Quarterly Consolidated Financial Statements
Included in the Quarterly Report

Meiko Electronics Co., Ltd.
and its consolidated subsidiaries
For the second quarter and six months ended September 30, 2022
(ENGLISH TRANSLATION)NOTE:This document is an excerpt translation of the Quarterly Report (“Shihanki Houkokusho”) of Meiko
Electronics Co., Ltd. (the “Company”), for the second quarter and six months ended September 30,
2022, filed with the Director of the Kanto Local Finance Bureau of the Ministry of Finance of Japanpursuant to the Financial Instruments and Exchange Act of Japan on November 10, 2022.
Please note that the quarterly consolidated financial statements in this document are a translation of
the reviewed quarterly consolidated financial statements presented in Japanese. The translation of thequarterly consolidated financial statements and notes has NOT been audited by KPMG AZSA LLC,
who reviewed the original Japanese figures.
The Company provides this translation for your reference and convenience only without any warranty
as to its accuracy. In case of any discrepancy between the translation and the Japanese original, thelatter shall prevail. The final decision and responsibility for investments rests solely with the reader ofthis document.

Financial Information
1 Basis of preparation of the quarterly consolidated financial statements
The quarterly consolidated financial statements of the Company are prepared in accordance with the“Ordinance on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial
Statements” (Cabinet Office Ordinance No. 64 of 2007).

2 Review reports
The quarterly consolidated financial statements of the Company for the second quarter (July 1, 2022 –September 30, 2022), and those for the six months ended September 30, 2022, were reviewed by
KPMG AZSA LLC, pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange
Act of Japan.

-1-1 Consolidated Financial Statements(1) Consolidated Balance Sheets
Meiko Electronics Co., Ltd. and its consolidated subsidiaries

Thousands of
U.S. dollars

Millions of yen
March 31, 2022

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Total non-current assets
Total assets

¥

*1

¥

-2-

September 30, 2022

September 30, 2022¥$

10,70035,74910,238
8,074
11,4572,315(165)
78,36819,02642,843
12,767
8,626
15,6434,365(180)
103,090131,387
295,853
88,16359,564
108,023
30,152(1,243)
711,899

25,64441,092
2,445
9,926
3,455
82,56229,09445,951
2,531
17,006
3,683
98,265200,909317,320
17,480117,437
25,433
678,579

304
651
955
6,444
89,961
168,329

6,900
714
7,614
7,909
113,788
216,878

47,648
4,933
52,581
54,611
785,771
1,497,670

*1

¥

*1

$

Thousands of
U.S. dollars

Millions of yen
March 31, 2022

September 30, 2022

September 30, 2022

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors
Provision for share awards
Provision for share awards for directors
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

¥
*3
*3

*3

32,267
216
115
25
2,717
1,275
36,615
109,643¥-3-

24,31928,167
5,962
985
1,064
59
12,47273,028

¥
*3
*3

*3

24,40455,495
6,500
1,898
1,186
3
13,088102,574
33,417
216
145
29
4,480
1,362
39,649142,223

$
*3
*3

*3

168,522383,230
44,886
13,1078,187
20
90,381
708,333
230,762
1,491
999
200
30,936
9,410
273,798
982,131

12,8896,700
28,062(2,186)45,465

12,8896,700
33,837(2,181)
51,24589,003
46,272
233,664(15,060)
353,879

4(42)
13,174(113)
13,023
198
58,686
168,3299(107)
23,427(101)
23,228182
74,655
216,878

60(739)
161,780(697)
160,404
1,256
515,539
1,497,670¥$

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
For the Six Months Ended September 30, 2022
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2021

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on disaster
Business restructuring expenses
Loss related to COVID-19
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

