[Please note that the followings including Independent Auditor s Reports and Report of the Board of Company Auditors are English translation of the original Japanese version, prepared only for the convenience of shareholders residing outside Japan with certain reference information excerpted from the Company s financial report for the fiscal year ended March 31, 2017. In the case of any discrepancy between the translation and the Japanese original, the latter shall prevail. Please be advised that certain expressions in the original document for domestic voting procedures that are not applicable to the aforesaid shareholders are omitted or modified to avoid confusion. Please also be advised that this material will not facilitate your status as a registered shareholder. In order to be authorized to physically attend the ordinary general shareholders meeting, presentation of the original Voting Form in Japanese to the receptionist at the place of the meeting is required.] To Our Shareholders: (Securities Code: 6963) May 31, 2017 21, Saiin Mizosaki-cho, Ukyo-ku, Kyoto, Japan Satoshi Sawamura President NOTICE OF THE 59TH ORDINARY GENERAL SHAREHOLDERS MEETING Dear Shareholders, You are cordially invited to attend the 59th Ordinary General Shareholders Meeting of ROHM CO., LTD. ( the Company ). If you are unable to attend the meeting, please kindly take the necessary procedure to exercise your voting rights in connection with the following matters to be resolved. Such matters can be reviewed in the attached REFERENCE MATERIALS FOR THE EXERCISE OF VOTING RIGHTS on page 3. Your vote must be received by the Company no later than Wednesday June 28, 2017, 5:15 p.m. (JST). NOTICE OF MEETING 1. Date and Time: Thursday, June 29, 2017, 10:00 a.m. (Start Accepting: 9:00 a.m.) 2. Place: Hyatt Regency Kyoto 1F The Ball Room 644-2 Sanjusangendo-mawari, Higashiyama-ku, Kyoto, Japan 3. Objectives of the Meeting: Reporting: 1. Business Report, Consolidated and Nonconsolidated Financial Statements, for the 59th Fiscal Year (from April 1, 2016 to March 31, 2017) 2. Audit Reports on Consolidated Financial Statements from the Independent Auditors and the Board of Company Auditors for the 59th Fiscal Year (from April 1, 2016 to March 31, 2017) Resolutions: Proposal 1: Appropriation of Dividends of Surplus for the 59th Fiscal Year Proposal 2: Election of ten (10) Directors Note: * You can exercise your voting rights by designating a shareholder who has voting rights and will attend the General Shareholders Meeting as your delegate. In such a case, a Power of Attorney will need to be submitted. * Please note that the meeting will be conducted in Japanese only. * If any changes have been made to items in the Reference Materials for the Exercise of Voting Rights, Business Report, Consolidated Financial Statements, or Nonconsolidated Financial Statements, such changes will be posted on our website. (http://www.rohm.com/web/global/investor-relations) - 1 -
How to Exercise Your Voting Rights 1. Three Methods to Exercise Your Voting Rights as follows: Attend the General Shareholders Meeting Presentation of the original Voting Form in Japanese to the receptionist at the place of the meeting is required. By means of the Voting Rights Exercise Form Fill out the Voting Rights Exercise Form with your voting in the affirmative or the negative for each proposal, and send the Form to the Company by mail. Voting by means of the Voting Rights Exercise Form can be accepted until 5:15 p.m. (JST), Wednesday, June 28, 2017. Via the Internet If you exercise your voting rights via the Internet, please follow the instructions below. If you are going to attend the meeting, you are not required to complete procedures to exercise your voting rights by mail (by means of the Voting Rights Exercise Form) or online. (1) Exercise Your Voting Rights via the Internet 1) You are able to exercise your voting rights via the Internet by accessing the designated voting website (http://www.evote.jp/). (Operation is adjourned from 2:00 a.m. to 5:00 a.m. everyday). You may be unable to access the voting website depending on the internet connection conditions. 2) Enter your login ID and temporary password, both of which can be found on your ballot sheet. Enter your current password, new password and the same again for confirmation, and then click a send button. Proceed with the instructions that appear on the display and select whether you are voting in the affirmative, or the negative for each proposals. 3) If you exercise your voting rights both by mail and via the Internet, only those exercised via the Internet will be valid, and if you exercise your voting rights multiple times via the Internet, the last time that you exercise your voting rights shall be deemed valid. 4) The expenses incurred by accessing to the voting website (internet access fees, communications charges, etc.) shall be borne by shareholders. 5) Voting from the website can be accepted until 5:15 p.m. (JST), Wednesday, June 28, 2017. However, exercising your voting rights at an earlier date is recommended. In the event of any problems with voting from the website, please contact the Help Desk below. (2) Handling of Password 1) You will be informed of your login ID and temporary password each time a shareholders meeting is called. 2) The password is very important to prove your legitimacy as a shareholder of the Company, so please ensure that you do not disclose them to other people. Please note that the Company cannot answer any inquiries regarding your password by phone, etc. For the e-voting system, please contact: Help Desk, Securities Business Division Mitsubishi UFJ Trust and Banking Corporation Telephone: 0120-173-027 Working hours: 9:00 a.m. to 9:00 p.m. (JST) 2. Exercising Your Voting Rights by Electronic voting platform If nominal shareholders (including standing proxies), such as management trust banks, apply in advance for the use of the platform for electronic exercise of voting rights for institutional investors, which is operated by ICJ, Inc., they may utilize the said platform as a method for exercising voting rights via an electromagnetic method for this Shareholders Meeting of the Company. - 2 -
