Notice of the 56th Ordinary General Meeting of Shareholders
Other Items for Which Measures for Providing Information inElectronic Format Will Be Taken(Items Excluded From Delivered Paper-Based Documents)

Business Report
Principal lines of business
Operating results by business segment
Employees
Major Creditors
Other Significant Information Concerning the Current State of the
Corporate GroupAccounting Auditor
Company Structure and Policies
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Statement of Changes in Equity
Notes to the Non-consolidated Financial Statements(From April 1, 2023 to March 31, 2024)

KAGA ELECTRONICS CO., LTD.
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Business Report
1. Principal lines of business (as of March 31, 2024)
The Company’s principal business is the planning, development, manufacture, and purchase andsale of electronic components for electronic equipment, the purchase, sale, import and export ofcomputers and peripheral equipment, related parts, accessories, software as well as other related
business.
Our main products and business activities are as follows:Business segment

Principal products and lines of businessElectronic Components

LCD modules, processed substrates, products for office automation equipment
and communications equipment, integrated circuits such as custom LSIs and onechip microcomputers, general-purpose integrated circuits such as memory ICs,
semiconductor devices such as CMOS image sensors and light emitting diodes
and others

Information Equipment

Personal computers, printers and other peripheral equipment, SD cards, digitalaudio and video equipment, optical equipment and others

SoftwareCopyright business, production of computer graphics, image systems andsoftware, planning and development of amusement products and others

OthersRepair and support for electronics equipment, manufacture and sales ofamusement equipment, event planning and operation, sales of sports goods, golfshop operations and others

2. Operating results by business segment
Net sales by business segment are as follows.
(Million yen)
Period and category

Business segment

Electronic Components
Information Equipment
Software
OthersTotal

The 55th fiscal year
(From April 1, 2022 to March 31, 2023)
AmountRatio

539,342
43,6802,998
22,044
608,064

88.7%
7.2%
0.5%
3.6%
100.0%-2-

The 56th fiscal year
(From April 1, 2023 to March 31, 2024)
Amount472,583
44,305
2,567
23,241
542,697

Ratio

87.1%
8.1%
0.5%
4.3%
100.0%

3. Employees (as of March 31, 2024)(i)

Employees of the Corporate Group
Business segment

Increase/Decrease from the end of theprevious fiscal year

Number of employees

Electronic Components

6,291

Decrease of 85

Information Equipment

277

Increase of 12

Software427

Increase of 11

Others299

Decrease of 50

Corporate (Common)
Total

727

Increase of 41

8,021

Decrease of 71(Notes) 1. The number of employees indicates the number of persons employed (including workers loaned to theGroup from outside the Group, contract workers, part-time employees, and non-regular employees).
2. The number of employees listed as “Corporate (Common)” indicates those belonging to the management
divisions that cannot be classified under a specific business.

(ii) Employees of the Company
Increase/Decrease from theend of the previous fiscal
year

Number of employees
549

Increase of 3

Average age

Average service years

43.3 years old

14.5 years(Note) The number of employees indicates the number of persons employed (including workers loaned to the Company
from outside the Company, contract workers, part-time employees, and non-regular employees).

4. Major Creditors (as of March 31, 2024)(Million yen)
Balance of loans payable

Creditor
MUFG Bank, Ltd.

7,523

Mizuho Bank, Ltd.

5,901

Sumitomo Mitsui Banking Corporation

1,401

The Hokuriku Bank, Ltd.

939

Nippon Life Insurance Company

1,900

Meiji Yasuda Life Insurance Company

400

5. Other Significant Information Concerning the Current State of the Corporate GroupNot applicable-3-6. Accounting Auditor(1) Name

PricewaterhouseCoopers Japan LLC

Note: PricewaterhouseCoopers Aarata LLC merged with PricewaterhouseCoopers Kyoto on December 1, 2023, andchanged its name to PricewaterhouseCoopers Japan LLC.

(2) Audit Fees
Amount (Million yen)
Audit fees for the current fiscal year

84

Total of amount of cash and other financial benefits payable by the Company and its
subsidiaries to the accounting auditor

112(Notes) 1. The audit agreement between the Company and the accounting auditors does not explicitly distinguish between
accounting remuneration, etc. for accounting under the Companies Act and accounting under the Financial
Instruments and Exchange Act, and is substantially unable to do so; accordingly, the total amount of the two is
given as the amount of accounting remuneration, etc. of the accounting auditors for the fiscal year underreview.
2. Of the significant subsidiaries of the Company, overseas subsidiaries are audited by accounting companies
other than the Company’s accounting auditors (including persons with equivalent qualifications in foreigncountries).
3. The Board of Auditors has decided to agree to the amount of remuneration, etc. for accounting auditors after
carrying out necessary verification of the appropriateness of matters such as the contents of the accounting
auditors’ audit plans, the status of the execution of accounting audit duties, and the basis for calculation of
remunerations estimates.

(3) Description of Non-Audit Services
Not applicable(4) Policy on Decisions of Dismissal or Non-reappointment of Accounting Auditor
In the event of any obstacles to the execution of the accounting auditors’ duties, etc., the Board ofAuditors will determine the contents of a proposal regarding the dismissal or non-reappointment of
the accounting auditors.
In the event that any of the matters provided for by Article 340, paragraph (1) of the Companies Act
are applicable to the accounting auditors, the Board of Auditors will dismiss the accounting auditors
by unanimous agreement of the auditors. In the event that this occurs, an auditor selected by the Board
of Auditors will report the fact of the accounting auditor’s dismissal and the reasons for that dismissal
to the first General Meeting of Shareholders held after the dismissal.
(5) Overview of Limited Liability Agreement
Not applicable-4-7. Company Structure and Policies(1) System to ensure the properness of operations
The following is an overview of decisions regarding the system for ensuring that the directors of theCompany and the Group execute their duties in accordance with laws, regulations, and the Articles ofIncorporation, and the system for otherwise ensuring the appropriateness of business operations by theCompany.
(i) Systems for ensuring compliance by Company and Group Company Directors with laws andregulations and the Articles of Incorporation in the performance of their duties
The Company and the Group are cognizant that enhancing corporate governance is a key
management issue and make it their fundamental policies to ensure total compliance with corporate
ethics and laws and regulations, and to reinforce internal control systems while ensuring thesoundness, efficiency, and transparency of business operations and raising corporate value.
To achieve such compliance, the Company has established Rules on Officers applicable to directors
and the Board of Directors Rules applicable to the Board of Directors. To ensure appropriate
management, the directors monitor each other’s status of execution of duties at regularly-held Boardof Directors meetings and at extraordinary meetings held on a dynamic basis as necessary. The
Company has also established Organization Rules, Rules on the Allocation of Work Duties, Rules
on Work Authority, and Rules on Internal Approval, clarifying the scope of authority of each director
and ensuring that mutual supervision by directors is effective.
In addition, the Company established an Audit Office under the direct authority of the Representative
Director, President & COO. The Audit Office works in collaboration with the Business
Administration Department—the Company’s legal affairs division—to monitor the status ofcompliance with laws and regulations, the Articles of Incorporation, and other internal rules.
The Company also has a board of auditors, and the auditors, including outside auditors conductdetailed audits regarding the execution of duties by the directors.
The Company also established a CSR Promotion Committee (now the Sustainability Committee)
chaired by the Representative Director, President & COO and established the Compliance
Committee, Risk Management Committee, Information Disclosure Committee, Environmental
Management Promotion Committee, Diversity Promotion Committee, and Governance Committee
as subordinate organizations. These organizations work to normalize decision-making and theexecution of business operations throughout the Group.
(ii) The systems for the preservation and control of information relating to the execution of duties
by directors
Information relating to the execution of duties by directors is appropriately and accurately controlled
and preserved according to the qualities of the recording media in accordance with the Document
Control Rules, which set forth the standards on the preparation and retention of documents, and theDocument Control in Handling Manual, which sets forth detailed provisions on document retention
procedures and periods.
(iii) Rules and other systems relating to control of the risk of loss
Potential risks that the Group faces include matters relating to economic conditions, exchange rates,
country risks, price competition, product procurement capabilities, internal brand risks, legal
regulation, market risks, major litigation, severance pay obligations, personal information, accidents,
the environment, and information management. Responding divisions have been set for each risk
and necessary and appropriate systems have been established to control risks under the authority ofrisk control officers and managers in each division.
If any of the risks mentioned above should occur, the corresponding responding divisions will
immediately take necessary and appropriate responsive measures to minimize the occurrence ofdamage under the direction of the risk control officers and managers.