¥

*1

*2

¥

-4-

69,471
57,31012,1616,611
5,550

Six months ended
September 30, 2022¥

*1

81,71069,18912,5217,880
4,641

Six months ended
September 30, 2022$

*1

564,258
477,795
86,46354,412
32,051

22
13
91
231
357

50
4
4,237
304
4,595

346
26
29,2602,102
31,734

327
232
559
5,348

430
65
495
8,741

2,971
451
3,422
60,363

3
10
13

0
－
0

1
－
1

59
24
－
628
18
729
4,632
482
4,150
(40)
4,190

137
60
16
－
－
213
8,528
2,157
6,371
(49)
6,420

949
417
110
－
－
1,476
58,88814,88943,999(334)
44,333¥$

Consolidated Statements of Comprehensive Income
For the Six Months Ended September 30, 2022
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2021

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

¥

4,150

Six months ended
September 30, 2022

¥

(3)
(256)
1,263
26
1,030
5,180
¥

-5-

5,219
(39)

6,371

Six months ended
September 30, 2022

$

4
(65)
10,287
11
10,237
16,608¥

16,623(15)

43,99926(450)
71,03478
70,688
114,687$

114,795(108)

(3) Consolidated Statements of Cash Flows
For the Six Months Ended September 30, 2022
Meiko Electronics Co., Ltd. and its consolidated subsidiaries

Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2021

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors
Increase (decrease) in provision for share awards
Increase (decrease) in provision for share awards for directors
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Insurance claim income
Foreign exchange losses (gains)
Loss (gain) on sale and retirement of property, plant and equipment
Loss (gain) on sale of investment securities
Loss on disaster
Business restructuring expenses
Loss related to COVID-19
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Other, net
SubtotalInterest and dividends received
Interest paid
Proceeds from insurance income
Payments for business restructuring expenses
Payments for loss related to COVID-19
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Purchase of insurance funds
Other, net
Net cash provided by (used in) investing activities

¥

¥

-6-

4,632
3,777
20
(0)
118
(43)
62
11
4
(35)
327
(78)
(173)
56
(10)
24
－
628
(4,983)(3,365)
1,318
(278)
1,316
10
3,338
37
(335)
78
－
(513)
(261)
2,344

Six months ended
September 30, 2022

¥

8,528
4,632
20
(17)
(138)
(59)
30
4
57
(54)
430
(23)
(2,721)
137
－
60
16
－
(1,620)(370)(4,419)
(347)
(324)
(16)
3,806
49
(422)
23
(16)
－
(1,113)2,327

Six months ended
September 30, 2022$

58,88831,985
140
(116)
(951)
(405)
207
28
393
(372)
2,971
(157)
(18,791)
948
－
417
110
－
(11,184)(2,552)(30,514)(2,398)(2,234)(128)
26,285336(2,917)157(110)－(7,679)16,072(4,620)
4
(108)
(100)
11

(10,525)
0
(66)
－
－

(72,678)
2
(453)
－
－

－

(9,312)(64,306)(1)
87(4,727)(1)(1,579)(21,483)(8)(10,913)(148,356)¥$

Thousands ofMillions of yen
Six months ended
September 30, 2021

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease obligations
Purchase of treasury shares
Proceeds from disposal of treasury shares
Dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

¥

*1

-7-

¥

8,541
－
(4,152)
(189)
(956)
0
(520)
2,724
152
493
12,122
12,615

U.S. dollars

Six months ended
September 30, 2022

¥

*1

¥

25,5005,000(3,315)
(141)
(0)
2
(645)
26,401
1,081
8,326
10,451
18,777Six months ended
September 30, 2022

$

*1

$

176,089
34,528(22,892)
(971)
(3)
16
(4,451)
182,316
7,468
57,50072,167
129,667

Notes to the Consolidated Financial Statements
Matters concerning Going Concern Assumption
Not applicable
Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Meiko Electronics Co., Ltd. (the “Company”) havebeen prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Act ofJapan and its related accounting regulations, and in conformity with accounting principles generally acceptedin Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translation of Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside Japan and have been made at the rate of ¥144.81 to $1,
the approximate rate of exchange at September 30, 2022. Such translation should not be construed as
representation that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

