My name is Eiji Kawamura, and I’m Head of the Administration Headquarters.
Thank you for your ongoing support.
I also appreciate your attending today’s briefing on our financial results.
With that, I will begin our explanation of Kaga Electronics’ financial results in thefiscal year endedin March 2021.

I will start with a summary of financial results in the fiscal year ended in March 2021.
First, net sales fell short of the previous year’s levels because of the lingering effect of
the termination of sales agency contracts with major suppliers. However, whenexcluding this special factor, we overcame the effect of COVID‐19, and results were solidoverall. Operating income and ordinary income both exceeded our previous forecasts,and we set new records for the second fiscal year in a row. Although we priced in
impairment losses and other, net income increased significantly thanks in part to theposting of a “gain on bargain purchase.”
In the January–March quarter, sales increased as demand recovered rapidly, and wecurtailed and reduced SG&A expenses. Results came in above forecasts, and we wereable to reverse direction and bring in higher sales and income. Fiscal year‐end dividends
will be 50 yen per share, which includes our previous forecast of 40 yen (30 yen ordinary
dividend plus a 10 yen extraordinary dividend) and an additional 10 yen extraordinary
dividend. Including the 30 yen interim dividend, the full‐year dividend will be 80 yen pershare. Full‐year dividends in the previous fiscal year were 70 yen per share.
Moving on to an overview of the main segments, in the electronic components business,
the termination of the sales agency agreement with Cypress continued to have animpact on the components sales business, but the business took advantage of therecovery in demand from Q3 and results were solid.
In the EMS business, sales in the medical and automotive areas were firm throughout
the year.
In the information equipment business, the PC sales business grew as it pulled intelework and online demand. The sale of anti‐viral and sterilizing products for companies
and commercial facilities were robust.
The fiscal year ending in March 2022 will be the final year of the Medium‐TermManagement Plan, and although net sales are still far from the plan’s target, we have notlowered this target. We aim for record‐high operating income for the third straight fiscalyear. We expect dividends to be 80 yen per share, which is the same as in 2021.

Now I would like to explain the financial highlights for the fiscal year ended inMarch 2021.
Net sales totaled 422,365 million yen, down 4.8% over the previous year. Thiswas 1.8% over the forecast. Gross profit was 47,936 million yen, up 2.0% over theprevious year. The gross profit margin amounted to 11.3%, 0.7% higher than inthe previous year. SG&A expenses were down 1.4% over the previous year, at
36,469 million yen. Operating income increased 14.5% over the previous year to
11,467 million yen, which was 27.4% higher than the forecast. Ordinary income
was 11,241 million yen, up 10.9% over the previous year and 32.2% higher thanforecast. Net income attributable to owners of parent came in at 11,399 million
yen, which was 94.8% higher than the previous year and 8.6% above forecast. Asa result, EPS (net income per share) was 415.07 yen. ROE was 13.5%.

In the ended in March 2021, we posted large amount of extraordinary gains andextraordinary losses, so I will explain their breakdown.
Excel became a Group subsidiary, resulting in a gain on bargain purchase of 7,963
million yen. However, COVID‐19 had an impact, and we also incurred losses on
bad debts to major suppliers, as well as a 2,230 million yen loss due to the caseof fraud at our US subsidiary announced in February. In addition, we posted a1,893 million yen impairment loss on an overseas subsidiary’s manufacturing
facilities and a 562 million yen loss on sales of investment securities and loss on
valuation of investment securities. These key losses added up to an extraordinary
loss of 4,892 million yen. As a result, we posted 3,230 million yen in extraordinary
gains.

Next, we will look at financial results by business segment.
The electronic components business posted net sales of 353,454 million yen,down 6.4% over the previous year. Income in this business totaled 8,151 million
yen, up 8.6% over the previous year. In the information equipment business, netsales totaled 48,389 million yen, up 11.3% over the previous year. Segment
income amounted to 2,482 million yen, up 45.3% over the previous year. In thesoftware business, net sales were 2,932 million yen, up 5.5% over the previousyear. Income totaled 263 million yen, up 11.4% over the previous year. In theOthers business, net sales were down 11.1% to 17,589 million yen. Segment
income was up 4.9% year‐on‐year to 474 million yen.

