSUMIDACORPORATION27ConsolidatedBalanceSheetAsofDecember31,2010MillionsofyenASSETSCurrentassets:Cashanddeposits7,399Notesandaccountsreceivable-trade10,086Merchandiseandfinishedgoods3,853Workinprocess816Rawmaterialsandsupplies3,037Deferredtaxassets589Incometaxesreceivable305Other1,103Allowancefordoubtfulaccounts(22)Totalcurrentassets27,168NoncurrentassetsProperty,plantandequipmentBuildingsandstructures10,804Machinery,equipmentandvehicles22,573Tools,furnitureandfixtures3,811Land1,456Constructioninprogress511Accumulateddepreciation(26,044)Totalproperty,plantandequipment13,112Intangibleassets:Goodwill2,896Leaseholdright492Software68Other396Totalintangibleassets3,854Investmentsandotherassets:Investmentsecurities443Deferredtaxassets3,837Other903Allowancefordoubtfulaccounts(6)Totalinvestmentsandotherassets5,178Totalnoncurrentassets22,145DeferredassetsBusinesscommencementexpenses45Bondissuancecost51Totaldeferredassets96Totalassets49,41028ConsolidatedBalanceSheetAsofDecember31,2010MillionsofyenLIABILITIESCurrentliabilities:Notesandaccountspayable-trade3,995Short-termloanspayable19,073Currentportionofbonds1,960Currentportionoflong-termloanspayable2,723Accountspayable-other833Accruedexpenses1,470Incometaxespayable365Deferredtaxliabilities2Other893Totalcurrentliabilities31,318Noncurrentliabilities:Bondspayable2,115Long-termloanspayable4,376Provisionforretirementbenefits756Deferredtaxliabilities354Leaseobligations499Other1,141Totalnoncurrentliabilities9,243Totalliabilities40,561NETASSETSShareholders'equity:Capitalstock7,216Capitalsurplus7,029Retainedearnings6,951Treasurystock(1,524)Totalshareholders'equity19,673Valuationandtranslationadjustments:Valuationdifferenceonavailable-for-salesecurities33Foreigncurrencytranslationadjustment(11,384)Totalvaluationandtranslationadjustments(11,350)Minorityinterests525Totalnetassets8,848Totalliabilitiesandnetassets49,41029ConsolidatedStatementofIncomeYearendedDecember31,2010MillionsofyenNetsales53,445Costofsales41,191Grossprofit12,253Selling,generalandadministrativeexpenses8,683Operatingincome3,569Non-operatingincome:Interestanddividendsincome30Other92122Non-operatingexpenses:Interestexpenses599Foreignexchangelosses507Lossonvaluationofderivatives227Other1161,450Ordinaryincome2,241Extraordinaryincome:Gainonsalesofnoncurrentassets7GainonsalesofinvestmentsecuritiesOther008Extraordinarylosses:Lossonsalesandretirementofnoncurrentassets32Businessstructureimprovementexpenses40Impairmentloss94Other25193Incomebeforeincometaxes2,056Incometaxes-current460Incometaxes-deferred(702)Minorityinterestsinincome88Netincome2,21030ConsolidatedStatementofChangesinShareholders'EquityYearendedDecember31,2010(Millionsofyen)Shareholders'equityCapitalstockCapitalsurplusRetainedearningsTreasurystockTotalshareholders'equityBalanceasofDec.
31,20097,2167,0295,125(1,524)17,847ChangesofitemsduringtheperiodDividendsfromsurplus(384)(384)Netincome2,2102,210Purchaseoftreasurystock(0)(0)Disposaloftreasurystock(0)00Netchangesofitemsotherthanshareholders'equityTotalchangesofitemsduringtheperiod--1,826(0)1,826BalanceasofDec.
31,20107,2167,0296,951(1,524)19,673(Millionsofyen)ValuationandtranslationadjustmentsValuationdifferenceonavailable-for-salesecuritiesForeigncurrencytranslationadjustmentTotalvaluationandtranslationadjustmentsMinorityinterestsTotalnetassetsBalanceasofDec.
31,200927(7,394)(7,366)58611,068ChangesofitemsduringtheperiodDividendsfromsurplus(384)Netincome2,210Purchaseoftreasurystock(0)Disposaloftreasurystock0Netchangesofitemsotherthanshareholders'equity5(3,990)(3,984)(60)(4,045)Totalchangesofitemsduringtheperiod5(3,990)(3,984)(60)(2,219)BalanceasofDec.