-5-In addition, with the establishment of the Risk Management Committee as a subordinate
organization to the Sustainability Committee, the Company established a system to respondpromptly and appropriately to risks foreseen by the Group.
(iv) Systems for ensuring the efficient execution of duties by the directors of the Company andGroup companies
The foundations of systems for ensuring the efficient execution of duties by the directors of theCompany and Group companies are periodic meetings of the Board of Directors and extraordinary
meetings of the Board held when necessary. Meetings of the Management Meeting are held prior tomeetings of the Board of Directors with regard to important matters that are within the scope of
duties of the directors to conduct prior deliberations so that the Board can engage in enhanced
deliberations and make prompt decisions.
The Company also introduced delegation-based and employment-based executive officer systems
to separate management decision-making and supervisory functions from business executionfunctions and to clarify each role, and has established structures that enable timely responses while
enhancing the functions of Board of Directors and business execution functions. In addition, having
an appropriate number of directors allows for adequate deliberation and appropriate and timely
decision-making.
With regard to specific execution of duties, the Board of Directors sets company-wide targets,formulates medium-term management plans to achieve those targets, and establishes necessary andappropriate systems for the execution of duties so that each executive officer responsible for businessdivisions can carry out those plans.
In addition, the Company has also established Organization Rules, Rules on the Allocation of Work
Duties, Rules on Work Authority, and Rules on Management of Affiliated Companies regarding theallocation of work duties, authority, and so on to the directors of the Company and Group companies.
These rules provide for the efficient execution of work duties.
(v) Systems for ensuring compliance by Company and Group Company employees with laws andregulations and the Articles of Incorporation in the performance of their duties
The Basic Compliance Rules were established as a code of conduct to ensure compliance with laws
and regulations and the Articles of Incorporation by employees of the Company and Group
companies when executing their duties. To ensure the effectiveness of these rules, the Company alsoestablished the Compliance Committee as a subordinate organization of the Sustainability
Committee, establishing a system that can make appropriate group-wide responses.
In addition, the Company established an Audit Office under the direct authority of the Representative
Director, President & COO. The Audit Office works in collaboration with the Business
Administration Department—the Company’s legal affairs division—to monitor the status ofcompliance with laws and regulations, the Articles of Incorporation, and other internal rules.
The Company has also established an internal reporting (whistleblowing) system that allows
employees to directly and anonymously report conduct by the Company or Group companies inviolation of laws and regulations or the Articles of Incorporation to the Representative Director,
Founder & CEO; Representative Director, President & COO; Auditors; the Sustainability
Committee; or the Sexual Harassment Investigation and Countermeasures Committee.
(vi) System to ensure the appropriateness of business operations by the corporate group
comprising the Company and its affiliated companies
The Company established the Rules on Management of Affiliated Companies to ensure appropriate
business operations by affiliated companies and conducts control in accordance with those rules.
Also, coordination among Group companies and key decisions require deliberation and decisions
by the Company’s Group Management Headquarters Meeting and Board of Directors.
In addition, the Company’s Audit Office works in collaboration with the Business Administration
Department—the Company’s legal affairs division—to achieve overall uniformity in Groupbusiness activities, conducts audits regarding the appropriateness of those business activities andcompliance with laws and regulations and the Articles of Incorporation and so on, and indicates
improvements to be made in business activities.
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Furthermore, Group companies submit all minutes of their Board of Directors meeting to theCompany and make monthly reports on business activities, status of budget implementation, andimportant matters relating to ensuring the appropriateness of business activities.
(vii) Matters relating to employees supporting the work of auditors
The Company’s Rules on the Allocation of Work Duties include provisions relating to employees
who assist auditors in the performance of their duties. Auditors cause employees, to support them inthe performance of audit operations, focusing on work in the Audit Office, as necessary.
(viii) Matters relating to the independence from the directors of employees supporting the workof auditors and matters relating to ensuring the effectiveness of indications by auditors to
employees
The Company’s Rules on the Allocation of Work Duties provide that in cases where an employee isaffiliated with the Audit Office and other departments that assist auditors in the performance of theirduties, only auditors have the authority to issue instructions and orders relating to that work. In casesof transfer, evaluation, and disciplinary disposition of such employees, the consent of Auditors is
required.
(ix) Systems for directors and employees of the Company and Group companies to report toauditors and other systems for reporting to auditors
If a Company director discovers facts that present a risk of causing substantial damage to theCompany, such a director must immediately report those facts to the Board of Auditors pursuant to
the Rules on Corporate Officers, and the Company has established systems for timely and accurate
reporting to the Board of Auditors.
If an employee of the Company, director or employee of a Group company discovers facts inviolation of laws and regulations or the Articles of Incorporation or discovers facts that present arisk of causing substantial damage to the Company or the respective Group company, such director
or employee must immediately report to Auditors in accordance with the Rules on Work Authority,and the Company has established systems that enable employees to make reports directly to Auditors.
(x) Systems for ensuring that the persons who make reports to Auditors are not subject todisadvantageous treatment as a result of making such reports
Reports made via the internal whistleblowing system can be made anonymously and through the useof a post office box. Since reporting individuals cannot be identified, there is a system in place toprevent disadvantageous treatment of persons making reports.
(xi) Matters relating to procedures for advance payment or reimbursement of expenses arising in
the course of auditors performing their duties and policies regarding handling of expenses or
obligations arising in the course of auditors performing their duties
When requests are made by auditors for advance payment of expenses or for reimbursement ofexpenses paid or obligations incurred, except in cases where it can be established that those expenses
and so on did not arise in the course of auditors performing their duties, the Company shall comply
with such requests.
(xii) Other systems for ensuring effective implementation of audits by auditors
The Company’s auditors are required to attend Board of Directors meetings and other importantinternal meetings and must express their opinions as necessary. Also, the Company established aboard of auditors and operates that board appropriately in accordance with the Board of Auditors
Rules. In addition, the Company established Auditor Audit Standards setting forth the optimal audit
structure for each board member, audit standards, and conduct policies for auditors, ensuring theeffectiveness of audits conducted by auditors.
Regarding items (i) through (xii) above, the Company will strive to establish a more appropriate system
by revising the relevant rules as necessary.

