エレマテック（2715） – Notice of Convocation Annual General Meeting 2022

The following is an unofficial translation of the Japanese-language original version, and is provided for your convenience only, without any warranty as to its accuracy or as to the completeness of the information. The Japanese original version of the notice is the sole official version. If there are any discrepancies between the Japanese original version and the English translation, the Japanese original version prevails and the company disclaims all responsibility for and results of the discrepancies. Dear shareholders We will strive to achieve our Medium-term Corporate Strategy “elematec NEXT.”. to our shareholders for We would like to express our sincere gratitude their continued support. For the current consolidated fiscal year (FY2022), although the severe situation due to COVID-19 persisted, we focused on the automotive and ODM businesses, and as a result, both sales and profits increased year on year. The Medium-term Corporate Strategy “elematec NEXT” is in its final year of implementation. While adapting to changes in the social environment due to the spread of COVID-19, we have steadily promoted each priority measure with an eye on the optimal allocation of management resources. This fiscal year, we will strive to maximize results, and the entire Group will work together to achieve its Medium-term Corporate Strategy. Looking further ahead, we will aim for sustainable growth to be a company that contributes to solving social issues. We sincerely ask our shareholders for their continued understanding and support. Akira Yokode, Chief Executive Officer and Chairman of the Board Management Principles Mission To provide new values by expanding our good relationships. Management policies • To provide a multitude of quality products and services globally. • To constantly strive for self-improvement and to seek sustained growth for betterment of social credibility • Strive to maximize corporate value while emphasizing corporate governance with due consideration to the environment and safety • Contribute to creating a sustainable society under the Basic Policy on Sustainability • Respect customer’s needs and be trusted as a manufacturing partner • Actively exchange views and take on challenges with enthusiasm, speed Action Guidelines and teamwork. • Each employee shall strive for self-improvement and place emphasis on equal opportunities and fair evaluation. • Pursue happiness and well-being of employees and growth as a group. – 1 – To Our Shareholders: (Securities Code: 2715) June 6, 2022 Akira Yokode, Chief Executive Officer and Chairman of the Board Elematec Corporation 3-5-27 Mita, Minato-ku, Tokyo Notice of Convocation of the 76th Ordinary General Meeting of Shareholders First, we would like to express our sincere gratitude for your continued support. You are cordially invited to attend the 76th Ordinary General Meeting of Shareholders of the Company. This General Meeting of Shareholders will be held after making every possible effort to prevent the spread of the coronavirus disease (COVID-19) infection at the venue. If we intend to make any significant change to the administration of the General Meeting of Shareholders due to any change in circumstances, we will announce such changes on the Company’s website or by any other means. If you are unable to attend the meeting in person, you may exercise your voting rights in writing or via the Internet, etc. Please review the Reference Documents for the General Meeting of Shareholders that appear later and exercise your voting rights by any of the methods described on this page through pages 3 to 5 of this Notice by 5:30 p.m. (at the close of our business hours) on Monday, June 20, 2022 (Japan time). Details of the General Meeting of Shareholders 1. Date and Time: Tuesday, June 21, 2022 at 1:30 p.m. 2. Venue: 3. Agenda: 28F (Emerald 28), Main Tower, Shinagawa Prince Hotel 10-30 Takanawa 4-chome, Minato-ku, Tokyo (Please note that the floor number and name of the venue differ, although the hotel is the same as last year.) Matters to be reported: 1. Business Report and Consolidated Financial Statements for the 76th Fiscal Year (from April 1, 2021 to March 31, 2022), results of audits of the Consolidated Financial Statements by the Accounting Auditor and the Audit & Supervisory Board 2. Non-consolidated Financial Statements for the 76th Fiscal Year (from April 1, 2021 to March 31, 2022) Proposals to be resolved: Agenda Item No. 1: Agenda Item No. 2: Agenda Item No. 3: Partial Amendment to the Articles of Incorporation Election of Nine Directors Election of Three Audit & Supervisory Board Members – 2 – If you are attending the Meeting in person, please submit the enclosed Voting Form to the receptionist at the venue. If any amendments are made to the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements and/or Non-consolidated Financial Statements, such amendments will be posted on the Company’s website. In connection with all documents required to be provided to you along with the notice of the convocation of this General Meeting of Shareholders, the following matters are posted on the Company’s website pursuant to the applicable laws and regulations and Article 17 of the Articles of Incorporation; therefore, they are not contained in the documents provided to you along with this notice. Please kindly note that the documents provided to you along with this notice form part of documents audited by the Audit & Supervisory Board Members or Accounting Auditor for their preparation of the Audit Report. 1. System for Ensuring Proper Business Operation and Operating Status of Such System 2. Basic Policy for Control of Company 3. Notes to Consolidated Financial Statements 4. Individual Notes to the Financial Statements The Corporation’s Website: http://www.elematec.com/ir/ • All shareholders considering attendance at this General Meeting of Shareholders are kindly requested to take good care of their health and physical condition up to the date of the meeting, and not to force themselves to attend the meeting. • This year, we have again decided not to distribute coffee shop tickets, which were previously distributed on the day of the General Meeting of Shareholders, considering the risks of novel coronavirus (COVID-19) infection. We would appreciate your understanding on this. Guidance for Exercising Voting Rights Exercising voting rights by attending the General Meeting of Shareholders Exercising voting rights in writing (by post) Exercising voting rights via the Internet, etc. Please indicate your vote for or against each of the proposals on the Voting Form enclosed and return the form to the Company. Exercise Deadline To arrive by 5:30 p.m. on Monday, June 20, 2022 Enter your vote for or against each proposal in accordance with the guide on pages 4 to 5. Exercise Deadline Make entry by 5:30 p.m. on Monday, June 20, 2022 Please submit the enclosed Voting Form to the receptionist at the venue. Date & Time Tuesday, June 21, 2022 at 1:30 p.m. Venue 10-30 Takanawa 4-chome, Minato-ku, Tokyo 28F (Emerald 28), Main Tower, Shinagawa Prince Hotel ⚫ ⚫ ⚫ – 3 – Guide to Exercising Voting Rights via the Internet, etc. Exercise Deadline Make entry by 5:30 p.m. on Monday, June 20, 2022 How to scan QR Code “Smart Vote” You can login to the website to exercise your voting rights without entering your voting code and password. 