Change in Scope of Consolidation or Application of Equity Method(Significant Change in Scope of Consolidation)
In the second quarter of the fiscal year ending March 31, 2023, following the Company’s acquisition of allshares of Meiko Embedded Products, Ltd., the acquired company and its subsidiary, Meiko Embedded
Technology, Ltd., were included in the scope of consolidation.
Only the balance sheets of these companies were consolidated in the second quarter of the fiscal year ending
March 31, 2023.
Changes in Accounting Policies
The Company adopted the Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021) from the beginning of the first quarter ended June 30, 2022. In
accordance with the transitional treatment stipulated in paragraph 27-2 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement, new accounting policies set forth in the Implementation
Guidance on Accounting Standard for Fair Value Measurement will be applied in the future. This has no
impact on quarterly consolidated financial statements.
Changes in Accounting Policies That Are Difficult to Distinguish from Changes in Accounting EstimatesThus far, the Company and its domestic consolidated subsidiaries primarily employed the declining-balancemethod for the depreciation of property, plant and equipment (excluding lease assets) of the Group. This waschanged to the straight-line method for the depreciation from the first quarter ended June 30, 2022.
In line with the overseas expansion of production sites of its major customers, the Group is establishing mass
production bases in China and Vietnam to take in orders for PCBs for automotive and smartphone
applications. Stable product supply has become an issue, due to the shutdown of plant operations and supply
chain disruptions caused by the recent spread of COVID-19. In addition, orders are expected to increase
going forward, owing primarily to an expansion in the electrification of automobiles and 5G/6G compatibility
in the field of communications. The Company is starting to implement large-scale investments into domestic
plants from the fiscal year under review to address these issues.
After reconsidering the depreciation method for property, plant and equipment taking these investments into
account, the decision to adopt the straight-line method of depreciation for property, plant and equipment
belonging to the Company and its domestic consolidated subsidiaries is reasonable and more accuratelyreflects the conditions of Group management given the likelihood that these assets will be stably operated
over the long term, and benefits from the return on these investments are likely to be reaped equally.
In conjunction with this change, in comparison with the depreciation of assets based on the former method,
operating profit, ordinary profit and profit before income taxes for the six months ended September 30, 2022,
rose ¥115 million, respectively.

-8-Specific Accounting Treatments Adopted in Preparing the Quarterly Consolidated Financial Statements(Computation of Tax Expense)
Tax expenses are calculated by reasonably estimating the effective tax rate after the adoption of tax-effectaccounting that is applicable to profit before income taxes for the fiscal year ending March 31, 2023, andmultiplying profit before income taxes for the period under review by this estimated effective tax rate.
Additional Information(Accounting Estimates Relating to the Spread of the Novel Coronavirus (COVID-19))
There are no material changes in assumptions including the future spread and timing of subsidence of
COVID-19 that were stated in “Accounting Estimates Relating to the Spread of the Novel Coronavirus(COVID-19)” from “Additional Information” of the annual report for the fiscal year ended March 31, 2022.

-9-

Consolidated Balance Sheets*1 Amount of allowance for doubtful accounts directly deducted from the amount of assets
Thousands of
U.S. dollars

