SUMIDA CSR REPORT2018

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Sumida is a global leader in the design and manufacture of coil-related

components and modules. Specialising in custom design solutions,

Sumida’s products are used in a wide range of applications from

consumer electronic devices through to home appliances, automotive

electronics, green energy solutions, industrial electronics and medical

healthcare devices and equipment.

Our core product scope includes components and modules such as

power inductors & transformers, automotive keyless antennas, xenon

ignitor modules, mobile communications equipment, radio frequency

identification tags (RFID), power inverters for solar power generators

and components for industrial lighting solutions. In addition, we also

provide the complementary products and services such as magnetic

materials, ceramics, flexible connectors and electronic manufacturing

services (EMS).

With over 60 years history in Asia and 80 years in Europe, our expertise in

coil-related manufacturing, as well as technical design, allows us to offer

our customers both customised design solutions as well as off-the-shelf

products. In addition, our comprehensive manufacturing capabilities

and footprint allow us to flexibly adjust product volumes and locations

as required while maintaining consistent high-quality standards. This is

why we pride ourselves on our ability to cultivate long-term relationships

with our customers built on trust.

About Sumida GroupContents

Quick Facts

Company Philosophy

Core Strengths & Technologies

Products by Application

Major Product Categories

Financial Performance Review

Global Network

Sumida’s Stance on CSR

Management Policy

Growth Strategy

Sumida Community

Environmental Philosophy

Green Procurement

Corporate History

At Sumida we pride ourselves on the global community of knowledge and expertise we have

created and developed over the years. With our sales and business development network we

have global insight into the needs of the industry, with our focused business units we tap into

key market segments and with our global manufacturing footprint and diverse production

technologies, combined together, we provide our customers with the solutions they need, when

and where they need it. This is our collective pride.

With our humble beginnings as a coil manufacturer for transistor radios in Japan, we have grown

both in product diversity and in global reach. We now are able to support and supply our services

to global customers with a wide range of products which span from basic coil components to

more complex value-added modules.

Our mission is to provide our customers with electronic solutions which enable them to develop products

and technologies which improve our quality of life - to make life easier, safer, healthier, more pleasurable and

more ecological. Be it in consumer devices, automotive related comfort and safety systems, solutions for a

cleaner brighter future, automation or devices to help us with our healthy well being. We constantly challenge

ourselves to be better at what we do and anticipate changes in our environment so that we may adapt quickly

and responsibly, maximizing the use of the finest resources at the best locations to meet the needs of our

times.

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Holding Company: SUMIDA CORPORATION; Tokyo Stock Exchange, First Section (code:6817)

Representative (CEO): Shigeyuki YawataHeadquarters: Harumi Island Triton Square Office Tower X 14/F,

1-8-10 Harumi, Chuo-ku, Tokyo, 104-8547, JapanTel: +81-3-6578-2470 Fax: +81-3-6758-2472

Date of Incorporation: January 16, 1956Capital: 10,150 million JPY (as of December 31st, 2017) Consolidated Net Sales: 90,153 million JPY (as of December 31st, 2017) Employees: 20,606 (as of December 31st, 2017)R&D Centers: China, Japan, USA, Germany, CanadaWorldwide Sales Offices: China, Japan, Hong Kong, Singapore, Taiwan, Thailand, South

Korea, USA, GermanyManufacturing Sites: Japan, China, Mexico, Vietnam, Thailand, Germany, Romania,

Slovenia, USABusiness Description: Research and development, design, manufacture and sales

of electronic components and modulesURL: http://www.sumida.com

“Connecting Technology to People” Our vision is to lead in the industry as a timeless company and to provide solutions

that help to power and inspire the world with innovations that fulfil the whims of our imagination.

- Shigeyuki Yawata, CEO

Quick Facts

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Winding is the core technology of Sumida, complemented by 7 other basic technologies.We use a balanced blend of experiences to design and manufacture high quality products.

A COMPETITIVE SOLUTION PROVIDER

With over 60 years of experience as a leader in key markets within the electronics industry we are a solution provider, capable of the design and manufacturing of products ranging from basic coil components through to complex value added modules.

