FY 2019
(April 2019 through March 2020)
Business Review
Katsuragawa Electric Co., Ltd.
June 10, 2020

We recognize that COVID-19 fast spreading is dramatically impacting
lives during this extraordinary and unprecedented time. Our top
priority is to keep our employee, our partner and our valued customer
and their families being well and safe.
We implement various protection skim and methods in our various
work places to be suitable for the daily evolving situation for caring thesafe and business continuation. And many of our employee takeworking from home as well. Even at the attendance in the office social
distance and proper designated internal rules are implemented andexecuted.
We jointly express our most appreciation with the society to all thepersons of Infectious healthcare to help and assist for medical
treatment and relative facility staff for the people lives.
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This document contains forward-looking statements with respect to future results, performance and achievements that aresubject to risk and uncertainties and reflect management’s views and assumptions formed by current available information.
Many factors could cause the actual results, performance or achievements of ours to be materially different from any future
results, performance or achievements that may be expressed or implied by such forward looking statements, including, among
others, changes in general economic and business conditions, changes in currency exchange rates and various other factors bothreferenced and not referenced in this document.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein. We do not intend or assume any obligation to update these forward-looking
statements.

3 Business Review
During the concerned fiscal year (April 1st 2019 through March 31st 2020) there werevarious different and un-predictive events such as national trade war, BRIEXIT, and generalconsistency of economic growth. Then COVID-19 fast spreading impacts the lives of people
and economy in world nations. This is unprecedented experience and time in world societyand life. And it rapidly impacts to the said world economy drastically to downturn situationand influences people and company not to able to move and access to physical businessactivities and result.
Under the above circumstance and situation our business result in the said period is
JPY7,169M and downed 12% against the last Fiscal year, its operation income: -JPY872M andordinary income : -JPY886M
We are about to try to achieve the organic growth and income especially with our own
various cumulated technology, knowledge and experiences as well as flexibility to approachand create the different segment and applications for providing the solution in various
different segments and markets.
4 Business Activities and Approaches
Technical Document & Image / Business Graphics segment for Wide Format Printing
industry in the past three years had flat growth and its production and higher range
took the same trend as office printing industry with less print volume and size.
During the above period we are continuing to provide differentiation and advantage
with unique functions & features to be suitable and matched for demanding theproductivity and simplicity in the higher range segment of the market. And by therecognition of market voices and close correspondences with the markets
KIP has been creating its market position and cumulating the numbers of installations.
We provides professional customer support to our partners and customers through ourKIP Customer Care Centre at our each subsidiaries and affiliates to local partners andcustomer.

5Our dry toner technology for Wide Format Printer is rather unique andprogressive, by the recognition of superior productivities such asConsistency, Durability and Speed, there are also numbers ofinstallations for Business Graphics Arts Printing segments with adding tothe technical documents printing markets.
We also approach to other industry printing markets by providing its
advantages of competitive operation cost and smaller foot print.

※ Dye-sublimation Toner Prints※ Wide format Monochrome/color Tech Document & Business Graphics※ Ceramic Toner Prints

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Our partners are core business asset in our main markets such as North America and P. R. of China.
And our KIP products are taken care by various type of the partners, Companies for Wide Format
Exclusively , Office Products Sales/Support Companies, Printing Device Manufacturers. Our local
subsidiaries and affiliates are working and providing KIP support with localized program and support
respectively.
In European markets KIP provides similar business support and activities to our partners with consideringto the various back-grounds, history and nature of business, by which sometimes we had to show
different business skim and program. For the sake of business stability and growth in the market we areworking for creating integrated KIP team with sophisticated and suitable for the current businessenvironment and demands. KIP new E-commerce program and new logistic system are underpreparation for releasing.
There is a fact in Japan for the trend in the market where still majority of the demands aremonochrome. We are working with the various partners to establish main stream of business with Dry
Toner Color Technology and its far advantages. And this will lead our partner and us to earning morebusiness materials and opportunities in the market.
We have been implemented various unique local demands in each different market to create thedemands and recognition of our approach and direction for real Digital Printing & KIP integrated
solution. As for P.R. of China and various South East region Patented KIP Digital Blue Print Systems werereleased to replace former analogue Blue printing, for North American markets real time cost ofoperation and calculation are implemented into our KIP System-K Software and such visible cost
operation system is one of industry standard. And our KIP Software Suite, KIP SYSTEM-K is single plate
forma for all current KIP Monochrome and Color Products Line-up, which provide another Digital
Simplicity in the markets. We always communicate with the markets to provide further progress andconvenience to our user and partners.
7 Products Trend and Technology Review
We cumulated and pursued electrophotography technology and implemented those to WideFormat Printing devices. And upon our releasing KIP Dry Toner Wide Format printer withreasonable price and various new feature in Y2015 Color Production Wide Format Printer sales
growth was rapidly different manner. It was the similar flow as office printing devices and it
created different focus and interest at the partners and customers minds.
We could have certain concreted conviction for this trend upon we released low volume
segment Production Color Toner Wide Format Printer last year and portion and balance of newPrinter sales in North American markets, top sales markets for Production Wide Format Printer, wasdifferent shape in the past years with higher number of unit sales than monochrome. We
recognize the different technology basis products in the same market are also taking certain
portion of the market as well and further competitions will be carried.

