Integrated Report 2024

[ For inquiry concerning our IR activities ]Head Office: 6-11, Miyahara 4-chome, Yodogawa-ku, Osaka 532-0003
T E L : +81-6-6399-5952 FAX: +81-6-6399-5864
U R L : https://www.daitron.co.jp/en/
E-mail : info.ir@daitron.co.jp

Hard work, prosperous lifestyle
In “hard work,” we put our determination to give our all in our work during working hours.
“Prosperous lifestyle” suggests that payments be increased and employees and shareholders
earn fair returns, as performance improves.
Since 2008, we have been further promoting this idea to better motivate employees by realizing aperformance-based pay system of an industry-leading level.

Philosophy System

Foundation Spirit
Code of Conduct
The writings offounder Zenshiro Takamoto

Management Philosophy▶Our Company will aim to provide a comfortable and safe work environment, respecting
our employees’ needs for self-esteem and encouraging every individual to achieve theirfullest potential.
▶Our Company will do its utmost to satisfy its customers, shareholders, and suppliers.
▶Our Company will strive to maintain a global outlook and continue to conquer
challenges in technological innovations to provide high value-added products for ourcustomers.
▶Our Company is committed to being a good corporate citizen and actively participatingin those communities where we are represented.

Group Statement

Table of Contents
Chapter 1 Value Creation

Product Lines ................................... 35

Philosophy System ........................... 01

Strategies by Management Organization ... 37

Greeting ........................................... 03

Chapter 4 Sustainability

The Daitron Group History ................ 05

Sustainability Management ............... 41

Financial and Non-Financial Highlights ... 07

Environmental Initiatives.................... 43

Our Value Creation Process.............. 09

Human Resource Initiatives .............. 47

The Source of Our Value Creation .... 11

Health and Safety Initiatives .............. 49

Chapter 2 Growth Strategy

Quality Initiatives ............................... 50

Message from the President ............. 15

Chapter 5 Governance

Message from the DivisionCorporate Governance ..................... 51

Organization Daitron GroupManager-Business Administration .... 21

Officers Introduction ......................... 57

New Medium-Term Business Plan .... 23

Outside Directors Messages............. 59

Chapter 3 Business Strategy

Chapter 6 Data Book

Business Management System and

Financial Summary ........................... 61

Segment Information ........................ 31

Company Information/Stock Information... 63* Caution Regarding Future Outlooks
The forward-looking statements in this integrated report,
including future plan figures and measures, are calculated
based on judgments and assumptions that the Company
has made based on information currently available andthat it believes to be reasonable. Accordingly, actual
results may differ from these forecasts due to various
important factors such as economic conditions in majordomestic and overseas markets and fluctuations in foreignexchange rates.

Overview by Product Segment ......... 33

01

Integrated Repor t 2024

• Editorial Policy
The Daitron Group has prepared the Daitron
Integrated Report 2024 to help all stakeholders
understand our efforts to create sustainable value.
In addition to our most recent businessresults, this report describes our management
policies and strategies, including notable casestudies. For detailed financial data and otherinformation, please visit our website.
• Scope of Reporting
Period Fiscal Year Ended December 31, 2023
(January 1, 2023 to December 31, 2023)

Grasp markets from a global viewpoint to create and provide values one stepahead of customer needs
This Group Statement expresses our idea of what the Daitron Group should be like. Further, “NEXT”(NETWORK, ENGINEERING, X[SYNERGY], TRADING) implies our aspiration to create new value as
an engineering trading company leading the electronics industry and capitalizing on its network.

* Some information from outside of this period is also included.

Integrated Repor t 2024

02

Chapter 1

Value Creation

Greeting

Contributing to future value creation through electronics
Daitron Co., Ltd. (then called Daito Shoji Co., Ltd.) was

philosophy, we launched the 1st Medium-Term Businessestablished in 1952, starting its journey as a trading

Plan (1M), aiming to operate our business based oncompany. In 1969, the Daitron trademark wasmid- to long-term goals and strategies. This was such aregistered, and in 1970, we took several actions towardmajor change, it could truly be called a “second

full-scale manufacturing functionality, including spinningfounding.” Since that time, our Group’s management

off our technology division. Our unique dual trading andhas been based on our Medium-Term Business Plans,

manufacturer functionalities comprise a truly important

and we have continued to achieve steady growth.

element of our DNA that has been passed down to the

Today, once again, we face a time of great

present and has been refined over the years to becomechange. As technologies such as IoT and AI make great

one of the Group’s major strengths.

strides, society finds itself up against a mountain of

In the 72 years since our founding, we have built

issues, including climate change as well as labora broad and stable customer base by meeting theshortages due to the declining birthrate and aging

needs of all industries through a wide range of

population. Here, we believe that electronics technology

businesses covering the entire electronics domain, fromwill serve as a key technology driving solutions to theelectronic devices and components to manufacturing

myriad social and environmental issues the world faces.

equipment. As a result, we have built deep and complex

In response to these major changes in thetrust relationships with our customers, who are also ourbusiness environment, during the period of the previous

suppliers and joint developers. With this, our customer

10th Medium-Term Business Plan (10M), we steadilybase has evolved into an even stronger “partner base.”developed a system to promote sustainability, includingThis is also a very significant source of competitivenessidentifying materiality and studying and formulating

for the Group.

action plans. In the new, 11th Medium-Term BusinessWith regard to the global development of ourPlan (11M) starting in 2024, this will lead to full-fledged

business, we have been focused on building overseas

initiatives toward sustainability. Prior to the formulation of

networks from an early stage, such as becoming the

11M, we partially revised 2030 VISION, our Long-Term

exclusivetechnology

Vision, to clearly establish our desired state as “amanufacturers in the U.S. and other countries in thecorporate group that co-creates diverse values with all

1950s. This track record and experience have been thestakeholders

basis for our steady overseas expansion, beginning withenvisioned contribution to bringing about a sustainable

the establishment of a U.S. subsidiary in 1986.

society. The above state stands alongside our existing

distributorforadvanced

Then, in 1993, around 40 years after theCompany’s founding, we reached a major turning point.

business

activities,”

ourIsayuki Mae

Shinsuke Tsuchiya

in Figure 3 on page 19.
Today, we recognize that we are entering a period

and there was a great sense of anticipation thatthat should be positioned as our “third founding.” Going

electronics technology would change the world. It was

forward, we will work to create new value demanded byamid this atmosphere of the times that the Groupsocieties of the future based on our achievements andestablished a new Management Philosophy with the aim

experience accumulated over the 72 years since ourof long-term growth and advancement. Simultaneously,

founding and our unique electronics technology.

Integrated Repor t 2024

President,
CEO and COO

image of sustainable growth for the Group, as displayed

It was the dawn of the Internet and personal computers,

as a new form of management to pursue this03

through

Chairmanand Director

We ask for your continued support of the Group.

Integrated Repor t 202404

Chapter 1

Value Creation

The Daitron Group History

In the 72 years since our founding,we have grown alongside the development of theelectronics industry in Japan and around the world2023• Locally incorporated a subsidiary in Eindhoven,
The Netherlands2022• Transitioned to the Tokyo Stock Exchange Prime Market• Locally incorporated a subsidiary in Singapore(billion yen)

100.0

Our beginnings in 1952 were as a trading company, and we established a manufacturing subsidiary in 1970 byspinning off our technical division. This was the start of our Group “combined manufacturing and sales policy”
management system that has continued to the present day.
We have established a unique presence in the industry by being an electronics trading company with amanufacturing function, which enables us to meet the needs of our customers in niche fields.
Then, in 2017, for our next stage of growth, we integrated two domestic manufacturing subsidiaries andbegan to create a new revenue base through combined manufacturing and sales as Daitron, achieving rapid
growth alongside the development of the electronics industry.

Exceeded
50 billion yen
in net sales
1998
Upgraded the Malaysian Representative Office to a
locally-incorporated subsidiary
2001
Listed on the Tokyo Stock
Exchange 2nd Section
1999
Stock
publicly listed

Exceeded
10 billion yen
in net sales

2017• Integrated two manufacturing subsidiaries,
marking the start of Daitron Co., Ltd.
• Established Daito-Tec Co., Ltd.

90.0

2021
• Upgraded theTaipei Branch,Taiwan into a
locally-incorporated
subsidiary

2006• Listed on the Tokyo Stock Exchange 1st Section• Upgraded the Seoul Branch, Korea into a
locally-incorporated subsidiary
2008
Locally incorporated a subsidiary
in Bangkok, Thailand

2002
Locally incorporated
subsidiaries inHong Kong and Shanghai,
China

80.0

70.0

60.0

2011
• Locally incorporated a subsidiary inShenzhen, China

50.0

40.0

1986
Locally incorporated a
subsidiary in Oregon, U.S.

30.0

1970
Spun off the technical division,
established Daito Denshi Kougyou Co., Ltd.

20.0

1952
Founded10.0

19521970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

01995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

*Bar graph shows net sales over time

1950s

■1952
•Established Daito Shoji Co., Ltd. in Kita-ku,
Osaka with a capital of 300,000 yen.
•Focused on sales of tape recorders, which
was not common in those days, as a
distributor of Tokyo Telecommunications
Engineering Corporation (now Sony Group
Corporation).
■1954•Moved the head office to Doyama-cho,
Kita-ku, Osaka to respond to expandedbusiness.
•Enhanced the purchasing division for Sonyproducts and started sales of transformers
from TAMURA Corporation and connectors
from Hirose Shokai Co., Ltd. (now Hirose
Electric Co., Ltd.) and Tajimi Electrics Co., Ltd.

Our offices at our founding

05

Integrated Repor t 2024

■1957
•Moved the head office to Oimatsu-cho,
Kita-ku, Osaka to respond to expandedbusiness.
■1958•Established the Tokyo Branch in
Hanazono-cho, Shinjuku-ku, Tokyo.
■1959•Started to import and sell wear testing
instruments and measuring instruments, etc.
of U.S.-based Taber Industries as its
Far-Eastern distributor.

1960s
■1969
•Registered the Daitron trademark.

The newly-opened Tokyo Branch

1970s

■1970
•Spun off the technical division, established
Daito Denshi Kougyou Co., Ltd.
■1975
•Opened the Product Control Center inTarumi-cho, Suita-shi, Osaka.

1980s
■1980
•The (First) Ritto Factory was completed in
Iseochi, Ritto-shi, Shiga. Started the
manufacture of cables and harnesses using
Bendix connectors.
■1986•Locally incorporated a subsidiary in Oregon,
U.S.

The Product Control Center■1988•Changed the trade name from Daito Denshi
Kougyou Co., Ltd. to Daitron Technology Co.,
Ltd.

1990s
■1991
•The new head office building was completed
in Shima-machi, Chuo-ku, Osaka.
■1993•Established the Management Philosophy.
■1994•Spun off the Electrical Wiring Division andestablished subsidiary Daito Denso Co., Ltd.
■1998
•Changed the trade name to Daito ElectronCo., Ltd., updating the Daitron trademark
logo design at the same time

Production of Bendix connectors•Upgraded the Malaysian Representative
Office to a locally-incorporated subsidiary■1999•Shares made publicly available on theover-the-counter market at the Japan
Securities Dealers Association (securities
code: 7609)

2000s
■2001
•Listed on the 2nd Section of the Tokyo Stock
Exchange and the Osaka Securities
Exchange, and increased capital to 2.186
billion yen through a public offering■2002•Locally incorporated subsidiaries in Hong
Kong and Shanghai, China

Our first day on the Tokyo Stock Exchange■2004•Integrated all the sales offices and Logistics
Center located in Osaka Prefecture into the
new head office building in Miyahara,
Yodogawa-ku, Osaka■2009•Took over the business for semiconductor
manufacturing equipment from Emtec Co., Ltd.

■2006
•Listed on the 1st Sections of both the Tokyo
Stock Exchange and the Osaka Securities
Exchange•Upgraded the Seoul Branch, Korea into a
locally-incorporated subsidiary■2011•Locally incorporated a subsidiary inShenzhen, China■2007•Daito Denso Co., Ltd. makes Takawa
Industry Co., Ltd. a subsidiary.

■2017•Integrated domestic subsidiaries Daito
Denso Co., Ltd. and Daitron Technology Co.,
Ltd. and changed the trade name to DaitronCo., Ltd.
•Made Tanimoto Denso Co., Ltd awholly-owned subsidiary and established
Daito-Tec Co., Ltd.

■2008
•Locally incorporated a subsidiary in
Bangkok, Thailand

Listing ceremony for the 2nd Section at
TSE Arrows■2018•Completed Chubu Second Factory on thepremises of Chubu Factory

2010s

■2016
•Completed Chubu Factory as a core Groupfactory in Ichinomiya-shi, Aichi

2020s
■2021
•Daito-Tec Co., Ltd. completed a new factoryin Hiroshima-shi, Hiroshima•Upgraded the Taipei Branch, Taiwan into a
locally-incorporated subsidiary■2022•Transitioned to the Tokyo Stock Exchange
Prime Market•Locally incorporated a subsidiary in
Singapore■2023•Locally incorporated a subsidiary inEindhoven, The Netherlands

The Chubu Factory
The head office building

Integrated Repor t 2024

06

Chapter 1

Value Creation

Financial and Non-Financial Highlights

Financial Information (Consolidated)

Non-Financial Information

Net sales (million yen)

Gross profit (million yen)

100,000

20,00087,63980,00092,156

72,341

61,621

17,587

18,151

14,281

15,00012,482

57,41860,000Operating income (million yen)

6,051 5,943

6,000

11,476

Number of employees

Number of Group
companies

Worldwide Group
locations(As of December 31, 2023)(As of December 31, 2023)(As of December 31, 2023)• Japan: 785• Overseas: 218• Japan: 2 (including the Company)• Overseas: 10• Sales offices: 27 (Japan: 16; Overseas: 11)• Manufacturing locations: 7 (Japan: 7, Overseas: 1)• Representative offices: 2 (Overseas)

Daitron (Non-Consolidated)

Original product ratio

Overseas business ratio(sales base)(sales base)Daitron (Consolidated)

8,000

1,003

4,196

10,000

4,000

12

3,205

40,00036

locations

2,403
5,000

20,000

0

2,000

0
2019

2020

2021

2022

2023

Net income attributable to owners of parent (million yen)
5,000

0
2019

2020

2021

2022

2023

Total assets (million yen)

4,237

4,014

2,171
2,000

2022

2023

Partner base58,454

63,202

67,78845.0

46,247

41.0

42.8
38.4

45,757

2,953

2021

60.0

60,000

3,000

2020

Shareholders’ equity/Total assets (%)

80,000

4,000

2019

40,00030.0

20,000

15.0

41.1

43.4

companies(As of December 31, 2023)

16.1

%

(FY2023)

21.0%(FY2023)• Customers: Approx. 5,000 companies• Suppliers: Approx. 2,000 companies

1,610

1,000

0

0
2019

2020

2021

2022

2023

400

381.78

0
2019

2020

2021

2022

2023

2019

2020

2021

3,000

115

120

361.65

2022

2023

Dividends per share (yen)Net assets per share (yen)Net income per share (yen)120

266.182,000

902,023.23
1,784.66
1,691.87

195.8660

Daitron (Non-Consolidated)

Ratio of childcare leave, etc. taken(Women as a share of new hires*)(including company-specific leave for the purpose of childcare)%80*(FY2023)* Data for new regular employees(not including contract and part-time employees)

60
50

145.24

Daitron (Non-Consolidated)

Ratio of female hires

20.6

2,650.52
2,342.79

300

200

7,000

Approx.

84.6%

Daitron (Non-Consolidated)

Ratio of outside officers

60%(FY2023)(As of December 31, 2023)• Women: 100%
• Men: 80.0%• Directors: 7 (including 4 Outside Directors)• Corporate Auditors: 3 (including 2 Outside Corporate Auditors)• Total officers: 10 (including 6 outside officers)

1,000
100

30

0

0
2019

2020

2021

2022

2023

0
2019

2020

2021

2022

2023

2019

2020

2021

2022

2023

*Includes 70th anniversary dividends of 10 yen

07

Integrated Repor t 2024

Integrated Repor t 2024

08

Chapter 1

Value Creation

Our Value Creation Process

We aim to make a leap forward in the global market as a
Surrounding megatrends• Diversifying technologies(Increasing importance ofsemiconductor back-end process)• Spreading EV & automated driving
Changing business methods• Evolving cloud computing

technology-based company and create new value for the world

Management base• Spreading local 5G and 6G systems• Fully spreading automated equipment
Further changing
manufacturing sites• 2050 carbon neutrality

Future vision to aim for

Philosophy System
Foundation Spirit / Code of Conduct

Management Foundations
Our Basic Policy on
Corporate GovernanceRisk management

Compliance andcorporate ethics

CSR Basic Policy/Materiality

Management Philosophy* Electronics is one of the key technologies

Group Statement

Long-Term Vision

2030 VISION
Qualitative target (2030)

Consolidated net sales ofoverfurther expansion

Efforts in management

Utilized capital
Financial Capital

Daitron Group Strengths

Financial base supporting
growth strategy and high profitability• Equity ratio• Gross profit ratio

43.4%
19.7%

Combinedmanufacturing
and sales

Sustained cultivation/enhancementof human resources
with superior field capabilities• Number of Group employees

1,003

See pages 11-12

Growth Strategy

Business structure

7Intellectual Capital

A Daitron brand withunique original products

16.1%

Social and Relationship CapitalRich partner base
• Partner base Approx.

7,000 companies(Customers + suppliers)

09

Integrated Repor t 2024

A corporate group needed

Make a leap forward in the global market
as a technology-based company

Striving to achieve our Long-Term Vision through three steps

High profitability

Launched 11M in 2024
Partner base2027-2030
2024-2026

Production system supporting
combined manufacturing andsales management• Original product ratio

Qualitative target (vision for 2030)

Medium-to long-term slogan

Manufacturing Capital• Domestic and global manufacturing locations

See pages 15-30

Field
capability

Human CapitalBusiness Operation

100 billion yen for

See pages 31-36

Responding to a global electronics
demand for both electronic equipment/partsand manufacturing equipment
Electronic Equipment
and Components

Manufacturing
Equipment• Electronic components &assembly products• Semiconductors• Embedded systems• Power supply equipment• Image-related equipment& parts• Information systems
etc.

• LSI manufacturing equipment• Electronic materials
manufacturing equipment• Optical device
manufacturing equipment• FPD manufacturing equipment• Energy device
manufacturing equipmentetc.

2021-2023

10M

11M

by the world for its technologicaland proposal capabilities

A corporate group that uses
its business activities toco-create a diverse range of values
with all stakeholders

12M
12th
Medium-Term Business Plan

11th
Medium-Term Business Plan

10th
Medium-Term Business Plan

Outputs (major results from 10M)

• Net sales: 92.1 billion yen*Three years of consecutive record highs from 2021 to 2023

• Operating income: 5.9 billion yen*Two years of consecutive record highs in 2021 and 2022

• ROA: 6.1% (target: 6% or more)• ROE: 14.5% (target: 12% or more)

Materiality(Sustainability key issues)

See pages 41-42

Create the Four Values
based on establishedmanagementfoundations!
1 Partner value creation
2 Human resource value creation
3 Social & environmental value creation
4 Economic value creation• Equity ratio: 43.4% (target: 50%)
Global business development

Note: All figures are consolidated results for 2023

Integrated Repor t 2024

10

Chapter 1

The Source of Our Value Creation ❶ Strengths

As a technology-based company, Daitron Group
Combined manufacturing
and sales
Starting out as an electronics trading company, we havealways been particular about being responsive to ourcustomers’ wide range of needs. Having frequently faced
the reality that many needs cannot be met only bypurchasing products from suppliers, we decided todevelop and manufacture products in areas not coveredby suppliers despite a certain level of needs, and have
gradually strengthened our manufacturing capabilities
through the establishment of manufacturing subsidiaries
and other measures. As a result, we have become acorporate group with both manufacturing and trading
company functions, and our current management isbased on combined manufacturing and sales exerting
great synergy from the integration of these two functions.
Though the original product ratio, one of the KPIs
in our growth strategy, is on the decline, net sales are
growing. This is partly due to the remarkable growth insales of purchased products amid recent rapid market
expansion. We will continue to strive to achieve the 25%
original product ratio target and expand synergies fromcombined manufacturing and sales.