Millions of yen
March 31, 2022

Investments and other assets･･････････････････････････¥

23

September 30, 2022¥31

September 30, 2022$

217

2 Discounted notes receivable-trade are summarized below:
Thousands of
U.S. dollars

Millions of yen
March 31, 2022

Discounted notes receivable-trade･･･････････････････ ¥23

September 30, 2022¥

19

September 30, 2022$

132

*3 Financial covenants
Consolidated fiscal year ended March 31, 2022
Of short-term borrowings and long-term borrowings (including borrowings scheduled for repayment within oneyear), ¥49,392 million have financial covenants attached under which the breaching of any of the following will
require the accelerated repayment of the obligation in the corresponding funding agreement (when there is morethan one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal
year shall be at least the higher of: (i) ¥20,589 million; or (ii) 75% of the total amount of net assets
recorded in the consolidated balance sheet as of the close of the immediately preceding fiscal year.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.
(4) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year divided by the amount of total net assets less the amount of foreign currency translation
adjustment shall be maintained at 2.5 or less for the fiscal year ended March 31, 2021, 2.3 or lessfor the fiscal year ended March 31, 2022, 2.1 or less for the fiscal year ending March 31, 2023, 1.9 orless for the fiscal year ending March 31, 2024, and 1.7 or less for the fiscal year ending March 31, 2025.
Six months ended September 30, 2022
Of short-term borrowings and long-term borrowings (including borrowings scheduled for repayment within oneyear), ¥60,300 million have financial covenants attached under which the breaching of any of the following will
require the accelerated repayment of the obligation in the corresponding funding agreement (when there is morethan one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal
year shall be at least the higher of: (i) ¥20,589 million; or (ii) 75% of the total amount of net assets
recorded in the consolidated balance sheet as of the close of the immediately preceding fiscal year.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.
(4) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year divided by the amount of total net assets less the amount of foreign currency translation
adjustment shall be maintained at 2.5 or less for the fiscal year ended March 31, 2021, 2.3 or lessfor the fiscal year ended March 31, 2022, 2.1 or less for the fiscal year ending March 31, 2023, 1.9 orless for the fiscal year ending March 31, 2024, and 1.7 or less for the fiscal year ending March 31, 2025.

- 10 -

Consolidated Statements of Income*1 Main items and corresponding amounts recorded as selling, general and administrative expenses are shown below:
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2021

Salaries and allowances････････････････････････････････････････¥
1,153
Provision for bonuses･･････････････････････････････････････ 208
Provision of allowance for doubtful accounts･･･････････････････ (0)Provision for share awards･･････････････････････････････････････68
Provision for share awards for directors････････････････
11
Retirement benefit expenses･･････････････････････････････････････
58
Research and development expenses･･･････････････････
1,243

Six months ended
September 30, 2022

¥

1,285
255
3
30
9
57
1,777

Six months ended
September 30, 2022

$

8,876
1,758
22
210
65
390
12,274*2 Loss related to COVID-19
Six months ended September 30, 2021
In response to requests by the governments of China, Vietnam, etc. concerning COVID-19, the Company
booked a loss related to COVID-19 of ¥464 million, an amount equivalent to fixed costs (personnel expenses,
depreciation, etc.) incurred while operations were suspended at overseas subsidiaries, and ¥164 million forinfection control measures under extraordinary losses.
Six months ended September 30, 2022
Not applicable
Consolidated Statements of Cash Flows*1 The relationship between cash and cash equivalents as of September 30, 2022, and the amounts shown on theConsolidated Balance Sheets are shown below:
Millions of yen
Six months ended
September 30, 2021

Six months ended
September 30, 2022

Cash and deposits･･････････････････････････････････････････¥
12,864¥19,026Time deposits with tenors exceeding 3 months･･････････････････････････････････････････
(249)
(249)
Cash and cash equivalents･･････････････････････････････････････････¥
12,615¥
18,777
Total Shareholders’ Equity
Six months ended September 30, 2021
1 Cash dividends paid
Resolution
Board meeting on May 24, 2021
Common shares
Type of shares ･････････････････････････・･･･・・･･・・・･･
521
Total dividends (Millions of yen) ･････････････・・･･･・･･･
20.00
Dividend per share (Yen)･････････････････････・・・･･････
March 31, 2021
Record date･･･････････････････････････････････・・・･･･
June 10, 2021
Effective date･･･････････････････････････････････・・・･･
Dividend resource･･････････････････････・・･･･・・・･･････
Retained earnings- 11 -