31,201033(11,384)(11,350)5258,84831Non-consolidatedBalanceSheetAsofDecember31,2010MillionsofyenASSETSCurrentassets:Cashanddeposits1,478Notesreceivable-trade621Prepaidexpenses48Deferredtaxassets174Short-termloansreceivable3,218Incometaxesreceivable73Accountsreceivable-other920Other159Totalcurrentassets6,695NoncurrentassetsProperty,plantandequipmentBuildings875Structures22Machineryandequipment4Land503Totalproperty,plantandequipment1,406Intangibleassets:Telephonesubscriptionright3Software10Totalintangibleassets14Investmentsandotherassets:Investmentsecurities334Stocksofsubsidiariesandaffiliates35,052Long-termloansreceivable120Long-termprepaidexpenses16Deferredtaxassets980Insurancefunds520Other36Totalinvestmentsandotherassets37,062Totalnoncurrentassets38,482DeferredassetsBondissuancecost51Totaldeferredassets51Totalassets45,22832Non-consolidatedBalanceSheetAsofDecember31,2010MillionsofyenLIABILITIESCurrentliabilities:Short-termloanspayable15,480Currentportionofbonds1,900Currentportionoflong-termloanspayable2,492Accountspayable-other186Accruedexpenses92Depositsreceived2,518Totalcurrentliabilities22,670Noncurrentliabilities:Bondspayable1,750Long-termloanspayable4,143Totalnoncurrentliabilities5,893Totalliabilities28,564NETASSETSShareholders'equity:Capitalstock7,216Capitalsurplus7,029Legalcapitalsurplus7,029Retainedearnings3,935Legalretainedearnings264Otherretainedearnings3,671Generalreserve3,100Retainedearningsbroughtforward571Treasurystock(1,524)Totalshareholders'equity16,658Valuationandtranslationadjustments6Valuationdifferenceonavailable-for-salesecurities6Totalnetassets16,664Totalliabilitiesandnetassets45,22833Non-consolidatedStatementofIncomeYearendedDecember31,2010MillionsofyenOperatingrevenue708Operatingexpenses515Operatingincome192Non-operatingincome:Interestincome50Dividendsincome0Other1061Non-operatingexpenses:Interestexpenses301Foreignexchangelosses149Other68519Ordinaryloss265Extraordinarylosses:Lossonsalesofnoncurrentassets33Lossbeforeincometaxes268Incometaxes-current(137)Incometaxes-deferred(375)Netincome24434Non-consolidatedStatementofChangesinShareholders'EquityYearendedDecember31,2010(Millionsofyen)Shareholders'equityCapitalsurplusRetainedearningsOtherretainedearningsCapitalstockLegalcapitalsurplusTotalcapitalsurplusLegalretainedearningsGeneralreserveRetainedearningsbroughtforwardTotalretainedearningsTreasurystockTotalshareholders'equityBalanceasofDec.
31,20097,2167,0297,0292643,1007104,075(1,524)16,797ChangesofitemsduringtheperiodDividendsfromsurplus(384)(384)(384)Netincome244244244Purchaseoftreasurystock(0)(0)Disposaloftreasurystock(0)(0)00Netchangesofitemsotherthanshareholders'equityTotalchangesofitemsduringtheperiod139)(139)(0)(139)BalanceasofDec.
31,20107,2167,0297,0292643,1005713,935(1,524)16,658(Millionsofyen)ValuationandtranslationadjustmentsValuationdifferenceonavailable-for-salesecuritiesTotalvaluationandtranslationadjustmentsTotalnetassetsBalanceasofDec.
31,20092216,799ChangesofitemsduringtheperiodDividendsfromsurplus(384)Netincome244Purchaseoftreasurystock(0)Disposaloftreasurystock0Netchangesofitemsotherthanshareholders'equity444Totalchangesofitemsduringtheperiod44(134)BalanceasofDec.
31,20106616,66435AuditReportTheAuditCommitteehasauditedtheperformanceofdutiesbyDirectorsandExecutiveOfficersforthe56thtermfromJanuary1,2010toDecember31,2010.
Wereportthemethodsandtheresultsoftheauditasfollows.
1.
