The business combination described in this document involves securities of Japanese companies. The business combination
is subject to disclosure requirements of Japan that are different from those of the United States. Financial information
included in this document, if any, was excerpted from financial statements prepared in accordance with foreign accounting
standards that may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities laws,
since the issuers are located in Japan and some or all of their officers and directors reside outside of the United States. You
may not be able to sue a Japanese company or its officers or directors in a Japanese court for violations of the U.S. securities
laws. It may be difficult to compel a Japanese company and its affiliates to subject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than under the business combination, such as in the
open market or through privately negotiated purchases.
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail. Ryoyo Electro Corporation andRyosan Company, Limited assume no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.

Extraordinary General Meeting of Shareholders
Reference Documents for Extraordinary General Meeting—
Supplementary Volume
Proposal 1

Approval of the Share Transfer Plan with Ryosan Company, Limited.

1. Content of Financial Statements, etc. for the Most Recent Business Year (ended March
2023) for The Ryosan Company, Limited.
(“5. Matters relating to Ryosan” on p.38 of the Convocation Notice)* The above matters are not stated in the document to be delivered to shareholders who have requested deliveryof the document in accordance with laws and regulations and Article 16 of the Articles of Incorporation. In addition,at this Extraordinary General Meeting of Shareholders, regardless of whether or not a request for the delivery of awritten document is made, a written document containing the items to be provided in electronic measures that
excluded above matters will be sent to all shareholders in a uniform manner.

Ryoyo Electro Corporation
Securities code : 8068
-1

Business Report(From April 1, 2022 to March 31, 2023)

I Matters Concerning the Current Status of the Corporate Group
1 Business Progress and Results
General Outline
During the current consolidated fiscal year (from April 1, 2022 to March 31, 2023), although theimpact of the COVID-19 pandemic eased, the prolonged conflict between Russia and Ukraine caused
resources and energy prices to rise, the zero-COVID policy in China spurred supply chain disruptions,and monetary tightening policies were implemented in response to high inflation mainly in the U.S.,
Europe, and other developed economies, resulting in a further slowdown in the global economy.
Although the Japanese economy continued to recover, especially in consumer spending, adownturn in overseas economies, supply constraints, and the rapid depreciation of the yen required
close monitoring.
The electronics industry in which Ryosan Company, Limited (the "Company") operates
experienced both strong and weak performance, with stable demand for industrial equipment anddeclining demand for PCs. In addition, production activities were affected by supply constraints ofsemiconductors and electronic components, which has increased uncertainty about the future.
In such macro environment, the net sales for the current consolidated fiscal year were 325,657 million
yen (up 19.4% YoY) due to the effects of the measures under the 11th Medium-Term Business Plan,
including the harvesting of prior investment products and the growth in existing businesses, as wellas the effect of yen depreciation. Operating income was 15,423 million yen (up 74.1% YoY) as aresult of increased income, the effect of yen depreciation, and the containment of SG&A expenses
through more efficient SG&A management. Ordinary income was 13,361 million yen (up 65.3%
YoY) despite foreign exchange losses arising from revaluation of foreign-currency-denominatedliabilities. Profit attributable to owners of parent amounted to 9,224 million yen (up 72.1% YoY).
Business Segment Overview
In the Device Business, net sales were 285,580 million yen (up 18.6% YoY) and operating income
was 13,881 million yen (up 83.1% YoY), mainly due to sales growth in consumer products and-2industrial equipment products.
In the Solution Business, net sales were 40,076 million yen (up 26.0% YoY) and operating income
was 2,129 million yen (up 49.8% YoY) due to large-scale projects for the telecommunications sector
and an increase in sales of products for the social infrastructures sector.

2 Capital Expenditure
The capital expenditure during the current consolidated fiscal year totaled 347 million yen. Its
major portion was the acquisition of building facilities, development equipment, and office suppliesof the Company. The necessary funds were allocated from the Company’s own funds.

3 Issues to be Addressed(i) Business environment and efforts under the Medium-Term Business Plan
Since our establishment, the Company has been aiming for the fusion of human and technologicalprogress as an electronics system coordinator based on the belief that "a corporation is a public
institution."In the electronics industry in which the Company operates, digitalization has accelerated across allindustries with the COVID-19 pandemic as the turning point. Within such digitalization, demand forsemiconductors and electronic components is expected to grow in the medium to long-term as afoundation supporting key technologies in the digital society such as 5G, AI, IoT, automated driving,robotics, and DX.
On the other hand, in the current fiscal year, the slowdown of the global economy is expected tocontinue due to increasing geopolitical risks and monetary tightening policies in various countries.
There is a possibility that market reversal becomes a reality in the electronics industry, anduncertainty about the future has increased.
Under these circumstances, the 11th Medium-Term Business Plan (period from FY ended March
31, 2022 to FY ending March 31, 2024) (the "Plan"), which aims to materialize the long-term vision"RS Innovation 2030," is entering its final year. The Plan is designed to shift the management stancefrom a rigid "defensive" mode for improving profitability to an "offensive" (active) mode focused ontransforming the business. The Plan includes: "Portfolio diversification" by thorough review ofbusiness opportunities for acquired commercial rights and reforms of sales channels; "Strengtheningof local business in China and Hong Kong" through cooperation with local partners; "Harvesting ofprior investment products and making new investment"; "Investments to transform the Company's-3line of business" such as entry into new businesses including manufacturing businesses based on
customer needs; "Raising the efficiency of existing businesses" through the use of various digitaltechnologies; and "Reinforcing the foundations" such as overhauling management information andbolstering education systems, risk management, and governance frameworks. The managementtargets set forth in the Plan for FY ending March 31, 2024 (net sales: 263,000 million yen, grossprofit: 21,300 million yen, operating income: 6,900 million yen, and ROE: 5%) are expected to beachieved during the entire period of the Plan.
(ii) Management Integration with Ryoyo Electro Corporation
Since the acquisition of the Company's shares by Ryoyo Electro Corporation ("Ryoyo Electro") inFebruary 2023 and March 2023, the Company and Ryoyo Electro (collectively, the "Companies")
have worked to vitalize exchanges between them, holding discussions aimed at realizing a wide rangeof alliances and business synergies. As a result, the Companies entered into a Memorandum ofUnderstanding on May 15, 2023, after deciding that in order to improve profitability and operational
efficiency to the maximum extent, it is necessary to aim for the integration of the Companies'
management under the spirit of equality, rather than making separate efforts.
The Companies will strive to further enhance their corporate values as a new core group of
domestic electronics trading companies, maximizing the use of management resources, such as good
customer relations and excellent products and solutions that each of the Companies has built up over
the years, within a new framework.
In addition, in light of the fact that there is only a limited overlap between the products handled by
the Companies and between the Companies’ customers, the Companies will not only establish a solidmanagement base and improve productivity and management efficiency through expansion of scale,but also promote cross-sales of their respective products and build business models that lead to thecreation of new value. The Companies will aim to realize a new vision for electronics trading
companies that create solutions and lead to solving problems and concerns their customers and theentire market are facing.

-44 Changes in Assets, Profit and Loss
(1) Changes in Assets, Profit and Loss of the Corporate Group(Millions of yen)

64th Fiscal Year
(Apr 2019Mar 2020)

65th Fiscal Year
(Apr 2020 Mar 2021)

66th Fiscal Year
(Apr 2021 Mar 2022)

67th Fiscal Year
(Apr 2022 Mar 2023)

227,297219,884

272,647

325,657

2,916

5,122

8,085

13,361

1,193

4,586

5,359

9,224

Net income per share

50.96 yen

195.78 yen

228.75 yen

393.70 yen

Total assets

137,746

148,087

190,548

188,188

Net assets

84,93589,60994,724

102,731

PeriodClassification
Net sales
Ordinary income
Profitattributableowners of parent

to(Notes) 1. Net income per share is calculated based on the average total number of shares outstanding during the period.
2. "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been
applied from the beginning of the 66th Fiscal Year, and the figures for assets, profit/loss for the 66th Fiscal Yearand subsequent fiscal years are after the application of these accounting standards.
3. In the calculation of net income per share, the Company's shares held by the Trust in connection with the stock
remuneration system are included in the treasury shares that are deducted in the calculation of the average numberof shares outstanding during the period.

(2) Changes in the Company's Assets, Profit and Loss

(Millions of yen)

64th Fiscal Year
(Apr 2019 Mar 2020)

65th Fiscal Year
(Apr 2020 Mar 2021)

66th Fiscal Year
(Apr 2021 Mar 2022)

67th Fiscal Year
(Apr 2022 Mar 2023)

144,381

138,435

170,645

190,816

Ordinary income

827

4,045

5,535

7,660

Net income (loss)

(395)

3,830

2,848

5,209

(16.87 yen)

163.49 yen

121.60 yen

222.34 yen

Total assets

100,038

104,674

131,713

113,736

Net assets

61,65464,44764,214

66,234

PeriodClassification
Net sales

Net income (loss) per share(Notes) 1. Net income (loss) per share is calculated based on the average total number of shares outstanding during the period.

-5

2. "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been
applied from the beginning of the 66th Fiscal Year, and the figures for assets, profit/loss for the 66th Fiscal Yearand subsequent fiscal years are after the application of these accounting standards.
3. In the calculation of net income per share, the Company's shares held by the Trust in connection with the stock
remuneration system are included in the treasury shares that are deducted in the calculation of the average numberof shares outstanding during the period.

5 Principal Businesses (as of March 31, 2023)
As a trading company specializing in electronics, the Company sells products to electronicequipment manufacturers and other customers in Japan and overseas.
The Company's business is divided into two segments, "Device" and "Solution," and the products
handled in each segment are as follows:
Device Business:
Solution Business:

Semiconductors and Electronic Components
IT Equipment and Solutions

6 Principal Business Locations (as of March 31, 2023)(1) Company
Ryosan Company, Limited

Head office

2-3-5, Higashi-Kanda, Chiyoda-ku, Tokyo

Sales Departments/
Branches

1st Sales Department, 3rd Sales Department, System Equipment Sales
Department (all of the above are located in Chiyoda-ku, Tokyo),
Tohoku, Mito, Takasaki, Nishitama, Shonan, Shizuoka, 1st Nagoya,
2nd Nagoya, Kyoto, Osaka, Kobe, Himeji, and Fukuoka Sales
Branches

Distribution Center

Kawasaki, Osaka

Technology Division

Head Office Annex, Sotokanda(Note) Effective April 26, 2022, Sendai Sales Branch and Iwaki Sales Branch were merged to form Tohoku Sales Branch.

-6

(2) Subsidiaries
HONG KONG RYOSAN LIMITED

Hong Kong Special Administrative
Region of the People's Republic of China

EDAL ELECTRONICS COMPANY LIMITED

Hong Kong Special Administrative
Region of the People's Republic of China

ZHONG LING INTERNATIONAL TRADING（SHANGHAI）
CO., LTD.

Shanghai, People's Republic of China

DALIAN F.T.Z RYOSAN INTERNATIONAL TRADING CO.,LTD.

Dalian, Liaoning, People's Republic of
China

RYOTAI CORPORATION

TaiwanSINGAPORE RYOSAN PRIVATE LIMITED

Republic of Singapore

RYOSAN IPC（MALAYSIA）SDN. BHD.

MalaysiaRYOSAN（THAILAND）CO., LTD.

Kingdom of Thailand

RYOSAN INDIA PRIVATE LIMITED

Republic of India

KOREA RYOSAN CORPORATION

Republic of Korea

RYOSAN TECHNOLOGIES USA INC.

United States of America

RYOSAN EUROPE GMBH

Federal Republic of Germany-77 Employees (as of March 31, 2023)(1) Employees of the Corporate Group
Segment

Number of employees

YoY

Device Business

752

(69)

-19

(0)

Solution Business

113

(16)

5

(0)

All (common)

89

(29)

13

(4)

Total

954

(114)

-1

(4)

(Notes) 1. The number of employees is the number of working employees (excluding employees seconded from the Groupand including those seconded to the Group), and the number of temporary employees (i.e. contract employees, parttimers, and temporary staff) is shown in parentheses.
2. The number of employees stated as "All (common)" is the number of employees who are members of administrative
divisions that cannot be classified into a specific segment.