Number ofsales offices*

29

16.1

downstream of electronics

Our business structure is broadly divided into twoareas: the Electronic Equipment and Components
Business and the Manufacturing Equipment Business.
The Electronic Equipment and Components
Business includes products installed in and incorporated into various facilities and equipment. Meanwhile, the Manufacturing Equipment Businessincludes equipment installed on production lines atmanufacturers’ plants and used to produce semiconductors, electronic materials, optical devices, energy
devices, etc. As the electronics market significantly
expands its base, our Group’s business covers awide range of fields and domains, from upstream todownstream, offering a wide range of business
opportunities for the future.

(Japan: 6; Overseas: 1)*Includes Representative Offices

140
117
104

2019

Business structure enabling total success from upstream to

7%(Japan: 16; Overseas: 13)

19.1

has built highly competitive, unique strengths

Number of
manufacturing locations

Original
product ratio

18.3

2020

148

114

16.0

15.8

2021

2022

16.1

■ Component ratio for sales by product segment
Manufacturing
Equipment Business

23.7

%

Electronic Equipment
and Components Business

76.3

%

2023

Field capability to provide close customer

Original product net sales: hundred million yen
Original product ratio (net sales basis): %orientation, marketing capability,and high level of expertise

In the course of promoting combined manufacturing and sales management,
we have cultivated thorough customer-oriented sales, advanced marketing
capability, and a high level of expertise. We are proud that our field capabilities
providing customers with these three functions combined is one of the major
reasons why customers prefer us.
By constantly refining our field capabilities, we aim to become the corporate group with the No. 1 customer satisfaction.

Grossprofit ratio

High profitability

19.7

%

By driving management through combined manufacturing and sales, we have established a foundation toensure an overwhelmingly higher profit ratio comparedto general electronic traders.
From the viewpoint of maintaining and strengthening its high profitability base, we have set a goal of
securing a gross profit ratio of 20%, and this has generally trended around 20%.

Value Creation

175

181

20.1

19.7

142
124

20.3

114
20.0

19.7

Our “partner base” is a group of companies withwhich we have established up to three complex

Partner basebusiness relationships (below) through our combined
manufacturing and sales management

2019

2020

2021

2022

Gross profit: hundred million yen
Gross profit ratio: %11Integrated Repor t 2024

2023

Customer

Supplier

Development
partner

See page 26 for details

Our Group’s relationships with our business partners are extremely unique and strong
due to our longstanding efforts in this area. While many companies have only a single
relationship with their business partners, we have many business partners who are
customers, suppliers, and development partners. These complex business relationships make up what we call our “partner base.” This is one of the major strengths
that we have gained by promoting combined manufacturing and sales.

Integrated Repor t 2024

12

Chapter 1

The Source of Our Value Creation ❷ Our Business Method

Value Creation

Further developing our own unique business method
as a technology-based electronics company
under the combined manufacturing and sales policy
The Daitron Group is a global corporate group with a total of 12 Group com-Creates high added-value by combined
sales and manufacturing functions as thecore of the Group

panies in Japan and overseas. We are centered on Daitron Co., Ltd., which
has both trading company and manufacturer functions.
We offer a broad product lineup in the electronics field through its

Through the merger of three companies, Daitron Co.,
Ltd. works to create new value oriented in various
solutions for customers by integrating the informationand expertise of a trading company and technologicaldevelopment capabilities related to electronic equipment
and components and manufacturing equipment. At thecore of this Group driving combined manufacturing andsales, we also take the lead in all functions, from technology development to manufacturing, sales, and maintenance, both in Japan and overseas.

product lineup in the two segments of Electronic Equipment and Components and Manufacturing Equipment.
In the trading company function, we have discovered around 2,000
suppliers from all over the world, while we have expanded the number ofcustomers to about 5,000 companies both in Japan and overseas. The scaleof these two wings of our business forms the partner base that supports our

Provides comprehensive
support from“production” to “use”
in the electronics industry

Trusted customer assets,a large number of accounts
With our approximately 600
major business partners and
5,000 business partners total,
mainly consisting of customers in Japan, we currently
enjoy considerable customer
assets. This large number ofaccounts reflects our deep
customer base across manydifferent industries, mitigating
the impact of economic
cycles on us and helping tosecure stable sales.

We support the electronics
industry over a wide rangeof areas with our electronicequipment and components
used in diverse businesssites and products as wellas various manufacturing
equipment required in
production.

Group’s stable growth.
In the manufacturing function, we develop and manufacture products
leveraging our unique marketing capabilities or jointly develop products with

Foresight to uncover cutting-edge products and promising markets

Marketing ability based on customer needs

suppliers, focusing on niche markets that our suppliers do not address andthat we believe we should address.

Suppliers

Through this combined manufacturing and sales management, we
continues a unique history as a technology-based company in the electronics industry.

Sales Function

Manufacturing & Processing Function

Daitron Co., Ltd.

Merged with two manufacturing subsidiaries

Japanesemanufacturers

Jan 2017-

Customers

Cutting-edge logistics system

Domestic Manufacturing Group Company

Japanese market

Daito-Tec Co., Ltd.
US Group Company

DAITRON INC.

American and European
manufacturers

Product Lines

Europe Group Company

DAITRON (NETHERLANDS) B.V.

Electronic
Equipment
and Components

American andEuropean market

Asian Group Companies

DAITRON (KOREA) CO., LTD.

Asian manufacturers

DAITRON (H.K.) CO., LTD.
DAITRON (SHANGHAI) CO., LTD.

Manufacturing
Equipment

Asian market

DAITRON (SHENZHEN) CO., LTD.
DAITRON (TAIWAN) CO., LTD.
Total number ofbusiness partners:
Approx. 2,000 companies(Major business partners: Approx. 200 companies)

13

Integrated Repor t 2024

DAITRON (MALAYSIA) SDN. BHD.
DAITRON (THAILAND) CO., LTD.
DAITRON (SINGAPORE) PTE. LTD.

Total number ofbusiness partners:
Approx. 5,000 companies(Major business partners: Approx. 600 companies)

Integrated Repor t 2024

14

Chapter 2

Growth Strategy

Message from the President

Review of the 10th Medium-Term Business Plan (10M)

Grew to a level bringing us within striking
distance of our target, 100 billion yen inconsolidated sales

In this plan, we practiced management aimed atboth securing profits and future investment based on thebasic policy of “continued profitable growth.” Specifically,
we targeted securing a gross profit ratio of 20% and increasing SGA expenses by about 3% to 5% per year.

Actions under the three-year 10th Medium-Term Business

For the former, the gross profit ratio was 19.7% inPlan (10M), which started in 2021, concluded in Decem-

2021, 20.1% in 2022, and 19.7% in 2023, hovering aroundber 2023, delivering a certain degree of results.

our stated 20% level throughout the three-year period. For

Turning first to our performance, we have continued

the latter, SGA expenses increased at a faster pace thanto achieve steady growth over the 10 years covered by 8M

planned, increasing 11.2% in 2021, 14.4% in 2022, and(2014-2016), 9M (2017-2020), and 10M (2021-2023), with

5.8% in 2023 compared to the respective previous years.

the exception of the final year of 9M (2020), where we suf-

This was a result of aggressive investment in human re-

fered temporary setbacks due to the COVID-19 pandem-

sources and technology development throughout the

ic. The results of these efforts are clearly shown in the re-three-year period.

cord sales and profits achieved on numerous occasions(see Figure 1 on page 17).

In 10M, based on the perspective that it is important to simultaneously pursue both a stable financial baseIn 10M, we were able to achieve significant growthand high capital efficiency, we also set and pursued threein business performance by pursuing an aggressive growthgoals: an equity ratio of 50%, ROA of 6% or more, andstrategy and steadily capturing the flow of technological in-

ROE of 12% or more. As a result, we are proud to say that

novations, even despite ongoing intense changes, such as

our final year (2023) results were satisfactory, with an equi-

the impact of the COVID-19 pandemic and internationalty ratio of 43.4%, ROA of 6.1%, and ROE of 14.5%.

affairs. In 2023, the final year of the plan, the growth curve
appears slightly distorted due to significant growth a year
before in 2022. However, the broader growth trend demonstrates a steady uptick, leading to our assessment that wehave achieved satisfactory performance to this point.

We have launched a new Medium-TermBusiness Plan, serving as the second step

In 2006, we first exceeded 50 billion yen in consoli-

For some time, we have focused our efforts on three KPIs

dated net sales. Since that time, we have set our sights on

related to business structure reform: original product ratio,

reaching our long-term goal of 100 billion yen for the same.

overseas business ratio, and composition ratio by busi-

This goal was temporarily put on hold during the downturn

ness (all on a sales basis).

following the collapse of Lehman Brothers in 2008 (theThe original product ratio, which directly affects

start of the worst effects of the global financial crisis fromprofit growth, was 16.1% in the final year of the plan (2023)

that time in Japan). However, since regaining a growthagainst a target of 25% or more. Meanwhile, the overseas

trend in 2014, this distant dream has steadily come closer

business ratio, which is the key to medium- to long-term

to a feasible future reality. In 2021, we clearly stated in our

growth, was 21.0% in the same year against a target ofLong-Term Vision that we aim to become a company with

30% or more.

consolidated net sales of 100 billion yen.

toward realizing our Long-Term Vision.

That vision came close to a reality in 2023, when wewere able to grow to reach 92.1 billion yen.

With this, we seek to co-create new value
with stakeholders in a future society.

Integrated Repor t 2024

As for the composition ratio by business, we set atarget of 5% in order to more proactively generate new
businesses in challenging domains beginning in 10M, in

To us, the greatest achievement during the three years

addition to our efforts to build a stable business earningsof 10M is that we have grown to be within striking distance ofbase through an appropriate balance between sales in ourour 100 billion yen target for consolidated net sales.

Electronic Equipment & Components and Manufacturing &Inspection Equipment businesses. As a result, the Green

Achieved satisfactory levels for main
management indices in line with our basic
policy of “continued profitable growth”

15

Overall our net sales expanded, with steadysales expansion for original products, ouroverseas business, and new business

Facility Department (GFD), which was launched in the 9th
Medium-Term Business Plan (9M) and cultivated thereafter, continued to grow steadily, leading us to surpass thetarget level at 5.5%. In order to sow the seeds leading to

President, CEO and COO

Under 10M, we also achieved satisfactory performance forsuccess in the 11th Medium-Term Business Plan (11M),

Shinsuke Tsuchiya

the plan’s main management indices.

we launched the new Battery Project (a sub-project of theIntegrated Repor t 2024

16

Chapter 2

Growth Strategy

Message from the President

in our Long-Term Vision, we are seeking to further andaccelerate our materiality initiatives.

Automotive Project) and the Software Business Project
during the three years of the 10M plan. This helped us
build the foundations to generate new earnings in each of

Overview of the new Medium-Term Business Plan (11M)these areas.
As described above, we believe that the 10M initia-

In the second step toward achieving our Long-Term
Vision, we work to build three foundations: growthpotential, sustainability, and human capitaltives, both quantitatively and qualitatively, have produced asteady accumulation of results for further growth ahead.
Realignment of our Long-Term Vision

The 11th Medium-Term Business Plan (11M), launchedin 2024, is the second step toward achieving the goalsof 2030 VISION, our Long-Term Vision. This plan was
built from the bottom up via the 11M Formulation Project, consisting of young executives who are expected to

Toward a Long-Term Vision that pursues bothsustainable growth of the Group and contributing
to the realization of a sustainable society
Today, we are working to achieve our 2030 VISION(Long-Term Vision) over a three-step process, consistingof the 10M (2021-2023), 11M (2024-2026), and 12M(2027-2030) plans. In this sense, there is no change inour overall direction. However, three years have passed
since we formulated this vision in 2020, and circumstances have changed dramatically. Therefore, we decided to adjust both our quantitative and qualitative targets.
Quantitatively, we have adjusted our Long-Term
Vision’s target from becoming a company with consolidated sales of 100 billion yen to achieving consolidated
net sales of over 100 billion yen for further expansion.
Since achieving 100 billion yen in consolidated net sales
by the end of the 11M period is now beyond doubt, we
will elevate our management to pursue a new phase ofchallenge, in which we will strive for further expansion
beyond the 100 billion yen mark.
As for the qualitative side, we have added a newtarget for social sustainability (contribution to the realization of a sustainable society), replacing the previous situation in which targets were set only for our sustainability. This new target is an appropriate response to thechanging times in which sustainability management has
become an essential element for listed companies.
Therefore, going forward, we will use its business activities to co-create a diverse range of values with all stakeholders. This value co-creation initiative corresponds tothe materiality (key issues) established in 2022. By positioning this as one of the two core qualitative objectives

Figure 1: Performance Trends and Management Indices Achievement Under the Previous 10M Medium-Term Business Plan

Following on from the 9th Medium-Term Business Plan (9M), in the 10th Medium-Term Business Plan (10M),

we have steadily achieved growth exceeding our record highs in both sales and profits

lead the next generation. In order to respond to the rapidly and drastically changing market and industry environment, we believe that future growth strategies should
be built on the perspectives, ideas, and analytical skillsof young executives who are well versed in the field. We
feel that given the rapid evolution in electronics-related
technologies and industries, this approach was an appropriate one.
The three years during the 11M plan will serve
three major functions. The first is to establish a management foundation capable of achieving and sustaining
consolidated net sales in excess of 100 billion yen overthe next three years, and the second is to ensure that
our commitment to sustainability through our businessactivities takes root in the awareness and actions of all
Group employees over the next three years. These twocorrespond to the two outlooks in our Long-Term Vision,
and we intend to firmly establish the groundwork for said
outlooks by 2026. The third function is to further
strengthen human resources and organizational capabilities, which are essential for growing the Group’s corporate value. We are confident that by firmly fulfillingthese functions and achieving the stated goals, we will
come much closer to achieving 2030 VISION, our LongTerm Vision.

Broadly carrying forward the 10M strategy,
tackling priority challenges, and further
elevating our efforts
The specific growth strategy in 11M is to continue the
10M strategy and further elevate our efforts. To date, wehave enhanced our presence in the electronics industry
and sustained profitable growth by accurately recognizing and steadily building our strengths. We will accurately analyze both what we were able to accomplish in 10M
and what has been left for us to accomplish in 11M, andmake further progress accordingly.
Our four key areas (priority challenges) will be ourdomestic business, overseas business, original products, and new business, as shown in Figure 4 on page
20. Key KPIs we will continue to vigorously pursue related to these areas are composition ratio by business,original product ratio, and overseas business ratio, asshown in page 25.

Figure 2: Steps for Achieving the Long-Term Vision

In 2024, launched the new Medium-Term Business Plan (11M),
the second step toward achieving the goals of 2030 VISION, our Long-Term Vision

Record sales for three consecutive years
Net sales (hundred million yen)

Record sales for two consecutive years
Record sales
and profits

516

Record sales
and profits
COVID-19
pandemic

616

596■ Main management indices (2023 results)

Record sales and profits fortwo consecutive years

Operating income (hundred million yen)

876
60.5

32.0

25.2

ROE

43.4 %

6.1%

14.5 %

vs. target of 50%

59.4

41.9

35.4

ROA

921

723

574

Equity ratio

24.0

2019
9M

17

Integrated Repor t 2024

2020

2021

2022
10M

2023

toward achieving 2030 VISION

Axis of “Stability & Challenge”

Axis of “Profit”

Axis of “Growth”

Composition ratio by business

Original product ratio

Overseas business ratio(sales base)(sales base)(sales base)Vs. target composition
ratio of 65:30:5

16.1% vs.
target of 25%

21.0% vs.
target of 30%

23.7%

2018

vs. target of 12% or more

■ KPIs for business structure reform (2023 results)

Manufacturing &Inspection
Equipment

2017

vs. target of 6% or more

New business

70.8%

2nd step
toward achieving 2030 VISION

1st step
toward achieving 2030 VISION

10M(three years)

5.5%

Electronic
Equipment& Components

ssbusinersuinguprlys
ntial fontinuoues esseice by co
d
lu
in
a
t
v
gemen
rporated manaizing corowthices anMaximdin-term gd
3rd step
to long-relate
re
m
tu
iu
c
d
u
str
our me16.1%

21.0 %

2021-2023

11M(three years)

2024-2026

New Medium-TermBusiness Plan

12M

(four years)

2027-2030

Next Medium-TermBusiness Plan

Long-Term Vision

2030 VISION

Qualitative target (2030)

Consolidated net sales ofover 100 billion yen
for further expansion

Quantitative target (vision for 2030)

A corporate group neededby the world for its technologicaland proposal capabilities
A corporate group that uses its business activities toco-create a diverse range of values
with all stakeholders

Previous Medium-Term Business Plan

Integrated Repor t 2024

18

Chapter 2

Growth Strategy

Message from the President

In our domestic business, we will continue to reinforce business with our key customers, who serve as animportant foundation for the Group’s continued stable
growth. We will achieve this through further key accountcultivation and establishment of new facilities in promising regions.
We will continue our efforts to increase the sales
component ratio for our overseas business, a core driverfor our medium- to long-term growth, and for our original products, which are a strong source of profits, as we
aim to achieve our KPI targets. In particular, we believethat it is essential to realize our aforementioned slogan
and other targets that the overseas business ratio (on asales basis) exceed the medium-term target of 30% andreach 50% in the long term.
We will further strengthen our efforts to create andnurture new business to develop new earnings pillars,
using the initiatives in 10M as a base to become evenmore proactive. As for KPIs, we doubled the target for
the new business component ratio for sales from 5% in
10M to 10% in 11M. This new target is a very challenging one for us. However, the young executives taking
part in the 11M Formulation Project expressed theirstrong desire and determination that it is essential to discover and nurture new markets and businesses in orderto achieve our medium- to long-term growth. Daitron’s
management, in respecting their approach, elected toaim high and double the 5% target to 10%. During thethree years of 10M, in addition to the significant growthof the Green Facility Department (GFD), we were able tolaunch the new Battery Project (a sub-project of the Automotive Project) and Software Business Project. During
the 11M period, we will work to generate profits throughthese projects.

Aiming for a new kind of combined
manufacturing and sales management that
adds software to hardware
The Daitron Group’s greatest strength is its combined
manufacturing and sales management, which combines
the functions of a trading company with those of a manufacturer. This creates new added value through the fusion of marketing, technology, and development capabilities. Specifically, this is a unique approach where if a
supplier has a standardized product, we introduce theirproduct; otherwise, we develop and commercialize ourown offering.
However, if we look back at the journey our Group
has taken, we can see our advances as being largely
limited to the mechanical, i.e., being hardware-oriented.
In recent years, customer needs have diversified fromsingle product to demanding more complex offerings
such as construction and systems, and it has become
difficult to fully meet these diverse needs using conventional methods. Meanwhile, at sites where we interface
with customers, we are encountering more and morerequests to develop and provide optimized software
alongside the hardware we offer. Therefore, we launched
the Software Business Project in 2021, and from 10M to

Figure 3: Long-Term Vision Overview

A company thatcan be relied uponfrom hardware tosoftware

A corporate groupthis project in order to fulfill this new meaning of combined manufacturing and sales.
In 2023, five subcommittee groups establishedunder the control of the Sustainability Committee worked

Conclusion (toward new value creation)

Mastering key carbon-neutral technologies for2050 and creating new value
In 10M, we nearly completed the creation of the basic
framework for sustainability management to be practiced in 11M and beyond.
From 2021 to 2022, we developed a mechanismand structure for sustainability management, including
re-examining its sustainability system, formulating its approach to sustainability, identifying materiality (key issues), and establishing the Sustainability Committee.

to study action plans and KPIs in specific activities, anda project team was established to address climatechange and prepare to respond to TCFD recommendations and disclose information.
Going forward, in the firm belief that electronics
technologies will be the key technologies for reachingcarbon neutrality by 2050, the we will use its businessactivities to accelerate sustainability initiatives andco-create new value in a future society and in collaboration with our stakeholders.
We hope you will look forward to our work to
tackle new challenges at the Daitron Group.

