CSR Report 2023

Financial and

Corporate Data

Business Principles

We provide the best-ever products and services for our customers through Meiko's manufacturing, thus contributing to the creation of happiness in employees and society.

Our profile

-Contents-

Introduction

Positioning of This Report

We produce cutting-edge PCBs for automobiles, smartphones, IoT devices, industrial equipment, etc. and design, develop, mount, and assemble electronic

01 Business Principles

Publications

Corporate Report

Securities Report

devices on a global basis.

Convocation Notice

Company Brochure

SSD

Value Creation

1. Business Portfolio

1. PCB Business Topics
2. EMS Business Topics
3. Message from the President & CEO

1. Outside Director's Message

ESG Management

1. Medium-termBusiness Plan

1. Sustainability Policy

1. ESG Initiatives

1. Governance (Management Report)

Financial and Corporate Data

1. Financial and Non-financial Data

1. Meiko's Global Network

The documents shown in the above table can be browsed on our website. https://www.meiko-elec.com/english/

To the Readers of This Report

◆Editorial Policy◆

This integrated report was issued for the purpose of deepening the understanding of all stakeholders, including shareholders and investors, about our mid/long-term activities.

Going forward, we will continue our efforts to meet requests from all stakeholders and have them deeply understand our business activities.

◆Applicable Period◆

April 1, 2022 to March 31, 2023

◆Coverage◆

Meiko Electronics Co., Ltd. and affiliated companies

◆Caution Regarding Forecasts◆

This report mentions our future outlook and plans based on currently available information.In particular, the PCB industry is faced with a variety of risks and uncertainties due to changes in raw material prices, diverse customers' market trends, changes in technological

trends, exchange rate fluctuations, changes in tax and other systems, natural disaster, international conflicts, COVID-19, etc. Accordingly, actual performance may be different from our expectations.

◆Reference Guidelines◆

The Ministry of Economy, Trade and Industry; Guidance for

Comprehensive Disclosure and Dialogue for Co-creation of Value・IIRC/

IIRC; International Integrated Reporting Framework

Task Force on Climate-related Financial Disclosures (TCFD)

Financial and

Corporate Data

Value Creation Process

Sources of Competitive Advantage

Business

Risks and opportunities Value we create

Smartphones

Social significance

Resolution of social issues

Smart

factoriesAutomobiles

AI

PCB Business Topics

Tendo Factory

The Tendo Factory is Meiko's fifth domestic PCB factory. Located in the Town of Kahoku adjacent to Tendo City is our largest factory in Japan, the Kahoku Factory. There, we mainly engage in the production of automotive PCBs.At the Tendo Factory as well, we will produce automotive PCBs, through- hole multilayered PCBs for high-

speed communications, and HDI PCBs. This factory was planned as an eco-smart factory. For its energy, natural gas (LNG) will be used alongside a solar power generation system, making the Tendo Factory environmentally-friendly. The inside of the factory is designed so that conveyance is conducted using Automatic Guided Vehicle (AGV), with the insertion of materials into production equipment performed by robots as well. Additionally, through linkage with an ERP that centralizes production equipment, we computerized materials input/output processing, inventory management, manufacturing instruction sheets, etc. to enable us to reduce defects caused by human error. We will also realize the establishment of a high level of traceability. Through this endeavor, we anticipate a 30% improvement in production over our preexisting factories. Eventually, the Tendo Factory will have triple the production capacity of the Kahoku Factory.

EMS Business Topics

EMS/electronic device development and manufacturing

Our EMS Business is characterized by the proposals we make for one-stop solutions that span design/development and finished product assembly. We handle design and development in line with customer needs, be they for electrical circuit, software or mechanical design. For the handling of the stages between PCB manufacturing and mounting/assembly, in Japan, we manufacture PCBs at our Kahoku and Tendo Factories and mount/assemble them at Meiko Embedded Technology in order to limit transport distances and complete the PCBs in Yamagata Prefecture to reduce lead times. At our Vietnam Factory (Thach That), a PCB factory and EMS factory have been built adjacent to each other within the same site, making the factory capable of one-stop solutions in every sense of the word. Normally, design, development, PCB procurement and mounting/assembly require business dealings with an individual supplier for each. Meiko, however, has a system in place that enables it to take on customer needs in their entirety.