(2) Employees of the Company
Number of employees
598

(114)

YoY
-12

Average age(4)

Average service years
44.1

16.1

(Notes) 1. The number of employees is the number of working employees (excluding employees seconded from the Company
and including those seconded to the Company), and the number of temporary employees (i.e. contract employees,
part-timers, and temporary staff) is shown in parentheses.
2. Average age and average service years are calculated excluding seconded employees.

-88 Significant Subsidiaries
Name

Capital stock

Investment
ratio

Principal businesses

HONG KONG RYOSAN
LIMITEDHKD 5 million

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment

EDAL ELECTRONICS
COMPANY LIMITEDHKD 1 million

100%

Import and local purchase and sale ofsemiconductors
andelectronic
components

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment

ZHONG LING
INTERNATIONAL TRADING（SHANGHAI）CO., LTD.

RMB 27 million

DALIAN F.T.Z RYOSANINTERNATIONAL TRADING
CO., LTD.

RMB 1 million

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment

RYOTAI CORPORATION

NTD 80 million

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment

SINGAPORE RYOSANPRIVATE LIMITED

SD 1,460 thousand

100%

RYOSAN IPC（MALAYSIA）SDN. BHD.

MYR 1 million

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment
Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment
Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment
Commission sales and local purchaseand sale of semiconductors andelectronic components

RYOSAN（THAILAND）CO.,LTD.

THB 12 million

100%

RYOSAN INDIA PRIVATELIMITED

INR 47 million

100%

KOREA RYOSANCORPORATIONKRW 1,000 million

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment

RYOSAN TECHNOLOGIESUSA INC.

USD 300 thousand

100%

Import/export and local purchase andsale of semiconductors, electronic
components, and IT equipment-9

RYOSAN EUROPE GMBH

EUR 1 million(Note) The investment ratio includes indirect holdings.

-10

100%

Import/export and local purchase andsale of semiconductors and electronic
components

9 Status of Financing
The Group raised funds through borrowings from financial institutions and the issuance ofcommercial papers.

10 Principal Lenders (as of March 31, 2023)(Millions of yen)
LenderLoan balance

Sumitomo Mitsui Banking Corporation

18,556

MUFG Bank, Ltd.

14,147

Sumitomo Mitsui Trust Bank, Limited

1,000

11 Other Important Matters Concerning the Current Status of the Corporate GroupAt the meeting of the Board of Directors held on May 15, 2023, the Company resolved to reach abasic agreement with Ryoyo Electro in order to realize the integration of management, and theCompanies entered into a Memorandum of Understanding.
For more details, please refer to the "Notice of Execution of a Memorandum of Understanding forManagement Integration between Ryoyo Electro Corporation and Ryosan Company, Limited"disclosed on the same day.

-11

II Matters Concerning the Company's Shares (as of March 31, 2023)
1 Total number of authorized shares:
2 Total number of issued and outstanding shares:
3 Number of shareholders:
4 Major shareholders:

155,673,598 shares
25,000,000 shares
5,866
Number of shares
Shareholding ratio
held

Name of shareholder

thousand shares%

Ryoyo Electro Co.

4,705

20.06

The Master Trust Bank of Japan, Ltd. (Trust account)

2,919

12.44

Sumitomo Mitsui Banking Corporation

1,015

4.32

Sumitomo Life Insurance Company

861

3.67

Custody Bank of Japan, Ltd. (Trust account)

821

3.50

Nippon Life Insurance Company

736

3.14

MUFG Bank, Ltd.

650

2.77

NEC Corporation

604

2.57

NORTHERN TRUST CO.(AVFC)RE NON TREATY CLIENTS ACCOUNT

566

2.41

City Index Eleventh Co., Ltd.

525

2.24

(Notes) 1 The Company holds 1,544 thousand shares of treasury stock but is excluded from the above major shareholders.
2. Shareholding ratio is calculated after excluding the treasury shares. Such treasury shares do not include 17 thousand
shares of the Company's shares held by the Trust in connection with the stock remuneration system.

-12

III Matters Concerning Company Officers
1 Directors (as of March 31, 2023)
Position in the
Company
Representative Director

Kazuhiko Inaba

President

Director

Shunya Endo

Director

Hiroyuki Igari

Executive Officer
General Manager, Sales Planning and Control Headquarters, General
Manager, 1st Domestic Marketing and Sales Headquarters
Executive Officer
General Manager, Administrative Headquarters

Director

Atsushi Kawabata

Senior Adviser, Global Environment Business Division, Global
Environment Division, Hitachi, Ltd.

Director

Haruyoshi Kawabe

Advisor, Cyberlinks Co., Ltd.

Director(Full-time Audit andSupervisory Committee
Member)Director(Audit and Supervisory
Committee Member)

Keiji Hirooka

Director(Audit and Supervisory
Committee Member)

Name

Responsibilities and important concurrent positions

Mahito Ogawa

Representative Director, ACE Consulting Inc.
Auditor, The Japan-British Society
Auditor, NPO Think Kids

Yasuko Teraura

Partner, Endeavour Law OfficeOutside Director, Seiko Group Corporation
Outside Auditor, Japan Overseas Infrastructure Investment Corporation forTransport & Urban Development(Notes) 1. Mr. Keiji Hirooka is appointed as a Full-time Audit and Supervisory Committee Member in order to enhance theeffectiveness of the Audit and Supervisory Committee's auditing and supervisory functions.
2. Directors Mr. Atsushi Kawabata and Mr. Haruyoshi Kawabe, and Directors (Audit and Supervisory Committee
Members) Mr. Mahito Ogawa and Ms. Yasuko Teraura are Outside Directors.
3. There are no special relationships between the Company and the companies where the Outside Directors holdimportant concurrent positions.
4. The Company has designated Directors Mr. Atsushi Kawabata and Mr. Haruyoshi Kawabe, and Directors (Audit
and Supervisory Committee Members) Mr. Mahito Ogawa and Ms. Yasuko Teraura as independent directors inaccordance with the rules set forth by Tokyo Stock Exchange, Inc. (TSE) and has notified the TSE of suchdesignation.
5. Director (Audit and Supervisory Committee Member) Mr. Mahito Ogawa is a certified public accountant and has
considerable knowledge of finance and accounting.
6. The Company has established the Nomination and Remuneration Advisory Committee as a voluntary committee.

-13

The members of the Nomination and Remuneration Advisory Committee are: Mr. Kazuhiko Inaba, Representative
Director; Mr. Atsushi Kawabata and Mr. Haruyoshi Kawabe, Directors; and Mr. Mahito Ogawa and Ms. Yasuko
Teraura, Directors (Audit and Supervisory Committee Members).
7. The Company has introduced an executive officer system, and the status of Executive Officers, excluding those
concurrently serving as Directors, as of March 31, 2023 is as follows.
Name

Responsibilities

Hirofumi Kitora

Executive Officer
General Manager, 2nd Domestic Marketing and Sales Headquarters

Tatsumi Nakahigashi

Executive Officer
General Manager, International Marketing and Sales Headquarters

Shunsuke Maruo

Executive Officer
General Manager, 1st Device Business Headquarters

Koji Horie

Executive Officer
General Manager, 2nd Device Business Headquarters

Yasuhiko Kirihata

Executive Officer
General Manager, 3rd Device Business Headquarters

Satoshi Mizusawa

Executive Officer
General Manager, Solution Business Headquarters

Kenji Ishimura

Executive Officer
General Manager, Engineering Headquarters

Norihiko Takahashi
Hideo Yuasa

Executive Officer
General Manager, Corporate Planning Headquarters
Executive Officer
General Manager, Finance and Accounting Headquarters(Notes) 1. Mr. Shunsuke Maruo assumed the position of Executive Officer as of January 5, 2023.
2. Mr. Ryuji Iwadate retired from the position of Executive Officer as of January 5, 2023.

-14

2 Remuneration, etc. of Directors for the Current Fiscal Year
(1) Total amount of remuneration, etc. paid to Directors during the current fiscal year

Classification of Officers

Directors (excluding Audit andSupervisory Committee
Members and Outside
Directors)
Directors (Audit andSupervisory Committee
Members)(excluding Outside Directors)
Outside Directors(excluding Audit andSupervisory Committee
Members)
Outside Directors (Audit andSupervisory Committee

Total amount of
remuneration,etc.
(millions ofyen)

Total amount by remuneration type (millions of yen)Fixed remuneration

Performancebased
remuneration

Basic
Stock-based
remuneration renumeration

Bonus

Non-monetary
renumeration

Number of
officers
covered(persons)

152

52

2

82

14

3

16

15

0

-

-

2

11

11

-

-

-

2

19

19

-

-

-

4

Members)(Notes) 1. The amount of remuneration, etc. of Directors does not include the amount of employee salaries of Directors who
concurrently serve as employees.
2. The above includes three (3) Directors who retired at the close of the 66th Ordinary General Shareholders' Meeting
held on June 24, 2022.
3. Stock-based remuneration in the breakdown of fixed remuneration represents a certain percentage of fixed
remuneration that was contributed by the relevant Director to the directors' shareholding association for theacquisition of the Company's treasury shares.
4. The performance indicator selected as the basis for calculating the amount of performance-based remuneration isthe amount of net income per share, and the reason for selecting this performance indicator is the Company's efforts
to improve capital efficiency. The performance-based remuneration is determined by the Representative Director
under the authorization of the Board of Directors according to the degree of achievement of the target values foreach fiscal year. Changes in net income per share, including the current fiscal year, are shown in the table in "4Changes in Assets, Profit and Loss, (1) Changes in Assets, Profit and Loss of the Corporate Group" in "I. Matters
Concerning the Current Status of the Corporate Group" on page 4 above.
5. As non-monetary remuneration, the Company introduced a performance-based stock remuneration system at the
66th Ordinary General Shareholders' Meeting held on June 24, 2022. It was resolved that under this remuneration
system: the Company contributes money to the trust, and the trust acquires Company shares using the relevant
contribution as capital, and the Company shares are issued to the eligible persons in proportion to the number of-15

points awarded to them; the eligible persons are Directors (excluding Audit and Supervisory Committee Members
and Outside Directors) and the applicable period is from the FY ended March 31, 2023 to the FY ending March
31, 2024; the Company will contribute money to an upper limit of 80 million yen in total as funds for the acquisitionof Company shares necessary to issue the relevant shares to the eligible persons; and the upper limit on the numberof points to be awarded to the eligible persons is 9,000 points per fiscal year (a point is equivalent to one Company
share).

(2) Matters concerning resolutions of the General Shareholders' Meeting regarding remuneration, etc. of
Directors
The Company resolved at the 60th Ordinary General Shareholders' Meeting held on June 23, 2016that the maximum amount of remuneration for Directors (excluding Directors who are Audit andSupervisory Committee Members) will be 300 million yen per year (not including employee salaries
for Directors who concurrently serve as employees) and the maximum amount of remuneration for
Directors (Audit and Supervisory Committee Members) is 200 million yen per year. As of the closeof the 60th Ordinary General Shareholders' Meeting held on June 23, 2016, the number of Directors(excluding Directors who are Audit and Supervisory Committee Members) was four (4), and thenumber of Directors (Audit and Supervisory Committee Members) was six (6). Separately, aresolution was passed at the 66th Ordinary General Shareholders' Meeting held on June 24, 2022 tointroduce a performance-based stock remuneration. As of the close of the 66th Ordinary General
Shareholders' Meeting held on June 24, 2022, the number of Directors (excluding Directors who are
Audit and Supervisory Committee Members) in accordance with the said resolution was three (3).
For an overview of this resolution, please refer to Note 5 in (1) above.
(3) Matters concerning the policy for determining the details of remuneration, etc. for each individual
Director(i) Method of determining policy
The Company's policy for determining the details of individual Director's remuneration isdetermined by a resolution of the Board of Directors. In addition, the Nomination and Remuneration
Advisory Committee considers the nature of the remuneration system for the Directors.
(ii) Basic policy on officer remuneration
The Company's officer remuneration system is based on the following basic policies:▪ The remuneration structure will be fair and accountable;▪ The remuneration structure will commensurate with the functions and roles of each officer;▪ The remuneration structure takes into consideration the improvement of corporate value; and-16▪ The remuneration structure reflects the management environment and business performance of theGroup.
(iii) Remuneration structure
Directors' remuneration consists of fixed remuneration, performance-based remuneration, andstock-based remuneration, with remuneration levels commensurate with their roles andresponsibilities and determined by reference to peer group remuneration benchmarks. Fixed
remuneration is paid monthly. The performance-based remuneration consists of a Director's bonus
system linked to the standard amount of net income per share, which is paid in a timely manner.
The Company has introduced a performance-based stock remuneration system using a trust. In
accordance with the rules for the issuance of shares, points are awarded on a certain date each year
based on the degree of achievement of corporate position and performance targets, etc., and when
the prescribed requirements are met, the Company shares are issued in proportion to the number ofthe points awarded, thereby increasing the incentives for sharing shareholder value and improving
corporate value in the medium and long term. Directors who are Audit and Supervisory Committee
Members and Outside Directors are paid only fixed remuneration, as their role is to supervise
management from an independent perspective.
(4) Matters concerning delegation of authority to determine the details of remuneration, etc. for individual
Directors
Pursuant to the authorization of the Board of Directors, the remuneration for Directors (excluding
Directors who are Audit and Supervisory Committee Members) for the current fiscal year isdetermined by Mr. Kazuhiko Inaba, Representative Director and President of the Company, whooversees the Group. This includes specific details of performance indicators related to performancebased remuneration, the method of calculating the amount or number of performance-based
remuneration, and the ratio of each type of remuneration. The Board of Directors takes measures toensure that such authority is properly exercised by the Representative Director, including deliberationby the Nomination and Remuneration Advisory Committee, the majority of which is composed of
Outside Directors, to ensure compliance with the decision-making policy. The Company has
determined that the amount of remuneration for each individual Director (excluding Directors who
are Audit and Supervisory Committee Members) is in line with the Company's decision-making
policy because the amount of remuneration is determined through such procedures. Remuneration
for Directors who are Audit and Supervisory Committee Members is determined through discussions-17