REFERENCE MATERIALS FOR THE EXERCISE OF VOTING RIGHTS Proposal 1: Appropriation of Dividends of Surplus for the 59th Fiscal Year Concerning the appropriation and year-end dividends of surplus, ROHM plans to pay out as specified below, in thorough consideration of relevant factors, including the results of the year ended March 31, 2017, financial forecasts, and future fund demands for investment in business to improve our corporate value. Accordingly, the total dividend for the year is 130 yen per share, including the interim dividend of 50 yen. (1) Type of assets distributed: Cash (2) Distribution of dividends of surplus and total distributed amount: Distribution of each common share of the Company 80 yen Total amount distributed 8,462,014,800 yen (3) Date when the distribution takes effect: June 30, 2017 Proposal 2: Election of ten (10) Directors The terms of office for all current directors expire at the closing of this Ordinary General Shareholders Meeting. It is proposed that ten (10) directors be elected. The candidates for the directors are as follows: No. Name (Date of Birth) Satoshi Sawamura (Mar. 6, 1950) Profile, Experienced Positions and Duties, at the Company, and Important Duties outside the Company Aug. 1977 Jun. 2005 Apr. 2010 Joined the Company Director of the Company, General Manager of Global Sales Headquarters and Western Japan Sales Headquarters President (Representative Director) (Current Position) (* New Candidate) Number of ROHM Shares Held 5,000 1 [Reasons for nomination as a candidate for a Director] Satoshi Sawamura has attained an abundant knowledge and experience of the corporate management through the duties as Representative Director and contributes to improve corporate value of the whole group by strong leadership, and he has attained an abundant knowledge and negotiation ability through the experience of sales operations for many years and has built deep relationship of mutual trust with domestic and foreign customers. The Company requests continued election for a Director. 2 Katsumi Azuma (Nov. 10, 1964) Apr. 1989 Jun. 2013 Mar. 2017 Joined the Company Director of the Company, General Manager of Discrete Production Headquarters Managing Director of the Company, General Manager of Discrete Production Headquarters and in charge of Optical Module Production Headquarters (Current Position) 1,500 [Reasons for nomination as a candidate for a Director] Katsumi Azuma has attained an abundant knowledge and experience through the duties in production sections of semiconductors or electronic components, and he has superior ability in improvement of Discrete Semiconductor Devices and Module quality and production engineering. The Company requests continued election for a Director. - 3 -
No. Name (Date of Birth) Tadanobu Fujiwara (Oct. 1, 1953) Profile, Experienced Positions and Duties, at the Company, and Important Duties outside the Company Sep. 1983 Jun. 2009 Apr. 2017 Joined the Company Director of the Company, General Manager of Eastern Japan Sales Headquarters Managing Director of the Company, in charge of Sales (Current Position) Number of ROHM Shares Held 2,500 3 4 5 6 7 [Reasons for nomination as a candidate for a Director] Tadanobu Fujiwara has attained an abundant knowledge and negotiation ability through the experience of sales operations towards a wide variety of customers in the electronics market where globalization progress, and contributes to new customer development and sales improvement. The Company requests continued election for a Director. Isao Matsumoto (Jan. 25, 1961) Apr. 1985 Jun. 2013 Jun.2016 Joined the Company Director of the Company, General Manager of LSI Production Headquarters Director of the Company, General Manager of LSI Production Headquarters and LSI Product Development Headquarters (Current Position) [Reasons for nomination as a candidate for a Director] Isao Matsumoto has attained an abundant knowledge and experience through the duties in domestic and foreign LSIs production and engineering divisions, and he has superior ability in improvement LSIs quality and production engineering. The Company requests continued election for a Director. Masahiko Yamazaki (Jul. 27, 1959) Mar. 1982 Jun. 2010 Aug. 2016 Joined the Company Director of the Company, General Manager of Administrative Headquarters Director of the Company, General Manager of Administrative Headquarters, General Manager of CSR Headquarters (Current Position) [Reasons for nomination as a candidate for a Director] Masahiko Yamazaki has attained an abundant knowledge and experience through the duties in the administration sections such as general affairs, personnel affairs and legal affairs, and he has superior ability in managing administration sections of the whole group. The Company requests continued election for a Director. Masaki Sakai (Oct. 21, 1960) May. 1988 Jun. 2015 Jul. 2015 Joined the Company Director of the Company, General Manager of Euro-American Sales Headquarters Director of the Company, General Manager of Overseas Sales Headquarters (Current Position) [Reasons for nomination as a candidate for a Director] Masaki Sakai has attained an abundant knowledge and negotiation ability through the experience of sales operations in overseas for many years, and he has superior ability in developing global sales. The Company requests continued election for a Director. Kenichiro Sato (Mar. 8, 1931) Dec. 1954 Sep. 1958 Feb. 1991 Apr. 2010 Jun. 2016 Established Toyo Electronics Industry, the antecedent of the Company Established Toyo Electronics Industry Corporation. (Currently ROHM CO., LTD.) President (Representative Director) Chairman of Rohm Music Foundation (Current position) Chairman Emeritus of the Company Director of the Company (Current position) 1,600 5,200 1,100 2,405,066 [Reasons for nomination as a candidate for a Director] Kenichiro Sato, as the Company s founder, has a wealth of knowledge and experience gained through corporate management over the years, helps to strengthen the unity of the Board of Directors, and can contribute to rapid management decisions and the improvement of ROHM s corporate value. The Company requests continued election for a Director. - 4 -