-7-(2) Overview of operational status of system to ensure the properness of operations
The following is an overview of the status of operation of the system for ensuring the appropriateness ofbusiness operations by the Company and the Group.
(i) Compliance initiatives and compliance system
The Compliance Committee held meetings. Additionally, during the fiscal year ended March 31,
2024, the Company conducted four practical training sessions for officers and employees of theGroup to ensure compliance with laws and regulations, including preventing accounting fraud,training about contracts and the Subcontract Act, dealing with antisocial forces, and more.
The Company is also making efforts to prevent compliance violations by establishing Compliance
Rules and raising awareness about compliance and establishing an internal reporting(whistleblowing) system to allow people to directly and anonymously report violations.
(ii) Risk management system and risk management initiatives
The Risk Management Committee holds meetings at which they analyze and consider responses tovarious risks of the Group, and previously designated departments in charge of potential risks makeefforts to reduce those risks.
In addition, the Company has established Risk Management Rules and strives to strengthen its risk
management system by clearly stating methods of responding to operational risks.
(iii) Ensuring the appropriateness of business operations of the GroupThe Company established a Group Management Headquarters to centrally manage data from Group
companies and set out a system under which Rules on Management of Affiliated Companies are
enforced, detailed information about authority commensurate with the size of Group companies isprepared, and other measures to ensure the appropriateness of the business operations of associatedcompanies are taken.
Additionally, in accordance with Rules on Internal Audits, the Audit Office audited 25 divisions of
the Company and 11 divisions of six Group companies during the fiscal year under review. While
conducting scheduled internal audits and continuing to advise on improvements to be made inbusiness activities, the Audit Office collaborates with auditor audits in an effort to more rigorously
enforce compliance with laws, regulations, and the Articles of Incorporation as well as internal rules.
Group Company Administration Department Managers’ Meetings, Sales Meetings, Budget
Meetings, and other meetings are also held and attended by Group companies in an effort to share
information between Group companies and improve the functionality of internal control throughout
the Group.
(iv) Ensuring the effectiveness of auditor audits and the auditor management system
During the fiscal year under review, the Board of Auditors held 17 meetings at which they examinedthe details of discussions at meetings of the Board of Directors.
The auditors met with the accounting auditors at scheduled quarterly meetings and ad-hoc meetings.
The auditors strive to gather information from outside institutions, and the Company strives toensure the effectiveness of business audits within the Group; for example, inside auditors serve
concurrently as auditors at key Group companies.

-8-Reference Information

Consolidated Statement of Comprehensive Income(From April 1, 2023 to March 31, 2024)(Million yen)Account title

AmountProfitOther 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
Share of other comprehensive income of associates accounted for using equity
methodComprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests(Note) Figures are rounded down to the nearest million yen.

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20,323
537
40
6,329
64
(82)

6,889
27,21327,227(13)

Consolidated Statement of Changes in Equity(From April 1, 2023 to March 31, 2024)(Million yen)
Shareholders’ equity

Balance at the beginning ofcurrent period

Capital stock

Capital surplus

12,133

14,820Retained earnings

Treasury shares

95,945

Total shareholders’equity(5,614)

117,285

Changes of items during period
Dividends of surplus(6,040)(6,040)

Profit attributable to ownersof parent

20,345

20,345Purchase of treasury shares
Disposal of treasury shares

28

(6)

(6)

17

45

Net changes of items otherthan shareholders’ equity
Total changes of items during
period–28

14,304

10

14,344

Balance at the end of current
period12,133

14,849110,250(5,603)

131,629

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at the beginning ofcurrent period

2,534

Deferred gains
or losses onhedges(18)

Foreigncurrencytranslation
adjustment
9,568

Total
Remeaaccumulated Non-controlling Total net assets
surements ofinterests
otherdefined benefit
comprehensive
plansincome239

12,322

129

129,737

Changes of items during period
Dividends of surplus(6,040)

Profit attributable to ownersof parent

20,345Purchase of treasury shares(6)

Disposal of treasury shares

45

Net changes of items otherthan shareholders’ equity

541

40

6,235

64

6,881

267

7,149

Total changes of items during
period

541

40

6,235

64

6,881

267

21,493

Balance at the end of current
period3,075

21

15,803303

19,204396

151,231(Note)

Figures are rounded down to the nearest million yen.

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Notes to the Consolidated Financial Statements
1. Basis of Preparation of Consolidated Financial Statements(1) Scope of consolidation
1) Number of consolidated subsidiaries and names of consolidated subsidiaries
a. Number of consolidated subsidiaries
60
b. Names of major consolidated subsidiaries
KAGA DEVICES CO., LTD.
KAGA SOLUTION NETWORK CO., LTD.
AD DEVICE CO., LTD.
KAGA FEI Co., Ltd.
EXCEL CO., LTD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA (H.K.) ELECTRONICS LIMITEDKAGA ELECTRONICS (THAILAND) COMPANY LIMITEDKAGA DEVICES (H.K.) LIMITEDKAGA FEI ELECTRONICS PACIFIC ASIA LIMITEDEXCEL ELECTRONICS (HONG KONG) LTD.
2) Changes in scope of consolidation
As a result of stock acquisition following the new establishment of KAGA AMUSEMENTAMERICA, INC., the companies Candera GmbH, Candera America Inc., TAXAN SWE (H.K.)
MANUFACTURING COMPANY LIMITED, and TAXAN-SWE MEXICO MANUFACTURING,
S.DE R.L.DE C.V. are now included within the scope of consolidation. Because Advanced Display
Solutions (HONG KONG) Ltd. completed liquidation and shares of SANKOH ENGINEERING
CO., LTD. were transferred, they have been removed from the scope of consolidation.
(2) Application of equity method
1) Status of associates accounted for using equity method: Number of associates accounted for using equity method:4
 Name of major company
OTAX CO., LTD.
2) Status of associates not accounted for using equity method: Name of major company
Wireless City Planning Inc.
 Reason for not using the equity method
The company was excluded from the scope of application of the equity method, because suchexclusion has only an immaterial effect on the consolidated financial statements, and it has no
significance.
(3) Fiscal year of consolidated subsidiaries
Of the consolidated subsidiaries, the account closing dates for KAGA (SHENZHEN) ELECTRONICS
LTD., KAGA (SHANGHAI) ELECTRONICS CO., LTD., KAGA (SHENZHEN) TRADING LTD.,
N.Y. SALAD Production Committee, N.Y. SALAD II Production Committee, KAGA TAXAN(SUZHOU) ELECTRONICS CO., LTD., SUZHOU TAXAN KAGA TRADING CO., LTD., KAGATECHNOLOGY (SUZHOU) ELECTRONICS CO., LTD., AD DEVICE (SHANGHAI) CO., LTD.,
HUBEI KAGA ELECTRONICS LIMITED, TAXAN MEXICO S.A. DE C.V., KAGA FEIELECTRONICS (Dalian) Software Limited, KAGA FEI ELECTRONICS (Shanghai) Co., Ltd.,EXCEL ASIAN TAIWAN CO., LTD., EXCEL ELECTRONICS (HONG KONG) LTD., EXCELINTERNATIONAL TRADING (SHANGHAI) CO., LTD., EXCEL ELECTRONICS TRADING- 11 -