at the Audit and Supervisory Committee meetings.

3 Outside Officers(1) Attendance at meetings of the Board of Directors and the Audit and Supervisory Committee during
the current fiscal year
Board of Directors meetings
Classification

Name

Director

Atsushi Kawabata

Director

Haruyoshi Kawabe

Number ofattendances
10 times /10 times
10 times /10 times

Percentage ofattendance

Audit and Supervisory
Committee meetings
Number ofPercentage ofattendances
attendance

100%

-

-

100%

-

-

Director (Audit and13 times /13 times /Supervisory Committee
Mahito Ogawa
100%
100%
13 times
13 times
Member)Director (Audit and
10 times /10 times /Supervisory Committee
Yasuko Teraura
100%
100%
10 times
10 times
Member)(Note) Directors Mr. Atsushi Kawabata and Mr. Haruyoshi Kawabe and Director (Audit and Supervisory Committee
Member) Ms. Yasuko Teraura were elected at the 66th Ordinary General Shareholders' Meeting held on June 24,
2022, and the number of meetings of the Board of Directors and the Audit and Supervisory Committee held after
their appointment is shown.

(2) Activities of the Board of Directors and Audit and Supervisory Committee
The Company expects Mr. Atsushi Kawabata, Director, to provide appropriate advice based on his
wealth of experience and wide-ranging knowledge by having served as a manager in the automotive
industry for many years. He has provided effective recommendations and statements on managementfrom time to time, including supervision for improving transparency and fairness of management andadvice on improving corporate value over the medium to long term.
The Company expects Mr. Haruyoshi Kawabe, Director, to provide appropriate advice based on
his wealth of experience and wide-ranging knowledge by having served as an entrepreneur andmanager in the IT services industry for many years. He has provided effective recommendations andstatements on management from time to time, including supervision for improving transparency andfairness of management and advice on IT infrastructure development.
The Company expects Mr. Mahito Ogawa, Director (Audit and Supervisory Committee Member),to provide appropriate advice based on his wealth of experience and wide-ranging knowledge byhaving served as a certified public accountant and consultant for many years. He has provided-18

effective recommendations and statements on management from time to time, including supervision
for improving transparency and fairness of management and advice on strengthening internal controls.
The Company expects Ms. Yasuko Teraura, Director (Audit and Supervisory Committee Member),to provide appropriate advice based on her wealth of experience and wide-ranging knowledge byhaving served as a lawyer for many years. She has provided effective recommendations andstatements on management from time to time, including supervision for improving transparency andfairness of management and advice on sound management.
(3) Overview of limited liability contract
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company has entered into acontract with its Outside Directors to limit their liability for damages as stipulated in Article 423,
Paragraph 1 of the said Act. The maximum amount of liability for damages under the relevant
contract is the amount stipulated by law.

4 Matters Concerning the Company Officers' Liability Insurance Contracts(1) Scope of insured persons
Officers and executive officers of the Company, and officers of subsidiaries (seconded from Japan),etc. under the Companies Act(2) Overview of details of officers' liability insurance contracts
The contract provides indemnification for damages and legal expenses, etc. incurred by the insured
due to claims for damages arising out of acts (and omissions) committed by the insured in theperformance of their duties as an officer of the Company or its subsidiaries. However, as a measure
to ensure that the insured's performance of their duties is not compromised, the contract does notcover damages resulting from criminal acts such as bribery or intentional misconduct by the insured.
The premiums for such insurance contract are fully borne by the Company.

-19

IV Status of the Accounting Auditor
1 Name of the Accounting Auditor
Deloitte Touche Tohmatsu LLC
2 Amount of the Accounting Auditor's Fees, etc. for the Current Fiscal Year
Category(Millions of yen)Amount paid

Amount of the Accounting Auditor's fees, etc. for the current fiscal year

65

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

65(Notes) 1.The audit agreement between the Company and the Accounting Auditor does not clearly distinguish the amount ofaudit fees, etc. between audits under the Companies Act and audits under the Financial Instruments and ExchangeAct, and it is practically impossible to do so. Therefore, the amount of the Accounting Auditor's fees, etc. for thecurrent fiscal year is the sum of such fees.
2. The Company's major subsidiaries are subject to audits (limited to those under foreign laws and regulations
equivalent to the Companies Act or the Financial Instruments and Exchange Act) by persons other than the
Company's Accounting Auditor (persons who have qualifications equivalent to those of certified public accountants
or audit firms in foreign countries).
3. Based on the "Practical Guidelines for Cooperation with Accounting Auditors" published by the Japan Audit &Supervisory Board Members Association, the Audit and Supervisory Committee reviewed the changes in audit hours
by audit item and audit fees, as well as the audit plans and results for the past fiscal year, and examined theappropriateness of the estimates of audit hours and fees for the current fiscal year. As a result of such review andexamination, the Audit and Supervisory Committee approved the Accounting Auditor's fees, etc., pursuant to Article
399, Paragraphs 1 and 3 of the Companies Act.

3 Details of Non-audit Services
Not applicable.

4 Policy for Determining the Dismissal or Non-reappointment of the Accounting Auditor
The Audit and Supervisory Committee will determine the content of a proposal to be submitted to
the General Shareholders' Meeting regarding the dismissal or non-reappointment of the Accounting
Auditor, if it deems it necessary to do so (e.g. if it is difficult for the Accounting Auditor to perform
its duties).
If the Accounting Auditor is deemed to fall under any of the items listed in the sub-paragraphs of
Article 340, Paragraph 1 of the Companies Act, the Audit and Supervisory Committee will dismiss-20the Accounting Auditor with the consent of all Audit and Supervisory Committee Members. In suchcase, the Audit and Supervisory Committee Member designated by the Audit and Supervisory
Committee will report on the dismissal of the Accounting Auditor and the reasons therefor at theGeneral Shareholders' Meeting to be convened first after the dismissal.

-21

V Corporate Structure and Policy
1 Systems to Ensure that the Performance of Duties by Directors Conforms to Laws andRegulations and the Articles of Incorporation, and Other Systems to Ensure theAppropriateness of Business Operations, and the Status of the Operation of Such
Systems(1)

The Company's basic policy for the development of "systems to ensure that the performance of
duties by Directors conforms to laws and regulations and the Articles of Incorporation, and othersystems to ensure the appropriateness of the business operations of the Corporate Group consistingof the Company and its subsidiaries" is as follows:(i) A system to ensure that the performance of duties by Directors, etc. (including persons equivalent
to Directors of the Company's subsidiaries) and employees of the Company and its subsidiaries (the"Group") conforms to laws and regulations and the Articles of Incorporation
・ Directors, etc. and employees shall comply with the Corporate Mission Statement, as well as the
Corporate Charter and Code of Ethics embodying the Ryosan Spirit (the "Compliance Rules"), to
ensure that the performance of duties conforms to laws and regulations and the Articles ofIncorporation.
・The ethics officer shall strive to secure a system under which Directors, etc. and employees comply
with laws and regulations and the Articles of Incorporation through activities to disseminate andimplement the Compliance Rules.
・If a Director, etc. or an employee discovers any improper, illegal or unethical conduct or othermisconduct in the course of the Group's business, he/she shall call a group-wide compliance hotline,
and the ethics officer shall investigate the facts and take corrective action if necessary.
・A system shall be secured under which the Company's Audit Office, through its proper audits,
prevents the performance of duties in a way that violates laws and regulations and the Articles ofIncorporation.
(ii) A system relating to the retention and management of information concerning the performance of
duties by Directors of the Company
・Information concerning the performance of duties by Directors shall be properly retained andmanaged in accordance with the Board of Directors' Regulations, the Document Retention Rules
and the Information Security Management Rules.
-22

(iii) Rules and other systems relating to the management of the risk of loss of the Group・Environmental, disaster and information security risks shall be properly managed in accordancewith the Rules for Operation of Environmental Management Systems, the Basic Disaster Response
Rules and the Information Security Management Rules.
・Business risks shall be properly managed in accordance with the Sales Management Rules, theCredit Management Rules, and various rules on inventory control.
・In the event of an emergency related to the above risks, etc., appropriate measures shall be taken
through a crisis management system in accordance with the Crisis Management Manual and the
Basic Disaster Response Rules, among others.
(iv) A system to ensure that Directors, etc. of the Group perform their duties effectively
・Important matters concerning the management of the Group as a whole, such as medium-termbusiness plans and annual budgets, shall be discussed at a meeting or on other occasions in advanceand, after deliberation, decisions shall be made at a meeting of the Board of Directors.
・The Board of Directors shall establish Rules on Allocation of Duties and Rules on Functional
Authority with respect to the duties of each general manager and each subsidiary president, andensure the effective performance of duties in accordance with these rules.
・ In order to improve the effectiveness of the performance of duties by Directors, etc., therationalization and digitalization of business operations shall be promoted through the use of
information technology.
(v) A system relating to the reporting to the Company of matters concerning the performance of duties
by Directors, etc. of the Company's subsidiaries
・Directors, etc. and employees shall report important matters requiring approval to the Company orobtain approval for such matters from the Company in accordance with the Group Company
Management Rules and the Rules on Functional Authority.
・The management information of the Group shall be shared by holding Group branch manager
meetings or other important meetings on a regular basis.
・By conducting audits of the Company's subsidiaries in accordance with the Internal Audit Rules,
the Company's Audit Office shall confirm whether reports made by the Company's subsidiaries to
the Company and approvals given by the Company were properly made and given.
-23

(vi) Matters concerning employees who support the duties of the Audit and Supervisory Committee,
matters concerning the independence of such employees from the Directors, and matters relating
to ensuring the effectiveness of instructions given by the Audit and Supervisory Committee to such
employees
・In order to support the duties of the Audit and Supervisory Committee, an Audit and Supervisory
Committee Secretariat shall be established, and employees shall be assigned to support the Audit
and Supervisory Committee.
・ Employees who support the Audit and Supervisory Committee shall perform their duties inaccordance with the directions and orders of the Audit and Supervisory Committee, and shall not
be subject to the directions and orders of Directors in the performance of such duties.
・The employees referred to in the preceding item shall perform their duties in connection with such
instructions in preference to other duties, if so instructed by the Audit and Supervisory Committee.
(vii) Systems under which Directors and employees report to the Audit and Supervisory Committee
A. A system under which the Company's Directors and employees report to the Audit and Supervisory
Committee
・ Audit and Supervisory Committee Members may attend executive management meetings,
operational management meetings, and other important meetings.
・In addition to the matters required to be reported by law, Directors and employees shall reportimportant matters requiring approval and other matters under the Rules on Functional Authority to
the Audit and Supervisory Committee.
・Directors and employees may report any improper conduct or other misconduct in the course ofbusiness to the Audit and Supervisory Committee through the compliance hotline.
B. A system under which Directors, etc., corporate auditors and employees of the Company's
subsidiaries, or persons who have received reports from them report to the Audit & Supervisory
Committee of the Company
・Audit and Supervisory Committee Members may attend group branch manager meetings and otherimportant meetings, and receive reports from subsidiaries, as appropriate, through regular audits ofsubsidiaries.
・Directors, etc. and employees shall report important matters requiring approval and other mattersunder the Group Company Management Rules and the Rules on Functional Authority to the Audit-24

and Supervisory Committee.
・Directors, etc. and employees may report any improper conduct or other misconduct in the courseof business to the Audit and Supervisory Committee through the compliance hotline.
(viii) A system to ensure that a person who has made a report under the preceding item will not betreated unfavorably for making such report
・The Code of Ethics and the Whistle-blowing Rules shall provide that in no case shall a person who
has made a report to the Audit and Supervisory Committee be treated unfavorably for making suchreport.
(ix) Matters concerning the policy for handling expenses or obligations arising from the performanceof duties by Audit and Supervisory Committee Members of the Company
・In order to secure audits, the necessary budget shall be allocated for expenses incurred by Audit
and Supervisory Committee Members in the performance of their duties.