No. 8 9 Name (Date of Birth) Hachiro Kawamoto (Oct. 18, 1934) Profile, Experienced Positions and Duties, at the Company, and Important Duties outside the Company Nov. 1995 Apr. 2007 Jun. 2008 Jul. 2008 Apr. 2013 May. 2013 Chairman of the Board of Trustees, The Ritsumeikan Trust Senior Advisor and Trustee, The Ritsumeikan Trust Director of the Company (Current Position) Advisor of The Ritsumeikan Trust Honorary Executive of The Ritsumeikan Trust (Current Position) Honorary Advisor of The Ritsumeikan Trust (Current Position) Number of ROHM Shares Held [Reasons for nomination as a candidate for an Outside Director] Hachiro Kawamoto has given advices and suggestions to the Company in terms of management and other issues by sharing broad-based insight and rich experience gained from longtime involvement in the management of an educational institution. The Company is certain that he will carry out his duties as an Independent Outside Director properly. The Company requests continued election for an Outside Director. Koichi Nishioka (May 11, 1946) Apr. 1971 Mar. 1991 Apr. 2003 Apr. 2008 Reporter working at the Editorial Office of Nikkei, Inc. Editorial Writer & Member of Nikkei, Inc. Columnist of Nikkei, Inc. Professor of Senshu University and Visiting Columnist of Nikkei, Inc. Director of the Company (Current Position) Jun. 2011 [Reasons for nomination as a candidate for an Outside Director] Koichi Nishioka has given advices and suggestions to the Company in terms of management and other issues by sharing broad-based insight and rich experience as a longtime economic press reporter. The Company is certain that he will carry out his duties as an Independent Outside Director properly. The Company requests continued election for an Outside Director. *Yoshiaki Suenaga (Jan. 1, 1959) Apr. 1985 May. 2017 Joined the Company Group General Manager of Corporate Marketing Strategy (Current Position) 1,400 0 243 10 [Reasons for nomination as a candidate for a Director] Yoshiaki Suenaga has attained an abundant knowledge and experience through the duties of LSIs development and design, product strategy, and he has superior ability in promoting product development and marketing strategy. The Company requests election for a Director. (Notes) 1. Kenichiro Sato is the Chairman of Rohm Music Foundation and the Company supports the activities of the foundation. There are no special relationships of interest between the other candidates and the Company. 2. Hachiro Kawamoto and Koichi Nishioka are candidates for the position of Outside Director of the Company. They satisfy the Independence Standards for Outside Officers of the Company on page 6, it has been judged that they are fully independent with no risk for conflict of interest with general shareholders. The Company has designated Hachiro Kawamoto and Koichi Nishioka as Independent Directors pursuant to the rules of the Tokyo Stock Exchange, and reported that information to the Exchange. 3. Pursuant to Article 427, Paragraph 1 of the Companies Act and the Articles of Incorporation of the Company, the Company has entered into contracts with Hachiro Kawamoto and Koichi Nishioka that limit their liabilities specified in Article 423, Paragraph 1 of the Companies Act to the minimum liability amount as specified in Article 425, Paragraph 1 of the Companies Act. If their reelections are approved, the Company will continue the contracts with them. 4. (1) Hachiro Kawamoto is currently an outside director of the Company and as of the closing of this General Meeting, his term of office as an Outside Director will reach nine years. (2) Koichi Nishioka is currently an outside director of the Company and as of the closing of this General Meeting, his term of office as an Outside Director will reach six years. - 5 -
Independence Standards for Outside Officers The Company appoints only persons who do not fall into any of the following categories of persons as its Outside Officers. 1. A major shareholder 1 of the Company or a person who executes the business of the Company 2 ; 2. A person who executes the business of a company of which the Company is a major shareholder; 3. A major customer 3 of the Group or a person who executes the business of that major customer; 4. An organization for whom the Group is a major customer 4 or a person who executes the business of said organization; 5. A consultant, accounting expert or legal expert who, in addition to director's remuneration, receives money exceeding a certain amount or other assets 5 from the Group (or an organization that receives the said assets or a person who belongs to the said organization); 6. A person who receives donations or grants exceeding a certain amount 6 from the Group (or an organization that receives the said grants is, or a director of that organization or a person who executes the business of that organization); 7. A partner, member or employee of the accounting auditors of the Company; 8. A person who executes the business of a major lender of the Company 7 ; 9. A person who fell into any of the categories described in 1 to 8 above in the last three years; 10. An organization to whom a director of the Group is transferred or a person who executes the business of said organization, or; 11. The spouse of an important person who executes the business of the Group 8 or a relative of that person within the second degree of relationship. (Enacted on November 5, 2015) 1 A major shareholder means a shareholder holding at least 10% of the total voting rights of the Company. 2 A person who executes business means a director, an executive officer, a member or an employee. 3 A major customer means a company whose payments account for over 2% of annual consolidated sales of the Company. 4 An organization for whom the Group is a major customer means a company with over 2% in annual sales coming from the Company. 5 A certain amount means ten million yen per year for an individual and over 2% of total revenue for an organization. 6 A certain amount means over ten million yen per year. 7 A major lender of the Company means a lender from which an amount exceeding 2% of total consolidated assets of the Company is borrowed. 8 An important person who executes business means a director (excluding outside directors) or a person in the senior management position of general manager or above. - 6 -
