Integrated Report 2022
(January 1, 2021 to December 31, 2021)

01

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Business Fields

Innovative Productdevelopment & Engineeringsolutions eXpert

Total
net sales: ¥66,871

Industrial

16%

Automotive

33%

millionNet sales
shareConsumer

51%

Consumer

33,939Net sales: ¥Board-to-board
connectors

Micro RF coaxial
connectors

Micro-coaxial
connectors

FPC/FFC
connectors

Angle sensors

Pressure sensors

Smart entry keys

Power connectors

GP-PRO automatic
molding machine

Ramps for harddisk drives

Forensic medicinerelated parts

ESTORQ electrostatic capacitancetorque sensor

millionAutomotive

This is what we aim for.

22,438With our keen sensitivity, it is the sharpest tip that opens the way to the next generation in

Net sales: ¥order to create a brighter future.

millionWe bring surprise, joy and excitement to the world by creating new values that reflect society,reflect tomorrow, and stay one step ahead of the needs of the times.

Industrial

10,494

Net sales: ¥millionContents
01

07

Overview

17

Value Creation Strategy
17

I-PEX Vision 2030 Medium- to Long-Term
Management Strategy

05 Performance Highlights

21

Build an Optimal Manufacturing System andPromote Capital Cost and Cash Flow Management

Value Creation Story

23

Tackle Climate Change and Contribute to a
Recycling-Based Society

25

Strengthen Human Resource Management

02

Business Fields

03

Growth History

07

Message from the President

11

Value Creation Process

13

Our Philosophy

15

Materiality

28

Management Foundation
28

Corporate Governance33

Directors, Audit & Supervisory Committee
Members, and Executive Officers

35

Compliance and Risk Management

37

Financial Information

Scope

I-PEX Inc. and 21 companies in the I-PEX Group(20 of which are consolidated subsidiaries)

39

Segment Overview

PeriodFiscal year 2021 (January 1, 2021 to December 31, 2021)

41This report also contains information from otherperiods in order to provide the latest information andmake comparisons with past fiscal years.

Corporate Overview/Stock Information

Publication Date July 2022
Disclaimer

This report contains forward-looking statements suchas the plans and strategies of I-PEX Inc. and its consolidated subsidiaries. Such statements are based on
judgments derived from information available at thetime, and actual results may differ significantly for avariety of reasons.
* All trademarks (products, services, and logos) in thisreport belong to I-PEX or their rightsholders, who haveauthorized their use by I-PEX.

02

03

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

04

Growth History
The I-PEX Group, with roots in precision molding technology, has been at the “sharpest

2005.03
Dong Guan Dai-ichi
Seiko Mold & Plastics
Co., Ltd.

2006.11
Listed on the JASDAQ
Securities Exchange.

2011.03
Listed on the 1st Section of
the Tokyo Stock Exchange.

2006.06
Vietnam Dai-ichi
Seiko Co., Ltd.

2007.05
Matsue Dai-ichi
Seiko Co., Ltd.

2017.08
Dai-ichi Seiko (M)Sdn. Bhd.

tip” of manufacturing throughout its history. Today, our mainstay business is connectors,
and we also develop products like sensors with a view to IoT
and a society in which people and robots collaborate. Goingforward, we will continue to take on the challenge of new

1988.11
Philippine Dai-ichi, Inc.

business fields and actively pursue further growth.

1991.03
Shanghai Dai-ichi Mould &Plastics Co., Ltd.
1976.10
Eikosha, our first company
for mass production

1979.01
Singapore Dai-ichi Pte. Ltd.
1963.07
Dai-ichi Seiko Co., Ltd.
1982.01
Ogori Plant, Fukuoka

1963–1975
Established as a High
Precision Mold Manufacturer
1963

1964

1968

Dai-ichi Seiko Co., Ltd. was established
to exclusively produce High-precisionmolds by using module systems for
manufacturing molds (full-split
structures/complete heat treatment
hardening/shift to complete precision
machining after full quenching),
which were developed in 1960.
Made extensions to the plant andestablished the Automated Machinery
Dept., which takes advantage of precision processing technology cultivatedthrough mold manufacturing.
Started to export molds for precision
plastics to U.S.A., Canada, Mexico,and Singapore.

1971

Opened Singapore Office.

1972

Opened Tokyo Office.

1973

Received orders for mass production of connectors, and started
commissioned production of
precision plastic components.

1973
Precision plastic components on
which mass production commenced

1976–1987
Business Expansion and Foray
into Commissioned Production
1976

1988

Started commissioned production of
automobile components

1988

Established Philippine Dai-ichi, Inc. in
the Philippines

1989

Established MDI Sdn.Bhd. in Johor
Bahru, Malaysia

1991

Established Shanghai Dai-ichi Mould& Plastics Co., Ltd. (now I-PEX
Precision Mold & Plastics (Shanghai)Co., Ltd.) in Shanghai, China.

1993

Established our first subsidiary in
Chikushino, Fukuoka, Japan (nowOnojo Plant)

1980

Established Singapore Dai-ichi Pte.
Ltd. (now I-PEX Singapore
Pte Ltd) in Singapore

Released GP-SYSTEM: MARK-I, theworld’s first fully automatic semiconductor molding machine.

1982

Started operations at Ogori Plant in
Ogori, Fukuoka, Japan.

1986

Established Yamanashi Plant inYamanashi, Yamanashi, Japan.

1993.06
Singapore Dai-ichi
Pte. Ltd.

2000.12
Pt. Pertama
Precision Bintan

2004

Acquired I-PEX Co., Ltd., an innovatorof high-speed, wide-area transmission
connectors, as a subsidiary.

2005

Established Dong Guan Dai-ichi Seiko
Mold & Plastics Co., Ltd. (now I-PEX
Precision Mold & Plastics (Dongguan)Co., Ltd.) in Dongguan, China.

2006

Established Vietnam Dai-ichi Seiko Co.
Ltd. (now I-PEX Viet Nam Co., Ltd.) in
Ho Chi Minh, Vietnam.

2000.12
Touchstone
Precision, Inc.

2011

Listed on the 1st Section of the Tokyo
Stock Exchange.

2015

Opened Detroit Office of Dai-ichi
Seiko America, Inc. (now I-PEX USA
Components Inc.) in Detroit, Michigan,
U.S.A.

2017

Established Daiichi Seiko (M) Sdn.
Bhd. (now IPEX Global Manufacturing(M) Sdn. Bhd.) in Johor Bahru,
Malaysia.

2020

Established I-PEX Campus in Ogori,
Fukuoka, Japan.

HDD ramps

1994

Established Dai-ichi Seiko America,
Inc. (now I-PEX USA Components Inc.)in San Jose, California, U.S.A.
Established Laguna Dai-ichi, Inc. (nowI-PEX Philippines Inc.) in Laguna, thePhilippines

1997

2000

Changed the company name to
I-PEX Inc.
Wheel speed sensors

Started the world’s first mass production of ramps, an important component used in hard disk drives (HDDs).
Established Thai Dai-ichi Seiko Co.,
Ltd. (now I-PEX (Thailand) Co., Ltd.) in
Chonburi, Thailand

Angle sensors

ESTORQ electrostatic capacitancetorque sensors

noseStick

FPC/FFC connectors

ES-HandMicro-coaxial
connectors

Board-to-board
connectors

nose@MEMS

Micro RF coaxial
connectors

Power connectors

Established Touchstone Precision, Inc.
(now I-PEX USA Manufacturing Inc.) in
Auburn, Alabama, U.S.A.
1980
GP-SYSTEM MARK-I

Established PT. Pertama Precision
Bintan (now PT IPEX Indonesia Inc) in
Bintan, Indonesia.

Water meters

1980
Sealing resin molds forsemiconductors
Smart entry keys

Molds at the time of thecompany’s founding

Business Field Expansion andBecoming a Listed Company

Listed on the JASDAQ
Securities Exchange.

Completed the construction of andstarted operations at the new plant of
SINGAPORE DAI-ICHI PTE. LTD.
in Yishun, Singapore.

Established our first company for mass
production in Fuchu, Tokyo, Japan.

1979

2004–2021

1988–2003
Building Systems for Production
in Optimal Global Locations

2020.06
I-PEX Campus

A company withtechnical capabilities
to implement digitalmanufacturing

05

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Segment Overview

06

Performance Highlights
Financial Information

Non-Financial Information

Net Sales

Operating Income(Million Yen)(%)

(Million Yen)

80,00080

12,00066,87160,00040,00054,53154,01952,67451,925

10.3

Employees

Women in Managerial Positions/
Percentage of Women in Managerial Positions(%)(Number)(Number)

12.0

8,000

80
6,184

60

9,000

6,076

5,928

(%)
15.7

5,843

5,667

13.4

60

9.0

6,000

6.0

4,000

40

3.0

2,000

20

0

0

6,877

30.0

31.1

28.6

27.3

33.7

20,000

40

6,000

20

3,000

0

0

5.3

5.0
2.8

2,604
1.4

16.3

16.5

54

56

20
15.7
55

15

41
10

31

2,911

1,505

5

719
0

2017

2018

2019

2020

2021

Gross income margin

Net Sales

2018

2019

2020

2021

Operating income percentage

Operating Income

Ordinary Income(Million Yen)

11.5

(%)

6,000

9.0

3,000

6.0

0

6,000
4.9

4.8
2,509
1.3

5,921
11.2

1,667
3.6
2.7

2017

2019

3.0

–1,882925 2.0

1,151

2021

0

(Number)

(%)

(%)
100

6.0

75

300

0

50

200

86.5

Total Assets/Net Assets/Shareholders’ equity Ratio(Million Yen)

75,00072.1

91,69065.5
66,82064,92961.8

60.4

43,84549,795

2019

2020

2021

–12.0

(%)

(Yen)

80

400

61.8

84.1

86.3

25

200

99.73

25.1

20.0

49,515
40

0

2017

0

16.4
2018

2019

Total assets

2018
Net assets

2019

2020

2021

Shareholders’ equity ratio

0

54.83

25.0

152

142
70

100

2020

2021

0

2017

2018

Patent applications (Global)

Certifications

CO2 emissions*2(%)(Number)(t-CO2)100

20

80,000

25.0

61.50
25.0

15.8
50.0

50

15

0

10

70

86

85
41

39

2019

2020

2021

Patent applications (Japan)

2018

61,51660,0009

66,19057,11057,55720192020

40,000

8
6

–50

2017

66,388

15

40.7

–200

–400

289

7.3

20,000

5
1

2017

2021

400

Mid-career hiring rate (Global)–112.58
20

25,000

0

92.7

15.9

13.7

New graduate hiring rate (Global)

316.82
49.5

60

2020

ROA

Net income (loss) per share/Dividend per share/
Dividend payout ratio*1

56,77546,87750,0002018

81,90880,421

83.6

128

Net income (loss) attributable to owners of parent
ROE

100,000

2017

2019

Women in Managerial Positions (Global)
Percentage of Women in Managerial Positions (Global)

12.0

–6.0

–6,0002018

2.3

1.3 1.4–3,000Ordinary income percentage

Ordinary Income

2017

0

2021

Patent Applications

13.5
2020

2020

–2.9
–4.2

1,382

2018

2019

Hiring Rates for New Graduates and Mid-Career Personnel

660
0

2018

6.8

2,672

2.6

2,000

(Million Yen)

7,704 12.0

2017
Employees (Global)

Net Income (Loss) Attributable to Owners of Parent/
ROE/ROA

8,000

4,000

2017

2019

Net income (loss) per share (EPS)

2020

2021

Dividend per share

–100

0

ISO
9001

IATF
16949

Certifications (Global)

AS
9100

ISO
14001

ISO
45001

1

1

SMK3

ISO
22301

0

2017

2018

2021

CO2 emissions

Dividend payout ratio*1 The dividend payout ratio is not indicated for fiscal year 2018 because
there was a net loss.