-25

(x) Other systems to ensure that the Audit and Supervisory Committee conducts audits effectively
・Effective audits shall be secured by appointing Audit and Supervisory Committee Members withspecial expertise.
・Audit and Supervisory Committee Members shall hold a meeting of the Audit and Supervisory
Committee on a regular basis and, if necessary, on an extraordinary basis.
・At a meeting of the Audit and Supervisory Committee, Audit and Supervisory Committee Members
shall report the status of implementation, results and other matters of audits, hold necessary
discussions, receive reports on accounting audits from the Accounting Auditor, and exchange
opinions.
(2)

A summary of the status of the operation of the systems to ensure the appropriateness of theCompany's business operations during the current fiscal year is as follows:(i) Status of compliance initiatives
As part of its activities to disseminate and implement the Compliance Rules, the Company has
made its employees fully aware of these rules through the "RS Values Training Course" and otherprograms.
In addition, the Company strives to prevent and promptly detect any actions that violate laws,
regulations, the Articles of Incorporation, the Compliance Rules or other internal rules through theGroup-wide compliance hotline.
(ii) Status of the performance of duties by Directors
At the 13 meetings of the Board of Directors held during the current fiscal year, supervision
was exercised over the performance of duties by Directors, including passing resolutions onimportant management matters, from the viewpoint of the compliance with laws and regulations,
the Articles of Incorporation and other rules, and the appropriateness of the performance of duties.
In addition, the Company has appointed four (4) Outside Directors to strengthen the Board of
Directors' function of supervising the performance of duties by Directors.
(iii) Status of the Audit and Supervisory Committee
At the 13 meetings of the Audit and Supervisory Committee held during the current fiscal year,
Audit and Supervisory Committee Members reported the status of the performance of duties andcompliance with laws, regulations and other rules by Directors, which they had ascertained mainly-26

by attending important internal meetings and auditing the condition of business operations andassets. In addition, the Audit and Supervisory Committee checked the development and operationof the Company's internal controls and promoted cooperation with, among others, the Accounting
Auditor and the internal control division.
(iv) Status of crisis management initiatives
All employees are fully informed of environmental, disaster and information security risks
through safety confirmation drills and regular training in accordance with various internal rules. In
addition, business risks are properly managed in accordance with various internal rules.
(v) Status of subsidiary (Group) management initiatives
The Company receives reports from its subsidiaries on important matters requiring approval,
as appropriate, in accordance with the Group Company Management Rules and other rules. In
addition, the management information of the Group is shared between Directors and employees byholding Group branch manager meetings and other important meetings on a regular basis, and theminutes of these meetings are shared with all employees.

2 Policy Relating to the Determination of Dividends from Retained Earnings, etc.
The Company recognizes the return of profits to shareholders as one of the important management
policies, and strives to increase the net income per share. Its basic policy is to pay dividends with atarget consolidated payout ratio of 50%.
In accordance with this basic policy, at the meeting of the Board of Directors held on May 15,2023, the Company resolved to pay a year-end dividend of 90 yen per share for the current
consolidated fiscal year. As a result, the annual dividend, including the interim dividend, will be 165
yen per share.
At the 50th Ordinary General Shareholders' Meeting held on June 23, 2006, the Company
amended its Articles of Incorporation to provide that dividends from retained earnings, etc. shall be
determined by resolution of the Board of Directors, except as otherwise provided by law.

-27

C o nsol i dat ed B al a nce S hee t(As of March 31, 2023)(Millions of yen)Account
ASSETS
Current assets
Cash and deposits
Notes and accounts
receivable - trade
Merchandise and finished
goodsWork in progress
Accounts Receivable-other
Other
Allowance for doubtful
accounts
Non-current assets
Property, plant and equipment
Buildings and structures
Land

AmountAccount

Amount83,336

16,760

LIABILITIESCurrent liabilities
Accounts payable - trade95,115

Short-term loans payable

33,70347,680

Lease obligations

16
14,345

Accounts payable-otherAccrued expenses

3,863
2,497

649

Income taxes payable

2,631

(645)

Other

173,923

14,265
8,364

Non-current liabilities
Lease obligations

39,999

157

483
2,120
318

2,539
5,179

Deferred tax liabilities
Net defined benefit liability

797
838

Leased assets
Other

451
193

Asset retirement obligations
Other

24
142

Intangible assets

1,059

Total liabilities

Investments and other assets
Investment securities

4,842
3,474
398
1,069

NET ASSETS
Shareholders' equity
Capital stock
Capital surplus(100)

Retained earnings

Deferred tax assets
Other
Allowancefordoubtfulaccounts

Treasury shares
Accumulated
othercomprehensive income
Valuationdifferenceonavailable-for-sale securities
Deferred gains or losses onhedgesForeign currency translation
adjustment
Remeasurements of defined
benefit plans-28

85,457
95,705
17,69019,11465,358(6,458)
7,026
1,443
1
5,649
(67)

Total Assets

188,188-29

Total net assets

102,731

Total liabilities and net assets

188,188

Consolidated Statements of Income(For the period from April 1, 2022 to March 31, 2023)(Millions of yen)Account

Amount325,657
292,848

Net sales
Cost of sales
Gross profit
Selling, general, and administrative
expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using
equity method
Commission fee
Rent income
Miscellaneous income

32,80817,385
15,423
37
77
61
149
48
217

Non-operating expenses
Interest expenses
Foreign exchange losses
Miscellaneous loss

1,205
1,403
43

591

2,653

Ordinary income
Extraordinary income
Gain on sales of non-current assets

13,36100Extraordinary loss
Loss on valuation of golf membership0013,362

Profit before income taxes
Income taxes - current
Income taxes - deferred

4,097
40

4,137
9,224
9,224

ProfitProfit attributable to owners of parent-30

Non-consolidated Balance sheet(As of March 31, 2023)(Millions of yen)Account
ASSETS
Current assets
Cash and deposits
Notes receivable - trade
Electronicallyrecordedmonetary claims - operating
Accounts receivable - trade
Merchandise and finished
goodsWork in progress
Accounts receivable - other
Other
Allowancefordoubtfulaccounts
Non-current assets

AmountAccount
LIABILITIESCurrent liabilities
Accounts payable - trade
Short-term loans payable

99,016
6,390
755
3,746

Lease obligations

57,84823,562

Amount45,28027,011
12,70977

Accounts payable - other

1,751

Accrued expenses

1,766

16
5,851
852
(6)

Income taxes payable
Other
Non-current liabilities

1,894
70
2,221

Lease obligations

128

14,720

Provision for retirement
benefits
Provision for loss on
guarantees
Asset retirement obligations
Other
Total liabilities
NET ASSETS
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Retained earnings
Legal retained earnings

Property, plant and equipment

7,829

Buildings
Structures
Tools, furniture and fixtures
Land
Leased assets
Intangible asset
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries andassociates
Investments in capital
Investments in capital ofsubsidiaries and affiliates
Deferred tax assets
Other

2,426
2
63
5,153
183
595
544
51
6,294
3,151
1,049
127
494
904
566

-31

460
1,579
24
29
47,50264,78917,69019,114
19,11434,443
1,371

Other retained earnings

33,071

General reserve
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments
Valuationdifferenceonavailable-for-sale securities
Deferred gains or losses on

19,30013,771(6,458)
1,444
1,443
1

Total Assets

hedgesTotal net assets
Total liabilities and net assets

113,736-32

66,234
113,736

Non-consolidated Statements of Income(For the period from April 1, 2022 to March 31, 2023)(Millions of yen)Account

AmountNet sales
Cost of sales

190,816
172,180

Gross profit
Selling, general, and administrative
expenses
Operating income

18,636
11,276
7,359

Non-operating income
Interest income

16

Dividend income
Consulting fee income

1,063
516

Miscellaneous income

169

Non-operating expenses
Interest expenses
Foreign exchange losses

558
882

Loss on investments in partnership
Miscellaneous loss

518

Ordinary income

1,765

1,464
7,660

Extraordinary income
Gain on sales of non-current assets

0Extraordinary loss
Loss on valuation of shares of subsidiaries andassociates
Loss on valuation of golf membership
Provision for loss on guarantees

0

4
0
199

203
7,457

Profit before income taxes
Income taxes - current

2,438

Income taxes - deferred

(191)

2,247
5,209

Profit-33

Accounting Auditor’s Report on the Consolidated Financial Statements
Independent Auditor’s Report
May 19, 2023

To the Board of Directors of Ryosan Company, Limited:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Limited
Liability Partner andEngagement Partner
Designated Limited
Liability Partner andEngagement Partner

Certifiedpublicaccountant:Certifiedpublicaccountant:

Shigeo Kawashima

Keiji Koide

OpinionPursuant to the provisions of Article 444, paragraph (4) of the Companies Act, we have audited the consolidated
financial statements of Ryosan Company, Limited (the “Company”) for the consolidated fiscal year from April 1, 2022 toMarch 31, 2023, which comprise the consolidated balance sheet, consolidated statement of income and consolidated
statement of changes in shareholders’ equity and the notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements fairly present, in all material respects, the status ofassets and profit and loss of the corporate group consisting of the Company and its consolidated subsidiaries for the
consolidated fiscal year for which the consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements” of this report. We are independent of the Company and its consolidated subsidiaries in accordance with theprovisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Other information comprises the Business Report and its supporting documents. Management is responsible for the
preparation and disclosure of such other information. The Audit and Supervisory Committee is responsible for overseeing
the performance of the duties of the Directors with respect to the development and operation of the reporting process ofsuch other information.
Our audit opinion on the consolidated financial statements does not cover the other information and we do not express
an opinion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read through the otherinformation and, in doing so, to consider whether the other information is materially inconsistent with the consolidated
financial statements or with our knowledge obtained in the audit, and to exercise due care to consider whether, in addition-34

to such material inconsistencies, there are other indications of material error in the other information.
If, based on the work we have performed, we conclude that there is a material error in the other information, we are
required to report that fact.
We have nothing to report in respect of the other information.
Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, including the development and operation of suchinternal control system as management determines is necessary to enable the preparation and fair presentation of theconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the appropriateness of theuse of the going concern assumption in the preparation of the consolidated financial statements, and disclosing, as
necessary, matters related to going concern in accordance with accounting principles generally accepted in Japan.
The Audit and Supervisory Committee is responsible for overseeing the performance of the duties of the Directors
relating to the development and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are, based on our audit, to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to express our independent
opinion on the consolidated financial statements in the auditor’s report. Misstatements may arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions ofusers of the consolidated financial statements.
Throughout the audit process, in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism in doing the following:•
We identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, and design and perform audit procedures responsive to those risks of material misstatement. The
selection and application of the audit procedures depend on the auditor’s judgment. In addition, we obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
•
As part of the risk assessment, we evaluate the Company’s internal control system relevant to the audit in order todesign audit procedures that are appropriate in the circumstances, although our audit of the consolidated financial
statements is not intended to express an opinion on the effectiveness of the Company’s internal control.
•
We assess the appropriateness of the accounting policies adopted by management and their application, as well as thereasonableness of accounting estimates and related disclosures made by the management.
•
We conclude on the appropriateness of management’s use of the going concern assumption in the preparation of theconsolidated financial statements and, based on the audit evidence obtained, whether a material uncertainty exists inrelation to events or circumstances that may cast significant doubt on the going concern assumption. If we determinethat there is a material uncertainty as to the going concern assumption, we are required to draw attention in our
auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures in the
consolidated financial statements as to such material uncertainty are inadequate, we are required to express a
modified opinion on the consolidated financial statements. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or circumstances may cause the Company to cease to bea going concern.
•
We evaluate whether the presentation of and disclosures in the consolidated financial statements are in accordancewith accounting principles generally accepted in Japan, as well as whether the presentation, structure and content of
the consolidated financial statements, including relevant disclosures, and the consolidated financial statements fairly-35

present the underlying transactions and other accounting events.
We obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its
subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and conduct of the audit of the consolidated financial statements. We remain solely responsible for our
audit opinion on the consolidated financial statements.
We communicate with the Audit and Supervisory Committee regarding the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit as wellas other matters required by auditing standards.
We also provide the Audit and Supervisory Committee with a statement that we have complied with the relevant ethicalrequirements regarding independence required in Japan, and report to them on matters that could reasonably be expected
to impair the auditor’s independence and the safeguards, if any, that have been taken to eliminate or reduce theimpairments.
•

