Alps Alpine : Summary of Questions and Answers at the 90th Ordinary General Meeting of Shareholders

To Our Shareholders

July 7th, 2023

ALPS ALPINE CO., LTD.

Summarized Questions and Answers at the 90th Ordinary General Meeting of Shareholders

The 90th Ordinary General Meeting of Shareholders was held on Friday, June 23, 2023, and Representative Director, President & CEO Toshihiro Kuriyama and other directors in attendance answered questions from shareholders as summarized here. In order to promote understanding based on accurate information, we have made additions and corrections to some of the figures and other information.

Notes

(Summarized question submitted in advance) The appropriateness of Alps Logistics' 49% equity interest and how it will be handled in the future

(Summarized answer) There are two main advantages to Alps Alpine maintaining a 49% ownership interest. The first is logistics synergy with Alps Logistics as the supply chain becomes increasingly important to our business. The second is the contribution of Alps Logistics' 49% equity interest to Alps Alpine's consolidated profit. In the fiscal year that ended March 31, 2023, it contributed +2.5 billion yen to consolidated income. From Alps Logistics' perspective, we have also heard that having Alps Logistics in our group is having a positive effect on the expansion and growth of their external sales business. Alps Logistics' major customers for external sales include Japanese electronic component manufacturers and our business partners. Since it is the logistics company of the Alps Alpine Group, we have gained the trust of many customers and expanded our business. Thus, we believe that maintaining our current 49% equity interest benefits both us and Alps Logistics, and we do not plan to change our 49% equity interest at the current point in time. That said, we will continue to consider various options that will contribute to increased corporate value for both the Company and Alps Logistics in the future.

(Summarized question submitted in advance) The response to the Tokyo Stock Exchange's guidance for a P/B ratio of more than 1.0-fold

(Summarized answer) Our response to a P/B ratio of less than 1.0-fold, as explained in our Results Briefing materials dated April 28, is to strive to restore market confidence by addressing and alleviating three issues with our business, which are presumably the reasons for the stock price slump, as our top priority this fiscal year. The three issues are (1) doubts about the profitability of our

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module and system business, (2) the inability to identify products to serve as a pillar for our post-smartphone business amidst the commoditization of products for smartphones, and (3) improving the predictive accuracy of financial earnings forecasts. These three issues were explained in the Results Briefing. Our top priorities are to ensure that our module and system business returns to profitability, to ensure the growth of our virtual entertainment business (which will be a pillar of our post-smartphone business), and to achieve the announced figures for this fiscal year. The balance sheet is the denominator of the P/B ratio. As announced in the capital policy of our Second Mid-term Business Plan, we will invest in growth and return profits to shareholders while aiming for an equity-to-asset ratio (that includes net cash) of 50% on our balance sheet based on maintaining our current A rating.

(Summarized question) Changes in Alps Alpine's sales and profits as a result of Alps Logistics becoming an equity-method affiliate

(Summarized answer) Alps Logistics was changed to an equity-method affiliate in the second quarter. As a result, Alps Alpine's consolidated net sales and operating income have decreased by Alps Logistics' portion of net sales and operating income since the second quarter, but 49% of Alps Logistics' net income has been incorporated into Alps Alpine's net profit margin. Net income attributable to the parent will not change.

(Summarized question) Exchange rates for FY2022 and FY2023

(Summarized answer) The assumed exchange rate for FY2022 was 110 yen per dollar, but the actual rate was 134.5 yen per dollar. The assumed exchange rate for FY2023 is 125 yen per dollar.

(Summarized question) What measures are being taken to address the slump in stock prices and what are the prospects for recovery?

(Summarized answer) There are three issues involved in the stock price slump:

1. Doubts about the profitability of our module and system business
2. The inability to identify products to serve as a future pillar for our post-smartphone business amidst the commoditization of products for smartphones, and
3. Improving the predictive accuracy of financial earnings forecasts

In contrast,

• Ensuring that our module and system business returns to profitability

• Ensuring the growth of our virtual entertainment business (which will be a pillar of our post- smartphone business), and

• Achieving the announced figures for this fiscal year

will restore market confidence and lead to increased corporate value this year. We are having difficulty overcoming cost increases due to inflation, but we are acquiring future business. ITC101 (becoming an "Innovative T-shaped company" with an operating margin/ROE of 10%

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and operating income in the amount of 100 billion yen in FY2027) is our mid- to long-term goal. We will achieve ITC101 by expanding our business in the future, which will lead to an increase in our stock price.

(Summarized question) Business for the virtual entertainment market and future development to reach the sales target of 50 billion yen

(Summarized answer) Alps Alpine's main products are analog joysticks and Haptic® reactors, which are tactile devices. Our share of the analog joystick market declined for a time due to cost competition with manufacturers overseas, but we expect to gain an overwhelming share in providing products to major companies in the game industry since we have won their trust in terms of durability, responsiveness, and quality. Haptic® reactors and our other existing products have been well received. Spurred by that fact, we will provide our products to the game industry as well as to the metaverse and virtual reality and augmented reality market, and we will continue our efforts to achieve sales of 50 billion yen by 2027.