A LEADING EXPERT IN COIL-RELATED TECHNOLOGIES

We are a technical specialist in coil-based manufacturing technologies, which allows us to provide a full scope of professional coil-related design & production capabilities to our customers.

GLOBAL FOOTPRINT - GLOBAL REACH, LOCAL SUPPORT

Our Sales and R&D network allows us to be able to provide local advisory and technical support services to our customers no matter where they are, to manufacture products at locations which best suit customer needs and to flexibly adjust production resources as customer requirements change, all while maintaining the high quality standards and business integrity the industry has come to expect from a global leader in the market.

Magnetic Metal

Capacitor Ceramic

MnZn Ferrite

NiZn Ferrite

Metal Powder Cores

Soft Magnetic Composites

Flexible Metal

Product Design

Magnetic Simulation

Circuit Simulation

Stress Simulation

Circuit Design

PCB Layout

Machine/ Equipment

Development

Laser Sealing

Laser Blasting

Laser Peeling

Tooling Design

Tooling Processing

Mold Flow Simulation

Alfa Winding

Edgewise Winding

Litz Wire Winding

Orthocyclic Winding

Toroid Winding

Air Coils

Injection Molding

Insert Molding

Low-P Overmolding

Overmolding

Pin Draw Molding

Metal Injection Molding

Vacuum Potting

Plasma treatment

Ferrite Injection Molding

Coating

Stamping

Electro-plating

Soldering

Arc Welding

Laser Welding

Pulse Heat Welding

Resistance Welding

Ultra Sonic Welding

Pressfit Pin (pin to PCB)

Crimping, Pinning

Board to Board Connection

Reliability Test

Transmission X-ray & CT

Scan

SEM/EDX

Ion Chromatography

Thermal Analysis

Differential

Thermographic / DTA

Full Automatic Scanning

Microscope

Inductive Coupled Plasma

Permeability Measurement

Over Temp

Laser Diffraction Meter

Our Core Strengths

& Technologies

DESIGN & APPLICATION MACHINE & PROCESS TOOLINGMATERIAL

WINDING PRECISE PROCESSING CONNECTION EVALUATION & TESTING

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Automotive Electronics Industrial Electronics

Consumer ElectronicsElectronics for HEV/EV/PHEVs

K E Y P R O D U C T A P P L I C AT I O N S

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POWER & RF INDUCTORS

Surface Mount, Through Hole, LPF Coils for Digital Amplifiers, RF Chip Inductors

Power Inductors for Automotive Electronics

POWER TRANSFORMERS & REACTORS

Surface Mount, Through Hole, PoE Transformers, Switching Mode Power Supplies, Reactors, Wireless Power Transfer Coils

SIGNAL MAGNETICS

RF/Communication, RFID, Antennas, Others

EMC COILS & CHOKES

AC Powerline, DC Powerline, Normal Mode Chokes, Common Mode Chokes

SENSORS & ACTUATORS

Rotor Position Sensors, ABS Coils, Solenoid Coils

Our Product Portfolio

POWER MODULES

POL power conversion modules for communications & industrial applications, DSP & FPGA power systems, & other high density distributed power systems

COMPONENTS FOR MEDICAL EQUIPMENT

Network Isolation Transformers, Isolation Transformers

AUTOMOTIVE MODULES

Xenon Ignitors, Choke Modules for Inverters, Module Components, Component Carriers, Power Conversion, Components & Modules

MAGNETIC MATERIALS, CERAMICS, EMS & FLEXIBLE CONNECTIONS

Ceramic based Passive Components , Electronic Manufacturing Services (EMS), Flexible Flat Cables

unit: millions2013 2014 2015 2016* 2017*

Net Sales JPY 63,893USD 663.7

JPY 77,563USD 738.7

JPY 86,236USD 714.0

JPY 81,052USD 741.5

JPY 90,153USD 802.9

Operating Income JPY 1,698USD 17.6

JPY 3,345USD 31.9

JPY 4,237USD 35.0

JPY 6,270USD 57.4

JPY 6,217USD 55.4

OIR 2.7% 4.3% 4.9% 7.7% 6.9%

Net Income JPY -2,008USD -20.9

JPY 1,346USD 12.8

JPY 2,032USD 16.8

JPY 3,666USD 33.5

JPY 4,504USD 40.1

*IFRS

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Sales by Market Sales by Region

Production Site Country Est.