1. Present Status of ROHM Group (1) Business Progress and Results Business Report For the period from April 1, 2016 to March 31, 2017 Overall Review of Results of Operations On the whole, the world economy in the fiscal year ended in March 2017 continued its recovery, despite the uncertain outlook and fears that came in the first half of the year with the Brexit decision and the trends tied to the US presidential election, as the western economies held firm, the Japanese economy stayed on a recovery track and the Chinese economy put a halt to its slowdown. The electronics industry was as follows. The automotive electronics market was bullish, despite a slowdown that was seen in the US in the second half of the year, as the markets in Europe and China improved, the Japanese market recovered, and car manufacturers increased their use of in-vehicle electronics. As for the industrial equipment market, adjustments characterized the first half of the year, but the latter half of the year was bolstered by the recovery in the Chinese market and other positive factors. As for consumer products, the smartphone market improved in the second half of the year on a strong uptick in sales of new products, while PC, TV and other consumer product markets remained challenged. Working within this business environment, the ROHM Group continued to implement important strategies aimed at boosting sales to overseas customers and strengthening product lineups for the IoT, automotive and industrial equipment markets, which are expected to grow in the mid- to long-term. Accordingly, time and resources were directed at developing and combining new products and technologies into [1] analog solutions, [2] power solutions, [3] sensor solutions and [4] mobile solutions that were then offered to customers. The ROHM Group also pushed ahead with production innovation and other efforts necessary for achieving zero defects by continuing its RPS (ROHM Production System) activities (*1) and promoting technological development needed to build a state-of-the-art quality management system. Under these circumstances, consolidated net sales for the fiscal year ended on March 31, 2017 were 352,010 million yen (a decrease of 0.1% from last year) and operating income was 31,827 million yen (a decrease of 5.4% from last year). Ordinary income was 35,579 million yen (a decrease of 2.9% from last year) and profit attributable to owners of parent was 26,432 million yen (an increase of 2.9% from last year). *1 RPS (ROHM Production System) activities A production system centered on improvement activities for integrating higher quality into products, shortening lead time and thoroughly eliminating waste in inventory and other operations at all Group plants. ROHM believes that establishing production systems of unparalleled efficiency and quality is essential for strengthening the Group s earning structure. Overview of performance in each segment <LSI> Consolidated net sales for the year ended March 31, 2017 were 161,195 million yen (a decrease of 1.8% from last year) and segment income was 9,064 million yen (an increase of 18.3% from last year). In the automotive electronics market, sales of power ICs and CD driver ICs for car AV went through an adjustment, while greater adoption of power ICs and LED driver ICs for car bodies and instrument panels, and isolated gate driver ICs (*2) for powertrains for hybrid cars translated into steady sales. In the industrial equipment market, sales of LCD driver ICs and power ICs for HEMS and BEMS (*3), factory automation and measuring instruments grew steadily, while sales of interface ICs and fan motor driver ICs for office equipment, POS systems and communication infrastructure decreased. In the consumer electronics markets, power ICs and USB Power Delivery Type-C (*4) controller ICs for game consoles and home appliances, and color sensors for smartphones sold well, but sales of power ICs for PCs and lens driver ICs for cameras slumped. With regard to group company LAPIS SEMICONDUCTOR CO., LTD., sales of microcontrollers for power meters and memory ICs for gaming devices and other applications increased, while sales of display driver ICs for high resolution TVs decreased. - 7 -
*2 Isolated gate driver IC A gate driver IC drives power semiconductors like IGBT (*5), but by incorporating an isolated element in a gate driver, external isolating components that are critical to protecting people and systems have become unnecessary. *3 HEMS (Home Energy Management System)/BEMS (Building Energy Management System) A HEMS is a system for managing energy consumption in a home. A BEMS is a similar system, but for buildings. Though they serve different targets, both systems connect power meters, solar power systems, storage batteries, home appliances and other equipment over a network, visualize power consumption and economically manage equipment, using sensors and IT. *4 USB Type-C Power Delivery A USB power expansion standard for receiving/delivering up to 100W of power over USB. It allows for larger devices, such as laptops, to be powered, which is not possible using conventional USB, and speeds up charging time considerably for portables. *5 IGBT (Short for Insulated Gate Bipolar Transistor) A semiconductor that combines the best features of a MOSFET (*6) and bipolar transistor (*7), making it ideal for power control applications. *6 MOSFET (Short for Metal Oxide Semiconductor Field Effect Transistor) This type of transistor enables faster switching with less power consumption than bipolar transistors, and is widely used in a variety of electronic products. *7 Bipolar transistor A 3-terminal semiconductor in which N-type semiconductors and P-type semiconductors have a P-N-P or N-P-N junction structure. Primarily used for current amplification and switching. <Discrete semiconductor devices> Consolidated net sales for the year ended March 31, 2017 were 130,036 million yen (an increase of 2.8% from last year) and segment income was 20,916 million yen (a decrease of 2.7% from last year). With regard to transistors, sales for PCs and other applications decreased, but sales of power MOSFETs to the automotive and game console markets grew steadily. As for diodes, sales for smartphone and PC applications slumped, but sales of diodes for automotive electronics were strong. Regarding power devices, sales of IGBTs to the automotive electronics market grew greatly and sales of SiC devices for solar power systems were solid. Moreover, sales of LEDs for amusement devices and sales of semiconductor lasers for reading optical disks and other applications fell. <Modules> Consolidated net sales for the year ended March 31, 2017 were 39,608 million yen (an increase of 8.9% from last year) and segment income was 1,793 million yen (a decrease of 61.0% from last year). With regard to printheads, sales of printheads for mini-printers used for mobile payment terminals and other devices, and sales for laser printers went through an adjustment. As for optical modules, sales of sensor modules for wearable electronics decreased on the one hand, while sales of sensor modules for smartphones grew greatly on the other. <Others> Consolidated net sales for the year ended March 31, 2017 were 21,169 million yen (a decrease of 17.0% from last year) and segment income was 1,497 million yen (an increase of 470.7% from last year). Sales of resistors were strong thanks to demand from automotive electronics markets. Sales of tantalum capacitors for smartphones and PCs were sluggish. Sales of LED lighting products declined as a result of ROHM s withdrawal from business during this fiscal year. The net sales mentioned above are sales to external customers. - 8 -
