NOTICE OF THE 148TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

Transcription

1 This document is a translation of the Japanese language original for information purposes and is prepared as a guide for non-japanese shareholders. In the event of a discrepancy, the Japanese original version shall prevail. May 31, 2013 NOTICE OF THE 148TH ORDINARY GENERAL MEETING OF SHAREHOLDERS Dear Shareholder: It is our pleasure to invite you to the 148th Ordinary General Meeting of Shareholders of Nitto Denko Corporation (hereinafter the Company ) to be held as indicated below. If you are unable to attend the meeting in person, you may exercise your voting rights in writing or electronically (e.g. over the Internet). Please review the attached reference materials for the general meeting of shareholders and exercise your voting rights as per the instructions from page 3. Sincerely, Yukio Nagira, President Nitto Denko Corporation Shimohozumi, Ibaraki, Osaka, Japan (Head Office: Umeda, Kita-ku, Osaka, Japan ) Date: Place: June 21, 2013 (Friday) at 10:00 a.m. (Reception desk is scheduled to open at 9:00 a.m.) 1-5 Senri-Banpaku-Koen, Suita, Osaka, Japan Orbit Hall, Hotel Hankyu Expo Park - 1 -

2 Meeting Agenda Items to be reported: 1. The Business Report, the Consolidated and Non-Consolidated Financial Statements for the 148th term (from April 1, 2012 to March 31, 2013) 2. Auditing results of consolidated financial statements by Accounting Auditors and the Board of Corporate Auditors Items to be resolved: Item 1: Approval of the proposed dividends from surplus Item 2: Approval of the payment of bonus for Directors Item 3: Election of eight Directors Item 4: Determination of the amount of compensation provided as stock options to Directors and related details - Any revisions for reference materials for the general meeting of shareholders, Business Report, consolidated financial statements and financial statements shall be reported in our IR Information website ( - When attending, you must present the enclosed Voting Rights Exercise Form to the receptionist at the meeting. We also ask you to bring this booklet with you to the meeting as a way of saving resources. - The Cool Biz (light clothing) dress code will be followed at the meeting. Shareholders are encouraged to wear clothing made of lighter materials

3 Instructions Concerning the Exercise of Voting Rights You may exercise your voting rights by using any of the following three methods: 1 Attending the meeting Please present the Voting Rights Exercise Form to the receptionist at the meeting. Date of the meeting: June 21, 2013 (Friday) at 10:00 a.m. 2 Mailing the Voting Rights Exercise Form Please mail the Voting Rights Exercise Form after indicating your approval or disapproval of each item. Deadline for mail arrival: June 20, 2013 (Thursday) at 5:00 p.m. 3 Voting by Internet (Personal computer or mobile phone) Please input approval or disapproval of each item on the Site for the Exercise of Voting Rights: (Japanese only). Deadline for voting: June 20, 2013 (Thursday) at 5:00 p.m. Decisions previously made for convocation (Please note the followings for exercise of your voting rights.) (1) If you exercise your voting rights by writing (Voting Rights Exercise Form), please post it so that it arrives by 5:00 p.m. of Thursday, June 20, (2) If you exercise your voting rights electronically (e.g. over the Internet), please complete it by 5:00 p.m. of Thursday, June 20, (3) When you exercise your voting rights by the Voting Rights Exercise Form and you do not indicate your approval or disapproval, this will be handled as approval. (4) In the event of multiple voting via the Internet or by the Voting Rights Exercise Form, the final vote shall be considered as the effective exercise of your voting rights. (5) In the event of voting via the Internet, even if the Voting Rights Exercise Form is returned, the online vote shall be considered as the effective exercise of your voting rights. Instructions concerning the exercise of voting rights via the Internet If you wish to vote via the Internet, you may do so by accessing the following Site for Exercise of Voting Rights designated by the Company by using a personal computer or mobile phone. URL of the Site for the Exercise of Voting Rights: (Japanese only) (The site is unavailable during the hours of 2:00 a.m. to 5:00 a.m. each day.) Please note that any costs arising from using the Site for the Exercise of Voting Rights, including connection fees to Internet providers and telecom rates charged by telecommunications carriers, will be the burden of the shareholder

4 If you have any questions regarding the exercise of voting rights via the Internet, please contact the following number. Mitsubishi UFJ Trust and Banking Corporation Corporate Agency Division (Help Desk) Tel: (toll-free) Office hours: 9:00 a.m. to 9:00 p.m. To institutional investors: The Company participates in the voting right electric exercise platform operated by ICJ Co., Ltd. If a nominal owner including a management trust bank (including a standing proxy) previously applies for the use of this platform, this platform may also be used in addition to the exercise of voting rights via above-mentioned Internet as a method to exercise voting rights by electric means for the general meeting of shareholders of the Company. *This English translation of the Notice of the 148th Ordinary General Meeting of Shareholders can be referred on our IR Information website (English version) at [