Automation of production

Simplification of inspections

AOI system utilizing AI

09

Automation of logistics

Automation of traceability

10

Financial and

Corporate Data

Our social role and significance

Over time, we at Meiko Electronics Co., Ltd. have expanded our business base as well as fulfilled our social responsibility through addressing SDG challenges based on our Business Principles of "We provide the best-ever products and services for our customers through Meiko's manufacturing, thus contributing to the creation of happiness in employees and society."

We live as residents of the irreplaceable Earth. Our lives as those residents have become more sophisticated and comfortable over time. However, we believe that these lifestyles should not be at the expense of global warming, ocean pollution, natural disasters, food problems, human rights issues, and the depletion of natural resources around the world. Currently, the world has been addressing such challenges, with rapid progress being made in endeavors aimed at realizing a sustainable society such as green transformation (GX) and digital transformation (DX). Amid this situation, corporations are being called upon to fulfill a greater role.

While placing sustainable management at its core, based on its purpose of growing and contributing to society through challenging the evolution of electronics, Meiko will continue pushing forward with its contributions to the promotion of social innovation through the evolution of electronics and endeavoring to do its part to address social issues through its business activities, including achieving carbon neutrality and efficiently using resources and energy to respond to climate change as well as addressing human rights and the way employees work and preserving employment.

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Business environment

We first publicly announced our Medium-term Business Plan in Fiscal 2022. However, due to factors such as surge in energy prices triggered by Russia's invasion of Ukraine, soaring procurement prices resulting from progression in the yen's depreciation caused by monetary

Current Meiko headquarters

tightening in Europe and the US, and sluggishness in demand because of the COVID-19 pandemic, we revised that plan for the period starting in Fiscal 2023 and ending in Fiscal 2026. As for the situation surrounding orders in the immediate term, while there has been a moderate trend of improvement, we believe there is a need for us to tackle measures for recovering from delays in our plans.

Firstly, in our leading products of automotive PCBs, in order to bolster orders for xEV PCBs, we will expand orders from Japanese customers as well as endeavor to expand transactions with European and US customers. For smartphone PCBs, in addition to expanding orders of HDI PCBs for high-end smartphones, we will proceed to work on expanding sales of flexible PCBs. In our EMS Business, our initiatives for M&As and so forth have yielded success in the form of gradual growth in net sales. We are currently working on expanding sales from automotive transactions as we look towards further net sales growth. Additionally, it is looking increasingly like sales to customers in our PCB Business will gradually go up. In our Semiconductor Package PCB Business, we have been preparing to produce FC-BGA PCBs at our Ishinomaki Factory No.2 and memory package PCBs at our Vietnam Plant No.3. However, we forecast that a delay in our plans of roughly one year will arise due to sluggish demand for semiconductors. During this time as well, we have been pushing forward with the likes of customer certifications and improvements to production preparations and yields at our factories.

To boost profitability, we are implementing automation and manpower-saving for the sake of promoting cost reduction measures and improving productivity. To give an example, at the Tendo Factory that we completed construction on in October, we have made great strides in automating production, and have successfully saved manpower by 30% over our existing factories. At our existing factories, we are engaged in various measures with the aim of improving productivity and yields.

Environmental initiatives

As environmental issues grow increasingly serious, initiatives for responding to climate change and transitioning to a decarbonized society are becoming important management challenges. For that reason, we will set environmental targets and push forward with CO2 reductions as we follow a roadmap. As our environmental targets, we have adopted the reduction of CO2 emissions per rate of consumption per production volume in Japan by 50% between Fiscal 2021 and Fiscal 2030 and the achievement of zero emissions by Fiscal 2050. Looking at a breakdown of our CO2 emissions, the ratio of CO2 emissions from production activities (Scopes 1 & 2) is 42%. That from purchased products and services (Scope 3) is 58%. As the majority of our Scope 1 and Scope 2 CO2 emissions are from the consumption of electric power, we worked on reducing those emissions largely through cutting down on standby power and switching production equipment to energy-saving devices.