(Summarized question) Human resource efforts

(Summarized answer) Alps Alpine's management of human capital promotes diversity by emphasizing the three aspects of allocating man-hours, improving individual skills/reskilling, and fostering a mindset (improving engagement with the Company). In hiring, we are working to increase the ratio of non-Japanese and female hires. Since our development site is located in the Tohoku region, recruiting excellent human resources is difficult both throughout Japan and also globally. Accordingly, we will promote the hiring and retention of human resources by improving working conditions by steps such as constructing a new R&D building at the Sendai R&D Center (Furukawa), promoting telework, and creating a comfortable workplace regardless of gender, and creating conditions so that employees can work from anywhere.

(Summarized question) The future outlook on borrowing (interest-bearing debt)

(Summarized answer) Alps Alpine is focused on balancing net cash (real cash on hand) and interest-bearing debt. Alps Alpine currently has approximately 120 billion yen in interest-bearing debt, which we balance by having approximately 120 billion yen in cash and deposits, and we do not intend to unilaterally worsen our net cash position.

(Summarized question) The budget for R&D expenses in FY2022 and results

(Summarized answer) The budget for R&D expenses in the last fiscal year was 34.9 billion yen, and the actual amount was 31.9 billion yen. In the current fiscal year, we expect to invest 39.0 billion yen in R&D. As a result of the orders we are receiving for new products, we will increasingly develop products connected to cabin controllers in our automotive business and products for the virtual entertainment market in our electronic components business.

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(Summarized question) The substantial decrease in the number of employees (See "(7) Status of Employees" on p. 38 of the [Japanese version of the] Notice of Convocation)

(Summarized answer) The decrease of the workforce by 5,876 employees is the result of changing Alps Logistics and its subsidiaries from consolidated subsidiaries to equity-method affiliates at the end of the first quarter of the current consolidated fiscal year. There are two other reasons for the decrease: labor costs are currently rising by 7-8% mainly in factories overseas, and we are reducing labor through automation and streamlining of manufacturing globally in order to achieve our performance targets. That said, we are enhancing our recruitment of excellent technical personnel, and the number of engineers is increasing.

(Summarized question) Why did you announce the revision of the full-year earnings forecast in the same month as the earnings announcement?

(Summarized answer) Inflation in FY2022 caused material, energy, and labor prices to increase substantially during the period. We attempted to pass through to customers, but negotiations took place after monthly deliveries came out, and the results of negotiations for the second half of the fiscal year were not evident until the end of March after product delivery, so the revised forecast was announced on April 14. We will make speedy decisions in the event of major fluctuations during future periods and we will strive to do better by implementing measures for recovery.

(Summarized request) We would like to see Alps Alpine continue to analyze the factors for its financial results in its Results Briefing materials.

(Summarized question) Differentiation of new products from those of competitors through the combination of software and hardware

(Summarized answer) The key to Alps Alpine's differentiation is to promote a "T-shaped strategy" that combines Alps Electric's vertical "I," furthering possibilities with core devices to enhance product competitiveness, and Alpine's horizontal "I," integrating a broad range of devices and technologies in systems. Since the integration in 2019, our strengths in the automotive business have been our advanced software capabilities and our ability to provide vertically connected sensors, ECUs, and the cloud. This is how we provide value in terms of excitement and safety to customers seeking mobility.

(Summarized question) Measures to improve the Company's module and system business

(Summarized answer) Alps Alpine is able to provide a wide variety of components, so the contention that our attention has been divided is undeniable. In order to orient our products in a single direction, we have specified some of the automotive businesses we were withdrawing from last fiscal year, and we intend to concentrate our management resources to improve our business.

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(Summarized question) Possible downward revision of results for FY2023

(Summarized answer) Due to the nature of business, we cannot rule out the possibility that results will be revised, but we will strive to do better by increasing the accuracy of our forecasts.

(Summarized question) Division of roles between the Chairman of the Board and the President

(Summarized answer) Mr. Izumi, who is scheduled to be appointed as President, will be the CEO and CTO. He will be our chief executive officer and head of technology.

Mr. Kuriyama, who is scheduled to be appointed as the Chairman of the Board, will be a Representative Director and Chairman of the Board of Directors. He will make proposals to the President in his role as management advisor, but the President will make the final decision and implement it, so ambiguity at the top is not a concern.

(Summarized question) The term of office for the Chairman

(Summarized answer) Mr. Izumi is scheduled to be appointed as President. Once he is able to put forward a suitable successor as CTO and focus on management as CEO, the Chairman intends to step down, but the Nomination Advisory Committee will continue to discuss the matter and make a formal decision.

(Summarized question) The Company's response to one of major shareholder

(Summarized answer) We believe discussing our conversations with specific shareholders at a general meeting of shareholders is not appropriate, so we respectfully decline to answer.

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