5 Reference Materials for the General Meeting of Shareholders Item 1: Approval of the proposed dividends from surplus The Company places the stable profit return to shareholders as one of the most important management issues, and before providing dividends, we comprehensively assess the profit conditions and the dividend payout ratio, and also consider the improvement of the financial conditions, prior investment for technical innovation and business development, and retained earnings. Proposed dividends for the 148th term is as shown below. Since we have paid interim dividends of 50 yen per share, the amount of dividends per year shall be 100 yen per share, the same amount as the previous term. Matters concerning year-end dividends (1) Type of dividends assets Money (2) Matters concerning distribution of dividends assets and the total amount 50 yen per share of our common stock: total amount of 8,240,984,700 yen (3) Effective date of distribution of dividends June 24, 2013 Item 2: Approval of the payment of bonus for Directors The Company proposes to provide the total amount of 173,111 thousand yen as bonus based on the results of this business year for seven Directors of nine Directors excluding two Outside Directors as of the end of this business year. The Company would like to ask the shareholders to leave the specific amount for each person and payment date and method to the Board of Directors

6 Item 3: Election of eight Directors At the close of this Ordinary General Meeting of Shareholders, the tenures of all nine present members of the Board of Directors will expire. Hence, we propose the appointment of eight Directors except Mr. Kenji Matsumoto who will retire at the close of this meeting. The candidates for the positions, all of whom are candidates for reelection, are as follows: Candidate number Name (Date of birth) Yukio Nagira (January 28, 1948) For reelection Brief profile, position, areas of responsibility and other important posts concurrently held April 1971 Joined Nitto Denko Corporation June 1998 Director June 2001 Executive Managing Director June 2003 Director, Executive Vice President June 2007 Director, Senior Executive Vice President April 2008 Representative Director, President (present) April 1977 Joined Nitto Denko Corporation April 2003 Vice President, General Manager of R&D Sector June 2004 Senior Vice President June 2006 Executive Vice President, General Manager of Industrial Business Headquarters Kaoru Aizawa June 2007 Director, Executive Vice President (August 25, 1952) June 2010 Director, Senior Executive Vice President For reelection June 2011 Representative Director, Senior Executive Vice President, General Manager of Quality, Environment and Safety Management Sector, General Manager of Export Control Center, in charge of environment management strategy, CSR and corporate governance (present) April 1978 Joined Nitto Denko Corporation June 2007 Vice President, Deputy General Manager of Optical Business Headquarters Hideo Takasaki (August 11, 1953) For reelection Yoichiro Sakuma (September 4, 1955) For reelection June 2008 Director, Vice President June 2011 Director, Executive Vice President June 2012 Director, Executive Vice President, General Manager of Sales Sector, in charge of functional base products and information fine materials April 2013 Director, Executive Vice President, General Manager of Corporate Sector (present) April 1980 Joined Nitto Denko Corporation June 2006 Vice President, Vice General Manager of Industrial Business Headquarters June 2010 Director, Vice President June 2011 Director, Senior Vice President April 2012 Director, Senior Vice President, General Manager of Functional Base Products Sector, in charge of management of operations in America, Europe and South Asia June 2012 Director, Senior Vice President, in charge of information and communication technology and new business development (present) Number of Company s shares owned 24,500 6,300 8,700 4,

7 Candidate number Name (Date of birth) Toshihiko Omote (December 3, 1958) For reelection Toru Takeuchi (January 1, 1959) For reelection Yoichiro Furuse (November 4, 1941) For reelection Candidate for Outside Director Independent Director Koshi Mizukoshi (September 1, 1938) For reelection Candidate for Outside Director Independent Director Brief profile, position, areas of responsibility and other important posts concurrently held April 1983 Joined Nitto Denko Corporation June 2007 Vice President, General Manager of Core Technology Center, Corporate Technology Sector June 2011 Director, Senior Vice President April 2013 Director, Senior Vice President, CTO, General Manager of Corporate Technology Sector, in charge of technical information (technical planning and intellectual property), functional base products and information fine materials (present) April 1981 Joined Nitto Denko Corporation June 2010 Vice President, General Manager of Corporate Accounting Division June 2011 Director, Vice President, CFO, General Manager of Corporate Accounting Division, Corporate Sector June 2012 Director, Vice President, CFO, General Manager of Corporate Accounting Division, Corporate Sector, in charge of management of operations in America, Europe and South Asia (present) July 2012 President of NITTO AMERICAS, INC (present) April 1964 Joined Sumitomo Bank, Ltd. June 1989 Director of Sumitomo Bank, Ltd. Oct Executive Director of Sumitomo Bank, Ltd. (retired in June 1996) June 1996 Senior Managing Director of Mazda Motor Corporation (retired in June 2000) June 2001 Director of Sanyo Electric Co., Ltd. June 2002 Representative Director and Vice President of Sanyo Electric Co., Ltd. (retired in October 2005) Jan Representative Director of Evanston Corporation (present) June 2007 Director of Nitto Denko Corporation (present) Sep Director of Akindo Sushiro Co., Ltd. (present) April 1961 Joined Kobe Steel, Ltd. June 1989 Director of Kobe Steel, Ltd. April 1999 President of Kobe Steel, Ltd. April 2004 Chairman of Kobe Steel, Ltd. Nov Chairman of the Kobe Chamber of Commerce and Industry (retired in November 2010) May 2005 Vice Chairman of Kansai Economic Federation (retired in May 2010) June 2009 Senior Adviser of Kobe Steel, Ltd. April 2011 Honorary Adviser of Kobe Steel, Ltd. (present) June 2011 Director of Nitto Denko Corporation (present) Number of Company s shares owned Notes: 1. There is no conflict of interest between the Company and the above candidates. 2. Both Mr. Yoichiro Furuse and Mr. Koshi Mizukoshi are the candidates for the Outside Directors stipulated in Item 7, Paragraph 3, Article 2 of the Ordinance for Enforcement of the Companies Act. 3. Notes for the candidates for the Outside Directors are as follows. (1) Candidate: Mr. Yoichiro Furuse 1) Reason for nomination as a candidate for the Outside Director In this fiscal year, Mr. Furuse participated in all of the Board of Directors meetings (12 times) and made useful comments based on his deep insight about management, which was cultivated through his service as director and representative director at listed companies, and extensive experience. The Company believes that his insight and experience can continue to be reflected in the management of the Company. Hence, we propose the appointment of him as an Outside Director. 2,900 4,800 2,