(2) Capital Expenditures In this period, the Group invested 42,182 million yen in total in facilities to pursue the improvement and expansion of the development and manufacturing system as well as drastic streamlining. A breakdown of investment by segment is as follows: LSI Discrete Semiconductor Devices Modules Others Sales and Administrative Expenses Division 16,484 million yen 17,704 million yen 2,709 million yen 1,925 million yen 3,358 million yen (3) Financing The capital expenditures and others during this period were funded through internal funding. No financing through stock issuance, bond issuance and borrowing was carried out. (4) Priority Issues The world electronics market is expected to see continued growth over the mid- to long-term because of expansion in the digital home appliance and IoT markets and increased use of electronics in automobiles, but this will also bring greater competition when it comes to pricing and technologies. This will likely augment the pressure to supply internationally competitive products, which means that new products and technologies will have to be developed for global markets and costs will have to be reduced across the board. Understanding the circumstances, the ROHM Group will direct efforts at developing high value-added products that anticipate industry needs in a wide range of markets, including automotive electronics, industrial equipment, information and communications, and mobile devices. Moreover, in order to serve expanding overseas markets, the ROHM Group will continue to strengthen our development and sales structures around the world. In addition, we will continue to strengthen CSV activities as a contribution to the realization of a sustainable society, and our risk management system in order to maintain business intact in the face of potential and actual risks. - 9 -
(5) Operating Results and Financial Position of the ROHM Group (Millions of yen otherwise noted) Item Mar-2014 Mar-2015 Mar-2016 (Current period) Mar-2017 Net Sales 331,087 362,772 352,397 352,010 Ordinary Income 35,915 59,218 36,625 35,579 Net Income Attributable to Owners of the Parent 32,091 45,296 25,686 26,432 Net Income per Share (yen) 297.65 420.15 241.91 249.87 Total Assets 754,407 864,380 804,134 834,503 Equity 663,387 752,433 706,251 725,452 (Notes) 1. These values are rounded down to the nearest million except for the net income per share for the period, rounded down to two decimal places. 2. Net income per share for the period is calculated based on the average number of shares during the period after deduction of the number of treasury stock. (Reference) Operating Results and Financial Position of the Company (Millions of yen otherwise noted) Item Mar-2014 Mar-2015 Mar-2016 (Current Period) Mar-2017 Net Sales 282,123 313,498 307,047 303,279 Ordinary Income 13,284 59,711 12,094 21,060 Net Income 10,765 36,700 6,450 20,187 Net Income per Share (yen) 99.85 340.43 60.75 190.85 Total Assets 485,318 548,790 496,342 521,498 Equity 419,324 459,868 425,359 442,278 (Notes) 1. These values are rounded down to the nearest million except for the net income per share for the period, rounded down to two decimal places. 2. Net income per share for the period is calculated based on the average number of shares during the period after deduction of the number of treasury stock. (6) Main Business Segments The Group s main operations are the manufacturing and sales of electronic components. The main products and business segments are as follows: Segment Name LSI Discrete semiconductor devices Modules Others Main products and business Analog ICs, Logic ICs, Memory ICs, ASICs, Foundry business operations Diodes, Transistors, Light Emitting Diodes, Laser Diodes Printhead Products, Optical Modules, Power Modules Resistors, Tantalum Capacitors, Lighting Products - 10 -
(7) Main Business Sites Name Location ROHM CO., LTD. Head Office/Factory Kyoto Kyoto Technology Center Kyoto Yokohama Technology Center Kanagawa Kyoto Business Center Kyoto Tokyo Business Center Tokyo Yokohama Business Center Kanagawa Nagoya Business Center Aichi Manufacturing ROHM HAMAMATSU CO., LTD. Shizuoka ROHM WAKO CO., LTD. Okayama ROHM APOLLO CO., LTD. Fukuoka ROHM MECHATECH CO., LTD. Kyoto ROHM SHIGA CO., LTD. Shiga LAPIS SEMICONDUCTOR CO., LTD. Kanagawa LAPIS SEMICONDUCTOR MIYAGI CO., LTD. Miyagi LAPIS SEMICONDUCTOR MIYAZAKI CO., LTD. Miyazaki ROHM KOREA CORPORATION Korea ROHM ELECTRONICS PHILIPPINES, INC. Philippines ROHM INTEGRATED SYSTEMS (THAILAND) CO., LTD. Thailand ROHM SEMICONDUCTOR (CHINA) CO., LTD. China ROHM ELECTRONICS DALIAN CO., LTD. China ROHM WAKO ELECTRONICS (MALAYSIA) SDN., BHD. Malaysia ROHM MECHATECH PHILIPPINES, INC. Philippines ROHM MECHATECH (THAILAND) CO., LTD. Thailand ROHM POWERVATION LTD. Ireland KIONIX, INC. U.S.A. SICRYSTAL AG Germany Sales ROHM SEMICONDUCTOR KOREA CORPORATION Korea ROHM SEMICONDUCTOR TRADING (DALIAN) CO., LTD. China ROHM SEMICONDUCTOR (SHANGHAI) CO., LTD. China ROHM SEMICONDUCTOR (SHENZHEN) CO., LTD. China ROHM SEMICONDUCTOR (H.K.) CO., LTD. China ROHM SEMICONDUCTOR TAIWAN CO., LTD. Taiwan ROHM SEMICONDUCTOR SINGAPORE PTE. LTD. Singapore ROHM SEMICONDUCTOR PHILIPPINES CORPORATION Philippines ROHM SEMICONDUCTOR (THAILAND) CO., LTD. Thailand ROHM SEMICONDUCTOR MALAYSIA SDN. BHD. Malaysia ROHM SEMICONDUCTOR INDIA PVT. LTD. India ROHM SEMICONDUCTOR U.S.A., LLC U.S.A. ROHM SEMICONDUCTOR DO BRASIL LTDA. Brazil ROHM SEMICONDUCTOR GmbH Germany Logistics ROHM LOGISTEC CO., LTD. Okayama (8) Employees LSI Segment Name Discrete semiconductor devices Modules Others Sales and administrative expenses division Number of Employees Change from the Previous Fiscal Year Average Service Years 21,308 Increase by 137 employees 10.3 years (Notes) 1. The value of the average service years is rounded down to one decimal place. 2. The number of employees includes, in addition to full-time employees, 460 regular workers based on fixed-term employment contracts. - 11 -