Thousands of
U.S. dollars
Six months ended
September 30, 2022$$

131,387(1,720)129,667

2 Of the dividends whose record date falls during the six months ended September 30, 2021, those dividends whose
effective date fell after the last day of the second quarter
Resolution
Board meeting on November 5, 2021
Common shares
Type of shares ･････････････････････････・･･･・・･･・・・･･
517
Total dividends (Millions of yen) ･････････････・・･･･・･･･
20.00
Dividend per share (Yen)･････････････････････・・・･･････
September 30, 2021
Record date･･･････････････････････････････････・・・･･･
November 30, 2021
Effective date･･･････････････････････････････････・・・･･
Dividend resource･･････････････････････・・･･･・・・･･････
Retained earnings
Note: Total dividends include ¥3 million in dividends on Company shares held as trust assets of the Board Benefit
Trust and the Employee Stock Ownership Plan (J-ESOP).
3 Significant changes in shareholders’ equity
In accordance with a resolution of the Board of Directors on March 22, 2021, the Company acquired 314,000
treasury shares during the six months ended September 30, 2021. In accordance with a resolution of the Board of
Directors on the same day, it also disposed of 109,500 treasury shares through a third-party allotment to theCustody Bank of Japan, Ltd. (Trust Account E) on April 16, 2021, following the introduction of an Employee
Stock Ownership Plan (J-ESOP). Furthermore, in accordance with a resolution of the Board of Directors on August
6, 2021, the Company disposed of 32,800 treasury shares through a third-party allotment to the Custody Bank ofJapan, Ltd. (Trust Account) on August 24, 2021, following the introduction of a Board Benefit Trust. The 140,200
Company shares remaining in the trust have been booked as treasury shares.
This has resulted in increases of ¥236 million in capital surplus and of ¥1,179 million in treasury shares to ¥6,700
million and ¥1,924 million, respectively, as of September 30, 2021.
Six months ended September 30, 2022
1 Cash dividends paid
Resolution
Board meeting on May 23, 2022
Common shares
Type of shares ･････････････････････････・･･･・・･･・・・･･
645
Total dividends (Millions of yen) ･････････････・・･･･・･･･
25.00
Dividend per share (Yen)･････････････････････・・・･･････
March 31, 2022
Record date･･･････････････････････････････････・・・･･･
June 10, 2022
Effective date･･･････････････････････････････････・・・･･
Dividend resource･･････････････････････・・･･･・・・･･････
Retained earnings
Note: Total dividends by a resolution of the Board of Directors on May 23, 2022, include ¥3 million in dividends on
Company shares held as trust assets of the Board Benefit Trust and the Employee Stock Ownership Plan (JESOP).
2 Of the dividends whose record date falls during the six months ended September 30, 2022, those dividends whose
effective date will fall after the last day of the second quarter
Resolution
Board meeting on November 4, 2022
Common shares
Type of shares ･････････････････････････・･･･・・･･・・・･･
696
Total dividends (Millions of yen) ･････････････・・･･･・･･･
27.00
Dividend per share (Yen)･････････････････････・・・･･････
September 30, 2022
Record date･･･････････････････････････････････・・・･･･
November 30, 2022
Effective date･･･････････････････････････････････・・・･･
Dividend resource･･････････････････････・・･･･・・・･･････
Retained earnings
Note: Total dividends by a resolution of the Board of Directors on November 4, 2022, include ¥4 million in dividends
on Company shares held as trust assets of the Board Benefit Trust and the Employee Stock Ownership Plan (JESOP).