8 2) Number of years in service The tenure of Mr. Furuse as Outside Director of the Company will be 6 years at the close of this Ordinary General Meeting of Shareholders. 3) Limited Liability Agreement The Company has executed an agreement with Mr. Furuse to limit his liability to the limit stipulated in laws and regulations, and the Company intends to extend the agreement when he is reappointed. 4) Notice of the Independent Directors The Company has designated Mr. Furuse as Independent Director under the provisions of the Tokyo and Osaka stock exchanges and filed notices with those exchanges accordingly. (2) Candidate: Mr. Koshi Mizukoshi 1) Reason for nomination as a candidate for the Outside Director In this fiscal year, Mr. Mizukoshi participated in Board of Directors meetings (11 times out of 12 times) and made useful comments based on his deep insight about management, which was cultivated through his service as representative director at listed companies and as Chairman of the Kobe Chamber of Commerce and Industry, and extensive experience. The Company believes that his insight and experience can continue to be reflected in the management of the Company. Hence, we propose the appointment of him as an Outside Director. 2) Number of years in service The tenure of Mr. Mizukoshi as Outside Director of the Company will be 2 years at the close of this Ordinary General Meeting of Shareholders. 3) Limited Liability Agreement The Company has executed an agreement with Mr. Mizukoshi to limit his liability to the limit stipulated in laws and regulations, and the Company intends to extend the agreement when he is reappointed. 4) Notice of the Independent Directors The Company has designated Mr. Mizukoshi as Independent Director under the provisions of the Tokyo and Osaka stock exchanges and filed notices with those exchanges accordingly

9 Item 4: Determination of the amount of compensation provided as stock options to Directors and related details In 2004, the Company abolished retirement benefits paid in cash to Directors and Corporate Vice Presidents and introduced an equity-based compensation stock option system as a replacement. As the stock options are granted as a way to effectively grant stocks in kind, those who are qualified can set aside an amount equal to the grant during a year while they are in service and acquire the stock by exercising their right after retirement. With respect to the above-mentioned grant, it is proposed that the amount and related details of the equity-based compensation stock options that are planned to be granted to Directors in the current fiscal year be approved. Further, those who are granted the Warrants will not include the Outside Directors. (1) Amount of compensation provided as stock options The compensation for Directors is up to 30 million yen per month (out of which up to 2 million yen is allocated to Outside Directors), as determined at the 143rd Ordinary General Meeting of Shareholders held in Separate from this maximum compensation amount, Warrants up to 113 million yen (this will be the amount calculated by the fair value at the time of issuing the Warrants) will be issued as equity-based compensation stock options for a period of 1 year from the date of this Ordinary General Meeting of Shareholders. The number of Directors eligible to receive the Warrants will be 6, excluding the number of Outside Directors, on condition that Item 3 is approved. (2) Details of Warrants as stock option compensation The details of the Warrants to be issued as equity-based compensation stock options within the extent of the above amount shall be as follows, and the specific matters concerning the issuance shall be determined by a resolution of the Board of Directors regarding the issuance of Warrants. 1) Total number of the Warrants and class and number of underlying shares that are subject to the Warrants Total number of the Warrants: Up to 179 units Class and number of underlying shares that are the subject of Warrants: 100 shares of common stock per Warrant (Maximum total number of shares: 17,900 shares) In the event that the Company merges, undergoes corporate separation, or splits or consolidates its common stock and it becomes appropriate to change the number of shares, the Company shall make any adjustment deemed necessary. 2) Amount to be paid upon exercise of the Warrants The amount to be paid for one underlying share of the Warrants (exercise value) shall be 1 yen. 3) Period during which the Warrants can be exercised The Company shall separately determine the period of 30 years or less from the day following the issue date of the Warrants. 4) Conditions for the exercise of the Warrants Regardless of the provisions described in 3) above, in principle, a holder of the Warrants shall be able to exercise these Warrants only for a period separately determined from the day following the holder s retirement from the position as Director of the Company