A company
needed bythose around it

environment
A company
where senior humanresources can workwith vigor andenthusiasm

Make a leap forward in the global market as a technology-based company

11M major policy
linked to the Long-Term Vision

Human resource
value creation

A youngand dynamic
company

Medium- to long-term slogan• A technology-based company growing in the global market and exceeding 100 billion yen in net sales

Partner value
creationneeded by the world
A company that for its technological andcan flexibly adapt
to changes in the proposal capabilities
A company
boasting the No. 1
position in theindustryquired action for developing and commercializing products in-house when standardized products are not available from suppliers, an activity we are engaged in at theDaitron Group. We would also like to evolve and deepen
the manufacturing portion of our combined manufacturing and sales to refer to both hardware manufacturing
and software development. Although we have only justbegun our efforts, we will first focus on the Software
Business Project in earnest and generating profits via

Figure 4: Major Policies and Enhancements in the New Medium-Term Business Plan (11M)

Our vision for 2030 (2030 VISION) has two core outlooks:
sustainable growth of the Group (pursuing Group sustainability) andcontributing to the realization of a sustainable society (contribution to society's sustainability)
An excellent
company withnamerecognition

11M, we are actively recruiting and training software-related personnel, cultivating and expanding alliance partners, and building a joint development system.
Going forward, we believe that it is essential we
recognize the fusion of hardware and software as a re-

A corporate group thatco-creates
diverse values
with all stakeholders

Social value
creation

Environmental
value creation• A company that its employees feel happy to work for and proud of• A company that has the strength of solidarity with an organizational culture of working autonomously and actively

Economic value
creationthrough business activities• A company that provides a rich lifestyle to society at large through electronic and electrical offerings• Continuing to reinforce domestic business as a foundation for stable growthMajorenhancements(key issues)• Further strengthening overseas business, the core of our medium- to long-term growth strategy(In particular, strengthening the Electronic Equipment & Components Business in overseas markets)• Development, cost reduction, and sales enhancement of original products, a source of our profit structure• Creating and strengthening new business to develop new earnings pillars*These five values correspond to the materiality initiative

19

Integrated Repor t 2024

Integrated Repor t 2024

20

Chapter 2

Growth Strategy

Division Manager-Business Administration Message

Striving to improve
corporate value throughdual drivers of DX andhuman resource initiatives
Senior Managing Director, General Manager ofBusiness Administration Division

Hajimu Mouri

The basic policy of the Business Administration Division in
11M is to strengthen management foundations and increase
corporate value
We recognize that the Business Administration Division
plays an important role in supporting the Group from various angles in order to sustainably enhance corporate value. Though this role has never changed, our actions toplay this role have gradually deepened in line with changes
in the business environment and progress in strategies
and measures.
In the previous Medium-Term Business Plan (10M),
we established a basic framework for future sustainability
management by identifying materiality (key issues), establishing the Sustainability Committee, and examining KPIs
and approaches to materiality issues mainly by the five
subcommittee groups under the Sustainability Committee.
In the new Medium-Term Business Plan (11M), we
will take another step forward based on the foundation laidin 10M, and will build and strengthen management foundations where we are capable of promoting both sustainability management and growth strategies, leading to anincrease in Group corporate value. In view of these goals,
the basic policy of the Business Administration Division in
11M is to strengthen management foundations and increase corporate value.

For specific initiatives, dual strategic pillars: DX and humanresource cultivation and enhancement
To achieve its basic policy of strengthening managementfoundations and increasing corporate value, the Business
Administration Division will advance initiatives in five areas:
DX strategy, human resource cultivation and enhancement
strategy, ESG management promotion strategy, PR/IR
strategy, and financial strategy.
Among these, there are two key pillars, DX strategy

21

Integrated Repor t 2024

and human resource cultivation and enhancement strategy, in which we will focus our efforts.

Advancing DX strategy to enhance productivity and work
quality, sustainably improving competitivenessDX strategy is an extremely important factor that will greatly affect our competitiveness in the medium to long term.
Rather than simply updating an outdated system, we
would like to develop and introduce a new system that
accurately responds to future business models while anticipating the ever-quickening changes in the business world
day by day. We call this “offensive DX strategy.”
As an example, our business is changing drasticallyfrom a parts business centered on the supply of individual
parts to a comprehensive solution business that covers allelements, including system sales and overall facility construction. This means our next core system must be developed founded in a concept that is appropriate to this comprehensive solution business that will be the core of ourbusiness going forward. Our plan is to define requirements
for the next core system during the 11M period and implement the system during the following Medium-Term Business Plan (12M) period.

Using human resource cultivation and enhancement strategy,
founded in human capital management, to increase humanresource value
In order to sustainably enhance our competitiveness, ourhuman resource cultivation and enhancement strategy isanother important area of initiatives, alongside DX strategy.
Taking a human capital management viewpoint, we regard
human resources as an important kind of capital, and we
aim to enhance the value of these resources by practicing
management that emphasizes their importance and revitalizes them.

In order to foster a common awareness of the importance of human resources among all Group employees
and to ensure that human resource investments are madein a reliable and sustainable manner, we have establisheda new budget line for human resource investments startingin 2024, separate from the existing budget line for education and training expenses. Under this budget, we are currently developing new training and education programs to
improve individual skills, including specialized skills.
There’s an old saying that goes, “a company is its
people.” Each and every day, I can feel that this is becoming a more and more important concept to live by. Now that
we have made progress in diversifying its human resources, including recruiting mid-career professionals, we intend
to focus on fostering a corporate culture as the DaitronGroup by sending groups of management-level employees
to visit our offices across Japan for discussion sessions.

In our financial strategy, aiming to build a sound financialbase by pursuing an optimal balance between investment ingrowth and shareholder returns
As for our financial strategy, we will first seek to build asound financial base as the basis for pursuing an aggressive capital policy. To this end, we have set three management indices for 11M: an equity ratio of 50%, ROA of 6%
or more, and ROE of 12% or more. Though these are thesame targets as in 10M, they were selected in an approachto build solid foundations by achieving the 10M targets
again under post-pandemic circumstances rather than under the special conditions during the COVID-19 pandemic,

such as growing stay-at-home demand and restrictions on
corporate activities.
With a sound financial base, we will then support
aggressive future growth investments and shareholder return policies. In terms of growth investment, we intend tosystematically invest in human resources and invest inoverseas location development, as well as to make solid
preparations for M&A investment so as not to miss out on
good deals. In addition, we will further enhance the returnof profits to shareholders by raising the consolidated dividend payout ratio to a target of 40% (previously 30%)
during the 11M period.

Accelerating sustainability initiatives for the realization of asustainable society through our business activities
In order to promote both sustainability management andgrowth strategies, we will proactively advance the activitiesof the Sustainability Committee and its subcommitteegroups, as well as actively work to comply with Japan’s
Corporate Governance Code and strengthen governance.
As for our underlying sustainability efforts, in response to climate change, we joined the TCFD Consortium in December 2023 and disclosed information basedon its recommendations. Also, in pursuing materiality, we
have established KPIs and are managing, reviewing, andscrutinizing each. We will continue and deepen our activities in these areas, believing that they will help sustainability initiatives take shape through our business activities.
As we take these actions, we hope to have the understanding and support of all of our stakeholders.

Business Administration Division Key Measures in the 11th Medium-Term Business Plan (11M)
Basic Policy

Strengthen managementfoundations and increase
corporate value
Specific Initiatives

1

DX strategy

2

Human resource cultivationand enhancement strategy

3

ESG management
promotion strategy

4

PR/IR strategy

5

Financial strategy▼ Dual strategic pillars: DX and human resource cultivation and enhancement
DX strategy

Human resource cultivation and enhancement strategy

Advancing DX to enhance productivity
and work quality

Advancing human capital management
to increase human resource value• Reforming work processes and systems• Improving labor productivity through training
and education investment

Replacing key systems• Production management systems• Sales and purchasing management systems• Accounting systems• Group management and administration systems• Estimate systems, etc.

Strengthening information security• Upgrading DX promotion infrastructure
Identifying issues and formulating/advancing measures
Initiatives for acquiring DX certifications(METI certification system)

Improving and investing in training andeducation systems to improve individual skills(clearly establishing training and education investment budget)

Strengthening recruitment of mid-career
specialized human resources• Promoting diversity & inclusion
Establishing new organizations andsystems harnessing diversity• Improving the ratio of women in career-track positions• Improving the ratio of women in management positions• Empowering senior human resources• Promoting recruitment of handicapped human resources, etc.

Integrated Repor t 2024

22

Chapter 2

New Medium-Term Business Plan ❶ Overall Framework

1

3

Performance Targets

Basic idea

• Continue to push forward with business structure reform to secure 20% gross profit ratio• Estimate an annual SGA increase of around 3-5% to promote investments forming the foundation of sustained growth (in human resources, technology development, etc.)

Net sales (hundred million yen)

Growth Investment

Shareholder Returns

Basic idea

Basic idea

Aggressive growth investments centeredon the development of human resourcesand expansion of overseas locations as
the foundation for future growth strategies

Raise consolidated dividend payout ratio
from 30% to 40% during the 11M period tostrengthen shareholder returns

Overview of preferred investments in 11M

Dividends per share and payout ratio over time

Operating income (hundred million yen)876

Aim at sustained
expansion of

921

723

net sales & operating income

574
60.5

with a view to becoming
a 100 billion yen company

59.4

Examination of new business expansion in India,
manufacturing locations in Southeast Asia,and new satellite offices in the U.S.A. and China

41.9

Facility improvement for data center-related businesses(UPS, storage batteries, etc.)

2021

Dividends per share

Payout ratio

(yen)

115

120

120

2022

2023

2024

2025

10M

Production capacity/efficiency improvement, etc.
at domestic factories

2026

11M

DX promotion (system replacement,enhancement of information security measures)

2

Target Management Indices

Human capital investment(direct investment + opportunity investment)

Set and pursue targets for four management indices based on the three axesof business profitability, financial soundness, and capital efficiency
Business profitability

Financial soundness

4

80

80
60
40

(％)

120

100

100

24.0

2020

Capital Policy

Pursue optimal balance between investment in growthand shareholder returns while maintaining financial soundness• Aim at sustained expansion of net sales & operating income through management focusing on
growth potential(Continued from 10M)

Growth Strategy

60

55
26.8

30.6

80
60

50
34.4

30.1

30.1

33.2

20

40
20

0

0

2018

2019

2020

2021

2022

2023

Basic Strategic Policies

Capital efficiency

Broadly carrying forward the 10M basic policy and further elevating our efforts
Gross profit ratio

Target20%

or moreEquity ratio

Target50

ROE

Target%12

Integrated Repor t 2024

or more6

1

Promote business structure reform!

Basic Strategic
Policy2

Maximize strengths utilizing unique capabilities!
P25-30ROA

Target23%

Basic Strategic
Policy%or moreBasic Strategic
Policy3

Define focus areas and markets to accelerate growth!

Basic Strategic
Policy4

Increase power toward sustained growth!

Integrated Repor t 2024

24

Chapter 2

New Medium-Term Business Plan ❷ Basic Strategic Policies

1

Basic Strategic
PolicyPromote business structure reform!

• Pursue the four axes of “Stability,” “Challenge,” “Profit,” and “Growth,” aiming for a reform into a business structure that enables stable and sustained growth not affected by the business cycle or demand in the electronics
industry including the silicon cycle• Establish three KPIs (key performance indicators), or business structure related indices, to measure progress inthe pursuit of these four axes, and aim to achieve targets through sustained progress management

Business
structurereform• We have strengths such as possessing both trading company and manufacturer functions and building a strong
partner base in Japan and overseas• We will leverage this uniqueness to build a unique corporate group that integrates manufacturing and sales on a
global level, and maximize our strengths to further enhance our differentiated advantage in the industry

D&P Company

Composition ratio by business“Profit” (highly profitable makeup)
KPI for Profit

Maximize strengths utilizing unique capabilities!

Production/
Development“Stability” of business + New “challenge”
KPI for Stability & Challenge

2

Basic Strategic
PolicyOriginal product ratio

Growth Strategy

Continued
profitable
growth“Growth” (increase in trade)

Strongpartner base

Sales/Marketing
M&S Company

Customers: Approx. 5,000 companies

Building relationships ofSuppliers: Approx. 2,000 companies

different companies

both kinds with many

Overseas business ratio

KPI for Growth

GlobalFor the D&P Company

Three KPIs for business structure reform

Overseas group

strategy, see page 38

Stability and Challenge Axis

Profit Axis

Growth Axis

Composition ratio by business

Original product ratio

Overseas business ratio(sales base)(sales base)(sales base)2026 target

2026 target

2026 target

For the M&S Company
strategy, see page 37

For the Global Business Division
strategy, see page 39
Our strong partner base is theComplex business relationships unique to Daitron Group

Partner base

New business

10%

Manufacturing &Inspection Equipment

30

%

25

Electronic
Equipment& Components

60

%

30

Toward comprehensive business fromelectronic equipment and components to
manufacturing equipment%

PartnercompaniesAs
customers%

business partners have multiple
us, as supplier, customer, and/or
development partner. Building on
this solid foundation of connections, we are pushing forward with

Developing competitive suppliers(converting customers into suppliers)
Composition ratio by business ……

As
suppliers

the expansion of its differentiatedadvantage in the industry.

Sales composition ratio of 10% is set as a new KPI target measuring new business creation(Accelerate efforts to create new business in response to the achievement of 5% in the previous Medium-Term Business Plan (10M))

Maintaining the 25% target from the previous Medium-Term Business Plan (10M)

Original product ratio…… (Original products = limited to our own products and those developed in collaboration with partner companies)

Overseas business ratio

The sum of exports from Japan to overseas and sales of overseas subsidiaries.
…… Maintaining the 30% target from 10M

Integrated Repor t 2024

business relationships. Many of ourrather than single relationships withDaitron25

result of its uniquely complex

Accelerating product development tostrengthen Daitron’s brand powerAsdevelopment
partners

Integrated Repor t 2024

26

Chapter 2

New Medium-Term Business Plan ❷ Basic Strategic Policies

Basic Strategic
Policy3

Define focus areas and markets to accelerate growth!

• Analyze domestic and overseas market trends and business opportunities for us, and continue to develop andexpand in a proactive and aggressive manner in the clearly identified focus areas and markets• Use the following three measures to advance strategic initiatives in response to each situation

Industrial
equipment
Automotive(including robots andautomatedequipment)

Communication

5G & 6G• Continue “All-Daitron” product deployment
Tama(Unified three-unit partnership: M&S Company, overseas group, D&P Company)• Expand business with local blue-chip companies by strengthening sales Matsumoto
Kanazawa
focused on local areasa

MarineAerospace(including
battery market)• Examine establishing new locations (including
satellite offices) in promising areas[Candidate areas] Hokkaido, Shikoku, Mie, etc.
• Promotion of satellite office to sales office: Sendai

Sales office + Fukuoka
logistics center
Factory
Satellite office* Circled areas are under examinationfor establishing new locations

2

Three measures to develop focus areas and markets
1

2

3

Existing

Projects

New

Promote business expansion in focus areas andmarkets for existing organizations

Promote commercialization and monetization incross-sectional projects (PJs)

Promote business creation and developmentfrom the stage of a “new business”

Automotive PJ(Power devices, analog devices, semiconductor
manufacturing equipment manufacturers)• Focus on EV/CASE fields• Develop construction/agricultural machinery manufacturers• Expand overseas business• Develop battery market (production materials/equipment)

Data center related business(UPS systems, storage cells,
peripheral equipment)

Industrial/consumer equipment related business(Robotics, automation, manpower saving)

Aerospace and defense related business
Automated visual inspection related business(Lenses, cars, medical, welding)27

Integrated Repor t 2024

Medical PJ• Expand overseas medical-related sales• Develop medical devices on contract• Expand D&P Company medical-related sales• Promote sales strategies by product segment

IoT PJ• Examine original product development based onmarket needs• Enhance solution proposals(collaborate with the Information System Sales Dept.
and SIers)• Work on the sensor business

Kumamoto

Osaka

Utsunomiya
Ibaraki
Kunitachi
Tokyo
Yokohama
Shizuoka
NagoyaIchinomiya (core factory)
HashimaRitto

Reinforce overseas business as the core of our growth strategy
Continue to promote expansion focused on the electronic equipment & components business* Ensure controlled, stable expansion of the manufacturing equipment business, where demand fluctuates significantly (planned launch/acceptanceinspection of orders, selection and concentration of customers, risk hedging)

Expand and enhance overseas sales locations• Establish regional manager companies (Greater China andIndo-Pacific regions)• Expand sales locations by region
Overseas location

Semiconductor related business

Sendai

NonoichiKyoto
Kameoka
Proactively promote new deployment in promising areas
Kobe
Hiroshima
Sales office

MedicalEnergyRailroad
vehiclerelatedReinforce domestic business as a foundation for stable growth
Further deepen relations with focus customers

Main focus areas and markets
Data
centerIncrease power toward sustained growth!

• We will enhance its power in three areas as the basis for sustainable growth: marketing, manufacturing, andcorporate divisions

1

AI

Semiconductors

Computingrelated4

Increase marketing power!

IoT(including sensor
related)Basic Strategic
PolicyGrowth Strategy

North America & Europe

Under investigation• Establish satellite offices or make distributorshipagreements (at least 3 regions each)• Establish maintenance offices (North America: 2 regions,
Europe: at least 3 regions other than the Netherlands)

Software PJ• Realize alliances/M&As• Develop software for sensor device field• Develop original software

China (Shanghai)
The Netherlands (Eindhoven)• Develop renewable energy related business• Expand sales of environment-related
products (Pacific, India)• Develop the lithium-ion battery recycling
business• R&D acceleration tools(computer simulation, AI)• MI (materials informatics)• Manufacturing DX field

U.S.A. (Oregon)
U.S.A. (Nebraska)

China (Shenzhen)

ECO/SDGs related

Other

South Korea (Seoul)

Taiwan (Taipei)
Philippines (Manila)

Greater China• Establish and expand/enhance satellite offices(Inland China)

China (Hong Kong)
Vietnam (Hanoi)
Malaysia(Kuala Lumpur)
Singapore
Malaysia (Penang)Indo-Pacific• Establish a representative office in India(2 potential sites under examination)• Examine the establishment of a manufacturinglocation (for harnesses, power supplies, and shift
to in-house production of outsourced products)(Potential site: Vietnam)

Integrated Repor t 2024

28

Chapter 2

New Medium-Term Business Plan ❷ Basic Strategic Policies

Basic Strategic
Policy4

Increase power toward sustained growth!

Increase manufacturing power!

Increase the power of corporate divisions!