1. Scan the QR Code printed on the bottom right of your voting form. * “QR Code is a registered trademark of Denso Wave Incorporated. 2. Follow the instructions on the screen to vote for or against each of the proposals. *The Voting form uses simulated image. You may exercise your voting rights only once through “Smart Vote.” If you wish to make corrections after you have exercised your voting rights, access the PC website, login by entering your voting code and password printed on the voting form, and exercise your voting rights again. * Rescan the QR Code to access the PC website. • If you exercise your voting rights both via the Internet, etc. and by returning the Voting Form, the vote received later will be treated as valid. If the votes via the Internet, etc. and the Voting Form are received on the same day, the votes via the Internet, etc. will be treated as valid. • If you exercise your voting rights more than once via the Internet, etc. the last vote will be treated as valid. – 4 – How to Enter Voting Code and Password Website for exercising voting rights: https://www.web54.net 1. Access the website for exercising voting rights. 2. Enter the voting code printed on your voting form. 3. Enter the password printed on the voting form. Click “Proceed to next.” Enter the voting code. Click “Login.” Enter the Password. Please set a new password to actually use. Click “Register.” 4. Follow the instructions on the screen to vote for or against each of the proposals. *The operation screen uses simulated image. The website for exercising voting rights may not be available depending on the internet usage environment of PC, Smart phone. Inquiries about exercising voting rights via the Internet To institutional investors Stock Transfer Agency Web Support Sumitomo Mitsui Trust Bank, Limited. Toll-free (within Japan): 0120-652-031 (Business hour: 9:00 a.m. to 9:00 p.m.) Institutional investors can also vote electronically at this General Meeting through the “ICJ Platform” operated by ICJ Inc. – 5 – Reference Documents for the General Meeting of Shareholders Agenda Item No. 1: Partial Amendment to the Articles of Incorporation 1. Reasons for the Amendments (1) An option for the form of General Meeting of Shareholders (Virtual General Meeting of Shareholders) With the enforcement of the “Act for Partially Amending the Industrial Competitiveness Enhancement Act, Etc.” (Act No. 70 of 2021) and the “Ministerial Ordinance Concerning General Shareholders’ Meetings without Venue Based on the Industrial Competitiveness Enhancement Act” (Ordinance of the Ministry of Justice and the Ministry of Economy, Trade and Industry No. 1 of 2021), listed companies that have obtained confirmation from the Minister of Economy, Trade and Industry (“METI”) and the Minister of Justice that meet the requirements specified in the Ordinance of METI and Ministry of Justice Ordinance (“Ministerial Ordinance Requirements”) can now hold a “Virtual General Meeting of Shareholders.” In the belief that it is in the interest of all shareholders to add an option available for holding the General Meeting of Shareholders, bearing in mind such factors as large-scale disasters, including infectious diseases and natural disasters, and the progress of digitization of society, the Company proposes to amend its Articles of Incorporation to allow the holding of a Virtual General Meeting of Shareholders. In amending the Articles of Incorporation, the Company has obtained confirmation from the Minister of Economy, Trade and Industry and the Minister of Justice that the amendment meets the Ministerial Ordinance Requirements. (2) Amendment due to introduction of system for providing General Meeting of Shareholders’ Materials in electronic format Accompanying the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) to be enforced on September 1, 2022, the system of electronic provision of materials for the General Meeting of Shareholders will be introduced. The Company thereby proposes to make the following amendments to the Articles of Incorporation. 1) Article 17, Paragraph 1 of the Proposed Amendment shall stipulate that the Company shall take measures to electronically provide information that is the contents of the Reference Documents etc. for the General Meeting of Shareholders. 2) Paragraph 2 of Article 17 of the Proposed Amendment shall establish a provision to enable the Company to limit the scope of matters to be included in the documents to be delivered to shareholders who have made a request for the delivery of the paper-based documents. 3) Article 17 that stipulates Internet disclosure and deemed provision of Reference Documents, etc. for the General Meeting of Shareholders of the current Articles of Incorporation shall be deleted as it will no longer be necessary. 4) Supplementary Provisions shall be established regarding the effect of the above newly established and deleted provisions. – 6 – 2. Details of the Amendments Details of amendments of the Articles of Incorporation are as follows. (Underlines indicate changes.) Proposed Amendment (Convening General Meetings) Article 10. 1. An ordinary general meeting of shareholders of the Company shall be convened in June of each year, and an extraordinary general meeting of shareholders shall be convened whenever necessary. in 2. General meetings of shareholders shall be convened at the location of the head office or the wards of Tokyo. Provided, however, that this shall not apply if the general meeting of shareholders is to be a Virtual General Meeting of Shareholders in accordance with the following paragraph. 3. The general meeting of shareholders of the Company may be held as a Virtual General Meeting of Shareholders. Current Articles of Incorporation (Convening General Meetings) Article 10. 1. An ordinary general meeting of shareholders of the Company shall be convened in June of each year, and an extraordinary general meeting of shareholders shall be convened whenever necessary. 2. General meetings of shareholders shall be convened at the location of the head office or in the wards of Tokyo. (Internet Disclosure and Deemed Provision of Reference Documents, etc. for the General Meeting of Shareholders) Article 17. In convening a general meeting of shareholders, if information that is to be stated or presented in the reference documents for the general meeting report, non-of consolidated and consolidated financial statements is disclosed through the Internet in accordance with the provisions prescribed by the Ordinance of Ministry of Justice, the Company may be deemed to have provided the information to shareholders. shareholders, business statements financial the Company shall for Providing Reference (Measures, etc. Documents, etc. for the General Meeting of Shareholders in Electronic Format) Article 17. 1. In convening a general meeting of shareholders, take measures for electronically providing information on Reference Documents, etc. for the General Meeting of Shareholders. 