10 Business Report for the 148th Fiscal Term For Fiscal Year of 2012 (April 1, 2012 to March 31, 2013) 1. Overview of business operations of the Nitto Denko Group (1) Operating progress and results During the fiscal year ended March 31, 2013, although the U.S. economy continued to recover at a moderate pace, conditions in the global economy were challenging overall due to the prolonged sovereign debt crisis in Europe and a slowdown in China and other emerging economies. In Japan, amid signs of a moderate pickup in the economy on the back of rebuilding demand in the aftermath of the Great East Japan Earthquake, the yen began to weaken on prospects for new monetary and fiscal policies following the change in government in the latter half of the fiscal year. As a result, despite continued uncertainty, there were growing prospects for economic recovery. Under such an economic environment, the Nitto Denko Group ( the Group ) started the fiscal year by positioning it as a year to overcome challenges in markets and against competitors. The Group launched new products for the electronics industry, its main market, aimed at smartphones (multi-function cellular phones) and tablet PCs, which are seeing very strong demand. In the automobile industry, sales expanded, centered on industrial tape (functional base products), supported by a recovery in automobile production. At the same time, as a result of aggressive efforts to implement a diversified business strategy and develop the businesses globally with the aim of creating new products and businesses, the industrial tape and medical products businesses in particular laid the foundations for new growth. As a result, consolidated net sales increased 11.2% from the previous year (changes hereafter are in comparison with the previous year) to 675,614 million yen. Operating income increased 21.6% to 68,672 million yen, ordinary income increased 15.3% to 67,372 million yen, and net income increased 41.1% to 43,840 million yen

11 (2) Summary of operations by segment Sales by business segment were as follows: (Unit: millions of yen) Business segment FY2012 (148th term) FY2011 (147th term) Sales (year-on-year change) Sales Industrial Tape 256,194 (up 5.4%) 242,986 Optronics 410,725 (up 14.4%) 359,105 Medical & Membrane 33,769 (up 1.2%) 33,384 Eliminations and corporate (25,074) (27,835) Total 675,614 (up 11.2%) 607,639 [Industrial Tape] Although sales to the automobile industry were affected by instability in Japan-China relations, sales were firm overall on the back of demand from markets in the Americas and South Asian markets. In addition, Nitto Denko started constructing a new plant in the promising growth market of Brazil to process high-performance components for automotive applications. Sales to the electronics industry were strong in the first half of the fiscal year, due to demand from the expanding smartphone and tablet PC markets and an increasing number of product applications for double sided adhesive tape and sealing products. However, moving into the second half of the fiscal year, the business was affected by a production adjustment at customers. In adhesive tape for electronics components and HDDs (hard disk drives), sales were weak owing to a slowdown in the market for PCs, digital home electronics and other products. Regarding conventional double sided adhesive tape, protection products and fluoroplastics products, which are all used for a broad range of industry applications, there was no strong recovery overall in sales. Highly cost-effective tape products, which are used for a wide range of applications, are expected to face increasingly intense global competition, but the Group is aiming to rapidly reinforce its business in this field through measures such as the acquisition of Bento, Turkey s leading maker of industrial tape. As a result of the above, net sales were 256,194 million yen (up 5.4%) and operating income was 12,209 million yen (down 12.0%). [Optronics] Sales of information fine materials were firm owing to stable supply and demand regarding products for TVs and continued growth in the market for products used in smartphones and tablet PCs. Sales of transparent electro-conductive films, which are core materials in touch panels for smartphones and tablet PCs, were steady due to growth in the market, as well as a successful strategy focusing on the quality and technological advantages of the Group s films. Sales of semiconductor related materials declined due to

12 the transfer of part of the semiconductor encapsulating materials business to Hitachi Chemical Co., Ltd. on October 1, The transfer did not include business for optical semiconductors. Sales of flexible printed circuits were affected by a slow recovery in the HDD market due to continued sluggish demand for PCs, despite an initial recovery of demand from the flood in Thailand at the beginning of the fiscal year. In processing materials, demand for protection tape laminating machines was weak due to continued restraint in capital investment by the semiconductor industry. However, sales of processing materials were solid overall on the back of firm demand for protection tape for semiconductor manufacturing processes, primarily for smartphones and tablet PCs. As a result of the above, net sales were 410,725 million yen (up 14.4%) and operating income was 56,593 million yen (up 34.2%) [Medical & Membrane] In medical products (medical related products), sales of medical hygiene materials were firm, but sales of transdermal therapeutic patches, a pharmaceutical product, were weak as a result of revisions to prescription drug prices and a downturn in demand after the building up of inventories following the earthquake. In addition, there were challenging conditions for a U.S. Group company in the oligonucleotide field due to the impact of project delays. In order to expand its business in the promising growth field of oligonucleotide, the Group acquired the assets of U.S. company Girindus America, Inc. In the field of membrane products (reverse osmosis membrane), the Group continued to strengthen its business base, and sales were solid due to a change in the areas of focus to general industrial applications in emerging markets and overseas shipments of products for seawater desalination projects. As a result of the above, net sales were 33,769 million yen (up 1.2%) and operating income was 359 million yen

13 (3) Trends in operating results and assets Item FY2008 (144th term) FY2009 (145th term) FY2010 (146th term) FY2011 (147th term) FY2012 (148th term) Net sales (million yen) 577, , , , ,614 Operating income (million yen) 13,838 56,086 85,245 56,491 68,672 Ordinary income (million yen) 14,807 58,833 85,143 58,436 67,372 Net income (million yen) ,570 55,743 31,066 43,840 Net income per share (yen) Dividend payout ratio (%) 4, ROA (Return on total assets) (%) ROE (Return on equity) (%) Operating income to net sales (%) Total assets (million yen) 558, , , , ,473 Net assets (million yen) 361, , , , ,628 Net assets per share (yen) 2, , , , , Shareholders equity to total assets (%) Depreciation and amortization (million yen) ,556 44,810 39,940 36,806 36,467 Capital investment (million yen) 55,926 37,147 26,882 33,758 49,807 Research and Development Costs (million yen) Exchange rate (average rate) (yen / 1 US dollar) 21,716 20,876 21,949 25,003 27,