MethodsusedinauditsandcontentofauditsTheAuditCommitteemonitoredandverifiedtheresolutionsoftheBoardofDirectorsregardingtheorganizationofthesystemstipulatedin(b)and(e),Item1,Paragraph1ofArticle416oftheCompaniesActandthestatusofthesystembasedonsaidresolutions(internalcontrolsystems).
Wealsoinspectedincooperationwiththeinternalcontroldivisiontheprocessandthecontentofthedecisionmakingonthesignificantmeeting,thecontentofthemajorauthorizationdocumentsandotherimportantdocumentsrelatedtobusinessoperation,businessperformanceoftheExecutiveOfficers,andtheCompany'soperationandconditionofpropertyinaccordancewiththeauditingpoliciestheAuditCommitteeestablished,thesegregationofdutiesandothers.
Withrespecttosubsidiaries,theAuditCommitteetookstepstofacilitatecommunicationwiththedirectors,executiveofficersandcompanyauditorsofsubsidiariesand,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.
(Translation)362.
ResultsoftheAudit(1)ResultsofauditofBusinessReport(i)Inouropinion,theBusinessReportandsupportingschedulesfairlypresentthesituationoftheCompany,incompliancewiththeprovisionsofapplicablelawsandregulations,andtheArticlesofIncorporation.
(ii)NeitherimproperactionsintheexecutionofdutiesbyDirectorsandExecutiveOfficers,normaterialfactsinviolationoftheprovisionsofapplicablelawsandregulationsortheArticlesofIncorporation,werefound.
(iii)Inouropinion,thecontentoftheresolutionbytheBoardofDirectorsregardinginternalcontrolsystemswasappropriate,and,furthermore,nopointswerefoundtobepointedoutabouttheexecutionofdutiesbyDirectorsandExecutiveOfficerswithrespecttoexecutinginternalcontrolsystems.
(2)ResultsoftheauditofNon-consolidatedFinancialStatementsandsupportingschedulesInouropinion,theauditingmethodsusedbytheindependentauditor,KPMGAZSALLCandtheresultsofitsauditwereappropriate.
(3)ResultsoftheauditofConsolidatedFinancialStatementsInouropinion,theauditingmethodsusedbytheindependentauditor,KPMGAZSALLCandtheresultsofitsauditwereappropriate.
February10,2011AuditCommitteeSUMIDACORPORATIONMasaruHattori(Seal)MemberoftheAuditCommitteeKazuhideKondo(Seal)MemberoftheAuditCommitteeKotaroMiyagi(Seal)MemberoftheAuditCommitteeMessrs.
MasaruHattori,KazuhideKondoandKotaroMiyagiareoutsidedirectorsasstipulatedinArticle2,Item15andArticle400,Paragraph3oftheCompaniesAct.
37ReferenceMaterialsforAnnualGeneralMeetingofShareholdersAgenda:Appointmentoften(10)directorsThetermofofficeoften(10)directorswillexpireattheendofthisAnnualGeneralMeetingofShareholders.
TheCompanyrequeststheappointmentoften(10)directorsbasedonthedecisionoftheNominationCommittee.
Thecandidatesforthedirectors'positionsareasfollows.
Eight(8)ofthecandidatesfordirector,RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetz,MasaruHattoriandCharlesF.
MartinseekpositionsasoutsidedirectorsasstipulatedinArticle2,Paragraph3,Item7oftheOrdinanceforEnforcementoftheCompaniesAct.
No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany(Briefpersonalprofile)Nov.
1977Mar.
1988Mar.
1990Apr.
1991Mar.
1992Apr.
2003JoinedtheCompanyDirectoroftheCompanyRepresentativeDirectorandSeniorManagingDirectorRepresentativeDirectorandVicePresidentRepresentativeDirectorandPresidentDirector,RepresentativeExecutiveOfficerandCEO(Todate)(PositionanddutiesattheCompany)Director(ChairmanoftheBoardofDirectors),RepresentativeExecutiveOfficerandCEO,Chairman,StrategyCommitteeandRiskManagementCommittee1ShigeyukiYawata(October28,1951)(Importantconcurrentoccupationsorpositionsatotherorganizations)ManagingDirector,SUMIDAEuropeGmbH561,33138No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany(Briefpersonalprofile)Apr.
1983Dec.
1987Mar.
1996Jun.
2000Mar.
2001Jul.