(SHEN ZHEN) LTD., EXCEL ELECTRONICS TRADING (THAILAND) CO., LTD., Candera
America Inc., and TAXAD-SWE MEXICO MANUFACTURING S.DE R.L.DE C.V. fall on December
31. In the preparation of the consolidated financial statements, financial statements of each of theconsolidated subsidiaries as of their respective account closing dates are used. However, necessary
adjustments are made for significant transactions that occurred between this date and the consolidated
account closing date.
(4) Accounting policies
1) Valuation basis and methods for significant assets
a. Valuation basis and methods for securities
Trading securities
Stated at fair value (Costs of securities sold are determined based on the moving-averagemethod)Available-for-sale securities
Securities other than shares with no market value, etc.
Stated at fair value (valuation differences are booked directly in a separate component of
net assets, and cost of securities sold is determined by the moving-average method)
Shares with no market value, etc.
Stated at cost determined by the moving-average method
Equity interest in investment partnerships (deemed to be securities under the provisions set
forth in Article 2, paragraph (2) of the Financial Instruments and Exchange Act)
Recorded by using a method that treats the amount (net) equivalent to the equity ownership
portion based on the latest available financial statements depending on the reporting datestipulated in the partnership agreement.
b. Valuation basis and methods for derivatives
Stated at fair market value.
c. Valuation basis and methods for inventories
Principally stated at cost determined by the specific identification method (for carrying
amounts in the balance sheet, the method of reducing the carrying amount based on the decline
in profitability), and at cost determined by the moving-average method (for carrying amounts
in the balance sheet, the method of reducing the carrying amount based on the decline inprofitability).
2) Accounting methods for depreciation of significant depreciable assets
a. Property, plant and equipment (excluding lease assets)
The Company and some of its consolidated subsidiaries in Japan apply the declining-balancemethod (however, the straight-line method is used for buildings (excluding facilities attached tobuildings) acquired on and after April 1, 1998 and facilities attached to buildings and structuresacquired on and after April 1, 2016), and other consolidated subsidiaries apply the straight-line
method.
Major useful lives are as follows:
Buildings and structures
2 to 50 years
Machinery, equipment and vehicles
2 to 12 years
Tools, furniture and fixtures
2 to 20 years
b. Intangible assets (excluding lease assets)
The Company and its consolidated subsidiaries in Japan apply the straight-line method.
c. Lease assets
Lease assets related to finance lease transactions that do not transfer ownership
The straight-line method is applied assuming the lease period as the useful life without residual
value.
- 12 -

3) Accounting policy for significant provisions
a. Allowance for doubtful accounts
To prepare for credit losses on receivables, the Company and its consolidated subsidiaries inJapan recorded an estimated uncollectable amount calculated by either using the historical rateof credit loss for general receivables, or based on individual consideration of collectability forspecific receivables such as highly doubtful receivables. Overseas consolidated subsidiaries
record an estimated amount needed for receivables at the end of the fiscal year based on criteriapredetermined by the company according to collectability for each business partner.
b. Provision for directors’ bonuses
To provide for payments of bonuses to officers, the Company and its consolidated subsidiaries
recorded the portion attributable to the fiscal year based on an estimated amount of payment.
c. Provision for directors’ retirement benefits
To prepare for payment of retirement benefits for officers, some of its consolidated subsidiaries
in Japan record an amount of payment required at the end of the fiscal year in accordance withinternal rules.
4) Standard for conversion of significant foreign currency-denominated assets into Japanese currency
Monetary receivables and payables in foreign currencies are translated into Japanese yen at the spot
exchange rate prevailing as of the consolidated account closing date, and translation differences areaccounted for as profit or loss. Assets and liabilities of foreign subsidiaries are translated into
Japanese yen at the spot exchange rate prevailing as of the consolidated account closing date, andtheir revenue and expenses are translated into Japanese yen at the average exchange rate during theperiod. Translation differences are included in foreign currency translation adjustment and noncontrolling interests under net assets.
5) Accounting methods for significant hedging
a. Accounting methods for hedging
The deferral hedge accounting is applied.
The furiate-shori (designated exceptional hedge accounting under the Japanese GAAP) isapplied to forward exchange contracts that qualify for furiate-shori, and designated exceptional
accounting is applied to interest rate swaps that qualify for exceptional accounting.
b. Hedging instrument and hedged item
Forward exchange contracts and non-deliverable forward (NDF) contracts are entered into as ahedge against exchange rate fluctuation risk for foreign currency-denominated assets andliabilities and foreign currency-denominated forecast transactions. In addition, interest rate
swap transactions are conducted for interest expenses on long-term loans payable.
c. Hedging policy
The Company determines its hedging policy based on internal rules. As for forward exchange
contracts, exchange rate fluctuation risk is hedged. Furthermore, as for interest rate swap
transactions, risk of increase in interest rate for interest expenses on long-term loans payable ishedged.
d. Method of assessing hedge effectivenessIn the period from inception of the hedge to assessment of the effectiveness, the Company
compares foreign currency-denominated assets and liabilities and foreign currencydenominated forecast transactions with changes in cash flows of forward exchange contracts,
which are hedging instruments, and judges the effectiveness based on the variable ratio, etc.
between the two. However, for interest rate swaps that are accounted for using exceptional
accounting, since the Company has confirmed that important conditions for hedging
instruments and hedged items are identical, the assessment of effectiveness is omitted.

- 13 -

6) Accounting policy for significant revenues and expenses
The Group consists of Electronic Components, Information Equipment, Software, and Others. As fordetails of main performance obligations in major businesses regarding revenue from contracts withcustomers of the Company and its consolidated subsidiaries and the typical timing when these
performance obligations are satisfied (typical timing of revenue recognition), because the Company
and its consolidated subsidiaries consider that material risks and economic rewards associated withlegal ownership of merchandise and finished goods and possession of merchandise and finishedgoods, etc. are transferred and the performance obligations are satisfied at the time when each ofmerchandise and finished goods, etc. is transferred to customers, revenue is recognized at that time.
For sales of some merchandise and finished goods, the Company applies the alternative treatment
stipulated in paragraph 98 of the “Implementation Guidance on Accounting Standard for Revenue
Recognition,” and for sales of merchandise and finished goods in Japan, revenue is recognized at thetime of shipment if the period from the time of shipment to the time when control of the merchandiseand finished goods in question is transferred to the customer is a typical period of time. Of sales ofmerchandise, those for which the Company and its consolidated subsidiaries consider that they act
as an agent, the net amount calculated by deducting the amount paid to the other party from theamount received in exchange for merchandise that the other party provides is recognized as revenue.
Furthermore, if variable consideration such as rebates is included in contracts with certain customers
for Information Equipment, revenue is determined as an amount derived by deducting rebate andothers from consideration promised with the customer, and the estimated amount of the rebate isdetermined based on past records. Consideration for transactions is received within one year fromthe satisfaction of the performance obligation, and does not contain any significant financial
component.
7) Other significant matters for preparing consolidated financial statementsa. Accounting policy for net defined benefit liability
To prepare for retirement benefits for employees, net defined benefit liability is recorded in an
amount calculated by deducting the amount of pension assets from retirement benefit
obligations based on an expected amount at the end of the fiscal year. In the calculation ofretirement benefit obligations, estimated retirement benefits are attributed to the period up to
the end of the fiscal year on a benefit formula basis. Past service cost is amortized using thestraight-line method over a certain number of years within the average remaining service years(10 years) of employees when incurred. Actuarial calculation differences are amortized using
the straight-line method for a certain number of years (mainly 10 years) during the averageremaining service period for employees in each fiscal year when they occur, and the amounts
allocated are treated as expenses from the fiscal year following the year in which they occur.
Unrecognized actuarial calculation differences and unrecognized past service liabilities arereported as remeasurements of defined benefit plans under accumulated other comprehensive
income in the net assets section after considering tax effects.
b. Application of the group tax sharing system
The group tax sharing system is applied(5) Amortization of goodwill
Goodwill is amortized in equal amounts over the period in which its effects will be realized (inprinciple, five years). However, if the quantitative materiality is insignificant, goodwill is fully
amortized in the fiscal year during which it arises.
2. Changes in Presentation Method(Consolidated Balance Sheet)
Because the monetary importance of “Guarantee deposits” (¥1,160 million in the fiscal year under review)and “Insurance funds” (¥876 million in the fiscal year under review), which had been provided in their own
categories through the previous fiscal year, has diminished, they have been included in the “Other” under“Investments and other assets” from the fiscal year under review.
- 14 -