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Neither our firm nor its engagement partners have any interest in the Company and its consolidated subsidiaries that isrequired to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

-36

Accounting Auditor’s Report on the Non-consolidated Financial Statements

Independent Auditor’s Report
May 19, 2023

To the Board of Directors of Ryosan Company, Limited:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Limited
Liability Partner andEngagement Partner
Designated Limited
Liability Partner andEngagement Partner

Certifiedpublicaccountant:Certifiedpublicaccountant:

Shigeo Kawashima

Keiji Koide

OpinionPursuant to the provisions of Article 436, paragraph (2), item (i) of the Companies Act, we have audited the nonconsolidated financial statements of Ryosan Company, Limited (the “Company”) for the 67th fiscal year from April 1,
2022 to March 31, 2023, which comprise the non-consolidated balance sheet, non-consolidated statement of income andnon-consolidated statement of changes in shareholders’ equity and the notes to the non-consolidated financial statements
as well as their supporting documents (the “Financial Statements”).
In our opinion, the accompanying Financial Statements fairly present, in all material respects, the status of assets andprofit and loss for the fiscal year for which the Financial Statements have been prepared in accordance with accounting
principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” of thisreport. We are independent of the Company in accordance with the provisions of the Code of Professional Ethics in Japan,
and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Other Information
Other information comprises the Business Report and its supporting documents. Management is responsible for the
preparation and disclosure of such other information. The Audit and Supervisory Committee is responsible for overseeing
the performance of the duties of the Directors with respect to the development and operation of the reporting process ofsuch other information.
Our audit opinion on the Financial Statements does not cover the other information and we do not express an opinion
thereon.
In connection with our audit of the Financial Statements, our responsibility is to read through the other information and,in doing so, to consider whether the other information is materially inconsistent with the Financial Statements or with ourknowledge obtained in the audit, and to exercise due care to consider whether, in addition to such material inconsistencies,-37there are other indications of material error in the other information.
If, based on the work we have performed, we conclude that there is a material error in the other information, we are
required to report that fact.
We have nothing to report in respect of the other information.
Responsibilities of Management and the Audit and Supervisory Committee for the Financial Statements
Management is responsible for the preparation and fair presentation of the Financial Statements in accordance withaccounting principles generally accepted in Japan, including the development and operation of such internal control
system as management determines is necessary to enable the preparation and fair presentation of the Financial Statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, management is responsible for assessing the appropriateness of the use of thegoing concern assumption in the preparation of the Financial Statements, and disclosing, as necessary, matters related togoing concern in accordance with accounting principles generally accepted in Japan.
The Audit and Supervisory Committee is responsible for overseeing the performance of the duties of the Directors
relating to the development and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our responsibilities are, based on our audit, to obtain reasonable assurance about whether the Financial Statements as awhole are free from material misstatement, whether due to fraud or error, and to express our independent opinion on the
Financial Statements in the auditor’s report. Misstatements may arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the decisions of users of the Financial
Statements.
Throughout the audit process, in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism in doing the following:•
We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error,
and design and perform audit procedures responsive to those risks of material misstatement. The selection andapplication of the audit procedures depend on the auditor’s judgment. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
•
As part of the risk assessment, we evaluate the Company’s internal control system relevant to the audit in order todesign audit procedures that are appropriate in the circumstances, although our audit of the Financial Statements is
not intended to express an opinion on the effectiveness of the Company’s internal control.
•
We assess the appropriateness of the accounting policies adopted by management and their application, as well as thereasonableness of accounting estimates and related disclosures made by the management.
•
We conclude on the appropriateness of management’s use of the going concern assumption in the preparation of the
Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists in relation to
events or circumstances that may cast significant doubt on the going concern assumption. If we determine that there
is a material uncertainty as to the going concern assumption, we are required to draw attention in our auditor’s reportto the related disclosures in the Financial Statements or, if such disclosures in the Financial Statements as to suchmaterial uncertainty are inadequate, we are required to express a modified opinion on the Financial Statements. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events orcircumstances may cause the Company to cease to be a going concern.
•
We evaluate whether the presentation of and disclosures in the Financial Statements are in accordance withaccounting principles generally accepted in Japan, as well as whether the presentation, structure and content of the
Financial Statements, including relevant disclosures, and the Financial Statements fairly present the underlying
transactions and other accounting events.

-38

We communicate with the Audit and Supervisory Committee regarding the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit as wellas other matters required by auditing standards.
We also provide the Audit and Supervisory Committee with a statement that we have complied with the relevant ethicalrequirements regarding independence required in Japan, and report to them on matters that could reasonably be expected
to impair the auditor’s independence and the safeguards, if any, that have been taken to eliminate or reduce theimpairments.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Neither our firm nor its engagement partners have any interest in the Company that is required to be disclosed pursuant
to the provisions of the Certified Public Accountants Act of Japan.

-39

Report of the Audit and Supervisory Committee

Audit Report
The Audit and Supervisory Committee has audited the performance of the duties of the Directors for the 67th fiscal year
from April 1, 2022 to March 31, 2023, and hereby reports the method and results of the audit as follows:
1. Method and Details of Audit
The Audit and Supervisory Committee regularly received reports from Directors and employees, etc. on the board
resolution regarding the matters provided for in Article 399-13, paragraph (1), item (i), sub-items (b) and (c) of theCompanies Act and the status of the development and operation of a system established based on the said resolution(internal control system), and requested explanations from them, as necessary, expressed our opinion and conducted our
audit in accordance with the methods described below:(i)
In accordance with the audit policy and the division of duties, etc., as determined by the Audit andSupervisory Committee, and in cooperation with our internal control division, etc., we have attended
important meetings, received reports from Directors and employees, etc. on matters concerning theperformance of their duties, requested explanations from them, as necessary, inspected important approval
documents, etc., and examined the status of business and assets at the head office and other major businesslocations of the Company. With respect to the subsidiaries, we communicated and exchanged information
with Directors and corporate auditors of the subsidiaries and received business reports from the subsidiaries asnecessary.
(ii)
We monitored and reviewed whether the Accounting Auditor remained independent and conducts anappropriate audit, and received reports on the status of the performance of duties from the Accounting
Auditor, and requested explanations from them, as necessary. In addition, we received a notice from the
Accounting Auditor stating that “a system to ensure appropriate performance of duties” (as indicated in each
item of Article 131 of the Ordinance on Company Accounting) is in place in accordance with the “Quality
Control Standards for Audit” (Business Accounting Council, November 16, 2021), etc., and requested
explanations from them, as necessary. We discussed key audit considerations with the Accounting Auditor
and received reports on the status of the audit and requested explanations from them, as necessary.
Based on the above methods, we reviewed the Business Report and its supporting documents, the non-consolidated
financial statements (non-consolidated balance sheet, non-consolidated statement of income, non-consolidated statementsof changes in shareholders’ equity, and notes to the non-consolidated financial statements) and their supporting
documents, and consolidated financial statements (consolidated balance sheet, consolidated statement of income,consolidated statements of changes in shareholders’ equity, and notes to the consolidated financial statements) for the
fiscal year under review.
2. Results of Audit(1) Results of audit of the Business Report, etc.
(i)
We confirm that the Business Report and its supporting documents accurately present the status of the

-40

(ii)

(iii)

Company in accordance with the applicable laws and regulations and the Articles of Incorporation of theCompany.
There are no improper actions, or material events that violate any of the applicable laws or regulationsor the Articles of Incorporation of the Company, in connection with the performance of the duties of the
Directors.
We confirm that the board resolution regarding the internal control system is reasonable. There are no
matters to be noted regarding the descriptions of the Business Report and the performance of the dutiesof the Directors in relation to the internal control system.

(2) Results of audit of the financial statements and their supporting documents
We confirm that the method and results of the audit conducted by Deloitte Touche Tohmatsu LLC, the Accounting
Auditor, are reasonable.
(3) Results of audit of the consolidated financial statements
We confirm that the method and results of the audit conducted by Deloitte Touche Tohmatsu LLC, the Accounting
Auditor, are reasonable.
May 25, 2023

Audit and Supervisory Committee of Ryosan
Company, Limited
Audit andSupervisory
Committee Member

Keiji Hirooka[seal]

Mahito Ogawa[seal]

Yasuko Teraura[seal](Full time)
Audit andSupervisory
Committee Member(Outside)
Audit andSupervisory
Committee Member(Outside)-41

(Note) Mahito Ogawa and Yasuko Teraura, members of the Audit and Supervisory Committee, areoutside directors as defined in Article 2, item (xv) and Article 331, paragraph (6) of theCompanies Act.

-42

@

Commencement date of measures for electronic provision: June 6, 2023

The 67th Ordinary General Meeting of Shareholders
Other Matters subject to Measures for Electronic Provision(Matters omitted in delivery documents)

Consolidated Statement of Changes in Net Assets
Notes to Consolidated Financial Statements
Non-consolidated Statement of Changes in Net Assets
Notes to Non-consolidated Financial Statements(From April 1, 2022 to March 31, 2023)

Ryosan Company, Limited-43

Consolidated Statement of Changes in Net Assets(For the period from April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Capitalstock
Balance at beginning ofcurrent period
Changes of items duringconsolidated fiscal year
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesPurchase of treasury
shares through a stock
issuance trust
Disposal of treasury
shares through a stock
issuance trust
Net changes of items
other than shareholders'equity during the fiscal
year
Total changes during
the consolidated fiscal
year
Balance at end ofcurrent period

Capitalsurplus17,690Retainedearnings

19,114

Total
shareholders'equityTreasuryshares59,586(6,534)89,857(3,399)(3,399)

9,224

9,224

(53)

(0)

(0)

117

63

(63)

(63)

23

23

-

-

5,771

76

5,847

17,69019,11465,358(6,458)95,705

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning ofcurrent period
Changes of items
during consolidated

1,257

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensiv
e income

3,634

(25)

4,867

1

-44

Total net
assets

94,724

fiscal year
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesPurchase of treasury
shares through a stock
issuance trust
Disposal of treasury
shares through a stock
issuance trust
Net changes of items
other than shareholders’equity during the fiscal
year
Total changes of items
during consolidated
fiscal year
Balance at end ofcurrent period(3,399)
9,224
(0)
63
(63)
23

186

0

2,014

(42)

2,158

2,158

186

0

2,014

(42)

2,158

8,006

1,443

1

5,649

(67)