3

5

Reinforce global production system

Continuously enhance domestic and overseas
production systems centered on the Chubu Factory,

Advancing DX to enhance productivity and work quality
1 Reforming work processes and systems

Chubu
Factory• Start upgrading/replacing systems for estimation, sales, purchasing, production management,
accounting, business management, etc.
• Strengthen information security● 新規協力企業開拓

the mother plant for our global production system（ハーネス・組配・基板・板金・塗装・ソフト設計・メカ設計）

2 Upgrade DX promotion infrastructure● ソフトウェア会社とのアライアンス、
M&Aの推進Domestic• Develop new partner companies(harness, assembly and wiring, substrate,
sheet metal, painting, software design,
mechanical design)• Promote alliances and M&As with software● リンカーン工場の人員補強
companies● リンカーン工場の協力企業開拓
（メキシコ
・米国
Securehuman resources
and・日本）• Identify issues using DX promotion indices and take measures

Develop global human resources and exchange personnel in and outside Japan

Lincoln
Factory• Introduce and institutionalize an overseas location internship system• Continue hiring Vietnamese technical intern trainees at D&P Company and expand it to other factories

Human capital management• Personnel reinforcement at the Lincoln Factory• Develop partner companies for the Lincoln
Factory (Mexico, U.S., Japan)

Increase the value of human resources through human capital management
1 Improve labor productivity through training and education investment• Improve and investing in training and education systems to improve individual skills• Recruit mid-career specialized human resources

Continuously promote production cost reduction measures

2 Promote diversity & inclusion• Empower women (increase the ratios of female employees
in management track and management positions)• Empower seniors (increase satisfaction)• Recruit persons with disabilities (comply with legal
employment rate)• Formulate and execute permanent person-hour reduction plan for the Lincoln Factory• Establish new production location in the Asian region (Potential site: Vietnam)

Enhance technology/product development and intellectual property
strategies for higher value-added products

More emphasis on technology/product development• Enhance the value added to mass-produced products (with upgraded performance, additional functions, etc.)• Enhance software related technologies that are essential for future higher value-added technologies/products
Employ more software engineers and examine alliances with software companies, etc.
• Strengthen customer information collection in Japan and overseas, and continuously pursue original productdevelopment

Enhance intellectual property strategies• Improve the foundations for intellectual property management by defining core technologies and taking
inventory of our held technologies• Establish a new qualification system based on a medium- to long-term intellectual property strategy
Increase employees’ motivation by establishing a comprehensive personnel system linked to the evaluation system• Expand the number of patents applied for and held over the medium to long term

Integrated Repor t 2024

• Review the personnel system(develop systems such as for expert, seniors, various
allowances, etc.)• Become a Certified Health & Productivity Management
Outstanding Organization

PR/IR strategy• Establish a department specialized in PR/IR

Strengthening of systems centering on Chubu Factory technical divisions

29

Obtain DX certification

Global human resources

reinforce technical capabilities

4

Enhance business support function
DX (digital transformation) strategy

Enhance domestic and overseas production capacities

Overseas

Growth Strategy

6• Increase recognition of the Daitron brand

Promote ESG management (sustainability initiatives)
Contribute to the realization of a sustainable society through ESG management promotion
1 Promote activities of the Sustainability Committee• Establish materiality-related KPIs and take specific actions (promote the Sustainability Committee’s
subcommittee activities)• Disclose KPI progress in Integrated Reports

2 Response to the Corporate Governance Code• Reduce areas where explanations are required

3 Strengthen corporate governanceCompliance Committee

Prevent occurrence/spread of scandals in the company

Risk Management Committee

Prevent management risks to preserve management resources

Internal Control Committee

Ensure the effectiveness of internal control over financial reporting

Integrated Repor t 2024

30

Chapter 3

Business Strategy

Business Management System and Segment Information

We operate our two product segments throughthree organizations: two companies and one division.
We operate two product segments: the Electronic Equipment and Components Business and the Manufacturing Equipment Business.

Sales/marketing

Manufacturing

Overseas

M&S Company

D&P Company

Global Business Division

Electronic Equipment and Components BusinessBusiness operation is comprised of three organizations: M&S Company, which handles domestic sales and marketing, D&P Company,
which handles domestic manufacturing, and Global Business Division. All three of these organizations provide comprehensive support

Manufacturing Equipment Businessacross the two product segments mentioned above (see figure right). By taking a comprehensive approach, we are able to provide ourclients with marketing, technology, and global development capabilities, bringing them comprehensive solutions.

Segment Information

Status by Product Segment

1

Component ratio for sales by segment

Electronic Equipment and Components

Segment Information

Manufacturing Equipment Business

Manufacturing Equipment BusinessElectronic Components & Assembly Products

23.7%

23.8%

Other Electronic Equipment and Components

Semiconductors

1.1%

92,156

3.7%

8.1%

Image-Related Equipment & Parts

7,387

Image-Related
Equipment & Parts (million yen)
20,846

18,761
16,776
13,29015,00012,78720,000

3,894

4,000

3,028

0

2019 2020 2021 2022 2023

Information Systems (million yen)
4,000

0

3,349

2019 2020 2021 2022 2023

Other Electronic Equipment
and Components (million yen)

1,000Integrated Repor t 2024

0

804

889

976

2019 2020 2021 2022 2023

Manufacturing
Equipment (million yen)
25,0001,333

20,856979
15,00024,367
21,79017,78015,355Net sales (million yen)
80,00060,00069,26361,64541,54452,472

41,83340,00020,00002019 2020 2021 2022 2023

Segment operating income

13.0%

0

Net sales (million yen)
4,000

5,000

4,416

3,000

2,000

Domestic
sales business

72.8%

1,000

0

10,000

2,000

5,000

1,000

1,166

2019 2020 2021 2022 2023

0

2019 2020 2021 2022 2023

0

1,237

2019 2020 2021 2022 2023

25,00022,046
18,93520,00016,68016,57415,00011,73905,0002019 2020 2021 2022 2023

Segment operating income02019 2020 2021 2022 2023

Segment operating income(million yen)
1,500

1,000

(million yen)
2,000

1,123

1,121

3,000

Net sales (million yen)

10,000

4,000

3,180

3,957

3,188

2,221

2019 2020 2021 2022 2023

3,501

3,947

3,844

(million yen)

2,000
500

2019 2020 2021 2022 2023

3,901

2,000

20,0002,317 2,201 2,422

5,609

4,000 3,491

1,500

2,627

7,315

6,000

1,000

5,000

31

4,323

3,405

3,419
3,000

10,000
8,000

5,443

2,000

10,000

0

7,507

8,000

Power Supply Equipment(Including Green Facilities) (million yen)

8,274

2,000

25,000

Embedded Systems (million yen)

6,000

10,0002019 2020 2021 2022 2023

Domestic
manufacturingbusiness

Overseas business

8,000

4,000 3,050

0

75.2%

Domestic manufacturing business

Semiconductors (million yen)

6,000

5,000

Component
ratio
for sales

2023

Segment
operatingincomecomposition
ratio*

9.0%

6,269

19,07620,00015,28914,601
15,000

Domestic
sales business2023* Segment operating income
composition ratio calculated using
the simple sum of the threesegments’ operating income(6,065 million yen)Domestic sales business

23,435
21,95425,00014.2%

Power Supply Equipment (Including Green Facilities)

22.6%

Electronic Components &Assembly Products (million yen)Overseas business

20.5%

4.3%

Embedded Systems

million yen

Overseas business

Domestic
manufacturingbusiness

8.0%

2023

Information Systems

Status by Business Segment

2

870 886

1,818

1,500

786

1,000

1,150

976

862

500
500

0

2019 2020 2021 2022 2023

0358

2019 2020 2021 2022 2023

Integrated Repor t 2024

32

Chapter 3

Overview by Product Segment ❶ Solution Technology Capabilities

Developing and providing solution technologies that lead tosolutions to customer issues in diverse niche markets

In our history of more than 70 years, the Daitron Group, as a group of technology trading companies in the electronics
industry, has steadily accumulated and advanced its technological capabilities in the Electronic Equipment and Components segment and the Manufacturing Equipment segment, while refining its manufacturer and trading company
functions. As a result, the technical capabilities provided by our Group have earned the trust of many customers in diverse
niche markets as solution technologies building solutions to their diverse issues.

Technical capabilities in the Electronic Equipment and Components segment

Technical capabilities in the Manufacturing Equipment segment

In the Electronic Equipment and Components segment, we offer a wide range of electronic components, including

In the Manufacturing Equipment segment, we create and supply manufacturing equipment for semiconductor manufac-

switching power supplies and UPS, various connectors and harnesses, customized cameras, and cables. We haveturing equipment, optoelectronics, and other general industry, through our own development and joint development withaccumulated many technical capabilities related to these commercial products and provide total solutions to our custom-

partner companies, thereby helping our customers solve various manufacturing issues. Through these efforts, we haveers through our five core technologies in this segment, as shown in the figure below.

established six core technologies for this segment within our Group, as shown in the figure below.

Powermanagement
technology

Glass hermetic
sealingtechnology

CoreTechnology
Imagingtechnology

Assembly
technology

Precisioncleaning
technology

FOCUS!

Grinding &polishingtechnology

CoreTechnology

Measurement
control
technology

Thermalcontrol
technology

Precisemotion control
technology
Microfabrication
technology

Connecting
technology

FOCUS!
Among our five core technologies in this area, we have notable superiority in glass hermetic sealing technology to

Based on the experience accumulated through the development of the industry’s first NC-controlled chamfering machine,develop and provide connector products that demonstrate high reliability even under severe environments such as

we have come to demonstrate a significant competitive advantage,vacuums and high pressure.

especially in grinding and polishing technology.

One of our core technologies in which we have a very high degree of superiority
is glass hermetic sealing technology. This is a technology that enables metal tobe glass-sealed to obtain excellent airtightness, pressure resistance, andelectrical insulation. For example, we provide connectors, power feedthroughterminals, and hermetic seals that can be used in harsh environments such as
deep-sea research, where materials must be resistant to high vacuum and highpressure states. In addition, the high-precision nature of electronic equipment
makes low noise power supplies an indispensable technology, and thanks toour expertise in power management technologies, we gain a competitive
advantage by providing low-noise switching power supplies.

33

Business Strategy

Integrated Repor t 2024

▼ Hermetic connectors▲ Switching power supplies

This grinding and polishing technology is one of our core technologies where we haveestablished a very high level of differentiation and superiority. We were the first in the industry
to successfully develop an NC-controlled chamfering machine, and since then we haveaccumulated an extensive track record and experience. Today, we develop and supply
equipment for a wide range of edge grinding processes for silicon wafers, compound semiconductors, sapphire, device wafers, etc. The manufacturing equipment provided by our technologies and functions that solve diverse issues faced by our customers. For example, we canhandle a wide range of wafer edge grinding processes from small to large diameters, and our
proprietary processing technologies (contour machining, etc.) enable high-precision chamfering,
among many other advantages.

▲ Wafer edge grinding machine▲ Scribing/breaking equipment

Integrated Repor t 2024

34

Chapter 3

Overview by Product Segment ❷ Product Lines

Electronic Equipment & Components Market

Daitron original productsElectronic Components & Assembly Products[Major Products]
Connector, harness, PCB assembly, wiring• General industrial equipment• Semiconductor manufacturing equipment• Medical-related equipment• Automotive equipment • Measuring equipment• Information communication equipment• Image-related equipment• IoT-related equipment
etc.

Daitron original products[Major Applications]etc.
Underwater connectors

Wires & harnesses

Connectors

Spin cleaners

Chip sorting machines

Fully automatic wafer tape mounters

Single wafer washing systems

Wafer edge grinding machines

One surface wafer polishing machines

Aging equipment

Scribing/breaking equipment

Automatic visual inspection system
DAVI Series

Organic EL evaluation systems

Cover glass processing equipment

Imaging inspection equipment

Electrode sheet inspection equipment

Electrode coating & drying furnace

Electrolyte leak inspection equipment

Electronic Materials Manufacturing Equipment• General industrial equipment • Semiconductor manufacturing equipment• Measuring equipment • OA equipment & household appliances• Image-related equipment • Medical-related equipment• Information communication equipment• IoT-related equipment (infrastructure, production sites)• Automobile-related equipment
etc.

[Major Applications]

Analog ICs

Gallium nitride (GaN),
silicon carbide (SiC)

Imaging IC/LED, optical elements

Embedded Systems• Silicon wafers• Quartz wafers• Compound wafers• Optical fiber/optical lenses• Oxide wafers• Hard disk negatives• SiC wafers• Sapphire wafers

etc.

Optical Device Manufacturing Equipment[Major Applications][Major Products]
Embedded Systems• Measuring equipment • Image processing equipment• Semiconductor-related equipment• Machine control equipment• IoT (infrastructure, production site, deep learning)• Medical-related equipment• Information communication equipment• Automotive equipment • Robot control related etc.

• LD (red, green, blue, short-wave length,
long-wave length)• LED (red, blue, purple)
etc.

Industrial custom PCs

Display systems

Embedded single-board computers

Power Supply Equipment

FPD Manufacturing Equipment[Major Applications][Major Products]
Switching power supply, uninterruptible power
supply (UPS), transformer, battery pack• Measuring equipment • Semiconductor-related equipment• Medical-related equipment • Automotive equipment• IoT-related equipment • Audiovisual equipment• Information communication equipment• Server-related • Analyses-related equipment• Other FA equipment
etc.

Switching power supplies

Lithium-ion batteries

Uninterruptible power supply (UPS)

Image-Related Equipment & Parts• LCD panels• LCD panel color filters• Touch panels• Organic ELs• EL backlights• Cover glass• Optical film
etc.

Energy Device Manufacturing Equipment[Major Applications][Major Products]
CMOS camera, lens, light, image processing
equipment, software• Semiconductor-related equipment • Robots• Electronic parts production facilities• Medical-related equipment • Automotive equipment• Automated logistics, carrier devices• IoT-related equipment • Other FA equipment
etc.

• Lithium ion batteries• Solar batteries• All-solid-state batteries• Fuel cells
etc.
Image-related equipment

CMOS cameras

Vessel engine interior automatic
photographing equipment “Kirari NINJA-DS”

Other Manufacturing Equipment

Information Systems[Major Applications][Major Products]
Video transmission systems, authentication devices(RFID, IC card, vein authentication, face authentication)

Integrated Repor t 2024

Electronic component
manufacturing equipment• LSI, masks, oxide devices• Ceramic devices• Compound communication devices• Power devices• Sensor devices[Major Products]
Analog IC, high-frequency IC, power discrete devices,image IC, optical devices

35

Semiconductor/
FPD manufacturing equipment

LSI Manufacturing Equipment

Semiconductors• Settlement terminal market• Security market• Authentication system market• Network equipment• Image information systems• Medical-related equipment

Manufacturing Equipment Market

Business Strategy

etc.

• Medical• Automotive• Automation, labor saving• Communication device• MEMS devices• Environmental, clean productsVideo/audio conferencing systems

Web conferencing devices

Contactless IC card systems

etc.

Integrated Repor t 2024

36

Chapter 3

Business Strategy

Strategies by Management Organization

Marketing & Sales Company

Senior Managing Corporate Officer
President, M&S Company

Shinji Ikutani

Development & Production Company

Under the slogans of “Elevate stable foundations andUnder the slogans of “Create new value” andstrengthen new business development” and“Solidify basic manufacturer operations,”“Adapt to various changes with new ideas,”

we will continue to evolve and develop into a

we will maintain our growth trajectory.

technology-based company.

Much of the three years of the previous Medium-Term Business Plan (10M) was

D&P Company is an internal company responsible for technology development andinfluenced by the challenges of the COVID-19 pandemic. Despite this, we believe

manufacturing. It was created in 2017 through the integration of our development
and manufacturing divisions with Group manufacturing subsidiaries. Therefore, thethat the M&S Company, an in-house company that performs trading company
functions primarily in the domestic market, was able to accomplish a great deal.

Managing Corporate Officer
President, D&P Company

Building on the results of these efforts, we will continue to pursue many of the

Tsuneto Chihara

basic strategic policies promoted in 10M in our new Medium-Term Business Plan

Basic Strategic Policies for 2024

(11M), which began in 2024. Still, there are new issues to tackle that came to

Basic Strategic Policies for 2024

1

light during our 10M initiatives. In 11M, our basic strategic policy has been newly

1

Cultivating customers
Continuing “All-Daitron” product development

foundations and strengthen new business development” and “Adapt to various• Expanding sales of new products toexisting customers

changes with new ideas.” This expresses our desire to constantly take on theOffering a wide range of products
as Daitron Group through cooperation
across sales departments

3

Sales development

4

5

37

preconceptions, while further strengthening our stable foundation for surviving in

2024, the first three of which are continuing policies and the latter two are• Expand business with local blue-chipcompanies regardless of industry

development of “All Daitron” products, focusing on our key customers. The

New business cultivation

second is “sales development.” We will continue to strengthen our communi-etc.

Overseas business collaboration

The first is “cultivating customers.” We will continue to promote thety-based area sales activities and further expand our customer base by expanding transactions with local blue-chip companies regardless of industry. The third is3

Manufacturing

our Group’s future growth strategy. Fifth is “next-generation human resource

Next generation human resource
development

VISION, we must create the human resources and organizations that will lead thedevelopment.” We recognize that in order to achieve the goals of our 2030
next generation. I am in particular tasked with this creation to build our future, and• Organizational revitalization &human resource development

I intend to diligently work toward this going forward.

• Cultivation of next candidates forupper management

significant technological innovation, going forward, I will continue my work to

Despite a rapidly-changing business environment due to quick waves of
ensure our Marketing &Sales activities exceed the expectations of our stakeholders.

Both the Equipment Business Operation segment and the Parts Business Operation segment were able to achieve a certain degree of success in new productdevelopment and sales expansion. However, we also found that our production
Based on the results of and reflections on 10M, we have set the slogans ofin which the new Medium-Term Business Plan (11M) was launched. We will create
new value (i.e., new products) by combining the Group’s technologies and expertise
concentrated in the D&P Company, and will work to strengthen capabilities such astechnologies, development, quality, cost adaptation, and others that will allow us tofirmly meet the trust our customers have placed in us as a manufacturer.

• Production outsourcing/collaboration between factories• Rigorous quality control• Enhancing cost reductions

with optimizing the three functions of technology development, manufacturing,

Sales and marketingproducts, we will further aggressively work to sustain software development

Cultivating key customers in the domestic market• Strengthening collaboration with the
Global Business Division
Expanding sales ratio in overseas markets

4original product ratio of 25% or more and overseas business ratio of 30% or more.

To “solidify basic manufacturer operations:”• Strengthening collaboration with
M&S Company

to actively support the expansion of overseas business, which is a major key toachieve them in order to contribute to the achievement of the Group’s goals of an“Create new value” and “Solidify basic manufacturer operations” for 2024, the year

such as automotive, medical, and IoT, areas of growth during the 10M period.
strengthen cooperation with the Global Business Division and overseas locations

During the three years of the previous Medium-Term Business Plan (10M),
the D&P Company set its own (undisclosed) target indicators and worked tosystem was somewhat inadequate to respond to the rapid expansion of demand.

To “expand new projects:”

Fourth is “overseas business collaboration.” The M&S Company will

create competitive and high-value-added technologies and products.

Hiring related engineers andenhancing development
Promoting alliances with related companies“new business cultivation.” We will further grow and develop projects in fields• Strengthening support for Global
Business Division and overseas locations

Integrated Repor t 20242

expertise, and we believe that their organic and efficient integration will enable us to• Continuing software development projects• Launching standardization projects formechanical and electrical design

a rapidly changing business environment.

newly-added policies.