3. Accounting Estimates
Valuation of unlisted shares, etc. including investments in venture companies
1) Amount recorded in the consolidated financial statements for the fiscal year under review
Investment securities
Loss on valuation of investment securities¥830 million¥238 million

2) Other information that contributes to understanding of details of accounting estimates
As for unlisted shares, etc., the real value is calculated on the basis of the amount of net assets per
share based on the latest financial statements that can be obtained from the investee, and the like. If
the real value declines significantly, valuation loss is recorded. Particularly investments in venturecompanies may be acquired at a higher price compared with the amount of net assets. In the casewhere the excess earning power, etc. is no longer expected in view of the status of achievement of
the medium- to long-term business plan obtained at the time of the acquisition and reasonableness of
future forecast, valuation loss is recorded only if the real value reflecting the excess earning power,
etc. has decreased significantly. The real value reflecting the excess earning power, etc. may beaffected by changes in the uncertain corporate environment in the future and other factors. If it
becomes necessary to review the real value reflecting the excess earning power, etc., additional losses
may be incurred in and after the next fiscal year.
4. Notes to Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment¥26,817 million(2) Contingent liabilities (Guarantee obligations)Contingent liabilities (guarantee obligations)for borrowings of the Company’s employees
from financial institutions under the loan
facilitation system, etc.

¥6 million

5. Notes to Consolidated Statement of Changes in Equity(1) Class and total number of issued shares, and class and number of treasury shares
Number of shares at
beginning of the fiscal
year

Increase (shares)

Decrease (Shares)

Number of shares at
end of the fiscal year

Common shares

28,702,118––

28,702,118

Total

28,702,118––

28,702,118

2,440,983

1,036

7,475

2,434,544

Issued shares

Treasury shares
Common shares

Total
2,440,983
1,036
7,475
2,434,544(Note) The increase and decrease in treasury shares are due to an increase resulting from the purchase request of 1,036
shares less than one unit and a decrease resulting from the granting of 7,475 shares of restricted shares to directors.
The number of treasury shares at the end of the fiscal year under review is 2,206 shares more than the number oftreasury shares at the end of the fiscal year under review stated in the Notes to the Non-consolidated Financial
Statements due to the Company’s shares held by associates accounted for using equity method.

- 15 -

(2) Dividends of surplus
1) Dividends paid
Resolved at
Ordinary General Meetingof Shareholders on June 27,
2023
Board of Directors meeting
held on November 8, 2023

Classes of shares

Total dividends(Millions ofyen)

Dividend pershare (Yen)Common shares

3,151

120

Common shares

2,889

110

Record date

Effective date

March 31, 2023

June 28, 2023

September 30, 2023 December 1, 2023

2) Dividends whose effective date falls in the fiscal year following the fiscal year of the record date

To be resolved at

Classes of shares

Total
dividends(Millions ofyen)

Ordinary General Meetingof Shareholders on June 26,
2024

Common shares

2,889

Source ofdividends

Dividend pershare (Yen)

Retainedearnings

110

Record date Effective date

March 31,2024

June 27, 2024

6. Financial Instruments(1) Status of financial instruments
1) Policy on financial instruments
The Group procures the funds necessary for carrying out business strategies as prescribed in theMedium-Term Management Plan by means of borrowings from banks and other entities, and issueof bonds payable. A temporary surplus fund is invested in financial assets that are highly secure, andworking capital is procured mainly by borrowing from financial institutions. Derivatives are used to
avoid exchange rate fluctuation risk for foreign currency-denominated trade receivables and payables
and loans payable, and the policy is that any speculative transactions are not conducted.
2) Description of financial instruments and their risks, and risk management system
Although notes receivable - trade, electronically recorded monetary claims - operating, and accounts
receivable - trade, which are trade receivables, are exposed to credit risk of customers, the Company
works to mitigate risks in accordance with the Receivables Management Rules. In addition, althoughforeign currency-denominated trade receivables arising from the global operational presence areexposed to exchange rate fluctuation risk, the Company uses forward exchange contracts to hedge
this risk in principle.
Securities and investment securities are mainly shares related to business or capital alliances, etc.
with business partners, and exposed to risk of fluctuations in market prices, but fair values obtained
are periodically reported to the Board of Directors. Furthermore, the status of holding such securities
is continuously reviewed based on relationships with the business partners.
Notes and accounts payable - trade, which are operating payables, are all due for payment within one
year. In addition, some of them are denominated in foreign currencies like receivables, and forward
exchange contracts are used to hedge exchange rate fluctuation risk.
Loans payable are principally aimed to raise funds for working capital and capital investment.
Bonds payable are principally aimed to raise funds for business acquisition.
3) Supplementary explanation regarding fair value, etc., of financial instruments
Fair values related to financial instruments include value based on market prices, and in addition,
reasonably determined value when there is no market price. As the calculation of said fair values
includes variable factors, these values may fluctuate if different assumptions are used, etc.

- 16 -

(2) Fair values of financial instruments
Carrying amounts in the consolidated balance sheet, fair values and the differences between them as ofMarch 31, 2024 were as follows:(Millions of yen)
Carrying amount
Securities

Fair value

171

Investment securities (*2)(*3)

Difference
171

–
–

8,754

8,754

Corporate bonds(10,000)(9,952)47

Long-term loans payable(10,500)(10,402)

97

(29)

(29)

–

Derivatives (*5)
(*1)

(*2)

Information on “cash and deposits,” “notes receivable - trade,” “electronically recorded monetary claims operating,” “accounts receivable - trade,” “notes and accounts payable - trade,” “short-term loans payable,” and“income taxes payable” is omitted, since these accounts are settled or repaid in cash and in a short period oftime, and therefore, their fair value approximates the carrying amount.
Shares with no market price, etc. are not included in “Investment securities.” The carrying amounts of thefinancial instruments are as follows.
Shares of associates
Unlisted shares

(*3)
(*4)
(*5)

¥822 million¥830 million

Information on investments in partnerships and other equivalent entities in which the amount corresponding toequity interest is recorded on a net basis in the consolidated balance sheet is omitted. The carrying amount ofthese investments is 64 million yen.
The figures in brackets indicate those recorded in liabilities
Net receivables and payables arising from derivatives are presented on a net basis, and value of a net payable
after totaling of receivables and payables is shown in brackets.

(3) Components of fair values of financial instruments by level, etc.
Fair values of financial instruments are classified into the following three levels, depending on
observability and significance of inputs for determining fair values.
Fair values of Level 1:

Fair value determined based on a quoted market price for the asset or liability
whose fair value is measured, which is formed in an active market, out ofobservable inputs for fair value measurement

Fair values of Level 2:

Fair value determined using inputs for fair value measurement other thanLevel 1 inputs, out of observable inputs for fair value measurement

Fair values of Level 3:

Fair value determined using unobservable inputs for fair value measurement

If multiple inputs that have a significant influence on determination of fair value, the fair value isclassified as the lowest priority level of fair value measurement of levels in which each input belongs.