2. Among items for which the measures for providing information in electronic format will be taken, the Company shall not be required to state all or part of those items designated by the Ordinance of Ministry of Justice in the paper-based documents to be delivered to shareholders who requested them by the record date of voting rights. – 7 – Current Articles of Incorporation Proposed Amendment Supplementary Provisions (Transitional Measures for Provision of General Meeting of Shareholders’ Documents in Electronic Format) Article 1. The deletion of Article 17 (Internet Disclosure and Deemed Provision of Reference Documents, etc. for the General Meeting of Shareholders) in the Articles of Incorporation before amendment and the establishment of the new Article 17 (Measures, etc. for Providing Reference Documents, etc. for the General Meeting of Electronic Shareholders Format) of in Incorporation after amendment shall be effective from September 1, 2022, the date of enforcement of the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) (the “Date of Enforcement”). the Articles in of the from the Date shareholders, Incorporation Article 2. Notwithstanding the provision of the preceding article, following provisions (Article 17 of the Articles before of amendment) shall remain effective regarding any general meeting of shareholders held on a date within six of months Enforcement. In convening a general meeting if information that is to be stated or presented in the reference documents for of shareholders, business report, non-consolidated financial statements financial and statements is disclosed through the the Internet provisions the prescribed Ordinance of Ministry of Justice, the Company may be deemed to have provided to shareholders. in accordance with general meeting consolidated information the the by Article 3. These Supplementary Provisions shall be deleted on the date when six months have elapsed from the Date of Enforcement or three months have elapsed from the date of the general meeting of shareholders the preceding article, whichever is later. in – 8 – Agenda Item No. 2: Election of Nine Directors The term of office of all of the current nine Directors will expire at the close of this General Meeting of Shareholders. Accordingly, we propose the election of nine Directors. The candidates for Directors are as follows. Name Position in the Company No. 1 Akira Yokode 2 Masanori Kitahira 3 Sei Kawafuji Chief Executive Officer and Chairman of the Board Executive Managing Director, Sales Executive Managing Director, Corporate & Administration 4 Naohito Tsuji Managing Director New appointment 5 Akio Hamada Member of the Board 6 Yosuke Komatsu Member of the Board 7 Sosuke Seki External Member of the Board 8 Tatsumi Maeda External Member of the Board 9 Yoshiaki Yatsu External Member of the Board Reappointment Reappointment Reappointment Reappointment Reappointment Reappointment External Independent officer Reappointment External Independent officer Reappointment External Independent officer Reappointment Reappointed Director candidate Newly appointed Director candidate New appointment External Director candidate External Independent officer pursuant to the regulations of Tokyo Stock Exchange, Inc. Independent officer – 9 – 1 Akira Yokode [Career summary, position and areas of responsibility in the Corporation] (Date of birth: June 18, 1961) Reappointment April 1984 Joined T. CHATANI & Co., Ltd. May 1988 Joined ROHM Co., Ltd. March 2001 Joined Toyota Tsusho Corporation (“Toyota Tsusho”) April 2006 General Manager of Section 1 Electronics Department, Toyota Tsusho June 2006 Managing Director, Assistant to Chief Division Officer of Sales Division, TOMEN DEVICES CORPORATION June 2008 General Manager of Electronics Device Department, Toyota Tsusho April 2011 General Manager of Electronics Department, Toyota Tsusho April 2012 Senior Managing Director, the Company June 2012 Executive Managing Director, the Company April 2018 Executive Managing Director, the Company June 2019 Chief Executive Officer and Chairman of the Board, the Company (to the present) Significant concurrent positions None [Reasons for nomination of the candidate as Director] Tenure: Number of the Corporation’s 2,140 shares held: 10 years Status of attendance to Board of Directors meeting: 13/13 (100%) Akira Yokode has been engaged mainly in electronics businesses since joined Toyota Tsusho Corporation in 2001, and has held positions such as General Manager of Section 1 Electronics Department, and General Manager of Electronics Device Department at Toyota Tsusho. Since the Company entered into a capital and business alliance agreement with Toyota Tsusho in 2012, he has served as Executive Managing Director of the Company. He has currently been Chief Executive Officer and Chairman of the Board (present post) since 2019. The Company has proposed him as a candidate for re-election as Director so that the Company’s management may benefit from his extensive experience of a general trading company and the Group as well as insights into global business operations. – 10 – 2 Masanori Kitahira (Date of birth: July 26, 1963) Reappointment [Career summary, position and areas of responsibility in the Corporation] April 1986 Joined the Company March 2000 General Manager of Kakogawa Branch, the Company November 2003 General Manager, Elematec Hong Kong Limited and General Manager, Elematec International Trading (Shenzhen) Co., Ltd. April 2009 Managing Director, Director of Sales Division, the Company April 2014 Managing Director, Director of Sales Division and General Representative for China, the Company April 2018 Senior Managing Director, Director of Sales Division, the Company April 2021 Senior Managing Director and Head of Sales Division, the Company June 2021 Executive Managing Director, Sales, the Company April 2012 Responsible for China and Director of Sales Division, the Company (to the present) Significant concurrent positions None Tenure: Number of the Corporation’s 39,800 shares held: 1 year Status of attendance to Board of Directors meeting: 11/11 (100%) (Status after appointment on June 22, 2021) [Reasons for nomination of the candidate as Director] Masanori Kitahira has been engaged in domestic and overseas sales-related business activities since he joined the company in 1986. He previously served as Director of the Sales Division, as Managing Director since 2014, and as Senior Managing Director since 2018. He has served as Senior Managing Director/Head of the Sales Division, as Executive Managing Director, Sales of the Company (current position) since 2021. He has extensive business experience within the Group and has knowledge of global business administration. Accordingly, the Company has proposed him as a candidate for re-election as Director. – 11 – 3 Sei Kawafuji (Date of birth: February 25,1969) Reappointment [Career summary, position and areas of responsibility in the Corporation] April 1991 Joined Sumitomo Bank, Limited (currently Sumitomo Mitsui Banking Corporation) August 2005 Joined the Company April 2012 General Manager of Administrative Department, the Company April 2014 Chief Division Officer of Administrative Division and General Manager of Personnel Department, the Company April 2016 Managing Director, Chief Division Officer of Administrative Division and General Manager of Personnel Department, the Company July 2016 Managing Director, Chief Division Officer of Administrative Division, General Manager of Finance & Business Administrative Department and General Manager of Personnel Department, the Company April 2017 Managing Director, Chief Division Officer of Corporate Division, the Company April 2018 Senior Managing Director in charge of Overall Personnel Affairs, General Affairs, and Legal Affairs, the