*2 Total CO2 emissions from plants and other manufacturing sites.

007

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Message from the President

From manufacturing
to value-adding:
expanding the scope ofour business for dramatic
growth as a company of
now and the future
Takaharu Tsuchiyama
President, CEO

Adding a new direction for the future to the traditions

our name from Dai-ichi Seiko Co., Ltd. to I-PEX Inc.

we’ve cultivated thus far, we have defined a clear start-(I-PEX), which stands for “Innovative Product develop-

ing point for taking these new steps forward, consisting

ment & Engineering solutions eXpert,” symbolizing ourof “Why” (Our reason for existing), “How” (Our capabili-

intention to take a new first step forward as a company

ties and values), and “What” (Our approach to businessunited in achieving its vision.

expansion). The following year, in 2020, we changed

Review of FY2021

Record-High Revenue. Seeking Further Development in
Solutions-Based Corporate Culture
In fiscal year 2021, an unclear outlook persisted due tovehicle sensors and connectors and other automotive

successive new waves of COVID-19 and semiconductors

products. In the equipment business as well, severe

remaining in short supply. Amid such conditions, thesemiconductor shortages continued, so demand for

Company set a new record high with net sales ofsemiconductor manufacturing equipment remained¥66,871 million. Operating income was ¥6,877 million

high, which led to increased orders of automatic mold-and net income attributable to owners of parent com-

ing machines and other such products.

pany was ¥5,921 million, achieving growth in both revenues and profits.
In the electric/electronic components business,

Corporate Vision

Taking a New First Step Toward Our Ideal

Certain issues, however, were not fully resolved. We
were not able to progress according to plan with new
manufacturing and new business creation, which we’ve

there was growth in demand for connectors used inengaged in over the past three years. The biggest

personal computers, which was associated with thereason was having limited opportunities to meet face torapid increase in remote work, online meetings, andface due to the impact of COVID-19. Another issue wasother such applications. In addition, with cloud services

related to developing a solutions-oriented corporate

becoming more widespread, there was strong demandculture. It is no simple task to get a new corporate cul-for large-capacity hard drive components for data cen-ture to firmly take root, but, first off, it is important that

ters. The automotive components business was partiallyeach and every employee deepen their awareness andaffected by supply chain disruptions from semiconduc-understanding of the new CI. We have initiated a

tor shortages and new waves of COVID-19 infections

number of projects just for this, and going forward wetoward the end of the year, but underpinned by ram-plan to create various mechanisms for it as well, somepant demand for automobiles, orders increased forof which will include HR.

Creation of I-PEX Vision 2030

During our nearly 60-year history as a company, having

In order for us to continue to press our competitive

started as a producer of high-precision molds, we haveadvantage and achieve sustained growth, however, andexpanded our field of business and grown to become awith the rapid advance of digitalization and changes in

Growth by Mixing Core Businesses and Priority Businesses,
Evolution of Business Models

commissioned manufacturer of components and pro-people’s lifestyles, expanding to become a company

In developing a new management strategy to realize

in order to achieve its vision while accommodatingvider of solutions. Drawing on technologies and expertisethat can provide value alongside conventional products

our vision for 2030, we gathered the opinions of manychanges in society. As a result of this process, wecultivated over these many decades, we have met theis a pressing issue for us. This was the impetus behindpeople inside and outside the company and held many

defined “Contribute to a safe and comfortable digitalneeds of customers with perfect precision manufacturing.

the new corporate identity (CI) we created in 2019.

discussions on what is important for the company to dosociety through innovation” as our most important

08

09

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Message from the President

priority. To “Tackle climate change and contribute to avehicles and power devices in the automotive

recycling-based society” will be essential to this end.

segment, and digital infrastructure and industrial

Further, to accomplish both of these, we will need tofields in the industrial segment. In life science, a newpromote corporate transformation, so we plan tobusiness area, we will focus on wearables and analyz-

In order for I-PEX to grow sustainably, we need to

Academy in Ogori City, Fukuoka Prefecture as a base for“Transform the business structure and expand our fielders, and also healthcare. MEMS is also an area withcreate value while accommodating changes in society.

education, training and passing on the Company’s man-of business,” “Strengthen human resource manage-

potential for further development across businessSpecifically, we plan to “Contribute to a safe and com-

ufacturing technologies. The curriculum will include

ment, “Build an optimal manufacturing system andsegments. We envision developing a range of markets,

fortable digital society through innovation” and “Tackle

specialized techniques like molding and plating as well

promote capital cost and cash flow management,” andincluding abnormity detection in manufacturing, nurs-

climate change and contribute to a recycling-based

as general education. We envision the academy to be a

“Strengthen corporate governance.” These have been

ing care, healthcare, and automotive applications.

society,” two of our points of materiality. The perspec-

place for overseas employees and, in the future, fortive of sustainability management is extremely import-

suppliers to learn our techniques and technologies.

established as our six points of materiality.

Regarding the evolution of business models, we see

Sustainability Management

Solving Social Issues through Business Activities

In I-PEX Vision 2030, our medium- to long-term

this as taking place on a matrix, with business fields on

management strategy that starts in fiscal year 2022, wea vertical axis, from physical manufacturing to digital

We are focusing particularly on diversity manage-

renew ISO 14001 certification at business sites in Japanprioritize growth by mixing core businesses and priority

value-adding, and business models on a horizonal axis,

ment, in which the talents of diverse people are com-and overseas and further accelerate related activities

businesses and evolution of business models as busi-

from self-reliance to collaboration. Specifically, thebined to generate innovation. Global personnel ingoing forward. Specifically, we have made energy-

ness policies derived from these points of materiality.

matrix is made up of business fields we plan to aug-

particular are essential to our future growth, so we aresaving in production our highest priority and are plan-

With regard to growth by mixing core businesses

ment in stages—production, hardware design, software

quickly building systems for hiring and advancement.

ning to introduce renewable energy at our Ogori Plant,

and priority businesses, rooted in I-PEX’s basic tech-and hardware, and aggregation—and business models

For HR development, beginning in fiscal year 2022, weTachiarai Plant and Shimane Plant in Japan and at

nologies, we will pursue both core businesses that

we will expand in phases—internal resources, the com-defined requirements for each key position, conducted

I-PEX Singapore, I-PEX Shanghai and I-PEX Malaysia

generate stable revenues and priority businesses forpany brand, external resources, and ecosystems. In

training, and carried out reassignments to further

overseas. Going forward, through the business activities

further development. Specifically, our priority busi-

areas where these two axes cross, we will pursue thestrengthen HR management from a sustainable, com-of the entire I-PEX Group, we will actively develop ini-

nesses are high-speed communication and high-evolution of new product creation and existing prod-pany-wide perspective and also initiated a succession

tiatives for helping to solve the various issues facing

frequency in the consumer segment, hybrid/electricucts to add comprehensive capabilities that will enable

plan for assigning personnel needed for business conti-

society, starting with climate change.

us to respond flexibly in any business environment.

nuity and development. We also plan to open the I-PEX

ant for this as well.

In the area of the environment, we will acquire andAlong with these strategies, we will strengthen six
areas on a priority basis—business structure, capital,
new business and M&A, management systems, HR, andrisk management—and strengthen corporate functions
for balance between profitability and soundness.

A Message to Our Shareholders

Constructive Dialogue and Sustained Increases in Corporate ValueIn this business environment where change is acceler-

are positively contributing to the world’s future andThrough carrying out the above strategies, we willating, I-PEX is being called to reconsider itself as a man-serve as an effective tool for dialogue.

work to achieve our management goals for 2030, net

ufacturer for the next generation. Recognizing change

sales of ¥100 billion, an operating income percentage

as an opportunity for new growth, we have steadilytinue being a company trusted and counted on by allof 10%, and ROE of 8% or more. Regarding shareholder

promoted reforms, creating a new corporate identity

stakeholders. Thank you for your continuing support.

returns, we are targeting a dividend payout ratio of(CI) in 2019, changing our company name, defining

30% while comprehensively considering growth invest-

materiality, and creating the I-PEX Vision 2030. Going

ment and profit allocation.

forward, we will engage in a range of initiatives toachieve the goals of the vision.
In addition, beginning this year, we issued an integrated report in order to enhance the information wedisclose to stakeholders. We hope that the report will
help stakeholders better understand how our initiatives

Going forward, we plan to redouble efforts to con-

Takaharu Tsuchiyama
President, CEO

10

11

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Process
The I-PEX Group’s products, which center on electronic, automotive and precision
mechanical components, help bring convenience and comfort to many facets of everyday life. Based on the manufacturing DNA we’ve cultivated to date, we will supportchanging lifestyles by serving as an “Innovative Product development & Engineeringsolutions eXpert” that creates new value a step ahead of the needs of the times.

Corporate
Identity (CI)

Materiality

P.15

Value Creation Strategy

Medium- to
Long-Term
Management
Strategy

Growth by Mixing
Core Businesses andPriority Businesses
Consumer

Automotive“Why”
Our reason for existing

To continually develop fields
that excite the worldTransform the businessstructure and expand
our field of business“How”
Our capabilities and values

We link people, knowledge
and technology to open up andexpand the sharpest tip.

Build asustainablebusinessmodel“What”
Our approach to business expansion

Build an optimal manufacturing system andpromote capital costand cash flow
management

Strengthen corporate
governance

Human capitalIntellectual
capitalManufactured
capital

Net assets ofGroup employees

Extensive track recordand advanced technological capabilities incore business fields

business sites

56.7 billion 62%

¥

5,667

39

Various sensors
and foundriesLife Science

Consumer
High-speed communication andhigh-frequency

I-PEX basic technology

Evolution ofbusiness models

Valueadding

Aggregation
Software andhardwareAutomotive

As of December 2021

Natural capitalSocial andrelationship capital

Increasing useof renewableenergyLongstanding trust
and partnerships
with customers

Innovative
Product
development &Engineeringsolutions eXpert
A company with technicalcapabilities to implement

Management goals

100 billion

Hybrid/electricvehiclesNet sales

Power devices

Operatingincome¥ROE

8% or higher

HardwaredesignManufacturing

12

P.20

Innovative Product development &Engineering solutions eXpert business sector
DigitalCorporate Overview/
Stock Information

digital manufacturing¥

10 billion

Production
Internal Company External
Ecoresources brand resources system

PhysicalSelf-reliance

Collaboration

Industrial
Digitalinfrastructure
Industrial fields

Strengthening Corporate Functions
CapitalNew
business,
M&A

Life Science
Wearables andanalyzers

Six Capitals

Financial capital
Equity ratio of

P.17

Core businesses

Business
structure

The

MEMS

Strengthen humanresource management

Delivering inspiration andastonishment by shifting frommanufacturing to creation

Segment Overview

Priority businesses

Contribute to a safe andcomfortable digitalsociety throughinnovation
Tackle climate change
and contribute to a
recycling-based society

Industrial

Financial Information

Creating and
Improving Priority
Businesses

P.17

I-PEX Vision 2030

P.13

Medium- tolong-termvaluecreationManagement Foundation

Management
systemsHR

Riskmanagement

Healthcare

Dividend
payout ratio

30%

13

I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Our Philosophy
The corporate identity (CI) we’ve created clarifies our reason for existing and what we

Corporate Identity (CI)aspire to become. It adds a new direction to the traditions we have cultivated under ourcompany creed, which represents our founding spirit.
With digital transformation accelerating and lifestyles rapidly changing, what vision
should we have for the next generation? What type of value should we create?
Taking this CI as our compass for the future, we at I-PEX will take a new first step.