(9) Summary of Important Subsidiaries Company Name ROHM HAMAMATSU CO., LTD. ROHM APOLLO CO., LTD. LAPIS SEMICONDUCTOR CO., LTD. ROHM ELECTRONICS PHILIPPINES, INC. ROHM INTEGRATED SYSTEMS (THAILAND) CO., LTD. ROHM SEMICONDUCTOR (CHINA) CO., LTD. ROHM ELECTRONICS DALIAN CO., LTD. ROHM SEMICONDUCTOR KOREA CORPORATION ROHM SEMICONDUCTOR (H.K.) CO., LTD. ROHM U.S.A., INC. ROHM ELECTRONICS ASIA PTE. LTD. Capital Million yen 15,400 Million yen 450 Million yen 400 Thousand peso 1,221,563 Thousand baht 1,115,500 Million yen 16,190 Million yen 9,417 Thousand won 1,000,000 Thousand HK$ 27,000 Thousand US$ 253,642 Thousand S$ 90,630 Voting Right Ratio by ROHM 100.0% 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Main Business Manufacture of electronic components Manufacture of electronic components Manufacture of electronic components Manufacture of electronic components Manufacture of electronic components Manufacture of electronic components Manufacture of electronic components Sales of electronic components Sales of electronic components Administrative responsibility for subsidiaries in North and South America Administrative responsibility for subsidiaries in Asia and others (Notes) 1. Amounts of capital and voting right ratios are rounded down to the nearest million (in yen) or the nearest thousand (in foreign currencies), and to one decimal places, respectively. 2. Voting right ratio by ROHM includes indirect holdings through subsidiaries. 2. Status of Shares (1) Total Number of Shares Authorized to be Issued 300,000,000 (2) Total Number of Shares Issued 111,200,000 (3) Total Number of Shareholders as of March 31, 2016 23,149 (4) Major Shareholders (Top 10 Shareholders) (Including 5,424,815 shares of treasury stock) Name Number of Shares Held (Thousands of shares) Ownership Rohm Music Foundation 8,000 7.56% Japan Trustee Service Bank, Ltd. (Trust account) 7,322 6.92- The Master Trust Bank of Japan, Ltd. (Trust account) 7,204 6.81- Japan Trustee Service Bank, Ltd. (Trust account 9) 3,274 3.09- The Bank of Kyoto, Ltd. 2,606 2.46- Kenichiro Sato 2,405 2.27- Japan Trustee Service Bank, Ltd. (Trust account 5) 1,775 1.67- STATE STREET BANK WEST CLIENT - TREATY 505234 1,351 1.27- CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW 1,317 1.24- Japan Trustee Service Bank, Ltd. (Trust account 1) 1,305 1.23- (Notes) 1.The number of shares less than one thousand shares and the percentage of ownership less than two decimal places are rounded down to the nearest unit, respectively. 2. 5,424 thousand shares of treasury stock are excluded from the above calculation. 3. Ownership is calculated by deducting the number of treasury stock from the total number of shares issued. - 12 -
3. Directors and Company Auditors of the Company (1) Directors and Company Auditors (As of March 31, 2017) Position Name Positions at the Company and Important Duties outside the Company * President Satoshi Sawamura Managing Director Katsumi Azuma General Manager of Discrete Production Headquarters and in charge of Optical Module Production Headquarters Managing Director Tadanobu Fujiwara General Manager of Japanese Sales Headquarters Director Isao Matsumoto General Manager of LSI Production Headquarters and LSI Product Development Headquarters Director Eiichi Sasayama General Manager of Accounting & Finance Headquarters Director Masahiko Yamazaki General Manager of Administrative Headquarters, General Manager of CSR Headquarters Director Masaki Sakai General Manager of Overseas Sales Headquarters Director Kenichiro Sato Chairman of Rohm Music Foundation Director Director Company Auditor (Full-Time) Company Auditor (Full-Time) Hachiro Kawamoto Koichi Nishioka Yoshiaki Shibata Hiroyuki Nii Company Auditor Hidero Chimori Attorney at Law, Outside Director of Kobe Steel, Ltd. Company Auditor Shinya Murao CPA Company Auditor Haruo Kitamura CPA, Outside Director of MonotaRO Co., Ltd. (Notes) 1. * Representative Director. 2. Hachiro Kawamoto and Koichi Nishioka are Outside Directors as provided in Article 2, Paragraph 15, of the Companies Act. 3. All five of the Company Auditors are Outside Company Auditors as provided in Article 2, Paragraph 16, of the Companies Act. 4. The Company has designated Directors Hachiro Kawamoto and Koichi Nishioka and all five of the Company Auditors as Independent Directors/Company Auditors pursuant to the rules of the Tokyo Stock Exchange, and reported that information to the Exchanges. 5. Company Auditors Shinya Murao and Haruo Kitamura are certified public accountants and are duly informed of finances and accounting. 6. Changes in the membership of the Board of Directors and the Board of Company Auditors during this fiscal year were as specified below. (1) New appointments 1) Kenichiro Sato was newly elected and appointed as a Director at the 58th Ordinary General Shareholders Meeting of June 29, 2016. 2) Hiroyuki Nii was newly elected and appointed as a Company Auditor at the 58th Ordinary General Shareholders Meeting of June 29, 2016. 3) Hidero Chimori was newly elected and appointed as a Company Auditor at the 58th Ordinary General Shareholders Meeting of June 29, 2016. (2) Retirements 1) Jun Iida resigned from the position of Director as of the closing of the 58th Ordinary General Shareholders Meeting of June 29, 2016. 2) Hideo Iwata retired from the position of Company Auditor as of the closing of the 58th Ordinary General Shareholders Meeting of June 29, 2016 due to the expiry of his term of office. 3) Yasuhito Tamaki retired from the position of Company Auditor as of the closing of the 58th Ordinary General Shareholders Meeting of June 29, 2016 due to the expiry of his term of office. (3) Changes in positions 1) Katsumi Azuma was appointed as Managing Director as of January 13, 2017. 2) Tadanobu Fujiwara was appointed as Managing Director as of January 13, 2017. (4) Changes in duties 1) Katsumi Azuma s position was changed from General Manager of Discrete Module Production Headquarters to General Manager of Discrete Production Headquarters and in charge of Module Production Headquarters as of June 11, 2016, and from General Manager of Discrete Production Headquarters and in charge of Module Production Headquarters to General Manager of Discrete Production Headquarters and in charge of Optical Module Production - 13 -