14 (4) Capital investment The Group invested a total of 49,807 million yen in plant and equipment during the fiscal year under review. Of this total, 33,640 million yen was invested on a domestic basis for capital investment to improve production facilities for information fine materials at the Onomichi Plant and to improve production facilities for industrial tape and environment-related facilities at the Toyohashi Plant. For overseas group companies, a total of 16,166 million yen was invested in production facilities for information fine materials and industrial tape in China, Taiwan and South Korea, and production facilities for industrial tape and the acquisition of assets including facilities for contract manufacture of oligonucleotide, in the Americas. (5) Financing During the fiscal year under review, interest-bearing debts increased by 3,146 million yen (an increase of 8,159 million yen in short-term debts and a decrease of 5,012 million yen in long-term debts), due primarily to an increase in demand from the Company s units in emerging countries for local currency-denominated capital investment funds and operating funds. (6) Key issues to be addressed The Group understands that it is important to constantly be prepared for any development and to act rapidly and translate those actions into results, in order to deliver its global growth in an economic and market environment where the pace of change is becoming more extreme. Consequently, the Group is globally reinforcing its marketing activities, collectively called the San-Shin (Three-New) Activities, in which it aims to explore new uses, to develop new products and to create new demands, in order to respond more rapidly to changing customer needs and markets. At the same time, the Group will build optimum business models in new areas it is targeting. The Group will implement the following priority initiatives in each business segment: - Industrial Tape In Functional base products, the Group will step up marketing activities in the BRICs markets, Turkey, Indonesia and other emerging markets, and develop and implement strategies tailored to each area and business model in order to develop its operations on a global basis with the aim of creating Niche Top products

15 - Optronics In Information fine materials, the Group will continue to develop and strengthen its business in the growing smartphone and tablet PC markets. In semiconductor related materials, flexible printed circuits and processing materials, the Group will focus on boosting profitability through cost reduction initiatives and work to establish new products and businesses. - Medical & Membrane In Medical products, the Group will seek to deliver solid results in existing businesses and strengthen its pipelines to support future growth. In Membrane products, the Group will continue to focus on reinforcing the business base, and will also develop the area of the Clean part of the three areas in which the Group believes it can deliver value to customers and markets: Green (environment), Clean (new energy), and Fine (life sciences). (7) Main business of the Group (as of March 31, 2013) Business segment Industrial Tape Optronics Medical & Membrane Major products Bonding and joining products, surface protection products, sealing products, packaging products and equipments, engineering plastics Information fine materials, semiconductor related materials, flexible printed circuits, processing materials Medical related products, membrane products

16 (8) Status of major subsidiaries (as of March 31, 2013) Corporate name Capital Company s stake Nissho Corporation in million yen % Nitto Europe NV in thousand euro 87, Nitto Americas, Inc. in thousand dollars 1, Nitto Denko (China) in thousand RMB Investment Co., Ltd. 925, Nitto Denko (Suzhou) Co., Ltd. in thousand RMB ,902 (65.8) Taiwan Nitto Optical Co., Ltd. Korea Nitto Optical Co., Ltd. in thousand NT$ ,003 (3.6) in million won 59, Korea Optical Hightech Co., in million won Ltd. 22, Nitto Denko (HK) Co., Ltd. in thousand HK$ 13, Shanghai Nitto Optical Co., in thousand RMB Ltd. 89,981 (24.5) Nitto Denko Material (Thailand) Co., Ltd. in thousand Thai Baht ,000 (39.4) Main business Production, processing and sales of industrial tapes Production, processing and sales of industrial tapes Administration of the Group companies in the U.S. Administration of the Group companies in China Production, processing and sales of optronics Production, processing and sales of optronics Production, processing and sales of optronics Production, processing and sales of optronics Sales of industrial tapes, optronics Production, processing and sales of optronics Production, processing and sales of optronics Note: Figures in parenthesis in Company s stake indicate the percentage of indirect stake

17 (9) Principal offices of the Group (as of March 31, 2013) Nitto Denko Corporation Nissho Corporation Nitto Europe NV Nitto Denko (Suzhou) Co., Ltd. Taiwan Nitto Optical Co., Ltd. Korea Nitto Optical Co., Ltd. Korea Optical Hightech Co., Ltd. Nitto Denko (HK) Co., Ltd. Shanghai Nitto Optical Co., Ltd. Nitto Denko Material (Thailand) Co., Ltd. Head office Offices (Plants / Laboratory) Branches Kita-ku, Osaka Kita-ku, Osaka Genk, Belgium Suzhou, China Taichung, Taiwan Pyeongtaek, South Korea Gumi, South Korea Hong Kong, China Shanghai, China Ayutthaya, Thailand Tohoku Plant (Osaki, Miyagi), Kanto Plant (Fukaya, Saitama), Toyohashi Plant (Toyohashi, Aichi), Kameyama Plant (Kameyama, Mie), Shiga Plant (Kusatsu, Shiga), Ibaraki Laboratory (Ibaraki, Osaka), Onomichi Plant (Onomichi, Hiroshima) Tokyo Sales Branch (Shinagawa-ku, Tokyo), Nagoya Sales Branch (Naka-ku, Nagoya), Osaka Sales Branch (Kita-ku, Osaka), Kyushu Sales Branch (Hakata-ku, Fukuoka) (10) Employees of the Group and the Company (as of March 31, 2013) Number of employees Changes from the end of the previous year Group 25, Company 5, Note: The number of employees does not include Directors (those who are classified as employees) and temporary workers. (11) Major creditors (as of March 31, 2013) (Unit: millions of yen) Creditor Balance at the end of the fiscal year The Bank of Tokyo-Mitsubishi UFJ, Ltd. 4,897 Nippon Life Insurance Company 3,000 Meiji Yasuda Life Insurance Company 2,