Our reason for existing

Open up a new field that
constantly generates
excitement for the world“Why”

Our approach tobusiness expansion

Surpassing expectations
through inspired
manufacturing andcreativity

To a market in which people and society demandfurther leaps forward in potential, we open the door
to the possibilities of the next generation andcontribute to the creation of a future that delivers
emotion andhappiness to people around the world.

We deduce for ourselves what things customers
want, and make it.
We create inspiration and astonishment thatexceeds customer expectations.

“How”

Our capabilities and values“What”

Open and enlarge the
sharpest tip by connecting
people, wisdom, andtechnology
More than just working at the forefront, we create
the sharpest tip to push beyond
Based on the pursuit of perfect manufacturing excellence,
We cultivate a precise ability to ascertain trends inservices and technologies demanded bycustomers and specifics of the market
environment in pursuit of highadded value.

CI Awareness-Raising Activities
In January 2019, we created a new corporate identity (CI)for a new stage of growth and the next year, on August 1,
2020, we changed our company name. Internally, we haveassembled an interdepartmental project team to conduct
awareness-raising activities for our CI. Specifically, we
are holding workshops for executives and managers,
educating each division on the philosophy based on theworkshops, adding a CI category to the President’sAwards — our internal commendation program — andhosting conversations on the CI between the president
and employees over the intranet. A variety of methods
are being used to raise awareness.
Further, outside of Japan, we have project teams in eachregion for the task, with awareness-raising activities being
conducted in line with local circumstances. The entire
I-PEX Group is actively working to fully embody our CI.

14

15

I-PEX Inc. Integrated Report 2022

Value Creation Story

Overview

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Materiality
Six Points of Materiality for Sustained Value Creation
The I-PEX Group has designated “Contribution to a comfortable and secure digital society through innovation”
as its most important issue from a CSR perspective.
In order to help bring about a comfortable andsecure digital society, it is essential that we “tackle
climate change and contribute to a recycling-oriented
society.” And to promote this effort, we will take athree-pronged approach, that of “transforming thebusiness structure and expanding our field of business,”“strengthening human resource management,” andSpecific Action Plan“building optimal manufacturing systems and promoting capital cost and cash flow management,” while“strengthening corporate governance” serves as thefoundation of our management. This will be our framework for building a sustainable business model.
Through efforts to solve these issues, we will contribute to building a comfortable and secure digitalsociety, and, by securing a medium- to long-term competitive advantage, we will seek to create new value.

Materiality System Diagram

Medium- tolong-termvaluecreation

Main SDGs we willcontribute toContribute to a safe and comfortable
digital society through innovation
Tackle climate change
and contribute to a
recycling-based society

Medium- tolong-termvaluecreationTransform the businessstructure and expand ourfield of business

Strengthen human resource
management

Materiality

Build an optimal manufacturingsystem and promote capital costand cash flow management

Build asustainablebusinessmodel

Build asustainablebusinessmodel

Strengthen corporate governanceAction plan

Corresponding
page(s)Contribution to a comfortable and secure digitalsociety through innovation• Contribute to the “Super Smart Society (Society 5.0)” through“sharpest tip” technologies• Develop new technologies and applications through partnerships and a market orientation• Utilize proprietary technologies at advanced levels throughbusiness synergies• Raise awareness of innovation and change mindsets

P.17

Tackle climate change andcontribute to a recyclingbased society• Raise energy efficiency in production and expand use of renewable energy• Contribute to an energy-saving society through “sharpest tip”
technologies• Reduce primary material use through resin recycling• Build new business models via circular economies andupcycling

P.23

Transform the businessstructure and expand ourfield of business• Consolidate and specialize in connection with existing products
and narrow focus for new areas of development• Convert to an earnings structure resistant to cyclical fluctuations and create a new business pillar• Allocate management resources to new and growth businesses
from a company-wide perspective• Shift from manufacturing to value-adding

P.17

Strengthen humanresource management• Strengthen HR management from a company-wide perspective,
perform global personnel evaluations and build career advancement programs• Enhance employee engagement and motivation• Secure and develop personnel with high specialization and thepotential to create future businesses• Promote diversity, equity and inclusion

P.25

Build an optimal manufacturing system and promote
capital cost and cash flow
management• Build a speedy, flexible production system, consolidate production sites, and promote allocation• Promote an outsourcing policy based on profitability andadded-value standards• Promote capital cost management by introducing ROIC andcash flow management by improving CCC

P.21

Strengthen corporate
governance• Further raise awareness of the corporate philosophy• Strengthen supervision of important matters related to
management• Strengthen global group governance

P.28

Materiality Selection Process
The I-PEX Group selected its six points of materiality through the following process while referring to international guidelines and initiatives.

STEP 1 Define issues

STEP 2 Identify themes

STEP 3 Analyze and selectWe created a list of issues based on the

We administered questionnaires and con-

Scores were assigned based on secondary

17 SDGs and 169 targets, the evaluation

ducted interviews with external stakeholders

research of ESG evaluation criteria (SASB,

criteria used in ESG investment (SASB,(investors, external directors) and internal

MSCI), and six high-priority themes were

MSCI) and our own management issues.

stakeholders (officers, operating divisions,selected using a materiality matrix that has

administrative divisions) and identified

importance to external stakeholders as its

important issues as high-priority themes.

vertical axis and importance to internal
stakeholders as its horizontal axis.

STEP 4 Systematize and create action plans
Materiality
Analysis map
Issue

Importance tostakeholders

Six high-priority
themesImportance to I-PEX

For the important issues selected, we defined a medium- to long-term ideal for theGroup and systematized initiatives for achieving it. Further, we will create action plansfor each point of materiality and based on the plans promote materiality measures
integrated with business operations.

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

I-PEX Vision 2030 Medium- to Long-Term
Management Strategy
Through growth by mixing core businesses and priority businesses, expansion of our fieldof business, and evolution of business models, we will improve business profitability andcapital efficiency and work to achieve, as our medium- to long-term goals, net sales ofMedium- to long-term
management goals¥100 billion, an operating income percentage of 10% and ROE of 8%.

100 billion

Growth scenario

Net sales¥

Priority businesses

Operatingincome¥ROE

8% or higher

Dividend
payout ratio

30%

Core businesses

2021
Priority Measure 1

2022

2024

2027

2030

10 billion

Growth by Mixing Core Businesses and Priority Businesses

Since our founding in 1963 as a producer of highprecision molds, we have expanded our field of businessto become a commissioned component manufacturer
and solutions provider, accumulating the basic technologies that underpin I-PEX today, namely, automatic
machine design and manufacturing, composite molding,high-speed transmission and high-frequency analysis.
Based on these varied technologies, we will pursue
the further evolution of core businesses that currently
produce revenue in the consumer, automotive, andindustrial segments, and, moreover, we will positionbusinesses with potential for development in thesesegments, businesses in the life science segment—a new area of challenge for us—and businesses like
MEMS that cut across segments as medium- to longterm priority businesses and work for their creationand development.
Through a growth strategy based on a mix of coreand priority businesses that will each create innovative
new products and technologies, we will seek to achieve
our management goals as quickly as possible.

Consumer

Automotive

Industrial

Life Science

MEMS (various sensors and foundries)

PrioritybusinessesCorebusinesses

I-PEX basic
technology

High-speed communication andhigh-frequency(connectors and composite devices)

Mobile devices and digital consumer
electronics(connectors)

Hybrid/electric vehicles(battery solutions, connectors, smart
devices)

Digital infrastructure(photoelectric conversion devices,connectors, large-capacity HDDs)

Power devices(power semiconductor equipment)

Industrial fields(torque sensors, robots, newequipment)Internal combustion(passive sensors and connectors)

HDD(various HDD components)

Wearables and analyzers(composite equipment and devices)
Healthcare(nursing care and rehabilitation devices)

Semiconductors and passive parts(general-purpose semiconductor
equipment)

Extremely small andprecise molds

High-speed transmission
and high-frequency analysis

Composite molding

Design and manufacture ofautomatic machines

MEMS design andmanufacturing

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Segment Overview

I-PEX Vision 2030 Medium- to Long-Term
Management Strategy
Examples of Priority Business Initiatives
MEMS• A new market created by smell sensors• A foundry business utilizing MEMS technology
noseStick

Automotive

nose@MEMS

MEMS Foundry

BMS
marketSmart devices• Develop smart device components in conjunction with E/E
architecture* innovation
Connectors• Develop new markets in line with electrification• Respond to new technology innovations and expand sales channels in line with the enhanced functionality of LED headlights

Build arecyclingbasedsociety

TackleclimatechangeDigitized
society

EPS
marketEnvironment

MarketPower semiconductors• Expand the market by pursuing differentiated technologies

High growth
Tip evolution

Decarbonization
Energy savings
Digitization

Powersemiconductors

I-PEX
unique technology

Power semiconductors

Measurement
technology

Business field

Business model

Expand tothe digital sector

From self-reliance tocollaboration

Analysistechnology

Innovative Product development &Engineering solutions eXpert business sector

Designcapability
Strengthening
points

Large-capacity HDD• Ahead of the new recording system• Pursue HDD large-capacity technology
ES-Gripper

ES-HandLife Science
Light ablation devices

Expansion of field of businessPhotoelectric converter devices/connectors• Aim for the most advanced niche fields, taking small and low-profile factors as
the differentiator• Strengthen technology for the development of electrical and optical transmission routes supporting next-generation digital communication technology• Establish a research building in 2024 to pursue high-speed transmission
technology

I-PEX’s vision

Devices and connectors

Customer delivery record
Differentiated technology
Custom availability

Industrial

Wearables/analyzers• Enter new markets through social transformation (life sciences)• Forensic medicine products

manufacturing to value-adding) and facilitating theevolution of business models from self-reliance to collaboration, we will pursue models that further raise
corporate value.

Changes in society

Battery solutions• Develop a proprietary Battery Management System (BMS)• Collaboration beyond industry boundaries targeting the
BMS market

Healthcare• Commercialize rehabilitation devices and nursing
care robots• Launch business as a medical and welfare device
manufacturer

As indicated in the section on materiality, it is necessary
for us to create economic value while simultaneously
addressing the digitized society, tackling climatechange, and helping to build a recycling-based society.
By expanding our business into the digital sector (fromPCU
marketBMS
collaboration

Robots• Torque sensors/ESTORQ

Evolution of Business Models

Priority Measure 2

DigitalValue-adding

MEMS

Software andhardware* E/E architecture: The structure of a system that connects an ECU or sensors and actuators by electrical or electronic means

DigitalinfrastructurePowerdevices
Wearables/
analyzers

Production

Healthcare

Internal resources

Self-reliance
Upper-limb
rehabilitation
devicesHybrid/electricvehiclesHardware design

Manufacturing
PhysicalEquipped with I-PEX
torque sensor
Walk-assist robot “Tree”
from Reif Co., Ltd.

Aggregation

Company brand

External
resources

Ecosystem

Collaboration

Evolution of business models

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Segment Overview

Build an Optimal Manufacturing System andPromote Capital Cost and Cash Flow Management
Building the Optimal Manufacturing System for Improvement to Key Indicators
System Optimization for Sustained Growth
Among the financial indicators it uses, I-PEX places particular emphasis on ROIC, with the aim of investing in management resources that produce added value to successfully execute its growth strategy while, at the same time, reducing
underperforming resources.
In order to have ROIC fully permeate the organization, its elements are organized into a tree structure that goes down
to the manufacturing floor. From executive management to frontline employees, we think of ideas together for the“ideal manufacturing system” based on profit improvement activities and then take action based on these ideas.