2001Apr.
2003Jan.
2004Sep.
2010JoinedSumidaElectric(H.
K.
)CompanyLimitedBranchHeadoftheCompany,HongKongDirectoroftheCompanyManagingDirectorRepresentativeDirectorRepresentativeDirectorandCOODirector,RepresentativeExecutiveOfficerandCOORepresentativeExecutiveOfficerandGroupPresidentRepresentativeExecutiveOfficerandDeputyCEO(Todate)(PositionanddutiesattheCompany)Director,RepresentativeExecutiveOfficerandDeputyCEOMember,RiskManagementCommittee2ChiuKaSheung(October23,1957)(Importantconcurrentoccupationsorpositionsatotherorganizations)RepresentativeDirector,SumidaElectronicComponentsCo.
,Ltd.
ManagingDirector,SUMIDAEuropeGmbH60,500(Briefpersonalprofile)Dec.
1972Jan.
1978Nov.
1999Jan.
2001Apr.
2003Dec.
2007RegisteredAttorney,California,U.
S.
A.
JoinedGrahamJamesLLP(CurrentlySquire,SandersandDempseyLLP)RepresentativePartner,GrahamJamesLLPAdvisoryBoardoftheCompanyManagingDirector,PeninsulaEquityPartners(CurrentlyPeninsulaVentures)DirectoroftheCompanyResignedSquire,SandersandDempseyLLPRepresentativePartner(Todate)(PositionanddutiesattheCompany)Director,Member,NominationCommittee,CompensationCommitteeandStrategyCommittee3RobertE.
Patterson(September14,1942)(Importantconcurrentoccupationsorpositionsatotherorganizations)ManagingDirector,PeninsulaVenturesOutsideDirector,mondoBIOTECHholdingAG1,70039No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany(Briefpersonalprofile)Apr.
1989Sep.
1998Apr.
1999Nov.
1999Apr.
2003CEO,M.
B.
MelwaniPteLtd.
ResignedM.
B.
MelwaniCEOCEO,ABMelwaniPTE,Ltd.
AdvisoryBoardoftheCompanyDirector(Todate)(PositionanddutiesattheCompany)Director,Member,NominationCommitteeandStrategyCommittee4AshokB.
Melwani(November26,1958)(Importantconcurrentoccupationsorpositionsatotherorganizations)CEO,ABMelwaniPTE,Ltd.
11,097(Briefpersonalprofile)Mar.
1967May1996Jun.
2003Mar.
2004Jun.
2004Jun.
2008RegisteredasCertifiedPublicAccountantRepresentativePartner,OtaShowa&Co.
(CurrentlyErnst&YoungShinNihonLLC)ResignedOtaShowa&Co.
RepresentativePartnerDirectoroftheCompanyCorporateAuditor,AjinomotoCo.
,Inc.
ResignedAjinomotoCorporateAuditor(Todate)5KazuhideKondo(April1,1941)(PositionanddutiesattheCompany)Director,Member,AuditCommittee0(Briefpersonalprofile)Jun.
1985Jun.
1989Mar.
2005RepresentativeDirector,ChiefExecutiveOfficer,NOKCorporationRepresentativeDirectorandChairman,NOKCorporationDirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Chairman,NominationCommittee6MasatoTsuru(January11,1948)(Importantconcurrentoccupationsorpositionsatotherorganizations)RepresentativeDirector,CEOandChairman,NOKCorporation040No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany(Briefpersonalprofile)Mar.
1995Mar.
2001Mar.
2004Mar.
2006Director,CanonInc.
Full-TimeCorporateAuditor,CanonInc.
ResignedCanonFull-TimeCorporateAuditorDirectoroftheCompany(Todate)7KotaroMiyagi(June17,1940)(PositionanddutiesattheCompany)Director,Chairman,CompensationCommittee,Member,AuditCommittee,StrategyCommitteeandRiskManagementCommitteeLeadIndependentDirector2,900(Briefpersonalprofile)Feb.
1983Jan.
1994Oct.
1997Apr.
2003Mar.
2007Director,BERUGmbH(CurrentlyBERUAG)President,BERUGmbHCEO,BERUGmbHResignedBERUGmbHCEODirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Member,CompensationCommitteeandStrategyCommittee8UlrichRuetz(March15,1940)(Importantconcurrentoccupationsorpositionsatotherorganizations)OutsideDirector,ProgressWerkOberkirchAGOutsideDirector,WüstenrotHoldingAGOutsideDirector,Wüstenrot&WürttembergischeAG3,000(Briefpersonalprofile)Jul.