18 2. Shareholders equity (as of March 31, 2013) (1) Number of shares authorized to be issued: 400,000,000 shares (2) Number of shares issued 173,758,428 shares (Number of treasury stock held) 8,938,734 shares (3) Number of shareholders 49,234 (4) Major shareholders (Top 10) Name Number of shares held Ownership percentage Japan Trustee Services Bank, Ltd. (Trust Account) Thousands of shares % 11, The Master Trust Bank of Japan, Ltd. (Trust Account) 10, JP MORGAN CHASE BANK , STATE STREET BANK AND TRUST COMPANY 4, SSBT OD05 OMNIBUS ACCOUNT - TREATY CLIENTS THE CHASE MANHATTAN BANK, N. A. LONDON SECS LENDING OMNIBUS ACCOUNT 4, , Nippon Life Insurance Company 2, Sompo Japan Insurance Inc. 2, Japan Trustee Services Bank, Ltd. (Trust Account 9) 2, CHASE MANHATTAN BANK GTS CLIENTS 2, ACCOUNT ESCROW Notes: 1. The Company holds treasury stock totaling 8,938,734 shares, but is not included in the above major shareholding parties. 2. The ownership percentage has been calculated based on the number of shares issued excluding treasury stock. 3. Although the reports on large scale shareholdings have been submitted as follows, the Company lists major shareholders above according to the shareholder register as of March 31, A total of three shareholders composed of Sumitomo Mitsui Trust Bank, Limited and its joint holders 8,912,000 shares (as of June 29, 2012) Capital Research and Management Company 11,649,000 shares (as of March 15, 2013) A total of two shareholders composed of FIL Investments (Japan) Limited and its joint holders 9,135,600 shares (as of March 29, 2013) Also, the following report on large scale shareholders has been submitted since April 1, Capital Research and Management Company 8,466,600 shares (as of April 30, 2013)

19 3. Matters concerning the Warrants (1) Summary of Warrants issued as compensation for executing duties and responsibilities owned by Directors at the end of this business year 1) Warrants (general stock options) Number of Warrants issued: 743 units (100 shares of common stock per unit) Class and number of underlying shares that are the subject to Warrants: Company s common stock: 74,300 shares Classified total of Warrants held by Directors and other executives Name No. 9 Warrants No. 10 Warrants Exercise value (payment amount per unit at the time of exercise) 324,000 yen 329,100 yen January 1, 2011 through Exercise period December 31, 2013 Number of owners and units by classification Directors Corporate Auditors January 1, 2012 through December 31, persons 5 persons 320 units 330 units 1 person 2 persons 18 units 75 units 2) Warrants (stock options of equity-based compensation) Number of the Warrants issued: 1,352 units (100 shares of common stock per unit) Class and number of underlying shares that are the subject to the Warrants: Company s common stock: 135,200 shares Classified total of Warrant units held by Directors and other executives Classification Type 1 Type 2 Exercise value (payment amount 100 yen 100 yen per unit at the time of exercise) Exercise period 20 years from the day following the issuing date 6 years from the day following the day they no longer serve as Directors, Corporate Vice Presidents, Corporate Auditors, Advisers or specific staff members (in principle) Number of owners and units by classification 30 years from the day following the issuing date 10 days from the day following the day they no longer serve as Directors 3 persons 7 persons Directors 121 units 1,231 units Notes: 1. Outside Directors and Corporate Auditors are not eligible for the above-mentioned Warrants. The above Warrants held by Corporate Auditors were granted when they were employees prior to assuming office as Corporate Auditors. 2. Following the discontinuation of traditional retirement benefit in cash approved at the 139th ordinary

20 general meeting of shareholders, issue of the above equity-based compensation stock options was approved as its replacement at the 139th ordinary general meeting of shareholders and onward. 3. Type 1 was approved at the 139th and 140th ordinary general meetings of shareholders under the former Commercial Code. Type 2 was approved at the 141st ordinary general meeting of shareholders and onward. (2) Summary of Warrants issued as compensation for executing duties and responsibilities to the employees of the Company and the Directors and the employees of the subsidiaries during this business year Name Number of the Warrants issued Class and number of underlying shares that are the subject to the Warrants Exercise value (payment amount per unit at the time of exercise) Warrants issued in August 2012 (stock option of equity-based compensation) Company s common stock: 207 units (100 shares of common stock per unit) 20,700 shares 100 yen Exercise period August 2, 2012 through August 1, days from the day following the day when the Corporate Vice President of the Company no longer serves as Corporate Vice President ( Right Exercise Starting Day ). Provided, however, that if the Warrant owner is the Corporate Vice President of the Company and has an employment contract with the Company, the later of the day following the day the Warrant owner no longer serves as Corporate Vice President or the day following the said employment contract expires shall be the Right Exercise Starting Day. Classified number of persons and units issued Employees of the Company (excluding those who also serve as Directors of the Company) 11 persons 207 units Note: The Warrants issued in August 2012 were approved by the Board of Directors of the Company to grant to the Directors and the Corporate Vice Presidents as a replacement of the traditional Directors retirement benefit in cash, the discontinuation of which was approved at the 139th ordinary general meeting of shareholders