Pood

uctio

n Ar

ea (m

2 )

No.

of

Empl

oyee

s*

Out

put/

mth

(m p

cs)#

ISO

9001

ISO

1400

1

ISO

5000

1

IATF

1694

9

Panyu (SHK) China 1984 132,000 4,168 36 o o - o

Dongguan Humen (Taiping) China 1991 33,000 2,234 15 o o - o

Nanning (SNM) China 2008 12,000 1,540 31 o o - o

Changde (SCD) China 2010 10,000 1,151 25 o o - o

Ji’an (SJA) China 2010 13,700 1,642 9 o o - o

Panyu (SGZ) China 2011 7,730 927 14 o o - o

Shanghai China 1997 5,000 90 3.1 o - - o

SuQian China 2013 2,500 296 1.7 o - - -

Aomori Japan 1987 1,300 106 0.1 o o - -

Sanada Japan 1970 900 90 0.2 o o - -

Hai Phong Vietnam 2010 7,370 723 12 o o - o

Quang Ngai Vietnam 2015 7,104 878 12 o o - o

Pathumthani Thailand 1989 9,900 361 6 o o - o

Obernzell Germany 1934 6,000 575 7.5 o o o o

Neumarkt Germany 1922 3,000 68 6.5 o o o o

Lehesten Germany 1965 3,800 249 0.7 o o o o

Radeberg Germany 1993 5,700 424 5.0 o o o o

Blejska Dobrava Slovenia 1997 3,900 397 3.3 o o o o

Jimbolia Romania 1998 16,000 1,200 3.2 o o o o

Guadalajara Mexico 1997 6,500 760 4 o o - o

Clarkston, Michigan USA 1954 5,481 170 1.2 - o - o

Searcy, Arkansas USA 1997 2,787 80 0.14 - o - o

OUR PERFORMANCE OUR GLOBAL NETWORK

*Data as of February 2018 #Maximum monthly output in 2017

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Society

Sumida targets business development in areas which help to tackle the global issues the world faces today. For example, our products are used vehicle road safety, medical devices, energy saving & emissions reducing devices; applications which are all increasing in market demand.

The issue of corporate social responsibility (CSR)1 is a top priority for Sumida’s management as it is an important basis for the company’s sustainable growth.

Founded in 1956, Sumida has always strived to adapt responsibly and appropriately to the changes in business environment. As a result, we have matured into a globalized company comprising of talent from a wide variety of backgrounds. The diversity of knowledge and expertise held within our talent pool is highly valued and respected as one of our strongest business assets.

At the same time, having a strong value-based corporate structure is also held with high importance by management. A company or it’s reputation is influenced by the behaviours and judgements of every employee, therefore, to maintain our reputation as a responsible and trustworthy company we ensure that Sumida’s core values and commitment to stakeholders are consistent throughout the organization. These are the ‘genes’ of what makes Sumida a success.

1 CSR: Besides having responsibilities to increase profit and pay dividends while complying with the law, companies also have social responsibilities as a global citizen to tackle environmental issues as well to contributing to the betterment of the community.

Changes in the External Environment

In recent years, the importance of ESG2 perspectives in managing a company’s operations for long-term growth has become widely recognized on a global scale. It is a notion which has been rapidly prevailing mainly among overseas institutional investors.

With the concept of sustainability3 growing increasingly popular, more and more companies are adopting strategies which focus on the social environment. An increasing number of companies have been committed to achieving priority goals, SDGs4 set by the United Nations in 2015, from which they can expect maximum effect.

2 ESG (Environment, Social and Governance): Three perspectives required for company’s long-term growth

3 Sustainability: Possibilities for corporations to continue contributing to economic, social and environmental aspects of human society

4 SDGs (Sustainable Development Goals): A collection of 17 global goals set by the United Nations in 2015 to be achieved by 193 UN Member States by 2030

Sumida’s Stance on Corporate Social Responsibility

Environment

From the aspect of Environment, Sumida continues to fulfill its obligations as a global citizen to protect environment and promote the effective use of natural resources for the livelihood of future generations. We have also been proactively engaged in nature conservation efforts following the requirements set by ISO14001 at our twenty business sites located in eight countries.