Company June 2018 Executive Managing Director in charge of Overall Personnel Affairs, General Affairs, and Legal Affairs, the Company June 2020 Executive Managing Director, Corporate & Administration, the Company (to the present) Significant concurrent positions None [Reasons for nomination of the candidate as Director] Tenure: Number of the Corporation’s 15,900 shares held: 4 years Status of attendance to Board of Directors meeting: 13/13 (100%) Sei Kawafuji has work experience at a major financial institution. He has been engaged in administration divisions in general since he joined the Company in 2005, and has held positions such as General Manager of Finance & Business Administrative Department, General Manager of Personnel Department, Chief Division Officer of Administrative Division, and Chief Division Officer of Corporate Division. Since 2018, he has served as Executive Managing Director (present post) using his extensive experience of the Group’s operations and insights into administrative and management operations. Accordingly, the Company has proposed him as a candidate for re-election as Director. – 12 – 4 Naohito Tsuji New appointment (Date of birth: September 22, 1970) [Career summary, position and areas of responsibility in the Corporation] April 1994 Joined Toyota Tsusho Corporation (“Toyota Tsusho”) April 2011 General Manager of Device Solutions Department 4, Toyota Tsusho Electronics Corporation (currently NEXTY Electronics Corporation) April 2012 Assistant General Manager of Marketing & Development GroupⅠ, the Company January 2013 General Manager, Automotive Group, the Company April 2016 Managing Director, Toyota Tsusho (H. K.) Corporation Limited April 2017 Managing Director, Toyota Tsusho (H. K.) Corporation Limited Chairman of the Board of Directors, TOYOTA TSUSHO NEXTY ELECTRONICS HONG KONG CO., LIMITED. Chairman of East Asia Region April 2021 Managing Director, Director of Sales Division, the Company (to the present) None Significant concurrent positions [Reasons for nomination of the candidate as Director] Naohito Tsuji has been engaged mainly in electronics businesses since he joined Toyota Tsusho Corporation in 1994, and has been engaged mainly in automotive-related business since temporary assigned to the Company in 2012. He was temporary reassigned to the Company and served as Managing Director, Director of Sales Division, (present post) since 2021. He has extensive experience and broad knowledge of a general trading company and the Group. Accordingly, the Company has newly proposed making him a candidate for election as Director because it has been judged that such experience and knowledge can be utilized in the management of the Company and that he can appropriately fulfill his duties as Director. Number of the Corporation’s – shares held: – 13 – 5 Akio Hamada (Date of birth: June 30, 1966) Reappointment [Career summary, position and areas of responsibility in the Corporation] April 1989 Joined Toyota Tsusho Corporation (“Toyota Tsusho”) April 2013 Department Manager, HEV Business Department, Toyota Tsusho April 2014 Department Manager, HEV & ITS Business Department, Toyota Tsusho April 2015 Senior Managing Director, Toyota Tsusho Electronics Corporation (currently NEXTY Electronics Corporation) April 2016 President of Toyota Tsusho (Shanghai) Co., Ltd.; and Director, Toyota Tsusho (China) Co., Ltd. April 2018 Executive Officer, Toyota Tsusho President of Toyota Tsusho (Shanghai) Co., Ltd.; and Head of Next Mobility East Asia, Toyota Tsusho April 2021 Senior Executive Officer, CEO for Chemicals & Electronics Division, Toyota Representative Director, NEXTY Electronics Corporation June 2021 Member of the Board, the Company Tsusho (to the present) (to the present) (to the present) Significant concurrent positions Senior Executive Officer, CEO for Chemicals & Electronics Division, Toyota Tsusho Representative Director, NEXTY Electronics Corporation [Reasons for nomination of the candidate as Director] Akio Hamada has extensive experience and broad knowledge cultivated over many years at Toyota Tsusho Corporation and its Group. He has served as Member of the Board (present post) of the Company since 2021, providing effective advice and recommendations to ensure the adequacy and appropriateness of the Company’s management decision-making. Accordingly, the Company has proposed him as a candidate for re-election as Director. Number of the Corporation’s – shares held: Tenure: 1 year Status of attendance to Board of Directors meeting: 11/11 (100%) (Status after appointment on June 22, 2021) – 14 – 6 Yosuke Komatsu (Date of birth: October 3, 1974) Reappointment [Career summary, position and areas of responsibility in the Corporation] April 1998 Joined Toyota Tsusho Corporation (“Toyota Tsusho”) April 2012 General Manager of Sales Division I, Toyota Tsusho Electronics Corporation (currently NEXTY Electronics Corporation) April 2013 Assistant General Manager, Sales Department, Toyota Tsusho Electronics Corporation (currently NEXTY Electronics Corporation) April 2014 Divisional Director of Semiconductor Sales Department, Toyota Tsusho Electronics Corporation (currently NEXTY Electronics Corporation) April 2017 Executive Officer, Toyota Tsusho Electronics Corporation (currently NEXTY Electronics Corporation) April 2018 General Manager of Electronics Department, Chemicals & Electronics Division, June 2021 Member of the Board, the Company Toyota Tsusho (to the present) (to the present) Significant concurrent positions Number of the Corporation’s – shares held: 1 year Tenure: Status of attendance to Board of Directors meeting: 11/11 (100%) (Status after appointment on June 22, 2021) General Manager of Electronics Department, Chemicals & Electronics Division, Toyota Tsusho [Reasons for nomination of the candidate as Director] Yosuke Komatsu has extensive experience and broad knowledge cultivated over many years at Toyota Tsusho Corporation and its Group. He has served as Member of the Board (present post) of the Company since 2021, providing effective advice and recommendations to ensure the adequacy and appropriateness of the Company’s management decision-making. Accordingly, the Company has proposed him as a candidate for re-election as Director. – 15 – 7 Sosuke Seki Reappointment External Independent officer (Date of birth: June 29, 1966) [Career summary, position and areas of responsibility in the Corporation] April 1993 Registered as attorney-at-law (member of Tokyo Bar Association) January 2004 Opened Ginza Prime Law Office (to the present) (to the present) (to the present) (to the present) June 2007 External Audit & Supervisory Board Member, the Company June 2015 External Member of the Board, the Company June 2016 External Director, Shobunsha Publications, Inc. Significant concurrent positions External Director, Shobunsha Publications, Inc. Tenure: Number of the Corporation’s – shares held: 7 years Status of attendance to Board of Directors meeting: 13/13 (100%) [Reasons for nominating the candidate as External Director and an overview of expected roles] Sosuke Seki has extensive insights and experience as a lawyer and has given advice and recommendations to ensure the adequacy and appropriateness of management decision-making and execution of duties of Directors from an independent standpoint, although he has not been directly involved in the management of the Company. Accordingly, the