We have drawn up an ideal manufacturing system and set forth three policies—reform rules, utilize systems, andutilize outside resources/consolidate sites—in order to improve key indicators through total process optimization.

Basic Capital Policy

Reform rules
We will pursue total process optimization through an
ideal manufacturing system based on profit improvement activities. We will reform rules for processes fromordering to equipment manufacturing and mass production to raise capital efficiency and bolster profitability. With the aim of standardizing order items, raising

I-PEX will promote a capital policy that seeks to secure sustained growth and raise corporate value over the medium
to long term while balancing profitability, shareholder returns, and financial soundness.

Manufacturing flow

Determine specifications with the customer
and create engineeringdrawing

Material cost ratio

ROE

ROIC

Operating income
percentage

Labor cost ratio

Advertising cost ratio
Inventory turnover
Accounts receivable
turnoverWorking capitalturnover

ROE = Net income/shareholders’ equity

Accounts payable
turnoverInvestment
turnoverWhen management is lean and not wasteful, ROE correlateswith ROIC. We therefore plan to create a management
system in the future that enables ROIC to be analyzed andmanaged for each business and investment.

Sample Practices

Property, plant andequipment turnover

Fixed asset turnoverTarget-setting and forecast/results management taking
into account individual business characteristics

ROIC and ROE will be increased through the following practices.
Based on past results we will conduct target-setting and forecast/results
management in a way that utilizes the characteristics of each business. Doing so
will make it possible to set different targets for each business.
In addition, in actual practice, it will also be possible to alter targets andtargeted figures after examining the sensitivity of the targets for each business.
We will also be able to revise frequency and granularity as appropriate.

Ship/
deliver

Customer

Create mass-production
equipment based on
finalized form (productdrawing)

Receive
order

TargetIntangible fixed asset
turnoverElectrical/electronics
Forecast

Result Difference
TargetMaterial cost ratio
Personnel cost ratio

Material cost ratio

Manufacturing cost ratio

Personnel cost ratio

Contract rate

Manufacturing cost ratio

Takt

Contract rate

Capacity utilization

Takt
Capacity utilization

Automotive
Forecast

TargetDifference
ResultFacilities
Forecast

Utilize systems
We will take a step forward in digital transformation(DX) by working to digitize business processes.
In the products division, in the first phase, our aim is
to increase business efficiency by introducing digital
tools. This means, specifically, the deployment of IoT
systems to production facilities and manufacturinglines to increase work efficiency as well as fully implementing a manufacturing execution system (MES) as atool for analyzing daily production to make improvements. In the second phase, we will introduce robots
and AI to further raise productivity.

In the procurement division, we will upgrade ourelectronic ordering system (EDI) and conduct transactions with suppliers at all sites via electronic ordering.
Our aim in digitizing order information is reducing
man-hours through visualization of order informationand electronic transactions (orders, delivery management, invoice reconciliation).
In addition, through utilization of digital data andother measures, we will move forward with digitaltransformation.

MES System

DX Promotion Project Example

Result Difference

Material cost ratio
Personnel cost ratio
Manufacturing cost ratio
Contract rate
Takt
Capacity utilization

Enhance manufacturing site capabilities andgenerate profit

MES

Factories
worldwide

Maintaining Financial Soundness
We will maintain financial soundness while making
strategic investments for growth.

Total processoptimization
Raise profitability

Gateway

Manufacturingexecution system
Wireless devices

Shareholder Returns
We will continue to pay a stable dividend and work toenhance shareholder returns while comprehensively
taking into account funds obtained from increasing
profitability and opportunities for growth investment.
Over the medium term, we will target a dividend
payout ratio of 30%.

Mass production
Production division

Manufacturing cost ratio
SG&A expense ratio

ROIC = Operating income/invested capital= Operating income percentage x investment
turnover

Create massproduction equipment
Production
equipment division

Create andsubmit sample
for evaluation
based on thedrawing

Project
start

Correlation Chart of Key Indicators
Gross income
marginCreateprototypeNew product

Equipment
Relocation

will manage business with greater awareness of capitalefficiency and strive to achieve ROE of over 8% for the
medium term.

Product design
Product
development
division

Releasedrawing

Profitability
Return on equity (ROE) is used by I-PEX as an important
indicator related to raising corporate value. By integrating the concept of return on invested capital (ROIC), we

order accuracy, and reducing order-related man-hours,
we will build a parts management system for massproduction items (BOM system) and promote so-called
automated ordering. We will also work to systematize
parts management for items not yet subject to thissystem through coordination with operating divisions.

Cultivate manufacturing technologies
Coordinate withpartners

Utilize outside resources/consolidate sites
After considering profitability, we will seek to optimize
production allocations by relocating production to overseas plants and contracting production to suppliers.

Increase efficiency• Promote IoT operations
monitoring system

Reduce weight• Utilize IT in facilities division• Utilize MES system• Promote improvement
activities• Digitize maintenance records• Automate inspection• Visualize plant management
indicators

A project led by the supply chain management division will be formed to actively contract new suppliers
and relocate parts to overseas plants.

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Tackle Climate Change and Contribute toa Recycling-Based Society
Map of ISO 14001 Certified Sites in Japan

Map of ISO 14001 Certified Sites Overseas

We aim to be a friendly corporation for the earth,human beings and our communities
Under the theme “People-friendly and Earth-friendly,” we aim to be a community-based company and promote environmental improvement activities to achieve a sustainable society for future generations.

Basic Environmental Policy
1. Promote environmental improvement activities to prevent environmental pollution of the local
community.
2. Observe laws, regulations and other requirements related to environmental preservation.

Increasing Energy Efficiency in Production, Expanding Use of Renewable Energy

3. Set up and execute objectives and targets reflecting the various conditions of our business activity
and provide a framework to review them periodically.

I-PEX is working to increase energy efficiency andconvert to renewable energy. We will reduce energy
use and produce/convert to renewable energy onsite.

4. Carry out regular audits and continuously enhance our environmental management system to ensure
the environment protection and everlasting improvements.
5. Establish a management system for environmentally hazardous substances and improve it
continuously.
6.Document our Environmental Policy, distribute it to all employees and make it widely accessible.
7. Work on energy conservation and increase the use of renewable energy in our production process.

Environmental Management System
We identify risks and opportunities related to theimpact of our business activities on the environmentand conduct improvement activities on an ongoingbasis in line with plans and measures at each site.

In addition, we are planning to deploy renewableenergy while first prioritizing major overseas facilities(Singapore, Shanghai, Malaysia) and then facilities
in Japan.

Roadmap for Renewable Energy

Overseas (starting 2022)

Japan (starting 2023)• Singapore Plants• China (Shanghai) Plants• Malaysia Plant• Ogori Plant• Tachiarai Plant• Shimane Plant

All facilities

Contributing to Energy Savings in Society with “Sharpest Tip” Technologies
I-PEX is developing new technologies and products that contribute to an energy-efficient, recycling-based society
while promoting environmental improvements in manufacturing processes.
Main Initiatives

Obtaining ISO 14001 Certification
The Group promotes certification under ISO 14001, an international standard for environmental management systems.

• We will design equipment to be as compact and energy-efficient as possible.
• We will provide sealing technologies for the production of power semiconductors used in EVs and other applications.
• We will develop robots to convert from manual processes and help increase efficiency in society overall.

ISO 14001 Certified Sites
Country

Certified sites

ISO 14001 certified dateJapan

I-PEX Group sites

Vietnam

I-PEX Viet Nam Co., Ltd. Ho Chi Minh Plant

January 2013

Thailand

I-PEX (Thailand) Co., Ltd. Chonburi Plant

March 2007

China

I-PEX Precision Mold & Plastics (Dongguan) Co., Ltd. Dong Guan Plant

January 2005

Indonesia

PT IPEX Indonesia Inc Bintan Plant

November 2005

Singapore

I-PEX Singapore Pte Ltd. Woodlands Plant, Yishun Plant

November 2005

June 2013 (integrated*)

Philippines

I-PEX Philippines Inc. Laguna Plant

March 2005

Malaysia

IPEX Global Manufacturing (M) Sdn. Bhd. Johor Bahru Plant

April 2004

China

I-PEX Precision Mold & Plastics (Shanghai) Co., Ltd. Shanghai Plant 1, Plant 2

March 2003

* Date I-PEX Group facilities in Japan were integrated into ISO 14001.

• We will help increase the energy efficiency of production processes by reducing the energy consumption of production
equipment we sell.

Reducing Material Use
We will recycle materials used at our facilities and work to reduce and reuse waste products.
Main Initiatives

Produce Collect• Surveys and studies on utilization of in-process recycled materials• Utilization of materials with high recycling rates (materials with additional UL certification)• Reductions to packaging, transport and materials by using cushioning materials and reusable
shipping cartons and changing packaging specifications• Other forms of cyclical use through recycling

RecycleCycle of Plastic
Recycling24

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Segment Overview

Strengthen Human Resource Management
Securing and Developing Highly Specialized Personnel Capable of
Creating Future Businesses

HR Development for a Challenging and Innovative Organization
To be an “Innovative Product development & Engineering solutions eXpert,” I-PEX has identified strengthening humanresource management as a key management issue, one of its points of materiality. We have a basic HR management
policy of securing diverse human resources and supporting the growth of people willing to continually take on challenges. Achieving the vision we have for ourselves, we will need to possess the organizational strength necessary tosustainably generate innovation. Combining the strengths of employees with different attributes, perspectives, sensibilities, abilities and experience provides the driving force for creating new value. Fostering and strengthening managerial
employees in an ongoing, systematic manner is also an important issue for HR management.
Along with these initiatives, we are also cultivating a corporate culture that allows diverse employees to fully demonstrate their respective potentials and take on individual challenges and are reinforcing the workplace environment as thefoundation for this. We believe that activating the organization in this way will increase our ability to generate innovation.

HR Development System and Enhancements
raise HR value and fully demonstrate the knowledge
and abilities needed for business expansion andgrowth. As a result, in fiscal year 2021, on a peremployee basis, training time was 9.6 hours and training costs were ¥27 million, both of which have been
increasing year after year. Going forward, we plan tofurther strengthen employee training while also adding
new programs.

Our HR development system is broadly divided into
basic skills, shared skills, and specialized skills, and it isput into practice through various training programs,
including level-based training, training for development of necessary and effective job skills, such as logical thinking and time management, and various typesof specialized training. We conduct education and training that is essential for each and every employee to
HR Development System
Basic Skills

Directors

Operating
Dept. A

Operating
Dept. B(shared coretechnologies,
planning, andadministration)

Executive
Officer
Operation
Director
Director

Deputy Operation
Director
Deputy Director
Next-Generation Executives= Successor candidates

Deputy General
Manager
HR Pool B

Manager

Career Course

7

Management
CourseLevel

6

Advanced,
Technical
Specialty
CourseDeputyManager

Next-Generation Senior
Managers= Successor candidates

4
Level

3
Level

2
Level

HR Pool C

Next-Next Generation
Senior Managers= Future candidates(medium/long term)

Junior1
Level

Selective
training

Training for manager candidates
Training for group mangers,
supervisors, mid-level
employees andjunior employees

Communications

Manufacturing division(“Perfection in
PRECISION”)
training

Providing Learning Opportunities
Operator/
AssistantCourseGeneralArea
CourseGeneralCourseSpecialization

Training for managers and deputy managers

New employee training

5

Operations

Training for general managers anddeputy general managers

Level

Level
HR Pool A

GeneralManager

Corporate
Function Div.