1974Jun.
2002Jun.
2005Jan.
2006Jan.
2008Mar.
2008May2008Jun.
2009JoinedOrientLeasingCo.
,Ltd.
(CurrentlyORIXCorporation)CorporateAuditor,FujiFireandMarineInsuranceCo.
,Ltd.
Director,FujiFireandMarineInsuranceCo.
,Ltd.
ExecutiveVicePresident,ORIXCorporationResignedORIXCorporationExecutiveVicePresidentDirectoroftheCompanyOutsideAuditor,RyohinKeikakuCo.
,Ltd.
ResignedFujiFireandMarineInsuranceDirector(Todate)(PositionanddutiesattheCompany)Director,Chairman,AuditCommitteeMember,RiskManagementCommittee9MasaruHattori(February12,1945)(Importantconcurrentoccupationsorpositionsatotherorganizations)OutsideAuditor,RyohinKeikakuCo.
,Ltd.
041No.
Name(Dateofbirth)Briefpersonalprofile,positionanddutiesattheCompany(Importantconcurrentoccupationsorpositionsatotherorganizations)NumberofsharesheldintheCompany(Briefpersonalprofile)May1988Apr.
1997Jul.
1999Apr.
2001Apr.
2008Dec.
2009Mar.
2010JoinedBankersTrustCompanyPrincipal,MergersandAcquisitions,Tokyo,Japan,BankersTrustCompanyJoinedDeutscheBankGroupManagingDirector,MergersandAcquisitions,Tokyo,Japan,DeutscheSecuritiesLtd.
RetiredfromDeutscheSecuritiesInc.
PresidentandCEO,Martin&CompanyInc.
DirectoroftheCompany(Todate)(PositionanddutiesattheCompany)Director,Member,NominationCommitteeandStrategyCommittee10CharlesF.
Martin(April21,1955)(Importantconcurrentoccupationsorpositionsatotherorganizations)PresidentandCEO,Martin&Company,Inc.
0Notes:1.
SumidaElectronicComponentsCo.
,Ltd.
andSUMIDAEuropeGmbHaresubsidiariesoftheCompany.
TheCompanyloanscapitaletc.
tothesesubsidiaries.
2.
TherearenospecialinterestrelationshipsbetweenthecandidatesandtheCompany.
3.
Eight(8)ofthecandidatesforoutsidedirectors,RobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetz,MasaruHattoriandCharlesF.
Martin,havebeendesignatedasindependentdirectorsoftheCompanyinaccordancewiththerulesoftheTokyoStockExchangeandtheirnameshavebeennotifiedtothesaidstockexchange.
4.
Two(2)ofthecandidatesfordirector,RobertE.
PattersonandAshokB.
Melwani,weremadeoutsidedirectors,startingfromthe51stfiscalyear,aftertheCompanyhadconsideredinterpretationoflawsandtheactualstateoftheirbusinessactivities.
Reasonsofappointment:Ten(10)ofthecandidatesfordirectorhavesufficientlyservedasdirectorswhomakeimportantmanagementdecisionsaswellassuperviseoperations.
TheCompanythereforerequeststhemtobeinthesameposition.
Reasonsfortheselectionofcandidatesforoutsidedirector,independenceasoutsidedirectorsandliabilitylimitationcontractswithoutsidedirectorsareasfollows.
(1)ReasonsfortheselectionofcandidatesforoutsidedirectorTheCompanyisacompanyemployingacommittee-basedcorporategovernancestructure,calledacompany-with-committees.
Atacompany-with-committees,theboardofdirectorsspecializesinsupervisingmanagement,whileacommitteemadeupofamajorityofoutsidedirectorsisestablishedtoimprovethetransparencyofmanagementandexecutiveofficersareinstalledasanorgantoworkfull-timefortheexecutionofoperations.
Thus,acompanywithcommitteesclearlyseparates"supervisionofmanagement"from"executionofduties"tomakethemfunctioneffectively.
Suchacompanygenerallyneedstoselectmultipleoutsidedirectors.