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Segment Information
As the Group’s businesses are primarily in PCB design, manufacturing, sales, and ancillary operations, thedescription of other businesses is omitted as they are of little significance.
Revenue Recognition
The regional breakdown of revenue generated from contracts with customers is as follows:
Millions of yen
Six months ended
Six months ended
September 30, 2021 September 30, 2022
22,92927,916
17,373
20,418
8,558
10,326
11,524
11,468
6,929
9,274
2,145
2,306
13
2
69,471
81,710－－69,471
81,710Japan
China
Vietnam
Asia
North America
EuropeOther
Revenue generated from contracts with customers
Other revenue
Sales to external customers
Business Combinations(Business Combination through Acquisition)(1) Summary of business combination
1) Name and business description of the acquired company
NEC Embedded Products, Ltd.
Name:
Business description:
Development, design, manufacturing, consignment, sales and maintenance of
all machinery, equipment, devices and systems related to electronic
machinery/equipment and auxiliary electronics businesses
2) Primary purpose for conducting a business combination
The Company has embraced “Providing the best products and services to customers, and happiness for
employees and society through manufacturing” as its management philosophy. To this end, the Company
is taking on the challenge in the field of advanced electronics in terms of electronic PCBs, expanding andstrengthening the EMS business, thereby aiming to contribute to customers. In the medium-term
management plan released on May 19, 2022, the Company has set forth a strategy to position andstrengthen electronic PCBs and semiconductor package boards for automotive and smartphone
applications, and the EMS business as new pillars in its business domain.
NEC Embedded Products, Ltd., is capable of accepting the consignment of orders for a wide variety ofelectrical and electronic equipment utilizing its embedded product development capabilities and cuttingedge technologies. Namely, the company boasts strengths in integrated consignment from development
and design to mass production as well as in high-quality and high-reliability manufacturing capabilities.
We believe that incorporating NEC Embedded Products, Ltd., into the Group will facilitate theestablishment of an ODM-type EMS business structure with development and design functions, and also
realize a proposal-based business structure targeting electronic PCBs to high value-added electronic
products. Hence the Company sees NEC Embedded Products, Ltd., as the optimal strategic partner.
Going forward, to expand the EMS business, the Company will promote collaboration between theelectronic PCBs business and the EMS plants in Vietnam conducting development, design and mass
production. Furthermore, the Company plans to build a system that can promptly respond to various
needs, including for mass production and small- to medium-lot orders, by managing EMS factories inJapan and implementing in-house evaluations and prototype development. The Company strives toprovide its customers with the maximum level of services to further enhance the corporate value of theGroup.

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3) Date of business combination
September 30, 2022
4) Legal formality for business combination
Acquiring shares in exchange for cash5) Name of company after business combination
Meiko Embedded Products, Ltd.
6) Percentage of voting rights acquired
100%7) Main rationale leading up to the decision to acquire the acquiring company
The Company acquired the shares in exchange for cash.
(2) Period of the acquired company’s profit and loss included in the consolidated statements of income forthe six months ended September 30, 2022
Only the balance sheet of the acquired company is consolidated. The profit and loss results of theacquired company are not included in our consolidated income statements for the six months ended
September 30, 2022.
(3) Acquisition cost and breakdown by type of consideration
Consideration for acquisition:Cash
11,000 million yen
Acquisition cost:
11,000 million yen(4) Major acquisition-related costs and amount
Advisory fees and others: 169 million yen(5) Accrued goodwill amount, reason and amortization method and period
1) Amount of goodwill accrued
6,616 million yen
The amount of goodwill is a tentative estimate since the allocation of the acquisition cost has not been
completed as of the end of the second quarter of the fiscal year ending March 31, 2023.
2) Reason for accrual
Mainly the excess earning power expected from future business development.
3) Amortization method and period
The goodwill will be amortized on a straight-line basis over the period in which the effect is expected tobe realized. The amortization period is currently being calculated.
Per Share Information
The basis for calculating profit per share is shown below:
Six months ended
Six months ended
September 30, 2021 September 30, 2022
161.72250.37

Item

Profit per share (Yen)Basis for calculation
4,190
6,420
Profit attributable to owners of parent (Millions of yen)Amounts not attributable to common shareholders－－(Millions of yen)
Profit attributable to owners of parent pertaining to
4,190
6,420
common shares (Millions of yen)
Average number of common shares outstanding for the period
25,911,140
25,641,302(Shares)
Notes: 1. Diluted profit per share is not disclosed, as there were no diluted shares.
2. The Company shares remaining in the trust which are booked as treasury shares in shareholders’equity, includes treasury shares deducted when calculating the average number of shares for theperiod that were used to calculate profit per share. The average number of treasury shares for theperiod that were deducted to calculate profit per share was 106,904 shares for the six months
ended September 30, 2021, and 138,908 shares for the six months ended September 30, 2022.