This slide shows changes in segment results from the forecasts previously
announced in February. Net sales were 7,455 million yen higher than this forecastin the electronic components business, 1,611 million yen lower in theinformation equipment business, 1,068 million yen lower in the software
business, and 2,589 million yen higher in the Others business. Operating income
was 1,942 million yen higher than the forecast in the electronic components
business, 307 million yen higher in the information equipment business, 37
million yen higher in the software business and 274 million yen higher in theOthers business. Operating income exceeded forecasts for all businesses.
By company, Kaga Electronics’ net sales came in 8,897 million yen above forecast,Kaga FEI’s sales were 1,932 million yen higher, and EXCEL’s sales were 3,464
million yen lower than forecast. Kaga Electronics’ operating income was 1,783
million yen higher than the forecast, Kaga FEI’s was 462 million yen higher andExcel’s operating income was 206 million yen higher.

I will now explain the performance of the electronic components business bysegment.
I just explained the factors pushing up net sales and segment income, but not
only did the consolidation of Excel raise income for the components sales
business; this segment also adapted to the recovery in demand from the second
half of the fiscal year and performed well. However, Kaga FEI continued to beaffected by the termination of its sales agency agreement with Cypress, andresults fell short of the previous year’s levels.
The EMS business hit its lowest point in Q1, when it was affected by thelockdown of some overseas plants during the COVID‐19 pandemic. Demand
recovered rapidly from the middle of the fiscal year, particularly in theautomotive and industrial equipment sectors, as economic activity picked up
again.

In the information equipment business, net sales and segment income all rose,primarily because the increase of telework and online learning led to higher salesof PCs, PC peripherals and security software to electronics retail stores andschools and other educational institutions.
Sales were strong for thermography equipment for temperature checks andsterilizing deodorizers with antiviral functions, which were sold as products
aimed at countering COVID‐19.

Moving on to the status of M&As, Kaga Electronics was affected by COVID‐19, but
sales increased by 866 million yen. Sales were down 68,651 million yen for Kaga
FEI due to the loss of major commercial rights. The addition of 46,535 million insales from Excel was unable to fully compensate for the decline at Kaga FEI, andthe Group’s sales overall fell 21,249 million yen.
Gross profit increased 1,974 million yen for Kaga Electronics, and fell 3,400
million yen for Kaga FEI. Excel, the new subsidiary, contributed 2,365 million yen,so that gross profit rose 920 million yen for the Group overall.
The gross profit margin increased from 13.7% to 14.5% for Kaga Electronics andfrom 6.8% to 7.8% for Kaga FEI. With the addition of a 5.1% gross profit margin
from Excel, the Group’s overall gross profit margin increased from 10.6% in theprevious year to 11.3%.

Next, we have SG&A expenses. Both Kaga Electronics and Kaga FEI endeavored tocut costs and absorbed the impact of the new consolidation. Kaga Electronics
reduced SG&A expenses by 1,011 million yen and Kaga FEI cut them by 1,750
million yen. SG&A expenses increased by 2,230 million yen for Excel, the newly
consolidated company. In the Kaga Electronics Group, Towada Pioneer (currently
Kaga EMS Towada), which joined the Group in the previous fiscal year, andKyokuto Electric, which joined the Group last autumn, pushed up SG&A expenses,
so when discounting for these new additions, the Kaga Electronics Group actually
reduced SG&A expenses by more than 1,011 million yen.