The content in the following pages provide further details and serve as an introduction to our CSR-related policies and practices.

The images above show some examples of Sumida employees participating in CSR activities in their local areas.

From left to right: Workshop for children in Japan, donations to monks in Thailand, tree planting in Thailand, clean up

near factory in Japan

Shigeyuki Yawata CEO, SUMIDA CORPORATION

Environmental

Activities

• Online energy monitoring system (Janitza GRIDVIS) – Germany, Romania, Slovenia, Mexico

• Regular internal & external audits and management reviews

• Various energy & water saving as well as waste reduction initiatives (promotional campaigns, projects)

Social /

Community

• Donations to kindergartens, elementary schools, orphanages

• Donations to public health, safety, aid, and emergency organizations

• Regular emergency exercises in cooperation with the community

• Donations to victims of natural disasters

• Internal training on selected topics from our business principles / code of conduct (e.g. whistle blowing,

compliance, harassment)

• Activities organized by employees and supported by management (e.g. recreational activities

(swimming, gym training, festive community events, community clean-up and tree planting initiatives)

• Various health programs for employees (e.g. healthy lifestyle, disease prevention)

• Support of employees advanced education (e.g. MBA)

Youth Education • Technical courses at elementary and secondary schools

• Scholarships for students

• Regular internships and in-company thesis with various universities

• Regular company presentations at education fairs

Research /

Cooperation

Projects

• With universities, research organizations, industrial partners and industry associations for power

electronics applications (energy saving, smart grid), wireless charging, sensor applications, management

training (sales, innovation, lean, logistics), IT & data security

Industry / Other • SUMIDA AG signed the ZVEI Code of Conduct in December 2017

• Alliances with NGOs

Summary of CSR Activities from 2016 - 2018

To realize our mission, we set forth the following seven items as a basic principle of business management and activities.

1. We produce and sell electronic parts used by people throughout the world while quality, efficiency in delivery and cost competitiveness are always recognized world-wide.

2. Our directors and employees respect one another and prioritize the building of strong relationships of mutual trust with our stakeholders.

3. We operate our company with the most suitable locations and employees.

4. We adopt the principle of ability first and do not discriminate based on ethnicity, race, gender, age, belief, religion and/or physical disability.

5. We respect the manners, customs and laws of local regions in all our business activities.

6. As global citizens, we positively participate in environmental conservation.

7. We strive through innovation to develop new products while our management always envisions future generations of technology. We continually challenge ourselves to grow and strive for the better.

The “Sumida Business Principles“ book was established in 2005 to act as a set of guiding principles of our business activities and management. Given to all employees for reference, it is a document that illustrates our mission and values which we have developed since our foundation, while it is not just a set of rules. It is a guidebook to ensure that everyone properly understands what is expected of a member of Sumida and, among other things, to illustrate what Sumida embodies.

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Management Principles

Governance

In terms of Governance7, Sumida adopted a company with committees system in 2003 ahead of any listed company in Japan, aiming to clearly separate supervisory function from execution to operations.

Besides having a high proportion of independent outside directors, Sumida is one of the top listed companies in Japan that maintains the highest percentage of non-Japanese directors, bringing local directors on board from Europe and China where Sumida has solid business bases. We take pride in being Japan’s leading company in corporate governance from the perspective of the strengthened management supervision as well as the ethnic diversity within the board.

7 Governance: In terms of business, governance means corporate governance, which is the system of internal controls by which a company is directed and controlled. Quality of corporate governance is judged among other things based on whether everyone in the company complies with the law, or efficiently executes jobs, or is kept fully informed of the company’s policies.

Sumida has shipped more than 70 million xenon ignitor front lighting modules over the product’s lifetime, that is the equivalent of 35 million cars equipped with Xenon ignitor modules from Sumida.

In Germany, the average car is used for 13,000 km annual mileage and the average lifespan of a car is 8 years.

Xenon front lighting systems save 1g of CO2 per km driven compared to halogen front lighting systems1.