• Automotive• Medical• IoT• Battery• Software(both in the Equipment Business Operation andParts Business Operation segments)

ers for business expansion with dynamic thinking unbound by conventional• Strengthen community-based area sales• Promoting cross-divisional projects• Continuing original product development

challenge of expanding new markets and cultivating new customers and suppli-

Next, the M&S Company has the following five basic strategic policies forTechnology development
To “create new value:”Firstly, our two slogans for 2024 at the M&S Company are “Elevate stable• Further cultivating of key customers*What is “All-Daitron?”2

established in recognition of these issues.

D&P Company has accumulated an extremely broad range of technologies andHuman resources
To “cultivate the next generation ofhuman resources:”• Cultivating next candidates forupper management• Continuing to recruit personnel from overseas• Continuing to secure personnel tosupport business expansion

Under the aforementioned two slogans, we will continue to push forward
and sales and marketing. First, on the technology development side, in order tocreate new value per the slogan, in addition to continuing to develop original
projects and, if necessary, look into alliances with software-related companies.
We have also started standardization projects for mechanical and electricaldesign. Second, on the manufacturing side, we are working to create a systemthat goes back to the basics in order to solidify basic manufacturer operations,
per the slogan. Third, on the sales and marketing side, we will further strengthen
cooperation with M&S Company and the Global Business Division toward the
expansion of new projects. In order to drive these three functions forward robustly, it is essential to strengthen human resources. Going forward, we will continue
to enhance our human capital by cultivating candidates for the next generation of
executives and continuing to hire personnel from overseas in response to theglobalization of our business.
We recognize that the D&P Company has a very important role to play inthe evolution and development of Daitron as a technology-based company, andwe will continue our efforts to develop original products and provide more attractive, high-value-added products to our customers.

Integrated Repor t 2024

38

Chapter 3

Business Strategy

Strategies by Management Organization

Global Business Division

Under the slogan of “Cultivate mutual trust indiversity to enhance teamwork andoperational quality,” we will push forward toOverseas location deployment

Overseas

14

Europe1Asialocation

locations

11(The Netherlands)

1 Seoul (Korea)

Major focus areas for our include domains and markets related to semiconductors,

3 Shenzhen (China)

electricity, and electronics. These are expanding not only in developed countries but

4 Hong Kong (China)also in developing countries all over the world, and this expansion trend is expected

Penang (Malaysia)

Basic Strategic Policies for 2024

evolve and develop the Group into a global and technology-based company.

6 Kuala Lumpur

1

or more in the previous Medium-Term Business Plan (10M), we secured significant• Reforming profit structure
Growing net sales of the Electronic Equipment
and Components Business to rectify a sales
composition where over a majority is held by
the Manufacturing Equipment Business• Enhancing the lineup oforiginal products for overseas(Collaboration with D&P Company)• Expanding exports of products frommajor domestic suppliers(Collaboration with M&S Company)• Expanding Out to Out business

2

System improvement• Cultivating global human resources• Introduce an overseas location internshipsystem• Building a training scheme in Japan for
locally hired personnel• Cultivating management controllers foroverseas locations and regions• Cultivating field service technicians• Enhancing overseas locations• Locally incorporating Representative Offices(Hanoi (Vietnam), etc.)• Preparing to establish overseas
manufacturing locations• Preparing to establish locations in growthmarkets(India, North America, Europe, etc.)

7 Taipei (Taiwan)

Sales locations

Manila (Philippines)

Oregon (U.S.A.) / Kuala Lumpur and Penang (Malaysia) / Shanghai,
Shenzhen, and Hong Kong (China) / Seoul (Korea) / Bangkok (Thailand)
Taipei (Taiwan) / Singapore / Eindhoven (The Netherlands)

5 Bangkok (Thailand)

Division, in close cooperation with the M&S Company and D&P Company, isManufacturing factories

10 Singapore

Nebraska (U.S.A.)(Malaysia)

Although we did not achieve the goal of an overseas business ratio of 30%

8 Oregon (U.S.A.)
9 Nebraska (U.S.A.)

Hanoi (Vietnam)

to continue going forward. Under these circumstances, the Global Business
continuing its efforts to accurately capture robust overseas demand in order to

Product portfolio reform

locations

11 Eindhoven

2 Shanghai (China)

Akio Tanaka

2locationsfurther expand our overseas business.

Corporate Officer
Division Manager - Global Business Division

North America

Representative Offices
Manila (Philippines) / Hanoi (Vietnam)

Daitron Group (Overseas): 10 companies

results for our future development, including record sales from overseas businessduring the period (in 2022). We can say with pride that we were able to deliver
such results despite severe pandemic-related restrictions thanks to steady efforts

1

2

3

4

5

7

8

9

10

11

6

based on our plan, including strengthening community-based sales, opening new
locations, and reinforcing our technical support system.
In 2024, the start of the new Medium-Term Business Plan (11M) starts, ouraim remains an overseas business ratio of 30% or more, while laying a global
management foundation capable of maintaining our desired future ratio of 50% ormore. Specifically, we will advance product portfolio reform and system improvement.
First, with regard to product portfolio reform, we will continue to reform our
profit structure, increasing sales of electronic devices and components and rectify
a sales composition traditionally dominated by manufacturing equipment with amajority of sales. In addition, we will expand original products for overseas
markets and products from major domestic suppliers in cooperation with the D&P
Company and the M&S Company. Furthermore, we will focus on expanding our
Out to Out business (especially manufacturing equipment).
Secondly, for system improvement, we will advance initiatives under two
perspectives: cultivating global human resources and enhancing overseas
locations. Under cultivating global human resources, we will improve our systems
in anticipation of growth in our global talent pool by introducing an internship

Overseas net sales and overseas business ratio over timeOverseas net sales (million yen)Overseas business ratio (net sales basis, %)18.0

rate our Representative Offices, prepare to establish overseas manufacturing

19.5
16.5

15.8

21.2

22,38019,376
16,846

16,713
12,665

India, North America, and Europe.
with employees in more than 10 countries. Under the slogan of “Cultivating

21.0

20.5

16.3

locations, and prepare to establish locations in future growth markets such as
We currently conduct our overseas business across 14 overseas locations

25.5
23.3

system for overseas offices and establishing a training scheme in Japan for locally
hired personnel. As for enhancing overseas locations, we will continue to incorpo-

27.1

11,744

10,056
6,283

6,382

6,814

7,310

2013

2014

2015

2016

mutual trust in diversity to enhance teamwork and operational quality,” we willseek the further expansion of our overseas business. Please watch this space as
we tackle further challenges ahead.

39

Integrated Repor t 2024

2017

2018

2019

2020

2021

2022

2023

Integrated Repor t 2024

40

Chapter 4

Sustainability

Sustainability Management

Sustainability
SystemChart

We established the Management Philosophy in 1993, which spells out ourFoundation Spirit / Code of Conduct

responsibilities for corporate ethics, global environment and social contribution, not to mention compliance with laws and regulations. Our sustain-

Management Philosophy

CSR Basic Policy

See page 51

1long-term perspective, starting with the Management Philosophy, Group Statement, and the 2030
Daitron Group, seeking to continuously promote its business activities directly connected tocontinuingly pursue the Basic CSR Policy established in 2011, and speci-

sustainability as a public instrument, has recently identified our key issues as Materiality, in addition to the Basic CSR Policy.

fied Materiality in February 2022.

Through aggressive business activities based on the healthy and strong management foundations, we are working toward cre-rate governance system that governs all our activities and have established the Basic Policy on Corporate Governance.

Materiality (sustainability key issues)

er industries as well as the entire society beyond by promoting management putting emphasis on aFounding Spirit and Code of Conduct at the top. In addition, we decided to

As the basis of the sustainability system, we positioned the corpo-

Our Basic Policy on Corporate Governance

We work to improve our own corporate value to provide a variety of value for the electronics and oth-

VISION, our Long-Term Vision, which sets out the corporate image we aim for.

ability is organized in this management philosophy and its origins, theSustainability
Materiality

Daitron’s
Idea of
Sustainability

Each Material Issue and Connection to the SDGs

ation of our “Five Values”: partner value, human value, social value, environmental value, and economic value, determined tocontribute toward the accomplishment of the SDGs (Sustainable Development Goals).
In May 2022, we established the Sustainability Committee to pursue action on material issues and other sustainability initiatives.

Materiality (sustainability key issues)2

Primary Efforts and Focus Themes

We believe that the pursuit of the five material issues identified as our Materiality will lead us to contribute to the accomplishment of manyIn pursuit of the five material issues toward further progress, the directions of the efforts are defined based on the Primary Efforts and Focus

goals included in the SDGs. By more deeply involving ourselves in the accomplishment of more goals in the course of promoting the sus-

Themes, and by setting representative KPIs in each issue in the following step to objectively assess the progress of the efforts at Material-

tainability management, we will multilaterally contribute to the realization of a sustainable society.

ity which will lead us to the next step.

To work for the creation of diverse partner*
value as an engineering trading company
with the manufacturing function

To promote a human resource strategy
making much of diversity to contributeto the innovation creation of the industry

Human resource
value creation

Partner*value creation

To contribute to the creation ofsocial and environmental value,
making full use of most-advanced
electronics technologies

Social &environmental
value creation

MaterialityofDaitron Group(key issues)

Managementfoundations
establishment

Economic
value creation

To continuingly work to createhigh added value one step ahead
for maximized economic value

To build healthy and strong management foundations
as the bases for creating the Five Values

Materiality

Primary efforts and focus themes

Partner value
creation

To work for the creation of diverse partner value as anengineering trading company with the manufacturingfunction• Reinforcement of manufacturing function (= enhancement of technological, developmental, and manufacturing
technological capabilities)• Reinforcement of trading function (= enhancement of marketing power, partner base, and sales capabilities)• Development of new markets and new customers (= creation of sustainable new partner value)• Contribution to the introduction of ICT and automation across industry to support improvements in productivity
and efficiency

Human
resource value
creation

To promote a human resource strategy making muchof diversity to contribute to the innovation creation of
the industry• Diversity-minded recruitment and utilization of human resources• Establishment of personnel and education/training systems which lead diversity to innovation• Respect for human rights of all employees, and support for the realization of society respectful of human rights• Creation of a satisfying workplace (safe work environment, work-style reform, and career-path system)

Social &environmental
value creation

To contribute to the creation of social and environmental value, making full use of most-advanced
electronics technologies• Contribution to ICT infrastructure, air, sea and land infrastructure, and the energy industry to support theconvenient, safe and secure lives of people• Contribution to environmental load reduction through provision of electronics technologies to a wide area ofindustry

Economic value
creation

To continuingly work to create high added value one
step ahead for maximized economic value• Continuous devotion to the development of high added value products and services toward creation of value
one step ahead• Promotion of business offering more comprehensive solution as the basics for the above purpose• Contribution to not only the Group’s own improved earnings but also industry-wide maximized economic value
through the development and distribution of high added value products and services

Managementfoundations
establishment

To build healthy and strong management foundations
as the bases for creating the Five Values• Reinforcement of corporate governance, compliance, and risk management systems• Securing of sound financial bases (improved equity ratio and reduced management costs)• Enhancement of the BCP (business continuity plan) and supply chain management• Thorough reinforcement of environmental management systems and quality management systems

Category

CSR Basic Policy
Environmental Policy

Safety and Health Policy

Based on our Environmental Philosophy, we will promote, and continuously improve,environmental management system activities in accordance with the Action Guidelines
to reduce environmental impacts of our business operations ranging from design, manufacture, and sales of products to related services and achieve harmony with the global
environment.

We will seek to provide employees with safe and sanitary working environments for the
purpose of minimizing occupational injuries and diseases, and improving the retention
rate and morale of employees in addition to the quality of products and services.

Quality Policy
We will establish an effective quality management system for the purpose of providing
products and services meeting the expectations and needs of customers.

Human Rights Policy
We will assist in the realization of a society in which respect is given to human rights. In
order for that, we are determined to exert efforts to fulfill the responsibility for respecting
human rights while making contributions to society through business activities.
* What is a “Partner?”
The term “partner” refers to both “customer” and “supplier.” The Group is promoting the building of deeper and more multiple relationships of trust with its partners
and the strengthening of its partner base, with its best customers becoming its most important suppliers (and vice versa).

41

Integrated Repor t 2024

Business Ethics
We will observe the highest level of business ethics to fulfill its social responsibility andachieve success in the market.

Social Contribution
In 2001, the late Mr. Zenshiro Takamoto, the Company’s founder, established the Daitron
Welfare Foundation to sponsor handicapped employment supporting institutions, etc. aswell as research organizations studying how to help the handicapped participate in society and improve their lives. We are actively supporting these social action activities in
sympathy with them including contributions to this Foundation.

Labor Policy
We will respect the human rights of all employees and treat them with respect of theirdignity in a manner to win international understanding.

Integrated Repor t 2024

42

Chapter 4

Sustainability

Environmental Initiatives

Environmental Policy

2 Strategy, Risks, and Opportunities

Environmental Philosophy
Based on the recognition that creating a people-friendly and earth-friendly environment is one of our top priority issues, we willcontribute to global environment protection by reducing environmental burdens through development, production, and sales ofevery product and related service.

Environmental Policy
Based on our Environmental Philosophy, we will promote, and continuously improve, environmental management system activities
in accordance with our Action Guidelines to reduce environmental impacts of our business operations ranging from design, manufacture, and sales of products to related services and achieve harmony with the global environment.

Environmental Protection
In accordance with our basic environmental policy, we have acquired ISO 14001 certification and established an environmental
management system to prevent environmental pollution, promote energy conservation, reduce waste, implement recycling, conduct green procurement, and promote the management of chemical substances found in products.

Climate Change Initiatives
We have identified social and environmental value creation as material issues, and has joined the TCFD Consortium as of December 2023 as part of its efforts to achieve a decarbonized society.
We aim to bring about a sustainable society and achieve corporate growth by identifying risks and opportunities related toclimate change, assessing business and financial impacts through scenario analysis, and implementing countermeasures.
By contributing to environmental load reduction through provision of electronics technologies to a wide area of industry,including information and telecommunications infrastructure, land, sea, and air infrastructure, and the energy industry, we will also
support people’s daily lives, safety, security, and convenience.
1 Governance
We are working to improve corporate value and provide diverse value to the electronics industry and other industries, as well as
to society as a whole. Going forward, as a public instrument, we will continue to promote sustainability management with the aimof ensuring that our business activities are directly linked to sustainability.
The Board of Directors oversees the content of policies, targets, and plans related to sustainability issues, including climatechange-related issues, as well as the progress of each measure, as reviewed and discussed by the Sustainability Committee.
The Sustainability Committee is chaired by the President and consisting of the President of each Company and General
Managers of each Division. This committee approves specific measures and KPIs for materiality initiatives via its subcommittees,
manages their progress, and reports to the Board of Directors. Then, opinions and directions received from the Board of Directors
are reflected in these initiatives. In addition, in cooperation with the Board of Corporate Officers, the committee disseminates information to each Company and Group company, working to ensure greater internal penetration of the Group’s initiatives, andadvancing Group-wide initiatives and dialogue with each stakeholder to evolve and enhance our initiatives.
The Sustainability Committee’s subcommittee structure consists of five subcommittee groups, each responsible for formulating specific measures and KPIs for its specific issues, and for advancing activities to achieve these measures and KPIs.
Board of Directors
Sustainability Committee
Chair: President
Members: Company Presidents and Division Managers

Coordination

Board of Corporate Officers

Based on the TCFD recommendations, we analyzed and identified climate change risks and opportunities for us, and conductedscenario analysis over short-, medium-, and long-term timelines in order to understand their impact on our business. Based on
the following major scenarios, we identified a wide range of possible future risks and opportunities. Furthermore, through discussions and examinations led by upper management and business units, we concluded with an assessment of events with a highlikelihood of occurring in us and their degree of impact, and studied and formulated countermeasures based on such evaluation.
Scenario Analysis Results (1) 1.5°C/2.0°C Scenario

Scenario Analysis Results (2) 4.0°C Scenario(Major risk)
Risk of increased operating
costs due to introduction ofcarbon tax

Work to reduce both greenhouse gas(GHG) emissions and energy use
throughout us, including the use ofLEDs and the introduction of renewable energy sources(Major opportunity)
Expand business by capturing new customer demandthat contributes to reducing
environmental impact

Work to develop and propose new
products and comprehensive solutions in response to growing semiconductor demand alongside thepopularization of EVs(Major risk)
Physical risk of intensifying
natural disasters

Based on scenario analysis results, we will regularly and continuously update its scenario analysis to enhance accuracy, flexibly
respond to anticipated risks, and increase its resilience to withstand any scenario and timeline. For opportunities, we will flexibly
and strategically consider and develop measures that will lead to sustainable corporate value enhancement, while focusing on thesituation regarding climate change, market trends, and dialogue with our customers.
3 Risk Management
In addressing climate change risk within the Group, the Sustainability Committee takes the lead in handling risks that may have a significant impact on management. Climate change-related risks identified by the risk management organizations of each division andreported to the committee are evaluated and prioritized in terms of degree of impact and likelihood of occurrence. Results of thesestudies are reported to the Board of Directors as necessary to ensure appropriate management and oversight. In addition, we areconsidering reflecting climate change-related risk management (identification and management of particularly important matters andformulation of countermeasures) into our Group-wide risk management process as part of efforts to upgrade existing risk management.
4 Metrics and Targets
As part of our efforts to reduce GHG emissions toward achieving carbon neutrality by 2050, we have set a target to reduce GHG
emissions from our business activities (Scope 1 and 2) by 50% by 2030 compared to the 2018 level. Our measures to achieve thisinclude working to save energy by replacing conventional lighting with LEDs and updating air conditioning equipment, as well as
utilizing electric vehicles, installing solar power generation equipment, and utilizing electricity derived from renewable energy sources. We also intend to act to reduce emissions in Scope 3, and will begin by calculating these emissions at our Group locations inJapan and overseas. Meanwhile, we are aware that our Group is connected to a large amount of Scope 3 emissions due to thenature of our industry, and we will seek to reduce these in cooperation with our partners in the supply chain.
GHG Emissions KPIs
Reduction targets

Scope

Base year

Base year
CO2 emissions

2030

2035

2040

2045

2050

1·2

2018

1,846 tons

50%

Over 90%

Carbon neutral

Carbon neutral

Carbon neutral

Scope 1 and 2 emissions(Fiscal 2022 results)（t）

Scope 1
Approx.

2,000

1,846

1,797

10%

50% reduction(vs. 2018)

Total:
Partner Value Creation
Subcommittee Group

Human Resource Value
Creation Subcommittee Group

Social & Environmental Value
Creation Subcommittee Group

Economic Value Creation
Subcommittee Group

Minimize risk through advanced risk
analysis, information gathering, disaster prevention measures, and disaster response measures, not only
at locations with high hazard ranks
but also at other locations

1,797tons

Management Foundations
Establishment Subcommittee Group

1,000

Achieved
carbonneutrality

Scope 2Companies, business divisions, Group companies

43

Integrated Repor t 2024

Approx.

90%

0

2018

2022

2030

2050

(year)

Integrated Repor t 2024

44

Chapter 4

Sustainability

Environmental Initiatives

Environmental Management System

Status of Environmental Education and Training Programs

With the aim of resolving environmental issues through our businessactivities, we have established and maintains and operates an environmental management system with our Environmental Policy at its
Environmental target-setting
and action plan creationcore, while adding fair and objective inspections and evaluations byContinuous
improvement
an external inspection organization.
through the PDCA cycleP
We conduct internal audits every year to ensure that the environmental management system is operated appropriately and efficiently
based on the PDCA cycle, and that continuous improvements are made.
Rectifying
In addition, to ensure that all employees always act in an envi- non-conformity
A Environmental D
and making
Policyronmentally conscious manner, we have established and rigorously improvements
enforce the Action Guidelines. These guidelines establish a numberof important actions, including compliance with environmental lawsCand regulations in all processes from design and manufacturing toprocurement and sales of materials, as well as promotion of educaInspection/evaluation,
tional activities including those related to the environment. We believe
management review
that it is our social responsibility to proactively address environmental
issues, protect the environment while balancing socio-economic
needs, and contribute to the creation of a sustainable society.