- 17 -

1) Financial instruments recorded at fair value on the consolidated balance sheet
Item

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities
Shares

171

–

–

171

Shares

7,122

–

–

7,122

Investment trusts

1,581

–

–

1,581

Corporate bonds

–

49

–

49

8,875

49

–

8,925

–

29

–

29

–

29

–

29

Investment securities

Total assets
Derivatives
Currency related
Total liabilities

2) Financial instruments other than those recorded at fair value on the consolidated balance sheet
Item

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Corporate bonds

–

9,952

–

9,952

Long-term loans payable–

10,402–

10,402

Total liabilities–
20,355–
20,355(Note) Explanation of valuation techniques used to determine fair values and inputs for fair value measurement
Securities and investment securities
Since listed shares are measured using the quoted market price and trust investments are measured usingreference prices and they both are traded in an active market, their fair value is classified as Level 1 fairvalue. On the other hand, corporate bonds are measured based on reference values in trading statistics, andclassified as Level 2 fair value.
Derivatives
Fair value of forward exchange contracts is determined by the discounted cash flow method, using
observable inputs such as exchange rates, and classified as Level 2 fair value. The fair value of forward
exchange contracts that are accounted for using the furiate-shori, is included in that of corresponding
receivables and payables (accounts receivable - trade, notes payable - trade, and accounts payable - trade),since those forward exchange contracts are treated as an adjustment to the receivables and payables ashedged items. The fair value of interest rate swaps that are accounted for using exceptional accounting, is
included in that of corresponding long-term borrowings, since those interest rate swaps are treated as an
adjustment to the long-term borrowings as hedged items. (See “Long-term loans payable” below.)
Corporate bonds
Fair value of bonds issued by the Company is determined based on the total of principal and interest as wellas the interest rate taking into account the remaining period and credit risk of the bonds, using thediscounted cash flow method, and is classified as Level 2 fair value.
Long-term loans payable
Fair value of long-term loans payable is determined based on the total of principal and interest as well as
the interest rate taking into account the remaining period and credit risk of the loans payable, using thediscounted cash flow method, and is classified as Level 2 fair value. Certain long-term loans payable withvariable interest rate are subject to exceptional accounting for interest rate swaps (refer to the above“Derivatives”), and calculated using the total amount of principal and interest that was treated as an
adjustment to the interest rate swaps.

- 18 -

7. Revenue Recognition(1) Information on disaggregation of revenue from contracts with customers(Millions of yen)
Reportable segments
Total

Electronic
Components

Information
EquipmentJapan

252,505

44,281

2,567

20,183

319,537

North America

44,738

–

–

1,198

45,936

Software

Others

Net sales

Europe26,088––79

26,168Asia

149,194

–

–

1,236

150,431

Revenue from contracts
with customers

472,526

44,281

2,567

22,698542,074

56

24

–

542

623

472,583

44,305

2,567

23,241

542,697

Other revenue
Sales to externalcustomers(2) Information forming the basis for understanding revenue
The information is stated in 6) Accounting policy for significant revenues and expenses in (4)Accounting policies of 1. Basis of Preparation of Consolidated Financial Statements.
(3) Information for understanding the amount of revenue in the fiscal year under review and the following
fiscal years
1) Balance of receivables from contracts with customers and contract liabilities
Fiscal year ended March 31, 2024 (Millionsof yen)Receivables from contracts with customers (Balance at the beginningof current period)
Receivables from contracts with customers (Balance at the end ofcurrent period)

129,007
111,967

Contract liabilities (Balance at the beginning of current period)

4,066

Contract liabilities (Balance at the end of current period)

2,903

Contract liabilities are principally consideration received from customers based on payment terms
and conditions before delivery of merchandise, and reversed upon the recognition of revenue. They
are included in “other current liabilities” on the consolidated financial statements. Of revenue
recognized during the fiscal year under review, the amount included in the balance of contract
liabilities as at the beginning of the year was 1,690 million yen.

- 19 -

2) Transaction price allocated to remaining performance obligations
The Company and its consolidated subsidiaries apply the practical expedient in providing a note ontransaction prices allocated to remaining performance obligations, and include contracts with an
initial expected contract period of one year or less in the scope of note disclosure. These performanceobligations are related to manufacture and sale in all the businesses, and the total amount oftransaction price allocated to remaining performance obligations and period in which revenue is
expected to be recognized are as follows.
Fiscal year ended March 31, 2024
(Millions of yen)
Within 1 year

846

After 1 year through 2 years

189

After 2 years through 3 years

168

After 3 years

291

Total

1,496

8. Per Share Information(1) Net assets per share¥5,742.22(2) Earnings per share¥774.61- 20 -

Statement of Changes in Equity(From April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Balance at the beginning ofcurrent period

Capital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Generalreserve

12,133

13,912

52

13,965

618

7,000

Open
Retainedinnovation earnings
promotion brought
reserveforward25

Total
retainedearnings

Total
Treasuryshareholder
sharess’ equity

19,92427,568(5,609)48,057

Dividends of surplus(6,041)(6,041)(6,041)

Profit15,463

15,463

15,463

Changes of items during
periodPurchase of treasury
shares
Disposal of treasury
shares

28

28

(6)

(6)

17

45

Net changes of items
other than shareholders’equityTotal changes of items
during period

–

–

28

28

–

–

–

9,422

9,422

10

9,461

Balance at the end ofcurrent period

12,133

13,912

81

13,993

618

7,000

25

29,34636,990(5,598)57,519Valuation and translation adjustments
Valuation difference on
available-for-sale securities
Balance at the beginning ofcurrent period

Deferred gains or losses onhedges2,380(6)Total valuation and translation
adjustments
2,373

Total net assets

50,431

Changes of items during
periodDividends of surplus(6,041)

Profit15,463Purchase of treasury
shares(6)

Disposal of treasury
shares45

Net changes of items
other than shareholders’equity

380

26

407

407

Total changes of items
during period

380

26

407

9,869

Balance at the end ofcurrent period

2,760

19

2,780

60,300(Note)

Figures are rounded down to the nearest million yen.

- 21 -

Notes to the Non-consolidated Financial Statements
1. Significant Accounting Policies(1) Valuation basis and methods for assets
1) Valuation basis and methods for securities
a. Trading securities
Stated at fair value (Costs of securities sold are determined based on the moving-averagemethod)b. Shares of subsidiaries and associates
Stated at cost determined by the moving-average method
c. Available-for-sale securities
Securities other than shares with no market value, etc.
Stated at fair value (valuation differences are booked directly in a separate component of
net assets, and cost of securities sold is determined by the moving-average method)
Shares with no market value, etc.
Stated at cost determined by the moving-average method
Equity interest in investment partnerships (deemed to be securities under the provisions set
forth in Article 2, paragraph (2) of the Financial Instruments and Exchange Act)
Recorded by using a method that treats the amount (net) equivalent to the equity ownership
portion based on the latest available financial statements depending on the reporting datestipulated in the partnership agreement.
2) Valuation basis and methods for derivatives
Stated at fair market value.
3) Valuation basis and methods for inventories
Inventories held for sale in the ordinary course of business are principally stated at cost determinedby the specific identification method (for carrying amounts in the balance sheet, the method of
reducing the carrying amount based on the decline in profitability), and at cost determined by themoving-average method (for carrying amounts in the balance sheet, the method of reducing thecarrying amount based on the decline in profitability).
(2) Accounting methods for depreciation of non-current assets
1) Property, plant and equipment (excluding lease assets)
Declining-balance method is applied (however, the straight-line method is used for buildings(excluding facilities attached to buildings) acquired on and after April 1, 1998 and facilities attached
to buildings and structures acquired on and after April 1, 2016). Major useful lives are from 3 to 50
years for buildings, and from 2 to 20 years for tools, furniture and fixtures.
2) Intangible assets (excluding lease assets)
Straight-line method is applied. Major useful life is 5 years for software for internal use.
3) Lease assets
Lease assets related to finance lease transactions that do not transfer ownership
The straight-line method is applied assuming the lease period as the useful life without residual value.

