Basic Policy on the Distribution of Profits

OMRON views its dividens policy as one of its most important management issues, and applies the following basic policy in regard to distribution of profits to shareholders.

1. In order to maximize corporate value over the long term, internal capital resouces will be secured for measures that will increase corporate value. These measures include investments in R&D and capital investments, which are vital to future business expansion.
2. After taking into consideration the required investments for future growth and the level of free cash flow, surplus will be distributed to the shareholders to the maximim extent possible.
3. For dividends in each fiscal year, OMRON´s policy is to enhance stable, uninterrupted profit distributions by taking into account consolidated results as well as indicators including dividends on equity (DOE), which is return on equity (ROE) multiplied by the payout ratio, although this is subject to the level of internal capital resources nenessary. Specifically, OMRON will aim to maintain the payout ratio at a minimum of 20% and make profit distributions with a near-term DOE target of 2%. Note that, OMRON will raise the minimum payout ratio to 25% from fiscal year 2013.
4. Utilizing retained earnings that have been accumulated over a long period of time, OMRON intends to systematically repurchase and retire the Company´s stock to benefit shareholders.