Sumida’s xenon ignitors contribute to a CO2 saving of 3.5 million tons of CO2.

This is the CO2 equivalent2 of a mid-sized town of 50,000 inhabitants for more than 6 years.1 Information from Osram used in their publications2 CO2 equivalent of an average German citizen is 11 tons of CO2

Product Highlight

More examples of Sumida employees participating in CSR activities in their local areas.

Top: Technology for Children Workshop (Technik für Kinder e.V.) in GermanyBottom: Apprenticeship fair in Passau, Germany

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Our Growth Strategy

CSR Goals for the Coming Years

Within the time frame of our current mid-term business plan 2018-2021, we hope to:

• Establish more comprehensive sustainability requirements & review process for our suppliers

• Establish specific environmental targets within our operations

• Further develop internal education programs & activities related to CSR

We strive to continuously improve on ourselves and our business operations to be a responsible leader in our industry and a role model to society at large.

Sumida recognizes the importance of having a strong value-based company culture.

For our healthy and sustainable growth, everyone of our employees behaves in accordance with these company cultures, which comprise of our global common basic values and commitment to our various stake holders.

Our values are the culmination of values which we found to live within our people. Sumida is committed to realize those value development of our talent pool.

Master Plan Stage III - Mid-term Business Plan 2018 - 2021

As the final stage of our Master Plan (2012-2021), our goal is to grow sales and operating income more and more. In addition, further expand on our target markets, product lineup and reinforce our business foundation.

• Further increase our Automotive and Industry business that has driven the majority of our growth in Master Plan Stage I and Stage II. Challenge to increase our Consumer Electronics market related business again.

• Expand our line-up and speed up the growth of our non-coil business.

• Reshuffle and rejuvenate the members of our top management team to prepare for further growth for the period of our next Master Plan.

Our Fundamental Approach to Employees

We continuously work to instill these values into global Sumida through the 3 steps “individual understanding”, “instillation into the organization” , and “practical system application”. Sumida Academy organizes these activities across all regions.

Our Sumida Community

• We regard our employees as our most important resource, and strive to fully appreciate each person’s individual value.

• We aim to be a borderless, transnational corporation in a true sense; we guarantee fair treatment for our employees at all worklocations, and promote teamwork among them.

• We ensure prohibition of discrimination by ethnicity, race, gender, age, belief, religion and/or physical disability.

• We assign appropriate and challenging work to employees according to their ability and evaluate and reward them properly.

• We provide employees with safe, comfortable and productive working conditions so that they can employ their abilities to the full.

• We continuously develop our human resources, encourage employees to exercise their full potential and create relationships where both the corporation and individual can grow together.

• Sumida will assist each employee in fulfilling his/her social responsibilities as a citizen.

Our Committment to Employees

We clearly promise to one of our valuable stakeholders - Employees the following commitment. We aim to realize high level realization of those commitment to our employees via our activities.

Our 8 Core Values

Target Applications / Products:

• Automotive - EV/HEV, Actuators

• Industry - Factory automation, RFID, Medical / Healthcare, Internet of Things

• Consumer Electronics - Metal type inductors

Metal Type Inductors

Electric Vehicle Related Applications

Organic Growth Targets by Market(excluding M&A)

Occupational Health and Safety Policy

Sumida Group recognizes Occupational Health and Safety (OHS) as a corporate social responsibility to protect life and health of all Sumida workers. Ensuring OHS is not only an indispensable factor for building strong relations of trust with our stakeholders that Sumida Group considers a basic management principle, but also the highest priority issue for our business. To secure OHS, Sumida Group works hard to comply with the national and regional laws concerning OHS as well as to reduce the risks of disasters and accidents and to protect employees from developing mental disorder by providing a safe and healthy work environment so that all workers can exploit their abilities to the full.

For example, China (Panyu area) has conducted SA8000 (Social Accountability) for two years and has conducted OHSAS18000 (Occupational Health & Safety management system) for two years and all China factories will pass OHSAS18000 certification in 2019.

HR Development

Growth of each individual results in growth of the company and vice versa, both of them are the essentials for sustainable growth.