Level

Solutions• Tech Forest
For I-PEX, which has grown on a foundation of precision molding technologies, the constant pursuit of
in-house technology transfer and further technological advancement is an absolute necessity. We havetherefore started an engineering academy to help
fulfill our aspiration to be an “Innovative Productdevelopment & Engineering solutions eXpert.”
Education and training on mold processing technologies have been consolidated in a new building, Tech
Forest, where we will train professionals on an expedited basis with our veteran employees, who are also
subject matter experts.

Basics of
Toyotaproduction
systemManagement

Solutions

PDCA +
S cycleLogicalthinking

Engineering academy

Career Courses (sample)

Management

Divisional specialty training

Succession Plan

Leadership

Job training & OJT

Mid-Level

Communication

Executive training(operation directors, directors)

CI awareness-raising

Managers

CI

Public certifications

Executives

Language training, recent trends, culture and etiquettegenerations. We have defined requirements for eachkey position, and by conducting necessary training andjob rotations in a systematic manner we are aiming tocreate a leadership pipeline for stable job succession.
In addition, we will clarify career paths to enable
diverse personnel to perform and advance in therespective business fields in line with their aptitudes
and reinforce multi-track career courses based on roles,
work styles, and other factors.

Cross-industry, cross-cultural exchange

In Japan, we will reinforce our human resource management system and visualize HR data like educational backgrounds, career histories, and certifications to ensure thatstrategic personnel assignments are connected to thegrowth of employees at the individual level.
In terms of career advancement programs, we initiated a succession plan in fiscal year 2022 in order tosystematically educate and train managerial employees
who will occupy key positions for the next and following

Cultural Skills

Specialized Skills

Internal certifications

Strengthening HR Management and Building Career Advancement Programs

Shared Skills

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Strengthen Human Resource Management

Corporate Governance

Employee Engagement and Raising Motivation

Governance Highlights

1

satisfaction survey to identify issues for engagement
and motivation, work thereby to render employee
awareness in visible form, and conduct initiatives forsolving issues.

I-PEX is committed to creating a workplace environment and corporate culture where diverse employees
are able to fully demonstrate their potential and takeon individual challenges. We conduct an employee

3(all three are Audit &Supervisory Committee
Members)

For Diverse HR Development
and advancement of women, international employees,
and mid-career hires as an important task, and we arededicated to enhancing educational opportunities fordiverse talent with a view toward active promotion to
managerial positions.

In order to generate innovation and become an“Innovative Product development & Engineering solutions eXpert,” it takes a variety of perspectives, whichmeans diverse human resources are a necessity. To
make this a reality at I-PEX, we regard the participation
Promoting Women’s Participation and Advancement

their careers across life events, and provide support forcareer development. Going forward, I-PEX will continue
working to promote the further participation andadvancement of women.

I-PEX helps employees balance their jobs with childraising and nursing care responsibilities and is involvedin changing its corporate culture and reforming work
styles. We will strengthen the hiring of women, enhance
the work environment to allow employees to continue

Inside Directors:

2

4

Diverse experienceand knowledge
Corporate and business management
Global experience
Finance, accounting and law

Hiring Rates for Women andInternational Personnel(Number)
40 18.6
36
20

0
(FY)

16.8

17.8

19.0

(%)
19.0 20

30
16

(%)
80

(%)
100

10

2019

2020

40

11
0

2018

Childcare leave rate

70.7
56.2

18

2017

Hiring Rates for New Graduates and
Mid-Career Personnel

2021

Total women and international personnel
Hiring rate for women and international
personnel

0
(FY)

43.8

2017

53.1

61.4

46.9

2018

38.6

2019

New graduate hiring rate
Mid-career hiring rate

100

100

100

Sales and marketing
100

100

Corporate Overview/
Stock Information

Independence

External Directors:

Enhancing Diversity, Equity and Inclusion

Segment Overview

Manufacturing and development
Governance

External
Directors:

InsideDirectors:

43%

57%

Ratio ofExternal
Directors

3

Objectivity andtransparency

Nomination andCompensation Committee
established (discretionary body)
Made up of Inside Directors andExternal Directors; at least three External
Directors to constitute a majority

53.6
46.4 29.3

2020

2021

50

0
(FY)

2017

2018

Childcare leave rate

2019

2020

2021

Basic Approach
Our basic approach to corporate governance is to build
relationships of mutual trust with all stakeholders,
including shareholders, customers, employees, suppliers and local communities, by working to sustainably

increase corporate value through increasing the transparency of corporate management and maintaining
fairness and independence.

Corporate Governance System
I-PEX’s corporate governance system primarily consists of the Board of Directors, Audit & Supervisory
Committee and independent auditors.
Three External Directors who are Audit &Supervisory Committee Members attend meetings ofthe Board of Directors, the highest decision-making
body of management, to ensure the objectivity andneutrality of management oversight. In addition, theAudit & Supervisory Committee coordinates internallywith the Internal Auditing and externally with theindependent auditors. Audits related to compliancewith various laws, regulations and internal company
rules are appropriately maintained, which is thereason this has been adopted as our current system ofcorporate governance.

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Corporate GovernanceCorporate Governance System

InsideExternal

00 Number of meetings in FY2021

General Meeting of Shareholders
Appoint

Appoint

Appoint

18

14

Audit & Supervisory
Committee

Coordinate

3

Audit
ReportBoard of Directors

7

InstructManagement
oversight
Audit

Audit

Audit

12

Audit

Nomination andCompensation Committee

5
Report4*

9AdviseRepresentative
Director(Executive Committee)

Independent
auditors

Consult

Coordinate

6Internal Auditing

Internal
auditing

Management
Committee
Business Execution
Committee* Number of regularmeetings of the Audit &Supervisory Committee
each quarter

Internal auditing

Governance oversightBusiness divisions, R&D Division, administrative divisions
Governance oversight

Affiliated companies in Japan and overseas

Audit & Supervisory Committee
The Audit & Supervisory Committee is made up of threemembers, all of whom are independent External
Directors. Audit & Supervisory Committee Members
attend meetings of the Board of Directors and otherimportant committees, and they supervise and audit

overall management as needed. The independent auditor is Deloitte Touche Tohmatsu LLC, which conducts
audits based on Article 436.2.1 and Article 444.4 of theCompanies Act and Article 193-2.1 and Article 193.2 of
the Financial Instruments and Exchange Act.

Nomination and Compensation Committee (discretionary body)
I-PEX has established the Nomination and Compensation
Committee, a discretionary consultative body of theBoard of Directors, in order to further strengthen corporate governance by raising the objectivity and transparency of evaluation and decision-making processes
related to officer nomination and compensation. The
committee is consulted with on the election, dismissaland compensation of Directors and other officers, considers these matters, and reports back to the Board of
Directors. The committee is made up of Inside Directors
and External Directors, and rules have been stipulated toensure there are at least three External Directors on thecommittee and that they make up a majority. The committee is chaired by External Director Junichi Hashiguchi.

Board of Directors
The Board of Directors is comprised of seven Directors(three of whom are Audit & Supervisory Committee
Members) and three are appointed from outside thecompany (all three of whom are Audit & Supervisory

Committee Members). The board, which meets once amonth in principle, oversees business execution by the
Representative Director and other Directors and makes
decisions on important matters.

Operation of the Board of Directors
fiscal year’s plan and reviews business execution by
Directors and other matters.
The Management Committee is convened apartfrom the Board of Directors, providing a venue fordiscussion and debate on various themes related tobusiness administration.

The Board of Directors, which is chaired by the
Representative Director and made up of seven
Directors (three of whom are External Directors who
are Audit & Supervisory Board Members), met 14 times
in fiscal year 2021. The board makes decisions onimportant matters such as investments and the next
Sample Agenda Items
Reporting

For Resolution

For Discussion• Matters related to investment• Matters related to equity investment• Reporting on IR activities and investor
opinions• Evaluation of the effectiveness of theBoard of Directors and reporting on it• Reporting on the activities of theNomination and Compensation Committee• Results of internal control effectivenessevaluations• Matters related to investment• Matters related to equity investment• Matters related to market selection• Matters related to materiality• Matters related to share buybacks• Matters related to capital policy• Annual business and financial plans• Capital policy• Response to Corporate Governance
Code• Selection of I-PEX points ofmateriality

Analysis and Evaluation of the Effectiveness of the Board of Directors
attending meetings of the Board of Directors, and an
anonymous survey was conducted. We analyze theresults and identify issues internally and these arethen discussed and evaluated on a deeper level by
the Board of Directors in order to make improvements to the issues that have been defined. In thisway, we continue working to strengthen the functioning of the Board of Directors.

I-PEX administers questionnaires (self-evaluation, etc.)
to all Directors once each year for the purpose of maintaining an accurate understanding of the current stateof the board and further raising its effectiveness, andanalyzes and evaluates the effectiveness of the board
based on the responses it receives.
In fiscal year 2021, the scope was expanded fromall Directors (including Audit & Supervisory
Committee Members) to include executive officers
Evaluation Results and Measures for the Next Fiscal Year (FY2021)
Results of Assessing the Effectiveness of FY2021 Measures

Main Measures for the Next Fiscal Year

With regard to strengthening supervisory functions andimproving administration—the main issues raised in FY2020
for which measures were taken the following fiscal year—
management strategy and capital policy were put on theagenda of the Board of Directors and discussed, and efforts
were made to distribute meeting materials early. These measures led to improved scores and a solid evaluation overall.

• Allow time for discussion of important agenda items byincreasing administrative efficiency and closely examining
the agenda• Deepen discussions by including a medium- long-term time
horizon and the perspectives of stakeholders

Training for Directors
When Directors are appointed internally, an orientation
is given on duties and responsibilities based on the law
and regulations, and opportunities are provided forreceiving training from an outside organization as necessary. When Directors are invited from outside thecompany, a briefing is provided on finances and theorganization, and to deepen understanding of I-PEX
manufacturing (our business), opportunities areprovided to tour business offices and plants and receive
information on them. In addition, for all Board
Members, support is provided for independent selfimprovement efforts when they are needed for responsibilities to be fulfilled. In addition, we provide theopportunity for training on corporate law and otherrelated matters conducted by a specialist once a year.

30

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Corporate GovernanceSupport System for External Directors

Succession Plan
assigned to the committee. Employees who are asked
to assist Audit & Supervisory Committee Memberswith their duties are required to put highest priority
on the requests and instructions of the committee,
and their assignment to the position requires the committee’s consent. These measures are taken to ensure
their independence.

While there is no dedicated organization that assists
External Directors with their duties, there is a system inplace in which all divisions provide assistance as needed,
starting with the Corporate Planning Division.
When it is necessary for personnel to assist thethree Audit & Supervisory Committee Members (all ofwhom are External Directors) with their duties, staff is

Executive Compensation
The performance share unit plan sets a numericaltarget in advance for company performance (consolidated) during the period covered and calculates thenumber of I-PEX common shares to be granted and themonetary amount needed for tax payments based on
the degree of achievement of the numerical target
after the period ends.
Regarding executive compensation, it was resolved
at the 54th Annual General Meeting of Shareholders
held on March 30, 2017 that compensation for
Directors who are not Audit & Supervisory Committee
Members shall be no more than ¥350 million annuallyand compensation for Directors who are Audit &Supervisory Committee Members shall be no morethan ¥45 million. At the time of the resolution, there
were nine Directors who were Audit & Supervisory
Committee Members (one of whom was an External
Director) and three Directors who were Audit &Supervisory Committee Members.