21 4. Executives (1) Directors and Corporate Auditors (as of March 31, 2013) Name Yukio Nagira Kaoru Aizawa Representative Director President Representative Director Director Position, duties and significant concurrent positions CEO, COO Senior Executive Vice President General Manager of Quality, Environment and Safety Management Sector, General Manager of Export Control Center, in charge of environment management strategy, CSR and corporate governance Hideo Takasaki Director Executive Vice President General Manager of Sales Sector, in charge of functional base products and information fine materials Kenji Matsumoto Director Senior Vice President, in charge of medical related products and membrane products President of Nitto Denko Technical Corporation Yoichiro Sakuma Director Senior Vice President, in charge of information and communication technology and new business development Toshihiko Omote Director Senior Vice President CTO General Manager of Corporate Technology Sector, in charge of technical information (technical planning and intellectual property) Toru Takeuchi Director Vice President CFO General Manager of Corporate Accounting Division, Corporate Sector, in charge of management of operations in America, Europe and South Asia President of NITTO AMERICAS, INC Yoichiro Furuse Outside Director Koshi Mizukoshi Outside Director Kenji Ueki Yoshihiro Taniguchi Masashi Teranishi Masakazu Toyoda Mitsuhide Shiraki Corporate Auditor (full-time service) Corporate Auditor (full-time service) Outside Corporate Auditor Outside Corporate Auditor Outside Corporate Auditor

22 Notes: 1. Directors duties were changed as follows on April 1, Name Hideo Takasaki General Manager of Corporate Sector Duties Toshihiko Omote CTO General Manager of Corporate Technology Sector, in charge of technical information (technical planning and intellectual property), functional base products and information fine materials 2. Yoshihiro Taniguchi, the full-time Corporate Auditor, has had experiences in the Company s accounting and auditing departments over the years, having a broad range of knowledge in finance and accounting. 3. The Company designated all of the Outside Directors and Outside Corporate Auditors as Independent Directors/Auditors stipulated by Tokyo Stock Exchange and Osaka Securities Exchange and reported them to the Exchanges. 4. The Company adopts the executive officer system. Addition to the aforementioned Directors, the following 12 persons take on the duties as indicated. Name Position and Duties Hongin Kim Executive Vice President South Korea general management Takeshi Nasu Senior Vice President Manufacturing engineering Masami Kanzaki Senior Vice President IT management, procurement, logistics management, customer support center and sales management Masahiko Arimoto Senior Vice President Management of operations in East Asia Michio Yoshimoto Vice President Corporate legal and export control Toshio Yamamoto Vice President Personnel, general affairs, corporate education and management of business offices Toshiyuki Umehara Vice President Information fine materials business management and functional base products business management (manufacturing engineering) Nobuhiko Mizumoto Vice President Nitto Lifetech Corporation Kageshi Maruyama Vice President New business development Kazuyuki Okada Vice President Functional base products business management Yasuhito Oowaki Vice President Functional base products business management Tsutomu Nishioka Vice President Corporate technology

23 (2) Compensation, etc. paid to Directors and Corporate Auditors (Unit: millions of yen) Category Director (including Outside Director) Number of payees Amount of payment Outside Director Number of payees Amount of payment Corporate Auditor (including Outside Corporate Auditor) Number of payees Amount of payment Outside Corporate Auditor Number of payees Amount of payment Compensation in cash Bonus paid to Directors Stock Purchase/Subscription Warrants (Equity-based compensation stock options) Total Notes: 1. The above includes 1 Director and 3 Corporate Auditors who retired upon the closure of the 147th general meeting of shareholders held on June 22, The amount of employee s salary (including bonus) for a Director who also holds an employee post is paid separately the above-mentioned compensation. Meanwhile, the amount of employee s salary (including bonus) was not paid for the current term. 3. The limit of compensation for Directors is 30 million yen per month (approved at the 143rd general meeting of shareholders) and that for Corporate Auditors is 12 million yen per month (approved at the 139th general meeting of shareholders). 4. Bonus for Directors is a tentative amount and its payment is subject to the approval of the Item 2 for the 148th general meeting of shareholders as proposed. 5. Matters related to the Warrant (stock option) were approved at the 147th ordinary general meeting of shareholders. 6. The Company also paid 18 million yen as Directors retirement benefit to a retired Director in addition to the compensation mentioned in the table above. This was paid in the current term in accordance with its approval at the 139th ordinary general meeting of shareholders. (3) Summary of policy to determine amount or calculation method of compensation for Directors and Corporate Auditors 1) Compensation for Directors Compensation in cash, bonus and compensation by the Warrant, of Directors, are determined by the Representative Director(s) in accordance with the duties, responsibilities and performances of each Director within the range of the total amount approved by the general meetings of shareholders. 2) Compensation for Corporate Auditors Compensation for Corporate Auditors is determined by consultation among Corporate Auditors in accordance with the duties and responsibilities of each Corporate Auditor within the range of the total amount of compensation for Corporate Auditors approved by the general meetings of shareholders