7,026

102,731-45

Notes to Consolidated Financial Statements
1. Notes to Significant Matters Related to the Basis of Preparation of the Consolidated
Financial Statements(1) Scope of consolidation
Number of consolidated subsidiaries and names of major consolidated subsidiaries
Number of consolidated subsidiaries
15 companies
Names of major consolidated subsidiaries
HONG KONG RYOSAN LIMITEDEDAL ELECTRONICS COMPANY LIMITEDZHONG LING INTERNATIONAL TRADING (SHANGHAI) CO., LTD.
DALIAN F.T.Z RYOSAN INTERNATIONAL TRADING CO., LTD.
RYOTAI CORPORATIONSINGAPORE RYOSAN PRIVATE LIMITEDRYOSAN IPC (MALAYSIA) SDN. BHD.
RYOSAN (THAILAND) CO., LTD.
RYOSAN INDIA PRIVATE LIMITEDKOREA RYOSAN CORPORATIONRYOSAN TECHNOLOGIES USA INC.
RYOSAN EUROPE GMBH
(2) Application of the equity method
Names of non-consolidated subsidiaries and associates to which the equity method is applied
AIO Core Co., Ltd.
Qingdao Sanyuan Taike Electronics Co., Ltd.
PRIKEN Co., Ltd.
As the Company acquired shares of PRIKEN Co., Ltd. during the current consolidated fiscal year, it isincluded in the scope of application of the equity method.
(3) Fiscal year of consolidated subsidiaries
The account closing date of ZHONG LING INTERNATIONAL TRADING (SHANGHAI) CO., LTD.,and DALIAN F.T.Z RYOSAN INTERNATIONAL TRADING CO., LTD., which are consolidated
subsidiaries, is December 31, and their financial statements are prepared on the basis of provisional
settlement equivalent to these accounts as of the consolidated account closing date.
(4) Accounting policies-46

(i) Valuation basis and method for significant assets
A. Valuation basis and method for securities
Held-to-maturity debt securities …… Amortized cost method (straight-line
method)Shares of subsidiaries and…… Moving average cost method
associates
Other securities
Securities other than ......... Market value method (Valuation differences are reported directly
shares without a market
in the net assets, and costs of securities sold are calculated by thepricemoving-average method)
Shares without amarket price......... Moving average cost method
With respect to equity investments in investment partnerships, theCompany adopts a method of incorporating the amount equivalent
to equity interests on a net basis based on the financial statementsof the most recent account closing date.

B. Valuation basis and method for inventories
Merchandise, finished ............... Moving average cost method
goods and Work in(Balance sheet values are calculated by the book value devaluation
progressmethod due to the decline in profitability)

C. Valuation basis and method for derivatives (forward exchange contracts)
Derivatives ............................... Market value method(ii) Method of depreciation of significant depreciable assets
A. Property, plant and equipment (excluding leased assets)
The declining-balance method is mainly used.
However, with respect to the Company, the straight-line method is used for buildings (excluding
building facilities) acquired on or after April 1, 1998 and building facilities and structures acquiredon or after April 1, 2016.
The useful lives are from mainly 8 to 50 years for buildings and structures, and from 5 to 15 years
for others.
-47

B. Intangible assets (excluding leased assets)
The straight-line method is used.
C. Leased assets
Leased assets related to finance leases that do not transfer ownership
The straight-line method, in which the lease period is assumed to be the useful life and the residual
value is assumed to be zero, is used.
(iii) Basis for recognition of significant provisions
Allowance for doubtful accounts
In order to prepare for losses due to bad debts, the Company has recorded an estimated uncollectible
amount based on the actual ratio of bad debts for general receivables, and the collectibility inindividual cases for certain receivables (such as doubtful receivables).
(iv) Basis for recognition of revenues and expenses
As a trading company specializing in the device business of selling semiconductors and electronic
components and in the solution business of selling IT equipment, the Group sells products to electronicequipment manufacturers and other customers in Japan and overseas, and has the obligation to deliver
the merchandise and finished goods based on the sales agreement with the customers. In both of thesebusinesses, we recognize revenues at the time of delivery of the merchandise and finished goods to thecustomer, when the customer has assumed control over the products or goods and our obligation isdeemed to have been satisfied.
In principle, transaction prices are calculated based on the consideration agreed in a contract with acustomer, but a portion of the consideration paid to customers for some transactions in the solutions
business is directly deducted from sales.
For transactions conducted as an agent, the transaction price is calculated as the net amount after
deducting the amount paid to the supplier from the total consideration received from the customer.
The consideration for the transaction is received within approximately one year after the satisfaction of
the performance obligation and does not include significant financial factors.
(v) Accounting method for retirement benefits
A. Method of attributing expected retirement benefits to period
For the calculation of retirement benefit obligations, the method of attributing expected retirement
benefits to the period up to the end of the current consolidated fiscal year is based on the benefit
formula.
B. Method of recoding actuarial gains and losses as expense-48

Actuarial gains and losses are recorded as expense by the straight-line method over a certain numberof years within the average remaining service years of employees (10 years) at the time of recognitionin each consolidated fiscal year, and allocated proportionately from the following consolidated fiscal
year.
C. Accounting method for unrecognized actuarial gains and losses
Unrecognized actuarial gains and losses are recognized in accumulated other comprehensive income
related to retirement benefits in the net assets after adjusting for tax effects.
(vi) Translation of significant foreign currency assets and liabilities into Japanese currency
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yenat the spot exchange rate on the consolidated account closing date, and translation differences arerecognized as profit or loss. The assets and liabilities of overseas subsidiaries are translated into
Japanese yen at the spot exchange rate on the consolidated account closing date, while revenues andexpenses are translated into Japanese yen at the average exchange rate during the period, with resulting
translation differences which belong to the Company included in the foreign currency translation
adjustment in the net assets.
(vii) Treatment of significant hedge accounting
A. Hedge accounting methods
Deferred hedge accounting is used. Certain forward exchange contracts are subject to the allotment
treatment if they meet the requirements of the allotment treatment.
B. Hedging instruments and hedged items
Hedging instrument ......... Forward exchange contract
Receivables and payables in foreign currency andHedged item.........
scheduled transactions in foreign currency
C. Hedging policy
In order to hedge the risks of foreign exchange fluctuations related to transactions in foreign currency,
in principle, forward exchange contracts are individually executed when orders are received from
customers or placed with suppliers based on the settlement date for each transaction.
D. Method of evaluation of hedge effectivenessEvaluation of effectiveness is omitted for those forward exchange contracts which havecorresponding relationship for fluctuations in foreign exchange rates after the conclusion of a forward
exchange contract by allocating forward exchange contracts in the same currency and of the same-49

amount and period to orders received, orders placed, or monetary debts and credits in foreign
currencies.

2. Notes on Accounting Estimates
Merchandise and finished goods(1) Amount recorded in the consolidated financial statements for the current consolidated fiscal year: 47,680
million yen(2) Information on the contents of significant accounting estimates pertaining to the identified items
There may be cases where the market price of the merchandise and finished goods held by the Groupdeclines due to the influence of market supply and demand or where the merchandise and finishedgoods cannot be sold out due to discontinuation of production by our customers. To reflect such decline
in profitability in the valuation of merchandise and finished goods, the cost method (the book value
devaluation method based on a decline in profitability) is adopted as the valuation basis. When applying
such valuation basis, estimates are made based on general inventory valuation, in which valuation ismade based on the classification of reasons for holding and turnover, and individual inventory valuation,in which valuation is made individually based on potential future sales. However, if actual results aredifferent from the assumptions made in the estimates (such as a sharp drop in the volume required forcustomers), disposal or valuation review may be required, which may have a material impact on the
consolidated financial statements in the following fiscal year.

3. Notes on Changes in Accounting Policies
The Company has applied the "Implementation Guidance on Accounting Standard for Fair Value
Measurement" (ASBJ Guidance No. 31, June 17, 2021; hereinafter the "Guidance") effective from the
beginning of the current consolidated fiscal year, and will apply the new accounting policy prescribed by the
Guidance prospectively in accordance with the transitional treatment prescribed in Paragraph 27-2 of the
Guidance. This does not affect the consolidated financial statements for the current consolidated fiscal year.

4. Notes to Consolidated Balance Sheet(1) Assets provided as collateral and obligations pertaining to collateral
Investment securities
173 million yen
The above assets are provided as collateral for trade payables (4,607 million yen).
(2) Accumulated depreciation of Property, plant and equipment
6,534 million yen

5. Notes to Consolidated Statements of Income(1) Loss on valuation of inventories included in cost of sales
The ending balance of inventories is the amount after write-downs of book value based on the decline inprofitability. As a result of offsetting the reversal of the valuation loss in the previous consolidated fiscal year-50

against the valuation loss in the current consolidated fiscal year, the cost of sales for the current consolidated
fiscal year includes the provision of 115 million yen for the loss on valuation of inventories.

6. Notes to Consolidated Statements of Changes in Net Assets(1) Total number of issued sharesClass of shares

Common shares

Number of shares at
beginning ofcurrent
consolidated fiscal
year(thousand shares)
25,000(2) Number of treasury shares
Number of shares at
beginning ofcurrent
Class of sharesconsolidated fiscal
year(thousand shares)
Common shares
1,571

Number of shares
increased in current
consolidated fiscal
year(thousand shares)

Number of shares
decreased in current
consolidated fiscal
year(thousand shares)

Number of sharesin current
consolidated fiscal
year(thousand shares)--

Number of shares
increased in current
consolidated fiscal
year(thousand shares)

Number of shares
decreased inconsolidated fiscal
year(thousand shares)

Number of sharesat end of current
consolidated fiscal
year(thousand shares)

28

38

1,561

25,000(Note 1) 17 thousand shares of the Company held by the Trust in connection with the stock remuneration system
are included in the treasury common shares at the end of the current consolidated fiscal year.
(Note 2) Of the increase in the number of common shares held in treasury, an increase of 28 thousand shares isdue to the acquisition by a stock issuance trust, and an increase of 0 thousand shares is due to the purchaseof shares less than one unit.
(Note 3) Of the decrease in the number of common shares held in treasury, a decrease of 28 thousand shares is dueto the disposal of treasury shares, a decrease of 10 thousand shares is due to the disposal through a stock
issuance trust, and a decrease of 0 thousand shares is due to additional purchases of shares less than one
unit.
(3) Dividends of surplus(i) Dividends paid

Resolution

Class ofsharesTotalamount ofdividend(Millions ofyen)

Dividend
per share
(Yen)
-51

Record date

Effective dateBoard of Directors
on May 13, 2022
Board of Directors
on October 31, 2022

CommonsharesCommonshares

1,639

70

1,759

75

March 31, 2022

June 8, 2022

September 30, 2022 November 29, 2022

(Note) The total amount of dividends declared by the Board of Directors on October 31, 2022 includes the dividendof 1 million yen on the shares of the Company held in the Trust in relation to the stock remuneration system.
(ii) Of the dividends whose record date belongs to the current consolidated fiscal year, dividends that takeeffect in the following consolidated fiscal year

Resolution

Class ofshares

Source ofdividend s

Totalamount ofdividend(Millions ofyen)

Board ofDirectors on May
15, 2023

CommonsharesEarnedsurplus

2,111

Dividend
per share(Yen)

Record Date

Effective Date

90

March 31, 2023

June 12, 2023

(Note) The total amount of dividends declared by the Board of Directors on May 15, 2023 includes the dividendof 1 million yen on the shares of the Company held in the Trust in relation to the stock remuneration system.