At I-PEX, compensation for executive Directors consistsof fixed monthly compensation, performance bonuses*1,
which are linked to annual business performance, and aperformance share unit plan*2, which is a stock compensation plan linked to medium-term performance.
This compensation package is designed to promote thecompany’s sustained growth, raise corporate value overthe medium to long term, and share further value withshareholders. The previous retirement benefits program for officers has been eliminated.
Regarding performance bonuses, the total amount offunds available for bonuses is determined based on consolidated sales and consolidated profit, indicators thatform the basis of business management activities. With
this amount as the upper limit, points are calculated foreach eligible Director based on both quantitative performance indicators and qualitative evaluations. Next, thepercentage of the total is calculated for each eligible
Director’s points, and the actual amount of bonuses paid
to each is calculated based on these percentages.

*1 Compensation plan that is more clearly linked to performance for the fiscal year, making it a short-term incentive.
*2 Compensation plan that further enhances motivation to achieve medium-term performance targets and promotes the sharing of benefits and risks with shareholders.

Total Amount of Compensation for Each Officer Category, Total Amount of Compensation by Type, and Number of Eligible
Officers
Total amount of compensation by type (Million Yen)

Officer Category

Directors (excluding Audit &Supervisory Committee Members)(excluding External Directors)

Total amount ofcompensation(Million Yen)

Fixed
compensation

Performancebonuses

PerformanceRetirement
linked stock
benefits
compensation*1

Nonmonetarycompensation(included in
the amounts
at left)

Regarding the succession plan for the Representative
Director and other officers, the discretionary
Nomination and Compensation Committee (discretionary body), a consultative body to the Board of Directors,
regularly deliberates on the plan and reports to theGroup Governance
I-PEX manages its Group companies based on Group
Company Management Rules. Compliance managers
are assigned to each business division, and their
responsibilities extend to Group companies affiliatedwith their division. The Internal Control and Compliance
Committee oversees and promotes compliance forGroup companies overall. Audits are conducted

220

143

28

44

4

—

8

Directors (Audit & Supervisory
Committee Members)(excluding External Directors)

—

—

—

—

—

—

—

External Directors

21

21

—

—

—

—

4

* Includes one Director who passed away on June 27, 2019, one Director and one External Director who resigned as of the end of the 58th Annual General Meeting of
Shareholders on March 30, 2021, and one Director who resigned as of the end of the 59th Annual General Meeting of Shareholders on March 29, 2022 (a total offour officers).
*1 Performance-linked stock compensation includes an allowance for the estimated payment amount.
*2 The number of eligible officers includes officers who receive performance-linked stock compensation.

regularly by the Internal Auditing and their scopeincludes Group companies. Compliance managers,
Directors, the Internal Control and Compliance
Committee and Internal Auditing are required to reportto the Audit & Supervisory Committee when legal violations or other important compliance-related matters
are discovered.

Disclosure
I-PEX promotes constructive dialogue with shareholders and investors to sustain growth and raise corporate
value over the medium to long term.
The Representative Director is the chief IR officer
and the officer in charge of disclosure (general managerof the Corporate Planning Division), who is appointed by
the Representative Director, supervises dialogue withshareholders and investors. Through this framework,
I-PEX works to maintain constructive dialogue.
Along with the Corporate Planning Division, thedivision in charge of IR, the company has also assigned
the Financial Division, and under the direction of theofficer in charge of disclosure, they coordinate topromote smooth and rational dialogue and work toensure that disclosure is appropriate and timely. In
addition, earnings briefings, company presentations,facility tours and other events are held to provide further opportunities for dialogue with shareholders andinvestors. The officer in charge of disclosure reports
important feedback and requests that emerge from
dialogue back to the Board of Directors or the management team in a timely manner and shares information
with them.
In conducting dialogue, insider information is appropriately managed in accordance with laws, regulations
and rules related to insider trading.

Sample Initiatives
Initiatives for enhancing the General Meeting of Shareholders
and facilitating the voting rights exercise process• Shareholder meeting notice sent at an early date
Numberof eligible
officers*2

Board of Directors, which makes decisions on it. The
Nomination and Compensation Committee maintains
independence by having External Directors as the
majority and a chair chosen from among them. It functions to provide advice that is objective and effective.

• Voting rights can be exercised via electronic means• Participation in electronic voting platform
Other initiatives for facilitating the voting rights exercise
process for institutional investors• Provision of shareholder meeting notice in English(a summary)

Activities related to IR• Creation of disclosure policy(https://www.corp.i-pex.com/en/ir/policy)• Regular briefings for analysts and institutional investors• IR materials available on the company’s website(https://www.corp.i-pex.com)• Department (personnel) in charge of IR

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Segment Overview

Directors, Audit & Supervisory Committee Members,
and Executive Officers (as of March 29, 2022)
5

External Director (Audit &Supervisory Committee Member)

Junichi
Hashiguchi

6

Date of birth: September 9, 1947
Number of the Company’s shares owned:
10,700Significant concurrent positions outside
the Company
Outside Director of TSUBAKI NAKASHIMA
CO., LTD.
Auditor of MarkLines Co., Ltd.

Career summary

Apr.
July

1970 Joined Nissan Motor Co., Ltd.
1996 General Manager ofPurchasing Department 1 of
Nissan Motor Co., Ltd.
June 2000 Executive Officer, General
Manager of Purchasing
Division of Unisia Jecs
Corporation (currently Hitachi
Astemo, Ltd.)May 2004 Vice President, General
Manager of Sales Department
of KIRIU CORPORATION
June 2006 Senior Vice President, General
Manager of Sales Department
and Purchase Department of
KIRIU CORPORATION

6

4

2

1

3 5 7

Date of birth: March 24, 1955
Number of the Company’s shares owned:
1,800

Shuji Niwano

Career summary

7

External Director (Audit &Supervisory Committee Member)

External Director (Audit &Supervisory Committee Member)June 2009 President and Representative
Director of KIRIUCORPORATION
June 2014 Chairman and Representative
Director of KIRIUCORPORATION
Mar. 2016 Director of the Company
Mar. 2017 External Director (Audit &Supervisory Committee
Member) of the Company(to present)
Mar. 2019 Outside Director of TSUBAKI
NAKASHIMA CO., LTD. (topresent)
Mar. 2022 Company Auditor of
MarkLines Co., Ltd. (to present)

Apr. 1977 Joined NEC Corporation
June 2003 General Manager of IR Office,Finance Division of NEC
Corporation
May 2007 General Manager of
Accounting Division of NEC
Mobiling, Ltd. (currently MX
Mobiling Co., Ltd.)
June 2009 Director, Executive Officer andGeneral Manager of
Accounting Division of NEC
Mobiling, Ltd.

Apr.

2012 Director, Managing Executive
Officer of NEC Mobiling, Ltd.
2014 Director, Managing Executive
Officer and General Manager
of Finance, Accounting and
IT Division of MX MobilingCo., Ltd.
Mar. 2016 Full-time Auditor of theCompany
Mar. 2017 External Director (Audit &Supervisory Committee
Member) (to present)

Feb.

Date of birth: August 2, 1966
Number of the Company’s shares owned:—

YoichiWakasugi
Career summary
Apr.
Apr.

Directors
1

President, CEO

Takaharu
Tsuchiyama

Date of birth: April 29, 1959
Number of the Company’s shares owned:
40,200Significant concurrent positions
outside the Company
Chairman of I-PEX Precision Mold &Plastics (Shanghai) Co., Ltd.

3

Board Member, Managing
Executive Officer, Chief Operating
Officer Operation Director of
Electronic Components &Devices Div.

Apr.
Apr.

2007 Chief Components Unit Officer
2009 Chief Automobile Components
Unit Officer
Mar. 2013 Appointed Senior Vice
President
Jan. 2017 Group Manager ofComponents Business Group,and Chief Automobile
Components Unit Officer
Jan. 2019 Chief Sales Div. Officer
June 2019 Appointed President
Jan. 2022 Appointed President, CEO (topresent)

Date of birth: August 22, 1963
Number of the Company’s shares owned:
6,800

Apr.
Nov.
Mar.

June
Mar.

Mar.

4

1979 Joined Daiwa Iron Works Co.,
Ltd.
1983 Joined the Company
1998 Operating Director of
Production Technology
Division
2001 Appointed Director
2002 Operating Director of
Semiconductor Equipment
Division and General Manager
of R&D Dept. Division 32005 Operating Director of
Semiconductor Equipment
Division
2007 Chief Equipment Unit Officer

Board Member, Executive Officer,
Chief Strategy Officer Corporate
Planning Div. Director

Sept. 2010 Deputy Supervisor on
Business, and Chief R&D Div.
OfficerMar. 2013 Appointed Senior Vice
President
Apr. 2013 Chief R&D Div. Officer, and in
charge of Precision
Components Dept. andEquipment Dept.
Jan. 2015 Chief R&D Div. Officer
Jan. 2021 Chief Technology Officer (topresent)
Jan. 2022 Appointed Board Member,Managing Executive Officer(to present)

Executive Officer
Operation Director, Equipment
Division

Executive Officer
Sales Director

Executive Officer
Operation Director, Mobility
Components Division

Executive Officer
Supply Chain Director

Yasumitsu Kikuchi

Atsushi Yasuoka

Hiromichi Nakagawa

Tatsuya Konishi

Executive Officer
General Affairs Director

Executive Officer
Operation Director, MFG Solution Division & CEO of I-PEX Global Operations, INC.

Executive Officer
Finance Director

Koji Saito

Tomohiro Nishiyama

Takeshi Shimazaki

Composition and Skills Matrix of the Board of Directors
Name

Date of birth: September 1, 1971
Number of the Company’s shares owned:
100,000

Takaharu
Tsuchiyama

Jan.

Jan.

2017 Deputy Chief I-PEX Unit
Officer
2019 Chief Connector Unit Officer
2020 Appointed Senior Vice
President
2021 Chief Operating Officer ofElectronic Components &Devices Div. (to present)
2022 Appointed Board Member,Managing Executive Officer(to present)

July 1996 Joined the Company
Dec. 2003 Seconded to I-PEX Co., Ltd.
Jan. 2014 General Manager ofMarketing Dept. of Sales Div.
of I-PEX Unit
Jan. 2017 Marketing Div. Director

Board ofDirectors
Attendancerate

President, CEO

100%
100%

100%

Jan.

Reiji Konishi

Jan.

Junichi
Hashiguchi

External Director(Audit & Supervisory Committee Member)

100%

Shuji Niwano

External Director(Audit & Supervisory Committee Member)

100%

YoichiWakasugi

External Director(Audit & Supervisory Committee Member)

100%

Reiji Konishi
Jan.
Apr.

Position and responsibility in the Company

Board Member, Managing Executive Officer,
Chief Technology Officer R&D Div. Director
Board Member, Managing Executive Officer,
Chief Operating Officer Operation Director of
Electronic Components & Devices Div.
Board Member, Executive Officer, Chief Strategy
Officer Corporate Planning Div. Director

Akihiko Hara

Career summaryJan.