- 22 -

(3) Accounting policy for provisions
1) Allowance for doubtful accounts
To prepare for credit losses on receivables, the Company recorded an estimated uncollectable amountcalculated by either using the historical rate of credit loss for general receivables, or based on
individual consideration of collectability for specific receivables such as highly doubtful receivables.
2) Allowance for investment loss
An amount was recorded to prepare for losses expected to arise in the future from investment in
subsidiaries and associates, using the amount required when considering the financial position andmanagement results of the subsidiary, etc. in the case of under-performance in its operating results.
3) Provision for directors’ bonuses
To provide for payments of bonuses to officers, the Company recorded the portion attributable to thefiscal year based on an estimated amount of payment.
4) Provision for retirement benefits
To prepare for payment of retirement benefits for employees, provisions are recorded based on theestimated amounts of retirement benefit obligations and plan assets at the final day of the fiscal year.
Past service cost is amortized using the straight-line method over a certain number of years within
the average remaining service years (10 years) of employees when incurred. Actuarial gains andlosses are amortized using the straight-line method over a certain number of years within the averageremaining service years (10 years) of employees when incurred, from the fiscal year following theaccrual of gain or loss.
(4) Standard for conversion of foreign currency-denominated assets into Japanese currency
Receivables and payables in foreign currencies are translated into Japanese yen at the spot exchange
rate, etc. prevailing as of the final day of the fiscal year, and translation differences are accounted for as
profit or loss.
(5) Accounting policy for revenues and expenses
As for details of main performance obligations in major businesses and the normal time when these
performance obligations are satisfied (typical timing of revenue recognition), because the Company
considers that material risks and economic rewards associated with legal ownership of merchandise andpossession of merchandise, etc. are transferred and the performance obligations are satisfied at the time
when each merchandise is transferred to customers, revenue is recognized at that time. For sales ofsome merchandise, the Company applies the alternative treatment stipulated in paragraph 98 of the“Implementation Guidance on Accounting Standard for Revenue Recognition,” and for sales ofmerchandise in Japan, revenue is recognized at the time of shipment if the period from the time of
shipment to the time when control of the merchandise in question is transferred to the customer is atypical period of time. Of sales of merchandise, those for which the Company considers that they act asan agent, the net amount calculated by deducting the amount paid to the other party from the amountreceived in exchange for merchandise that the other party provides is recognized as revenue.
Consideration for transactions is received within one year from the satisfaction of the performanceobligation, and does not contain any significant financial component.
(6) Accounting methods for significant hedging
1) Accounting methods for hedging
The deferral hedge accounting is applied. The furiate-shori (designated exceptional hedge accounting
under the Japanese GAAP) is applied to forward exchange contracts that qualify for furiate-shori,and designated exceptional accounting is applied to interest rate swaps that qualify for exceptional
accounting.
2) Hedging instrument and hedged item
Forward exchange contracts and non-deliverable forward (NDF) contracts are entered into as a hedge
against exchange rate fluctuation risk for foreign currency-denominated assets and liabilities and- 23 -

foreign currency-denominated forecast transactions. In addition, interest rate swap transactions are
conducted for interest expenses on long-term loans payable.
3) Hedging policy
The Company determines its hedging policy based on internal rules. As for forward exchange
contracts, exchange rate fluctuation risk is hedged. Furthermore, as for interest rate swap transactions,risk of increase in interest rate for interest expenses on long-term loans payable is hedged.
4) Method of assessing hedge effectivenessIn the period from inception of the hedge to assessment of the effectiveness, the Company compares
foreign currency-denominated assets and liabilities and foreign currency-denominated forecast
transactions with changes in cash flows of forward exchanges, which are hedging instruments, andjudges the effectiveness based on the variable ratio, etc. between the two. However, for interest rate
swaps that are accounted for using exceptional accounting, since the Company has confirmed thatimportant conditions for hedging instruments and hedged items are identical, the assessment ofeffectiveness is omitted.
2. Accounting Estimates(1) Valuation of unlisted shares, etc. including investments in venture companies
1) Amount recorded in the non-consolidated financial statements for the fiscal year under review
Investment securities
Loss on valuation of investment securities¥691 million¥225 million

2) Other information that contributes to understanding of details of accounting estimates
As for unlisted shares, etc., the real value is calculated on the basis of the amount of net assets per
share based on the latest financial statements that can be obtained from the investee, and the like. If
the real value declines significantly, valuation loss is recorded. Particularly investments in venturecompanies may be acquired at a higher price compared with the amount of net assets. In the casewhere the excess earning power, etc. is no longer expected in view of the status of achievement of
the medium- to long-term business plan obtained at the time of the acquisition and reasonableness of
future forecast, valuation loss is recorded only if the real value reflecting the excess earning power,
etc. has decreased significantly. The real value reflecting the excess earning power, etc. may beaffected by changes in the uncertain corporate environment in the future and other factors. If it
becomes necessary to review the real value reflecting the excess earning power, etc., additional losses
may be incurred in and after the next fiscal year.
(2) Estimate of allowance for highly doubtful accounts for receivables
1) Amount recorded in the non-consolidated financial statements for the fiscal year under review
Total receivables
Allowance for doubtful accounts¥3,563 million¥1,630 million

2) Other information that contributes to understanding of details of accounting estimates
Regarding receivables from subsidiaries categorized as highly doubtful receivables, the Company
examines the collectability of receivables individually using the financial content evaluation method,
and the estimated amount of bad debt is calculated based on an overall assessment of the subsidiary’s
solvency, taking into account the degree of insolvency of the subsidiary and its future business plans
based on assumptions such as future sales forecasts and operating profit margins. If it becomes
necessary to review the solvency due to future changes in the business environment, etc., theallowance for doubtful accounts may increase or decrease in the next fiscal year.
3. Notes to Non-consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment- 24 -¥2,880 million

(2) Contingent liabilities
Guarantees for borrowings from financial institutions and accounts payable of subsidiaries andassociates, etc.
AD DEVICE CO., LTD.
KAGA SOLUTION NETWORK CO., LTD.
EXCEL ASIAN TAIWAN CO., LTD.
EXCEL ELECTRONICS TRADING (THAILAND) CO., LTD.
Other
Total

¥2,738 million¥1,144 million¥587 million¥512 million¥78 million¥5,061 million

Guarantees for performance guarantee insurance contracts of subsidiaries and associates
KAGA TECHNO SERVICE CO., LTD.

¥2,842 million(3) Monetary receivables from or payables to subsidiaries and associates
Short-term monetary receivables
Short-term monetary payables¥10,435 million¥6,011 million(4) Monetary receivables from or payables to the Directors and Auditors
Monetary payables¥1,169 million

The above monetary debts are debts related to the discontinuation of payments due to the abolishmentof the directors’ retirement benefits system approved at the 50th Ordinary General Meeting of
Shareholders held on June 28, 2018.
4. Notes to Non-consolidated Statement of Income
Volume of transactions with subsidiaries and associates
Amount of operating transactions
Net sales
Purchase of goods
Supply of materials for value to subsidiaries and associates for subcontract
processing
Transactions other than operating transactions¥21,477 million¥35,422 million¥3,761 million¥14,486 million

5. Notes to Non-consolidated Statement of Changes in Equity
Number of treasury sharesClasses of shares

Number of shares at
beginning of the fiscal
year

Increase (shares)

Decrease (shares)

Number of shares at
end of the fiscal year

2,438,777
1,036
7,475
2,432,338
Common share(Note) The increase and decrease in the number of treasury shares are due to an increase resulting from the purchase requestof 1,036 shares less than one unit and a decrease resulting from the granting of 7,475 shares of restricted shares todirectors. The number of treasury shares at the end of the fiscal year under review is 2,206 shares less than the numberof treasury shares at the end of the fiscal year under review in the Notes to the Consolidated Financial Statements due
to shares of the Company held by associates accounted for using equity method.