To promote efforts for global environmental protection through all of our business activities, including product development, production, sales, and service provision, we conduct environmental education and training to ensure that all employees understand ourEnvironmental Policy and act based on this policy in the performance of their duties.
For example, twice a year, M&S Company provides training on matters such as
the environment, quality, and related regulations in its training programs for new andmid-career employees, as well as for employees who have been transferred.

Acquisition of ISO14001
As shown in the table to the right, we have obtained ISO 14001
certification, the international standard for environmental management systems, at our major locations since around 20 years ago.
These locations are regularly audited by an external assessment
organization to ensure these systems’ effectiveness is maintained.

Scope ofISO 14001
certification
applicability(as of December 2023)

Education/training
andaction/management

All domestic locations• Head Office• M&S Company: Acquired 16
places of business• D&P Company:
Equipment Business Operation
Parts Business Operation• Global Business Division

Sustainable Procurement
1 Green procurement

Supplier
Based on our Environmental Philosophy and Environmental Policy, we
have prepared the Green Procurement Guidelines and are promoting
Communication
Procurement ofof requests,
green procurement activities for all materials and equipment we procure.
conforming goods
surveyguidance
The purpose of this policy is to provide customers with environmentally-friendly products and goods and to contribute to global environmental
Daitronprotection based on a recycling society. It does this by setting forth
standards for procurement from our suppliers, ensuring complianceContributing to a greener supply chain by developingwith laws, regulations, and other requests agreed upon by the Compaand supplying products through green procurement
ny, and making them aware of the need to reduce their environmental
burden. Our requests for suppliers cover all processes, from material
Customerprocurement to manufacturing and delivery, such as indicating prohibited substances and preventing their attachment, mixing, or misuse; minimizing packaging, wrapping materials, cushioning materials, etc. during shipment; and ensuring traceability management.
These guidelines were first published on January 1, 2017, and have been revised periodically since then.
2 Responsible procurement of minerals
In material procurement, we strive to select suppliers that are appropriate not only in terms of the environment but also in terms ofhuman rights and other aspects. For example, there is a global concern that the mineral resources mined in the Democratic Republic of the Congo and its neighboring countries are providing a source of funds to armed groups causing human rights abusesand environmental destruction. Global supply chain traceability investigations have been conducted by U.S. listed companies andothers since 2013 to confirm whether or not their supply chains contain such conflict minerals. We are actively cooperating withthese investigations as a member of supply chains.

45

Integrated Repor t 2024

Environmental bulletin board

TOPICS

Accelerating next-generation battery development toward achieving carbon neutrality

Utilizing AI to accelerate battery material analysis 100-fold,
and launching particle analysis AI software in the market

In our Group’s Automotive Project, part of our new business creation activities, one of our partner companies, BLUE TAG Co.,
Ltd., has developed particle analysis AI software, which we havebegun marketing and selling.
Reducing battery costs and improving battery performance
are key to the spread of electric vehicles (EVs), and automotive andbattery-related manufacturers have an urgent need to develop
new types of batteries, such as all-solid-state and semi-solid-statebatteries. In the development of a new battery, the particle shapeand degree of uniformity of the battery materials affect the battery
performance, which is why at present, images from electron microscopes are pasted into Excel and other programs and meaImage after analysis by the new AI analysis system
sured manually, requiring several hours for a single analysis.
Now, BLUE TAG’s newly-developed particle analysis AI software can accelerate particle analysis by over 100 times thanks to a model
incorporating 300,000 existing shapes through machine learning.
This software offers significant contributions such as the following, and is expected to be used in many other fields in the future,in addition to battery development.
Contribution effects for researchers• Shortened analysis time reduces workload• Increased R&D speed and better research
results unlocked

Contribution effects for society• Shortened development period enables
provision of environmentally friendly products(such as batteries for EVs) to the market earlier
than expected• Enables improved performance for environmentally friendly products (such as batteries
for EVs)

Aiming to develop new
customers and provide
new solutions
Naonori Kanagawa, Group HeadOther major areas offering utilization
Manufacturing

Life sciences• Non-metallic particles• Fibrous materials• Semiconductor substrates/
materials• Alumina• Ceramics• MLCC materials• Chemicals, etc.

• Pharmaceuticals/pharmaceutical raw materials(Regenerative medicine/basic
research)• Chemicals, etc.

This AI analysis software specializes in particle analysis, offering customers significant reductions in development time in the development of
new batteries, where the particle’s state is a critical aspect. Since there
is also an English version of the software, we have received numerous
inquiries from automotive and battery-related manufacturers from allover the world, not just Japan. We are also looking to provide battery
manufacturing and inspection equipment to newly-cultivated customers,
aiming to provide new solutions to meet customer needs.

Integrated Repor t 2024

46

Chapter 4

Sustainability

Human Resource Initiatives

Human Rights Policy / Labor Policy

Diversity & Inclusion

Human Rights Policy

We will assist in the realization of a society in which respect is given to human rights. In order for that,
we are determined to exert efforts to fulfill the responsibility for respecting human rights while making
contributions to society through business activities.

Labor Policy

We will respect the human rights of all employees and treat them with respect of their dignity in a manner
to win international understanding.

Human Resource
Development Policy

We aim to be a company with the strength of unity and an autonomous, proactive organizational culture.
To this end, it is essential to strengthen our human resources power and we are promoting skill development to realize one element of our Management Philosophy, to respect our employees’ needs for self-esteem and encourage every individual to achieve their fullest potential.

Internal Environment
Improvement Policy

We recognize that maintaining a workplace environment in which employees can maintain their healthand work safely and with peace of mind is a prerequisite for maintaining our business foundation.

Our Group’s human resource initiatives are implemented by setting KPIs corresponding to action plans based on Japan’s Act on the Promotion of Female Participation
and Career Advancement in the Workplace and the Act on Advancement of Measures to Support Raising Next-Generation Children, and by working toward these goals.

Ratio of female employees
in career-track positions

Ratio of women in
management positions(Section Manager equivalent)

New personnel system*
utilization rate

15%

10%

30%

(5 years from April 1, 2021 to March 31, 2026)

Toward the development of an environment and organizational
culture in which all employees can play an active role,
regardless of gender or the presence or absence of childcare or
family care responsibilities

or moreor moreor moreMale employees
taking childcare leave

Percentage of male employees
whose spouse gave birth to achild using the company’s uniquechildcare leave system

Introducing a shortened working hoursystem for employees withchildren up to the end of thethird grade of elementary school* New personnel system: A new personnel system (staggered work, work fromhome) that has been gradually introduced in line with job types, job
descriptions, and lifestyles

KPI corresponding to the action plan based on
the Act on Advancement of Measures to Support
Raising Next-Generation Children(2 years from January 1, 2023 to December 31, 2024)

Toward the development of an environment in which all
employees can balance work and childcare and fully
demonstrate their abilities

25%

2 or more

1 Empowering women
Our goal is to create an environment that empowers all employees, regardless of gender and whether or not they are raising children
or caring for family members, and to create an environment in which employees can balance work and childcare or family care. To
this end, we have identified issues we are facing, formulated targets and concrete action plans, and are taking actions accordingly.
With regard to balancing work and childcare, the ratio of employees taking childcare leave (men + women) was 84.6% in
2023, an increase versus 56.5% in 2022. By gender, the ratio was 100% for women in both 2022 and 2023, while for men the ratio
increased from 41.2% in 2022 to 60.0% in 2023, leading to an increase in the overall ratio. The utilization rate when including thecompany-specific leave system for childcare purposes, was 80% (male employees). These results indicate that through educational
activities to encourage men to take childcare leave, an environment is being created in which they can balance work and childcare.
In terms of promoting women,
Ratio of female hires
Ratio of childcare leave, etc. taken
Ratio of women in
Ratio of women in(including company-specific leave for(Women as a share of new hires*)career-track positions
management positions
the ratio of women in career-track posithe purpose of childcare)(regular employees)(Section Manager equivalent)tions (regular employees) is 20.9% (versus 16.7% as of March 31, 2022), andthe ratio of women in management po%sitions (section managers) is 5.1% (ver%%%
Women: 100%sus 4.1% as of March 31, 2022). Going
Men: 80.0%
forward, we will proactively continue
with support measures to improvethese figures, such as follow-up train- * Data for new regular employees* All figures above are FY2023(not including contract andresults for Daitroning for career-track courses and manpart-time employees)(non-consolidated)agement training.

20.6

Major KPIs related to human resource initiatives

KPIs corresponding to action plans based on
the Act on the Promotion of Female Participation andCareer Advancement in the Workplace

Based on our Human Rights Policy and Labor Policy, and in the interest of strengthening our competitiveness as an organization,
we are advancing a human resources strategy that emphasizes diversity.

or more

84.6

20.9

5.1

2 Diversity employment and empowerment
We recognize that a strong management foundation is essential for sustainable growth, and that the core of this foundation is ourhuman resource base. With this in mind, we are taking actions to revitalize the organization by securing diversity in our humanresources. Specifically, we are encouraging the employment of foreign human resources and experienced workers, and focusing
on empowering senior and handicapped human resources. The specific results of our efforts in this area are to be disclosed as
we build up a steady track record.

Training and Development of Employees
Based on our Human Resource Development Policy, we provide training and development programs by position and job classification, as well as programs tailored to individual employee situations, such as career design and self-development, in an effort todevelop self-motivated and proactive human resources.

Main training and education programs• New employee training (at employment, 3-month intermediate follow-up, 6-month follow-up)• Young employee training (at their 3rd to 4th years)

Health Management
We aim to maximize the vitality of the organization and ultimately maximize corporate
value by working to maintain and improve the health of all officers and employees inaccordance with its Management Philosophy. In September 2023, we announced our Health Management Declaration, underwhich we are continuously improving our health management promotion system. In March 2024, Daitron became a CertifiedHealth & Productivity Management Outstanding Organization 2024 (Large Corporation Category).
The basic system for health management where we have begun efforts is collaborative health, an efficient and effective path
toward better health for employees and their families. As a basis for this, we are striving to understand health issues in terms ofboth mental and physical health (by accumulating health-related data on all employees), aiming for a 100% regular health checkup
rate and a 100% stress checkup rate. In addition, in cooperation with industrial physicians, we have established a dedicatedconsultation service (via a third-party organization, ensuring privacy) for general health, mental health counseling, and harassment.

47

Integrated Repor t 2024

• Training by rank (General Manager class, Section Manager class, and Assistant Manager class)• Mid-career hire employee training (at their 1st to 2nd years)• New manager training• Management course change follow-up training• Career design training
New employee training (FY2023)• Voluntary training• Business Administration Division educational program (internal e-learning)• Personal development (such as correspondence course, e-learning, TOEIC internal test)

Employment data
(most recent 3 years)

2021

25 (new graduates), 30 (mid-career hires)

2022

20 (new graduates), 50 (mid-career hires)2023

30 (new graduates), 38 (mid-career hires)

Integrated Repor t 2024

48

Chapter 4

Health and Safety Initiatives

Sustainability

Quality Initiatives

Safety and Health Policy

Quality Policy

We will seek to provide employees with safe and sanitary working environments for the purpose of minimizing occupational injuries and diseases, and improving the retention rate and morale of employees in addition to the quality of
products and services.

We will establish an effective quality management system for the purpose of providing products and services meeting the expectations and needs of customers.

Safety and Health Management System

Quality Management System

We recognize that providing our employees with a safe and sanitary work
environment is our responsibility as acompany and one of the most important issues in management.
From this perspective, under the
Safety and Health Policy, Safety and
Health Committees play a central role instudying and implementing measures toprevent occupational accidents, as wellas conducting surveys and deliberations on important matters to this end.
These Safety and Health Committees are set up at all of our places ofbusiness with at least 50 workers, holding regular monthly meetings. Committees consist of equal numbers of members from the management and laborside. In addition, we have establishedthe Safety and Health Committee Liaison Committee as a Group-wide organization to identify management items
related to occupational safety andhealth. This liaison committee encourages actions to ensure compliance withlaws and regulations and to improve theworking environment.
Safety and Health Meetings are
set up at factories and distribution centers with between 10 and 50 workers
that do not have a Safety and HealthCommittee. These meetings conduct
activities similar to those of their committee counterparts, including holding
regular meetings once a month.

We recognize that one of our major missions is to contribute to society
and our customers through relentless efforts to improve the quality ofour products. To this end, we are working on our quality management
system to ensure our quality standards always exceed our customers’
expectations.
As with our environmental management system, we conduct
internal audits every year to ensure that the quality management sys-

Safety and Health Committee Liaison Committee
Group-wide organization comprised of safety and health managers

Safety and Health Committees
Location-based organizations (at places of business with at least 50 regular workers)

General Safety and Health Manager
Safety manager

Labor representative

Health manager

Labor representative

Industrial physician

Labor representative

Management side

Labor side

Location-based organizations(at factories, distribution centers, etc. with between 10 and 49 regular workers)

Management side

Labor side

Rectifying
non-conformity
and making
improvements

tem is operated appropriately and efficiently based on the PDCA cycle, and that continuous improvements are made.
We also focus on activities to familiarize all employees with our
Quality Policy and to raise awareness about being proactive with regard to our quality management system.

In order to establish an effective quality management system, comply with laws and regulations, and ensure the achievement ofquality standards, we obtained ISO 9001
certification, the international standard for
quality management systems, in April 1998,

Scope ofISO 9001
certification
applicability

and have been periodically audited by an external assessment organization since then.
In addition, the Specialized Equipment Factory within the parts business has acquired
certification under JISQ 9100 (for aerospace), a quality management system standard with additional requirements specific toaviation, space, and defense.

Chair
Labor representative

Continuous improvement
through the PDCA cycle

A

P
Quality
PolicyD

Education/training
and work cycles

C
Customer satisfaction analysis
and management review

Acquisition of ISO 9001 and JISQ 9100

Safety and Health Meetings

Safety and health promoter

Quality target-setting andaction plan creation

Safety and health promoters
Selected by location (at places of business with 10 to 49 regular workers)

4M-based quality management

QCD-based
production
management

Man

Assigning human resources
with the right skills

MachineIntroducing optimal machineryand equipment

Material

Procuring the needed amount ofmaterials as they are needed

Cost

MethodEstablishing optimal
working methods

Delivery

Quality

Promoting comprehensive
quality management

Each location’s Safety and Health Committee (sites with 50 or more employees) or its Safety and Health Promoter (sites with less than 50 employees)
conducts site patrols to ensure safety and health at each location. These patrols simultaneously serve to identify and report challenges toward minimizing
future occupational accident risk to head office divisions.

*Specialized Equipment Factory*: Has also acquired JISQ 9100 certification(for aerospace)

Promoting Comprehensive Quality Management Based on the 4Ms and QCD
In order to ensure the optimum level ofquality demanded by our customers,
we must ensure that the various quality control tasks occurring at production sites are properly executed. At
our production sites, we promotecomprehensive quality management
through a combination of quality management based on the 4Ms and production management based on QCD,
as shown in the figure on the right.

Site Patrols(as of December 2023)• M&S Company:• Quality and Environment Promotion Office• Tama Sales Office, Tokyo Electronics Sales Office,Nagoya Electronics Sales Office, Osaka Electronics Sales Office, Tokyo Machinery Sales Office,Osaka Machinery Sales Office• Purchasing Section: Tokyo Center, Osaka Center• D&P Company:• Equipment Business Operation• Parts Business Operation

A site patrol

49

Integrated Repor t 2024

Integrated Repor t 2024

50

Chapter 5

GovernanceCorporate Governance

Our Basic Policy on Corporate Governance

Outline of Important Organizations in the Corporate Governance Structure

Amid this rapidly changing business environment surrounding corporations with the increasing globalization of theworld economy, for corporate health and sustainable growth we are aware that improving the management systemand enhancing corporate governance from the shareholders-oriented standpoint are among the most important
challenges for us.
The key elements of our corporate governance principles include building good relationships of trust with all
the stakeholders, ensuring timely and proper information disclosure and management transparency for shareholders, and following effective and healthy operating procedures, all of which are based on the Management Philosophy.

Compliance andcorporate ethics

Timely disclosure andinformation management

Risk management

We established the Compliance
Committee to formulate basic
compliance policies and manuals
that provide for the codes of ethics focusing on compliance withexternal relevant laws and regulations as well as internal rules of
the Company. With this system
implemented we are strengthening internal governance and promoting compliance activities forsound and smooth operation of
the whole Group.

We have created the Information
Disclosure Committee to ensure
timely and appropriate disclosureof important corporate information while keeping it true, complete, and accurate. This allows
us to make fair and quick decisions on when and what information should be disclosed. We also
have set up information security
rules and personal information
protection rules for thoroughgoing information management.

We regard risk management as a matter of extremely highpriority in business administration and have established the
Risk Management Committee, which is designed to work
together with the Compliance Committee for the purpose of
improved corporate value and reliability. Their mission is toprevent diverse possible risks that could seriously affect ourbusiness administration, to quickly and properly cope witheach situation so that it would not damage the stakeholders’ interests, and consequently to conserve management
resources. Under this system administrators in charge ofcarrying out these activities are designated from each section, who are required to report promptly on the occurrenceof any important issue concerning risk management.

1 Board of Directors

5 Sustainability Committee

In principle, the Board of Directors meets once a month on a regularbasis, and extraordinary meetings are held as necessary when important matters arise. Participants of Board meetings are fully informed andact in good faith and with due diligence in the best interests of theCompany and its shareholders. In addition, the Company’s Board of
Directors always keeps abreast of business conditions at the grouplevel and makes prompt decisions on medium- and long-term management issues and important matters to maximize the Group’s corporate
value, including to strengthen the Group’s comprehensive capabilities
and further reinforce the entire Group’s corporate governance.

We established the Sustainability Committee to address materiality (keyissues) surrounding the Group’s sustainability and to promote and oversee activities aimed at the sustainable growth of society and theGroup’s business activities and the enhancement of corporate value
over the medium to long term. This committee examines specific measures to address materiality, sets target indicators, supports and monitors activities to achieve targets, and reports and makes recommendations to the Board of Directors on the results of these examinations andthe progress of activities.

2 Board of Corporate Auditors

We established the Compliance Committee to build a compliance system rooted in high ethical standards, centered on compliance with relevant external laws and regulations as well as internal rules of the Company, and to strengthen internal governance and promote complianceactivities for the sound and smooth corporate management of theGroup. In addition, for the purpose of preventing the occurrence andexpansion of internal misconduct, we have established the DaitronGroup Compliance Hotline, an internal reporting and consultation service. We have assigned a third-party organization as the information
provider for this service in an effort to detect violations of laws andregulations and to uncover potential violations before they occur.

The Company’s Board of Corporate Auditors currently consists of three
Corporate Auditors, including two outside Corporate Auditors, and inprinciple meets once a month to receive reports on important mattersrelated to auditing, and to discuss and make resolutions on the same. In
addition, Corporate Auditors attend meetings of the Board of Directors
and other important meetings to audit and supervise the status of Directors’ performance of their duties, and exchange opinions with the internal audit department and financial auditor to improve audit functions.
Group Corporate Auditor Liaison Committee
The Group Corporate Auditor Liaison Committee, consisting ofCorporate Auditors (including Outside Corporate Auditors) of theCompany and its subsidiaries, meets regularly to exchange information and opinions on audits of Group companies in accordance with audit policies, thereby establishing a system handling
corporate governance of the entire Group.