24 (4) Outside Directors and Outside Corporate Auditors (as of March 31, 2013) 1) Major activities of Outside Directors and Outside Corporate Auditors Name 1. Outside Directors Yoichiro Furuse Koshi Mizukoshi Participation Major comments Participation 2. Outside Corporate Auditors Masashi Teranishi Masakazu Toyoda Mitsuhide Shiraki Major comments Participation Major comments Participation Major comments Participation Major comments Major activities Board of Directors: 100% (12 times out of 12 times) He mainly makes comments from the viewpoint of experienced corporate executive. Board of Directors: 92% (11 times out of 12 times) He mainly makes comments from the viewpoint of experienced corporate executive. Board of Directors: 100% (12 times out of 12 times) Board of Corporate Auditors: 100% (11 times out of 11 times) He mainly makes comments based on his experience at financial institutions over many years and deep financial knowledge. Board of Directors: 100% (12 times out of 12 times) Board of Corporate Auditors: 100% (11 times out of 11 times) He mainly makes comments based on his broad insight and extensive experience in the field of economy, trade and industry. Board of Directors: 100% (10 times out of 10 times) Board of Corporate Auditors: 100% (9 times out of 9 times) He mainly makes comments based on his broad insight as a person with relevant knowledge and experience. 2) Liability limitation agreement of Outside Directors and Outside Corporate Auditors The Company has executed agreements with all of the Outside Directors and Outside Corporate Auditors to limit the compensation liability provided in Paragraph 1, Article 423 of the Companies Act, and the compensation limitation amount under these agreements are the amount determined under laws and regulations

25 The Company s View on Independence of Outside Directors and Outside Corporate Auditors In order to ensure the independence of Outside Directors and Outside Corporate Auditors, the Company has established its Criteria for election of Outside Directors and Outside Corporate Auditors as described below: 1 The Outside Director/Outside Corporate Auditor is not, nor has been an executing person (Director, Corporate Auditor, Corporate Vice President or any other employee) of the Company or the Group. 2. The Outside Director/Outside Corporate Auditor is not an important executing person (director, corporate auditor, accounting advisor, executive officer or executive director, or any other important employee) of a major shareholder of the Company (a shareholder holding 10% or more of the voting rights of the Company). 3. The Outside Director/Outside Corporate Auditor is not an important executing person of a company of which the Company is a major shareholder. 4. The Outside Director/Outside Corporate Auditor is not an important executing person of a major counterparty of the Company (a counterparty for which the amount of payment or receipt for transactions with the Company for the latest fiscal year exceeds 2% of consolidated gross sales). 5. The Outside Director/Outside Corporate Auditor is not an important executing person of a major financial institution of the Company (a financial institution to which the Group s aggregate amount of loans payable for the latest fiscal year exceeds 2% of consolidated total assets). 6. The Outside Director/Outside Corporate Auditor is not a legal professional, accounting and tax professional, consultant, or research and education specialist who receives a large amount of compensation or donation (for the latest fiscal year, 10 million yen or more in the case of an individual and more than 2% of consolidated gross sales in the case of a corporation or an organization) from the Company. 7. The Outside Director/Outside Corporate Auditor does not have a kinship (being a relative within the third degree of kinship or a relative living together) with an executing person of the Company or the Group. 8. In addition to the above, the Outside Director/Outside Corporate Auditor does not have any interest that is reasonably considered to give rise to any doubt on the independence as an outside director or outside corporate auditor or to a conflict of interest with shareholders of the Company

26 5. Accounting auditors (1) Name of accounting auditor: KPMG AZSA LLC (2) Amount of compensation for accounting auditor (Unit: millions of yen) 1) Amount of compensation as an accounting auditor for this business year 150 Total amount of money and other asset interests to be paid by the Company and 2) the subsidiaries of the Company 192 Notes: 1. The compensation for auditing as an accounting auditor under the Companies Act and the compensation for auditing under the Financial Instruments and Exchange Act have not been differentiated in the auditing agreement between the Accounting Auditor and the Company, and also cannot be materially differentiated, so the above figure is the total of these compensations. 2. The Company entrusts to the accounting auditor support and advisory services, etc. for the introduction of IFRS (International Financing Reporting Standards), which are services other than those stipulated in Paragraph 1, Article 2 of the Certified Public Accountants Act (non-auditing work). (3) Policy to determine dismissal or non-reelection of the accounting auditor In addition to the dismissal of the Accounting Auditors by the Board of Corporate Auditors in accordance with the provision of Article 340 of the Companies Act, in principle, the Company does not reelect the Accounting Auditor, elects another relevant accounting auditor and brings the accounting auditor election agenda to the general meeting of shareholders upon consent or request of the Board of Corporate Auditors when the relevant execution of the business by the Accounting Auditor is deemed difficult or when problems are found for eligibility or creditworthiness of the Accounting Auditor based on the auditing standards. The Company also intends to determine election or non-election of the Accounting Auditor based on the number of years continued for auditing in addition to the factors mentioned above