Y2017

B&W

COLOR

Y2018

B&W

COLOR

Y2019

B&W

COLOR

※ Trends in the ratio of monochrome to color models

8We have our own software development team which has deep and experienced
knowledge for the industry and minds for foreseeing the future work-flow anddemands. We all the time integrate both Hardware and Software new concepts andfunctions for earning higher customers satisfactions and for users benefits.
We newly designed image process system and it will be implemented onto our newprinters for providing further precise and impressive image prints being required inGraphics Art Printing market. We also focus to our responsibility for sustainability toassist the green activities in the society and increase business feasibility by reviewing
the cost for material and production to resume group corporate earning.

※High Coverage Poster Printer※ New KIP CCT Imaging Technology9Digital Transformation (DX), Digital Signage and Remote Work/Access are getting
common work flow and demands now days. The first common concern and interest
are security for Corporate Asset, Technical Drawing, Project Management Documents,
Designed Graphics called as intellectual properties. KIP Data security system isrecognized and certified by the most strict security standard and we are about toupgrade such security systems in our products. KIP Cloud Print and access function is
also going to expand its capability and functionality to support and work for DX
progress.
Also for our partners benefit to enable them to execute remote IT maintenance andaccess to the installed printer KIP IT Remote maintenance in addition to the current
status notice feature.

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KIP PRODUCT LINE-UP

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

Approach to Other Markets/Applications

Our target markets are mainly for Office Printing and Commercial Printing as for finished print on themedias. And those are for checking the contents of print, proofing, reprographics and commercialpurpose.
Various changes and evolutional work-flow for the printing demands and operation at Industrial items
manufacturing and traditional industry (craft and light industrial item) and they are moving their workflow with Digital Printing System even with the different technology from ours. And we are encourage
the market to enable the user for pure digital printing benefits. Productivity, operation cost saving andwork place environment by our KIP unique Dry Toner been developed for particular industries.
KIP Provides the solution for the above in Ceramic, Textile and materials for housing/interior industries
with unique Toners for individual and variable requirement of design, responding to minimal number
production without increment of operation cost, shorter delivery and work place and style changes.
KIP unique Dye basis Toner and Wide Format Print system are targeting for sports apparel, indoor interior
as new solution for the process of Dye-sublimation textile industry, which is expected to have large
scale growth in the coming years, with superior productivity, environmental safe, operation cost saving
and consistency for color grade and stability. KIP EST480 is expected to enter into the market as an freshbreeze. We showed it at Printing United 2019 (October 2019) and Impression Expo 2020 (January 2020)
to the public and succeeded to put the new breeze in the markets as one of industry growth potential
items.
12KIP EST480 Production Dye-sublimation Wide Format Printer
For Textile and Apparel
KIP EST 480 (Dry Toner Wide
Format Print on standardbondpaper)providesproductive Dye-sublimation
textile printing.
KIP EST Toner (Dye basis) istransferred from the printed
media to textile with theprocess of heat pressing.
(sublimation process)Light fasten durability, laundry
durability
andcolor
consistency are exceptional
one in comparison with thecurrent available other digitaltechnology.
Many of sporting wear,
Customs Uniform are alreadymade by dye-sublimation
system and KIP EST candifferentiate from the current
work-flow and model fromnow.

13We also developed another unique Toner and Wide Format Printer for CeramicIndustry. This is enabling to change the fundamental work-flow for Decal print andtransferring onto Ceramic during the process before firing (the last process for ceramic
goods).
There are various items to be solved in the industry, high ratio of print failure during
over 10 to 20 different color ink print process, environmental protection, shortage ofhands and small number production feasibility. KIP DDP Toner and KIP DDP 480 Digital
Decal Wide Format Printer are the organic solution for the industry.
We installed several machines with the actual ceramic products manufacturers inJAPAN, South East Asia region and Eastern Asia. With several correspondences ,physical operation and listening the voice from the users we could reach to the stage
to introduce them to the public.
We will carry our venture and study for other applications and markets where we canutilize our core technology than the above to provide the difference and changes inthe various industries. And our flexibility and high Consciousness for chasing thedifferentiation. We will work for pure and real digital printing solution provider in varioussegment and markets.

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KIP DDP480

Production Digital Decal PrinterWide Format Ceramic Tile/Signage, Table Ware and Enamel Signage/Design
KIP HTRT Technology
KIP Patented High Temperature
Resistance Toner (KIP HTRT) canreproduce bright and solid color
quality even with 1200C by whichcurrent other digital technology
with Ink can be burned to Ash ordisappeared.

※ For table Ware
※ Reduce time and cost for production of Wide Format Tile and Enamel Signage
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KATSURAGAWA ELECTRIC CO., LTD.