Company proposes him as a candidate for re-election as External Member of the Board. He is expected to continue to strengthen governance from the viewpoint of compliance, and to fulfill his responsibilities from the perspective of all shareholders, including minority shareholders. – 16 – 8 Tatsumi Maeda Reappointment External Independent officer (Date of birth: January 1, 1953) [Career summary, position and areas of responsibility in the Corporation] March 1975 Joined Kyoto Ceramic Co., Ltd. (currently KYOCERA Corporation) (“KYOCERA”) June 2001 Director, KYOCERA June 2003 Managing Executive Officer, KYOCERA April 2007 Senior Managing Executive Officer, KYOCERA June 2008 Director and Senior Managing Executive Officer, KYOCERA April 2009 Vice President and Representative Director, and Vice President and Executive Officer, KYOCERA April 2013 Vice Chairman and Representative Director, KYOCERA June 2017 Advisor, KYOCERA March 2018 Retired from Advisor, KYOCERA June 2019 External Member of the Board, the Company June 2021 External Director of TOMEN DEVICES CORPORATION (to the present) (to the present) Significant concurrent positions External Director of TOMEN DEVICES CORPORATION Tenure: Number of the Corporation’s – shares held: 3 years Status of attendance to Board of Directors meeting: 13/13 (100%) [Reasons for nominating the candidate as External Director and an overview of expected roles] Tatsumi Maeda has abundant experience gained through long years of service at KYOCERA Corporation and extensive insight into overall management of the Company, and has given advice and recommendations to ensure the adequacy and appropriateness of management decision-making and execution of duties of Directors from an independent standpoint. Accordingly, the Company proposes him as a candidate for re-election as External Member of the Board. He is expected to continue to fulfill his responsibilities for the general business operations of the Company based on this management experience from the perspective of all shareholders, including minority shareholders. – 17 – 9 Yoshiaki Yatsu Reappointment External Independent officer (Date of birth: March 13, 1964) [Career summary, position and areas of responsibility in the Corporation] October 1990 Joined Tohmatsu & Co. (currently, Deloitte Touche Tohmatsu LLC) June 2005 Partner, Tohmatsu & Co. October 2018 Retired from Deloitte Touche Tohmatsu LLC November 2018 Established Yatsu Certified Public Accountant Office March 2019 Outside Auditor, SHIZUOKA GAS Co., Ltd. June 2020 External Member of the Board, the Company (to the present) (to the present) (to the present) Significant concurrent positions Outside Auditor, SHIZUOKA GAS Co., Ltd. [Reasons for nominating the candidate as External Director and an overview of expected roles] Yoshiaki Yatsu has extensive insights and experience as a certified public accountant and has given advice and recommendations to ensure the adequacy and appropriateness of management decision-making and execution of duties of Directors from an independent standpoint, although he has not been directly involved in the management of the Company. Accordingly, the Company proposes him as a candidate for re-election as External Member of the Board. He is expected to strengthen governance from the viewpoints of finance and accounting, and to fulfill his responsibilities from the perspective of all shareholders, including minority shareholders. Number of the Corporation’s shares held: – Tenure: Status of attendance to Board of Directors meeting: 13/13 (100%) 2 years – 18 – (Notes) 1. There are no special interests between each candidate for Director and the Company. 2. Sosuke Seki, Tatsumi Maeda and Yoshiaki Yatsu are candidates for External Member of the Board. 3. Present or the past ten years positions and titles of three Director candidates, Naohito Tsuji, Akio Hamada and Yosuke Komatsu, as executive officers at Toyota Tsusho Corporation and its subsidiaries are described in the above “Career summary, position and areas of responsibility in the Corporation” and “significant concurrent positions.” 4. The term of office of Sosuke Seki as Audit & Supervisory Board Member will be eight years and term of office as External Member of the Board will be seven years at the conclusion of this General Meeting of Shareholders. The term of office of Tatsumi Maeda as External Member of the Board will be three years at the conclusion of this General Meeting of Shareholders. The term of office of Yoshiaki Yatsu as External Member of the Board will be two years at the conclusion of this General Meeting of Shareholders. 6. 5. The Company has, pursuant to Article 427 (1) of the Companies Act, concluded agreements with Akio Hamada, Yosuke Komatsu, Sosuke Seki, Tatsumi Maeda and Yoshiaki Yatsu to limit their respective liabilities for damages under Article 423 (1) of the same Act to the minimum amount provided by Article 425 (1) of the same Act. The Company plans to extend the aforementioned limited liability agreements if reappointment of these candidates is approved. The Company has concluded an officer liability insurance contract with an insurance company as stipulated in Article 430-3, Paragraph 1 of the Companies Act. An overview of the contents of the relevant insurance contract is provided on page 43 of the business report. If the appointment of the candidate for Director is approved, they will be insured based on the relevant insurance contract. The relevant insurance contract is scheduled to be renewed at the next renewal with the same contract contents in accordance with a resolution of the Board of Directors. The Company has designated Sosuke Seki, Tatsumi Maeda and Yoshiaki Yatsu as independent officers pursuant to the regulations of Tokyo Stock Exchange, Inc. and filed a notice of that with the Exchange. If their re-election is approved, the Company will continue to designate and register them as independent officers. 7. – 19 – Agenda Item No. 3: Election of Three Audit & Supervisory Board Members The term of office of Audit & Supervisory Board Member Atsuo Isogami will expire and Audit & Supervisory Board Member Atsushi Shimizu and Seishi Tanoue will resign at the close of this General Meeting of Shareholders. Accordingly, we propose the election of three Audit & Supervisory Board Members. The Audit & Supervisory Board’s consent has been obtained for this Proposal. The candidates for Audit & Supervisory Board Members are as follows. Number of the Corporation’s 32,802 shares held: 1 Yoshihito Noguchi (Date of birth: March 10, 1962) New appointment [Career summary, position and areas of responsibility in the Corporation] April 1984 Joined the Company April 2014 General Manager of General Affairs & Legal Affairs Department, the Company April 2017 General Manager of Human Resources & General Affairs Department, the April 2022 Assistant General Manager of Human Resources & General Affairs Department, Company the Company (to the present) None Significant concurrent positions [Reasons for nomination of the candidate as Audit & Supervisory Board Member] Since joining the Company in 1984, Yoshihito Noguchi has been engaged in general administrative operations, including general affairs, personnel and labor affairs, legal affairs, and investor relations, and has served as General Manager of General Affairs & Legal Affairs Department and General Manager