One of our commitment to employees is “We continuously develop our human resources, encourage employees to exercise their full potential and create relationships where both the corporation and individual can grow together.”

We have been conducting various training programs globally. When we plan, design, and conduct our training programs, we build-in management commitment to the programs and employees’ eagerness to learn as the key driving force.

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Diversity & Inclusion

Sumida strives to act as Global One to maximize our company’s strength and business potential. We continuously develop ourselves into next level as a global enterprise comprised of people from various talent, expertise, and backgrounds.

One of our commitment to employees is “We aim to be a borderless, transnational corporation in a true sense; we guarantee fair treatment for our employees at all work locations, and promote teamwork among them.”

We foster the appropriate environment for the diversified and inclusive team. Management localization is the important management strategy to maintain our competitiveness.

Sumida has positively embraced environmental protection issues in order to fulfill its social responsibilities as global citizens.

Our determination to protect the environment is specified in the “Sumida Environment Philosophy”. Additionally, each local region has established an “Environmental Policy” and promotes environmental protection activities according to the management system of ISO14001.

Sumida Environment Philosophy

Sumida pledges its commitment to cherishing earth’s irreplaceable natural environment by implementing healthy and continuous policies that positively grapple the issue of environmental protection. We also pledge the efficient use of resources to fulfill our social responsibility as a global citizen by preserving a healthy and natural environment for future generations.

Sumida is committed to:

• Integrating environmental policies, programs and practices into each business as an element of management in all its functions

• Developing, designing and manufacturing products taking into consideration the efficient use of renewable resources, the minimization of waste generation, and the safe disposal of wastes

• Respecting and complying with applicable laws and regulations in local regions concerning environmental issues

• Improving environmental protection measures relevant to its activities on a continual basis

• Providing appropriate information, communication and training to elevate internal and external understanding of its environmental commitments and actions

• Establishing environmental objectives, monitoring progress, evaluating results and defining future actions. These activities ensure the continual improvement in performance of our environmental initiatives

Our Environmental Philosophy

RoHS - Effort Towards Green Products

Sumida carries out its activities to provide products free of environmentally hazardous substances (Green Products) to its customers in cooperation with its suppliers.

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Green Procurement & Our Stance on Conflict MineralsGreen Procurement Policy

We at SUMIDA are committed to the identification and assignment of outside suppliers as our counterpart partners who will support us in achieving our Charter goal of customers’ satisfaction.

Unification

Product production is 100% reliant on overseas Sumida facilities with local procurement of materials and therefore requires an ‘Only One’ globally unified procurement policy across all local production markets.

Fairness

Selection for partnering with suppliers will be done on a open, frank and fair basis for creating business opportunities for both parties, and evaluation criteria for selection will take in to consideration quality, competitive pricing, speed of delivery and environmental consciousness.

Cooperation

The mutual business relationship between Sumida Group and each of its suppliers one based on mutual development and trust, with an understanding of the need for control of confidential information and respect for local social and legal sensitivities.

Guidelines

To procure environmentally-friendly materials such as raw materials, parts, processed goods, and packing materials, from vendors.

1. Criteria of Selection of Vendors:

• EMS: Environmental management system (ISO14001 or as same level as ISO14001)

• Effective utilization of limited resources (REDUCE, REUSE, and RECYCLE)

• Internal environmental audit

2. Criteria of Materials:

• Control of environmental control substances

• Consideration for resource saving

Corporate History

Our History by Product

Conflict Minerals Statement

Reflecting the Code of Conduct in “Sumida Business Principles”, Sumida does not use conflict minerals that originate in conflict-affected and neighboring areas for the purpose of cutting the humanitarian crisis such as violence, plunder, abuse and child labor by rooting out sources of funding for the ongoing conflict.

With the cooperation of suppliers, Sumida is determining if any such minerals are contained in existing products and establishing a framework to ensure they are not used in new products. As much details as possible of the Sumida Group’s survey (based on the EICC/GeSIDD template) will be disclosed to customers.

www.sumida.com

Harumi Island Triton Square Office Tower X 14F, 1-8-10, Harumi, Chuo-ku, Tokyo, 104-8547, JapanTEL: +81-3-6758-2470 FAX: +81-3-6758-2472