-52

7. Notes on Financial Instruments(1) Status of financial instruments(i) Policy for financial instruments
The Group basically invests its funds in short-term and highly secure financial assets.
In addition, in order to avoid foreign exchange fluctuation risks as described below, the Group uses
short-term bank borrowings of funds in foreign currencies and raises its working capital through bankborrowings and the issuance of commercial papers. Derivatives are used to avoid risks described below,
and it is our policy not to engage in speculative transactions.
(ii) Contents and risks of financial instruments and risk management system
Trade receivables such as notes and accounts receivable – trade are exposed to customers' credit risk.
In relation to this risk, we manage due dates and balances for each client in accordance with the Debt
Administration Rules and the Sales Management Rules of the Group, and periodically monitor thecredit status of customers.
Although the trade receivables in foreign currency arising from expansion in business overseas are
exposed to the risk of exchange rate fluctuations, the risk of exchange rate fluctuations is avoided by,in principle, taking out bank loan in foreign currency for the position netted with trade payables inforeign currency. For business transactions, the Company's policy is to use the same currency forpurchasing and sales, but in the case of transactions for which the same currency cannot be used, theCompany hedges the risk by using forward exchange contracts.
Investment securities are shares in companies with which the Company has a business relationship andare exposed to the risk of fluctuations in market prices. The market prices of these securities are
regularly monitored and reported to the Board of Directors.
Long-term deposits are highly secure financial instruments for which the principal amount is paid infull on the maturity date. However, since they are derivatives-embedded deposits and the contract
involves the risk of interest rate fluctuations, the Company has a system in place to monitor the market
prices on a regular basis.
Accounts payable - trade, which are trade payables, are due within one year. A portion of these accounts
are exposed to the risk of foreign exchange rates fluctuations since some of the trade payables aredenominated in foreign currency, but they are constantly within the balance of trade payables in theforeign currency.
Short-term loans payable are issued principally to avoid the foreign exchange fluctuation risks
mentioned above, and commercial papers are issued to pay accounts payable - trade.
(2) Market value of financial instruments
The table below shows the amounts reported in the consolidated balance sheet, market values and theirdifferences as of March 31, 2023 (the consolidated closing date of the current fiscal year).
-53

The table below does not include shares without market prices (see (Note 2)).
(Millions of yen)Account reported inconsolidated balance
sheet
(*)

Market value (*)

Difference(i) Investment securities

2,977

2,977

-

(ii) Long-term deposit

300

251

(48)

2

2

-

(iii) Derivative transactions* Items reported as liabilities are shown in parentheses.
(Note 1) Notes for cash are omitted. Also, notes for deposits, notes and accounts receivable - trade, accounts
receivable - other, accounts payable - trade, short-term loans payable, accounts payable – other andincome taxes payable are omitted because they are settled in a short period of time and their market
values are proximate to their book values.
(Note 2) Shares without market price(Millions of yen)Amount reported in consolidated balance
Category
sheet
Unlisted shares
37
Shares of associates

188

Capital contributions to associates

134

Investments in investment limited partnerships

137

The above-mentioned shares without market prices are not included in "(i) Investment securities".
(3) Breakdown of financial instruments by market value level
Market value of financial instruments is classified into the following three levels according to the observability
and materiality of inputs used for market value measurement.
Level 1 market value: Market value of inputs related to the calculation of observable market values which
is subject to the calculation of quoted values of assets or liabilities formed in active
markets.
Level 2 market value: Market value calculated using inputs for market value calculation other than Level
1 inputs related to the calculation of observable market value.
Level 3 market value: Market value calculated using inputs from unobservable market value calculations.
In the case where more than one inputs that have a significant impact on the market value are used, the market-54

value is classified to the level to which each of these inputs belongs, with privilege being the lowest in themarket value calculation.
(i) Financial instruments recorded on the consolidated balance sheet at market valueMarket value (Millions of yen)
Category
Level 1

Level 2

Level 3

Total

Investment securities
Other securities
Shares

2,977

-

-

2,977

-

2

-

2

2,977

2

-

2,979

-

0

-

0

-

0

-

0

Derivative transactions
Currency
Total assets
Derivative transactions
Currency
Total liabilities(ii) Financial instruments other than those recorded on the consolidated balance sheet at market valueMarket value (Millions of yen)
Category
Level 1

Level 2

Level 3Total

Long-term deposit

-

251

-

251

Total assets

-

251

-

251

(Note) Explanation of valuation techniques and inputs used for market value calculation
Investment securities
Listed shares are valued using quoted prices and are classified as Level 1 market value as they are traded in
active markets.
Long-term deposit
Long-term deposits are derivative-embedded deposits, and classified as Level 2 market value because theirmarket values are calculated based on the price offered by the counterparty financial institution using
observable inputs such as interest rates.
Derivative transactions
The market value of foreign exchange contracts is calculated based on the price quoted by the counterparty-55

financial institution using observable inputs such as exchange rates and interest rates, and thus derivativetransactions are classified as Level 2 market value.

8. Notes on Retirement Benefits(1) Overview of the retirement benefit plans adopted
The Company and its consolidated subsidiaries have a defined benefit corporate pension plan and adefined contribution pension plan in addition to an internally funded lump-sum retirement allowance plan
based on the rules and regulations relating to retirement benefits. Certain overseas consolidated
subsidiaries have defined benefit plans and calculate the liabilities for retirement benefits and retirement
benefit expenses using the simplified method.
(2) Defined benefit plan(i) Reconciliation of beginning and ending balances of retirement benefit obligations
Beginning balance of retirement benefit obligations
4,904million yen
Service cost
248
Interest cost
39
Actuarial gains and losses
61
Retirement benefit payments(263)
Miscellaneous(1)
Ending balance of retirement benefit obligations
4,987(ii) Reconciliation of beginning and ending balances of plan assets
Beginning balance of plan assets
4,003million yen
Expected return on plan assets
50
Actuarial gains and losses(10)
Contributions from employers
554
Retirement benefit payments(259)
Ending balance of plan assets
4,338(iii) Reconciliation of ending balances of retirement benefit obligations and plan assets, and retirement
benefit liabilities and retirement benefit assets reported in the consolidated balance sheet
Retirement benefit obligation for funded plans
4,987million yen
Plan assets(4,338)649
Net liabilities and assets reported in the consolidated
649
balance sheet-56

Retirement benefit liabilities
Net liabilities and assets reported in the consolidatedbalance sheet

649
649

(iv) Amounts of retirement benefit expenses and components thereofService cost
248million yen
Interest cost
39
Expected return on plan assets(50)
Actuarial gains and losses recognized in expenses
11
Retirement benefit expenses related to defined249
benefit plans(v) Remeasurements of defined benefit plans
The breakdown of items recognized as remeasurements of defined benefit plans (before tax effect) is asfollows.
Actuarial gains and losses(61)million yen(vi) Accumulated remeasurements of defined benefit plans
The breakdown of items recognized as accumulated remeasurements of defined benefit plans (before
tax effects) is as follows.
Unrecognized actuarial gains or losses
97million yen(vii) Major components of plan assets
Insurance assets (general account)

100%(viii) Method of determination of long-term expected return rate
To determine the long-term expected return rate on plan assets, the Company takes into account thecurrent and expected allocation of plan assets and the current and expected long-term return rate fromthe various assets that comprise the plan assets.
(ix) Actuarial calculation basis
Discount rate
Expected long-term return rate

0.82%
1.25%

(3) Defined benefit plans using the simplified method(i) Reconciliation of beginning and ending balances of retirement benefit obligations to which thesimplified method is applied-57

Beginning balance of retirement benefit obligations
Service cost
Retirement benefit payments
Contributions to the plan
MiscellaneousEnding balance of retirement benefit obligations

167 million yen
34
(8)
(3)
(0)
188

(ii) Reconciliation of ending balances of retirement benefit obligations and plan assets, and retirement
benefit liability and retirement benefit assets reported in the consolidated balance sheet
Retirement benefit obligation for funded plans
34 million yen
Plan assets(25)
8Retirement benefit obligation for unfunded plans
180
Net liabilities and assets reported in the consolidated
188
balance sheet
Retirement benefit liabilities
Net liabilities and assets reported in the consolidatedbalance sheet

188
188

(iii) Retirement benefit expenses
Retirement benefit expenses calculated by the simplified method: 34 million yen(4) Defined contribution plan
The Company and its consolidated subsidiaries are required to contribute 165 million yen to their defined
contribution plans.

9. Notes on Tax Effect Accounting(1) Breakdown of major causes of deferred tax assets and deferred tax liabilities(Deferred Tax Assets)
Loss from inventory revaluation
287million yen
Excess amortization of deferred assets
13
Investment securities
33
Golf membership
43
Accrued enterprise tax
62
Accrued bonus
375
Retirement benefit liabilities
208-58

Accounts payable denied
260
Commission paid
185
Miscellaneous
682
Subtotal deferred tax assets
2,152
Valuation allowance(411)
Total deferred tax assets
1,740(Deferred Tax Liabilities)
Valuation difference on available-for-sale securities(383)
Retained earnings of foreign subsidiaries(1,732)
Miscellaneous(24)
Total deferred tax liabilities(2,140)Net deferred tax liabilities(399)
Note: Of the net deferred tax liabilities, 398 million yen is included in "Deferred tax assets" under Noncurrent assets in the consolidated balance sheet.
(2) Breakdown of major items that cause significant differences between statutory and effective tax rates andincome tax burden after tax effect accounting is applied
The description is omitted since the differences between statutory and effective tax rates and income tax
burden after tax effect accounting is applied is not more than 5% of the statutory and effective tax rates.

10. Notes on Revenue Recognition(1) Disaggregation of revenue from contracts with customers(Millions of yen)
Reporting Segment
DeviceSolution

Total

Semiconductor

220,306-

220,306

Electronic component

65,274-65,274

IT devices-

23,61023,610

Solutions
Revenue from contracts withcustomers
Sales to external customers-

16,466

16,466

285,580

40,076

325,657

285,580

40,076

325,657-59

(2) Underlying information for understanding revenue
The underlying information for understanding revenue is provided in "1. Notes to Significant Matters Related
to the Basis of Preparation of the Consolidated Financial Statements, (4) Accounting policies (iv) Basis forrecognition of income and expenses".
(3) Information to recognize the amount of revenue for the current period and subsequent periods(i) Balance of contract liabilities
The description of contract liabilities of the Group is omitted because the outstanding balance is immaterial.
In addition, the revenue recognized in the current fiscal year is immaterial based on the performanceobligations satisfied in prior periods.
(ii) Transaction price allocated to remaining performance obligations
The description is omitted based on practical convenience because the Group does not have any material
contracts with an initial expected term exceeding one year.

11. Notes on Per Share Information(1) Net assets per share
4,383.09 yen(2) Net income per share
393.70 yen(Note) In the calculation of net income per share, the Company's shares held by the Trust in connection withthe stock remuneration system are included in the treasury shares that are deducted in the calculationof the average number of shares outstanding during the period.

-60Non-Consolidated Statement of Changes in Net Assets(For the period from April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Capital surplus
Capital reserve
Total capital surplus

Capital stock
Balance at beginning ofcurrent period
Changes of items during
the fiscal year
Dividends of surplus
Net income per share
Purchase of treasury
shares
Disposal of treasury
sharesPurchase of treasury
shares through a stock
issuance trust
Disposal of treasury
shares through a stock
issuance trust
Net changes of items
other than shareholders'equity during the fiscal
year
Total changes of items
during the fiscal year
Balance at end of current
periodRetainedearnings
reserve
Balance at beginning ofcurrent period
Changes of items during
the fiscal year
Dividends of surplus
Net income per share
Purchase of treasury
shares
Disposal of treasury
sharesPurchase of treasury
shares through a stock

1,371

17,69019,114

19,114---

17,69019,114

19,114

Shareholders' equity
Retained earnings
Other retained earnings
Total
Retainedretained
Additional
earnings
earnings
reservebrought
forward19,30012,01432,686(3,399)
5,209

(53)

-61

TreasurysharesTotalshareholders'equity(6,534)62,956(0)(3,399)
5,209
(0)

117

63

(63)

(63)

(3,399)
5,209

(53)

issuance trust
Disposal of treasury
shares through a stock
issuance trust
Net changes of items
other than shareholders'equity during the fiscal
year
Total changes of items
during the fiscal year
Balance at end of current
period

23

-

-

1,756

1,756

76

1,832

1,371

19,30013,771

34,443(6,458)64,789Valuation difference on available-for-sale securities
Valuation
Valuation anddifference on
Deferred gains ortranslation
available-for-salelosses on hedges
adjustments
securities
Balance at beginning ofcurrent period
Changes of items during
the fiscal year
Dividends of surplus
Net income per share
Purchase of treasury
shares
Disposal of treasury
sharesPurchase of treasury
shares through a stock
issuance trust
Disposal of treasury
shares through a stock
issuance trust
Net changes of items
other than shareholders'equity during the fiscal
year
Total changes of items
during the fiscal year
Balance at end of current
period

23

1,257

1

1,258

Total net assets

64,214(3,399)
5,209
(0)
63
(63)
23

186

0

186

186

186

0

186

2,019

1,443

1

1,444

66,234-62

Notes to Non-consolidated Financial Statements
1. Notes on Significant Accounting Policies(1) Valuation basis and method for assets(i) Valuation basis and method for securities
Shares of subsidiaries and…… Moving average cost method
associates
Other securities
Securities other than ......... Market value method (Valuation differences are reported directly
shares without a market
in the net assets, and costs of securities sold are calculated by thepricemoving-average method)
Shares without amarket price......... Moving average cost method
With respect to equity investments in investment partnerships, theCompany adopts a method of incorporating the amount equivalent
to equity interests on a net basis based on the financial statementsof the most recent account closing date.