Headquarters as of March 25, 2017. 2) Isao Matsumoto s position was changed from General Manager of LSI Production Headquarters to General Manager of LSI Production Headquarters and LSI Product Development Headquarters as of June 29, 2016. 3) Masahiko Yamazaki s position was changed from General Manager of Administrative Headquarters to General Manager of Administrative Headquarters, General Manager of CSR Headquarters as of August 25, 2016. (2) Overview of the Contents of Contracts for Limitation of Liability Pursuant to Article 427, Paragraph 1 of the Companies Act and the Articles of Incorporation of the Company, the Company has entered into contracts with all Outside Directors and Outside Company Auditors that limit their liabilities specified in Article 423, Paragraph 1 of the Companies Act to the minimum liability amount as specified in Article 425, Paragraph 1 of the Companies Act. (3) Total Remunerations for Directors and Company Auditors Position Number of Members Remuneration Directors 11 315 million yen Company Auditors 7 61 million yen Total 18 376 million yen (Notes) 1. Directors remunerations do not include the amount paid as salary for employees to those Directors who are also employees. 2. The total amount of Directors remuneration is limited to 600 million yen per year based on the resolution of the 48th Ordinary General Shareholders Meeting held on June 29, 2006, and the total amount of Company Auditors remuneration is limited to 6 million yen per month based on the resolution of the 36th Ordinary General Shareholders Meeting held on June 29, 1994. 3. Directors remunerations include the amount of 70 million yen as bonuses for the Directors with respect to the 59th fiscal year. 4. Two Directors are Outside Directors and all the Company Auditors are Outside Company Auditors. The total amount of their remunerations is 83 million yen. (4) Main Activities of Outside Director and Outside Company Auditors Position Name Main Activity Director Hachiro Kawamoto Attended all 25 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 11 resolutions deemed to have been made in writing). Provides opinions based on experience and knowledge as a longtime administrator of an incorporated school. Director Koichi Nishioka Attended 96% of the 25 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 11 resolutions deemed to have been made in writing). Provides opinions based on experience and knowledge as a longtime economic press reporter. Company Auditor (Full-Time) Company Auditor (Full-Time) Yoshiaki Shibata Hiroyuki Nii Attended all 25 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 11 resolutions deemed to have been made in writing). Attended all 12 meetings of the Board of Company Auditors. Provides opinions regarding corporate management, etc., from a comprehensive point of view, based on his position and experience as the full-time Company Auditor. Attended all 19 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 7 resolutions deemed to have been made in writing). Attended all 7 meetings of the Board of Company Auditors. Provides opinions regarding corporate management, etc., from a comprehensive point of view, based on experience and knowledge as a longtime administrator at a financial institution. Company Auditor Hidero Chimori Attended 89% of the 19 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 7 resolutions deemed to have been made in writing). Attended all 7 meetings of the Board of Company Auditors. Provides opinions regarding corporate management, etc., principally from a professional point of view as a lawyer. Company Auditor Shinya Murao Attended 92% of the 25 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 11 resolutions deemed to have been made in writing). Attended all 12 meetings of the Board of Company Auditors. Provides opinions regarding corporate - 14 -
management, etc., principally from a professional point of view as a certified public accountant (CPA). Company Auditor Haruo Kitamura Attended all 25 meetings of Board of Directors during the fiscal year ended March 31, 2017 (including participation in 11 resolutions deemed to have been made in writing). Attended 92% of the 12 meetings of the Board of Company Auditors. Provides opinions regarding corporate management, etc., principally from a professional point of view as a CPA. 4. Independent Auditor (1) Name of the Independent Auditor Deloitte Touche Tohmatsu LLC (2) Remuneration for the Independent Auditor for the 59th Fiscal Year 94 million yen (Notes) 1. The audit engagement between the Company and its Independent Auditor, Deloitte Touche Tohmatsu LLC, does not and actually cannot distinguish between remuneration based on the Companies Act and remuneration based on the Financial Instruments and Exchange Act. For this reason, the amount above includes the aggregate sum of these amounts. 2. Based on the Practical Guidelines for Cooperation with Independent Auditors released by the Japan Audit & Supervisory Board Members Association, the Board of Company Auditors has verified and examined the execution of duties of accounting audit and remuneration for previous fiscal year, the contents of audit plans and the calculation basis for remuneration estimates. As a result, the Board of Company Auditors agreed to the remuneration paid to the Independent Auditor. (3) Policy Regarding Decision to Dismiss or Not to Reappoint Independent Auditor The Board of Company Auditors may dismiss the Independent Auditor based on a unanimous decision when the Board of Company Auditors has decided that the Independent Auditor has violated or infringed such laws as the Companies Act or the Certified Public Accountants Act or have offended public order or morals. The Board of Company Auditors may decide the proposal regarding dismiss or not to reappoint the Independent Auditor and based on such decision the Board of Directors shall submit such proposal at the General Shareholders Meeting when it is deemed difficult for the Independent Auditors to perform audits properly due to an event that may damage their qualification or independence. (4) Total Remuneration for the Independent Auditor to be Paid by the Company and Its Subsidiaries 135 million yen (Note) Among ROHM Group s major subsidiaries, financial statements of the eight overseas subsidiaries are audited by certified public accountants or auditing firms (including those who have commensurate licenses in foreign countries) other than the Company s Independent Auditor. 