of Human Resources & General Affairs Department, equipped with extensive business experience and knowledge of management and administrative operations in the Group. Accordingly, the Company proposes him as a candidate for Audit & Supervisory Board Member because it has been judged that he can fulfill a wide range of audit business activities in overall corporate activities of the Group leveraging such experience and knowledge. – 20 – Number of the Corporation’s – shares held: 2 Hiroshi Ito New appointment (Date of birth: November 5, 1960) [Career summary, position and areas of responsibility in the Corporation] April 1983 Joined Tomen Corporation (currently, Toyota Tsusho Corporation (“Toyota Tsusho”)) April 2007 General Manager of Financial Planning Department, Toyota Tsusho April 2011 General Manager of Enterprise Risk Management Department, Toyota Tsusho October 2013 General Manager, Administration Division, TOYOTA TSUSHO FOODS CORPORATION March 2018 External Audit & Supervisory Board Member, FIRST BAKING CO., LTD. June 2019 Managing Director, Administration Division, TOYOTA TSUSHO FOODS July 2021 General Manager of Enterprise Risk Management & Legal Department, NEXTY CORPORATION Electronics Corporation (to the present) Significant concurrent positions General Manager of Enterprise Risk Management & Legal Department, NEXTY Electronics Corporation [Reasons for nomination of the candidate as Audit & Supervisory Board Member] Hiroshi Ito joined Tomen Corporation (currently Toyota Tsusho Corporation) in 1983 and since then has been engaged mainly in financial and planning operations, serving as General Manager of Financial Planning Department, General Manager of Enterprise Risk Management Department, and in other positions, equipped with extensive business experience in a general trading company. And he served as External Audit & Supervisory Board Member in FIRST BAKING CO., LTD. and has extensive insight into auditing matters. Accordingly, the Company proposes him as a candidate for Audit & Supervisory Board Member because it has been judged that he can fulfill a wide range of audit business activities in overall corporate activities of the Group leveraging such experience and knowledge. – 21 – Number of the Corporation’s – shares held: 3 Toshio Ohshima New appointment External Independent officer (Date of birth: July 19 1952) [Career summary, position and areas of responsibility in the Corporation] April 1976 Joined Toray Industries, Inc. January 2001 General Manager of Films Trading Department, Toray Industries, Inc. April 2005 General Manager of Information Materials Department, Toray Industries, Inc. March 2007 Director of Dow Corning Toray Co., Ltd. March 2009 President and Representative Director of Dow Corning Toray Co., Ltd. June 2013 President of Toray Medical Co., Ltd. June 2016 Audit & Supervisory Board Member of Sanyo Chemical Industries, Ltd. Significant concurrent positions None [Reasons for nomination of the candidate as External Audit & Supervisory Board Member] Toshio Ohshima has a wealth of experience gained over many years at Toray Industries, Inc. and has extensive insight into general management, serving in key positions at various companies. Mr. Ohshima has also served as a full-time Audit & Supervisory Board Member at Sanyo Chemical Industries, Ltd. and also has extensive insight into auditing matters. Accordingly, the Company proposes him as a candidate for External Audit & Supervisory Board Member because it has been judged that he can fulfill a wide range of audit business activities in overall corporate activities of the Group leveraging such experience and knowledge. – 22 – (Notes) 1. There are no special interests between the candidates for Audit & Supervisory Board Member and the Company. 2. Toshio Ohshima is a candidate for External Audit & Supervisory Board Member. 3. Hiroshi Ito has been appointed as a candidate for Auditor of NEXTY Electronics Corporation at the 50th ordinary meeting of shareholders which is scheduled to be held on June 24, 2022. If the elections of Yoshihito Noguchi, Hiroshi Ito and Toshio Ohshima are approved, the Company plans, pursuant to Article 427 (1) of the Companies Act, to enter into an agreements with them to limit their respective liabilities for damages under Article 423 (1) of the same Act to the minimum amount provided by Article 425 (1) of the same Act. The Company has concluded an officer liability insurance contract with an insurance company as stipulated in Article 430-3, Paragraph 1 of the Companies Act. An overview of the contents of the relevant insurance contract is provided on page 43 of the business report. If the appointment of the candidates as Audit & Supervisory Board Member is approved, they will be insured based on the relevant insurance contract of the Company. The relevant insurance contract is scheduled to be renewed at the next renewal with the same contract contents in accordance with a resolution of the Board of Directors. Toshio Ohshima meets the requirements for an independent officer as stipulated by Tokyo Stock Exchange, Inc. If his appointment is approved, the Company will designate him as an independent officer and notify the Tokyo Stock Exchange of his appointment. End of document 4. 5. 6. – 23 – Reference on corporate governance The basic concept of corporate governance As a prerequisite for the Company’s corporate activities, the Company will build smooth relationships with its stakeholders, including “shareholders,” “customers and other business partners,” “employees” and “community.” The Company will also ensure soundness, transparency and efficiency in building such relationships. Based on these activities, the Company aims to increase profits and continuously increase corporate value, and to fulfill its responsibilities to stakeholders, including ensuring the rights of shareholders, as well as its accountability to them. To this end, the Company will continuously improve and maintain the internal control framework governing corporate activities, such as the management structure, management organization and management system that support transparent, fair, prompt and decisive decision-making and execution of business. Taking into account the size of the company, we have set up the Board of Directors and the Audit & Supervisory Board. In addition, The Company has adopted an executive officer system to separate the roles of management oversight and business execution functions. A part of officers including those in charge of domestic subsidiaries and major overseas subsidiaries also concurrently serve as Executive Officers of the Company or senior employees of the Company. Chief Executive Officer and Chairman of the Board – 24 – Policies and procedures for nominating candidates for Directors and Audit & Supervisory Board Members Candidates for senior management, Directors and Audit & Supervisory Board Members shall be taken into account the balance of knowledge, experience and capabilities as management team and Directors as a whole, shall be based on the ability to make appropriate and prompt decisions with the certain level of knowledge and insight about corporate management, corporate administration or specific areas of expertise, as well as possessing excellent personality as an individual with insight into compliance with laws, regulations and corporate ethics. Chief Executive Officer and Chairman