3 Nominating Committee
We established the Nominating Committee as a voluntary advisory bodyto the Board of Directors for the purpose of deliberating and proposing
to the Board of Directors related to the nomination and dismissal of officer candidates.

4 Remuneration Committee

Corporate Governance Structure

Inside officers

Outside officers

General Meeting of Shareholders
Appointment/dismissal

3
4

5

7
8
9

Remuneration Committee

RequestforadviceAppointment/dismissal

Board of Directors

Audit 2

Board of Corporate Auditors

Coordination

Response

ReportOrganizational Memberships (◎ indicates the chairperson, while ○ indicates members)
President, CEO and COO

ReportCoordination

President and Corporate Officer
Audit OfficeGroup Risk Management Committee
Information Disclosure Committee

Board of Corporate Officers
Internal audit

Internal Control Committee
Business execution divisions

Financial audit

Scope of audit by the Board of Corporate Auditors

51

Integrated Repor t 2024

8 Information Disclosure Committee
We have created the Information Disclosure Committee for securing
timely and appropriate disclosure of important corporate information
while keeping it true, complete, and accurate. This system has madepossible a fair and quick decision on when and what information should
be disclosed. We also perform practical inspections to ensure that
there are no omissions in disclosure content.
The Internal Control Committee operates, maintains, and evaluates internal control over financial reporting, and reports the results of internal control evaluations and other information to the President, CEO and COO ina timely manner, including when financial results are announced.

Sustainability Committee

Compliance Committee

7 Group Risk Management Committee
We regard risk management as a matter of extremely high priority inbusiness administration and have established the Risk Management
Committee for the purpose of improved corporate value and reliability.
Its mission is to prevent diverse possible risks that could seriously affectour business administration, to quickly and properly cope with eachsituation so that it would not damage the stakeholders’ interests, andconsequently to conserve management resources. Under this systemadministrators in charge of carrying out these activities are designatedfrom each section, and are required to report promptly on the occurrence of any important issue concerning risk management.

9 Internal Control Committee
1

Financial Auditor

6

Nominating Committee

Appointment/dismissal

We established the Remuneration Committee as a voluntary advisory
body to the Board of Directors for the purpose of deliberating and proposing to the Board of Directors on matters related to remuneration
structure and system policies for officers.

6 Compliance Committee

Position

Name

Board ofDirectors

Board ofCorporate
Auditors

Group Corporate
Auditor Liaison
Committee

Nominating
Committee

Remuneration
Committee○

Chairman and Director

Isayuki Mae◎○

President, CEO and COO

Shinsuke Tsuchiya○○

Senior Managing Director

Hajimu Mouri○

Director (Outside)

Yasutoshi Kimura

○

◎

○

Director (Outside)

Toru Wada○○◎

Director (Outside)

Akihiko Imaya○○

Director (Outside)

Kazutoshi Hosoya○

Standing Corporate Auditor

Minoru Ujihara◎◎

Corporate Auditor (Outside)

Noriko Kitajima○○

Corporate Auditor (Outside)

Satoshi Nakayama

○

○

○

○

Sustainability
Committee

Compliance
Committee

○

◎

◎

○

○

○

○
○

○
○

Integrated Repor t 2024

52

Chapter 5

GovernanceCorporate GovernanceDirector Skill Matrix

Director and Corporate Auditor Attendance at Fiscal 2023 Meetings of the Board of Directors,
Nominating Committee, Remuneration Committee, and Board of Corporate Auditors
Specialization/Experience

Position

Name

Corporate
management

Finance/
Accounting

Overseasbusiness

Legal affairs/
Personnel/
Risk management HR development

R&D

Sales

Name

Board of Directors
meetings attended

Nominating Committee
meetings attended

Remuneration Committee
meetings attended

Board of Corporate
Auditors meetings attended

Chairman and Director

Isayuki Mae

●

●

●

Chairman and Director

Isayuki Mae

100% (18/18)

100% (2/2)

100% (6/6)—

President, CEO and COO

Shinsuke Tsuchiya

●

●

●

President, CEO and COO

Shinsuke Tsuchiya

100% (18/18)­

100% (2/2)——

Senior Managing Director

Hajimu Mouri

Senior Managing Director

Hajimu Mouri

100% (18/18)—

100% (6/6)—

Director (Outside)

Yasutoshi Kimura

Outside Director

Yasutoshi Kimura

100% (18/18)

100% (2/2)

100% (6/6)—

Director (Outside)

Toru Wada

Outside Director

Toru Wada

100% (18/18)

100% (2/2)

100% (6/6)—

Director (Outside)

Akihiko Imaya●●

Outside Director

Akihiko Imaya

100% (18/18)

100% (2/2)——

Director (Outside)

Kazutoshi Hosoya●●

Outside Director

Kazutoshi Hosoya*1

100% (14/14)

—

—

—

Standing Corporate Auditor

Minoru Ujihara

100% (18/18)——

100% (14/14)

Outside Officers

Outside Corporate Auditor

Shunsaku Yagi*2

100% (4/4)—

100% (1/1)

100% (4/4)

The Company has four Outside Directors and two Outside Corporate Auditors. The Outside Directors and Outside Corporate
Auditors meet the criteria for independence set forth by the Tokyo Stock Exchange, and the Company designates all of its Outside
Directors and all of its Outside Corporate Auditors as independent directors and corporate auditors.

Outside Corporate Auditor

Noriko Kitajima*3

100% (18/18)—

100% (5/5)

100% (14/14)

Outside Corporate Auditor

Satoshi Nakayama*1

100% (14/14)——

100% (10/10)

●
●

●

●

●
●

*The above table does not show all skills possessed by each individual.

Outside Director

Yasutoshi Kimura

Outside Director

Toru Wada

Outside Director

Akihiko Imaya

Outside Director

Kazutoshi Hosoya

Outside Corporate Auditor

Noriko Kitajima

Outside Corporate Auditor

Satoshi Nakayama

53

Title

Integrated Repor t 2024

Yasutoshi Kimura has extensive experience and highly professional knowledge as a certified public accountant andtax accountant, and the Company believes that he will be able to provide beneficial opinions about the Company’s
management, and has therefore appointed him as an Outside Director. Note that as of December 31, 2023, he holds
6,000 shares of Company stock. However, the Company has judged that there are no concerns of conflict of interest
with him. He also serves as head of the Kimura CPA Office and Outside Director (Audit Committee Member) of sinops
Inc. However, there are no particular relationships between the Company and either of these organizations.
Toru Wada has extensive experience and highly professional knowledge about corporate legal affairs as a certified
public accountant, and the Company believes that he will be able to provide beneficial opinions about the Company’s
management, and has therefore appointed him as an Outside Director. Note that as of December 31, 2023, he holds
1,000 shares of Company stock. However, the Company has judged that there are no concerns of conflict of interest
with him. He also serves as Joint Partner of Phoenix Law Offices and Outside Corporate Auditor of OUG Holdings Inc.
However, there are no particular relationships between the Company and either of these organizations.
Akihiko Imaya has extensive experience and advanced knowledge in corporate management from his past experience
as a manager of a group of companies operating globally, and the Company believes that he will be able to provide
beneficial opinions about the Company’s management, and has therefore appointed him as an Outside Director.
Kazutoshi Hosoya has advanced professional knowledge in manufacturing from his many years as a manager of a
global manufacturer in a business field similar to that of the Company’s, and the Company believes that he will be able
to accurately assess the management environment and industry trends of the Group and provide useful opinions andsuggestions, and has therefore appointed him as an Outside Director.
Noriko Kitajima has highly professional knowledge about corporate legal affairs and other topics as an attorney at law,and the Company has determined she has the ability to provide meaningful checks and balances on the Company’s
decision-making, and has therefore appointed her as an Outside Corporate Auditor. She also serves as Joint Partnerof Phoenix Law Offices, Outside Audit & Supervisory Board Member of Daiei Kankyo Co., Ltd., and Outside Director(Audit Committee Member) of SANKYO KASEI CORPORATION. However, there are no particular relationships between the Company and either of these organizations.
Satoshi Nakayama has highly professional knowledge about finance and accounting as a certified public accountant,and the Company has determined that he has the ability to provide meaningful checks and balances on the Company’s decision-making, and has therefore appointed him as an Outside Corporate Auditor. He also serves as head of
Satoshi Nakayama CPA Office and Representative of Kyo-Risshi Audit Corporation. However, there are no particular
relationships between the Company and either of these organizations.

*1 The number of total meetings is since March 30, 2023, the date this officer assumed office.
*2 The number of total meetings is until March 30, 2023, the date this officer retired from office.
*3 This officer newly became a member of the Remuneration Committee on March 30, 2023.

Effectiveness Evaluation of the Board of Directors
As part of its efforts to strengthen corporate governance, the Company conducts evaluations of the effectiveness of its Board of
Directors.

Overview of Effectiveness Evaluation
In December 2023, the Company’s Board of Directors conducted a self-evaluation using the Board of Directors Effectiveness Evaluation
Questionnaire for all Directors and Corporate Auditors, including outside officers (10 Directors and Corporate Auditors in total). Based on theaggregated results, an analysis was conducted and awarenesses were shared about the current status of the Company’s Board of Directors,
and future initiatives to enhance the Board’s effectiveness were discussed.

Overview of Evaluation Results and Future Initiatives
Based on the aggregated results and analysis of the responses to the Board of Directors Effectiveness Evaluation Questionnaire (38 items in
total), it was determined that the effectiveness of the Company’s Board of Directors has been adequately secured. In addition, as for the initiatives from the previous fiscal year’s effectiveness evaluation:• Ensuring gender, nationality, and other diversity in the composition of the Board of Directors, it was decided to retain these as initiatives forfurther improvement of the effectiveness of the Board of Directors since sufficient improvement could not be claimed as of the evaluation
despite ongoing discussions.

Future Action
Based on the results of the effectiveness evaluation, the Company’s Board of Directors will discuss and consider the initiatives listed in the
Overview of Evaluation Results and Future Initiatives, and will proceed with efforts to further improve the effectiveness of the Board of Directors. We will continue to evaluate the effectiveness of the Board of Directors and analyze the results annually to continue said effectivenessand strengthen corporate governance.

Director and Corporate Auditor Training
The Company encourages Directors to participate in external seminars for the purpose of self-development, etc. and to build
personal networks outside our organization. The Company bears the costs of such seminars in accordance with internal regulations. In addition, for the purpose of training Directors, Corporate Auditors, and senior management, the Company has a policy ofinviting outside lecturers to address the annual Group Joint Board of Officers and Group Corporate Auditor Liaison Meeting.

Integrated Repor t 2024

54

Chapter 5

GovernanceCorporate Governance

Officer Remuneration

Compliance with the Corporate Governance Code

The Company’s Board of Directors, at a meeting held on March 28, 2024, revised the policy regarding the determination of thedetails of individual Director remuneration. The Remuneration Committee was consulted in advance on the details of the resolution
to be adopted by the Board of Directors and delivered its report to the Board of Directors.
The Board of Directors has also confirmed that the method of determining the details of remuneration for individual Directors and the details of remuneration determined are consistent with the determination policy before the aforementioned revisionand that the report from the Remuneration Committee has been respected. Therefore, it has determined that the remuneration for
individual directors for the current fiscal year is consistent with the determination policy before the aforementioned revision.
The Company’s basic policy is to set an appropriate level of remuneration for each Director based on his or her duties in acompensation linked to shareholder benefit so as to sufficiently function as an incentive for the sustainable improvement of corporate value. Here, the Board of Directors is given the authority to determine the amount of remuneration for the Company’s officers and the policy regarding the determination of the method of calculation thereof.
The remuneration of officers consists of base remuneration (financial remuneration) as fixed remuneration, bonuses as
performance-linked remuneration (financial remuneration), and share-based remuneration (non-financial remuneration), taking into
consideration that they are responsible for improving business performance in each fiscal year and for improving corporate value
over the medium to long term. For Directors who are not Executive Directors, remuneration consists of base remuneration (financial remuneration) as fixed remuneration and bonuses as performance-linked remuneration (financial remuneration).

With regard to the following Corporate Governance Code item for which we are not in compliance, we have disclosed the reason
for non-compliance and will continue to examine the optimal corporate governance for the Company.

Details of General Shareholders Resolutions on Officer Remuneration

We have established and are operating an internal control system as a framework and process for the control of business operations in orderto ensure sound and efficient corporate management based on the above basic policy, and in particular, we recognize the following items as
our top priorities and are working to address these.
• Formation of an organization and culture for the prevention of misconduct and compliance with laws and regulations, and the maintenanceof their effectiveness• Establishment of a system to reasonably identify, evaluate, and appropriately manage foreseeable risks in corporate management• Formation of an organization and culture for ensuring the reliability of business reports and disclosure information, and the maintenance of
their effectivenessThrough these efforts, we have established and are operating an internal control system in order to fulfill the responsibility and trust we havetoward our stakeholders with regard to social responsibility for corporate behavior and social requirements on corporate ethics.

The maximum amount of remuneration for Directors is 500,000,000 yen per year (not including employee salary portions) as resolved at theExtraordinary General Meeting of Shareholders held on September 20, 1991. The number of Directors as of the close of this General Meetingof Shareholders was 13. In addition, separately to the maximum amount of remuneration above, in a resolution of the Annual General Meetingof Shareholders held on March 28, 2024, a separate resolution was passed to set performance-linked share-based remuneration for Executive Directors at a maximum of 10,000 shares per year and 35,000,000 yen per year. The number of Executive Directors as of the close of this
General Meeting of Shareholders was 3.
The maximum amount of remuneration for Corporate Auditors is 50,000,000 yen per year as resolved at the Annual General Meetingof Shareholders held on March 31, 1999. The number of Corporate Auditors as of the close of this General Meeting of Shareholders was 2.
The Company resolved to abolish the retirement benefit system for officers as of the conclusion of the 56th Annual General Meeting of Shareholders held on March 28, 2008, and to pay retirement benefits to Directors and Corporate Auditors who continue to hold office after theconclusion of said meeting at the time of their respective retirements, corresponding to the lengths of their periods of service until the system’s
abolishment.

Total Remuneration by Officer Category, Total Remuneration by Type, and Number of Eligible Officers
Total Remuneration(thousand yen)

Directors (excluding Outside Directors)

Officer Category

Total Remuneration by Type (thousand yen)

Number of Eligible
Officers

Fixed Remuneration

Performance-Linked
Remuneration

Retirement Benefits

Non-Financial
Remuneration

167,330

109,950

57,380——3

Corporate Auditors (excluding Outside
Corporate Auditors)

15,19010,680

4,510

—

—

1

Outside officers

55,50041,10014,400——7(Note) The above performance-linked remuneration shows the amount of officers’ bonuses for fiscal 2023.

Principle 4-11: Preconditions for Board and Auditor Board Effectiveness
The Company’s Board of Directors consists of individuals with professional expertise and abundant experience in the fields of management, financeand accounting, marketing, personnel and human resource development, legal affairs and risk management, and research and development. In addition, we have appointed Directors with overseas work and management experience, and our understanding is that the Board of Directors is composed in a way that is both diverse and appropriately sized to effectively fulfill the roles and responsibilities of a board of directors. At this time, theCompany has not appointed any female Directors and is aware that this is an issue to be addressed in the future. In addition, the Company has appointed attorneys at law, certified public accountants, and other professionals as its Corporate Auditors, who have appropriate knowledge of financial,accounting, and legal matters. Each Director engages in active discussions at Board of Directors meetings, and the Board functions effectively.

Basic Approach to and Status of Internal Control System
Basic Policy on Internal Control Systems
The Group’s basic policy for strengthening corporate governance is as follows.
• Building good relationships of trust with all the stakeholders• Appropriate risk management• Ensuring transparent and sound management• Timely and proper information disclosure

Status of Internal Control System

Initiatives to Strengthen Governance2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
• Introduced the Corporate Officer system• Appointed the first Outside Corporate Auditor• Formulated the Compliance Manual• Established the Risk Management Committee• Formulated the Basic Policy on Internal Control Systems• Formulated the CSR Basic Policy• Disclosed our approach to the Basic Policy on Corporate Governance• Appointed the first Outside Director• Abolished the retirement benefit system for officers• Established the Compliance Committee• Formulated the Compliance Code of Conduct• Disclosed the Company Initiatives for the Corporate Governance CodeCross-Shareholdings
It is the Company’s policy to hold shares of partner companies when it is judged that said holdings assist the Company in achieving objectives such as maintaining and strengthening business relationships and creating synergies in order to improve its corporate value over the medium to long term, and to sell shares that fall out of the scope of this policy.
In addition, the Company shall provide specific explanations regarding such information as the purpose of cross-shareholdings.
The Board of Directors regularly reviews the status of transactions, risk/return assessments, and eligibility of majorcross-shareholdings, and examines whether to maintain or sell said holdings.
With respect to the exercise of voting rights for cross-shareholdings, the Company does not provide unconditional agreement to all proposals by the company in question, but decides whether to exercise its voting rights in approval or disapproval
based on whether or not it is deemed to contribute to the improvement of the Company’s corporate value.

55

Integrated Repor t 2024

• Increased the number of Outside Directors to two• Established the position of lead independent Outside Director• Established the Nominating Committee and Remuneration Committee as voluntary advisory bodies• Appointed Outside Directors as chairpersons of the Nominating Committee and Remuneration Committee• Conducted the first effectiveness evaluation of the Board of
Directors (conducted every year thereafter)• Resolved to discontinue takeover defense measures• Increased the number of Outside Directors to three• Disclosed the Skill Matrix• Established the Sustainability Committee• Increased the number of
Outside Directors to fourIntegrated Repor t 2024

56

Chapter 5

Governance

Officers Introduction(as of April 1, 2024)

Directors

Chairman and Director

President, CEO and COO

Senior Managing Director

Outside Director

Outside Director

Outside Director

Outside Director

Isayuki Mae

Shinsuke Tsuchiya

Hajimu Mouri

Yasutoshi Kimura

Toru Wada

Akihiko Imaya

Kazutoshi Hosoya

Apr.1978 Joined the Company
Jan.2000 General Manager of International
Electronics Sales Dept.,
International Operation
Mar.2001 Director
Jan.2002 General Manager, International
Operation
Apr.2003 Senior Corporate Officer
Dec.2004 Vice General Manager ofElectronics Operation
Head of Business Strategy Office
Apr.2007 Deputy General Manager ofMarketing & Sales Division
Jan.2009 General Manager of Group
Business Strategy Division
General Manager of Business
Planning Dept.
Apr.2009 Managing Director
Mar.2011 President and COO
Mar.2013 President and Corporate Officer
Chief Operating Officer
Jan.2017 President, M&S Company
Mar.2021 Chairman and Representative
Director
Apr.2021 Chief Executive Officer
Mar.2023 Chairman and Director (to present)(Significant concurrent positions
outside the Company)
Director, Chairman, Daitron Inc.