- 25 -

6. Notes to Tax Effect Accounting(1) Main contributing factors to deferred tax assets and deferred tax liabilities
Deferred tax assets
Devaluation of inventories
Deterioration in valuation of shares of subsidiaries
Accrued enterprise tax
Loss on valuation of investment securities
Directors’ retirement benefits
Allowance for doubtful accounts
Accrued bonuses
Provision for retirement benefits
Other
Subtotal of deferred tax assets
Valuation allowance on deductible temporary differences
Subtotal of valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Asset retirement cost
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)¥22 million¥1,405 million¥45 million¥736 million¥358 million¥1,852 million¥454 million¥25 million¥817 million¥5,718 million¥(4,698) million¥(4,698) million¥1,019 million¥(1,248) million¥(4) million¥(16) million¥(1,269) million¥(249) million(2) Reconciliation of significant differences between the statutory effective tax rate and the actual effective
rate of income taxes after application of deferred tax accounting
Statutory effective tax rate
(Adjustments)
Exclusion of entertainment expenses from deductible expenses
Exclusion of dividends income from taxable income
Non-taxable dividends from overseas subsidiaries
Non-deductible overseas withholding
Inhabitant per capita taxes
Changes in valuation allowance
Exclusion of provision for directors’ bonuses from deductible expenses
Tax credits under the wage promotion system
Subtotal
Effective rate of income taxes after application of deferred tax accounting

30.6%
0.3%
(12.6)%(7.5)%
1.2%
0.1%(0.9)%
0.7%(0.2)%(19.0)%
11.7%(3) Accounting treatment of corporation tax and local corporation tax or accounting treatment of tax effectaccounting related to these
The Company applies the group tax sharing system, and accounting treatment of corporation tax andlocal corporation tax or accounting treatment and disclosure of tax effect accounting related to these areconducted pursuant to “the Practical Solution on the Accounting and Disclosure Under the Group Tax
Sharing System” (Practical Solution No. 42, August 12, 2021).

- 26 -

7. Transactions with Related Party
Subsidiaries and associates of the Company

Category

Name ofcompany

KAGA
DEVICES
CO., LTD.

Location

Chiyoda-ku,
Tokyo

KAGA
SOLUTION Chuo-ku,
NETWORK Tokyo
CO., LTD.

Percentage
of voting
Capital stockrights, etc., RelationshiporTransaction
Details of business held (or heldwith theinvestments
detailsof therelated party
in capitalCompany)(%)
Sale of electronic
components,¥395 million
electronicequipment, etc.

Transaction
Endingamountbalance
Account title(Millions of(Millions of
yen)
yen)

Borrowingof funds(zerobalance)

Short-termloanspayable to
1,828
subsidiaries
andassociates

1,966

Borrowingof funds(zerobalance)

Short-termloanspayable to
4,772
subsidiaries
andassociates

6,025

Purchasingof
merchandise

Accounts
11,719 payable trade

2,328

Guarantee ofobligation

1,144

–

–

Borrowingof funds,(holding)
guarantee ofGuarantee of
Directly
obligation,
obligation
96.7 andinterlocking
of officers

2,738

–

–

Borrowing(holding)of funds andDirectlyinterlocking
100.0
of officers

Development,
design, installation,and maintenanceof computer
Borrowing
network systems,of funds,
and sale of(holding)
guarantee of¥310 million information
Directly
obligation,equipment,
100.0 andsoftware,interlocking
photosensitiveof officers
material, andoptical equipment,
etc.

AD DEVICE Chiyoda-ku,
CO., LTD.
Tokyo

Sale of electronic
components,¥301 million
electronicequipment, etc.

KAGA
MICRO
Chiyoda-ku,
SOLUTION Tokyo
CO., LTD.

Development,
manufacture, sale,and recycling ofLending ofcomputers,(holding)
Lending offunds and¥300 million computer
Directly
funds (zerointerlocking
peripheral
100.0
balance)of officers
equipment, andelectric equipment,
etc.

Short-term
loans
receivable
2,608 fromsubsidiaries
andassociates

1,589

Manufacture,
Lending of(holding)
Lending ofwholesale, and salefunds and
Directly
funds (zeroof sports goods,
interlocking
100.0
balance)etc.
of officers

Short-term
loans
receivable
2,060 fromsubsidiaries
andassociates

2,090

9,134

1,501

Subsidiary

KAGA
SPORTS
CO., LTD.

KAGA FEI
Co., Ltd.

Chiyoda-ku,
Tokyo

Yokohama,
Kanagawa

KAGA EMS
Towada,TOWADA
AomoriCO., LTD.

¥50 million

Sale of electronic¥4,877 components,
million electronicequipment, etc.

Lending of(holding)
funds andLending of
Directlyinterlocking funds
100.0
of officers

Short-term
loans
receivable
7,619 fromsubsidiaries
andassociates

Manufacture andsale of electronic¥30 million equipment,
electronic
components, etc.

Lending of(holding)
funds andLending of
Directlyinterlocking funds
100.0
of officers

Short-term
loans
receivable
1,255 fromsubsidiaries
andassociates- 27 -

Category

Name ofcompany

Location

Percentage
of voting
Capital stockrights, etc., RelationshiporTransaction
Details of business held (or heldwith theinvestments
detailsof therelated party
in capitalCompany)(%)

Transaction
Endingamountbalance
Account title(Millions of(Millions of
yen)
yen)

Lending of(holding)
funds andLending of
Directlyinterlocking funds
100.0
of officers

Short-term
loans
receivable
1,556 fromsubsidiaries
andassociates

1,606

3,860

1,415

KyokutoMoriguchi,Electric Co.,
Osaka
Ltd.

Manufacture andsale of electronic¥99 million equipment,
electronic
components, etc.

TAXAN
San Luis
MEXICO
Potosi,S.A. DE C.V. Mexico

Manufacture and861 million sale of electronic
Mexican equipment,
peso electronic
components, etc.

Lending of(holding)
funds andLending of
Directlyinterlocking funds
100.0
of officers

Short-term
loans
receivable
300 from
subsidiaries
andassociates

Manufacture andsale of electronic
102 million
equipment,
THBelectronic
components, etc.

Supplies
some
products soldby theCompany(holding)
Sale ofand theDirectly
merchandise
100.0 relevant
company.
Directors
serve
concurrently.

Accounts
3,072 receivable trade

KAGA
ELECTRONICSSamut(THAILAN Prakan,
D)
Thailand
COMPANY
LIMITED(Note) Transaction terms and policy for determination thereof, etc.
(1) Transactions are determined by mutual consultation based on contracts and other agreements.
(2) Interest rates of interest income and interest expenses on loans and borrowings to the above companies areindexed to certain market interest rates.
(3) Zero balance refers to the “domestic yen funds pooling service” of the Cash Management System (CMS). As
funds are transferred daily at zero balance, the transaction amount lists the average amount of loans andborrowings during the fiscal year under review.
(4) Allowance for doubtful accounts of 1,630 million yen is provided for doubtful receivables from subsidiaries. In
addition, provision of allowance for doubtful accounts regarding a subsidiary of 26 million yen has been recorded
for the fiscal year under review.

8. Revenue Recognition
Information forming the basis for understanding revenue
Information forming the basis for understanding revenue is omitted as the same contents are stated in (5)Accounting policy for revenues and expenses of 1. Significant Accounting Policies.
9. Per Share Information(1) Net assets per share¥2,295.42(2) Earnings per share¥588.68- 28 -