of the Board shall formulate the drafts of the candidates, deliberate the draft at the Board of Directors to comprehensively appoint and nominate the Directors. For management executives, Directors and Audit & Supervisory Board Members, the Company has defined six skill areas that are considered important for the Group in light of corporate management, and they are listed in the reference materials for the Notice of Convocation as the Skill Matrix. To further ensure fairness and transparency in the selection and nomination process, upon consultation and reporting procedures at the “Nomination and Compensation Committee” established in April 2022, candidates are selected and nominated after final deliberation by the Board of Directors. – 25 – Reference on skill matrix As an organization that performs a more appropriate and high-level supervisory function for management and business execution in the Group and strives to continuously improve corporate value, Directors and Audit & Supervisory Board Members with extensive experience, as well as high levels of insight and expertise are appointed as members of the Board of Directors and members of the Audit & Supervisory Board, and each member of the Board of Directors and the Audit & Supervisory Board effectively fulfills their roles and responsibilities. The Company has set up six items in the areas of knowledge and experience, which are regarded as important for the Group, for deliberation and decision-making at meetings of the Board of Directors, from the perspective of corporate management to achieve a well-balanced structure as a whole. As candidates for Directors and Audit & Supervisory Board Members, we select talented persons who have diverse perspectives, diverse insights, and diverse and advanced skills, regardless of attributes such as gender, nationality, and age, and regard diversity in terms of tasks as important. Skill area Attribute Name Corporate management Global Sustainability (Environment, society, governance) Finance /accounting Legal affairs/risk management Experience in sales and marketing in the business operations of the Company and in the industry ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Executive Directors Non-executive Directors Audit & Supervisory Board Member Akira Yokode Masanori Kitahira Sei Kawafuji Naohito Tsuji Akio Hamada Yosuke Komatsu Sosuke Seki * Tatsumi Maeda * Yoshiaki Yatsu * Yoshihito Noguchi Hiroshi Mizukami * Hiroshi Ito Toshio Ohshima * ● ● ● ● ● ● ● ● ● ● ● ● – 26 – ● ● (Notes) 1. * indicates an External Director or an External Audit & Supervisory Board Member. 2. The above description is based on the composition of the Board of Directors after the close of this Ordinary General Meeting of Shareholders. Reference Commitment to Sustainability Our Group considers sustainability initiatives to be an important management issue. We have formulated the “Basic Policy on Sustainability” to ensure that we properly address the sustainability issues, and have stated in our Management Principles that we will contribute to the realization of a sustainable society. In April 2022, a Sustainability Committee chaired by the President and Representative Director was established to identify materiality, and it will continue to implement sustainability initiatives across the entire company based on the materiality. Basic Policy on Sustainability The Elematec Group aims to enhance corporate value by contributing to creating a sustainable society through business activities under its mission to provide new value by expanding our good relationships as a global manufacturing partner. As with addressing risks, we consider efforts to expand business and tackle social issues with environmental considerations important business opportunities. Identification of Materiality Based on the Basic Policy on Sustainability, our Group has identified the following materiality to be addressed with priority through its business activities in response to issues that society and the Company are facing. Elematec Group materiality Materiality Relevant SDGs Our Initiatives Realization of a safe and secure society Reduction of environmental burdens and realization of a recycling-oriented society Construction of organizations that respect diversity and grow together Construction of governance structures trusted by all stakeholders • Realization of a society without traffic accidents • Improvement of proper medical environment • Distribution of eco-friendly electronic and other materials • Operation of quality and environmental management systems • Promotion activities recycling of • Distribution of electronic and other materials related to clean energy • Respect for human rights • Expansion systems of training • Promotion of D&I (diversity & inclusion) • Workstyle reform • Establishment and strengthening of governance structures and compliance systems – 27 – Individual case • Deliver components for PHEV/EV Related SDGs Theme of activity Improving automotive energy efficiency Efficiently utilizing electricity Realizing a decarbonized society Diffusing clean energy Realizing a circular society management systems Mitigating environmental burdens Eliminating starvation and poverty NPOs, etc. tnemnorivnE yteicoSRealizing a society without traffic accidents Preparing and maintaining an appropriate medical environment Improving productivity in manufacturing processes Eliminating labor shortages Establishing stable infrastructures vehicles • Deliver secondary battery components for industrial equipment, etc. • Deliver clean energy-related components • Implement quality/environment • Promote recycling activity • Provide environmentally friendly components • Deliver packaging materials using plant-derived raw materials • Donate through international • Plan and develop dashboard cameras and expand sales of components • Deliver components for various medical devices • Deliver main units of industrial automatic robots and related systems • Deliver secondary battery components for automobiles, buses, trains, etc. • Deliver components for 5G base stations • Implement quality/environmental • Promote recycling activities • Foster global human resources by establishing systematic training programs • Practice based on our ethical code of conduct • Promotion of D&I (diversity & • Workstyle reform • Educate employees based on our ethical code of conduct and infiltrate it into them • Establish and strengthen a governance framework and a compliance framework – 28 – Realizing a circular society management systems Promoting human resources development Respecting human rights Respecting diversity inclusion) ecnanrevoG Respecting human rights Implementing fair business activities Business Report (From April 1, 2021 to March 31, 2022) Main business activities of the Group (as of March 31, 2022) The main business activities of the Group are to sell, process, and assemble electronic materials, electronic parts, equipment, etc. in Japan and overseas, as well as to design and manufacture them on assignment. In recent years, we have also focused on the ODM business, which handles everything from designing to manufacturing other companies’ brand products. (We outsource manufacturing.) We can create added value utilizing extensive knowledge of electronic materials, which has been cultivated over a long period. Elematec is active in familiar areas Digital Electronics ＜Drone＞ • Propeller • Motor • Camera ＜Smart phone＞ • Glass • Optical film • Tape Automotive ＜Game machine＞ • Heat dissipation parts • Environmentally friendly packaging materials • parts for VR • Harness In the automotive-related business, upon which we have been focusing for some time, we see improving the electrical equipment ratio associated with the shift to connected, autonomous, sharing, and electric (CASE) in automobiles as an opportunity, and we are focusing upon expanding sales of products for electric vehicles and autonomous driving systems. ＜Automobiles＞ • Headlamp parts • Heater • Front plate of car navigation system • Fireproof sheet assemblies for batteries • Sensor • Cockpit module Broad Market ＜Robot＞ • Robot main body • Related systems ＜Medical equipment＞ • Sub-ASSY* for ultrasonic diagnostic equipment • Monitor • Probe *A unit that combines multiple parts ＜IoT home electric appliance (ODM）＞ ＜Dashboard camera(ODM*)＞ We have set up a dedicated team focusing upon selling communication-based dashboard cameras. The Marketing & Development Division and Design Department work together to provide support from the specifications stage. For commercial vehicles, we have deployed a cloud-based operation management system called “Telema-kun,” which can manage routes and driving hours for efficient operation. *Designing and manufacturing other companies’ brand products. (We outsource manufacturing.) Digital Electronics, Automotive, Broad Market ＜Products made from environmentally friendly materials＞ We were quick to focus on a global concern of environmental issues caused by plastic waste, and provide environmentally friendly packaging materials that contribute to the prevention of marine pollution. • Packaging materials • Molded products made of different materials • Biodegradable resin – 29 – 1 The current situation of the Group (1) Business conditions during the fiscal year under review 1) Trend and results of the business In the electronics industry during the consolidated fiscal year under review, despite supply shortages of semiconductors and other products and supply chain disruptions in some sectors, the production of electronic components continued to increase due to expanding demand in various fields, including recovery of demand for automobiles, 5G-related areas and industrial equipment. Under these circumstances, the Group has promoted measures to further increase added value by working on the ODM business, which handles everything from designing to manufacturing other companies’ brand products (we outsource manufacturing), new customer acquisition centered on overseas leading customer, expansion of products, etc. In the automobile business, which has been focused on for some time, we strived to expand sales of finished in-vehicle units, and worked to boost sales of heaters and fireproof sheets for batteries as products for electric vehicles, where demand is expected to grow in the future, and as a result, the business remained strong. In addition, dashboard cameras, which we have been working to strengthen the ODM business for, also performed well. We also strived to expand sales of environmentally friendly products with an awareness of sustainability initiatives. As a result, net sales for the fiscal year under review increased 11.3% from the previous fiscal year to 200,646 million yen. Operating income increased 52.8% from the previous year to 8,346 million yen. This was the result of improved gross profit in line with higher net sales. Ordinary profit increased 51.9% from the previous fiscal year to 7,867 million yen, due to an increase in operating income. Net income increased 46.6% from the previous fiscal year to 5,374 million yen. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and others were applied from the beginning of consolidated fiscal year under review, resulting in a decrease of 10,467 million yen in net sales for the period. – 30 – Net sales by market*1 Based on production items of our customers, we manage net sales by dividing them into three categories: “Digital Electronics,” “Automotive,” and “Broad Market.” (Unit: million yen) Digital Electronics Automotive Broad Market Total FY2019 FY2020 FY2021 90,240 26,780 66,379 183,399 79,688 27,187 68,778 175,654 80,484 24,484 75,249 180,218 FY2022 85,961 28,103 86,581 200,646 2) Status of assets and profits and losses FY2019 FY2020 FY2021 FY2022 183,399 6,188 175,654 4,499 180,218 5,179 200,646 7,867 Net Sales*1 (million yen) Ordinary profit (million yen) Net income attributable to owners of parent (million yen) Net income per share*2 (Yen) Total assets (million yen) Net assets (million yen) Shareholders’ equity ratio (%) ROE (%) 3,364 82.17 95,667 50,056 52.3 6.9 3,263 79.70 91,781 50,896 55.5 6.5 3,666 89.55 101,317 54,413 53.7 7.0 5,374 131.25 115,332 59,645 51.7 9.4 (Note) *1. As the “Accounting Standard for Revenue Recognition” (Corporate Accounting Standard No.29, March 31, 2020) is to be applied from the beginning of FY2022. *2. The company implemented a two-for-one stock split of its common stock with the effective date of June 1, 2019. Accordingly, net income per share stated above is calculated on the assumption that the stock split was implemented at the beginning of FY 2019. – 31 – 3) FY 2022 segment summary Net sales increased by 5.3% from the previous fiscal year to 109,115 million yen thanks to an increase in various automotive-related materials sales, even though they were negatively affected by the application of the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. since the beginning of the fiscal year under review. Operating income increased by 64.4% from the previous fiscal year to 4,060 million yen. Net sales increased 36.6% from the previous fiscal year to 50,253 million yen, due to an increase in sales of game console-related materials. Operating income increased 42.8% from the previous fiscal year to 2,034 million yen. Net sales increased 2.2% from the previous fiscal year to 32,136 million yen, due to an increase in sales of electronic parts-related materials. Operating income increased 79.6% from the previous fiscal year to 1,534 million yen. *Other Asia: South Korea, India, Southeast Asia, etc. Net sales increased 9.5% from the previous fiscal year to 9,141 million yen, due to an increase in sales of automotive-related materials. Operating income decreased 46.4% from the previous fiscal year to 140 million yen due to an increase in distribution cost, etc. *Europe and America: United States, Mexico, Czech Republic FY2021 FY2022 Year on Year Change Net Sales (million yen) Operating Income (million yen) Net Sales (million yen) Operating Income (million yen) Net Sales (%) Operating Income (%) Japan China 103,634 36,776 Other Asia 31,457 Europe and America 8,350 Adjustment – 2,470 1,424 854 261 452 109,115 50,253 32,136 9,141 – 4,060 2,034 1,534 140 576 Total 180,218 5,463 200,646 8,346 5.3 36.6 2.2 9.5 – 11.3 64.4 42.8 79.6 (46.4) – 52.8 – 32 – 4) Corporate Strategies and Issues to Be Addressed Medium-term corporate strategy (FY2021-2023) Elematec NEXT Business environment The environment of the electronics industry surrounding the Group is going through dramatic changes against the backdrop of rapid technological innovation (launch of 5G services, spread of IoT, shift to CASE in the automotive market, etc.), the rise of Chinese manufacturers, and the rapid expansion of U.S.-based IT plat