(ii) Valuation basis and method for inventories
Merchandise finished ............... Moving average cost method
goods, and Work in(Balance sheet values are calculated by the book value devaluation
progressmethod due to the decline in profitability)(iii) Valuation basis and method for derivatives (forward exchange contracts)
Derivatives ............................... Market value method(2) Method of depreciation of depreciable assets(i) Property, plant and equipment (excluding leased assets)
The declining-balance method is used.
However, the straight-line method is used for buildings (excluding building facilities) acquired on orafter April 1, 1998 and building facilities and structures acquired on or after April 1, 2016.
The useful lives are from mainly 8 to 50 years for buildings, and from 5 to 15 years for tools andequipment.
-63

(ii) Intangible assets (excluding leased assets)
The straight-line method is used. Goodwill is amortized over five years.
(iii) Leased assets
Leased assets related to finance leases that do not transfer ownership
The straight-line method, in which the lease period is assumed to be the useful life and the residual
value is assumed to be zero, is used.
(3) Translation of foreign currency assets and liabilities into Japanese currency
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at
the spot exchange rate at the end of the fiscal year, and translation differences are recognized as profit orloss. Monetary claims and obligations denominated in foreign currencies that are subject to foreignexchange contracts are translated into the yen amounts of the foreign exchange contracts.

-64(4) Basis of recognition of provisions(i) Allowance for doubtful accounts
In order to prepare for losses due to bad debts, the Company has recorded an estimated uncollectible
amount based on the actual ratio of bad debts for general receivables, and the collectibility in individual
cases for certain receivables (such as doubtful receivables).
(ii) Allowance for investment losses
In order to prepare for losses from investments in associates, the necessary amount is recorded inconsideration of the financial position of associates.
(iii) Provision for retirement benefits
In order to prepare for retirement benefits for employees, the amount is recorded based on the estimatedamount of retirement benefit obligation and plan assets at the end of the current fiscal year.
A. Method of attributing expected retirement benefits to period
For the calculation of retirement benefit obligations, the method of attributing expected retirement
benefits to the period up to the end of the current fiscal year is based on the benefit formula.
B. Method of recoding actuarial gains and losses as expense
Actuarial gains and losses are recorded as expense by the straight-line method over a certain numberof years within the average remaining service years of employees (10 years) at the time of recognitionin each fiscal year, and allocated proportionately from the following fiscal year.
The treatment of unrecognized actuarial gain/loss in the non-consolidated balance sheet differs fromthat in the consolidated balance sheet.
(iv) Provision for loss on guarantees
In order to prepare for losses related to the guarantee of obligations provided to subsidiaries, anestimated amount of loss is recorded in consideration of the financial position of the subsidiaries.
(5) Basis for recognition of income and expenses
As a trading company specializing in the device business of selling semiconductors and electronic
components and in the solution business of selling IT equipment, the Company sells products toelectronic equipment manufacturers and other customers in Japan and overseas, and has the obligation
to deliver the products or goods based on the sales agreement with the customers. In both of thesebusinesses, we recognize revenue at the time of delivery of the products or goods to the customer, when
the customer has assumed control over the products or goods and our obligation is deemed to have beensatisfied.
In principle, transaction prices are calculated based on the consideration promised in a contract with acustomer, but a portion of the consideration paid to customers for some transactions in the solutions
business is directly deducted from sales.
For transactions conducted as an agent, the transaction price is calculated as the net amount after
deducting the amount paid to the supplier from the total consideration received from the customer.
The consideration for the transaction is received within approximately one year after the satisfaction of-65

the performance obligation and does not include significant financial factors.
(6) Hedge accounting method(i) Hedge accounting methods
Deferred hedge accounting is used. Certain forward exchange contracts are subject to the allotment
treatment if they meet the requirements of the allotment treatment.
(ii) Hedging instruments and hedged items
Hedging instrument ......... Forward exchange contract
Hedged item ......... Receivables and payables in foreign currency and scheduled transactions in foreign
currency(iii) Hedging policy
In order to hedge the risks of foreign exchange fluctuations related to transactions in foreign currency,
in principle, forward exchange contracts are individually executed when orders are received from
customers or placed with suppliers based on the settlement date for each transaction.
(iv) Method of evaluation of hedge effectivenessEvaluation of effectiveness is omitted for those forward exchange contracts which have corresponding
relationship for fluctuations in foreign exchange rates after the conclusion of a forward exchange
contracts by allocating forward exchange contracts in the same currency and of the same amount andperiod to orders received, orders placed, or monetary debts and credits in foreign currencies.

2. Notes on Accounting Estimates
Merchandise and finished goods(1) Amount recorded in the financial statements for the current fiscal year
23,562 million yen(2) Information on the contents of significant accounting estimates pertaining to the identified items
These are the same as those presented in the "Notes on Consolidated Financial Statements (Notes on
Accounting Estimates)" in the consolidated financial statements.

3. Notes on Changes in Accounting Policies
The Company has applied the "Implementation Guidance on Accounting Standard for Fair Value
Measurement" (ASBJ Guidance No. 31, June 17, 2021) effective from the beginning of the current fiscal year,
and it has applied the new accounting policy provided for by the Implementation Guidance on AccountingStandard for Fair Value Measurement prospectively in accordance with the transitional measures provided forin paragraph 27-2 of the Implementation Guidance on Accounting Standard for Fair Value Measurement. This
does not affect the non-consolidated financial statements for the current fiscal year.

4. Notes on Changes in Presentation Methods
From the current fiscal year, "goodwill" (4 million yen in the previous fiscal year), "telephone subscription
rights" (47 million yen in the previous fiscal year) and "leased assets" (0 million yen in the previous fiscal
year), which were separately stated as intangible fixed assets in the previous fiscal year, are included in"others" (51 million yen in the current fiscal year) due to their immateriality.
-66

5. Notes on Balance Sheet(1) Assets provided as collateral and obligations pertaining to collateral
Investment securities
173million yen
The above assets are provided as collateral for trade payables (4,607 million yen).
(2) Accumulated depreciation of tangible fixed assets
5,646million yen(3) Guarantee obligations, etc.
(i) Contingent liabilities outstanding as a result of letters of guarantee for borrowings, etc. from financial
institutions of associates and Letter of Awareness of Management
19,557million yen(ii) Outstanding joint and several guarantee obligations to suppliers of associates
564million yen(iii) Outstanding guarantee obligations to suppliers of associates
4,725million yen(4) Monetary claims and obligations to associates(i) Short-term monetary claims to associates
4,601million yen(ii) Short-term financial obligations to associates
40million yen

6. Notes on Statement of Income(1) Loss on valuation of inventories included in cost of sales
The ending inventory is the amount after write-downs of book value based on the decline in profitability.
As a result of offsetting the reversal of the valuation loss in the previous fiscal year against the valuation
loss in the current fiscal year, the cost of sales for the current fiscal year includes the provision of 179
million yen for the loss on valuation of inventories.
(2) Transactions with associates(i) Sales
20,646million yen(ii) Purchase amount
572million yen(iii) Other operating transactions-million yen(iv) Transaction volume from transactions other than business transactions
1,523million yen

7. Notes on Statement of Changes in Shareholders' Equity, Etc.
Matters regarding the number of treasury shares
Number of shares
Number of shares
Number of shares
Number of sharesat beginning ofincreased indecreased in
at end of current
Class of shares
current fiscal year
current fiscal year
current fiscal year
fiscal year
(thousand shares)(thousand shares)(thousand shares)(thousand shares)
Common shares
1,571
28
38
1,561
(Note 1) 17,000 shares of the Company held by the Trust in connection with the stock remuneration system areincluded in the treasury common shares at the end of the current fiscal year.
-67

(Note 2) Of increase in the number of common shares in treasury shares, an increase of 28,000 shares is due to theacquisition by a stock issuance trust, and an increase of 0 shares is due to the purchase of shares less than
one unit.
(Note 3) Of decrease in the number of common shares in treasury shares, a decrease of 28,000 shares is due to thecancellation of treasury shares, a decrease of 10 shares is due to the disposal of treasury shares through astock issuance trust, and a decrease of 0 shares is due to the sales of shares less than one unit.

-688. Notes on Tax Effect Accounting(1) Breakdown of major causes of deferred tax assets and deferred tax liabilities(Deferred Tax Assets)
Loss on valuation of inventory
242million yen
Excess of depreciation
13
Investment securities
39
Shares in subsidiaries
405
Golf membership
43
Accrued bonuses
350
Provision for retirement benefits
140
Provision for loss on guarantees
483
Allowance for doubtful accounts
2
Other
542
Subtotal deferred tax assets
2,264
Valuation allowance(973)
Total deferred tax assets
1,290(Deferred Tax Liabilities)
Valuation difference on available-for-sale securities
(383)
Other
(2)
Total deferred tax liabilities(386)
Net deferred tax assets
904(2) Breakdown of major items that cause significant differences between statutory and effective tax rates andincome tax burden after tax effect accounting is applied
The description is omitted since the differences between statutory and effective tax rates and income tax
burden after tax effect accounting is applied is not more than 5% of the statutory and effective tax rates.

9. Notes on Transactions with Related Parties
Subsidiaries and associates, etc. 子会社及び関連会社等(million yen)Type

Name of company,
etc.

HONG KONG
Subsidiary RYOSAN
LIMITED

CapitalRatio ofstock orNature ofvoting
Location
capitalbusiness or rights, etc.
investment occupation holding orsheldSale ofsemiconduct Direct 99%
Hong
HKD 5
ors andIndirectKongmillionelectronic
1%
components-69

RelationshipTransac
Transac
Account Ending
with related
tion
tions
title
balancepartiesamountPurchase andGuarant
sale ofee ofmerchandise
debt
Guarantee of(Note 1)
debt

8,465

-

-

Concurrent
positions ofofficers

ZHONG LING
INTERNATIONAL
Subsidiary TRADING(SHAN
GHAI)
CO., LTD.

Subsidiary

RYOTAICORPORATIONSINGAPORERYOSAN
Subsidiary
PRIVATE
LIMITEDEDALELECTRONICS
Subsidiary
COMPANY
LIMITED

China

Sale ofsemiconduct
RMB 27
Directors andmillion100%
electronic
components

TaiwanSale ofsemiconduct
NTD 80
Directors andmillion100%
electronic
components

Singapore

Sale ofsemiconduct
SGD 1
Directors andmillion100%
electronic
components

Hong
Kong

Sale ofsemiconduct Direct 90%
HKD 1
ors andIndirectmillionelectronic
10%
components

Purchase andsale ofmerchandise Guarant
Guarantee of ee of
debt
debt
Concurrent (Note 1)
positions ofofficers
Purchase andsale ofGuara
merchandise ntee
Guarantee of of
debt
debt
Concurrent(Note
positions of1)
officers
Purchase andsale ofmerchandise Guarantguarantee of ee of
debt
debt
Concurrent (Note 1)
positions ofofficers
Guarantee of Guarant
debt
ee of
Concurrent debt
positions of (Note 1)
officers(Note 2)

7,369

-

-

2,973

-

-

1,245

-

-

Provision for2,589 loss on
guarant
ees

1,579(Note 1) Guarantees of debt, etc. are provided to financial institutions as lenders, and suppliers. No guarantee fees,
etc. related to guarantees of debt, etc. have been received.
(Note 2) The provision for loss on guarantees of 199 million yen was recorded in the current fiscal year.

10. Notes on Revenue Recognition
The underlying information for understanding the revenue is provided in "(5) Recognition of revenue andexpenses in 1. Notes on Significant Accounting Policies."

11. Notes on Per Share Information(1) Net assets per share
2,825.91 yen(2) Net income per share
222.34 yen(Note) In the calculation of net income per share, the Company's shares held by the Trust in connection with thestock remuneration system are included in the treasury shares that are deducted in the calculation of theaverage number of shares outstanding during the period.
-70