One example of a concrete initiative in this regard is the design of the Tendo Factory, which was completed in October, as a smart factory based on expertise on energy-saving. For Scope 3, to address a challenge present in our overall supply chain, we have been collaborating with suppliers to promote initiatives to reduce CO2.

DX initiatives

At our preexisting factories, operators performed the moving of raw materials and work in process and input of production results. At our latest Tendo Factory, the moving of raw materials and work in process is conducted with the use of AGV. Additionally, robots are utilized to supply work in process to the production equipment. Production orders are optimized using IT systems, and production results are automatically prepared based on movement data from production equipment. Also, we introduced IoT devices to monitor production equipment and help improve productivity and reduce losses, and worked towards lowering the burden on the environment through the likes of energy-saving and waste treatment. As a result, we forecast productivity improvements of 30% over our existing factories. These initiatives have enabled us to realize manpower-saving and are also serving to address the decline in the working population as well as social issues such as the reform of the way employees work.

Furthermore, we have been conducting a myriad of initiatives for our existing factories, such as performing task analysis using AI cameras developed in-house and pushing forward with productivity and yield improvements. Presently, our core systems differ between Japan and overseas. This presents a bottleneck when the site of work changes.We will go on to promote DX with "integration" as a keyword from that standpoint as well.

Human resource empowerment initiatives

Meiko leaves the operation of its overseas factories in the hands of local staff. Our ability to do so is the result of establishing a cycle of dispatching local staff to Japan to study manufacturing and having them engage in factory operation following their return. This cycle has been in place since the startup of our Guangzhou Plant in 2000. Alongside the expansion of Meiko's efforts to develop its businesses globally, more and more individuals representing a number of nationalities are active in Japan as well. Be it Vietnam, China or Japan, our human resources capable of working in any country have steadily grown in number. Going forward, we will continue to further expand upon such initiatives.

In terms of recruitment, as the ratio of new graduates and mid-career hires is roughly 50% each, there is no discrimination between the two categories. As such, a corporate climate of working in a free environment is in place. While it goes without saying that employees are properly called upon to demonstrate work skills, we do not discriminate against them whatsoever on the basis of nationality or gender provided that they are capable. Given our need to further advance our global business development efforts in a strategic fashion, diversity could be considered an essential choice for our company. We strive to ensure that diverse human resources are able to fully demonstrate their abilities without discrimination based on race, creed, religion, nationality, disability, or the like. We promote the creation of a comfortable working environment that is safe, secure, hygienic for all our employees, respects their diversity, and allows them to develop.

As a result, with gender as an example, the ability for both men and women to approach their work without worrying about their gender has become one of Meiko's strengths. Such a positive working environment is surely part of our company's value. Of course, it is true that there was a long way to go in terms of internal education to establish such an environment. Unless we make a steady effort to bridge the gap of awareness among our employees, diversity cannot be achieved. It is important to continue to make efforts to gradually change the mindset of onsite workers until "diversity as a matter of course" can be achieved without worrying about various differences. If we aim for further improvement in work performance, we need to reform the way we work, including telecommuting.

We are currently working on improvements in all areas to enhance the quality of our work. For example, should productivity improve by 30%, we may be able to boost net sales up to double the amount. In our eyes, that would enable us to sufficiently best our global competition with the same headcount. In the future, we would like to motivate our employees to work harder, and we would like to provide generous support, including salary consideration, to new hires and other young employees.

Shareholder returns and communication with investors

Meiko views the improvement of profits for its shareholders as one of its priority management challenges. For the time being, we will prioritize investment for expanding our corporate scale and focus on growing our net sales and profit amounts. With a target dividend payout ratio of 15%, we will endeavor to increase dividend amounts as well as expand amounts of profit.

In corporate management, communication with shareholders and investors is indispensable. Meiko conducts initiatives that incorporate management by arranging for opportunities for our officers to hear the opinions of shareholders and investors at shareholder's meetings, financial results briefings, individual interviews, and other forums.

Through the provision of PCBs, we at Meiko have made investments, expanded employment, and stably delivered products bearing outstanding quality to our customers while simultaneously paying taxes in countries where we have placed factories and making local contributions in various ways. Going forward, we will keep on growing and contributing to society through challenging the evolution of electronics.

Financial and

Corporate Data