- 14 -

Significant Subsequent Events(Issuance of Series 1 Non-convertible preferred stock by third-party allotment and reduction in share capitaland legal capital surplus)
At a meeting of the Board of Directors on September 21, 2022, the Company resolved to issue Series 1 Nonconvertible preferred stock by third-party allotment and to reduce its share capital and legal capital surplus. The
payment for the stock was completed on October 25, 2022. The outline of the transaction is as follows:
1. Issuance of Series 1 Non-convertible preferred stock by third-party allotment
Series 1 Non-convertible preferred stock, 70 shares(1) Type and number of shares issued:
100,000,000 yen per share(2) Issue price:
7,000,000,000 yen(3) Total issue price:
50,000,000 yen per share(4) Stated value:
3,500,000,000 yen(5) Total stated value:
Payment
due
date:
October 25, 2022
(6)
Third-party allotment(7) Method of offer or allotment:(8) Allottee and number of shares allotted: Development Bank of Japan Inc., 70 shares
Funds for the construction of a plant and production facilities at(9) Use of funds:
the Tendo Plant(10) Other:
The preferred dividend rate for the Series 1 Non-convertible
preferred stock is set at 4.5% (which will increase to 7.5% on
and after the day following the fifth anniversary of the paymentdate). The shareholder of the Series 1 Non-convertible preferredstock is entitled to receive dividends before shareholders ofcommon shares. If the Company is short of funds to appropriate
to the payment of preferred dividends to the shareholder of theSeries 1 Non-convertible preferred stock in a given fiscal year,
the shortage will be accumulated in and after the following
fiscal year. The shareholder of the Series 1 Non-convertible
preferred stock is not entitled to receive dividends from theCompany’s surplus exceeding such preferred dividends.
The Series 1 Non-convertible preferred stock has a clause for
repurchase in exchange for cash and a right to claim buyback in
exchange for cash. The preferred stock does not have a right toclaim or a clause for buyback in exchange for common shares.
The shareholder of the Series 1 Non-convertible preferred stock
does not have voting rights.
To acquire the Series 1 Non-convertible preferred stock by
assignment, the acquirer must obtain approval from theCompany’s Board of Directors.
2. Reduction in share capital and legal capital surplus(1) Purpose of reduction in share capital and legal capital surplus
To promptly improve the Company’s financial position, book the funds available for distribution andprepare for a flexible and agile capital policy in the future, the Company will reduce all of the increased
parts of share capital and legal capital surplus, respectively, due to the incorporation of the payment for
the Series 1 Non-convertible preferred stock by transferring the amounts to other capital surplus. The
reductions in share capital and legal capital surplus have no impact on the Company’s net assets status as
they are transfers within the net assets section of the balance sheet.
(2) Details of reduction in share capital
Under Article 447, paragraphs 1 and 3 of the Companies Act, the Company reduced its share capital by
3,500 million yen on October 25, 2022, and transferred the entire amount to other capital surplus.
(3) Details of reduction in legal capital surplus
Under Article 448, paragraphs 1 and 3 of the Companies Act, the Company reduced its legal capitalsurplus by 3,500 million yen on October 25, 2022, and transferred the entire amount to other capitalsurplus.

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2

Other
Dividends of surplus
With regard to interim dividends for the fiscal year ending March 31, 2023, the Board of Directors passed a
resolution at its meeting on November 4, 2022 to pay interim dividends to shareholders who are recorded in theshareholder registry as of September 30, 2022 as follows:
1) Total dividends
2) Dividend per share3) Effective date of claim for payment and payment commencement date

696 million yen
27.00 yen
November 30, 2022

Note: Total dividends include ¥4 million in dividends on Company shares held as trust assets of the Board
Benefit Trust and the Employee Stock Ownership Plan (J-ESOP).

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