Apr.1984 Joined the Company
Apr.2006 President, Daitron Inc.
Mar.2013 Corporate Officer
Deputy General Manager ofMarketing & Sales Division
General Manager of Overseas
Business Development Dept.
Jan.2014 General Manager of MachineryOperation
Head of Machinery Business
Promotion OfficeMar.2015 General Manager of Overseas
Business Operation, Marketing &Sales Division
Jan.2017 General Manager of Overseas
Business Operation, M&S Company
Jan.2018 General Manager of Overseas
Business Division
Mar.2019 Director
Apr.2019 Managing Corporate Officer
Mar.2021 President and COO (to present)
Apr.2021 President and Corporate Officer (topresent)
Chief Operating Officer (to present)
Apr.2023 Chief Executive Officer (to present)

Apr.1983 Joined the Company
Dec.2003 General Manager of System
Administration Dept.
July2009 Head of Audit Office
Apr.2011 General Manager of Finance Dept.,
Business Administration Division
Mar.2013 Corporate Officer
Deputy General Manager ofBusiness Administration Division
Mar.2015 Senior Corporate Officer
General Manager of Business
Administration Division (to present)
Jan.2017 Corporate Officer
Jan.2019 General Manager of Personnel andGeneral Affairs Dept., Business
Administration Division
Mar.2019 Director
Apr.2019 Managing Corporate Officer
Apr.2021 Senior Managing Executive Officer(to present)
Mar.2023 Senior Managing Director (topresent)

Nov.1973 Joined Tohmatsu Awoki & Co.
(currently Deloitte Touche Tohmatsu
LLC)
Sep.1977 Registered as a certified public
accountant (to present)
July1991 President and Representative
Director of Tohmatsu Consulting
Co., Ltd. (Currently ABeam
Consulting Ltd.)
July1995 Senior Partner of Tohmatsu & Co.
(currently Deloitte Touche Tohmatsu
LLC)
Sep.1999 Established KIMURA Certified
Public Accountants, Director (topresent)
Mar.2000 Outside Corporate Auditor of theCompanyMar.2007 Outside Director of the Company(to present)

Apr.1985 Registered as attorney-at-law (topresent)
Mar.1989 Established Toru Wada Law Firm,
Director
Feb.2003 Established Phoenix Law Offices,
Co-Chairman (to present)
Mar.2003 Outside Corporate Auditor of theCompanyMar.2017 Outside Director of the Company(to present)

Apr. 1981 Joined Sharp Corporation
Jan. 2002 General Manager of System LCD
Division, Mobile LCD Business
Dept.
May2005 General Manager of Mobile LCD
Business Dept.
Sep.2008 General Manager of Mobile
Business Development Dept.
Apr. 2009 General Manager of Personal
Solution Business Development
Dept.
Apr. 2013 Executive Officer
Oct. 2016 General Manager of Structural
Reform Dept., Display Device
Company
Feb.2018 Vice President, Display Device
CompanyMar.2021 Outside Director of the Company(to present)

Apr. 1979 Joined Hioki E.E. Corporation
Mar.2005 Executive Officer, Director of ATE
Dept.
Dec.2006 Executive Officer, Director of R&D
Dept.
Feb.2011 Director, Executive Officer, Directorof R&D Dept.
Jan. 2013 Director, Managing Director
Executive Officer, Director of R&D
Dept.
May 2013 Director, Managing Director
Executive Officer, Director of R&D
Dept. and Head of Corporate
Planning OfficeJan. 2017 Appointed to President
Jan. 2021 Director
Feb.2021 Special Advisor
Mar.2023 Outside Director of the Company(to present)

Corporate Officer System

The Company has introduced a corporate officer system to vitalize the Board of Directors by separating decision-making and supervisory functions from business execution. The following are oureight corporate officers.

Corporate Auditors

Position

57

Integrated Repor t 2024

Standing Corporate Auditor

Outside Corporate Auditor

Outside Corporate Auditor

Minoru Ujihara

Noriko Kitajima

Satoshi Nakayama

Apr.1981 Joined the Company
Dec.2004 General Manager of Accounting
Dept.
Apr.2007 Head of Audit Office
Apr.2012 General Manager of Business
Administration Dept., Marketing &Sales Division
Jan.2013 General Manager of Business
Management Dept., Business
Administration Division
July2014 General Manager of Management
System Dept., Business
Administration Division
Mar.2015 Deputy General Manager ofBusiness Administration Division
Mar.2019 Standing Corporate Auditor of theCompany (to present)

Oct.2000 Registered as attorney-at-law (topresent)
Joined Takahiko Inoue Law Office

Oct.1987 Joined Tohmatsu Awoki & Sanwa(currently Deloitte Touche Tohmatsu
LLC)
Aug.1991 Registered as a certified public
accountant (to present)June2007 Partner of Deloitte Touche
Tohmatsu (currently Deloitte Touche
Tohmatsu LLC)
July2020 Established Satoshi Nakayama
Certified Public Accountant Office,Director (to present)
Established Kyorisshi Audit
Corporation, Senior Partner (topresent)
Mar.2023 Outside Corporate Auditor of theCompany (to present)

Jan.2012 Co-Chairman of Phoenix Law
Offices (to present)
Mar.2017 Outside Corporate Auditor of theCompany (to present)

Name

Responsibility

President and Corporate
Officer

Shinsuke Tsuchiya

Chief Executive Officer and Chief Operating Officer

Senior Managing Executive
Officer

Shinji Ikutani

President, M&S Company

Senior Managing Executive
Officer

Hajimu Mouri

General Manager of Business Administration Division

Managing Corporate Officer

Tsuneto Chihara

President, D&P Company

Corporate Officer

Hiroshi Kurata

General Manager of Procurement Department, M&S
Company

Corporate Officer

Shinji Oka

General Manager of Green Facility Department, M&S
Company

Corporate Officer

Takayuki Mio

General Manager of Parts Business Operation, D&P
Company

Corporate Officer

Akio Tanaka

Division Manager - Global Business Division

Integrated Repor t 2024

58

Chapter 5

GovernanceOutside Directors Messages

Daitron’s Growth Strategy

Outside Director

Yasutoshi Kimura

Daitron has enjoyed consistent and stable growth over thelast 10 years. In the past, the Company was at the mercyof the silicon cycle, and would fall into the red every few
years, but recently it has become more resistant to recession. This resistance is the result of Daitron’s work to diversify and stabilize its business structure by developing markets outside of the semiconductor-related industry.

Greater Rigor in Risk Management

Outside Director

Toru Wada

Daitron’s 10th Medium-Term Business Plan, which began
in 2021, has been successfully completed with annual
sales in excess of 90 billion yen and ordinary income inexcess of 6 billion yen. The main reason for these positive
results amidst an uncertain outlook amid the COVID-19
pandemic, prolonged delivery times and price increases formaterials, and the faltering Chinese economy, was the sol-

Toward Growth
into a Vibrant Company

Outside Director

Akihiko Imaya

My hope is to contribute to the improvement of Daitron’ssustainability by guiding discussions in the field, utilizing mylong years of experience in the electronics business.
The Japanese economy is finally emerging from deflation, driven by the forces of decarbonization (otherwise
known as green transformation, or GX) and digital transfor-

Using the Power to Create to Unlock
Corporate Value Enhancement and Growth

Outside Director

Kazutoshi Hosoya

59

Integrated Repor t 2024

The three years of the 10th Medium-Term Business Plan (10M), the firststep of the 2030 VISION Long-Term Vision, was completed last year.
The market environment during this period has been changing dramatically due to accelerating factors such as technological innovation andsustainability transformation (SX). However, there were also negative
factors for the industry from a geopolitical perspective, including the

However, Daitron still faces many challenges.
The first of these is the rate of growth of new business. The Company has been successful in creating a decent amount of new businesses over the past 20 years.
However, my sense is that the growth rate in this area has
been somewhat slow. I would like to see a more concentrated and focused investment of management resources, sothat Daitron can reach a fuller bloom over a shorter horizon.
The second issue is the development of original
products in the manufacturing sector. Although Daitron is adistinctive trading company with its catchphrases like “combined manufacturing and sales,” the speed of expansion ofits manufacturing side has not exceeded my expectations.
The reason for this could be attributed to the lack of new
products coming out of the original product family. In otherwords, although Daitron is putting reasonable investments
in new product development, from my point of view, they
seem a bit weak here. I hope that will invest more vigorously in new product development.

id performance of the domestic sales business, a corebusiness for Daitron. In addition to existing businesses
such as semiconductor-related business, the Company
has been focusing on new businesses such as automobile-related business, medical-related business, and large
power supply contracting business for data centers. These
new businesses have enjoyed steady growth. During thisperiod, Daitron was able to cultivate many new customers
and develop many new products. However, this kind of
business expansion also entails increased risk of quality

defects, construction defects, accidents, bad debts, andso on. In addition, the number of quality defects on thedomestic manufacturing side, especially in the parts manufacturing business, has not been decreasing. In the 11th
Medium-Term Business Plan, which began this year,
Daitron will steadily implement the various measures included in the plan to improve its business performance. At
the same time, the Company will further strengthen its risk
management in the desire to not fall victim to any unexpected pitfalls.

mation (DX). Daitron has woven together a value chain ofelectronic components and their manufacturing equipment, which are fundamental technologies for GX and DX.
This gives Daitron a great social mission to fulfill.
The 11th Medium-Term Business Plan sets a goal of
attaining appropriate business scale. In the belief that continuous investment in human resource development andtechnological development is necessary for business continuity, the Company has set goals for the scale of its business and for its organizational structure to ensure an effec-

tive and continuous scale of investment. Daitron seeks togrow into a vibrant company that consistently and steadily
develops commercial distribution based on human resources capable of forming and maintaining a global value
chain, and develops commercial products based on its
proprietary technologies.

COVID-19 pandemic, and for some industries, including the electronics
industry, demand continued to greatly exceed supply for some time,leading the market into turmoil for some in more recent years. During
this period, however, the Company successfully achieved record performance for three consecutive years. I consider this to be the result of themarket’s need for corporate value like Daitron’s, where sales, management, and manufacturing capabilities cultivated to date are combinedwith recent organizational reforms. This market appraisal and Daitron’svalue in the market is reflective of the level of trust in its ability to deliver results.

Now, in 2024, Daitron launches the 11th Medium-Term Business Plan (11M). Under 11M, in addition to further solidifying its foundations, Daitron sees globalization and being a technology-based company, as stated in its medium- to long-term slogan, as major keys toincreasing its corporate value. I see Daitron’s power to create as offering great potential in these areas. Globalization will create Daitron users
in each region. As a technology-based company, it will create high value-added commercial products by its own accord. Various activities are
already underway to realize this goal, and I look forward to seeing the
fruits of these.

Integrated Repor t 2024

60

Chapter 6

Data Book

Financial Summary(Unit: Million yen)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Net sales

34,89938,702

43,21444,932

51,684

59,662

61,621

57,41872,341

87,63992,156

Cost of sales

27,42830,40533,74434,87940,193

46,84349,13845,94158,06070,05274,004Gross profit

7,470

8,297

9,469

10,052

11,49012,81812,482

11,476

14,281

17,587

18,151

Consolidated management performance*

1

Gross profit ratio (%)

21.4

21.4

21.9

22.4

22.2

21.5

20.3

20.0

19.7

20.1

19.7

Selling, general and administrative expenses

7,332

7,522

7,927

8,141

8,968

9,272

9,276

9,072

10,084

11,535

12,208

SG&A to net sales ratio (%)

21.0

19.4

18.3

18.1

17.4

15.5

15.1

15.8

13.9

13.2

13.2

Operating income

138

774

1,542

1,910

2,522

3,546

3,205

2,403

4,196

6,051

5,943

Ordinary income

252

861

1,537

1,863

2,583

3,592

3,220

2,436

4,325

6,210

6,015

Net income attributable to owners of parent

-77

641

1,131

1,217

1,867

2,274

2,171

1,610

2,953

4,237

4,014

Depreciation expense

414

272

233

231

278

272

348

337

322

327

391

Capital investment

99

143

180

1,163

339

907

227

140

428

412

743

Research and development expense

129

141

139

167

150

166

150

146

93

150

123

Total assets

23,76627,312

28,681

32,06835,383

43,11445,757

46,24758,454

63,202

67,788

Net assets

11,63012,161

13,17913,914

15,492

16,977

18,765

19,79822,45526,012

29,451

Total interest-bearing debt

1,321

1,202

1,122

1,609

902

697

544

374

467

583

761

Earnings per share (yen)

-6.94

57.74

101.91109.62

169.15205.25195.86145.24266.18381.78361.65

Net assets per share (yen)1047.04

1,094.87

1,186.64

1,252.94

1,397.97

1,530.94

1,691.87

1,784.66

2,023.23

2,342.79

2,650.52

Cash flows from operating activities

288

722

447

1,472

-53

5,502

2,377

3,065

2,796

-275

315

Cash flows from investing activities

-110

-123

15

-1,171

-292

-876

-313

-156

-371

-237

-627

Cash flows from financing activities

-434

-182

-278

201

-1,286

-758

-816

-762

-672

-1,004-1,501

Period-end cash and cash equivalents

5,581

6,092

6,251

6,727

5,094

8,923

10,15012,26014,183

12,882

11,224

Payout ratio (consolidated, %)

—

26.0

24.5

27.4

26.6

26.8

30.6

34.4

30.1

30.1

33.2

Annual dividends (yen)

5

15

25

30

45

55

60

50

80

115

120

Consolidated financial position

Per-share information (consolidated)

Consolidated cash flows

Dividends

Main management indices
Return on equity (ROE)*2 (%)

-0.7

5.4

8.9

9.0

12.7

14.0

12.2

8.4

14.0

17.5

14.5

Return on assets (ROA)* (%)

-0.3

2.5

4.0

4.0

5.5

5.8

4.9

3.5

5.6

7.0

6.1

Debt-to-equity (D/E) ratio (times)

0.11

0.10

0.09

0.12

0.06

0.04

0.03

0.02

0.02

0.02

0.03

Shareholders’ equity/Total assets (%)

48.9

44.5

45.9

43.4

43.8

39.4

41.0

42.8

38.4

41.1

43.4

Period-end share price (yen)

389

627

793

936

2,335

1,227

1,906

1,576

2,146

2,282

2,801

Number of consolidated employees

651

638

644

666

763

795

823

855

893

942

1,003

Number of consolidated subsidiaries

11

11

11

11

9

9

9

8

9

10

11

Electronic Equipment and Components Business (%)

79.5

79.4

73.6

75.6

78.2

74.6

66.2

73.3

75.5

72.2

76.3

Manufacturing Equipment Business (%)

2

Other

KPIs for business structure reform
Composition ratio by business

20.5

20.6

26.4

24.4

21.8

25.4

33.8

26.7

24.5

27.8

23.7

Original product ratio*3 (%)

22.2

22.4

24.8

24.0

24.2

26.0

21.9

18.3

15.8

16.0

16.1

Overseas sales ratio (%)

18.0

16.5

15.8

16.3

19.5

21.2

27.1

20.5

23.3

25.5

21.0

*1 From fiscal 2022, figures are calculated based on application of the Accounting Standard for Revenue Recognition*2 Shareholders’ equity and total assets are calculated using the averages of those at the beginning and at the end of the period, respectively*3 From fiscal 2021, the definition of original products has been changed

61

Integrated Repor t 2024

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62

Chapter 6

Data Book

Company Information/Stock Information

Company Information

Group Company Information
Company Name

Trade Name

Daitron Co., Ltd.

Established

June 24, 1952

Representative

Shinsuke Tsuchiya, President

Capital2,200,708,560 Yen

Number of
Employees

1,003 (consolidated)

Daito-Tec Co., Ltd.

DAITRON INC.

Head Office
Headquarters
Sales Offices

Osaka
Tokyo
Sendai, Utsunomiya, Ibaraki, Tokyo, Kunitachi,
Yokohama, Matsumoto, Shizuoka, Nagoya,
Kanazawa, Kyoto, Osaka, Kobe, Hiroshima,
Fukuoka, Kumamoto
Representative Offices Manila (Philippines) /Hanoi (Vietnam)
Logistics Centers
Kunitachi, Hashima, Osaka
Factories
Tama, Ichinomiya, Nonoichi, Ritto, Kameoka

Places ofBusiness

Business Lines▲Head Office

Manufacturing and sales of electronic components & assembly goods, semiconductors, embedded systems, power
supply equipment, image-related equipment & components, information systems, semiconductors & FPD manufacturing
equipment, electronic components manufacturing equipment, etc.
Import/export of the above products

Country

CapitalJapan

JPY 10,000,000

Daitron Co., Ltd. 100%

USD 4,000,000

Manufacture, sales, and import/
export of electronic equipment/
components for North American
Daitron Co., Ltd. 100% markets, sales and import/exportof semiconductor manufacturing
equipment for North American
markets
Sales and import/export of electronic equipment/components
Daitron Co., Ltd. 100%and manufacturing equipment
for European markets

USA

Investment Ratio

DAITRON (NETHERLANDS) B. V.

Netherlands

EUR 700,000

DAITRON (KOREA) CO., LTD.

South Korea

KRW 1,500,000,000

Number of Group
Consolidated: 11 (Overseas: 10, included)
Companies

DAITRON (SHANGHAI) CO., LTD.

Stock Information
Stock Information

Shareholder distribution by type

Total number of authorized shares

40,000,000

Total number of issued shares

11,155,979

Number of shareholders

Securities
companies

Financial
institutions

27(0.5%)18(0.3%)

Other domestic
corporations

42(0.8%)

5,271

China

Shareholder name

DAITRON (H.K.) CO., LTD.

China

HKD 3,800,000

Sales, procurement, and import/
export of electronic equipment/
Daitron Co., Ltd. 100%
components for Hong Kong andSouth Chinese markets

DAITRON (SHENZHEN) CO., LTD.

China

RMB 500,000

Sales and import/export of elecDAITRON (H.K.) CO., LTD.
tronic equipment/components
100%
for South Chinese markets

TWD 20,000,000

Sales and import/export of electronic equipment/components
Daitron Co., Ltd. 100%and manufacturing equipment
for Taiwanese markets

Malaysia

MYR 2,500,000

Sales and import/export of electronic equipment/components
Daitron Co., Ltd. 100% and manufacturing equipment
for Malaysian and South-East
Asian markets

Thailand

DAITRON (MALAYSIA) SDN. BHD.
49%
THB 2,000,000
Thai local companies(Japanese-owned financial institutions)51%

106(2.0%)
Number ofshares held

Shareholding
ratio

1,109

9.9

1,000

9.0

588

5.2

(thousands of shares)

The Master Trust Bank of Japan, Ltd.
(Trust account)
Public Interest Incorporated Foundation
Daitron Welfare Foundation
Custody Bank of Japan, Ltd.
(Trust account)

DAITRON (TAIWAN) CO., LTD.

Taiwan(%)

Shareholder distribution by region
Outside Japan

Shikoku95(1.8%)91(1.7%)

Tohoku119(2.3%)

62(1.1%)400

3.6Mizuho Bank, Ltd.

399

3.5

185(3.5%)

Daitron Employee Shareholding Association

383

3.4

Kyushu/Okinawa

Kanto

234(4.4%)

2,111(40.1%)

MUFG Bank, Ltd.

363

3.2

Daitron Partner Shareholding Association

183

1.6

Nippon Life Insurance Company

181

1.6

HIROSE ELECTRIC CO., LTD.

171

1.5

DAITRON (THAILAND) CO., LTD.

ChugokuChubu

897(17.0%)

DAITRON (MALAYSIA) SDN. BHD.

Hokkaido

Yasuyuki Ohmori

Kinki

1,477(28.1%)

Sales, procurement, and import/
export of electronic equipment/
components for South Korean
and East Asian markets

USD 550,000

Foreign individuals

Major shareholders

Manufacture and sales of electronic equipment/components

Sales and import/export of electronic equipment/components
Daitron Co., Ltd. 100%and manufacturing equipment
for Chinese markets

Individuals/other5,078(96.4%)

Daitron Co., Ltd. 100%

Business Lines

DAITRON (SINGAPORE) PTE. LTD.

Singapore

SGD 500,000

Sales and import/export of electronic equipment/components
and manufacturing equipment
for Thai and South-East Asianmarkets

Sales and import/export of electronic equipment/components
Daitron Co., Ltd. 100% and manufacturing equipment
for Singaporean and South-East
Asian markets

For an updated list of Group companies, please visit our website.

https://www.daitron.co.jp/en/company/network/group.html*Shareholding ratios are calculated excluding treasury shares (52,917)

63

Integrated Repor t 2024

Integrated Repor t 202464