May 2008 Outside Auditor of PAL Co.,
Ltd. (currently PAL GROUP
Holdings CO., LTD.)May 2020 Resigned as Outside Auditor of
PAL GROUP Holdings CO., LTD.
Mar. 2021 Appointed External Director(Audit & Supervisory
Committee Member) (topresent)

Executive Officers (excluding those concurrently serving as Board Members)

Kenji Ogata

Akihiko Hara
1984 Joined Daiwa Iron Works Co.,
Ltd.
Aug. 1985 Joined the Company
Mar. 2007 Operating Director of
Electronic Components &Devices Div. of Connector Unit
Jan. 2012 Operating Director of
Electronic Components &Devices Div. of I-PEX Unit
Mar. 2012 Appointed Director

Date of birth: April 2, 1958
Number of the Company’s shares owned:
39,800Kenji Ogata

Apr.

Career summary
Apr.

Board Member, Managing
Executive Officer,
Chief Technology Officer R&D
Div. Director

Career summary

Career summary
Mar. 1982 Joined the Company
Mar. 1997 Operating Director of Tool &Equipment Dept.
June 2000 Appointed Director
Mar. 2002 Operating Director of Tool &Equipment Dept. and General
Manager of R&D Dept.
Division 1
July 2003 Operating Director of
Electrical Components
Division and General Manager
of R&D Dept. Division 1
Mar. 2005 Operating Director of
Electrical Components
Division

2

1994 Registered as an attorney,
joined Oh-Ebashi Law Offices
2001 Partner of Oh-Ebashi Law
Offices (currently
Incorporation of Oh-Ebashi
LPC & Partners) (to present)2018 Executive Officer andMarketing Div. Director
2021 Executive Officer andCorporate Planning Director
Mar. 2021 Appointed Director
Jan. 2022 Appointed Board Member,
Executive Officer, Chief
Strategy Officer (to present)

Management ofcorporate
operations

100%

Note: The list above is not intended to show all specialties and experience of the Directors.

Specialties and experiences particularly expected
Finance,
Manufacturing
Sales andaccounting, andandmarketinglegal affairs
development

Globalexperience

Governance

34

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Compliance and Risk Management
Role of the Internal Auditing
I-PEX has established an Internal Auditing that is independent of divisions involved in business execution.
The office audits the business processes of the divisions
and works to discover and prevent non-compliance andto improve processes.
I-PEX’s administrative division (internal control division) guides and checks the overall Group related tobusiness functions on a daily basis, and the Internal
Auditing (two members), which is directly under thepresident, conducts internal audits, including onsite

Business Risks
audits, and designs and implements the Group’s auditing
system.
In addition, the Audit & Supervisory Committee,
Internal Auditing, and independent auditors coordinate
with each other, reporting and exchanging information
on audit schedules, auditing progress, the status of internal controls, and other matters. They also work to qualitatively improve the internal control division through auditsof it and strengthen the Group’s overall control andsupervisory functions.

Coordination between Audits, Accounting Audits and Internal Audits
External Directors who are Audit & Supervisory
Committee Members attend meetings of the Board of
Directors and other bodies, receive briefings on thestatus of business execution, internal controls, andother matters, and supervise management. In addition,
comprising the Audit & Supervisory Committee, they
review internal audits and audits by the committee

based on audit plans and the auditing system andmethods of the independent auditors, and also receive
reports on the audit findings of the independent auditors and Internal Auditing. The independent auditors
and Internal Auditing also exchange information andopinions and work to further enhance audits.

Strengthening Compliance System
I-PEX has established the Internal Control and Compliance
Committee, which is chaired by a supervising manager
appointed by the Representative Director and made up of
Directors and other necessary personnel, and an administrative office for it directly under the chairperson. In addition, compliance managers are assigned to each division.
We have also established the Code of Behavior for
I-PEX Group Personnel, which is the foundation of ourcompliance system. A CSR handbook containing
excerpts of the code and of the Compliance Reporting
Rules, and other related information is posted on thecompany intranet site and communicated to directors
and employees. CSR study sessions are also held asappropriate as a part of continuing efforts to raise compliance awareness.
In addition, the Internal Auditing conducts compliance audits of the Group from an independent perspective and reports on any compliance-related problems at
the internal audit reporting meeting. There is also awhistleblowing contact point on the I-PEX website, andthrough it we work to uncover fraudulent actions andother non-compliance at an earlier stage.

The following items describe potential risk factors forbusiness expansion by our Group. We have included
matters that we do not necessarily consider as risks forour business, but that we consider important for investment decisions and for investors to understand theGroup’s business activities, in order to actively disclose
information to investors.
Risk

If a major accident, disaster, scandal or other such
event occurs, we establish a crisis management headquarters that is led by the Representative Director andmade up of necessary personnel and takes measures in
response to the crisis. Also, if it becomes necessary toaddress new risks that arise, we promptly assign
responsibility for them to a Director.

Response

Risks regarding
quality

We have built quality systems that are suited to the products of our business divisions and requirementsof our customers based on ISO 9001 and related international standards and continue to make improvements to them. In addition, to prevent quality-related non-compliance with the potential to impact
business continuity, we conduct activities to reduce cases of non-compliance and work to strengthen
quality governance.

Risks of disasters or
accidents

We have created a business continuity plan to fulfill our supply responsibilities for certain products
during a major disaster. We estimate the minimum restoration time, keep track of finished products,
work in process, key materials, parts, and other items and maintain them as decentralized inventory.
Our ongoing crisis management during the COVID-19 pandemic has consisted of launching a COVID-19
response taskforce, holding regular (and ad hoc) meetings, setting internal operating rules as appropriate and implementing them within the company to prevent outbreaks.

Country risks

We address country risks by conducting business continuity planning as a form of risk management
based on local information. Our sites connect with each other every week to update information on
production status and changes in conditions as well as to share information on measures taken in
response. The management status of overseas sites is tracked and monitored for each business groupduring monthly meetings. Production facilities for certain key products are disbursed globally to makepossible mutual complementarity with respect to site risk.

Risks related tointellectual property
rightsIn order to prevent the outflow of technologies when patents on intellectual property have intentionallynot been filed, we certify such non-patented technologies internally as “know-how” and manage it in aconfidential database. Also, in order to prevent non-patented technologies from being unintentionallydivulged, we conduct training for employees involved in handling know-how. In addition, from thestandpoint of respecting the intellectual property of other companies, we actively gather information
related to the current status of intellectual property rights in the Group’s business fields and work toprevent to the fullest extent possible infringement resulting from not accurately grasping that status.

Risks associatedwith large capital
investment

Strict screening is conducted when making large capital investments using a Requisition for
Reimbursement scheme of production Equipment (R.R.E). We also review developments in projects on
long-term delays at monthly meetings of the Construction in Progress Monitoring Committee, with thecommittee, as necessary, instructing the business division involved to address the matter. When there
are no prospects of capitalization or when the asset is capitalized but no longer contributes to production, impairment accounting is conducted on the asset according to fixed standards.

Risk Management System
We created the Internal Manual for Crisis Management,
the foundation of our risk management system, and areworking to fully integrate it into all divisions. Risk management overall is overseen by the General Affairs
Division, which monitors and addresses risks that it
identifies in connection with business execution.

While we understand the possibility of these risks
occurring and try to avoid them while taking action in
the event of their occurrence, investors should deliberate over investment decisions concerning our sharesby reading this page along with the other sections of
this report.

Risks of price fluctuations of raw materials and purchased
components

Risks related toinventory

Main raw materials
For plastic molding materials and metal materials, we take measures to reduce the risk of sudden priceincreases by utilizing off-balance-sheet inventory. For gold, we standardize the purchase price by purchasing in fixed quantities, although going forward we will consider addressing the risk of priceincreases by using derivative transactions that utilize futures markets.
Purchased components
For steel materials used in machinery and electrical and mechanical components, efforts are made to
reduce prices through multi-sourcing, purchasing in lots, overseas procurement and other measures inorder to address risks related to stable procurement and price increases.
Trends in long-term inventory are confirmed at monthly meetings of the Construction in Progress Monitoring
Committee and by the Internal Control and Compliance Committee, which meets every other month. Whennecessary, the committees instruct the business division involved to address the matter concerned.

36

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Financial Information
Six-Year Financial Summary

Operating Results

Consolidated fiscal year

54th

55th

56th

57th

58th

59th

Fiscal year-end

12/2016

12/2017

12/2018

12/2019

12/2020

12/2021Net sales

45,83451,92552,67454,01954,531

66,871

Cost of sales

33,71736,34338,291

38,55037,58444,315Gross income

12,116

15,582

14,383

15,468

16,94722,555

SG&A expense

11,715

12,97813,664

13,962

14,036

15,678Operating income

401

2,604

719

1,505

2,911

6,877

Ordinary income

800

2,509

660

1,382

2,672

7,704

Net income (loss) attributable toowners of parent

157

1,667

–1,882

925

1,151

5,921

Capital expenditure

6,914

11,98010,535

12,765

9,631

10,697

Depreciation

5,477

5,730

5,726

5,578

6,429

6,898

R&D expenses

2,241

2,234

2,530

2,090

2,050

2,077

Operating Performance (Million Yen)

Financial Position (Million Yen)
Current assets

31,09430,10629,34536,03035,925

41,139Total assets

59,17564,92966,82080,421*

81,90891,690Current liabilities

9,112

11,144

13,905

16,46817,991

20,629Interest-bearing debt

6,283

7,767

12,983

17,58017,092

16,735

Net assets

44,681

46,877

43,84549,79549,51556,775

Operating cash flow

4,535

6,805

4,370

5,994

9,195

12,809Investing cash flow

–6,400–10,547–9,296–8,485–6,632–7,946

Financing cash flow

497

792

4,090

7,937

–2,558–3,236

10,964

7,905

6,872

12,182

11,71913,797

9.41

99.73

–112.58

54.83

61.50

316.82

Net assets per share

2,666.11

2,799.15

2,617.79

2,656.10

2,641.63

3,060.94

Dividend per share

15.00

25.00

20.00

25.00

25.00

50.00

Gross income margin (%)

26.4

30.0

27.3

28.6

31.1

33.7

Operating income percentage (%)

0.9

5.0

1.4

2.8

5.3

10.3

Ordinary income percentage (%)

1.7

4.8

1.3

2.6

4.9

11.5

ROE (%)

0.3

3.6

–4.2

2.0

2.3

11.2

ROA (%)

0.3

2.7

–2.9

1.3

1.4

6.8

Shareholders’ equity ratio (%)

75.3

72.1

65.5

61.8

60.4

61.8

Dividend payout ratio (%)

159.4

25.1

–

49.5

40.7

15.8

Per Share Data (Yen)
Net income (loss) attributable toowners of parent

Like with the global economy, economic activity was
restricted by new waves of COVID-19 and the impact of
the semiconductor shortage.
Under such conditions, net sales in the consolidated
fiscal year under review totaled ¥66,871 million, a yearon-year increase of 22.6%, operating income was ¥6,877
million, an increase of 136.2%, ordinary income came to¥7,704 million, an increase of 188.3%, and net income
attributable to owners of parent was ¥5,921 million, an
increase of 414.3%.

Financial Position
Total assets at the end of the consolidated fiscal year
under review increased ¥9,781 million from the end of
the previous fiscal year to ¥91,690 million. The mainincreases were buildings and structures of ¥2,974 million, cash and deposits of ¥2,082 million, machinery,equipment and vehicles of ¥1,894 million, notes andaccounts receivable – trade of ¥1,418 million and workin process of ¥1,181 million. Liabilities increased ¥2,521
million to ¥34,914 million. The main increases were

accounts payable – other of ¥1,601 million, notes andaccounts payable – trade of ¥477 million, and income
taxes payable of ¥350 million. Net assets increased¥7,259 million to ¥56,775 million as a result of anincrease in retained earnings of ¥5,266 million fromrecording net income attributable to owners of parent
and an increase in foreign currency translation adjustment of ¥2,046 million from the impact of foreignexchange rate fluctuations.