Tofurtherenhancethefunctionsoftheboardofdirectors,theCompanyistomakeoutsidedirectorsaccountforamajorityofdirectors,andherebyrequeststheappointmentofeight(8)outsidedirectors.
42(i)RobertE.
PattersonisaU.
S.
attorney,andhasservedasanoutsidedirectorofaU.
S.
corporationformanyyears.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedonhisknowledgeandexperienceasalegalexpert,whichhavebeenaccumulatedthroughhiscareer,andhisinsightintocorporategovernanceatU.
S.
corporationsandintotheU.
S.
market.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefiveyearsattheendofthisAnnualGeneralMeetingofShareholders.
(ii)AshokB.
MelwanihasmanagedacorporationinSingaporeforalongtime.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheAsianmarket.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefiveyearsattheendofthisAnnualGeneralMeetingofShareholders.
(iii)KazuhideKondoisacertifiedpublicaccountantandservedasanoutsidecorporateauditorofothercompanies.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheexpertiseandexperienceinfinancialaffairsandaccountingthathehasaccumulatedthroughouthiscareer.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbesevenyearsattheendofthisAnnualGeneralMeetingofShareholders.
(iv)MasatoTsuruhaslongengagedinthemanagementofNOKCorporation.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheautomobileindustry.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbesixyearsattheendofthisAnnualGeneralMeetingofShareholders.
(v)KotaroMiyagiservedasPresidentofoverseassubsidiariesofCanonInc.
,andDirectorandfull-timeCorporateAuditorofCanon.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheelectricandelectronicsindustry.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefiveyearsattheendofthisAnnualGeneralMeetingofShareholders.
(vi)UlrichRuetzhasengagedinthemanagementofBERUAGofGermanyforalongtime.
HecurrentlyservesasoutsidedirectorofEuropeancorporations.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,andhisinsightintotheautomobileandelectricandelectronicsindustriesandtheEuropeanmarket.
HecurrentlyservesasanoutsidedirectoroftheCompany.
ThelengthofhisserviceasanoutsidedirectorwillbefouryearsattheendofthisAnnualGeneralMeetingofShareholders.
(vii)MasaruHattoriservedasanexecutivemanagingdirectorofORIXCorporationandanoutsideauditoranddirectorofFujiFireandMarineInsuranceCo.
,Ltd.
HeservesasanoutsideauditorofRyohinKeikakuCo.
,Ltd.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedontheknowledgeandexperienceasacorporateexecutivethathehasaccumulatedthroughouthiscareer,especiallyinthecorporateplanningandaccountingfields,andhisinsightintotheaudit.
ThelengthofhisserviceasanoutsidedirectorwillbethreeyearsattheendofthisAnnualGeneralMeetingofShareholders.
43(viii)CharlesF.
MartinhasadvisedovermanyyearsonfinancialstrategyandM&Asinthefieldofinvestmentbanking,amongothers.
TheCompanymadehimacandidateforoutsidedirectorbecauseitexpectshimtooverseeandcheckmanagementbasedonhisknowledgeonfinancialstrategyandcorporatevalueenhancementmeasuresfosteredthroughouthiscareer.
ThelengthofhisserviceasanoutsidedirectorwillbeoneyearattheendofthisAnnualGeneralMeetingofShareholders.
(2)Independenceofcandidatesforoutsidedirector(i)NoneofthecandidatesforoutsidedirectorhavebeenmanagingmembersoftheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompanyinthepast.
(ii)NoneofthecandidatesforoutsidedirectorhavereceivedorplantoreceivealargeamountofmoneyorotherpropertyfromtheCompanyorbusinessoperatorsthathavespecificrelationswiththeCompany.
(iii)NoneofthecandidatesforoutsidedirectorhaverelativesinthethirddegreeorcloserwithdirectorsorexecutiveofficersoftheCompany.
(3)LiabilitylimitationcontractswithoutsidedirectorsTheCompanyhasenteredintoliabilitylimitationcontractswithcandidateswithRobertE.
Patterson,AshokB.
Melwani,KazuhideKondo,MasatoTsuru,KotaroMiyagi,UlrichRuetz,MasaruHattoriandCharlesF.
Martin,whoarecurrentlyoutsidedirectorsoftheCompany.
(Outlineofthecontractsisstatedonpage21oftheBusinessReport.
)Iftheirreappointmentsareapproved,theCompanywillcontinuetheaboveliabilitylimitationcontractswiththem.