5. Corporate System and Policies of ROHM Group (1) Corporate System to Ensure Proper Operation (Internal Control System) Regarding the reinforcement of the internal control system as one of the major corporate missions, ROHM Group intends to carry out its corporate social responsibilities by maintaining compliance of the operational processes of the entire Group. The Board of Directors of the Company has resolved the basic policies to build the internal control system and the improvement of the system, as listed below: 1) The system to ensure the compliance of the execution of duties of the Directors under applicable laws as well as the Articles of Incorporation (a) In order to promote further progress of globalization, ROHM Group will comply not only with laws and regulations but also with the 10 principles of the United Nations Global Compact for a wide range of problems in the areas of human rights, labor, the environment, anti-corruption, etc. and promote the management focusing on CSR based on ISO26000, the international standards for social responsibility and Electronic Industry Citizenship Coalition (EICC) Code of Conduct, etc. (b) Directors should perform their duties based on the in-house regulations such as ROHM Group Business Conduct Guidelines and the Basic Rules of the Board of Directors and ensure the compliance with all applicable laws and regulations as well as the Articles of Incorporation (c) The Director or Directors who are highly informed in a specific field should be responsible for the duties related to such field, while all Directors should hold discussions and monitor each other on a daily basis concerning the respective individual fields. - 15 -
(d) Should a Director be found having committed an illegal act by another Director or a Company Auditor, it should be promptly reported to the Board of Directors and the Board of Company Auditors. (e) In addition to two Outside Directors, five Outside Company Auditors should regularly hold the meeting to exchange information and opinions with each other and constantly check that Directors perform their duties in compliance with all applicable laws and regulations as well as the Articles of Incorporation. (f) The Compliance Hotline (the internal hotline system (including the case where the hotline system independent from the management is set up at an outside law firm) and hotline system for suppliers) should be deployed to the entire ROHM Group including overseas entities to discover any illegal conduct of a Director and to prevent recurrence thereof. 2) System to save and control information related to Directors performance of duties (a) Decisions regarding Directors performance of their duties, such as the minutes of general shareholders meetings, the minutes of the meetings of the Board of Directors, executive proposals, business plans for individual fiscal years, etc., should be saved in writing. The documents should be saved and controlled in compliance with all applicable laws and regulations as well as all in-house regulations. (b) The directions and notices provided to Group companies or in-house divisions concerned shall be issued via email or in writing as a rule. The directions and notices shall be saved so as to be inspected at any time by Directors and Company Auditors. (c) Information related to Directors performance of duties should be kept and controlled duly by relevant sections or divisions concerned, and the leak and unjust use of such information must be prevented by giving internal notice and information security training to all employees to ensure that they are fully aware of and comply with such rule. 3) Rules and other systems to control the risk of loss (a) Under the CSR Committee chaired by the President himself, Committees of Quality, Corporate Safety and Health, Risk Management/BCM, Compliance, Information Disclosure, Environmental Conservation, etc. should be established as company-wide cross-sectional committees. These committees will appropriately respond to various management issues and risks in each responsible area by taking necessary measures, giving directions and solving problems. (b) The Risk Management/BCM Committee should be organized to identify, analyze and control major risks that may occur in the course of the performance of business operations. In order to avoid or minimize the effect of unforeseeable circumstances such as sudden natural disasters as much as possible and enable the survival of our business as a consequence, the Risk Management/BCM Committee will verify the activities of each section in charge of risk management, establish a business continuity plan and take any and all possible preliminary measures or preparations across ROHM Group. (c) As a corporate effort to eradicate antisocial groups, a Risk Management Office should be established in the Department of General Affairs. The Office should cooperate and exchange information with external specialist organizations such as the police department, promote specific actions and perform them thoroughly, to eradicate antisocial groups. In-house regulations should be established to eradicate antisocial groups and should be strictly observed. All ROHM Group employees should be informed by way of the ROHM Group Business Conduct Guidelines, as distributed to all employees, or by other means, that they must take a firm stand against antisocial groups. Further, the necessity of taking a firm stand against antisocial groups should be communicated to all employees through various in-house training sessions. 4) System to ensure that Directors perform their duties efficiently (a) The Board of Directors should consist of a small number of Directors authorized to execute business operations to realize prompt executive decision-making. (b) The Board of Directors should have Directors who are highly experienced in different fields. The Board should divide duties to the Director in charge of that certain field and have him/her perform the specific duties of that field. (c) Issues that may have a considerable influence on corporate management should be examined, analyzed and reported by in-house project teams established separately for individual issues. Upon completion of such examination, prompt decisions should be made by way of a meeting of Board of Directors or executive proposals, as appropriate, based on the Articles of Incorporation and in-house regulations. - 16 -