Cash Flows

Cash Flows (Million Yen)

Cash and cash equivalents at endof period

In the consolidated fiscal year under review, the global
economy was generally marked by a gradual recovery
as conditions continued to improve in the economies ofdeveloped countries in Europe and North America. At
the same time, the economic outlook remains unclear
due to surges in new cases of COVID-19, a decline inautomobile production caused by the global semiconductor shortage, concerns over deceleration in the
Chinese economy, and other developments.
In Japan as well, some sectors were on a recovery
track, but this was not the case for the overall economy.

Financial Indicators* The major change in net assets in the 57th fiscal year is the result of a capital increase through public offering conducted in December 2019.

Operating cash flow in the consolidated fiscal year
under review increased ¥12,809 million (¥9,195 million
increase the previous fiscal year). This was attributable
to an increase in trade receivables of ¥1,011 million, an
increase in inventories of ¥982 million and an increasein accounts receivable of ¥962 million being more thanoffset by income before income taxes of ¥7,292 million,
depreciation of ¥6,898 million, impairment loss of ¥412
million, an increase in trade payables of ¥368 million,
and consumption taxes refund of ¥735 million, among
other factors.
Investing cash flow decreased ¥7,946 million(¥6,632 million decrease the previous fiscal year) fromthe purchase of property, plant and equipment of ¥7,318
million, purchase of intangible assets of ¥292 million

and purchase of short-term and long-term investment
securities of ¥340 million, among other factors.
Financing cash flow decreased ¥3,236 million(¥2,558 million decrease the previous fiscal year) as aresult of a net increase in short-term borrowings of¥284 million and proceeds from long-term borrowingsof ¥4,800 million being more than offset by repayments of long-term borrowings of ¥5,481 million,
repayments of lease obligations of ¥469 million, repayments of long-term accounts payable – other of ¥1,293
million, dividends paid of ¥655 million, and purchase oftreasury shares of ¥421 million, among other factors.
As a result, cash and cash equivalents at the end of
the period increased ¥2,078 million from the end of theprevious fiscal year to ¥13,797 million.

Investment (Capital Expenditure)
Capital expenditure in the consolidated fiscal year
under review totaled ¥10,697 million and was primarily
for production facilities. In the electric/electronic components business, ¥3,847 million was invested inmachinery and equipment, including molds and automatic machines. In the automotive components business, investments of ¥5,731 million were made inmolds, automatic machines, and other machinery andequipment for the purpose of augmenting production
capacity. In the equipment business, investments of¥81 million were made to maintain production capacity.
Capital expenditures of ¥1,036 million were also madein administrative divisions.

38

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Segment Overview
Review of Operations
generally steady, though they were partially affected byautomakers cutting production due to the global semiconductor shortage. In the equipment business, semiconductor manufacturers actively made capital
investments to increase production, so demand forsemiconductor manufacturing equipment remained at
a high level, and orders increased.
As a result of the above, net sales exceeded the previous fiscal year in all segments and increased overall.

In the consolidated fiscal year under review, net sales
totaled ¥66,871 million, an increase of 22.6% comparedto the previous fiscal year. There was a rapid increase in
telework during the COVID-19 pandemic, and against
this backdrop, in the electric/electronic components
business, strong sales were maintained throughout theyear, centering on connectors for notebook computersand routers.
In the automotive components business, sales were
Consolidated Net Sales

7,704

51,92552,67454,01954,531

2,878

3,163

2,586

2,149

19,457

18,076

20,98229,58921,283Equipment business
Ordinary income
Total

1,382
660

2017

21,524

Automotive components business

2,672
28,529

800

2016

3,877

18,4982,509
26,134

Business Environment ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••(Million Yen)
21,283

While the automotive components business was partly affected toward theend of the fiscal year by automobile manufacturers reducing production due
to parts shortages and supply chain turmoil, among other factors, connectors
used in automotive sensors, LED headlights and other applications generally
remained firm, supported by strong demand for automobiles.

2019

18,4982020

21,5242021

Electric/electronic components business

66,871

1,623

Net Sales •••••••••••••••••••••••••••••••••••••••••

Outlook(Million Yen)

45,834

Automotive Components Business2018

30,14833,884

41,469

2019

2020

2021

The outlook is expected to be uncertain due to shortages
for semiconductors and the spread of new variants of
COVID-19. However, since production activities of automobile manufacturers are expected to recover gradually, we
will strive to expand orders for automotive components,
including automotive sensors and connectors.
In the future, the environment surrounding theautomotive industry will change dramatically, including
electrification, connected cars, and advanced driving
assistance system (ADAS). In this context, we will focus on
research and development of electronic control module
components, high-speed transmission connectors forautomobiles, and battery control systems, thereby contributing to achieving a comfortable and safe mobility society.

Equipment BusinessElectric/Electronic Components Business
Net Sales •••••••••••••••••••••••••••••••••••••••••

Business Environment ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••(Million Yen)

The electric/electronic components business continued to perform strongly
throughout the fiscal year, particularly for connectors for personal computers,
due to the rapid expansion of remote work and other developments in
response to the spread of COVID-19. In addition, connectors used for network
equipment such as mobile routers have also seen an increase in sales, supported by demand relating to staying home. As for HDD-related parts, demand
for large-capacity HDD components for data centers increased as data communications have seen further increases in speed and capacity.

30,1482019

33,8842020

41,4692021

Outlook
We must closely monitor the impact of supply chain
turmoil on production activities. However, since demandfor personal computers and other products is expected
to remain steady due to changes in people’s lifestyles
represented by the “new normal,” we will continue todevelop our strengths in high-frequency and high-speedtransmission technology to provide excellent signal
integrity solutions.
In the future, with the aim of further strengthening ourrevenue base, we will focus on developing and expanding
the sales of connectors used in electrical and opticaltransmission routes supporting next-generation digitalcommunication technology. In particular, by utilizing our
expertise in high-frequency and high-speed transmission
technology, we will promote the development of new
business areas such as data centers, base stations, andother enterprise markets where demand is expected to
grow as communication sees further increases in speed
and capacity, and achieve sustainable growth.
Torque sensors can be used not only in the joints ofhuman-assisting robots, but also as an end-effector
attached to the robot arm to enable automatic insertion ofconnectors, and are expected to be used in a variety ofsituations in the future.

Net Sales •••••••••••••••••••••••••••••••••••••••••

Business Environment ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••(Million Yen)

As for the equipment business, with the continuing grave global shortage ofsemiconductors in sight, semiconductor manufacturers actively invested in
facilities to increase production, and as a result orders for semiconductor-related
equipment including semiconductor sealing devices and automatic taping
machines have increased.

2,586

2019

3,877
2,149

2020

2021

OutlookFor semiconductor manufacturing-related equipment,
semiconductor manufacturers are expected to continue toactively invest in facilities, so we will capture new demandby providing technology, quality, and services that areahead of market needs. In particular, due to the demand for

decarbonization and power saving, as the market for power
semiconductors used for power control and conversion is
expected to expand in the future, we will strive to acquire
new orders through differentiated technologies and customized proposals centered on automotive applications.

MEMS Devices
Outlook
Regarding the MEMS smell sensor that “visualizes” smell,
we commercialized the personal model “noseStick” in
2021, which allows easy measurement of nearby odors byconnecting it to a smartphone. In addition to the existing“nose@MEMS”, we will also look to further cultivate
technology and collaborate with other companies toenable their use in various fields such as food, nursing
care, and manufacturing, and aim to create new markets.

40

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I-PEX Inc. Integrated Report 2022

Overview

Value Creation Story

Value Creation Strategy

Management Foundation

Financial Information

Segment Overview

Corporate Overview/
Stock Information

Corporate Overview/
Stock Information (as of December 31, 2021)
Global Network

Corporate Overview
01

02

Tokyo Branch*

Head Office/Kyoto Plant

03
07

04

02

08

11

09

01

05

14

06

I-PEX Inc.

Head office12-4 Negoro, Momoyama-cho, Fushimi-ku,
Kyoto, JAPAN 612-8024

Date of incorporation

July 10, 1963

Paid-in capital

10.968 billion yen

Head countConsolidated: 5,667
Non-Consolidated: 1,972

Main banks

The Bank of Kyoto, MUFG Bank,
Sumitomo Mitsui Banking Corporation,
Mizuho Bank

Shizuoka Office

Tokyo Machida Office

13

10

03

Trade name07

Corporate Website
https://corp.i-pex.com/en

04
06

Heiwa Laboratory

05

08

12

09

10

Ogori Plant

15

11

12

Okinawa Plant

Tachiarai Plant

Onojo Plant

13

Yamanashi Plant

I-PEX Campus

Osaka Branch

14

I-PEX Shimane Inc.

15

DJ Precision Co., Ltd.

I-PEX Global Operations, Inc.

* closed May 2022

Stock Information
Stock exchange listingFirst Section, Tokyo Stock Exchange (Prime Market as of April 4, 2022)

Stock code

6640

Shareholder registryadministrator

Mitsubishi UFJ Trust and Banking Corporation

Total number ofissuable shares

35,000,000

Total number ofissued shares

18,722,800

Number of shareholders

7,927

Major shareholders (Top 10)

36
37

23
31
32

21

29

22

27

30

25

DMC Co.
Custody Bank of Japan, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
Employees’ Stockholding
Custody Bank of Japan, Ltd. (Trust Account 9)
Daiki Konishi
SMBC Nikko Securities Inc.
Japan Securities Finance Co., Ltd.
DFA INTL SMALL CAP VALUE PORTFOLIO

16
33

28

26

Number ofshares held
6 , 8 2 1 , 4 00
1 , 6 4 8 , 1 00
1 , 5 6 6 , 000
5 68 , 3 80
4 7 4 , 3 00
3 00 , 000
2 2 1 , 7 00
1 7 3 , 9 00
1 4 9 , 9 00
1 36, 7 50

Shareholder name

34
24
17 20
18 35
19

JP MORGAN CHASE BANK 385781* The Company owns 199,866 shares of treasury stock, but these have been excluded from the above table.
Treasury shares (199,866 shares) have been deducted from the shareholding ratio.

Overseas production bases
16

17

18

19

20

21

Share Distribution by Owner Category(Unit: 1,000 Shares)

Alabama Plant, USA

22

Yishun Plant, Singapore

23

Woodlands Plant, Singapore

24

Johor Bahru Plant, Malaysia

25

Bintan Plant, Indonesia

Treasury shares

Shanghai Plant 1, China

199

26

1.0%

Finance institutions
4,408

Securities companies

Individuals, etc.
Shanghai Plant 2, China

Dong Guan Plant, China

Laguna Plant, Philippines

Chonburi Plant, Thailand

Ho Chi Minh Plant, Vietnam

4,871

Overseas sales offices

26.0%

707

Foreign corporations, etc.

27 Austin, USA

28 San Jose, USA

29 Detroit, USA

30 Shanghai, China

31 Hong Kong, China

33 Korea

34 Taiwan

35 Singapore

36 France

37 Germany

32 Shenzhen, China

1,540

23.6%

8.2%

3.8%

Other companies
6,994

37.4%

Shareholding
ratio (%)
36.8
8.9
8.5
3. 1
2.6
1 .6
1 .2
0.9
0.8
0. 7

42

I-PEX Inc.
12-4 Negoro, Momoyama-cho, Fushimi-ku, Kyoto, JAPAN 612-8024
Tel: (81) 75-611-7155
https://www.corp.i-pex.com/en