Next, we have operating income. During the COVID‐19 outbreak, operating
income increased for Kaga Electronics, and the operating income margin
improved significantly. Kaga Electronics’ operating income increased by 3,155
million yen, Kaga FEI’s operating income fell by 1,723 million yen, and Excel’soperating income increased by 6 million yen. This boosted the Group’s overall
operating income by 1,452 million yen.
The operating income margin increased from 3.3% in the previous year to 4.5%
for Kaga Electronics. Kaga FEI’s operating income was 1% in the previous year, so
unfortunately it decreased to 0.3%. In the Group overall, the operating incomemargin increased from 2.3% in the previous year to 2.7%.

This table shows the results for each company that I just explained. Pages 10 to
15 explain earnings in each quarter, so please take a look.

Page 16 explains the financial status.
Starting with assets, total assets amount to 237,004 million yen, which is up
29,366 million yen compared with the previous fiscal year. Of this, current assets
total 200,179 million yen, up 25,847 million yen. Non‐current assets are 36,825
million yen, up 3,518 million yen.
Moving on to liabilities and net assets, liabilities total 141,942 million yen, up
20,553 million yen. Net assets amount to 95,062 million yen, up 8,812 million yen.

Starting with assets, total assets amount to 237,004 million yen, which is up
29,366 million yen compared with the previous fiscal year. Of this, current assets
total 200,179 million yen, up 25,847 million yen. Non‐current assets are 36,825
million yen, up 3,518 million yen.
Moving on to liabilities and net assets, liabilities total 141,942 million yen, up20,553 million yen. Net assets amount to 95,062 million yen, up 8,812 million yen.

Next, we have inventories. Inventories total 37,948 million yen, up 6,040 million
yen. Inventory turnover was 32.8 days. Notes and accounts receivable were
108,394 million yen, up 17,023 million yen. Notes and accounts payable were
79,854 million yen, which is a 9,665 million yen increase. The A/R turnover was
93.7 days and the A/P turnover was 79.8 days.

Next, I would like to explain cash and deposits, interest‐bearing debt and cash
flows. Cash and deposits totaled 45,636 million yen, up 2,251 million yen.
Interest‐bearing debt was 38,261 million yen, up 9,524 million yen.
Cash flow from operating activities provided 9,999 million yen, cash flow frominvesting activities used 2,453 million yen, and cash flow from financing activities
used 6,851 million yen.

Continuing on to the equity ratio, total assets were 237,004 million yen, up
29,366 million yen, and shareholders’ equity was 90,967 million yen, up 12,682
million yen. As a result, the equity ratio was 38.4%.
The ROE increased significantly to 13.5%. The net profit margin was 2.7%, double
compared with the previous year. Financial leverage was almost unchanged at 2.6,
and the total asset turnover deceased to 1.8.

Finally, I would like to explain our full‐year earnings forecasts for the fiscal year
ending in March 2022.
We expect net sales to increase 11.3% over the previous year to 470,000 million
yen. We forecast 13,000 million yen in operating income, up 13.4% over theprevious year. Ordinary income is expected to increase 6.7% over the previousyear to 12,000 million yen. We expect profit attributable to owners of parent todecrease 29.8% over the previous year to 8,000 million yen. As a result, EPS
would be 291.20 yen and ROE would be 8.5%.

If we look at forecasts by segment, we expect net sales in the electronic
components business to be 404,000 million yen and segment income to total
9,900 million yen. This amounts to a 14.3% increase in net sales over theprevious year and a 21.5% increase in segment income.
In the information equipment business, we expect a 7% decrease in net sales to45,000 million yen, and a 7.3% decrease in segment income, to 2,300 million yen.
In the software business, we forecast 3,000 million yen in net sales, up 2.3%, and300 million yen in segment income, up 13.9%. In the Others business, we forecast
18,000 million yen in net sales, up 2.3%, and 500 million yen in segment income,up 5.4%.
As the final year of the Medium‐Term Management Plan 2021, the entire Groupwill work together to achieve its initial operating income target of 13,000 million
yen. We ask for your ongoing support.
Thank you for your attention.